I just bought three new memoirs: Sarah Silverman's The Bedwetter: Stories of Courage, Redemption, and Pee, Pam Grier's Foxy: My Life in Three Acts and Christopher Hitchens's Hitch-22.

"Chelsea Dagger" is a song by The Fratellis and their second single. It was released on 28 August 2006. It is taken from their debut album Costello Music, which was released in the UK on 11 September 2006. It is supposed to be named after both Jon Fratelli's wife Heather, a burlesque dancer whose stage name -- Chelsea -- he borrowed for the song, and also as a play on the name of pop singer Britney Spears.

...

Characterised by its anthemic, scat chorus, it has been adopted on many football terraces as a crowd "favourite."

This song was played when Shunsuke Nakamura scored from a free-kick for Celtic Football Club in their 1-0 win over Manchester United on 21 November 2006 and was also played during Celtic's Scottish Premier League Celebrations after beating Kilmarnock 2-1. When Celtic score at home, the song's chorus is played. The Fratellis claimed on Soccer AM that this was a great honour and they hadn't known for a while, as they were too excited with the goal.

It was also played during Scotland's win over Georgia at Hampden Park in 2007 much to the delight of the Scottish fans.

It is played when Nottingham Forest, Ipswich Town, MK Dons, Rotherham United, Preston, Bristol City, Plymouth Argyle, Mansfield Town, Northampton Town, Coventry City, Brechin City and Middlesbrough score a goal (although many fans feel that the playing of this song and others detracts from the natural goal celebration). 

In ice hockey, it is played at the United Center for all Chicago Blackhawks goals and wins, and a version of the chorus is played on the organ during the listing of the game's "Three Stars". It is also played regularly at the Verizon Center for the Washington Capitals.

(Blackhawks team captain Jonathan Toews (just turned 22!)

The Blackhawks pulled ahead 2-1 in the series against the increasingly feisty Vancouver Canucks last night after a hat trick by the cheeky Dustin Byfuglien and some excellent goaltending by Antti Niemi. Strange to see the smiley actor Owen Wilson at the game (maybe Vince Vaughn gave him his tickets).

Nice passing/teamwork before Kris Versteeg's game-winner in the previous game (which turned the series around in my opinion).



Go Blackhawks! For some great hockey-blogging check out Michael Bérubé.

Roger Lowenstein writes about Fannie and Freddie.

Report: China To Overtake U.S. As World's Biggest Asshole By 2020

From the G20 meeting:

Although India and Brazil this week joined calls by the United States for China to allow the value of its currency, the renminbi, to appreciate, the Group of 20 officials said the topic did not come up in their meetings.

Yoon Jeung-Hyun, the South Korean finance minister who coordinated the meetings, said "there were no specific discussions" of either the renminbi, also known as the yuan, or the euro, which has recently fallen in value.

Even as problems in Europe preoccupied the leaders, officials reported positive developments in some poorer parts of the world.

Adam Scott who played Will Ferrell's brother in Step Brothers will have a role in Parks and Recreation beginning this season and extending into the next.

AS: I play a state auditor who comes into Pawnee to cut the budget of the Parks And Recreation department and possibly fire people. I just kind of scare the shit out of everyone.

My Big Fat Greek Default
(or Damn the Gods /
Release the Kraken)

Greece waves the white flag and appeals for international aid. 

Greece was forced to make the request after investors shunned the country’s bond offerings because of concern about its runaway debt. Those worries intensified Thursday when the European statistics agency raised its estimate for Greece’s debt above the government’s most recent figures, pushing the yield on Greek bonds to nearly 9 percent.

At that point, the need for international funds seemed a certainty, and Mr. Papandreou made the request while on a visit to Kastellorizo, an island in the Aegean Sea.

The financing will come from an emergency aid package arranged two weeks ago in Brussels in which Greece’s euro zone partners pledged up to 30 billion euros ($40 billion) in loans to Greece. The International Monetary Fund is expected to provide an additional 15 billion euros.

Teasury Secretary Geithner and the IMF push for global tax on banks but G20 is split on the idea.

Mr. Lipsky’s boss, Dominique Strauss-Kahn, the top I.M.F. official, caused rumblings on Friday when he suggested that some countries were moving too quickly on reform. He said the Obama administration’s plan "comes too soon" given the need to coordinate responses across countries.  

"I read that and I thought, really?" Mr. Geithner said in response. "My sense is that it’s been 15 months -- or more than a year -- since we started this process in the United States. We’re not moving with excessive haste." 

