The Bloodless Coup Continues-7

"The Obama administration picked Goldman Sachs Group Inc. Vice Chairman Robert Hormats to be the State Department's undersecretary for economic, energy and agricultural affairs, the White House announced Friday. ... He served during the 1970s as an economic adviser in the White House to former national security adviser Zbignew Brzezinski", Jay Solomon at the WSJ, 18 July 2009, link: http://online.wsj.com/article/SB124788062989961233.html.

Quoted without comment.

Benchmark Baloney

"Self-serving compensation practices, we can now agree, played a central role in the financial wreckage that still surrounds us. For example, rewarding Wall Street's outsized risk-takers with immediate bonuses, no matter how their trades worked out, turned out to be, well, disastrous. ... Like most companies, Alliance [Data Services] dispenses stock awards to its executives each year when certain performance measures are met. Where Alliance gets creative is in the benchmark those stock awards are tied to, one that excludes some fairly significant costs that the company incurs. Alliance calls this measure 'cash earnings per share.' ... But at least one analyst objects to the fact that the company's performance pay is based on a number that management can easily massage. And basing executives' pay on a measure that does not take into account the costs of acquisitions means that Alliance's management is encourage to make acquisitions with little regard for price", Gretchen Morgenson (GM) at the NYT, 26 July 2009, link: http://nytimes.com/2009/07/26/business/26gret.html.

Is GM ever right.

Michael Savage, Barbarian

"Being a lifelong liberal, I'd never heard anybody like Savage in my life. ... But what shocked me the most was his saying that men have become 'feminized.' I'd never been so offended. ... Like any good feminist, ranting and raving about men were two of my favorite pastimes. Men frightened me. Testosterone fueled types like Michael Savage [MS] scared the bejeezus out of me. ... Now I see Savage as a seer warning us of the dangers we weer in for if men went the way of the dinosaur. I had thought taming men's animal nature was a win-win for everybody. Now I realize it was tampering with Mother Nature. ... Because while we've been engineering a kindler, gentler man, much of the wrold has been doing the opposite. Countries like Iran and North Korea have been building nuclear weapons and poisoning their young men with hatred of the US. They have been making their men stronger, meaner and better armed. Liberals: be honest with yourselves. In the end, if the worst case scenario happens (God forbid) and we are attacked, who will you run to? ... No; all of us, liberal and leftists, conservatives and feminists, we will go where we have always gone from the beginning of time; we will search desperately for the big, strong men to protect us, the ones who have always had the guts, the courage, and yes the cojones, to put their lives and limbs on the line", original italics, Robin of Berkeley, 22 July 2009, at: http://www.americanthinker.com/2009/07/are_men_obsolete.html.

"The political roots of the UK government's decision to bar talk show host [MS] have been revealed for the world to see, thanks to a freedom of information lawsuit in Britain that caused Home Office documents on the subject to be made public. We now know that political considerations--the need to placate Muslims, a powerful voting bloc--resulted in a search for someone to 'provide a balance of types of exclusion cases.' ... Certainly, if one is appeasing Muslim extremists, whose violent reaction was supposedly feared should Savage set foot in the UK, then a Jew makes the best fall guy, as everyone from Hitler to the Grand Mufti of Jerusalem would agree. ... The US media has studiously ignored the story", original italics, Thomas Lifson, 25 July 2009 at: http://www.americanthinker.com/blog/2009/07/brit_ban_on_savage_was_pure_po.html.

"When I first heard that radio host [MS] had been banned from traveling to England along with an assortment of Moslem terrorists and other miscreants, my first thought was that the public relations arm of the politically corrent thought police had struck again. It only made sense. ... Yet the spineless Neville Chamberlain bureaucrats charged with this task--whose credo seems to be 'peace through capitulation'--would never want to be seen as singling out Moslems. So they traded a man's reputation for peace in our time. ... You may rest secure in the knowledge that you're not as controversial as Savage, but understand the implications of quota selection. Whether you're favoring a person or persecuting him, the standard is the same: you're selecting him not based on what he has done but what he is", Selwyn Duke 27 July 2009, link: http://www.intellectualconservative.com/2009/07/27/britannia-ruled-by-knaves-savage-banned%20to-fill-white-man-quota/.

