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Is Cantor ‘Insider Trading’ on US Treasury Bonds?

By: readerOfTeaLeaves Tuesday June 28, 2011 4:10 pm

Suppose you wanted to make a killing in the bond market?

The quick-and-dirty way to make a killing would be to go short on US Treasury bonds, then affect the budget negotiations on the debt ceiling in a way that affects the prices of Treasury bonds in favor of your financial position.

But if you were a budget negotiator, you would want to steer clear of any financial positions on Treasury bonds.

Why?

Because holding any sort of position – long or short – would put you at risk of being charged with insider trading.  You are an ‘insider’ in the negotiations, and consequently you steer clear of financial activities that may involve Treasury bonds – at least, for the duration of your time as a negotiator.

Unless you are Eric Cantor.

Dylan Ratigan reported today that Rep Eric Cantor holds a ‘short’ position on US Treasury bonds. In other words, Cantor’s position as a negotiator means that he can affect the price of Treasury bonds. The same bonds on which he has taken a short position.

Stop the presses, please.

Forget arguing about who gets to cut what.

We were told these were budget negotiations.

If Ratigan’s information is accurate then Cantor’s ‘budget negotiations are a bizarre form of market manipulation.

 

Five Senators, three communication eras: Desktop, Internet, Mobile

By: readerOfTeaLeaves Saturday May 28, 2011 4:51 pm

Emptywheel has some intriguing analysis of Senatorial hidden threats, smiling public faces, and back room parliamentary deals regarding our dearly beloved Patriot Act.
The five senators involved in this were born between 1933 and 1956.

Between those two dates,

  • America had prevailed in WWII,
  • the semiconductor industry had begun to develop out of applied physics (at AT&T),
  • the transistor had been created,
  • the telephone network (as a utility) had become widely accepted in the U.S.

In other words, between the birth of DiFi in 1933 and the birth of Jeff Merkley 23 years later (in 1956), America had become the dominant economic power in the world and the technologies that underlie telephone networks, computing, and computer networks were being invented.
The oldest of the five senators (DiFi) was elected to the US Senate in 1992, which is prior to the birth of the Internet as we know it.

  • At the time of DiFi’s election to the US Senate, the personal computer was only about a decade old.  It was The Era of the Desktop.
  • Ron Wyden was elected to the US Senate about a year after Microsoft released the first Internet Explorer browser; the Desktop Connected to the Network.
  • Sheldon Whitehouse was elected to the US Senate  (Nov 2006) only two months before the release of the iPhone (Jan 2007), at the emergence of mobile devices (and mobile apps).
  • By the time that  Tom Udall (NM) and Jeff Merkley (OR) were elected to the US Senate in 2008, the iPhone had been on sale for over a year and the App Store was open for global business, offering mobile applications for users worldwide.
  • In summary: five senators — three communication eras: desktop, Internet, and mobile devices.

How might the birth dates, educational backgrounds, and cultural melieu of the five senators named in Emptywheel’s Patriot Act post affect one’s views of the Patriot Act?  Would growing up in WWII predispose one to have somewhat different views about government surveillance and privacy rights than growing up in the raucous 1960s?  I contend that it would, but I wondered whether I might find any patterns in a quick search through Wikipedia archives.  (Yes, I know that Wikipedia is not 100% accurate and well may be a spook’s dreamscape, but nevertheless, it’s simple and easy.  So that’s where all of the information listed below was located.)
The events and milestones listed below are *not* deterministic; n evertheless, as I started to collect a list of milestones, I began to marvel at some of the connections, some of the contrasts.
You may find some of the events or milestones resonate with your own life; if they do, please leave a comment.

————————————–
Birth Dates: of semiconductors, as well as senators

—— 1930s ———————-
1933 DiFi born to a prominent San Francisco family of Jewish heritage (grandparents from St Petersberg, who appear to have fled Russia during the Revolution of 1917).  DiFi was probably entering first grade at the outbreak of WWII.   ALL of the other Senators mentioned in this post were born post-WWII, and entered adult life during, or after, the VietNam war. Two (Udall, Merkley) have strong backgrounds in international relations and international law.

