Krugman on Madoff...

...and how Madoff was not all that different from Wall Street business as usual:

Well, Mr. Madoff allegedly skipped a few steps, simply stealing his clients’ money rather than collecting big fees while exposing investors to risks they didn’t understand. And while Mr. Madoff was apparently a self-conscious fraud, many people on Wall Street believed their own hype. Still, the end result was the same (except for the house arrest): the money managers got rich; the investors saw their money disappear.

More Change You Can Stick in Your Crack Pipe and Smoke it!

Interesting article about Obama's pick to head the Commodities Futures Trading Commission, Gary Gensler. The upshot:

The choice of Gensler for that mission is ironic. While in the Clinton administration, the former assistant Treasury secretary helped oppose regulation of the exotic derivatives at the center of the financial crisis.

That pretty much describes everybody on Obama's economic team.

HHHHOOOOLLLLLYYYY CCCCRRRRAAAAAPPPP!!!!

A must-read post by Rob Patterson on the key points of the Boyd 2008 Meeting, a group looking to apply the theories of John Boyd, an influential military strategist, to survive what they see as the coming economic and political unraveling. Here are Patterson's first two bullet points:

• That there is no soft landing. We are not in a recession. We are not even in a depression. We are at the end of an era. The Tipping Point is of course the financial collapse. The Vast Ponzi Scheme of our financial world - with the vast sums in the Derivative Market and the Credit Bubble all in effect lost - cannot be saved. There is not enough money in the national accounts to pull this back.

• The search for efficiency and the urge to consume has set us all up like a row of dominoes - there is no buffer, no resiliency. As one problem rises it causes another. As one solution is tried it drives another problem. We all pull back and the consumer economy stalls. The auto industry and credit firms feeds the media (40% of conventional advertising). Papers and TV and Radio networks, many subject to LBO's will have to fail as per the Tribune. Every sector will be laying people off. Sales of all things fall off a cliff - driving more business failures and layoffs. Cities and states that depend on sales tax and property tax and the credit markets can rely on none of these. So they too will have to lay off millions - thus making all the problems worse. National governments will be asked to save us all and of course cannot. As States and Cities get squeezed and cannot borrow, they will too lay off millions - teachers, firemen police. No one will be safe.

Read the whole thing!

Alexander Cockburn On Madoff

Interesting article in Counterpunch about how the Madoff fiasco is disproportionally affecting Jews:

It’s not just ruined heiresses in the Palm Beach Country Club now faced with the prospect of dividing the contents of the Whiskas can into two equal portions for mistress and cat, it’s academics on Ivy League campuses, doctors in Santa Monica, rich people from Boston to San Francisco to the West Side of Los Angeles finding their retirement nest eggs or charitable trusts wiped out overnight.

The True Story of Bush and the Shoes...

Awesome Gawker Piece About Shana Madoff!

Pretty funny. So Shana Madoff, Bernie Madoff's niece, married a lawyer at the SEC. Apparently, her job at the family firm was keeping regulators at bay. Talk about taking your job seriously!

Gloom & Doom from Mike Whitney Part 6,721,452

Mike Whitney from Counterpunch argues that the Fed's massive injection of liquidity into the financial system is having little effect. He quotes Christopher Woods from the Wall Street Journal:

"The origins of the modern conventional wisdom lies in the simplistic monetarist interpretation of the Great Depression popularized by Milton Friedman and taught to generations of economics students ever since. This argued that the Great Depression could have been avoided if the Federal Reserve had been more proactive about printing money. Yet the Japanese experience of the 1990s -- persistent deflationary malaise unresponsive to near zero-percent interest rates -- shows that it is not so easy to inflate one's way out of a debt bust."

Whitney goes on to say:

The Fed has increased the money supply at an unprecedented pace and expanded its balance sheet to $2.25 trillion, but velocity is down. [snip] According to the Wall Street Journal, " the issuance of nonagency mortgage-backed securities (MBS) in America has plunged by 98 per cent year-on-year to a monthly average of $0.82 billion in the past four months, down from a peak of $136 billion in June 2006. There has been no new issuance in commercial MBS since July. This collapse in securitization is intensely deflationary."

