Facts On My Teevee

Matt Taibbi, in what may be his final appearance on Morning Joe.

Visit msnbc.com for Breaking News, World News, and News about the Economy

Was it disclosed on the show that Maria Bartiromo is married to a CEO of an investment services company and routinely interviews corporate titans in whose company she owns stock? Come to think of it, has that EVER been disclosed on the NBC family of networks?

John Ridley finally figured out in the end that the cries from the elite about how "we have the best health care in the world" doesn't mean a thing to the large majority of the country who cannot access that level of care. To that majority, their version of US health care includes the ER or Remote Area Medical or nothing at all. That's not the best health care in the world. That's a human tragedy. And the haves are the ones shouting at town halls while the have-nots quietly suffer.



But we must not get shrill.

...more Taibbi!!!

More Evidence Of Goldman Sachs' Blood Funnel

I saw Bill Maher offer Matt Taibbi some pushback last night about his Rolling Stone piece on Goldman Sachs. Maher wasn't willing to believe that Goldman has been uniquely positioned to profit from the breakdown of the financial system and the various bubbles created. Maher offered the predictable "why just Goldman" response, and Taibbi decided to talk about the many Goldman officials in high positions in the government. He could have just pointed to this story that leaped from Zero Hedge to the New York Times yesterday.

It is the hot new thing on Wall Street, a way for a handful of traders to master the stock market, peek at investors’ orders and, critics say, even subtly manipulate share prices.

It is called high-frequency trading — and it is suddenly one of the most talked-about and mysterious forces in the markets [...]

Nearly everyone on Wall Street is wondering how hedge funds and large banks like Goldman Sachs are making so much money so soon after the financial system nearly collapsed. High-frequency trading is one answer.

And when a former Goldman Sachs programmer was accused this month of stealing secret computer codes — software that a federal prosecutor said could “manipulate markets in unfair ways” — it only added to the mystery. Goldman acknowledges that it profits from high-frequency trading, but disputes that it has an unfair advantage.

Yet high-frequency specialists clearly have an edge over typical traders, let alone ordinary investors. The Securities and Exchange Commission says it is examining certain aspects of the strategy.

“This is where all the money is getting made,” said William H. Donaldson, former chairman and chief executive of the New York Stock Exchange and today an adviser to a big hedge fund. “If an individual investor doesn’t have the means to keep up, they’re at a huge disadvantage.”

They literally place their super-fast computers physically close to the machines that govern NYSE trades, to get the jump on competitors and make enough pennies off of the brief ups and downs of stocks to rake in mounds of cash. And in some cases, investors can buy access to buy and sell order information on certain exchanges that can be used to make these quick orders. When Chuck Schumer is calling for an investigation of Wall Street, you know something has gone horribly wrong.

No, Goldman Sachs is not the only organization profiting from this scheme, or any of the numerous others. But their name keeps surfacing among those that are, in pretty much every case. I don't know how much evidence it takes to understand their role in all of this. Taibbi may not have gotten every single solitary thing right in his very long piece, but he got enough right to make some very powerful people nervous. And rightly so.

We need to go further in determining what caused this financial crisis and what pitfalls remain. The new iteration of the Pecora Commission, a Depression-era panel that uncovered the origins of that crisis, can lead the way.

We, the undersigned, call on you to fulfill the responsibilities of your position by joining together in non-partisan cooperation to investigate the origins of the financial crisis in ways that lead to a full understanding of the institutions, people and practices that are responsible for our economic collapse.

In particular, we encourage the adoption of three guidelines that history has taught us are essential to an effective inquiry:

Appoint a single investigator. This individual must have a proven record of exposing fraudulent elites and institutions, and must provide a professional, non-political spirit to the investigation.

Afford no special treatment. No one is off-limits or gets special protection in the investigation.

Provide the tools to do the job. The investigator must be given ample budget and time, full subpoena authority, and the ability to hire and fire staff.

These principles were applied in the 1930s when Congress launched a formal inquiry into the causes of the Great Depression. That commission - led by Ferdinand Pecora - was willing to reach into the highest levels of Wall Street and finance to determine the causes of the economic collapse of 1929. The courage with which the commission greeted its task - and the revelations that courage ensured - inspired the sweeping banking and financial reforms that were the bedrock of our financial system for decades.

Building a new financial foundation requires us to begin on solid ground - the truth. It is only by illuminating the mistakes of the past that we will be able to meet the great challenges of the future.

And they can start by photocopying Matt Taibbi's notes.