—— 1940s ———————-

1947 Researchers at AT&T’s Bell Labs in US working in applied physics coin the term semiconductor
1948 Tom Udall born to a New Mexico family of Mormon affiliation with a family history dating back to Territorial days.  DiFi would have been at Catholic High School in SF.
1949 Ron Wyden born in Kansas, later the family moved to Palo Alto where he grew up.

—— 1950s ———————–

1954 The first silicon transistor is produced by Texas Instruments; one of the greatest inventions of the 20th century
1955 Sheldon Whitehouse born into an East Coast family with a heritage of diplomacy.
1955 DiFi graduates from Stanford, BA in History
1956 Jeff Merkley born (Myrtle Creek, OR.)

—— 1960s ————————————–

1961 DiFi is in her  late 20s,  – Merkley and Whitehouse were probably starting kindergarten
1961 Tom Udall’s father (Stewart Udall) becomes US Sec of Interior (1961 – 1968)
1961 On Aug 4, 1961 in Hawaii, Barack Obama is born
1968:

  • DiFi was in her late 30s
  • ‘Prague Spring’ in Czecheslovakia; riots in Paris
  • Bobby Kennedy and MLK assassinated
  • Merkley and Whitehouse were in junior high
  • Wyden was in college (Santa Barbara or Stanford), as was Udall (at Prescott**)
  • The US was at war in VietNam
  • The first Apollo mission launched
  • Best Picture:  Oliver! beat out Funny Girl and Romeo & Juliet
  • Best Actress: Katharine Hepburn won for The Lion in Winter
  • Tammy Wynette won Best Country Grammy award for “I Don’t Wanna Play House”
  • The Beatles had just released  Magical Mystery Tour
  • Outstanding Television Drama Series: Mission Impossible beat out Star Trek;  Get Smart won for Comedy television series
  • The origins of what would become the Internet were being invented: the next year [1969], the first two nodes of what would become the ARPANET were interconnected between Kleinrock’s Network Measurement Center at  UCLA’s School of Engineering and Applied Science and Douglas Engelbart’s NLS system at SRI International (SRI) in Menlo Park, California, allowing communication between computers [29 October 1969]

—— 1970s ————————-

1970 Tom Udall graduates from **Prescott College, Pre-Law
1971 Wyden graduates from Stanford with a BA
1974 Wyden, JD from Univ of Oregon
1975 Udall, BA Law from Univ of Cambridge (England)
1977 Udall, JD from Univ of New Mexico
1978 Whitehouse, Yale
1978:

  • Best Picture: The Deer Hunter
  • Best Actor: John Voight Coming Home, a movie about a VietNam vet)
  • Best Actress: Jane Fonda (Coming Home)
  • The Sex Pistols play final show (until 1996) in DiFi’s city of San Francisco
  • The first computer bulletin board system [predecessor to blogs] is created in CBBS in Chicago, IL
  • The Police, a New Wave band formed the preceding year, develop a new style of rock influenced by punk, reggae, and jazz
  • The Blues Brothers make their first appearance Saturday Night Live
  • The Camp David Accords are signed (Pres Jimmy Carter, Begin, and Sadat) in Washington, DC
  • The nation is enthralled by Star Wars, released the previous May (1977), which surpassed Jaws [1975]  as the highest grossing movie to date.

1979 Merkley, Stanford, BA in International Relations

—— 1980s ————————-

1980-1 86-DOS is purchased for $75,000 by Bill Gates and Paul Allen, who rename it MS-DOS
1982 Whitehouse, JD Univ of Virginia
1982 Merkley, MS in Public Policy from the Woodrow Wilson School, Princeton Univ
1982  MS-DOS 1.0 is released with the IBM PC; personal computing emerges, but it is not yet linked to telecomm systems
1984 The first Apple Macintosh PC (the Macintosh 128K) is released, priced at $2,495 with 128 KB built in memory
1985  Windows OS 1.0 (basically, a Microsoft copy of the Mac GUI system) is released in November:
1988:

