Esoteric Dissertations from a One-Track Mind

September 17, 2008

The Credit Crisis: AIG Bailout

Filed under: economy — Tags: , — codesmithy @ 6:17 am

In yet another twist in the Credit Crisis, the Fed stepped in to give AIG a $85 billion loan.  AIG, and the other insurance companies like AIG that guaranteed the mortgage backed securities (through “credit default swaps”) are basically where the buck stops in the credit crisis.  Well, not exactly, if the insurance companies go bankrupt, then the mortgage backed securities would have to be reevaluated because they obviously aren’t going to be AAA any longer, which in turn would cause massive write-downs and losses.  It is a fear of the second scenario that made the Fed act.  Another reason the Fed had to act was because no one else would.  AIG’s obligations on these mortgage backed securities are so odious, only the government, an institution that can raise funds through coercion, could make such a poor investment.  Therefore, I find the following highly dubious.

Fed staffers said that they expected A.I.G. would repay the loan before it comes due in two years, either through the sales of assets or through operations.

The $85 billion is what is needed continue a delusion, i.e. that by chopping and slicing a bundle of bad debt, you wind up with something that just isn’t repackaged bad debt.  Well, it isn’t anymore, because now the American tax-payer is footing the bill, but AIG’s ability to repay the loan is predicated on re-couping some of that debt through selling the underlying asset, like the house (good luck with that), selling other assets and firing employees.

This isn’t to say the Fed didn’t do the right thing.  If this is the approach the Fed takes, guaranteeing AAA rated securities with taxpayer money, then it needs to be regulated.  The second issue is anti-trust.  There should be no entity on Wall Street that is “too big to fail.”  Third, people who perpetrated this fraud need to be sent to prison and some of their property confiscated in order to repay American tax-payers.  The end result of the credit crises cannot be a financial system that continues with “business-as-usual” after getting bailed out by American tax-payers.  It is morally indefensible to have a system that privatizes profits and socializes losses.  The effects of this crisis are going to linger for years to come, so we are faced with a choice: the people can either demand something better or let the moment pass.

September 11, 2008

Media Narratives

Filed under: media, politics — Tags: , , — codesmithy @ 8:19 am

Crooks and Liars has video of Lou Dobbs discussing the “liberal” media with Howard Kurtz and Ken Auletta from the New Yorker.  I am somewhat thankful that Auletta called Dobbs on his assumptions about the “liberal” media.  Auletta is right that one facet of bias is horse race politics, it isn’t the only bias, but for broaching the issue in the mainstream media it is a good start.

Kurtz opines that he has never seen so much positive coverage of a presidential candidate as Barack Obama has gotten.  I will say again, the best indication of bias are not the stories that run, but rather the stories that get ignored.  History doesn’t really allow repeatable experiments, so a reasonable approach is to look at paired examples.  Thankfully, there have been multiple in the campaign and campaigns past that we can draw upon.

First, there are the respective episodes of Reverend Wright and Reverend Hagee.  Obama’s pastor dominated the news cycle.  McCain’s political alliance with Hagee got a brief mention.

Second, we can compare coverage of Kerry and McCain marrying heiresses as Glenn Greenwald did.  The conclusion was that Kerry was a gigolo.  McCain is just living the American dream.

Third, we have McCain saying that Iran is training al-QaedaChuck Todd points out that if either Obama or Clinton had made a similar mistatement, more attention would have been focused on the episode.

The problem with the media is not facts, it is the framing.  A truly objective mainstream media would look at a story from different perspectives and multiple frames.  But, we don’t have an objective media.  The various media narratives for Obama is that he isn’t specific, an elitist, vaguely un-American, and inexperienced.  For McCain, he is maverick, a war-hero, a straight-talker who may be suffering various degrees of senior moments.

It doesn’t matter if the evidence for media narratives are flimsy, it is just a simple matter of repetition.  The “pledge of allegiance” smear has lasting effects beyond that story because it reinforces a particular narrative.

Narratives like the Republicans running a badly mismanaged and unnecessary war in Iraq,  Republicans being the party of irrational fear and cronyism, Republicans being a party of incompetence in times of crisis (i.e. the credit crisis and Katrina), these narratives don’t gain traction in the media.  Yet, the myth of the “liberal” media persists.

