No more Larry Summers Watch

Cindy and Lupi both emailed to tell me Summers is out for Treasury, and Tim Geithner is in. A question from one of them: Is that good? Geithner was a protogee of Summers at Treasury, but what if we were all judged by our past bosses? We should let Geithner make his own mistakes; then hang him out to dry. Point is, Summers was a disaster at Treasury on his first watch, given his fatal policy choices (akin to invading Iraq -- except without human casualties, at least so far). So, rewarding him would have been too much. Now it appears Summers will be housed in the White House as "Senior Economic Advisor" to the President. (WashPost, Sat11-22) There, he can do more damage if not controlled, but at least he'll have less of a podium (we hope) for pontification. And, maybe Geithner, having acted with authority at the Fed, will have his own voice. (Of course, we don't know whether that will be any more effective than the bailout moves so far.) We'll have to watch and listen. Papers say Summers is being considered for Fed Chairman when Bernanke's term expires. Let's let the feminists and environmentalists work their magic over the next couple of years to scupper that one. As a self-appointed Madame DuFarge, I'm officially off the case, but still knitting.
Email me at jwagner@bethesda20817.net or leave a comment below.

Update: Senate still dithering on bailout inspector general

Try as it might to put a good face on dithering over the confirmation of a special inspector general (see my Nov 15 post) to oversee the $700 billion giveaway, the Senate is still weighed down by Majority Leader Harry Reid (D-Nev) (he of the "no can do") who is, according to the Wash Post Nov 19,

• "looking into whether it is possible to schedule [a confirmation vote], his spokesman Jim Manley said."

At least they got the turf battle between committees cleared up, and Sen Dodd has been aggressive in moving the nomination forward. However, Dodd's committee has not yet scheduled a vote. So, we're still without someone to look over the shoulder of the people handing out a billion here, a billion there...

Senate dithering on bailout inspector general

We're in economic crisis, yes? We (that is, our esteemed leaders) are throwing the kitchen sink and then some in taxes and borrowed and printed money at the problem, yes? Then, you would think the jokers in the Senate would stop their bickering over Committee turfs and actually confirm the appointment of a special inspector general for the $700 billion bailout, no? NO, according to the Wash Post this a.m. An apparently swell guy -- Neil Barofsky -- has been nominated by the White House for the new position, one created by our jokers in the first place when they passed the bailout law last month. But (according to the Post),

• "The length and form of the confirmation process remains unclear. The Finance Committee, which has jurisdiction over The Treasury Department and a chairman who pushed for the creation of the special inspector general position, has scheduled a hearing for Monday afternoon to question Barofsky. But the Banking Committee, which has held multiple hearings on the bailout legislation, said last night that it will hold a similar one on Wednesday. In addition, the Homeland Security and Governmental Affairs Committee has the right to hold a hearing on inspectors general, or else 20 days must pass before the nomination proceeds to the full Senate."
• "The Senate parliamentarian plans to decide Monday which committee has jurisdiction. "
• "That throws into question whether the proper vetting and hearings can take place before the end of Congress' lame-duck session, scheduled to begin next week. "No one at this point has any clue how this is going to work," said one congressional aide, who spoke on condition of anonymity because he was not authorized to speak publicly."

If this Senate can't move fast on a non-controversial but important appointment, will they ever be responsive to anything but their own egotistical needs? The only hope we have is to let our respective senators know we're watching and that we will use this appointment as an early signal that they are simply not up to the task of governing in this crisis. To contact your Senator via email, go to US Senate, and use the State-specific search in the upper right hand corner to get to your Senator(s)' page. And, if you live in Connecticut (Dodd & Lieberman), Montana (Baucus), or Iowa (Grassley), let 'em know that you think their turf war is unseemly at this time.

Have another idea? Think I'm tramping on molehills? Leave a comment (see below), or if that's too hard (Google sometimes makes it so), email me directly at jwagner@bethesda20817.net.