  • USSR, perestroika (economic restructuring) begins, led by PM Gorbachev
  • Anthony M. Kennedy is appointed to the Supreme Court of the United States
  • Best Picture: The Last Emperor (directed by Bernardo Bertolucci) wins nine Oscars
  • Michael Dukakis is the Democratic Presidential Candidate, with Lloyd Bentsen for Vice President
  • The Iran–Iraq War ends 20 Aug 1988, with an estimated one million lives lost
  • TAT-8, the first transatlantic telephone cable to use optical fibers, is completed
  • Michael Jackson’s  Bad and the soundtrack to Dirty Dancing are two of the top 5 biggest selling albums; Bon Jovi’s  Bad Medicine and U2′s Angel of Harlem also hit the charts
  • Pre-Internet: the NSF-sponsored conversion to a higher-speed 1.5 megabit/second network became operational in 1988.
  • (Three years earlier, in 1985, the United States’ National Science Foundation (NSF) had commissioned the construction of the NSFNET, a university 56 kilobit/second network backbone using computers called “fuzzballs” by their inventor, David L. Mills)
  • NOTE:  A key decision to use the DARPA TCP/IP protocols was made by Dennis Jennings (in charge of the Supercomputer program at NSF circa 1988)
  • The opening of the NSFNET to other networks began in 1988
  • The US Federal Networking Council approves the interconnection of the NSFNET to the commercial MCI Mail system in 1988, and the link is made in the summer of

1989 The following year, 1989, the Web was invented by British scientist Tim Berners-Lee while working at CERN (a NeXT computer was the first www server)

—— 1990s ————————-

1992:

  • DiFi elected to US Senate from the State of California
  • A seminal science fiction book, Snow Crash (by Neal Stephenson), is published  (the book takes its title from a term for a particular software failure mode on the early Apple Macintosh computer)
  • NOTE: The preceding year, in 1991, the NSFNET backbone was upgraded to 45 Mbps, but decommissioned in 1995, when it was replaced by new backbone networks operated by commercial Internet Service Providers.
  • (Al Gore may not have ‘invented’ the Internet, but as the Vice President, he oversaw science policy, and must surely have helped shape these developments.)

1994 by late 1994 there was growing public interest in the previously academic, technical Internet
1995 Internet Explorer released by Microsoft; it is ‘bundled’ with other MS software
1996 The words Internet and email become commonplace, and consequently, so had its use as a synecdoche in reference to the World Wide Web.  Netscape had become widely used; Microsoft was releasing Internet Explorer updates
1996 Wyden beats Gordon Smith for US Senate seat in Oregon
1998:

  • Russia begins to circulate new rubles to stem inflation and promote confidence
  • Lewinsky scandal: On American television, President Bill Clinton denies he had “sexual relations” with former White House intern, Monica Lewinsky
  • Osama bin Laden publishes a fatwa, declaring jihad against all Jews and Crusaders
  • United States troops stationed in the Persian Gulf begin to receive the first anthrax vaccine
  • Best Picture: Titanic wins a record 11 Oscars
  • The Food and Drug Administration approves Viagra for use as a treatment for male impotence, the first pill to be approved for this condition in the United States
  • United States v. Microsoft: The United States Department of Justice and 20 U.S. states file an antitrust case against Microsoft
  • Nuclear testing: In response to a series of Indian nuclear tests, Pakistan explodes 5 nuclear devices of its own in the Chaghai hills of Baluchistan, prompting the United States, Japan and other nations to impose economic sanctions
  • Nuclear testing: Pakistan conducts 1 more nuclear explosion following its first test.  A 6.6 magnitude earthquake hits northern Afghanistan, killing up to 5,000
  • Microsoft releases Windows 98 (First Edition)
  • France beats Brazil 3-0 in the World Cup final, with the first two goals scored by Zinedine Zidane
  • Monica Lewinsky scandal: Ex-White House intern Monica Lewinsky receives transactional immunity, in exchange for her grand jury testimony concerning her relationship with U.S. President Bill Clinton
  • U.S. embassy bombings: The bombings of the United States embassies in Dar es Salaam, Tanzania, and Nairobi, Kenya kill 224 people and injure over 4,500; they are linked to terrorist Osama Bin Laden
  • Russian financial crisis: Russia defaults on the state short-term bonds, and devalues the ruble
  • The ruble loses 70% of its value against U.S. dollar in the next 6 months
  • Several of the largest Russians banks collapse, and millions of people lose their savings
  • Google, Inc. is founded in Menlo Park, California, by Stanford University Ph.D. candidates Larry Page and Sergey Brin
  • Telecommunications companies MCI Communications and WorldCom complete their $37 billion merger to form MCI WorldCom
  • America Online announces it will acquire Netscape Communications in a stock-for-stock transaction worth US$4.2 billion
  • Green Day, Matchbox 20, and Celine Dion top the music charts
  • During the late 1990s, it was estimated that traffic on the public Internet grew by 100 percent per year, while the mean annual growth in the number of Internet users was thought to be between 20% and 50%.

