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Disastrous, Catastrophic, Murderous, Deceptive, Illegal, & Criminal

Daniel Ellsberg on the course the US Government is currently pursuing in Afghanistan.

Wassup?

I originally posted this here on October 24, 2008….

How And Why Goldman Sachs Defrauded Investors While Homeowners Went Broke

In this first video Greg Gordon of McClatchy News reports that Goldman knew that mortgages were not being properly reviewed



Real News Network – November 1, 2009

GOLDMAN SACHS’ SECRET BETS

McClatchy’s Greg Gordon reports that Goldman knew that mortgages were not being properly reviewed

Here Paul Jay interviews Gordon who explains that a five month McClatchy investigation has found that Goldman’s failure to disclose those secret bets may have violated securities laws – that in 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers that it also was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting.



Real News Network – November 1, 2009

How Goldman secretly bet on the U.S. housing crash

Goldman didn’t tell buyers of $40 billion in securities it was secretly betting the other way

Well, this is good, no?



The Congressional Budget Office has completed their “public option” number crunching…

AP this afternoon via MSNBC, updated 12:15 p.m. PT, Sat., Oct . 31, 2009

WASHINGTON – What’s all the fuss about? After all the noise over Democrats’ push for a government insurance plan to compete with private carriers, coverage numbers are finally in: Two percent.

That’s the estimated share of Americans younger than 65 who’d sign up for the public option plan under the health care bill that Speaker Nancy Pelosi, D-Calif., is steering toward House approval.

The underwhelming statistic is raising questions about whether the government plan will be the iron-fisted competitor that private insurers warn will shut them down or a niche operator that becomes a haven for patients with health insurance horror stories.

[snip]

Congressional Budget Office weighs in

The latest look at the public option comes from the Congressional Budget Office, the nonpartisan economic analysts for lawmakers.

It found that the scaled back government plan in the House bill wouldn’t overtake private health insurance. To the contrary, it might help the insurers a little.

The budget office estimated that about 6 million people would sign up for the public option in 2019, when the House bill is fully phased in. That represents about 2 percent of a total of 282 million Americans under age 65. (Older people are covered through Medicare.)

The overwhelming majority of the population would remain in private health insurance plans sponsored by employers. Others, mainly low-income people, would be covered through an expanded Medicaid program.

[snip]

The concern was that the public option would destabilize the bulk of private insurance, but in fact what Congress has fashioned is very targeted,” said economist Karen Davis, president of the Commonwealth Fund. “It’s not going to be taking away the insurance industry’s core business.”

[snip]

The version that Majority Leader Harry Reid, D-Nev., has offered would let states opt out, probably leaving a smaller plan than the House would want.

Insurers aren’t buying the budget office analysis. Asked if it might soften that opposition, industry spokesman Robert Zirkelbach of America’s Health Insurance Plans responded with a curt “No.”

Now the wintertime is coming,


The windows are filled with frost.

I went to tell everybody,

But I could not get across.

Fat Open Thread

Blueberry Hill

How Tim Geithner Bailed Out Wall Street And Screwed The Taxpayer

The Full Story Of How Tim Geithner Secretly Bailed Out Wall Street And Screwed The Taxpayer Last Fall

Henry Blodget,

Oct. 28, 2009,

The Business Insider

When the historians finally finish sorting through the appalling decisions that have been made in the past two years, this one will probably be at the top of the heap.

Last fall, as AIG began to realize how screwed it was, it started negotiating with the counterparties to all the credit default swaps it had written.  One of the AIG’s goals was to persuade these counterparties–including Goldman Sachs–to accept buyouts discounts of as much as $0.40 cents on the dollar.

These sorts of negotiations are exactly what should happen when a company gets in trouble.  It goes to its creditors and says, look, we can’t pay you everything, so here’s your choice: Take something, or take your chances in banktuptcy court.  (And, in this case, this wouldn’t have been much of a choice, given the standing of CDS holders in the liquidation line).

But then Tim Geithner, head of the New York Fed, stepped in. 

A few weeks later, the counterparties–all of whom voluntarily did business with AIG and understood the risks–were bailed out at par: 100 cents on the dollar. 

Thus began the most nauseating giveaway in the history of the country.

Bloomberg has the whole sickening story:

By Sept. 16, 2008, AIG, once the world’s largest insurer, was running out of cash, and the U.S. government stepped in with a rescue plan. The Federal Reserve Bank of New York, the regional Fed office with special responsibility for Wall Street [run by Tim Geithner], opened an $85 billion credit line for New York-based AIG. That bought it 77.9 percent of AIG and effective control of the insurer.

The government’s commitment to AIG through credit facilities and investments would eventually add up to $182.3 billion.

