Thursday, April 29, 2010

Class on Thursday (Vice the Usual Friday) at NoBullU on WEBY

Listen to the voice of wisdom and reason in a wilderness of partisan rhetoric -- No political insanity, no conservative hypocrisy, no liberal foolishness -- Just straight talk, straight at you, and that’s no bull!!

NoBullU will broadcast today from 4:05 to 6:00 p.m. at 1330 AM WEBY and on line, courtesy of Cyber Smart Computers.


Local and regional: the good ol' boys rule in Bubbaville, USA and is it better to be a dog than a black man in the South, and

Nation and international: what did Crist do?, Palin v. Truman, countdown to dismissal, are you ready to protest, Comrade Mark's Republi-CON fairy tales, the new Republi-con elixir - take two aspirin and bring me a chicken in the morning, and NC beach town says no thong you, could this be a promotional opportunity for local beaches?

But I'll discuss anything. (Disclaimer: the host reserves the right to end any discussion and hang up on you.)

So tune-in, call-in, but only if you can handle some ass kickin' discussion of politics and current events!

Comrade Mark's Republi-CON Fairy Tales

UPDATE VI: From the Washington Post:

Fabulous Fab is Fabrice Tourre, a Goldman Sachs trader involved in a deal that has prompted civil fraud charges from the Securities and Exchange Commission. In a January 29, 2007, email to a woman he was dating, Fabulous Fab described a Goldman Sachs financial product as follows:

"When I think that I had some input into the creation of this product - which by the way is a product of pure intellectual masturbation, the type of thing which you invent telling yourself: 'Well, what if we created a "thing," which has no purpose, which is absolutely conceptual and highly theoretical and which nobody knows how to price?' - it sickens the heart to see it shot down in mid-flight.... It's a little like Frankenstein turning against his own inventor."

Read the Washington Post, Want to save capitalism? Regulate it.

UPDATE V: Blame Congress for the meltdown, it was caused by deregualtion and a lack of oversight. Read The New York Times, Meet the Real Villain of the Financial Crisis.

"The great enemy of the truth is very often not the lie -- deliberate, contrived and dishonest -- but the myth -- persistent, persuasive and unrealistic."

UPDATE IV: "The biggest bummer to arise from the allegations that the revered and feared Wall Street puppet master Goldman Sachs had played us all for patsies is this: the dial on the Wall Street capital-formation machine, the engine that was supposed to be the driving force of the greatest economic system on earth, was purposely set to junk — worthless, synthetic junk. " Read Time, The Case Against Goldman Sachs.

UPDATE III: For more proof that Wall Street just used Main Street mortgages to gamble the economy into ruin, read The New York Times, Questions for Banks That Put Together Deals, which states:

"The C.D.O. business has been a vital engine in the money machine at many firms for much of the last decade.

Big investors became addicted to the extra yield. Rating agencies earned windfall profits from evaluating the securities. Investment banks enjoyed hefty fees from ready buyers of the assets. And C.D.O. dealmakers racked up huge bonuses, regardless of whether their products later imploded.

If the limitless appetite for these so-called structured products provided much of the easy money that fueled the housing boom, it also contributed to its bust. What began as a financial innovation lauding the benefits of diversified portfolios of corporate investments morphed into one giant bet on the American housing market.

To lure investors who wanted higher returns, bankers increasingly stuffed C.D.O.’s with riskier assets like subprime mortgage securities, rather than traditional corporate bonds.

They bought their own mortgage companies to feed their loan packaging machines and relaxed the standards on the types of assets they would accept."

BTW, synthetic C.D.O.’s are really just credit default swaps, which in plain terms is just a guarantee or insurance on the underlying asset.

It appears that Goldman and other investment institutions (not banks in the traditional sense) may have structured and sold the guarantee or insurance on the underlying asset without disclosure of losses, accounting irregularities and possible conflicts of interest on the underlying assets. Goldman then got a little of the action with a side bet against the asset(by purchasing the synthetic C.D.O.’s/swaps).

Which is why I suggested that the economic recovery plan should have included legislation that invalidated the swaps.

Taxpayers were suckered big time.

UPDATE II: Watch a great animated editorial cartoon on the report that Goldman Sachs pocketed a profit of $3.3 billion last quarter at the expense of the little guys.

UPDATE: "The Goldman Sachs fraud suit illustrates how the big banks have abandoned their mission." Read The New York Times, Gambling With the Economy, When Wall Street Deals Resemble Casino Wagers, and Goldman’s Stacked Bet.

But don't worry, it was another great quarter for the Banksters, courtesy of Main Street. Read The New York Times, You’re Welcome, Wall Street.