—— 2000s ——————————–

2000 In Bush v Gore, SCOTUS deals a near-death blow to the legitimacy of US federal government; over the ensuing years involving bogus claims of WMD in Iraq, no-bid contracts for defense contractors and telecomm companies, outed CIA agents, and Cheney’s Secret Energy Task Force (including SCOTUS protection of government secrecy claims), this problem of government legitimacy deepens.
2006 Whitehouse beats Lincoln Chaffee for RI for US Senate seat in Rhode Island, Nov 2006
2007 On 9 Jan 2007, the iPhone is announced by Steve Jobs and the era of mobile devices begins to accelerate
2008 Merkley beats Gordon Smith for US Senate seat in Oregon
2008 Tom Udall wins US Senate seat in New Mexico, replacing Pete Domenici (who retired)

  • NOTE: Udall’s cousin Mark won the Colorado seat in 2008

2008 [includes specific dates]:

  • January 2 The price of petroleum hits $100 per barrel for the first time
  • Feb 18 A general election is held in Pakistan, delayed from January 8 due to riots in the wake of the assassination of Benazir Bhutto. Opposition parties, including Bhutto’s, take more than half of the seats, while President Pervez Musharraf’s party suffers a huge defeat
  • March –April:  Rising food and fuel prices trigger riots and unrest in the Third World
  • March 25 – A 414 square kilometer (160 sq. mi.2) chunk of Antarctica’s Wilkins Ice Shelf disintegrates, leaving the entire shelf at risk
  • April 28 India sets a world record by sending 10 satellites into orbit in a single launch
  • May 7 Dmitry Medvedev takes office as President of Russia, replacing Vladimir Putin
  • June 27 – After three decades as the Chairman of Microsoft Corporation, Bill Gates steps down from daily duties to concentrate on philanthropy
  • August 18 Pervez Musharraf resigns as President of Pakistan, under impeachment pressure from the coalition government
  • October 3 Global financial crisis: U.S. President George W. Bush signs the revised Emergency Economic Stabilization Act into law, creating a 700 billion dollar Treasury fund to purchase failing bank assets
  • November 26 – November 29 A series of terrorist attacks in Mumbai, India by Pakistan-based Islamic militants kills 195, and injures at least 250.

From 2009 onward, the Internet is expected to grow significantly in Brazil, Russia, India, China, and Indonesia (BRICI countries).

  • These countries have large populations and moderate to high economic growth, but still low Internet penetration rates.
  • In 2009, the BRICI countries represented about 45 percent of the world’s population and had approximately 610 million Internet users, but by 2015, Internet users in BRICI countries will double to 1.2 billion, and will triple in Indonesia

————————————-
3 of the 5 senators are linked with Gordon Smith, former Oregon US Senator (GOP)

  • Second-cousin to Tom Udall, NM and Mark Udall, CO
  • Beaten by Ron Wyden in 1996, then elected to the other Oregon US senate seat
  • Beaten by Jeff Merkley in 2008

Of the 5 Senators, 3 are Stanford grads:

  • DiFi 1955 (the year Whitehorse is born, the year before Merkley was born)
  • Ron Wyden, Standford BA 1971
  • Jeff Merkley, Stanford 1979 (Foreign Relations)

3 of the 5 senators have JDs:

  • Whitehouse (Yale 1979, then Univ of VA for JD)
  • Udall (Prescott College 1970, Univ of Cambridge UK 1975, Univ of New Mexico JD 1977)
  • Wyden (Stanford, then Univ of Oregon)

=================================

** It appears that Tom Udall would have been in the original graduating class of Prescott College, which was among the first colleges in the US to emphasize interdisciplinary studies and self-directed learning.

