The kid and the ball, Band Aid art, you are the jury, whose flood is it, and what happens on the farm stays on the farm.
Rolling Stone's Matt Taibbi, in an article due in the next issue, is making waves by casting light on part of the financial bailout he says gave away billions of dollars to financial fatcats -- and their spouses -- who gamed a system designed to free up allegedly frozen credit markets.
In his article, Taibbi describes the TALF program -- Term Asset-Backed Securities Loan Facility -- in which "investors" put 10 percent down, the government puts up the other 90%, and assumes most of the liability.
Cue your Billy Mays voice, because wait, there's more! A key aspect of TALF is that the Fed doles out the money through what are known as non-recourse loans. Essentially, this means that if you don't pay the Fed back, it's no big deal. The mechanism works like this: Hedge Fund Goon borrows, say, $100 million from the Fed to buy crappy loans, which are then transferred to the Fed as collateral. If Hedge Fund Goon decides not to repay that $100 million, the Fed simply keeps its pile of crappy securities and calls everything even.
This is the deal of a lifetime. Think about it: You borrow millions, buy a bunch of crap securities and stash them on the Fed's books. If the securities lose money, you leave them on the Fed's lap and the public eats the loss. But if they make money, you take them back, cash them in and repay the funds you borrowed from the Fed. "Remember that crazy guy in the commercials who ran around covered in dollar bills shouting, 'The government is giving out free money!' " says Black. "As crazy as he was, this is making it real."
But a comment attached to Taibbi's article attempts to shift the discussion back to where it always seems to go. The meltdown wasn't the fault of the "big" people, it was the fault of the "little" ones.
The article is very slanted. What really happened: greedy irresponsible Main Street got caught up in a real estate frenzy thanks to easy credit, predatory mortgage brokers, and the naive notion that "real estate never goes down". Americans thought they could buy and flip homes forever with no doc loans. Wall Street didn't underwrite or default on these subprime mortgages, but was only guilty of packaging and reselling them to greedy investors who thought that real estate never goes down. When the bottom inevitably fell out, investment banks like Goldman and Morgan took a hit but still had billions on their relatively healthy balance sheets. They reluctantly became commercial banks at the government's urging so they could borrow from the Federal Reserve window, to improve consumer confidence and prevent a panic. The author's reference to "billions in emergency loans" is actually what they borrowed at the Federal Reserve Bank Discount window, just like all commercial banks have routinely done since 1913. The TALF was open to everybody and without such government lending, Main Street wouldn't have been able to get credit since 2008 when they started defaulting on mortgages and walking away from foreclosures. John Mack earned $41 million in 2006 and thus could easily afford a $13.5 million home in 2009 without government help. Once the crisis hit, he paid himself almost nothing for a couple of years before retiring as CEO. With the exception of Madoff, almost nobody from Wall Street is in jail, because almost nobody on Wall Street broke the law. Question is: why isn't Main Street held responsible for defaulting on mortgages, credit cards, and student loans? Americans' credit ratings go down but at the end of the day, unlike Wall Street, they don't have to repay their loans.
The anti-corporate hoaxsters struck again today.
The Associated Press was the victim this time when it ran a story -- based on an authentic-looking news release from General Electric -- that it would repay a $3.2 billion tax refund for 2010 to the Treasury Department.
GE has been criticized following a New York Times story that it would pay no taxes on its domestic profits.
There's no indication -- yet -- that this was the work of The Yes Men, who made news in 2009 by pretending to be the U.S. Chamber of Commerce announcing support for greenhouse gas legislation, and last fall convinced news organizations that a large oil company was admitting to policies that damage the environment.
President Barack Obama is announcing his plans this afternoon for reducing the national debt by $4 trillion over the next 12 years. That's far short of the $5 trillion targeted by Republicans.
$4 trillion? $5 trillion? What's it all mean?
Under Obama's plan, $4 trillion off the debt works out to $333 billion a year.
Check this chart from the Web site, usgovernmentspending.com. The estimated spending was to increase by almost $290 billion a year through 2016:
In many ways, Obama's target is more aggressive than President Kennedy's promise to put men on the moon within 10 years, even though the U.S. had absolutely no clear clue how to do that. In 2010 dollars, the entire program mission $188 billion.
The FAA has moved to solve the problem of sleeping air traffic controllers today by announcing 27 airports will now have two controllers in the tower during the overnight shift. Their primary job appears to be keeping the other controller awake.
There's not going to be much else for the additional controller to do; controlling aircraft isn't much of an option.
Officials say an air traffic controller fell asleep at Reno-Tahoe International Airport while a medical flight carrying an ill patient was trying to land at about 2 a.m. The agency said the controller, who was out of communication for about 16 minutes, has been suspended.
The FAA also said it had suspended a sleeping controller in Lubbock, Texas. "During the midnight shift, the Lubbock controllers failed to hand off control of a departing aircraft to the Fort Worth Air Route Traffic Control Center," the FAA said. "Handing off" control of a departing aircraft involves telling the pilot to change frequency on his/her radio.
Between midnight and 6 a.m. this morning in Lubbock, there were two departing flights; both of them within a few minutes of 6 a.m.
An air traffic controller's primary job is to maintain separation between aircraft. Most of the incidents of late have occurred on the overnight shift when there really isn't any other aircraft in the area, and certainly not much to do, which is probably why they doze off in the first place.
For example, between midnight and 6 a.m., there were only four arrivals at the airport in Reno.
Last month, a controller in the tower at Reagan Airport in Washington fell asleep. Even in busy airspace such as Washington, there were only 5 arrivals this morning between midnight and 6 a.m., four of them within a few minutes of midnight or 6 a.m.
By contrast, two aircraft arrived at St. Paul's downtown airport over the same time period. St. Paul's control tower is unstaffed overnight.(13 Comments)
If you're a voter and need help marking a ballot in Minnesota, you can forget about asking a family member or friend to help you.
A Minnesota lawmaker today proposed a bill that would only allow election judges to complete a ballot on behalf of a voter using an absentee ballot in a hospital or care facility.
Under Sen. Scott Newman's proposal, an absentee ballot can only be delivered by two election judges -- members of different political parties -- traveling together by car.
It also changes who can mark the ballot of a voter...
The person who assists the voter shall, unaccompanied accompanied by an election judge, retire with that voter to a booth and mark the ballot as directed by the voter. No person who assists another voter as provided in the preceding sentence shall mark the ballots of more than three voters at one election. Before the ballots are deposited, the voter may show them privately to an election judge to ascertain that they are marked as the voter directed.
Under present law the only people who can't help someone mark a ballot are the voter's employer, an agent of the voter's employer, an officer or agent of the voter's union, or a candidate for election.
Sen. Newman did not immediately return a call from MPR News for an explanation of the reason for his bill (Update 4/14 11:13 a.m. - Sen. Newman's office said he would not do an interview because of the Passover recess) , but it appears to address a dust-up in Crow Wing County in the last election in which a voter alleged fraud by residents and staff of a group home:
FoxNews reported earlier this month that the father of one of the voters says his son was too incompetent to vote.(4 Comments)