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Wednesday, April 1, 2009

Oh, Those Crafty Congressmen!

U.S. lawmakers to grill AIG's Greenberg, Liddy

So, when are they going to build a panel of experts who can handle a blue-ribbon investigation, like Reagan's 1987 group, or something?

I mean, seriously, we're not going to find out what went on at AIG, until someone skilled talks to (a) the people who traded the various books and (b) anyone in risk management who was given enough information to kinda know what was going on.

Talking to the CEO's is NOT going to provide data, let alone information, right?

And, since I've been looking at formulas (and 'the story' is in the air), I'd like to hear from the guys who have profited so handsomely from the selling of risk, the Chairman and his key lieutenants at RiskMetrics. Afterall Ethan Berman is a $100 million dollar man, at least ... and Steve Thieke was on the FSA board, according to SEC disclosures.

At least, it seems more logical than asking Liddy questions. Arthur Levitt is on the RiskMetrics board - did you know that (I didn't)?

[click pic to embiggen]
AND

Beneficial Owner Number Market Value
04/23/2008 of Shares (@ $14/shr)

Entities w/General Atlantic LLC (1)
13,333,332 $186,666,648
Entities w/ Spectrum Equity 10,833,332 $151,666,648
Investors IV, L.P. (2)

Entities affiliated with TCV V, L.P. (3) 6,424,802 $89,947,228
Ethan Berman (4) 7,547,375 $105,663,250
Lovida Coleman 3,000 $42,000
Philip Duff (5) 91,668 $1,283,352
Rene Kern (1) 13,333,332 $186,666,648
Arthur Levitt (6) 131,072 $1,835,008
Christopher Mitchell (2) 10,833,332 $151,666,648
Frank Noonan 15,500 $217,000
Stephen Thieke (7) 22,334 $312,676
Robert Trudeau

David Obstler (8) 368,751 $5,162,514
Jorge Mina (9) 194,723 $2,726,122
Gregg Berman (10) 325,814 $4,561,396

The Seduction of Hope

(The ears of the President. pic: Kevin Coombs)

HAS TEAM OBAMA ALREADY SEALED THEIR FATE?

We like to think that we have second chances. Afterall, President George Bush astoundingly got one, at the polls, after no weapons of mass destruction were found. Of course, his Presidency became a double-speak nightmare, perhaps even worse than at the outset ...

67 days or so into the Obama Presidency, they have been forced to make choices of such large scale that their own fate may well have been sealed. Any willingness of the electorate to let this President (and his party) rise above his own policies is still undetermined for quite some time to come, most likely.

A COLLECTIVE ACTION PROBLEM, OR "THE REVENGE OF MICRO"?

We might be in a situation in which it is rational for the banks (and for individual legislators?) to fight macro-medicine, like a serious-going 'nationalization' of likely-to-be-insolvent banks.

It might be that the legal hurdles to nationalization are ... beyond reach, either in finite time or in principle (that would certainly explain why Helicopter Ben has only admonitions so far, not a comprehensive proposal).

It could be that the policy course was set, fixed among the ruling elite, wittingly or no, when Paulson & Co. rammed through a non-nationalization plan last fall.

It may also be that policy makers have been seduced into an (Asian-style) policy of hope, hoping that asset values are not as bad as we think, hoping that asset prices or business prospects can be resuscitated without market clearing, hoping that banks will 'earn-out' of their problems in time for recovery to 'take hold'.

If the latter is true, America is most certainly, as Paul Krugman says, Japan. Be afraid.

[Once you think in those terms, you start to see confirming evidence of it - not the best kind of evidence, but still chilling: I just read someone fairly serious suggest that the U.S. raise interest rates ...].

WHEN 'SAVING FACE' IS NOT A POLICY

If Krugman-sensei is right - and I have no way to judge whether the problem is concentrated or as large as his argument presupposes (not wholly, but in important respects), then there is only one message for David Axlerod (and Senator Schumer?): Bad news does not get better with time.

Monday, March 30, 2009

Another Flawless Microsoft Launch

Since I'm in Microsoft Hell, once again today, with p-dog's computer, there is this:

IE8 was released last Thursday and by Sunday, it had managed to garner a 2.59 percent market share that has since then fell steadily to reach 1.86 percent by Monday. Most dedicated IE users seem to have downgraded to the now reliable and stable IE7. -Techtree


Apparently, there is a known exploit, that is frustrated with VISTA, but not XP ... (Computer World).

How many hours of your life have you 'donated' to Microsoft?

Friday, March 27, 2009

Second Laugh of the Day

Following a wise, staunchly followed, and very useful custom, the FDIC have put up the plan for public comment.

What's funny about that?

Send your comments to "angry" at fdic.gov.

[okay, the person's name is 'angray', but still...]

Picture of the Day

Bank Executives assure President Obama that they own more Senators than he does ...


David Mills/ New York Times - Article

Banker Joke of the Day

I was going to take Felix to task for exaggeration in his op-ed, but then he comes up with this cheeky chart:



My favs? Rollover minutes and single-ride metrocards...

The Party Unable to Persuade...

The Dems look like a party that are unable to actually *move* opinion on an issue.

