What Happened Tonight

It's 10:45 PM at the White House and I hope Barack and David Axelrod are having a beer on the second floor. One year ago they won a generational election as the anti-establishment candidate of change. Tonight, no matter how you slice it, the Democrats lost two big statehouses (New Jersey and Virginia), because they were perceived as the party of the establishment. A little more than two hours ago I read a speech by a famous investor who explained in simple terms how a Democratic Congress, in the fall of 2008 and then a Democratic administration, in the spring of 2009, got played by the oligarchs on Wall Street.

David Einhorn, who runs Greenlight Capital is a pretty smart investor. I don't always agree with him, but he gave a speech a couple of weeks ago that I hope will eventually reach the desk of our President. Einhorn's belief, like mine, is that much of the backlash flowing around the health care debate (or even tonight's election) is not really about healthcare--but more about a general sense that the average citizen is a pawn in a rigged game run by corporate special interests and a clueless Congress. The real root of the populist anger was in the bailout of the banks.

In the context of the recent economic crisis, a highly motivated and organized banking lobby has demonstrated enormous influence. Bankers advance ideas like, "without banks, we would have no economy." Of course, there was a public interest in protecting the guts of the system, but the ATMs could have continued working, even with forced debt-to-equity conversions that would not have required any public funds. Instead, our leaders responded by handing over hundreds of billions of taxpayer dollars to protect the speculative investments of bank shareholders and creditors. This has been particularly remarkable, considering that most agree that these same banks had an enormous role in creating this mess which has thrown millions out of their homes and jobs.

The critical line here is, "but the ATMs could have continued working, even with forced debt-to-equity conversions that would not have required any public funds". In other words, Goldman Sachs, Citibank, JP Morgan Chase, Morgan Stanley and Merrill Lynch bondholders might have had to convert all their debt to equity, but the system would have survived without the $700 billion tax-payer bailout. But what is Geithner proposing now?

On the anniversary of Lehman's failure, President Obama gave a terrific speech. He said, "Those on Wall Street cannot resume taking risks without regard for the consequences, and expect that next time, American taxpayers will be there to break the fall." Later he advocated an end of "too big to fail." Then he added, "For a market to function, those who invest and lend in that market must believe that their money is actually at risk." These are good points that he should run by his policy team, because Secretary Geithner's reform proposal does exactly the opposite.

The financial reform on the table is analogous to our response to airline terrorism by frisking grandma and taking away everyone's shampoo, in that it gives the appearance of officially "doing something" and adds to our bureaucracy without really making anything safer. With the ensuing government bailout, we have now institutionalized the idea of too big- to-fail and insulated investors from risk.

And Einhorn also points out that the problem of Credit Default Swaps has not gone away, it's merely been subsidized by the taxpayers while the vultures throw more companies into bankruptcy (CIT yesterday, GMAC maybe tomorrow).

The proposed reform does not deal with the serious risks that the recent crisis exposed. Credit Default Swaps, which create large, correlated and asymmetric risks, scared the authorities into spending hundreds of billions of taxpayer money to prevent the speculators who made bad bets from having to pay. CDS are also highly anti-social. Bondholders who also hold CDS make a bigger return when the issuing firms fail. As a result, holders of so-called "basis packages" - a bond and a CDS - have an incentive to use their position as bondholders to force bankruptcy triggering payment on their CDS, rather than negotiate traditional out of court restructurings or covenant amendments with troubled creditors. Press accounts have noted that this dynamic has contributed to the recent bankruptcies of Abitibi-Bowater, General Growth Properties, Six Flags and even General Motors. They are a pending problem in CIT's efforts to avoid bankruptcy. The reform proposal to create a CDS clearing house does nothing more than maintain private profits and socialized risks by moving the counter-party risk from the private sector to a newly created too-big-to-fail entity. I think that trying to make safer CDS is like trying to make safer asbestos. How many real businesses have to fail before policy makers decide to simply ban them?

Larry Summers and Tim Geithner and even Rahm Emanuel, have been so inside the Wall Street game for so long that they have no idea of the level of anger directed at the capitalists who have managed to scam a few trillion out of the public coffers with phrases like "without the banks, we would have no economy". President Obama needs to listen to other voices on the economy or else the pitchfork brigade may show up outside the White House next November. We did not elect him to bring us more of the same--more dominance of our national policy by the military industrial complex, the Big Banks, Big Pharma, Big Insurance and Big Oil.

The irony is that if Obama started kicking ass and taking names with the syncophants of the Fortune 500 that sit in Congress, I bet a lot of Glenn Beck's audience might even take notice. And surely, Axelrod doesn't plan to run the 2010 campaign without the youth vote, which was totally absent tonight. This is a teaching moment. Let's hope the President understands this.

White House - David Axelrod - Rahm Emanuel - United States - Wall Street

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C&L's Late Nite Music Club with Otis Redding

DOWNLOADS: (117)
PLAYS: (192)

I ran that Sam and Dave clip from this same show featuring the "Stax/Volt Revue" on tour in Europe -- which meant that the house band was Booker T. and the MG's and the Mar-Keys -- a little earlier, but as good as Sam and Dave might have been, they paled in comparison to Otis Redding, who immediately followed them. He was The Man. This was his closing song. Whew. Seven months after this, Redding died in a plane crash. It was one of the great losses to music.

