Thursday Reads: S & P, the New Madrid Fault, the Gaddafis, and Obama in the Eye of Hurricane Irene

Good Morning!! I think I have some interesting reading for you today, so let’s get right to it.

Last night I wrote about Goldman CEO Lloyd Blankfein possibly being in trouble with the feds. Interestingly, on Monday another high-profile exec announced he’ll be stepping down. I’m referring to S&P president Deven Sharma. From The New York Times:

The ratings agency Standard & Poor’s said late on Monday that its president, Deven Sharma, who has become the public face of the firm in the wake of its historic downgrade on the United States’ long-term debt rating, will step down and leave the company by the end of the year….

The management change had been in the works for months and was unrelated to either the Justice Department’s inquiry or to the emergence of the activist investors, Jana Partners and the Ontario Teachers Pension Plan, according to people briefed on the matter.

Oh really? Kind of a strange coinky-dink, then, isn’t it?

The ratings agency’s decision to downgrade the United States’ long-term credit rating to AA+ from AAA on Aug. 5 set off a storm of controversy, including criticism by President Obama and Treasury Secretary Timothy F. Geithner. The decision contributed heavily to the worst drop in American stocks since the financial crisis three years ago, as well as volatility that continues to whipsaw the markets weeks later. The other big ratings agencies, Moody’s and Fitch, maintained their top-tier rating on United States debt.

At the same time, the agency is being investigated over whether it improperly rated mortgage securities in the years leading up to the financial crisis. Standard & Poor’s, along with the other major ratings agencies, gave their highest ratings to bundles of troubled loans that appeared less risky during the housing boom, but have since collapsed in value.

Since the financial crisis, the agencies’ business practices and models have been scrutinized by Congress, and Standard & Poor’s is also being investigated by the Justice Department, people briefed on the matter have previously said. At issue is whether the agency’s independent analysis was driven by profits. The Justice Department inquiry, which began before the Standard & Poor’s downgrade of the United States’ debt, is centered on whether analysts’ decisions to assign securities a low credit rating on subprime mortgage loans were overruled by business managers.

Right. I’m sure none of that had anything to do with the president of the troubled company stepping down. /snark

The Financial Times has a piece on the incoming president, Douglas Peterson.

As head of Citigroup’s Japanese operations in 2004, Mr Peterson dramatically bowed in apology before Tokyo regulators after they shut down Citi’s private banking operations there.

Now, as he takes over the embattled ratings agency just weeks after its unprecedented downgrade of US credit, Mr Peterson is likely to find himself before regulators in the US, who are looking into the downgrade and reportedly investigating S&P’s ratings of mortgages before the financial crisis.

Yet, it is Mr Peterson’s experience in Japan, and his more recent turn running Citibank, the retail banking arm of Citigroup, that has given S&P’s owner McGraw-Hill confidence that he is the right man for the job.

Seven years ago, Mr Peterson was given the tricky task of mending relations with Japanese regulators and rebuilding Citi’s tarnished reputation after the US bank’s private banking unit was found to have illegally amassed large profits and was ordered to close down.

By all accounts, the affable Mr Peterson, who is widely described in Tokyo as “nice” and “sincere”, succeeded in reassuring the Financial Service Agency and the Japanese public alike that Citi could once again be trusted with the considerable financial assets of one of the largest economies in the world.

IOW, Peterson has been hired because of his pleasing personality and his ability to make friends and influence people.

But Sean Gregory at Time argues that “A New Leader Won’t Save S&P.”

It’s tempting to read the resignation of Deven Sharma, who stepped down as president of S&P Monday night, as an admission that the rating agency goofed in downgrading the United States’ sovereign rating from AAA to AA+, even as Fitch and Moody’s maintained America’s top grade. Warren Buffett said the U.S. should be rated “quadruple A.” The Treasury department complained that S&P overestimated the nation’s future debt by $2 trillion. Timothy Geithner said that the S&P decision shows “a stunning lack of knowledge about basic U.S. fiscal budget math. And I think they drew exactly the wrong conclusion from this budget agreement.”

