Sunday, November 27, 2011

Blog Demolition Day

Although I switched to "New Blogger" four years ago, I never quite got around to utilizing the New Blogger templates. Since then, some blog elements have been behaving badly, plus I want to take advantage of some of the newer features and I am just kind of bored with the old look.  So the time has come.

I'll be putting up a new template over the next day or two, and things are going to look pretty messy around here in the meantime.

Friday, November 18, 2011

Refresher Course: Honest Graft vs. Dishonest Graft vs. The STOCK Act

John Boehner and Nancy Pelosi at the feet of George Washington Plunkitt

In a recent feature story on 60 Minutes, Steve Kroft detailed how many in Congress use their privileged access to information on pending legislation, investigations and regulations to line their own pockets. Much of the piece was based on research of Hoover Institute fellow Peter Schweizer from his book “Throw Them All Out”. Among the surprising revelations in the book – Congress is exempt from prosecution for the same kind of insider trading that would send the rest of us to jail.

Coincidentally, ├╝ber-lobbyist and felon Jack Abramoff was saying much the same thing to anyone who would listen while promoting his new book "Capitol Punishment". CNBC has been covering the story for a while and offers a succinct summary:

Sunday, November 13, 2011

Ranked-choice Voting: Epic Fail in Oakland.

Mayor Quan releases dove at religious conference.
The dove was reportedly killed shortly thereafter, struck by a wayward bullet
while flying over the Occupy Oakland encampment.

One year ago, Jean Quan was elected mayor of Oakland. She never led in any poll at any time during the campaign. She always trailed front-runner Don Perata in every minute of the campaign from beginning to end.

On election day, 36% percent of Oakland voters said they wanted Don Perata as their mayor. Only 24% of Oakland voters said Jean Quan was their first choice to be mayor. In prior years, a runoff election would have followed and voters would have chosen between Perata and Quan in a head to head runoff election. Not this year. This was Oakland's first Ranked-choice Voting election for Mayor. The other candidates on the ballot were eliminated and the second and third choice votes on their ballots were added to Quan and Perata's totals. Jean Quan became mayor. Oakland saved the cost of conducting a runoff election.

Thursday, November 10, 2011

Meanwhile, in the People's Republic of San Francisco...


... over 2/3 of our citizenry did not bother to vote in Tuesday's election for Mayor, Sheriff, and District Attorney. Of those who did vote, many did not understand the "Instant Runoff" Ranked Choice Voting used for the first time in the mayoral race.

Before we get to the results, your loyal blogger wishes it to be known that there was something good to come out of this election season. Specifically, the best thing to come out of this election season was rediscovering The Argonaut by way of their current election edition (the image at the top of this post is from the front page of their latest edition).

The Argonaut is a San Francisco institution the dates back in various incarnations to 1877. As near as I can tell, it is published whenever they damn well feel like it. The preface to their election recommendations in this edition is a pitch perfect articulation of my loathing for this election. I can't say it better, so I won't try:
"... let us express our complete and unqualified contempt for the city’s system of ranked choice voting and taxpayer financing of campaigns – to the current (already spent and still climbing to the highest mountain peak) whistle of over 14 million dollars of taxpayer financial underwriting by a bone-broke city of candidates campaigns. Many of them had no business running in the first place – but the city’s idiotic law makes it impossible for them to drop out of the rat race because if they do the practical thing and drop out of a race they know they have no chance of winning, the prudent candidate is has to pay the city back for the taxpayer money received, which most of them can’t afford to do. But if they wait and stay in the race and go ahead and lose as everyone in town including the candidate him (or her) self knows they will. Just how stupid is that? Very."
Exactly. As noted here before, between the Ranked Choice Voting and public funding of candidates, this election was pregnant with disaster. We have no one to blame but ourlselves. As long as we continue to elect these clowns to the Board of Supervisors, we deserve the unconscionable idiocy and incompetent governance we get in return.

Tuesday, November 08, 2011

Chinese Communist leader eviscerates European welfare state. Really.

Image from The Economist

Al Jazeera's Teymon Nabili recently interviewed Jin Liqun, Chairman of China's Sovereign Wealth Fund. The remarkable interview has garnered well deserved attention in the blogosphere and MSM. It is well worth the 30 minute investment of time, but for those who want to skip right to the good parts, I'll offer a few highlights.

First, Jin Liqun explains with crystal clarity the prerequisite conditions for China's potential role as a "white knight" riding to the financial rescue of the Eurozone. To whit - if it is not good for China, and it is not a good investment, China is not going to participate in the European Financial Stability Facility (EFSF):
“You cannot come to me, asking me ‘Hey! Why don’t you pump money in this kind of… projects, or investing the banks that are in trouble… we are in trouble, and our two countries are friendly, so why don’t you come in?’, this is actually in stark contrast to the requirement imposed on our sovereign wealth fund”, “the recipient countries should treat sovereign wealth funds fairly… as any other financial investors…”
This is a perfectly reasonable investment posture, but apparently a surprise to the European leadership.

Even more interesting, is the explicit, no bullshit, no mincing of words, no diplomatic artifice with which Jin Liqun lectures Europe on exactly the problem with the Eurozone labor laws and welfare state:

Saturday, November 05, 2011

After only 10 months in office Mayor Jean Quan unifies Oakland


Ten months in office, and Oakland Mayor Jean Quan has done what most people would consider impossible. She has united the citizens of Oakland. A recent CBS 5 poll reports that 85% of the Oakland do not think she is doing a good job as mayor. Occupiers, Anarchists, Business Owners, Protesters, The Chamber of Commerce, Conservatives, Liberals, Centrists and Anarchists all standing shoulder to shoulder with this this single shared conviction and unity of purpose. Amazingly, an even higher percentage are united in the belief that she is doing a terrible job handling the protests.

