Dow Jonesin’: Rupert Murdoch reports big loss on ‘Wall Street Journal’-related writedown

The pot’s calling the kettle black: The New York Times runs a Reuters story this afternoon about Rupert Murdoch‘s News Corp. posting an $8.4 billion writedown on the advertising-challenged Wall Street Journal and other properties.

The Times, as we know, is in even worse shape and has even reached out to Mexican billionaire Carlos Slim.

Nevertheless, the snooty paper of record neglected to mention its own troubles — while it saw fit to mention the woes of other media corpses:

News Corporation is the latest media conglomerate to report gloomy financial results as advertisers slash their budgets in the weak economy.

This week, Time Warner posted a $16 billion quarterly net loss because of a write-down, and the Walt Disney Company posted a sharply lower-than-expected profit in part because of poor TV ad and DVD sales.

The bad news for the Wall Street Journal — the best piece of Murdoch property other than The Simpsons — is that it’s apparently dragging down the whole thing.

Meanwhile, if you want to learn more about the Times‘s own troubles, read this story from Murdoch’s Post:

I told you last month that newspapers needed a bailout. But George W. Bush, whose presence on the scene provided mucho grist for the mill, has fled to Texas, and all he left us was this lousy meltdown.



Wall Street’s bonus army pulls bank robbery; Al Jazeera’s Josh Rushing joins his U.S. mates in Afghanistan

In “Taliban resurgence pushes troops to change tack,” Al Jazeera‘s Josh Rushing joins U.S. troops on the frontline in Afghanistan. Watch this and then ask yourself: Why isn’t this as freely available on your cable as CNN or Fox News? And yes, you’ve heard Rushing’s name; he’s the former Marine flack during the Iraq invasion who was featured in the documentary Control Room and then defied the Pentagon by talking about his experiences with Al Jazeera. Now he works for Al Jazeera.

Unlike Wall Street’s short-sellers, I hate to burst anyone’s bubble, but capitalism is not dead, despite the moaning and groaning from Davos to D.C.

The International Monetary Fund predicts that the global economy will come to “a virtual halt.” No, not yet and not for everybody. For evidence, see “What Red Ink? Wall Street Paid Hefty Bonuses” in the Times:

Despite crippling losses, multibillion-dollar bailouts and the passing of some of the most prominent names in the business, employees at financial companies in New York, the now-diminished world capital of capital, collected an estimated $18.4 billion in bonuses for the year.

That was the sixth-largest haul on record, according to a report released Wednesday by the New York State comptroller.

While the payouts paled next to the riches of recent years, Wall Street workers still took home about as much as they did in 2004, when the Dow Jones industrial average was flying above 10,000, on its way to a record high.

On the other hand, you can say that capitalism is in trouble, judging by the surprisingly cynical, lively tone of Ben White‘s above story.

In fact, this is one of the rare moments when a Times story is sharper and more skeptical than the tabloids’ stories on the same topic. Compare this morning’s Daily News story: “City takes hit as Wall St. bonuses cut.” Or the Post‘s: “WALL STREET BONUSES DROP TO LOWEST IN 30 YEARS.”

Yes, the fact that the bonuses sharply fell indicates trouble on Wall Street. But the main thing it indicates is that the bonuses in past years have been staggeringly unconscionable and are now falling back to being merely unconscionable.

In any case, Barack Obama, the nation’s first Kenyan-Kansan president, has already used his bully pulpit to preach social responsibility and rail against greed. Looks as if he might have to summon these Wall Street gangsters to the basketball court and posterize them. You know, add them to his In-Your-Facebook.

And you can just ignore the caterwauling by Capitol Hill’s Republicans about Obama’s stimulus plan. Even the Wall Street Journal reports that corporate types look favorably on Obama’s package.

For those of us accident victims bleeding after being run over on Wall Street or gasping for breath at the foot of Capitol Hill, that stimulus package can’t come too soon. The depression is finally hitting home: I almost dropped my laptop when I heard that profits earned by my Sony baby daddy dropped by 95 percent. Poor little laptop overheats as it is.

If yours still works (and if you’re reading this, it is), click on these items…



Members of the MTA board were called “callous” and “oppressors” at a fare hearing in Brooklyn last night that drew nearly 500 people.

Wall Street Journal: ‘Continuing Jobless Claims Hit Record’

N.Y. Times: ‘What Red Ink? Wall Street Paid Hefty Bonuses’

Despite crippling losses in 2008, employees at financial companies in New York collected an estimated $18.4 billion in bonuses for the year.


N.Y. Daily News: ‘Mobster put body in acid, then gave boss the finger — in soup’


Astroland Park’s popular Rocket won’t be blasting out of Coney Island after all. City officials confirmed yesterday that the park’s longtime operator, the Albert family, has donated…

N.Y. Times: ‘House Passes Stimulus Plan Despite G.O.P. Opposition’

Without a single Republican vote, President Obama won House approval for an $819 billion economic plan as Democrats sought to temper their own differences.

Wall Street Journal: ‘U.S. Moves to Aid Credit Unions’

Bloomberg: ‘Gore Says Stimulus Package’s Investments Will Help Combat Global Warming’

N.Y. Post: ‘DA: #!@ ATT’Y $CAMMED SICK

It takes a special kind of thief to get Morgy this mad. Manhattan’s gentlemanly district attorney, Robert Morgenthau, yesterday needed a pair of profanities to describe a big-shot…

N.Y. Times: ‘Youth Charged With More Attacks on Latinos’

The seven defendants in the deadly assault on Marcelo Lucero, an Ecuadorean immigrant, are accused of assaulting or attempting to assault a total of eight other Latino men.


The wealthy Upper West Side woman charged with bilking $80 million from Fortune 500 firms is complaining that she can’t live without her Rolex, Warhol and MontBlancs…

Bloomberg: ‘Mitchell’s Firm Lobbied For Dubai’s Ruler to Help Quash Camel Jockey Suit’

George Mitchell, President Barack Obama’s special Middle East troubleshooter, was chairman of a law firm that was paid about $8 million representing Dubai’s ruler in connection with a child-trafficking lawsuit.

CBS: ‘CIA Officer In Algeria Accused Of Rape’

N.Y. Times: ‘Backers of Mayoral School Control Face Resistance’


N.Y. Daily News: ‘15,000 school jobs may go: Klein’

N.Y. Times: ‘Friends, Until I Delete You’

As your circle of friends on Facebook widens, you may wonder if there’s an etiquette to “defriending” someone, just in case.

FOX: ‘Curvy Kim Kardashian Thinks Curvy Jessica Simpson “Looks Hot”‘

N.Y. Times: ‘On Iraq, Obama Faces Hard Choices’

In redefining the nation’s mission in Iraq, President Obama must decide between abandoning a campaign promise and risking a rupture with the military.

Wall Street Journal: ‘Chinese Premier Blames Recession on U.S. Actions’

CBS: ‘LA Cardinal Subject Of Federal Probe’

N.Y. Times: ‘Stimulus Package’s Components Vary in Speed and Efficiency’

The impact of the $819 billion economic stimulus package will be felt within weeks once the final version becomes law, but estimating its effectiveness is far more complex.

N.Y. Times: ‘After the War on Terror’ (Roger Cohen)

In his first White House televised interview, with the Al Arabiya news network, President Obama buried the lead: The war on terror is over.

N.Y. Times: ‘Blagojevich to End Boycott of His Own Trial’

N.Y. Times: ‘White House Unbuttons Formal Dress Code’

N.Y. Times: ‘Musicians Hear Heaven in Tully Hall’s New Sound’

‘JPMorgan Exited Madoff-Linked Funds Last Fall’

From the Times:

…the bank suddenly began pulling its millions out of [funds that invested with Madoff] in early autumn, months before Mr. Madoff was arrested, according to accounts from Europe and New York that were subsequently confirmed by the bank. The bank did not notify investors of its move, and several of them are furious that it protected itself but left them holding notes that the bank itself now says are probably worthless.


He’s “The Prisoner of Park Avenue.”

Bernie Madoff is whining to anyone who’ll listen that he’s being held captive in his palatial penthouse and unable to traipse around the Big Apple as he did before being busted for running a $50 billion Ponzi scheme, a source familiar with the scam artist told the Post.

“I’m a prisoner in my own house!” Madoff fumed. “I can’t go anywhere! I’m stuck here all day!”…

In recent days, The Post has learned, private contractors have been moving at the request of federal authorities to install wiretaps on Madoff’s apartment phones and computers.