Goldman's Record Taxpayer-Subsidized Profits

Matt Taibbi's excellent reported piece on Goldman Sachs is now online, and he's created a kind of sequel with this piece about Goldman's big profits, mostly the result of handout after handout from the Feds:

Last year, when Hank Paulson told us all that the planet would explode if we didn’t fork over a gazillion dollars to Wall Street immediately, the entire rationale not only for TARP but for the whole galaxy of lesser-known state crutches and safety nets quietly ushered in later on was that Wall Street, once rescued, would pump money back into the economy, create jobs, and initiate a widespread recovery. This, we were told, was the reason we needed to pilfer massive amounts of middle-class tax revenue and hand it over to the same guys who had just blown up the financial world. We’d save their asses, they’d save ours. That was the deal.

It turned out not to happen that way. We constructed this massive bailout infrastructure, and instead of pumping that free money back into the economy, the banks instead simply hoarded it and ate it on the spot, converting it into bonuses. So what does this Goldman profit number mean? This is the final evidence that the bailouts were a political decision to use the power of the state to redirect society’s resources upward, on a grand scale. It was a selective rescue of a small group of chortling jerks who must be laughing all the way to the Hamptons every weekend about how they fleeced all of us at the very moment the game should have been up for all of them.

Goldman's profits only count as "profit" if you consider a pass-through federal subsidy to AIG, quick and easy loans and multiple bailout programs made available to them by the FDIC and the Fed after converting themselves into a bank holding company, the forced collapse of much of its competition and fees from stock issuance from other banks having to repay TARP to be something based on hard work and ingenuity and not political connections and corporate welfare.

But what's most amazing about all of this is how Goldman Sachs is taking all this federal largesse and plowing it back into the market at HIGHER rates of leverage than even during the crisis which amount burnt down the entire financial system:

As Felix Salmon notes, Goldman last year, after it converted to bank holding company status, announced that it was “taking steps to reduce leverage.” But what’s happened since then is that Goldman has actually been emboldened by all its state backing to borrow more and gamble more than ever. This is the equivalent of a regular casino gambler who hears that the house has doubled down on his credit line and decides to stay up at the tables all night, instead of going home and sobering up. Just look at Goldman’s VaR, or Value at Risk, which measures the amount of money the bank puts at risk on any given day: it’s soared since last year.



Taken altogether, what all of this means is that Goldman’s profit announcement is a giant “fuck you” to the rest of the country. It is a statement of supreme privilege, an announcement that it feels no shame in taking subsidies and funneling them directly into their pockets, and moreover feels no fear of any public response. It knows that it’s untouchable and it’s not going to change its behavior for anyone. And it doesn’t matter who knows it.

And meanwhile, out in the country, unemployment will top 10 percent soon, and lots of people will be wondering why those Wall Street profits haven't trickled down.

Ian Welsh has a lot more.

It's Good To Be The King

The loss of 467,000 jobs last month and the loss of practically every single job created this decade aside, at least some employees are back in business.

Business is back on Wall Street. If the good times continue to roll, lofty pay packages may be set for a comeback as well.

Based on analysts' earnings forecasts for 2009, Goldman Sachs Group Inc. is on track to pay out as much as $20 billion this year, or about $700,000 per employee. That would be nearly double the firm's $363,000 average last year, and slightly higher than the $661,000 for the average Goldman employee in fiscal 2007, according to analyst estimates reviewed by The Wall Street Journal.

Well, that was a close one! For a second I thought the banksters would have to SUFFER for the damage they caused blowing a hole in the global economy. Thankfully, that task will fall only to the rest of the population.

By the way, you really shouldn't miss Matt Taibbi's epic takedown of Goldman Sachs, arguably the most devious actor in this whole mess, in the latest issue of Rolling Stone. They haven't put it on their website yet, but Zero Hedge has a very hard-to-read copy. It's a comprehensive look at Goldman's increasing ubiquity throughout practically all of modern life, and their role in manipulating Wall Street and K Street to get favorable outcomes. Goldman is like the Borg, and the ruling class has been assimilated. Needless to say, Goldman's none too happy about having their agenda exposed. Taibbi responds here. He's one of the only journalists who would dare to write this story, and he should be credited for that.

...Taibbi's article is on the Rolling Stone site. But I agree with those in comments, anything that can be done to support Taibbi's work in this matter ought to be encouraged. Also, he appears to have stumbled upon a very serious issue about Goldman Sachs front-running its clients, which is basically buying a stock before executing a large trade for its clients and taking the profit.

