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Personal writings of thoughts, opinions and things I come across while blundering through my life.
Saturday, February 28, 2009
I'll Watch the Watchmen
Wednesday, February 25, 2009
Health Care News!
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Sunday, February 22, 2009
Friday, February 20, 2009
I'm Taking the Day Off From Work
Iran and the Atomic Bomb
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Thursday, February 19, 2009
Up Too Late
Saturday, February 14, 2009
Sitting at Home
Friday, February 13, 2009
Economic News from the NY Times
NEWS ANALYSIS
Ailing Banks May Require More Aid to Keep Solvent
By STEVE LOHR
Some of the nation’s large banks, according to economists and other finance experts, are like dead men walking.
A sober assessment of the growing mountain of losses from bad bets, measured in today’s marketplace, would overwhelm the value of the banks’ assets, they say. The banks, in their view, are insolvent.
None of the experts’ research focuses on individual banks, and there are certainly exceptions among the 50 largest banks in the country. Nor do consumers and businesses need to fret about their deposits, which are federally insured. And even banks that might technically be insolvent can continue operating for a long time, and could recover their financial health when the economy improves.
But without a cure for the problem of bad assets, the credit crisis that is dragging down the economy will linger, as banks cannot resume the ample lending needed to restart the wheels of commerce. The answer, say the economists and experts, is a larger, more direct government role than in the Treasury Department’s plan outlined this week.
The Treasury program leans heavily on a sketchy public-private investment fund to buy up the troubled mortgage-backed securities held by the banks. Instead, the experts say, the government needs to plunge in, weed out the weakest banks, pour capital into the surviving banks and sell off the bad assets.
It is the basic blueprint that has proved successful, they say, in resolving major financial crises in recent years.
Japan endured a lost decade of economic stagnation in the 1990s before it adopted such measures from 2001 to 2003.
The Swedish government took tough steps in 1992 and Washington did so in 1987 to 1989 to overcome the savings and loan crisis.
“The historical record shows that you have to do it eventually,” said Adam S. Posen, a senior fellow at the Peterson Institute for International Economics. “Putting it off only brings more troubles and higher costs in the long run.”
Of course, the Obama administration’s stimulus plan could help to spur economic recovery in a timely manner and the value of the banks’ assets could begin to rise.
Absent that, the prescription would not be easy or cheap. Estimates of the capital injection needed in the United States range to $1 trillion and beyond. By contrast, the commitment of taxpayer money is the $350 billion remaining in the financial bailout approved by Congress last fall.
Meanwhile, the loss estimates keep mounting.
Nouriel Roubini, a professor of economics at the Stern School of Business at New York University, has been both pessimistic and prescient about the gathering credit problems. In a new report, Mr. Roubini estimates that total losses on loans by American financial firms and the fall in the market value of the assets they hold will reach $3.6 trillion, up from his previous estimate of $2 trillion.
Of the total, he calculates that American banks face half that risk, or $1.8 trillion, with the rest borne by other financial institutions in the United States and abroad.
“The United States banking system is effectively insolvent,” Mr. Roubini said.
For its part, the banking industry bridles at such broad-brush analysis. The industry defines solvency bank by bank, and uses the value of a bank’s assets as they are carried on its books rather than the market prices calculated by economists.
“Our analysis shows that the banks have varying degrees of solvency and does not reveal that any institution is insolvent,” said Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable, a trade group whose members include the largest banks.
Edward L. Yingling, president of the American Bankers Association, called claims of technical insolvency “speculation by people who have no specific knowledge of bank assets.”
Mr. Roubini’s numbers may be the highest, but many others share his rising sense of alarm. Simon Johnson, a former chief economist at the International Monetary Fund, estimates that the United States banks have a capital shortage of $500 billion. “In a more severe recession, it will take $1 trillion or so to properly capitalize the banks,” said Mr. Johnson, an economist at the Massachusetts Institute of Technology.
At the end of January, the I.M.F. raised its estimate of the potential losses from loans and other credit securities originated in the United States to $2.2 trillion, up from $1.4 trillion last October. Over the next two years, the I.M.F. estimated, United States and European banks would need at least $500 billion in new capital, a figure more conservative than those of many economists.
