More Tale Of The TARP

News of the release of documents detailing the shenanigans of the particular parties involved in perpetrating the 700 billion dollar fraud bank bailout, or Troubled Asset Relief Program, came out last week and didn’t really get the attention it was due, what with the Pretendident-as-Solomon’s first “Split the Fetus” tour stop at Notre Dame, and his fingernail clinging, bus undercarriage-headed Speaker of the House, Nasty Pancake’s, more-serious-because-chicks-have-a higher-standard, CIA never lies, and all going on.  The Freedom of Information documents obtained by Judicial Watch show that TARP, (or, as I’m sure it is known in certain circle jerks, the Rape of They, The Sheeple, those willing, clueless, hopium-addicted, changeling co-conspirators, who managed to both bend over and grab all of our collective ankles, while forcing everybody’s, theirs included, hands up in a “reach for the sky” surrender gesture at the same time, by electing the Chicago Robbin’ Hood whose vig to the Merry Band of Banksters who he fronted for was due) is  the cross-party, cross-administration, shady scummy scam we’ve all known it to be all along.  From Politico:

MSNBO: The Official Network Of ObamaLove

On May 5, the Obministration finally decided to make official what every Obot detesting realist has known since Barack Obama became a United States Senator: the”internetwork” and the so-called, “politician” are in love.  This, though unspoken, has never been a secret.  Who needs words when one has actions?  MSNBC, whose journalistically-challenged on-air personalities pornographically ooze affection for their Golden Boy on a 24/7 basis, are shamelessly forthcoming about their tingly-leg motivated compulsion to see to it that the man whose relationship with their parent company’s CEO is only slightly less of a tangled web than the one between said parent company and its co-partner in the hybrid network’s joint venture, is perceived as spectacularly successful and beloved by all.  After all, such public bended-knee fluffing and prostate stroking is part of their job description, even if not everybody got the memo on the same day.

And, with the kind of deliciously wicked, bitchy-type writing I love, Andrew Malcolm of the L.A. Times snarkily reported on the White House representative Kareem Dale’s confirmation, at 1:51 in the following You Tube clip, that the ooey-gooey love feeling  is mutual:

From The Depths Of The Department Of “Duh!”

Boy, oh, boy, reading the news can destroy lickety-split any sense of confidence unintentional proximity to residual whiffs of Hopium might inspire.  Not that I’ve been so influenced, but I can certainly sympathize with the unfortunate souls who might have been unduly charmed by the relentless barrage of happy-hopeyness from the Changelings of Obamedia, only to have any semblence of Obamaptomism dashed by actually reading past the Headlines of Hype.  Take, for example, today’s Wall Street Journal piece by Fox Business News’ Stuart Varney, who seems bewildered, nay, dare I say it, shocked, that the recent reluctance of the Obministration to accept repayment of TARP funds by banksters not exactly in league with the Big Bank Mafia means that (horrors!) the ObaHoods want to control the banks!  Duh?!  I mean, really, Stu, I’m no London economist, and I saw that weeks ago!  Sheesh, you don’t need fancy degrees to tell you that if you want to control things, first ya gotta grab hold of the banks!  Like I said, duuuuuh!

Coupla days ago, Newsweek ran an article claiming that Obama’s telephone buddy, Warren Buffet was the real architect of certain aspects of the bailout, not his Doogie Howser-esque Boy Wonder, Turbo Tax Timmy Geithner, tax cheat (TTTG,tc).  Holy cannoli, Batman!  Who coulda figured that one out, huh?!  Double-dog duh-uh-uh-uh-uuuuhhhh!  In September, I wrote about Obama’ Bailout Buddies and, the second name mentioned besides Goldman Sachs’ own Treasury Secretary, and Obama telephone pal, Henry Paulson was, you guessed it, you super smart PUMAlicious devil, you, Warren Buffet.   Ta dahhhh!  Gee whiz, when even I can see this stuff, what’s taking the smartest guys in the media so long to see the handwriting on the mirror that’s right in front of the nose on their faces?  Riddle me that one, Batman, whydoncha?

Barack Obama: Does Anybody Know Just What He’s Doing?

Obama's EarPrompTer?

As we proceed merrily along from opening credits to first act of this Baracky Horror Picture Show we’re living in, it seems everybody is asking themselves the same thing; “what the hell is this guy doing?”  As you go from article to column to blog post, from pundit to talking head to know-it-all, the only thing consistent between them is their common “grab smoke in your fist” attempts to define the undefinable that is Barack Obama.  With his disdain of labels unless he’s protesting that he’s not a socialist or Muslim, or professing to being a “New Democrat” Christian willing to kick his pastor under the bus to further either cause, nobody knows for sure whose side this guy is on.

The Real Double Standard

Many people are wondering if the difference in the way Wall Street and Motown are being treated represents a double standard, and, while that may, or may not, be a debate worth having, it’s not the question uppermost in my mind.  The double standard that concerns me is the one employed by Just Barely President Baracus Hubris Maximus (Hail Ceasar!) and his minions in his Obministration to further his clear-cut, sweeping agenda.  That double standard is the lie under the obscurity that characterizes every utterance from the Obamessiah’s lips.  Hope and change = restructure and redefine.  Inherited a mess = a chance to do things my way.  Everything said and done by this administration is a perverse manipulation of reality wielded as a bludgeon against those resistant to its plans.

