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More Photo Fun…

Sunday, May 3rd, 2009

First of all, how cool is this: The Official White House Flickr Photostream. I know there’s always a camera following the President around, but now we can subscribe to the photostream, and see recent pictures whenever we want. Here’s my favorite so far:

Second, The New York Daily News, in reporting on the recent Air Force One Photo-Op Flyover Fiasco, pointed out that The White House could just as easily obtained the publicity shot they wanted with a skilled Photoshop artist. They then asked their readers to submit examples of where Air Force One could be photographed using Photoshop. The results are, well, predictably creative and hilarious. Here’s my favorte from that bunch:

Go ahead and browse both sets. Which are your favorites???

Categories: News and/or Media, Random Acts of Blogging | No Comments »

Real Time Reality TV

Wednesday, April 15th, 2009

By now, most everyone is aware of the escalating violence off the coast of Somalia. Since Sunday, Somali pirates have taken seventy-five additional hostages and fired upon American ships bearing food aid, all in response to this past weekend’s rescue of American Captain Richard Phillips and several French sailors. A spokesman for the pirates (yes, they apparently have spokesmen) said, “Our latest hijackings are meant to show that no one can deter us from protecting our waters from the enemy because we believe in dying for our land.”

A serious situation, to be sure. So imagine my surprise when I saw this banner ad in my Yahoo! news feed:

Apparently, a company called 44 Blue Productions will station TV crews aboard U.S. Navy vessels patrolling the Somali waters for pirates. Rasha Drachkovitch, 44 Blue’s president and founder says he will have access to dozens of navy cameras along with his own. He feels it’s his job to “find the characters and stories to focus upon.”

Spike’s senior VP for original series, Sharon Levy, said she didn’t know if the incident with Richard Phillips would “kill the deal or seal the deal,” but feels that “following the work of Navy personnel on this mission is the sort of action Spike craves. . . The cable channel targets young male viewers aged 18 to 34, potentially making ‘Pirate Hunters: USN’ a strong recruiting tool for the Navy.”

The Navy, believe it or not, agrees. Navy spokesman Commander Richard K. Anderson (who was terrific in The Matrix, by the way): “That’s the Spike demographic and (recruiting) is a factor. We also have a responsibility to inform the American public about what we are doing.”

To all of which, I can only add this: Seriously? The U.S. Navy needs a Reality TV show to inform the American public about what they’re doing to fight Somali pirates? Isn’t that what the news media is for? Isn’t it enough that the President of the United States has publicly vowed to halt the piracy? Or is that just advance marketing for the TV show now?

And do we really need to “find characters and stories to focus upon?” Here’s a story: a group of Navy Seals took out three pirates with high-powered rifles in open water without so much as splashing water on the hostage. Sorry, but I don’t need touching background footage of their wives & kids back home to consider them heroes.

This is reality. It doesn’t need to be reality television.

Categories: News and/or Media, Primetime TV | 1 Comment »

AIG – One more thing…

Wednesday, March 18th, 2009

It’s being reported today that seventy-three of the roughly four hundred AIG employees that received retention bonuses received bonuses of more than $1 million. It’s also being reported that eleven of them (including one who received $4.6 million) have already left AIG, and received the bonus anyway.

In my previous post, I attempted to explain that retention bonuses are not new, nor are they sinister plots to distribute taxpayer money to rich executives. Especially when a company is going through tough times, retention bonuses can be absolutely critical to retaining the most critical people so that the company can flourish again when the crisis is over. I roundly criticized our leaders (including the President) for misleading the American people into believing that this wasn’t the case.

I stand by that criticism. However, if AIG’s retention contracts were written such that bonuses (especially substantial ones) are still paid even after an employee leaves, then we’re talking about extremely poorly written contracts.  Also, if you believe that almost 20% of your division’s staff requires $1 million to remain with the firm, then you haven’t done nearly enough to incent them in other ways.