Still, these numbers are all based on estimates of the value of complex mortgage-backed securities in a very uncertain economy. “At this moment, the liabilities they have far exceed their assets,” said Mr. Posen of the Peterson institute. “They are insolvent.”
Yet, as Mr. Posen and other economists note, there are crucial issues of timing and market psychology that surround the discussion of bank solvency. If one assumes that current conditions reflect a temporary panic, then the value of the banks’ distressed assets could well recover over time. If not, many banks may be permanently impaired.
“We won’t know what the losses are on these mortgage-backed securities, and we won’t until the housing market stabilizes,” said Richard Portes, an economist at the London Business School.
Raghuram G. Rajan, a professor of finance and an economist at the University of Chicago graduate business school, draws the distinction between “liquidation values” and those of calmer times, or “going concern values.” In a troubled time for banks, Mr. Rajan said, analysts are constantly scrutinizing current and potential losses at the banks, but that is not the norm.
“If they had to sell these securities today, the losses would be far beyond their capital at this point,” he said. “But if the prices of these assets will recover over the next year or so, if they don’t have to sell at distress prices, the banks could have a new lease on life by giving them some time.”
That sort of breathing room is known as regulatory forbearance, essentially a bet by regulators that time will help heal banking troubles. It has worked before.
In the 1980s, during the height of the Latin American debt crisis, the total risk to the nine money-center banks in New York was estimated at more than three times the capital of those banks. The regulators, analysts say, did not force the banks to value those loans at the fire-sale prices of the moment, helping to avert a disaster in the banking system.
In the current crisis, experts warn, banks need to get rid of bad assets quickly. The Treasury’s public-private investment fund is an effort to do that.
But many economists and other finance experts say that the government may soon have to take on troubled assets itself to resolve the credit crisis. Then, they say, the government could wait for the economy to improve.
Initially, that would put more taxpayer money on the line, but in the end it might reduce overall losses. That is what happened during the savings and loan crisis, when the troubled assets, mostly real estate, were seized by the Resolution Trust Corporation, a government-owned asset management company, and sold over a few years.
The eventual losses, an estimated $130 billion, were far less than if the assets had been sold immediately.
“The taxpayer money would be used to acquire assets, and behind most of those securities are mortgages, houses, and we know they are not worthless,” Mr. Portes said.
Eric Dash contributed reporting.
Tuesday, February 10, 2009
Bugliosi vs Bush
The average American instinctively feels without having read my book that if an American President takes his nation to war under any circumstances, he can't be prosecuted for murder. Related to that, people find it very hard to believe that an American President would engage in conduct that is so extremely criminal. You just don't expect that of a President.
Americans just can't believe an American President would engage in conduct that smacks of such criminality, and thus the whole notion of taking the President to court for murder is a revolutionary one.
In order to make the legal case for murder the prosecution, you write, would have to show that George Bush had a criminal state of mind--in legal terms, "malice aforethought"--when he led the country to war. That strikes me as no easy task. Can you explain how exactly you would go about arguing such a mindset?
To satisfy the main elements of murder--murder being an unlawful killing of a human being with the requisite state of mind--the following question would have to be answered: Did George Bush, or did he not, take the nation to war in self-defense, as he claimed, as a pre-emptive strike? Bush said Saddam Hussein had weapons of mass destruction and was therefore an imminent threat to security of the country, so we had to pre-emptively go to war against him. If the prosecutor can show that President Bush did not take the country to war in self-defense but instead under false pretenses, then all the killings that have taken place would be unlawful killings, and therefore murder.
Without getting into legal complexities and technicalities, which I do in the book, let me give you just one example of the kind of evidence that could be used to make just such an argument. In President Bush's first speech to the nation, on October 7, 2002, from Cincinnati, he told the American people that Saddam Hussein was great danger to our nation, either by Hussein attacking us with WMDs, or by giving these weapons to a terrorist group to do so. Bush said this attack could happen on "any given day," meaning that the threat was imminent. The only big problem for Bush in a trial is that on October 1, just six days earlier, the CIA sent Bush its 2002 National Intelligence Estimate, a classified, top-secret report, that represented the consensus opinion of all sixteen US intelligence agencies on the issue of whether or not Hussein was an imminent threat to the security of this country. On page 8, it clearly and unequivocally says... that Hussein was not an imminent threat to the security of this country; that he would only be a threat to us if he feared that America was about to attack him. So we know--not think, but know--that when George Bush told the nation on the evening of October 7, 2002, that Saddam Hussein was an imminent threat to the security of the nation, he was telling millions of unsuspecting Americans the exact opposite of what his own CIA was telling him. Even if we have nothing else at all, this alone shows that Bush took this nation to war on a terrible lie, and therefore all the killings of American soldiers in Iraq were unlawful killings and therefore murder.