“If he surfs the Web or makes a call, it’s going to be tracked,” a source said.

NY1: ‘Queens Warehouse May Be Linked To Madoff Scheme’

Bloomberg: ‘Madoff’s Tactics Date to 1960s When Father-in-Law Was Recruiter’

Bloomberg: ‘Ex-Madoff Worker Objects to $58,000 Bill for Boss’s Mercedes’

Wall Street Journal: ‘Painting the Scene of Madoff’s Operation’

Forbes: ‘Wells Fargo becomes the first major U.S. bank to report Madoff-related loan losses’

CNBC: ‘Accused Swindler Cosmo Owed Thousands to Mob’


Happy holidays: Madoffs shop, Gov. Paterson gallivants

Only three shopping days ’til Depression. But no need to hurry as in years past because you may have already been laid off, so have that second cup of coffee before you head off to longingly press your noses against those store windows.

If you still have a job, it probably won’t matter if you take off from work (because you’re probably not going to have your job much longer anyway) to grab that new bauble for your spouse (because diamonds are forever).

Let’s face it: You’re fucked. (No really, Xmas season is the peak time of mating.)

Anyway, this could be your last chance to get that plasma TV. Next year you could be at the blood bank cashing in your plasma just to put food on the table.

This morning’s best headline is the New York Post‘s “DEATH-LEAP SUV GAL WAS BOOZY: BAR BOSS.” And the most heart-warming Xmas story also comes from the Post: yesterday’s joyous shopping spree by one of Bernie Madoff‘s sons. The Post was on the scene:

Bernard Madoff’s investors have lost everything, but his son and daughter-in-law seemed without a care in the world yesterday as they dashed around SoHo on a holiday shopping spree.

Andrew Madoff, 42, who worked with brother Mark at their dad’s now-failed financial firm, still drives around in a BMW SUV to do his holiday shopping, loading up with purchases from J.Crew, Longchamp, Kidrobot and other tony stores in SoHo.

Andrew and wife Deborah, 41, who live on the Upper East Side, also shopped at American Eagle and a high-end lamp store, and checked out the windows at Vera Wang.

No word on whether the couple also went shopping for a shiny, new Ponzi to give to their dad. Take us for a ride, Bernie!

Already going for a spin at our expense is Governor David Paterson, who went to Iraq to “spread holiday cheer” to the troops, as the Daily News reports.

WTF is he doing in Iraq!? He has no say on decisions concerning the war. Some government is paying for that trip. The Daily News sez:

Paterson, joined by Reps. Anthony Weiner (D-Brooklyn, Queens) and Steve Israel (D-L.I.), arrived in Iraq with Yankees and Mets baseball caps for the soldiers.

He said he came to thank them for their service but wound up being “overwhelmed” by their appreciation in return.

It’s bad enough that the two congressmen are over there for no practical purpose. But while tens of thousands of New Yorkers and other Americans are standing on line for the first time to collect food stamps and other dwindling social services, Paterson’s collecting good wishes from the troops? We know that pols live for applause, but WTF!?

Stranded, we point and click to these items …



N.Y. Daily News: ‘Obama probe clears top aide Rahm Emanuel of too much Blago blabbing’

McClatchy: ‘Stimulus plan could be mother of all “Christmas tree” bills’

N.Y. Daily News: ‘Stars of David: A-listers do Chanukah’

Wall Street Journal: ‘Investors Lose Faith, Pull Record Amounts’

Rank-and-file investors, who likely account for half or more of all U.S. stock holdings, are losing faith in stocks just as in past, long market downturns. Investors withdrew an estimated $72 billion from stock funds overall in October.

Guardian (U.K.): ‘Stampede for “Bush shoe” creates 100 new jobs’

Ramazan Baydan, owner of the Istanbul-based Baydan Shoe Company, has been swamped with orders from across the world, after insisting that his company produced the black leather shoes which the Iraqi journalist Muntazar al-Zaidi threw at Bush during a press conference in Baghdad last Sunday.

Baydan has recruited an extra 100 staff to meet orders for 300,000 pairs of Model 271 – more than four times the shoe’s normal annual sale – following an outpouring of support for Zaidi’s act, which was intended as a protest, but led to his arrest by Iraqi security forces.

Times (U.K.): ‘Gordon Brown puts millions on table to save car maker Jaguar Land Rover’

BBC: ‘Windows XP allowed to live again’


Maybe it wasn’t the “Finest” idea. Two identity thieves ripped off cops at a Brooklyn station house after they got hold of a 15-year-old personnel roster and used the information …

Wall Street Journal: ‘The Presidential Pickup Game’

With the naming of ‘the best basketball-playing cabinet in American history,’ hoops madness is hitting Washington. But don’t count out the bowling lobby.

Wall Street Journal: ‘U.S. Developers Seek
Their Own Bailout’

Big property developers are asking to be included in a new $200 billion loan program as a surge in commercial mortgages comes due.

The Age (Australia): ‘Japanese protest against Google Street View’

A group of Japanese journalists, professors and lawyers demanded Friday that the US Internet search giant Google scrap its “Street View” service in Japan, saying it violates people’s privacy. … The service was expanded to 12 major cities in Japan in August and six cities in France in October. …

The Google Japanese unit earlier said it was blurring the faces of people seen in Street View scenes by special technology and that it would delete the pictures of people and buildings upon request.

Japan has stricter protections on privacy in public than in the United States, with Japanese able to stop their pictures from being used against their will.

Saudi-U.S. Relations Information Service: ‘Election 2008: Arab World Views’

“When you talk to Arabs they talk about the American media, they say American media is synonymous with Fox.

“Well, no, American media is not synonymous with Fox. And great things are published by the American media. Great things are published by the American media. The American media covered the Shabra and Shatila massacres in a more dignified professional way than all the Arab media put together. Make no mistake.”

Times (U.K.): ‘FBI diverts anti-terror agents to Bernard Madoff $50 billion swindle’

Washington Times: ‘Bush, Cheney comforted troops privately: Met with thousands of war injured, kin out of spotlight’

Times (U.K.): ‘Three near-invisible drawings discovered on back of Da Vinci masterpiece’ [VIDEO]

Wall Street Journal: ‘Mortgage Applications Surge on Falling Rates’

Times (U.K.): ‘Bad for investors, good for lawyers: Grandchildren of Madoff investors will still be suing grandchildren of hedge fund managers in fifty years’

Washington Post: ‘Cheney Defends His Tenure, Administration’s Actions’ [TRANSCRIPT]

Vice President Cheney offered an unabashed defense of the Bush administration’s claims of broad executive powers today, mocking criticism from Vice President-elect Joseph R. Biden Jr. and saying the president “doesn’t have to check with anybody” before launching a nuclear attack.

AP: ‘AP study finds $1.6B went to bailed-out bank execs’

Banks that are getting taxpayer bailouts awarded their top executives nearly $1.6 billion in salaries, bonuses, and other benefits last year, an Associated Press analysis reveals. …

The total amount given to nearly 600 executives would cover bailout costs for many of the 116 banks that have so far accepted tax dollars to boost their bottom lines.

Sunday Mail (U.K.): ‘Fury as bust bank flies 100 branch managers to New York on junket’

CRISIS-HIT bank HBOS came under attack yesterday after rewarding 100 branch managers with an all-expenses paid trip to New York.

The four-day holiday – which includes tickets for their partners and spending money – comes weeks after taxpayers bailed out the bank with £11.5 billion.

The managers are being rewarded for hitting performance targets – in a year that ended with the bank facing collapse.



Indiana Jones and the Lost Billions, starring Bernie Madoff as the Grinch

We’ve always known that New York is the city of big liars. But if last week’s blockbuster criminal complaint is true, then Bernie Madoff is the biggest liar in town.

And now that adds to the burden of Barack Obama. At least he’s from the city of big shoulders. And he’ll need them.

It is satisfying that Madoff is one of those annoying high-society mogul twits and that he has enveloped other rich goniffs in places like the Palm Beach Country Club.

It’s like a bad Spielberg movie — and it is to Steven Spielberg himself, who also got taken.

But Madoff’s assault on other rich people is only an amusing sideshow in light of the charities and other institutions that got suckered and are now shuttered because of his alleged Ponzi scheme. (Brilliant New York Post lede graf this morning: “He’s the Grinch who stole … everything.”)

