A Brief Note About Bank of America's Recent Actions



I posted a couple of articles on Facebook regarding a transfer of derivatives from Merrill Lynch to Bank of America, N.A. the commercial arm of the Bank of America bank holding company.  I will give a shot to explaining what happened and what it means both for Bank of America and the economy as a whole.

What happened:

At the request of counterparties (institutions that purchased derivative products such as collateralized debt obligations (CDO) and credit default swaps (CDS)), Bank of America transferred at least $53Trillion and as much as $73 Trillion worth of derivative investments from its Merrill Lynch arm (which is an investment bank that is not insured by FDIC) to Bank of America, NA (its federally insured commercial bank).  This was done with the blessing of the Federal Reserve Bank and outside of any other regulatory approval or governmental oversight.  The FDIC has reportedly objected to the transfer of these assets but the transfer has gone through nonetheless.

What this means:

My first reaction was to question the amount of the notional value of these assets.  $73 Trillion is a hell of a lot of money.  However, reading several reports including the initial Bloomberg report, these amounts are correct.

What this transfer does is it takes a whole lot of risk and places it in the hands of taxpayers.  The counterparties of these derivatives most likely were having doubts about the soundness of these securities and the solvency of Bank of America in general.  Remember, BofA's credit rating was just downgraded recently by Moody's. 

If these derivatives went bust, or BofA became insolvent (or admitted they were insolvent since they pretty much are insolvent) the counterparties would be looking at the possibility of losing their entire investment or at the very least accepting a significant haircut on the securities (accepting a significant decrease in the amount that they were due like forty cents on the dollar or some such thing).

However, the commercial bank has as much as $1 Trillion of insured deposits under its hold.  These are backed up by the FDIC.  If BofA goes under, these counterparties come first in line and the government, i.e. the taxpayers, is left paying the money.

Also, the securities that were transferred to Bank of America, N.A. are almost certainly the worst of the derivatives since there would be no other reason to look for taxpayer backup on these.  The fact that these securities are more likely to go bad, means that the risk to depositors of Bank of America has just skyrocketed.  If these derivatives go bad now, the risk is on the commercial bank, which means that rather than Merrill Lynch going under, Bank of America, N.A. goes under.

Here's the best analogy I can come up with.  I buy a bunch of Picassos from Sotheby's on credit.  Sotheby's wants their bill paid and is afraid I won't be able to pay the bill.  Therefore, I take out a trillion dollar insurance policy on my house, then transfer all of the Picassos to my house, set my house on fire, collect the insurance, pay off Sotheby's and pocket the difference.  The only difference is that if I did that, I would almost certainly go to prison for insurance fraud.  Bank of America gets the seal of approval of the Federal Reserve Bank and no doubt the Treasury.

The other upshot of this is that despite their announced $6Billion quarterly profit (due mostly to accounting and bookkeeping tricks), the chance of BofA going belly up in the near future is pretty good.  Furthermore, the fact that any insurance in this case is going to go to counterparties, the shareholders of BofA are going to get hosed. 

Last, and most importantly, the fact that the Fed and Treasury are pulling these shenanigans in this case is a clear indication that they are readying themselves for yet another huge bailout of the banking industry or a continuation of the previous bailout once the banks start failing again. This is a continuation of the standard policy of Ben Bernanke and the Federal Reserve, along with the Treasury Department of both George W. Bush and Barack Obama of Privatizing profit/benefit and Socializing losses/risk.  Almost the entire risk of Bank of America's still toxic derivative portfolio has in one move by the Fed been placed on the backs of taxpayers.

Sharpening your pitchfork yet?  I sure as hell am.

My Demands

Before I start this latest post, I wanted to quickly follow-up on my last post about Herman Cain and his insane 9-9-9 plan.  I must admit that I really didn't know a whole lot about Herman Cain's past other than what is reported repeatedly in the media that he was the CEO of Godfather's Pizza.  However, I have since learned that he was also the chairman of the Kansas City Federal Reserve Bank.  After the economic collapse of 2008 and the subsequent malaise in which our economy has remained, putting a Central Banker in charge of the government is about the same as putting a serial arsonist as Fire Chief.  Again, this newly discovered fact further begs the question, why are so many middle class, lower class and Tea Party types supporting this person who is obviously going to do everything he can to screw you ten ways to Sunday?

As the #OccupyWallStreet protests gain more and more momentum and attention, there has been a lot of attention focused on their lack of any demands and their lack of an organized platform.  Although I think this criticism is somewhat misguided (for most of us who have followed the train wreck in which the economy finds itself resulting directly from the actions of major Wall Street banks and the government which they run) I decided to set forth what my demands for the big banks and the government to address the actions of the financial system and prevent another economic collapse.  So, here goes.

