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Please check out my new books, "Prosecutors Gone Wild: The Inside Story of the Trial of Chuck Panici, John Gliottoni, and Louise Marshall" and also, "The Definitive Dossier of PTSD in Whistleblowers"

Friday, April 30, 2010

On the Brink of Collapse: The Gerard Beloin Story Continues



UPDATE: Please also check out my new book, The Definitive Dossier of PTSD in Whistleblowers by going to this link where in chapter three this case is explored in further.


That video is from a public town hall meeting in New Boston, New Hampshire. It was a town hall meeting held on March 2nd, 2010 to determine the fate of the Chief of Police of New Boston, Chris Krajenka. At about 3:20 of the video, a citizen of New Boston, Gerard Beloin, takes his turn to speak and begins to play a recording he had made of Chief Krajenka. Even before Beloin starts playing the tape, New Boston Selectman Rodney Towne can be seen motioning to have it cut off. As a result, the tape was barely heard and no one could make out its contents. Here's how the Manchester Union Leader described the encounter.

"One man, Gerard Beloin, approached the microphone with a laptop and portable speaker system. Beloin then proceeded to play what he alleged was a 911 call with Krajenka, though the content of the call was unclear.
Beloin was ruled out of order and police officers escorted him from the microphone.
Here's how the local New Boston paper described the encounter.
The evening took a bizarre twist when one man, Gerard Beloin, approached the microphone with a laptop and portable speaker system. Beloin then proceeded to play what he alleged was a 911 call with Krajenka, though the content of the call was unclear. Beloin was ruled out of order and police officers escorted him from the microphone.

While the media described the encounter, no one bothered to describe the tape that Beloin played. The recording (linked her under New Boston Police Chief Christopher Krajenka lying to my wife Linda on a 911 call asking for protection) is a recording of Beloin's wife asking Krajenka for protection for her husband. Krajenka is heard saying that Beloin isn't under any threat and inter mixed are other recordings of numerous people actually threatening the life of Gerard Beloin. I asked Towne why he cut off Beloin and Towne said that since the contents of the recordings couldn't be verified they were out of order. At the same time, several of the other participants retold stories of their own encounters with Krajenka and they couldn't necessarily be verified either.

I have run a series of stories Beloin. His story starts in 2002 when he, a roofer, bid on a roofing job at his daughter's high school, Goffstown High School. Upon discovering that the material of the Goffstown High School was in danger of collapse he took his information to the school board president, Dr. Craig Hieber. Dr. Hieber assured Beloin that he would look into the matter and take all necessary steps. Months later, Dr. Hieber died under mysterious circumstances. Then, Beloin says that he began to be threatened and he began recording conversations with powerful people near and around New Boston. (these recordings can be found here) On these recordings, there's evidence of arson, murder, blackmail, and extortion. Beloin took these recordings to County Prosecutors, the State's Attorney General, and all local media. As Beloin gathered more and more recordings, he believes he's uncovered a criminal conspiracy that stretches from the Goffstown School Board, to the County Prosecutors office, and even reaches the attorney general's office.

Yet, instead of having the recordings' contents investigated, publicized, and serving indictments, the media ignored Beloin while the state's law enforcement began to charge Beloin with a series of crimes related to unlawfully recording others. In fact, Beloin has even spent one night in prison stemming from a conviction and another six months in prison from another arrest.

This encounter, however, is the latest in a series of encounters Beloin has had with members of government that refuse to allow his recordings to be heard. Beloin has been in court in front of no less than eight judges and attempted to have one of these recordings played in court and had those judges refuse. One judge, Judge William Groff, even suggested that the threats against Beloin's life weren't legitimate since Beloin was still alive. (Here's a tape of that encounter,
Supervisory Justice William Groff of Hillsborough County Superior Court - South is telling me that because I'm still alive, the death threats against me are not credible.)

In fact, I described another such encounter between Beloin and members of New Hampshire government in this piece on October 3rd, 2009. In this encounter, Beloin attended another town hall meeting to consider the nomination of Marguerite Wageling to a Superior Court position. Prior to this, Wageling had been a Hillsborough County (Beloin's county in NH) Attorney and she was one of several officials that Beloin reached out to with many of his recordings. In fact, Wageling's office was the one that ultimately first began to prosecute Beloin himself for making these recordings illegally and also never prosecuted anyone else on them. Once again, Beloin had a recording ready to play for the town hall. Once again a government official, this time
Raymond Burton, a County Executive Council Person, cut off Beloin before his entire tape could be heard.

In fact, I've spoken with one government official, State Senator Al Baldassaro, who has heard the recordings. In his view, "Gerard Beloin ISN'T crazy" and there is something there. Baldassaro told me that he presented these recordings to the New Hampshire Attorney General's office but so far nothing's been done.

Baldassaro is in the minority. The tapes speak for themselves and they're all listed here. There were dozens of media at the event on the 2nd of March and most described the encounter between Towne and Beloin. None, according to Beloin, asked him to play the tape for them. These tapes now occupy that sphere we call cyberspace and available for any that are curious enough to take a look. Beloin continues to this day to be involved in several court proceedings in which he may wind up being imprisoned. No one else has ever been charged with a crime related to this matter.

Council Winners

Here's the council winners.

Council Winners

Non Council Winners

GDP Growth Mild in First Quarter

The GDP growth disappointed in the first quarter.

The U.S. economy grew at a slightly slower-than-expected pace in the first quarter, held back by inventories and exports, but resurgent consumer spending offered evidence of a sustainable recovery, a government report showed on Friday.

Gross domestic product expanded at a 3.2 percent pace, the Commerce Department said in its first estimate—marking three straight quarters of growth as the economy climbs out of the worst recession since the 1930s.

Analysts polled by Reuters had forecast GDP, which measures total goods and services output within U.S. borders, growing at a 3.4 percent rate in the first three months of 2010 after a 5.6 percent growth pace in the fourth quarter.

Now, a 3% growth rate is what you'd want during normal periods of economic growth. Of course, we aren't in normal periods. Imagine that your own income should be $100,000 yearly. That's what it would have been from 2003-2007. Then, starting at the end of 2008, you not only stopped making $100,000 yearly but lost money for the next year. To make up for that crater in income you'd need to make well over $200,000 for at least a year and then you can taper back off to $100,000. The quarter prior the economy did grow at nearly 6% (or $200,000) but now it's back to normal growth.

So, our economy won't recover until we see sustained growth of 6% for several quarters in a row. 3% will simply not do it.

