Here’s what happens when you drill baby drill

I’ve taken my dog Karma for a walk several times today and this evening there is a smell that I can only describe as being similar to that of the coffee can I used to have full of old crayons when I was a kid. It vaguely smells like a leaky old kerosene lamp. It’s not pleasant. The air is thick with humidity, sickly smelling, and heavy. There are very gray clouds–possibly the smoke from the controlled burns–blowing in from the south. I have that same feeling in my gut that I had around Hurricane Katrina when I knew the aftermath was going to be more of a disaster than disaster itself.

It is now more than 8 days after the original fire. There’s a spill headed for us and the oil is still burbling up from the uncapped well head. Again, I repeat, it’s been doing that for 8 days and counting now. We’ve finally gotten the Governor to ask for a federal declaration of disaster and the President is finally sending his versions of Heckuva Job Brownies down here. Notice, he’s not even giving us a fly over yet. At least the electricity is on, so there will be no Presidential speeches where the only lights in the city are on him and the cathedral. I don’t know if I could handle another one of those photo-ops.

Meanwhile, this is the AP headline: Gulf Coast oil spill could eclipse Exxon Valdez. Yup, read it, it could eclipse the big one. Do any of you out there want to drill, baby, drill now? The only potentially positive thing my friends (who are air core drilling specialists) and I see coming out of this is a big huge ownership stake in BP for every single Louisianan. We’re going to need some compensation because I can’t image how much damage this is going to do to our economy, our ecosystem, and our wildlife. I know I’m going to see pictures on TV shortly that will make me cry and it’s way too soon for that again. At least it is for me and it will probably will be for most of my neighbors. We’re still tired recovering from all those hurricanes and from Bobby Jindal’s way of balancing the state budget.

This is been one big SOP of hoping for the best, saying you’re planning for the worst in front of the press, the worst happens and then you’re planning is pretty much shown for what it is; empty words. Did I mention I have a headache now?

An oil spill that threatened to eclipse even the Exxon Valdez disaster spread out of control and drifted inexorably toward the Gulf Coast on Thursday as fishermen rushed to scoop up shrimp and crews spread floating barriers around marshes.

The spill was both bigger and closer than imagined — five times larger than first estimated, with the leading edge just three miles from the Louisiana shore. Authorities said it could reach the Mississippi River delta by Thursday night.

“It is of grave concern,” David Kennedy of the National Oceanic and Atmospheric Administration, told The Associated Press. “I am frightened. This is a very, very big thing. And the efforts that are going to be required to do anything about it, especially if it continues on, are just mind-boggling.”

The oil slick could become the nation’s worst environmental disaster in decades, threatening hundreds of species of fish, birds and other wildlife along the Gulf Coast, one of the world’s richest seafood grounds, teeming with shrimp, oysters and other marine life.

The leak from the ocean floor proved to be far bigger than initially reported, contributing to a growing sense among many in Louisiana that the government failed them again, just as it did during Hurricane Katrina. President Barack Obama dispatched Cabinet officials to deal with the crisis.

So, I’ve been sending money to Congressman Charlie Melancon who is trying to take on David Vitter for Senator down here. He’s not a great Democratic candidate but he’s not Vitter, and at the moment that’s all I want. Here’s some information for any one that’s interested in helping us, the wetlands and coastline, and all the critters that are going to be in the path of destruction. Notice, they’re asking for citizens with boats again. I can’t believe it, nearly FIVE friggin’ years after Katrina and we’re still relying on our neighbors with boats. Yup, getting rid of Dubya, made a big difference didn’t it? So much for hope and change down here in bayou land. Would it be too cynical of me to ask for a reconsideration of the Obama Drill Baby Drill plan now?

Here’s some information via Congressman Melancon:

Already, I’ve run into many Louisianians who want to know how they can help. Below are some resources that you can use to find opportunities to pitch in. We’ll be updating this list as new updates come in at


BP and the federal government have established an official hotline for volunteers at 1-866-448-5816. You can also find information on getting involved at Volunteer Louisiana, the official state website for local volunteering.

If you have a boat in Louisiana and want to help with the oil spill response, BP is telling volunteers to contact Vince Mitchell at or 425-745-8017.

