The world freaked out because Kurt Cobain blew his head off, so we didn't hear much about the passing of Bill Hicks, America's would have been greatest stand-up comic. He and George Carlin were cut from the same cloth, and now they're both gone...
I neither shot nor edited this video. The text comments are not mine. The only bitch about the show I have is that we had backstage passes and because the stage got rushed, Morrissey was ushered right by us on to the bus which hastily drove away. Though by the end of the show, his voice was a little ragged out...
My childhood friend John is the young man resembling Morrissey who lowers his head at the end.
Jim Bunning, a Republican from Kentucky, is single-handedly blocking Senate action needed to prevent an estimated 1.2 million American workers from prematurely losing their unemployment benefits next month.
As Democratic senators asked again and again for unanimous consent for a vote on a 30-day extension Thursday night, Bunning refused to go along.
And when Sen. Jeff Merkley (D-Ore.) begged him to drop his objection, Politico reports, Bunning replied: "Tough shit."
Bunning says he doesn't oppose extending benefits -- he just doesn't want the money that's required added to the deficit. He proposes paying for the 30-day extension with stimulus funds. The Senate's GOP leadership did not support him in his objections.
And at one point during the debate, which dragged on till nearly midnight, Bunning complained of missing a basketball game.
"I have missed the Kentucky-South Carolina game that started at 9:00," he said,"and it's the only redeeming chance we had to beat South Carolina since they're the only team that has beat Kentucky this year.
The unemployment rate in Kentucky is 10.7 percent.
The stakes are enormous: provisions of last year's stimulus bill that allow extra weeks of unemployment benefits and COBRA health coverage are set to expire on Feb. 28. State workforce agencies have already sent out letters informing recipients that they'll be ineligible for extra "tiers" of benefits starting next month. The National Employment Law Project estimates that 1.2 million people will prematurely lose benefits in March.
Judy Conti, a lobbyist for the NELP, said that even when Bunning is eventually thwarted and the extension is passed, state governments will still have to deal with the extra administrative costs of shutting down and restarting the extended benefits programs.
"Once the program is retroactively reauthorized, the federal government is going to send the same amount of money, but his own state government is going to have to spend even more money," Conti said.
"What happened last night was an absolute disgrace. There is a time and a place a purpose for debate on deficit reduction, but you don't make your stand on the back of the unemployed. It is ill-informed, counter productive and just cruel."
Daily Kos produced a video of Bunning's obstruction:
UPDATE 12:00 PM -- Senate Majority Leader Harry Reid (D-Nev.) made a last-minute attempt on Friday morning to get Bunning to let the Senate move forward with extending benefits.
"We talk a lot in the Senate about procedure. Our debate sometimes relates only to procedure. And often that's appropriate," Reid said. "And, as we know, sometimes these procedural rules we have in the Senate are complex. But the issue before us today is not something that's arcane, very ritualistic or complex. It's very simple. And it's clear -- clear that it's going to be a lot more noticeable by people Monday morning, because it's going to affect the lives of thousands of Americans and their livelihoods.
"By Monday morning tens of thousands of Nevadans and more than one million Americans who rely on unemployment insurance and health benefits will simply lose them."
(The National Employment Law Project estimates that 1.2 million people will lose their benefits over the course of March, not at all once on Monday.)
Sen. John Cornyn (R-Texas) took the floor after Reid to stick up for Bunning. He noted that there is broad bipartisan support for extending benefits, but said Bunning was right to take a stand against adding $10 billion to the deficit. He also pointed out that the jobs bill that Reid scrapped two weeks ago, crafted by Sens. Chuck Grassley (R-Iowa) and Max Baucus (D-Mont.), contained an extension of UI and COBRA.
"I admire the courage of the junior senator from Kentucky," he said. "Somebody has to stand up finally and say, 'No more inter-generational theft!'"
And with that, the Senate adjourned for the weekend.
So, when I read that Assassin's Creed 2 for the PC would fight piracy by requiring a live internet connection all the time when you were playing, I thought it was a joke. Sort of a dry, post-modern satire of the whole idea of DRM. Then I learned that, if your internet connection broke while playing it, the game would freeze. What's more, if the connection didn't return soon enough, the game would quit and your progress would be unsaved. This convinced me that the whole thing was a joke.
Then I learned, as explicitly confirmed by Ubisoft representatives, no. Not a joke. Not at all.
Of course, this is pretty harsh medicine, and the many reasons this set-up is hostile have been ably discussed. What if you have an inconsistent internet connection? What if servers ever go down? (Due to malfunction, bankruptcy, or no longer wanting to pay to maintain them.)
Also, you don't hold onto your saved games anymore. They do. This part is really significant. That's why the game needs the net connection all the time. It's not just for their amusement. The constant contact is necessary because your game is saved on their machine. Not yours. They are claiming that this is for your convenience, because then you can get at your saved games from any computer anywhere, but nobody is fooled.
But, in all the writing and bitching on the topic, everyone seems to be missing the most significant detail of this new system. Everyone always assumes that all DRM will be broken immediately and pirated versions will appear instantly and anti-hacker measures never work. But this system (and I know saying this will immediately get me written off as an idiot, but bear with me) is the one that will finally do a good enough job of holding off pirates. It won't hold them off forever (I think) but it will hold them long enough for the game to get its sales.
Here's why ... This is how hacking usually works. A game (or word processor, or operating system) is programmed to, say, check in at launch with the home server to make sure it's a legal copy. The hacker goes through the code and looks for that line of software and disables it. Snip. And the program is cracked and ready to be sent to the Torrents. This is a bit of a simplification, but it gets at the heart of the thing. Most hacking require disabling a small chunk of the program, and that is not hard.
But Assassin's Creed 2 is different. Remember, all of the code for saving and loading games (a significant feature, I'm sure you would agree) is tied into logging into a distant server and sending data back and forth. This vital and complex bit of code has been written from the ground up to require having the saved games live on a machine far away, with said machine being programmed to accept, save, and return the game data. This is a far more difficult problem for a hacker to circumvent. What are the options?
1. Make your own, free saved game server and alter the application code to use it.
This means a lot of work and expense, both to duplicate Ubisoft's game saving code and to set up and maintain the servers. Won't happen.
