The Fourth of July: Three Questions

Can a nation state truly celebrate “independence” even if so many of its people were classified as property?

What is your independence day?

What does “freedom” mean to you as an individual and as a citizen?

FDIC and Bank Buy-Outs

From the Financial Times:

A statement from FDIC President Sheila Bair –

On May 21, 2009 the FDIC issued a press release stating that we would provide guidance concerning acceptable structures for acquiring failed institutions. This Proposed Policy Statement would provide guidance to private capital investors interested in acquiring or investing in failed banks or thrifts regarding the terms and conditions of the investments or acquisitions.

I am particularly concerned with new owners’ ability to support depository institutions with adequate capital, management expertise, and a long term commitment to provide banking services in a safe and sound manner. Obviously, we want to maximize investor interest in failed bank resolutions. On the other hand, we don’t want to see these institutions coming back. I remain open minded on many aspects of this proposal, including the categories of investors to whom it should apply, the appropriate level of upfront capital commitments, and the operation of cross guarantee provisions and limits on affiliate transactions. I look forward to receiving comments in these areas.

I support the transactions we have completed to date which have involved sales to private equity owners. We have imposed some special restrictions on these, including higher capital requirements. However, some have suggested that capital requirements should be even higher, given the difficulties in enforcing source of strength obligations outside the initial capital investment made by the acquirers in so-called “shell” structures. I know that this will be a contentious area, and we are opening high, with a proposed 15% requirement.

I am also troubled by the opacity of some of the ownership structures that we have seen in our bidding process, though these have not been winning bids. We have seen bids where it has been difficult to determine actual ownership. We have seen bidders who have wanted permission to immediately flip ownership interests. We have seen structures organized in the secrecy law jurisdictions. So based on the experiences we have gathered, I think it is prudent to put some generic policies in place which tell non-traditional investors that we welcome their participation, but only if we have essential safeguards to assure that they will approach banking in a way that is transparent, long term, and prudently managed.

Could You Survive with A Billion Dollars?

Self-Destruction 101.

Could you make it with a billion dollars in your bank account?

Could you survive the waves of gold diggers and blood suckers with blood ties and phat thighs and prophetic types who would be at your feet?

Could you outlast the fiendish Wall Street hucksters and the pleading investors or the pleasing digestors wanting to chew on your intestines?

How long would you last?

What would you do?

Would you fly solo or with a team?  If so, who’s on your team?  Do you a “Hell NO!!” person”?  Who is it?  Who loves you and won’t be seduced by someone else?

What would be written on your tombstone or vase of ash?  Would it be about your life or your waste of the cash?

Vacation’s Are Good

I just took a brief hiatus for the to the Hamptons.  It was a nice quiet week away from the wonderful noises of Brooklyn.  Ocean air, pool play with the twins, a little tennis, lots of sand and dirt and rain.

Robert Caro had a great deal to say about Long Island and the outer boroughs in The Power Broker.   Caro’s book is arguably the definitive book on modern New York City history.  I’ve just picked it up again and found that little things like taking children to an aquarium (located many miles from everything in Coney Island) were part of a larger political fight decades ago.

Nothing in New York is at it seems.  Perhaps moreso than Hollywood, New York is the world’s greatest city of illusion.  Tinseltown can make starlets appear from thin air, but Wall Street can steal your entire economy.

As Legitimate As George W., Right?

Legitimate elections? Surely the US has absolutely NOTHING to say about that. Surely, there isn’t a soul within these borders who would even dare utter a syllable about someone else’s election. Shhhh!

clipped from www.bloomberg.com June 15 (Bloomberg) — Iranian President Mahmoud Ahmadinejad vowed defiance against external “threats” as he defended his disputed re-election. He may have vanquished for now the internal threats to his authority. The president’s victory and its endorsement by Iran’s Supreme Leader, Ayatollah Ali Khamenei, sidelines those in the Islamic republic’s theocracy who favor easing tensions with the West, according to analysts. While his main opponent, former Prime Minister Mir Houssein Mousavi, says the vote was rigged and demands its annulment, his complaints and protests by his supporters are unlikely to shake the regime, said the analysts. The election results mean leaders who still adhere strictly to the principles of the 1979 Islamic Revolution have beaten back a challenge to their dominance, said Geneive Abdo, an Iran analyst at the Century Foundation, a New York research group.

