Merry Belated Christmas

Work, travel, and other Christmas-related business has kept me incommunicado for a while but I hope you and yours are having a lovely holiday.

What we have here is a failure to regulate

Yet another epic failure by the CEO President…

The Securities and Exchange Commission learned about what it describes as one of the largest securities frauds in history when Bernard L. Madoff volunteered his confession, raising questions about the agency's ability to police the financial marketplace.

The SEC had the authority to investigate Madoff's investment business, which managed billions of dollars for wealthy investors and philanthropies. Financial analysts raised concerns about Madoff's practices repeatedly over the past decade, including a 1999 letter to the SEC that accused Madoff of running a Ponzi scheme. But the agency did not conduct even a routine examination of the investment business until last week.

Look, if the SEC is incapable of ferreting out the largest ever case of fraud (by an order of magnitude), then the SEC needs a top to bottom overhaul. Investigation and enforcement of regulations helps insure fairness in the market and investor confidence. That this asshole could lose $50 billion and no one noticed until he confessed is an indictment of both our regulations and those that would enforce them. I know Pres.-elect Obama has a full plate already but let’s hope he appoints someone to chair the SEC that is not a Wall Street sycophant (see Cox, Chris).

Scuttling the ship

Faced with the prospect of their ship or cargo being captured, sailors and pirates throughout history have at times made the decision to quite literally go down with their ship. Depending on the context, some would call it noble (or insane) but it is, at its core, an act of pure nihilism. Nihilism is not IMHO a philosophy that ought to be well represented in government.

So when the Senate Republican killed the $14 billion auto bailout yesterday, I fear they may have turned their cannons into the proverbial deck of our flagging economy and let fly. Their basic argument seems to be that if you don’t let us destroy the United Auto Workers union with this bill, we will let the Big Three do it in Chapter 11 and we don’t give a fuck about the consequences. It is unbelievably irresponsible and a giant middle finger to people who don’t go to work in a suit, especially after showering Wall Street in cash with almost no strings attached. We are in for nearly $100 billion on AIG alone and we are BUYING that piece of shit. But these assholes can’t get over the ideological hump and fund a pittance of what we blew on the bankers to keep a couple million people and the heart of our manufacturing sector at work in the middle of the worst employment environment in a generation. The last hope appears to be the Administration stepping in with some funding from the money allocated to the financial sector, a move that they have previously discarded.

Dick Cheney is reported to have said that with the failure of the bailout bill, it is “Hebert Hoover” time. The markets open in a few minutes. Let’s see if he is right.

Negligent homicide

This sound less like “supporting our troops” and more like criminal neglect.

WASHINGTON (AFP) – The US Defense Department knew years before insurgent actions began in Iraq of the threat posed by roadside bombs but failed to take available steps to mitigate the risk to US troops, a Pentagon audit concluded Tuesday.

The US Marine Corps asked the Pentagon's inspector general to perform the audit after coming under fire for setting aside an urgent request from field commanders in 2005 for Mine Resistant Ambush Protected (MRAP) armored vehicles.

"DoD (Department of Defense) was aware of the threat posed by mines and improvised explosive devices (IEDs) in low-intensity conflicts and of the availability of mine-resistant vehicles years before insurgent actions began in Iraq in 2003," the audit found.

"Yet DoD did not develop requirements for, fund, or acquire MRAP-type vehicles for low-intensity conflicts that involved mines and IEDs," a summary of the report said.

"As a result, the department entered into operations in Iraq without having taken available steps to acquire technology to mitigate the known mine and IED risk to soldiers and Marines," it said.

Negligent homicide as defined by the Uniform Code of Military Justice:

(1) Nature of offense. Negligent homicide is any unlawful homicide which is the result of simple negligence. An intent to kill or injure is not required.

(2) Simple negligence. Simple negligence is the absence of due care, that is, an act or omission of a person who is under a duty to use due care which exhibits a lack of that degree of care of the safety of others which a reasonably careful person would have exercised under the same or similar circumstances.

We report, you decide.

Corrupt asshole

Illinois Democratic Governor Rod Blagojevich has been arrested on corruption charges alleging, among other things, that he was conspiring to sell the appointment to Barack Obama’s vacated Senate seat.

Federal officers took Blagojevich and his chief of staff, John Harris -- also arrested on corruption charges -- into custody at around 6:30 a.m. (7:30 a.m. ET) without incident, FBI spokesman Ross Rice told CNN.

Each was charged with a count of conspiracy to commit mail and wire fraud and a count of solicitation of bribery, authorities said.

The government says the two were "conspiring to obtain personal financial benefits" for the Illinois governor by leveraging his sole authority to appoint a U.S. senator to replace Obama.

The Obama transition team is aware that Blagojevich is in federal custody, but has no comment, according to a senior Democratic source.

The government also accuses Blagojevich and Harris of threatening to withhold state assistance to the Tribune Company -- the company that owns the Chicago Tribune -- in connection with the sale of Wrigley Field baseball stadium. The company also owns the Chicago Cubs and Wrigley Field.

In exchange for assistance, the governor and his chief of staff wanted the newspaper to fire Chicago Tribune editorial board members who were sharply critical of the governor, the government said.

There ought to be a special place in Hell…

Obvious

The AP headline on a poll of California gay marriage opponents:

Poll: Calif. gay marriage ban driven by religion

Um, no shit.

Big Trouble for the Big Three

The automakers' bailout plans shed a lot of light on just how screwed they are.

In blueprints delivered to Congress on Tuesday, GM and Chrysler said they needed an immediate infusion of government cash to last until New Year's, and both said they could drag the entire industry down if they fail. Ford is requesting a $9 billion "standby line of credit" that it says it doesn't expect to use unless one of the other Big Three goes belly up.

But Chrysler said it needed $7 billion by year's end just to keep running. And GM asked for an immediate $4 billion as the first installment of a $12 billion loan, plus a $6 billion line of credit it might need if economic conditions worsen. The two painted the direst portraits to date — including the prospects of shuttered factories and massive job losses — of what could happen if Congress doesn't quickly step in.

It would appear that Ford is the only company not on the brink of collapse.

GYWO

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