Guess Sharma and Geithner won’t be hanging out at any holiday parties. If the S&P downgrade was indeed a mistake, it was an expensive one. In the week after the Aug. 5 S&P downgrade, according to Bloomberg, the market value of global stocks tumbled by $7.6 trillion. Sharma, a former Booz Allen Hamilton consultant who has headed S&P for the past four years, might not be trumping this fact on his newly-polished resume. So you’re the guy who cost the world $7.6 trillion in wealth? You’re hired!

Like FT, Gregory points out that S&P has been shopping for a new leader for months, mostly because Sharma has failed the company in a number of ways. So will a new president make a difference? No, because the ratings agencies simply aren’t qualified to evaluate the credit of sovereign states.

There’s a frightening earthquake story at The Daily Beast: The Quake We Should Fear. Apparently it’s the Midwest that is due for a big one–not the east coast.

Early in the morning of May 16, while most of America was being titillated and transfixed by the appearance in court of the then-suspect Dominique Strauss-Kahn, an urgent message was suddenly received at the headquarters of the Federal Emergency Management Agency (FEMA) in Washington, D.C.

Reports were streaming in of a catastrophic earthquake, magnitude 7.7, that had struck the Midwest near the town of Marked Tree, Ark. First reports were alarming: phenomenal property damage; casualty figures were unprecedented; transportation links were severed; and cities like St. Louis, Memphis, Little Rock, and Cincinnati had been thrown into utter turmoil. Eight states were believed to have been directly affected, and it was thought the death toll would be in the thousands.

A gigantic federal relief mission swung into action. Nine thousand National Guardsmen were ordered to be deployed. Triage centers were opened in all the affected cities—a list that grew longer as a secondary magnitude 6.0 earthquake struck close to the city of Mt. Carmel, Ill. The Red Cross deployed emergency teams. Power companies were given priority to restore electricity and gas supplies. Heavy equipment was sent in to clear highways and railway tracks.

Within 72 hours some kind of order was restored. Hospitals found themselves more able to cope with the vast number of patients suffering injuries. Refugees fleeing in panic were being assembled into special camps. Temporary tent cities were set up along the main refugee routes.

Huh? Oh wait. That was a FEMA exercise. But it was based on the real possibility of a major earthquake on the Madrid fault. It’s happened before and is due to happen again.

This year marks the bicentennial of the great swarm of earthquakes that afflicted New Madrid between December 1811 and February 1812—hundreds of them, day after day, but punctuated by four enormous ruptures, two occurring on Dec. 16, and one each on Jan. 23 and Feb. 7. These caused spectacular effects all across the then young, sparsely settled United States—toppling church steeples in South Carolina, ringing church bells in Boston, causing the Mississippi to reverse it course, and sinking numerous properties deep into the liquefied earths of the prairies.

Yikes! But I’m still worried that Boston hasn’t had a major earthquake since 1755–so we’re probably due also.

Yesterday I came across a couple of interesting stories on Muammar Gaddafi and his son Saif that you might want to check out.

From Scientific American: Egotist Rex: Are a Dictator’s Defiant Statements Indicative of Self-Delusion? It’s an interview with George Washington University Professor of Psychiatry Jerrold Post.

The interviewer asks Post about the many bizarre statements that Gaddafi has made since the rebellion began. He seems out of touch with reality. Is he delusional? Post discusses the circles of sycophants that surround every world leader–this may make it difficult for the leader to see what is really happening outside this protective bubble of supporters.

They can have a very unrealistic understanding and believe, as Qadhafi stated again and again, “My people, they all love me.”

I found this language of his quite remarkable. And with Qadhafi as an exaggerated example, this is true of any of the other leaders, too—namely, they believe they have widespread support. If there are public demonstrations against them, that must reflect outside agitators. This was true with [ousted Egyptian president Hosni] Mubarak as well. He spoke of outside conspiracies.

