US Financial Regulation and Arbitrage

Posted: January 5, 2011 | Author: | Filed under: Bailout Blues, commercial banking, Corporate Crime, Equity Markets, financial institutions, Global Financial Crisis, investment banking, Team Obama, U.S. Economy | Tags: , , , , , | 17 Comments

There is no doubt that we have had a major world wide financial collapse drastically affecting many innocent people in terms of livelihood and life long savings. It is fair to say that if the regulators had done their job, the country would have not had the hard landing that was experienced in 2008. The 2010 Financial Reform Bill kicked the can down to the Regulators for implementation and the bankers still have influence. This article takes a look at who the regulators were and how they did or did not do their job. The Obama people in the regulator domain are identified along with examples of Bush regulator failures.  Hopefully this will give insight into what is being done to preclude another crisis

The financial industry has a gaggle of regulators, each with its politically protected turf.

From Wikopedia: Financial regulation is a form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain the integrity of the financial system.

Regulation is an unnecessarily a complex subject. It is important to understand that in some cases financial entities can choose their regulator. Some regulators were much more lenient and in many cases banks switched to them, hence the term Regulatory Arbitrage.  The following are the major Federal regulators: FED, SEC, OCC, OTS, FDIC, CFTC and FINRA described below. Except for the FED, most of these organizations have direct or indirect ties to the Treasury organization.

FED – Federal Reserve System

From Wikopedia: Its duties today, according to official Federal Reserve documentation, are to conduct the nation’s monetary policy, supervise and regulate banking institutions, maintain the stability of the financial system and provide financial services to depository institutions, the U.S. government, and foreign official institutions.Current chairman is  Ben Bernanke, the former chairman was Alan Greenspan. Much more on Mr Greenspan later.

SEC – Securities and Exchange Commission

From Wikopedia: It holds primary responsibility for enforcing the federal securities laws and regulating the securities industry, the nation’s stock and options exchanges, and other electronic securities markets in the United States. Mary Schapiro is the current Chair. Predesessors were; Christopher Cox – 2005-2009, William H. Donaldson – 2003-2005, Harvey Pitt – 2001-03

OCC – Office of Comptroller of the Currency

From Wikopedia: US federal agency established by the National Currency Act of 1863 and serves to charter, regulate, and supervise all national banks and the federal branches and agencies of foreign banks in the United States. Current Acting Chairman is John Walsh. Previous Chairman were John C. Dugan – (2005 – 2010) John D. Hawke, Jr. – (1998–2004)

OTS – Office of Thrift Supervision ( recently folded into OCC)

From Wikopedia: United States federal agency under the Department of the Treasury. It was created in 1989 as a renamed version of another federal agency (that was faulted for its role in the Savings and loan crisis). Like other US federal bank regulators, it is paid by the banks it regulates. The OTS was initially seen as an aggressive regulator, but was later lax. Declining revenues and staff led the OTS to market itself to companies as a lax regulator in order to get revenue.

FDIC – Federal Deposit Insurance Corporation

From Wikopedia: United States government corporation created by the Glass-Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. The FDIC insures deposits at 7,895 institutions. The FDIC also examines and supervises certain financial institutions for safety and soundness, performs certain consumer-protection functions, and manages banks in receiverships (failed banks).

Sheila Bair is the current chairman of the FDIC and is viewed as a serious regulator with the right incentives for all concerned.

CFTC – Commodity Futures Trading Commission

From Wikopedia: The stated mission of the CFTC is to protect market users and the public from fraud, manipulation, and abusive practices related to the sale of commodity and financial futures and options, and to foster open, competitive, and financially sound futures and option markets.

CFTC is considered to be the primary regulator for Credit Default Swaps in the Dodd Frank regulation scheme.

FINRA – Financial Industry Regulatory Authority

From Wikopedia: In the United States, the Financial Industry Regulatory Authority, Inc., or FINRA, is a private corporation that acts as a self-regulatory organization (SRO). FINRA is the successor to the National Association of Securities Dealers, Inc. (NASD). Though sometimes mistaken for a government agency, it is a non-governmental organization that performs financial regulation of member brokerage firms and exchange markets.

Previously run by Mary Shapiro, FINRA has been critisized as being a ineffective regulator. Most notable was their (and SEC)  allowing Bernie Madow to continue for 10 years to operate despite being warned by a whistle blower. When testifying before congress, the whistle blower (Harry Markopolos) said SEC was incompetent, FINRA was corrupt.

It must be said that Financial Regulation in the United States is done by committee of political bureauocrats. It is important to be aware of the fact that many of them are funded by fee’s assessed to the agencies they regulate. So opportunity for Regulatory Capture and Regulatory Arbitrage is prevalent in these agencies. The clear example is Office of Thrift Supervision bowing to their clients. The opposite example is that of Sheila Bair who tries to do the right thing for her clients despite critisizm.

Read the rest of this entry »

Tuesday Reads

Posted: January 4, 2011 | Author: | Filed under: Barack Obama, Civil Liberties, Civil Rights, Democratic Politics, executive orders, Gitmo, indefinite detention, investment banking, morning reads, U.S. Economy, U.S. Politics | Tags: , , , , , , , | 34 Comments
Good Morning!

The first week of the New Year continues to bring College Football bowls and weird news.

The BBC thinks that Arkansas bird mystery may be solved. You may have heard that thousands of birds fell out of the sky on New Year’s Eve in the small town of Beebe.  Poison was ruled out since many of them wound up as midnight snacks for local cats and dogs that didn’t get sick. Now, investigators believe that fireworks may have caused the birds to panic and fly into each other and other things.

Initial laboratory reports said the birds had died from trauma, the AGFC said.

Residents reported hearing loud fireworks just before the birds started raining from the sky.

“They started going crazy, flying into one another,” said AGFC spokesman Keith Stephens.

The birds also hit homes, cars, trees and other objects, and some could have flown hard into the ground.

“The blackbirds were flying at rooftop level instead of treetop level” to avoid explosions above, said Ms Rowe, an ornithologist.

“Blackbirds have poor eyesight, and they started colliding with things.”

Here’s an interesting thing at The Economist on the PornoScans used by the TSA.    Evidently, they efficiently humiliate us, but terrorist find them pushovers.  They’re expensive, offensive, and they don’t work.

