Author: luimbe

The Big Picture get’s it right “Its the Law, Bitches!” [UPDATED]

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Knowing that the Exxon Valdez Settlement took 20 years for the claimants to be awarded $507.5m (plus interest from the judgement of 1996) of the original $5b dollar figure, from a layman’s point of view, I am actually content with the Goldman Sachs $550m settlement with the SEC. We avoided years of appeals and legal wrangling. Many folks, and many liberals are not happy with this. Over at the Big Picture, Barry Riholtz points out that the SEC attorneys opted to settle because doing the prudent thing is well…the law.

FT’s Alphaville says I am cranky. Jeff Matthews says I am wrong. Michelle Leder points out the settlement is a pittance relative to GS’ cash.

Here’s a news flash: All of that is irrelevant. We are a nation of laws, and that is what guides SEC prosecutions, negotiations, and settlements. Sure, I may be cranky (only fellow curmudgeon Alan Abelson agrees with me), but what I truly am is astonished at some of the uninformed commentary pinging about inter-tubes about this subject.

Spin isn’t fact, opinions aren’t laws, and having an opinion is not the same as being informed.

One might hope that various folks discussing these issues have a passing familiarity with Securities law, but apparently not. Let’s see if we can edumacate some folks who are unfamiliar with the 1933 and 1934 Security acts.

…

Based upon the evidentiary information the SEC had — emails, phone calls, sworn statements, etc. — the “Fabulous Fab” told Abacus buyers that John Paulson was long the Abacus CDO when he was in fact short it; Further, Fab omitted to mention that a short seller helped to construct the synthetic CDO that he was betting against.

That factual description is a clear violation of Rule 10b-5.

There are some folks who have argued that yes, Fab made untrue statements and omitted others — but they were not material. That is a very good, very lawyerly argument — but it is one that would be a stone cold loser in front of any jury.

Bottom line: IMO, this was a no brainer case based on these facts and the law. Unless you can show Fab never said those things, it is case closed.

THAT is why Goldman settled.

via Its the Law, Bitches! | The Big Picture.

Also, Riholtz continues and makes a great point regarding some folks anger that Goldman still walks away with tons of profits and that the fines are not enough to wipe the bums out. (emphasis his):

Penalties should be proportionate to infractions: Consider the transgression at hand: Fab lied in the sale of structured products, and his firm Goldman Sachs failed to adequately supervise him in these transactions. In the grand scheme of things, this was actually a minor transgression. Sure, it was sleazy, but it was not a billion dollar violation; It sure as hell was not an Arthur Anderson type massive firm-wide fraud deserving of the death penalty — as some of the angrier posts have demanded.

As much as many people want to blame the entire economic meltdown on the vampire squid, they deserve only a modest amount of blame. Worse still, this was not their most egregious offense.

It may be tough to swallow, but we can’t wipe out the banksters with one, “you can’t handle the truth” civil trial moment.

Different Fossil Fuel, Same story

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Massey Energy’s Upper Big Branch coal mine in West Virginia:

Well before this month’s fatal explosion at Upper Big Branch, the country’s worst mine disaster in 40 years, the lack of proper ventilation had been a continuing concern among its miners. The fear of methane building while oxygen dropped preyed on their minds.

“I have had guys come to me and cry,” said the veteran foreman. “Grown men cried — because they are scared.”

But workers in the mine said they did not dare question the company’s safety practices, even when asked to perform a dubious task.

“It was all about production,” said Andrew Tyler, 22, an electrician who two years ago worked as a subcontractor on the wiring for the coal conveyer belt and other equipment at Upper Big Branch. “If you worked for them, you didn’t ask questions about whether some step like running a cable around the breaker was a smart idea. You just did it.”

via 2 Mines Show How Safety Practices Vary Widely – NYTimes.com

BP leased, Trans Ocean owned Deepwater Horizon oil rig in the Gulf Of Mexico:

A confidential survey of workers on the Deepwater Horizon in the weeks before the oil rig exploded showed that many of them were concerned about safety practices and feared reprisals if they reported mistakes or other problems.

In the survey, commissioned by the rig’s owner, Transocean, workers said that company plans were not carried out properly and that they “often saw unsafe behaviors on the rig.”