Uncle Barack Wants Your Company

The “dirty little secret” regarding the firing of General Motors’ CEO Richard Wagoner by the Obama administration is not that it represents an alarming degree of government intervention into private business, former Treasury Secretary Henry Paulson fired AIG’s CEO of three months, Robert Willumstad, and brought in his Midwestern Goldman Sachs board member buddy, Edward Liddy, (who resigned his seat on Goldman’s board a couple weeks later) when he loaned the company 85 billion pre-TARP dollars in return for 79.5% of  it, after all.  In fact, the “dirty little secret” is not even a “secret” at all.  You see, what nobody wants to admit, is that none of this crap makes any difference at all.

People simply can’t afford new cars, and everybody knows it.  The Big 3 could be making the bestest, most beautifullest, fuel efficient air-powered chariots in the world and, like the housing market, they would struggle.  Nobody’s accusing the construction industry of building crappy houses and causing the real estate collapse.  Nope, the government is diverting your attention from the fact that they’re still funneling the money consumers might use to buy shit that would stimulate the economy to the banksters who screwed up the economy in the first place.  All while they take over everything else, of course.

Debating the Undebatable

Just Barely President, Baracus Hubris Maximus, (Hail Ceasar!) forced the networks to give him a hunk of their prime time last night because…well, he really, really wanted to go on TV again.  It wasn’t like he had anything earth-shattering, or even new, to share with the nation; he just must have felt, just like the rest of us did, that his last few giggly, insulting television appearances sucked, so he needed to hijack American Idol time to try to re-convince America that he was indeed worthy of their American Idol, West Wing-esque devotion to his Spokesmodel-In-Chief-iness.   Whatever; Obi in HD is getting old.

Who’s Zoomin’ Who?

On a day when Chairman of the Federal Reserve, Ben Bernanke and Treasury Secretary, Turbo Tax Timmy Geithner, tax cheat (TTTG,tc) appear before Congress seeking unprecedented power to further loot manipulate regulate the financial industry, including non-banking entities like AIG, the company whose bonuses they’ve been called on the carpet to address, perusal of the day’s news stories, blog posts, and opinion pieces reveals more questions than answers.  Is this the bizarre Obministration Hokey Pokey Bamboozle One Step Forward, Two Steps Back Cha-Cha-Cha it appears to be, or are the Obanomic efforts of the government so far truly on behalf of the people?

Brazile Says “Ignorant,” “Punch-Drunk” Obama Doing Great!

Donna Brazile, who claims her life is going to crap since her “Mama Factor” was elected, nonetheless says when it comes to bashing the Baby Prez on Training Wheels, everybody should just shut the hell up and keep sucking.  Okay, she didn’t say that; that’s the punchline to an awful joke, but I thought that, given what she did say, it was a pretty apt interpretation.  The Object of Donna’s Desire has been having a pretty rough go of it, lately, and DB is just sick of it, sick I tellya, and hates all the haters hating.

Donna’s mama would be proud that her baby girl is so kind-hearted and forgiving, considering all that her KoolAid-fueled infatuation has cost her.  But, Does Donna blame Oboyfriend?  Did Juliet blame Romeo?  Cleopatra blame Antony?  The chick on Dancing With The Stars blame The Batchelor?  Noooooo!  Whatareyounuts?

Over the last two months, I have seen my hours cut back, a newspaper column canceled, clients unable to renew their contracts with my firm, and others needing to renegotiate my modest fees. Business is drying up, and despite all my frantic maneuvers to move my little retirement funds out of harm’s way, my 401(k) is disappearing faster than the snow from the recent storm. I don’t want to see this president fail, and I suggest that to do so is a partisan luxury none of us can afford.

What Dodd Did (And Probably Didn’t Do)

The whole “who put the “out” in the stimulus bill?” kerfluffle has had me flummoxed since it came to light.  Why all the confusion?  Either Christopher Dodd is a one-man crime spree, ( ‘cuz finagling with a bill after it’s been voted on should be a crime, if it isn’t) or he meddled with the wording during some crack in time before it was voted on, (in which case somebody should have noticed) or, he didn’t do nothing.  I vote for the last one.

Chris Dodd was not on the House Senate committee that changed the language of the executive compensation amendment to the stimulus bill.  I’ve posted the relevant portion of the February 8, 2009 version of the Senate bill here, and the final version here.  The segment containing the February 11, 2009 cutoff date affecting AIG’s retention bonuses is not in the Senate version; however, the bill does contain the Wyden-Snowe amendment calling for a 35% tax, and a provision that executives be paid no more than the president of the United States.   As near as I can tell, this is the bill that was voted on, and passed by the Senate, Tuesday, February 10, 2009.  In fact, in Dodd’s mea culpa, he refers to the “Senate approved” language.