BOINGBOING’s brilliant Cory Doctorow has dug up a paper (published in the Journal of Transportation Security) outlining how easy it would be for terrorists to beat the new backscatter “full-body” imaging scanners that are being installed at major airports worldwide. Leon Kaufman and Joseph W. Carlson, two professors at the University of California, San Francisco, submitted their paper, “An evaluation of airport x-ray backscatter units based on image characteristics” ( PDF) on October 27, way before the John Tyner/”Don’t touch my junk” incident pushed the controversy over airport security rules into the cultural mainstream. The findings are pretty clear-cut: a smart terrorist could defeat backscatter units (or “pornoscanners,” as Mr Doctorow dubs them) with relative ease …

Here’s a story from NPR that should bring more shame to the Texas justice system that imprisons and kills people at an unbelievably high rate. Where’s the DOJ when you need them to investigate violations of civil rights on things like this?

Prosecutors declared a Texas man innocent Monday of a rape and robbery that put him in prison for 30 years, more than any other DNA exoneree in Texas.

DNA test results that came back barely a week after Cornelius Dupree Jr. was paroled in July excluded him as the person who attacked a Dallas woman in 1979, prosecutors said Monday. Dupree was just 20 when he was sentenced to 75 years in prison in 1980.

Now 51, he has spent more time wrongly imprisoned than any DNA exoneree in Texas, which has freed 41 wrongly convicted inmates through DNA since 2001   more than any other state.

“Our Conviction Integrity Unit thoroughly reinvestigated this case, tested the biological evidence and based on the results, concluded Cornelius Dupree did not commit this crime,” Dallas County District Attorney Craig Watkins said.

Dupree is expected to have his aggravated robbery with a deadly weapon conviction overturned Tuesday at an exoneration hearing in a Dallas court.

There have been 21 DNA exonerations in Dallas since 2001, more than any other county in the nation. Only two states — Illinois and New York — have freed more of the wrongly convicted through DNA evidence, according to the Innocence Project, a New York-based legal center representing Dupree that specializes in wrongful conviction cases.

I’ve been posting some links down thread on some of the names floating around for the people on the probable list to replace Rahm and Summers at the White House.  Their main qualifications appear to be working for Investment Banking firms.  Leading contender for Rahm’s replacement as White House Chief of Staff is J.P Morgan’s William Daley.  Former Economic Adviser Larry Summer may be replaced by a Goldman Sach’s  beneficiary Lawyer Gene Sperling whose been an adviser to Timothy Geithner. Yes, that’s right; a lawyer for an economic adviser.  You’d think our economics-disabled POTUS would want an actual economist.  It seems, however, that Obama is highly worried that Big Business and Wall Street don’t like him.  Oh dear, we wouldn’t want any donations to dry up to the re-election campaign, would we?  Daley is close to Axelrod and Chicago’s Mayor Daley.  Feel all better now?

Antonin Scalia provided yet another reason why we need to reconsider resurrecting the ERA.  He just gave an interview and said women don’t have constitutional protection under the 14th amendment. He said this last September also.  There are lots of feminist blogs writing on this and you can find their links on Memeorandum.

Marcia Greenberger, founder and co-president of the National Women’s Law Center, called the justice’s comments “shocking” and said he was essentially saying that if the government sanctions discrimination against women, the judiciary offers no recourse.

“In these comments, Justice Scalia says if Congress wants to protect laws that prohibit sex discrimination, that’s up to them,” she said. “But what if they want to pass laws that discriminate? Then he says that there’s nothing the court will do to protect women from government-sanctioned discrimination against them. And that’s a pretty shocking position to take in 2011. It’s especially shocking in light of the decades of precedents and the numbers of justices who have agreed that there is protection in the 14th Amendment against sex discrimination, and struck down many, many laws in many, many areas on the basis of that protection.”

Greenberger added that under Scalia’s doctrine, women could be legally barred from juries, paid less by the government, receive fewer benefits in the armed forces, and be excluded from state-run schools — all things that have happened in the past, before their rights to equal protection were enforced.

Republicans are once again using Islamphobic slams to motivate the base and set ground for their continuing radical assault on constitutional rights.  We should be so lucky to have Shari’a compliant finance and banking.  Think no usurious interest and fees.   Also, the aim of investing in Shari’a compliant finance is ethical and moral investing and hoarding is prohibited.  Money must be used for the good of the community.   Plus some revenues must be set aside to take care of widows and orphans.  The most outrageous thing about some of these lies is that Orthodox Jews in places like New York have similar laws and practices already in place.  You don’t hear complaints about that though, do you?

Rep. Allen West (R-FL), a newly-elected member who has loudly scapegoated Muslims and campaigned on a promise to oppose religious diversity, appeared on Frank Gaffney’s radio program last week. Gaffney, who routinely says that Obama is both a secret Muslim and a member of the “Muslim Brotherhood,” asked West about how the new Republican Congress plans to “take on Sharia as the enemy threat doctrine?” West said that, although he has not spoken with all of the new members, he hoped that Congress would focus on the “infiltration of the Sharia practice into all of our operating systems in our country as well as across Western civilization.” He explained that targeting Sharia should be part of America’s “national security strategy” and that a response to Sharia would somehow include “tailor[ing]” American “security systems, our political systems, economic systems, our cultural and educational systems, so that we can thwart this”

Propublica reports that Obama is trying to expand his options on Guantanamo.  The problem is that they also expand executive power in a way that would give a pretty good hard on to Dick Cheney.  Obama may use a signing statement.

Obama has issued a number of signing statements taking issue with more than a dozen legislative provisions and has come under some criticism for it from both Republicans and Democrats. Shortly after he took office, Obama promised to use them with less frequency than former President Bush, noting in a presidential memorandum in March 2009: “I will act with caution and restraint, based only on interpretations of the Constitution that are well-founded.”Bush established Guantanamo through executive order and issued over 150 signing statements, more than any other president. The practice was especially controversial when Bush applied it to legislation dealing with detainee treatment.

The American Bar Association issued a report in 2006 that called signing statements “contrary to the rule of law and our constitutional separation of powers.” The report was signed by a number of legal scholars including Harold Koh, who was then dean at Yale Law School and is today the top lawyer at the State Department and one of several advisers involved in the administration’s Guantanamo policy.

It seems that deceit webs–once woven–keep entangling the rule of law.

Robert Reich calls Obama and the Democrats enablers of Republicans and Their BIG Lie on his latest blog thread.

Republicans are telling Americans a Big Lie, and Obama and the Democrats are letting them. The Big Lie is our economic problems are due to a government that’s too large, and therefore the solution is to shrink it.

