“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."

Wednesday, March 18, 2009

Banking Explained


The AIG Outrage
The government shouldn’t run anything, because it cannot run anythin
Larry Kudlow
This whole AIG fiasco — where the entire political class is suddenly screaming over bonuses paid to derivative traders in AIG’s financial-products division — is just a complete farce. What it really shows is how the government has completely bungled the AIG takeover. Blame the Bush administration and the Obama administration. It also shows, once again, why the government shouldn’t run anything, because it cannot run anything.

AIG should have been placed in bankruptcy last fall under some sort of government sponsorship. While in bankruptcy, all the salary contracts (and every other AIG contract) would have been nullified and voided. At the same time, there would have been an orderly liquidation and sale of AIG’s assets and separate divisions.

But as things stand now, there still is no clear roadmap for the dissolution of AIG. There are ideas, but nothing is set in concrete.

And as for the $165 million or so in AIG bonus payments, the Obama administration — including the president, Treasury man Tim Geithner, and economic adviser Larry Summers — knew all about them many months ago. They were undoubtedly informed of this during the White House transition.

So there’s no big surprise. Nobody should be shocked. But President Obama is doing his best play-acting ever. He knows full well that the nationwide outcry against federal bailouts and takeovers is only going to get worse on his watch. His poll numbers are already falling, and this AIG episode is going to pull them down more.

Incidentally, has anybody asked Team Obama why it is more than willing to break mortgage contracts with a bankruptcy-judge cram-down, but won’t cram-down compensation agreements for AIG, despite the fact that the U.S. government owns the company? Kind of odd, don’t you think?

The Wall Street Journal editors get it right when they ask: Who’s in charge and what’s the game plan? The whole AIG story is an outrage.

What’s more, AIG is acting as a conduit for taxpayer money that is being sent to dozens of derivative counterparties, including foreign banks and American banks like Goldman Sachs. If we’re going to bail out all these other firms, why not bail them out in full taxpayer view? Why is the money being laundered furtively through AIG? And where exactly is the end game for AIG? How are the taxpayers going to be repaid?

And what is Treasury man Geithner’s role in all this? He appears to be the biggest bungler in what has become a massive bungling. My CNBC friend and colleague Charlie Gasparino thinks Geithner can’t survive this. I am inclined to agree.

Nevertheless, behind the furor over AIG, there is some good news to report on the banking front. This week’s decision by the Federal Accounting Standards Board (FASB) to allow cash-flow accounting rather than distressed last-trade mark-to-market accounting will go a long way toward solving the banking and toxic-asset problem.

Many experts believe mortgage-backed securities and other toxic assets are being serviced in a timely cash-flow manner for at least 70 cents on the dollar. This is so important. Under mark-to-market, many of these assets were written down to 20 cents on the dollar, destroying bank profits and capital. But now banks can value these assets in economic terms based on positive cash flows, rather than in distressed markets that have virtually no meaning.

Actually, when the FASB rules are adopted in the next few weeks, it will be interesting to see if a pro forma re-estimate of the last year reveals that banks have been far more profitable and have much more capital than this crazy mark-to-market accounting would have us believe.

Sharp-eyed banking analyst Dick Bove has argued that most bank losses have been non-cash — i.e., mark-to-market write-downs. Take those fictitious write-downs away and you are left with a much healthier banking picture. This is huge in terms of solving the credit crisis.

In a column last week I suggested that not one more dime of government money is necessary for the banks. Instead, the marriage of the cash-flow valuation of bank assets and the upward-sloping Treasury yield curve will do the trick. Net interest margins are rising as banks purchase money for near-zero interest and loan it out at profitable rates. And the new mark-to-market reform will allow banks to hold their toxic assets for several more years and work them out — just as they did back in the 1990s.

We don’t need more TARP. We don’t need to take over more big banks. And we don’t need to have the government run things it simply isn’t capable of running.


  1. I hope you are into plan B when the government runs your health care.

  2. 'just make it one enormous cock-up, things will be fine'


  3. AIG Exec Digs Che Guevara
    Complete w/Che T-Shirt.
    Remember the early days of the campaign, before all the Che Perephenalia got cleaned out?

  4. A-compelling-message-of-personal-responsibility

    LET"S HEAR IT FROM THE MAN: Here is Obama himself:

    WASHINGTON – Joining a wave of public anger, President Barack Obama blistered insurance giant AIG for "recklessness and greed" Monday and pledged to try to block it from handing its executives $165 million in bonuses after taking billions in federal bailout money. "How do they justify this outrage to the taxpayers who are keeping the company afloat?" Obama asked. "This isn't just a matter of dollars and cents. It's about our fundamental values."

    It's about our fundamental values? Which ones? Surely not "a deal is a deal."

    These bonuses have been quietly kicked around for a while ($55 million was paid on this plan in December - did everyone at Treasury forget?), so
    I guess the fundamental value in play with Obama is

    "When the crowd stands up and boos its time to stand up and boo."

    Yeah, that's leadership.
    This is from the Administration that appointed tax cheat Tim Geithner to head the Treasury, inspired no doubt by his marvelous success at the NY Fed, where he had regulatory responsibility for Citigroup.
    Not only did Geithner cash his paychecks, he cheated on the taxes (in his IMF days) - maybe they should think long and hard about that before lecturing anyone else.

  5. BC was lauding Tigerhawk again, who often misses the mark imo, so I posted this in response to his goofy claim that it was the greedy borrowers that forced the banks into making outrageous loans!
    Doug Ross's Excellent Depiction of the Meltdown

    This is the community agitator and ACORN attorney named Barack Obama, who sued Citibank in 1994; one of hundreds of nuisance lawsuits filed by ACORN and its affiliates to loosen mortgage underwriting standards.
    These are the pay packages the Democrats awarded themselves, through undeserved bonuses, immense salaries and incentive payments, all based upon pushing huge numbers of subprime loans through Fannie Mae.

