Attaturk!

Connecticut Zed

Shoulda left off the “connecticut” I guess!

I think Connecticut is FINALLY seeing the light about LIEberman. DiNardo has stripped the lying loser of his superdelegate status, which is no biggie, but to those pols that is a big deal. He is a pariah in Connecticut now, and since Obama won Conn thaks to the Lamont endorsement and machine, that bodes well for the future of progressives in Conn. LIEberman is finished once we get more and better Democrats in the congress. Donna winning ove Wynn is the beginning fo the end of the Bush Dog LIEbercrats, and all I can say is GOOD FARGIN RIDDANCE!

“Sociopath” is the perfect characterization.

Joe-Lie-Moron…

The difference, he said, is that waterboarding is mostly psychological and there is no permanent physical damage. “It is not like putting burning coals on people’s bodies. The person is in no real danger. The impact is psychological,” Lieberman said.

Common Article 3 of the Senate-ratified Geneva Conventions prohibits all cruel treatment of detainees, including torture, which the Senate-ratified U.N. Convention Against Torture defines as “any act by which severe pain or suffering, whether physical or mental, is intentionally inflicted on a person for such purposes as obtaining from him or a third person information or a confession …” Article VI of the U.S. Constitution makes Senate-ratified treaties “law of the land,” and the War Crimes Act of 1996 makes violations of Common Article 3 federal crimes.

Uh oh, no waterboarding Joe jokes around here, eh?

Probably for the best…

a shonda for us and the neighbors.

Yeah, but the Nazis, Facists, and Commies were different.

It is disturbing to realise that my country has lost it’s warmth for our fellow creatures. I thought that we had a simpatico.
The cowardice to make captive then systematically degrade another creature and strip them of any self worth is sadistic.
Additionally troubling is the lack of self-esteem of those doing the rendition and the planning.
Far worse after the torture and questioning why the repeated treatment for months or years. Kidnapping and ranson/information is so dark and evil.
I am sickened.

When the shootings happened at Virginia Tech we talked about it for what seemed like two days. I guess the body count was small enough at NIU that it’s not really news. This is an observation not a criticism.

“And both Sen. Obama and Clinton want to set a date for withdrawal — that means chaos, that means genocide, that means undoing all the success we’ve achieved and al Qaeda tells the world they defeated the United States of America.

JM

Majorly impressed that you found that CT Post headline at 1 a.m. It was at the top of the front page - for all of Fairfield County to see and ponder.

Sue, CFL Secretary

Does CFL stand for what I think it does?

1,757 DAYZ AND THE KILLIN’ GOEZ ON AND ON AND…

Citizen Raven and the Firepup Freedom Fighters:

Great ta hear from you in the wee hours, brother Raven…how ya doin’ on this first night after the Democrats’ “right of passage” today? Remember what the ol’ Norske’s been sayin about lettin’ ‘em know where it’s at so they can lead us there…

KEEP THE FAITH AND LET ‘EM KNOW WHERE YER GOIN ‘CUZ THEY’RE OUR LEADERS AND THEY MUST LEAD US!!

Not bad but, like Va Tech, I have a very close connection at NIU and I was just reading her email. Not much to say I guess.

Catholic Forensic League?

Compact Flourescent Lightbulb?

Canadian Football League?

help please!

Not Connecticut For Leiberschitz?

OT

The potential for a systemic collapse of the global financial system is finally hitting the mainstream. For instance, this from the Wall Street Journal: New Hitches In Markets May Widen Credit Woes

A widening array of financial-market problems threatens to trigger a new phase in the global credit crunch, extending it beyond the risky mortgages that have cost banks and investors more than $100 billion in losses and helped push the U.S. economy toward recession.

In the past few days, low-rated corporate loans — the kind that fueled the buyout boom of recent years — have plummeted in value. As a result, banks are expected to try to unload some of those loans this week at fire-sale prices.

Nervous buyers also have retreated in recent days from the market for securities backed by student loans and municipal bonds, roiling some corners of the short-term money markets. Similarly, investors have recoiled from debt backed by commercial real estate, such as office buildings.

