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Van Gogh’s Ear

May 5, 2009

In broken news,  German researchers contend that Van Gogh did not cut off his own ear in madness, rather that it was excised from his face with the wild swinging epee of one Paul Gauguin, who lashed out at him in anger. Van Gogh gave the ear to a nearby prostitute and Gauguin tossed the sword into the Rhone. Now, after all these years, their pact of silence has been broken, fucking up the martyrdom complexes of millions of artistes around the globe.

In Van Gogh’s Ear: Paul Gauguin and the Pact of Silence Hans Kaufmann and Rita Wildegans claim it was the sword attack, not Van Gogh’s madness, that led him to commit suicide two years later.

The prevailing theory is that the Dutchman, who painted Sunflowers and the Potato Eaters, almost bled to death after slashing his own ear with a razor in a fit of lunacy on the night of December 23, 1888.

He is said to have wrapped it in cloth and handed it to a prostitute in a nearby brothel.
However, the new work from experts in Hamburg offers a very different version.
Gauguin, an excellent fencer, was planning to leave Van Gogh’s “Yellow House” in Arles, southwestern France, after an unhappy stay.

He had walked out of the house with his baggage and his trusty épée in hand, but was followed by the troubled Van Gogh, who had earlier thrown a glass at him. As the pair approached a bordello, their row intensified, and Gauguin cut off Van Gogh’s left earlobe with his sword – either in anger or self-defense.

He then threw the weapon in the Rhône. Van Gogh delivered the ear to the prostitute and staggered home, where police discovered him the following day, the new account claims. Gauguin had undoubtedly been staying with Van Gogh, but most experts think he had disappeared before the ear incident.

Although the historians provide no “smoking gun” to back up their claims, they argue theirs is the most logical interpretation, and explains why in his final recorded words to Gauguin, Van Gogh writes: “You are quiet, I will be, too”.

RIP Dom DeLuise

I nearly peed my pants seeing this scene of him getting stoned way back in the dark ages. Truly a very funny man who delighted with his inanity over the years.

32 Comments leave one →
  1. Stemella permalink*
    May 5, 2009 7:09 am

    Here’s a good article on the banks are too big to fail issue

    Size Really Does Matter

    America’s obsession with bigness has led us to assume glibly that organizational growth, vertical and lateral, is a natural consequence of business success and must be respected, even celebrated. Armies of consultants, lawyers and investment bankers devote their businesses to the science of corporate enlargement, encouraged by economists who celebrate not only economies of scale, but even “economies of super scale.” Ken Thompson, then CEO of one of the most venerated banks in the United States, Wachovia, spoke for an industry when he declared in 2006, at the very moment the company was making its fatal acquisition of Golden West Financial, that ““[c]onsolidation continues to make economic sense. Done right, size enhances competitive power. With economies of scale, a company can better afford the technology and longer branch hours that customers demand.”

    The author then talks about the problems of the getting bigger process, the mergers, and how expertise, technology and essential culture are lost in the hulkification the supersizing of those institutions. Most damaged in the process was risk management as evidenced by the complete lack of oversight and remedy for shenanigans up to full on criminal malfeasance.

    Here’s his thoughts on rememdies.

    What does this mean for public policy?

    At the very least we ought to re-examine our assumptions about letting banks, or any financial institution the actions of which generate systemic concerns, grow to whatever size they desire. Antitrust analysis has taken a back seat to “market discipline.” Yet it is not at all clear that markets have the information or power necessary to ensure that the discipline of the market will prevent the growth of institutions that are too big to handle. Optimal size assumptions, ones that do not rely upon surreptitiously externalized or postponed risk and costs, ought to be an important yardstick in antitrust analysis.

    Secondly, we should not assume that corporations are internally coherent. Employees operate in large divisions, frequently strangers to each other; sometimes they even have to operate in environments fragmented by cultural misalignment and division. Incentive structures are widely different and do not necessarily ensure that everyone acts for the good of the shareholder. Conflicts of interest remain even after complex formal controls are imposed—indeed these controls often create more opportunities than ever for inimical arbitrage within the organization. It is quite possible that something like the re-imposition of some Glass-Steagall type constraints is needed to prevent unnatural combinations and impose structural curbs on the risk-taking that has created the present crisis.

    Third, when corporate executives claim that they can live large safely, directors, shareholders, analysts and reporters should apply healthy doses of skepticism. It would be more effective to require executives to account, without excuses, for their success in actually delivering and preserving what they already promised the last time than to accept promises of future performance.

    America has always celebrated competition. Our recent experience suggests that our obsession with size has diverted the focus from this critical element of our economic strength and it is high time to question whether it is how corporations can really perform, not how big they can get, that should be the foundation for sound merger and acquisition policy.

    These seem to be common sense solutions to me, but I question whether the still dominant neo-liberal free marketeers like Timmy, Larry, Benny and Barry will even consider real regulation and enforcement. Break them up, antitrust, sustainable growth all good ideas, but unlikely in this country still so addicted to junk and steroids.