Whitney thinks there is not going to be any real structural change out of Obama's economic team, which is the only thing that can restore confidence in the financial system. He writes:

And how can confidence be strengthened when no one pays for predatory lending, ratings manipulation, malfeasance, fraud, or any other white collar crime? So far, not one indictment has been served in the biggest financial swindle of all time. That's not how a "rules-based" system is supposed to operate.

[snip]

Treasury Secretary Timothy Geithner and presidential adviser Lawrence Summers believe they can fire off a stimulus salvo and put the economy back on track, but it will take more than that. The financial system needs fundamental structural reform and both men rose to power because they proved themselves defenders of the status quo. Geithner and Summers may nibble at the edges and make grandiloquent proclamations about rebuilding the system, but when it’s time to pull the trigger, they will subvert every attempt to regulate or oversee the system which they feel is the sole province of the establishment elites who own the big financial institutions. There's bound to be plenty of blasting trumpets and celebratory confetti to greet Obama's economic whiz kids. Just don't expect change. Barring a complete economic meltdown, the rot at the heart of the system will continue to fester and grow under Obama just as it did under Bush and Clinton.

Since I'm an Obamacynic, I agree 100%. So what's in store? A long, deep recession. Read the whole piece!

Avian Mental Health Break

Really?

Hall & Oates Say Goodbye to Alan Colmes!

Pretty funny bit on the Daily Show.

Katha Pollitt Tears Bill Ayers a New One!

It couldn't have been easy for Bill Ayers to keep quiet while the McCain campaign tarred him as the Obama's best friend, the terrorist. Unfortunately, the silence was too good to last. On Saturday's New York Times op-ed page, he announced that "it's finally time to tell my true story." Like his memoir, Fugitive Days , "The Real Bill Ayers" is a sentimentalized, self-justifying whitewash of his role in the weirdo violent fringe of the 1960s-70s antiwar left.

Ouch! Read the whole post here.

Friday Night Talking Cat Blogging

Colin Powell to Sarah Palin: GFY!

I think GFY should enter the texting lexicon like IMHO or LOL. It's sure succinct: Go F* Yourself! Anyway, here's what Colin Powell, speaking to Fareed Zakaria on CNN, had to say about Sarah Palin:

"Gov. Palin, to some extent, pushed the party more to the right, and I think she had something of a polarizing effect when she talked about how small town values are good. Well, most of us don’t live in small towns. And I was raised in the South Bronx, and there’s nothing wrong with my value system from the South Bronx.

And when they came to Virginia and said the southern part of Virginia is good and the northern part of Virginia is bad. The only problem with that is there are more votes in the northern part of Virginia than there are in the southern part of Virginia, so that doesn’t work."

The YouTube video is posted on Think Progress. The 1st comment in the comments section is pretty funny:

1. shoeless Says:

   ---

   Well, most of us don’t live in small towns.

   That’s why they are small.

   December 11th, 2008 at 5:05 pm

   ---

Donde es el Joe Stiglitz?

Interesting article by Michael Hirsh in Newsweek, wondering why NYU economist and Nobel price winner Joseph Stiglitz has not yet been offered a position on Obama's economic team. He's been a vocal critic of Rubin's and Summers' policies for years, so they don't like him much:

No surprise there. Stiglitz, more than anyone on the Washington scene, was the biggest fly in the ointment of "free-market fundamentalism" pressed on the world in the '90s by Summers, Geithner and their mentor, former Treasury secretary Robert Rubin—advice that has now contributed to the worst financial crisis since the Great Depression. It's not just that Stiglitz's Nobel-winning work, building on John Maynard Keynes's insights, uncovered profound fallacies in the Reagan-era idea that markets, especially in finance, can always correct themselves (good call, Nobel committee). In his writings and speeches since serving as chairman of Bill Clinton's Council of Economic Advisors and then chief economist of the World Bank, Stiglitz has been the leading voice opposed to the mindless liberalization of capital flows that brought us to where we are today.

Everyone's a Critic!

Apparently, karaoke is quite the rage in Malaysia, but bad karaoke etiquette will get you killed. From the New York Times:

A 23-year-old Malaysian man was killed on Thursday night after reportedly enraging other customers who felt that he “hogged the microphone” at what Malaysia’s Star Online described as “a coffeeshop-cum-karaoke outlet” in the town of Sandakan, on the island of Borneo.