The $62,905,312 Smear of Elizabeth Warren

By: readerOfTeaLeaves Wednesday May 25, 2011 10:26 pm

Where did I get that $62,905,312 figure?  From an article by Elliot Spitzer, surmising why the bankers — and their attack dogs in Congress — are so determined to smear Elizabeth Warren:

Spitzer: Why are Republicans giving Elizabeth Warren such a hard time? According to Spitzer:

“…financial, insurance and real estate institutions, according to one study, spent $62,905,312 lobbying in DC last year—double what the federal government spent on protecting consumers.”

So what kind of legislators might $62,000,000+ buy you these days?   Well, let’s take a quick look at Congressman Patrick McHenry, the GOP committee chair, from a 2005 article in Washington Monthly about this former College Republican, Getting Ahead in the GOP.

McHenry’s first full-time job in Washington was with the conservative communications group DCI. It was quite a choice. If there is a center to Washington conservative dark arts, DCI is pretty much it. They were paid consultants, for instance, to the Swift Boat Veterans for Truth last year, although they are most known for attacking fellow Republicans. DCI’s founder is Thomas Synhorst; his expertise lies in “astroturfing“–developing fake grassroots groups to front for conservative and corporate causes–and “push-polling,” a subtle technique that can impart damaging information about a rival candidate in the guise of a hypothetical question for a poll.

There’s plenty more at that link, all of it eye-popping.  It is worth noting that McHenry is a product of the College Republicans – the same outfit that also produced Karl Rove, Jack Abramoff, and others who believe that the ends justify the means; no matter how venal, socially or personally destructive, or poisonous.

McHenry’s largest funder is the FIRE sector, although his relationship to that North Carolina-based money laundering operation for Mexican drug lords (Wachovia) is unclear.    He has received at least $1,200,000 from the FIRE sector (Finance, Insurance, Real Estate).

Notably,  during the Financial Meltdown in 2008, 40% of US GDP was attributed to the FIRE sector.  In other words, this sector has made obscene profits by means of mortgage and insurance fraud.  With so much profit based on questionable conduct, it appears the FIRE sector is quite able and willing to fund McHenry; perhaps his questionable ethics are regarded as a sign that he will pimp any legislative agenda, no matter how destructive to American life.

Given McHenry’s ‘training’ in political intrigue and deception, it’s not surprising that the bankers spotted a man perfectly suited to smear any public servant, no matter how qualified, decent, hardworking, or ethical they might be.

According to the Nation,

McHenry was once known as Tom DeLay’s “attack-dog-in-training,” a title he more than earned today. Before the hearing had even begun, McHenry went on CNBC and brazenly accused Warren of lying to Congress. He claimed that Warren had misrepresented her role in advising state attorneys general who are seeking a multibillion-dollar settlement with the country’s largest mortgage service providers, who stand accused of massive and widespread foreclosure fraud.

It is worth a moment’s pause to consider that while Elizabeth Warren was doing research into factors affecting the financial security of American families and teaching at a prestigious law school, McHenry spent his college life surrounded by GOP College Republican ideologues, training to win political campaigns by whatever expedient means attained his short-term objective.

But why has McHenry specifically targeted Prof Elizabeth Warren for particularly nasty political thuggery…?  Why is he so focused on Warren?   Perhaps because, as McClatchy reported in Sparks fly at hearing on consumer protection bureau,  the CFPB  is her brainchild and in order to subvert the agency, they seek to smear its creator:

Elizabeth Warren, a Harvard law professor, conceived the Consumer Financial Protection Bureau during the financial crisis, and President Barack Obama asked her to oversee its startup. Many consumer advocates and Democrats want Warren to become the bureau’s new director, but she faces overwhelming Republican opposition.
The Consumer Financial Protection Bureau, which will begin work in July, is charged with being the consumers’ voice in financial matters such as opening bank accounts, using credit cards or buying homes.

With the CFPB as her brainchild, Warren seems to have focused the Rove-trained, GOP-dark-arts political machine’s efforts at smearing, astro-turfing, and Swift Boating upon herself.  Are we, as citizens, really going to sit by and watch this happen without bothering to phone our Congressional representatives and insist that this is not acceptable?