The Teabag D-Bags

We have our first epic teabagger FAIL.

But a funny thing happened en route to a visually pleasing Tax Day protest. The National Park Service said the tea party protesters didn't have the proper permit to dump their bags [...]

"We have a million tea bags here, and we don't have a place to put them because it's not on our permit," said Rebecca Wales, lead organizer of D.C. Tea Party [...]

A local think tank, the Competitive Enterprise Institute, said it would allow the dumping of the tea bags in its 12th floor conference room instead. Not quite the same impact, though.

Perfect. Using a right-wing think tank's conference room for a "grassroots" protest.

There's also this amusing nugget inside a Fox News story on the teabag protests:

In New Hampshire, state employees are hitting the street to speak out against cuts aimed at public employee jobs.

Um... fellas? Public employee jobs are being cut because of a lack of revenues.

But that's the whole point of this thing. Conservative leaders are trying to leverage some genuine anger in the country based on the recession, bailouts, etc., and target them toward movement goals like the flat tax and other harmful measures. The very people who caused the problem want to use the anger generated by themselves to rail against the Administration's goals. It's the exact same cast of characters pushing the exact same failed solutions. And with a lack of leadership at the top of the Republican Party, this kind of teabaggery has filled the vacuum for people whose party got blown out in the election and are looking for answers. Matt Taibbi has his typical solid take:

This must be a terrible time to be a right-winger. A vicious paradox has been thrust upon the once-ascendant conservatives. On the one hand they are out of power, and so must necessarily rail against the Obama administration. On the other hand they have to vilify, as dangerous anticapitalist activity, the grass-roots protests against the Geithner bailouts and the excess of companies like AIG. That leaves them with no recourse but to dream up wholesale lunacies along the lines of Glenn Beck’s recent “Fascism With a Happy Face” rants, which link the protesting “populists” and the Obama adminstration somehow and imagine them as one single nefarious, connected, ongoing effort to install a totalitarian regime [...]

After all, the reason the winger crowd can’t find a way to be coherently angry right now is because this country has no healthy avenues for genuine populist outrage. It never has. The setup always goes the other way: when the excesses of business interests and their political proteges in Washington leave the regular guy broke and screwed, the response is always for the lower and middle classes to split down the middle and find reasons to get pissed off not at their greedy bosses but at each other. That’s why even people like Beck’s audience, who I’d wager are mostly lower-income people, can’t imagine themselves protesting against the Wall Street barons who in actuality are the ones who fucked them over. Beck pointedly compared the AIG protesters to Bolsheviks: “[The Communists] basically said ‘Eat the rich, they did this to you, get ‘em, kill ‘em!’” He then said the AIG and G20 protesters were identical: “It’s a different style, but the sentiments are exactly the same: Find ‘em, get ‘em, kill ‘em!’” Beck has an audience that’s been trained that the rich are not appropriate targets for anger, unless of course they’re Hollywood liberals, or George Soros, or in some other way linked to some acceptable class of villain, to liberals, immigrants, atheists, etc. — Ted Turner, say, married to Jane Fonda.

But actual rich people can’t ever be the target. It’s a classic peasant mentality: going into fits of groveling and bowing whenever the master’s carriage rides by, then fuming against the Turks in Crimea or the Jews in the Pale or whoever after spending fifteen hard hours in the fields. You know you’re a peasant when you worship the very people who are right now, this minute, conning you and taking your shit.

I think liberals have generally done a very good job calling out this nonsense for what it is, and the traditional media has taken notice. For practically the first time, they have failed to take the bait. But because this economic crisis is so confusing, so tangled, so out of reach to most Americans who don't work in the financial sector, and because there are genuine concerns and frustrations out there, I wouldn't suggest that this tea party nonsense was hopelessly doomed. I plan to point and laugh considerably today, but there's a germ of an idea here, a leveraging of real anger, that could be dangerous in the future.

Taibbi FTW

Earlier this week, Jake DeSantis, an executive at the AIG Financial Products division, quit, and published his resignation letter in the New York Times. Matt Taibbi has the ultimate response.

DeSantis has a few major points. They include: 1) I had nothing to do with my boss Joe Cassano's toxic credit default swaps portfolio, and only a handful of people in our unit did; 2) I didn't even know anything about them; 3) I could have left AIG for a better job several times last year; 4) but I didn't, staying out of a sense of duty to my poor, beleaguered firm, only to find out in the end that; 5) I would be betrayed by AIG senior management, who promised we would be rewarded for staying, but then went back on their word when they folded in highly cowardly fashion in the face of an angry and stupid populist mob.