Quoted without comment.

The UK is gutless. As opposed to fighting its homegrown jihadis, it bans Savage. There may be a bright spot here. The UK's pub crowd may bring down its Labor government over this act of cowardice.

Duke says it all. I wonder if Sonia Sotomayor or POTUS Obama has anything to say about this. Or Henry Gates?

Arbitration RIP

"Two major arbitration firms are backing away from the business of resolving disputes between customers and their credit-card and cellphone companies, throwing into disarray a controversial system that prevents unhappy customers from filing lawsuits. ... The National Arbitration Forum [NAF] said companies prevail over consumers in 94% of such cases. Credit-card companies defend those results, arguing that there is typically a long paper trail proving the customers owe the amounts in dispute. ... Although arbitration long has been controversial, the current situation developed rapidly starting last week when the Minnesota attorney general's office sued the [NAF], based in St. Louis Park, Minn., over the way it handled disputes. Among other things, the lawsuit contended that the NAF didn't disclose that it has financial ties to the debt-collection industry, violating Minnesota laws against consumer fraud, deceptive trade practices and false advertising. ... 'This is an issue beyond any one problem company,' said Minnesota Attorney General Lori Swanson. 'It is a systematic industrywide problem. Consumers are giving away rights without even knowing it.' An official with the [American Arbitration Association] AAA said the group, which is a not-for-profit, will stop taking debt-collection arbitrations 'until some standards of safeguards are established. A spokeswoman for NAF, a closely held, for-profit company said it made the decision to stop doing credit-card arbitrations because it was being hit with a wave of lawsuits", my emphasis, Robin Sidel and Amol Sharma at the WSJ, 22 July 2009, link: http://online.wsj.com/article/SB124822374503070587.html.

I'm glad to see this. Do I smell a RICO association in fact here? Plaintiffs' bar, start your engines. As Basil Hart says, "Nothing can deceive like a document". This is another "Graffam" moment. Paper trails do not impress me. If anyone wonders why we need federalism, I ask, where were the Feds on this? See my 26 June 2008 post: http://skepticaltexascpa.blogspot.com/2008/06/repeat-player-advantage-3.html.

Obamaramus-2

"Well ... let'as take a tally: Barack Obama looks down condescendingly on small town Americans (you know, the religious fanatics who grasp at guns and religion because they have so little else to believe in or rely upon), does not believe America is an exceptional country (he said so himself), while continually apologizing for our actions throughout history; he refused to wear a flag pin until politics intruded during the campaign; he makes fun of mentally handicapped people on Jay Leno (comparing his bowling skills to those in the Special Olympics); finds Republicans all but repugnant; disregards the feelings of our strongest ally, Great Britain; and calls on Israelis to be more self-reflective. ... Israel is one of the most self-reflective nations on earth ... condescendingly telling Israel to be more self-reflective reveals a profound lack of respect for our ally and knowledge about its people. For a self-styled student of history, this reveals a startling lack of knowledge as does his claim that there were not moves made towards a resolution between the Palestinians and the Isrealis over the past eight years--a claim brilliant and concisely eviscerated by Rick Richman. ... Marty Peretz, who defended Barack Obama during the campaign from criticism that he would likely sell-out Israel, has taken off his rose-colored glasses over the last few months and has come to believe he was snookered. ... 'He brought nothing back from Riyadh and Cairo, absolutely nothing except the conviction of the Arab leaders that they need do nothing but sit and wait until the president squeezes one concession after another out of Jerusalem. Oops, I apologize. Maybe I should still say Tel Aviv.' ... The Arab world is one where almost no self-reflection occurs. ... But for this world Obama mostly sings words of praise", Ed Lasky, 15 July 2009, link: http://www.americanthinker.com/blog/2009/07/to_obama_self_reflection_start.html.