2. Trick the Ubisoft servers into believing you have a legit copy, so that they will let you save your game.
OK, the hackers will probably eventually come up with a keygen program. This is tricky, because the software that generates the keys will be in Ubisoft's hands, far from prying eyes. But they could possible do it, given a bit of time. But if they ever figure out you have a fake or duplicate key (and I bet they have their ways), poof. Your account and saved games disappear. I don't think this will work.
3. Hack the game to not need to save games on a remote server.
This means a hacker has to figure out the saved game format, somehow jam into the application new code to write the saved data and new code to read it, TEST IT, and get it to work. Doable. But it will take time, and I bet you'd get some bugs in the process.
So this will be a tough nut to crack.
Remember what it takes to get DRM to work. It doesn't have to be uncrackable. Nothing is. All it has to do is delay the hackers long enough for the game to get a couple months worth of sales. And by turning a key part of their game into a MMO ("We, like WoW, control the saved game, not you."), they have come up with a clever and brutal way to do just that.
But this will make everyone hate them.
Perhaps. Make no mistake. Ubisoft will lose customers and earn much nerdrage over this. But they are engaged in a grand experiment. They are seeing if an adequately pirate-proof game can make money. Will keeping cracked copies off the Torrents for a month make extra sales? And enough extra sales to make writing PC games worthwhile? Because the current system, where 90% of the copies out there are pirated and only megahits that could turn a profit on that 10%, doesn't seem to be working.
But it's an amazingly harsh system. As much as I hope for someone to come up with an anti-hacker measure that can reliably hold off the thieves for a few months without ticking the entire planet off (so that I can start using it), well, I wouldn't buy a game with the system Ubisoft is using. I really sympathize with what they're trying to do, and I can't join in with the (almost) unanimous chorus of rage. But this doesn't feel like the answer.
People might buy more copies of Assassin's Creed 2, but this is the sort of measure that can sour people on PC gaming as a whole. And that hurts everyone. Including me.
With uncharacteristic bluntness, Federal Reserve Chairman Ben S. Bernanke warned Congress on Wednesday that the United States could soon face a debt crisis like the one in Greece, and declared that the central bank will not help legislators by printing money to pay for the ballooning federal debt.
Recent events in Europe, where Greece and other nations with large, unsustainable deficits like the United States are having increasing trouble selling their debt to investors, show that the U.S. is vulnerable to a sudden reversal of fortunes that would force taxpayers to pay higher interest rates on the debt, Mr. Bernanke said.
"It's not something that is 10 years away. It affects the markets currently," he told the House Financial Services Committee. "It is possible that bond markets will become worried about the sustainability [of yearly deficits over $1 trillion], and we may find ourselves facing higher interest rates even today."
It was some of the toughest rhetoric to date about the nation's fiscal and budgetary woes from the Fed chief, who faces a second round of questioning Thursday before a Senate panel.
Mr. Bernanke for the first time addressed concerns that the impasse in Congress over tough spending cuts and tax increases needed to bring down deficits will eventually force the Fed to accommodate deficits by printing money and buying Treasury bonds — effectively financing the deficit on behalf of Congress and spurring inflation in the process.
Some economists at the International Monetary Fund and elsewhere have advocated this approach, suggesting running moderate inflation rates of 4 percent to 6 percent as a partial solution to the U.S. debt problem. But the move runs the risk of damaging the dollar's reputation and spawning much higher inflation that would be debilitating to the U.S. economy and living standards.
Rep. Brad Sherman, California Democrat, asked Mr. Bernanke directly whether the Fed would consider such a strategy, especially since IMF officials endorsed it.
"We're not going to monetize the debt," Mr. Bernanke declared flatly, stressing that Congress needs to start making plans to bring down the deficit to avoid such a dangerous dilemma for the Fed.
"It is very, very important for Congress and administration to come to some kind of program, some kind of plan that will credibly show how the United States government is going to bring itself back to a sustainable position."
Separately, Mr. Bernanke's predecessor, Alan Greenspan, told Bloomberg News that "fiscal affairs are threatening the outlook" for recovery from recession as Congress and the White House have been unable for years to make tough decisions to raise taxes or cut spending.
He said he is so concerned about a sudden sharp increase in interest rates that every day he checks the interest rate on 10-year Treasury notes and 30-year Treasury bonds, calling them the "critical Achilles' heel" of the economy.
Despite his gloomy testimony, Mr. Bernanke dismissed concerns that the United States will lose its gold-plated AAA credit rating any time soon. Moody's Investors Service recently said that the U.S. rating would come "under pressure" at some point if Congress does not rein in the budget deficit.
The Fed chairman said repeatedly that he understands how difficult it will be for Congress to tame deficits by curbing spending in popular programs like Social Security, Medicare and defense, while also considering tax hikes. But he said there would be an immediate payoff: lower interest rates.
"It would be very helpful, even to the current recovery, to markets' confidence, if there were a sustainable, credible plan for a fiscal exit," he said.
A plan that eases market worries by laying out how Congress will address the long-term insolvency of Social Security, Medicare and other entitlement programs also would give Congress more room to take the actions needed today to address the jobs crisis, Mr. Bernanke added.
"There could be a bonus there," he said. "To the extent that we can achieve credible plans to reduce medium- to long-term deficits, we'll actually have more flexibility in the short term if we want to take other kinds of actions."
Separately, the debate continued over whether Fannie Mae and Freddie Mac, the two mortgage financing giants, should be included in the federal budget books now that the Obama administration has taken the limits off aid the Treasury Department is prepared to give the companies to keep them solvent.
Republicans, including Rep. Spencer Bachus of Alabama, the top Republican on the banking committee, have argued that the government is now effectively guaranteeing Fannie and Freddie's nearly $5 trillion of mortgage-backed securities and other debt, so their revenues and liabilities should be included in the federal budget as obligations of the government. Taking this step would greatly bloat the federal balance sheet.
Mr. Bachus said he worries that keeping Fannie and Freddie's status off the federal books is "the same sort of financial shell game that has brought governments like Greece to a crisis point."