1.  Break Up TBTF.  One of the reasons that was given in 2008 for bailing out the largest of the banking titans was that these entities had become Too Big To Fail.  That is, that if they were allowed to collapse as a result of their own reckless investments and their own fraudulent actions (as would be the result in a free market capitalist system) that the resulting damage to the economy would be so severe that the economy itself would collapse.  Of course, the result of the bailout was to further enlarge these banks as they swallowed up even more of their competitors.

In a normal world, the next step would have been to ensure that these newly created behemoth banks which have swallowed up all of the still festering carcasses of their competitors and been thrown trillions of dollars to shore up their bad assets (read debts) would be subject to some kind of reform to prevent this from happening again.  Of course, this isn't a normal world, this is the Bizzaro economy where nothing acts according to reason.  Therefore no demands were made of the banks and with the exception of a few quite frankly half-hearted reforms, no real regulations were put into place which would address the problems which led to the disaster of 2008.

One of the surest ways to prevent this from happening again would be to take these behemoth banking entities and break them up into their parts and separate them into smaller entities.  This would have the dual benefits of encouraging competition between the newly separate companies benefiting the consumer and also preventing the type of system wide meltdown that happened in 2008.  Without this breakup of the TBTF banks, the bailout was nothing more than a hand-out to the banks to line their pockets and promote profits on the backs of the taxpayer.

How would this be done?  That brings me to my next demand.

2.  Bring back Glass-Steagall  During the debate in 1999 over the Gramm-Leach-Bliley Bill which repealed the Glass-Steagall Act, Senator Byron Dorgan said on the Senate floor, "I think we will look back in 10 years' time and say we should not have done this but we did because we forgot the lessons of the past, and that that which is true in the 1930's is true in 2010."   There are very few instances where an elected official in our modern times gets an argument quite so right.  The only thing that Senator Dorgan was incorrect about was the time frame.  It only took 9 years instead of 10.

The Glass-Steagall Act was a gem of legislative simplicity passed in 1933 during the height of the New Deal reforms sweeping through Congress and saving the nation from its biggest economic disaster in history.  Glass-Steagall prevented the combination of different financial entities into one giant company.  Specifically it stated that commercial banks, investment banks and insurance companies had to be separate entities.

The reason for this was simple.  Commercial banks which deal with consumer deposits have a different responsibility to their customers than the more free-wheeling risk-taking investment banks.  Same with insurance companies.  Investment banks take on more risk for the hopes of higher returns, but they do so with money from large, wealthy investors who are more able to weather the huge losses that these investments can bring.  Commercial banks and insurance companies necessarily have more of a responsibility to invest more conservatively to protect their customers' assets and in the same way have more of a duty to their small investors to make sure that the investments they are making are sound.

We quickly saw the damage wrought by the repeal of this reasonable and sensible law during the housing bubble.  The combining of commercial and investment banks resulted in the huge growth in collateralized debt obligations, which are complex financial securities made up mostly of mortgages, although they can consist of any debt that has collateral such as car loans, for example.  The huge profits that were generated by these derivative products sold by investment banks meant that the investment arms of the new combined entities pushed the consumer banks to make more and more mortgages and in doing so, overlook the usual underwriting standards used to make sure that the debtor was a good risk.  The mortgages were made simply so they could be broken up into securities and sold as investments.  If these combinations of investment and commercial banks didn't happen, it is less likely that this type of abuse would have occurred.

Similar consequences occurred as a result of the combination of investment banks and insurance companies.  AIG is a perfect example wherein the world's largest insurer recklessly sold trillions of dollars of risky investments known as credit default swaps without any possibility of being able to cover the losses if they went bad.  The profits that were generated by AIG-FP which was an investment bank within the overall AIG insurance company were so great that the insurer ignored the liabilities that it was facing and just celebrated the profits.  As a result the company collapsed and became subject to the largest government bailout of all.

The re-institution of Glass-Steagall would require the break up of these entities into their separate parts.  For instance, Bank of America, long known as a commercial bank, is also Merrill Lynch an investment bank, Countrywide, a thrift and an amalgam of several other financial entities.  All of these if broken up into distinct parts would prevent the type of system-wide failure we saw in 2008, while also increasing the amount of competition within the entire banking system, which in and of itself will make the entire economy stronger and encourage growth, consumer lending and consumer demand.

3.  Consequences.  None of the bad players in the economic collapse have really suffered consequences as a result of their activity.  There have been fines paid by the likes of Goldman-Sachs and JP Morgan Chase for their fraudulent activities in marketing CDOs and other bad investments, but these fines when compared to the profits that the companies extracted due to their bad activities are minuscule.

There needs to be a system wide criminal investigation into what actions led to the economic collapse caused by the banks.  It is only through a criminal investigation and prosecutions that we will be able to prevent similar behavior in the future.

There are many in the banking industry who say that criminal prosecution would have no effect other than satisfying public outrage.  Of course history would be against them on this.  Following the stock market crash of 1929 leading to the Great Depression, the Pecora Commission, an independent Congressional investigation led by Ferdinand Pecora, an Assistant District Attorney for New York County, uncovered tremendous abuses within the financial world which directly led to the Great Depression such as price fixing, fraudulent lending, conflicts of interest and insider trading.  This led to the adoption of stringent financial regulations which kept the United States economy on a strong and even keel throughout the remainder of the 20th Century.