Wall Street’s potholes are widening into one big chasm, thanks in part to such stupidity as pension funds letting Wall Streeters manipulate the money reserved for hard-working middle-class retirees. Yes, it’s not only banks, hedge funds, and other rich people who lost millions. Fairfield, Connecticut, for just one of many examples, reports losses of $42 million in pension funds.

Maybe potholes is the wrong word. Wall Street’s looking like tar pits that are hardening so suddenly that we can’t even grab our shoes to throw them at crooks and pols.

On the other hand, now we hear that Dick Cheney calls the Guantanamo Bay prison “very valuable” and wants it to stay open. That’s a great idea. Send Bernie Madoff and other Wall Street crooks there.

But at least environmentalists are getting good news about other valuable real estate. They just might have won a major victory with Obama’s selection of Colorado senator Ken Salazar as Secretary of the Interior.

He’s definitely no Stewart Udall — not even close — but for these times he’ll do. Salazar has been engaged with the Bush regime’s Bureau of Land Management in a bitter fight to keep the government from tearing up the Roan Plateau in western Colorado, a beautiful, massive area west of Aspen that sits over gas and oil shale.

For newsy, recent background, see Alan Prendergast‘s fine reporting (as always) in the Denver alt paper Westword. Last June, in “A Hot Summer on the Roan Plateau,” Prendergast wrote:

It’s official. The Bureau of Land Management announced Monday that it will auction gas leases on 55,000 acres on top of the Roan Plateau on August 14. And Governor Bill Ritter and Senator Ken Salazar, who’ve been battling the BLM plan for years, are more than a little exercised over the move.

Although it doesn’t enjoy the protection of a national park or even a designated wilderness area, the Roan is one of the most biologically diverse areas in the state — a haven for black bears, mountain lions, peregrine falcons, rare plants and the world’s purest strain of Colorado River cutthroat trout. But the plateau also sits on an estimated $22 billion worth of natural gas.

For a human’s look at the Roan, a place you’ve never heard of, see Prendergast’s “Raiding the Roan: Rich in wildlife and natural resources, the Roan Plateau survived the last energy boom. Will this one destroy it?”

Stewart Udall, by the way, is still alive. And as recently as last June, the still-sharp 88-year-old former Secretary of the Interior under JFK and LBJ told the New York Times‘s Timothy Egan that he was hopeful that the country was about to enter “a new era” of conservation.

Tragically, his brother, charismatic former congressman, presidential candidate, and shoulda-been-president Mo Udall, died a decade ago after a bitter battle against Parkinson’s during which he clung to his congressman post for 12 years after he was diagnosed. However, Stewart’s son Tom Udall is a senator-elect in New Mexico, and Mo’s son Mark Udall is a senator-elect in Colorado.

As Egan wrote:

[F]rom Udall’s long tenure as secretary of the interior for both Kennedy and President Lyndon Johnson came a legacy of public land protection responsible in large part for so many wilderness areas just outside Western cities.

Now, the son also rises. And so does the nephew.

That is a family that helps relieve the bitter taste left in our mouths by Bernie Madoff and his clan.


Times (U.K.): ‘Head of IMF fears unrest without action on economy’

Violent unrest may be sparked around the world by a prolonged global slump unless governments act with greater urgency to jump-start stalled economies, the head of the International Monetary Fund said on Monday.

Dominique Strauss-Kahn sounded a stark warning over the consequences of what he argued was weak and uncertain government reaction to the economic crisis. He used a hard-hitting speech in Madrid to single out eurozone nations over what he attacked as an inadequate response.

The broadside from the IMF’s managing director came as fears over a protracted global recession, and political fallout, mounted after China said that its factories’ output registered the weakest growth in almost a decade last month.

Register (U.K.): ‘Nine in ten emails now spam’

Nine in ten emails are now spam with an estimated 200bn junk mail messages a day clogging up the internet, according to a new report by networking and security giant Cisco.

The US is the single biggest source of spam, accounting for 17.2 per cent of junk mail. Other big offenders include Turkey (9.2 per cent), Russia (8 per cent), Canada (4.7 per cent), Brazil (4.1 per cent), India (3.5 per cent), South Korea (3.3 per cent), Germany and the UK (2.9 per cent each). …

The latest 2008 edition of Cisco’s annual security report notes a 90 percent growth in threats stemming from legitimate domains, nearly double that recorded in 2007. Numerous mainstream websites were loaded with iFrames, malicious scripts that redirect visitors to malware-downloading sites.

The compromise of legitimate domains is all part of the bigger picture of increasingly sophisticated attacks which these days are usually tied to cybercrooks looking to turn a fast buck, rather than teenagers looking to make a name for themselves.

McClatchy: ‘Even with gasoline prices down, Americans cut back on driving’

New Yorker: ‘News You Can Lose’

The perfect storm is real enough, and it is threatening to destroy newspapers as we know them. …

Times (U.K.): ‘British banks losing billions to “one big lie” in biggest ever fraud’

The eye-popping scale of what is being billed as the world’s largest swindle became apparent yesterday as wealthy investors and banks around the world emerged as the victims of Bernard L. Madoff. …

Banks and investors around the globe announced probable losses of $19.5 billion in aggregate, although Mr Madoff has said that the figure could go as high as $50 billion.

Wall Street was still trying to digest the unprecedented scale of the fraud, news of which broke last week when the FBI announced that Mr Madoff, a pillar of New York society and a former chairman of the Nasdaq share market, had been arrested and charged. What had taken Mr Madoff years to set up had collapsed in less than three months.

Washington Post: ‘Obama Picks Chicago’s Schools Chief For Cabinet’

[It is a little unnerving that George W. Bush’s Secretary of Education, Margaret Spellings (great name!) has praised the guy, Arne Duncan, as a “kindred spirit.” — Harkavy]

N.Y. Times: ‘Kennedy Seeks to Prove Qualifications for Senate Bid’

McClatchy: ‘Bush shoe incident caught Secret Service flatfooted’

N.Y. Post: ‘The Most Hated Man in New York: Bernie Madoff Skulks From His Manhattan Penthouse’

Register (U.K.): ‘China “bans” BBC’s Chinese website’

McClatchy: ‘Probe finds politics drove endangered species decisions’

Politics corroded Bush administration decisions on protecting endangered species nationwide, federal investigators have concluded in a sweeping new report.

Former Interior Department official Julie MacDonald frequently bullied career scientists to reduce species protections, the Interior Department investigators found.

N.Y. Times: ‘Legal Hurdle in Blagojevich Case: A Crime, or Just Talk?’

L.A. Times: ‘Madoff debacle hits region’s Jewish community’

Wall Street financier Bernard L. Madoff’s alleged $50-billion Ponzi scheme appears to have extended deeply into Southern California’s Jewish community, with millions of dollars in losses tallied Monday by charitable organizations, Hollywood executive Jeffrey Katzenberg and a foundation bankrolled by director Steven Spielberg. …

The more than 30 organizations and individuals around the world identified so far as victims of the alleged deception are a diverse lot. But the disclosures by Southland Jewish organizations suggest a so-called affinity scam, in which members of a perpetrator’s ethnic or religious group are targeted.

N.Y. Times: ‘Giant Wall St. Fraud Leaves Charities Reeling’

Aspen Daily News (Colorado): ‘Conservation groups ask Obama for oil shale reversal’

Conservation organizations are asking President-elect Barack Obama to reverse the Bush administration’s efforts to speed oil shale development in western Colorado, eastern Utah and southern Wyoming.

Twenty-one local, regional and national organizations are asking the incoming administration to withdraw the Bush administration’s last-minute rules governing oil shale development and wait until after the results of a research and development program are known.

They accuse the Bush administration of “rushing development of a commercial oil shale leasing program in a manner that solely benefits industry — at the expense of taxpayers and sound policy.” …

Environmentalists are looking to the Obama administration to be a closer ally on their issues than the Bush administration, which they criticized for rolling back protections for public lands and easing energy exploration.

They have been asking Obama’s transition team to reexamine a range of public lands issues, from drilling on the Roan Plateau to protections for roadless areas.

McClatchy: ‘For Congress, auto executives are “lemons,” too’


Daily Flog: Feds bail out Citibank, automakers. You’re still at the end of the bread lines.

Fearing Detroit’s auto-destruction, Henry Paulson has decreed a bailout of automakers.