But Treasury Secretary Timothy F. Geithner, who also testified on Capitol Hill on Wednesday, said the administration opposes including the quasi-government entities in the budget, although it lifted the limits on aid to Fannie and Freddie with the intent of assuring financial markets that the U.S. government stands behind their obligations.
"We do not think it is necessary to consolidate the full obligations of Fannie and Freddie onto the nation's budget. But we do think it's very important … that we make it clear to investors around the world that we will make sure that we will take the actions necessary" to keep the two entities stable, he told the House Budget Committee.
LINO LAKES, Minn. – Ever since his 1996 Toyota Camry shot up an interstate ramp, plowing into the back of an Oldsmobile in a horrific crash that killed three people, Koua Fong Lee insisted he had done everything he could to stop the car.
A jury didn't believe him, and a judge sentenced him to eight years in prison. But now, new revelations of safety problems with Toyotas have Lee pressing to get his case reopened and his freedom restored. Relatives of the victims — who condemned Lee at his sentencing three years ago — now believe he is innocent and are planning to sue Toyota. The prosecutor who sent Lee to prison said he thinks the case merits another look.
"I know 100 percent in my heart that I took my foot off the gas and that I was stepping on the brakes as hard as possible," Lee said in an interview Wednesday at the state prison in Lino Lakes. "When the brakes were looked at and we were told that nothing was wrong with the brakes, I was shocked."
Lee's accident is among a growing number of cases, some long resolved, that are getting new attention since Toyota admitted its problems with sudden acceleration were more extensive than originally believed. Numerous lawsuits involving Toyota accidents have been filed over the recent revelations, and attorneys expect the numbers will climb.
In testimony before Congress, company executive renewed their apologies for underestimating the safety problems but also acknowledged that they still may not have identified all the causes for the sudden acceleration.
The uncertainty could wind up helping Lee and others. Attorneys for both the 32-year-old St. Paul man as well as the victims' families say they're encouraged by the evidence that the problems went beyond models that originally were recalled.
If Lee's car was defective, "We don't want an innocent man sitting in prison," said Phil Carruthers, who prosecuted the case for Ramsey County.
A Toyota spokesman declined to comment on Lee's case.
Lee, a recent Hmong immigrant with only about a year of driving experience, was driving his pregnant wife, 4-year-old daughter, father and brother home from church the afternoon of June 10, 2006, when their Camry zoomed up an Interstate 94 exit ramp in St. Paul. Police said it was traveling between 70 and 90 mph when it rear-ended an Oldsmobile stopped at a red light.
Javis Trice Adams, 33, and his 10-year-old son, Javis Adams Jr., died at the scene. Adams' 6-year-old niece, Devyn Bolton, was paralyzed from the neck down, and died shortly after Lee was convicted.
At his 2007 trial, Lee testified he was certain he tried to brake. But a city mechanic testified the brakes worked fine, and Carruthers, the prosecutor, argued Lee must have hit the gas by mistake. Lee's attorney at trial, Tracy Eichorn-Hicks, seemed to concede as much, arguing Lee's actions fell short of gross negligence.
In the end, a jury convicted Lee on two counts of criminal vehicular homicide. At sentencing, Ramsey County District Judge Joanne Smith gave Lee the maximum after emotional testimony that included Devyn Bolton's mother, Bridget Trice, saying to Lee: "I hope you understand what you've done to my family, Mr. Lee. You have ruined it."
Lee's Camry wasn't among those subject to Toyota's recent safety recalls, but Toyota did recall some 1996 Camrys for defective cruise controls that could cause sudden acceleration.
Lee's current attorney, Brent Schafer, said several '96 Camry owners whose cars were not in the recall have filed sudden-acceleration complaints with federal regulators.
Bob Hilliard, a Texas attorney, is preparing a lawsuit by the victims in the Lee crash. Hilliard said other federal complaints suggest a defect more widespread than recalled cruise controls — something with engine control modules that could extend to other Toyota makes and model years.
Hilliard said he's aware of about 16 potential class-action cases filed around the country on the basis of the automaker's recent revelations. Attorneys for the victims' family declined to make them available, but Hilliard said they feel differently about Lee now. "They seem to have made peace with the fact that he's telling the truth," Hilliard said.
Lee said he's grateful.
"I feel like them believing in me is a gift that I've received from God," he said.
Schafer said he'll file paperwork soon asking to reexamine the wrecked Camry, which still sits at the St. Paul police impoundment lot. All sides expect that request to be granted. Then Schafer would have to persuade the judge that new evidence merits a new trial.
Judges usually are skeptical about claims of new evidence, but Joseph Daly, a law professor at Hamline University in St. Paul, said Lee's chances appear to be good. "I really think a judge would be inclined to let that evidence be presented," Daly said.
Still, Carruthers said several factors would work against Lee. Lee testified his brakes didn't work, not that his car suddenly accelerated. And two experts — a city mechanic and an engineer hired by Lee's insurance company — didn't identify sudden acceleration as a problem with the car. Schafer said sudden acceleration is the only reasonable explanation for what happened.
Lee said he never had driven before immigrating to the United States and settling in St. Paul's large Hmong community in 2004. He was working to get his high school equivalency degree before the crash, and he's still working on it in prison. He wept as he described the impact of his imprisonment on his wife and four children, ages 8, 5, 3 and 2, who are on welfare.
"Right now it is very difficult for them," Lee said tearfully. "It's because my children are still very young. My wife is going to school and there aren't people to help her out. My kids ask about me constantly. They ask me when I'm going to come home. They ask about me. I don't know what to say to them."
Ongoing Congressional investigations into the AIG bailout have put the incestuous and murky relationship between the Federal Reserve and Wall Street in the spotlight--and put Treasury Secretary Timothy Geithner and Fed chair Ben Bernanke in the hot seat. Calls for Geithner's resignation regularly reverberate inside the Capitol, and Bernanke's recent reappointment was opposed by thirty senators, including Republican John McCain and independent Bernie Sanders. Critics from both sides of the aisle fault Geithner and Bernanke for mismanagement, unnecessary secrecy and undermining Congressional oversight. But neither of them has been the target of questions about gaming the system for personal financial gain.
