SWAT Teams for BP Oil Spill??

That's what Obama announced and no one blinked an eye, at least in the MSM (mainstream media). The alleged purpose is to inspect platforms and rigs.

Here's what SWAT is about, from Wikipedia.org:

"A SWAT (special weapons and tactics)^[1][2] team is an elite paramilitary tactical unit in American and some international law enforcement departments. They are trained to perform high-risk operations that fall outside of the abilities of regular officers. Their duties include performing hostage rescues and counter-terrorism operations, serving high risk arrest and search warrants, subduing barricaded suspects, and engaging heavily-armed criminals. A SWAT team is often equipped with specialized firearms including assault rifles, submachine guns, shotguns, carbines, riot control agents, stun grenades, and high-powered rifles for snipers. They have specialized equipment including heavy body armor, entry tools, armored vehicles, advanced night vision optics, and motion detectors for covertly determining the positions of hostages or hostage takers inside of an enclosed structure."

Tongues are wagging in the blogsphere. Many are sarcastically wondering if those oil rigs have been taken over by the Tea Party grandmas in Quincy, Illinois as they smile and sing "God Bless America".

Conspiracy theorists abound; one of them is Mark Levin, a neoconservative talk radio host and former Reagan cabinet advisor, who tells us Obama's SWAT team response to oil spill is government takeover plot of the oil industry.

Maybe SWAT stands for totally different words. But what most people think of when they hear the word SWAT is the paramilitary special operation force as defined in Wiki.

Or maybe singing Tea Party grandmas did take over and blew up the rig...

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FDIC Bank Closures as of April 30th, 2010

FDIC Friday Folly (as some people call it) is picking up the pace again after a relatively quiet February.

The first four months of the year 2010 saw 64 bank closures. In comparison, the first four months of 2009 saw 29 bank closures; the first four months of 2008, 2.

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Federal Reserve to Create CDs for the Banks

so that the banks don't lend to Main Street.

Another of Bernanke's so-called "exit strategy" has been put in place. Just another way to keep as many excess reserves at the central bank so that the Fed can continue to support its junky balance sheet ($1.2 trillion MBS and agency bonds that no one wants), and to further encourage banks NOT to lend to credit-starved consumers and businesses.

For more details of this new instrument at the Fed, see my post from December 2009.

Fed adopts plan to let banks set up CDs (4/30/2010 AP via Yahoo Finance)

"WASHINGTON (AP) -- The Federal Reserve has adopted a plan allowing banks to set up the equivalent of certificates of deposit at the central bank. The move would help the Fed mop up money pumped out during the financial crisis and prevent inflation from taking off later.

"Under the plan, the Fed would offer so-called "term deposits" that would pay interest. Doing so would provide banks with another incentive to park their money at the Fed, rather than having it flow back into the economy.

"Once the economy is on firm footing, this would be one of the tools the Fed could use to tighten credit.

"The Fed says Friday's action has "no implication for the near term conduct of monetary policy.""

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Where Has President Obama Been As BP Oil Spill Disaster Unfolds?

Washington Times article wonders if this oil spill from BP rig (made by Transocean) accident is Obama's "Katrina".

I decided to check the schedule of the POTUS of the past 10 days to gain any insight (if there's any). CBS News has a nifty summary of the presidential schedule on their site, and I used that information, plus statements posted on the White House website and other public news for the list below:

4/20 (BP rig blew up around 10PM CST)
on the way back from fundraising in California for Senator Barbara Boxer

4/21
regular meeting with cabinet members, greeting G20 labor ministers

4/22
in New York to deliver remarks on his financial reform plan (Goldman Sachs was made a boogieman on the previous Friday)
Earth Day reception (remarks have no mention of oil spill)

White House Press Secretary's statement: the rescue response "as the number one priority" for the President. (First mention of the oil spill since the rig blew up.)

4/23
left for "middle class" weekend getaway in Asheville, North Carolina

(The US Coast Guard reports that there is no oil spill the sunken rig.)