But it is particularly true of Qadhafi. There is an interesting kind of almost syllogism for him: “My people all love me, and therefore if there is anyone protesting against me, they are not really my people, and that must be a consequence of outside provocation.” And one of the points that he made early on was that this was crazed youth who were on hallucinogens with which their Nescafe had been laced, which I thought was rather creative, really.

I found Qadhafi’s language in general very striking. And what is most interesting about it is it is entirely in the first person singular: “My people all love me. They will support me. My people, they love me.” It was very “me” centered.

Next the interviewer asks whether narcissism is a characteristic of many national leaders? The response could perhaps be applied to someone a little closer to home, if you know what I mean. Check it out.

Vanity Fair has a new article up about Saif Al-Islam Gaddafi. It’s rather long, but here’s the introductory paragraph:

Saif al-Islam Qaddafi—son of Muammar, and long regarded as his heir—was subjected to an arrest warrant months ago by the Criminal Court for crimes against humanity. Libyan rebels in Tripoli reported that he was in custody, but Saif soon appeared in public, rallying what’s left of pro-Qaddafi forces. As NATO bombs fell on Libya, the distinguished international lawyer Philippe Sands sat down with those who know Saif Qaddafi best—a London professor, his Libyan mentor, and the prosecutor who may decide his fate. Saif Qaddafi may claim that he was merely an intermediary, or a force for moderation, or perhaps even a victim. But whatever the claims, according to the prosecutor, he was deeply complicit in his father’s crackdown this year.

Hurricane Irene could become a category 3 sometime today. It’s still predicted to go right up the coast to New England. States all along the east coast are preparing for the worst. Will it hit the Cape and islands? The LA Times suggests President Obama might have to be evacuated.

First, President Obama’s golf game was interrupted by an earthquake. Now, it appears that Hurricane Irene is beating a path toward Martha’s Vineyard, where the president is vacationing with his wife and two daughters.

The National Hurricane Center’s latest forecast shows Hurricane Irene reaching landfall in the Carolinas late Friday and early Saturday before raking its way up the East Coast and into New England. Coastal areas are urged to keep tabs on the storm’s path and remain alert for possible evacuation orders as the hurricane continues to grow in intensity.

It swelled to a Category 3 storm overnight with winds that could exceed 110 mph, and remains on track to gain in strength and ferocity to become a Category 4 hurricane.

Obama is supposed to be in Washington on Sunday to speak at the opening of the Martin Luther King Memorial and then return to the Vineyard. The storm is supposed to hit DC before moving up to Massachusetts.

The eye of the storm appears to be sticking to the coastal outlines, which could spell trouble for Martha’s Vineyard, an island accessible only by boat or plane. As it has done throughout the storm, the National Hurricane Center stresses that the projected path could change dramatically as weather projections come into sharper focus over the next several days.

Hmmm…. Perhaps Mother Nature is trying to send a message to our obtuse leader: Americans need jobs!! Or maybe not.

That’s all I’ve got for you today. What are you reading and blogging about?

42 Comments on “Thursday Reads: S & P, the New Madrid Fault, the Gaddafis, and Obama in the Eye of Hurricane Irene”

  1. bostonboomer says:

    East Coast Earthquake Reveals Major Flaws in Planning for Nuclear Disaster

  2. Pat Johnson says:

    bb: I’m conflicted at the moment about my own weekend plans. The coverage of this storm heading up the east coast is very unsettling. You may have gotten out of Boston just in time.

    Am supposed to leave for Boston tomorrow noon for a night game at Fenway followed by a wedding shower on Sat. morning at 11. Not sure I want to be riding on the pike after 2pm with all the rain that is expected prior to the storm actually hitting our area with Western MA expecting a hit of winds up to and possibly over 60mph.

    We have had so much rain that the ground is “mushy” and fear the highways may just be flooded this weekend.

    Still turning it over in my head but the forecasts are kind of scary.