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http://lnmc.crooksandliars.com/david-neiwert/cls-late-nite-music-club-otis-reddin

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Tuesday Stuff

(And I also posted here.)

Really, New Jersey? Really?

Chris Christie is really your new governor, huh?

Well then, get ready for tax cuts all around (except property taxes, which won?t budge - they never do regardless of who is in power), budget deficits as far as the eye can see, and rewards for every well-heeled Republican in the state and elsewhere (and yes, I called it for Corzine, so I ?screwed the pooch? on that one).

I don?t think this is as extreme a judgment on the Dem as Virginia, but I think the results in both states show what happens when one ?base? is excited and the other decides to sit on its hands (and I blame both Deeds and Corzine for that one).

Tonight?s election results, particularly in New Jersey, proved two things conclusively for me: 1) In no way whatsoever is either development a referendum on Obama, and 2) More people should read this blog :-).

And by the way, I?m preparing myself for the strong possibility of a repeat development in PA next year :-(.

Finally, here is a reminder once more of how New Jersey?s new governor-elect stole from Monty Python in his campaign?

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

?and I dedicate this to everyone who voted for Christie.



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http://liberaldoomsayer.blogspot.com/2009/11/tuesday-stuff.html

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My Thoughts On Joe Lieberman And His Idiotic
Opposition To The Public Option--Yeah, It's A Rant!

Suck it, Lieberman. Just who the fuck do you think you are, you shitty little duplicitous dick bag? Waaaaa, waaaaa, waaaaa, no one pays any attention to me so I'm gonna stamp my feet and hold my breath until people stop making fun of me and start taking me seriously. I don't care if I have to derail some major legislation to do it. Waaaaa, waaaaa, waaaa. Who cares if healthcare is important? So is my ego! Listen, you whiny, human soporific piss-ant fuck, get that big, slimy rotten brick block head of yours out of your fucking doughy white turncoat ass, inflate your tiny little man bags and lose the narcissism, you unholy melange of shit, piss and gangrenous schmutz.

Don't make me come up there and shit in your kasha varnishkes, because I will. Try me! But you know, you're such a fucking grimy douche bag twat polyp that you probably have Hadassah do that for you already, don't you, you sick little dickwit cock canker? Nasty ass fucker. I bet you also love to just roll around in your own bodily excretions, dont you? DON'T YOU?? Mmmmmmm, this is so warm and viscous, it's like I'm bathing in me. Ohhhhhh, ahhhhhh, yes, I can do no wrong...Yeah, you're one really sick anal spincter sucking man leach.

Someone needs to grab you by your scrawny, wrinkled giblets and force you to inhale some of the ungodly shit you're peddling out for the rest of us to choke on. And that someone is my foot. I'll jam my steel-toe boots all the way up your fetid, rancid poop hole stink chamber and break your slippery, drippery ass cherry wide open, so you know what it's like to have someone fuck up your health just to prove a point! God, you make me so mad, I could just vomit, and by vomit I mean kick your ass.

Ok, seriously, you've been warned. So stop your grandstanding and get back on the right side of the healthcare debate, or so help me god I'll hog-tie your sorry ass and perform a colon-fucking-oscopy on you with a jackhammer and post the resultant video on YouTube. Won't that be fun? So do your goddammed duty, you idiotic lowlife, opportunistic, shit slurping, traitorous, dickhole remora fish!

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http://zirgar.blogspot.com/2009/11/my-thoughts-on-joe-lieberman-and-his.html

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Test Post

This is a test post. We seem to be having problems with the coding and can't get the newswrap to publish.  


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Maine Marriage Equality

We're now at 38% reporting in Maine, and it's dead even. 200 votes ahead for equality out of about 225,000. [...]

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SC: Scoville Wins Mayoral Post, Ard Tops City
Council Votes

The City of Georgetown will have a Democratic mayor and city council remains under Democratic[...]

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http://www.everydaycitizen.com/2009/11/sc_scoville_wins_mayoral_post.html

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SC: Scoville wins mayoral post, Ard tops city
council votes

The City of Georgetown will have a Democratic mayor and city council remains under Democratic[...]

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http://www.everydaycitizen.com/2009/11/sc_scoville_wins_mayoral_post.html

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Volcker calls for reduction in consumer spending
to drive economy

But then how will Wall Street make money? Sounds like he's part of the left of the left. Reuters:

The alternatives to help bolster future economic growth include boosting exports, applying innovative technology to green issues and improving the nation's infrastructure, Volcker said.

The former Federal Reserve chairman, who now heads the White House Economic Recovery Advisory Board, said Obama understands that "We cannot have so much consumption."

Consumer spending accounted for 70 percent of the U.S. economy before last year's economic meltdown, a level that Volcker said was sustained only by "the magic of financial engineering."

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A Major WTF in NYC

It looks like Bloomberg is going to pull this out. With 80% of the votes in, he's up 50% to 47% over Thompson. But a lot of people in New York City weren't even thinking of this as a real race. A margin that slim is a major rebuke for Bloomberg.10:53[...]

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