    • cometman permalink*
      May 5, 2009 10:21 am

      Seems like common sense to me too. I’ll have to come back later and read the whole article at the link, but one thing that jumped out right away was this:

      Secondly, we should not assume that corporations are internally coherent. Employees operate in large divisions, frequently strangers to each other; sometimes they even have to operate in environments fragmented by cultural misalignment and division.

      I am so sick and tired hearing about corporate efficiency and how government should be run like a business. Evidently those who say that have never had to call a large corporation to try to get some customer service. I could go on and on but even the most simple thing like trying to get off the mailing list of some asshole credit card company that keeps filling up your mailbox with junk, something which if the company were actually efficient would take about 30 seconds, takes literally months. I know. I’ve tried many times.

      • Stemella permalink*
        May 5, 2009 10:35 am

        Yep, business is a mess. The culture of Voodoo economics combined with cutthroat competition combined with the constant threat of outsourcing has lead to a totally Fubar society, private and public, for profit and not.

        I have a solution. Go back up to the main post and watch the video I posted near the bottom. It really works! You gotta laugh sometimes because it all gets so absurd. :)

        And if you haven’t noticed it appears the latest whackoff has been whacked off the zone! Talk about absurdities. Jesus fucking keeeewriste!

        • cometman permalink*
          May 5, 2009 10:46 am

          Ha! I was wondering if you had anyone specific in mind when you mentioned fucking up the martydom complexes of certain artistes. I know I did when I read it :)

        • cometman permalink*
          May 5, 2009 4:09 pm

          Just got a chance to watch the video. Thanks for the laugh!

  2. Stemella permalink*
    May 5, 2009 7:29 am

    The folks at Naked Capitalism have a great discussion of one of Roubini’s recent articles that talks about the stress tests and the need to end the bank bailout sharade.

    Richardson and Roubini call for bank Resolution, Diss Stress Tests

    History repeats itself, the first time as tragedy, the second time as farce. But when it’s your farce, sometimes it’s hard to appreciate the humor.

    We’ve railed about the stress tests since they were announced, but the chicanery, starting with the March 10 Citi and Bank of America pronouncements that they had had a decent couple of months, have lead to a big rally in bank shares. Of course, before we get too excited, it’s important to remember that Citi is still trading at a bit over $3 and Bank of America at just over $10.

    Nevertheless, the insistence of the cheerleading is looking strained, particularly when pretty much every professional investor we know is skeptical of the rally, even those who had the foresight to buy into it early. And even an equity broker (generally of the bullish persuasion) commented on earnings season: “One third had earnings that beat expectations, one third were short, and one third were delusional.”

    and here’s the direct link to Richardson and Roubini’s article: We Can’t Subsidize the Banks Forever: Government has to show it can handle major insolvencies

    The results of the government’s stress tests on banks, to be released in a few days, will not mark the beginning of the end of the financial crisis. If we are to believe the leaks, the results will show that there might be a few problems at some of the regional banks and Citigroup and Bank of America may need some more capital if things get worse. But the overall message is that the sector is in pretty good shape.

    This would be good news if it were credible. But the International Monetary Fund has just released a study of estimated losses on U.S. loans and securities. It was very bleak — $2.7 trillion, double the estimated losses of six months ago. Our estimates at RGE Monitor are even higher, at $3.6 trillion, implying that the financial system is currently near insolvency in the aggregate. With the U.S. banks and broker-dealers accounting for more than half these losses there is a huge disconnect between these estimated losses and the regulators’ conclusions.

    The hope was that the stress tests would be the start of a process that would lead to a cleansing of the financial system. But using a market-based scenario in the stress tests would have given worse results than the adverse scenario chosen by the regulators. For example, the first quarter’s unemployment rate of 8.1% is higher than the regulators’ “worst case” scenario of 7.9% for this same period. At the rate of job losses in the U.S. today, we will surpass a 10.3% unemployment rate this year — the stress test’s worst possible scenario for 2010.

    The stress tests’ conclusions are too optimistic about the banks’ absolute health, although their relative assessment is more precise, because consistent valuation methods were used. Still, with Thursday’s announcement of the results, it shouldn’t be a surprise when the usual suspects emerge. We fear that we are back to bailout purgatory, for lack of a better term. Here are some suggestions for how to extricate ourselves.

    First, while Treasury Secretary Timothy Geithner’s public-private investment program (PPIP) to purchase financial firms’ assets is not particularly popular, we hope the government doesn’t give up on it. True, the program offers cheap financing and free leverage to institutional investors, which will lead to the investors overpaying for the assets. But it does promote price discovery and remove the assets from the bank’s balance sheets — necessary conditions to move forward.

    And to minimize the cost to taxpayers, banks must not be allowed to cherry-pick which legacy assets to sell. All the risky loans and securities banks were never meant to hold should be on the block. With enough investors participating in the PPIP program, the prices of the assets should be competitive, and there should be no issue of fairness raised by the banks.

