What a great role model for the world

It's not all connected. The large size of Michelle Obama's staff is the result of a growing role for the First Lady. I'm not sure I like the idea, because political ascension via marriage is not my idea of democracy. But I strongly suspect it's among the best-spent money in the entire government. As a goodwill ambassador, she's been exceptionally good -- probably the best since Jackie Kennedy. And the amount of money is trivial if you measure it against any of the issues that are driving our economy.

The international rip-off in the financial world is completely unrelated: the result of a deep and corrosive rot in western capitalism. If we can't solve that, I think we may be screwed. Not that our economy will collapse, but that it will be irredeemably out of our control. The pirates will be running the ship, and for all intents and purposes, they will own us.

This really is a moment of truth. There has never been a better time to restore a sound and democratic basis to our economy. If we can't do it now, and if moving money around among a relative few financial insiders remains the driving dynamic behind our economic ups and downs, the game is over, IMO.

-- Ed Huntress

On Fri, 14 Aug 2009 21:23:42 -0400, the infamous "Ed Huntress" scrawled the following:

I don't see why most of her scheduling can't be handled by existing Presidential advisors/staff in 2-10 minutes a day. Surely they're already kept in the loop so the First Lady doesn't say/do something she shouldn't, something against current/projected policy.

And waste by the gov't, no matter to whom it goes, is still waste. That's where I see the connection. It has to be identified and it has to be handled, just like the much larger wastes. Do you think that the CONgresscritters are above using misdirection to get what they want, despite consequences to the people and the country?

Are you sure they aren't and don't already?

Aye, and things bode poorly, laddy.

-- If you are distressed by anything external, the pain is not due to the thing itself, but to your estimate of it; and this you have the power to revoke at any moment. -- Marcus Aurelius Antoninus

That's why other people have the six-figure job, and you and I don't. d8-)

I doubt if that's more than a tiny issue.

And that's why we're in such trouble: Too many voters can't focus on the distinction between a million and a billion. And a trillion is just noise to them -- "one, two, and a heap," and all that.

It's what they live on. They get away with it because we don't have the sense to distinguish between individual free speech and megamillions lobbying. The libertarians think that K Street is all about free speech, when it's really all about stealing money from taxpayers.

They have been for a while. Now is our chance to fix it. I think we'll blow it.

-- Ed Huntress

Kind of looks like that today, doesn't it. Commercial paper underlying securities is going to begin coming home to roost over the next year Ed. At that point we'll see an awful lot of outright failures and this ought to generate the will at large for law makers and regulatroy agency's to do what they must. The politics and public will are going to have to lead the way on this.

Grim early Indications for Wall Street reform The banks want to stay huge and indulgent, and the administration may not be willing or able to stare them down

By Robert Reich

The trader has a contract with Citibank that was made before the government passed a law about approvals on pay. So now the government wants to void the contract. Our legal system does not allow laws to be retroactive regardless of how popular a new law is. Dan

If they had let Citibank go bankrupt, they could have voided the contract. But the government acted in haste and as often happens there were unintended consequences. If they do anything to void the contract now, there will be other unintended consequences. If I were the trader, I would be appealing all the way to the supreme court. I certainly agree that it is a rotten state of affairs. But in this case I think the government ought to admit they screwed up and let the contract stand. I would rather have the guy get the 100 million than let the government pass retroactive laws.

My thoughts are that his boss is the one that should be out of a job. He is the one that approved the contract.

Dan

OK. but they would be BK without the hand out they got. He'd have gotten nothing at all then. There is also a concept called "fairness" and humility that comes into play. Either way, were I his boss and wanting to cut his payout you can bet exactly that would happen even if he had to be caught in bed with a small boy or something....

The rules of good compaortment end well before $100 million per year. Know what I mean?

The problem is that that trader really is a rainmaker, making billions for the bank year after year, and if they break the contract, he will be hired away in a flash for much more than $100M.

He will also sue the bank and will win.

And his boss is not in danger of losing his job for paying that much, unless the govt is able to force the bank to do something foolish.

The boss would have a case against the bank as well. But he'll probably follow the trader to a new company. Being fired by the govt for hiring and retaining a trader who made billions for the bank looks good on one's resume.

I bet the govt will find a way to change the subject.

And retroactive (ex post facto) laws are forbidden by the Constitution.

Joe Gwinn

Last bonus, ever! :-)

Mark Rand RTFM

On Sat, 15 Aug 2009 10:34:14 -0400, the infamous "Ed Huntress" scrawled the following:

What's why? Because we think and they just scheme?

Big egos don't like to be caught from behind by their wife's errant comments or behavior. That makes it a big issue to both the uppy ups and their advisors.

Hell, I'm confused when I see a comma in a monetary figure...

Does _any_ good ever come from lobbying?

Until the next revolution. Methinks Dems + Obama just might form critical mass for it. Don't hold your breath, but you might want to think about ducking and covering soon, folks.

-- If you are distressed by anything external, the pain is not due to the thing itself, but to your estimate of it; and this you have the power to revoke at any moment. -- Marcus Aurelius Antoninus

That might be the case. The guy might also be managing a computer trading scheme. One version of that has the trading computers right off the trading floor and is executing transactions from buy to sell again in less than a second. The margins are small but if you execute a million trades per day, it adds up. It's the ultimate day trading scam.

They have given the job to a faceless beaurocrat. Someone who is not elected and that can take any amount of heat for them.

Retroactive tax laws are passed all the time. What you are referring to is only true in criminal law.

Anyway, the commercial mortgage fiasco is just now getting started. One of the few remaining lenders providing other banks with wharehouse lines of credit was siezed on Friday and they will be the first of many. All of our "To Big to Fail" banks are sitting on a TON of securities that are supported by commercial real estate loans and none of those securities have been marked to market because of a rule change made a year ago to keep them solvent. That change won't help them once the actual loans can't be refinanced and the paper will have to be marked down all the way to zero as it defaults.

Congress will either have passed the enabling legislation to allow these large institutions to be siezed and sold off the way banks currently are or we'll see the lot of them in the crapper. The very dissruption TARP was intended to avoid will happen anyway. At that point, the courst will be able to reach back 18 months and deal with bonus issues and that is already the law.

Oh? Ever hear of the Lautenberg Amendment? It retroactively changed penalties for certain domestic violence misdemeanor crimes, so if you were convicted of them long ago, doesn't matter how long, you no longer have the right o keep and bear arms.

David

From what I've read, he is not a computer trader at all.

It will be decided by a Judge, not a bureaucrat.

It's more complex than that. See and especially , which turned on Congress's motive not being improper. A trader getting $100M per year can afford to fight all the way to the Supreme Court, and improper motive is sure to be alleged. Nor should it be all that hard to establish.

This may perhaps all be true, but is not relevant to the trader case.

Joe Gwinn

LOL

Citigroup, Bank of America, the American International Group, General Motors and its finance arm, GMAC, which all received two taxpayer infusions, will face the strictest scrutiny from the new federal official charged with vetting compensation, Kenneth R. Feinberg. He is known for overseeing payouts to the families of the victims of the Sept. 11, 2001, attacks.

It might look that way to you now but the courts in a BK case can review history and retroactively "undo" a lot.

We'll see.

It's a little different animal that what we have been discussuing but might openthe door to other actions.