For details of this smokin’ deal, see the Wall Street Journal‘s ‘U.S. Auto Makers Look to Federal Sales Incentives’

That’s the automakers’ reward for having spent the past 50 years refusing to produce electric cars and other energy-saving modes of transportation and lobbying aggressively against energy-saving and convenient mass-transit systems.

Good news for me, though: Paulson’s also going to bail out my bank.

Best headline today: ‘Citi Dump: Feds, Bank Giant in $1.2 Trillion “Toxic” Rescue’

Best bailout today: The Detroit Rescue, which is a landmark event in the history of U.S. capitalism: the end of the free-market system and the start of a full-blown free-marketing system.

At first blush, these steps may seem insane. A bank will be created to manage Citibank’s “toxic” assets — the ones that Citi’s executives worked so hard to acquire but which now are threatening their empire.

As for Detroit, auto sales are down, so the federal government is actually going to subsidize the automakers’ attempts to sell us more cars.

Does this mean even more TV ads bombarding us with news of vehicle “sales events”? (Adding to our irritation, the ads continue to say “sales events” or just plain “events,” instead of simply calling them “sales.” Hey, everybody, it’s an “event”! Let’s all go to the “event”!)

Oh, the weather outside is frightful, but the fire sales are so delightful. So let there be snow jobs.

These new twists to corporate welfare could be considered reckless driving leading perhaps to vehicular suicide, but only if you think that Paulson and the bailout crew really know what they’re doing instead of just scrambling to get the money flowing on Wall Street.

The bankers and their lawyers know full well how they made their billions of dollars: by setting up credit-default swaps and clever trading instruments based on shaky mortgage deals. So why don’t they know how to manufacture the proper antidote for themselves (and the global economy and, lastly, us)?

Think of the Street’s bankers and lawyers as kids sweltering on high sidewalks and then the federal government comes in and turns on the fireplugs’ faucets, flooding the place with gushes of cool, cool water.


Meanwhile, start thinking about what it would take to put you and your family in that brand-new vehicle you can’t afford because we’re in a recession.

Here’s a tip: Don’t pay extra for the “undercoating.” You’ve already paid dearly for it.

In the past 60 years, the federal government has built for the automakers the Interstate Highway System
and at the same time refused similar help to the railroads, thus letting rail passenger service wither away. And of course, the feds heavily subsidized airports and other infrastructure for airlines while letting inner-city train stations decay.

What’s next? Henry Paulson’s going to spend the money to raise Eastern Air Lines from the dead?

In other rescue news, Barack Obama‘s team is working hard to help Hillary Clinton overcome her election embarrassment.

Eerie parallel to Wall Street’s meltdown: Wasn’t it Obama who caused Hillary’s meltdown? And now he’s bailing her out?

On Wall Street, the bankers melted down the economy, and Paulson, the ex-CEO of Goldman Sachs and thus one of the most powerful Wall Street bankers, is spending billions of your money to rescue them.

(Rant continues here.)

The bailouts are spreading like a fungus. Not that bailouts aren’t needed. But when exactly is the federal government’s infectious enthusiasm to help our corporate citizens going to reach the country’s human citizens?

Or at the very least, when is the federal government going to start bailing out the state and city governments that are having to slash their budgets — which means sacrificing the already underfunded social programs that promote the general welfare throughout the country?

If it pursues its present course, the federal government will eventually have to at least start setting up bread lines. Otherwise we’ll all be too weak to go further into debt to buy those overpriced, gas-guzzling Detroit cars.

Here’s an idea: Start directly saving the workers who build those cars by helping them restructure their mortgages and by making sure that vital social services for them and other ordinary Americans aren’t cut. Do what the FDIC’s Susan Bair suggests and attack the problem of getting the money flowing by starting at the bottom and working your way up, instead of starting at the top and letting these schemes trickle down — if they trickle down to us at all.

While you’re waiting for the government’s rescue engine to warm up . . .


Bloomberg: ‘U.S. Stock Futures Climb as Citigroup Rallies 41 Percent; Exxon Falls’

Salon: ‘Barack Obama, honeymoon killer?’

“The Clintonites in his Cabinet, forgiveness for Lieberman, the creeping signs of centrism — progressives aren’t ready to panic, yet.”

Wall Street Journal: ‘U.S. Agrees to Rescue Struggling Citigroup’

Plan Injects $20 Billion in Fresh Capital, Guarantees $306 Billion in Toxic Assets

Times (U.K.): ‘Thirteen burned alive in Baghdad bus bomb’

Times (U.K.): ‘Huang Guangyu, China’s richest man, disappears amid corruption investigation’

Salon: ‘Barack Obama wants you (to spill your secrets)’

“Prospective White House employees must cough up an unprecedented amount of detail about their online activity. Is the new administration being smart — or scary?”

Scoop (New Zealand): ‘Environmental Risk Management Authority Warned Over Inadequate Monitoring GE Animals’

GE Free NZ in food and environment is concerned that transgenic animal experiments in New Zealand are being undertaken without sufficient knowledge of the constructs being created, or analysis of the effects of cloning.

It has been announced by the CEO of Nexia Biotechnologies Dr. Jeffrey Turner that his US-based company has destroyed 214 genetically modified goats that were modified with a spider silk gene and bred to produce fibre that could be used in sutures and body armour. He admitted that the project was one of the company’s “less successful” programs to develop high-strength fibers”.

Wall Street Journal: ‘Anatomy of the Morgan Stanley Panic’

“Trading Records Tell Tale of How Rivals’ Bearish Bets Pounded Stock in September.”

Wall Street Journal: ‘Scowcroft Protégés on Obama’s Radar’

Wall Street Journal: ‘U.S. Auto Makers Look to Federal Sales Incentives’

As executives from the Big Three auto makers prepare to make a second pitch for a federal bailout, concern is rising in Detroit that it will be difficult to show lawmakers how they can return to profitability with sales at their current depressed level.

Their solution: Get Washington to help them sell more cars.

General Motors Corp., Ford Motor Co. and Chrysler LLC may go back to Washington and urge Congress to take measures to spur consumer demand, in addition to providing the $25 billion in loans the auto companies seek. . . .

On Monday, Sen. Charles Schumer (D., N.Y.) plans to send a letter urging the Federal Reserve to make financing available for the auto companies’ lending arms, which would allow them to offer more auto loans, a spokesman for the senator said. The letter will also ask the Treasury to speed approval of GMAC LLC’s request to become a bank holding company.

Vehicle sales are tracking at such a low level right now that most or all auto makers are losing money in North America. Globally, Toyota Motor Corp., Chinese car makers and even Europe’s normally recession-proof luxury auto makers are struggling to stanch losses, the executive of the Big Three firms said.

N.Y. Post: ‘Citi Dump: Feds, Bank Giant in $1.2 Trillion “Toxic” Rescue’

“The feds late last night announced an unprecedented plan to rescue Citigroup by taking a $20 billion stake in the desperately troubled . . .”

Newsday: ‘Gunman in NJ church kills his wife, wounds 2 others’

Times (U.K.): ‘Gordon Brown defends plans to tax the rich’


It is still hard to believe but, if Hillary Clinton’s “confidantes” are to be trusted, Barack Obama is about to appoint her secretary of state and she is about to accept. This appointment represents the capstone of betrayal of Obama’s promise to be the “change we can believe in.”

Having upended the Democratic Party, largely over his different views on foreign policy and the war in Iraq, he now turns to the leader of the ancient regime he ousted, derided, mocked and criticized to take over the top international-affairs position in his administration.

No longer, apparently, does he distrust Hillary’s “judgment,” as he did during the debates when he denounced her vote on the Iraq War resolution. Now, all is forgiven. After all, Obama’s election, the only change he apparently truly believed in, is a fait accompli.

Apart from the breathtaking cynicism of the appointment lies the total lack of foreign-policy experience in the new partnership. Neither Clinton nor Obama has spent five minutes conducting any aspect of foreign policy in the past. Neither has ever negotiated anything or dealt with diplomatic issues. It is the blonde leading the blind.

Salon: ‘Progressive complaints about Obama’s appointments’ (Glenn Greenwald)

N.Y. Times: ‘Radio Host Has Drug Company Ties’

An influential psychiatrist who was the host of the popular public radio program “The Infinite Mind” earned at least $1.3 million from 2000 to 2007 giving marketing lectures for drugmakers, income not mentioned on the program.

The psychiatrist and radio host, Dr. Frederick K. Goodwin, is the latest in a series of doctors and researchers whose ties to drugmakers have been uncovered by Senator Charles E. Grassley, Republican of Iowa. Dr. Goodwin, a former director of the National Institute of Mental Health, is the first news media figure to be investigated.