You call the hypothetical case you've just laid out a case of "first impression"--a case for which there is no legal precedent. What are the implications for such a trial, if it were ever to be held, for American politics and American democracy?
What it does is tell future Presidents in no uncertain terms that if they commit a horrendous crime, they can be held accountable, just like any other private citizen.
There is no murder statute at the state or federal level that says it only applies to certain people--not Presidents, or golf pros or hair stylists. It applies to everyone. And there is no statute that says murder has to take place in a certain place, and not a battlefield. So President Bush has no immunity from prosecution.
No other American President has been prosecuted for any crime--there's no history of it. That doesn't mean they can't be. The closest we came to it was in 1974, when Nixon resigned and there was a great demand that he be prosecuted for the crimes he committed while he was in office--obstruction of justice, wiretapping, perjury. The threat of this was so real that President Ford stepped in and pardoned him. I think that was closest we ever came. Clinton was tried in the Senate and acquitted. I'm talking about putting George Bush in an American courtroom, where next door someone might be on trial for killing a liquor store owner. He cannot be charged as a war criminal because the International Criminal Court has no jurisdiction here, so it would have to be an American courtroom.
At this very moment, in fact, there is a documentary being produced for the big screen based on my book. And the filmmakers are about to reach out to prosecutors throughout the land to find a prosecutor willing to prosecute George Bush. So what I'm talking about here is very real. I've established jurisdiction in this book for prosecutors on a state or federal level to go after President Bush. With the literally hundreds of prosecutors out there and the powerful evidence of guilt I've set out, it's hard to believe there's not at least one prosecutor, maybe more, courageous enough to say this is America, and in America no man is above the law.
I've also drafted a letter to DAs across the country offering my services. I'm dead serious about this. With my record as a prosecutor with twenty-one consecutive murder convictions, I would never in a million years argue for a prosecution against the President of the United States unless I knew I was standing on firm and strong legal grounds.
I'm going after Bush and I'm not going to be satisfied until I see him in an American courtroom prosecuted for murder.
You are, of course, famous for your prosecution of Charles Manson, the notorious cult leader and mass murderer who was found guilty of conspiracy to commit the Tate-LaBianca murders. What similarities, if any, would you expect to encounter in preparation for the trial of President George Bush compared with someone like Charles Manson?
Well, with Manson we're talking about seven murders. With Bush it's hundreds of thousands. But in a general way I'd prosecute the cases similarly, even though there are great differences. Neither Bush nor Manson participated in the act, physically, of murder. So in both cases I'm going after someone who didn't themselves commit the act. But both, in their leadership, can be argued to hold responsibility through the rule of conspiracy for the deaths of innocents.
It has to be said, you also just seem to really hate George Bush. You state that your aim in writing this book is not political, and yet there is a palpable anger, which you admit to, that comes across powerfully in certain passages. For example, you call Bush a "spoiled, callous brat who became President only because of his father's good name" and Rove a "pasty, weak-faced, and mean spirited political criminal." Where does this anger come from?
The anger is based on one thing, and one thing only. These people deliberately and knowingly took this nation to war under false pretenses, and therefore they are murderers. I don't like to see anyone get away with murder, never mind over 100,000 murders. O.J. Simpson got away with two murders, and I was outraged, so I wrote a book about it. I do not like people who commit murder.
In the [Scott] McLellan book which just came out, he called the war in Iraq a serious strategic blunder. A blunder is a mistake, and people who make mistakes are innocent and not guilty. George Bush, I believe and I argue, is guilty.
This was from a phone interview conducted by Brett Story
The Drug Industry is Looking Out for YOU!
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Monday, February 09, 2009
Not as Good as it Could have Been
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Sunday, February 08, 2009
Another Great Day
Lux Interior Dead at 60
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Saturday, February 07, 2009
An Early Spring
Monday, February 02, 2009
Something to think About
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