4/24
vacationing in Asheville

(The Coast Guard changes the story, and now says oil is leaking at 1000 bpd (barrells per day).)

4/25
vacationing in Asheville

4/26
meeting cabinet members, receiving NY Yankees

4/27
embarking on his Main Street Tour of Midwestern states, townhall meetings with friendly audience

4/28
continuing Main Street Tour

(The Coast Guard upps the estimate of oil spill from 1000 bpd to 5000 bpd.)

4/29
attending a funeral, honors 2010 National Teacher of the Year
starting daily intelligence briefing on the oil spill (after 9 days)

4/30
tours the training center for the Secret Service in Maryland
The presidential statement about oil spill released (after 10 days).

A flurry of statements started to appear on the White House website on 4/29. The president has yet to tour the disaster area, and his press secretary says there's no plan.

He's been busy, as you see, campaigning and vacationing.

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Biometric National ID Card - True Intent of Immigration "Reform"?

I was browsing the C-Span website to check out the coverage on the Senate financial "reform" debate. I scrolled down, then I saw a picture of Harry Reid. The headline said "Senate Majority Leader Reid & Democratic Members on Immigration Reform", and the segment had a link to the draft proposal of immigration reform by the Congressional Democrats titled "Conceptual Proposal for Immigration Reform".

So I started flipping the pages of the proposal, and I caught this on page 8:

III. Ending Illegal Employment through Biometric Employment Verification

In order to prevent future waves of illegal immigration, this proposal recognizes that no matter what we do on the border, our ports of entry, and in the interior, we will not be completely effective unless we can prevent the hiring, recruitment, or referral of unauthorized aliens in America’s workplaces. Jobs are what draw illegal immigrants to the United States.

Not later than 18 months after the date of enactment of this proposal, the Social Security Administration will begin issuing biometric social security cards. These cards will be fraud-resistant, tamper-resistant, wear resistant, and machine-readable social security cards containing a photograph and an electronically coded micro-processing chip which possesses a unique biometric identifier for the authorized card-bearer.

The card will also possess the following characteristics: (1) biometric identifiers, in the form of templates, that definitively tie the individual user to the identity credential; (2) electronic authentication capability; (3) ability to verify the individual locally without requiring every employer to access a biometric database; (4) offline verification capability (eliminating the need for 24-hour, 7-days-per-week online databases); (5) security features that protect the information stored on the card; (6) privacy protections that allow the user to control who is able to access the data on the card; (7) compliance with authentication and biometric standards recognized by domestic and international standards organizations. The new biometric social security card shall enable the following outcomes: (1)permit the individual cardholder to control who can access their information;(2) allow electronic authentication of the credential to determine work authorization; and (3) possession of scalability of authentication capability depending on the requirement of the application.

It goes on to say it is unlawful for anyone, any organization to require or ask an individual cardholder to produce this biometric Social Security card for any other purpose than verification of employment eligibility.

NOWHERE does it say this system is for new immigrants. It's for everyone. And everyone will be placed in the system called BELIEVE - Biometric Enrollment, Locally-stored Information, and Electronic Verification of Employment, and all employers hiring workers will be required to enroll, with a stiff penalty for not doing so.

The description of this BELIEVE system ensues, including how this vast system will be funded (you don't need to even guess - it will come out of the pockets of the public and private businesses as fees and fines) until page 18. This is a 26-page document, and 10 pages of it dedicated to describing this biometric ID system.

So the immigration "reform" under the Democrats would serve two purposes: One, to implement national ID card system that will rigidly control employment; Two, as a tax bill. Yes, yet another one. Call it fees and fines, but it is a tax extorted out of everyone but the government.

The stock market is tanking. Dow is down triple digits. The White House Chief of Staff must be having a field day every day - crisis after crisis worldwide (take your pick: Greece sovereign debt crisis, Icelandic volcano, Goldman Sachs criminally charged, BP oil spill - and they are just the most recent ones). And you know what his modus operandi is, don't you? It really defines this administration.