Dr. Goodwin’s weekly radio programs have often touched on subjects important to the commercial interests of the companies for which he consults. In a program broadcast on Sept. 20, 2005, he warned that children with bipolar disorder who were left untreated could suffer brain damage, a controversial view.

“But as we’ll be hearing today,” Dr. Goodwin told his audience, “modern treatments — mood stabilizers in particular — have been proven both safe and effective in bipolar children.”

That same day, GlaxoSmithKline paid Dr. Goodwin $2,500 to give a promotional lecture for its mood stabilizer drug, Lamictal, at the Ritz Carlton Golf Resort in Naples, Fla. In all, GlaxoSmithKline paid him more than $329,000 that year for promoting Lamictal, records given to Congressional investigators show.

(Full disclosure: Daily doses of Lamictal are to blame for enabling me to write this column. If I had received $329,000 from the drug’s manufacturer, I wouldn’t have needed the drug.)


Daily Flog: Wall Street’s little piggies don’t want to go mark-to-market; meanwhile, more huffing and puffing

The Senate grabbed hold of the Cash for Crash bill and finally came up with a workable version — one that may work for the Wall Street crapshooters but likely not for the rest of us, who are simply loaded dice in the palms of their hands.

Part of the complex maneuverings supposedly aimed at keeping the country from sliding into Great Depression II revolves around “mark-to-market accounting” of the assets that Wall Streeters have played with to the point of, literally, no return.

Yeah, like you, I have only a hazy understanding of this. Those who are financially alliterate are welcome to read this morning’s New York Post story “PIGGY POLS IN HOG HEAVEN WITH PORK-PACKED PACT.” Daphne Retter’s funny, funky take brings a little light to an otherwise dark day of journalism:

Here, little piggies!

Congressional deal-brokers yesterday slopped a mess of pork into the $700 billion financial rescue bill passed by the Senate last night — including a tax break for makers of kids’ wooden arrows — in a bid to lure reluctant lawmakers into voting for the package

Stuffed into the 451-page bill are more than $1.7 billion worth of targeted tax breaks to be doled out for a sty full of eyebrow-raising purposes over the next decade.

More to the point of your financial future and such no-longer-arcane topics as mark-to-market accounting, lower your eyebrows, peer through this morning’s financial fog and try to grab for this guidepost: Bankers and conservative Republicans (including former anti-populace populist Newt Gingrich) favor the abandonment of mark-to-market accounting rules. To which auditors, big investors, and consumer groups reply, “Are you out of your friggin’ minds?”

Think of it like the nursery rhyme that goes, “This little piggy went to market . . .”, and add some huffing and puffing by wolves that may eventually knock down millions of American homes.

In the present case, these little piggies went to mark-to-market, and now they want to remove that accounting rule so they can instantly wipe out their losses on the books and resume playing their Neverland gambling games with our money.

In essence, the new Senate version of the bailout bill would let Wall Streeters lie even more about the value of the assets they’re trading and set us up for a rerun of the Enron scandal.

That should help things.

Or maybe the financial system is so fouled up and so wedded to its inherently corrupt trading instruments and practices that abandoning mark-to-market accounting really would help restart the credit markets and protect you from foreclosure.


And where has Wall Street’s mayor, Mike Bloomberg, been in all this? I pointed to Bloomberg’s culpability on September 23, and now the New York Times is dipping its toe into the topic. The Times, of course, is making excuses for him. See this morning’s “Mayor’s Stewardship Is Mixed, Fiscal Experts Say.”

Enough on Bloomberg and more on the important mark-to-market piece of the corporate-bailout bill below, but first . . .


Wall Street Journal: ‘Fed Considers Rate Cut as Recession Fears Mount’

Slate: ‘How to Debate a Girl, and Win’ (Dahlia Lithwick)

BBC: ‘Tanzania disco stampede kills 19’

N.Y. Times: ‘Stopping a Financial Crisis, the Swedish Way’

Jurist: ‘Ohio to proceed with absentee voting after courts rule on registration requirements’

N.Y. Times: ‘Surveillance of Skype Messages Found in China’


N.Y. Times: ‘Studios Sue to Bar a DVD Copying Program’

Wall Street Journal: ‘Bombs Hit Shiite Worshippers in Baghdad’


Wall Street Journal: ‘Analyzing the “Twelve Tribes of Politics” ‘

McClatchy: ‘What’s in that Senate bill? Something for everyone.’

Agence France Presse: ‘Enron-era accounting reforms blamed in financial crisis’

Far Eastern Economic Review: ‘The Great Crash of China’

Back to the dust-up over the new bailout bill’s endorsement, in effect, of abandoning mark-to-market accounting:

Over at, John R. Simpson issues a fire-and-brimstone warning: “New ‘bailout’ tactic would let fat cats cook books.”

Stirring the pot, today’s Wall Street Journal story “Momentum Gathers to Ease Mark-to-Market Accounting Rule” explains things pretty well. Elizabeth Williamson and Kara Scannell craft a succinct lede:

The banking industry and a band of lawmakers have used the scramble to salvage the financial-markets rescue plan to give new life to an industry push to avoid billions in further write-downs with the stroke of a regulatory pen.

It would just further cloud matters for me to try to paraphrase this, so here’s how Williamson and Scannell lay it out:

A proposal contained in the revised financial-rescue bill the Senate considered Wednesday reaffirms the Securities and Exchange Commission’s existing authority to suspend “mark-to-market” accounting. The language was meant to send a message to the agency to re-evaluate the issue.

The practice, adopted in the aftermath of the savings-and-loan collapse in the 1980s, pegs the value of assets to their current market price, rather than the price paid for them. Banks have complained the strict application of mark-to-market rules has forced them to write down billions of dollars worth of mortgage-related securities, intensifying the squeeze in the credit markets.

Critics of the proposed changes to the “mark to market” rules say gains created by easing the rules would be illusory and would delay resolving genuine doubts about the value of mortgage assets that has caused the recent crisis in confidence.

As Bloomberg’s Jesse Westbrook reported Tuesday, conservative Republicans might very well have supported the House version of the bailout bill if the SEC had suspended mark-market accounting rules.

For background, see “Auditors Resist Effort To Change Mark-to-Market,” in Tuesday’s Wall Street Journal, in which Judith Burns wrote:

U.S. accounting firms, which had been silent on the $700 billion financial-rescue package rejected by the U.S. House of Representatives on Monday, are opposing congressional efforts to scrap mark-to-market accounting rules. . . .

Some House members advocate scrapping mark-to-market accounting altogether as a way to help lenders holding mortgage loans and securities whose value have fallen sharply. Consumer groups have balked at the idea, and accounting firms are about to jump in as well, fearing such a change could deceive investors about the value of troubled loans and mortgage-backed assets.

Let the staggeringly diverse gaggle of opponents of abandoning mark-to-market accounting speak for themselves. This is what they told the WSJ‘s Burns and Bloomberg’s Westbrook:

“It’s just bad for investors,” said Beth Brooke, global vice chair at Ernst & Young LLP, in Washington, D.C. “Suspending mark-to-market accounting, in essence, suspends reality.”

“It’s absolute idiocy,” said Barbara Roper, director of investor protection for the Consumer Federation of America. “Allowing companies to lie to investors and lie to themselves is not the solution to the problem, it is the problem.”

“Suspending the mark-to-market prices is the most irresponsible thing to do,” said Diane Garnick, who helps oversee more than $500 billion as an investment strategist at Invesco Ltd. in New York. “Accounting does not make corporate earnings or balance sheets more volatile. Accounting just increases the
transparency of volatility in earnings.”

Still unclear? In NPR’s “Senate OKs Bailout Package, House to Vote Friday,” Dina Temple-Raston tries to explain:

Although senators approved the bailout plan, lawmakers aren’t out of the woods yet. Conservative Republican members of the House are still calling for some sort of mandatory insurance program that financial firms would be required to buy, but it is unclear how the program would work.

They have also asked for the Securities and Exchange Commission to suspend mark-to-market accounting rules and instead require bank regulators to assess the real value of troubled assets.

Mark-to-market accounting essentially allows Wall Street firms to value (or “mark”) the assets in their portfolio based on current market prices. The problem, critics say, is that under that accounting rule, sliding home prices affect not just the value of mortgages that are defaulting but of all mortgages — and therefore, of all mortgage-backed securities.