Thursday, April 29, 2010

The Center for Responsible Lending Conspiracy

The conservatives are working themselves up in a lather and they've found their latest whipping boy for the mortgage crisis. It's the Center for Responsible Lending. This particular whipping boy hits several erogenous zones. First, the CRL was tied into John Paulson, who's been recently disgraced by the Goldman Sachs scandal. Second, a major player at CRL is now in the Obama Treasury Department, Eric Stein. Overall, it fits the narrative that misguided policies from groups like this pressured banks into making bad loans.

The Center for Responsible Lending presents itself as a tireless advocate of poor and downtrodden borrowers facing a credit industry of greedy banks, payday lenders and other financial predators. Yet a review of CRL’s advocacy paints a different picture of the organization. It is intimately tied to some of the worst actors in the lending business and its advocacy has too often hurt, not helped, the very people it claims to defend.

The California financiers Herbert and Marion Sandler must have had a rude shock when they saw themselves depicted in an October 2008 comedy routine on “Saturday Night Live,” the popular late night television show also known as “SNL.”

Presented as a mock C-SPAN broadcast, the sketch brutally parodied the politicians who orchestrated the bailout legislation that fall.

I'm always amused by narratives like this. First, it was the Community Reinvestment Act. Then, it was ACORN. Now, it's the Center for Responsible Lending. If all these groups were responsible for the mortgage crisis, they did it an Orwellian fashion. Tha t's because no one had heard of them when the mortgage boom was happening. Somehow, they puppeteered the complicated mortgage market that include brokers, banks, securitizers, as well as fancy products like Mortgage Backed Securities and Collateralized Debt Obligations. They did it all without anyone noticing.

I don't know why it's so hard for people to believe that the Federal Reserve was chief in responsibility. After all, what has more influence: the group that effectively controls the supply of money in the world or some obscure group no one has heard of. Yet, Conservatives jump over themselves to blame the obscure left wing group of the hour for creating the crisis, and most never mention the Fed.

The whole thing is totally without logic, and by that I mean, the logic created by conservatives. Conservatives will tell you that there's too cozy a relationship between banks and D.C. Well, if that's the case how did some obscure group force these banks into doing bad loans they didn't want to do?

The much more likely scenario was that no one forced the banks, Fannie/Freddie, and all other Wall Street titans into doing anything they didn't want to do on any significant scale. The Community Reinvestment Act accounted for 3% of all mortgages at its height. It was never more than 3%. Yet, this obscure government program forced the banks to give anyone a loan with a heart beat...is this really what conservatives would have us believe.

The Community Reinvestment Act only applied to retail banks not wholesale using mortgage brokers. (the same for CRL) Are conservatives saying that small community banks are responsible for the crisis...because that's who the CRA applied to. The Chase's, WAMUs and Countrywide reiled on mortgage brokers mostly and those loans had nothing to do with CRA. It had nothing to do with the Center for Responsible Lending. The exotic loans we now call "toxic assets" were all a creation of wholesale mortgages. Wholesale sub prime lending just happened to explode less than a year after the Fed lowered its Fed Funds Rate below 1%. Are conservatives really saying this is mere coincidence and all these obscure groups were pulling the strings on people while no one noticed?

Here's my full summary of the crisis.

Video, Quote and Word of the Day



valedutinarian (noun)

a weak person

The true secret of giving advice is, after you have honestly given it, to be perfectly indifferent whether it is taken or not, and never persist in trying to set people right.

Hannah Whitall Smith

Defending Goldman Sachs

Goldman Sachs has officially become a pinata and used for politicians of all sides. The events this week on Capitol Hill were brilliant political theater. Senators from both sides took turns roasting Goldman Sachs executives. Democrats think they've found a perfect symbol and foil to use to create just the right public perception against Wall Street and pass financial reform. Since everything is political in D.C., many conservatives have gone to defending Goldman Sachs.

The absurdities of its case are evident from the SEC complaint. Paulson, ACA and Goldman knew exactly where each other stood. Indeed paragraph 30 of the SEC complaint states that ACA rejected some of the subprime reference positions that Paulson had proposed for inclusion in the mortgage reference pool and substituted others in its place. As such, the SEC claim’s of Goldman deception looks utterly groundless given ACA’s active role. Unless it was brain dead, ACA knew that it was negotiating with a party on the opposing end of the agreement.

At this point the mysteries only deepen. If Goldman committed fraud, then so did Paulson, who was mysteriously not charged. Even more notably, the SEC complaint makes no mention that Goldman actually took the same side of the deal as ACA, which puts it in the unique position of defrauding itself. In light of Goldman’s business decision, it is odd for the SEC to fault Goldman’s efforts to enlist ACA’s aid in selling the new round of CDOs to other sophisticated investment banks. So long as ACA knew what was going on, Goldman adopted a sensible marketing strategy that helps other investors.


and...

As self-righteous Senators grill Goldman Sachs about their role in the housing bubble, it would not be far fetched to request that the Senators switch seats with the Goldman executives.

After all, it wasn’t Goldman that passed the Community Reinvestment Act that forced banks to make loans to people who could never pay them back. It wasn’t Goldman that created and supported Fannie Mae and Freddie Mac. And it wasn’t Goldman that drove interest rates down to a below market level to cause a housing rush not seen since gold was found in them thar’ hills in the mid-1800s.


In our hyperpartisan world, if your opponents hate you must defend. It's the only way to explain Republicans' continued defense of big oil. So, it's important to look again at what Goldman Sachs has been accused of.

hey got together with this guy Paulson. Paulson wanted to bet against the housing market but he wanted to have an extra safe bet. So, he handpicked the worst of the worst mortgages and told GS to package those into a Collateralized Debt Obligation. Then, he bet against it through a Credit Default Swap (it's very complicated but that's the layman's explanation). GS did this and then sold the CDO to their clients without disclosing the deal they made with Paulson to those that bought it.

Now, I am not a lawyer and so I don't know if this is illegal. I do know that it should be if it isn't. I also know that it isn't merely that this guy bet against it. He and GS created it and it was designed to fail and GS never disclosed that to their clients. That's not behavior you want to defend.

Yes, their behavior has been politicized and so be it. Let's also not lose sight of what they've done.

Wednesday, April 28, 2010

Dr. Chacko at the University of Pittsburgh



University of Pitt Appointment

That's an offer letter dated June 1st, 2009 from the provost at the University of Pittsburgh to Dr. Anna Chacko inviting her to be a visiting professor at the university. It's another piece in the evolving puzzle of Dr. Anna Chacko that I've documented here.