That distinction belongs to Stephen Friedman, the former chairman of the board of the New York Federal Reserve Bank and a member of the board of directors of Goldman Sachs. Through those two posts, Friedman may have had access to privileged information about the extent of Goldman's exposure to AIG and the opportunity to profit from the Fed's bailout of the beleaguered insurance giant. While he was serving on both boards, Friedman purchased 52,600 shares of Goldman stock, more than doubling the number of shares he owned. These purchases have since risen millions of dollars in value--and raised allegations of insider trading.
Friedman's purchases were exposed by the Wall Street Journal in early May 2009, and within days he resigned as chair of the New York Fed. His resignation letter claimed that although he had acted "in compliance with the rules," the suggestion of impropriety had become a "distraction" from the important work of the Federal Reserve. In a press release, New York Fed executive vice president and general counsel Thomas Baxter also said that Friedman's acquisition of Goldman shares "did not violate any Federal Reserve statute, rule or policy."
But if Friedman and Baxter were hoping to extinguish scrutiny over Friedman's Goldman buy and limit any collateral damage to the Fed, it looks like they are out of luck. In late January, House Oversight Committee chair Edolphus Towns called in Geithner, former Treasury Secretary Henry Paulson, Baxter and Friedman to testify about the AIG bailout. Friedman's Goldman deal was a significant line of inquiry.
And now, at least one member of the committee, Massachusetts Representative Stephen Lynch, is calling not just for continued Congressional investigation but for other enforcement agencies to look into possible insider trading and other matters surrounding the AIG bailout. In an interview with The Nation, Lynch said that he intends to meet with the SEC to see "whether or not they might be helpful with this." Lynch also suggested that the Justice Department's Financial Fraud Enforcement Task Force should be investigating Friedman's Goldman purchases as well.
A full investigation would not only determine if Friedman violated the Fed's rules; it would also shed light on the arcane regulations and conflicts of interest that riddle the Federal Reserve system, an important public service, since Congress is debating whether the Fed should serve as the leading regulator of systemic risk in our economy. Indeed, what we already know suggests that even if Friedman acted "in compliance with the rules," the rules were inadequate and easily subverted and therefore did little to guarantee transparency and accountability.
That Friedman was simultaneously chair of the New York Fed and a board member of Goldman Sachs was itself a violation of Fed policy. As a "Class C" director who is on the New York Fed board to represent the public, Friedman was barred from being on the board of a bank holding company or even owning stock in a bank holding company. This policy came into play in September 2008, when Goldman converted from an investment bank to a bank holding company (the policy did not apply to investment banks). Friedman was not only on the board of Goldman but also held 46,000 shares in the company. So he had to make a choice: resign from the Fed or resign from Goldman Sachs and sell the shares he owned.
But Friedman did neither. Instead, to allow him to maintain his roles at the Fed and Goldman, New York Fed officials, led by then-president Geithner, asked the Federal Reserve board of governors in Washington for a waiver, which was granted on January 21, 2009.
In the meantime, the New York Fed made its now-infamous decision--on November 9, 2008--to pay AIG counterparties like Goldman Sachs, Bank of America and Merrill Lynch full value for insurance on mortgage-backed securities that had tanked when the housing bubble burst. It was a $62 billion deal, and Goldman was the greatest domestic beneficiary, receiving an estimated $13 billion. Goldman had been locked in a dispute with AIG since 2007 over the value of those securities--a dispute New York Times reporters Gretchen Morgenson and Louise Story described as "one of the most momentous in Wall Street history"--until the Fed stepped in and sided with Goldman.
Despite demands from Congress and the media, neither the Fed nor AIG disclosed the names of the banks or the amount of money each had received through the bailout until March 15, 2009, when AIG finally did so. While the public was left in the dark, Friedman nearly doubled his Goldman holdings by purchasing 37,300 shares for about $3 million. Friedman made that purchase on December 17, 2008, just over a month after the Fed decided to pay Goldman and the other banks full value for the insurance on mortgage-backed securities. Since he had yet to receive the waiver, his purchase of additional shares occurred at a moment when he was still prohibited from owning the shares he already possessed and was thus out of compliance with Fed policy.
On January 22, 2009--just one day after the Federal Reserve granted Friedman the waiver--he purchased another 15,300 shares of Goldman. According to the Wall Street Journal, the "million-dollar purchase brought his holdings to 98,600 shares." On March 16, 2009--one day after the public was finally told the identities of the banks and the amount of money each had received from the Fed--Goldman was trading at approximately $94 per share. A week later the stock price had risen to just under $112. As of late February Friedman had gains of approximately $4.2 million on those post-bailout stock purchases.
The fact that Friedman's actions augmented rather than diminished the conflict of interest was not lost on members of the House Oversight Committee. "At a time when Mr. Friedman was prohibited from owning Goldman Sachs stock, he proceeded to buy 37,000 more shares of it anyway," says committee chair Edolphus Towns. "That strikes many Americans as unjust, unwise and unfair."
At the hearing, Representative Lynch also homed in on that fact. "Here's the problem," said Lynch. "As a member of the board of governors you're making decisions on matters that directly affect Goldman Sachs, and you're a former shareholder, current shareholder, and then you buy 37,000 more shares of that company that you're overseeing?"
"Yeah," replied Friedman.
After the hearing Lynch told me that Friedman was "obviously in a position of extreme conflict and was given full opportunity for inside trading."
"I mean, think about it," Lynch said. "He asks for a waiver; he knows there's a conflict. Then he gets the information that the Fed is going to pump this money into AIG and the positions are going to be covered 100 cents on the dollar. And so with that information, what would you do? Buy another 37,000 shares, baby."
Various spokespeople and others close to Friedman insist that everything he did was aboveboard and that he is a victim of a media frenzy and politicians with their own agendas. None of these people allowed their names to be used for this article. Friedman did not respond to an offer for an interview.
Friedman testified that he had consulted with Goldman counsel before the purchase in accordance with the firm's policy. He also said he was informed by New York Fed officials that "the rules were in abeyance" while the waiver was pending, so he could continue "chairing the board." But Friedman never informed the New York Fed of his intention to buy more Goldman shares, only of his existing ones. Fed officials there were surprised by both stock purchases as well as the size of the transactions, according to sources familiar with the matter.