That, in turn, affects how much capital firms are required to have on hand to cover their debt exposure. And to raise that capital, firms end up having to sell other assets — which drives the price of those assets down, too. In other words, they say, mark-to-market accounting can lead to a downward spiral.

House Democrats have been opposed to both a change in mark-to-market accounting rules and to the insurance provision. It is unclear how they will work out those differences or how much the House will tinker with the bill when they get it. That said, the sense on the Hill is that everyone wants to get the vote behind them, key lawmakers say.

That’s reassuring that our lawmakers — like pro athletes and philandering pols — want to pull out the hackneyed reasoning to say that all they want to do is get their past mistakes “behind them.” In real time, however, the train is still hurtling down the track toward us.


Daily Flog: The Wall Street bear, the Capitol Hill bull; Kucinich irrelevant but his bailout plan isn’t

Running down the press:

Face it: Capitol Hill’s bailout schemes are Marxist. The only question is which Marx: Groucho or Karl?

House Finance Committee Chairman Barney Frank opts for the former.

His tragicomic analysis last weekend came in a Wall Street Journal story that is one of the finest pieces of journalism yet on the bailout maneuverings. Read the September 29 story for free on The Australian site; here’s the key passage, which you may have seen but bears repeating:

Democrat Senator Max Baucus of Montana, chairman of the Finance Committee, became frustrated that Mr Paulson appeared to be arguing for softer language on the executive-pay rules, arguing that executives at these companies shouldn’t be handsomely paid.

“Let’s not get emotional,” Mr Paulson responded, according to someone in the room.

Mr Paulson also objected to language that would give a new oversight board power to control how the new program would be run. “All we’re talking about is having Groucho, Harpo, and Chico watching over Zeppo,” said Rep. Frank, before Democrats backed off.

By the time the meeting ended around 5.30pm in Washington, lawmakers were breaking up into smaller working groups. Sandwiches and pizza were delivered later in the evening. Many lawmakers continued grazing on a big bowl of pistachios in Speaker Pelosi’s office.

Nuts to them.

The best bailout plan so far may be the one pushed by Dennis Kucinich, whose House floor speech calling for a real bailout for the doomed majority of Americans was cut off by the Democratic leadership.

Kucinich’s clever plan is aimed at protecting millions of Americans after — no matter what manner of bailout Congress approves — the shit inevitably rolls downhill from Wall Street.

See “Kucinich: Bailout Must Protect Home Ownership” — on his own site because even the press belittles Kucinich and other little guys — for his letter to Nancy Pelosi and Barney Frank and backup material from an Emory University prof. And see his full September 30 statement, reproduced in the tiny Cleveland Leader.

Kucinich is this century’s H. Ross Perot — but unlike Perot, Kucinich has a social conscience.

Speaking of those who don’t: What the “free-market” advocates won’t face is that their 21st century corporate-welfare plan is also straight from Karl Marx.

As Martin Masse of Toronto’s National Post business page noted on September 29 in ‘Bailout marks Karl Marx’s comeback: Marx’s Proposal Number Five seems to be the leading motivation for those backing the Wall Street bailout’:

In his Communist Manifesto, published in 1848, Karl Marx proposed 10 measures to be implemented after the proletariat takes power, with the aim of centralizing all instruments of production in the hands of the state. Proposal Number Five was to bring about the “centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly.”

If he were to rise from the dead today, Marx might be delighted to discover that most economists and financial commentators, including many who claim to favour the free market, agree with him.

Indeed, analysts at the Heritage and Cato Institute, and commentators in the Wall Street Journal . . . have made declarations in favour of the massive “injection of liquidities” engineered by central banks in recent months, the government takeover of giant financial institutions, as well as the still stalled US$700-billion bailout package. Some of the same voices were calling for similar interventions following the burst of the dot-com bubble in 2001.

Hail, Freedonia!

But that jingoistic pledge of allegiance to the “Land of the Spree, and the Home of the Knave” that Groucho ran into the ground in the Depression-era Duck Soup (1933) won’t help the average American hang onto the commune he or she bought with an adjustable-rate mortgage.

Angry voters deluged Congress earlier this week when details of the first corporate-welfare bailout were revealed — see this morning’s New York Times story “Labeled as a Bailout, Plan Was Hard to Sell to a Skeptical Public.”

Now the market has staged a revival and a revised bill faces a vote later today in the Senate, but the pols — only a few weeks from the election — wised up, refusing to reveal its details until shortly before the vote.

We no doubt will eventually be trampled by Wall Street’s raging bulls — once the bailout bill restores their dominion over the bears — but things could always be worse. As the Times reports this morning in “Stampede in India Kills at Least 147”:

A religious festival in northern India turned into a horrific deadly crush on Tuesday as thousands of Hindu pilgrims stampeded at a temple shrine, piling into one another on a treacherous walkway slick with spilled coconut milk. Officials said at least 147 people, mostly men, suffocated.

Television showed dead pilgrims strewn on the narrow walkway near the Chamunda Devi temple, at the southern edge of the 15th-century Mehrangarh fort in Jodhpur, in the western state of Rajasthan. It was the second deadly religious tragedy in the past few months in India, where pilgrim stampedes are not uncommon. The victims were suffocated as they rushed down a narrow path from the temple 150 yards above, officials said.

Tuesday was the first day of a nine-day festival called Navratra that celebrates nine incarnations of the Hindu mother goddess Durga. Between 2,000 and 3,000 pilgrims were present when the stampede began about 6 a.m.

Don’t cry over spilled coconut milk; today’s another day. While you try to steer clear of Wall Street’s latest incarnation of a corporate-welfare bill, have another triple-shot espresso and take a break for some browsing . . .


N.Y. Daily News: ‘Murders send city crime rate upwards’

Scotsman: ‘Teenager in £7 million lottery win toasts luck with beans’

AP: ‘Pentagon announces 2009 deployments to Iraq’

BBC: ‘Iraq remains “locked in conflict” ‘

Washington Post: ‘Bush’s Warnings of Danger Are No Longer as Powerful’


N.Y. Daily News: ‘Third term, Mayor Bloomberg? That’s rich!’

Slate: ‘The Black President: A 1926 Brazilian sci-fi novel predicts a U.S. election determined by race and gender’

Scotsman: ‘How predicted empty hives would mean end of the world’

N.Y. Times: ‘Bloomberg Said to Seek Third-Term Bid’

Register (U.K.): ‘Movie giants sue RealNetworks over DVD copying software’

BBC: ‘US drone “kills six” in Pakistan’

Jurist: ‘Ex-CIA official pleads guilty to wire fraud in defense contract corruption case’

Washington Post: ‘Those Up for Reelection Have Explaining to Do’

BBC: ‘Bail-out hope sends shares higher’

Register (U.K.): ‘Boffins dreaming of white Xmas at Martian North Pole’

Register (U.K.): ‘Elvis has left the border: ePassport faking guide unleashed’

Register (U.K.): ‘Secret Service camera bought on eBay’

Register (U.K.): ‘Nasty web bug descends on world’s most popular sites’

St. Petersburg Times (Fla.): ‘Outcry raised over voter ID law’

Jurist: ‘US Senate approves expiration of moratorium on offshore oil drilling’

BBC: ‘Canada PM faces plagiarism claim’

N.Y. Daily News: ‘911 call led to loopy Heather Locklear arrest’

nineMSN (Australia): ‘Wealthy investors hoard bullion’

Slate: ‘Your DVD Player Sleeps With the Fishes’



Daily Flog: America’s King Henry; money bailout for Wall Street but no bailout from Mets’ bullpen




Please recall what Mr. Dooley said a century ago: “Trust everybody, but cut the cards.” Especially when people like Treasury Secretary Henry Paulson are wheeling and dealing.

Under the bailout, we won’t need to appoint Mike Bloomberg our economic czar. (He’ll be free to change NYC’s law and remain our mayor.)

Paulson would no longer be just another Cabinet member. He would become King Henry.

That’s not hyperbole if you believe that bullshit walks while money talks. Your money. Which he would use, at his discretion (not yours or your elected officials’) to bail out his Wall Street pals. As the N.Y. Post puts it: “YOUR $700 BIL TO THE RESCUE.”

Paulson’s control over your money would be unprecedented. In “Treasury Would Emerge With Vast New Power,” the N.Y. Times‘s Floyd Norris writes:

Rarely if ever has one man had such broad authority to spend government money as he sees fit, with no rules requiring him to seek out the lowest possible price for assets being purchased.