Where did Obama learn his Middle Eastern history? From John Esposito? One good thing which may come out of the Obama administration: an end to American Joos re-electing FDR 64 years after his death.

Why Friehling?-2

"The former auditor for convicted Ponzi-scheme operator Bernard Madoff appears poised to waive his right to indictment, making it easier for the government to proceed with the case. ... If Mr. Friehling does waive his right to be indicted, it makes the process easier on the government because it won't have to empanel a grand jury. But legal observers said it doesn't necessarily mean Mr. Friehling is close to reaching a plea agreement with prosecutors. Mr. Friehling's lawyer declined to comment. ... The government also has alleged that Mr,. Friehlibng failed to conduct independent audits of Mr. Madoff's firm that complied with generally accepted auditing standards and conformed with generally accpeted accounting principles, and falsely certified he had done so", Chad Bray (CB) and Amit Efrati at the WSJ, 16 July 2009, link: http://online.wsj.com/article/SB124768925368647391.html.

"The former auditor for convicted Ponzi-scheme operator Bernard Madoff waived indictment and pleaded not guilty to criminal charges Friday. ... He is the only person, aside from Mr. Madoff himself, who has been criminally charged in connection with the multibillion-dollar Ponzi scheme. ... Prosecutors from the US attorney's office in Manhattan have alleged that Mr. Friehling failed to conduct meaningful, independent audits of Mr. Madoff's firm, Bernard L. Madoff Investment Securities LLC, and falsely certified that he had done so", CB at the WSJ, 18 July 2009, link: http://online.wsj.com/article/SB124784585862258641.html.

Did Friehling do anything worse than say KPMG at Citigroup, or PWC at AIG, or, you get the picture. I think D&T which "audited" General Motors should chip in with the rest of the Big 87654 and underwrite Freihling's defense. Suppose he goes to prison, will that portend ill for some Big 87654 partners?

Lev Dassin (LD), is this the best you can come up with? The SDNY US attorney's office continues to be a farce. Freihling is a nobody. I hope he goes to trial and is acquitted, no matter what he did or didn't do. Friehling's acquittal might force LD & Co. to hunt bigger game.

Lake Wobegon of Texas

"A record number of Houston ISD students are now classified as 'gifted and talented' [G&T]--an increase spurred by changes in how the school district tests and enrolls children in so-called Vanguard programs. Nearly 28,300 HISD students earned entrance into the popular program by spring 2009, up more than 2,000 students from 2007. ... The first--and most cosmetic of the recommendations enacted--was to call all [G&T] programs by the prestigious Vanguard name. ... HISD now needs to make sure students across the district are receiving high-quality education and specialized attention once they're given the prestigious label, they said. ... 'We need to look at this group just like we look at every group to make sure they are academically growing so their parents feel good about their choice of public school,' [said school board member Diane Johnson]. Currently, HISD's Vanguard program is serving a disproportionate percentage of white students. More than 26 percent of Vanguard students are white, who make up just 8 percent on the overall district. ... A generous 14 percent of HISD students have earned the gifted label based on standardized testing and other qualifiers. ... Rock Courtright, gifted education specialist for Duke Unversity's Talent Identification Program, said ... Children at all intelligence levels are entitled to make a year's worth of progress during the academic term", my emphasis, Jennifer Radcliffe at the Houston Chronicle, 26 July 2009, link:

http://www.chron.com/disp/story.mpl/metropolitan/6547482.html.

With apologies to Richard Nixon, we are all gifted now. The Bayou City is Lake Wobegon, Texas. HISD's 2008 ethnic composition was: 61.0% Hispanic, 27.7% African American and 11.3% other. 12.5% of HISD's 2008 students, 24,986 of 200,225 were in G&T programs. How? I estimate 2008's average HISD student IQ was: 87; only about 17% exceed 100, 1.4% exceed 120. Are 12.5% of HISD's 2008 students G&T? HISD's G&T program looks like a sham. "Other qualifiers", like? Would being Sonia Sotomayor's BFF qualify?