An attorney for Friedman said he met any reasonable standard one could expect from an investor and that any financial impact from AIG payments to counterparties was reflected in Goldman's fourth-quarter earnings report, issued December 16, 2008. But that report does not disclose the amount of money Goldman received from the Fed. Moreover, Goldman has said repeatedly that the payments from AIG were "immaterial" because the firm had purchased insurance to cover any losses arising from an AIG default. But at a time when the financial system was on the verge of collapse, the value of that insurance could not have been certain.
"Goldman might have been fully hedged, but how good is that hedge if the counterparty in those hedges was not solvent or fully hedged and so on?" asks James Cox, a securities law expert and professor at Duke Law School. One of the parties must have been exposed, he says. "So would not knowledge that the first domino would not fall be inside information?"
Perhaps most significant, an attorney for Friedman confirmed that Friedman and other Goldman board members were briefed regularly in late 2007 and early 2008 regarding how much money AIG owed Goldman. This is an important piece of information because Friedman can't claim complete ignorance about how much money was at stake when AIG collapsed and thus how much the Fed's intervention would benefit Goldman. One question that Friedman still needs to answer under oath is: What exactly did you know about Goldman's exposure to AIG when you purchased 37,300 shares in December 2008 and another 15,300 shares in January 2009?
Goldman Sachs declined to comment when asked this very question. According to a Fed spokesperson, Friedman did not have access to confidential information regarding AIG stemming from his tenure on the New York Fed's board of directors. An attorney for Friedman wrote in an e-mail: "The facts demonstrate that Steve Friedman was not aware of any undisclosed material information relating to Goldman's exposure to AIG on December 17, 2008, when he purchased Goldman shares."
Another spokesperson directed me to Friedman's written Congressional testimony, in which he attempts to make the case that when he made his purchases, the public knew that Goldman had been paid full value on its contracts with AIG and that it was a good time to buy Goldman. He points to newspaper articles speculating that Goldman was one of AIG's counterparties and on the amount of exposure Goldman had to AIG. He cites financial analysts who rated Goldman stock a "buy." He quotes Goldman Sachs CFO David Viniar on public earnings calls in the third and fourth quarters of 2008 describing the firm's exposure to AIG as "immaterial" because of "risk management with appropriate hedging strategies."
Friedman's testimony reads: "At the time of my purchases, it was widely known and reported--through various public statements by Goldman Sachs officials, in numerous contemporaneous newspaper articles, in multiple investment analysts' reports, and in the November 10 Federal Reserve Board and AIG press releases...that Goldman Sachs was a counterparty to AIG and had been repaid at par on November 10."
But Friedman's claim--that newspaper articles, ratings from individual analysts and public statements from Goldman's CFO are the equivalent of being briefed on what Goldman said it was owed by AIG--rings hollow. The Fed and AIG press releases issued in November didn't reveal that the banks were paid full value. That information wasn't disclosed until SEC filings were released in December, and the identity of the banks and how much each received wasn't disclosed until March 2009.
And what of the Fed's role in all of this? If Goldman really was fully protected by hedging instruments--so that it had no exposure whatsoever to AIG--then why did the Fed pay full value on those securities?
"Friedman's explanation does raise questions about the full-payment justifications offered by Secretary Geithner and others," says Cox. "Namely, that to pay less would have caused losses throughout the system and create havoc."
"These [securities] are in the vortex--these are at ground zero of all this," says Lynch. "They've got huge positions. And what happens to Goldman if AIG is allowed to go into bankruptcy? The market was pricing those derivatives at 50 percent of value, yet they were paid 100 cents on the dollar. There's just no way in hell they would have received that in the bankruptcy process. So here's someone sitting here with this great inside knowledge and capitalizing on it. Maybe it's just too obvious."
The government was so intertwined with Friedman's stock purchases, one can imagine there is significant pressure to move past any questions about insider trading. That's why it's so critical that the Oversight Committee continue its investigation.
Finally, it's worth noting that before Friedman resigned, he finished his job as chair of the search committee charged with finding a replacement for Timothy Geithner at the New York Federal Reserve Bank: William Dudley, another Goldman alum.
They're said to utter little more than an occasional groan, but zombies -- the blood-drenched monsters of Hollywood "B" movies -- still have a right to free speech, a US court ruled this week.
An appeals court in the northern US city of Minneapolis, Minnesota on Wednesday allowed a group of zombies -- or rather, several protesters costumed as such -- to press ahead with their lawsuit against police who arrested them for disorderly conduct.
The appeals court overturned a lower court in finding that the group of seven "zombies" had been wrongfully detained during a 2006 shopping mall protest against consumerism.
The three-judge panel, by a two-to-one vote, ruled that Minneapolis police lacked probable cause to arrest the demonstrators for disorderly conduct.
At the time of the protest, the plaintiffs were wearing makeup that gave them a "living dead" look: white face powder, fake blood and black circles around their eyes.
They lurched stiff-legged through the halls of the mall urging shoppers to "get your brains here" and "brain cleanup in aisle five."
In various bags, the protesters carried audio equipment including loudspeakers and wireless phone handsets, which police had described as "simulated weapons of mass destruction."
The judicial panel upheld the lower court in dismissing the plaintiffs' claims of "false imprisonment" and "First Amendment retaliation" by Minneapolis police after being put in jail for two nights.
But the appeals court sided with the protesters in ruling that police had no reason to imprison them simply for "dressing as zombies, and walking erratically in downtown Minneapolis," the court decision said.
"An objectively reasonable person would not think probable cause exists under the Minnesota disorderly conduct statue to arrest a group of peaceful people for engaging in an artistic protest by playing music, broadcasting statements (and) dressing as zombies," the appeals court ruled.
The decision allows the protesters to revive their lawsuit against Minneapolis and its police, which according to the Star Tribune newspaper seeks damages of at least 50,000 dollars per person arrested
Feb. 25 (Bloomberg) -- The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program.
The proposal, reviewed by lenders last week on a White House conference call, “prohibits referral to foreclosure until borrower is evaluated and found ineligible for HAMP or reasonable contact efforts have failed,” according to a Treasury Department document outlining the plan.