One would assume that consumer affairs advocates might have some perceptive observations about McHenry’s treatment of Prof. Warren.  At a Consumer Affairs blogpost titled: Republicans Accuse Warren of Lying, Democrats ApologizeTaxpayers’ time, money wasted, Public Citizen declares revealed McHenry’s current political agenda:

David Arkush, director of Public Citizen’s Congress Watch Division, said Rep. Patrick McHenry (R-N.C.) “waste[d] taxpayer money on a hearing that apparently has no purpose but to harass professor Elizabeth Warren and hamper the Consumer Financial Protection Bureau’s (CFPB) efforts to protect Americans from abuses in the financial sector.

But it’s not only the consumers union pointing to the dark deeds that McHenry and his GOP committee comrades are pulling.  With a rather eyebrow raising dose of frankness, TIME’s Joe Klein found the ‘boorish grilling’ of Warren raises serious questions about what’s at stake, and what the President is willing to do to address the very serious financial pillaging that occurred on GWBush’s watch:

The incredibly boorish grilling of Elizabeth Warren by Republican members of a House subcommittee on Tuesday raises two interesting questions: After a decade in which money lenders raped and pillaged homeowners, home-buyers and credit-card holders, why are Republicans so intent on gutting an agency that would protect the American middle class from such persistent sleazebags? And second: Why has the Obama Administration been so reluctant to appoint Warren director of the Consumer Protection Finance Bureau–and force a massive and very accessible public fight on an absolutely crucial economic issue: the corrupt, predatory nature of the financial community?

I think the simple shorthand goes like this: $62,905,312 against Warren.

For $1,200,000, you get a Karl Rove trained political apparatchik well suited to tell CNBC that Warren ‘lied’ to your committee, and then tell Warren that despite having completely rescheduled her day (multiple times) to accommodate your whims, she is ‘lying’ if she questions your interpretation of events.

If anyone needs a fine example of why we need serious, fundamental campaign reform, watch that clip of McHenry accusing Elizabeth Warren of lying.

It’s one thing to disagree with a witness; but to slander a Congressional witness (both during the hearing, as well as on CNBC) is completely beyond the pale.

We all make mistakes, and we all misspeak from time to time.  That is human, and understandable.

Nevertheless, when an individual like McHenry shows a long history of affiliating with dishonest people, who have a history of repeatedly slandering  political opponents, who alter schedules in order to make it appear that the witness is ‘uncooperative’, then it is time for the public to start contacting their legislators and insist that this kind of abusive behavior — where a committee chair insults and slanders a witness — is entirely out-of-bounds and needs to be addressed by the House leadership.

Populations of 15 US States = Cairo’s Population

By: readerOfTeaLeaves Tuesday February 1, 2011 9:28 am

Map of Egypt (source: CIA World Factbook)

The metro population of Cairo is estimated at  19,400,000.

How does that huge number compare to state populations in the US?   In other words, how many states’ worth of US citizens would fit into Cairo’s metropolitan population?

A quick click to Wikipedia, and a quick spreadsheet estimate suggests that the population of the metropolitan region of Cairo would scatter across fifteen US states:

Nevada  2,700,551
New Mexico   2,059,179
West Virginia  1,852,994
Nebraska  1,826,341
Idaho   1,567,582
Hawaii  1,360,301
New Hampshire  1,316,470
Rhode Island  1,052,567
Montana  989415
Delaware  900877
South Dakota  814180
Alaska  710231
North Dakota  672591
Vermont  625741
Wyoming   563626

If the Al Jazeera news reports of 1,700,000 Egyptians demonstrating out in the streets are accurate, that translates roughly to the combined populations of Wyoming, Vermont, all North Dakota all pouring out on the streets of Egypt.

Imagine every man, woman, child in Wyoming, Vermont, and North Dakota out on the streets determined to find some way to have more control over their lives and communities, to defy tyranny.  The mind boggles.

However, simply comparing rough numbers does not really convey the magnitude of what seems to be happening: the demographics of US states are much older, overall, than the Egyptian populations.  Imagine if over half the populations of Wyoming, Vermont, and North Dakota were under the ages of 30: if that were the case, the political and economic issues would be different than we currently see in the U.S.

Consider that over half the Egyptian is under age 30, and what we are watching is momentous in more ways than we can possibly grasp at this time.  

Start Your Popcorn Popping! FCIC Wed Hearings on Derivatives!