Thursday, November 03, 2011

The Corzine Caper

Corzine and Obama - joined at the wrist?
Does this sound familiar? - A high risk "bet the company" culture, huge leverage, "smarter than you" corporate arrogance, regulators asleep at the switch, a"rock star" CEO cozying up to the President of the United States, questionable accounting, bankruptcy, investigations, and criminal prosecutions.

How about Enron, "Kenny-Boy" Lay, and the Bush administration?
-or-
How about MF Global, "Jonny" Corzine, and the Obama administration?

Most of the mainstream media coverage of the MF Global failure has focused on the leverage and the highly speculative bad business bets made by CEO Jon Corzine. But with the SEC and FBI looking under the covers, Dan Primack of Fortune Magazine goes where the NYT fears to tread:
Is Jon Corzine going to jail?
By Dan Primack November 2, 2011: 2:57 PM ET

This may just be the beginning of Jon Corzine's troubles.

Jon Corzine is unlikely to ever again work in finance, after overseeing this week's collapse of brokerage MF Global. But he may have much bigger things to worry about. Like going to jail.

Federal officials reportedly say that MF Global (MFGLQ) has admitted to transferring hundreds of millions of dollars of client money into company accounts, perhaps to cover investment losses. This is on top of Craig Donohue, CEO of the Chicago Mercantile Exchange, saying that MF Global wasn't "in compliance" with the CMOE's cash management regulations.

"The first thing you learn on the first day of your first financial job is that client money is not to be mixed with corporate money," says a source familiar with MF Global. "Nobody could have done this by accident."...

"If this was a former Republican senator and governor, the press would be all over it," argues a GOP-affiliated investment professional. "They'd be talking about how it is emblematic of corruption on Wall Street. But because it's a Democrat, everyone keeps focusing on bad investments rather than the possibility of fraud."
CNBC talks to Primack about his column:



Curiouser and curiouser. As mentioned in a comment on Tully's recent post:

Dipping into the client's funds to backstop the firm's heavily leveraged and high risk bets on European debt is about as serious as it gets. We're talking - Federal Felony / Criminal Fraud / Grand Theft / Go To Jail / Do Not Pass Go / Do Not Collect $200 / Throw Away The Key / - that kind of serious.

This is where the special relationship with the President and the related special provisions of the "Investment Grade" debt offerings from MF Global only two months ago get interesting:
"The futures broker sold $325 million of five-year unsecured notes, the company said today in a statement. The notes will pay an extra percentage point of interest if Corzine is named to a federal post and confirmed by the Senate before July 2013, New York-based MF Global said yesterday in a regulatory filing.

“That seems crazy,” said William Larkin, a fixed-income portfolio manager who oversees $500 million at Cabot Money Management Inc. in Salem, Massachusetts, and has 22 years of experience. “I’ve never heard of something like this.”...

A Democrat, Corzine is among the biggest fundraisers for President Barack Obama’s 2012 re-election campaign. He has been the subject of speculation about administration jobs such as Treasury secretary or White House economic adviser, said Christopher Allen, an analyst at Evercore Partners Inc. in New York...

Corzine’s employment contract is written with a view to future government service. It stipulates that he’ll be paid his $1.5 million retention bonus on a pro rata basis if he leaves to work for any “U.S. federal, state or local government” before March 31, 2014."
I wonder if Corzine's retention bonus and the bond interest kicker will be invoked if it turns out that Corzine's federal employment is working in the laundry of a Federal Prison?

Meh - probably not worth worrying about that "Investment Grade" Bond Interest kicker. These bonds (sold last August and having yet to pay a coupon) were trading at 40 cents to the dollar on Monday. BTW - Thank you S&P for another great call. In the same time frame that S&P was downgrading US Debt early this summer, they rated this MF Global bond offering "Investment Grade". U.S. Treasuries have increased in value since that rating. The MF Global bonds? Not so much.

The Bush Justice Department prosecuted and convicted Ken Lay. Let's see what happens to Corzine.

UPDATE: 11-5-11
Jon Corzine resigned, lawyered up, and as of today, the missing money is still missing.


Wednesday, November 02, 2011

STRIKE! STRIKE! STRIKE!

With the call from Occupy Oakland for a General Strike, the epicenter of the Occupy Wall Street/D.C. /San Francisco/Oakland/Sesame Street movement moved to the left coast today:
"OAKLAND, Calif. — A week after police in riot gear rousted and then tear-gassed Occupy Oakland protesters, supporters of the movement have rebuilt their encampment in front of City Hall and are calling for a general strike on Wednesday that will include an attempt to shut down the nation’s fifth-busiest shipping port. “We call for a general strike around the country, and around the world, because we know that the wealth of the 1 percent is produced by the work of the 99 percent,” said Louise Michel, one of the protest organizers, at a news conference."
What better day to end my 60 day strike against my own blog and re-occupy this space in solidarity with the "movement". In no particular order, some thoughts on the unfolding events that are currently occupying my mind:

Strike Status
Upon awakening this morning, the first thing I did was check out the traffic cam for the Bay Bridge connecting Oakland and San Francisco. I expected to seen this primary commuter route to be deserted as the oppressed 99% flexed their collective muscle and answered the call for a general strike against the oppressing 1%. As you can see in the screen shot at the top of the page, the bridge superficially appears to be jammed with commuter traffic at 6:45 AM, pretty much as it is every day at this time. I can only assume that this is attributable to the 99% streaming across the bridge to Occupy San Francisco. Or something. I may have to walk down the hill and see how my Occupy San Francisco brethren are doing in Justin Hermann square. Or not