Jun 5, 2009 at 4:29 PMBernanke Looks To Hire Former Enron Chief Lobbyist To Boost The Fortunes Of The Federal Reserve (Hunter S. Thompson Weird)
As Hunter Thompson wrote once, "When the going gets weird, the weird turn pro." Life imitates art this afternoon as Bloomberg is reporting that B-52 and the Federal Reserve will soon be hiring a veteran lobbyist to fight the Ron Paul-Alan Grayson machine. Wait, it gets weirder. She is Linda Robertson, the former head of Washington lobbying for Enron. Pause for impact. Thompson would be proud.
On the very bright side, we now have exquisite proof that Bernanke is rattled. Nassim Taleb and Dean Baker have called for his head. Ron Paul is on a personal seek and destroy mission. Paul's bill to audit the Federal Reserve is still stuck in Barney Frank's committee. H.R. 1207, as its known, has more than 190 co-sponsors at last count. The Federal Reserve is frightened of transparency and truth. Congressman Alan Grayson put a bulls-eye on the Inspector General, Elizabeth Coleman, last month. The walls are tightening on the private banking cabal and their imbalance sheet of junk assets. Recent speeches by regional Presidents Thomas Hoenig and Richard Fisher demonstrate that agreement on policy is no longer uniform. These are the most perilous times for the Federal Reserve since the 30s.
After the jump we have the details from Bloomberg.
A Lengthy Rant On Taxes From Opie & Anthony (Audio)
I am not taking sides in the debate, but long-time readers have probably deduced that my views on the growth and size of the federal government coincide nicely with those of Congressman Ron Paul. I am not a Republican, however, because they have proven to be equally reckless with deficit spending and I can't stomach their intolerance on so many social issues.
Though I have been extremely critical of Obama's handling of the bank bailouts, I firmly believe the bailout path chosen would have been exactly the same with a McCain administration. And I believe the nomination of Sarah Palin to the vice-presidency was the single greatest public insult in the history of politics in my lifetime. For him to place the dimwitted, 6-stop undergraduate, pneumatic Alaska Governor so close to the Presidency is an act I will never forgive. Sarah Palin makes George W. Bush look like a Rhodes Scholar.
For many reasons, not the least of which being their insane belief in the power of government to solve problems, I am also not a Democrat. I am like millions of other Americans who feel betrayed by our leaders and our system. Like so many of you, I am a fiscal conservative--social liberal. And there is no party (except for Libertarians who are, sadly, completely marginalized politically) that offers us a warm, comfy home.
Give me your thoughts in comments. Are taxes too high in this country? An interesting rant on taxes from radio duo Opie & Anthony is after the jump.
Michael Arrington: Say Hello To Couch Computing
Michael Arrington is a genius. While running TechCrunch, the world's most successful blog on new technology and start-ups, he somehow found the time and focus to destroy HP, Dell, Sony and perhaps even Apple in the race to launch the first ever touch-tablet personal computer. We think it's so cool that we decided to veer off-topic briefly and show it here. Visit TechCrunch to see more photos and get the skinny on the CrunchPad.
The price will likely be $299 for the tablet which has a 12-inch screen and is 18 millimeters thick.
Alan Grayson Discusses Ron Paul's HR 1207 And Auditing The Fed
B-52 carries a heavy visage amidst the talk of an audit of the Federal Reserve.
Inside we have a short clip from TechTicker and Aaron Task who interviewed Congressman Alan Grayson yesterday about his very popular youtube video showing an extreme lack of oversight at the Federal Reserve. According to Grayson, that video has helped dramatically to convince certain Congressional members to demand more transparency from the Fed. He also discusses the status of H.R. 1207, Ron Paul's bill to audit the Federal Reserve.
Oh Glorious And Succulent Bailout Revenge: Angelo Mozilo Charged With Insider Trading
Pale Man Walking...Finally the Beginning of Justice
It's been a decent week for the home team. First, tax-cheating turbo Timmaaay is mocked openly by Chinese students (and Siddhartha) during a Q&A session, and now former Countrywide CEO, Angelo Mozilo, has been formally charged with illegal insider trading and fraud in a civil case brought by the SEC.