News Updates on the Response

In addition to local news sources, you can get updates on the federal response at

Updates on the state response can be found at

Emergency Contact Information

If you would like to report oiled wildlife, spill related damage, or oil on land, please use the following contact numbers:

  • To report oiled wildlife, please call 1-866-557-1401 and leave a message. Messages will be checked hourly.
  • To discuss spill related damage, please call 1-800-440-0858.
  • To report oil on land or for general community and volunteer information, please call 1-866-448-5816.

Shitty Deals

I just spent the morning watching Goldman Sachs executives dance around both good and bad questions from senators sitting on Karl Levin’s Subcommittee on Investigations. I’ve learned several things. First, many senators sitting on that committee seem to misunderstand the role of firms like Goldman Sachs as market makers. Senators Coburn and Ensign should be required to spend some time in an investments class or seminar until they figure out why strategies for buying and selling and for risk management can be different at various levels of a firm. Some folks manage the entire position of the firm of Goldman Sachs and then some have to manage the position of individual products that will be originated and sold to many parties; including competitors. They also seemed to confuse why Goldman could sell a product and then create a synthetic hedge to minimize the risk or basically insure a price. That being said, I completely enjoyed watching Senator Levin make them squirm in their seats with words from their own emails.

On the Goldman side, I was really impressed with Dan Sparks who seemed to try to answer questions and at times, even tried to explain the complex derivatives world to the very thickheaded Senator Jon Tester who was clearly asking questions that showed he should be limited to serving on agriculture and land use committees. Joshua Birnbaum seemed to suffer from a lot of forgetfulness for such a young man and Fabrice Tourre seemed to parse words with the ease of a champion linguist. (Aside: I’ve been wondering all day what the deal is with the woman behind Fabrice over his right shoulder. Is she dying from boredom or is it just me?)

As Senator Susan Collins remarked, they sure spent a lot of time not answering questions in very complex ways. Collins spent a great deal of time trying to ask about how much loyalty an investment banker should have to a client compared to loyalty to their firm and potential bonus checks. (BTW, GS stock is up at the moment, that should say something.)

Sen. Susan Collins asked the question to Dan Sparks, former head of the mortgages department at Goldman He paused briefly, then said: “I believe we have a duty to do well for our clients.”

Collins asked the same question to Joshua Birnbaum, a former managing director in structured products group trading at Goldman. Birnbaum said Goldman has such a duty and has fulfilled that duty.

Collins asked the question to Fabrice Tourre, executive director in structured products group trading at Goldman. He said the firm has a duty to serve clients in its role as a market maker by providing liquidity. “I do not believe we act as an investment adviser to our clients,” Tourre added.

“There seems to be confusion here,” Collins concluded. She also proposed legislation that would impose a clear fiduciary duty on investment banks to work in the best interests of their clients.

“Conceptually that doesn’t seem like an issue,” Birnbaum said. “It seems like an interest idea.”

Even though this was set up to be a public circus, there were some very revealing moments. Senator Karl Levin just connected the dots between emails (the ones leaked recently) within Goldman Sachs and products foisted on the public. It was clearly buyer beware atmosphere as far as GS was concerned. If they could off load it, they would and they did.

Here’s the best exchange I saw this morning highlighted at Politico. It’s an excerpt from the YouTube video above with some political analysis added.

“Boy, that Timberwolf was one shitty deal,” Levin said, quoting the email from a Goldman Sachs executive.

It is extremely unusual for senators to use obscenities from the dais, let alone during remarks carried live on cable television networks. Levin used it again and again.

“How much of that shitty deal did you sell to your clients?” Levin asked a witness, Daniel Sparks, former head of the Mortgage Department at Goldman Sachs.

“Mr. Chairman, I don’t know the answer to that,” Sparks replied.

Levin pressed Sparks on the question of whether he had an obligation to disclose to his clients that he was selling assets that Goldman itself was betting against.

“You didn’t tell them you thought it was a shitty deal? Levin asked.

Sparks said that the context of the email was that his own performance on the deal was not good.

“Should Goldman Sachs be trying to sell a shitty deal?” Levin pressed.

“Well, there are prices in the market that people want to invest in things,” Sparks responded.

Live stream for the rest of the testimonies (Blankfein coming up):
Feel free to live blog with us!!!
Note: GS stock was the only financial stock that traded up today. Very interesting.
My thoughts at the Conclusion of these hearings:
My bottom line on this is that most of these types of derivatives(CDOs not like the vanilla ones) are not traded on a market and so therefor, the price is dependent on very few parties to the trade. That includes the rater, the buyer and the seller, and the arranger or market maker. It’s pretty clear that the those folks arrived at fairly bad and way off estimates because there were extreme winners and losers and they disrupted larger markets.