In the blogosphere, many analysts have warned of this possibility. For example, Nouriel Roubini posted this on rgemonitor.com: The Rising Risk of a Systemic Financial Meltdown: The Twelve Steps to Financial Disaster. Michael Panzner over at Financial Armageddon has written a sobering book on the topic and provides blog updates on the meltdown’s progress.

…

As we discussed yesterday, the entire system is built on a series of incentives to obfuscate or hide risk and then pass the risky asset on to the next player.

# The borrower lies about income and creditworthiness, hiding the true risk.
# The broker happily goes along, otherwise the loan won’t fund and he won’t get paid.
# The lender goes along in order to reap a fat profit from selling the loan to Wall Street.
# The ratings agencies go along in order to earn their fat fees for masking risk-laden debt with a AAA rating.
# Wall Street goes along to sell the bundled loans and derivatives constructed from the loans to investors seeking a “safe, AAA investment.”
# Traders and sales reps distribute the asset as “safe” around the globe in order to reap huge commissions/trading profits.
# Politicians look the other way as Wall Street ponies up big-bucks contributions.
# The Mainstream Media gloss over the layers of risk so as not to offend their big-bucks real estate/banking advertisers.

These incentives to cloak the true risks of loans aren’t just built into the home mortgage market–they’re built into all loans which have been bundled and sold as “low-risk”: student, auto, commercial real estate, corporate buy-outs, you name it.

http://www.dailykos.com/story/.....703/385775

Connecticut for Lieberman - the party we took over from Joe because he never bothered to join.

CFL stands firmly against torture of any kind.

My next guess was gonna be Chicago Federation of Labor… …I’ll be a little less dense with a little more coffee…

O Sander, did you see this over at the Wall Street Journal?
Citigroup Fund Bars Exit By Investors After Bad Bet

Citigroup Inc. has barred investors in one of its hedge funds from withdrawing their money, another black eye for the financial behemoth’s troubled foray into new types of investments. …

how bad is the hedge fund market, really?

Good morning, pups. 340 days to go. Today it’s Bobo and Krugman. Bobo typed about “Fresh Start Conservatism.” He says Republicans should believe that positive government can help prepare Americans for the rigors of competition so that they can have a fair chance. Mr. Krugman has a question: Why has a crisis that began with loans to a limited group of home buyers ended up disrupting so much of the financial system?

http://mgpaquin.wordpress.com/

The coffee, tea and hot chocolate are ready, and I’ve got banana pancakes this morning. Have a great day.

Morning Marion, mMmm banana pancakes, I know someone just cravin’ those. I let you read Bobo, but I’ll read Krugman. :)

CFL stands firmly against torture of any kind.

Does CFL [Connecticut for Lieberman] have a position on whether or not waterboarding is torture?

Do avoid Bobo — I have a Hazmat suit so I’m safe. (I wear two of them for Kristol.)

and:

Where’s The Liquidity?

Those who think the Fed is pouring on the liquidity spigot need to think again. 100 failed municipal auctions in a single day is proof enough. As the Credit Default Swap Tsunami Approaches, the “beginning of the end of the auction-rate market” is now underway. Yields on treasuries are going to plunge, but it will not do a thing for the solvency crisis we are in.

It’s time for a slogan change in this corner. For quite some time I have been saying Things That “Can’t” Happen Will Happen.

My new tune is Things That “Can’t” Happen Are Happening Now.

The curtain over there at Wall street is revealing the wizard who is full of hot air. There is something like 250-300 billion of bad debt to be written off down at wall street.

The party of selling “vapor” for high fees is coming to a quick end. Remember vapor ware… software that was an idea but no code. That’s Wall St’s products. All hat and no cattle, but you sell them for fees, commissions and use them as leverage and collateral. What a totally phony scheme.

Connecticut for Lieberman…

Do avoid Bobo — I have a Hazmat suit so I’m safe. (I wear two of them for Kristol.)

oh I do hope the double Hazmat is enough, talk about contagion! And wasn’t Krugman a ray of sunshine this morning. oh.

It’s frightening.