Underestimate Obama At Everybody’s Risk

While conspiracy theorists and other befuddled Americans are searching for hidden agendas to justify, or at least, explain, the media-driven election of an inexperienced junior Senator who can’t form complete sentences without the use of a TelePrompTer, they’re missing the all-too obvious agenda staring them dead in the face.  Whoever funded and formulated Barack Obama’s meteoric rise from obscurity to omnipresence is bound and determined to totally revamp the country’s policies, programs, and policy-making procedures, as we’ve known them.   This is not cosmetic surgery we’re talking here; a little nip here, a tuck there.  This is fundamental, foundational, systemic change, according to their dictates.  If you’re not on board with every element of the sweeping  “change” they have in mind, well, that’s just too damned bad.

The Press-ident and his backers want the economy to fail.  That’s the only way his policies to this point make any sense at all.  He has said he wants the population angry, outraged, even, so that he can push his agenda through under his budget umbrella.  The economic system we live under must collapse, so that a new one can be put in place.  With it, healthcare, education, housing, energy and other core elements of out national foundation will experience profound systemic “change.”

Psssst! They’re All Lying!!!

When it comes to Barack’s Bailout Bonanza Brouhaha, everybody responsible for the current “outrage” about the debacle is lying their head off through their perfectly capped teeth.  Case in point, The Dodd Amendment supposedly “snuck” into the stimulus bill that allegedly restricted the bonuses to be paid executives employed by companies receiving government handouts.  First, the amendment was there, then it wasn’t.  Dodd said he didn’t change it, then he said he did. The exact sequence of events seems deliberately fuzzy.  What, exactly did Dodd do, and when did he do it?

By February 4, Obama had angrily shaken his finger at “shameful” Wall Street executive excess and had issued new rules regarding their future compensation that even he, via MSNBO, admitted were “symbolic.”

The limits would not apply retroactively to any bank that received money from the first half of the $700 bailout allocated by Congress. For example, the restriction would not apply to such firms as American International Group Inc., Bank of America Corp., and Citigroup Inc., that already have received such help.

But Obama touted the broad symbolism of his action.

February 10, the International Herald Tribune noted that the toothless language was all Geithner’s:

Who’s Shuckin’ ‘n’ Jivin’ Now?

While there are many tangled webs to unravel in the current Obama Drama Bailout Brouhaha, one man seems to have had a pretty clear eye on the situation all along.  New York Attorney General Andrew Cuomo, the Clintonite once accused of demeaning Barack Obama with the use of the phrase “shuck and jive” in a sentence only marginally related to Sir Nose in the Air, has been yelling and screaming about the unfair Wall Street bonuses since at least October.  And, everybody knew it.

During the primaries Hillary Clinton supporting Cuomo, during a radio interview, said:

“It’s not a TV crazed race. Frankly you can’t buy your way into it,” Cuomo said, according to Albany Times Union reporter Rick Karlin. He then added, “You can’t shuck and jive at a press conference. All those moves you can make with the press don’t work when you’re in someone’s living room.”

No Strings Attached Means No Strings Attached

Watching CNN this morning and listening to talking head after talking head egging on commentator after commentator responding to outraged viewer after outraged viewer, I’m struck by the ease with which my fellow Americans can be manipulated into gleefully relinquishing their common sense.   Of course, this tsunami of indignation is just the latest episode of Barack’s Blameless Bailout Brouhaha, part whatever of the ongoing ObaDrama.

You see, first, the Candidate Once Known As Inevitable, in the immediate wake of the Lehman Brothers collapse that served as a catalyst to the current crisis, stood back and let his then-opponent commit to a position, only to assess, evaluate, formulate, mock and dismiss it, thereby gaining Sheeple points without actually countering, or even addressing it.  Once his then-opponent was on the ropes, The American Idol boldly, yet, appropriately shyly, stepped into the fray, marketing himself as the voice of reason, willing to listen and adjudicate between the warring factions negotiating the wisdom of propping up crippled companies on a government crutch.  While that maneuver gained the Chicago Calculator even more Sheeple points, public resistance to idea of pouring government money down incompetently run, failing companies’ drains, threatened to upset the Ocean Parter’s best laid plans.   The Preppie Prevaricator then, feigning reluctance, went before Congress to plead the case for the bankers, for the good of the people, introducing his now-famous, and oft-used, “crisis to a catastrophe” line.

The Sheeple went wild.  ObiWanNaBePresident had saved the day.  Of course, having been in daily contact with the architects of the frequently renamed “don’t call it a bailout, it’s a recovery plan, TARP rescue,” then- Treasury Secretary, Henry Paulson and his Boy Wonder, then-Chairman of the New York Federal Reserve and Obama’s mama’s boss’ kid, Turbo Tax Timmy Geithner, tax cheat, (TTTG,tc) the Obamessiah knew full well that the “bank bailout” would be divided between the two banksters and would soon stretch to include the world’s biggest government owned insurance company, too.