Some workers also voiced concerns about poor equipment reliability, “which they believed was as a result of drilling priorities taking precedence over planned maintenance,” according to the survey, one of two Transocean reports obtained by The New York Times.

“At nine years old, Deepwater Horizon has never been in dry dock,” one worker told investigators. “We can only work around so much.”

“Run it, break it, fix it,” another worker said. “That’s how they work.”

via NYT: Workers on doomed rig voiced safety concerns – U.S. news – The New York Times – msnbc.com

EOG Resources natural gas drilling in the Marcellus Shale Natural Gas reserve near Harrisburg, PA:

A natural gas drilling company failed to use a proper backup pressure-control system last month when hooking up a well to a pipeline, leading to a major blowout in Pennsylvania that spewed gas and wastewater for 16 hours, a state investigation has found.

EOG Resources Inc. of Houston, which operates nearly 300 wells in Pennsylvania, cut corners by not using a second set of pressure-control devices, a consultant hired by the state concluded in a report issued Tuesday.

EOG took similar safety shortcuts on at least some of its other wells in Pennsylvania, where about half of its drilling operations are in the gas-rich Marcellus Shale reserve, a lucrative source of natural gas that has drawn scores of companies to the state.

“I don’t know any company that would cut corners like this on this kind of well,” said consultant John G. Vittitow, a Texas-based petroleum engineer. “This was just a bad decision and it caught up with them.”

In signed papers released Tuesday, EOG and its contractor, C.C. Forbes Co. of Texas agreed to maximum fines of more than $400,000 combined and to take corrective actions. But they also were allowed to resume all activities in Pennsylvania after the state had shut down some operations since the June 3 blowout.

via Natural Gas Blowout Caused by Safety Shortcut | Chem.Info.

Anything seem familiar?

Breitbart’d: USDA Appointee Shirley Sherrod

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When will the Democrats learn? When the school bully says your shoes look like shit and punches you in the face the solution isn’t to run home, throw out your shoes, yell at your mom for buying you crap shoes, drop 100 dollars on some new kicks and hope the bully won’t punch you in the face the next day. When you roll into school the next day, new shoes squeaking…the bully knows that he’s got you. Acting out of fear and self doubt won’t stop the bully.

Until yesterday: Democrats 1, Brietbart 1. Because of Breitbart’s heavily edited videos ACORN (later cleared of all wrong doing) was forced to shut down after being de-funded by congress, but Senator Landrieu stood up to Breitbart smears and exposed his in house propaganda team led by James O’Keefe.

Today, another Breitbart win. 2-1 Breitbart. Government looks like a big mess where people aren’t fired for being incompetent, delinquent or unqualified. They are fired due to the irresponsible, dishonest accusations of a right wing blow hard. The Obama Administration becomes an even more unattractive place for talented appointees who may be in the private sector. The honor of being nominated to serve the President’s administration comes with invasive vetting and anonymous holds all to be rewarded with a lower salary and an administration that will gladly throw you under the bus.

Shirley Sherrod, a now former USDA Official, whose father was murdered in the Jim Crow south by a white farmer who was never brought to justice, was actually advocating racial reconciliation. She was telling NAACP members assembled that day that race can’t be used to judge people’s fortunes and that when we are in positions of power we should be working on behalf of the poor. She was using her experience from 1986 with white Georgia farmers as a parable for those assembled to honor her at the NAACP of Coffee County’s 20th annual Freedom Fund banquet. It’s a simple, powerful story.

What of the white farmers that Sherrod recounted in her story? Here’s what they think of her:

Sherrod says her comments were taken out of context. And the white farmer she helped, Roger Spooner, credited her with helping save the family farm.

“I don’t know what brought up the racist mess,” he told CNN’s Rick’s List. “They just want to stir up some trouble, it sounds to me in my opinion.”

Spooner’s 82-year-old wife, Eloise, told the Atlanta Journal-Constitution that Sherrod “kept us out of bankruptcy.”

“Her husband told her, ‘You’re spending more time with the Spooners than you are with me,’ ” Spooner told the Atlanta Journal-Constitution. “She took probably two or three trips with us to Albany just to help us out.”