Funny, we didn’t waterboard the Nazis, we didn’t waterboard the Japanese militarists, the Italian Fascists. We didn’t waterboard the North Koreans or the Red Chinese. We didn’t waterboard Soviet defectors, or the occasional captured Russian pilot. We didn’t waterboard suspected Eastern European spies.And yet somehow we survived — and even prevailed.

it’s because we refused to torture we prevailed, not inspite of it

these maggots are in it for the jolies, they get no added information they get less information, they also waste assets investigating worthless information

PEOPLE DIE BECAUSE WE TORTURE

the purpose of torture is NOT to gather information, it’s to instil fear in the populace

the problem with that is they are immune to the fear, they are on to us, they know we are occupiers of their land, they know these maggonts just want their national assets and they know the only thing they can do to get their land back is form insurgencies

we didn’t win the wars against the nazis and the fascists inspite of not torturing, it was because we wouldn’t torutre

I remember a soldier told us the germans were never afraid of surrender to us

who in their right mind would surrender to us now?

off to the gym

Elliott -

Do you have any idea of why Brian Lamb no longer shows up on Washington Journal?

Do you have any idea of why Brian Lamb no longer shows up on Washington Journal?

He is too sheepish?

the purpose of torture is NOT to gather information, it’s to instil fear in the populace

Exactly. Waterboarding is terrorism.

no, not really, they say he is doing other things, he just did the Presidential Library series. It could be he’s taking advantage of his seniority to sit out the election sniping cycle? Just one guess.

Good Morning folks. Joe Liberman is torture. I love me some banana pancakes.

speaking of Washington Journal

here’s what’s scheduled:
7am - Newspaper Articles & Viewer Calls
7:45am - Anthony Cordesman, Center for Strategic & International Studies, Strategy Chairman
8:30am - Sen. Robert Casey (D-PA), Banking Committee Member
9am - Newspaper Articles & Viewer Calls
9:30am - Jendayi Frazer, Assistant Secretary of State for African Affairs

So the House now becomes the “deliberative” body while the Senate is no longer.

These latest, pathetic, episodes in the Senate, FISA and torture, demonstrate that we must make sure that more Democrats are elected this cycle. We cannot expect a damn thing to get done with a Dem. Prez. unless we have a clear, unhindered, majority in the Senate. In NH we have a chance of ditching the idiot boy sununu and next door, in Maine, there is a good chance for Tom Allen to down collins giving two more Dems to the Senate.

but we are electing bush lap dogs

we have to unelect the lapdogs we elected so our electorate understand;

you do what we pay you to do, you are not a lapdog of the most depraved adminsitration in this nations history

Who are the creeps that actually carry this out?

And what about the “psychologists” which assist in interrogations?

We have some very sick people in our midst and the military and the spook services attract and exploit these sickos. No normally balanced person would do these things. They have to be “perverted” to begin with or perverted by circumstances. The security state does that.

We don’t have a democracy. We don’t even follow the constitution.

We play lip service.

This has NEVER been a country for, by and of the people.

It is for, by and of the oligarchs. END OF STORY

The executive branch (Ds and Rs) has issued more than 10,000 ILLEGAL executive orders which have the force of law. We have an elected “dictator”. And one who steals the election to boot.

And now they do signing statements or use vetos to threaten the congress into creating the illusion of representative democracy.

We have neither representatives or democracy.

Who are the creeps that actually carry this out?

there is a “team b”

the real cia were opposed to this torture, they were getting EXCELLANT information without “enhanced” techniques, they LOST information once they started these methods

team b was set up by cheney and it’s team b doing this, the cia and the fbi would have none of it

that’s when the president started looking for immunity for these maggots, they used as an excuse that they were breaking the law and creating a liability so the president tried to eliminate that liability

But they need to investigate drug use in sports?

How about drug rip offs and murder by Pharma, with the lethal drugs which have killed thousands of people?

Here we go. From the NYTimes this morning:

MILWAUKEE — Representative John Lewis, an elder statesman from the civil rights era and one of Senator Hillary Rodham Clinton’s most prominent black supporters, said Thursday night that he planned to cast his vote as a superdelegate for Senator Barack Obama in hopes of preventing a fight at the Democratic convention.

“In recent days, there is a sense of movement and a sense of spirit,” said Mr. Lewis, a Georgia Democrat who endorsed Mrs. Clinton last fall. “Something is happening in America, and people are prepared and ready to make that great leap.”.