Beginning late in the week of Nov. 3, the New York Fed, led by President Timothy Geithner, took over negotiations with the banks from AIG, together with the Treasury Department and Chairman Ben S. Bernanke’s Federal Reserve. Geithner’s team circulated a draft term sheet outlining how the New York Fed wanted to deal with the swaps — insurance-like contracts that backed soured collateralized-debt obligations…

Part of a sentence in the document was crossed out. It contained a blank space that was intended to show the amount of the haircut the banks would take, according to people who saw the term sheet. After less than a week of private negotiations with the banks, the New York Fed instructed AIG to pay them par, or 100 cents on the dollar. The content of its deliberations has never been made public…

The New York Fed’s decision to pay the banks in full cost AIG — and thus American taxpayers — at least $13 billion. That’s 40 percent of the $32.5 billion AIG paid to retire the swaps. Under the agreement, the government and its taxpayers became owners of the dubious CDOs, whose face value was $62 billion and for which AIG paid the market price of $29.6 billion. The CDOs were shunted into a Fed-run entity called Maiden Lane III.

Read the whole story (and then marvel about how Tim Geithner is now Treasury Secretary) >

Educational Open Thread

SCHOOL — 1957 vs. 2007

Scenario:

Johnny and Mark get into a fistfight after school.

1957 – Crowd gathers. Mark wins.  Johnny and Mark shake hands and end up buddies.

2007 – Police called, arrests Johnny and Mark.   Charge them with assault, both expelled even though Johnny started it. Both children go to anger management programs for 3 months.. School board holds meeting to implement bullying prevention programs.

Scenario:

Robbie won’t be still in class, disrupts other students.

1957 – Robbie sent to office and given 6 of the best by the Principal.  Returns to class, sits still and does not disrupt class again.

2007 – Robbie given huge doses of Ritalin. Becomes a zombie. Tested for ADD. Robbie’s parents get fortnightly disability payments and School gets extra funding from state because Robbie has a disability.

Scenario :

Billy breaks a window in his neighbor’s car and his Dad gives him a whipping with his belt.

1957 – Billy is more careful next time, grows up normal, goes to college, and becomes a successful businessman.

2007 – Billy’s dad is arrested for child abuse. Billy removed to foster care and joins a gang. State psychologist tells Billy’s sister that she remembers being abused herself and their dad goes to prison.

       

Sigh. Go Read The Whole Thing.

President Obama fails to go after those responsible for the financial meltdown

By James Lieber,

October 27, 2009,

Miami New Times News

When Barack Obama donned the crusader’s mantle during the 2008 presidential campaign, his web-savvy team created KeatingEconomics.com. The main video showed Charles Keating – the wealthy, politically connected poster child of the ’80s savings-and-loan scandal – in handcuffs.

The video portrayed John McCain as Keating’s stooge and likened the S&L crash to the 2008 Wall Street meltdown. Today’s corporate villains were flashed on the screen, among them AIG, Bear Stearns, Lehman Brothers, Fannie Mae, and Freddie Mac. The opening narrator was Bill Black, a Ph.D. criminologist and lead attorney at the government’s Office of Thrift Supervision. Black helped steer the brilliant federal effort that cleaned up the S&L industry, won more than 1,000 felony convictions, and recovered millions of ill-gotten dollars.

Those watching the compelling attack ad had every reason to believe Obama’s approach would be just as hard-edged, and that felon-busting G-men would rout the crooks and recover our money.

This was not to be.

As it stands now, there’s only one federal prosecution related to the credit crash and bailout cycle, and it was begun by the Bush administration in June 2008.

[snip]

The nation’s new top prosecutor, Attorney General Eric Holder, has a history of preferring that deviant corporations be held to no more than a “voluntary cooperation” system in which they privately investigate themselves. Under the “Holder Memo,” written in 1999 when he was deputy AG in the Clinton administration, bad-boy executives and their corporations who turn over evidence to the government qualify for lenient sentences and fines; sometimes they simply walk. The consequences of their crimes often amount to only the cost of doing business.

UPDATED: “The Greatest Debtor Nation In Human History”

Lawrence Wilkerson is a retired United States Army soldier and former chief of staff to United States Secretary of State Colin Powell. Wilkerson is now adjunct professor at the College of William & Mary where he teaches courses on US national security. He also instructs a senior seminar in the Honors Department at the George Washington University entitled “National Security Decision Making.”

This talk by Larry Wilkerson was the keynote speech given at an event sponsored by the Sam Adams Associates for Integrity in Intelligence, American University History Department, American University’s Nuclear Studies Institute on Oct 21,2009 at American University in Washington DC.

Sam Adams Associates for Integrity in Intelligence describes itself as “a movement of former CIA colleagues and other associates of former intelligence analyst Sam Adams, who hold up his example as a model for those in intelligence who would aspire to the courage to speak truth to power”.



Real News Network – October 26, 2009

The Military-Industrial-Congressional Complex

Part 1


Larry Wilkerson: The beginning of the American “Imperial Rome” and Eisenhower’s warning

Open Sunday Morning

Sunday Morning

9/11 Redux (Part 3)

Part 3 of Real News Network Paul Jay’s interview of former FBI agent and whistleblower Coleen Rowley about the leadup investigations to the September 11, 2001 WTC attacks.

Part 2 of the interview is here.

Part 1 of the interview is here.

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