UPDATE:  Yes, I know – an update to an update, but these things evolve rather quickly.  Anyway, it was pointed out to me by those who know better that the eleven people who left probably stayed until the day they were required to stay to get their retention bonuses, and then left for the job they had lined up as “retention day” neared.  Payout of the bonus itself could we weeks or months later, which would create the situation described above – a person who’s already left the company receiving a retention bonus.  If that’s the case, then the retention bonus did exactly what it was supposed to do – keep the employee in the firm until a predetermined date.  The bit about 20% of the staff receiving $1 million or more for retention is still a valid criticism, though…

Previous statements made on this matter by our leaders and by the media leave me with little confidence that we’re getting all the facts straight, but if the above is true, I say that AIG fire those responsible for creating these contracts. Not because AIG has received government bailout funds, or because it feels good to punish rich people when times are bad, but because they did a lousy job structuring their retention contracts. Even in a good market, the above terms do the company no good and don’t achieve the retention incentive that they set out to achieve in the first place.

By the way, while I have your attention (if I still have it…), I’d also like to emphasize two things from my previous post that I fear weren’t clear enough:

Categories: Money Talk, News and/or Media, Political Rantings | 1 Comment »

Time Magazine: 25 People to Blame for the Financial Crisis

Thursday, March 5th, 2009

A few weeks back, Time Magazine published a list of the 25 People to Blame for the Financial Crisis, in which it details the 25 people (or groups of people) that it considers most “blameworthy.”

Unfortunately, it’s website requires you to click “Next” twenty-five times to see the entire list, which is pretty inconvenient. So, as a public service, here’s the complete list:

  • Angelo Mozilo, co-founder of Countrywide and IndyMac. Made predatory lending into a big business.
  • Phil Gramm, chairman of the Senate Banking Committee from 1995-2000. Repealed the Glass-Steagall Act in 1999 and modified the 2000 Commodity Futures Modernization Act to exclude OTC derivatives from CFTC regulation.
  • Alan Greenspan, chairman of the Federal Reserve, 1987 – 2006. Kept interest rates low through the booming 90s.
  • Chris Cox, chairman of the Securities and Exchange Commission, 2005-2009. Didn’t catch Bernie Madoff or sufficiently police the I-Banks.
  • American Consumers, borrowed up to 130% of their income by 2007.
  • Hank Paulson, Treasury Secretary, 2006-2009. Let Lehman fail, mis-managed the original bailout bill/TARP program.
  • Joe Cassano, founding member of AIG’s financial products unit. Made Credit Default Swaps big business, beginning in 1987.
  • Ian McCarthy, CEO of Beazer Homes since 1994. Admittedly violated regulations to get loans for unqualified borrowers.
  • Frank Raines, CEO of Fannie Mae, 1999-2004. Presided over a massive accounting scandal and kicked off investments in sub-prime mortgage backed securities.
  • Kathleen Corbet, President of Standard & Poor’s, 2004-2007. Assigned questionable ratings to CDO products that are now “toxic assets.”
  • Dick Fuld, CEO of Lehman Brothers, 1994-2008. Got Lehman into the MBS business, presided over it’s demise in September of 2008.
  • Marion and Herb Sandler, owners of World Savings Bank, who invented the adjustable-rate mortgage (ARM) in the early 1980′s.
  • Bill Clinton, 42nd President of the United States, 1993-2001. Presided over the repeal of the Glass-Steagall Act, signed the Commodity Futures Modernization Act and the Community Reinvestment Act, which pressured banks to lend in low-income neighborhoods.
  • George W. Bush, 43rd President of the United States, 2001-2009. Embraced deregulation, didn’t get Congress to control Fannie Mae and Freddie Mac, signed the Sarbanes-Oxley Act, blocked additional regulation of mutual and hedge funds.
  • Stan O’Neal, CEO and Chairman of Merrill Lynch, 2003-2007. Got Merrill into the CDO and MBS businesses.
  • Wen Jiabao, Premier of the People’s Republic of China, 2003-present. Purchased copious amounts of U.S. Government debt.
  • David Lereah, Chief Economist at the National Association of Realtors, 2001-2007. Recommended real estate as a sound investment, despite the bursting bubble.
  • John Devaney, Hedge Fund Manager and buyer of more than $600 million in mortgage-backed securities.
  • Bernie Madoff, purveyor of a $50 billion Ponzi scheme that bilked many of the rich and famous.
  • Lew Ranieri, Salmomon Brothers bond trader. Inventor of mortgage backed securities in the late 1970′s.
  • Burton Jablin, head of programming for HGTV. Created programs that taught homeowners how to extract value from their homes.
  • Fred Goodwin, CEO of the Royal Bank of Scotland, 2000-2008. Strained RBS’s capital reserves through acquisition, leading to a government bailout.
  • Sandy Weil, CEO of Citigroup, 1998-2003. Lobbied for the repeal of Glass-Steagall, formed the first “universal bank” (Citigroup) by merging Salomon Smith Barney, Travelers and Citibank.
  • David Oddsson, Prime Minister and Central Bank Governor of Iceland, 2001-2009. Privatized Iceland’s banks and presided over a “macroeconomic meltdown.”
  • Jimmy Cayne, CEO fo Bear Stearns, 1993-2008. Over-leveraged Bear Stearns and presided over it’s rescue/sale to JPMorganChase.

