Wall Street: Stealing Pennies to Make Billions

[Note: video was fixed and post updated]

This...

Powerful computers, some housed right next to the machines that drive marketplaces like the New York Stock Exchange, enable high-frequency traders to transmit millions of orders at lightning speed and, their detractors contend, reap billions at everyone else’s expense.

...sounds an awful lot like this:



And I think Jennifer Aniston's character had it right:



If you like these clips, please go buy this movie.

Capitalism's quote of the day

A financial writer was trying to track down the source of the financial crisis, from greedy loan marketers to failures at rating agencies overseeing complex "collateralized debt obligations" (CDOs), and heard this from a hedge fund manager that had seen the problems early:

[Eisman, hedge fund manager]: ‘Where are the rating agencies in all of this? And I’d always get the same reaction. It was a smirk.’ He called Standard & Poor’s and asked what would happen to default rates if real estate prices fell. The man at S.& P. couldn’t say; its model for home prices had no ability to accept a negative number. ‘They were just assuming home prices would keep going up,’ Eisman says.” [emphasis mine]

These are the guardians of our markets.  

Something is rotten in the state of Alaska

Update 11/17/08:  
Turnout may actually break a record.


Update 11/11/08:

Elections officials now report that uncounted ballots number closer to 100,000 than 50,000, so turnout is a much more reasonable 63%, with time enough for a few thousand more ballots to arrive before counting begins later this week.

Alaska has a large vote-by-mail population, so it may be that ballots were simply delayed. It will be interesting to see if the vote-by-mail folks break heavily Democratic, making the polls more accurate than previously thought.

----

In a banner year for Democratic candidates from Obama on down, here's what happened in Alaska:

• Convicted felon Sen. Ted Stevens leads by 1% despite pre-election polls showing him down by 15 points.
• Alaska Rep. Don Young won re-election despite being under investigation for corruption by the FBI and despite trailing by at least 5% in pre-election polls (in fact, he trailed in every poll since 2007).
• "The national polling firm, Rasmussen Reports, accurately predicted every Senate race in the country within the margin of error in their most recent polls -- except Alaska"
  

Here's a great summary graphic from fivethirtyeight.com illustrating the anomaly. The first column shows the latest polls, the second is the result. "Delta" is the difference:

• It wasn't just a strange slide toward Republicans, but voter turnout in Alaska was inexplicably low, 45 percent, after reaching 60 percent and 66 percent in 2000 and 2004 and after turnout was up 12 percent from 2004 in the primary. (the addition of 50,000 absentee ballots only brings turnout up to 52 percent).

How bad is that turnout figure? I did a quick comparison, pulling 2004 turnout data from here and then searching for newspaper reports of 2008 turnout. It's not exactly apples to apples, but Alaska clearly stands out.

The news on this is starting to spread. Let's hope there's a full-scale investigation.

The last 100 days - an agenda of destruction

While Barack Obama's victory is giving many Americans a vision of hope for his first 100 days, the Bush administration is busy trying to wreak as much havoc on civil liberties, the environment, abortion rights as it can.

A sample:

Last month, Attorney General Michael Mukasey rushed out new guidelines for the F.B.I. that permit agents to use chillingly intrusive techniques to collect information on Americans even where there is no evidence of wrongdoing.

In coming weeks, we expect the Environmental Protection Agency to issue a final rule that would weaken a program created by the Clean Air Act, which requires utilities to install modern pollution controls when they upgrade their plants to produce more power.

Soon after the election, Michael Leavitt, the secretary of health and human services, is expected to issue new regulations aimed at further limiting women’s access to abortion, contraceptives and information about their reproductive health care options.  Existing law allows doctors and nurses to refuse to participate in an abortion. These changes would extend the so-called right to refuse to a wide range of health care workers and activities including abortion referrals, unbiased counseling and provision of birth control pills or emergency contraception, even for rape victims. 

I suppose when your approval rating is already under 25%, you might as well just flip the bird to the 75%.    I can't wait to see who gets a pardon. 