There are all sorts of peculiarities in this offer and it leaves a lot of question. Dr. Anna Chacko arrived in Pittsburgh from Butte, Montana in October of 2008 and began working at the Pittsburgh VA. By March of 2009, following a series of complaints from staff an investigative administrative board had removed Dr. Chacko from that position. She was reinstated at the Pittsburgh VA following the intervention of North Carolina Congressman Brad Miller and the head of the VA, General Eric Shinseki. She resumed working in August. By the beginning of October, she was again placed in indefinite leave and terminated the following January.

As such, this offer was made in the middle of all this turmoil. Furthermore, it was made by the Provost himself. Finally, it was backdated to start in the previous October. All of these were questions I raised to the Provost in an email that remains unanswered.

As I've documented previously, the tumultuous tenure of Dr. Anna Chacko at the Pittsburgh VA was immediately preceeded by an equally tumultuous tenure by Dr. Anna Chacko at St. James Hospital in Butte, Montana. There, Dr. Chacko lasted only fourteen months, was named in four lawsuits, and left a radiology department once deep in the black deep in the red.

Prior to that, Dr. Anna Chacko spent about a year at the Boston University Medical Center until she left following complaints of sexual harassment. Before that she spent six years at Lahey Clinic and when she was removed, she infamously had to be carried out SCREAMING

kiss my big Indian Ass


None of these appear to be the qualifications of a visiting professor. Yet, Dr. Anna Chacko wasn't only given that honor but that honor was even backdated. Furthermore, it was given to her by the Provost of the entire university.

At least one radiologist at the Pittsburgh VA also worked on staff at the University of Pittsburgh Medical Center at the time Dr. Chacko was given this position. Were they consulted by the Provost James Maher? Was anyone at the staff at the Pittsburgh VA?

The only thing I know for sure is that there's a lot more to this story and I welcome anyone with any knowledge to contact me.

Here's the full dossier of Dr. Anna Chacko.


The Long Strange Trip of Mario Benitez

Jerry Lemaine is facing an immigration nightmare. A bust for possession of marijuana and a subsequent conviction that wound with the penalty of probation may cost Lemaine the ability to stay in America. Lemaine is a legal resident alien that came here from Haiti as a youth. Yet, this pot bust may lead to his deportation.

When a police officer in this Long Island suburb found a marijuana cigarette in Jerry Lemaine’s pocket one night in January 2007, a Legal Aid lawyer counseled him to plead guilty. Under state statutes, the penalty was only a $100 fine, and though Mr. Lemaine had been caught with a small amount of marijuana years earlier as a teenager, that case had been dismissed.

But Mr. Lemaine, a legal permanent resident, soon discovered that his quick guilty plea had dire consequences. Immigration authorities flew him in shackles to Texas, where he spent three years behind bars, including 10 months in solitary confinement, as he fought deportation to Haiti, the country he had left at age 3.

Under federal rulings that prevailed in Texas, Mr. Lemaine had lost the legal opportunity that rulings in New York would have allowed: to have an immigration judge weigh his offenses, including earlier misdemeanors resolved without jail time, against other aspects of his life, like his nursing studies at Hunter Business School; his care for his little sister, a United States citizen with a brain disorder; and the help he gave his divorced mother, who had worked double shifts to move the family out of a dangerous Brooklyn neighborhood.


It's a fate that Rigo Padilla also almost faced when a DUI conviction also nearly lead to his deportation. Like Lemaine, Padilla was a legal resident alien in the States and he'd come here as a youth. Following his arrest, he too was summoned in front of an immigration judge and faced deportation.


Padilla was arrested for drinking and driving in January. He admitted to police that he had "a few beers" while watching a football game with friends. He planned to only drive eight blocks from a friend's house to his own. He w



as stopped before he made it home after rolling through a stop sign.

Nobody was hurt in the incident and Padilla was given supervision, which under Illinois law wouldn't even result in a conviction, according to his immigration attorney Beatriz Sandoval.

But Padilla was reported to immigr
ation officials and now the young man faces deportation to Mexico, a country he hasn't visited since he left more than 15 years ago.


Padilla was given a reprieve not only by DHS but by the Supreme Court. His case could turn into a landmark for others in his position. The Supreme Court ruled that because Padilla's attorney didn't forewarn the immigration consequences of his pleading that he was denied "competent representation." In writing the majority decision, Justice John Paul Stevens likened deportation to banishment.


Mario Benitez, currently serving time in Brevard County Florida, is now also getting a taste of our immigration system. On May 7th, 2007, Benitez, following an evening of binge drinking, broke into his neighbor's home and stole his change change jar totaling just over $100. He was arrested the next day and subsequently confessed. For the next year, Benitez attempted to work out a plea agreement with prosecutors. He had no other criminal record. He eventually paid back the money to his neighbor.

He also hoped the circumstances that lead to his crime would weigh in his favor. He had moved to Florida from Chicago about a year prior. In the months leading up to his crime, his business tanked, he broke off his engagement with his girlfriend, and this lead to a serious drinking problem. The prosecution wouldn't agree to any plea and his fate was left in the hands of the judge.

Even walking into his sentencing on the 31st of January 2009, Benitez was still hoping to avoid jail. The judge was having none of it. He said that Benitez showed no remorse. He said that Benitez' action had violated the safety that everyone should feel in their homes, and the victims would never feel safe again in their home. The judge gave Benitez a sentence of 22 months. The sentence was eventually reduced to sixteen months and he's scheduled to be released on June 18, 2010.

Within months, Benitez received notice from the Department of Homeland Security of a motion to have him deported. Benitez arrived in America with his parents from Mexico in 1972 when he was four years old. His family came here initially just to visit but then his parents overstayed their Visa. His entire family would eventually straighten out their legal status. The rest of his family even eventually became U.S. citizens however Mario was going to school at the time and he's been a legal resident alien. That said, aside from a few vacations in Mexico, Mario Benitez has lived in America full time since he was four years old.

Now, because of his conviction, the Department of Homeland Security is attempting to deport him to Mexico. Benitez no longer has any family there. He has no friends or contacts and so he'd be deported to a foreign country with no resources.

In his last correspondence to me (for full disclosure I consider Benitez a friend), he called the Padilla decision akin to hitting the lottery. Like Padilla, Benitez claims that he wasn't made aware of the fact that a plea of guilty would lead to his deportation. Now, Benitez is hoping that the recent Supreme Court decision will pave the way to his own case being given another look.