    CEO Franklin Raines - $90,128,761

    CEO Timothy Howard - $30,155,029

    Chair Jamie Gorelick - $26,466,834

    CEO Jim Johnson - $21,000,000

    This is Fannie Mae's stock price, the collapse of which devastated the capital-to-asset ratios of banks and insurance companies like AIG (which held five billion dollars in Fannie Mae and Freddie Mac equities).
    These are the total campaign contributions ("investments") Fannie Mae executives made to Democratic Senators Chris Dodd, Barack Obama and John Kerry in order to "fix" federal regulation.
    This is a list of the attempts made by the Bush administration starting in 2001 to rein in the out-of-control spending frenzy by Fannie and Freddie.
    This is one such hearing in 2004 (YouTube video available), wherein Republicans demanded additional oversight of Fannie Mae and Freddie Mac because of the GSEs' rampant accounting scandals, inadequate capital reserves, inappropriate bonuses and hundreds of billions in low-income, no documentation mortgages.
    This is Maxine Waters (D-CA), complaining that there is no crisis at Fannie and Freddie; and that attempts to audit the GSEs simply disenfranchise the poor by preventing them from getting subprime mortgages.
    This is Barney Frank (D-MA), claiming that Fannie Mae and Freddie Mac are fine and that oversight is not needed.
    This is Chris Dodd (D-CT), the powerful member of the Senate Banking Committee, who threatened filibuster after filibuster over additional regulation of the mortgage market (while accepting funds and sweetheart mortgages from the very organizations he was supposed to be regulating).
    These are the organizations that profited from subprime mortgages, sold to unqualified individuals -- even those without documentation of citizenship, income or assets -- knowing they could sell the loans to the GSEs. For example, Fannie even accepted a $700,000 mortgage application from a migrant with an annual income of $14,000.
    This is President Clinton signing the Community Reinvestment Act (CRA), which forced banks to write low-income, zero documentation loans. These loans would then be purchased by Fannie and Freddie and securitized for sale to other financial institutions.
    These are the Democrats who profited at every step of the mortgage meltdown while blaming George W. Bush for the crisis, and whose continued oversight of the financial system is a disgrace and a mortal danger.
    One Big Ass Mistake, America!

  6. Exercises in Tortured Pretzel Logic (and spelling)

    Don't Blame Chris Dodd For The Bonuses
    by Marc Ambinder - The Atlantic

    In a statement yesterday, Dodd called on AIG executives to voluntarily refuse their bonuses. The truth is that the codicil was added in conference by mutual agreement of House and Senate Democrats and the White House.

    At the time, the administration worried about both the perception and the reality of government's interfering in the decisions and internal operations of the banks.

    The worry was that the banks would suffer immediate and disasterous sic brain drain if the govenment sic could abrogate (the world of the week!) employment contracts willy-nilly. Apparently, no one at the Treasury Department or the New York Federal Reserve Board bothered to check on what those contracts actually contained - therein was the sin of omission, if you can call it that. How many tens of thousands of employees does AIG have? And didn't Geithner recuse himself from dealing with AIG?

    In conference -- Dodd was not a conferee -- the following clause was added to reconcile differences between the Senate and House bills...

    Dodd, the chair of the banking committee, agreed to this language because most all of the stakeholders - including the administration - wanted it. But the original bill passed by the Senate contains Dodd's compensation limits without the carve out the exemption for bonuses.
    So there is no evidence that Dodd bowed to pressure from his contributors or that he was the author, the force of nature, behind it.

  7. Anonymous said…
    Wasn’t the primary issue dogging AIG the CDS exposure?
    My complaint there is why did we have to actually invest capital at all, since the Treasury could merely have stepped into AIG’s insurer role without actually investing capital.
    In that instance the US Treasury AAA rating would have been a satisfactory replacement for the AIG AAA rating, and the actual capital invested would have come only in those instances of actual need, instead of for collateral posting purposes.

    By the way, does AIG get the insurance payments back in those instances where the contracts eventually unwind without a need to draw on the insurance? Does Goldman or Barclays or whomever return the money AIG posted in cash if and when the contract party proves good for the underlying debt?

  8. AIG's Not Very Transparent List of Counterparties

    It's good that AIG has released a list of its counterparties. But if it really believes in "the importance of upholding a high degree of transparency with respect to the use of public funds", this is a very odd way of releasing the information.

    If you're not already familiar with the intricacies of AIG's operations, it's very easy to just start adding up the numbers in the various appendices, coming up with a kind of bailout league table: Goldman Got $12.9 billion! Barclays got $8.5 billion! But in fact it's much more complicated than that.

    There are four appendices in all. Before we get to them, it's worth reading a bit of Gretchen Morgenson today:

    Even A.I.G.'s own independent directors haven't been told which of the counterparties were paid...
    Such secrecy raised hackles because the insurance claims were paid off in full, even though widespread defaults on the underlying debt have not occurred. Why, many people wonder, did the Fed make A.I.G.'s counterparties whole on losses that have not happened yet?

    What Morgenson is talking about here is the second of the four appendices: the payments made by the company known as "Maiden Lane III".

    After banks insured their assets against default, AIG essentially used Maiden Lane III to take those assets onto its own books, thereby allowing it to cancel out the insurance contracts. The big winners here are SocGen and Goldman Sachs -- and it's worth noting that unlike the first appendix, where the counterparties are helpfully listed in order of size, in the second appendix there seems to be no particular order at all, and the two biggest recipients of government money are hidden in the middle of the list.
    In any event, so many of the counterparties on this list had hedged their AIG exposure that it's massively oversimplifying matters to conclude that even the banks with the biggest exposures on the second appendix are the ones which effectively got the biggest government bailout.
    It's not nearly as simple as that -- and AIG should be much more upfront about such matters than it is being with this release.

    Fair Game - At A.I.G., Good Luck Following the Money -

    Representative Carolyn B. Maloney, Democrat of New York, said she had twice asked for a full accounting from Ben S. Bernanke, the chairman of the Federal Reserve, which arranged the A.I.G. rescue. She has not received it.

    “They have told others it is proprietary information,” Ms. Maloney said in an interview. “But we are the proprietors now. Taxpayers own the store, and we should be able to see the books.”

  9. Oh, come on,
    "We had to do SOMETHING!!!

    And we did.
    Now it is remembered that the Federals do nothing well.

    When this was pointed out, in September and October of last year, the panic had already infected the Republican minority and the White House. A few of US urged restraint, patience and suggested that the normal political process of writing legislation should be followed.

    Now, the Federals will write new Tax Law to recoup those bonuses, new targeted tax rates for employees of AIG. Think that one through, amigos.

    This sweeping excercise in Federal taxing power will set new precedent.


  10. Here is a salient point, made by a fellow with a last name that'd be tough to pronounce, James Pethokoukis.

    As both Andrew Ross Sorkin and Jim Manzi have pointed out, who is supposed to unwind all these complex derivatives? The hard truth is probably the same guys that put them together. It's like after WWII when America got all those Nazi rocket scientists. Now they're working for us;

    3) Rather than being outraged over the bonuses, maybe people should be furious that billions in taxpayer dollars are going to foreign banks. That would have been a nice topic to discuss at the G20 meeting, yes?. This is something Team Obama does not want to talk about;

    Rather than being outraged over the bonuses, maybe people should be furious that billions in taxpayer dollars are going to foreign banks.

    We're being misdirected, again, and falling for it, again.

    Keep walkin' on the sunny side of the street, amigos.