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GAO's Sting Operation Against EPA and DOE "Energy Star" Program

ROTFLOL, LOL, LOL...

I did, for the first time in a long time. This is from Lewrockwell.com, and the article was taken from CNS News:

Obama’s EPA Gave Energy Star Certification to ‘Gas-Powered Clock Radio’ and 14 Other Phony Products, GAO Says (Matt Cover, 4/30/2010 CNS News)

"The Environmental Protection Agency certified that a “gas-powered clock radio” was an energy-efficient product under the government’s Energy Star program, despite the fact that neither the clock nor its manufacturer ever existed.

"The clock and 14 other phony products were part of an investigation into the Energy Star program conducted by the Government Accountability Office, which submitted 20 fraudulent Energy Star applications from four fake companies. The EPA evaluated 16 of those products while the Department of Energy (DOE) evaluated four.

"Fifteen of the phony products – including the gas-powered alarm clock – and all four of the fake companies were certified by EPA/DOE under the Energy Star program.

"GAO conducted the investigation between June 2009 to March 2010, setting up fake Web sites and using rented post office boxes and cell phones to make it look like its fake companies were real. (See fake companies’ Web sites: Cool Rapport, Futurizon Solar Innovations, Spartan Digital Electronics, and Tropical Thunder.)" [The article continues.]


I just had to find the gas-powered clock radio. So I visited all of the fake sites, checking out tongue-in-cheek product descriptions and corporate philosophies. Cool Rapport has a catchy message: "Welcome to Cool Rapport online - relax, put your feet up and stay a while". Futurizon Solar Innovation has a picture of daffodils for its geothermal heat pumps that are "cut above the rest". They seem to have made a liberal use of photos from residential real estate listings (particularly Tropical Thunder).

I finally found the clock at Spartan Digital Electronics.

Here's how the company describes the product:

Gas-Powered Alarm Clock
Spartan Digital Electronics is proud to announce its latest line of home electronics. The gas-powered Black-Gold model clock radio is sleek, durable, easy on your electric bill and surprisingly quiet. The newly Energy Star-qualified product is safe for indoor use and easy on the environment. This product approximates the size of a small portable generator for increased ease while traveling.

Hahahahaha I love this. And EPA/DOE issued Energy Star certification. (Here's the full report from GAO.) I highly approve of such sting operations. GAO's conclusion: "Energy Star is for the most part a self-certification program vulnerable to fraud and abuse." What a surprise. Now we know what travesty this government certification process is. Wait till all these "eco" "green" "clean energy" certifications get unleashed on us if the cap and crap bill passes the Senate.

I love to have the GAO do the full audit of the Federal Reserve, too.

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Toyota's Hearing Was For Raising Money for the Federal Government, Again

and again and again and...

Remember the brief but intense circus last February, when the federal agencies ganged up on Toyota? Now we have the result which I suspect was the government's purpose all along: more money going from us, to the coffers of the federal government.

House panel releases auto safety proposals (4/29/2010 AP via Yahoo Finance)

"WASHINGTON (AP) -- New cars and trucks would be required to carry black boxes to record crash information and automakers would pay fees to help fund the government's auto safety agency under a series of proposals in Congress in response to Toyota's massive recalls.

"...The draft legislation, released by Energy and Commerce Chairman Henry Waxman, D-Calif., would eliminate the cap on civil penalties an automaker could face and allow NHTSA to order an immediate recall if it finds an "imminent hazard of death or serious injury." It would also require new safety standards related to brake override systems, the prevention of pedals from getting trapped in floor mats and vehicle electronics.

"...The proposal would require a U.S. auto executive to certify the accuracy of information submitted to NHTSA in response to a government investigation. Any executive who provided false information could face up to $250 million in fines.

"Vehicles would be required to be equipped with event data recorders, commonly known as black boxes, to help authorities reconstruct the elements that led to a crash.