And from the Washington Post, Hedge Fun:

After some quiet, the Republi-con party faithful are out spreading myths and engaging in Republi-con revisionist history (such as Comrade Mark, longtime Republi-con party loyalist, on Friday's show) . It wasn't Carter and the Community Reinvestment Act that nearly destroyed the economy, it was Republi-con deregulation and opposition to government oversight. Read the details in these previous posts:

Problem, Causes and Professor NoBull's Solution for the Economic Mess,
More Articles About How We Got Into, and How We Might Fix, the Economic Mess,
Was Wall Street Just a Ponzi Scheme?,
Who is Responsible for the Economic Mess, Part Deux,
Was Wall Street Just a Ponzi Scheme, Part II,
Economic Mess for Dummies,
The Fed Enabled a Ponzi Scheme,
Economic Mess for Non-Dummies,
Shame on the Government,
Who is Responsible for the Economic Mess?,
Can You Say Sucker, and
With Washington Bankrupt, Banksters Now Loot Main Street

For addition information about how "much of the financial industry has become a racket — a game in which a handful of people are lavishly paid to mislead and exploit consumers and investors," read:

The New York Times, Looters in Loafers,
The New York Times, What Goldman’s Conduct Reveals,
ProPublica, The Magnetar Trade: How One Hedge Fund Helped Keep the Bubble Going,
Vanity Fair, Betting on the Blind Side, and
This American Life, Inside Job.

The Vanity Fair article is an excerpt from The Big Short: Inside the Doomsday Machine, a book which profiles people who shorted the real-estate bubble. One of these individuals was Michael Burry, who realized "in May 2003 that the real-estate bubble was being driven ever higher by the irrational behavior of mortgage lenders who were extending easy credit." Since he couldn't short the mortgages in the traditional fashion without substantial downside exposure, Burry convinced Goldman Sachs to create credit-default swaps on the subprime-mortgage bonds, so that the "downside was defined and certain, and the upside was many multiples of it." "As early as 2004, if you looked at the numbers, you could clearly see the decline in lending standards. In Burry’s view, standards had not just fallen but hit bottom. The bottom even had a name: the interest-only negative-amortizing adjustable-rate subprime mortgage." The book describes the sheer ignorance of the mavens of Wall Street:

"The price of insurance was driven not by any independent analysis but by the ratings placed on the bond by Moody’s and Standard & Poor’s. If he wanted to buy insurance on the supposedly riskless triple-A-rated tranche, he might pay 20 basis points (0.20 percent); on the riskier, A-rated tranches, he might pay 50 basis points (0.50 percent); and on the even less safe, triple-B-rated tranches, 200 basis points—that is, 2 percent. (A basis point is one-hundredth of one percentage point.) The triple-B-rated tranches—the ones that would be worth zero if the underlying mortgage pool experienced a loss of just 7 percent—were what he was after. He felt this to be a very conservative bet, which he was able, through analysis, to turn into even more of a sure thing. Anyone who even glanced at the prospectuses could see that there were many critical differences between one triple-B bond and the next—the percentage of interest-only loans contained in their underlying pool of mortgages, for example. He set out to cherry-pick the absolute worst ones and was a bit worried that the investment banks would catch on to just how much he knew about specific mortgage bonds, and adjust their prices.

nce again they shocked and delighted him: Goldman Sachs e-mailed him a great long list of crappy mortgage bonds to choose from. “This was shocking to me, actually,” he says. “They were all priced according to the lowest rating from one of the big-three ratings agencies.” He could pick from the list without alerting them to the depth of his knowledge. It was as if you could buy flood insurance on the house in the valley for the same price as flood insurance on the house on the mountaintop.

The market made no sense, but that didn’t stop other Wall Street firms from jumping into it, in part because Mike Burry was pestering them. For weeks he hounded Bank of America until they agreed to sell him $5 million in credit-default swaps. Twenty minutes after they sent their e-mail confirming the trade, they received another back from Burry: “So can we do another?” In a few weeks Mike Burry bought several hundred million dollars in credit-default swaps from half a dozen banks, in chunks of $5 million. None of the sellers appeared to care very much which bonds they were insuring. He found one mortgage pool that was 100 percent floating-rate negative-amortizing mortgages—where the borrowers could choose the option of not paying any interest at all and simply accumulate a bigger and bigger debt until, presumably, they defaulted on it. Goldman Sachs not only sold him insurance on the pool but sent him a little note congratulating him on being the first person, on Wall Street or off, ever to buy insurance on that particular item. “I’m educating the experts here,” Burry crowed in an e-mail."

For a sad but true brief recap, watch:

Does Anybody Really Care?