We have an elected “dictator”.

he was never elected, he won neither the electorial nor the popular vote

he was installed by the legacy of his father and reagan and we are under the rule of a silent coup

but we are electing bush lap dogs
we have to unelect the lapdogs we elected so our electorate understand;

Absolutely. But as we have seen this last few days the critters are pretty malleable. A little nudge from one election in MD has instilled a bit of spine. A few more non-sychophant wins and the pelosi pansies will be out the door (that is my wishful thinking for the morning)

the super delegate thing is a non issue designed to create discontent in the democratic party

the super delegates do NOT act as a block, they are individual progressive groups like native american indidans, nurses, unions, things like that

they are delegates that have to be won just like the states delegates, it insures a progressive agenda for the candidate and I am amazed we are allowing us to be played like a cheap violin by corporate media and the republicans

the super delegate system is MUCH better then a state by state cuacus hybrid system,

A little nudge from one election in MD has instilled a bit of spine.

even pelosi grew a spine from that and I have no doubt she fears the loss of her seat in power

we CAN pressure her to impeach, we can and we need to make it clear, impeachment GOES on the table or she will no longer have a seat in power in this governmet

she took a sacred oath to office and she has an oath to fulfill

A little nudge from one election in MD has instilled a bit of spine.

While I stand and applaud Edward’s defeat of Wynn, I also have to recognize that the district in which Donna was elected is arguably one of the most progressive in the country. I sincerely hope this is a harbinger for outcomes elsewhere, but I do so with tempered expectations.

Perris,

You have a naive view of the CIA’s “A team”. The CIA has always been a rather nasty operation, destabilizing governments, planting dis information in media in this country and around the world, spying, assassinating.

They are the executive branch’s private under the radar, outside the law, squad to advance their predatory agenda.

The CIA signs on to the USA as supreme in the world and in a struggle to control and manage all markets for the good of American corporations.

They have a budget for this mischief of over 10 billion.

Is the world really out to get you? Us?

What’s with the paranoia?

Plame and Bruster Jennings? We developed nukes and want to hold that unilaterally over the head of any nation. So we are for non proliferation, but not our own nuclear disarmament.

We are still building them, re newing them. We still have nuke tipped missiles in silos or subs prowling the world.

We are the largest arms producer and dealer to the world.

We got duped into the cold war weapons systems nightmare with the help of the CIA providing false threat assessments as they ALWAYS will. They have their masters. And we are only the payers for this.

You didn’t read the whole comment. I said they steal elections now…

Even legit elections are bogus with the electoral college which does not represent the popular vote.

The supremes issued a completely nonsense ruling and 5 republicans gave Bush the presidency. He was “elected” by 5-4. Lovely.

While I stand and applaud Edward’s defeat of Wynn,

I should have mentioned that the “powers that be” will have noticed the incredible turnout in the caucuses and primaries. And you are right it is a progressive district. As they ALL should be

As they ALL should be.

Amen.

pelosi pansies

The pansies I have planted out in front of my house, which are tough enough to withstand temperatures below freezing and keep on blooming, take exception to your choice of words. They say pansies are tough, and Madame Speaker is a wuss. (*G*)

Perhaps the only spine is coming from the outpouring of “support” for Obi who is seen by many as a challenge to the status quo, right or wrong, that is the basis of the inertia he is getting.

If he starts to articulate progressive positions congress might wake up and read the tea leaves. People are pissed and won’t take it anymore.

They can do little but vote and demonstrate and americans are not the take to the street types. But they may even get to that as the economy crumbles beneath them and they have nothing left to lose. Then you’ll begin to see them take to the streets.

Lewis can read the tea leaves. Hillary, smart as she may be, is the past who gave us, allowed this horror, enabled Bush. She is going down with the ship that lead us into these treacherous waters.

Obi can begin a sea change, if he survives and if he has overwhelming popular support at the polls. He doesn’t need more than a landslide to get the congress to wake up and smell the coffee.

It’s time to cause those lap dogs to fear for the jobs: primary them.

Pansies everywhere thank you Marion.

Krugman this morning talks about auction-rate securities. I need to read up on these a bit. Seems like every day we’re seeing news of some new, formerly obscure, investment vehicle that’s going bad. But the following certainly caught my attention.