SEC enforcement jefe Robert Khuzami said Mozilo earned more than $140 million in illegal profits. The core of the case according to the SEC is that Mozilo was selling stock heavily in 2006 and 2007 while telling investors that all was well. At a press conference today announcing the charges, Khuzami said Mozilo "deliberately misled" Countrywide shareholders about the financial health of the billions in mortgages Countrywide was carrying on its books.
Carney at Clusterstock has a partial transcript from David Faber's reporting on the charges, which we are reprinting after the jump.
It is undoubtedly great news but we remain cautious. According to Reuters, possible criminal charges against Mozilo are still months away as prosecutors and investigators are still in discussions. However, $140 million isn't chump change and is a decent clawback. And we feel it couldn't happen to a nicer or more honest individual.
Angelo deserves to wear orange for a few years, and we hear they no longer have tanning beds in prison. Perhaps one day Mozilo will be known as 'Pale Man Walking'.
Bailout Nation
Fellow financial blogger and all-around nice guy, Barry Ritholtz officially published 'Bailout Nation' a few weeks ago. When The Daily Bail (and others) were unfairly attacked by Playboy Magazine early in our first month, Barry went out on a limb for us and published our response to Playboy on his blog. It was an extremely kind gesture on his part that we won't soon forget. From an email he sent us at the time of publication, here are Barry's own words on 'Bailout Nation':
At long last, BAILOUT NATION is now available!
The book was a long time in the making, required two publishers (cause the first one chickened out). It is full of insights that you won't find anywhere else. I name names -- call out the bad players for their actions, and show you just how much the CEOs were paid for destroying their firms (about $1.5 billion to the top 20 firms!)
If you have been watching the bailouts with an increasing sense of frustration, and want to know 1) how this happened; 2) who is to blame and 3) what we can do about it, this is the book for you!
Thank you -- and enjoy the book!
-Barry Ritholtz
After the loop we have a short clip from Barry on the continued bank bailouts.
See also:
Barry Ritholtz On Banks: "You Can't Drink Yourself Sober"
Chris Whalen: United States Risks Credit Rating Downgrade With Continued Support Of AIG And Citigroup
AIG is a dead duck.
As most of you know, embattled AIG interim CEO Frank Liddy resigned last week. Likely having realized AIG would need to ask for billions more in taxpayer subsidies, Liddy made the intelligent personal decision to step away quietly. He was unqualified for the position from the outset (he ran Allstate, a quiet domestic insurer) and was already heavily conflicted with his service on the board of Goldman Sachs, the largest recipient of AIG counterparty payouts.
Site favorite, Chris Whalen of Institutional Risk Analytics, weighed in recently on AIG, Liddy, Citigroup and the entire sordid mess of government-sponsored zombie corporations. The most interesting observation from the short clip is Whalen's contention that Treasury risks a sovereign debt ratings downgrade with continued support of the aforementioned failing GSEs.
Tip to James for finding this video; an outstanding clip from Bloomberg is after the loop.
Mocked By Pravda
Can we agree it's a low point when Pravda calls you a Marxist?
I have never before read Pravda, so perhaps the vitriol is normal. But the Russians really don't care much for us anymore. I was a teenager in the 80s, and saw the whole track: from Star Wars geo-political tension (the defense shield fantasy that fooled Gorbachev) leading to fears of nuclear armageddon, all the way to the night of the orgasmic crumbling of the Berlin Wall. It was a hell of a decade for a Cold War education, though I imagine it was a picnic compared to the era of Kruschev's famous shoe and " We will bury you. We do not have to invade you. We will destroy you from within."
Here's an excerpt from a recent Pravda editorial about the United States, our bailout culture and descent into Marxism (ouch for honesty):
"First, the population was dumbed down through a politicized and substandard education system based on pop culture, rather then the classics. Americans know more about their favorite TV dramas then the drama in DC that directly affects their lives. They care more for their "right" to choke down a McDonalds burger or a BurgerKing burger than for their constitutional rights. Then they turn around and lecture us about our rights and about our "democracy". Pride blind the foolish."