It was only through Pecora's tenacity and the willingness to put the titans of Wall Street under oath and in front of an independent investigator who had an eye toward criminal prosecution for their wrongdoing which accomplished this.  It is only through similar action now, by a prosecutor who is independent and removed from Wall Street's excessive campaign spending and wicked lobbying that such a result can occur today.

4.  Regulation of Derivatives.  Thanks to another late 20th Century law, the Commodity Futures Modernization Act, the types of investments known as derivatives which led to the 2008 collapse remain unfettered by regulation.  Many in the financial world would say that this is a good thing, since it supports an unfettered free market free from restriction.  However, in practice the opposite is actually true.

Because credit default swaps, collateralized debt obligations, rate swaps and other complex derivative instruments are not traded publicly, the price and market for such investments is controlled by the parties entering into the deals.  This can lead to abuse and outright fraud on the part of the sellers of such instruments.  For example, Goldman Sachs in a well publicized case for which they paid a multi-billion dollar fine was requested by a customer to put together a CDO made up of the worst of the worst of the mortgages available, for the sole purpose that he could bet against it.  Goldman Sachs subsequently sold this CDO which was designed to fail to its other investors (usually life insurance companies and pensions) as a sound investment even telling them that their own money was invested in the CDO (true, they had a 4 million dollar investment in it, and a 2 billion dollar short against it).  Trading such securities on an open, transparent market would effectively put an end to this type of abuse.

The other thing that providing transparency for derivatives would do is that it would eliminate the accounting hocus-pocus in which these financial companies take part that allows them to use derivatives to hide losses and obligations from investors.  Because derivatives are "over the counter", meaning that they are privately traded, all profits are booked immediately and any obligations or losses that happen subsequently are considered "off book" which means that they don't have to be reported.  This type of profit manipulation resulted in the misstating of profits which led to the downfall of such entities as Freddie Mac, Fannie Mae, Lehman Brothers and Behr Stearns.  Regulation of derivatives would make it harder to hide these types of potentially disastrous obligations from investors, again making for a more transparent and healthy economy.

5.  Regime Change.  During the Arab Spring, the protesters in Tahrir Square, Yemen, Libya and across the region were demanding regime change -- the ouster of the corrupt abusive regimes which had held their citizens under their iron grip, enriching themselves at the expense of their nation and holding onto their power at any cost.  In the United States, we face a similar oligarchy of wealthy interests which control the money supply and for all intents and purposes control the government as well.

We should accept nothing less than a total regime change in the financial power centers of this country.  This means the resignation and potential prosecution and imprisonment for a lot of people who have built and perpetuated this system which allows banks to take part in the most serious abuses of power both political and economic.  We cannot continue with a system that not only condones but rewards this type of bad behavior.

This means the immediate resignations of a lot of powerful people from their current positions.  Included in this are Ben Bernanke the head of the Federal Reserve, Timothy Geithner the Treasury Secretary and former head of the New York Federal Reserve Bank, Jamie Dimon the Chairman and CEO of JP Morgan Chase, Lloyd Blankfein the Chairman and CEO of Goldman Sachs among many others.

Additionally, and more importantly, we need to hold our elected officials accountable.  This means throwing away the labels of Democrat and Republican, Liberal and Conservative.  We must not support any elected official or candidate who has ties to or has supported legislation which favors the continued abuses that are taking place on Wall Street.  We must not allow either Democrat or Republican to co-opt this movement for themselves.  It is not until Barack Obama is as afraid of the outrage of those in Zuccotti Park as Mitt Romeny is that we will see real change occur.  There are plenty of legislators on both sides of our two party system who have proven that they care more about the interests of Wall Street banks than they do the interests of the common person.  Among these on the Democratic side are Senators Chuck Shumer and Kirsten Gillibrand of New York, Senator Kay Hagan from North Carolina and Congressman Barney Frank from Massachusetts.  Shumer and Frank are considered among the most liberal of politicians in Congress, and although I am sure that we agree on many issues, their continued unabashed support for the monied interests of Wall Street and their refusal to implement any real reforms means that they will never receive my support and shouldn't receive yours.  Furthermore, Barack Obama has proved that he is willing to put the interests of his donors on Wall Street above the interests of those who elected him.

The Democratic party for years has presented a populist tone in its campaigns and then embarked on a conservative agenda once elected.  They count on keeping the support of their constituents by alarming warnings of the dire circumstances that will occur if their opponents are elected.  There is no doubt that I don't want to see Mitt Romney, Heman Cain or Rick Perry as President in 2012.  But quite frankly I can't say that having them in office will really be different than having Barack Obama for another four years.  Perhaps it will take a Democratic drubbing in 2012 to make the party realize that they can't continually turn their backs on their supporters year after year after year and promote serious change within the ranks of the party.  And if they don't, then perhaps they need to be replaced by another party.