Meanwhile, these securities seemed like a good deal for borrowers despite the fact that they contain a penalty clause: if an auction fails, the interest rate the borrower pays jumps up. (The Port Authority, which had a failed auction last week, just saw the interest rate it pays leap from 4.3 percent to 20 percent.) You see, there weren’t ever supposed to be failed auctions, so the penalties weren’t supposed to be relevant.

My bold.

here:
A wave of bonds sold by U.S. municipal borrowers with rates set through periodic auctions failed to attract enough buyers in recent days as banks including Goldman Sachs Group Inc. and Citigroup Inc. that run the bidding wouldn’t commit their own capital to the debt.

Rates on $100 million of bonds sold by the Port Authority of New York and New Jersey, with bidding run by Goldman, soared to 20 percent yesterday from 4.3 percent a week ago, according to data compiled by Bloomberg.

“It’s the beginning of the end for the auction-rate market,” said Matt Fabian, a senior analyst with Concord, Massachusetts-based Municipal Market Advisors. “Banks have stopped supporting the market.”

Auction bonds have interest rates that are determined by bidding that typically occurs every seven, 28 or 35 days. When there aren’t enough buyers, the auction fails and bondholders who wanted to sell are left holding the securities. Rates at failed auctions are set at a level spelled out in official statements issued at the initial bond sale.

Local governments are obliged to pay the high rates until either the auctions start attracting more buyers or they arrange to convert the bonds to some other form of debt. The 20 percent rate for the $100 million of Port Authority auction bonds will cost it $388,889 until the next weekly auction, up from $83,611 last week.

“This market has been under a tremendous amount of stress,” said Alex Roever, a JPMorgan Chase & Co. fixed income analyst. “Without the dealers providing an active secondary bid, it’s very hard for these transactions to clear.”

Unsuccessful auctions have hurt companies that bought those variable-rate securities as short-term investments with excess cash, and are unable to sell their holdings. Bristol-Myers Squibb Co., the New York-based maker of the anti-clotting pill Plavix, announced on Jan. 31 a $275 million writedown of its auction-rate holdings related to subprime debt, which totaled $811 million at the end of 2007.

About a third of 449 companies polled in a survey last May for the Association for Finance Professionals said they had investments in auction-rate bonds.

100 Failed Auctions Yesterday

The number and size of the auctions failing is simply stunning. Professor Sedacca is commenting on that in 100 Muni-Bond Auctions Fail.

There were over 100 failed auctions in Auction Rate Securities yesterday, notably some in the closed end space. This is a first and it is important.

Why? Imagine you had a margin account where you were forced to pay a higher margin rate and your bonds were falling in price? It is a lethal combination.

If I could borrow these funds I would short them, but they are notoriously hard to borrow. The sad part is that these funds were more financial alchemy by the folks on Wall Street. There are approximately $265 billion outstanding.

I know this: If I owned ‘em, I would blow ‘em out. If I could short ‘em, I would, in size. This is a mess and mom-and-pop retail won’t likely find out about it until it’s too late.”

‘morning, all… coffee is ready…

Andrea Mitchell just said on the msnbc that the NY Times story is incorrect - she contacted John Lewis’ office and they said he had not switched and that he was misunderstood…

You have a naive view of the CIA’s “A team”. The CIA has always been a rather nasty operation, destabilizing governments, planting dis information in media in this country and around the world, spying, assassinating.

you assume too much sandero, I have a much more intimate knowledge of the cia then you might imagine

yes, I understand there are covert operations that we wouldn’t approve, however, torture is not among those

You believe Mrs Greenspin? Her hubby is a complete utter liar and responsible as anyone for the credit crap we are in.

I am deeply impressed by the responsible environmental
policies of our petulant boy king president.

Shorter George: CO2 good; hydrazine bad.

in addition, I hate to address this point, but we have ALWAYS had a “smoking gun” defense of torture

it’s called selective prosecution, extenuating circumstances and jury nulification

all of those and others, if a person could legitimately prove they saved the world they would not be prosecuted or convicted

don’t know, SanderO, but that is what she said…

Just heard Pat Buchanan frame a question to Mike Huckabee in these words…Middle America not doing as well as they should have–in a Republican era, a Republican economy.