Obama Carries Dirty Water to Cairo

From the New York Times:

“I consider Mr. Obama’s speech a morphine injection to numb the minds of Muslim and Arab people,” said Mr. Abdullah, the Syrian electrical engineer, “so that they don’t mind so much the injustices carried out by the United States in the region, as long as Mr. Obama respects Islamic culture and heritage.”

I’m sleepy already.

Now that we’ve established that the critical issues are: 1) violent extremism 2) unbreakable bonds with Israel  3) nuclear weapons 4) democracy 5) religious freedom 6) women’s rights; it must be plainly said that today’s speech had some limits.  It wasn’t “real talk to real people,” it was an introduction to an international community – but to be clear, everyone who shows up for the next conversation must know that the first conversation requires some clean up. 

The speech sounded wonderful. 

It sounded genuine.  It also sounded unlike anything ever said by a Western (let alone American) head of state.  It was delivered in clear, crisp, clean cultural tones that appealed to the ear of the listener.  Well-chosen words reflected a commitment to reframe a new relationship, but (and this is a big one) there are some positions that are so deeply entrenched that even a commitment to speak truth from the outset can be waylaid by a superior agenda.

“That is the responsibility we have to one another as human beings. This is a difficult responsibility to embrace, for human history has often been a record of nations and tribes, and, yes, religions subjugating one another in pursuit of their own interests.Yet in this new age, such attitudes are self-defeating. Given our interdependence, any world order that elevates one nation or group of people over another will inevitably fail. So whatever we think of the past, we must not be prisoners to it. Our problems must be dealt with through partnership, our progress must be shared.

Now, that does not mean we should ignore sources of tension. Indeed, it suggests the opposite. We must face these tensions squarely. And so, in that spirit, let me speak as clearly and as plainly as I can about some specific issues that I believe we must finally confront together.”

All rational adults know that violent extremism simply cannot be Barack Obama’s first REAL talking point.  Frankly, its patently absurd for a grown ass man who controls the world’s largest military to even raise this issue.  That would be like Bill Gates agreeing to gift computers to every elementary school in New York City on the condition that every child surrender their Apple t-shirts. 

Obama needs a new introduction.  It’s not that the acts of violence engaged in by these persons are “cool” or “acceptable.”  Far from it.  It’s that in the specific case of Al-Qaeda and Osama bin-Laden, these acts are a response to the United States military establishing a presence in Saudi Arabia.  That was never discussed.  Presumably after a nice visit to Riyadh (perhaps a red phone conversation to the hills of Afghanistan or the South of France or wherever Osama is getting dialysis), Obama knows all about the reasons why talking point Number 1 is a Red Herring.  He also knows that for the game to be the game, talking point #1 must remain talking point #1.

The Pentagon operates an untold number of bases, directly and indirectly.  They own or lease millions of acres of land, hire millions of people and have conducted operations all over the planet.  Soldiers and American contractors have committed crimes, skirted local jurisdictions, killed, raped, maimed and otherwise trod on the sovereingty of many nations with impunity. 

This is a brand of sanctioned and subsidized violent extremism.  It is exported to the ends of the earth: Nicaragua, Panama, Ecuador, Colombia, Iran, Iraq, Indonesia and so many points along the way.  This brand of violence is advanced and it is ongoing.  It has not ceased or abated in any demonstrable way. 

If it had, that should have been talking point number 1.  The world has been witness to American violence for decades.  You cannot begin a conversation with someone you respect by acting as if you have no history.  You cannot authentically and honestly claim that history by claiming the gun in your hand while seeking to take the slingshot in theirs.

For all the things that President’s Obama’s speech was, it was not a commitment to pull back from a military presence and aggression in areas where it can be sustained.  It was an acknowledgment that the US is willing to “retreat” from certain locations, but we should know by now that this is a function of being overextended. 

It occurred to me, while listening to the speech, what tremendous difficulty the Native Americans must have had in negotiating treaties with the United States of America.  Even as far back as the 1880’s, it must have been nearly impossible to truly grasp the perfidious American predilection for shades of truth.  One side of the forked tongue opposes torture.  The other side defends it and avoids prosecution for war crimes.  One side of the forked tongue defends the rights of oppressed peoples.  The other side professes an unbreakable bond with three settler-colonial apartheid regimes on three continents (Israel, South Africa, Australia).  At some point, the Indians must have simply said, “Who the hell are you?” 