The truth is our economic problems stem from the biggest concentration of income and wealth at the top since 1928, combined with stagnant incomes for most of the rest of us. The result: Americans no longer have the purchasing power to keep the economy going at full capacity. Since the debt bubble burst, most Americans have had to reduce their spending; they need to repay their debts, can’t borrow as before, and must save for retirement.

The short-term solution is for government to counteract this shortfall by spending more, not less. The long-term solution is to spread the benefits of economic growth more widely (for example, through a more progressive income tax, a larger EITC, an exemption on the first $20K of income from payroll taxes and application of payroll taxes to incomes over $250K, stronger unions, and more and better investments in education and infrastructure.)

But instead of telling the truth, Obama has legitimized the Big Lie by freezing non-defense discretionary spending, freezing federal pay, touting his deficit commission co-chairs’ recommended $3 of spending cuts for every dollar of tax increase, and agreeing to extending the Bush tax cuts for the wealthy.

Will Obama stand up to the Big Lie? Will he use his State of the Union address to rebut it and tell the truth?

No and No.  Robert, you should know by now that Obama believes The Big Lie and that Democrats won’t stop him.  Raise your hand if you think The Big Question will be how long into the State of the Union Adress will it take before Obama tries to sell us The Big Lie and tells us we need to hand over and cut our Social Security?

We don’t appear to be the only group of liberals worried about Obama betraying the Democratic position on Social Security according to The Hill.

Maria Freese of the National Committee to Preserve Social Security and Medicare said she thinks Social Security is “more at risk than it was in 2005,” when President George W. Bush proposed far-reaching changes to the program, including personal accounts. The plan was vigorously opposed by Democrats and liberal groups and never came up for a vote in Congress.

Now, with Social Security coming to the forefront once again, liberal groups are preparing a campaign to oppose any “backroom” deals on retirement benefits.

“What I am really afraid of is another deal behind closed doors,” said Nancy Altman, the co-director of Social Security Works. “At least with President Bush, he went around the country on a tour and presented his plan, and people didn’t like it.”

This is such a true statement.  We saw that Obama was more than willing to sell us out–behind close doors–to big Pharma interests during health care reform.  We witnessed Obama dropping a public option so  quickly–despite campaign promises–that it must  been prearranged.   There’s got to be a connection to all these Investment Banker people showing up in the West Wing and that big pool of  money and investments in Treasury Bills out there that are pledged to those of us that have paid into the program since our first day of work.

Whats on your reading and blogging list today?

Psychopaths in Charge

Posted: January 2, 2011 | Author: | Filed under: Civil Liberties, Corporate Crime, financial institutions, Global Financial Crisis, Human Rights, income inequality, investment banking, psychology, torture, U.S. Economy, U.S. Politics | Tags: , , , , , , , , , , , | 73 Comments

In 1991, Brett Easton Ellis published a brilliant satirical novel called American Psycho. The book is narrated by a young man, Patrick Bateman, a graduate of Harvard and Harvard Business School, who is now a fabulously wealthy Wall Street investment banker with a pricey apartment on Manhattan’s Upper west side. In other words, he’s a typical ’80s yuppie, benefiting from the “Reagan Revolution.”

Bateman is utterly materialistic and narcissistic, obsessed with things like getting a reservation at the most trendy, expensive restaurant of the moment and having a more perfectly designed and printed business card than any of the other yuppies he works with. He is engaged to another yuppie named Evelyn, but he doesn’t really have any feelings for her. She is just another status symbol for him to show off to his Wall Street colleagues.

As the book progresses, it becomes clear that Bateman is filled with narcissistic rage. He begins torturing and murdering people–a homeless man, his secretary, a business associate, and more. The crimes become successively more violent and horrifying. In conversations with coworkers, he tells anecdotes about serial killers and even confesses his own crimes, but no one takes him seriously. These other numb, detached young men simply assume Bateman is joking and laugh at his bizarre, inappropriate remarks.

Toward the end of the book, there are hints that Bateman’s descriptions of violent murders could be hallucinations or fantasies–or they might have really happened. The interpretation is left to the reader.

Ellis told an interviewer that he wrote American Psycho at a time in his life when he was living an isolated, consumerist lifestyle, somewhat like Bateman’s:

He did not come out of me sitting down and wanting to write a grand sweeping indictment of yuppie culture. It initiated because my own isolation and alienation at a point in my life. I was living like Patrick Bateman. I was slipping into a consumerist kind of void that was supposed to give me confidence and make me feel good about myself but just made me feel worse and worse and worse about myself. That is where the tension of “American Psycho” came from. It wasn’t that I was going to make up this serial killer on Wall Street. High concept. Fantastic. It came from a much more personal place…

American Psycho was not well received by reviewers–before or after publication. In fact, the original publisher, Simon & Schuster, cancelled their contract with Ellis based on “aesthetic differences.” The book was never released in hardcover, but was eventually published in a quality paperback edition by Vintage Books. After its publication, Ellis was on the receiving end of a flood of hate mail and even death threats.

Today, Ellis points out, the blood and gore that was so shocking in his 1991 book is all around us.

You see it in “Saw” movies or in “Hostel” or anywhere. The gore is mainstream. The stuff you see now wass unimaginable in 1991 and that’s one reason why it caught on. The availability of that kind of subject matter was limited. It was limited to maybe certain graphic novels or transgressive fiction or certain out-there horror films but it wasn’t part of the mainstream. the accessibility of it was unique. This is how we’re rolling now.

What I took from the novel when I first read it was that it was a perfect representation of the societal effects of Reaganism. In the ’80s, American culture became more materialistic, superficial, and value-free than ever before. Reaganism taught that “greed is good.” Becoming wealthy became the highest goal for many Americans. At the same time, anyone who was poor, sick, or disabled was reviled. Reagan made Social Darwinism fashionable again.

Under Reagan, we closed hospitals for the mentally ill and threw them into the streets to beg and to wander our cities muttering as they listened to the voices in their heads. The need for low-cost housing and maintaining public infrastructure was ridiculed, and poor families with children began to wander our city streets homeless, sleeping in their cars or in public parks. Meanwhile the rich continued to get richer, greedier, and more callous toward people who had less than they did.

What other result could we have expected than the America we live in today? We live in a country in which so many people are cold, callous, and calculating, seeking to amass as much money as possible at the expense of ordinary taxpayers. Investment bankers like Ellis’s Patrick Bateman are treated like gods, shielded from any negative effects of their own lying, cheating, and stealing.

