The answer is inside the belly of the beast

clipped from www.cnsnews.com Documentary film director Michael Moore, who has become a millionaire thanks to the profits from his movies, told CNSNews.com that “capitalism did nothing” for him. “You know, I had to pretty much beg, borrow and steal,” he said. “The system is not set up to help somebody from the working class make a movie like this and get the truth out there.” “In fact, in Fahrenheit 9/11 if you remember, capitalism, the Disney Corporation, tried to kill that film--tried to make it so that people couldn’t see it,” said Moore. Moore reportedly was paid $21 million by Disney for producing, directing and creating the film. Moore also earned 50 percent of the profits of his 2007 film “Sicko,” totaling $25 million plus DVD sales, according to Vanity Fair. CNSNews.com asked: “Critics may say, when they see this movie, Michael Moore has amassed a fortune of over $50 million, some have said and –” Moore said: “Really? Are you kidding me? Seriously? Wow. Where did it go?”

The good news is that if single-payer health care passes Moore will either die from a heart attack or be found out to have used private doctors (like the wealthy liberals in "progressive" Western democracies Moore talks about do) and defrauded as a grade-D pork once and for all.

An MBA in Hustling

Given the amoral utilitarianism of Russia's oligarchs it's not surprising that they would be willing and able craft what may very well become one of the only business schools that's more than a circle jerk rest stop for burned-out bankers and bored corporate types seeking to switch careers.
Learning how to deal with the prevalent issues of politics, bureaucracy and corruption is applicable not just to emerging markets, but to the developed world as well. Wherever there are puppet politicians there are puppeteers pulling the strings.
Furthermore, anyone who has worked for a large corporation understands the importance of successfully navigating office politics and greasing bureaucracy's palm to free oneself from its suffocating grasp.

clipped from www.businessweek.com A handful of top Russian business figures have created an MBA program that tackles the issues they faced themselves: bribery, relentless bureaucracy, imperfect laws. Skolkovo includes classroom courses in management theory, but invites dozens of guest speakers [and] might even invite an organized crime boss to talk about the challenges of management. Skolkovo faculty members say they avoid moral judgments, and offer no ready-made strategies for handling corruption and predatory practices. Among the patrons are some of the Russian business world's biggest names: Abramovich, the billionaire investor and owner of the Chelsea football team, donated 26 hectares (64 acres) of choice land outside Moscow for the construction of the gleaming $250 million campus, which has its own helipad. Skolkovo's training doesn't come cheap. Fees for a full-time MBA including accommodation, flights to India, China and the U.S. come to euro50,000 ($74,000).

A Darling Buffoon

Alistair Darling must have slept through his maths classes in elementary school. If you want to get tax revenue from the rich, but also command firms to curb bonus payments then where are you going to get that extra money from?
At least he is being completely "Frank" about his socialist, Robbin' Hood, ideals. Maybe Labour should just drop the pretense and rename themselves the Pathetic Proletariat Party.

clipped from www.bloomberg.com Chancellor of the Exchequer Alistair Darling, targeting what he calls “greed and recklessness” in Britain’s financial system, asked banks to curtail bonuses and said the rich will pay more in tax. “It is right that those who earn the most should shoulder the biggest burden.” “We will introduce legislation to end the reckless culture that puts short-term profits over long term success. It will mean an end to automatic bank bonuses year after year.” Darling said he has raised tax rates and eliminated relief for pension contributions for the rich. This week, Darling will [ask bank heads of remuneration] that they reduce bonus payments at the ahead of a change in the law aimed at formalizing curbs on pay. “The government’s implicit presentation of excessive remuneration as the cause of the crisis, and the banking bill as a silver bullet that will kill off financial excesses, is singularly unconvincing,” said Simon Morris, a partner at law firm CMS Cameron McKenna.