No, gee, ya think?

Raven, CNN’s covering the NIU story this morning, interviewing the president. There wasn’t the tension of a manhunt to the story the media could use to gin up the fear–the killer was himself dead at the scene by suicide.

Exactly.

I am not saying every single person in the CIA or the Army of the national security state is a nasty horror. There are employees who believe that they are doing some good by being in those franchises.

And I don’t condone torture as most people don’t.

But I don’t like 95% of what the national security franchises do. I do not support them AT ALL. NONE OF THEM. And no true progressive does.

We want openness and none of these franchises are open. They are secret. Sorry man. That doesn’t cut it in a democracy.

Yea, guess that’s it.

The pansies I have planted out in front of my house, which are tough enough to withstand temperatures below freezing and keep on blooming, take exception to your choice of words. They say pansies are tough, and Madame Speaker is a wuss. (*G*)

Hey I love pansies, some of my best flowers are pansies, I like lysianthus, daffodil, tulip, flox and any damn thing that will grow after this present 6 inches of snow has departed. I do not like pelosi

No sercet ops ever, no matter what huh?

“Blomberg is reporting AIG Falls on Concern Losses May Have Been Understated.

American International Group Inc., the world’s largest insurer by assets, fell the most in 20 years in New York trading after its auditor found faulty accounting may have understated losses on some holdings. AIG’s auditors found “material weakness” in its accounting for the contracts, and the firm doesn’t know what they were worth at the end of 2007, the filing said.

“It raises the question about whether management is in control of what’s going on with their derivatives,” Edward Ketz, a Pennsylvania State University accounting professor, said in an interview. “The uncertainty as to whether additional losses are coming is as unsettling as anything.”

Fitch Ratings may lower the insurer’s AA credit rating because AIG’s “weakness in internal controls,” coupled with “current market conditions, contributes to uncertainty regarding the valuation” of the derivative portfolio, the credit-ratings company said in a statement today.”

and

“However, there are $45 trillion of credit default swaps out there. A default on a mere 10% would cause an economic disaster. Unfortunately, it’s guaranteed to happen.

Companies like Citigroup (C), AIG (AIG), Merrill Lynch (MER), Lehman (LEH), Morgan Stanley (MS), might think they are hedged. If so they are only fooling themselves. Just what is a guarantee from someone like MBIA (MBI), Ambac (ABK), or Madame Merriweather’s Mudhut Malaysia worth? The answer is nothing.

I mentioned dear Mmm. Madame Merriweather to the WSJ today and said that may as well be who is guaranteeing this stuff.

There are countless hedge funds out there, leveraged to the hilt in garbage that has not been marked to market. The same holds true for banks and as we have seen today, insurance companies like AIG.

At some point, some company will declare bankruptcy or a debt downgrade will trigger a claim. That claim will not be paid because the hedge fund or mudhut (whichever comes first) does not have the means to do so. A cascade of defaults will occur up the line on any corporation counting on that claim as part of their hedge.

Consider GM. The market cap of GM is $15 billion or so. There are about $1 trillion in credit default swaps bet on the success or failure of GM. It is virtually impossible for this to be hedged because there is not $1 trillion in GM bonds available as collateral.

The credit swaps on MBIA, Ambac, and the homebuilders trade deep into junk, some priced outright for default. Is there any wonder Moody’s, Fitch, and the S&P are reluctant to downgrade MBIA and Ambac? The ratings assigned to Ambac and MBIA are a joke.”

No, you should have left out the zed…*g*

Where are these quotes from?

” Now enter the regulators, like the Insurance Commissioner of New York, Mr. Danalli. To solve this situation, the regulators are asking banks like Citi and a bunch of European banks (which already have their own funding problems) to ‘bail out the municipal insurers’. Supposedly we can’t let them fail because the result would be too large and would finally hit the individual municipal bond investor right between the eyes.