Today the message I take from American Psycho is even more troubling to me than when I first read the novel years ago. I see Bateman’s serial murders as symbolic of the damage out-of-control capitalism is doing to us as a people. I look at our political leaders and see empty, cold, callous people with no core values except how to get the most money and power for themselves, and screw the rest of us. They are serial murderers too, only they manage to distance themselves from those they murder in their wars and through their pro-corporate, anti-human policies.

The America we live in today is much like the surreal world that Brett Easton Ellis created in American Psycho, except that we now have even more electronic gadgets, more stuff to do on the internet, more “reality” TV shows where we can ridicule fat people or people with obsessive-compulsive disorder, or people trying to sing and dance. We have books and movies so violent that people become desensitized to depictions of blood and gore that seemed shocking in 1991. We are in decline in every way–our health, our incomes, our infrastructure, our rights, our values, our privacy. And the rich are richer and the poor are poorer now than at the end of the Ronald Reagan era.

I know I’m not the only one here who thinks we are being ruled by psychopaths–whether we’re talking about government officials or the heads of corporations. I really believe that, and I don’t mean it as hyperbole. I think the richest among us are the most likely to be detached and callous, because they don’t even have to see the poor and suffering people they are hurting with their greed. Their wealth insulates them from the daily struggles of the vast majority of Americans.

I think this is a subject that is worth talking about. Do you need to be at least a subclinical psychopath to be willing to do the kinds of immoral things government officials, corporate CEOs, and investment bankers do? Like lying in order to enter illegal wars so you can steal oil from other countries and murder hundreds of thousands of their citizens? Like sending young Americans to die for oil and a dying empire? Like taking jobs away from Americans and replacing them with slave labor in third world countries? Like throwing people out of their homes illegally? Like testing drugs on babies and children? Like polluting the water, air, and food with chemicals and refusing to clean up your messes?

I think you have to be a very sick person to do those things. And how is it different from what a serial killer does? First, government officials and corporate CEOs kill and maim and destroy people in far greater numbers and with more powerful weapons than a serial killer. Second, government officials and corporate CEOs don’t need to get close to the blood and death. They get other people to do their killing so they don’t have to see or hear their victims suffer.

So what exactly is a psychopath? Robert Hare, now emeritus professor of psychology at the University of British Columbia developed a checklist used by professionals to identify people with psychopathic tendencies.

People who are psychopathic prey ruthlessly on others using charm, deceit, violence or other methods that allow them to get with they want. The symptoms of psychopathy include: lack of a conscience or sense of guilt, lack of empathy, egocentricity, pathological lying, repeated violations of social norms, disregard for the law, shallow emotions, and a history of victimizing others.

Hare’s checklist (the PCL-R) is used in combination with a semi-structured clinical interview (an interview with set questions that allows the interviewer to follow up with his or her own questions when appropriate) and a detailed review of medical and psychiatric records. The following are the 20 traits for the evaluator to watch for:

•glib and superficial charm
•grandiose (exaggeratedly high) estimation of self
•need for stimulation
•pathological lying
•cunning and manipulativeness
•lack of remorse or guilt
•shallow affect (superficial emotional responsiveness)
•callousness and lack of empathy
•parasitic lifestyle
•poor behavioral controls
•sexual promiscuity
•early behavior problems
•lack of realistic long-term goals
•impulsivity
•irresponsibility
•failure to accept responsibility for own actions
•many short-term marital relationships
•juvenile delinquency
•revocation of conditional release
•criminal versatility

Not all of these characteristics would have to be met for someone to be diagnosed as a psychopath.

Each of the twenty items is given a score of 0, 1, or 2, based on how well it applies to the subject being tested. A prototypical psychopath would receive a maximum score of 40, while someone with absolutely no psychopathic traits or tendencies would receive a score of zero. A score of 30 or above qualifies a person for a diagnosis of psychopathy. People with no criminal backgrounds normally score around 5. Many non-psychopathic criminal offenders score around 22.

The checklist was originally designed for evaluating prison inmates, but not everyone with psychopathic characteristics becomes a criminal. I am arguing that many of them go into business or politics, am I’m far from the only one to suggest that. In fact Hare himself co-wrote a book called Snakes in Suits: When Psychopaths Go to Work. Other books that make similar arguments are The Sociopath Next Door, by Martha Stout, and The Psychopathy of Everyday Life: How Antisocial Personality Disorder Affects Us All, by Martin Kantor.

Just a bit about terminology. Psychopathy and Sociopathy are essential the same thing. Antisocial Personality Disorder is similar too, but could perhaps apply to people who wouldn’t score 30 on Hare’s checklist. I don’t know why the names of this disorder keep changing–it may just be because some psychiatrists see studying prison inmates as somewhat disreputable. Anyway, psychopathy is no longer listed in the Diagnostic and Statistical Manual of the American Psychiatric Association (latest version: DSM IV-TR). Instead, it is subsumed under “antisocial personality disorder.” Here is the DSM-IV-TR criteria for APD:

A. There is a pervasive pattern of disregard for and violation of the rights of others occurring since age 15 years, as indicated by three (or more) of the following:

1. failure to conform to social norms with respect to lawful behaviors as indicated by repeatedly performing acts that are grounds for arrest

2. deceitfulness, as indicated by repeated lying, use of aliases, or conning others for personal profit or pleasure

3. impulsivity or failure to plan ahead

4. irritability and aggressiveness, as indicated by repeated physical fights or assaults

5. reckless disregard for safety of self or others

6. consistent irresponsibility, as indicated by repeated failure to sustain consistent work behavior or honor financial obligations

7. lack of remorse, as indicated by being indifferent to or rationalizing having hurt, mistreated, or stolen from another.

B. The individual is at least age 18 years.

C. There is evidence of conduct disorder with onset before age 15 years.

D. The occurrence of antisocial behavior is not exclusively during the course of schizophrenia or a manic episode.

That official characteristics of APD are much less extreme than the ones on Hare’s checklist. I think it’s fairly obvious that many of our political and business leaders could meet at least three of those criteria. But can anyone argue that someone like Bernie Madoff could not be classified as a full-blown psychopath according to Hare’s criteria? What about Alan Simpson? What about someone like John Ensign or Mark Sanford? I believe I could make an argument for many more of our political and business leaders being either clinical or subclinical psychopaths.