By: readerOfTeaLeaves Tuesday June 29, 2010 9:26 am

Ever heard of ‘derivatives’?
Those complex math formulas that claimed to measure risk?

In many respects, the development of financial derivatives parallel the development of modern computing, networks, and globalization. But computing and networks never needed to produce the concentrations of wealth, the levels of financial risk, nor the amoral conduct that we’ve all witnessed on a vast scale the past few years.

Back in 2008, the Congress created the FCIC: The Financial Crisis Inquiry Commission.
They funded it with a paltry $8,000,000.

The FCIC’s web page listing the Sessions for Wed, 30 July lists Michael Greenberger (former assistant to Brookesley Bourne) in the morning session; Greenberger’s ability to explain the problems with derivatives is impressive and worth logging on to see.

The full lists for others who will testify are listed on the FCIC page, which also contains links to the website’s full list of hearings, exhibits, and related content.
The following day (Thurs, July 1), the FCIC will hold hearings on the Role of Derivatives in the Financial Crisis.

I’ll be putting extra butter on my popcorn in hopes that the FCIC can somehow unearth some of the relationships, errors, assumptions, and arrogance that led to the Financial Meltdown of 2007 – 2008, and will haunt us until we figure out what caused it and take meaningful action to restructure our financial systems.

Personally, I’ve found some of the FCIC hearings riveting.
I hope you make time to watch at least part of this week’s hearings.

A Net Neutrality Primer: Will the FCC Protect An Open Network?

By: readerOfTeaLeaves Thursday May 6, 2010 9:00 am

Back when telephone exchanges were still being built across America, the U.S. Congress passed the Telecommunications Act of 1934.

The bill had five titles.

Of those five titles, the second (Title II) created the FCC. One of the main tasks of the FCC was to regulate telephone, which back in 1934 was still a new technology. Congress thought that telephone should be regulated in order to ensure: ‘the greatest good for the greatest number’ of Americans.’ The legislation that created Title II specifically regulated ‘telecommunications’ as a Common Carrier — this meant that everyone was billed at a standard rate, even if their home was 20 miles off the main phone line.  Throughout the rest of the 20th century, telephone was regulated (by the FCC) as a Common Carrier, ensuring that everyone had reasonable access to the telephone networks.

The idea of a ‘common carrier’ is quite old; for our purposes, it’s simplest to trace it to the 1700s, where people could purchase a ticket to travel by ‘common coach’ (or ‘common carrier’) from one town to another. The concept of equal access — that anyone had an equal right to purchase a ticket for transport — eventually made its way, over hundreds of years, into the US Telecommunications Act of 1934.

Back in 1934, telephone technology was ‘analog’, meaning that sound waves were carried through phone wires. Originally, the wires were strung in Rights of Way that followed railroad lines, reinforcing the recognition that telecommunications – like railways – was essential to commerce.

By the 1990s, however, the sound waves that pass along telephone lines had been converted to digital sequences like: 0011010110101001010100011.

Waves of sound were converted to digital data, and powerful interests used this shift in format to argue that The Technology Formerly Known As Phone should be legally reclassifed as an "information service".

Why?

Because telecoms wanted to grab a larger share of the revenue that was suddenly being captured by new kinds of digital businesses: Yahoo, digital video, eCommerce, and other digital content providers.

Shoe-ness, Car-ness, and Diamond-ness are commodities; Sick-ness is not. Market Failure for ‘Sick-ness’ requires a Public Option.

By: readerOfTeaLeaves Friday February 19, 2010 7:00 am

If my neighbor gets a new diamond ring, no ‘diamond-ness’ comes my way as a result.

If my friend gets a new car, I am not likely to get ‘car-ness’ as a result.

If a co-worker gets a new pair of shoes, I’m not going to get ’shoe-ness’ as a result.

But if my neighbor is sick, I’m quite likely exposed to ’sick-ness’ — even though I don’t want any of it!

Diamonds, cars, and shoes can be obtained in markets.

But when is the last time that you went to the store for ‘a quarter pound of sick’?

Never.

And when is the last time that you picked up ‘a pound of wellness’ at the local shops?

Never.

———————–
Commodities: Shoes, Cars, and Diamonds.

Certain ‘things’ can be exchanged in markets; we call them ‘commodities’.