Last, make sure to support those candidates that actually do stand for substantial change in our economic system and actually fight for the middle class against the Wall Street interests.  If you contributed to Barack Obama's campaign in 2008, take that money and give it instead to Elizabeth Warren's Senate campaign in Massachusetts.  You may even want to let the Obama campaign know that you've done this and that they won't get another dime from you because they turned their backs on you as soon as they took office.

Regime change can happen, but only if you are willing to make it happen and it is only through regime change and the implementation of the reforms of which I have written here that we can prevent the economic injustice which has permeated every aspect of our society and it destroying our nation.

Herman Cain and the Politics of Cognitive Dissonance

As the Occupy Wall Street protests pick up steam and spread across the nation, I hold out hope that people will stand for real and radical change in the way that politics and the economy work in this country. 

However, any hope that I have for such a radical but necessary shift in the economic structure of our society is tempered by the rise in Herman Cain whose main support seems to be coming from the working class adherents of the Tea Party movement.  The only explanation I can have for this is the theory of cognitive dissonance.

Cognitive dissonance is the anxiety that is induced in one who simultaneously holds beliefs that are contradictory.  For example, one may wish to live a long life, but at the same time smoke.  We know that these two things cannot exist together since smoking has been proven to significantly shorten one's life.  The way one alleviates the anxiety is to somehow explain the contradiction, either by justifying it (I don't smoke a lot and I know I will quit one day so I won't die from it) or by simply ignoring the contradiction altogether (the scientific evidence linking smoking to emphysema and lung cancer is incorrect).

This type of illogical justification is the only reason I can come up with to explain how middle and lower class voters can be drawn to Herman Cain.  Cain is proposing the single biggest transfer of the tax burden in this country from the wealthy to the poor.  His 9-9-9 plan proposes a 9% federal income tax across the board, a 9% federal corporate tax across the board, and a 9% federal sales tax across the board.  His plan would eliminate most, if not all, deductions and would also eliminate capital gains, payroll and estate taxes.

Let's think about that for a minute.  Under Cain's plan, 23,000 millionaires would pay no tax at all since their income comes entirely from capital gains.  Every person in the highest tax bracket would receive the largest tax break in history (35% to 9%).  Together with this, there would be a tremendous transfer of tax burden to the poorest individuals in the nation.  In addition to the fact that Cain's plan eliminates the earned income tax credit and many other deductions that ordinary Americans rely on (there are arguments to be made in favor of this, but not under this insane plan), the  9% sales tax Cain proposes means that a much larger percentage of working Americans income will go toward paying federal taxes than the wealthiest Americans (since a gallon of milk costs the same for Joe Sixpack or Donald Trump).  Not to mention what would happen to Social Security and Medicare.

Cain is Robin Hood in reverse -- stealing from the poor to give to the rich.  We've had enough of this in the past 30 years, we surely don't need more.  Anybody who makes less than $250,000 a year and is supporting Herman Cain is voting against their own economic best interest.  And trust me, although he is promising that his plan will lift the poor out of their prison of poverty and help them become rich, Herman Cain has no interest in helping you make money. 

My only hope is that the issues being raised by Occupy Wall Street and that have been raised on this blog and by me to anyone who would listen over the past several years, will start to filter through to ordinary Americans.  None of the people running for President from either of the two major parties have your economic interests at heart.  Some are better than others.  None are worse than Herman Cain.

So when you decide you might like Herman Cain and you feel that pang of anxiety in your chest -- don't try to explain it away.  It's just your brain trying to steer you in the right direction.

Full Tilt Justice



The Full Tilt Poker criminal prosecution really couldn't have come at a more opportune time for me since it perfectly illustrates the absolute insanity of the U.S. economic/justice system at this particular moment in time.  The actions of Full Tilt Poker, which were undoubtedly criminal and fraudulent in nature, parallel almost perfectly with the actions of the TBTF banks and other Wall Street financial titans, which also were undoubtedly criminal and fraudulent in nature.

For those of you who haven't been following the story, Federal prosecutors filed indictments against owners and board members of the online poker website Full Tilt Poker for defrauding investors.  As part of the several pronged attack, Full Tilt's online licenses were revoked and for all intents and purposes, their business was shut down.  After the indictments were unsealed and arrests were made of the major players in the Full Tilt business, prosecutors went so far as to accuse Full Tilt of being a "global ponzi scheme" which raided the funds of their customers in order to enrich their owners and board members to the tune of hundreds of millions of dollars.

A quick review of the indictments shows that Full Tilt indeed did lavish themselves with high dollar payouts and were undercapitalized to an alarming extent.  In March of this year, Full Tilt owed $390 Million to its customers in winnings but had on deposit just $60 Million dollars in assets.  In addition to this, Full Tilt had used customer accounts, which were promised to be off limits to the company itself and were held for the benefit of the customers, in order to pay owners and board members salaries and bonuses of approximately $440 Million.