    Second, the government should stop providing capital, loan guarantees and financing with no strings attached. Banks should understand this. When providing loans to troubled companies, they place numerous restrictions, called covenants, on what these firms can do. These covenants generally restrict the use of assets, risk-taking behavior, and future indebtedness. It would be much better if the government focused on this rather than on its headline obsession with bonuses.

    • cometman permalink*
      May 5, 2009 10:43 am

      Ha! I liked the part about 1/3 of those reporting earnings being “delusional”. But seeing as how many of the earnings were just recently reported, I expect many of them to be “revised” soon, and the revision will be downward.

      And regarding the unemployment figures cited, I was reading through the latest Harpers yesterday and in the Index one of the figures they mentioned was this:

      Percentage of all U.S. men over 20 who are now unemployed or not seeking work: 31

      Not sure what metric was used to come up with that figure (for example are college kids counted as unemployed?) but the source they cited was the US Bureau of Labor Statistics.

  3. Stemella permalink*
    May 5, 2009 7:35 am

    About fucking time, and there better damn well be more to follow, lots more:

    Deutsche Bank Worker Sued in First SEC Credit-Default Swap Case

    U.S. regulators filed their first insider-trading case focusing on credit-defaults swaps, suing a Deutsche Bank AG salesman who allegedly tipped a hedge-fund portfolio manager to a bond sale in 2006.

    Jon-Paul Rorech, 36, a bond and credit-default swap salesman at Deutsche Bank Securities, passed information on the bond sale to Renato Negrin, 45, a portfolio manager at Millennium Partners LP, who then purchased the swaps to reap a $1.2 million profit after the deal was announced, the Securities and Exchange Commission said in a lawsuit filed today at federal court in Manhattan.

  4. cometman permalink*
    May 5, 2009 8:43 am

    Interesting stuff about Van Gogh. Speaking of cutting off body parts, it reminded me of a really good book I read a few years back called The Professor and the Madman about the making of the Oxford English Dictionary. They asked people to make submissions for definitions and one pretty crazy guy became somewhat obsessed with sending in entries. He ended up in an insane asylum where he chopped off his johnson ( perhaps an homage to fellow lexicographer Samuel Johnson? :P ).

    And again speaking of cutting off body parts and other acts of torture, last week Condi rice was lying to college students about torture, and now she’s lying to fourth graders. Next week she will visit a pre-school in Peoria to describe to 4 year olds how harsh interrogation is like playing tickle-me-elmo.

  5. cometman permalink*
    May 5, 2009 4:58 pm

    Rrrrrr. It just doesn’t stop. The cramdown bill that would have benefited taxpayers was defeated last week but if you’re a corporation and things get tough you can just write it off:

    Earlier this week, Senate Democrats quashed an attempt to amend a bankruptcy bill that would have given judges the power to reduce the principal on mortgages of distressed homeowners, swallowing an explanation from the banking industry that reducing the value of mortgages would make it harder for other Americans to get a loan.

    Apparently, though, if you’re a car company formerly owned by a private equity firm — and soon to be taken over by a powerful union and an Italian automaker, there are different rules.

    As part of the company’s bankruptcy filing, Chrysler LLC will not repay US taxpayers more than $7 billion it received as part of the company’s bailout earlier this year. Instead, the US will get an 8% ownership in a firm whose value continues to deteriorate by the day.

    I’d like to hear more about this. A quick look around says Chrysler’s current market cap is in the single digit billions – basically the amount of the loan the taxpayers are eating is about what the entire company is worth, and the US government only gets an 8% stake. The article doesn’t say whether that 8% stake gives the government any voting rights as to how the company is run. I do remember that when they took partial ownership of some of the financial institutions there were no voting rights at all.

    • Stemella permalink*
      May 5, 2009 7:30 pm

      Here’s a couple of other articles on Chrysler

      from Huffpo: Creditors May Have Pushed For Chrysler Bankruptcy To Rake In Bailout Cash

      from Reuters: Chrysler bankruptcy could be protracted – Moody’s

      also, for more rrrrrrrr’s AIG Adjusts Bonus Total Again, To $454 Million Oooops, we know we told y’all we paid ourselves $120 million in bonuses but you know what? It was really $450 million. You won’t mind though, you won’t care. We’re giving it all to your congresscritters to make sure they represent our interests, because we’re holding all of you ransom you fucking suckers! bwwwwaaaahahahaha


      • cometman permalink*
        May 5, 2009 8:35 pm

        In the Chrysler situation, from other articles it seems like it’s some hedge funds who stand to make more money by letting Chrysler go under and selling off assets than by accepting some sort of deal, which really pisses me off. from reading the articles you linked to, a large part of the problem seems to be that the parties who ought to know all the details of what is going on don’t, and there is simply no transparency. All parties are looking out for themselves, even the ones who’ve already been bailed out with billions, and none of them are being made to make concessions (well except the unions of course) or show any kind of transparency. We only start getting some of the details, as in the case of the ridiculous AIG bonuses, after the cows have already left the barn. This part from the Roubini article above would seem to be essential:

        Second, the government should stop providing capital, loan guarantees and financing with no strings attached. Banks should understand this. When providing loans to troubled companies, they place numerous restrictions, called covenants, on what these firms can do. These covenants generally restrict the use of assets, risk-taking behavior, and future indebtedness. It would be much better if the government focused on this rather than on its headline obsession with bonuses.