"The plan also creates a "vehicle user fee" of $3 per vehicle, increasing to $9 in its third year, to fund NHTSA's vehicle safety program. Safety groups have said the agency is underfunded and ill-equipped to investigate complicated safety problems." [Emphasis is mine. The article continues.]

If a private party does something similar, it is called blackmailing and extortion.

"Vehicle user fee"? A protection racket. Meyer Lansky and Lucky Luciano would be proud.

The whole point of this legislation is to grab more money for the government to feed its further growth. It it ends up raising costs for everyone else, well that's too bad but you want to be safe, don't you?

You see, the federal government is the ultimate Vampire Squid, not Goldman Sachs whom the ultimate VS is going after with "criminal charges" to extort even more money. (GS is penalized, some speculate, for making the government look stupid during the Senate hearing.)

Unlike Goldman, this ultimate VS can simply create a new legislation over any real or imagined problem so that it can jab its tentacles into a fresh body which didn't exist before. And it sure grows much, mush faster because it can afford to hire and retain workers of dubious qualifications and capabilities (some of them are extremely good at surfing the net, for sure).

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Getting Rich the Federal Way

I really love the way Drudge Report organizes the news headlines. Today (9:51 AM PST), we have, in the middle column:

Obama: 'I Do Think At A Certain Point You've Made Enough Money'...
[Comments on the website say "It's none of your business Mr. President.." and "Tell that to your pal Oprah.." So, here's Oprah..]

Oprah Winfrey $100 Million Deal With PROCTER & GAMBLE Rocks Industry...

Want to get rich? Work for feds...

The last link goes to an editorial at today's Washington Examiner:

"For decades, public sector unions have peddled the fantasy that government employees were paid less than their counterparts in the private sector. In fact, the pay disparity is the other way around. Government workers, especially at the federal level, make salaries that are scandalously higher than those paid to private sector workers. And let's not forget private sector workers not only have to be sufficiently productive to earn their paychecks, they also must pay the taxes that support the more generous jobs in the public sector.

"Data compiled by the Commerce Department's Bureau of Economic Analysis reveals the extent of the pay gap between federal and private workers. As of 2008, the average federal salary was $119,982, compared with $59,909 for the average private sector employee. In other words, the average federal bureaucrat makes twice as much as the average working taxpayer. Add the value of benefits like health care and pensions, and the gap grows even bigger. The average federal employee's benefits add $40,785 to his annual total compensation, whereas the average working taxpayer's benefits increase his total compensation by only $9,881. In other words, federal workers are paid on average salaries that are twice as generous as those in the private sector, and they receive benefits that are four times greater."

I'm afraid, though, the editorial board of Washington Examiner didn't check the numbers carefully. The average federal salary AND benefits in 2008 was $119,982. See this Cato Institute's article by Chris Edwards from last year showing the 2008 numbers.

The article continues to describe the difference between state/local government salaries and private sector salaries. Not as bad as the federal, but still a widening gap.

Here are two charts from the Cato Institute article that show the gaping gap between the federal worker and the private sector worker. And did you know that it has been like this for at least 10 years?

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Obama TV Mini-Series

no, not here in the US mercifully, or unfortunately, depending on your support level (or lack thereof).

Europeans still can't seem to get enough of him. (If Europeans agree that the Brits are Europeans, that is.)

So Who's Going To Play Candidate Obama? (4/29/2010 Deadline London)

"Open TV and Film, the London-based production company, is developing a TV mini-series based on Barack Obama’s days on the campaign trail. ITV Studios USA is co-developing the project. Simon Shaps, chairman of Open, has optioned Newsweek journalist Richard Woolfe’s book Renegade: The Making of a President. The author was granted unique access to Obama during the campaign. Shaps – who used to be ITV’s director of television -- told me: “It is early days, but we are sure there will no shortage of ideas for who plays the President.”

