Come for the politics, stay for the snark.
by John Cole| 69 Comments
This post is in: Open Threads
Via John Rogers, there is apparently a website for, of all things, pen addicts.
Taking this one step further, there are apparently pens which are better for left-handed writers and vice versa. I just thought a pen was a pen was a pen. Am I alone not knowing this?
At any rate, here is an open thread.
This post is in: Domestic Politics, Politics, Clap Louder!, Democratic Stupidity
The reviews are in on the leaked Geithner plan, and we are going to do something different here for a change. We are not going to listen to people who have been wrong about everything, and instead are going to listen to people who have been more right than wrong. The administration might learn from this approach. First up, Yves at Naked Capitalism:
And notice the utter dishonesty: a competitive bidding process will protect taxpayers. Huh? A competitive bidding process will elicit a higher price which is BAD for taxpayers!
Dear God, the Administration really thinks the public is full of idiots. But there are so many components to the program, and a lot of moving parts in each, they no doubt expect everyone’s eyes to glaze over.
With almost no skin in the game, these investors can pay a higher than market price for the toxic assets (since there is little downside risk). This amounts to a direct subsidy from the taxpayers to the banks.
Oh well, I’m sure Geithner will provide details this time …
The Geithner plan has now been leaked in detail. It’s exactly the plan that was widely analyzed — and found wanting — a couple of weeks ago. The zombie ideas have won.
The Obama administration is now completely wedded to the idea that there’s nothing fundamentally wrong with the financial system — that what we’re facing is the equivalent of a run on an essentially sound bank. As Tim Duy put it, there are no bad assets, only misunderstood assets. And if we get investors to understand that toxic waste is really, truly worth much more than anyone is willing to pay for it, all our problems will be solved.
If this were a medical emergency, it appears it would look something like this:
The Illness- reckless and irresponsible betting led to huge losses
The Diagnosis- Insufficient gambling.
The Cure- a Trillion dollar stack of chips provided by the house.
The Prognosis- We are so screwed.
If these guys are right, this will be the undoing of the Obama administration. Better enjoy this four years, libs.
by John Cole| 63 Comments
This post is in: Science & Technology
Here is what I don’t understand about twitter. When blogs came out and started to rise in popularity, lots of folks in the MSM and elsewhere said “Great. Just what we need. The undigested, unedited thoughts of the rabble.” If blogs are the undigested thoughts, tweets are the orts.
And I say this as a guy who fires off numerous posts a day without properly thinking through most of them, usually in a fit of pique, later having to come back and apologize and correct the record or both. I had a twitter account for approximately an hour and thought to myself “No good can come from this.”
And not only that, the few times I have attempted to read “tweets,” I can never figure out who is saying what and why, and they all read like cell phone text messages between 12 year olds.
/fuddyduddy
This post is in: Open Threads
For the whiners. All you have to do is ask, you know…
Also, bad news for Tom Friedman:
A possible General Growth Properties bankruptcy could happen in the next few days.
Actually, I guess that is bad news for all of us, since the market for dull platitudes will never dry up, and this means he most likely won’t retire young. Damnit.
Also, I am watching the Sarah Connor Chronicles or whatever it is on Fox, and it appears that in the future, all the freedom fighters have had collagen implants in their lips. I find that odd.
by John Cole| 70 Comments
This post is in: Clown Shoes
This is pretty rich:
The banks demanded that the accountants give them leeway in how they report losses to investors. The accountants responded by giving away their souls.
This week, the Financial Accounting Standards Board unveiled what may be the dumbest, most bankrupt proposal in its 36-year history. If it stands, the FASB ought to change its name to the Fraudulent Accounting Standards Board. It’s that bad.
Here’s what the board is floating. Starting this quarter, U.S. companies would be allowed to report net-income figures that ignore severe, long-term price declines in securities they own. Not just debt securities, mind you, but even common stocks and other equities, too.
All a company would need to do is say it doesn’t intend to sell them and that it probably won’t have to. In most cases, it wouldn’t matter how much the value was down, or for how long. In effect, a company would have to admit being on its deathbed before the rules would force it to take hits to earnings.
So, if these rules had been in place last year, a company that still owned shares of American International Group Inc. or Fannie Mae, for instance, could exclude those stocks’ price declines from net income entirely. It would make no difference that the companies were seized by the government last year, or that both are penny stocks. The loss would get buried away from the income statement, in a balance-sheet line called “accumulated other comprehensive income.”
Basically what they are asking, if I understand this correctly, is that the next time something like this happens, the accountants and banks will just pretend the losses aren’t losses. I can’t believe we didn’t think of this before. Other than the late stages of cancer, Patrick Swayze is fine! This is magical thinking taken to an art form.
More analysis here, but what shocks me is that this is what they think is the way forward. Not serious regulation and back to sane business models and practices. What we need now is new and improved hocus pocus!
*** Update ***
J. Michael Neil in the comments says otherwise.
by John Cole| 79 Comments
This post is in: Domestic Politics
Are we misunderstanding this:
But then this fascinating nugget:
Goldman Sachs, which received about 8 percent of the pile, or $13 billion, has claimed publicly that the money was, to them, a matter of indifference, as Goldman had hedged itself against a possible collapse of AIG — by making bets against AIG.
If I understand this correctly, Goldman was making bets against the insurance company it was paying to insure its bets. If that’s correct, is it any wonder we’re in the mess we’re in?
Also, more Taibbi:
The most galling thing about this financial crisis is that so many Wall Street types think they actually deserve not only their huge bonuses and lavish lifestyles but the awesome political power their own mistakes have left them in possession of. When challenged, they talk about how hard they work, the 90-hour weeks, the stress, the failed marriages, the hemorrhoids and gallstones they all get before they hit 40.
“But wait a minute,” you say to them. “No one ever asked you to stay up all night eight days a week trying to get filthy rich shorting what’s left of the American auto industry or selling $600 billion in toxic, irredeemable mortgages to ex-strippers on work release and Taco Bell clerks. Actually, come to think of it, why are we even giving taxpayer money to you people? Why are we not throwing your ass in jail instead?”
But before you even finish saying that, they’re rolling their eyes, because You Don’t Get It. These people were never about anything except turning money into money, in order to get more money; valueswise they’re on par with crack addicts, or obsessive sexual deviants who burgle homes to steal panties. Yet these are the people in whose hands our entire political future now rests.
Good luck with that, America. And enjoy tax season.
This is like a slow motion bank robbery, but this time the victims are the ones providing the getaway car.
Heads and Goldman Wins, Tails and You’re Royally ScrewedPost + Comments (79)
This post is in: Domestic Politics
Matt Taibbi:
The best way to understand the financial crisis is to understand the meltdown at AIG. AIG is what happens when short, bald managers of otherwise boring financial bureaucracies start seeing Brad Pitt in the mirror. This is a company that built a giant fortune across more than a century by betting on safety-conscious policyholders — people who wear seat belts and build houses on high ground — and then blew it all in a year or two by turning their entire balance sheet over to a guy who acted like making huge bets with other people’s money would make his dick bigger.
Read the whole thing.
Right now I am vacillating between thinking I really don’t like Congress passing laws to tax specific people to wondering at what point some of the assholes who caused this mess are going to see jail time. Probably never.
The Financial Crisis In One Paragraph Or LessPost + Comments (112)