AIG Outrage Bamboozle

There’s a lot to be mad at about the nation’s current financial situation, but most of it is not quite what the yammering yakkers in the media would like for you to focus on.  The faux-rage being directed at the Biggest Beneficiaries of the Bailout Bonanza, American Insurance Group (AIG) is classic Obacratic Obfuscation by misdirection.  The simple fact that AIG has exploited the government for one hundred seventy billion dollars is more than enough to justify the country’s growing national fury.  The fact that they are contractually obligated to spend less than one tenth of one percent of that money on executive bonuses is not.  In fact, it’s a lot like a parent who loans their basement-dwelling 30 year old who won’t move without a loan for a down payment on a house of his own, getting p.o.’ed because the kid took his girlfriend to the movies on her birthday.

The brouhaha is being fueled by Obacrats doing their media massage and Congressional grandstanding thing in an obvious ploy to shift the blame from their shoulders for acquiescing to Wall Street’s extortion demands in the first place.  Their hope is that the short memoried public will forget just how involved Treasury Secretary Turbo Tax Timmy Geithner, tax cheat (TTTG, tc) then Chairman of the New York Federal Reserve, was in engineering the original AIG bailout following  the Lehman Brothers collapse, as well as then Senator Alfred E. Urkelbama’s (what, me do something?) much touted input into the original, unpopular TARP passage at a critical point in the primaries.

Revenge Of The Maltese ObaDrama Could Happen To You

What’s the difference between American International Group (AIG) and any other garden variety extortionist?  Not much.  In fact, your average “gimme $1,000, or I tell your wife about the weekend with the monkey,” slimeball could take a lesson from these guys.  According to Bloomberg, not only is AIG resorting to “pony up, or else you’ll be sorry” threats to keep the government on the hook, they’re warning their marks to keep it on the downlow:

American International Group Inc. appealed for its fourth U.S. rescue by telling regulators the company’s collapse could cripple money-market funds, force European banks to raise capital, cause competing life insurers to fail and wipe out the taxpayers’ stake in the firm.

AIG needed immediate help from the Federal Reserve and Treasury to prevent a “catastrophic” collapse that would be worse for markets than the demise last year of Lehman Brothers Holdings Inc., according to a 21-page draft AIG presentation dated Feb. 26, labeled as “strictly confidential” and circulated among federal and state regulators.

Presidentin’ Is Hard

Though I make no claims of being a financial wizard, or a political maven, even I can see that all is not right on Wall Street, D.C. where the heart and soul of our country is on life support, currently being administered to by second graders who want to be doctors when they grow up.  And, I’m sophisticated enough to recognize that a lot of what I read about our dire national situation is presented in the media by people representing the political party so far out of favor they have to look to bloviating blowhards for advice, or worse, can be made to appear to need to do so.  I get that.  However, in spite of all that, the forces pretending to represent the white-hatted good guys in this classic Adventures in Administration movie, armed with their heralded sky-high approval ratings for their poor man’s Dark Gable leading man, simply can’t mount enough of a stampede to disguise the fact that the dustcloud that follows them like Charlie Brown’s pal Pigpen’s is not the result of riding hard and strong over the dusty trail, but merely the wispy smoke trails from their “throw ‘em off the path,” hastily built, diversionary cookfire.  In other words, they got nothing.

Stalwart bastion of the Obamedia protection service, Salon Magazine, has an article by former Clinton labor secretary and Obacolyte, Robert Reich, in which he pitifully attempts to pooh-pooh rightwing claims that the Obamessiah himself is responsible for our economic woes by trying to lay them at the feet of the finger-pointers:

When it turns out that people like Lloyd Blankfein, the CEO of Goldman Sachs, who took home $68 million in 1997, was the only Wall Streeter in a meeting last September at the New York Federal Reserve to discuss the initial AIG bailout with Tim Geithner, then New York Fed chair, among others, at the very time Goldman was AIG’s largest trading partner, a distinct scent of self-dealing begins to emanate. When it turns out that Citigroup got a bailout deal last October far more generous than that given to any other distressed bank, when a top Citi executive was advising the Treasury and Fed, the scent increases. Goldman’s past CEO was treasury secretary at that time, by the way, and another former Goldman CEO was a top Citi official and also a former treasury secretary. I am not suggesting anything so crude as corruption. But could it be, given these tangled webs, that — innocently, unintentionally, perhaps even subconsciously — the entire bailout effort was premised on saving these companies rather than protecting the public? Or that the distinction between the two was lost, and still is?

Yet, Reich gleefully and disingenuously, ignores the fact that the people he’s defending his ObaMaster against are the people who funded his campaign.  Not only that, the central figure in Reich’s little morality play, Turbo Tax Timmy Geithner, tax cheat, (TTTG,tc)  has a family history of sorts with Barry Sutoro, and is currently employed as the Blameless One’s lapdog and whipping boy.  To point out that he may have colluded with the banksters against the public in ripping off the country on the other team’s watch is…well…stupid.

Why would anyone purporting to defend the Obama administration draw attention to the man quickly becoming the public face of its incompetence?  Especially when the author can’t even make it through to the end of his own piece without acknowledging at least some of the complicity of the Obama Drama Troupe?