Lemaine was arrested in New York and incarcerated for more than two years in an ICE detention center in a room with dozens of others facing deportation. He lost fifty pounds during his incarceration. Benitez is in the hands of Brevard County and reports to be in good health. Yet, he's forced to mount a defense pro se against his deportation order. He tells me that he needs some legislator somewhere to speak out on his behalf. That's no easy task. He's now a convicted criminal. The law states that a non citizen guilty of a felony will be deported. So, the clock ticks on his uncertain future.

Florida in Play

Governor Charlie Crist has apparently decided that he will announce that he is dropping out of the Florida Senate Republican primary and run as an independent.

Republican Florida Governor Charlie Crist has decided he will run as an independent in the race to fill the Florida U.S. Senate seat, Crist allies tell Fox News. The official announcement is scheduled for Thursday at 5pm ET in St. Petersburg, Florida.

The Senate campaign has been rough and tumble for Crist, he was once the front-runner -- but in recent months began trailing his GOP opponent, Tea Party favorite and former Florida State Speaker Marco Rubio. Rubio has been able to turn a 30-point deficit in the polls into a 30 point lead over Crist.

Crist has said that under no circumstance would he drop out of the race, saying he will do what is best for the voters of Florida. The governor says Republicans in Washington want him to stay in the Republican party but voters in Florida have told him they want him to run as an independent.


Both Crist and Rubio would have won the general election handily but in a three way race it's now wide open. The Democratic nominee is Kendrick Meek.

Council Submissions

The council submissions are up.

Council Submissions

Non Council Submissions

Monday, April 26, 2010

SEC IG to Investigate Goldman Sachs Investigation Timing

This is what Republicans have been clamoring for.

The Securities and Exchange Commission's (SEC) investigative office said Sunday it had begun an investigation into whether charges against Goldman Sachs were politically timed.

SEC Inspector General H. David Kotz wrote Rep. Darrell Issa (R-Calif.) on Sunday to notify the lawmaker that he had opened an investigation, at the congressman's request, into whether the commission's civil charges against the Wall Street giant were coordinated in order to boost the case for the Wall Street reform legislation before Congress.


The timing of the investigation has always been curious. Just as curious, the decision to investigate was decided along party lines. The three Democrats voted to formally charge Goldman Sachs while the two Republicans voted against it. Now that these charges are being investigated formally, if there is any truth to them the Obama administration is in serious trouble.

Financial Reform and Mortgages

I can't speak for anything else but I can tell you with certainty what will happen in mortgages as a result of financial reforms. If you have ever closed on a mortgage, you can appreciate this. It's sometimes referred to as "signing your life away". That's because there are near one hundred documents to sign. Get ready there will be more. All those documents are created in response to some regulation. More regulations mean more documents to sign.

Just so no one thinks that we don't have enough regulations. We have something called Regulation Z. Look it up. Guess what. If there's a Reg Z, A-Y is there as well.

Here's my "favorite" regulation. If I pull someone's credit, I have three business days to sign the initial disclosure. Suffice to say, that was never enforced. You can all imagine the enforcement levels of more regulations.

National Guard to Chicago

We have a war zone in the city and it's time for drastic action say two state lawmakers.

Two state representatives called on Gov. Pat Quinn Sunday to deploy the Illinois National Guard to safeguard Chicago's streets.

Chicago Democrats John Fritchey and LaShawn Ford said they want Quinn, Mayor Richard Daley and Chicago Police Supt. Jody Weis to allow guardsmen to patrol streets and help quell violence. Weis said he did not support the idea because the military and police operate under different rules.

"Is this a drastic call to action? Of course it is," Fritchey said. "Is it warranted when we are losing residents to gun violence at such an alarming rate? Without question. We are not talking about rolling tanks down the street or having armed guards on each corner."

What he envisions, Fritchey said, is a "heightened presence on the streets," particularly on the roughly 9 percent of city blocks where most of the city's violent crimes occur.


This is not the first time such an action has been proposed. Every so often violence really spins out of control in the worst areas of the city. Someone compares Chicago to a war zone and asks for the national guard. Of course, Chicago isn't really a war zone. It only feels that way in areas like Englewood, Austin and Lawndale. So, actually putting the National Guard into the city usually goes nowhere. That's likely where this proposal will go.

Get Ready for the Immigration Debate

The new Arizona immigration bill is likely to be the first serving for a much larger national debate on immigration. Already, the first casualty is likely to be the climate change bill.

Mr. Graham, Republican of South Carolina, said in a sharply worded letter on Saturday that he would no longer participate in negotiations on the energy bill, throwing its already cloudy prospects deeper into doubt. He had been working for months with Senators John Kerry, Democrat of Massachusetts, and Joseph I. Lieberman, independent of Connecticut, on the a legislation, which they were scheduled to announce with considerable fanfare on Monday morning. That announcement has been indefinitely postponed.

In his letter to his two colleagues, Mr. Graham said that he was troubled by reports that the Senate Democratic leader, Harry Reid of Nevada, and the White House were planning to take up an immigration measure before the energy bill. Mr. Graham has worked with Democrats in the past on immigration matters and was expected to be an important bridge to Republicans on that issue, as well as on energy.

Mr. Graham said that any Senate debate on the highly charged subject of illegal immigration would make it impossible to deal with the difficult issues involved in national energy and global warming policy.


The new Arizona bill has laid down the markers for a national debate not seen since health care reform. On one side are those that believe that most tough immigration techniques are inherently racist and violate civil rights.

It is nothing short of astonishing that Arizona Gov. Jan Brewer Friday signed a bill that could make it dangerous just to look Hispanic. That's not the purpose of the new law, of course. As The Post reported, the law "requires authorities in Arizona to question people about their immigration status if there is reason to suspect they are in the country illegally." The Arizona Republic notes that it "would require anyone whom police suspect of being in the country illegally to produce "an alien registration document,' such as a green card or other proof of citizenship, such as a passport or Arizona driver's license."


On the other side, it is those that are fed up with a situation that is out of control.

Mr. President, are you listening? Secretary Napolitano, remember us?

If you or your predecessors had done something to close the nation's back door, we wouldn't be in this fix, where U.S. citizens are left to wonder whether they'll be asked for their papers simply because of the color of their skin. Where our ranchers live in a war zone and our largest city is the kidnapping capital of the planet.

Where everybody is now dug in to whichever foxhole they've chosen in this fight – alien invader or noble immigrant -- with little room for middle ground or rational discussion.

The Democrats see an opportunity. That's why Harry Reid has shuffled his schedule and moved up immigration reform. They see an opportunity to cement the perception that Republicans are racists and anti Hispanic. Of course, the Democrats also thought that health care reform would be a good political move as well once.