        And we shouldn’t hear one more time from a government official, “if only we had the authority to act . . .”

        We were sympathetic to this argument on March 16, 2008 when Bear Stearns ran aground; much less sympathetic on Sept. 15 and 16, 2008 when Lehman and A.I.G. collapsed; and now downright irritated seven months later. Is there anything more important in solving the financial crisis than creating a law (an “insolvency regime law”) that empowers the government to handle complex financial institutions in receivership? Congress should pass such legislation — as requested by the administration — on a fast-track basis.

        And yet this has been going on for months and months, the taxpayers are on the hook for trillions already, and there hasn’t been any new regulation of consequence, or even enforcement of old ones that should be enforced like those Black brought up recently.

        The guillotine for these assholes would be way to quick and painless.

  6. cometman permalink*
    May 5, 2009 8:51 pm

    Haven’t heard much from her lately, but Sibel Edmonds had a great piece today on the corruption and rot that permeates our political system:

    How does it work? How do these people escape accountability, the consequences? Are we talking about the possible use of blackmail by the Executive Branch against congressional representatives, as if Hoover’s days were never over? Cases such as NSA illegal eavesdropping come to mind, when congressional members were briefed long before it became public, yet none took any action or even uttered a word; members of both parties. Or is it more likely to be a case of secondhand blackmail, where members of congress keep tabs on each other? Or, is it a combination of the above? Regardless, we see this ‘one for all, all for one’ kind of solidarity in congress when it comes to criminal conduct and scandals such as those of Hastert and Harman.

    Although at an initial glance, based on the wiretapping angle, the Harman case may appear to involve blackmailing, or a milder version, exploitation, of congress by the Executive Branch, deeper analysis would suggest even further implications, where congressional members themselves use the incriminating information against each other to prevent pursuit or investigation of cases that they may be directly or indirectly involved in.

    • Stemella permalink*
      May 6, 2009 7:32 am

      Rotten to the core. We’ve known that for a while now, but it is comforting in a disturbing way to have that reinforced …

      Despite a certain degree of exposure cases such as Harman and Hastert, involving corruption of public officials, seem to meet the same dead-end, literally dead. Powerful foreign entities’ criminal conduct against our national interest is given a pass as was recently proven by the AIPAC case. The absence of real investigative journalism and the pattern of blackout by our mainstream media are known universally and seem to have been accepted as a fact of life. Pursuit of cases such as mine via cosmetically available channels has been and continues to be proven futile for whistleblowers. Then, you may want to ask, why in the world am I writing this piece? Because more and more people, although not nearly enough, are coming to the realization that our system is rotten at it’s core; that in many cases we have been trying to deal with the symptoms rather than the cause.

      In related news today, Aipac urges Congress members to sign letter to Barack Obama calling for Israel to set pace of negotiations with Palestinians

      US pro-Israeli group attempts to stop shift in White House Middle East policy

      Aipac urges Congress members to sign letter to Barack Obama calling for Israel to set pace of negotiations with Palestinians

      US congressional leaders and the most powerful pro-Israel lobby group in the US are attempting to forestall a significant shift in the White House’s Middle East policy.

      The move comes amid growing signs that the US president, Barack Obama, intends to press for urgent efforts to be made towards the creation of a Palestinian state.

      The Israeli prime minister, Binyamin Netanyahu, is visiting Washington later this month amid growing expectations that Obama is preparing to take a tougher line over Israel’s reluctance to actively seek a two-state solution to its conflict with the Palestinians.

      It will be the first time that Netanyahu and Obama have met since both were elected.

      The American Israel Public Affairs Committee (Aipac) this week sent hundreds of lobbyists to urge members of Congress to sign a letter to Obama.

      The letter, written by two House of Representatives leaders, calls for Israel to be allowed to set the pace of negotiations.

      Who are those two Congressional signatories? Steny Hoyer, the Democratic majority leader in the House of Representatives, and Eric Cantor, the Republican whip. But of course.

      So let’s see how much effect this AIPAC lobbying effort has on Obama’s policy. Let’s see how Hillary responds as Secretary of State. I’m sure the Pakistani and other middle eastern nations would like to know also whether the status quo will prevail. This is the crux of the foreign policy biscuit. Obama supposedly has a lot of political capital. Let’s see if he actually uses it to stand up for a supposed policy principal, or if he too will cave to those oh so special interests.