She said she called Sherrod — “a friend for life” — this morning. “She’s very sad about it,” Spooner said. “She told me she was so glad we talked. I just can’t believe this is happening to her.”

via Storm rages over ousted black Ag official accused of racism – USA Today.

Here is video of Tony Harris interviewing Sherrod and also Eloise Spooner, the farmer who Sherrod helped. (By the way kudos to CNN, Harris and later Rick Sanchez who actually did a solid job interviewing Sherrod and the Spooners).

As you can see in the clip above, Ag Secretary Vilsack’s deputy pressured Sherrod to retire while she was no doubt returning to her office in Athens after working to save more farms. The NAACP is ashamed and has admitted their mistake in vilifying Sherrod on Breitbart’s word and according to NAACP President Ben Jealous, has contacted Sherrod directly to apologize (no doubt after Sherrod was interviewd by Harris or Sanchez). They have vowed not to trust Breitbart and Fox News. (Ask George W. Bush about fool me once). All this is a smart move and yet little comfort for a woman who was tireless worker on behalf of Georgia’s farmers. The damage has been done and the most dissappointing thing is that Obama’s administration has been set up to save face.

This week, the Obama Administration has failed the bully test miserably. In keeping Sherrod fired, Obama and his Administration are basically saying: Breitbart’s got a point there. Sherrod wasn’t sufficiently not racist in her speech against racism. As of this posting, she will remain fired.

“When I saw the statements and the context of the statements, I determined that it would make it difficult for her to do her job as a rural development director,” Vilsack said.

via USDA’s Shirley Sherrod: I Helped White Farmer – CBS Evening News – CBS News.

After this fiasco, it’s safe to say Breitbart, Beck, Carlson and the right wing smear mongers just saw Obama and Vilsack walk into the cafeteria with their new shoes on.

Republican platform for 2010: trust us

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David Gregory asks a simple question of Republican Representatives John Cornyn (R-TX) and Pete Sessions (R-TX): what tough decisions will the GOP make to deal with the deficit they hate so much if they gain control of the US House of Representatives. (Keep in mind the war in Afghanistan, Iraq and the Bush Tax Cuts for higher income Americans are the three huge contributors to our current deficit).

MR. GREGORY: But, Congressman, that’s a, that’s a pretty gauzy agenda so far. I mean, what specific–what painful choices are Republicans prepared to make? Are they going to campaign on repealing health care, for instance, repealing financial regulation? Would you like to see those two things done?

REP. SESSIONS: Well, first of all, let’s go right to it. We’re going to balance the budget. We should live within our own means, and we should read the bills and work with the American people.

MR. GREGORY: How do you do it? Tell me how you do it. Name a painful choice that Republicans are prepared to say we ought to make.

REP. SESSIONS: Well, first of all, we need to make sure that as we look at all that we are spending in Washington, D.C., with, not only the, the entitlement spending but also the bigger government, we cannot afford anymore. We have to empower the free enterprise system. See, this is where…

MR. GREGORY: Congressman, these are not specifics.

via July 18: Cornyn, Menendez, Sessions, Van Hollen – Meet the Press – Transcripts – msnbc.com.

As you can see in the following video, Gregory is actually knocking up against the real issue here, but he doesn’t go far enough.

Either the Republicans have no idea what they want to do or they don’t want to talk about the real cuts they want to make to trim the deficit. I would imagine the specifics, from previous platforms, the Republicans would really like to do things like privatize Social Security, cut every business tax possible, further deregulate any industry that affects our lives, cut funding to the US Department of Education and make sure every defense and intelligent contract gets full funding. This Meet the Press appearance sums up the current Republican messaging: just trust us, this time it’ll be different.

Trouble in the Atmosphere

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An upper layer of Earth’s atmosphere recently shrank so much that researchers are at a loss to adequately explain it, NASA said on Thursday.

The thermosphere, which blocks harmful ultraviolet rays, expands and contracts regularly due to the sun’s activities. As carbon dioxide increases, it has a cooling effect at such high altitudes, which also contributes to the contraction.

But even these two factors aren’t fully explaining the extraordinary contraction which, though unlikely to affect the weather, can affect the movement of satellites, researchers said.