  11. And this story, from the WSJ shows how poorly the reconstruction of Iraq has gone. The Federal Socialists of the US military putting the Iraqi economy in a worse position than US politicos have put US.
    With Iranians playing the role of the Chinee in Iraq, and the US allowing it.

    We should have never tasked the US military to an entrepreneurs mission. They failed to perform, hell, they failed to identify the real mission until it was to late to accomadate the realities.

  12. Whatever happened to that magnificent concrete edifice you used to talk about, 'Rat?

    - Fallout: Dems in disarray over AIG -

    Congressional Democrats careened between the circular firing squad and the three-ring circus Tuesday as they struggled with their new reality: playing defense on the economy.

    Sen. Robert Menendez (D-N.J.) blamed Treasury Secretary Timothy Geithner for letting bailed-out insurance giant American International Group pay $165 million in bonuses to its employees, saying he wrote a letter to Geithner two weeks ago warning him of just such a possibility.

    Sen. Chris Dodd (D-Conn.), tagged by Republican aides for sponsoring an amendment to the stimulus bill that allowed the bonuses, shifted the blame to the Treasury Department and “the bill conferees,” saying he had no idea that the AIG bonuses were coming.

  13. Faux outrage and everyone happy as a clam to use the Tax Code to rectify the 'problem'.

    WASHINGTON -(Dow Jones)- The top Democrat and Republican on the Senate Finance Committee Tuesday proposed to tax the bonuses of executives at firms receiving federal aid, as outrage over $165 million in bonuses paid by struggling insurance giant American International Group Inc. (AIG) reached a boiling point.

    The legislation from Sens. Max Baucus, D-Mont., and Charles Grassley, R-Iowa, would levy a 35% excise tax on the employee receiving the bonus, and a 35% excise tax on the firm that paid it. The provision applies to bonuses earned or paid after Jan. 1, 2009.

    While lawmakers' anger this week has focused on payments by AIG, the Finance Committee legislation would cast a much broader net. The excise taxes would apply at any company that received aid from the Treasury's Troubled Asset Relief Program, or in which the federal government has an equity stake.

    At a Tuesday press conference, the senators said they haven't yet been advised as to whether and when their bill will be brought before the full Senate for a vote. Senate Majority Leader Harry Reid, D-Nev., said Tuesday the Senate will pass legislation in the next few days to tax excessive bonuses.

  14. Concrete edifice?

    In regards to what, doug?

  15. Some Dems want brake in Obama plans

    Obama’s Big Bang Theory of Governance faces its first big test.

    As Obama’s remarks echoed on Capitol Hill, it soon became clear that the skeptics are not just Republicans.

    There is rising doubt among Democrats — particularly moderates already concerned about the big costs and deficits called for in Obama’s budget — that either Obama or Washington have enough bandwidth this year to stimulate the economy, overhaul the failed financial sector and move on to a far-reaching domestic agenda.

    “From the standpoint of the Congress, there’s only so much that we can absorb and do at one time,” Sen. Daniel Inouye (D-Hawaii), the chairman of the Appropriations Committee, told POLITICO Tuesday. “To maintain a schedule like the one we’ve got at this moment, throughout the year, I don’t know if it will be healthy.”

  16. The grandest concrete edifice in the whirled is the retired Yankee Stadium, Edison's best work, right after light bulbs and other things electric.

  17. A guy called the Bennet show and said his firm had paving projects set for this summer.
    Now they've been put on hold to wait and see where the easy money from Uncle Sam is available.

  18. Edison's low point:
    Electrocuting an Elephant!

  19. All retention bonus amounts paid by TARP firms or firms in which the government has a stake, including Fannie Mae (FNM) and Freddie Mac (FRE), would be taxed by the proposal.

    For other types of bonuses, including performance-based pay or year-end bonuses, the tax would apply to amounts above $50,000.

    Senators said they believe the approach will stand up in the courts, where the tax would almost certainly be tested. That includes potential challenges that the tax violates constitutional protections for contracts, and due process provisions.

    "We think this passes muster," said Baucus. "We have run it past experts in the field."

    Committee aides added that there are plenty of precedents in which lawmakers have enacted retroactive tax changes.

    The aides said it hasn't yet been determined whether the 35% excise tax on employees will apply on top of income taxes, or whether the excise tax would take the place of income taxes. But they said in no case would all the taxes total more than 100% of the bonus amount.

  20. (glad I didn't know that as a lad when Edison was my hero.)

  21. Baucus leaves out that foreigners that got bonuses aren't subject to US Tax Law.

  22. I do not recall being a major fan of that project, doug.

  23. You used to write about it sitting there empty.
    An edifice to waste.

  24. Well, back when the US forgot to send civilian experts to fill those empty slots, using the military in their stead. Has to do more with the personnel failures than the building, itself.

    That was when it became clear that the US was going to fail, in Iraq. Not willing to make an effort commensurate to the challenge of the mission we embarked upon.

  25. A bill of attainder (also known as an act or writ of attainder) is an act of legislature declaring a person or group of persons guilty of some crime and punishing them without benefit of a trial.

    Bills of attainder are forbidden by Article I, section 9, clause 3 of the United States Constitution.

  26. Barclays is about to unravel and with it Britain.

  27. The building just exemplifying US failure, doug.

    We tried for
    Big & Bold
    Hollow & Empty
    is what we got.

  28. 1903: Thomas Edison stages his highly publicized electrocution of an elephant in order to demonstrate the dangers of alternating current, which, if it posed any immediate danger at all, was to Edison's own direct current.

    Edison had established direct current at the standard for electricity distribution and was living large off the patent royalties, royalties he was in no mood to lose when George Westinghouse and Nicola Tesla showed up with alternating current.

    Edison's aggressive campaign to discredit the new current took the macabre form of a series of animal electrocutions using AC (a killing process he referred to snidely as getting "Westinghoused"). Stray dogs and cats were the most easily obtained, but he also zapped a few cattle and horses.

    Edison got his big chance, though, when the Luna Park Zoo at Coney Island decided that Topsy, a cranky female elephant who had squashed three handlers in three years (including one idiot who tried feeding her a lighted cigarette), had to go.

    Park officials originally considered hanging Topsy but the SPCA objected on humanitarian grounds, so someone suggesting having the pachyderm "ride the lightning," a practice that had been used in the American penal system since 1890 to dispatch the condemned. Edison was happy to oblige.

  29. Not many had their own videos in them days.
    A Real Pioneer.

  30. So Deuce,
    How do we balance the scales @ the Bar?

    This cannot stand unresponded to.