There is some evidence that psychopathy is at least partly genetic, although most criminal psychopaths who have been studied had very abusive childhoods. There is also evidence for differences in the brains of psychopaths compared to typical brains.

I’m going to get into this topic in more detail in a future post. But for now, what do you think? Would it be useful for us to stop denying reality and accept that the psychopaths are in charge of our society?

Derivatives – The Dark Market

Posted: December 28, 2010 | Author: | Filed under: Barack Obama, commercial banking, Corporate Crime, Equity Markets, financial institutions, Global Financial Crisis, investment banking, Stock Market, The Bonus Class, The Great Recession, U.S. Economy, U.S. Politics | Tags: , , , , , , , , , , , , , | 35 Comments

[Dakinikat here:  We at Sky Dancing would like welcome fiscalliberal to the Front page!!!]

The major objective of this article is to begin the process of understanding the financial market to enable intelligent discussion on the blog.

One of the major pillars of financial collapse was Derivatives. They are very complex financial instruments with a wide diversity. They are described by a gaggle of terminology used by the high priests of finance. Because of complexity most of the books on the collapse skirt the detail of the Derivative Market. After we get through some basic definitions, we will focus on Credit Default Swaps (CDS); a subset of the Derivatives offerings. We will see how the government created a non regulated environment where fraud, compromised regulators and incompetent people ran the Investment Financial community in a very high risk mode.

Derivatives Defined

A Derivative is a financial instrument whose value is dependent on the value of another entity at a future time. Its primary function is to mitigate risk. A simple analogy would be your Home insurance. These policies guarantee that you will be remunerated if the value of your home falls due to fire, wind, or accident.  A relatively small premium of money can mitigate a large potential financial catastrophe. State regulators are in charge of most regular Insurance products and solvency is less of an issue as adequate capital reserves are defined.

We need to think of Derivatives as a “risk tool” meant to stabilize the financial businesses (markets). The wide variety of Derivatives creates confusion, so we are going to restrict our discussion to Credit Default Swaps (CDS).   Anticipating problems with Sub Prime mortgages, Securities were insured by investors. It was the Credit Default Swaps inability to perform that was a party to the financial collapse after the Lehman bankruptcy. They did not have the financial reserves to back up the policies they wrote How did that happen?

Deregulation

For our discussion today, three government deregulation actions are relevant.

  • 1999 Graham Leach Bliley Act repealed the 1933 Glass Steagall act. The Glass-Steagall Act prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and an insurance company.
  • April 28, 2004 SEC drastically relaxed leverage standards for the Big Five Investment Banks: Goldman, Merrill, Bear, Lehman and Morgan Stanly. This created a very high risk environment.  The session can be viewed here.

Financial self regulation brought the system down in 8 years. Bush de-funded Federal regulation. Greed, incompetence and corruption reigned supreme. Enron people went to jail. As of 2010, under Obama only bit players have been jailed. Civil fines are a joke.

Securitization Market

We need to understand the environment created by the above regulation changes  to understand the role of CDS Derivative failure. We will concentrate on the Real Estate Industry

Traditionally, according to HBSwiss, the real estate industry was handled by local banks who retained the loans. Their exposure to losses resulted in more careful origination of loans. For a long time, Fannie, Freddie and FHA were packaging (securitizing) mortgages and selling them to Investors. They enjoyed a good reputation because they had good loan origination standards. These were categorized as Prime mortgages. Generally these securities obtained a AAA rating which rarely changed. Good consistent returns were recorded with these products.

Early in the 2000 decade the Investment banks adopted the securitization model called Private Label Securities. They purchased their mortgages from unregulated brokers (Country Wide, Ameriquest etc) who had little or no standards regarding underwriting of loans. The private label market latched on to the fact that high risk “Sub Prime”  loans carried higher interest rates, hence higher profits. They had no exposure to the failure of the loan as risk was passed on to the Investors. They simply collected the lucrative fee’s.

Investment Banks packaged the loans (millions and billion level). They paid the rating agencies (S&P. Moody and Fitch) for ratings structuring the packages to get AAA ratings. It is clear the rating agencies did not do their job as traditionally solid AAA ratings were changed as the packages started to fail. These packages were sold to the domestic and world markets. Trillions of dollars were involved. The banks simply passed the risk on to the investors and collected the origination and servicing fee’s

CDS Market

Risk could be mitigated by purchasing a CDS against the failure of the security. So if the security failed the investor was held harmless. Remember that as of 2000 the CDS  market was unregulated. AIG – London Financial Services is the poster child of the CDS industry. AIG wrote most of the CDS contracts cheaply as they held inadequate reserves (in the event of a default) and had a good company rating based on the parent insurance company whose operations were regulated. Office of Thrift Supervision was the responsible regulator, but their presence was effectively non existent, Goldman Sachs (Hank Paulson as CEO) was one of their major clients.

However, late 2006 / 2007 AIG FP realized they were over exposed and got out of the market retaining the previous contracts. Recall in the unregulated market anyone could write CDS and the big banks did. As the Mortgage Backed Securities began to fail, the banks started writing CDS between the banks to mitigate risk always falsely believing the market would recover. This was necessary because When Bear and Lehman started to fail the banks were joined at the hip, guaranteeing each others toxic securities. Based on the 2004 SEC relaxing reserve requirements, that banks were leveraged up and things were starting to fail. In a leveraged market things get serious to critical in a matter of hours.

The daily, weekly and monthly credit markets froze up because nobody trusted anybody. Even GE was having trouble borrowing for daily operations. Andrew Ross Sorkin’s book—‘Too Big to Fail’— gives a good account of the scenario in 2008. Fannie and Freddie were in conservator ship, near bankruptcy Bear was bought on a fire sale by JP Morgan, Lehman was bankrupt, Merrill near bankruptcy was bought by Bank Of America and AIG had to be rescued by the Federal Government. Morgan Stanly and Goldman were within days of bankruptcy, but got bailed out by Warren Buffet and a Korean financial entity.

The AIG story is discussed in this newspaper article ‘Behind Insurer’s Crisis, Blind Eye to a Web of Risk’.

It is interesting to know that just before the 2008 collapse, the rating agencies down graded AIG forcing them to hold more reserves. They were forced to raise cash in a collapsing market.  In a high leverage industry, when it rains it pours.