“It is one of the many ideas under consideration in the administration’s ongoing housing stabilization efforts,” Treasury spokeswoman Meg Reilly said in an e-mail. “This proposal has not been approved and there are no immediate planned announcements on the issue.”
She confirmed the authenticity of the document, which hasn’t been made public.
At present, lenders can initiate foreclosure proceedings on any loan that hasn’t been submitted for HAMP eligibility. Under current HAMP rules, foreclosure litigation can proceed while borrowers are under review for the program or even in a trial modification.
The proposed changes would prohibit lenders from initiating new foreclosure actions before loan screening by HAMP and would require lenders to halt existing proceedings for borrowers once they are in a trial repayment plan.
The Treasury Department will soon release guidance “which will include a set of improved protections for borrowers” in HAMP, Phyllis Caldwell, chief of Treasury’s Homeownership Preservation Office, said today in testimonyprepared for a House Oversight and Government Reform subcommittee. She didn’t provide details.
The proposal goes further than rules adopted amid the crisis by federally controlled mortgage-finance companies Freddie Mac and Fannie Mae, which require lenders to review borrowers for a federal loan modification before a foreclosed property can be sold.
Foreclosure proceedings can still be initiated without a review, said Freddie Mac spokesman Doug Duvall. Fannie Mae spokeswoman Amy Bonitatibus said it adopted the same policy last March.
About 89 percent of outstanding residential mortgage loans are covered by the voluntary HAMP program.
About 2.82 million U.S. homeowners lost properties to foreclosure last year and 4.5 million filings are expected in 2010, RealtyTrac Inc., an Irvine, California data company, said last month.
Obama’s foreclosure prevention initiative, announced in February 2009 to help as many as 4 million Americans avert foreclosure, has modified 116,297 loans through steps such as lowering interest rates or lengthening repayment terms. More than 830,000 borrowers received trial repayment plans through January, according to Treasury data.
“Foreclosure processes differ among states, and the process is often confusing to homeowners already facing distress,” Caldwell said in her prepared testimony. “Treasury has been reviewing guidelines around outreach and the foreclosure process as part of its continual assessment of program effectiveness and transparency.”
Foreclosures may reach as many as 7 million mortgages, and an additional 5 million are at risk of default because borrowers owe more than the property is worth, Laurie Goodman, senior managing director at Amherst Securities Group LP in New York, said in a Feb. 17 interview.
“This is a problem of mammoth proportions,” Goodman said. “You can’t throw 12 million people out of their homes, so you need a successful modification program. My fear is that this isn’t it, but I’m highly confident that the administration will continue to iterate until they succeed.”
The Treasury proposal would require all borrowers who are 60 or more days delinquent on their mortgage to be sought out for participation in HAMP. Mortgage companies would need to try to contact the borrower at least four times by phone and twice by certified mail over 30 or more days before going to foreclosure.
Under current Treasury policy, foreclosure proceedings are only halted when a borrower receives a permanent modification plan.
House Republicans criticized HAMP as a failure today, saying in a report that it is prolonging the economic crisis and harming homeowners.
“By every empirical measure, HAMP has failed,” according to the 18-page report released by Republicans on the House Oversight and Government Reform Committee. “In its current form, HAMP both hurts homeowners who might otherwise spend their trial-period mortgage payments on rent and also distorts the housing market, delaying any recovery.”
Torn from the pages of history, and picking up the torch once held by the likes of the great Lenny Bruce, the saga of Bowley & Wilson and the lovely and talented First Amendment.
These guys are friends of the family...
THE HARROWING ACCOUNT OF BOWLEY AND WILSONS' ARREST AND TORTUROUS INCARCERATION IN THE DALLAS CITY JAIL (BOWLEYS' VERSION.....WILSON TELLS THIS MUCH BETTER THAN I DO, BUT I'LL TAKE THE FIRST SWING AT IT). First of all, there had been some contact with the Texas Alcoholic Beverage Commission (TABC), concerning the deportment of Bowley and Wilson on stage. "A little over the line..." was mentioned. And a $5000 fine. Deal or no deal? No deal. We took it as a shakedown. Extortion even. And we were young and cocky and stupid. Stupid smart, as it turned out. So, the TABC started to send in undercover "agents" (these were guys who didn't quite get accepted to the Dallas Police Department, but still wanted to walk around with a gun. And cheap suit). They didn't own tape recorders (or didn't know how to run 'em) so they'd write down everything we said, and had a secretary transcribe it later. (BTW, I read some of the transcriptions and was reallllllly funny......where I said to some gal "Don't be such a sour-puss" in a double entendre-ish wise-guy way, the TABC wrote down "Mr. Bowley says to the young lady "You have a sour smelling Pussy"). Yikes!!!
When the TABC thought they had a tight and righteous case, they launched their invasion plan. Would have loved to have been in that meeting. The maps. The second by second schedule. Blocking the escape routes. What kind of ammunition. Hollow points??? Please please just this once??????
Now, Bowley and Wilson almost always ending the first show singing Eric Claptons' 'Cocaine'....during which the band and the whole audience would get drenched in corn starch powder, Bowley head to toe. it was then the TABC sprung their trap. The head TABC guy was named Elvis.....Something-or-other.....anyone remember to help me out here......who lead the "task-force" to the stage. Guns . Badges. Bad haircuts. The audience HOWLED thinking it was part of the show. Top gun Elvis I guess was introducing him self ("I"m officer Elvie ---------- from the TABC and you're under arrest, " or something. My ears were packed with corn starch and my eyes with the same....the only word i heard was "Elvis" and thinking someone was requesting an ELVIS song at that inconvenient moment, I said something like "f**k off, were takin a break." Yikes!! The handcuffs went on. The audience HOWLED. The fake fuzzies went through the dressing room looking for drugs, and OF COURSE found nothing. It was in the kitchen. Putzes.
Into the police cars and downtown to jail. The fake fuzzies turning us over to real cops. Please bare in mind that we knew tons of Dallas Police Officers. We'd had so many cops' bachelor parties in our place we were practically members of the union. They made sure we got home at night. They were incredulous when we were hauled in. And HOWLED.
