quote of the day

"The notion that when we are fighting two wars, we're not supposed to consider raising taxes on [the wealthiest 1 percent] is one sign of a country that's no longer serious. Why do so few military hawks acknowledge that if they lack the gumption to ask taxpayers to finance the projection of American military power, we won't be able to project it in the long run?"

- E.J. Dionne on the unsustainable Empire

and now for the Obama quote

18 days before the BP Gulf of Mexico oil rig disaster, Obama seemed to be reading from a Big Oil talking points memo.

President Obama on April 2, 2010: "I don’t agree with the notion that we shouldn’t do anything. It turns out, by the way, that oil rigs today generally don’t cause spills. They are technologically very advanced. Even during Katrina, the spills didn’t come from the oil rigs, they came from the refineries onshore."

Sarah Palin quote of the day

"After inheriting a good pro-development GOP plan that opened up both coasts for drilling, the Obama administration halted development ... and now we're gonna study, more study of the South Atlantic and parts of the Gulf of Mexico ... my goodness, folks, these areas have been studied to death ... I have seen so many, many studies! I say, let's send the White House this message: that, you know, we can save taxpayer time, save money and announce: there is oil and gas down there, and we can produce it safely and responsibly! We don't need more studies, we need more action! Because energy produced in America is security for America, and it is jobs for American workers, jobs that can't be outsourced. Let's drill baby, drill, not stall, baby, stall!"

-Sarah Palin on March 31, 2010. (Three weeks before the BP oil spill.)

Obama and BP oil

Oil giant BP has given more than $3.5 million to federal candidates over the past 20 years, with the largest chunk of their money going to Obama, according to the Center for Responsive Politics.


Congress' Top Recipients of BP Oil Money:

Sen. Barack Obama (D-IL) $77,051
Rep. Don Young (R-AK) $73,000
Sen. George Voinovich (R-OH) $41,400
Sen. John McCain (R-AZ) $44,899
Sen. Mary Landreiu (D-LA) $28,000


In 2000, BP gave 39 percent more to Republican candidates, but by 2008, Democrats had nearly pulled even with Republicans in BP donations.

defining terrorism

U.S. missile attacks vs. unstamped letters:

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swine flu vaccine to those who need it most

the CDC is making sure that Wall Street bankers are getting first dibs...

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and

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Capitalism Devours Itself by Andy K.

The new derivatives trading bill being debated in Congress is a toothless, spineless joke of a bill (authored by Dems) intended to provide oversight and transparency for the unregulated secret $600 trillion market for derivatives. And even after Treasury Secretary Geithner watered down the new bill with exemptions and loopholes for most of Wall Street, the House Republicans still voted against it, insisting that government intervention will, uh, suffocate free enterprise and, um, stifle innovation.

In my mind, regulating a secret $600 trillion market that killed Lehman Brothers, Merrill Lynch, Bear Stearns, AIG, and ignited the biggest economic catastrophe since the Great Depression would be an uncontroversial bipartisan no-brainer that any semi-literate Congressman would support immediately. There are 2 obvious changes that could easily fix the derivatives market:

1) Every buyer and seller of derivatives must prove they have the cash to cover their bets.

2) Every derivative contract must be listed on an exchange. (An exchange is a clearinghouse where trades are made, the most famous examples being the New York Stock Exchange (NYSE) and NASDAQ).

The Big Banks hate both of these new rules, but they really hate Rule #2, the creation of an exchange exclusively for derivatives. And that has puzzled me, because every gargantuan American corporation you can think of (Exxon, Procter&Gamble, AT&T, WalMart) sells its own stock on the NYSE and capitalists love the NYSE. The purpose of an exchange is to provide transparency for buyers and sellers, which increases efficiency and reduces fraud. This is boring old-fashioned Capitalism 101 and it's not particularly radical; the NYSE has flourished since 1792, so what's the problem?

The problem is that the NYSE publishes the price of every stock! And the Big Banks do not want the prices of derivatives published. Because if the prices are published, then the investors who hire the Big Banks as brokers would realize they're being screwed by their own broker. The investors would shop around for better deals from brokers with lower fees and if there's one thing I know about Big Banks, it's that they hate lowering their fees.

Senator Maria Cantwell, (D-WA) explained it this way: "Wall Street has a lot of reasons for wanting to keep the unregulated derivatives casino open for business. Specifically, Sanford C. Bernstein & Co. analyst Brad Hintz recently estimated that Wall Street revenue from trading unregulated derivatives might decline by 15 percent just by moving trades to clearinghouses. That is because the current system enables banks to profit from secret pricing - pocketing the gap between what they charge customers and what they pay to hedge their trades. With transparent pricing and true competition on an exchange, higher gambling returns are much more difficult to achieve. Public disclosure of price data would also mean that dealers no longer had better price data than clients."

In other words, a market with secret prices isn't an honest market, it's a rigged market.

Prediction: rigged markets aren't sustainable. They collapse.