You become the Belgian Congo, and he becomes your King Leopold, controlling your financial resources. Instead of keeping the loot, he’ll hand it off to bankers; hopefully he won’t cut off your hands.

Who elected this guy? Under the bill, the former CEO of Goldman Sachs can auction off assets, or he can just simply set prices. Every pension fund, bank, broker, pol will have to kiss his butt. Weak “oversight” panels would supposedly keep an eye on him, but that wouldn’t amount to much control over Paulson’s power. Norris adds:

Mr. Paulson can choose to buy from any financial institution that does business in the United States, or from pension funds, with wide discretion over what he will buy and how much he will pay. Under most circumstances, banks owned by foreign governments are not eligible for the money, but under some conditions, the secretary can choose to bail out foreign central banks.

Leave aside regime frontman George W. Bush‘s brief public P.R. appearance early this morning on the White House lawn. It was supposed to soothe bankers and traders and big investors, but it didn’t calm any of them, based on early action in the markets this morning.

What will matter to them is what Paulson says and will do. He’s about to become the most powerful man in America. No exaggeration. Just follow the money — and the guy who will control it.

What really went on in the private meetings that resulted in a bailout plan that would give the unelected Paulson more direct power over the nation’s money than FDR had during Depression I?

Which leads to this question: Are Dick Cheney and Bush as paranoid and vain as Richard Nixon? Please say yes.

Then we’d have videotape of at least some of those private meetings Paulson conducted to hammer out the Cash for Crash bill. Maybe we’d even have video of Paulson going down on Nancy Pelosi in the White House to plead for a bailout of his Wall Street pals.

It probably wouldn’t be the first time that Hank Paulson has been secretly taped in the White House. Before launching his career as an investment banker, Paulson was an aide to John Ehrlichman during Watergate. He’s certainly familiar with private meetings in the White House about how to bail out an administration. Maybe he even sat in on some of those famous meetings of the coverup conspirators more than 30 years ago.

To refresh your memory, here’s a snippet from the momentous July 16, 1973, Watergate hearing:

SAMUEL DASH, Watergate Committee Chief Counsel: If either Mr. Dean, Mr. Haldeman, Mr. Ehrlichman, Mr. Colson had particular meetings in the Oval Office with the president on any particular dates that have been testified before this committee, there would be a tape recording with the president of that full conversation, would there not?

ALEXANDER BUTTERFIELD, former Nixon aide: Yes, sir.

Mr. DASH: So if one were, therefore, to reconstruct the conversations at any particular date, what would be the best way to reconstruct those conversations, Mr. Butterfield, in the President’s Oval Office?

Mr. BUTTERFIELD: Well, in the obvious manner, Mr. Dash — to obtain the tape and play it.

Play it again, Sam.

But first…


Scotsman (U.K.): ‘Judgment day for world economy’


Telegraph (U.K.): ‘Belief in God “really can relieve pain”‘

Register (U.K.): ‘ “I can see dinosaurs from my back porch”: Palin-tology and the threat to science teaching’

IAN (Indo-Asian News Service): ‘Attack against Christians will not be tolerated: Dikshit’

N.Y. Times: ‘Holiday Bombings Kill 27 in Baghdad’

Slate: ‘The End of the BSD: A Wall Street icon falls’

McClatchy: ‘Anger at bailout turns on fat salaries for Wall Street execs’

Register (U.K.): ‘How an Italian judge made the internet illegal’

McClatchy: ‘Rescue package aside, economy faces deep challenges’


Slate: ‘Tie Goes to Obama: Neither candidate won a clear victory’

Telegraph (U.K.): ‘Miriam Margolyes’ lesbian confession gave her mother a stroke’

Jurist: ‘Pastors challenge US ban on political campaign activity by tax-exempt groups’

Bloomberg: ‘European Lenders Get Bailouts as U.S. Crisis Spreads’

Wall Street Journal: ‘Lehman’s Demise Triggered Cash Crunch Around Globe’

McClatchy: ‘Bailout plan faces a tough vote in Congress today’

Telegraph (U.K.): ‘US warship challenges Somalia pirates’


Daily Flog: White House on its knees, the rest of us on our backs, Wall Street zipping up

We feel the bankers’ pain.

Running down the press:

A surprisingly lively New York Times lede this morning:

[Yesterday] began with an agreement that Washington hoped would end the financial crisis that has gripped the nation. It dissolved into a verbal brawl in the Cabinet Room of the White House, urgent warnings from the president and pleas from a Treasury secretary who knelt before the House speaker and appealed for her support.

“If money isn’t loosened up, this sucker could go down,” President Bush declared Thursday as he watched the $700 billion bailout package fall apart before his eyes, according to one person in the room.

Not since the Clinton Administration has it been widely reported that people were on their knees in the White House and that a president talked about a sucker going down.

And this time it’s a Treasury secretary on his knees, not just an intern. This is some serious shit.

Or not. McClatchy’s Kevin G. Hall, who constantly snoops for fresh angles and comes up with solid material, writes in “Is the bailout needed? Many economists say ‘no’ “:

“It’s more hype than real risk,” said James K. Galbraith, a University of Texas economist and son of the late economic historian John Kenneth Galbraith. “A nasty recession is possible, but the bailout will not cure that. So it’s mainly relevant to the financial industry.”

The Paulson plan will get some bad assets off the balance sheets of troubled Wall Street institutions and commercial banks. That may help thaw the lending freeze.

But it wouldn’t reduce the crush of homes in or near foreclosure, said Simon Johnson, a professor at the Massachusetts Institute of Technology. That’s a problem that will surely grow worse if the U.S. economy enters recession, leading to greater job losses, which feed a vicious downward spiral of even more foreclosures and defaults on car loans and credit-card debt.

What? A story in the national press about the plight of the rest of us? How dare he!

John McCain‘s own September surprise isn’t working out too well, as another McClatchy story points out. In “McCain gets blamed for angry end to Bush’s bailout meeting,” David Lightman and Margaret Talev write:

“What this looked like to me was a rescue plan for John McCain,” said Senate Banking Committee Chairman Christopher Dodd of the Republican objections.

His reference was to McCain’s eleventh-hour intervention in the negotiations, when he declared he was suspending his campaign and postponing Friday night’s debate with Democrat Barack Obama to help negotiate a bailout plan.

Democrats think that Republicans were backing away from a compromise many of them agreed to earlier Thursday — without McCain’s involvement — in order to give McCain time to play a role and perhaps appear as a rescuer.

Senate Majority Leader Harry Reid, D-Nev., said he believed the breakdown was simply an effort to allow McCain to miss Friday night’s scheduled debate with Obama. . . .

Republicans, in contrast, said their reservations on the bailout plan were principled. The plan, they said, had too much government involvement in private industry and too high potential liabilities for taxpayers.

Yes, “principled.” Buy or sell? Sell.

No question that the month has been tough on McCain, but just think about those poor mid-level banker types on Wall Street, which is just a little more than a stone’s throw from my office. (If I had an arm like Rocky Colavito‘s and a bag of stones, I’d take the subway down there and start hurling, instead of just hurling over my latest bank statement.)

Anyway, in “Big banks delay decisions on bonuses,” the Financial Times (U.K.) reports on the plight of British bankers’ bonuses, which depend on how U.S. firms decide their own bonuses:

Morgan Stanley and Goldman Sachs are delaying their decisions about year-end bonuses as they struggle with the financial crisis.

The US investment banks have traditionally set the bar for European and American competitors because their fiscal years end earlier. But the two, which have been forced to seek regulated retail bank status, are putting off their October meetings on bonuses until they have greater clarity about the fourth quarter.

[B]anks have warned that bonus pools will be cut sharply and that top performers will get the bulk of the money. “A falling tide lowers all boats but some people will end up above the river on stilts,” said one bank executive.

Well, we appreciate that news from the other side of the pond that at least we won’t all drown. I’m certainly looking forward to my own bonus. I hope those bananas at the Astor Place kiosk are still only 35 cents apiece.

And here’s a September surprise, again courtesy of the FT, whose Cash for Crash coverage rocks and is free for the viewing. In “Hedge fund chief warns on wrongdoing,” Gillian Tett and James Mackintosh report a frank admission from a financial-world insider:

Investigators and regulators are likely to uncover significant evidence of wrongdoing when they examine the records of some of the financial companies that have failed, a leading short-selling hedge fund manager claimed.

