Morning, folks… feeling sick today, going to retreat to my bedroom and watch the Investigation and Discovery channel all day long, tuning everything else out. The world is insane and you all can have it this week. In the meantime, a long-overdue mailbag. I have some specific answers to questions on the Housewives story that I’ll publish in the next days – until then, some other interesting questions, including one about the amazing Levin report, which I encourage everyone to read.
How about those Red Sox?
Your Chortling Creator
After all the hype… this year has been like waking up and finding out that your son is Hitler’s gay lover. That’s the only thing I can compare it to.
I just read Charles Hugh Smith's piece entitled, "Here's the Setup for the Con of the Decade" on www.oftwominds.com. The "financialization of the U.S. economy" seems to be the trajectory along which these huge manipulations of capital are directed. If the endgame is the unchecked privatization of profits and socialization of losses, could Rep. Paul Ryan's budget proposal contain contrived austerity measures (privatization of medicare, general slashing of social programs) that anticipate the financial oligarchy's next move?
That's interesting, I had just read that piece myself. I'm skeptical, if only because I don't see the Paul Ryan austerity measures as having been, primarily, part of some larger plot to squeeze more yield out of the Treasury market. I think the Ryan austerity measures are what they seem to be, on the face of things: part of a larger public relations campaign designed to create in the mind of the public an image of the government as a slavish, financially irresponsible handmaiden to liberal special interests. This more than anything is a political campaign designed to fuel resentment against the poor and minorities, and to drive wedges between the various sects of the middle and lower classes. Big companies and the wealthy are always going to support deregulation, lower taxes, and reduced entitlement spending for self-serving reasons more immediate than some larger long-term goal of securing permanent revenue streams by lending the public back its own (stolen) money at high interest. But what Smith is describing isn't completely crazy and elements of his theory are inarguably true.
About how many times a day do you find yourself saying "What the fuck?" to nobody in particular? I'm up to about 23 these days.
Maybe twice or three times a day. Fewer than before, certainly. See, what I've done, and you all can try this yourselves, is to simply avoid reading the news as much as possible. I read old books and the only periodicals I even look at lately are NFL draft guides. I've read Nolan Nawrocki's draft booklet like 400 times already. To me he’s the greatest novelist since Waugh. That does wonders for my general sanity, but then I'll have something happen like last Friday, when I went into 30 Rock to do a hit on Cenk Uygur's show and saw him talking about a poll that had Donald Trump leading the field of prospective Republican candidates. Donald Trump has 26% of the Republican vote right now? What the fuck? Things like that, honestly, I don't even want to know, until I have no choice…
I can't tell if you enjoy questions outside your areas of expertise, but I love your opinion on most things, so here goes: What do you think of the anti-abortion crusade that's happening around the country? Is the issue of reproductive rights a state or federal one? Is this anti-Planned Parenthood etc. campaign just a right-wing ruse to distract us left-wing feminist hippie assholes (cunts?) from protesting against other important issues in which we're also being fucked over? Or is it just a result of so much Tea Party fervor electing these nut jobs who push this stuff through into law? I hope abortion doesn't fall on your list of things you refuse to talk about.
Thanks for the education!
Abortion does definitely fall on the list of things I try really hard to avoid talking about. My problem is that I have sort of a weird take on Roe v. Wade that nobody else seems to agree with... I'm pro-choice personally, and I'd always vote that way, but I also feel nervous calling for drug and gun laws to be states-rights issues while keeping abortion a federal matter. I’d like for this to be the kind of thing left to the states, but once you open that door, the crazies on the other side of this issue would run wild with it and use it as a springboard to try to establish their lunatic fundamentalist patriarchy/Caliphate, and I’m pretty sure I don’t want that, either. So much like Dennis Kucinich overcame his Catholic objection to abortion to be pro-choice, I'm kind of in a place where I'm having to overcome my federalist objection to Roe v. Wade. Since pretty much everybody hates this position, and I don’t feel particularly strongly about it anyway, I try to shut up about it as much as possible.
Most of all, I think abortion is one of those issues that politicians use to inflame the public and keep them away other, more complicated issues. In that regard I do think the recent emphasis on abortion and the campaigns against Planned Parenthood and the like are part of the same age-old What’s the Matter With Kansas? technique of using divisive social issues to keep lower and middle-class voters from wondering about things like the bailouts and commodity prices. And that technique works really well, because people tend to be unpersuaded by anything else once they see that a candidate is on the wrong side of their abortion stance. From my point of view, the more noise there is about abortion, the less chance any of this Wall Street stuff reaches the general public.
I figure you've heard about the Senate panel report from Sens. Levin and Coburn concluding, with some hard evidence, there was indeed fraud and double-dealing going on at major investment firms. Is there any chance the DOJ pursues criminal prosecutions over this? Are we getting to that point yet? The fact that once its referred to them they don't have to rely on Senators and Congressmen to do anything removes a major obstacle.
Among the myriad reasons I yearn for this to happen is my morbid curiosity about what in the hell assholes like Jim DeMint, Richard Shelby, Rand Paul, et al are possibly going to say in response. Would they even dare to spin this in some bizarro partisan way? Even tea partiers hate Wall Street. It seems like this is a rare "wash issue" where any politician in his or her right mind would get behind it because it's so fundamentally offensive that both parties would benefit equally. There's real no "advantage" at all to be had by defending these financial executives...besides campaign contributions. But in such a black-and-white "these guys lied" case, what good can it possibly do for you with your constituents? You're just going to lose your next election.