Mr. Geithner acknowledged that one of the biggest reform elements -- forcing banks to hold more capital as a buffer against economic disruptions -- was partly beyond the scope of the legislation being debated by Congress. The Basel Committee on Banking Supervision, a global regulatory body, is coordinating discussions around capital requirements in the hope of announcing new standards by the end of this year.

A Federal District Court rules National Day of Prayer violates First Amendment.

The Freedom From Religion Foundation claims a membership of more than 14,000, the largest group in the country advocating for atheists and agnostics. It has doubled its staff to eight in the last year, publishes a newspaper 10 times a year, Freethought Today, and has a weekly radio show. The group counts among its members and vocal supporters Janeane Garofalo, Christopher Hitchens and Ron Reagan. 

... 

The group’s biggest victory to date came last week when Judge Barbara B. Crabb of Federal District Court ruled that the federal government could not enact a law in support of prayer any more than it could "encourage citizens to fast during the month of Ramadan, attend a synagogue, purify themselves in a sweat lodge or practice rune magic." The law, signed by President Harry S. Truman in 1952, calls on the president to sign a proclamation annually in observance of a National Day of Prayer.

Now's not the time to begin talking about considering interest rate hikes in the medium term.

Christine Romer, the chairwoman of the White House Council of Economic Advisers, addressed a conference at the Woodrow Wilson School of Public and International Affairs at Princeton University. She says the nation’s high unemployment rate is a result of a severe drop in demand for goods and services and is not a reflection of longer-term structural changes in the economy. We shouldn't settle, in other words. From a New York Times piece:

"It reflects the fact that we are still feeling the effects of the collapse of demand caused by the crisis," she said. "Indeed, at one point I had tentatively titled my talk, 'It’s Aggregate Demand, Stupid,’ but my chief of staff suggested that I find something a tad more dignified."

Ms. Romer said that demand remained constrained by tight credit, state and local government budget shortfalls, subdued demand by consumers and foreign markets, and the inability to lower interest rates any further.

It is highly unusual for the White House to take a stance on short-term interest rates, which are the purview of the Fed, but Ms. Romer’s remarks carry weight because she is an authority on monetary policy and the Depression.
...
Ms. Romer said that conventional estimates of G.D.P. might have underestimated the "true decline" in economic activity, helping to explain an otherwise "anomalous rise" in unemployment. She also argued that other factors -- the decline in manufacturing, rising joblessness among less-educated middle-aged men, and the shrinking of sectors like construction and finance -- were not enough to suggest that high unemployment would last.

By vigorously arguing that the current 9.7 percent unemployment rate was a matter of cyclical forces rather than structural ones, Ms. Romer was defending the Obama administration’s program of active intervention to stimulate demand. "I find it distressing that some observers talk about unemployment remaining high for an extended period with resignation, rather than with a sense of urgency to find ways to address the problem," she said, saying unemployment was not "the new normal."

She called for increasing aid to states, extending unemployment insurance benefits, stimulating small business lending and subsidizing energy-efficiency measures by homeowners.

The End of Bailouts

From an interview with Sheila Bair on Obama's financial reform legislation:

If this had been law prior to 2008, would we have seen the bailouts that took place? Would we have seen capital injections into banks?

BAIR: No. You could not do an AIG, Bear Stearns, or any of that. Those were all one-off things, capital or asset guarantee transactions. This bill would only allow system-wide liquidity support which could not be targeted at an individual firm. You can't do capital investments at all, period. It's only liquidity support. No more capital investments. That's banned under all circumstances.

You can do systemwide liquidity support. But you can't do anything on an individual basis. They would have to be generally available.

Do you see any way left for the government to bail out a financial institution?

BAIR: No, and that's the whole idea. It was too easy for institutions to come and ask for help. They aren't going to do that. This gives us a response: "Fine, we will take all these essential services and put them in a bridge bank. We will keep them running while your shareholders and debtors take all your losses. And oh, by the way, we are getting rid of your board and you, too."

The whole idea is to get market discipline back.

That's what ending "too big to fail means." It means debtors and shareholders understanding their money is at risk and especially the debtholders starting to look at the balance sheet of these big institutions and asking their own hard questions instead of relying on government support.

Will this bill really end "too big to fail"?

BAIR: I think it will go a long way.