The problem with this potential solution is that the bailors (banks) have the same balance sheet problems as the bailees (insurance companies). The banks have hundreds of billions of dollars of exotic paper that they really don’t know how to price, yet if they let the insurers fail, they will be forced to write down their own positions simultaneously. This becomes one vicious cycle of capital raising in the banking and brokerage industry…

If you think the banks are a mess, try taking a quick look at the balance sheets of companies like Lehman (LEH) and Bear Stearns (BSC). These companies have balance sheets that are literally 40 times their shareholder equity. They also own 3 times their equity in what is known as ‘Level 3 assets’—those that can’t be accurately priced, and can’t even be estimated based on a model. Level 3 is ‘mark to management’s best guess’.

Best guess is better than what Citi’s CFO said when asked about its $60 billion of CDOs. On the investor conference call he stated that their positions were ‘marked to a reasonable stab’. I know this may sound as if I am making this up, but sadly, I am not.

Many credit derivative transactions don’t simply involve two parties but are often times the risk is passed from one party to the next several times. When an event occurs it causes a careful examination of the complicated legal documents which spell out the specifics of solving a default event.

In a legal case from last year, Bear Stearns loaned $10 million to a development in the Philippines which was backed by a Philippines government agency. In order to protect itself from default, Bear Stearns purchased protection from AON for about $425,000. AON was then short exposure to the Philippines government agency, and so then purchased protection from Societe Generale for $328,000. Offsetting the risk gave AON an easy $97,000, right?

Well the project went bust, the developer did not pay and neither did the Philippines government agency. Bear sued AON for $10 million to reclaim their loss under the Credit Default Swap it had purchased from them and AON paid. AON then went and sued SocGen for $10 million asking for a summary judgment claiming that since the one CDS had been resolved it should automatically create a resolution for the second CDS. After several courts opined on the case, AON lost their case, and lost $10 million. The final court ruling was that the language in CDS1 and CDS2 were not identical and that the risk was not purely offset. So instead of making $97,000 they lost $10,000,000. Seems like documentation is a real counter-party risk.

The big question now is, if you have a derivatives contract, CDS, or CDO with another institution, you may start to wonder if your counter-party is sound, and if it is properly documented.

This is the largest risk we see going forward for the financial markets, when investors do not trust their counterparties, when counterparties suddenly decide to pull your financing due to ‘balance sheet constraints’ and when financial institutions do not trust each other that ‘the other side of the trade will settle’.

Things to keep in mind as the credit default tsunami approaches

* No one can reliably quantify the amount at risk
* There is no liquidity in any of the exotic credit markets
* On some products there is no bid at all
* Counterparties do not trust each other
* Balance sheet considerations are causing financing arrangements to be pulled
* Various CDOs and CDSs as well as counterparty guarantees on those products are essentially worthless
* A major counterparty failure is all it takes to cause a cascade of defaults

Madame Merriweather’s Mudhut Malaysia Inc phoned me minutes ago. I spoke with Mme. Merriweather in person. She was upset by my comments to the Wall Street Journal. She went on to say that her AAA credit rating was still intact, that she could make good on her guarantees, and that she was not in any way affiliated with Madame Merriweather’s Mudhut Phillipines. “My mudhut is priceless” she stated.”

from:

http://globaleconomicanalysis......aches.html

Bloomberg?

Thank you. Always helps to know where info is coming from.

Crow is upstairs with Fisa applause. This one looks interesting too so I will linger a bit to read. (Lieberman with coffee at the lake in the early morning - Mmmmm).

as I’ve said before sandero, I am right of center and while you and I agree on most points, this one I don’t

I believe there have be covert programs that the publica are not aware, less they loose effectiveness

for instance, we really have to do whatever is possible to make sure petro is traded in dollars, if that effort were overt it would loose it’s effective force

What was Lewis doing endorsing the Clintons in the first place? He has always advanced a certain persona but underneath it is a pretty self-interested person who has not been too much in Congress. Barack must be happy but rolling his eyes at the same time. Gee, Barack took 80% of the vote in Lewis’ CD and now he sees the light. I am just tired of these types.

So, it is OK to waterboard Lieberman in order that he experience what it is like?

We do disagree. I will not favor anything done in secret.

There is no need for secrets when you have nothing to hide.

I realize that the Dem’s need Lieberman until the election, but I also think there is such a thing as principles. No one should be caucusing with the party that believes in torture. No tent should be that broad. I believe he deserves a majhor slap down from the party leaders over this comment.

