This is why we need independent investigations...

See stories like this are what's driving me insane about President Obama throwing money at banks all willy nilly like. This story further proves that investment banks knew that the assets that they were using to back CDOs were worthless and intentionally spread the risk throughout the market in an attempt to recoup their losses and get out before the market began to completely crumble. Here we have a government official, and former Lehman Brother's employee wanting to invest heavily in real estate at the end of the bubble? Having worked for Lehman, I'm sure that he was fully aware of the impending collapse of several mortgage lenders including Mortgage Lender's Network in which Lehman was a heavy investor. What made Lehman Brother's stop purchasing paper from wholesale mortgage lenders? And if Lehman found that the investments were no longer sound, what would make a former Lehman executive take a government insurance fund heavy into stocks and real estate in or after 2007?

If he was unaware of Lehman's disastrous position in 2007 then he was ill equipped to be handling government finances. If he was aware and made this investment anyway then he's a criminal. Either way he needs to be investigated. President Obama, there can be no redress until we stop allowing these criminals to rob the cookie jar. If cases like this one and the recent funneling of billions from AIG to private banks demonstrate nothing else, they tell you that these criminals will not stop unless charges are filed. Congress, the SEC, and other regulatory and oversight bodies are derelict.

Criminal investigations need to begin immediately.

State of the Union

I've never felt a sense of nationalism before. I've always identified with others more so on the basis of race than ethnicity or nationality. As I watched President Obama address the nation last night, I really understood what it meant to be proud of one's country and to unite around the principle of nationhood. It wasn't that I wished harm upon the nation or did not want the country to succeed, I just felt like the success of the nation was separate and apart from me or that I had no say in the direction that the nation would take. I always felt like an outsider looking in watching people make decisions about the course of the nation and it's citizens fate with utter disregard for our unique vantage points and perspectives.

For as far back as I can recall, the government has been an entity shrouded in secrecy, rife with corruption and backroom deals. Presidents and Congress seemed to be running the nation from some self designated pedestal. Their approach to governance seemed to be that of an aristocratic elite, smarter and better suited somehow to guide the people; justified in their efforts to make decisions without the support or consensus of we the people. Last night I heard the president, for the first time in my lifetime, appeal to the will of the people.

Reading the Constitution it appears that the "founding fathers" made the qualifications to hold public office simple by design. Escaping the firm grip of a monarchy "ordained by God" to subjugate, over-tax and wrongfully imprison its citizenry, surely influenced the political perspectives of the "founders." Although their experience did not lead them to see the obvious wrongs of chattel slavery and sexism, it indubitably roused their desire establish a government that was more representative and less oppressive than a monarchy based in the principle of divine right. And yet somehow, after the revolutionary war to establish the union and a civil war to preserve it, the country metamorphosed into an imperialistic, war mongering, torturing, empire, led by a god-head/president who thought it more prudent to abandon the rules of law & evidence and to rely on his instincts masked as messages from God. Last night, President Obama reassured us that America's future will be representative of the people again, enhanced to be more inclusive and reflective of all Americans.

For the first time in my entire life I feel like I can consider myself to be American. I feel like the person sitting in the Oval Office is my president. I feel personally accountable for the success of not just my immediate circle of family and community but the larger circle of nation. (I'd always skipped nation even though I felt like a global citizen.) And interestingly enough my feelings are not predicated on President Obama's race. I am proud of President Obama because I sense that he has a genuine desire to understand and incorporate the viewpoints of all people. His desire to encourage everyone to break free of the chains that bind them--the lie that you are second class because of your gender or race, the lie that you can not reach your desired level of greatness, the lie that you are somehow better or worse than anyone else because of your access to or denial of privileges, the idea that false racial or gender based or caste based constructs can be eradicated by acknowledging their presence and by providing everyone with not only equal opportunity but also equal access--is laudable.

To paraphrase author Ayi Kwei Armah, the greatest leadership comes in the form of inspiration. Given President Obama's first state of the union address, he has a keen sense of true leadership.

Next Free Re-Financing...

Banks have agreed to halt foreclosures for three weeks. Maybe Barney Frank can convince them to allow people to re-fi at better rates without the exorbitant fees.

Full article here.

The Media...

Will the media stop reporting every single thing that the president does? I understand that news outlets have to make money, but do we need to know every single step the man takes? The conspiracy theorist in me says that the media is intentionally over exposing the president so that the American public will become fatigued and apathetic again, allowing the media to spoon feed us what they want us to know. But my more conformist side says that this is just like everything else in our capitalist system, when people find out that something makes money they milk it dry.

From playing the same song on the radio 1000 times a day to incorporating rap music into every form of advertisement from rapping lizards to rapping grannies to every single person with studio time recording a song using a vocoder, capitalism encourages people to suck the life out of all forms of inspiration or creativity. It's as though business owners do not believe that consumers are capable of appreciating more than one concept at a time.

Note to the media, yes we like President Obama, yes we think he's intelligent and we do want to know pertinent relevant information about what is going on in the white house, but each day your dramatizations about supposed infighting and "missteps" are tending more and more toward hyperbole as opposed to news. Here's an idea on something Americans may also be interested in.