I have a few responses to those points. They are 1) Bullshit; 2) bullshit; 3) bullshit, plus of course; 4) bullshit. Lastly, there is 5) Boo-Fucking-Hoo. You dog.

There's the big piece of fiction, that DeSantis knew nothing about the exotic financial deals at his 377-person unit, but had to be retained (and compensated with a bonus) to unwind those very same exotic deals. Then there's this other fiction that DeSantis and other Wall Street bonus babies could have gotten all kinds of other good offers from competing firms, even though half of Wall Street is out of work at the moment. But Taibbi focuses on the third argument:

But all of this is really secondary to the tone of DeSantis' letter. He acts like he's a victim because he didn't get to keep his after-tax bonus of $742,006.40 in the middle of a global depression. And he really loses his fucking mind when he writes:

"None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house."

First of all, Jake, you asshole, no plumber in the world gets paid a $740,000 bonus, over and above his salary, just to keep plumbing. Second, try living on a plumber's salary before you even think about comparing yourself to one; you're inviting a pitchfork in the gut by even thinking along those lines. Third, Jake, if you were a plumber, and the electrician burned the house down -- well, guess what? If you and that electrician worked for the same company, you actually wouldn't get paid for that job.

Out in the real world, when your company burns a house down, you're not getting paid by that client. It's only on Wall Street, where the every-man-for-himself ethos is built into an insanely selfish and greed-addled compensation system, that people like you expect to get paid in a bubble -- only there do people expect their performance bonuses no matter how much money the shareholders lose overall, no matter how many people get laid off after the hostile takeover, no matter how ill-considered the mortgages lent out by your division were.

That sense of entitlement has sparked the public anger. It's part of a mindset that assumes the virtue of selfishness and striving for the most dollars as an end in itself. It leads to perversities like Goldman Sachs bailing out their own executives even while the company was being bailed out themselves. It leads to self-interest being valued over the public interest. And it's led, in a very real sense, to the current crisis.

Man Crush

Is it such an accepted bit of wisdom that policy doesn't grab eyeballs, or a contempt for those who are smart enough to demand substance, or WTF is it that results in this kind of crap masquerading as political analysis?

Mitt Romney is so good he is almost too good.

Candidates want people to come away from their events thinking “presidential,” not “slick.”

But Romney is so polished and looks so much like a president would look if television picked our presidents (and it does) that sometimes you have to ask yourself if you are watching the real deal or a careful construction.

Romney has chiseled-out-of-granite features, a full, dark head of hair going a distinguished gray at the temples, and a barrel chest. On the morning that he announced for president, I bumped into him in the lounge of the Marriott and up close he is almost overpowering. He radiates vigor.

And he can’t wait to stand next to John McCain on a stage and invite comparison. (McCain, who looks less hearty than Romney, was severely injured while fighting for his country as a Naval aviator. Romney never served in the military, though the band at his announcement played both “Anchors Aweigh” and “The Marines’ Hymn.”)

That's maybe the worst article I've seen since this blog started. It's cotton candy; there's literally nothing in it except measuring manly chins and manly muscles, and looking for flip-flops and how things will "play" with the base and horse-race process politics. It's literally everything bad about journalism thrown into one article.

If these Presidential beat reporters can't pass a basic policy quiz, or just turn up their noses when anything meaningful gets discuss, can we have a vote in the country to fire them? The number of poll respondents there would make American Idol look like a group of volunteers for shark cage duty.

P.S. Speaking of the media, I don't think I've ever seen as bristling an effective a takedown of anyone as I see in this Matt Taibbi article about Joe Klein. A sampling:

He is the living, breathing incarnation of American "conventional wisdom" -- and what American "conventional wisdom" is is a spineless, slavish, power-worshipping watcher of polls who has no problem whatsoever denying today what he said yesterday, and is mostly interested in making sure he still has invitations to the right Beltway parties.

The war, you might have noticed, has not budged very many of these people from their places. Many of them now claim to be against the war. But they're the same people they were three or four years ago, and they're still quite openly sneering at the people who really were right all along. They seem to hate us even more, now that we've so obviously been proven right.

Klein's getting pressure from his left so he's starting to turn around, but that doesn't make him any less spineless (actually more so). Matt Taibbi might be my favorite current political writer (not good enough to get me to buy Rolling Stone, but still).