Waterboarding is torture. It always was torture. It is illegal and always was illegal. We executed prisoners of war for this act. To suddenly try to remarket the brand as “enhanced Interrogation” is insulting. I can’t believe that we as a country can even be having this discussion. All my life, we have condemned other nations for such crimes. If we are a nation of principles, then we need to stand by them. I wish one of our candidates would have the courage to really stand up against this, rather than the vague generalities that they have expressed so far.

Speaking of McCain double-talk, CNN and the NYT dutifully pass on McCain’s attacks on Obama’s voting record without mentioning that McCain’s missed so many Senate votes that the National Journal couldn’t rate Mister Double Talk’s own voting record for 2007.

Don’t blame us!

Connecticut Democrats voted Joe out! He only got in because the Republicans refused to run a viable candidate and all the R’s voted for him. Tomorrow is too late for this pantload to be gone. Waterboarding is too good for him! Let’s throw him out and give the Senate back to the Republicans, who really control it anyway, given the spinelessness of Sen. Reid, and his acceptance of phantom filibusters.

And don’t forget, Connecticut is also the home the primary hero in this mess — Chris Dodd!

Connecticut (where I reside) takes no ‘ownership’ for Joe Lieberman. He is a monster of his own creation. It was a dirty election in which the republicans won. Stop blaming an entire state for the actions of some republicans. Karl Rove’s White House even contributed their support.

While you’re at it, blame California for Nancy Pelosi; Nevada for Harry Reid; Florida for George Bush; and every other state that allowed a sleazy asshole to slither into office.

Yeah, but WE’RE the bad guys. Jesus.

CFL= Congenital Fucking Liar

I am very upset, that after all the work John Orman and I have done, you would ever, ever diss the CFL Party.
Gawd, and I’m the Secretary.

We keep minutes and have rules:
http://www.dailykos.com/story/.....778/295179

Agenda:
I. Dr. John Orman’s reasons for starting the Connecticut for Lieberman Party:
Professor John Orman discussed his reasons for the continuation of the CFL party.
These include:
using it as a mechanism to keep Senator Joseph Lieberman accountable to the voting public.

We have goals and resolutions:

http://www.dailykos.com/story/.....653/296329

Senator Lieberman,

We, the members of the Connecticut for Lieberman Party, have passed the following goals and resolutions for our party at our meeting held on Thursday, January 18, 2007.
We call for you to:

Stop misleading Connecticut voters.
We have questions:
http://www.dailykos.com/story/.....842/356135

John Orman, Elected Chair of the CFL Party wants to know what happens when a candidate doesn’t join the party he is elected under.

We’ve called for Joe to resign:
http://www.dailykos.com/story/.....739/346052

and we get ‘cease and desist orders from dipwads:
http://www.dailykos.com/story/.....871/292027

Orman says he has received a “cease and desist” letter from one Stuart Korchin, who claims to be the true head of the Connecticut for Lieberman party. Orman’s response: “Prove it.”

Who is Korchin? Got me. From a Google search, he appears to be an AIPAC stalwart and a medical physicist who owns Radiation Protection Services.

CFL, working hard.

“And both Sen. Obama and Clinton want to set a date for withdrawal — that means chaos, that means genocide, that means undoing all the success we’ve achieved and al Qaeda tells the world they defeated the United States of America.

How come this didn’t happen when the British withdrew from their empire? How can you believe the “white man’s burden” trash?

And of course we prosecuted the Japanese who used this practice as war criminals.

I hate to say this but when the British withdrew from India Muslims and Hindus slaughtered each other with impunity.

So far as Iraq is concerned our presence there makes matters worse. Sunnis and Shias as well as Shias and Shias and Sunnis and Sunnis have been doing it right under our noses. The number of deaths since our unprovoked, unnecessary and immoral invasion of probably near a million is proportionally as bad as the slaughter in India after the British left. The longer we stay the worse it will be. Leaving may enable a settlement (granted with some violence) to be reached with fewer deaths in the long run.

Our invasion started the slaughter and our own losses in lives and treasure can’t continue without worsening the damage to both countries.