Naked CDS

Investors can buy CDS on securities even though they do not own the security. This is equivalent to a neighbor buying insurance on your house. So if you know that a Mortgage Backed Security has a lot of high risk loans in it and is headed to failure, you buy a CDS anticipating the default. Michael Lewis’ book—‘The Big Short’–is all about the people who anticipated the failures and bought CDS products. A Bloomberg video interviews Lewis and it provides a lot of insight into the mess that evolved.

I look to Dakinkat, Gillian Tett, Yves Smith, and Janet Tavakoli on technical issues of Derivatives. Lewis’ forte is being able to write to the general public. His book gives a lot of insight to the CDS market nuances. It is interesting that Smith and Tavakoli consider Lewis to be a light weight. Yet, his book sales exceed theirs.

To get a notion of the size of the CDS market we need to look at these numbers. The size of our national economy this year is roughly $15 trillion. The whole world GDP is about $56 trillion. At the time of the 2008 failure, the size of the Credit Default Swaps (CDS) market was $64 trillion. The exposure at the time of the collapse was huge. The magnitude of the Naked CDS is not known, but is understood to be huge.

Given that the unregulated CDS underwriters were prone to not provide adequate capital reserves for defaults, there was a massive liquidity problem, hence the government had to step in and bail out the likes of AIG and banks who wrote these products.

The whole CDS market is described as being part of the Casino Gambling image in the financial markets

Current Status

The Dodd Frank Bill has a moderate approach for Derivatives Regulation. However it is up to the regulators for implementation and the banks are attempting to minimize the impact of regulation. This is documented by two recent NYT articles.

It’s Not Over Until It’s in the Rules

A Secretive Banking Elite Rules Trading in Derivatives

A short summary of the above articles is that the big banks are attempting to save their Oligopoly through the Risk Committees of the Clearing Houses. This is being done by imposing high capital reserve requirements for participants. This has the effect of limiting competition which limits price competition and transparency. The elephant in the room is the risk committee’s saying certain derivatives are to complex to be cleared. This gets us right back to where we were in the financial crisis. Over the Counter non clearing house products are the most profitable and open to risk.

In the spirit of Brooksly Born regulation, It has been proposed that Derivatives be run using a Clearing House or a Exchange Trading Requirement.

From The Economist:

Clearing House: A clearing requirement is a requirement that all eligible derivatives be cleared on a central clearinghouse (also known as a central counterparty, or CCP). A clearinghouse provides critical counterparty risk mitigation by mutualizing the losses from a clearing member’s failure, netting clearing members’ trades out every day, and requiring that parties post collateral every day. Clearinghouses also centralize trade reporting, and can provide any level of post-trade transparency to the OTC derivatives markets that your heart desires — same-day trade reporting, including prices, aggregate and counterparty-level position data, etc. Virtually all of the harmful opacity and murkiness of the current OTC derivatives markets can be ended with just a clearing requirement — that is, a clearing requirement is a prerequisite for getting rid of the harmful opacity in OTC derivatives

Exchange Trading: An exchange-trading requirement, on the other hand, is simply a requirement that all eligible derivatives use a particular type of trade execution venue: exchanges (also known as “boards of trade”)..The exchange is just the trade execution venue (think NYSE vs. Nasdaq). The only thing that an exchange-trading requirement adds to the clearing requirement is “pre-trade price transparency.”

The clearing house is obviously the better because it brings a degree of financial integrity and transparency. It certainly is the more expensive of the options, but its cost  is minuscule when we think of the financial collapse.

However based on the articles above, it is clear that the big bankers are attempting to preserve their oligopoly in terms of the CDS market. They also want to preserve the option to take the market back to the opaque high risk environment because of profit opportunities.  The Opaque Over the Counter market is the biggest threat to the stability of the market

In Dodd – Frank, the CFTC and SEC have co-jurisdiction The CFTC commission seems to be moving to the bankers view. SEC has been relatively quiet on this subject

We need to remember that Mary Schapiro (SEC)  and Gary Gensler (CFTC) were part of the problem before the 2008 Financial Crisis. It remains to be seen how well they address the problem. Will they do the right thing or are they financial industry moles?

Tuesday Reads

Posted: December 28, 2010 | Author: | Filed under: Global Financial Crisis, Gulf Oil Spill, investment banking, jobs, New Orleans, the blogosphere, The Bonus Class, The Great Recession, the villagers, U.S. Economy, U.S. Politics, We are so F'd, Wikileaks | Tags: , , , , , , , , , , , , , , , , , | 29 Comments
Good Morning!

I had a productive day yesterday for a change and I hope you did too!  Dare I go shop for plumbing stuff today?  I was bemoaning a shortage of headlines on Sunday.   I should be a bit  more careful about wishing for things because today’s list of reads will be long.

The other good news for me is that we’re going from hard freeze warnings to weather in the 70s this weekend.  It sounds like it’s going to be a fun New Year’s Eve here in New Orleans!  That should explain the picture!  I also wanted to give you a bit of  New Orleans News before I moved on to other things.

First, if you haven’t had a chance to read Sandy Rosenthal’s piece at HuffPo on the failure of the Levees during Hurricane Katrina, please do so.  There are still folks out there that think our devastation was from Hurricane Katrina and that just isn’t so.  I was on the edge of the bowl.  I know.  My house experienced very little actual damage because my house was on high ground and above the waters.  A failure of engineering devastated my city. It was not an act of nature.  I signed the petition.  Will you?

Last week, I wrote to the New York Times asking them to please resist using fast and easy “Katrina shorthand.” Forty-eight hours passed and we heard no response, so we decided to let our supporters step in. We urged our followers to sign our petition to the NY Times urging the paper to be more specific when referencing the flood disaster.

Over 1,000 people all across the nation signed our petition in under 48 hours. This immediate huge response – during the holiday no less – will hopefully show the New York Times that informed citizens understand that “Katrina” did not flood New Orleans. Civil engineering mistakes did.

Saying Katrina flooded the city protects the human beings responsible for the levee/floodwall failures. It is also dangerous since 55% of the American people lives in counties protected by levees.

If you haven’t yet, please sign our petition. We will keep it live until Jan 4, 2011.

In a similar vein, I would like to shout out HAPPY BIRTHDAY HARRY!!! to fellow New Orleans Blogger, neighbor, actor, musician, and polymath Harry Shearer (12/23/49) who made his film debut in the great epic  ‘Abbott and Costello Go To Mars’ in 1953.   There’s another New Orleans connection in that movie.  The Abbot and Costello characters–Lester and Orville–accidentally launch a rocket that should’ve been Mars bound.  They land in New Orleans for Mardi Gras instead.   Harry plays an uncredited “Boy”.