“This is the biggest contraction of the thermosphere in at least 43 years,” John Emmert of the Naval Research Lab was quoted as saying in NASA news report.

Emmert is the lead author of a paper announcing the finding in the June 19 issue of the journal Geophysical Research Letters.

“We cannot explain the abnormally low densities, which are about 30 percent lower” than from previous contractions, Emmert told CNN.com.

via Scientists baffled by unusual upper atmosphere shrinkage – CNN.com.

Under current models, the sun activity and the amount of CO2 in the atmosphere at that time doesn’t explain the extraordinary collapse in the thermosphere. There is a piece of the puzzle missing that has scientists scrambling for an explanation.

BP: Cap Works…for now

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BP’s new cap is fully functional

A tightly fitted cap was successfully keeping oil from gushing into the Gulf of Mexico for the first time in three months, BP said Thursday. The victory — long awaited by weary residents along the coast — is the most significant milestone yet in BP’s effort to control one of the worst environmental disasters in U.S. history.

Kent Wells, a BP PLC vice president, said at a news briefing that oil stopped flowing into the water at 2:25 p.m. CDT after engineers gradually dialed down the amount of crude escaping through the last of three valves in the 75-ton cap.

via BP: No oil leaking into Gulf from busted well – Yahoo! News.

No celebrations yet.

There still may be cracks in or below the sea floor filling with petroleum and methane that would create an even bigger problem and I don’t trust BP to tell us all that they know or our current MMS administration to even go about getting the correct information out to the public.

Lugar deflates Romney’s critique of Nuclear Treaty

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Romney will say anything negative about President Obama and try and see what sticks

“Governor Romney offers additional misreadings and myths that have been refuted explicitly in Congressional hearings,” said Mr. Lugar, the ranking Republican on the Senate Foreign Relations Committee. Among other things, Mr. Lugar said the treaty imposes no restriction on current American plans for missile defense and has the support of prominent Republican national security leaders like former Secretary of State Henry A. Kissinger and former Defense Secretary James R. Schlesinger.

[…]

Mr. Lugar’s statement took issue with a number of factual assertions by Mr. Romney on issues like counting rules and a consulting commission that would monitor treaty issues. He also took issue with Mr. Romney’s logic. Where Mr. Romney criticized the treaty for not limiting tactical nuclear weapons, Mr. Lugar said that “rejecting the treaty would guarantee that no agreement on tactical nukes would occur” in the future.

via Lugar Attacks Romney on Nuclear Treaty – The Caucus Blog – NYTimes.com.

Richard Lugar has actually been working on non-proliferation issues for years and wanted to let Romney know that whatever sh*t he was throwing just ain’t sticking too well.

Good Thing: NAACP supports Proposition 19

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What the NAACP should be doing: supporting California’s Proposition 19 (h/t The Daily Dish via Reason) since the criminalization of marijuana usage leads to disproportionate arrests among people of color.

“We are joining a growing number of medical professionals, labor organizations, law enforcement authorities, local municipalities, and approximately 56 percent of the public, in saying that it is time to decriminalize the use of marijuana,” state NAACP President Alice Huffman said in a news release Monday. “There is a strong racial component that must be considered when we investigate how the marijuana laws are applied to people of color.”

via NAACP signs onto pot legalization measure – San Jose Mercury News

The disproportionate incarceration replaced by targeted treatment for problem users also has positive public societal effects.

But in its 2009 World Drug Report, the UN had little but kind words for Portugal’s radical (by U.S. standards) approach. “These conditions keep drugs out of the hands of those who would avoid them under a system of full prohibition, while encouraging treatment, rather than incarceration, for users. Among those who would not welcome a summons from a police officer are tourists, and, as a result, Portugal’s policy has reportedly not led to an increase in drug tourism,” reads the report. “It also appears that a number of drug-related problems have decreased.”

via UN Backs Drug Decriminalization In World Drug Report.

Cantor the Wonk vs. Back Slappin’ Boehner

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Ezra Klein wonders if Politico’s description of House Minority Whip Eric Cantor (R-VA) as a “wonk” makes sense:

But maybe I’m missing something on Cantor and my readers can enlighten me. Is he known for mastery of a particular issue? Does he have some really smart policy initiatives that he’s promoting in the House? What’s the deal here?

via Ezra Klein – Is Eric Cantor a policy wonk?.