(via Yglesias)

A Darwinian Crisis
(or Doing God's Work
or "Say it ain't so, Joe")

Books like Andrew Ross Sorkin's "Too Big to Fail," Gregory Zuckerman's "The Greatest Trade Ever," and Michael Lewis's "The Big Short" present narratives where smart, talented and virtuous bankers and financiers prevail against the mob during the recent clusterfuck. (The authors still agree common sense reforms are needed of course.)

Joe Nocera however provides an analysis of a different kind of Darwinian moment:

Remember in the months leading up to the crisis, when the Federal Reserve chairman, Ben Bernanke, and Henry Paulson Jr., then the Treasury secretary, were assuring everyone that the "subprime problem" could be contained? In truth, if the only problem had been the actual mortgage bonds themselves, they might have been right. At the peak there were well over $1 trillion in subprime and Alt-A mortgages that were securitized on Wall Street. That’s a lot, to be sure -- but it was a finite number. You could have only as much exposure as there were bonds in existence.

The introduction of synthetic C.D.O.’s changed all that. Unlike a "normal" collateralized debt obligation, which contained the bonds themselves, the synthetic version contained credit-default swaps -- derivatives that "referenced" a particular group of mortgage bonds. Once synthetic C.D.O.’s became popular, Wall Street no longer needed to feed the beast with new subprime loans. It could make an infinite number of bets on the bonds that already existed.

And why did synthetic C.D.O.’s become popular? One reason was that the subprime companies were starting to run out of risky borrowers to make bad loans to -- and hitting a brick wall. New Century, a big subprime originator, went bankrupt in early April 2007, for instance. Yet three weeks later, the Goldman synthetic C.D.O. deal, called Abacus 2007-ACI, went through, because it was betting on subprime mortgage bonds that already existed rather than bundling new ones. It didn’t even have to go to the trouble of repackaging old C.D.O. tranches into new C.D.O.’s, which was also a common practice. (Goldman has vehemently denied any allegations of wrongdoing, pointing out that it lost $90 million on the particular Abacus deal that is the subject of the S.E.C. complaint.)

The second reason, though, is that synthetic C.D.O.’s gave people like John Paulson a way to short the subprime market. Mr. Paulson’s bet against the subprime market, which famously reaped the firm billions in profits, was the subject of a recent book, "The Greatest Trade Ever." Boy, I’ll say.

Both Gregory Zuckerman, the author of that book, and Michael Lewis, who wrote the current best seller "The Big Short," make it clear that the heroes of their narratives -- the handful of people who had figured out that subprime mortgages were a looming disaster -- were pushing Wall Street hard to give them a way to short the market. Maybe synthetic C.D.O.’s would have been created even without their urging, but it seems a little unlikely. They were the driving forces. (emphasis added)

 Reminds me of some lines James Diedrick wrote about Martin Amis's novel London Fields.

This exhaustion extends right down to the low comedy of Keith's petty criminality. Consider this description of what he and his cohorts discover when they enter a house they intend to rob: "it was all burgled out. Indeed, burgling, when viewed in Darwinian terms, was clearly approaching a crisis. Burglars were finding that almost everywhere had been burgled" (248).

Nocera makes an excellent point at the end of his piece:

In its filing on Thursday, the S.E.C. charged that Goldman never told investors of Mr. Paulson’s involvement. "Credit derivative technology helped people disguise what they were doing," said Janet Tavakoli, the president of Tavakoli Structured Finance, and an early critics of many of the structures that have now come under scrutiny.

There appear to be other examples of this, as well. Last week, Pro Publica, the nonprofit investigative journalism outfit, reported how a big Chicago hedge fund, Magnetar, helped put together some synthetic C.D.O.’s -- precisely so that it could bet against them. In his book, Mr. Zuckerman seems to have stumbled onto Abacus and similar deals. One banker, he writes, "suspected that Paulson would push for combustible mortgages and debt to go into any C.D.O., making it more likely that it would go up in flames." Which is precisely what the S.E.C. is claiming. But in his quest to lionize his central character, Mr. Zuckerman rushes past what by all rights should have been the most shocking revelation in his book.

Mr. Lewis, for his part, recounts a dinner, late in the game, in which one of his heroes, Steve Eisman, is seated next to a man who is taking the long position on many of the C.D.O.’s he is shorting. They get to talking, and the man says to Mr. Eisman: "I love guys like you who short my market. Without you, I don’t have anything to buy." He adds, "The more excited that you get that you’re right, the more trades you’ll do, the more product for me."