The latest Rasmussen polls show that both in Arizona and in the U.S. at large this law is overwhelmingly favored. That should surprise no one. The border is out of control and most Americans, Hispanics included, think something drastic must be done. The problem for Republicans the last time this debate occurred was that they wound up backing a bill that wasn't tough enough. So, not only did they not appease their own base but their opponents painted them as racists anyway.

Any party that proposes tough immigration measures: putting the national guard behind the border patrol, building a fence that spans the entire border, an ID card to identify all citizens, and tough penalties for hiring illegals, will win this debate. Most people want the border under control. That's the next national debate.

Saturday, April 24, 2010

Did GM Payback the Tax Payers

The FTC says no and GM may be in big trouble.

General Motors is running ads on all the major networks this week claiming it has repaid its bailout from the taxpayers "in full." But the claim isn't standing up to scrutiny from lawmakers and government watchdogs who have found that the automaker was able to repay the bailout money only by dipping into a separate pot of bailout funds.

The TV spot may land GM in hot water with the Federal Trade Commission

over its truth-in-advertising laws, which prohibit ads that are "likely to mislead consumers."

"We have repaid our government loans in full — with interest — five years ahead of the original schedule," says Ed Whitacre, chairman and CEO of General Motors Company, asking Americans to give the bankrupt company another look.

GM paid back the taxpayers through Enron style accounting. They paid back the tax payers with another set of tax payer funds. So, GM's claims is absurd on it's face and it may violate truth in advertising claims.

Of course, if GM is stretching the truth in their ads, what are we to make of Joe Biden? He called this so called pay back a "great accomplishment." What are we to make of the media that reported this so called payback as though it was legitimate? In fact, what are we to make of the media still that hasn't yet reported the truth. The truth is that GM used a separate fund of tax payer bailout funds to pay back this set of taxpayer funds. They still owe the tax payers about $50 billion. They will not any time soon pay back the tax payers. That's the truth.

Broadway Bank Officially Closes

The final nail in the coffin of Alexi Giannoulias' former employer has been nailed.

Only hours after federal regulators took over the failed bank that his family controlled, an emotional Democratic U.S. Senate candidate Alexi Giannoulias took a big swig of water and labeled his day personally "devastating."

Now Giannoulias must convince the White House and voters that it's not politically devastating as well.

The closing of the doors at Broadway Bank for the final time Friday failed to slam shut ongoing concerns over Giannoulias' relationship with the bank and the impact on Democratic hopes to retain the Senate seat once held by President Barack Obama.

In 2006, Giannoulias portrayed himself to voters as a savvy young executive at a thriving community bank with the experience that qualified him to be state treasurer. Four years later, his role at the bank is being downplayed and the bank is out of business as he tries to persuade voters to send him to Washington.


The Democrats are stuck between the proverbial rock and hard place. Giannoulias is not at all viable. Yet, if he were to drop out, there's no chance that a Democrat would win anyway. Frankly, their primary voters are to blame. His top opponent was David Hoffman. Hoffman was the Chicago Inspector General. Hoffman got the well earned reputation for taking on Chicago corruption. Hoffman was significantly more viable and would have reflected voter anger. Meanwhile, Giannoulias is the consummate insider. Yet, Democrats chose Giannoulias over Hoffman in the primary. All that we know now we knew then as well.

On another note, disgraced former Lieutenant Governor candidate Scott Lee Cohen is considering a run for Governor.

Scott Lee Cohen, the pawnbroker who flamed out of Illinois politics just days after voters nominated him as the Democratic lieutenant governor candidate, is making plans to run for governor.

Cohen last weekend told House Speaker Michael Madigan, who doubles as state Democratic Party chairman, that he intends to mount an independent run for governor, Madigan's spokesman said. In addition, a Cohen adviser confirmed Friday that Cohen plans to announce his candidacy this week and is trying to find a suitable running mate.


This will make for great political theater. I don't know how viable he'd be as a candidate but then again he came out of nowhere to win the primary.

More Problems for Goldman Sachs

The Wall Street Journal has a story about potential insider trading.

In the Galleon Group insider trading case, the focus has now turned to Warren Buffett’s Goldman Sachs (NYSE: GS) deal, which came during the peak of the financial crisis. The Wall Street Journal, citing a person close to the situation, has reported that before the public announcement of the deal where Buffett’s Berkshire Hathaway Inc. (NYSE: BRK.A) invested $5 billion in Goldman Sachs Group, a director at the bank tipped off Galleon Group’s Raj Rajaratnam about the deal.

The revelation strengthens government’s case against Rajaratnam, a hedge-fund titan, accused in the biggest insider trading case in a generation. The government is examining into whether Goldman Sachs director, Rajat Gupta, provided inside information to Rajaratnam. On March 22, the government filed a case alleging that Rajaratnam or “co –conspirators” traded on non-public information about the bank. Last week, the government provided more details of the information, which Rajaratnam allegedly received, including an advance notice about Buffett’s transaction with Goldman.


Buffett invested about $5 billion into Goldman Sachs. The stock jumped on the news. The allegation here is that director tipped off a hedge fund manager before the news was announced. If this is true, it's signficantly more serious than the other allegation even.

Friday, April 23, 2010

Too Big To Fail

NPR just published the results of a survey of "experts" about what Obama's financial reform will do to curb too big to fail.

Everyone thinks the reforms just aren't enough to solve the problem.

Take, for example, "too big to fail" -- the idea that if one of the largest banks in the country gets into trouble, the government will save it with taxpayer money.

"A vote for reform is a vote to put a stop to taxpayer-funded bailouts," Obama said in his speech in New York on Thursday.

I cannot find any experts -- of any party -- who are willing to agree with Obama on this one.

"We're not seeing a very forceful step on the too-big-to-fail problem," said Carmen Reinhart, an economist at the University of Maryland. "If there's any doubt that the crisis may be systemic, we will bail out again."


Here's what I see. The reality is this. By bailing out the banks in 2008, we have created too big to fail as a near certainty. That's because bailing them out told all banks of that size that they are to vital to fail and the government will back them if they do fail. The banks have been told that their industry is not like others.

So, this problem will not be solved with band aids. Simply creating a slew of new bureaucracies and rules will do little. That's because their size and structure will remain the same. They will still be potentially too big to fail.

That's why there's a push in several circles to break up the banks. That would provide the sort of change that will force them to no longer be too big to fail. The reality is that this is a complicated problem with complicated solutions. Yet, both sides have engaged in sloganeering and platitudes. Those aren't answers to too big to fail. As such, financial reform will ultimately fail. As long as Citigroup has tentacles in insurance, investment, mortgages, and insurance with assets that near a trillion dollars, it will continue to be too big to fail. No one has proposed an idea to stop that. Too big to fail will not be solved until it is addressed.