I also want to offer up a plug for Shearer’s wonderful documentary on the Levee Failure called ‘The Big Uneasy’ that was released last August on our 5th Katrina Anniversary.  It’s going to be re-released in 2011.    I’m including an interview with him by local radio show host Kat (not me).  You’ll learn that the Golden Globes are a simple piece of business and that Harry’s songstress wife is spoonable.   Who knew?  Also there seems that there’s a chance his documentary will be shown on PBS so you may get to see it there. I wonder if we can help encourage that situation.

I’d like to take another chance to remind you that we’re still living with the results of the BP Oil Gusher here on the Gulf Coast. There also appears to be covered-up as well as forgotten stories down here.  You may want to take a look at this from Open Channel on MSNBC.com: ‘ Is dispersant still being used in the Gulf?” This story reports on pictures and samples take in early August that are being investigated now. I’d written about some of these reports earlier.

Kaltofen is among the scientists retained by New Orleans attorney Stuart Smith to conduct independent environmental testing data from the Gulf on behalf of clients who are seeking damages from BP. (Click here to read about their effort.)

An independent marine chemist who reviewed the data said that their conclusion stands up.

“The analytical techniques are correct and well accepted,” said Ted Van Vleet, a professor at the College of Marine Science at the University of South Florida. “Based on their data, it does appear that dispersant is present.”

Why responders would continue to use chemical dispersants after the government announced a halt is a mystery. If the oil was gone or already dispersed, as the federal government and BP have said, what would be the point? And, because dispersants don’t work very well on oil that has been “weathered” by the elements over long periods of times, there would be little point in spraying it that situation.

I wanted to share a New Orleans and indeed a Southern New Year’s eve tradition. We serve a concoction of black eyed peas, cabbage and sausage/ham called ‘Hoppin’ John’ to bring us luck and wealth in the New Year.  I evidently didn’t make enough of it last year, so I’m planning to cook more this year.  The pea’s black eyes represent coins, the cabbage represents cash, and the sausage or ham is meat that always symbolizes luxury to hungry, poor people.

Here’s  Emeril’s ‘Hoppin’ John’ recipe provided courtesy the Food Network:

Hoppin’ John

Prep Time: 15 min    Cook Time:50 min     Serves: 10

Ingredients

1 tablespoon olive oil
1 large ham hock
1 cup onion, chopped
1/2 cup celery, chopped
1/2 cup green pepper, chopped
1 tablespoon chopped garlic
1 pound black-eyed peas, soaked overnight and rinsed
1 quart chicken stock
Bay leaf
1 teaspoon dry thyme leaves
Salt, black pepper, and cayenne
3 tablespoons finely chopped green onion
3 cups steamed white rice

Directions

Heat oil in a large soup pot, add the ham hock and sear on all sides for 4 minutes. Add the onion, celery, green pepper, and garlic, cook for 4 minutes. Add the black-eyed peas, stock, bay leaves, thyme, and seasonings. Bring to a boil, reduce the heat and simmer for 40 minutes, or until the peas are creamy and tender, stir occasionally. If the liquid evaporates, add more water or stock. Adjust seasonings, and garnish with green onions. Serve over rice.

Okay, so enough about my home town.

The AFL-CIO wants to talk unions this holiday season because there is so much misinformation about these days. It’s a nice list of myths and facts that you may want to arm yourself with when talking to those right wing nattering nabobs of negativism.

MYTH: Unions only care about their members.

FACT: Unions are fighting to improve the lives of all workers.

  • It’s easy to forget that we have unions to thank for a lot of things we take for granted today in today’s workplaces: the minimum wage, the eight-hour work day, child labor laws, health and safety standards, and even the weekend.
  • Today, unions across the country are on the frontlines advocating for basic workplace reforms like increases in the minimum wage, and pushing lawmakers to require paid sick leave.
  • Studies show that a large union presence in an industry or region can raise wages even for non-union workers. That means more consumer spending, and a stronger economy for us all.
  • So it’s no wonder that most Americans (61 percent) believe that “labor unions are necessary to protect the working person,” according to Pew’s most recent values survey.

Here’s a gift that keeps on giving er… taking from FT: “AIG secures $4.3bn in credit lines“.

AIG, took a step closer to independence from government as it said it had secured $4.3bn in credit facilities.
The US insurer bailed out by Washington during the financial crisis is is in the process of repaying the $95bn the US Treasury and the Federal Reserve Bank of New York lent following its disastrous decision to insure billions of dollars worth of securities backed by mortgages.

Under the facilities arranged by 36 banks and administered by JPMorgan Chase, AIG can borrow $1.5bn over three years and an additional $1.5bn over 364 days, according to a regulatory filing. Separately, Chartis, an AIG division, obtained a $1.3bn credit line.

Let’s just hope they clean up their act this time.  I’m not holding my breath or any stock offers that may come up. Notice one of the usual suspects is ‘facilitating’ the arrangements. Cue ‘The Godfather’ music, please.

There’s an item from Slate that you may want to check out.  It’s “A selection of gaffes from the 2010 campaign we should forgive”.  Here’s one from Pelosi that gave me a chuckle.

Nancy Pelosi: “We have to pass the bill so that you can find out what is in it.”

On March 9, the Speaker of the House spoke to the National Association of Counties about the health care bill that was days away from final passage. This was the phrase that launched a thousand campaign ads. Nine months later, this is remembered as Pelosi admitting what Tea Partiers had feared: that Democrats were ramming through bad bills without reading them.

BostonBoomer sent me to Glenn Greenwald’s latest which really is a must read: ‘ The worsening journalistic disgrace at Wired’.  Greenwald’s work on behalf of massacre leaker Bradley Manning is Nobel Peace Prize worthy. I don’t mean aspirational prizes either.

For more than six months, Wired‘s Senior Editor Kevin Poulsen has possessed — but refuses to publish — the key evidence in one of the year’s most significant political stories:  the arrest of U.S. Army PFC Bradley Manning for allegedly acting as WikiLeaks’ source. In late May, Adrian Lamo — at the same time he was working with the FBI as a government informant against Manning — gave Poulsen what he purported to be the full chat logs between Manning and Lamo in which the Army Private allegedly confessed to having been the source for the various cables, documents and video that WikiLeaks released throughout this year. In interviews with me in June, both Poulsen and Lamo confirmed that Lamo placed no substantive restrictions on Poulsen with regard to the chat logs:  Wired was and remains free to publish the logs in their entirety.

