Mike's Blog Roundup
By Mike Finnigan Friday Dec 19, 2008 8:00amShakesville: The Bush administration's sweeping new regulations protect a broad range of health-care workers -- from doctors to janitors -- who refuse to participate in providing services that they believe violate their personal, moral or religious beliefs. Tell me again why Rick Warren should be part of Obama's inauguration ceremony.
Emptywheel: The Holder delay, the OLC delay, the SJC delay, and a policy subject to interpretation
Dennis Perrin: Many American liberals are fond of the imperial state, and will defend it against ungrateful recipients of our sometimes misguided, but generally benevolent interventions.
Amygdala: Dennis Blair has been named as Obama's National Intelligence Director. There are questions...
The Raw Story: Goldman Sachs, now just another zombie bank, takes bailout billions, then cuts taxes to one percent by moving profits offshore. The Swiss have come up with a great way to handle those golden parachutes and executive bonuses.
ANNALS OF JOURNALISM: The year in media errors and corrections...Murdoch's new hire... Inside Iraq...Media Minutes...Crusader for torturers...Dire economy is a media ploy to make Obama look good...Most inane punditry of the 2008 campaign...WaPo crashed-and-burned watch...Chris Matthews for Senate?...Lies Agreed Upon...The demise of newspapers...2008 Misinformer of the Year...More CRA Idiocy...Political reporters without politics...Racing towards irrelevancy...Mission Accomplished..."I saw someone on cable say this..."...Detroit newspaper experiment...Ongoing Villager Gong Show...NBC's Curry repeated Warren falsehood...
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Here - Michael Lewis author of 'Liar's Poker', helps us understand why the banks sold Credit Default Swaps on toxic mortgage securities in the first place. Each swap allowed them to create a CDO (Collateralized Debt Obligation) clone.
It would have worked if property values kept rising. Now the loses are as high as one hundred times the value of mortgages. These dingbats that cling to their CRA nonsense haven't a clue. It takes work to get one's mind around all of this.
Here Barney Frank (at 33.33) describes as fundamental to our problem the securitization of mortgages (and everything else though he doesn't say that) then (at 34.30) he talks about Credit Defaul Swaps.
At 35.28 he describes CDS as something akin to life insurance for vampires.
Here Ben Bernanke is giving vast loans to those people that sold the vampire life insurance. He is taking the toxic mortgage securities as collateral using the same rating agencies that rated the crap as wonderful in the first place.
Here AIG is experiencing more losses because of the life insurance for vampires.
Barney Frank may live to regret describing Credit Default Swaps as akin to life insurance for vampires. I certainly hope he lives that long.
But one of the vampires might just come along and bite him on the ass.
Life insurance for vampires, that description works for me.
I posted a link and a snippet to the Michael Lewis article a few days ago. People don't seem to realize that for some of these traunches (a group of mortgage securities) there is not an actual home or mortgage behind it. The securities are fraudulent and the feds are still willing to buy them!
I would like to read more about it. I know how CDS work but I thought there had to be a mortgage behind them.
Following is an excerpt. It is a long but worth while read.
That’s when Eisman finally got it. Here he’d been making these side bets with Goldman Sachs and Deutsche Bank on the fate of the BBB tranche without fully understanding why those firms were so eager to make the bets. Now he saw. There weren’t enough Americans with shitty credit taking out loans to satisfy investors’ appetite for the end product. The firms used Eisman’s bet to synthesize more of them. Here, then, was the difference between fantasy finance and fantasy football: When a fantasy player drafts Peyton Manning, he doesn’t create a second Peyton Manning to inflate the league’s stats. But when Eisman bought a credit-default swap, he enabled Deutsche Bank to create another bond identical in every respect but one to the original. The only difference was that there was no actual homebuyer or borrower. The only assets backing the bonds were the side bets Eisman and others made with firms like Goldman Sachs. Eisman, in effect, was paying to Goldman the interest on a subprime mortgage. In fact, there was no mortgage at all. “They weren’t satisfied getting lots of unqualified borrowers to borrow money to buy a house they couldn’t afford,” Eisman says. “They were creating them out of whole cloth. One hundred times over! That’s why the losses are so much greater than the loans. But that’s when I realized they needed us to keep the machine running. I was like, This is allowed?”
All I have today are questions. I question Obama's judgment in choosing Rick Warren, of all people.
And why are we letting religion interfere with science and people's mental and psychical well being? What's next, a ban on sex change operations? Why can't these idiots just let people be?
another day, another crushing disappoinment... (and i didn't have high hopes--this is effin ridiculous)
change should mean shunning those that looked the other way and apologized for crimes against humanity--not rewarding them with top-level assignments. and blair not only looked the other way he actively worked against the dictates of the congress and gave his tacit support to the military dictatorship of indonesia as they continued the rape of east timor.
Back in the sixties and seventies we passed laws in an effort to prevent doctors and hospitals from refusing medical care to patients and turning them away because they could not pay.
Now we are writing rules to protect people from the consequences of practicing bigotry in refusing medical care.
Soon I expect to see fake hospitals spring up next door to real hospitals, just like the fake abortion clinics next door to the real ones.
It's a bit annoying when bloggers don't allow comments, as in Dennis Perrin's case. While he makes some good points (and usually does), he also runs with a false extrapolation of Rick Perlstein's views based on a very short post.
And could Goldman Sachs and Paulson get any sleazier?
The CJR piece, "I saw someone on cable say this," is fantastic.
Credit Suisse's idea of paying top executives in the same illiquid, mortgage-backed securities those 'leveraged loans and commercial mortgage- backed debt, some of the securities blamed for generating the worst financial crisis since the Great Depression' that caused so much of the problem with banking in the first place is just brilliant.
As in - give them the lemons and maybe they'll be motivated to turn it into lemonade.
I just read about this on ThinkProgress.org. This sure sounds like a fair deal to me.
http://clusterstock.alleyinsider.com/2008/12/...
OTC thanks you for the link!
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