    • bostonboomer says:

      What day is the storm supposed to hit? Isn’t it Sunday? Don’t miss the Red Sox game!

      • bostonboomer says:

        According to this map, the storm won’t hit New England until late Sunday or Monday.

        They’re predicting a lot of rain for MA on Friday and Saturday though.

      • Pat Johnson says:

        It’s predicted for landfall on Sunday but the rain is supposed to precede it on Saturday and it is said to be heavy rain.

        Having ridden on the pike during other heavy rainfalls where the visibility is practically nil, I am having second thoughts about traveling. They are saying that with all the rain we have had over the last few weeks that the ground will be unable to absorb it therefore making the roads even more treacherous as it will have nowhere else to go.

        The drive from here is not quite 2 hours but the thought of reduced speed could add another hour onto the drive and as I will be alone in the car makes me very uneasy. I’m not the “pioneer” I was was.

        Hate to give up a game but it is still a “wait and see” decision. It’s not the ride down I fear since Friday is supposed to be clear but the ride back that is giving me angst.

      • bostonboomer says:

        Yes, I know what you mean. Can you wait until Saturday morning to decide, or do you have to know sooner than that? The game might even be rained out.

        I’m glad I started my sump pump before I left. I guess I’ll have to call my next door neighbor after the storm to make sure my house is still standing. LOL

      • Pat Johnson says:

        My son just sent me an e-mail from Boston saying that the rain is not supposed to start until Sat. afternoon and I can leave early Sat morning from his house rather than staying for the shower.

        I may do that since he has the tickets for the game Friday night. I just remember the last rainstorm that took almost an hour on 128 alone took an hour to get from his house to the pike that normally is no longer than 20 minutes due to the heavy rain.

        It was an unsettling ride. More so if the winds are over 20 mph since I am driving a Focus which is not a heavy car.

      • bostonboomer says:

        That sounds good. I hate driving on the Mass Pike in the rain. Oh, I had the day of the game wrong. Friday night should be OK then.

  3. bostonboomer says:

    Rick Perry vows to defund Planned Parenthood–signs the pledge.

    The pledge has four parts:

    * a promise only to pick federal judges who adhere to the strict “original meaning of the Constitution,”

    * to “select only pro-life appointees” for attorney general and assorted posts at the National Institutes of Health, Justice Department and Department of Health & Human Services.

    * to defund Planned Parenthood and any other organization that performs or funds abortions and to end all taxpayer funding of abortion, domestically or overseas and

    * to sign into law the “Pain-Capable Unborn Child Protection Act,” to ban abortion based on the premise that fetuses can feel pain.

    • Pat Johnson says:

      With these predictions how is it that this nitwit is so high in the polls?


    • Delphyne says:

      How do these idiots define “original meaning of the Constitution?”

      I say we hold a seance, bring back the founders and hear what they meant. Holding the seance alone would probably make them faint from fright.

    • WomanVoter says:

      Perry is on full attack mode on women and then we have the Presidential Stupak Executive Order signed by President Obama making women buy separate insurance for reproductive care. What choice ( BANGS HEAD ON DESK), since they say Perry has a double lead on the other GOP candidates, and there is already a DINO in the White House. 😦

      • paper doll says:

        I was just blogging that perhaps we will look upon these times of Obama so often on the links as the good old days….Perry seems like much more of a go getter for the GOP wet dreams than laid back Barry…sigh .

  4. Delphyne says:

    I notice since being back in NJ that people are prepared for hurricanes, epic snow falls, Nor’easters, but the idea of the earth shaking really doesn’t register. Even after Tuesday’s earthquake, so many people thought it was amusing. Me? I never minimize any earthquake.

    Having lived in California for 33 years and having experienced earthquakes, large and small, I am more unnerved about that New Madrid fault line than I ever was of the San Andreas fault. I do not think we, as a country, are ready for the kind of devastation a major quake would have on us, if and when it hits that area. I don’t think our infrastructures will hold, I think city governments are ill prepared, both physically and mentally, and I seriously doubt that FEMA is prepared for anything even with a practice session like that one. We also would need real leadership from the White House and that would not be forthcoming with the current occupant or any of the idiots running on the Republican side.