Obama email list for sale- comments

Great comments came in on Obama email list post (see end of previous post to get access). But, readers say it's hard to leave comments, cause to do so apparently requires a google email account. To heck wit 'em! If you don't want the hassle, just send comments by email to jwagner@bethesda20817.net. I'll give you credit for ideas I steal, either by indicating that my old friend "Anonymous" told me... , or by first name and last initial, if you give permission. But, the gist of Ben and Michael's comments was that I shoulda checked the privacy policy on both the campaign and change.gov websites. Who does that these days? All that fine print! Sort of like a reading a sub-prime mortgage. Anyway, from those helpful guys' info, I learned that campaign privacy policy says:

• It is our general policy not to make Personal Information available to anyone other than our employees, staff, and agents. We may also make personal information available to organizations with similar political viewpoints and objectives, in furtherance of our own political objectives.


• Online petitions and Personal Information: We treat your name, city, state, and any comments as public information. We may, for example, provide compilations of petitions, with your comments, to national leaders, without disclosing email addresses. We may also make comments along with your city and state available to the press and public online.
  
• Opting out and modifying information: "Subscribers to our e-mail list may terminate their subscriptions via a link at the bottom of each email sent from BarackObama.com.

Well, after reading this myself I'm not sure that the privacy policy actually says that it can sell email addresses. (Remember, collateral is a contingent contract of sale.) And, what political organization (except the DNC? or a PAC?) had the money to lend to the Obama campaign? Well, at least they didn't contemplate selling the email list to AIG. (I hope.) I expect dot-coms to sell my email adddress, but not political campaigns. If you think this issue isn't worth worrying about, you'll enjoy the comment by Anonymous, who argues convincingly that no commercial enterprise worth its salt would value the Obama list, cause it is simply too unfocused. So, that's the end of my worrying about Disappointment #1.

The Selling of Obama Campaign's Email List

Here's alarm bell #1 that the Obama team is just a tad more manipulative and less idealistic than they'd like us to believe. In an article Monday in the Washington Post about Obama campaign's pathbreaking use of the internet, it was reported that

• "The nucleus of that effort is an e-mail database of more than 10 million supporters. The list is considered so valuable that the Obama camp briefly offered it as collateral during a cash-flow crunch late in the campaign, though it wound up never needing the loan, senior aides said."
• "At least 3.1 million people on the list donated money to Obama."

Are the senior aides so tone deaf that they don't realize what it means to use my email address as collateral? Collateral is, in effect, a contingent sale of an asset, in lieu of paying a debt. That means the Obama campaign organization was willing to sell MY EMAIL ADDRESS to banks, rich investors (Mark Rich?), or companies to get more money for his campaign. What's more, they can still do it again at any time in the future. I didn't sign on to a barrage of junk mail when I gave money to the campaign, and I sure wouldn't have given through the internet if I'd known I was creating a tradable asset!

Already, I'm getting pitches from the DNC for money. Were the emails given away to DNC or sold to it? Either way, this is a snarky development. Even Though I'm counting this as disappointment #1, Obama's decision to walk away from public funding in the general election annoyed me. But I became reconciled when I realized the funny money through other sources still flows freely in both parties. Can anyone give me a reason to be reconciled to this news?

Another question I need to research is whether the new http://www.change.gov/ site for the transition (which I advised we use to foil the Larry Summers appointment) is just another asset development project for future Obama or democratic campaigns.

What to do? At the very least, you can mark all future Obama campaign emails and DNC emails as "junk". (I've done that.) Any other ideas for how to make sure political use of the internet doesn't become commercial use of political support? Feel free to leave a comment below (even if, or especially if, you disagree!), or email me at jwagner@bethesda20817.net to continue the discussion off-line.

What to do about Larry Summers?

We all know that Pres-Elect Obama is on fast track to appoint a new Treasury Secretary. Yes, we do need someone who understands the global financial system, but we DON'T need someone who was a major policy architect of the meltdown in the first place! That's Summers, in short. (see my previous posts for the evidence.)
To let the Obama people know that you won't feel happy if Summers, with all his baggage, is appointed as BIG MONEY-Spending Czar in the new administration, you can contact the Transition at http://change.gov/page/s/yourvision and just spill your guts.

Here's some more ammunition: Not only did Summers actively oppose the establishment of some oversight over the credit default swap market throughout his tenure at Treasury (first under Rubin and then as the Big T himself), but he's now a managing director of DE Shaw, a very large hedge fund. (Joined it late in 2006. The fund makes money buying distressed businesses. How rich is that? Lehmann Bros invested in it, ha ha!) I finally checked out our bad boy's recent BIO on Wikipedia. Up till then, I'd thought LS was just a globe-trotting Harvard prof. with a monthly column in the Financial Times, making his living giving speeches and interviews. (You can hear him self-justify in 2007 on Boston's radio interview show On Point .)