"Open wants to get it on air within the next 12 to 18 months. Shaps tells me that what appealed to him about Woolfe’s book is that it is a multi-layered portrait of Obama, not a simplistic hero worship. “The questions that have since emerged about what he’s going to do with the Presidency were, to some extent, already there during the campaign,” Shaps says. “We will get to the root of what Obama wants to do with America.”

"Meanwhile, there's no recent word on another project about the Obamas announced by African-American filmmaker Tyler Perry (of those Madea movies fame). The Obama donor back in 2008 announced plans to write, direct and produce "a love story inspired by the relationship between Obama and his wife Michelle" after meeting them through pal Oprah Winfrey. Perry had said he dreamed of casting Denzel Washington and Angela Bassett in the lead roles."

Remember the musical that was staged in Germany about Obama?

I guess Europeans can focus on his person instead of his policies and policy consequences, since they are not on the receiving end of them, at least not directly. Besides, socialism and political correctness are near-complete in Europe; there's nothing to worry about or feel threatened by his policies, stupid Americans... Just look at him and adore.

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GOP Capitulates, Finance "Reform" Bill Moves Forward

The timely leak of the SEC lawsuit against Goldman Sachs and a circus of the Senate hearing the other day over a CDS whose main buyers (two) were both large institutional investors who knew the risk have resulted in GOP capitulating to the "public opinion" (according to the article from Huffington Post, which has a photo of jubilant Chris "friend of Angelo" Dodd..ugghh) and agreed to proceed with the debate of the bill on the floor.

If the public do support this bill that no one has read, I'm so close to giving up and rolling over.

What's hilarious about this so-called "reform" to me is this:

"The bill would establish a nine-member Financial Services Oversight Council, including the treasury secretary, Federal Reserve chairman and the heads of regulatory agencies to monitor markets for threats, such as the bubble in housing prices and mortgage-backed securities that preceded the financial near-collapse two years ago."

In other words, people who didn't have a clue that anything was amiss until the collapse in 2008 would be put in charge of monitoring the market threats. Either they would deem any activity as "threat" or they wouldn't see a "threat" at all, just like before. And we would be paying for these people and their soon-to-be-created new bureaucracy of supporting staff members and outside so-called experts who didn't see anything coming either.

Besides, I think I know what the next bubble is, and the government council would do its best to ignore: US sovereign debt bubble, which is already happening. Or worse, as more and more people move their paper assets to physical assets like gold, they would designate that flight to safety as "bubble" and restrict people from buying and/or holding gold.

Also under this "reform" bill, the Federal Reserve would have more power to do ... what? Do we know what they do? Not really, because they refuse to tell us anything, other than it (whatever it is) is a "national security":

"The Federal Reserve would begin policing large bank holding companies and interconnected nonbank institutions whose collapse might pose a threat to the economy. With approval of the council, the Fed could even break up complex companies that posed a grave threat."

The gravest threat is the Fed itself, particularly under this reckless chairman who doubled the balance sheet in one short month and refuses to tell us what he used it for.

Democrats may or may not drop $50 billion bailout fund to be managed by the insolvent FDIC, but the consumer protection would be another Federal Reserve's job. As far I have read, the definition of "financial" activity is extremely broad; any business extending credit to customers could be classified as "financial" firms and under the regulation and policing by the Federal Reserve.

So the small council to decide what is risky, the privately-held central bank with hardly any transparency to police the country's financial activities - the federal government would be in charge of the most vital part of any country. It would be so unlike America that the world has known. East Europeans and Russians must be shaking their heads in disbelief.

If the money and capital don't flow freely in and out, the country dies. Death may be slow, but it comes surely. Just like the body dies if the blood stops circulating. But this government doesn't seem to care for free-market capitalism that requires free flow of money and capital; it opts so readily for crony capitalism in which the people and big corporations who are well-connected with the government officials benefit and dominate.