As a reader, it is hard not to love that moment, rich as it is in irony and foreboding. The guy on the long side -- who was making investments that the housing and mortgage markets would remain strong -- is an obvious fool; Mr. Eisman, on the short side the trade, is clearly going to be vindicated. (And, by Mr. Lewis’s account, Mr. Eisman never "helped" a Wall Street firm pick the bonds for the C.D.O.’s he was shorting, the way the S.E.C. says Mr. Paulson did.)

But on second reading, the passage isn’t quite so funny. The people on the short side of those trades were truly savvy investors, who, unlike so many others, did their homework and had insights that made them a great deal of money. But the rise of synthetic C.D.O.’s that they pushed for -- and their ability to use credit-default swaps to short subprime mortgage bonds -- took an already bad situation and made it worse.

And here we are now, all of us, paying the price.

Emphasis added. How did the savvy speculators make it worse? By encouraging enormous, over-leveraged bets by people who were - by design - in the dark about the fact that the "smart money" was betting against them. The game was fixed in other words.

To Do

My stack of books to read: Liaquat Ahamed's Lords of Finance, Dean Baker's False Profits, John Cassidy's How Markets Fail, Jonathan Cohn's Sick, Barbara Ehrenreich's Bright-Sided, Brad DeLong and Stephen Cohen's The End of Influence, Simon Johnson  and James Kwak's 13 Bankers, Alyssa Katz's Our Lot, Michael Lewis's The Big Short, David Plouffe's The Audacity to Win, Andrew Ross Sorkin's Too Big to Fail, Joseph Stiglitz's Freefall, David Wessel's In Fed We Trust.




In the "Your Decision" music video - embedding disabled by request - the invitation at the beginning reads "1023 Corinthians Drive." Corinthians 10:23 from the King James Bible reads:

All things are lawful for me, but all things are not expedient: all things are lawful for me, but all things edify not.

And from the Bible in Basic English:

We are free to do all things, but there are things which it is not wise to do. We are free to do all things, but not all things are for the common good.

A nice touch in the video is at 2:16 where a man is heading upstairs but is turned away from the VIP area and expresses frustration.

(John Paul Jones Memorial in DC)

During his engagement with Serapis, Jones uttered, according to the later recollection of his First Lieutenant, the legendary reply to a quip about surrender from the British captain: "I have not yet begun to fight!"

Justice John Paul Stevens recently announced his retirement from the US Supreme Court. Dawn Johnsen withdrew her nomination to the Office of Legal Counsel yesterday after facing a filibuster threat from Senate Republicans and Democrats Ben Nelson and Arlen Specter. Republican Senator Lugar from Indiana supported Johnsen's nomination.

Once obscure, the office [of Legal Counsel] became controversial in the administration of President George W. Bush when its political appointees, citing sweeping theories of presidential power, secretly signed off on interrogation and surveillance policies that bypassed statutory and treaty restraints. Ms. Johnsen was an outspoken critic of those claims after they came to light.

An Indiana University law professor, Ms. Johnsen had also served as acting head of the Office of Legal Counsel during the Clinton administration. During the Bush administration, she helped lead a coalition of Clinton-era alumni of the office in proposing changes to restore its reputation and independence.

In a 2008 essay titled "Restoring Our Nation’s Honor," Ms. Johnsen wrote: "We must avoid any temptation simply to move on. We must instead be honest with ourselves and the world as we condemn our nation’s past transgressions and reject Bush’s corruption of our American ideals. Our constitutional democracy cannot survive with a government shrouded in secrecy, nor can our nation’s honor be restored without full disclosure"

 
Obviously Obama should nominate her as Stevens's replacement.

I have tickets to see Them Crooked Vultures and John Paul Jones of Led Zeppelin fame at the Scaragon Brawlroom next month.

Republicans, Leukemia Team Up to Repeal Health Care Law

"Leukemia has always been a disease that veers to the right," said Newsweek columnist Ezra Klein, adding that Republicans have also sought out the support of high-profile illnesses such as sickle-cell anemia, type 1 diabetes, and sepsis. "And at the end of the day, you can't ignore the fact that this deadly blood disorder has a lot to lose if the bill succeeds."

After the Gold Rush

The New Republic now has a photo up of senior editor Michelle Cottle. I once shared a fiction writing class with her in college. From what I remember she had a very beautiful southern accent, although she rarely spoke in class. (I believe she came from a small town in western North Carolina.) My attempts to engage her in conversation after class always failed. I would heap praise on a story she recently shared with the class and she would respond with a polite thank you and excuse herself. Maybe it was my Yankee/Chicago accent and off-putting manner. Maybe it was her religiosity. Probably she just wasn't interested in the slightest and thought my stories were crap.