      Rotten to the core.

      • cometman permalink*
        May 6, 2009 8:19 am

        If I were president, I’d tell the Israeli lobby that I was well aware of where Israel was, what its history is, who its enemies are etc etc and if I did have any questions I knew who to ask. Then I’d tell them that for every fucking letter that crossed my desk asking for a favor, I’d cut a billion in financial and military aid for wasting my time.

      • cometman permalink*
        May 6, 2009 8:45 am

        Good article from Counterpunch on just what Obama is up against in trying to negotiate with Israel. Avigdor Lieberman is an even bigger whackjob than I thought.

        The Minister of Foreign Affairs, Avigdor Lieberman, ignores the hints by many of the pundits that he may be embarrassing his boss, Bibi Netanyahu. Thriving on media attention, Lieberman keeps up a barrage of inanities like his statement in an interview to a Russian publication to the effect that “the US will do what we tell it to do.” Despite his appearance as a thug and a buffoon, Lieberman has a broad geo-political agenda and even presumes to explain to Obama that Pakistan and Afghanistan and not Iran are the chief problem. Lieberman is working on his very own contribution to world security by pushing the idea of a USA-Russia alliance against the Islamic world (civilization) to be brokered by…you guessed it…Israel and its foreign minister. There are people out there who take the clash of civilizations seriously. Just what we need – a Judeo-Christian alliance for the preservation of Western values.

        Lieberman is no genius but he can pick up on a racist strain in US-European thinking. Bibi is a bit more elegant, but he is following the very same scenario as his buddy. This policy must be characterized as the right wing-extremist line of the more aggressive and adventurous elements in the US administration. These forces dislike Obama’s “moderate” style even when it is seen purely as a matter of form. They know the hard facts of imperial power and will exploit every element to wear down Obama, who has hitherto been simply unable to elaborate a coherent alternative to traditional hegemonic thinking.

        The article goes on to discuss how Israel wants to make confronting Iran a priority before engaging in negotiations about the Palestinians, which as you mentioned above would have Israel setting the pace when and if they bother to get around to them. The article continues and gets to the crux of the matter:

        Even so, Obama and Hillary will tell Netanyahu that progress in the Palestinian talks is absolutely necessary to isolate Iran either for heavy sanctions or eventually a full sale attack. We must have peace they will explain before we can make war. Netanyahu, if it appears that he cannot really get his war (with Iran) for promising peace (with the Palestinians) will make the “ultimate concession” and agree to renew talks with the Palestinians. Obama will fake a victory, the “moderate” Arab countries will marvel at US diplomatic and the US will proceed on its mission to Teheran. The US will ostensibly have moved in the direction of dialogue but will brandish the Israeli sword in the face of the recalcitrant Iranians to keep them up to speed. With all this jockeying hither and thither very few bright people will be fooled into forgetting the name of the game. This region is oil country and it is the United States and it alone which wants it hands on the spigot. Iran with its reactionary regime and crude and clumsy leadership has the weird idea that it should decide how to dispose of its own oil, a crime punishable by death and invasion in the US playbook.

  7. cometman permalink*
    May 5, 2009 9:03 pm

    Really scary things going down in Pakistan. Obama has continued the Bush policy of predator drone strikes to kill the ‘terrorists’ however they mostly kill innocent bystanders and for some strange reason that tends to really piss people off. The fact that the Pakistani government refuses to stand up to the US isn’t helping the situation either, and now they are coming closer to collapse.

    This article argues that at this point there is ample reason to stop these strikes but Obama so far seems unwilling to do so. Probably because some whackjob on Fox would call him soft on terror.

    Until this week, it seemed like the conventional wisdom in Washington was that stopping U.S drone strikes in Pakistan was outside the bounds of respectable discussion.

    That just changed. Or it should have.

    Writing in the Los Angeles Times, Doyle McManus notes that counterinsurgency guru David Kilcullen has told Congress that U.S. drone strikes in Pakistan are backfiring and should be stopped. Until now Congress has been reluctant to challenge the drone strikes, as they are reluctant in general to challenge “military strategy,” even when it appears to be causing terrible harm. But as McManus notes, Kilcullen has unimpeachable Pentagon credentials. He served as a top advisor in Iraq to General Petraeus on counterinsurgency, and is credited as having helped design the Iraq “surge.” Now, anyone in Washington who wants to challenge the drone strikes has all the political cover they could reasonably expect.

    And what Kilcullen said leaves very little room for creative misinterpretation:

    “Since 2006, we’ve killed 14 senior Al Qaeda leaders using drone strikes; in the same time period, we’ve killed 700 Pakistani civilians in the same area. The drone strikes are highly unpopular. They are deeply aggravating to the population. And they’ve given rise to a feeling of anger that coalesces the population around the extremists and leads to spikes of extremism. … The current path that we are on is leading us to loss of Pakistani government control over its own population.”