Robertson puts it in real simple terms for the fools on the Hill

...but somehow I doubt even these clear and irrefutable facts from one of the brightest minds in finance will make them listen.
When all you're thinking about is reelection, or your immediate problems - in the case of dimwitted constituents, it's hard to see past to the burgeoning debt load that will put a vice grip on future generations. At least we'll all be green - cars will be too expensive and dollars will be crowding out all other colors in landfills.

clipped from www.cnbc.com The US is too dependent on Japan and China buying up the country's debt and could face severe economic problems if that stops, Tiger Management founder and chairman Julian Robertson told CNBC. "It's almost Armageddon ... if the Chinese and Japanese stop buying our bonds, we could easily see [inflation] go to 15 to 20 percent. It's not a question of the economy. It's a question of who will lend us the money if they don't. Imagine us getting ourselves in a situation where we're totally dependent on those two countries. It's crazy.” “The other thing is, they're buying almost exclusively short-term debt. And that's what we are offering, because we can't sell the long-term debt. And you know, the history has been that people who borrow short term really get burned.” "The U.S. has to quit spending, cut back, start saving, and scale backward," Robertson said. “I really do think the recession is at least temporarily over. But we haven't addressed so many of our problems and we are borrowing so much money that we can't possibly pay it back, unless the Chinese and Japanese buy our bonds.”

More Quants shifting to Behavioral Finance

Behavioral finance, which once was a footnote in most advanced economics textbooks is now coming to the forefront of financial engineering as quants realize that models must account for the facts that market participants - when pushed beyond their comfort zone - will rarely act efficiently.
As followers of this blog will know I never bought into the EMH, and so have a perennial interest in modeling behavior in the markets. Exploiting inefficiencies is the true path to arbitrage profits.
Of course if quant models start trading against what they perceive as erratic human behavior it's inevitable that they themselves will act erratic at times. It's a Catch-22 of trying to predict the unpredictable.
The added volatility this brings should make things a lot more interesting in the coming years. It will also make whoever can decipher the decision pathways of both the black boxes and gray ones a whole lot of money.

clipped from www.nytimes.com IN the aftermath of the great meltdown of 2008, Wall Street’s quants have been cast as the financial engineers of profit-driven innovation run amok. The risk models proved myopic, they say, because they were too simple-minded. They focused mainly on figures like the expected returns and the default risk of financial instruments. What they didn’t sufficiently take into account was human behavior, specifically the potential for widespread panic. “When trust in counterparties is lost, and markets freeze up so there are no prices,” said Stephen Figlewski, a professor of finance at the Leonard N. Stern School of Business. The drive to measure, model and perhaps even predict waves of group behavior is an emerging field of research. “You don’t need a model of human psychology to see that there was a danger of impending disaster,” Mr. Farmer observed. “But economists have failed to make models that accurately model such phenomena and adequately address their couplings.”

I highly recommend reading the rest of the article for a look at two very different approaches to modeling investor behavior.

White House wants to bring out the Pavlik Morozov in all Americans

I am sure this name Pavel Morozov is foreign to Americans. In a nutshell, he was a darling young boy who achieved martyrdom in Soviet Russia by reporting his father's un-Partylike activities to the police. The father was summarily arrested and executed, and Pavlik's family, unable to see his unbridled patriotism, murdered him. There are statues of Pavlik throughout Russia, and schoolchildren were indoctrinated taught about his courage and bravery.
The Administration hopes that Joey Sixpack will take Morozov's fallen torch by sending in "fishy" emails about the President's Master Plan to the authorities at the White House. Can you imagine the [completely justified] outcry had Bush enacted such a policy?
I am sure that this story will be generally dismissed by the media and quickly die down in popularity (maybe the President can stage a bourbon summit as a distraction this time?), but the fact remains that fundamental principles on which this country was founded upon are being ever so slightly encroached.
Put a frog in boiling water and it'll jump out, but turn the heat up slowly and it will never realize that it's being boiled alive.

clipped from www.whitehouse.gov Opponents of health insurance reform may find the truth a little inconvenient, but as our second president famously said, "facts are stubborn things." Scary chain emails and videos are starting to percolate on the internet, breathlessly claiming, for example, to "uncover" the truth about the President’s health insurance reform positions. There is a lot of disinformation about health insurance reform out there, spanning from control of personal finances to end of life care. These rumors often travel just below the surface via chain emails or through casual conversation. Since we can’t keep track of all of them here at the White House, we’re asking for your help. If you get an email or see something on the web about health insurance reform that seems fishy, send it to flag@whitehouse.gov.

