And now, a Game of Concentration

When I saw this NYT Headline, “As Big Banks Repay Bailout Money, U.S. Sees a Profit”, it really did not send me to a

Expecting Customer service?  Fat Chance!

Expecting customer service? Fat Chance!

happy place. You’re probably going to raise a Spock-like eyebrow and ask me to explain. Why, Kat, you’re probably saying, isn’t a 15% return on our “money” a good deal in this market? Remember finance 101, rates are relative to risk so let me tell you why I’m a concern troll on this. First, here’s what the author thought was the punch line to this story.

But critics at the time warned that taxpayers might not see any profits, and that it could take years for the banks to repay the loans.

As Congress debated the bailout bill last September that would authorize the Treasury Department to spend up to $700 billion to stem the financial crisis, Representative Mac Thornberry, Republican of Texas, said: “Seven hundred billion dollars of taxpayer money should not be used as a hopeful experiment.”

So far, that experiment is more than paying off. The government has taken profits of about $1.4 billion on its investment in Goldman Sachs, $1.3 billion on Morgan Stanley and $414 million on American Express. The five other banks that repaid the government — Northern Trust, Bank of New York Mellon, State Street, U.S. Bancorp and BB&T — each brought in $100 million to $334 million in profit.

What the author really missed was that information also comes on the back of this information last week that shows that the government has created incredible high concentration ratios in the banking market. I discussed it here in a piece where I called it a big ol’ game of monopoly. This is an ongoing policy disaster and many folks appear to be missing it.

J.P. Morgan Chase, an amalgam of some of Wall Street’s most storied institutions, now holds more than $1 of every $10 on deposit in this country. So does Bank of America, scarred by its acquisition of Merrill Lynch and partly government-owned as a result of the crisis, as does Wells Fargo, the biggest West Coast bank. Those three banks, plus government-rescued and -owned Citigroup, now issue one of every two mortgages and about two of every three credit cards, federal data show.

There are so many headlines buried in that NYT piece that you’d think it was written by ostriches. This is one alone should’ve grabbed a banner headline.

But the real profit came as banks were permitted to buy back the so-called warrants, whose low fixed price provided a windfall for the government as the shares of the companies soared.

Well, isn’t that nice, the best borrowers paid back first. Some one over there ever take any finance classes? I doubt it. Of course, that’s going to happen you twit!! It’s the implication of what that means that scares the pants off me. The fact they’ve borrowed funds allows us to regulate their actions. Now, the big ones are paying them back so they’re out of the reach of tighter TARP regulation! They like their old loosey goosey nonsense regulations especially now that they’re all set up as a de facto cartel with government blessing. They’re ready to price discriminate, restrict services, and create extraordinary profits all they want with FEW RESTRICTIONS. Just wait until we get to witness the new and improved, unregulated CEO pay schemes!

It’s similar to handing all of our energy needs and policy over to OPEC.

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SCOTUS Reviews “Hillary” the Movie

{  Physical and Mental Health Warning!!! Watch right wing hate CDS youtubes at your own risk!!!}

Okay, here’s another constitutional question about which I am no authority but sure find interesting. Here’s the link to the NYT and Adam Liptak’s article today called “Supreme Court to Revisit ‘Hillary’ Documentary”. It’s high drama for the court because this basically pits first amendment rights against campaign funding. It’s also pitting interest groups that are usually allies against each other and has made strange bedfellows of the NRA and the ACLU. If the Supreme Court could actually pick away at how Corporations fund political campaigns this day and age I would be relieved, but of course not if it violates the First Amendment. So SCOTUS has to determine the fate of the baby and they’re coming back from their summer vacation early to do so. We also have some increased drama in that the court itself since it as polarized as the country itself and definitely the interest groups that are involved in providing huge campaign donations. I’m intrigued.

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vpResident Evil on Fox: Waterboarding “good policy”

Fox News has just posted RAW DATA: Transcript of Cheney on ‘FOX News Sunday’. I’m not a lawyer and I’m certainly no expert on national security. I try to keep to economics because I have training and expertise there. Some times, because I’ve been given front page privileges, I bring things up that I’ve read because they just shake me to my core. I really believe from the bottom of what I feel is right and wrong that the policies pushed on this country by Dick Cheney were beyond pale and the U.S Constitution. I’d like to compare Cheney’s thoughts to some other Americans who have known the privilege of serving the American public and taken oaths to uphold our Constitution. I consider these Americans to be the experts that I am not on matters of the U.S. Constitution and Liberty.


Here is a quote from a great American justice that encapsulates what I feel right now as I share the contents of that interview.

The greatest dangers to liberty lurk in insidious encroachment by men of zeal — well-meaning but without understanding.

Louis D. Brandeis

Then, there are these thoughts from two great Presidents and Statesmen.

The natural progress of things is for liberty to yield and government to gain ground.

Thomas Jeffersonjefferson

The history of liberty is the history of the limitations of governmental power, not the increase of it. When we resist the concentration of power we are resisting the powers of death. Concentration of power precedes the destruction of human liberties.

Woodrow Wilson

Then, there is the granddaddy of all liberty quotes.

They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.

Benjamin Franklin

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Four Years Ago …

Looking at the side of my house the day after Hurricane Katrina.  (Taken by a neighbor who stayed.)  You can see there is no flooding and my roof is on.  I still had to stay in Omaha for FIVE weeks before they'd let me come back home.

Looking at the North side of my house on the day after Hurricane Katrina. (Taken by a neighbor who stayed.) You can see there is no flooding and my roof is on. I still had to stay in Omaha for FIVE weeks before they'd let me come back home.