Bananas vs. Dollars

"Which is a better store of value, bananas or corn? ... Meanwhile, a bag of corn kernels, if properly handled, has dried to a form that can be stored to months or even years, without refrigeration. ... Not only does the corn have actual value and investment value, it has value as a speculation that its actual value will be greater in the future. By coincidence, of course, the corn is a pleasing golden color. ... In the modern economy, a barrel of oil is much like a bag of corn. Both are sources of energy. ... Other long-lasting commodities, as well as shares in corporations and bonds both governmental and corporate, are like bags of corn. Paper money and bank balances are more like the bag of bananas. Dollars, euros, yen, rubles, yuan, rupees, pesos and their numerous kin all rot, but at various rates. The German mark after World War I and the Zimbabwean dollar in the past few years rotted at least as fast as bananas, but in most years, most currencies rot at a rate of a few percentage points per year. ... Inflation is not a natural phenomenon. It is an event caused by people, particularly bankers, most particularly central bankers, especially the central bankers in charge of the world's reserve currency. ... The economists agreed with the politicians' priorities. Avoiding unemployment was the only important goal. ... Once a government gets the idea that it can control the economy, or at least smooth off the rough edges of the business cycle, there's trouble ahead", Thomas Donlan at Barron's, 13 July 2009, link: http://online.barrons.com/article/SB124726734857225645.html.

I have analogized the dollar to a rotting banana many times.

Goldman 1, SEC 0

"Federal securities regulators are taking a shot at a high-profile trading strategy that triggered controversy on Wall Street a few years back. Perry Corp., a well-known hedge fund, will pay $150,000 to settle allegations brought by the [SEC] that it improperly withheld details about a large investment in an effort to profit. ... Perry neither admitted nor denied wrongdoing. The firm, run by former Goldman Sachs Group Inc. trader Richard Perry and which at its peak controlled $15 billion, called the settlement a 'satisfactory conclusion.' ... The SEC accused Perry of failing to file a regulatory document known as a 13(d) that would alert the market it had built up a stake of more than 5% in a public company, according to the agency's administrative proceeding. ... 'This case shows that institutional investors need to take very seriously their disclosure obligations,' said David Rosenfeld, associate director of the SEC's New York regional office who oversaw the case. The case 'hopefully will deter others from engaging in this type of conduct.' Perry was represented in the case by securities lawyer William McLucas, who ran the SEC's enforcement division for eight years before leaving the agency in 1998", my emphasis, Jenny Strasburg at the WSJ, 22 July 1009, link: http://online.wsj.com/article/SB124822107142070361.html.

Imagine even "former" GSGers are exempt from meaningful sanction. There are "former" GSGers? Rosenfeld thinks a $150,000 fine will deter a hedge fund from doing something. Hahahahahaha, says the Mogambo Guru. I'll bet McLucas' fees exceeded $150,000. Is this what happened: McLucas told Perry it will cost you $1 million to get out out this. Then McLucas job was to minimize the SEC's cut. Laugh! The conclusion was "satisfactory" to: Perry and McLucas.

Swiss Banks and the IRS

"In a sign that UBS AG's high-profile spat with the [IRS] is chipping away at Switzerland's private banking industry, some Swiss banks are cutting off or curbing business with American clients for fear of crossing US authorities. A number are no longer accepting deposits from US-based customers, or allowing them to open accounts. ... The battle has made some banks in Switzerland see clients based in the USD-regardless of nationalitiy--as an expensive liability. ... For American citizens, who are taxed by the US government on all world-wide income, regardless of its origin, Swiss banks don't offer obvious legal tax advantages. ... Over the past several weeks, Zurich-based retail bank Zurcher Kantonalbank decided to no longer accept business from US cloients, a spokesman said", Katharina Bart at the WSJ, 21 July 2009, link: http://online.wsj.com/article/SB124812576770166239.html.

Why the big push to stop Americans from holding money in Swiss banks? Is it to reduce tax evasion? Or should we don our tin foil hats and expect the 1963-74 Interest Equalization Tax to return, and Treasury figures it will be easier to enforce such tax if Americans hold no money abroad? Stay tuned.