The Wall Street and Republican media attack machine doesn’t know exactly what to make of this. The Wall Street Journal’s editorial page, along with CNBC, alternates between attacking Obama for bailing out Wall Street and excusing Wall Street’s excesses. But then again, Obama doesn’t seem to know exactly what to make of it either. He seems to vacillate as well — one moment scorning Wall Street, the next moment justifying further bailouts. I do hope he takes a firmer hand, drawing a clearer distinction and making a clearer connection between clearing up these financial balance sheets and helping average people. Otherwise, the next populist uprising will be born in this moneyed quagmire. It is here — within the muck that was created by AIG, Citigroup, Fannie and Freddie, other giant financial institutions, now in combination with the U.S. Treasury and Fed — that the public is most confused, bears its most serious scars, and is potentially most burdened in future years, by decisions still made in secret.

Inside the Wall Street Whisper Campaign

As I watched last week’s PBS special about the financial crisis, “Inside the Meltdown,” one of the many things I was struck by was the lengths to which the producers went to establish the consensus of opinion regarding Wall Street’s inordinate sensitivity and susceptibility to rumor, gossip, and innuendo.  That such a vast, powerful, integral industry run by people presumed to be America’s “best and brightest” could allow decisions affecting the rise and fall of entire global conglomerates comprising the world’s economic foundation to be based on nothing more than “he said, she said” tales told out of school, or worse, possibly deliberately planted, malicious seeds of doubt, seems hard to fathom.  Yet, the possibility of such an eventuality was demonstrated in great detail in the documentary, and, with just a modicum of imagination, one might easily consider that a few well timed “revelations,” true or not, might well take down an entire financial empire, if not industry.  A little research might lead one to believe that such a thing is not only possible, it just might have happened.

In March of 2008, at the time Bear Stearns tanked and was  sold to JP Morgan Chase at 2 dollars a share, only to have the price bumped up to ten dollars a share after the government intervened, even that price was only considered to be approximately ten percent of its market value.  According to many sources, such intervention was rather suspect, for a lot of reasons, especially considering that the firm was not insolvent, though nobody would loan them money because of rumors that they were.  In other words, it was not a lack capital that undid the company, but a lack of confidence.  Vanity Fair encapsulated the cause of Bear Stearns’ death this way in the opening paragraph of its August ‘08 “autopsy:”

On Monday, March 10, the rumor started: Bear Stearns was having liquidity problems. In fact, the maverick investment bank had around $18 billion in cash reserves. But soon the speculation created its own reality, and the race was on to keep Bear’s crisis from ravaging Wall Street. With the blow-by-blow from insiders, Bryan Burrough follows the players-Bear’s stunned executives, trigger-happy reporters at CNBC, a nervous Fed, a shadowy group of short-sellers-in what some believe was the greatest financial scandal in history.

So, why did the corporation’s protestations to the contrary fall on industry-wide deaf ears?  The company had experienced difficulties the previous year with 2 of its subprime mortgage hedge funds,  High-Grade Structured Credit Strategies Fund, and High-Grade Structured Credit Strategies Enhanced Leverage Fund, and was facing lawsuits from Barclays and other angry investors, as a result.  Additionally, two of its former managers, Matthew Tannin and Ralph Cioffi, were eventually arrested in June of ‘08 for taking their own money out of the funds while propping them up with corporate bailout money and lying to investors about it.  But, that was after the company died and was consumed.

According to CNN Money, Fortune, CFO Sam Molinaro asserted that by February, ‘08, Stearns’ troubles were behind them:

Bear had survived one liquidity challenge, in the summer of 2007, when two of its hedge funds cratered after the subprime mortgage collapse. The firm had labored to repair its balance sheet and improve its financing. “Our capital position is strong,” said Bear’s CFO, Sam Molinaro, at an investors’ conference in February. “Balance-sheet liquidity has continued to improve throughout the course of the year. We spent an awful lot of time trying to reduce our higher-risk asset categories.”

So, could Bear Stearns have weathered the storm?  Then Treasury Secretary Henry Paulson’s old company didn’t think so.  On March 11, an email sent by Goldman Sach’s derivatives group to its hedge fund clients, saying they would no longer back them on Bear Stearns deals, was the nail in the company’s coffin.

While I am not prepared to suggest that there was a direct “cause and effect” relative to the currently discussed events, I do think it’s helpful to bear in mind that the financial “crisis” evolved against the backdrop of the presidential campaign.  Would Bear have “collapsed” had the results of Super Tuesday been different?  Who knows?  It is something to think about, though.

On March 28, the Chicago Tribune and Reuters, among others reported that rumors that the company was claiming were “totally unfounded,” were swirling about Lehman Brothers, too.  By August 25, on the day the Democratic National convention started, The Deal.com was reporting that the rumors had become a full-fledged storm amid suggestions of a hostile takeover by Korea Development Bank and intra-company planned coup against CEO Richard Fuld.

On September 15, Lehman Brothers filed for bankruptcy after the government, presumably weary of going to bat for “failing” Wall Street companies, like Bear, having bailed out Fannie Mae and Freddie Mac the week before, refused to intervene this time.  Interestingly, one of Lehman’s holdings, Neuberger Berman, headed by then President, George W. Bush’s second cousin, George Herbert Walker IV, was exempted from the bankruptcy filing:

Neuberger Berman LLC and Lehman Brothers Asset Management will continue to conduct business as usual and will not be subject to the bankruptcy case of the parent company, and its portfolio management, research and operating functions remain intact. In addition, fully paid securities of customers of Neuberger Berman are segregated from the assets of Lehman Brothers and aren’t subject to the claims of Lehman Brothers Holdings’ creditors, Lehman said.