  31. Should hook a team of Elephants up to the Edison Museum and pull it down.

  32. DC should do the job too, without that damned alternating jolt!
    Edison opposed capital punishment, but his desire to disparage the system of alternating current led to the invention of the electric chair. Harold P. Brown, who was at this time being secretly paid by Edison, constructed the first electric chair for the state of New York in order to promote the idea that alternating current was deadlier than DC.[14]

    When the chair was first used, on August 6, 1890, the technicians on hand misjudged the voltage needed to kill the condemned prisoner, William Kemmler.

    The first jolt of electricity was not enough to kill Kemmler, and only left him badly injured.

    The procedure had to be repeated and a reporter on hand described it as "an awful spectacle, far worse than hanging." George Westinghouse commented:

    "They would have done better using an axe."

  33. By Sarah Jones

    March 18 (Bloomberg) -- U.K. stocks rose, led by financial companies as investors speculated central banks will increase efforts to buoy the economy.

    Royal Bank of Scotland Group Plc and Barclays Plc rose more than 2 percent on optimism the Federal Reserve will outline plans to boost growth. Xstrata Plc rallied as shareholders took up almost 100 percent of the company’s rights offer, raising 4.1 billion pounds ($5.8 billion).

    The FTSE 100 Index added 36.10, or 0.9 percent, to 3,893.20 at 8:36 a.m. in London. The FTSE All-Share Index gained 0.9 percent, while Ireland’s ISEQ Index added 0.6 percent.

    U.S. stocks advanced yesterday amid speculation Fed policy makers will consider increasing the pace and size of a $600 billion program to purchase mortgage securities and other assets.

    Royal Bank of Scotland climbed 3.2 percent to 22.9 pence. Chairman Philip Hampton said the bank’s corporate banking has been “buoyant” since the start of the year, the Financial Times reported, citing an interview.

    Barclays rallied 2.7 percent to 93.8 pence.

  34. Reuters - ‎Mar 16, 2009‎
    By Rodrigo Campos NEW YORK, March 16 (Reuters) - The Dow industrials and the S&P 500 climbed on Monday as Barclays said it had a strong start for 2009, ...

  35. UPDATE: Barclays May Sell iShares Unit; Reports Good Start To 2009

    March 16, 2009:

    LONDON (Dow Jones) -- British bank Barclays Plc on Monday said it has held talks about selling its iShares unit, which operates the popular exchange-traded funds, and is also still considering whether to tap a government asset insurance program.

    Britain's third-largest lender said it has held discussions with various interested parties over the potential disposal of its iShares fund-management business, but added that no decision has been made.

    The statement didn't give a valuation for the unit, but it followed press reports that Barclays could raise 4 billion pounds to 5 billion pounds ($5.6 billion to $7 billion) from the sale, helping to significantly boost its capital position.

    A sale price of 4 billion pounds would represent almost two-thirds of the bank's market capitalization following the slump in its stock price over the past two years.

  36. I'll believe that when I see the charts on Mat's intuition, 'Rat!

  37. Chairman Philip Hampton said the bank’s corporate banking has been “buoyant” since the start of the year, the Financial Times reported, citing an interview.

    You don't sell your most prized assets in a distressed market because your operation is buoyant. There's also a big scandal brewing over tax evasion schemes by Barclays. We'll have wait and see how long the public's mood will stand for all this.

  38. The Guardian newspaper, ... described Barclays' structured capital markets operations unit as a "legal tax-dodging operation"

    Barclays says it's not a tax evader
    U.K. newspaper says court ordered removal of documents from Web site

    By Simon Kennedy, MarketWatch
    Last update: 11:59 a.m. EDT March 17, 2009

    LONDON (MarketWatch) -- Barclays on Tuesday said it "does not encourage or condone tax evasion" and complies with U.K. tax laws, following allegations that the bank used elaborately structured deals to avoid paying hundreds of millions of pounds in tax.
    The Guardian newspaper said that Barclays had obtained a court order forcing the newspaper to remove documents from its Web site, which it alleged included details of several different plans used by the bank.
    The documents were leaked by a whistleblower to Vince Cable, deputy leader of the Liberal Democrat party and are being investigated by HM Revenue & Customs, the U.K. tax authority, The Guardian reported.
    Barclays said in an e-mailed statement that it has a fiduciary duty to shareholders to manage its tax affairs efficiently. The bank added that it discloses all its transactions to the U.K. authorities.

    The newspaper, which described Barclays' structured capital markets operations unit as a "legal tax-dodging operation" said its lawyer had argued the Guardian's case to a judge by phone at 2 a.m. It said the court had ruled that the documents were the property of Barclays and could only have been leaked by someone who acquired them wrongfully and in breach of confidentiality agreements.

  39. Kudlow wrote:

    "AIG should have been placed in bankruptcy last fall under some sort of government sponsorship. While in bankruptcy, all the salary contracts (and every other AIG contract) would have been nullified and voided. At the same time, there would have been an orderly liquidation and sale of AIG’s assets and separate divisions."

    Now I tend to lead toward the simply solution of letting the sucker go bankrupt and let the chips fall where they may but I think the reason they didn't is because the chips falling would have created a whole host of dominoes to go tumbling over.

    Take a hypothetical for example - say you've just been in a car accident and you are in the hospital prepped for surgery. Your health insurance is all paid up but it goes bankrupt. Are you now shit outta luck because 'all contracts are voided'? I would imagine there is a fund in the US that would pick up where a failed health insurance company goes bust much like your if your stock broker goes bust your cash in the brokers account is insured (probably by AIG heheh). Anyway, take a look at the bigger picture if AIG were to have all its contracts voided and a slow bankruptcy workout were ordered - loads of 'innocent' counter party's would also fail.

    Back to the Mark to Market vs. Cash Flow accounting. Dontcha think that if these securities threw off cash and accounting for that cash flow were relatively easy then there would be a market for the suckers. The problem, I'm guessing, is they are opaque as hell and the holders really don't know how much cash they are throwing off and for how long they'd keep spitting that cash out. I don't see this cash flow accounting to be the silver bullet to fix the financial crisis. Rather it might help make the balance sheet LOOK better but the problems would still lurk. If they do it we might see a run up in the financial stocks which would give room for the more savvy players to get out with some profit. Long term holders -- ouch!

  40. Barclays says it's not a tax evader

    Yes. And we should take them at their word. After all, why would they lie?

  41. ..We'll have ^to wait and see..

  42. Barclays Bank gags Guardian over leaked memos detailing offshore tax scam, 16 Mar 2009,_16_Mar_2009

  43. Barney was splitting hairs:

    Conspicuously absent from Frank's list of targets: a legislator who received contributions from Fannie and Freddie executives, whose lover was a senior executive at Fannie, and who resisted attempts to reign them in from the reckless policies.

  44. "C’mon, he writes housing and banking laws and his boyfriend is a top exec at a firm that stands to gain from those laws?"
    the aide told FOX News.