This type of activity is not only bad business, but does appear to amount to criminally fraudulent activity which if proven will land those responsible for this looting of customer funds in federal penitentiaries for years if not decades.

Now, say instead of an online poker company you are instead the world's largest insurance company AIG.  What would happen if you acted in the same way as Full Tilt Poker?  You would think that if any major American company did anything like the absurdly illegal activity that is alleged against Full Tilt, that the hammer of American justice would come down hard and fast to protect the integrity of the American financial system, right?  Well, you'd be mistaken.

AIG presents a perfect example of why what went wrong leading to the crash of 2008 and the depression in which we still find ourselves was not only outrageous and criminal, but why the subsequent bailout by the Treasury and the Federal Reserve was possibly the worst single decision of the U.S. government in recent memory.

The only difference between the actions of AIG and the actions of Full Tilt appears to be that of scale.

The problems with AIG arose from their division AIG-FP (financial products) which issued insurance-like products known as credit-default swaps (CDS).  Although there are similarities between insurance and CDS, CDS are not insurance, they are financial derivative products which are not regulated like insurance and therefore have the same risks to the issuer of insurance policies, without any of the requirements of sufficient reserves or conservative investing of the premiums that are required of insurance products.  CDS are financial products which are purchased by customers (known as counterparties) who want to hedge their investments in the complex dervative investment products such as collateralized debt obligations (CDO).  A counterparty will purchase a CDS, paying a premium every required period (quarterly, annually, etc) with the promise that they will receive payout if the CDO in which they have invested suddenly fails and loses money. 

Another key difference between CDS and insurance is that CDS can also be purchased by any investor (usually hedge funds or other large investors) which are simply betting that a certain investment is going to fail, whether or not they actually are invested in that product itself.  In essence, it is simply a bet that a certain financial product or investment is going to fail, without the requirement that the purchaser have any stake in the investment against which he is betting.

AIG-FP was issuing CDS to an alarming extent during the 2000s.  Most of these were written on CDO products which were based on subprime mortgage loans.  Since the belief was that the real estate market would continue to rise in value over time for eternity, these were considered incredibly safe investments by AIG.  Their computer models showed that the chance of any of these CDO failing were so small, that the head of the AIG-FP branch actually stated in company e-mails that he could not foresee a situation in which AIG would lose a single dollar as a result of their obligations on CDS, even as the subprime mortgage market began to implode.

Because these financial instruments were unregulated, the profits on the sales of CDS and the fees generated by AIG were booked immediately as profit, which the liabilities created by the products were kept off-book, in essence showing no liability to investors.  Because of this AIG-FP became a profit generating machine for AIG and as long as the money was coming in, no attention was paid to what was happening beneath the surface -- a financial catastrophe of its own making which would bring down the largest insurance company in the world.

At the height of AIG's CDS binge, the company had a portfolio containing over $2.3 Trillion of CDS.  On this portfolio, AIG had $440 Billion in immediate obligations to counterparties.  However, despite this enormous amount of liability, there was little or no money set aside to cover these obligations.

Now, let's take a small step back and look at the comparison between what AIG did and what Full Tilt Poker's actions.  Remember, Full Tilt had obligations to its customers in an amount of $390 Million and had only $60 Million on deposit to cover these obligations.  AIG had obligations to its customers of $440 Billion (more than 1000 times the amount Full Tilt owed) and had essentially nothing on deposit to cover these obligations.

As we all know, the obligations to its counterparties came due and AIG was unable to cover the amounts owed.  So, after seeing what happened to Full Tilt, this would be the time that the Feds would swoop in, we'd see Wall Street execs in $3,000 suits being dragged handcuffed through the perp walk on the evening news, right?

Well, not exactly.  In fact, not at all.

It became known that AIG was unable to meet its obligations just after the Treasury and the Federal Reserve decided to impliment the Toxic Asset Relief Program and the larger bailout of the entire banking system.  AIG was negotiating with its counterparties, the largest of which was Goldman Sachs which had just received billions of dollars of government money to keep it afloat, in order to come to a settlement of the obligations.  This would have resulted in AIG paying out a settlement of 60% of its obligations to its counterparties to settle all of the claims against it. (An aside, in researching this post, I discovered that the CFO for the AIG division who was negotiating this settlement was a very good friend of mine from college -- odd).

While these negotiations were taking place between AIG and its counterparties, the Fed swooped in on September 16, 2008 and injected $85 Billion into AIG to help cover its obligations.  Furthermore, Tim Geithner, who was at the time the head of the NY Federal Reserve Bank took over the negotations from AIG.  The result of Geithner's takeover of the negotiations was that rather than the counterparties receiving a 40% haircut on their bad investment and receiving 60 cents for every dollar they were owed (a rather generous settlement under the circumstances), Geithner decreed that the obligations were to be paid at par value, meaning that the counterparties received 100% of everything that they were owed on their bad investments with AIG.  This resulted in Goldman Sachs alone receiving an additional $19 Billion in government money which was paid directly to it through the bailout of AIG.