To the 94 who flip-flopped: you suck

Of the 94 Democrats who flip-flopped on FISA, 83 received PAC contributions from the three telecom giants, according to MAPlight's research, some as high as $29,500 for Rep. James Clyburn of South Carolina. Other notables in the top ten include Illinois Rep. Rahm Emanuel ($28,000) and House Speaker Nancy Pelosi ($24,500.)

Hat tip to MinnPost, nod to MAPlight, the bird to Pelosi, Emanuel, and the 81 other chickenshits who traded campaign contributions for immunity for illegal phone taps.

"Military Analysts" means "Pentagon lackeys"

A New York Times investigation has uncovered that those generals you see on CNN aren't just post-career pundits, but are often in bed with the Pentagon publicity machine. Just how cozy is that relationship?

Internal Pentagon documents repeatedly refer to the military analysts as “message force multipliers” or “surrogates” who could be counted on to deliver administration “themes and messages” to millions of Americans “in the form of their own opinions.”

And the Pentagon strategy was worthy of the greatest psyops efforts of our time.

• These analysts want a business relationship with the Pentagon. Many of these ex-soldiers are responsible for drumming up business for defense contractors. Being cozy is their job.
• The analysts continue to be loyal to the Pentagon, from their careers in the military.
  
• The Pentagon provides the analysts with regular talking points briefings, including at least 18 meetings with the Secretary of Defense. The briefings include the sharing of classified information.
• The Pentagon has flown them to Iraq and given the analysts carefully orchestrated tours to enable them to push the administration's talking points.

Of course, nothing is done right in the Bush administration if it's not a secret:

The access came with a condition. Participants were instructed not to quote their briefers directly or otherwise describe their contacts with the Pentagon.

And the analysts weren't just offering their opinion on the skewed reality shoveled to them by the Pentagon. They were toeing the line. Or else.

When [retired marine colonel and analyst Mr. Cowan] told Bill O’Reilly that the United States was “not on a good glide path right now” in Iraq, the repercussions were swift. Mr. Cowan said he was “precipitously fired from the analysts group” for this [2005] appearance.

Just another reason to be thankful that the Constitution puts a civilian as commander-in-chief. Now we just need to elect an honest one.

Bush administration: Let's do more domestic spying

A spy program, dubious legal authority, and an agency head determined to go ahead regardless? Just the latest episode in the Bush Administration's serial: You Weren't Really Using Those Civil Liberties, Were You?

Here's my favorite part. After submitting woefully incomplete documents about the program to Congress, the Department of Homeland Security head Michael Chertoff said:

"There is no basis to suggest that this process is in any way insufficient to protect the privacy and civil liberties of Americans," Chertoff wrote..."I think we've fully addressed anybody's concerns,"

Now that you say it like that...

Pay to indoctrinate

From Paul Krugman, news that conservative businesses are paying universities to require students to read Ayn Rand. Nice to know the canon is for sale.

As long as they understand Atlas Shrugged is fiction...

To Bear Stearns stockholders: STFU

Dear Bear Stearns Whiners,

A week ago, your "investment bank" was in danger of going belly up because of really stupid gambles such as subprime mortgages and "highly leveraged" (read: debt-financed) speculation.

My government stepped in and gave $30 billion in loan guarantees to JP Morgan Chase to buy you out at $2 a share, saving you from bankruptcy.

This week, you whined that the price was too low. And so the Fed relented and said that JP Morgan could pay up to $10 a share.

Excuse me? But for the Federal Reserve and $30 billion in taxpayer collateral, you were about to be worthless. If you'd like to go without a bailout, be my guest.

So do us all a favor and shut the fuck up.

-jff

P.S. And for the Fed: what the fuck? Let them sink if they don't want $2 a share.

Bush: I regret that I have but one life to give to my country telco

In the ongoing coverage of the FISA renewal, mcjoan of Dailykos notes that President Bush has immunity for telecommunications companies as his litmus test for the "Protect America Act" (gag me with a spoon).

The interesting twist? Bush has already declared that Americans could die if this renewal is not passed by Congress. In other words:

Let's just remember Sen. Kennedy's summation of Bush's position on FISA:

The President has said that American lives will be sacrificed if Congress does not change FISA. But he has also said that he will veto any FISA bill that does not grant retro-active immunity. No immunity, no FISA bill. So if we take the President at his word, he's willing to let Americans die to protect the phone companies. (emphasis mine)

You can get more on the new wiretap law from Moldy's ongoing FISA coverage.