The best way to eliminate these problems is to trade these things on markets and make them as standardized as possible (like some of the other derivatives) so that the pricing mechanism works better and it’s out in the open. So, even if there isintent to defraud or there is an intent to withhold some pertinent information, it’s less likely to matter when the pricing is SO far off. It contains the damage to the participants only and not to society.

I think every one would be much better off if these things were exchange traded, standardized and monitored by an independent regulator for certain standards. That way, it’s absolutely clear what’s involved to most the of the participants. It’s a risky asset. If you want to call speculation betting, then fine, but the deal is the longs create an asset of value and without the speculators it would’nt work. When you bet on a horse race, there’s no social or business benefit to either the long or the short position in terms of risk or portfolio management. Both are purely speculative. And that’s the difference.

More Reasons to drink …

Amazing how one Republican can throw a hissy fit and the entire Democratic agenda can change, isn’t it?

Timing is Everything

Fluffy, a Wall Street investment banker and hedge fund manager, receives his bonuses from a well timed bet against the value of your home funded by low interest rate loans from taxpayers and the FED's discount window. Laissez les bon temps roulez Fluffy!!! Vive la Laissez Faire!!!!

The Goldman Sachs casino–aided and abetted by folks in the NY Fed and friends in congress that refused to set up reasonable regulation and standardization in derivatives market–is finally getting some serious investigation. We’re beginning to see that the complete lack of regulatory framework around the more exotic derivatives allowed GS to become very very rich while passing on social costs to its clients and to the taxpayer. You just can’t convince me that these folks didn’t know full well that what they were doing was seriously screwing over some of their clients and what they were doing later was taking full advantage of taxpayer largess.

The NY Times has been running a series of articles on the firm that you really should read. While the mortgage market was in free fall, GS folks were full speed head profiting by what looks like the creation of adding more momentum to the crash and passing on more losses to clients with the offsetting position. A senate committee released some emails today and they are a very interesting read.

However, imho, the timing of all of this release of information can’t be just coincidental. It seems uniquely close to a big Presidential speeches demonizing the firms who funded his presidential campaign in a big way and the bill coming out of the Dodd committee which is now looking slightly bipartisan because all this release of information is making Republicans look like enablers of a gambling addict even when Democrats have been equally enabling in the past. It also appears to be the prime issue that could give Democrats up for re-election some momentum in the fall and just oddly enough, we’re getting close to the partisan primary season.

I have to ask what seems to me to be an obvious question at this point, did they have this information earlier and have they just sat on it for possibly a year and a half while we’ve taken on more costs–both social and transactional–of their actions? Is it just coincidence that endangered senators like Blanche Lincoln (who faces a primary challenge from the Democratic left) are front and center in the debate? Could they have released this information sooner and saved the taxpayer a lot of money as well as stopped GS and other investment banks from making billions of dollars of profits and giving their execs millions of bonuses? This stinks of Axelrahm to me.

In the e-mails, Lloyd C. Blankfein, the bank’s chief executive, acknowledged in November of 2007 that the firm had lost money initially. But it later recovered by making negative bets, known as short positions, enabling it to profit as housing prices plummeted. “Of course we didn’t dodge the mortgage mess,” he wrote. “We lost money, then made more than we lost because of shorts.”

In another message, dated July 25, 2007, David A. Viniar, Goldman’s chief financial officer, reacted to figures that said the company had made a $51 million profit from bets that the value of mortgage -related securities would drop. “Tells you what might be happening to people who don’t have the big short,” he wrote in an email to Gary D. Cohn, now Goldman’s president.

There’s really no way that I can say for certain that messages dated back in 2007 probably were discovered earlier and could’ve been brought to public attention prior to the spring of 2010. But, you have to believe, that release of information like this would’ve derailed health care legislation and focused public angst on Wall Street had it come to light earlier. We possibly could’ve gotten the systemic reform we need at least a year ago.