    "No media ever takes note?
    Imagine what would happen if Frank’s political affiliation was R instead of D?
    Imagine what the media would say if [GOP former] Chairman [Mike] Oxley’s wife or
    [GOP presidential nominee John] McCain’s wife was a top exec at Fannie for a decade while they wrote the nation’s housing and banking laws."

    Frank’s office did not immediately respond to requests for comment.

    Frank met Moses in 1987, the same year he became the first openly gay member of Congress.

    "I am the only member of the congressional gay spouse caucus," Moses wrote in the Washington Post in 1991. "On Capitol Hill, Barney always introduces me as his lover."

  45. Rev Al, Constitutionalist!

    The House speaker, Nancy Pelosi, on Tuesday asked three committee chairmen, including Mr. Frank, to come up with legislation to recoup the bonus money, and suggested the House might pass a measure as early as this week.

    But the reaction of another of the chairmen, Representative Charles B. Rangel of the tax-writing Ways and Means Committee, underscored the legal and political complexities facing Democrats as they scramble for a solution.

    Mr. Rangel, a Democrat from New York, objected to one of the most popular ideas being floated — a confiscatory income tax on the recipients.

    The tax code is not “a political weapon,” he told reporters.

  46. There lies the future of a free Republic, doug, with Charlie Rangel.

  47. What did Mike Oxley's wife ever do to you? Stop casting dispersions on people's character, Doug!

  48. How to get back the AIG bonuses
    Washington Times -

    Well, we have a simple solution to help make up the difference and help taxpayers get back some of the employees' supposed "ill-gotten" gains. AIG employees have given large donations to some of the very politicians who are screaming the loudest about the bonuses (see box below). Since these politicians got money from those employees, why don't they offer to turn their donations over to the government? If we are to be angry with these employees, why aren't we just as mad at the politicians who have taken their donations?

    Two of the politicians screaming the loudest to tax the bonuses are Dodd and Schumer.
    The two have gotten more money from AIG employees over their careers than anyone now in Washington.

    Sen. Chuck Grassley, who, inspired by Japanese hari-kari, is calling for AIG employees to repent or commit suicide, is among the top 12 senators who have gotten money from AIG employees. Also on the list of top donation recipients from AIG employees is Rep. Carolyn Maloney, New York Democrat, who has also been calling for a 100 percent tax on bonuses.

  49. "The predator control effort has run into opposition from the National Park Service, which manages the nearby Yukon-Charley Rivers National Preserve, where biologists have been radio-collaring wolves in a long-running study of how predators and prey interact in the 2.5-million-acre wilderness near the Canadian border"
    Should have a TV in their bedrooms showing wolves taking down Caribou 24 hours a day.
    Study that, fuckers!

  50. Even Maureen Dowd is piling on ...

    As Andrew Cuomo pointed out on Tuesday, 11 of the A.I.G. executives who received retention bonuses of $1 million or more — including one who received $4.6 million — were not even retained. They’re no longer working at A.I.G. Bonuses were paid to 52 people who have left the company.

  51. The president needs to brush back the arrogant, greedy creeps who kneecapped capitalism, rather than cosseting Wall Street for fear of looking like an avatar of socialism.

    Geithner, who comes from the cozy Wall Street club, and Liddy believe it’s best to stabilize the company and keep on board the same people who invented the risky financial tactics so they can unwind their own rotten spool.

    Isn’t that like giving bonuses to the arsonists who started a fire because they alone know what kind of accelerants they used to start it?

    “Their mythology starts with the false premise that these are irreplaceable geniuses,” says Cuomo.

    Boiling mad that A.I.G. made more than 73 millionaires in the unit that felled the firm, Cuomo called the company’s counsel on Monday to demand that she stop payment on the checks. Cuomo was informed that the money had already been direct-deposited in the accounts of the derivative scoundrels with the push of a button.

  52. “Their mythology starts with the false premise that these are irreplaceable geniuses”

  53. Robert Fisk: Why Avigdor Lieberman is the worst thing that could happen to the Middle East

    World Focus: I can identify Lieberman's language with the language of Messrs Mladic and Karadzic and Milosevic

  54. Discharge Incapable Commanders

    Steve Forbes

    President Obama should take a cue from his hero, Abraham Lincoln. During the Civil War Lincoln never hesitated to fire generals he thought weren't up to the task. Obama should do the same thing with his economic commanders. Clearly Treasury Chief Timothy Geithner has been about as effective in fighting the credit crisis as George McClellan or Joe Hooker were in fighting Robert E. Lee's Army of Northern Virginia. Geithner has been in the midst of this crisis since it erupted in the summer of 2007. You would think he'd have been ready for decisive, bold action as soon as Obama took the oath of office. Instead, he has discouraged markets with his vague generalities.

    Why hasn't he persuaded the President to do away with the debilitating accounting principle of mark-to-market? Roosevelt suspended it in 1938, but it came back under the auspices of the Bush Administration. With that political pedigree, getting rid of it should be a no-brainer. More substantively, mark-to-market has been demolishing financial balance sheets with book losses. Banks have more cash than ever before, but their regulatory capital (the amount of capital required by regulators for industries like banks and life insurance) is continually being eviscerated by lawsuit-fearful auditors and stupidly aggressive bank regulators. As Brian Wesbury and Robert Stein said on, "The accounting rules force banks to take artificial hits to capital without reference to the actual performance of loans."

    Another figure who should suffer a Lincoln-like termination is Federal Reserve Chairman Ben Bernanke. This seemingly quiet, unassuming man has made just about every mistake possible in both creating and dealing with the crisis. His latest blunder is astonishing: Contrary to impression, the Fed has been tightening, shrinking its balance sheet by nearly $400 billion since December. In the face of the most severe banking/insurance crisis since the 1930s, the squeeze absolutely defies belief. This would be like a fire department deciding to roll up some of its hoses when a big house is a flaming inferno. Bernanke says he fears future inflation, but that's like those firefighters being afraid to cause water damage to the furniture. Right now we're in a bone-crunching deflation. Bernanke's actions recall those of the Fed during the early years of the Depression, when our central bank wouldn't ease in the face of a catastrophic contraction for fear of igniting a German-style inflation.

  55. "The accounting rules force banks to take artificial hits to capital without reference to the actual performance of loans."

    If the loans were performing and that could be demonstrated then there would be a market for the suckers. There doesn't appear to be a market for them because no one can seem to specify which are performing and how well. Now, I agree that it is possible that they are spinning off cash, that how much they are spinning off is demonstrable yet no one wants to buy them anyway. Clearly, under that scenario they have some value and trick appears to be to come up with a reasonable method of valuation short of them being worth what the banks declare them to be worth. If they do manage to modify the accounting rules to take into account a discounted forward cash flow valuation you will get some improvement to the bank's balance sheets but not much I would guess.