There were two Senior level fiction classes of 15 students (I'm pretty sure you had to be an English major). Students applied to the class by submitting a story, and luckily I was deamed worthy. The professor who taught the class and judged the stories was an elderly Southern gentleman who reminded me of the actor John Neville. Aloof but courteous. 

I labored on my story all summer and don't remember much about it except it involved a typewriter repair man who hitchiked even though hitchiking was unheard of in the story's universe because of a high crime rate and general distrust of strangers. I dropped proper names like Theodore Dreiser (An American Tradgedy), Norman Mailer (The Executioner's Song) and Neil Young.  

Not long ago, I was thinking about Neil Young and the cover to his album After the Gold Rush which I always found striking and memorable. Recently it dawned on me that the album cover reminded me of Bruegel's Landscape with the Fall of Icarus, which W.H. Auden discusses in his poem Musée des Beaux Arts.

About suffering they were never wrong,
The Old Masters; how well, they understood
Its human position; how it takes place
While someone else is eating or opening a window or just walking dully along;
How, when the aged are reverently, passionately waiting
For the miraculous birth, there always must be
Children who did not specially want it to happen, skating
On a pond at the edge of the wood:
They never forgot
That even the dreadful martyrdom must run its course
Anyhow in a corner, some untidy spot
Where the dogs go on with their doggy life and the torturer's horse
Scratches its innocent behind on a tree.
In Breughel's Icarus, for instance: how everything turns away
Quite leisurely from the disaster; the ploughman may
Have heard the splash, the forsaken cry,
But for him it was not an important failure; the sun shone
As it had to on the white legs disappearing into the green
Water; and the expensive delicate ship that must have seen
Something amazing, a boy falling out of the sky,
had somewhere to get to and sailed calmly on.

Damn the Gods
(or Release the Kraken)

New Godzilla Haikus every day.

James Carville once famously said,

I used to think if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter. But now I want to come back as the bond market. You can intimidate everybody.

In today's column, Tom Friedman prostrates himself rhetorically once again in front of the bond market:

If you step back far enough, you could argue that George W. Bush brought the Reagan Revolution — with its emphasis on tax cuts, deregulation and government-as-the-problem-not-the-solution — to its logical conclusion and then some. But with a soaring deficit and a banking crisis caused by an excess of deregulation, Reaganism has met its limit. Meanwhile, President Obama’s passage of health care reform has brought the New Deal-Franklin Roosevelt Revolution to its logical conclusion. There will be no more major entitlements for Americans. The bond market will make sure of that. (emphasis added)

At least he writes

"Obama is at least trying to push an agenda for pursuing the American dream in these new circumstances. I don’t agree with every policy — I’d like to see a lot more emphasis on innovation and small business start-ups — but he’s clearly trying. I do not get that impression from the Republicans, and especially those being led around by the Tea Partiers."

The New Pornographers - The Laws Have Changed

(via Salon)

Now Comes the Hard Part by Jonathan Cohn

Article on Elizabeth Warren.

She will not comment on whether she might head the [consumer protection] agency, for the same reason administration officials will not. "What we’re trying to do is build an institution that’s over and above any individual," Ms. Farrell said.

Ms. Warren does say that if she and the administration lose on the agency’s passage, she’d like them to lose big -- to force lawmakers, as she puts it, to leave "lots of blood and teeth" on the floor.

If that happens, Ms. Warren will still have her own platform, starting with her nearly constant stream of television appearances. Hosts and cameramen love her: she has the friendly face of a teacher, the pedigree of a top law professor, the moral force of a preacher and the plain-spoken twang of an Oklahoman.

"This is America’s middle class," she recently said on "The Daily Show With Jon Stewart." "We’ve hacked at it and pulled at it and chipped at it for 30 years now, and now there’s no more to do. We fix this problem going forward, or the game really is over."

"When you say it like that and you look at me like that, I know your husband is backstage, I still want to make out with you," Mr. Stewart responded.

If no agency or government post materializes, Ms. Warren says she will happily return to Harvard. Others expect her to do more, including Eliot Spitzer, the former New York governor who has come to know her through their shared interest in consumer advocacy.

"Plan B is to become Ralph Nader," he said.

I [heart] Joe Biden.