Jim Chanos, head of Kynikos Associates, believes that some of the public statements that emerged from some of the best-known financial groups could have been seriously misleading.

“I do think that what we are going to find out, when regulators and law enforcement people get into some of these firms which have failed, was that . . . the statements which people were making were materially misleading, if not criminal,” he said in a video interview on “It is going to shock people…the extent of the deception to the market.”

Chanos is of course saying this as a defense of short-selling, setting up the argument you’ll hear in the coming years that there’s a big difference between conniving and illegal conniving.

And here’s something else in this FT story that comes as absolutely no surprise:

Lawyers in both the US and London are considering lawsuits, many of which are likely to revolve around the extent to which bank executives knew about risks in their businesses.

Weary of skipping around the web? Do some one-site shopping this morning. Here’s a clump of readable FT stories that you could skim through and try to choke down over your third cup of coffee — remember to take small bites and chew thoroughly unless you want to spit up hairballs later in the day:

‘US “will lose financial superpower status” ‘

‘Church accused over short selling’

‘WaMu seized and sold to JP Morgan’

‘Flight from Morgan Stanley brokerage’

‘Nomura offers bonuses to Lehman staff’

‘CVS is added to ban list on short selling’

At least one of my Voice colleagues is staying focused on the presidential race: See Lynn Yaeger‘s “How I’m Contributing to McCain’s Campaign Suspension.”

And now . . .


N.Y. Times: ‘In Storm’s Aftermath, Cow Roundups in Southeast Texas’

N.Y. Daily News: ‘Shoplifter turns in Brooklyn rapist’

Washington Post: ‘Health Insurance Costs to Spike an Average 8 Percent’

Slate: ‘Things Fall Apart’

BBC: ‘Arming the Taleban’

Washington Post: ‘U.S. Has Achieved “Victory” in Iraq, Palin Tells Couric’

Haaretz: ‘Jewish terrorists tried to murder left-wing professor’

Washington Post: ‘Away from Wall Street, Economists Question Basis of Paulson’s Plan’

IRIN: ‘Charity coffers face credit crunch’

Washington Post: ‘Carbon Is Building Up in Atmosphere Faster Than Predicted’

Haaretz: ‘Peres: U.S. has no choice but to save world from Ahmadinejad’

Washington Post: ‘Negotiations Falter on Financial Bailout Package’


Washington Post: ‘Debate Remains In Limbo’

L.A. Times: ‘Palin talks to Couric — and if she’s lucky, few are listening’

Baltimore Sun: ‘McCain hints debate appearance “possible” ‘

Financial Times: ‘Ex-Merrill chief considers hedge-fund return’

Jurist: ‘US military commissions prosecutor resigns due to “ethical qualms” ‘

N.Y. Times: ‘Pakistani and American Troops Exchange Fire’


Daily Flog: Panic spreads to McCain; White House meeting will solve everything; the world sneers

You can’t spell “down” without “Dow.”

The only good thing about this morning’s scheduled meltdown meeting of George W. Bush, Barack Obama, and John McCain is that it confirms that Bush will not be president for much longer — he’s actually hosting his successors in the White House.

Otherwise, what the hell are these guys doing? This is not democracy.

Neither Obama nor McCain has won the presidency yet, and Bush is the lame duck. Even if Bush were capable, it’s not in our interest for the three of them to reach a consensus unless it’s conducted in a democratic process as a publicly hashed-out and argued bit of horse-trading (I’m not talking about a debate). Even then it wouldn’t be democratic because we haven’t elected any of these three guys to lead the country starting in January 2009.

Besides, you can hardly call this a meeting of the minds if one of the participants is Bush. The mindless, careless, disinterested front man hasn’t been running the country — Dick Cheney has, with the help of three guys formerly on our payroll: Karl Rove, Don Rumsfeld, and Paul Wolfowitz.

Democracy is what’s going on in Congress right now: messy, contentious, and often ugly, with alliances shifting and factions of Democrats and Republicans forming with each other and dissolving, instead of a strictly bipartisan war in which Republicans march in lockstep at the White House’s bidding.

Democracy is also messy, ugly episodes like the Bonus Army, the economy-ravaged, broke World War I vets who camped out in protest in D.C. and clashed with the Army in 1932, during Depression I.

Is a Wall Street Executive Bonus army forming? Or is the government worried about the broke-ass rest of us descending on D.C.? The Register (U.K.) reports this morning, based on an Army Times story: “US Army unit deployed to home front: Nonlethal force for civil unrest.” (For background on the grim 1932 clash, see NPR’s 2005 video and story “Soldier Against Soldier: The Story of the Bonus Army.”)

Still, there may be no need to rush into a massive bailout — as Press Clips reader John McGowan argues in a detailed comment attached to my Tuesday item “Krauts Sour on Wall Street Bailout.”

Don’t pay much attention to Bush’s speech last night. He doesn’t know shit about the economy — even with his daddy’s help he couldn’t make it in the oil bidness, and he became the Texas Rangers’ owner without investing hardly any money at all. (The real owners brought him in so they could pimp for a new stadium at public expense, a previous example of his pimping for corporate welfare).

Now, he’s performing as the front man for the GOP/Wall Street types who hunger for a quick dose of corporate welfare at our expense through a plan that would throw the rest of us onto the welfare rolls.

Yes, there is definitely pressure on the U.S. from other countries to be quick about a bailout plan (“Overnight Markets,” Financial Times).

Although maybe there’s not as much pressure from other countries as Hank Paulson and crew would have us believe: See this morning’s Washington Post story “U.S. Appeals Abroad Fall Flat as Leaders See No Crisis at Home.”

Still, there’s no doubt that something does have to be done quickly, but maybe it doesn’t have to be an entire, massive bailout right this second. Aren’t there more intermediate steps that could calm things down without putting the average American in deeper hock for the unimaginable future?

But in this country, there’s always such a rush by lobbyists that all important issues can’t be fully hashed out. Remember that during the hubbub leading to the disastrous October 2002 Iraq war resolution, debate was sharply curtailed on the orders of the White House and the GOP leaders who controlled Congress.

And after the unjustified invasion, Democrats like Henry Waxman and Byron Dorgan were prevented from conducting hearings on how the Cheney-Rumsfeld regime was conducting the war. (See my April 2005 item “Fix Your Corrupt Regime” for details.)

Just one of many examples: In February 2005, Waxman pushed for a hearing on allegations of “waste, fraud and abuse
in U.S. Government Contracting in Iraq.” He was rebuffed and had to hold an unofficial hearing that, even though it revealed fascinating and major corruption including actual bundles of cash, had no official standing and, as a result, garnered little press coverage.

And now there’s a real danger of another invasion: the possibility of a GOP-engineered October Surprise involving Pakistan that could scare voters into sticking with the Republicans and electing McCain. Scott Horton laid that out in Harper’s the other day.

For guidance, however, look to the markets — the one stock exchange that hasn’t yet melted down and isn’t asking for a bailout: Intrade Prediction Market, where the current action on John Delaney‘s sophisticated and clever operation shows that the betting favors Obama.

I wrote about Intrade during the Paul Wolfowitz and Scooter Libby meltdowns, but because our site is screwed up you may not be able to find those items. So here they are:

“Wolfowitz Out? Bet On It.” (May 7, 2007)
“Wolfie’s Stock Soars” (May 8, 2007)
” ‘You’re a Criminal!’ “ (June 6, 2007)

And now here’s a collection of today’s links from all over . . .


McClatchy: ‘Election officials telling college students they can’t vote’

BBC: ‘US rivals in economy crisis talks’

N.Y. Daily News: ‘Naked man falls to his death after Tasered by cops in Brooklyn standoff’

Slate: ‘Is Paulson’s bailout bill unconstitutional?’

Dawn (Pakistan): ‘We’re in a state of war: Asif’

N.Y. Times: ‘Bush Aides Linked to Talks on Interrogations’


BBC: ‘What would financial Armageddon look like?’

N.Y. Daily News: ‘This loss to Brewers could strand Mets in October’


BBC: ‘Q&A: US $700bn bail-out plan’

BBC: ‘Japan offers solution to financial crisis’

Financial Times: ‘Bail-out fears hit credit markets’

Financial Times: ‘Banking after the bail-out’

Financial Times: ‘Bail-out cost ‘impossible’ to estimate’

AME Info (Dubai): ‘Jordan poised to enter nuclear age’