  56. How about valuing US T bills for example. Say you buy a $100,00.00 30 year T bill with a yield of 3.25%. Right now the market is pretty liquid for these things and you could sell it for face value but say next year the market freezes up for these beasts (who the heck wants to tie up their money for 30 years at 3.25%??) So, what is the sucker worth if no one wants to buy it? In 30 years you will get the face value of it but it isn't worth much if you need to buy a house now, or pay your health insurance bill. Say I want to borrow money from you and use this asset as collateral - how much will you loan me?

  57. hehehehe---Teleprompter Prez & Irish PM get it cocked-up--

    Obama In St Patrick's Day Teleprompt Blunder

    12:26pm UK, Wednesday March 18, 2009

    A teleprompt blunder has led to Barack Obama thanking himself in a speech at the White House in a St Patrick's Day celebration.

    Irish Prime Minister Brian Cowen was just a few paragraphs into an address in Washington when he realised it all sounded a bit too familiar.

    It was. He was repeating the speech President Barack Obama had just read from the same teleprompter.

    Mr Cowen stopped, turned to the president and said: "That's your speech."

    A laughing Mr Obama returned to the podium to take over but it seems the script had finally been switched and the US president ended up thanking himself for inviting everyone to the party.

    Mr Obama is an accomplished orator but is becoming known in America as the "teleprompt president" over his reliance on the machine when he gives a speech.

    Mr Obama is an accomplished orator

    Yup, if you say so.

    Shooting wolves in Alaska. We ought to shoot them from the air here too, saves time and trouble. If they have a drawing for a wolf hunt here this fall, I'm putting in for it. I won an antelope permit once.

  58. A radio collared wolf is sending out a signal. Wonder where and if one can get a receiver that picks up that signal, and gives a location read.

  59. A Spectre Is Glimpsed Haunting The West Wing

    We need a Killer Rabbit Attack, al-Bob.

    (jeez, duh, sorry, my mistake, was reading from al-Doug's teleprompter there)

  60. 52. veracious:

    Doug, I’m really starting to like you. In the past you sort of wandered. Be brave, the truth shall set us free!

    54. Doug:

    Figured @ 60 it might be time to grow up.
    esp when they’re giving our children’s future away.
    As well as spitting on the legacy of our founders.

  61. Rasmussen Reports--

    Generic Congressional Ballot
    Republicans Take Small Lead on Generic Congressional Ballot

    Tuesday, March 17, 2009

    Support for the Democratic Congressional candidates fell to a new low over the past week, allowing the GOP to move slightly head for the first time in recent years in the Generic Congressional Ballot.

    The latest Rasmussen Reports national telephone survey found that 41% said they would vote for their district’s Republican candidate while 39% would choose the Democrat.

    Investors now favor Republicans by a 46% to 36% margin, while non-investors would vote Democratic by a 45% to 33% margin.

    Democrats began the year holding a six or seven point lead over the GOP for the first several weeks of 2009. Over the past month, the gap has been smaller, with Democrats holding a two-to-four point lead. It remains to be seen whether the current results reflect lasting change or statistical noise.

  62. Business Is Booming At Fannie

    Lisa LaMotta, 03.18.09, 02:20 PM EDT

    Mortgage applications surge as the company reports a significant jump in February volume.

    Americans are jumping on the home refinancing bandwagon as they try to take advantage of Washington's ability to push down interest rates.

    The Mortgage Bankers Association said Wednesday that last week, mortgage applications surged as the borrowing rate on 30-year fixed-rate home loans fell 0.7 percentage point, to 4.89%. The market index, which includes purchase and refinance loans, jumped 21.2%, to 876.9, the highest since mid-January. The spike in applications was due to an increase in refinancing, which jumped 29.6%, to 4,497.6, while purchase applications only rose 1.5%, to 257.1.

  63. Seems like a good time to buy a home, if you're young and have a decent job. Prices down, low interest rates. What's not to like?

  64. The spike in applications was due to an increase in refinancing, which jumped 29.6%, to 4,497.6, while purchase applications only rose 1.5%, to 257.1



    March 17, 2009

    He may not be paying much attention to the stock market, where $11 trillion of pensions, investments and 401(k)s have been destroyed, but you can be sure that President Obama is paying attention to the polls showing diminishing support for his policies.

    Of course, in presidential polling, all numbers are not equally important. Obama got 52 percent of the national vote. So when his approval drops, as it has, from 65 percent on Inauguration Day to 56 percent now (according to Rasmussen), he is playing with house money. Most of those who are coming to negative conclusions about his administration didn't vote for him in the first place.

    But there are ominous signs in the data.

    So far, Obama's administration has been characterized by two main programs: the stimulus spending and bank bailouts. But the polls indicate problems with each pillar of his package.

    The public generally approves of his stimulus proposals. CNN found that voters approved of his economic program in general by 59-40, while Pew Research discovered that they backed his stimulus program specifically by 56-35.

    But the problem is that voters don't think the stimulus package will work. CNN's poll, while showing broad approval of his programs, also found that voters did not believe his economic proposals would work, by 22-64. In fact, the CBS survey data indicates that 48 percent feel that the "economy would improve without government intervention," while only 41 percent agreed that intervention was "necessary."

    If voters approve of the stimulus program, even while they are pessimistic about its impact and question its necessity, they are downright hostile to the bank bailouts. CBS found that they disapproved of the bailouts by 37-53 and noted that "48 percent are mostly resentful toward Obama's policies toward banks and financial institutions." While Pew found 48-40 approval of the bailouts, it also noted that 87 percent are "bothered by the bank bailout."

    So Obama has one program that is popular but won't work and another that is downright unpopular.

    And his presidency is dependent on how they work out.

    Clinton could sustain his presidency with small-bore initiatives. But Obama can't. Stem cell research is well and good, but it's not the central concern of the nation at the moment.

    Some news organizations like to compare how Obama is doing with how other presidents fared. Specifically, at this point in their presidencies, George W. Bush was at 58 percent approval while Clinton stood at 53 percent. By that measurement, Obama's 56 percent would seem in the normal range.

    But Clinton won with only 42 percent of the vote in 1992, and Bush got 49 percent. Obama, of course, won 52 percent of the vote. So here's how the vote-to-popularity ratio stacks up:

    • Clinton: Vote 42%; Job Approval 53%; Difference +11%

    • W. Bush: Vote 49%; Job Approval 58%; Difference + 9%

    • Obama: Vote 52%; Job Approval 56%; Difference + 4%

    ...not very good.

    And let's remember that Clinton lost control of Congress in 1994 while Bush's presidency -- heading downward -- was saved by his excellent response to Sept. 11.