According to Wikipedia, and corroborated here, on September 13, Turbo Tax Timmy Geithner, tax cheat (TTTG, tc,) then President of the New York Federal Reserve, now Secretary of the Treasury, convened a meeting about Lehman’s future that Lehman wasn’t invited to, after Lehman suffered substantial losses starting September 9:

An official from the Federal Reserve Bank of New York said participants include Treasury Secretary Henry Paulson, Timothy Geithner, president of the Federal Reserve Bank of New York, and Securities and Exchange Commission Chairman Christopher Cox. The New York Fed official asked not to be named due to the sensitivity of the talks.

Participants in today’s discussions at the offices of the New York Fed also include executives from Goldman Sachs, JPMorgan Chase, Morgan Stanley, Citigroup and Merrill Lynch. Representatives for Lehman Brothers were not present during the discussions.

Lehman claimed to be in negotiations for sale with Barclays and Bank of America, both of whom backed out.  Bank of America bought Merill Lynch on September 14, instead.  Barclays bought Lehman’s North American investment-banking and trading divisions along with its New York headquarters building, the next day, after Lehman was, for all intents and purposes, dead.

After the fact, in October, former CEO Richard Fuld said in prepared testimony before the House Committee on Oversight and Government Reform, that rumor-mongering was a big part of the problem that brought Lehman down. However, Fuld’s first contention was that the Federal Reserve’s refusal to allow Lehman an exemption to become a bank holding company, or commercial bank, was a body blow to the company.   On September 22, a week after Lehman filed bankruptcy, The Fed allowed Goldman Sachs and JP Morgan Chase, “the last two major investment banks” to switch.  According to the New York Times, this was a major big deal. The Washington Post reported at the time that the Fed had approved the conversion with “unusual haste.”

On September 27, the New York Times* reported that one of the members at the meeting that decided Lehman’s fate was Lloyd C. Blankfeld of Goldman Sachs, Henry Paulson’s old firm.  At that meeting, the state of A.I.G., Goldman Sach’s largest trading partner, was discussed.  As we know now, the government bailed out A.I.G., yet let Lehman die.  Naked Capitalism asserts that the Goldman Sachs/Paulson relationship might have been more than a factor.  In October, Bloomberg claimed that Lehman’s collapse was the fault of JP Morgan Chase, purchasers of Bear Stearns.

It bears remembering that in the midst of this Lehman Brothers/A.I.G./Fannie Mae/Freddie Mac financial upheaval, Barack Obama and John McCain were involved in a pitched battle for the presidency.  It is also worth noting that Obama was reported at the time to have been in daily contact with Henry Paulson, Treasury Secretary and former head of Goldman Sachs, one of Obama’s largest campaign donors.  FYI, Paulson was raised in Barrington, Illinois, outside of Chicago, was also head of Goldman’s Midwestern Division, headquartered there.  Worthy of equal or better note, Obama’s campaign economic team included William Daley, Mayor Richard Daley’s brother, and Midwest Chairman of JP Morgan Chase, as well as its CEO and New York Fed Board of Directors member, Jamie Dimon, who parlayed his turnaround of Bank One, after being dumped by his mentor, Sandy Weill of Citigroup, into the JP Morgan gig.  Oh, gosh, did I forget to mention Bank One is in Chicago?  My bad.  One other noteworthy Obama advisor at that time was Turbo Tax Timmy Geithner, tax cheat (TTTG, tc).  I have done a series of posts chronicling Jamie Dimon’s involvement in the Obamenon, I humbly advise readers to check them out, here, here, here, and here,to name just a few posts, not so much for my opinions, but for the links to information they provide.

By November, when Obama secured the presidency, Paulson’s TARP had distributed about half of the allotted funds to “troubled” banks, more than half of it to the country’s largest, including Goldman and JP Morgan.  According to reports, most of which came to light after Obama was inaugurated, the banksters were forced to accept the funds the Treasury was giving away, whether they wanted to or not, yet were later called on the carpet to explain how they spent them.  At the hearing in the House, they, like their counterparts in the beleaguered auto industry, were castigated for frivolous financial excess, even though, not all of them requested government funds.  As president, Obama had by that point, already railed against the ” shameful” bankers, and issued a “salary cap,” generally considered to be window dressing, since it only applied to those financial institutions receiving future government assistance from the second half of TARP, not the ones funded in the first bailout.  TTTG, tc was said to have prevailed against other Obama administration advisers, namely David Axelrod, in the president’s ultimate soft bailout stance.

The TARP program, or Paulson Plan, is not universally loved by bankers, some say it’s a sneaky attempt at nationalization, or in the words of Elizabeth Warren, Chair of the TARP Congressional Oversight Panel, “subsidization.”   The Brookings Institute called for more Congressional oversight in December, calling the plan “frayed” and “rushed into law.”  At any rate, the relatively ineffective, previous admonition is now a moot point, having been trumped by the new, stricter “salary cap” guidelines supposedly snuck into the president’s “stimulus plan” by Chris Dodd when nobody was looking.