You also can’t convince me that delay of the release of these memos hasn’t created a situation where we’ve had a few more months of money going to Wall Street via the Fed Discount Window and the TARP over the last few years that has allowed them to rake in profits from the recovery in financial markets which also, not so coincidentally has increased stock prices of firms like GS. The fact this information was discovered three years later has certainly created a huge rate of return on delay. Look, there were committees looking at what happened on Wall Street and the housing market meltdown while we were still be regaled by the idea of an office of the President-Elect. For Pete’s sake, Paul Volcker and Warren Buffett sat on some of them. You can’t tell me regulators weren’t on site as early as the fall of 2007. The New York Fed and Tim Geithner were actively on the phone with GS during the earliest moments. It doesn’t take a first rate FBI agent to think about looking at emails of your prime suspect during the timing of the commission of a possible crime.

Meanwhile, we have the also interestingly timed released of personal information on SEC employees and their porn addictions played out on work computers. This some how seems to imply that the release of the above information might be related to SEC staff not doing their job rather than, well-timed political timing. Also notice, that we’re getting many firms that are saying they are now more flush with cash and can quickly pay off taxpayers and return to business as usual. This while, everything that brought the 2007 crises to a head is still completely out there and operating per usual business. They’ve been allowed to completely recover their losses and now they’re making extraordinary profits. All these speeches and release of information couldn’t have happened before they raked in their current years’ extraordinary profits?

The more I read these ‘discoveries’ and the more that I see the President out on another marketing mission, the more I think the timing of all this is incredibly suspicious. I don’t have access to Robert Gibbs, SEC investigators, or congressional insiders, but if I did, I think I would be questioning why, if this data is over two years old, and we know there has been a focus by many folks on figuring out what went wrong within key financial institutions, have we waited until AFTER the health care debate, AFTER the recovery of Wall Street and the achievement of more of its gambling profits, and DURING the election cycle to get around to disclosing it?

This inquiring mind really wants to know.

Update: Karl Levin has provided a link to the documents in question here.

The Politics of No Place to Go

Today is Equal Pay Day. I got this information from a mailing from NOW.

Equal Pay Day — observed this year on April 20 — is a symbolic date when women’s earnings into a second year finally catch up to the salary made by men in the previous year. In recent decades the gap has narrowed only because men’s wages have stagnated, and progress is moving at the glacial pace of a fraction of a cent per year. The disparity between women’s and men’s pay is a huge barrier to women’s equality that costs them hundreds of thousands of dollars over their lifetimes. The wage gap undermines women’s struggle for independence by compromising their financial security. Equal pay for equal or substantially similar work is more important than ever now that many women are the prime breadwinners during this recession, which has seen many more men lose their jobs. Sex-based wage discrimination is undoubtedly a factor in the high mortgage foreclosure rate, which continues unabated.

Pay Gap Always Present – Several recent reports document that from the moment they graduate from college women are penalized with a lower salary compared with identical male counterparts — for instance, an average of $4,600 less for female MBA grads. An oft-cited reason for the pay gap is that women take time out of the paid workforce to care for children and thus lose out on promotions and pay increases. The Catalyst study, however, showed that the salary difference existed even for women with no children. Center for American Progress economist Heather Boushey testified at a recent congressional hearing that the pay gap grows over time. One reason is that women are less likely than men to negotiate for a high salary, and the cumulative effect over a working career is great.

Huge Lifetime Losses – A small hopeful change in 2009 was an increase to 80.2 of the earnings ratio for the median weekly earnings for female full-time workers compared to male median weekly earnings, according to the Institute for Women’s Policy Research. However, a more important statistic relates to women’s annual earnings. In her median annual earnings, a woman working full time made 77.1 percent (this amount has declined slightly in recent years) of the pay made by a man working the same hours, in 2008. The figure is lower for women of color and is a prime reason for the perpetuation of economic vulnerability of these groups.

African-American women, for instance, are paid 67.9 percent of men’s wages, and Latinas take home 58 percent of what men are paid. Experts estimate that the gender wage gap costs women between $700,000 to $2 million in lifetime earnings; lifetime losses range higher for women in top professional categories. The gender-based pay gap creates serious economic insecurity for women and their families and is a major factor of old age poverty for women.