I have to go check now to see if the president has sneezed today and if it was the sneeze heard round the world or some other god awful headline...

Stop the world and let me off...

Looking at the current state of the world I can't stop thinking about the Tower of Babel. Humans, fresh off the flood and full of themselves, felt like they should build a tower to heaven and make a name for themselves across the Earth. Of course this story is a myth developed by humans to explain the poly lingual nature of the Earth, but it seems so appropriate in these times. Across the globe, people destroyed what was best about the diverse cultures of the world to speak one tongue and adhere to one standard of life. Men transformed themselves to gods on Earth, subjecting one another to atrocities, attempting to limit the extent to which individuals could exist and what could matter to them. I know this is an over simplification, but weren't banks and governments the culmination of man's desire to control the Earth? Under the current world order, men control every one's right to pursue even the most fundamental human desires: food and shelter. Given the power to control others man didn't seek to uplift or share, instead he waged war and stood by idly as hunger, disease and poverty persisted.

What if banks are supposed to fail? Back in October when former President Bush sent Paulson out to hoodwink Congress, I couldn't help thinking why do I care if banks fail? Sure it would be terrible for capitalism and the current world order but what if you didn't really like the current world order to begin with? What if people didn't have to indenture themselves to banks and could really pursue their own interests? Sure it would be hard at first but I think I would prefer tending to my own garden to sitting in my cubicle.

The current system promotes class hierarchy, hunger, war and destruction; surely enlightened souls could come up with an alternative to the injustices wrought upon our spirits each day. Why does the fulfillment of the few have to come at the costs of so many?

Maybe I'm a dreamer but my goal in life is to live somewhere warm enjoying the Earth's bounty, surrounded by loved ones, pontificating on the origins of life. I know that many people's nature would push them to fight and destroy one another, but what if everyone just started a garden and we all just ate enough and didn't hoard and gorge? What if we could appreciate the sing song nature of multiple languages and embrace the spiritual philosophies of multiple cultures? What if we didn't desire to be gods on Earth controlling one another and the rest of the Earth's inhabitants for a change?

What did they know and when did they know it...

Ok I've had enough. Today Geithner came out spewing that same nonsense about the government guaranteeing the banks debt which is essentially the same as an agreement to pay off their debt. The same banks that lobbied to make filing for bankruptcy more difficult and have been ripping consumers off with usurous interest rates on credit cards and car loans for years. The same banks that KNOWINGLY passed on exorbinant risk to investors; some saavy and some not so saavy. The banks need to be investigated for myriad reasons not limited to the following:

They knowingly securitized bad debt.
At the start of the housing boom, mortgage brokers and lenders used their established relationships with commercial banks and investment houses to pass off riskier debt. People have to question why investment banks, many of which had lending arms of their own post the repeal of the Glass-Steagall Act, were purchasing paper from mortgage lenders. If the investments were as safe as purported, why were borrowers paying a premium for the loan in the form of higher interest rates and why couldn't the retail or commercial lending arms of these banks provide loans to these consumers in the first place?

They knew the product lines were dangerous.
Banks knew that mortgage lenders were creating products that would significantly impair a borrowers ability to sell their home. Loans with LTVs of 103-125% were prevalent meaning that borrowers were getting loans that were higher than the value of the asset itself. This is fine in a growing market but creates quite a challenge if the market stagnates or worse begins to decline. Initially banks sought legislation like the revisions to bankruptcy law forcing homeowners into a state of indetured servitude. However as more homeowners continued to defualt, investment banks stopped purchasing paper from mortgage lenders forcing them to collapse.

Banks knowingly sold assets that had questionable value.
Once investment bankers began to realize the toxicity of the assets they were holding, they began to look for ways to spread the risk. Issuance of asset backed secutrities peaked between 2006 and 2007, AFTER banks cease to buy loans from mortgage lenders. Banks did not differentiate the assets in these securities even though they were aware that there were significant challenges with some of the loans they were holding on their books to be bundled into securities. In the pyramid scheme that was the mortgage industry for the past decade, the banks looked for new entrants in an attempt to recoup their losses. This worked well until outside investors began to challenge the valuations of the assets backing the securities.

If for no other reason than to garner a better understanding of the potential depth of the challenge currently faced by the banks, the government needs to conduct a thorough audit of these banks books. By thorough I mean access to the banks ledgers and internal manangement consolidation systems and reports. The government has many arms capable of carrying this out, including forensic accountants in the IRS and FBI. Congress should request this inquiry before attempting to shore up assets they don't understand.

I think at this point everyone is growing weary of the charades and grandstanding of hearings that accomplish nothing because congressional leaders don't even know what questions to ask.

I'm Just Saying...

I can not stand all the tell the president what to do people out there but I had to make this suggestion. Maybe President Obama should go beyond limiting executive pay at the banks. Maybe he should just fire them altogether and let hedge fund managers run the banks. They seem to understand what the banks are holding better than the CEOs and regulators do. Maybe by forcing them to have skin in the game on the side of the growth of the economy instead of its failure we can all come up. I'm just saying don't take my word for it read for yourself...

John Paulson article.