While the connection of some of these folks to the Current Financial Crisis(TM) range from obvious to tenuous, I generally like the list because it highlights the fact that “blame,” to the extent we need to find it, belongs with a large number of people across many industries.

It’s a welcome refresher from the “bash the banks” mentality that seems to have saturated our media and our leaders over the last couple of months.

Categories: Money Talk, News and/or Media | No Comments »

Seth Meyers Rages Against the (Gaffe) Machine

Monday, February 9th, 2009

Kudos to Seth Meyers and Saturday Night Live for calling out the folks who fall all over themselves to call out Michael Phelps:

NOTE #1: Not entirely safe for work, in a late-night network TV kind of way…

NOTE #2: But still hilarious, also in a late-night network TV kind of way…

NOTE #3: Thanks to Willow Gross for passing it along…

Categories: News and/or Media, Primetime TV | 1 Comment »

More on Taxes

Sunday, February 8th, 2009

Seems another Obama appointment fits into the tax problem news-catalog. The hearing to consider Rep. Hilda Solis as Labor Secretary was cancelled on Thursday after it was revealed that her husband paid off $6,400 in tax liens (some of which were sixteen years old) the day before the hearing was scheduled. Once again, we are led down the lazy path, on which all four of these problems are considered equivalent. Even though, in this case, Rep. Solis’ husband is, in fact, not being considered for Labor Secretary. To his credit, Press Secretary Robert Gibbs said this:

We reviewed her tax returns, and her tax returns are in order. The story denotes that her husband had some issues with paying a business tax, and obviously that tax . . . should be paid. She’s not a partner in that business, so we’re not going to penalize her for her husband’s business mistakes. Obviously, her husband, I think, has and should pay any taxes that he owes.

On the more amusing side of news cataloging is the JammieWearingFool, who, while discussing Rep. Charles Rangel’s ongoing tax problems, comes up with this gem:

What with tax cheats being all the rage, one wonders how Charlie Rangel avoided an Obama cabinet appointment?


Categories: News and/or Media, Political Rantings | 4 Comments »

Taxing our Patience

Tuesday, February 3rd, 2009

Another tax problem for an Obama nominee. And once again, the media is news cataloging – lumping all three of these tax-related issues together as if they are the same thing. Let’s skim just slightly below the surface and point out the differences, shall we?

Tim Geithner- Mr. Geithner didn’t pay his employer’s portion of his social security taxes ($43,000), something that most of us don’t have to do. But the rules are different for people who work for the International Monetary Fund. At the IMF, employees are considered “self-employed” for the purposes of Social Security taxes, and are reimbursed separately for the need to pay these extra taxes. In 2006, the IRS informed him that he failed to pay these taxes (despite being reimbursed) for his 2003 and 2004 returns, and he promptly paid up (including penalties and interest). The Obama vetting team discovered the same issue with 2001 and 2002, at which point he paid up on those as well. All of this makes him careless, not criminal. Not that I’m advocating for a careless Treasury Secretary, especially in these times, but an administrative foul-up does not diminish his qualifications to run the Treasury Department.

Tom Daschle- Senator Daschle used a chauffeur-driven car that was provided to him by a long-time friend, Democratic fundraiser and founder of his own private equity firm, InterMedia Advisors, for three years. The value of this service – more than $300,000 – is taxable as income, which he never declared and hence, never paid tax on. When the Obama team vetted him for HHS secretary, they discovered the discrepancy, at which point, Senator Daschle amended his 2005, 2006, and 2007 tax returns – paying over $100,000 in back taxes and interest (but no penalties). Unlike Mr. Geithner’s case, this does not seem like an administrative oversight, nor does it seem like something that Mr. Daschle would have cleared up on his own until he got caught by the vetting process. The article I linked too, nonetheless, compares the two cases, implying that they’re part of the same story.