This financial "reform" is no exception. Under this bill, anyone who wants to invest in a promising startup will be required to have either annual income of $450,000 minimum or net worth of $2.3 million minimum. In other words, only rich people need to apply. If a grandma wants to give $10,000 to her grandson's garage startup, unless she's that wealthy, the government wouldn't allow her. And the grandson would have to wait for 4 months to see if his application to the SEC to raise funds has been approved by the bureaucrats. For more, see my post from April 9.

And remember, Goldman's CEO said in the Senate hearing that he supports the bill.

Not that the previous government cared about free-market capitalism, but they at least pretended, and cooked the proverbial pot slowly. But this one, everything it does is "in your face", one after another.

I think I quoted this British Prime Minister before, but I'll do so again:

"Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves."

Looks like tyrants are winning, and we are being rendered slaves.

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ObamaCare the Great Equalizer

unless it gets nullified, repealed, made unconstitutional (better happen sooner than later)

From yesterday's LRC Blog post by Thomas DiLorenzo:

Doctors, Ditch Diggers, What’s the Difference?

Posted by Thomas DiLorenzo on April 27, 2010 08:21 AM

I hear from a very reliable source who attended a presentation by Maryland Congressman John Sarbanes to Johns Hopkins Hospital doctors on Obamacare that the docs were told that their pay was being cut by about 40% over the next two years.

"Some of the medical profession’s finest were apparently upset that they might have been duped by years and years of propaganda about the “need” for socialized medicine. They were never told that the inevitable price controls would apply to THEM! Where will the upcoming “brain drain” drain to?

Update: Tom B. writes: “Your title [to this blog] is very appropriate. I was born in Poland and came to the U.S. at age 2, but have many cousins and other family back there. Several of them are medical professionals (MDs, dentists) who, during the latter days of communist rule, made about $44/month while laborers made almost double that amount.”

"This of course is the point of Obamacare in particular and Obammunism in general: Redistribution and the total destruction of as many markets as possible. Obama’s “Change” means descending into the cesspool of early twentieth-century style socialism. Like all socialists, the Obammunists are obsessed with envy of the more successful."

Emphasis is mine. I might add that the success is allowed only for the President himself and his designated friends.

I hear that some of the doctors who are not in "the system" who only accept cash (or cash equivalent) payment from the patients have already doubled their consulting fee.

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Harrisburg, PA Bankrupt Over Garbage Incinerator

Harrisburg, Pennsylvania, was told to consider bankruptcy, which "may offer Harrisburg relief from $68 million in debt-service payments this year tied to a waste-to-energy incinerator project," Bloomberg reports.

Harrisburg, the state capital, "has guaranteed payments on $282 million in bonds on the incinerator, run by the Harrisburg Authority. The payments on the bonds and on a working-capital loan this year add up to four times the amount the city collects in property taxes each year, budget documents show."

PennLive.com reported on April 8 that the Harrisburg Authority would look into the controversial incinerator deal - $125 million bond deal in 2003 to repair and upgrade the Harrisburg incinerator after the EPA shut it down. The bond was not a performance bond. The city and county was left with the debt when the repair job was botched.

$68 million in debt-service payments exceed the city's annual budget, according to PennLive.com. The new mayor of the city, Linda D. Thompson, wants to sell off city's assets like parking garages and dam to pay the debt, instead of bankruptcy. She says the city has already identified a real estate agent who can quickly evaluate land assets that the city has.

Hmmmm. Who is this woman, who wants to sell out the city to pay the investors?

And who are the investors of this bond, and which bank was the underwriter of this bond? (My best guess is one of those Wall Street firms, but I could be wrong.) Who was a liaison between the bank and the city council? And who holds the CDS on the bond?

How did the original $125 million balloon into nearly $300 million? (Interest rate swap, anyone? Say the bank would accept 6% fixed rate interest payment from the city, and pay the city at a floating rate. The problem is that the floating rate, which is often pegged to short-term LIBOR, cratered to near zero when the credit market froze and the financial markets crashed in 2008.)