PFA Addresses Wrongs – Among the remedies found in the Paycheck Fairness Act is a provision that allows wronged women to collect compensatory and punitive damages — a standard practice in discrimination cases based on race or ethnicity that is still unavailable to women. The new act will also prohibit employers from retaliating against their staff for sharing salary information with each other; this will allow an employee to freely determine if she is experiencing wage discrimination and take appropriate action. This provision alone might have spared Lilly Ledbetter the loss of hundreds of thousands of dollars and the need to take her case all the way to the Supreme Court.

Employers Must Prove Reasons – The act limits acceptable justifications for an affirmative defense, which is “factors other than sex” used by employers to explain lower wages of their female workers. Currently, employers can claim a broad range of reasons, such as women’s “weaker” salary negotiations skills, to rationalize paying women less. The Paycheck Fairness Act will require employers to show that the pay gap is truly caused by factors other than sex-stereotyping and relates directly to job performance. The act also establishes a grant program that would train women on how to gain better jobs and encourage them to break out of low-paying job categories. Finally, the Paycheck Fairness Act improves guidelines on the collection and publication of wage discrimination information and research.

The Lily Ledbetter Act was a needed clarification in the Title VII employment discrimination law. Now, we must follow through on the momentum and take the next most important step by securing passage of the Paycheck Fairness Act.

You can see one of my pet peeves in action in this description. The politics of no place to go which is what the Democratic Party plays on us day in and day out as women. They also play it on the GLBT community and they’re playing it on the Hispanic and Black communities. Witness these two headlines. Pro-Gay Hecklers Repeatedly Interrupt Obama At DNC Fundraiser which shows how the GLBT community is getting tired of the lipservice paid to DADT. The White House pledged to change it and is now reportedly trying to block a vote on the measure until after the November Elections.

A group lobbying for the repeal of the ban on gays serving openly in the military is “disturbed” by word that the White House is quietly working to postpone a vote on repeal until after the midterm elections.

“I am very disturbed by multiple reports from Capitol Hill that your Congressional liaison team is urging some Members of Congress to avoid a vote on repeal this year,” the executive director of the Servicemembers Legan Defense Network, Aubrey Sarvis, wrote Obama in a letter to the White House dated today. “The upcoming House and Senate votes will be close, and very frankly, Mr. President, we need your help now.”

Advocates — with the backing of legislators including Senator Joe Lieberman — had hoped to include the repeal measure in this year’s Defense Authorization, with the support of key military leaders. But Sarvis’s letter, urging Obama to “reaffirm” his campaign promise and to strengthen his commitment to gay rights issues, is the most public sign yet of doubts that repeal will come this year.

Then there’s this one from the Hill: Dem to Obama: Push immigration or I’ll tell Latino voters to stay home.

A congressman from the president’s home state is threatening that he will urge Latino voters to stay home this November if the Democratic Party does not make a concerted effort to pass comprehensive immigration reform.

Rep. Luis Gutierrez (Ill.) is arguably President Barack Obama’s biggest Democratic critic in Congress. And he’s not fond of Obama’s top advisers at the White House, either.

The Congressional Hispanic Caucus (CHC) member has strongly criticized the administration’s policy on deportation and questioned its commitment to far-reaching reform.
Some Democrats have felt little urgency in pursuing the controversial issue, partly because they see no risk that Hispanic voters will bolt the party for the GOP. But Gutierrez says they are missing the real political consequence of inaction.

Seeing any pattern here?

Sadly, we lost Dorothy Height, one of the key figures in the civil rights movement who fought to integrate the YWCA back in the day.

As president of the National Council of Negro Women from 1957 to 1998, she led the group to expand its mission. Her initiatives included training thousands of women –housewives, teachers, office workers, students — to work as community advocates. Back in their own communities, they pushed for better housing, schools and stores. It was a way to help women escape what Height called the “triple bind of racism, sexism and poverty.”

One of Height’s most visible accomplishments was the Black Family Reunion Celebration, a three-day cultural event in Washington, D.C., with related events around the country. Founded to counter negative images of the African American family, it has been held annually since 1986.

“Her fingerprints are quietly embedded in many of the transforming events of the last six decades as blacks, women, and children pushed open and walked through previously closed doors of opportunity,” Marian Wright Edelman, founder of the Children’s Defense Fund, wrote in 2006 in the Baltimore Times.

Wouldn’t it be a great day to make a symbolic movement towards actually doing things to make some of these initiatives real rather than just giving them lip service at campaign time ? We could do this in remembrance of folks like Dorothy Height who put her actions where her beliefs stood.