CFTC Helping Green America with $10 Gas

I'm starting to see the brilliant foresight of the master plan of our current Administration's social engineering program. Eroding liquidity in the energy markets that are easily accessible to hedgers (gas pump operators, airlines, utilities, etc.) who actively need big banks & other investors (speculators) to take the other side of their trades will certainly cause gas prices to spike at the pump, make air travel & shipping the luxury it once was, and ensure that the President is the only one who can keep his office tropically warm in the winter.
Since companies won't be able to put floors on the price of gasoline, natural gas and other commodities their costs will be at the mercy of a very volatile supply and demand and they will have to adjust their prices up to ensure they can still make a profit in any given quarter. That is, until they're nationalized because they can't sustain independent operations anymore and are too big to failll into the wrong hands (like those of a successful foreign company that might fire some US union workers).
This policy will at once force people into buying hybrids and increase the cost of imports (which makes Obama's protectionist allies happy). Of course it would be extremely unpopular to achieve these goals through gas taxes and import tariffs. Making this appear to be a crusade against evil market manipulators makes it far easier to achieve the same results with popular support.
Of course with taxes and tariffs at least the government would make some money to pay back the exponentially expanding debt load, but that's the problem of another generation. At least the Earth they'll inherit will be green, that's good since all their money will be going to interest payments they'll have to learn how to live off the land.

clipped from online.wsj.com CFTC Will Pin '08 Price Surge on Speculators, in a Reversal From Bush Findings. Under Chairman Gary Gensler, appointed by President Barack Obama, the CFTC is departing from the more hands-off approach it took under its previous head, a George W. Bush appointee. During his confirmation process earlier this year, Mr. Gensler said he believed speculation was partly behind the surge in commodity prices. In the U.S., the CFTC begins public hearings Tuesday to determine whether to limit speculative investments in commodities. Byron Dorgan, a North Dakota Democrat, has called on the CFTC to curb "oil speculators looking for a quick buck at the expense of American consumers." [CME Head] Craig Donohue, said: "We are deeply concerned that inappropriate regulation of these markets will cause market participants to move to dark pools and other unregulated markets, causing irrevocable harm to the entire U.S. economy." Last year, CFTC Chief Economist Jeffrey Harris told a House Agriculture subcommittee: "The economic data shows that overall commodity price levels, including agriculture commodity and energy futures prices, are being driven by powerful fundamental economic forces and the laws of supply and demand." Mr. Harris didn't return a call to comment. The acting CFTC chairman at the time, Bush-appointee Walter Lukken, told the House Agriculture committee that CFTC's economists "did not find direct evidence that speculation was driving up prices." Mr. Lukken, now an executive at the New York Stock Exchange, declined to comment. U.K.'s Financial Services Authority has found no evidence that speculators are behind big oil-price swings. The FSA doesn't believe that limiting the size of trading positions would be "beneficial" for the market.

Let's drop the pretense and the trousers.