Think I'm off the wall about this guy? Know more about him that I should researh? You can comment directly at the end of this post, or email me at jwagner@bethesda20817.net.

My Lazy Girl's Guide to the Meltdown

Finally realized that the grownups you thought were in charge of our economy were just kids with their hands in the candy jar? Join my club. Want to make sure the jokers in Congress don't screw things up further? To be able to hold them accountable for good policy going forward, we need to understand how we got in this mess. But how to do that without heavy reading? Here are links to the best radio shows (available online) on the meltdown. You can listen online while doing your most mindless computer tasks, like cleaning out your "sent mail" folder of the last 6 months.

The very best explanation I've heard goes back to April 08, on
Fresh Air -- Prof. Michael Greenberger interviewed by Terry Gross --
in a program called "Our Confusing Economy explained" http://www.npr.org/templates/player/mediaPlayer.html?action=1&t=1&islist=false&id=89338743&m=89338809

Now, for more details about the rip-off machine generally referred to as our global financial system, here are great programs:

1. Credit Default Swaps - how they work and why they ruined us! "The Giant Pool of Money" (5/9/08) on This American Life at http://thisamericanlife.org/Radio_Episode.aspx?episode=355

2. How Bad is the meltdown, and why? "Another Frightening Show on the Economy" on This American Life (10/3/08) http://thisamericanlife.org/Radio_Episode.aspx?sched=1263

3. Who tried to provide Adult Supervision on WallStreet?
Interview with Michael Greenberger on Fresh Air with Terry Gross (9/17/08)http://www.npr.org/templates/story/story.php?storyId=94686428

4- What role did Fannie Mae and Freddie Mac Play in the Meltdown?
C-Span Q&A with Peter Wallinson (AEI), (9/14/08) http://qanda.org/Video/?ProgramID=1197

5- Are the real culprits the Ratings Agencies (S&P, Moody's, Fitch)? -- I think so, and here's the best explanation! C-Span -House Hearing on Credit Rating Agencies - Henry Waxman (D), Chr. This is a 4-hour hearing, boooring... but if you can navigate to the statement of Sean Egan, Managing Director, Egan-Jones Credit Rating Agency– minute 31:13-39:10 - and again in answer period 44:00-46:05, you will want to start knitting quietly in true Madame DuFarge style! http://www.cspan.org/search.aspx?For=Ratings%20Agencies

Election Day Update on Bad Boys of the Meltdown

Looks as though word is getting out that Rubin and Summers won't do as Treasury Secretaries under Obama -- need to punish the guilty! Lupi R sent this link to MSNBC news article.
http://www.msnbc.msn.com/id/27453836/from/ET/
If Summers gets close, we'll have to go on an anti-Summers campaign.
But, at 81, can Paul Volcker do anything more than reminisce? (Hey, hey, before you call me agist, let's remember how many times we've questioned McCain's age as a factor in his ability to handle presidency.)
There are plenty of smart 50-something people to choose from for either administration. They don't have to have worked on Wall Street for credibility.

Let's start thinking of smart people we know. How about John Brennan of Vanguard? He's retiring. Vanguard is great. John Bogle is great (but also too old.) Any other ideas? Let me know at jwagner@bethesda20817.net

What Bob Paretta Coulda told me about Wachovia

This post should read: What Bob Paretta SHOULDa told me about Wachovia in time for me to sell it all on April 3, 07(price = 54.47), instead of when I did, Sep 22, 08 (price = 17.60).

Bob, (Prof of Accting at U Del) sent me the nice analysis at left to illustrate why I'm a dunce when it comes to the stock market. It's all about the cash flows, says he, and I believes him now. But not before I loses a pretty penny, says I. Bob also shared the two rules of Financial Analysis 101 that anyone who invests in the stock market should follow: Rule 1: Focus on the statement of cash flows. Rule 2: Pay attention to Rule 1. That's what you learns when u takes Bob's course in Accting 800.

Back when Bob and I taught at SUNY Binghamton, he was known among the faculty as "a river to his people." We were jealous but never knew why the students loved him so. Now I know.

Bottom line: Hold your friends close; hold your accountant friends closer!