Prior to Ezra’s musings, MSNBC’s Joe Scarborough came right out and said he heard from all his Republican friends on the hill that House Majority Leader John Boehner is known to be “lazy” and then he attempted to force Politico’s Jim Vandehei to admit he’s heard the same about Boehner from GOPers on Capital Hill as well. Vandehei demures and instead claims that the younger members of the GOP caucus just don’t feel Boehner’s ideas are fresh enough. Watch Vandehei awkwardly dance around Scarborough’s assertions:

What I am getting at, is that Ezra is missing the story here. I think the Cantor folks are pulling the knives out for Boehner and are using third party anecdotal validation (through Vandehei’s Politico and MSNBC’s Scarborough) to do it.This whole Cantor the Wonk being held back by “back slappin’ beer guzzlin’ bronzed up” Boehner (R-OH) theme seems to be the Cantor camp preparing for what they see as a good chance to force a shake up in their caucus leadership: the 2010 midterm elections. If Cantor’s camp projects that the GOP remains the minority party in the house, then they are most likely purposely crafting this image of Cantor the Wonk (a la maverick McCain or Cowboy/Successful MBA Bush) in anticipation of those elections. We may begin to hear more about how the GOP sees Cantor as a serious, wonky, young-ish, change agent and it’s all for Cantor to make his case for ascension to the Leadership position.

If November brings a failed attempt by the Republicans to take over the Pelosi house, Cantor the Wonk can then make the case that the reason Pelosi is still in power, even though America hates her and her dirty health care, is that Lazy Boehner did not work hard enough. If the GOP does take over the House, then Cantor is the guy that made it happen with his tireless wonkiness as Boehner was probably back slappin’ and beer guzzlin’ at the tanning salon.

The question really being: if Boehner was seen as such a party animal by his fellow GOPers, why was he in leadership in the first place? It will be interesting to see what develops.

Ruling: Google’s YouTube not responsible infringing on Viacom copyrights

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Viacom had claimed that “tens of thousands of videos” based on its copyrighted works had been posted on YouTube, and that both YouTube and its owner Google had known about it but had done nothing about it.

But District Judge Louis Stanton said in his ruling: “Mere knowledge of prevalence of such activity in general is not enough. The provider need not monitor or seek out facts indicating such activity.”

Google and YouTube had argued that they were entitled to “safe harbour” protection under digital copyright law because they had insufficient notice of particular alleged offences.

Judge Stanton agreed, saying that when “YouTube was given notices, it removed the material… it is thus protected from liability” under a provision in the Digital Millennium Copyright Act.

via BBC News – Google’s YouTube wins Viacom copyright case.

If I record an episode of South Park to DVDs and then proceed to make copies for all of my friends, is Verbatim responsible for making blanks? Panasonic for making DVD players that can play a burned disc? Old media shouldn’t fight YouTube as a medium. Instead they should publish their content through it and attempt to generate add revenue in that fashion.

Buzz Tweets

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Buzz Bissinger, Pulitzer Prize winner, tweets.

I am an angry man, which is one of the reasons I have resumed therapy and take four different pharmaceuticals. I wake up angry, stay angry during the day except to my dog and children, and go to bed angry at night. Most of my anger amounted to a running dialogue of abuse and self-abuse while working alone at home. But with Twitter, I now had an outlet. I used profanity, because that’s the way I talk, the perfect sentence being one in which the f-bomb appears as adverb, verb, adjective, and noun, as in, “You kind sir, go fuckly fuck yourself, you fuck of a fuckhead.” I also began to routinely apply the term “douche juice” to those I felt were sub-troglodytes. It has become my tweeting imprimatur and many Twitterites congratulated me on coining the phrase. I did not. But fuck it. The person I appropriated it from had even fewer followers than I did, implying of course a very empty and unsuccessful life.

via Twidiot | The New Republic.

Personally I am glad Bissinger has evolved a good deal from seeing blogging/new media like this…

To understanding blogging/micro-blogging like this

@TheYankeeU Stop being weener dickiedo. Say something or Twitter off. How I tweet has nothing to do with the way I write. I am 24/7 angry.

via Twitter / buzzbissinger: @TheYankeeU Stop being wee ….