The new rules require all banks recieving government assistence to be subject to the new, stricter salary cap rules.  That means, even banks forced into the bailout program are now under government supervision.  And, though Obama has made, “the discussion’s not over” noises, as Politico pointed out, it’s not credible that the administration was blindsided:

The tougher rules that passed in Congress were no last-minute surprise. Dodd talked them up in a February 5 press release, and in another released on Thursday, just hours before the bill was filed. The rules were debated in the Senate.

Okay, I know this is a long post, and to be honest, I’ve only scratched the surface of the mountains of information and questions that arise from it, here.  But, for a series of rumors to be the catalyst for events that end up in the “nationalization” and/or “subsidization” of the nation’s banks, at the expense of the global economy, is a mindboggling thing to consider, even if it’s ultimately untrue, or unprovable, if it is.

As I’ve said before, it’s reminiscent of a John Grisham novel, The Appeal, to be exact, so maybe my skepticism is born of an overactive imagination.  But all things considered, the more pertinent question is, what if it’s not?

*The New York Times printed a correction clarifying the dates and participants of 2 separate meetings re: Lehman/A.I.G.:

Because of an editing error, an article on Sunday about the financial problems of American International Group referred incorrectly to the timing and participants at meetings at the New York Federal Reserve between Saturday, Sept. 13, and Monday, Sept. 15. Although there were indeed meetings that weekend, there was also a separate meeting on Monday to discuss financial aid for A.I.G. Lloyd C. Blankfein, the chief executive of Goldman Sachs, was the only Wall Street chief executive who attended the Monday meeting, not the only chief executive who attended weekend meetings. Also, Henry M. Paulson Jr., the Treasury secretary, did not lead or attend the Monday meeting. (Both Mr. Blankfein and Mr. Paulson did attend the weekend meetings.)

Best Little Whorehouse On Wall Street

Can you say “double standard?”  Kristin Davis, escort service CEO (madam) who provided companionship by the hour to former governor Elliot Spitzer, and whose “little black book” is revealing the peccadilloes and services purchased to indulge them of some of the country’s biggest big ballers, surely can.   And she is indignantly proclaiming it loudly to anybody who’ll listen, like ABC News:

Wall street lawyers, investment bankers, CEOs and media executives often used corporate credit cards to pay for $2,000 an hour prostitutes, according to the madam who ran one of New York’s biggest and most expensive escort services until it was busted last year.

But prosecutors in the Manhattan District Attorney’s office chose not to pursue any of the corporate titans, says Kristin Davis, who pleaded guilty last year to charges of running a prostitution business that used more than a hundred women.

“Used?”  Not “employed?”  There is a difference, ya know.  Whatever one thinks of the morality of the profession, there’s not a lot of difference between a madam and a CEO, or a call girl and a consultant.  Which is pretty much Davis’ point.  Either it’s a crime to indulge in prostitution, or it isn’t.  Can’t sell what nobody will buy, after all.

However, the larger point is that these poor, misunderstood, stressed out titans of industry were getting their ashes hauled using corporate credit cards that were billed for services such as “computer consulting” and “roof repair.”  Which is fraud:

Davis says one CEO ordered her to send him invoices for “roof repair on a warehouse” to disguise the payment for prostitutes from corporate funds.

“That is fraud,” said former New York prosecutor Sid Baumgarten, who told 20/20 the district attorney should have investigated the men.

“Not necessarily just for the patronizing but for the use of these business records and credit cards to see what kind of fraud or tax fraud was being used. And if so, that is a major offense,” Baumgarten said.

When ABC News contacted that CEO, he said he used his corporate card to pay for the escort service to entertain clients, but that there was no sex involved.

Davis, who can plausibly be called an entrepreneur in her own right, operated a multi-faceted organization providing a variety of services, (I’d bet the farm sex was indeed involved in all of them) until the Fed crackdown on Elliot Spitzer took her down with him:

Davis operated her escort service as a prostitution conglomerate, with five different “brands” over a four year period, each with its own “price point” and websites.

At the high end was an escort service called Carlyle Trust, mimicking the name, but not connected in any way, to a prestigious investment firm. Davis said she recruited top fashion models who charged up to $2,000 an hour for clients of Carlyle Trust.

Her lower cost services charged $400 an hour for a “body rub,” she said.

The “best little whorehouse on Wall Street” was located just a few blocks from the New York Stock Exchange, in apartment 3A at 136 William Street.

Davis operated three other “in-call” locations in the mid-town area of Manhattan.

The escort business took in as much as $200,000 a week, Davis estimated.

This is where the story gets strange.  Davis’ reputation seems to have been trashed, then, somewhat rehabilitated since the Spitzer investigation first revealed that he used her services as well as those of Mark Brener, the proprietor of the Empire Club and employer of Ashley Dupree, the woman Spitzer allegedly violated the Mann Act with by transporting her to Washington for sheet sweating, possibly on the taxpayers’ dime.  Brener was sentenced Friday to 30 months in prison for conspiracy to commit prostitution and money laundering.  Curiously, Spitzer was never arrested or prosecuted though he was forced to resign as Governor, and the Federal investigation against him was dropped 2 days after the November national election.  Probably just a coincidence.