I guess most of these people have no scruples, so as long as they can get their cash up front they don't care. They'll get a cushy "consulting" job with Blackstone or Transocean or some other arch-corporation.
Did you notice how progressively depressing this email got? Fuck...
I read some of the Levin report. It's wild. It completely puts to lie the notion that Goldman was innocent during this entire time period, as the report details instance after instance of the bank reaming its clients and customers. The most interesting passage for me so far came on page 391, about the “Hudson” deal:
Goldman began marketing Hudson 1 securities in October 2006, soliciting clients to buyHudson securities. It did not fully disclose to potential investors material facts related to Goldman’s investment interests, the source of the CDO’s assets, and their pricing. The Hudson 1marketing materials stated prominently, for example, that Goldman’s interests were “aligned” withinvestors, because Goldman was buying a portion of the Hudson 1 equity tranche. In its marketing materials, Goldman did not mention that it was also shorting all $2 billion of Hudson’s assets – an investment that far outweighed its $6 million equity share and which was directly adverse to the interests of prospective investors. In addition, the marketing materials stated that Hudson 1’s assets were “sourced from the Street” and that it was “not a balance sheet CDO.” However, $1.2 billion of the Hudson assets had been selected solely to transfer risk from ABXassets in Goldman’s own inventory.
Goldman also did not disclose in the materials that it had priced the assets without using any actual third party sales. The absence of arm’s length pricing was significant, because the Hudson CDO was designed to short the ABX Index using single name RMBS securities, and there was a pricing mismatch between the two types of assets. Goldman not only determined the pricing for the RMBS securities purchased by Hudson 1, but retained the profit from the pricing differential. The marketing materials did not inform investors of Goldman’s role in the pricing, thepricing methodology used, or the gain it afforded to Goldman.
Translating this into English: Goldman acquired reams of crappy residential mortgage-backed securities, dumped them on clients, then bet against 100% of the deal. But the shocking detail to me was this bit about pricing: Goldman bought the crappy securities at X price, then sold the securities to their clients at another, completely Goldman-invented price – let’s call it (X + Blankfein) – and then pocketed the difference. So the bank gouged clients on price and then turned around and took a short position on them on the other side.
Then, and this is my favorite part, when Hudson began losing money, all the investors came running to Goldman, begging them to liquidate the deal to get whatever they could for the crap securities before they lost all their value. But unbeknownst to Goldman’s clients, you see, Goldman had that monster short position on the other side, meaning that the more those securities plummeted in value, the more Goldman made. So Goldman stalled and continually refused to liquidate the deal even as their clients begged them to get out. The report quotes a Morgan Stanley rep (Morgan was one of the investors) who claimed that he was so mad when Goldman refused to liquidate the deal that “I broke my phone.” He says to the head of Goldman’s CDO desk: “One day I hope to get the real reason you are doing this to me.” Morgan Stanley ended up losing $960 million on that deal. Think about that next time you consider how much federal aid both Goldman and Morgan Stanley got during the bailouts. Morgan Stanley lost nearly a billion dollars on this one simple, good old-fashioned ripoff – a straight-up fraud deal. Of course, we ended up paying for it.
I personally don’t see why more politicians don’t do what Levin is doing. These nitwits at Goldman are totally indefensible and politically cancerous. Even for purely cynical reasons – even leaving out the part about it being the right thing to do – politicians should be whaling away at them with stories like this. But they don’t. It’s hard to figure, even when you take the campaign dollars into consideration.
as a lapsed linguist, I believe strongly that grammar fights are the best fights. I think your/you're errors *almost*--but not quite--invalidate an entire argument. Basically I apply a scale like the following:
Forgivable: typo error (you/your errors are common here)
On the Fence: homonym errors (your/you're, etc.)
Eye-Rollers: bad apostrophe errors
Full-On Kenny Powers YOU'RE FUCKING OUT territory: incorrect introduction of "whom" into a sentence, describing person and number as "tense", spelling "grammar" as "grammer"
The middle two can be ignored or highlighted as I wish, depending on my feelings about the writer and argument. If a dickhead is writing something stupid, you best believe I'm pouncing all over that shit. If somebody right-on is speaking truth to power, well, the occasional gaffe is a burden one must bear, in the way that one may not have Welcome to the Terrordome without Incident at 66.6 FM.
The apostrophe thing I find really strange. You even see storefront signs, things people had to have made, by professionals, that say things like LIVE WORM’S and WE BUY YOUR GOLD ITEM’S. You would think the guy at the signmaking shop would call the client and say, “Dude, can I leave out the apostrophe? Your worms will be plural even without it!” It’s sort of like the 18-inch Stonehenge in Spinal Tap… somebody should have said something before the concert started.
That said, busting on people for bad grammar is kind of a dick move generally I think. I just have a personal thing about the “your” mistake, especially when it’s coming from some guy who just read The Road to Serfdom ten minutes ago and is lecturing me on “the Austrian school” and Hayek’s theories of market libertarianism. I think in general bad grammar is okay, but it’s problematic when added to pseudo-intellectualism. Might be a topic for the Supreme Court to consider…
Why don’t you do what Michael Lewis does, and trade off your finance career to write a sports book that will make you millions of dollars? You can have your very own stereotype-reinforcing Sandra Bullock movie about all the good things that happen when middle-class Christian whites civilize black street children!
Bullock’s Oscar was another what the fuck? moment for me. After watching the audience full of bourgeois Hollywood types cheering the selection I had to call the local white guilt hotline here in Jersey City and stay on for like 37 straight minutes. I still love Liar’s Poker, though.