I cannot think of an issue in which the party has actually swayed opinion, as part of an ongoing debate or dialog.

Maybe I'm just annoyed at the way the GOP was able to move opinion on immigration, so easily (low, but easily).

Maybe, I just *feel* like some of the Senators are just too used to playing defense, that they don't seem to be taking up the heavy - very heavy - burdens of leadership.

Maybe, I'm just being too harsh.

More Troops

... arrive in Afghanistan 'too late'. [Although, anyone remember Rumsfeld's "five years" website - you'd think that 'victory' was just around the corner and the Taliban were on their 'last gasp' on his calculus.]

Bush's stop gap for inadequate boots-on-the-ground, the air war, has already cost dearly, very dearly, in the currency of counter-insurgency, public opinion.

The amped-up "drone war" in Pakistan may well do the same.

The creeping scope of the Afghan "war" was not hard to foresee.

The hope to exit anytime soon is belied by the fact that the root-causes of the main problems are all fixed in timeframes that are *generational*.

Small Government Lunatics

The nails in the coffins of "small government" - whatever the heck that ever meant, anyway, except as code for wealth redistribution upwards - look like they might get an able hammering.

Andrew Sullivan thinks that the GOP should come out for the "freedom" from government, by standing up for the 'right' of AIG workers to get paid ludicrous sums of money from a company that stands between us and ... even deeper recession:


It's appalling that 85 Republican congressmen never gave any thought to this consideration in their rush to pander to ignorant fools.

- AS, quoting Bruce Bartlett

Shut down the OTS

Another reason emerges to shut down the OTS (not the OTC).

Thursday, March 26, 2009

GOP Brings the Crazy, Today

A ONE-NOTE BUDGET WITHOUT NUMBERS

On GOP calculus, "Liberals" are supposed to be embarrassed by Pelosi, Reid, et. al.

Today, the GOP caucus brought a budget without numbers.

Got that? A conceptual budget.

This is not unlike the GOP's war plans at the start of the decade:

Saddam is dangerous. Don't bother me with the details.

Is there such a thing as an orderly shutdown

...of a financial institution?

Nouriel Roubini thinks so.

My sense is that, for financial companies, one is either in business or not. Is there a ... halfway?

A special insolvency regime would give the Treasury time to figure out whether the unsecured debt of the institutions should be worked out, and how it should be worked out; it also allows a more orderly workout of CDS and other credit derivatives issued by the financial institution.


Why an institution fails is, perhaps, more important than how.

In some circumstances, a failure, no matter how well managed, will cast contagious doubt wide and far, including associated speculative "attacks".

On the other hand, the FDIC regime for banks is really stunningly efficient, even when it ruffles feathers.

Beefed-up Regulation is in the Air

SWEEPING UP THE WHOLE ROOM

...don't let's forget that one of the immediate problems is also to keep cleaning up where Bush-Paulson were ... too "tired":

The suit grabbed attention because it brought to light worrisome conflicts of interest in the servicing business. Loan servicers act as middlemen between the borrowers paying the loans and the investors who own the mortgages through mortgage securities. They are responsible for monitoring delinquencies and managing billions in monthly payments. With virtually no oversight, this industry has become the new hotbed of opaque mortgage-related dealings.

Wednesday, March 25, 2009

GOP-Inspired Disinformation Channel

With so much technical stuff being talked about, including economics, health care economics, and more, FOX is ramping-up their department of disinformation.

Media Matters notes:

Neil Cavuto and Bret Baier falsely claimed that the Employee Free Choice Act would, in Baier's words, "do away with the secret ballot in votes to unionize."


Meanwhile, it may be time for the man-who-wouldn't-shut-up to get shut down.

That’s why we need O’Reilly’s corporate advertisers to tell him to shut down his “ambush journalism.”

Getting ahead of science

For Andrew Sullivan, in case he misses it, intentionally.

Democrats Didn't Get a Majority Afterall

A group of Senators are living in the past.

In 1993, the three of us, as much younger politicians, stood with great expectations as the last Democratic president was sworn in with big plans, a head of steam and a Democratic Congress ready to begin a new progressive era. In less than two years, it all came crashing down, with disillusioned moderate voters [???] handing the GOP broad congressional victories in 1994.

Two words: transformative politics.

These people don't know its meaning. They want to triangulate, especially on social issues; and they think that is going to bring box-office success.

They will just be re-living their past (but with more perks, this time?), not seizing the day for a new era.

Update from Bayh (via Chris Matthews): (a) health care / Max Bacus, will require 60 votes, if it is sough outside budget "reconciliation"; (b) cap-and-trade will require 60 votes and may fail inside the Democratic caucus, because it 'penalizes' the midwest and doesn't make job-sense outside a global agreement of emissions controls / trading.

Condoleeza's Do-Nothing Mideast Policy

The long tail of the Bush's policy is coming to roost.

The idea that it was 'safe' to go with whatever Israel wants/wanted leaves the new team with ... almost no options.

The far away most likely thing that is going to happen under Netanyahu is war, of one form or another.

In the 90s, during his tenure, there was more building, faster than ever. He is at it again, but this time the religious right are ... "emboldened", by the long history with Bush-Condi and more besides.