It seems municipal governments across the country went on a borrowing and spending binge in the early 2000's to build a world-class garbage incinerator or sewage treatment plant or power line (or whatever they can spend money on). Jefferson County in Alabama almost went bankrupt after having splurged on the sewer treatment plant, thanks to the bond (with the interest rate swaps) underwritten by J.P. Morgan. Here's another one from Seattle area, Snohomish County, paying AIG $14 million to get out of the swap agreement that it entered to reduce interest expenses on the debt, which was used to build power lines and electric poles. This one was underwritten by Smith Barney, later absorbed by Citigroup.

I expect many more stories like these to surface in the not-too-distant future.

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Goldman vs Senate Musings

My musings...

Is it a crime to take a short position on the structured financial securities that one is selling? Is it a crime if you tell the buyer that you are shorting?

Why can't you sell a "crappy" "shitty" security? There are tons of such securities which are eagerly snapped up by the investors today, even after the financial market crash we had. Junk bonds have been snapped up by investors betting on the price recovery. For that matter, people are still trading Washington Mutual and Lehman Brothers pinksheets.

If the German bank was stupid enough to buy the CDO without protection (CDS), the CDO that references to other CDOs which are based on the US subprime mortgages whose market the bank, being a foreign bank, couldn't have known well enough, shouldn't that be the German bank's problem, not Goldman's?

Why are we (or the Senators) concerned so much about the welfare of a big institution who bought the crappy CDO from Goldman?

If they are really concerned, not about a dumb international investor but about the wellbeing of the US financial markets and the housing market, instead of Goldman (or in addition to Goldman) they should haul the management of this black-box company that creates indices of asset-backed securities and supposedly prices various CDS and which happens to include the major broker-dealers including Goldman Sachs as equity partners - Markit. When this company concocted the ABX index in 2006, that was the beginning of the end.

More than anything else, this index has caused market dislocation and upheaval by enabling the short-sellers. But no, no one mentions Markit except for a very few writers. Here's one ("The Markit Group, A Black-Box Company that Devastated Markets" by Mark Mitchell, 11/17/2009 Deep Capture) well worth reading. And asking question: Why is the role played by this firm being ignored?

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Goldman vs Senate, Part 3

The head honcho arrives... Lloyd Blankfein, CEO of Goldman Sachs, all by himself.

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Goldman vs Senate, Part 2

Here comes the big shots...

David Viniar, GS's Executive Vice President and CFO,
Craig Broderick, Chief Risk Officer,

Chairman Levin is asking Mr. Viniar whether Goldman had a large short position in 2007. Mr.Viniar tries to answer by saying yes but the firm had a large long position to offset. Levin is not interested in net position, he just wants to know whether the short position was large or not.

(Sigh...)

Is taking a short position an immoral sin or something?

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Goldman Execs in Senate Hearing

Four GS traders are on the deck. Fabrice Tourre, Daniel Sparks, Michael Swenson, Josh Birnbaum.

So far, it's a civilized ritual.

Difference in brain power is rather obvious, just by looking at the Senators and the traders.

Senator McCaskill (D-Missouri) tries to reduce the whole thing into a bookie business. Oh dear. (And Senator, pull your elbows off the table. Bad manners.)

She doesn't know what she's babbling about...

Live on C-Span: http://www.cspan.org/Watch/C-SPAN3.aspx

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Vampire Squid (Goldman) vs Vampire Squid (US Gov)

The match will be on tomorrow (Tuesday April 27, 2010), at 10:00 AM EST.

The government Vampire Squid is represented by the members of the Senate Permanent Subcommittee on Investigations (chairman Carl Levin (D-Michigan)).

Expect the trading on the US stock exchanges to be extremely thin, as most traders will likely be watching the show.

In February, the US government ganged up on Toyota over Toyota's sticking pedal recalls, which caused the then-world No.1 automaker's share price to plunge. Today, no one talks about Toyota.