Nancy Killefer- Ms. Killefer owed $298 in unpaid unemployment compensation taxes for her housekeeper in February of 2005. The IRS fined her $600 for the mistake and charged her $48.69 in interest, which she paid in July of 2005. She has been free and clear of any and all tax problems for three and a half years. And yet, the Associated Press “broke” this “news story” today, linking Ms. Killefer to Messrs. Geithner and Daschle, implying that she, too, is part of the same story. This, despite the fact that she a) was quicker and more complete about settling her accounts with the IRS when she found out about them, and b) owed amounts that were orders of magnitude less than the other two. Surprisingly, Ms. Killefer decided to withdraw her name from nomination to the new post of Chief Performance Officer, saying:

“I recognize that your agenda and the duties facing your Chief Performance Officer are urgent. I have also come to realize in the current environment that my personal tax issue of D.C. Unemployment tax could be used to create exactly the kind of distraction and delay those duties must avoid. Because of this I must reluctantly ask you to withdraw my name from consideration.”

The key words here are “in the current environment.” In other words, because the media has used each subsequent story to build upon the one before, “news cataloging” these three significantly different situations together, she feels her $947 tax penalty from 2005 is enough to disqualify her from high office. One can speculate that she just didn’t want to deal with the spotlight over something so trivial.

When I sat down to write this post, I was going to conclude with “what a waste.” As it turns out, Ms. Killefer’s actions may have had some benefit after all, as it was just announced (a mere three hours after Ms. Killefer withdrew her nomination) that Senator Daschle is doing the same thing.

Of the three, Senator Daschle seems to be the one who came closest to commiting tax fraud here, and for a much larger sum of money than the other two. The right answer in this whole mess would have been for him to resign, and for the other two to get past it and get on with their new jobs.

Two out of three ain’t bad, I guess…

Categories: News and/or Media, Political Rantings | 4 Comments »

The Gaffe Machine processes another tax return

Thursday, January 15th, 2009

John Hinderaker, over at Powerline Blog, has a well-written (and most non-partisan) look at Tim Geithner’s tax problems. Some sample quotes:

Some have gone overboard by calling Geithner a “tax cheat.” It is inconceivable that the error was intentional. Others have used the occasion to call for tax simplification. I am all in favor of tax simplification, but the issue at hand isn’t all that complicated: payment of self-employment taxes is elementary, and the fact that an IMF employee is “self-employed” for this purpose, while obscure to the general public, ought to be known to IMF’s employees.I don’t draw any conclusion from this episode other than that Geithner is a busy guy who, like many others, hasn’t paid enough attention to his personal tax and financial matters.

UPDATE: Additional facts have come to light that make this situation much more serious. Byron York reports that IMF employees received additional compensation that was earmarked for their portion of FICA taxes. Their incomes were, as the IMF put it, “grossed up.” Thus, Geithner accepted “reimbursement” from the IMF for taxes that he didn’t pay. Not only that, he certified that he would pay the taxes.

I’m still sure it’s carelessness, not fraud, but if Byron’s description is correct (and I’m confident it is), it represents a level of carelessness that is not going to be tolerated in a Treasury Secretary at this moment in history. I expect Obama to withdraw Geithner’s nomination.

I tend to agree with Mr. Hinderaker that this is not a big deal, and certainly a distraction when we should be talking about Geithner’s role as head of the New York Fed during a major Wall Street Financial Crisis(TM).

Most in the media seem to be giving Geithner the pass he deserves. That said, I do feel the need to point out that Geithner’s mistakes total more than $43,000 in unpaid taxes. Back in October, though, Joe the Plumber‘s credibility was lambasted when he dared ask Barack Obama a question about his tax plan while owing the state of Ohio less than $1,200.

Maybe the media ought to give plumbers the same consideration it’s willing to give Fed-Chiefs-Turned-Treasury-Secretary-Elects…

Categories: News and/or Media, Political Rantings | 1 Comment »

The Five Living Presidents

Saturday, January 10th, 2009

Barack Obama had lunch yesterday at the White House with the four other living Presidents and ex-Presidents:

For the record, despite appearances, I’m told that Jimmy Carter was not played by a cardboard-cutout of Jimmy Carter. Then again, Photoshop is a powerful tool and we shouldn’t take anything for granted these days.