    William Rivers Pitt explains just how bad the current situation in Pakistan is:

    But a suicide bomber in Pakistan rammed a car packed with explosives into a jeep filled with troops today, killing five and wounding as many as 21, including several children who were waiting for a ride to school. Residents of the region where the attack took place are fleeing in terror as gunfire rings out around them, and government forces have been unable to quell the violence. Two regional government officials were beheaded by militants in retaliation for the killing of other militants by government forces.

    As familiar as this sounds, it did not take place where we have come to expect such terrible events. This, unfortunately, is a whole new ballgame. It is part of another conflict that is brewing, one which puts what is happening in Iraq and Afghanistan in deep shade, and which represents a grave and growing threat to us all. Pakistan is now trembling on the edge of violent chaos, and is doing so with nuclear weapons in its hip pocket, right in the middle of one of the most dangerous neighborhoods in the world.

    The situation in brief: Pakistan for years has been a nation in turmoil, run by a shaky government supported by a corrupted system, dominated by a blatantly criminal security service, and threatened by a large fundamentalist Islamic population with deep ties to the Taliban in Afghanistan. All this is piled atop an ongoing standoff with neighboring India that has been the center of political gravity in the region for more than half a century. The fact that Pakistan, and India, and Russia, and China all possess nuclear weapons and share the same space means any ongoing or escalating violence over there has the real potential to crack open the very gates of Hell itself.

    • Stemella permalink*
      May 6, 2009 7:40 am

      Yeah, shit is apparently hitting the fan there again. And it looks like we are going in with guns blazing. From the NYT

      A new operation in Swat may signal the harder stance American officials have been looking for. But the question remains whether the Pakistani military has the will and ability to sustain its operations against the insurgents, the vast majority of whom are Pakistani.

      The American special envoy for the region, Richard C. Holbrooke, said Tuesday that the situation in Pakistan was fragile, but he welcomed the turn toward wider military action.

      “Until yesterday, the momentum did not appear to be in the right hands,” he told Congress. “The army has now begun a major offensive. We’ll have to wait and see how it goes.”

      The Pakistani military has battled the militants reluctantly in the past, and recently began to engage in heavy fighting with the Taliban in Buner and Dir, another district that borders Swat in the North-West Frontier Province.

      Holbrooke, unsurprisingly, sounds just like a war hawk. Meanwhile it looks like a major humanitarian crisis in the making: Pakistan braces for flood of displaced from Swat

      Pakistan is bracing for its biggest ever displacement of people, as many as 800,000, as a military offensive against Taliban militants in their stronghold in the Swat valley appears imminent.

      Expanding Taliban influence in nuclear-armed Pakistan has spread alarm at home and abroad and will be a core issue when U.S. President Barack Obama meets his Afghan and Pakistani counterparts in Washington later on Wednesday.

      Convoys of military vehicles carrying troops and artillery were seen heading towards Swat as authorities in Mardan, the second biggest city in the North West Frontier Province (NWFP), search for sites for camps for people uprooted by fighting.

      “Initially, we were estimating that 100,000 to 200,000 people would leave their homes but now we are expecting displacement of 600,000 to 800,000,” Khalid Khan Umerzai, commissioner of the Mardan division in NWFP, told Reuters on Wednesday.

      “This will be the biggest displacement of Pakistanis since independence,” he said, adding about 1.6 million people live in Swat.

      • cometman permalink*
        May 6, 2009 8:14 am

        Fareed Zakaria was on Jon Stewart last night talking about Pakistan and mentioned that Pakistanis he knew who were against the predator strikes were now for them as the situation becomes more dire. He didn’t say exactly which Pakistanis were welcoming the strikes and somehow I doubt it is those likely to be in the crosshairs.

        Also for some comic relief because if we couldn’t laugh at it we’d all go nuts, Stewart had a very funny and politically incorrect bit on the bank stress tests.

        • Stemella permalink*
          May 6, 2009 8:41 am

          That was right on the edge, aie aie aie, but yes hilarious. Stewart and Colbert’s shows are good for mental health, indeed.

        • triv33 permalink
          May 6, 2009 8:51 am

          I found myself giggling uncontrollably at “The Lost Party.” I love it when Republican scions try to act like they’re just plain folks, so authentic!

          • cometman permalink*
            May 6, 2009 8:54 am

            Yeah, where they all got together at some family restaurant, dressed in shirt sleeves, spoke in front of the dessert menu, and said the exact same thing as they have for years and tried to pass it off as new and different. Hilarious!

            • triv33 permalink
              May 6, 2009 9:04 am

              Is it just me or does Cantor always look like he smells shit?

              • Stemella permalink*
                May 6, 2009 9:15 am

                Well, he’s often surrounded by other Republicans, so that is quite plausible. I have to agree that he has an odd expression. Too funny, triv! :)

                • triv33 permalink
                  May 6, 2009 5:03 pm

                  Hmmm, he looks that way even when he’s alone. Clearly, much of it is his own stench.