The $85 Billion was only the beginning, though.  By the time that the Fed was done bailing out AIG, it had paid out $182.5 Billion to AIG's books either through direct injections of cash, or in exchange for purchasing the toxic assets which led to the implosion of the insurance giant in the first place.  This means that the taxpayer now holds the obligations on all of these bad financial instruments rather than AIG itself.

Now, let's remember also the emphasis that the Federal prosecutors in the Full Tilt case made about the money paid out to its owners and board members over the course of several years -- $444 Million dollars in total.  After the government bailed out AIG and paid its counterparties in full for the obligations that AIG owed them, in March 2009, AIG paid its traders in the very department AIG-FP that caused this entire mess, bonuses in the amount of $165 Million.  So, while Full Tilt may have misused their client money to enrich the owners and board members of the company, AIG took it a step further and after blowing all of their shareholder's money on ridiculously risky deals, they then used money given to them from the Treasury and Federal Reserve to pay bonuses to the very same idiots who caused the shareholders to lose all of their money in the first place!

Now, I would never excuse the type of fraud that seems to have been practiced by the owners of Full Tilt Poker and if it turns out that the allegations contained in the indictments issued by Federal Prosecutors are true, I hope that all of those indicted serve their time in prison.  But, it makes one question the very foundations of our justice system when you have companies like AIG who engage in what would appear to be conduct which is just as fraudulent and just as reckless not only escape any kind of criminal prosecution but actually receive government subsidies to save them from the financial consequences which would have been the natural and deserved result of their activities.

There are those who will say that these two examples are not comparable.  That allowing AIG to fail would have caused immeasurable damage to the entire financial system of not only the United States, but to the world as a whole, whereas Full Tilt was simply a money-making scam foisted by dishonest and unethical grifters looking to enrich themselves at the expense of the marks who spent money gambling on their website.  There may be some truth to that.  However, the grifters at AIG were no less dishonest or unethical or greedy than those at Full Tilt, and the worst part of this entire scenario is that not only did the government's actions following the financial crisis of 2008 not result in any substantial criminal penalties for those involved in the destruction of the American economy, but that nothing was done to prevent this very scenario from happening again -- and happen again it will.  The only question this time is, will we prosecute those responsible and demand change, or will we just drum up another bailout causing the entire economy to go full tilt?

Mom

As most of you know, my Mom died on September 24.  I was honored by my family by being asked to write and deliver the eulogy at her funeral last Thursday.  Below is the text of the eulogy.  It gives you just a little glimpse of how wonderful my mother was.  Thank you all for the cards, prayers, kind words and time you have given to me through this difficult time.

    We gather here today to mourn our loss, but more importantly we come today to celebrate the life of a remarkable woman, one who has touched each of us in a different but equally important way, a woman who I had the privilege throughout my life of calling mom.
    As I thought about what I was going to say today, one word kept coming to mind – strength.  That is what I am going to speak of today, my mom’s strength.    You would never know from looking at her that mom could be as strong as she was, a little girl from Geneva, Ohio, barely over five feet tall.  But for anyone who knew her, it is no surprise that she was known on the playground in her youth as Toughy Tanner, for although small in stature, she had an inner strength that allowed her to stand up not only for herself but for anyone she loved without hesitation.
    It was this strength that helped her survive what was at times a very difficult and troubling childhood.  More importantly it was her strength which made sure that her children were spared such difficulty and that the cycle was broken with her.
    It was this strength that allowed her to raise seven children, five of whom were 13 months or less apart.  At three different times, my mom had three children in diapers at the same time.  For myself, who sometimes finds it challenging to take care of one child in diapers, this seems almost superhuman.
    It was also my mom’s strength that moved her to leave the relative comfort of her life as a homemaker to take a job at Syracuse University so that she could guarantee that her children would have the benefit of a college education.  Her strength sustained her through 18 years at SU, typing so fast that to me it seemed that her hands were a blur, even though she suffered from painful and debilitating arthritis.  She kept working as her health became worse, so that she could see me, her last child through school, and yes, her date of retirement was the very next day after the date on my diploma.
    Later in her life, it was her strength that sustained her through her many ailments. From COPD, to cancer, to heart problems, she faced each ailment head on and fought them courageously.  Whenever her strength would fail her, she could lean on my dad to whom she was married for 55 years and together they would pull each other through.
    But it was in the last few months and weeks that we really saw my mom’s strength as she fought her last battle.  She did not go quietly into that good night.  She held on until she knew it was time for her finally to leave.  And what was truly remarkable was the strength to know when it was time to stop fighting that truly showed what a remarkable woman my mom was.
    There was not a dry eye in the hospital room at St. Joe’s when my brother Mike arrived a few weeks ago as we all came knowing the end was near to say goodbye to my mom.  When she saw him and realized that all seven of us were there, she said “Now everybody’s home.”
    Mom, now you’re home.  We love you and we will surely miss you.  But we have your strength, and that will carry us through these next weeks and months and we will always know whenever times are tough that we can lean on your memory and your strength will carry us through.
   