    • bostonboomer says:

      I worry about an earthquake hitting Boston. I’m afraid the whole city would fall into the Boston Harbor if it happened. The midwestern states probably aren’t well prepared for earthquakes either. At least in CA they have building codes. As for help from DC, I imagine we’d pretty much be on our own, since they only seem to care when things affect them.

      • Delphyne says:

        I just read the link to the Boston earthquake, BB – interesting. I had no idea that there was a sizable earthquake up there. The fill thing would worry me – we saw the damage in the Marina district (on fill) after Loma Prieta.

        WV – good advice about keeping supplies in the car, too. And don’t forget about your companion animals – make sure you have something for them, too!

    • WomanVoter says:

      Delphyne & BB,

      I think they are expecting something big, as a ‘Disaster’ specialist came by to review procedures and well, (you all know I run on with it) it is the first time ever… the gov is checking. Maybe we should do a discussion as I was amazed that the cable news people broke away from the USGS live East Coast Quake press conference and went to ask some man what he felt!?! (Bangs head on desk again) The USGS went on to explain many of the questions that people were wondering about and the USGS has links for what to do to prepare
      and what to do AFTER the quake hits. INFO IS FREE!

      One thing people should keep in their car is a small back pack with a first aid kit, rain poncho, tennis shoes, flash light, a box of granola bars (10-12 bars) and at least three 12-16 oz bottles of water. The suggested items are a ‘basic’ for survival as after a quake, it is hard to find kits for weeks, but check with the Red Cross:

      Everyone should know, that in a major quake event, you will be on your own for the First 72 hours. Oh, and if a major quake hits, please anyone that isn’t affected, ask that they don’t allow the Scientology planes to land, to make priority for the field hospital/surgeons planes to land (there are two of them, one carries the hospital the other the surgeons), as in Haiti, the hospital plane landed and the surgeons got diverted to the Dominican Republic. Please do that for those of us that may need such services.

  5. northwestrain says:

    Ma Nature needs to send Perry a message. I’ll leave the form of the massage up to her.

    • Pat Johnson says:

      The “gays” must have a hand in this unsettling weather across the nation.

      Either that or the “Rapture” is about to descend.

  6. WomanVoter says:

    RawStory The Raw Story
    Looks like the former dictator had a crush: Condoleezza Rice photo album found in Gaddafi’s home.


  7. dakinikat says:

    Michele Bachmann, Wife in Chief?
    Katha Pollitt

    If you vote for Michele Bachmann are you really voting for her husband, Marcus, the pray-away-the-gay psychologist? After all, in 2006 she said she took a degree in tax law, despite hating everything to do with taxes, because he told her to. “The Lord said, ‘Be submissive. Wives, you are to be submissive to your husbands,’” she told the crowd at a Minnesota megachurch. At the recent GOP debate in Iowa, her supporters in the audience booed when the Washington Examiner’s Byron York reminded her of this episode and asked if she would be submissive to Marcus as president. But it was a perfectly reasonable question: people have a right to know who would really be calling the shots in a Bachmann administration. I can hear it now: “Darling, can you believe Paul Ryan wants Grover Norquist on the Supreme Court? Oh, well… If you really think so…” Nor was the question sexist, as some said. During a 2008 debate, Mike Huckabee was asked about an ad he signed supporting the Southern Baptist Convention’s doctrine that wives should “graciously submit” to their husbands. Much like Bachmann, who answered by saying she has a wonderful marriage and that “submission” means “respect,” Huckabee said it was really all about mutual love.

    Trying to figure out how to react to this.

    • madamab says:

      I’m sure people will disagree, but my gut reaction is, this is MASSIVELY sexist. Michele would be doing a job. How she relates to her husband at home has NOTHING to do with how she would do her job.