In fact, the answer was probably, “I am no one in particular.  I am elected for a short time to serve a people who know not what I do in their name.  I will soon be gone and be replaced by another with an unknown name and an unknown game.  Know this, if nothing else.  Whatever it is on which we agree today, know that it will be torn asunder tomorrow.  Do not trust in what I say because my words come with an expiration date.  My truths work best if believed by November 20, 2012.  In the end, I am a proxy for the genuine article.  If you must know me for me, look at my guns and my money.”

Dirty water is deadly on both sides of the Atlantic.

Chrysler at Odds with Indiana State Treasurer

Is it possible that the Republicans have figured out that two can play the game of claiming assets on the cheap.

clipped from www.reuters.com NEW YORK, May 25 (Reuters) – U.S. automaker Chrysler on Monday slammed Indiana State Treasurer Richard Mourdock as making demands that would ultimately push the carmaker into liquidation — resulting in the loss of more than 4,000 jobs and 9,000 retiree pensions in Indiana alone. Mourdock, who oversees pension funds invested in Chrysler debt, has objected to Chrysler LLC’s plan to quickly sell itself in bankruptcy, claiming it is a dangerous path that would hurt pensions for thousands of his state’s retirees. The Indiana pension funds have filed court papers requesting that an examiner be appointed to investigate Chrysler’s business decisions, and that the company be placed in the hands of a Chapter 11 trustee who can act independently of the government. Chrysler claimed in a statement on Monday that Mourdock, a Republican, is willing to put Chrysler in liquidation over less than 1 percent of the three funds’ assets.

Carlyle Reaches Settlement with New York State

Andrew Cuomo is exuberant. Is he premature? Probably. Carlyle has more and better criminals, er, lawyers than Cuomo. They’ll be working on loopholes while he’s trying to figure out his next path to the Governor’s mansion.

clipped from www.nytimes.com The Carlyle Group has agreed to pay $20 million and make broad changes in its practices under a settlement reached with the state attorney general, Andrew M. Cuomo, as part of Mr. Cuomo’s sweeping investigation of corruption of the state pension fund. Under the deal, Carlyle executives and the firm will not face any further action, including criminal prosecution, by Mr. Cuomo’s office. Mr. Cuomo hopes to use the settlement with Carlyle, one of the largest and most politically connected private equity firms, as a model for broader reform in how hedge funds and private equity firms intersect with public pension funds. Under its terms, Carlyle will be prohibited from using any kind of intermediary to provide even an introduction to officials at public pension funds. Carlyle will also have to disclose contributions to any politicians in a state — such as governors, mayors or legislators — in which it does pension business. “This is a revolutionary agreement,”

Crude Oil Is On the Move

North.

clipped from www.bloomberg.com May 5 (Bloomberg) — Crude oil was little changed near a five-month high as pending sales of U.S. existing homes jumped along with spending on construction projects, signaling energy demand may improve with the economy. Oil gained 2.4 percent yesterday as the Standard & Poor’s 500 Index erased its 2009 loss. The National Association of Realtors’ index of signed purchase agreements climbed for a second month. Equities markets in China and Australia rose on optimism the worst of the global recession has passed. “The market has been surprised to the upside by the data coming out of the U.S.,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “The strength of late is definitely an indication that markets are sensing a bottom in the economy.” Crude oil also gained as the dollar traded near a one-month low against the euro. Investors seek purchases of commodities and oil as a hedge against inflation as the currency declines.

Buffett Places Blame for Fiscal Crisis

Well, at least he didn’t blame homeowners of a certain hue. That would be 7-house Johnny’s job. It’s a good thing Johnny didn’t become president. Between forgetting how many homes he owns; where he keeps Cindy’s meds; keeping up with his right wing death squad buddies, there is no way he could helped out during this crisis.

clipped from www.bloomberg.com May 4 (Bloomberg) — Berkshire Hathaway Inc. Chairman Warren Buffett lambasted bankers, insurers and regulators for being blind to the possibility home prices could fall, and said their shortcomings caused the worst recession in half a century. Buffett and Vice Chairman Charles Munger said Wall Street sold subprime mortgage “sewage,” blamed the media and regulators for missing the danger and said the government stress tests of financial firms won’t advance Berkshire’s understanding of the stocks the company owns. Buffett hosted a record 35,000 people at the Omaha, Nebraska-based firm’s annual meeting May 2 and spoke at a news conference yesterday. “I think that virtually everybody associated with the financial world contributed to it,” Buffett said of the crisis. “Some of it stemmed from greed, some from stupidity, some from people saying the other guy was doing it.”