  8. Stemella permalink*
    May 6, 2009 8:45 am

    For the FINRA version of “rotten to the core”

    Now It’s Official: Securities Industry Regulator Takes Care of Self, Not Investors

    I really should be past being surprised at misconduct in the securities industry, but when it extends to supposed regulators, it is a clear sign that the entire system is hopelessly beyond redemption.

    The case example is FINRA. Some excerpts from its website:

    The Financial Industry Regulatory Authority (FINRA), is the largest non-governmental regulator for all securities firms doing business in the United States. All told, FINRA oversees nearly 5,000 brokerage firms, about 173,000 branch offices and approximately 653,000 registered securities representatives.

    Created in July 2007 through the consolidation of NASD and the member regulation, enforcement and arbitration functions of the New York Stock Exchange, FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services….

    In today’s fast-paced and complex global economy, FINRA is a trusted advocate for investors, dedicated to keeping the markets fair, ensuring investor choice and proactively addressing emerging regulatory issues before they harm investors or the markets.

    If you believe the last sentence, I have a bridge I’d like to sell you.

    As of year end 2007, FINRA had a roughly $3 billion balance sheet (see page 28 of the pdf) of which $862 million was invested in auction rate securities (see the second paragraph on page 48). As readers may recall, ARS had been sold aggerssively to retail investors, and were presented as being “as safe as cash”, thus positioning them as a higher yield alternative to Treasuries or money market funds.

    According to Dan Solin, FINRA sold them six months before the auction rate securities market froze. Since the market had been experiencing rising levels of dealer inventory, it is quite probable that FINRA knew of imminent problems (why did it cease holding ARS altogether rather than merely lightening up?)

    • cometman permalink*
      May 6, 2009 8:51 am

      Let’s not forget that FINRA was created by combining other regulatory bodies so there would be less regulation overall and what there was would be mostly ‘suggestions’ rather than anything binding. And IIRC it was Pam Martens in a Counterpunch article a few months back who mentions that FINRA was created due to lobbying efforts by none other than Bernie Madoff. I think I’d be more surprised to find out that FINRA wasn’t completely corrupt.

  9. Stemella permalink*
    May 6, 2009 9:32 am

    Another article on the Chrysler debacle and strong arm tactics (cough Rahmbo cough of the Obama Admin)

    New Allegations Of White House Threats Over Chrysler

    Creditors to Chrysler describe negotiations with the company and the Obama administration as “a farce,” saying the administration was bent on forcing their hands using hardball tactics and threats.

    Conversations with administration officials left them expecting that they would be politically targeted, two participants in the negotiations said.

    Although the focus has so been on allegations that the White House threatened Perella Weinberg, sources familiar with the matter say that other firms felt they were threatened as well. None of the sources would agree to speak except on the condition of anonymity, citing fear of political repercussions.

    The sources, who represent creditors to Chrysler, say they were taken aback by the hardball tactics that the Obama administration employed to cajole them into acquiescing to plans to restructure Chrysler. One person described the administration as the most shocking “end justifies the means” group they have ever encountered. Another characterized Obama was “the most dangerous smooth talker on the planet- and I knew Kissinger.” Both were voters for Obama in the last election.

    Apparently this author has a pro wall st, right wing bias looking at some of the language, so take that into account with some salt. I found the link at Naked Capitalism, which is decidedly not right wing.

    Here’s another take from Reuters (looks like lots of denials going on from all sides – so much for transparency and sunshine Obama)

    UPDATE 1-Perella denies White House threat over

  10. cometman permalink*
    May 6, 2009 9:49 am

    If Obama were actually strong arming some of these financial companies that would be an encouraging development seeing as they’ve all gotten everything they’ve asked (bribed) for and more so far. But I get the impression that these banking types consider any response other than “How high?” when they say “Jump” to be strong arming and threats. And yeah, some sunlight would be nice. From that last link:

    The secured creditor group remains largely anonymous, with the exception of steering committee members PWP, OppenheimerFunds, Stairway Capital Management and Elliott Management.

    Hard to tell what’s going on when you don’t even know who all the players are and there are so many conflicting reports.

  11. cometman permalink*
    May 6, 2009 1:44 pm

    Very good interview with James K. Galbraith at truthout. Much like William Black, he is not afraid to use the F-word. A lot. Here’s an excerpt:

    MR: In an interview with Bill Moyers, bank regulation expert William K. Black did not hedge in describing the Wall Street collapse as a result of massive fraud starting in the board rooms and CEO offices of Wall Street. What is your take on this? Has the American economy fallen victim to a group of confidence men?

    JKG: Bill Black is a comprehensive expert on the subject of bank fraud. He is not prone to exaggeration or polemic. He is a lawyer and criminologist who uses words with considerable precision. One of the things that Bill has noted is that as far back as 2004, the FBI warned that there was an epidemic of mortgage fraud on the way. The [Bush] administration failed to do anything about it and did not give the FBI the direction and the resources required to make dealing with white-collar fraud a priority.