Follow Bissinger. He skewers his latest co-author Lebron James and Peggy Noonan alike. His twitter rants > tv panel rants.

McChrystal’s candid view of his civilian leadership

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Originally uploaded by The White House

President Barack Obama meets with Army Gen. Stanley McChrystal, the Commander of U.S. Forces in Afghanistan, aboard Air Force One in Copenhagen, Denmark on Oct. 2, 2009. (Official White House photo by Pete Souza)

Rolling Stone gets McChrystal to give his honest opinion of members of the Obama Administration.

Gen McChrystal also appears to joke in response to a question about the vice-president.

“Are you asking about Vice-President Biden?” McChrystal asks. “Who’s that?”

An aide then says: “Biden? Did you say: Bite Me?”

Another aide refers to a key Oval Office meeting with the president a year ago.

The aide says it was “a 10-minute photo op”, adding: “Obama clearly didn’t know anything about him, who he was… he didn’t seem very engaged. The boss was pretty disappointed.”

Gen McChrystal himself says: “I found that time painful. I was selling an unsellable position.”

Another aide refers to national security adviser, James Jones, as a “clown stuck in 1985”.

Of an e-mail from US special envoy to Pakistan and Afghanistan Richard Holbrooke, Gen McChrystal says: “Oh, not another e-mail from Holbrooke… I don’t even want to open it.”

Last year’s Afghan strategy review by the new president was detailed and drawn out, with Gen McChrystal finally getting an additional 30,000 US troops from Mr Obama.

Analysts say Gen McChrystal disagreed with the pledge to start bringing troops home in July 2011.

Meanwhile the US congressional report says that trucks carrying supplies to US troops allegedly pay the Afghan security firms to ensure their safe passage in dangerous areas.

The convoys are attacked if payments are not made, it is alleged.

via BBC News – US general McChrystal sorry for Rolling Stone ‘error’.

Sound familiar? Remember McChrystal’s speech in October 2009 speech in London?

An adviser to the administration said: “People aren’t sure whether McChrystal is being naïve or an upstart. To my mind he doesn’t seem ready for this Washington hard-ball and is just speaking his mind too plainly.”

In London, Gen McChrystal, who heads the 68,000 US troops in Afghanistan as well as the 100,000 Nato forces, flatly rejected proposals to switch to a strategy more reliant on drone missile strikes and special forces operations against al-Qaeda.

He told the Institute of International and Strategic Studies that the formula, which is favoured by Vice-President Joe Biden, would lead to “Chaos-istan”.

When asked whether he would support it, he said: “The short answer is: No.”

He went on to say: “Waiting does not prolong a favorable outcome. This effort will not remain winnable indefinitely, and nor will public support.”

The remarks have been seen by some in the Obama administration as a barbed reference to the slow pace of debate within the White House.

via White House angry at General Stanley McChrystal speech on Afghanistan – Telegraph.

It seems the White House aide may be the naive one and McChrystal is an upstart who understands Washington politics well enough. Or maybe McChrystal is the angry guy who vents every smoke break. Either way, his disdain for the strategy he has been tasked to execute needs to be dealt with by the Administration since he cannot deal with it himself.

UPDATE: Looks like it’s being dealt with.

An angry President Obama summoned his top commander in Afghanistan to Washington on Tuesday after a magazine article portrayed the general and his staff as openly contemptuous of some senior members of the Obama administration.

An administration official said the commander, Gen. Stanley A. McChrystal, would meet with President Obama and Vice President Biden at the White House on Wednesday “to explain to the Pentagon and the commander in chief his quotes in the piece,” which appears in the July 8-22 edition of Rolling Stone. General McChrystal was scheduled to attend a monthly meeting on Afghanistan by teleconference, the official said, but was directed to return to Washington in light of the article.

via McChrystal Is Summoned to Washington Over Remarks – NYTimes.com.


Human Again?

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Ron Artest, the crowd storming monster celebrates after the game, but he refers to his doctor who helped him through mental issues. Like Ricky Williams, instead of just being vilified…maybe a championship makes him seem less like a monster….