The Worst (and Best) Thing I Ever Bought on Ebay

I have bought lots of things on Ebay over the years.  Most of the items have been exactly as advertised and I have come by some fantastic deals and items that I would not have been able to get anywhere else.

However, there is one item that was far from this standard, but was so incredibly bad that it has to be one of the funniest items I've ever seen.

Now, this isn't like those XBox boxes that people spend $300 to buy and then realized they literally bought the box that the XBox came in.  It's not that bad, and I really can't say that it was entirely fraudulent, although it was certainly not the most forthcoming seller ever.

I wanted to purchase for my wife the entire West Wing collection on DVD.  When we first started dating, the West Wing was a weekly date night for us.  We would usually have dinner and then return to her house and watch the West Wing together (with lots of kissing during commercials for good measure).  For Christmas that first year, we each bought each other the first season of the show on DVD.  Of course, if you have ever looked at the price for the entire series, it is quite expensive.  So, I perused the wonderful world of eBay in order to find a deal.  Most of the items were listed at or near the retail price for the series collection.  However, there was one collection that was very reasonable.  There were some things that raised some questions in my mind -- not the least of which being the Chinese lettering above the title.  The seller assured me that the unopened package was (or at least appeared to be) what it purported to be.  So I placed a bid.

At first, the bids remained very low.  It looked as if I was going to get this import (counterfeit) for a steal.  However, at the last minute, the bidding went a little crazy.  I hesitated before raising my bid limit, but I really wanted to get this for my wife and it was still cheaper than I could get it anywhere else, although it was becoming far from a steal.  I ended up paying $75 for the collection -- still not terribly bad for 7 seasons of a television show.  Well, that is if it proved to be what it was advertised to be.

The large box arrived in time for my wife's birthday.  I was very excited about it and wrapped it up nicely for her.  When she opened it, she was very happy with my purchase at first, but then had a confused look on her face -- why were there Chinese characters on the front of the collection?  Were these even in English?

As we opened the box it got worse -- There were seemingly hundreds of DVD's none of which were labeled.  They did have the West Wing labels from each season on the DVD's, but no indication as to which disc was from which season and in what order the discs were.  We decided to put in the first disc and see what it did.  It did have the first episodes from the first season, however, there were English subtitles.  No problem, we just went to the disc menu and took off the subtitles.  No dice.  Subtitles remained.

OK, so there is a problem.  Can't get the subtitles off.  But the episodes were there.  The language selections were also interesting.  We had the following subtitle choices: English (check); Portuguese (interesting choice); Chinese (I think); and what I can only guess is Korean (?).  Unfortunately, the audio was only in English, because it would have been great to hear them speaking in Korean, well, at least I would have thought this was interesting.

As my wife became less and less impressed with my bargain online shopping, I decided to do my best to make the most of the situation and label the discs.  This involved a painstaking process of bringing up each individual menu on each individual disc and then labeling which episodes were on which disc.  However, everything worked.  Well, except for the last season.  That was in the wrong format for U.S. televisions.  But, we can watch it all we want in Europe.

It wasn't until later that we discovered the best part of my purchase.  This was included on the back of the very large velvet lined box in which the discs came.  In the great tradition of Chinese counterfeiters, the makers of this particular collection cut and pasted things from various sources in order to describe the contents of the package.  This sometimes leads to interesting spellings and grammar such as a knock-off of the upside down tomato grower I found at a flea market which had apparently been spelled phonetically by the counterfeiter as it listed the product as the "Topsy Tourey".  It also leads to some great product descriptions such as "Super Fantastic Fire Making Device for Crazy Lucky American Capitalist Smoking Cowboy Man" for a cigarette lighter.

On this collection this is how this manifested (this is funnier if you say it aloud in a fake Chinese accent) (formatting and grammar mistakes from the original):

"Special Features: Lauren Bacall Hosts You Must Remember This: A Tribute to Casablanca;A spellbinding Backstage Tour  Bacall on Bogart Features the Award -Bunny and the Looney Tunes Gang Premiere  Episode Who Holds Tomorrow?From the 1955 TV Series Adaptation of Casablanca Screed Guild Players Radio Production of Casabl anca Feature The Film's 3 Top-Billed Stars Scoring Session Outtakes Gallery  Production History Gallery Includes Photos,Press Materials,Studio Correspondence,Memorabilia And More."