And that's some of the mild stuff. We have the entire painful (yet mostly true) ass-chewing from Pravda after the loop. This one is not to be missed.
Fat And Happy: California Flexes It's Muscles
The Governator as a young boy in Austria. More reasons NOT to bail out California.
We covered this topic in more detail late last week. More evidence has emerged to illustrate the level of fiscal insanity that can be found in municipalities across California. The abuse of the public purse is rampant. It is absolutely vital to taxpayer fairness and integrity that bloated states be forced to pare back and cut their egregious spending during the recession. Pension corruption (what else do you call legal theft?) is commonplace and, sadly, almost the norm. The taxpayer is getting screwed left and right, and not in a good way.
Read about the City Manager from tiny Vernon (in LA County) making 600k per year after the jump. And that's just the start. Warning: unlike jr. Scharzenegger above, it's not so pretty.
Word to the wise for those who attack me for criticizing police and fire pensions. Neither occupation is even in the top 10 of most dangerous careers, so back off.
Chinese Students (And Siddhartha) Openly Mock Tim Geithner
Aw...tax-cheat Timmy is welcomed by his former teacher from his days as an expat teenager in Asia.
You should admit that this story makes you happier than anything we have ever printed. And you should also grasp the reality that this admission reveals that you are depraved, saddened creatures reduced to pettiness after months of following the greatest heist in the history of our Republic. It's okay. We've been there for awhile.
At a minimum, it is unnerving to speak to a foreign audience. When that audience follows US economic policy very keenly and happens to be the principal foreign funding source for our staggering national debt, it starts to get dicey. Then add Treasury Secretary Tim Geithner's penchant for spewing bullshit whenever the sun is out and you have a recipe for well...The Best Story Ever.
Simple is good. Geithner is in China trying to sell a few trillion in U.S. Treasuries (translation: he's kissing Wen Jiabao's Totalitarian Ass <anyone remember Tibet?> so we can remain fat and happy in our slothdom of spending and generational rape). He was speaking yesterday to a group of students from Peking University and said: "Chinese [US Dollar] assets are very safe." The room then erupted into "loud laughter in response" according to journalists following the Treas head.
Karma is a bitch, especially in China. Well played, Siddhartha, well played indeed.
See also:
China Warns U.S. On Debt Monetization
CNBC Congressional Bonus Debate: The Sherminator Kicks Some Wall Street Ass
The debate with Mark Haynes and Erin Banking Apologista Burnett is focused on Capitol Hill efforts to impose special taxes on bonus payments made by firms who have received taxpayer bailout cash.
Guess who wins this contest of wit and intelligence. If you thought brunette bimbette, then you are asked to leave the site.
I have been trying to restrain myself in descriptions, but this video is terrific. You will enjoy it.
China Warns U.S. About Debt Monetization
Seemingly everywhere he went on a recent tour of China, Dallas Fed President Richard Fisher was asked to deliver a message to Federal Reserve Chairman Ben Bernanke: 'stop creating credit out of thin air to purchase U.S. Treasuries.' The Chinese are rightfully worried that B-52's plan for all the newly-created U.S. sovereign debt is monetization through Treasury purchases, otherwise known as quantitative easing (which is failing by the way).
China is talking more cautiously, yet still is long schizophrenia as the newest evidence shows they remain buyers of US government debt at a steady clip, though they have shifted their risk appetite to shorter-maturity paper. Is that a fear of U.S. hyper-inflation a few years hence?
The most important story of the long weekend and short week is the WSJ account and interview with Dallas Fed President Richard Fisher (call him Mr. $99 trillion in unfunded liabilities, if you will). He's the inflation hawk on the Fed board and claims to see none percolating yet.
He also reveals that he voted against the plan for quantitative easing (using money <credit> created from nothing in order to purchase U.S. government debt and thereby move interest rates lower). It is the only monetary option remaining to governments who have already pushed interest rates to zero. And as B-52 will tell you, it doesn't always work, at least for longer than 60 days. Not when the market sees $10 trillion in new debt issuance coming down the pike.
Outstanding WSJ piece (free link) is after the jump.