The Republican party is the one that wrecked America.  Our infrastructure is in shambles, our economy skirting with disaster, our standing in the world has been severely diminished, our civil liberties have been trampled, none of this leaves the slightest blemish on the Republican party in the eyes of the mainstream press.  No, it is Obama who has received gushing coverage in the eyes of Kurtz with the so-called bitter-gate, alienating-low bowling scores and all.  If this is what Dobbs and Kurtz consider to biased towards Obama then I find their world-view and their expectations for an objective reporting of it inconceivable.

September 9, 2008

Fannie Mae and Freddie Mac Takeover

Filed under: economy — Tags: — codesmithy @ 8:08 am

Fannie Mae and Freddie Mac were taken over by the government.

The government pledged to inject taxpayer dollars into the companies to prevent insolvency — up to $100 billion total for each company. It also will also start buying mortgage-backed securities from the companies.

The stocks of the respective companies have plunged over the past year, losing over 90% of their value.  Fannie Mae was trading at 62.76 on 9/10/2007 and Freddie Mac was trading at 58.75 on the same date.  Fannie Mae closed at 0.730 and Freddie Mac closed at 0.880.

Banks make terrible neighbors, and resulting suburban blight is likely to give positive feedback to already hurting home values.  In short, suburbia is dying.  Depending on energy prices and future technology, it could be a terminal case for millions of Americans.

September 7, 2008

Dan Rather Channels Manufacturing Consent

Filed under: media — Tags: , — codesmithy @ 8:56 am

Dan Rather, who was often on the receiving end of many of Chomsky’s attacks on the media, is speaking like he has been converted.  What is the world coming to?  Although, is there ever going to be a point in time where the mainstream media acknowledges that there is a bias and it is anything but “liberal”?

September 3, 2008

Reflections on the Bristol Palin Fiasco

Filed under: culture, politics — Tags: , , — codesmithy @ 9:55 am

The Internet was buzzing with rumors this weekend that Bristol Palin was the actual mother of Trig Palin, Sarah Palin’s fifth child.

Fueling the rumors was this photoHowever, this story also with a photo is the most convincing, clinching that Sarah Palin is actually the mother of Trig.  Everything else, as it turns out, is just coincidence.  Therefore, I feel obligated to preface any comment on this story by saying Bristol is not the mother of Trig, Sarah is.

Now from the you-can’t-make-this-up department, the McCain campaign countered these “vicious” rumors, not with a photo of Sarah being clearly pregnant, but by saying that Bristol can’t be the mother because she is currently 5 months pregnant, and pointing out that Trig is four months old.

This leaves me sort of dumbfounded on exactly what was so “vicious” about the rumors then.  Let’s say for the sake of argument that the rumors were right (which they aren’t) and that Sarah Palin was covering for her daughter.  Is that so horrible?  When I think about it, there is a part of me that finds it admirable that a mother would make that type of sacrifice for her daughter.  Really, who is hurt? Who is worse off?

Ok, ok, it is based on a deception and lying is bad.  Worse than Santa, the tooth fairy or the Easter bunny?  Worse than telling your kid that the Earth is only 6,000 years old?  Worse than telling your kid that they will burn in Hell for all eternity if they don’t open their heart to your particular brand of religion?  Worse than denying anthropomorphic global climate change? Worse than burdening them with more debt to China? Worse than continuing a disastrous war that was based on bad information?  Worse than endorsing ignorance as the preferred method of preventing teenage pregnancy?

Hey, at least Sarah is the mother of Trig.  Although, I’m personally finding broad ignorance a whole lot more terrifying than petty deception.

September 2, 2008

Amy Goodman Arrested at RNC

Filed under: culture, politics, protest — Tags: , , — codesmithy @ 8:39 am

Amy Goodman, award-winning journalist and host of Democracy Now!, was arrested at the Republican National Convention on Monday.

According to the Washington Post, Goodman has been released.

Goodman’s arrest is the culmination of a long series of events leading up to the RNC.  The FBI attempted to infiltrate “vegan potlucks” back in MarchThen there were a series of preemptive raids the weekend before the RNC.  Finally, we are seeing an escalation of mass arrest tactics used at the 2004 Republican National Convention in New York.

It is usually shrill hyperbole to call the United States a police state.  However, if what is happening in the Twin Cities does not constitute a police state, then what does?

Arresting journalists is a typical tactic of third-world dicatorships.  Now we are seeing it imported.

Glenn Greenwald has more.

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