Four years ago, I was sitting on a pink futon on the floor of a motel in Lake Charles, LA with two blond labs and a cat named after Miles Davis wondering if I still had a place called home. In the bed on the right was a finance Phd student from Macao and on the bed on the left, her roommate, a sociology Phd student from Japan. I actually got my place on the floor because I called all the foreign Phd students at UNO (New Orleans) in the Econ/Finance Department and said, get hotel rooms and get out of here, as soon as you can! We had the United Nations there. My friends from Syria, Turkey, and then, of course, the other two I mentioned took me right in! My lama from Nepal showed up there eventually too.

I had planned to stay in New Orleans. It wasn’t until I remembered the aftermath of other hurricanes that went else where (like Georges) and the mess that went on inside and around the Superdome that I thought, I bet I could survive the Hurricane, but NEVER the aftermath. I knew the aftermath would be a Hell Realm. After boarding up the house, I left with my pets, a pink futon, a poorly packed overnight bag, and little else since I was waiting for a paycheck due on that Monday that wouldn’t arrive until three months later. I went to bed that night, thinking I could drive back home. I woke up the next morning wondering where I was going to seek refuge.

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There must be Rum in the Rum River … Only possible explanation

There a couple of rummys short of pint living near the Rum River in Minnesota.

There are a couple of rummys short of pint living near the Rum River in Minnesota.

I lived in Minnesota for awhile in the mid 1990s. Thankfully, not this part of Minnesota represented by Congresswoman Michelle Bachmann. Sesame’s Street’s Elmo needs to send some tapes over there to improve the educational results in Lake Elmo and some of her other communities, I fear. I’ve watched committee hearings with questioning by Bachmann and seen her ask questions that have made me question her grasp on just about everything including reality. It must run in the waters of the Rum River, because she’s not the only elected official up there that seems confused. Check this out at Think Progress and Roll Call where one of Bachmann’s constituents, LeRoy Schaffer, a St. Francis city council member evidently showed up in a tuxedo and a top hat to one of her health care town hall meetings and made the following pithy statement.

Shaffer got visibly emotional asking Bachmann about the future of health care and the role of special interests in Washington.

“I’ll be danged if I am going to give up my Social Security because of socialism,” Schaffer said, before being booed by the crowd.

How many in the room think this man probably gets all his information and news from either Rush Limbaugh or

Congress Women Michelle Bachman explains how our she came up with the theory that God Created a Flat Earth in 7 days without the help of Socialists or Communists.

Congress Women Michelle Bachmann explains how she came up with the theory that God Created a Flat Earth in 7 days without the help of Socialists or Communists.

Glenn Beck? Sean Hannity? Bill O’Reilly? Bueller? Bueller?

With deafening cheers and a few jeers, hundreds of people packed a health care town hall meeting Thursday held by U.S. Rep. Michele Bachmann, some targeting the Republican with the kind of anger previously directed at Democrats.

“Why do you persist on distorting the president’s plan?” asked Ilya Gorodisher, 46, of the Stillwater area, accusing Bachmann of “stretching the truth to the point of lies.”

Bachmann, who represents the Sixth District, defended her claim that President Obama’s plan would crowd out existing private insurers, and suggested Democratic plans were big gambles.

“Washington, D.C., is telling the American people, ‘Trust us,'” she said.

Bachman obviously believes you can’t trust Washington, D.C. However, the Congresswoman, who lives in Washington, D.C. felt she deserved to be trusted on this issue. Bachmann (via the Roll Coll link) gives us this stunning example of why national health care is doomed to fail. Relying on personal anecdotes and faith based reliance on her medical insurance is always a way to prove your case.

At one point, Bachmann told the crowd: “I believe we have the best health care in the world.”

“I far prefer American health care than medical care in the U.K. any day of the week,” Bachmann said.

Lifting a stack of news reports about the health care problems in England, Bachmann told a story about women having to give birth in hospital hallways.

One angry male constituent yelled, “That happens here.” And Bachmann quickly retorted, “I’ve given birth here probably more times than you, sir.”

Elmo sez, that even though the CIA website (according to Glenn Becksters) is subject to frequent hacking and skews data to make other countries look good, you can check out how the US Ranks in infant mortality at

Elmo sez, only Glenn Becksters think the CIA Factbook is subject to frequent hacking and that it skews data to make other countries look good. Smart lil monsters know you can check out how the US ranks in infant mortality at

Since I don’t know any one that’s ever given birth any where but a hospital, it can’t possibly happen here, can it? My eldest daughter delivers babies in hospitals. Of course, I had two daughters while having access to good health care insurance in a hospital so I’m a serious authority on this too. Yup, never have I ever heard of any one having a baby any place else but in a delivery room in, you guessed it, a hospital! The Celestial Teapot has obviously blessed the American Health Insurance Industry personally! I mean, just ignore the U.S. ranking on the number of infant deaths as compared to any other developed economy, or for that matter developing economy. My personal experience obviously trumps it all. Plus, there’s that Celestial Teapot thing. Nah, you’re not buying it are you? Then why do some of the voters in Minnesota? She’s won elections for Teapot’s sake!!!

On a serious note, here are the rankings for Infant Mortality. If you love babies, you want to rank near the bottom not the top so higher numbers are better. Its from the CIA Factbook. Out of 224 countries ranked for 2009, the UK ranked 193. Canada was 189. The United States is number 180 which is one ranking lower than Cuba and one ranking higher than the Faroe Islands. Gee, Congresswoman Bachmann, aren’t you proud to be an American now? Our health care system rations health care so that more potential Republican babies in the US die than Marxist Babies in Cuba. It must be a communist plot!

Please Digg!! Share!! Tweet!!! and keep your fingers crossed that the fine folks in Minnesota wake up and get rid of her in 2010!!

(Oh, and since I brought up RUM you might as well treat this as an open thread with whatever cocktail you can chase down in your neck of the woods.)

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