Arizona to Sign Tough New Anti Immigration Law

This law will set off all sorts of controversy.

Arizona Gov. Jan Brewer on Friday neared a deadline to act on the nation's toughest legislation against illegal immigration.

The sweeping measure would make it a crime under state law to be in the country illegally. It would also require local police officers to question people about their immigration status if there is reason to suspect they are illegal.

A Saturday deadline for Brewer, a Republican, to act on the bill was set on Monday when the legislation arrived on her desk. She can sign, veto or allow it to become law without her signature.

This law will also make sanctuary cities illegal. On the other hand, it will almost certainly lead to at least charges of racial profiling. The bill is currently overwhelmingly approved by the citizens of the state overrun with illegal immigration.

The president just weighed in on the bill.

He denounced as "misguided'' efforts around the nation to crack down on illegal immigrants -- pointing to Arizona, where protests and counter-protests are mounting amid local crackdowns and new state legislation allowing police to check the documents of people suspected of being illegal immigrants.

"If we continue to fail to act at a federal level, we will continue to see misguided efforts opening up around the country,'' the president said. "That includes, for example, the recent efforts in Arizona.''' Efforts there, he said, "threatened to undermine basic notions of fairness that we cherish as Americans, as well as the trust between police and their communities that is so crucial to keeping us safe.''

The president may or may not take up immigration reform later on in 2010. If he does, the only way to make it work is to combine tough border security and enforcement with a path to citizenship. This is a window into what Obama thinks is tough border security.

HHS Says that Obamacare Will Increase Costs

I'm shocked, shocked I say.

President Barack Obama's health care overhaul law will increase the nation's health care tab instead of bringing costs down, government economic forecasters concluded Thursday in a sobering assessment of the sweeping legislation.

A report by economic experts at the Health and Human Services Department said the health care remake will achieve Obama's aim of expanding health insurance -- adding 34 million Americans to the coverage rolls.

But the analysis also found that the law falls short of the president's twin goal of controlling runaway costs, raising projected spending by about 1 percent over 10 years. That increase could get bigger, however, since the report also warned that Medicare cuts in the law may be unrealistic and unsustainable, forcing lawmakers to roll them back.

While all of these are merely analyses, this obviously hurts Obama's credibility. The study came from an independent HHS committee.

Council Winners

The Council Winners are up.

Council Winners

Non-Council Winners

Thursday, April 22, 2010

4 Million To Pay Health Care Fee

So says the CBO.

Nearly 4 million Americans will have to pay a penalty if they fail to get health insurance when that element of President Barack Obama's health care overhaul law kicks in, according to congressional projections released Thursday.

The penalties will average a little more than $1,000 apiece in 2016, the Congressional Budget Office said in a report.

The vast majority of people paying the fine will be middle class, which would violate Obama's 2008 campaign pledge not to raise taxes on individuals making less than $200,000 a year and couples making less than $250,000.


This appears to be another example of the media not getting nuance. Everyone that fails to get health insurance will be fined. So, all Americans will be fined if they fail to get health insurance. I assume that the CBO has estimated that four million Americans will not get health insurance by 2016 and face that fine.

No More I Tunes Tax

Governor Quinn has walked this one back.

Gov. Pat Quinn is backing off a proposal to tax music and video downloads in an effort to plug the state’s massive budget hole, saying he still believes raising the income tax is the best way to generate money for the state.

Quinn floated the idea of taxing downloads from online services such as iTunes in a
meeting with legislative leaders earlier this week, but the proposal received a cold reception in Springfield. Today, Quinn said that he was simply offering suggestions on ways to solve the state’s budget crisis and does not support the plan, which would have generated $5 million to $10 million a year.

“We had a meeting with the legislative leaders the other day, we made a list of all
the possible things that could happen,” Quinn said. “I didn’t advocate that. I’m not interested in doing that, frankly.”


The budget woes in Illinois remain all too real.

Financial Reform: Still No Clue

It's been about a month since financial reform has taken the spotlight and I still can't say if I like or dislike the bill. That's because I still have no clue what's in the bill. What I have watched over the last month is nothing short of a pathetic display of platitudes by politicians on both sides and a complete lack of knowledge by newscasters.

Both sides are making a series of claims and attacks. What I still can't find is much detail of what's in the bill. I hear a lot about "cracking down on Wall Street". I don't know what that means. What are the specific crackdowns? I don't know because politicians aren't saying and newscasters aren't challenging.

I watched Alan Colmes on Megyn Kelly's show yesterday defending the Democrats' taking money from Goldman Sachs. He defended them by saying that while they took the money, they are now "cracking down on them". How are they cracking down on "them"? I don't know because Colmes didn't say and Kelly never asked. She asked if this bill would crack down on them but Colmes never gave any specifics in the bill that would crack down on them.

President Obama says he wants to regulate derivatives. I'm still not sure what those derivative regulations are. I do know that Fannie/Freddie aren't included in the regulations. That's a bad thing but frankly, I'm not confident they'd be regulated properly anyway.

So far, all we've had is a debate at the margins. Both sides are making accusations with few specifics. How can anyone fairly judge the bill if no one can debate its specifics?

Wednesday, April 21, 2010

US Attorney Investigating Florida GOP

This investigation includes Rubio's use of the GOP credit card.

A spokeswoman for the Republican Party of Florida, Katie Betta, said she could not confirm the investigation nor make any comments. Coming in a high-stakes election year, the investigation could expose the inner-workings of a party that has dominated state government and raked in millions of dollars from lobbyists and special interests.

Meanwhile, in a separate inquiry, the IRS is also looking at the tax records of at least three former party credit card holders — former Florida House Speaker Marco Rubio, ex-state party chairman Jim Greer and ex-party executive director Delmar Johnson — to determine whether they misused their party credit cards for personal expenses, according to a source familiar with the preliminary inquiry.

Political parties, which are tax exempt, are allowed to spend money only on political activities, such as fundraising, running campaigns and registering voters. While it's commonplace for party officials and politicians to wine and dine donors, the Florida party allowed credit card holders to rack up hundreds of thousands of dollars in charges with little oversight.


So far this story has received little attention and we'll see if the story grows as a result of the latest revelation.

Roethlisberger Suspended Six Games

Commissioner Roger Goodell just put out the word.