Torture: we only do it when we have to

Jon Stewart's new "Torture Show" explores the Bariyshnikov-like dancing around the definition of torture by the Bush administration. He learns:

• Waterboarding has been called torture since the Spanish Inquisition and Japanese soldiers were prosecuted by American litigators for using it during World War II.
• At least three Al Qaeda suspects have been waterboarded by the CIA.
• The official policy on waterboarding is that we would only use it if we thought a suspect had information about a calamitous attack.

In other words, we use torture on terrorism suspects, despite evidence that it is ineffective, when we feel we have to. Gee, something tells me it wouldn't hold up in international court.

Stewart also notes that:

• No Bush administration will admit that waterboarding=torture
• Attorney General Mukasey will not begin criminal proceedings against CIA officials who waterboarded Al Qaeda suspects.

Yeah, land of the free.

Here's Stewart's video segment:

Think wiretapping is over? Think again

If you haven't heard much on illegal wiretapping since a judge struck down the program, the big decisions about it are being made in the U.S. Senate today. And the decisions aren't positive for rule of law and liberty:

• The Senate rejected amendments that would have held telecommunications companies responsible for their participation in illegal wiretapping. Basically, the Senate is saying, "you broke the law, but because Bush told you to, you're forgiven." Nuremberg defense, anyone?
• The Senate rejected "exclusivity," a provision from the original FISA law that would say that this wiretap law covers ALL wiretapping done by the U.S. government. To leave it out says, "this law covers wiretapping, except if the President decides to do some other kinds of wiretapping and says it's not covered under this law. Basically, he can do whatever he wants."

Dailykos has several ongoing threads about the FISA debate. Call your Senator and tell them to protect civil liberties and punish those who break laws about illegally spying on Americans!

For more on the wiretap legislatio, read up on what provisions SHOULD be included.

Why tax incentives for jobs fail

Minnesota has a program to create tax-free "Job Zones (JOBZ)" to give an incentive to companies to create more jobs in distressed areas. It seems to work as well as most corporate welfare. Here's a story on the report from the Legislative Auditor and here's a brief summary of the boondoggle:

• There is no formal mechanism within JOBZ for evaluating whether a subsidy is needed, and, if so, whether a more limited subsidy could achieve the same business expansion.
• Within the business subsidy agreement itself, there is no deadline for creating the promised jobs, and no requirement to maintain the jobs through the life of the tax forgiveness.
• Using state unemployment tax data submitted by the firms benefiting from the program, the auditor's office found that the increase in employment at JOBZ businesses was 20 to 30 percent lower than what DEED was reporting.
• Although JOBZ was supposed to target economically distressed areas for business tax relief, need has not been a factor in designating JOBZ zones

Torture: immoral, and as it turns out, ineffective

A nice story on the best understanding of the effectiveness of torture. The interview is with an expert who deals with torture victims.

Harsh interrogation definitely yields names and other information, Johnson agreed. "It works," he said.

But the information confessed is utterly unreliable, he said, and it can lead investigators in the wrong direction, endangering U.S. military forces and threatening national security.

In a panic to stop tough interrogation, many will spit out any name that comes to mind — innocent neighbors, cousins and friends — Johnson said.

In other words, torture gets people to spill the beans. Whatever beans will get their torturer to stop... For an administration of yes men, I guess that's why torture works out well.

You can read more on the story at the above link or check out the full (pdf) report.

Why Calling Dick Cheney Darth Vader is Too Generous

1) Darth Vader served in the military
2) Darth Vader's contractors actually finished their job (i.e. the Death Star)

Nod to Paul Krugman for the hilarious, and honestly very sad, comparison.

Blogging roundup

Once in a while I like to devote one post to several stories I've found interesting, but have been unable to find time to blog about.

1. When should rescue attempts be abandoned?
Mine collapses in the Rocky Mountain West two months ago led to the loss of several miners, and subsequently the death of several rescuers from an ensuing cave-in. Manned rescue attempts were stopped after the second collapse. Was that fair? What if the original miners were still trapped below earth and eventually died from starvation?