      They are using her religion as an excuse to intimate that women can’t lead. Which the media has been doing FOREVER. And because Michele is a conservative woman (and okay, batsh*t crazy), the “liberal media” thinks it’s disguising its sexism by going after her religion. I don’t think it’s working for me.

      I am far more upset about this than the Newsweek picture of Bachmann, which when I first saw it, looked like every other picture of her I’ve ever seen.

      • bostonboomer says:

        I agree that it’s sexist. Not that surprising coming from Katha Pollitt though. She was horrible about Hillary, and basically advocated voting for Obama because if Hillary were elected we’d never hear the end of the sexist attacks.

        I get the feeling that Bachmann can take care of herself. I don’t think she would like getting pushed around by Marcus.

  8. Delphyne says:

    Mayor Bloomberg tells NYers to prepare for evacuation. (I don’t know how to do that linky thing.)

  9. joanelle says:

    As I type this in my office in the wooded hills of northern NJ, I am sitting right above the Ramapo Fault – the longest fault in the Northeast, it begins in Pennsylvania and moves into New Jersey, trending northeast through Hunterdon, Somerset, Morris, Passaic, and Bergen counties before terminating in New York’s Westchester County, not far from the Indian Point Energy Center (nuclear power plant.) And though scientists dispute how active this roughly 200 million-year-old fault really is, many earthquakes in the state’s surprisingly varied seismic history are believed to have occurred on or near it. The fault line is visible at ground level and possibly extends as deep as nine miles below the surface.

    During the past 230 years or so, New Jersey has been at the epicenter of nearly 170 earthquakes. The largest known quake struck in 1783, somewhere west of New York City, in Sussex County, NJ. It’s listed as 5.3 in magnitude, though that’s an estimate since the concept of magnitude was not introduced until 1935.

    The quake of a few days ago was felt as a “rumble,” mild shaking – although we felt it, we saw no damage in this area.

    We are having a doozey of a thunder storm here right now – but it is said to be coming from the west, not Hurricane Irene.

    I’m concerned that we’ve not heard enough about the Dominion movement that Perry, Bachmann and other GOPers belong to – I don’t think the average Repug knows what they would be voting for.

    • paper doll says:

      – I don’t think the average Repug knows what they would be voting for.

      I agree

    • Delphyne says:

      Interesting, Joanelle – I knew a little about the Ramapo fault line, but not nearly as much as you have posted. Now I want to do more research on it. What I always hear about is the Ramapo river flooding.

      Right Wing Watch has got some article on the Dominionists – they are a group that sets off all kinds of alarms in me. They’re planning on “laying siege” on DC to rid it of the Pagan influence of Columbia and retaking the city, naming it the District of Christ. The “siege” runs from 3 October until 22 November, a day for each State.

      • dakinikat says:

        Dominionists have to be the inspiration for Hand Maid’s Tale.

      • joanelle says:

        Yes, their goal is actually to take over all government management.

      • joanelle says:

        just google it – there is tons of info on it.

        I was surprised that none of the folks on talk radio who were talking about the VA earthquake never brought up the fact that we have at least three more faults in the Philly to NYC range –

        My first thought was uh, oh “shifting plates” what’s going to happen here????

  10. Sara says:

    Read Dr. Jeff Masters’ blog on Hurricane is a dangerous hurricane that hasn’t been seen in the NE since 1938 – it’s the storm surge – 15′ plus high.

  11. dakinikat says:

    h/t Susie M @ Suburban Guerrilla & Digby

    • Delphyne says:

      That is unbelievable!

    • WomanVoter says:

      The Patriot Act is the NEW constitution, upheld by police that believe they have absolute power over the citizens and their rights. SAD, but Obama is keeping this crazy train going and the Democrats support it, because they are not allowing anyone to primary him (DINO).

  12. WomanVoter says:

    kirstenpowers10 kirsten powers
    by StrayYellarDawg
    Loyal Dog Refuses To Leave The Side Of Fallen Navy SEAL During Memorial

    Navy Seal’s best friend…