    But presidential popularity is not going to be the key determinant of Obama's political success or failure. The unemployment rate is going to fill the role of political harbinger. And that front is unlikely to be favorable. Despite the current reports of a false dawn -- based on ratings that, while still dropping, have slowed somewhat in their descent -- we are in for a long, hard haul in trying to turn this economy around. And Obama's vigorous pronouncements that he plans to raise taxes in two years are not going to help induce the economy's most prodigious spenders -- the wealthy -- to step up to the checkout counter.

    Obama's fate is deeply linked to the economy. These days, that's like being tied to an anchor.

  66. House To Vote Tomorrow On Bonus Tax

    Democrats will introduce a bill on the House floor tomorrow morning that would apply a 90 percent income tax to bonuses given to employees of companies that have received at least $5 billion in TARP money.

    "We passed a recovery act. We did not pass a license to steal," said Rep. Steve Israel (D-N.Y.), one of the architects of the bill. "If you won't give the bonuses back. We will tax them back."

    House Majority Leader Steny Hoyer, who sets the House floor agenda, said at an afternoon press conference that the bill would be voted on tomorrow and that he expects it to pass "in an overwhelmingly bipartisan fashion."

  67. If the AIG people are shamed or cajoled into returning the bonuses, that's one thing. But using tax laws to get the money back is unthinkable. Any kind of coercion by the Feds is unacceptable. This is America, dammit, not some banana republic where the tinhorn du jour can run roughshod over whoever he wishes to.

    It is scary that so many people from opposite ends of the political spectrum agree on grabbing back the bonuses. The country is going to hell in a rocket ship.

  68. I shouldn't be surprised though. Lately, we've seen some pretty laws written as well as bad decisions from the Courts.

  69. ...pretty bad laws...

  70. Ash, they managed to value things before mark to market, right?

  71. Maybe Shaming would be more destructive in the end, Whit, setting off everyone on a guilt trip thy brother quest.

    With taxes, at least there's a chance some IRS agents will get shot.


    Orofino AP-

    There are those who consider carbon trading a "snake oil" business, said one of the speakers at a seminar here Tuesday.

    Even so, said Dick Wittman, a Lapwai-area farmer and a member of the Idaho Governor's Advisory Committe on Carbon Sequestration and Trading, there's money to be made for those savvy enough to get involved with the business as government policy and regulations are developed.

    "Two years ago we thought this was an abstract concept," Wittman told a group of about 100 farmers, tree farmers and others gathered at the Best Western hotel at the edge of Orofino. "Now we're finding out it's real and it's measurable. There will be winners and losers, so we're trying to figure out how to win before somebody else decides our future."

    The seminar featured state, federal and regional speakers giving participants a look at everything from a defintion of carbon sequestration and trading to ways landowners can use it to put extra money in their pockets.

    Kelli Rosellini, manager of the Clearwater Soil and Water Conservation District, explained under the United Nations framework convention on climate change, the world wide goal is to stabilize greenhouse gases in the atmosphere and inventory national emissions.

    Manufacturing companies that pollute the atmosphere can buy carbon credits from non-polluting industries, such as farming and raising trees, to offset their emissions. Selling carbon credits is one way for farmers to make money on environmental practices they already use, such as no-till cultivation and setting aside land in the Conservation Reserve Program.

    Wittman pointed out farmers in the Pacific Northwest Seed Association have already made that work when, in 2002, they were the first farming organization in the country to market their carbon credits to a Louisiana company.

    The deal was not a huge money maker, Wittman said, but it was a start.

    "Our philosophy was not to make money first, it was to educate first," Wittman said. The idea was to position farmers to benefit from the growing carbon trading movement.

    "There are many people who don't want climate change legislation to happen because they figure it will cost them money," Wittman said. "We have a good story. You are the grassroots. Your voices need to be heard."

  73. Considered one of the most respected actresses of her generation, Vanessa is also known for her political activism, having campaigned against the Vietnam war, for nuclear disarmament and for the Palestinian cause.
    At 72, she remains a committed Marxist, and in 2007 it emerged that she had paid ??40,000 bail for former Guantanamo Bay detainee Jamil el-Banna.

    Vanessa recalled how Natasha used to beg her to stay at home and spend more time with her.
    'I tried to explain that our political struggle was for her future, and that of all the children of her generation.

    "But I need you now," said Natasha, "I won't need you so much then".'

    At this stage, her mother was also drinking heavily. She said in her autobiography that she would open a bottle of cheap wine every morning 'to get the fuzzy obliteration of alcohol'. Natasha was a chubby and insecure child, much perturbed by the constant comings and goings of lodgers and revolutionaries.
    She spent a great deal of time planning and organising, presumably as a reaction to the boundary-free chaos of her home life in Hammersmith, West London.

    In one interview she said she felt like a middle-aged mother instead of a teenager, cooking for the whole family aged 12.

  74. Finally, it seems like the luck o' the Irish wasn't quite with the White House's teleprompter operator at Tuesday evening's Saint Patrick's Day celebration. As we have reported, President Obama uses a teleprompter on most speeches and even at town hall events.

    There were no cameras allowed at last night's gathering, but a print reporter says Irish Prime Minister Brian Cowen was a few paragraphs into his remarks when he realized he was repeating the exact speech President Obama had just delivered. Cowen stopped and turned to the president saying, "That's your speech."

    Mr. Obama laughed and returned to the podium to offer what might have been Cowen's remarks. In doing so, President Obama jokingly thanked President Obama for inviting everyone over.

    Blarney Blooper

  75. I'll have to tell the wife I gave her a 24 hour orgasm.

    Yes! Yes!! Yes!!!

    A new documentary called Orgasmic Birth aims to 'educate' women that far from going through the normal agonies of labour, we should be getting sexual enjoyment out of it.

  76. The head of AIG said on Wednesday the "cold realities of competition" compelled the insurer to pay $165 million in bonuses, but angry lawmakers insisted the money belonged to taxpayers and vowed to get it back.


    Channeling that populist sentiment, several Democrats and Republicans in Congress sought to force AIG to disclose details about the bonuses, and proposed taxing them so heavily that the recipients could wind up with nothing.


    AIG has argued the payouts were necessary to retain top employees with the specialized knowledge to dispose of $2.7 trillion in complex securities that ended up dragging the company to the brink of collapse last year.

    Defending Bonuses

  77. Eggplant...
    Don't Worry, Be Happy

    'The Cassandra effect'
    The Cassandra effect is when one believes they know the future happening of a catastrophic event, having already seen it in some way, or even experienced it first hand.

    However the person knows there is nothing that can be done to stop the event from happening, and that nobody will believe them if they try to tell others.