A March 26 New York Times article reporting Kristin Davis (not the Sex in the City actress, btw) does not mention Spitzer, and charcterized her as a “woman accused of running a large prostitution ring.”  Subsequent reports, mainstream and otherwise, began to detail Davis’ involvement with the kinky governor who developed crushes on “consultants” and whined and tried to bully them into allowing him to “ride bareback.”  Davis herself was soon being described as everything from “trailer trash” to “tranny.”  Web articles here, here, here, here, and here get increasingly bitchy.

By December of last year when she was “freed” after being sentenced to 90 days, time served, and relieved of the almost $500,000 she ws arrested with, Davis, though still referred to as a “buxom blonde,” was back on her way to relative respectability.  By January of this year, Gawker was posting her opinion of celebrities’ sex worker potential.  February 6 brought us Davis’ tell all book, though the contents of her “little black book” were hinted at as early as March of last year.  Among those contents, partially verified by ABC, were these, re-printed here from the Raw Story:

* a vice president of NBC Universal (owned by General Electric)
* the part owner of a Major League Baseball team who “loves Kelsey”
* the CEO of one of the country’s largest private equity firms who met “Cameron” at the Peninsula Hotel
* a major New York real estate developer who, according to the list, “will come to the door wearing women’s panties”
* a partner at the Wall Street law firm Cravath Swaine Moore “looking for a party girl to come fully equipped” and spent a total of $20,000
* an investment banker from Lehman Brothers who saw “Kelsey and Keely together” and later saw “Aria and Skyler at the same time”
* an investment banker at JP Morgan Securities who “loves Brooke” and spent $41,600
* an investment banker at Goldman Sachs who “only wanted all-American girls” and spent $27,000
* a managing director from Merrill Lynch who saw “Lana” using the name “Nataly”
* a managing director from Deutsche Bank “who called about seeing Nataly again”

Spitzer, whose identity as Mark Brener’s, not Kristin Davis’, Client Number 9, was leaked to the media and confirmed by a “person briefed on the case,” took a big hit to his reputation as the “Sheriff of Wall Street,” an appellation earned from his efforts as New York State Attorney General to reform the financial industry, though some say those efforts didn’t go far enough.  In light of the allegations of impropriety, and his subsequent resignation 2 days later, Wall Street took delight and unabashedly celebrated his predicament, while trashing his previous accomplishments.  Some sources even began to go so far as to dismiss Spitzers triumphs as hollow victories.

As AG, however, Spitzer’s efforts were initially welcomed by industry watchdogs.  Salon even called him “Wall Street’s Worst Nightmare.”  So, what happened?  Some speculate that the leak of his implication in the Federal investigation and possibly even the investigation itself was tantamount to a political “hit” orchestrated by forces furious with the governor’s reform efforts against companies like Merrill Lynch, Bear Stearns, Goldman Sachs and AIG, among others.

Lost in the allegations of hypocrisy leveled at Spitzer for his indulgences with prostitutes while self-righteously prosecuting prostitution rings to the fullest extent of the law, was the fact that he had set his reformer sights on industries other than pimps and money-changers.  According to Business Week, in December 2002, Spitzer served notice to the Hyde Park crowd:

Who’s to blame for expensive prescription drugs, pollution, and the biased research coming out of Wall Street? Try pinning the rap on the University of Chicago.

At least that was New York State Attorney General Eliot Spitzer’s attempted in a Dec. 4 speech to financial-services executives at the annual Banker of The Year dinner. At the banquet, which was held in New York’s Helmsley Palace, Spitzer blasted the University of Chicago for encouraging recent market excesses with a philosophical curriculum that teaches less regulation is always good for capitalism. The audience listened respectfully, but many, especially the University of Chicago alums, privately voiced their disagreement with Spitzer’s thesis later in the evening.

As a voice of laissez-faire economics, the University of Chicago has shaped much of the dialogue over market regulation in recent years, starting with Ronald Reagan’s Administration in 1980. Free markets, the theory goes, will correct most excesses by making it impossible for those guilty of bad behavior to survive. “They’ve said that intervention by…government is wrong,” Spitzer said. “But they haven’t taken into account that markets can have structural flaws.” Contacted by BusinessWeek Online for a reaction, University of Chicago professor of business and economics Kevin Murphy said Spitzer’s interpretation of the schools position was simplistic. Says Murphy: “I think we have better things to do than beat up a straw man.”

Hmmm…Bear Stearns, University of Chicago, AIG, Goldman Sachs, Merrill Lynch, Wall Street…straw man?  2002?  Didn’t Rod Blagojevich say something about prescription drugs?

I know what you’re thinking, but, nah, couldn’t be.  This is a story about prostitutes and double standards, remember?  Doesn’t have anything to do with bailouts and presidents.  Who was on Kristin Davis’ list, again?