The booking officer, whom we did not know, took our information and wanted to take our stuff. I was wearing (and still am actually) a solid gold band that my friend Jerry Forrest of the jewelry forrest had made for me and permanently soldered onto my wrist. The officer wanted to get it off me. "How do you get this f**kin' thing off? There's no f**kin clasp here? What the f**k am I supposed to do with this? God damn motherf........" He cut it off. "Now" he said "what were you boys arrested for?" "Sayin' the word f**k" we said.
Remember, we were covered head to toe in white powder. And a matter of GREAT CURIOSITY to all the other prisoners. "What's with you guys?" they asked. "Well,' we'd explain "we were making a Coke delivery in the convertible when the Cops started chasing us. We tried to throw it all out during the chase, but it kept blowing back on us." We were stars. Dollar bill were rolled, pens taken apart to make straws, and we were followed everywhere, our clothes and clouds of trailing dust sniffed, snorted, licked and loved.
Our crackerjack legal team of Kevin Clancy and Bill Bratton arrived and bailed us out. The law the TABC had arrested us under had already been declaired unconstitutional, but some prick in the D.A.'s office decided to charge us with public obscenity. Because it was already all over the newspapers and TV I guess. We were famous. And now obligated to be ten times dirtier than we ever were before. Eventually the Playboy Magazine Defense Team got involved in the case (read all about it in the 1982 August issue of Playboy Magazine). We have been in prison in Huntsville Texas ever since.
A rapid acceleration may have begun in levels of a gas far more harmful than CO2
Atmospheric levels of methane, the greenhouse gas which is much more powerful than carbon dioxide, have risen significantly for the last three years running, scientists will disclose today - leading to fears that a major global-warming "feedback" is beginning to kick in.
For some time there has been concern that the vast amounts of methane, or "natural gas", locked up in the frozen tundra of the Arctic could be released as the permafrost is melted by global warming. This would give a huge further impetus to climate change, an effect sometimes referred to as "the methane time bomb".
This is because methane (CH4) is even more effective at retaining the Sun's heat in the atmosphere than CO2, the main focus of international climate concern for the last two decades. Over a relatively short period, such as 20 years, CH4 has a global warming potential more than 60 times as powerful as CO2, although it decays more quickly.
Now comes the first news that levels of methane in the atmosphere, which began rising in 2007 when an unprecedented heatwave in the Arctic caused a record shrinking of the sea ice, have continued to rise significantly through 2008 and 2009.
Although researchers cannot yet be certain, and there may be non-threatening explanations, there is a fear that rising temperatures may have started to activate the positive feedback mechanism. This would see higher atmospheric levels of the gas producing more warming, which in turn would release more methane, which would produce even further warming, and so on into an uncontrollable "runaway" warming effect. This is believed to have happened at the end of the last Ice Age, causing a very rapid temperature rise in a matter of decades.
The new figures will be revealed this morning at a major two-day conference on greenhouse gases in the atmosphere, taking place at the Royal Society in London. They will be disclosed in a presentation by Professor Euan Nisbet, of Royal Holloway College of the University of London, and Dr Ed Dlugokencky of the Earth System Research Laboratory in Boulder, Colorado, which is run by the US National Oceanic and Atmospheric Administration (NOAA).
Both men are leading experts on CH4 in the atmosphere, and Dr Dlugokencky in particular, who is in charge of NOAA's global network of methane monitoring stations, is sometimes referred to as "the keeper of the world's methane". In a presentation on "Global atmospheric methane in 2010: budget, changes and dangers", the two scientists will reveal that, after a decade of near-zero growth, "globally averaged atmospheric methane increased by [approximately] 7ppb (parts per billion) per year during 2007 and 2008."
They go on: "During the first half of 2009, globally averaged atmospheric CH4 was [approximately] 7ppb greater than it was in 2008, suggesting that the increase will continue in 2009. There is the potential for increased CH4 emissions from strong positive climate feedbacks in the Arctic where there are unstable stores of carbon in permafrost ... so the causes of these recent increases must be understood."
Professor Nisbet said at the weekend that the new figures did not necessarily mark a new excursion from the trend. "It may just be a couple of years of high growth, and it may drop back to what it was," he said. "But there is a concern that things are beginning to change towards renewed growth from feedbacks."
The product of biological activity by microbes, usually in decaying vegetation or other organic matter, "natural gas" is emitted from natural sources and human activities. Wetlands may give off up to a third of the total amount produced. But large amounts are also released from the production of gas for fuel, and also from agriculture, including the production of rice in paddy fields and the belches of cows as they chew the cud (which is known as "bovine eructation"). However, methane breaks down and disappears from the atmosphere quite quickly, and until recently it was thought that the Earth's methane "budget" was more or less in balance.
Global atmospheric levels of the gas now stand at about 1,790 parts per billion. They began to be measured in 1984, when they stood at about 1,630ppb, and were steadily rising. It was thought that this was due to the Russian gas industry, which before the collapse of the Soviet Union was affected by enormous leaks.
After 1991, substantial amounts were invested in stopping the leaks by a privatised Russian gas industry, and the methane rise slowed.
Methane in the atmosphere: The recent rise
Many climate scientists think that frozen Arctic tundra, like this at Sermermiut in Greenland, is a ticking time bomb in terms of global warming, because it holds vast amounts of methane, an immensely potent greenhouse gas. Over thousands of years the methane has accumulated under the ground at northern latitudes all around the world, and has effectively been taken out of circulation by the permafrost acting as an impermeable lid. But as the permafrost begins to melt in rising temperatures, the lid may open - with potentially catastrophic results.
WASHINGTON, Feb 24 (Reuters) - The U.S. House of Representatives voted on Wednesday to take a 65-year-old antitrust exemption away from health insurance companies, leaning hard on an industry that has been the focus of criticism for fast-rising rates.
The chamber voted 406 to 19 to effectively repeal an antitrust exemption that has meant that states take the lead in enforcing antitrust law for health insurers. Consumer groups say states often lack the resources to effectively regulate insurers.
"Just recently 80,000 Iowans were told that their insurance rates would go up 18 percent," said Rep. Leonard Boswell in debate before the vote. "Iowans in the 3rd district are struggling to make ends meet."