Now it is ganging up on the top dog on Wall Street, as it tries to force the financial "reform" through the Senate. Shares of Goldman Sachs has lost 18% since April 16, when the SEC charges were leaked on New York Times ahead of the formal announcement.

The Senators will first beat up on 31-year-old Goldman trader "Fabulous" Fab Tourre, and then on to the showdown with the Vampire Squid incarnate Lloyd Blankfein. The last time he was on Capitol Hill, Mr. Blankfein was rather impatient with the Senators whose CPUs were clearly slower. Let's see how he does this time.

All for our entertainment, so that we can forget about the mountain of new taxes and regulations that are coming our way.

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Vampire Squid Is the US Government, Not Goldman

And it's set to grow bigger with the imminent passage of financial "reform" bill.

I'm almost ready to give up and stop wasting my breath.

As the so-called financial "reform" is being pushed as if it's a good thing - the "reform" that will give the Federal Reserve, the very institution (privately held, just to remind you) that has been the cause of boom and bust and of untold sufferings by the consumers for nearly 100 years, the very role to protect the consumers, that will create $50 billion bailout fund for so-called "too big to fail" and for so-called "investors" so that they don't lose their money, the questions of the timing of SEC leak to New York Times on Goldman Sachs and the ulterior motive of the Obama government have all but disappeared. (What a surprise.)

Now this corrupt Senator from Montana who is also the chairman of Senate Banking Committee assures us that there will be a bank tax.

Max Baucus: A bank tax is coming (David Rogers, 4/26/2010 Politico)

"It was a short hallway conversation but spoke volumes about the dilemma facing Democrats, hungry for new revenues after emptying the cupboard on health care reform.

"“I don’t think there’s much doubt that there will be a bank tax,” Senate Finance Committee Chairman Max Baucus told POLITICO. And more than ever, the Montana Democrat signaled that Congress will also crack down on wealthy hedge fund and private equity partners who shelter their income as capital gains — taxed at half the top 35 percent rate.

"Three times in recent years, the House has voted to rein in the so-called carried interest provision — only to meet Senate resistance. That’s changing with the pressure to find revenues to pay for other priorities such as a $35 billion measure extending popular tax provisions for businesses and families.

""I’ve asked my staff to look at alternatives ... Carried interest will probably be part of the offsets,” said Baucus. “We were thinking of putting it on later as part of tax reform. But we’re here; we’re here now.”

"Wealthy Democratic donors are sure to scream; Baucus concedes he could face opposition from his own party moderates. But isn’t the chairman himself the “very soul of the moderate Democrat?” a reporter asks. “I’m a ‘Do-the-Right-Thing’ Democrat,” Baucus grinned. "

Like giving another raise to your girlfriend, Senator Baucus? The article goes on and on but you get the idea. Do-the-Right-Thing Democrat and some Republicans (here's one, as usual) will shove the finance "reform" bill down the throat of the public, who, this time around, may remain stupid enough to think it's a good thing. It will punish the bad banksters like Goldman Sachs, won't it?

Keep hoping, sheeples. It's another tax bill, just like the health care insurance "reform" is just a gigantic tax bill, just like the so-called job bill is a tax bill. Just like all these bills, the financial "reform" bill will suck the money out of you. Bank tax? Added cost of banking will be passed on to the account holders, and that's you. Remember what happened when the Congress passed the credit card "reform" bill to "protect" you? The APR shot up, and many people lost credit lines. Some protection.

The Vampire Squid "wrapped around the face of humanity, relentlessly jabbing its blood funnel into anything that smells of money", a famous phrase by a liberal/progressive writer for the Rolling Stone magazine Matt Taibbi, is not really Goldman Sachs; it is the US federal government under this particular administration.

In the meantime, government union workers demand a huge tax increase so that they continue to get paid a generous pay and benefits, and a designer cupcake is all the rage. If you think your head is splitting, you are not alone.

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