Ben Roethlisberger was suspended for six games on Wednesday for violating the NFL's personal conduct policy, the NFL announced.

The Pittsburgh Steelers quarterback also was ordered to undergo a comprehensive behavioral evaluation. Commissioner Roger Goodell will evaluate Roethlisberger's progress before the season and might consider reducing the suspension to four games.

That's fairly stiff.

The Explosive ACORN Video

Here's Bertha Lewis, chief organizer at ACORN, speaking at a conference of Young Democratic Socialists.



What is the Young Democratic Socialists? They're the youth arm of Democratic Socialists of America. It's a group that's looking to bring social justice and European style social democracy to America.

This speech is from a conference held at Norman Thomas High School in New York. Thomas was a self avowed socialist that took over the mantle from Eugene V. Debs. Here's how this group describes socialism.

Socialism is one of the most misused words in the American political vocabulary. Contrary to misrepresentations by both conservatives and liberals, socialism is not about breadlines, fur hats, or police states. Rather, we fight for the extension of democracy into all aspects of social life, including the economy. We are proud of the relative democratic freedoms enjoyed by US citizens. But without economic democracy, this political liberty is weak and incomplete. People must have a voice in the economic decisions which affect their lives. Democratic socialism also means fighting non-economic inequalities of power- including racism, sexism and heterosexism in all their forms. A radical democracy is the only way to ensure a world in which class, race, and gender do not decide our futures.

We'll see how this story progresses.

Council Submissions

The council submissions are up.

Council Submissions

Non-Council Submissions

Tuesday, April 20, 2010

Emanuel for Mayor

Rahm Emanuel says he's interested.

White House chief of staff Rahm Emanuel, who said in an interview Monday that he wants to become Chicago mayor, has a warchest of nearly $1.2 million left over from his career in Congress, Federal Election Commission records show.

The balance in the fund named Friends of Rahm Emanuel was $1.175 million at the end of March, records show.

Jan Witold Baran, an attorney in Washington, D.C., who is an expert in campaign finance laws, said nothing in federal law would prevent Emanuel from transferring the money to another political organization. And Illinois law also would allow the funds to be used for a local race such as mayor.

...

Break Up the Banks

Do want to end "too big to fail"? How about breaking up the banks?

The FDIC is empowered by the Federal Deposit Insurance Act to use its judgment to set the target value of the DIF taking into account any economic factors that it deems appropriate, but must select a target value of not less than 1.15% of aggregate insured deposits but no greater than 1.50% of aggregate insured deposits. This standard has a very practical protection against being relaxed for political reasons. If the target value is increased to allow banks to become bigger, then the banks will have to pay higher assessments into the DIF. This has two benefits: greater reserves for possible resolutions, and, higher costs for banks which will temper their fervor for greater growth. By way of illustration, the current targeted value for the DIF is equal to one and 15 hundredths of one percent (1.15%) of total insured deposits, the Macey Rule would not allow any bank to have total liabilities in excess of 0.0575% of total insured deposits, or approximately, $3.096 billion.

The Macey plan would, in practice, lead to the dismantling of only about 3 percent of the nation's banks. But these banks do all of the risky trading. They hold 100% of the derivatives that remain on banks' balance sheets, 100% of the trading liabilities, and over 80% of all bank liabilities. This data is not surprising because banks that are too big to fail have a huge competitive advantage over their smaller rivals because the customers of the biggest banks know that the government will bail them out if they get into trouble.

Like Odysseus trying to sail past the deadly and seductive Sirens on his journey back to Ithaca after the Trojan War, the government must find a way to protect itself from succumbing to the temptation to bailout companies when they fail. Odysseus's well-known strategy was to order his crew to plug their ears with beeswax and then to bind him securely to the mast, and make sure that he remained bound to the mast until they were out of earshot of the Sirens' island home.

Bill Kristol said this was the sort of bold idea the Republicans should champion. Of course, this is easier said than done. If you think financial regulation is tough, try and break up a behemoth like Citigroup without sending the financial industry into total chaos.

The Politics of Financial Reform

On first look, one assumes that financial reform is a political winner for Democrats. After all, we're in an economic crater because of the actions of Wall Street. They're out of favor and this bill would crackdown on Wall Street.

Of course, in the beginning, health care reform was a political winner for Democrats as well. Then, as the debate progressed, it turned toxic for Democrats. This one is not as clear. That's because neither side really has a clue on financial reform. On health care reform, Democrats presented a government expansion for health care reform. Republicans presented a free market solution. That will win every time.

On this debate, it's not clear what either side is doing. So far, the debate is entirely in soundbites. Furthermore, while Republicans presented clear alternatives on health care reform, so far they've only presented criticism on financial reform. Both sides run risks in presenting nothing but soundbites. For instance, Republicans have fixated on the $50 billion fund as proof that this is nothing more than more bailouts. Well, what if that fund is removed?

In fact, the biggest problem with this bill is that it allows the Treasury Secretary to come into any financial institution and take it over if the Secretary deems said institution too big to fail.

If the financial regulation bill that passed the House last year becomes law, President Obama and his Treasury secretary will acquire the right to take over any financial institution they wish to, provided that, in their sole opinion, it is both "too big to fail" and on the brink of insolvency. The House bill provides for no judicial review and does not require any objective evidence of imminent failure to trigger the takeover provisions.

Once the government takes over such a company, it will acquire the right to replace the entire board of directors, fire the management of the company, wipe out stockholder equity, and even sell off divisions of the company.


If the Republicans are to oppose anything it is this provision. That's a stunning increase in power and yet it is Dick Morris leading the charge against this provision. Opposing this would continue with a larger theme that President Obama is dangerously increasing the scope and power of the federal government. It also continues the theme that Obama is engaging in behavior that is not rooted anywhere in the constitution.

Yet, Republicans have become fixated on a fund that can easily be removed. Meanwhile, Obama simply says that anyone opposed to his bill is siding with Wall Street. He says that our current regulatory structure is not sustainable. Yet, he's never once explained or analyzed what is in the bill itself.

He tried a similar argument in health care reform and failed. He said we had to pass Obamacare because health care was broken. Just because health care is broken doesn't mean Obamacare is the solution. He gives Republicans an opportunity to pick apart his proposal.

For the most part, Republicans have not taken advantage of this opportunity. That's because financial reform is frankly above all their heads. The recent Goldman Sachs civil indictment is a great example. Goldman Sachs is charged with fraud. Yet, Democrats think this is timely for financial reform.

With the Senate scheduled to begin debate on a financial overhaul bill this week, the fraud suit against the Wall Street titan Goldman Sachs has emboldened Democrats to ratchet up pressure on Republicans who oppose the Obama administration’s proposal.