UPDATE VIII: Compare the Steen case and video (below), to the case of a bycyclist pushed to the ground by a New York City police office, for seemingly no reason. That officer was prosecuted and convicted of lying to cover-up the incident. Read The New York Times, Ex-Officer Guilty in Shove of Bicyclist. Here is the video of that incident:

UPDATE VII: An internal review of the actions of the officer that caused the death of 17-year-old Victor Steen stated:

"After reviewing the video evidence in this incident, I believe that the pursuit did expose the subject to unreasonable risk of harm or injury. At times in the pursuit, Officer Ard drove his cruiser so close to the suspect’s bike that it would have been difficult if not impossible for him to stop if the suspect fell from the bike. I also found it disturbing that Officer Ard attempted to tase the suspect on a bike as he rode next to him. If this action would have been successful, it is very possible that the suspect would have sustained serious injuries from the fall."

Why was this review not discussed during the corner's inquest, or mentioned in the court's ruling?

Sounds like adequate evidence to find probable cause to charge the officer with manslaughter (Sec. 782.07, Fla. Stat.)? Or vehicular homicide (Sec. 782.071)?

Can you say whitewash.

UPDATE VII: Seems that the police officer's actions were a violation of the Pensacola Police Department policy. As a result of Steen's death, the officer was suspended for 80 hours without pay. Read Rick's Blog, Official PPD statement on Officer Ard.

Was the policy violation discussed during the corner's inquest, or mentioned in the ruling?

UPDATE VI: The verdict of the Coroner’s inquest is in. His death the result of over zealous enforcement of a statute making it a non-criminal traffic offense to ride a bike at night without a light. Read it and decide for yourself whether the outcome was justified:

UPDATE V: History teaches everything, including the future.

What does history teach about the Steen case. Read the Independent News, A Cycle of Injustice? A 1974 Death Reflects Present-Day Frustrations with Steen Case.

UPDATE IV: Yes people care -- if a dog is killed. Read the Pensacola News Journal, Marine's arraignment set March 31 in dog strangulation.

People even protested at his first appearance in court on Wednesday.

UPDATE III: For more on the Steen case, read the Independent News, The Pursuit Of Justice.

So what was the purpose of a coroner’s inquest. It is "a political shield."

"[S]ince 1988 at least 12 coroner’s inquests have been conducted in Escambia County in cases involving the Florida Department of Law Enforcement. Two of those 12 cases resulted in a finding that officers contributed to the victim’s death. However, the state attorney did not initiate a prosecution in either case."

Read The Voyager, ACLU: Coroner’s inquest system flawed.

UPDATE II: Today's inquest testimony is the the officer didn't have time to stop. So does that mean that it is not his fault, or that he was following too closely? Read the Pensacola News Journal, Investigator: Ard could not have stopped.

If you hit the car ahead of you, would the excuse "I didn't have time to stop" exonerate you?

Time will tell if this inquest is a .

UPDATE: A gun was found in the pocket of the kid. According to an article in the Pensacola News Journal, Teen's final moments shown in videos:

An "investigator cut the pocket and removed a. 380 caliber handgun that was not registered to Steen, nor was it reported stolen.

Tracy Love, an FDLE fingerprint analyst, said that after a battery of five tests, she was unable to recover a single fingerprint from the gun, the magazine or the bullets.

The gun had seven bullets in the magazine and one in the chamber."How you get a gun in the pocket without getting fingerprints on it is a question we all wish to seek the answer to," Watson said after the hearing. "I'm not going to argue about the gun because, like I said in the beginning, what happened after the fact is not relevant. What we're concerned about is what happened before he was killed."

(Watson is the Steen family attorney.)

How does a gun get into a pocket without getting fingerprints on it?

After Hurricane Katrina, near tha Danziger Bridge in eastern New Orleans, five people were "walking to get food and supplies, and . . . two [others] were on their way to a family member’s dentistry office when they were fired upon by police officers. Four were seriously injured." Two were killed. It was immediately apparent that the shooting was unjustified. Moments later a police Lieutenant arrived at the scene and "he and the other officers began to plot a cover-up, planting a gun near the site to make the shootings appear justified."

I hope there has been further investigation of the 'clean' gun issue.

One dead black kid after the police use deadly force without justification. Watch the video:

Running from the police is not justification for using deadly force. And the officer used deadly force twice. The second use was hitting the kid with the vehicle, which was likely unintentional. But the first use was firing the taser at a person riding a bicycle.

Although there is no reason to believe that the officer intended to kill the kid, it seems that the risk of serious injury or death is likely where the police use a taser on someone riding a bicycle. And it appears that nothing the office knew during the chase justified the use of deadly force.

Should the officer be charged with manslaughter (Sec. 782.07, Fla. Stat.)? Or vehicular homicide (Sec. 782.071)?

Of course, no one really cares cause he was just a black kid.