Apparently the firms that were able to quickly repay the TARP money, with 23% interest to the taxpayers, and immediately turn a profit are not to be praised. Indeed, they are villains of the highest order. Their crime is that they dared to succeed without the government's help and oversight. In fact, those unbridled rapscallions couldn't wait to shake Geithner off the saddle and spit Obama's bit from their foaming mouths.
Naturally, Obama is upset that there's an important sector of the economy he doesn't have full control over - so it's important we quickly pass reform to nationalize everyone, regardless of their financial condition. At least he's finally being forthright about his intentions.

clipped from www.pbs.org JIM LEHRER: Speaking of the economy, do you share the concern and growing anger by some people over the fact that these big Wall Street banks are suddenly making these huge profits while the unemployment rate continues to go up, foreclosures continue to rise, all kinds of other bad things are happening to individual Americans on the economy. PRESIDENT OBAMA: The problem that I've seen ... is you don't get a sense that folks on Wall Street feel any remorse for having taken all these risks; you don't get a sense that there's been a change of culture and behavior as a consequence of what has happened. Now, there are some companies, like Goldman Sachs, that have paid the money back and that means that we don't have the same kind of levers on them that we might have. And that's why I think it's important to pass this broader financial regulatory reform package. Make no bones about it, I am pushing hard.

P.S. If you don't want firms to take irresponsible risks, then maybe you shouldn't let lobbyists tattoo "2Big2Fail" on the back of every lawmaker's skull.

The SEC Puts Family First

The world's most inept regulator may have had more motives than mere stupidity for ignoring the glaring Madoff fraud.
Aside from Markopolous' clear evidence against Madoff, that he spelled out in a way that even community college JDs and analysts at the SEC could understand, their own lawyer found suspiciously mismatched trades and inconsistencies in strategies. Her boss told her to make like Helen Keller, however, because it would create a few awkward moments at his upcoming wedding. I wonder if he'll be kind enough to offer his homeless aunt a couch to crash on.

clipped from www.finalternatives.com A lawyer in the SEC’s Office of Compliance Inspections and Examinations, assigned to look into Madoff’s relationship with hedge funds, told her supervisor that information provided by the now-convicted Ponzi schemer didn’t add up. Walker-Lightfoot’s investigation uncovered a slew of inconsistencies in documents and filings from Madoff. She brought the matter to the attention of her supervisors, one of whom would go on to marry Madoff’s niece. He then told Walker-Lightfoot to hand her Madoff findings over to another SEC lawyer; shortly thereafter, the material was boxed for transfer.

Captain Morgan shows the Somalian Pirates how it's done

While the amateur Somalians are busy raiding rich tourists and cargo ships, Captain Morgan knows that far bigger booty lies in the pockets of American politicians, not just because they're fat. They're stupid too.

clipped from www.bloomberg.com Lawmakers and the public are just now discovering some of the curious subsidies tucked into TARP. Governor John deJongh Jr. agreed to give London-based Diageo Plc billions of dollars in tax incentives to move its production of Captain Morgan rum from one U.S. island -- Puerto Rico -- to another, namely St. Croix. The Diageo deal started shortly after deJongh took office in 2007. The governor says the company contacted him to say it planned to leave Puerto Rico after having decided the U.S.V.I. might be a better location to produce Captain Morgan. [as in they were already planning to move] The U.S.V.I. will give subsidies representing as much as 44.5 percent of tax revenue to Diageo. Diageo also qualifies for additional tax incentives, reducing its U.S.V.I. tax liabilities to as low as 3.5 percent, from 35 percent. The $2.7 billion Diageo tax break in the October bailout bill gives the most financial aid to a non-U.S. company. Diageo, which had a stock market value of 21 billion pounds ($35 billion) as of June 8, reported net sales of 5.07 billion British pounds in 2008. Revenue from selling rum accounted for 5 percent of Diageo’s income. [do the math on the value of the subsidy relative to product revenue on this one] Still, Captain Morgan, named for Henry Morgan, the 17th-century Jamaican privateer, is a major driver of earnings for Diageo, spokeswoman Zsoka McDonald says. [well, it is now!]