Once again, Democrats have given Republicans an opening and Republicans aren't smart enough to figure it out. Goldman Sachs is charged with fraud. That's already not legal. There needs to be no new financial reform to curb this behavior. Instead, there needs to be better enforcement. More rules only makes it more difficult to enforce. Goldman Sachs is yet another example of the fact that our bureaucracy failed to enforce the rules we have not that we didn't have enough rules.

In fact, financial reform is infinitely more complicated than health care reform. That was easy. This is very hard. Because in fact both sides are equally clueless both their soundbites will be effective. Neither will be anywhere near the truth. Neither side will likely be able to explain their side in a way the public can understand. That will leave the public confused and distrustful of both sides. That will make it a political loser for both. So, Republicans may as well oppose it. They won't get hurt opposing it because Obama won't be able to get past soundbites in explaining it. Without that, the public isn't going to jump on board.

Obamacare Class Action

A suit on behalf of a Tennessee citizen named Anthony Shreeve has been filed challenging the constitutionality of Obamacare. This is the first suit brought by a private citizen against Obamacare. It joins several other constitutional challenges to that law.

Unlike other suits, this one challenges the constitutionality of the entire law and not merely individual parts. The suit is being handled by Tennessee attorney Van Irion who is also not coincidentally running for US Congress in the third district of Tennessee. The most interesting aspect of this suit is that it will challenge nearly a century of Supreme Court precedent on the Commerce clause.

A. This case has unique causes of action, as outlined above, that directly challenge the erroneous "Commerce Clause" and "General Welfare Clause" precedents of the Supreme Court. The interpretation of past courts have essentially rendered moot any limitations on the Federal government established in the Constitution.

The Commerce clause argument and the 10th Amendment argument were intended to be complimentary, just like those two parts of the Constitution are complimentary. They are opposite sides of the same coin. The argument is also about Canons of Legal Interpretation: Any interpretation of a single clause that negates the overall purpose of a law, contract, or other document, must be wrong. Such a clause can be included to create exceptions to an overall rule, but in those cases, the clause must be very clear about its limitations in reference to the overall purpose of the document. The scope of such exceptions must be clear and the courts must interpret them as narrowly as possible. The actions of Congress over the past 70 years have become the illustration that the "Commerce Clause" and the "General Welfare Clause" were misinterpreted as many years ago.

One other unique aspect of this suit is that it allows citizens to become part of the suit by lending their name behind the plaintiff. Last night, before Mr. Irion appeared on On the Record, there were almost eleven thousand names and that has grown to almost sixteen thousand and growing since.

This suit continues a trend of citizens challenging the Constitutionality of not only the Obama agenda but out of control D.C. policy in general. It is now referred to as Constitutional Conservatism.

Monday, April 19, 2010

Obama Admin Reaches Out to Tea Parties

Things that make you go hmm...

Tea Partiers, the Obama administration is on your side.

That's been the message from the White House over the past few days, as top officials dispute charges that Washington is on a spending binge and encourage conservative protesters to count their blessings.

Treasury Secretary Timothy Geithner, when asked about the Tea Party protests, said in an interview Sunday that the Obama administration is paying more attention to deficit and spending concerns than the Bush administration did.


If the Obama administration is paying a lot of attention to the deficits, I'd hate to see their policies if they weren't paying attention.

Derivative Reform a Good Idea But..

Here is an interesting aspect of credit default swaps.

As an example, imagine that an investor buys a CDS from AAA-Bank, where the reference entity is Risky Corp. The investor—the buyer of protection—will make regular payments to AAA-Bank—the seller of protection. If Risky Corp defaults on its debt (i.e., misses a coupon payment or does not repay it), the investor will receive a one-time payment from AAA-Bank, and the CDS contract is terminated. If the investor actually owns Risky Corp debt, the CDS can be thought of as hedging. But investors can also buy CDS contracts referencing Risky Corp debt without actually owning any Risky Corp debt. This may be done for speculative purposes, to bet against the solvency of Risky Corp in a gamble to make money if it fails, or to hedge investments in other companies whose fortunes are expected to be similar to those of Risky.


To understand how dangerous this is one has to understand what a derivative, which a credit default swap is, is. A derivative is a financial instrument that DERIVES its value from another security. Let's look at one of the most popular derivatives, stock options. Let's say you own stock option on AT&T. The better AT&T stock does, the better your option does. (assuming you buy a call option which bets the stock goes up but I digress) The reason is that a stock option is an OPTION to buy/sell an underlying stock. Inherent in such an investment is the availability to buy/sell said stock. In other words, AT&T stock is always available to buy/sell said stock in order to exercise that option if the holder chooses to do so.

In the case of CDS', the underlying security need not be available to exercise the CDS. That's what that aspect of CDS' was saying. You may in fact be holding onto the debt instrument, or you may just make a bet on said instrument. Now, I'm no fan of regulations but I do believe that a derivative needs to actually be a derivative. The world of Credit Default Swaps are so wild, wild West that they are derivatives that don't even follow the rules of derivatives. The underlying security need not be available to exercise the derivative. It's one reason why the size of derivatives grew to such a massive size in 2007-2008 (over $60 trillion at one point) People were just making bets long after the underlying security had been accounted for.

So, clearly, something needs to be done vis a vis derivatives. The problem is that derivatives are one step below rocket science and government officials are stupid. While there is a need for regulation of derivatives I have no confidence that our current government has the first clue what it is. So far, the president is adamant something must be done regarding derivatives.

resident Barack vowed Friday to veto a financial overhaul bill that doesn't regulate the eclectic derivatives market, even as Senate Republicans lined up en mass against it.Legislation pending in Congress would for the first time regulate derivatives, complex financial instruments like the mortgage-backed securities that contributed to a near economic meltdown in 2008 when their value plummeted during the housing crisis.

Just because you do something doesn't mean you've done the right thing. Yet, all I've heard from both sides are sound bites. Soundbites aren't actual regulations. That's what concerns me. So far, neither side has gone beyond soundbites. Republicans can't get beyond the idea that this bill will "bail out Wall Street". Even after the bailout fund was removed, they still said the same thing. I haven't heard about any specific regulations that they think are necessary. Meanwhile, Democrats continue to want to "hold Wall Street accountable". Holding Wall Street accountable is not an actual regulation.

What we have are two clueless sides. Meanwhile, the world of credit default swaps is a world of nuance and complexity. Trying to regulate such a world is no easy task. Doing it wrong is disastrous.