Anyway, the picture made me think of this picture from Richard Nixon’s funeral in 1994:

Since ’94, we’ve had two ex-Presidents die, and we’ve elected two more. All part of our Presidential replacement program, I guess…

Categories: News and/or Media, Political Rantings, Random Acts of Blogging | No Comments »

Fair & Balanced…

Monday, December 22nd, 2008

The other day, I slammed the New York Times for running a “Wall Street is Evil” article on the front page.

Yesterday, in the Sunday paper, there was a longer article that went into more detail about the financial crisis. It’s still laced with political invective, but it does a much better job of presenting the history of what happened than the one from last Thursday. Credit where credit is due (no pun intended).

What it shows is an administration suffering from the same things it’s suffered from throughout it’s eight years – a desire to do the right thing, coupled with an inability to waver from an initial decision, and an inability to control the message and/or inspire any confidence:

Mr. Bush did foresee the danger posed by Fannie Mae and Freddie Mac, the government-sponsored mortgage finance giants. The president spent years pushing a recalcitrant Congress to toughen regulation of the companies, but was unwilling to compromise when his former Treasury secretary wanted to cut a deal.As early as 2006, top advisers to Mr. Bush dismissed warnings from people inside and outside the White House that housing prices were inflated and that a foreclosure crisis was looming.

“We absolutely wanted to increase homeownership,” Tony Fratto, his deputy press secretary, recalled him saying. “But we never wanted lenders to make bad decisions.”Advocating homeownership is hardly novel; the Clinton administration did it, too. For Mr. Bush, it was part of his vision of an “ownership society,” in which Americans would rely less on the government for health care, retirement and shelter. But for much of Mr. Bush’s tenure, government statistics show, incomes for most families remained relatively stagnant while housing prices skyrocketed. That put homeownership increasingly out of reach for first-time buyers. So Mr. Bush had to, in his words, “use the mighty muscle of the federal government” to meet his goal. He proposed affordable housing tax incentives. He insisted that Fannie Mae and Freddie Mac meet ambitious new goals for low-income lending. Concerned that down payments were a barrier, Mr. Bush persuaded Congress to spend up to $200 million a year to help first-time buyers with down payments and closing costs. And he pushed to allow first-time buyers to qualify for federally insured mortgages with no money down.

Senior aides, like Karl Rove, Mr. Bush’s chief political strategist, were wary of overly regulating an industry that, Mr. Rove said in an interview, provided “a valuable service to people who could not otherwise get credit.” While he had some concerns about the industry’s practices, he said, “it did provide an opportunity for people, a lot of whom are still in their houses today.”Today, administration officials say it is fair to ask whether Mr. Bush’s ownership push backfired. Mr. Paulson said the administration, like others before it, “over-incented housing.” Mr. Hennessey put it this way: “I would not say too much emphasis on expanding homeownership. I would say not enough early focus on easy lending practices.”

The plan Mr. Bush announced on Aug. 31 reflected that belief. Called “F.H.A. Secure,” it aimed to help about 80,000 homeowners refinance their loans. Mr. Montgomery, the housing commissioner, said that he knew the modest program was not enough — the White House later expanded the agency’s rescue role — and that he would be “flying the plane and fixing it at the same time.”Instead, Mr. Bush developed Hope Now, a voluntary public-private partnership to help struggling homeowners refinance loans. And he worked with Congress to pass a stimulus package that sent taxpayers $150 billion in tax rebates. In a speech to the Economic Club of New York in March 2008, he cautioned against Washington’s temptation “to say that anything short of a massive government intervention in the housing market amounts to inaction,” adding that government action could make it harder for the markets to recover.In August, Freddie Mac and Fannnie Mae’s stocks lost half their value in a single day, prompting Congress to quickly give Mr. Paulson the power to spend $200 billion to prop them up and to finally pass Mr. Bush’s long-sought reform bill, but it was too late. In September, the government seized control of Freddie Mac and Fannie Mae.

A dispassionate review of the administration’s reactions to the crisis, given what was known at the time and ignoring 20/20 hindsight probably ranges somewhere between “cautious” and “over-optimistic.” Of course, no one is the least bit interested in a dispassionate review – only the collection of people who take the (now politically safe) position that Mr. Bush was at least partially at fault.

Categories: Money Talk, News and/or Media | No Comments »

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