A guesstimate is not a lie, just bullshit

To quell concerns of constituents that the stimulus plan will do nothing but enslave future generations to foreign creditors and inflation the Administration has enlisted the help of the stimulus recipients (the needy greedy governors) by asking them to round up their guesstimates of how many jobs Federal money created.
Good thing we have plenty of bored economists and statisticians to point out the inevitable inaccuracies in employment statistics that will result from government clerks who can barely flip burgers at Mickey D's attempting to cook the books.

clipped from online.wsj.com President Barack Obama had promised that the stimulus plan would save or create 3.5 million jobs. Republicans have criticized the plan and the reliability of the administration's numbers. The latest Wall Street Journal/NBC poll suggests growing public doubts, with 39% of those surveyed saying the stimulus is a "bad idea," up from 27% in January. Meanwhile, some state officials worried about how they were supposed to count jobs credited to the stimulus. Now, the White House Office of Management and Budget has given states guidance calming these concerns. Recipients won't be asked to grapple with complicated estimates, he added. Instead, they may use their best guess whether a job would have been created or saved in the absence of a recovery plan, and to not count it if they are uncertain. Philip Mattera, research director for the economic development research group Good Jobs First, said the method appeared to be "a bit impressionistic" and presented pitfalls.

Soros confuses CDS for Puts

The apparently attrocious payout scheme of a CDS that Soros illustrates is remarkably similar to (as in exactly the same as) that of a vanilla Put option. Should those be outlawed as well?
There is no doubt option volume has a "reflexive" effect on the underlying stocks as well. The reason for this, however (and Soros even points this out himself), is because dumb money eventually follows smart money and smart money likes smart instruments (derivatives) that they can tailor precisely to their views on any particular aspect of a firm. The fact that professionals are expressing their views (in CDS' case on "adverse developments" affecting an issuers' credit rating) only leads to greater market efficiency and quicker fair price discovery.
Companies don't fail because evil speculators shorted/wrote puts on their stock or bought protection on their bonds. They fail because their management fucked up.

clipped from www.guardian.co.uk "CDS are instruments of destruction which ought to be outlawed," Soros told a meeting of the Institute of International Finance. Going short on bonds by purchasing a CDS contract carried limited risk but almost unlimited profit potential. By contrast, selling CDSs offered limited profit and practically unlimited risk, Soros said. Soros said: "People buy a CDS not because they expect an eventual default but because they expect them to appreciate in response to adverse developments." "It's like buying life insurance on someone else's life and owning a license to kill," he concluded. He said derivatives should be standardised and saw no case for custom-made derivatives, which he said only increased the profit margins of the financiers who tailored them. Soros' criticism echoes fellow investor Warren Buffet's description of derivatives in 2003 as "financial weapons of mass destruction".

Rob the Rich: Forced Charity

Yes We Can... fund universal healthcare by taxing the very people who have no need for it. The bourgeoisie have squeezed the juices of the proletariat with their mighty kulak to quench their unpatriotic greed long enough! Now we shall drain the very marrow from their spines (and harvest the stem cells therein)!
We’ll hit them hard on their mortgages. Sure, we're disincentivizing the people who can actually afford to buy a house and create upward momentum in the housing market, thereby generating positive equity for every homeowner organically. Homeowners facing foreclosure and looking for a handout are one of our strongest constituencies, why would we not want to grow it?
We'll cap their investment gains. Markets are the engine of the capitalist machine. We want to keep them going at precisely our chosen speed limit, and we are pouring billions into the enforcement of our arbitrary laws. Of course we see no need to disband the SEC, their peccadilloes, like ignoring evidence of Madoff's scam, pale in comparison to their ability to choke vehement short sellers and regulate other speculators out of existence.
We’ll decide how much the rich give to charity too. The only worthwhile charity is the one the government deems necessary: funding the socialist welfare state.
Oh, and just to make sure that they don't keep trying to persevere and prosper despite the shackles we have put on them we will change tax code so their estate goes to the government after they die. Bourgeoisie progeny can get in the bread line with everyone else.