We’re waiting for a response from Wired since vacation seem to preempt media responsibility these days. Will we find out that there’s been some active media suppression of the truth regard Manning’s accusations today?   This morning, Greenwald continued his admonition to fellow journalists in the excellent article “The merger of journalists and government officials”.

From the start of the WikiLeaks controversy, the most striking aspect for me has been that the ones who are leading the crusade against the transparency brought about by WikiLeaks — the ones most enraged about the leaks and the subversion of government secrecy — have been . . . America’s intrepid Watchdog journalists.  What illustrates how warped our political and media culture is as potently as that?  It just never seems to dawn on them — even when you explain it — that the transparency and undermining of the secrecy regime against which they are angrily railing is supposed to be . . . what they do.

There’s another economics story covered on The New Yorker‘s The Financial Page headlined:  ‘The Jobs Crisis’ by James Surowiecki.  It’s a good explanation of a debate between economists and politicians right now.  Guess which one knows best on this?

Why have new jobs been so hard to come by? One view blames cyclical economic factors: at times when everyone is cautious about spending, companies are slow to expand capacity and take on more workers. But another, more skeptical account has emerged, which argues that a big part of the problem is a mismatch between the jobs that are available and the skills that people have. According to this view, many of the jobs that existed before the recession (in home building, for example) are gone for good, and the people who held those jobs don’t have the skills needed to work in other fields. A big chunk of current unemployment, the argument goes, is therefore structural, not cyclical: resurgent demand won’t make it go away.

Though this may sound like an academic argument, its consequences are all too real. If the problem is a lack of demand, policies that boost demand—fiscal stimulus, aggressive monetary policy—will help. But if unemployment is mainly structural there’s little we can do about it: we just need to wait for the market to sort things out, which is going to take a while.

The structural argument sounds plausible: it fits our sense that there’s a price to be paid for the excesses of the past decade; that the U.S. economy was profoundly out of whack before the recession hit; and that we need major changes in the kind of work people do. But there’s surprisingly little evidence for it. If the problems with the job market really were structural, you’d expect job losses to be heavily concentrated in a few industries, the ones that are disappearing as a result of the bursting of the bubble. And if there were industries that were having trouble finding enough qualified workers, you’d expect them to have lots of job vacancies, and to be paying their existing workers more and working them longer hours.

Here’s a fun read at New York Magazine about living large in a libertarian world.

No one exemplifies that streak more than Ron Paul—unless you count his son Rand. When Rand Paul strolled onstage in May 2010, the newly declared Republican nominee for Kentucky’s U.S. Senate seat, he entered to the strains of Rush, the boomer rock band famous for its allegiance to libertarianism and Ayn Rand. It was a dog whistle—a wink to free-marketers and classic-rock fans savvy enough to get the reference, but likely to sail over the heads of most Republicans. Paul’s campaign was full of such goodies. He name-dropped Austrian economist Friedrich Hayek’s seminal The Road to Serfdom. He cut a YouTube video denying that he was named after Ayn Rand but professing to have read all of her novels. He spoke in the stark black-and-white terms of libertarian purism. “Do we believe in the individual, or do we believe in the state?” he asked the crowd in Bowling Green, Kentucky, on Election Night.

It’s clear why he played coy. For all the talk about casting off government shackles, libertarianism is still considered the crazy uncle of American politics: loud and cocky and occasionally profound but always a bit unhinged. And Rand Paul’s dad is the craziest uncle of all. Ron Paul wants to “end the Fed,” as the title of his book proclaims, and return the country to the gold standard—stances that have made him a tea-party icon. Now, as incoming chairman of the subcommittee that oversees the Fed, he’ll have an even bigger platform. Paul Sr. says there’s not much daylight between him and his son. “I can’t think of anything we grossly disagree on,” he says.

Well, they must have both been impacted by the same disease or environmental catastrophe to share so many views so out of the mainstream and be so far removed from experience, data, and science.  I can’t help but believe the more the media shines a bright light on them, the more the warts and the brain damage will become noticeable.

So, one more suggested read comes via Lambert and Corrente.  It’s really interesting piece from The Atlantic on ‘The Hazards of Nerd Supremacy: The Case of WikiLeaks’. It talks about Hackers, Assange, and the Hacker code of conduct. Any one who as read Assange’s manifest can see the connect and disconnect that simultaneously occur in the ideas.  BB and had discussed that Assange might have a form of Aspergers disease about a month ago and I was also interested to see that Lambert, Valhalla, and some others had similar thoughts. It frequently runs in brilliant people who can decode a lot of things with the exception of other people. Anyway, here’s a taste of Jaron Lanier.

The strategy of Wikileaks, as explained in an essay by Julian Assange, is to make the world transparent, so that closed organizations are disabled, and open ones aren’t hurt. But he’s wrong. Actually, a free flow of digital information enables two diametrically opposed patterns:  low-commitment anarchy on the one hand and absolute secrecy married to total ambition on the other.

While many individuals in Wikileaks would probably protest that they don’t personally advocate radical ideas about transparency for everybody but hackers, architecture can force all our hands. This is exactly what happens in current online culture. Either everything is utterly out in the open, like a music file copied a thousand times or a light weight hagiography on Facebook, or it is perfectly protected, like the commercially valuable dossiers on each of us held by Facebook or the files saved for blackmail by Wikileaks.

The Wikileaks method punishes a nation — or any human undertaking — that falls short of absolute, total transparency, which is all human undertakings, but perversely rewards an absolute lack of transparency. Thus an iron-shut government doesn’t have leaks to the site, but a mostly-open government does.

I’m still fascinated by the sideshow that is driving ad hominem attacks on Assange and the women involved with the charges.  Still, that does not cloud my appreciation of what’s being released by Wikileaks.  We’ll definitely have more coming.  I’m personally waiting for the BOA stuff as that’s the stuff that I can personally decode.  I’m glad we’re extending the Front Page Team to include more and more people that can tackle some of the other technical stuff from their vantage points.  Stay tuned for more on all of this.

Just ONE MORE NAWLINS THANG: New Orleans Saints 17 – Atlanta Falcons 14.  My home town continues to be the Great American Comeback Story.

So, what’s on your reading and blogging list today?
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