But, if you thought that was all, wait...we've got more!  Apparently in other countries the television series "The West Wing" was actually an action film.  I had no idea of this, but just check out the following from my exclusive one of a kind collection:

FRANCHISE PICTURES PRESENTES A RENNY HARLIN FILM: SYLVESTER STALLONE "THE WEST WING" BURT REYNOLDS, KIP PARDUE, TIL SCIWEIGER, GINA GERSHON, ESTELLA WARREN, CRISTIAN DE LA FUENTE, MUSIC BY BT LINE PRODUCER MARY MCLEOD, CO-EXECUTIVE PRODUCERS REBECCA SPIKINGS, TRACEE STANLEY, EDITED BY STUART LEVY AND STEVE GILSON, PRODUCTION DESIGNER CHARLES WOOD, DIRECTOR OF PHOTOGRAPHY MAURO FIORE, EXECUTIVE PRODUCERS ANDREW STEVENS, DON CARMODY, KEVIN KING, PRODUCED BY ELIE SAMAHA, SYLVESTER STALLONE, RENNY HARLIN, STORY BY JAN SKRENTNY AND NEAL TAVACHNICK, SCREENPLAY BY SYLVESTER STALLONE, DIRECTED BY RENNY HARLIN.

Oh, and apparently it is rated PG-13 (PG in Canada)

I don't know about you, but I had no idea that Sylvester Stallone played such a prominent role in the West Wing.  I think that Aaron Sorkin has some explaining to do.

Anyway, most of the discs play just fine.  One day we'll make the investment in the non-felonious version of the series collection.

By the way, e-mails to the seller went unreturned.  A negative review was left, and I never bought any other DVD's on eBay.  It did make for a good laugh though.

May 8, 2012 -- VE day (Victory for Equality)

May 8 has been since 1945 known as VE day since that was the day in which the Nazis finally surrendered to Allied forces in Europe.  May 8, 2012 is a chance for the forces of good once again to strike a blow for freedom and equality in North Carolina by defeating the ill-conceived, divisive and ignorant proposed constitutional amendment banning same sex marriage. 

It is my honest hope that this will happen.  But, I'd also like to encourage everyone to use this as an opportunity to completely screw with the GOP majority in both houses of the NC General Assembly who put this travesty on the ballot to begin with.

Although they are claiming (without blushing) that they put it on the primary ballot in May instead of November to avoid the appearance that they were trying to boost Republican turnout in November's presidential and gubernatorial elections, the simple fact is that it was placed on in May for purely political reasons.  There is a Republican presidential primary in 2012, while President Obama will be unopposed in his re-election campaign.  Furthermore the race for Governor will also almost certainly have several Republicans vying to replace Bev Perdue who will probably not be opposed in a primary.

It isn't terribly difficult to see the cynicism and political brinkmanship the GOP is employing in placing this measure on a ballot where they are certain to have an overwhelming advantage, since Republicans will have a reason other than the constitutional amendment to turn out to vote, while Democrats will not.

So, let's screw with them.  Seriously, cynically, screw-tacularly mess them up and show that we are tired of the political games we have seen in the past year coming out of Raleigh.

It's not that hard, really.  Here's what I am proposing:

1.  North Carolina has open primaries.  That is, that Independents can vote in either party's primary. 

2.  If you are a Republican and you oppose the gay marriage amendment, I applaud you and hope that your voice will become louder in your party.  There is nothing you have to do except turn up and vote as you already would.

3.  If you are a Democrat and you oppose the gay marriage amendment (I'm hoping it's most of you, but we are in North Carolina after all), switch your party affiliation (it's ok, you can switch it back later) to Unaffiliated prior to the May 8 primary.

4.  For all of you who are already registered unaffiliated and for all of you newly minted former Democrats who are now registered as unaffiliated, simply go to the polls on May 8 and request a Republican ballot.

5.  Vote against the amendment as you would have done anyway.

6.  (Here's the good part).  There are plenty of crazy mother****ers running for everything in the Republican Party.  Most of these will still be plugging along in the primaries come next May.  So, by all means vote for the craziest mother****er you can for every position.  For President I suggest either Ron Paul, Michele Bachmann or Herman Cain (there's also the gay guy who is running for the Republican presidential nomination -- I don't know his name, but wouldn't it be great if he won the NC primary?).  For Governor there is always more than a few crackpots trying to get the nomination, usually someone whose entire platform would require homeschooling and institute some Congregational sect as the official state church of the State -- vote for them.  Continue for any and all other positions on the ballot.

If enough people in North Carolina do this, the state's GOP could actually end up destroying their own chances of victory in every state race in November, not to mention the fact that it could really screw up their Presidential nomination process.

It would serve them right.  Since the North Carolina GOP took control of the NC House of Representatives for the first time in 141 years they have used it as an opportunity to institute a program of radical socially conservative policies which have turned back the clock of progress in North Carolina decades.  Instead of focusing on jobs as they promised, they have spent their time attacking women, abortion rights, education, the poor, teachers, unions, state employees and any other group they saw as being "the other."  It is my hope that their insane agenda will lead them to be turned out of power for another 141 years at least.

How many of you are willing to do this?  I am already registered as unaffiliated, and I plan on carrying out my plan for myself.  Let's unite and work together to make May 8, 2012 a true Victory for Equality and a slap in the face of political cynicism!