clipped from www.bloomberg.com Democrats Weigh Health Mandate as Obama Urges Taxing Wealthy The president is trying to avoid broad-based levies such as a Senate proposal to tax some employer-provided health benefits Axelrod said. Instead he is urging lawmakers to reconsider limiting all tax deductions for Americans in the highest tax brackets. Obama is “mindful” about how “ordinary Americans are able to foot the bills.” Obama’s own proposal would set a 28 percent cap on tax deductions for items such as mortgage interest, investment expenses and charitable gifts Obama also proposes new taxes on securities dealers and life insurers, and to raise revenue by prohibiting certain estate-planning techniques. The plan would place new restrictions on private insurers, including a bar on excluding coverage for those with “pre-existing conditions.” The effort to overhaul health-care would affect a sector that makes up 17 percent of the U.S. economy.

Expect the USD IRS market to explode...

...but don't play taps for the USD just yet.
First of all, the CCB doesn't speak for China in any official capacity (like the PBC does), and secondly Shuqing's intent in these remarks is to strengthen the Yuan's global authority, rather than hedge against US' looming inflation risk. Of course Xiaochuan and Medvedev are arguing precisely this point - the fundamental weakness and instability of America's currency due to the country's tremendous leverage. That is why they want another currency, or most likely a basket like SDR, to replace the USD. All signs point to this eventually happening, but the Dollar's demise will be a painful, political, and most importantly lengthy process (of course no political process is ever efficient, so that's a moot point).

That being said,the USD is going to keep depreciating, with a few bounces in between, as America has little alternative to printing more greenbacks. Well you know, aside from fiscal responsibility anchoring free-market capitalism.

clipped from www.telegraph.co.uk The head of China's second-largest bank has said the United States government should start issuing bonds in yuan, rather than dollars, in the latest indication of the increasing importance of the Chinese currency. Guo Shuqing, the chairman of state-controlled China Construction Bank (CCB), also said he is exploring the possibility of issuing loans to trading companies in yuan, allowing Chinese and foreign companies to settle their bills in yuan rather than in dollars. Mr Guo said the issuing of yuan bonds in Hong Kong and Shanghai would help to develop the debt markets in China and promote the yuan as a major international currency. Two months ago, before the G20 meeting in London, Zhou Xiaochuan, the head of the People's Bank of China, the central bank, published a personal paper proposing to replace the dollar as the international reserve currency. His call came after Wen Jiabao, the Chinese premier, asked the US to guarantee the safety of China's huge pile of US debt.

Welcome to the bandwagon, Bill.

Bil Gross believes that the US will lose its AAA rating within 3-4 years, something I said when the details of TARP first emerged. Of course the credit rating agencies will be a bit scared to eradicate the concept of "risk free" as we know it, but like Mr. PIMCO said - the downgrade will be priced in regardless of what the ratings are on paper.
Jay-Z and Giselle were too quick to switch to Euros in 2007 (unless they cashed out between April and July of 2008), but now might be a good time to consider what currency, if any, you want to hold in your bank account. Barrels of oil and gold bars might not fit in a wallet, but they won't evaporate either.
Note: While I think Oil's run-up is fully merited, I would take some profit now and leave it on the sidelines until an inevitable dip that leads to another buying opportunity. The curve is still contango, but a lot less steep.

clipped from ftalphaville.ft.com Bill Gross, manager of the world’s biggest bond fund, warned on Thursday the US was “going the way of the UK” and will eventually lose its top AAA credit rating - a fear that had already spooked financial markets on Thursday and could keep the dollar, stocks and bonds under heavy selling pressure, reports Reuters. The US will face a downgrade in “at least three to four years, if that, but the market will recognise the problems before the rating services — just like it did today,” said Gross, co-chief investment officer of Pimco and manager of the Pimco Total Return Fund, which has $154bn in assets. clipped from www.usnews.com

Vive La France?

I love vacations, and if I can stimulate the private aviation, lodging and retail industry while enjoying my just reward then I'm all for it. What I'm not for is the government getting its nose even deeper into the pockets and personnel policies of small (or big) business.