The debate took place on the margins of a larger healthcare debate. On Thursday, President Barack Obama will host a healthcare summit, the latest step in his uphill battle to break an impasse in Congress over a sweeping overhaul of the $2.5 trillion industry, one of his domestic policy priorities.
Supporters portrayed the bill as a way to tamp down sharply rising health insurance costs, such as those from WellPoint Inc , which raised rates an average of 25 percent for some Anthem Blue Cross customers in California.
WellPoint Chief Executive Angela Braly, at a hearing on the issue on Wednesday, said the company was concerned that it would lose the ability to share data with other companies. "It's not going to affect healthcare costs one way or another," she said.
The Senate Judiciary Committee's version of the legislation is narrower in some ways than the House version, although the Senate bill also strips medical malpractice insurers of their antitrust exemption. Obama has said that he would sign the repeal into law.
Oh, good! Obama just might capitulate AGAIN to the bankers. A government by the bankers, for the bankers. Who knew the banks got the exact man they wanted in the White House? I would have thought they'd rather have a Republican, but they own both parties, anyway, so I guess it doesn't matter.
The Obama administration is no longer insisting on the creation of a stand-alone consumer protection agency as a central element of the plan to remake regulation of the financial system.
In hopes of quick congressional approval of a reform bill, White House officials are opening the door to compromise with lawmakers concerned about creating a new bureaucracy, according to congressional and some administration sources.
President Obama's economic team is now open to housing the consumer regulator inside another agency, such as the Treasury Department, though they still prefer a stand-alone agency. In either case, they are insisting on a regulator with political autonomy and real teeth so it can effectively enforce rules designed to protect consumers of mortgages, credit cards and other financial products.
The administration may also have to compromise on Obama's recent proposal for a rule to limit risky activities at banks by prohibiting them from engaging in many kinds of speculative investments.
Treasury officials are preparing to send Capitol Hill a toughly worded measure that would bar banks from making certain investments that benefit only the firms' bottom line rather than their customers. But there is little support among either Democratic or Republican lawmakers for this proposal, known as the "Volcker rule," and Senate leaders are now closing ranks around legislation that would leave it to banking regulators, rather than the law, to decide which activities to ban.
From the start of the Obama presidency, administration officials have made far-reaching financial reform one of their highest priorities, along with overhauling the nation's health-care system. Officials have vowed to put in place new rules and regulators to prevent a repeat of the abuses that precipitated the financial crisis.
Even as the administration is showing new flexibility, some senior executives in the financial industry have also been coming around, easing some of their intensive lobbying against the regulatory overhaul. Instead of trying to block the proposals for a consumer protection agency and curbs on risky investment practices, these executives are working more closely with Democrats to secure a deal the banks can live with.
After the White House escalated its attacks on Wall Street earlier this year, some executives concluded that the swift passage of a regulatory reform bill would be in their best interest because it would move them out of the political cross hairs, industry officials said. The adoption of a new bill would also resolve much of the uncertainty about the rules to govern the financial industry, allowing companies to make business decisions with more confidence.
According to some industry officials, Wall Street executives also sense that they now have a better chance for a relatively favorable bill because the administration is in a hurry to record a major legislative achievement before congressional elections in November. At the same time, some financial lobbyists said they were afraid the administration would unilaterally impose strict new measures on the industry if Congress could not come up with a bill.
The new momentum has raised hopes within the administration that a bill could be signed before the elections. But the path is still not clear. Administration officials and Democratic leaders have been seeking to win support from Republicans, who could filibuster the bill, without alienating liberals insisting on a new consumer protection agency and tough restraints on Wall Street activities.
Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.), who is shepherding the effort in the Senate, said Wednesday evening that there is still no final agreement between Democrats and Republicans, and aides said that many vital details remain unresolved.
"Dodd is willing to be flexible, but there's a limit to that flexibility," said one Senate aide, who spoke on the condition of anonymity because talks are ongoing. "Both sides are going to have to learn to live with things that aren't exactly how they would have written it."
Still, major components of the measure are beginning to take shape.
Michael S. Barr, Treasury's assistant secretary for financial institutions, delivered a speech Tuesday that repeated the need for a consumer financial regulator with broad enforcement powers. Absent, however, was a call for a stand-alone, agency -- an intentional omission, a source familiar with the matter said.
A free-standing agency had been a central part of the original blueprint released by the Obama administration, which said it is essential to have one agency with the sole mission of protecting consumers from lending abuses. In the lead-up to the financial crisis, that responsibility was spread across numerous agencies and often took a back seat to ensuring the well-being of banks. A version of the stand-alone proposal was included in a bill passed by the House in December.
Dodd has expressed some support for the plan. But Republicans on his committee have said that such an agency would clash with the separate set of regulators overseeing the health of financial firms. Sen. Bob Corker (R-Tenn.), who has been working with Dodd on a revised Senate bill, has called the idea a "non-starter."
The two men have been exploring solutions that both sides could embrace. On Wednesday night, Treasury Secretary Timothy F. Geithner huddled with Corker and Dodd to go over the work the two senators have been doing on regulatory reform. Only Dodd would comment on their meeting, saying, "There's no deal tonight," but adding that he remained optimistic.
In one scenario under discussion, a consumer bureau would be set up within the Treasury Department. In another, a consumer protection division would be established inside a new national agency to regulate banks.
The latter idea would upset some consumer advocates, who say they do not want the consumer regulator to answer to bank supervisors. Advocates say these supervisors have shoddy records on shielding customers from abusive financial practices.
Dodd's legislation, which he is expecting to unveil next week, is also likely to strip the Federal Reserve of much of its authority to supervise banks, government sources said. Few on Capitol Hill want to take up the unpopular cause of defending the central bank, which lawmakers say not only ignored the warning signs of the financial crisis but also has been aloof from the problems of ordinary Americans.
Dodd's bill is also set to include updated language giving the government authority to wind down large, troubled financial firms in extreme cases, congressional and industry officials said. The measure will make bankruptcy the preferred route when firms run into trouble. The government's resolution mechanism would serve as a backstop and possibly could be overseen by the Federal Deposit Insurance Corp.