    For example, in finance, the more you warn your colleagues about the tail risks—the rare but devastating events that can bring the bank down—the more they roll their eyes, give a yawn and change the subject. This eventually leads to self-censorship.

  78. Noam Shalit spoke at a press conference called Wednesday by him and Hezi Meshita, the head of the group working toward Shalit's release.

    "We came here 10 days ago to be a reminder that this window is closing and to bring the matter to a public test. We hoped that Prime Minister Ehud Olmert would take advantage of his last days in office to bring Gilad home.

    Unfortunately, we were wrong," Shalit said. "It was on Olmert's watch that Gilad was captured, and it is his responsibility to bring him home.

    Hamas Threatens

  79. Accelerating Future » Charles Stross’ Singularity-Clueless, “New Scientist”, Yawn-tastic 21st Century Future

    I usually don’t read Charles Stross’ blog, but I saw a post linked from Brian Wang’s blog, which I read all the time, so I checked it out.
    It’s Stross’ “21st century FAQ”, where he says the 21st century will be “pretty much what you read about in New Scientist every week”, something I would just laugh at and ignore if it weren’t the case that so many transhumanists read Stross’ books.
    It’s important to criticize this statement because the way we handle the 21st century will be based on how we anticipate it, and if we expect it to be more of the same, we’ll be blindsided by the civilization-transforming changes to come.

  80. A team of paleontologists gave advice on how the dinosaurs would have moved, and even how they would have roared.

    Dinosaurs featured include the stegosaurus, with its distinctive double row of plates along its arched back; the giant, flying ornithocherius, which soars above the stadium,'its wings almost as wide as the stage; and the fierce, evil-looking utahraptor, with its long, sharp claws.

    The show has already gone down a storm in Australia and the US. Newsweek magazine proclaimed it as 'that rare entertainment beast that parents and kids can enjoy together'.

    Walking with Dinosaurs

  81. Going into Moscow, east of town, Sam.

    Dodd Changes His Tune

    What a guy.

  82. "I agreed reluctantly," ... "I was changing the amendment because others were insistent"

    - Chris Dodd

  83. Seems like a good time to buy a home, if you're young and have a decent job. Prices down, low interest rates. What's not to like?

    What's not to like? Prices going down, and interest rate going up.

    Anyone falling for these teaser rates is going to get hit very hard. The gov will soon start monetizing its debt, and the baby-boomers will soon start selling their homes to supplement their nonexistent pensions.

  84. Bury them all in a red grave, al-Doug.


    Cute little critter, that Hesperonychus elizabethae.

  85. What's up with all those hand motions? Looks like Hitler.

  86. Blogger Doug said...

    "Ash, they managed to value things before mark to market, right?"

    Short answer: WELL HOW THE HELL DO YOU THINK WE GOT TO THIS PLACE IN THE FIRST PLACE???? Bad valuations persisting on a bogus balance sheet!

  87. al-Bob:
    Man, that clears up everything!

    Somebody told him to put it in, he does not remember who.

  88. Losers included Oji Paper and other paper mills as well as telecommunications carriers such as NTT, NTT DoCoMo and KDDI.

    Game maker Nintendo slumped due to worries about a possible business turndown.

    In index futures trading, the key June contract on the Nikkei average closed up 30 points at 7,920 on the Osaka Securities Exchange.

    Housing News

  89. You have no faith in Mankind, Ash!


    Obama urges immigration reform 3:40
    President Obama explains how he would like to reform immigration and deal with undocumented workers

    Sounds just like Dodd

  91. Obama and Dodd
    Two peas in a pod
    Isn't it odd
    How they think they're God

  92. Where is Obama's used car lot?
    I need a car.

  93. Obama on a Credit Card Bill of Rights

    "If toaster blows up in your face...

    There is a consumer safety law to protect you...

  94. But these two scenarios of unwelcome entry are not quite the same. Those city leaders and judges and cops who use the Manitou Incline thumb their noses at the state's criminal code.

    They willfully commit a crime. Those who enter this country without permission do no such thing.

    They merely violate the federal civil code, committing an act known as "entry without inspection," and it's nothing nearly as serious as criminal trespass. The so-called "illegal immigrant" is to the criminal trespasser on Manitou Incline what a jaywalker is to an impaired driver.

    Trespass Reform

  95. Obama:
    I’ll take responsibility 3:11

    President Obama says that while he didn’t draft the AIG contracts, he’ll take the responsibility for fixing it.


  97. Obama Fs Up Missile Defense

    Rookie mistake, or something more sinister?

    Russians laugh and promise military buildup.

  98. 'The markets have to behave' 4:26
    AIG CEO Edward Liddy says the plan to pay back the government hinges on the markets rebounding

  99. The Obama administration has proposed using the majority of the money generated from a cap-and-trade plan to pay for its middle-class tax cuts, while using about $120 billion to invest in renewable-energy projects.

    Which shows what they really think go this climate change stuff.

    Cap 'n Trade 'n Fackaroo

  100. Freshman urges accountability 3:34
    Freshman Rep. Jason Chaffetz (R-UT) urges congressional leaders to make congress more transparent.
    He's carrying a video camera for his contributions to CNN!

  101. Clean, Green, Jet-Set Machines

    Pelosi has been going to museums in Florence, receptions at night and was even presented the birth certificates of her grandparents by the head of the Italian Chamber of Deputies.

    The government-owned Boeing executive jet doesn't fly cheap; about $10,000 an hour, according to Air Force. 20 hours flying between Washington and Italy adds up to about $200,000.

    For weeks now, Congress has chastised banks and bailout recipients for unnecessary trips and conferences.

    And CNN caught this group of House members on their way to India last Friday to mark the 50th anniversary of Rev. Martin Luther King, Jr. journey to meet Ghandi.
    The details:
    six Democratic members of Congress, Martin Luther King III, Andrew Young, musician Herbie Hancock and others.

    Both the U.S. State Department and Congress are picking up the bill.

    Martin Luther King III who along with his sibling sold his father's papers for $32 million two years ago, was among the guests of the state department.

    He called it the trip of a lifetime.

  102. Calls For Geithner To Resign Gain Force

    Anyone who hopes Obama falls totally flat on his face might hope the guy retains his position.

  103. Herbie Hancock got to go?


  104. "As long as we see the impacts of it and where it's going, we have the ability to prepare the system," Kjaer says.

    He's convinced he's seen the future. It's electric.

    California Utility Prepares For Plug-In Electric Cars

    Have to burn more coal to fire up those clean green electric machines. Put more radioactivity in the air, save the planet.

  105. Limbaugh is terrifying.
    Sounds like 'Rat:
    Says BHO is benefitting from all this.
    All the hatred going toward corporations.
    Meanwhile, he marches on.