Employees and employers have the right to agree on a contract that makes the most sense to those two parties.

Many employees prefer a higher income to vacation days. Even a kid who failed arithmetic (at least in a European school) can tell you that an employer with limited resources will have to cut gross yearly salaries to account for mandatory vacation. The cut is likely to be more than just the wages for five days’ work, however, when you account for scheduling and training expenses in a small business, where every employee plays an important role and job overlap is minimal. This policy will thus directly hurt the business and benefit nobody, while creating a breadth of negative externalities - including for the government since a business that earns less pays fewer taxes.

clipped from www.politico.com Rep. Alan Grayson was standing in the middle of Disney World when it hit him: What Americans really need is a week of paid vacation. So on Thursday, the Florida Democrat will introduce the Paid Vacation Bill. The idea: More vacation will stimulate the economy through fewer sick days, better productivity and happier employees. So far, no group has come out in opposition of the bill. Nor has anyone announced opposition to roller coaster rides, cookouts on the beach or salt-water taffy on the boardwalk. “There’s a reason why Disney World is the happiest place on Earth: The people who go there are on vacation,” said Grayson, a freshman who counts Orlando as part of his home district. “Honestly, as much as I appreciate this job and as much as I enjoy it, the best days of my life are and always have been the days I’m on vacation.” France currently requires employers to provide 30 days of paid leave.

Didn't see that one coming!

No, but seriously, like I said when this first broke wind - good luck getting capital from any sane investor without putting a gun to their head (an option I'm sure Rahmbo put on the table).
This, combined with the downright moronic mandated CAFE standards (which will at best lower temperatures by 0.0078 degrees ... in 2100) ensure the destruction of American automakers.
If conspiracy theorists thought Bush was owned by Haliburton, how come nobody is saying that Obama's pockets are lined by Toyota?
On the upside, however, once the government runs out of money (or prints so much of it that the dollar is worthless), the unions will have nobody to turn to for funding their fundamentally inefficient and unsustainable business practices and will become extinct. Too bad they're taking the entire country down with them.

clipped from www.bloomberg.com Pacific Investment Management Co., Barclays Capital and Fridson Investment Advisors have joined Schultze Asset Management LLC in saying lenders may be unwilling to back unionized companies “Anything that involves a large number of jobs or affects a large number of people, you can expect to see a Chrysler redux,” Jerry del Missier, president of Barclays Capital, said in an interview from his New York office. “One of the consequences here is the so-called speculators, people who provide financing, will think twice about getting involved.” Unions spent $52 million to help elect Obama, which includes $5 million from the United Auto Workers, according to OpenSecrets.org “People are starting to think ‘This is a very activist administration, even more than we counted on,’” said Martin Fridson, CEO of money manager Fridson Investment Advisors in New York. “If it comes down to the interest of creditors or labor unions, the administration is going to override what you thought you could do.”

Godfather Paulson made banks an offer they couldn't refuse

This is nothing new to anyone, especially considering what we already knew about the BofA/ML prearranged marriage, but now there's proof that Paulson was a government gangster.

clipped from www.bloomberg.com Former Treasury Secretary Henry Paulson said nine U.S. banks would have to accept $125 billion in government investments or be forced to by regulators. “If a capital infusion is not appealing, you should be aware that your regulator will require it in any circumstance” “Your nine firms represent a significant part of our financial system. Therefore, in our view, you must be central to any solution,” the memo said. Three and a half hours after the meeting was scheduled to begin, Paulson had obtained the bankers’ signatures on half-page forms along with the handwritten amount of the federal government’s investment, according to the documents. He announced the actions publicly the next day. “Most Americans are going to be uncomfortable with the government forcing the banks into this arrangement,” said Tom Fitton, president of Judicial Watch, a nonprofit research group in Washington that obtained the documents under a Freedom of Information Act request. “This is, in many ways, thuggery.”