    So, you had fraud in the origination of the mortgages, fraud in the underwriting. You also had fraud in the ratings agencies, which were operating according to a business model where they did not get paid unless they issued the favorable ratings, and they issued ratings on assets they could not examine. They examined using statistical methods and did not look at the underlying documents to asses the possibilities that the assets they were rating were rotten to the core.

    But of course they were. A subprime mortgage is an intrinsically problematic instrument. It is an loan issued to people who can’t document their incomes, whose credit histories are bad, and were issued on assets whose values were systematically inflated.

    MR: Do you think this fraud was a plan?

    JKG: Sure it was! There was a whole class of lenders out there, many of whom were completely unregulated, the Countrywide Financials of the world, others of whom should have been regulated but were effectively desupervized, the Indymacs and the Washington Mutuals, where the business model was “push those bonuses out the door, get as many of them signed up as possible because if they pay for the first 30 days, we can sell them and pocket the fees. After that, it isn’t our responsibility.”

    Systematically, in this industry, the people who previously specialized in risk management used to say, “show me the documents proving that this will be a safe mortgage,” were given instructions by top management, “get out of the way, and get these mortgages issued.” There are plenty of records showing that these lenders were told to drop the standards. That was the revenue model for the institution. You have a model which is fraud in origination, fraud in the conveyance and fraud in the rates.

  12. cometman permalink*
    May 6, 2009 2:07 pm

    Here’s some more about the massive fraud being perpetrated by GoldmanSux: Cashing in on Government Sachs from Robert Scheer. Evidently if you’re a Goldie, you can be chairman of the NY Federal Reserve and serve on Goldman’s board at the same time and when you make decisions that benefit Goldman knowing that their stock price is likely to rise as a result, you can snap up shares and make a hefty profit.

    We are so inured to tales of business corruption that even a devastating exposé in The Wall Street Journal no longer shocks us. The fact that the chairman of the New York Federal Reserve Bank made millions off his secret purchase of Goldman Sachs stock, “in violation of Federal Reserve policy,” as the WSJ put it, at a time when the N.Y. Fed was ostensibly overseeing the antics of the Wall Street firm, has barely registered a blip of outrage.

    When N.Y. Fed Chairman Stephen Friedman bought stock in the company that he once headed, and where he still serves as a director, he was already in violation of Federal Reserve policy and was hoping for a waiver to permit him to hold his existing multi-million-dollar stock stash and to remain on the Goldman board. The waiver was requested last October by Timothy Geithner, then the president of the N.Y. Fed and now Treasury secretary. Yet, without having received that waiver, Friedman went ahead in December and purchased 37,300 additional shares. With shares he added in January, after the waiver was granted, he ended up with 98,600 shares in Goldman Sachs, worth a total of $13,330,720 at the close of trading on Monday.

    Friedman was in violation of the Fed’s policy because, thanks in part to the urging of Geithner and the N.Y. Fed, Goldman Sachs was allowed to become a bank holding company, making it eligible for government bailout funds (an option that Geithner had denied to Goldman rival Lehman Brothers). But that shift also put Goldman under more rigorous banking regulations that required Friedman as Class C director of the N.Y. Fed, a position in which he ostensibly represents the public instead of the banks who dominate the board, to step down as a Goldman director and divest his holdings. Instead, he stayed on the Goldman board and added additional shares while waiting for the Fed waiver. Nor did he inform the Federal Reserve of his additional purchases last December, and the lawyers for the N.Y. Fed didn’t know about that purchase until the WSJ raised questions in April. Friedman has made a profit of about $3 million on the additional shares.

    WTF?!?!?!?! He violates the policy with no repercussions and then is still granted a waiver. Why in the hell would Timmy the Elf even think about granting a waiver when it was so clearly a monumental conflict of interest? Why the fuck does Obama continue to stick with this guy?

    Somebody needs to start heating up the oil and throw these bastardly bankers in for a nice slow boil.

    • Stemella permalink*
      May 6, 2009 8:17 pm

      I think when it comes to Goldman, conflict of interest is moot. All interest is their interest. The Obama Admin is in their interest and Goldman is in the Obama Admin’s interest, so not conflict, see? They’re all self interested in eachother because they’ve all been in bed together for years. No conflicts there, no sireee. All goldy goodness of the rich and powerful rubbing the golden balls of the other rich and powerful. Ethics? Regulations? Laws? pssshaw. They don’t apply to the Golden ones.

      In other potentially really crappy news I found out I have been exposed to somebody who might have swinish flu. They definitely have flu, just don’t know if it’s swinish yet. I’m healthy at the moment but have to admit the thought of coming down with any flu right now is pissing me off. I’m mainlining goldenseal, echinacea , zinc and vitamin C just in case – chased with whiskey. :)

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