2. How "constant vigilance" for terrorists hands them a victory

This story has been repeated endlessly, both in the United States and in other countries. Someone -- these are all real -- notices a funny smell, or some white powder, or two people passing an envelope, or a dark-skinned man leaving boxes at the curb, or a cell phone in an airplane seat. The police cordon off the area, make arrests and/or evacuate airplanes, and in the end the cause of the alarm is revealed as a pot of Thai chili sauce, or flour, or a utility bill, or an English professor recycling or a cell phone in an airplane seat.

Read the story about the English professor - it's an embarrassment.

3. Care about privacy or the 4th Amendment? Here's a nice 2-page analysis of what we need when Congress passes amendments to the Policing America Act - the legislation passed as a stop-gap in August to give Democrats more time to cave in to the Bush Administration's demands for unscrutinized ability to police Americans. One thought:

• The legislation currently allows a "blanket warrant" to wiretap (or otherwise surveil) conversations of a foreign national with any American citizen. This is expressly prohibited by the 4th Amendment, which requires "probable cause." I shudder to think that some Founders thought we didn't need a bill of rights and that the Constitution implied that only very limited powers accrued to the national government.

4. Popcorn suppliers finally decide to remove a toxic chemical from microwave popcorn. So now you can inhale the buttery aroma without permanently reducing your lung function. Too bad the government never bothered to step in to protect your food...

In May I noted how OSHA declined to regulate diacetyl despite several debilitating injuries to popcorn plant employees. In September, a man was diagnosed with "popcorn lung" after being a heavy consumer of microwave popcorn.

This isn't "performance pay"

One of my favorite features of Paul Krugman's blog is his willingness to look back. In this case, he examines the ridiculous pay packages of CEOs from the perspective of the early 1990s:

Jensen and Murphy, 1990:

On average, corporate America pays its most important leaders like bureaucrats. Is it any wonder then that so many CEOs act like bureaucrats?

So we stopped paying them like bureaucrats, and got this:

The Price of Any Departure Will Be at Least $159 Million
By ERIC DASH
Merrill Lynch’s directors may be weighing E. Stanley O’Neal’s future, but one thing is already guaranteed: a payday of at least $159 million if he steps down.

Alberto Gonzales, this song's for you

Almost exactly five months after I called his ouster "pending," the world's greatest insult to justice has decided to resign as Attorney General.

Finally, Alberto, this song's for you:

President Bush: codifying environmental degradation since 2001

Coal mining has been in the news with the trapping of six miners in a collapsed Utah mine and the subsequent death of three rescuers in a second collapse. The federal government has joined the fray, with an announcement that new rules will expressly allow the longtime practice of mountaintop removal for coal mining. The tradeoff is that this method of mining is substantially safer than underground mines, but significantly more destructive to the environment.

The technique involves blasting off the tops of mountains and dumping the rubble into valleys and streams...Mountaintop mining is the most common strip mining in central Appalachia, and the most destructive. Ridge tops are flattened with bulldozers and dynamite, clearing all vegetation and, at times, forcing residents to move.

...From 1985 to 2001, 724 miles of streams were buried under mining waste, according to the environmental impact statement accompanying the new rule. If current practices continue, another 724 river miles will be buried by 2018, the [Army Corps of Engineers] report says.

As always with this administration, however, the stink of corruption lies heavy about the decision.

The early stages of the revision process were supported by J. Stephen Griles, a former industry lobbyist who was the deputy interior secretary from 2001 to 2004...The regulation is the culmination of six and a half years of work by the administration to make it easier for mining companies to dig more coal to meet growing energy demands and reduce dependence on foreign oil.

Gee, the industry writes its own rules. That's new.

And then there's the bogus note about oil dependence. Coal is for electricity, oil is for cars. But thanks to the excellent journalism at the New York Times, that lie talking point on energy independence will reach thousands of readers. Bravo.

Why is the lying man still in charge of the law?

That, and other fun questions from Jon Stewart and Company. Let's summit this mountain of obfuscation!