With commodities, if you’d like one, you buy it.

If you don’t want a commodity, or if you cannot afford it, then you don’t have one.

However, if someone else has a commodity like a pair of shoes, or a car, or a diamond, their possession of that ‘thing’ does not transfer itself to you.

However, not everything that we currently sell in markets is actually a commodity.

Health care and wellness care are offered in ‘markets’, but that market system does not increase the ‘wellness’ of the population as a whole.

You can’t buy ‘a pound of well,’ and I can’t sell you ‘a gallon of sick’, because those two things are not commodities in the same way that a pair of shoes, or a car, or a diamond are commodities.

This basic confusion about what is — and is **not** — a commodity lies at the core of far too much of the Congressional ‘debate’ that I’ve watched on health care reform.

Senators on the conservative end of the spectrum don’t appear to have much ability to distinguish between things that ARE commodities, and things that ARE NOT commodities. They never seem to ask themselves: could ‘health’ be poured into a gallon container, or worn, or driven?

And if it can’t be worn, driven, or poured…well… then maybe ‘health care’ is actually NOT a commodity.

Senate Filibuster Rules: Letting 0.58% of the US population control Senate health care votes

By: readerOfTeaLeaves Saturday November 28, 2009 12:24 pm

David D wrote a post about the dysfunction being caused by the decades-old Senate filibuster rule.

This rule has played right into the hands of those who want to concentrate wealth and operate by oligarchic rules. Why?

According to David Dayen, the filibuster originated in 1841, so let’s check a Wikipedia page about the history of the US Census and see what the nation’s demographics looked liked like in 1841 when the filibuster rule was implemented. First, we learn that:

The sixth Census was taken June 1, 1840. The census estimated the population of the United States at 17,100,000. The results were tabulated by 28 clerks in the Bureau of the Census.

Clicking on the Wikipedia link for the 1840 US Census, we learn some interesting facts:

The United States Census of 1840 was the sixth census of the United States. Conducted by the Bureau of the Census on June 1, 1840, it determined the resident population of the United States to be 17,069,453 — an increase of 32.7 percent over the 12,866,020 persons enumerated during the 1830 Census.

The total population included 2,487,355 slaves. In 1840, the center of population was about 260 miles (418 km) west of Washington near Weston, West Virginia.

If you were a slave-holding Senator, you’d probably want to ensure that the ‘rules’ of the Senate favored your property interests, and any claims that ‘rights’ or legislation should operate by some kind of democratic head-count would have been anathema.
And today, they are still anathema to certain special intrests.
And for every dollar spent in America, about 17 cents is spent on health care.
So you might say that we still have some very, very special interests who have more to gain by allowing a tiny minority to filibuster than they will gain by anything resembling actual, one-person-one-vote ‘democracy’.

In 1841, the US was a rapidly growing agrarian nation in 1841, with over 2,000,000 slaves. Senate rules that heavily weighted property rights (since slaves were regarded as ‘property’) were implemented in what became known as the ‘filibuster rule’.
In 1841, when the filibuster rule was adopted, the Civil War was more than a decade into the future.
Electricity was not yet understood, despite Ben Franklin’s kite flying escapades.
Ships were powered by sails and oars.
Samuel Morse had sent the first telegraphic message, "What Hath God Wrought?" a mere four years previously.
The British government had just invented postage stamps, so that recipients of letters didn’t have to scramble around for money in order to receive their letters, and the US was taking note of this new novelty.
Charles Goodyear had just figured out how to ‘vulcanize’ rubber, but a Brit had stolen his idea.
A German chemist was discovering that nitrogen was a key plant nutrient.
Czar Nikolai ruled in Russia, and Queen Victoria (all of 21 years old) was ruling England.
In this social, political, and economic context, the Senate filibuster was born.

But consider the following facts: we are no longer an agrarian society.
We no longer allow slavery.
We currently have more than 17,069,453 US citizens in the following cities: New York, LA, Chicago, and Houston (and that doesn’t include any of their suburbs).
We’ve been to the moon.
We have iPods, iPhones, computers, and cars.
And now, almost 81% of us live in cities, which gives even more popwer to anyone in the US Senate who is from a small state, and who wants to filibuster.

It is 2009, and we are allowing the US Senate to be ‘held hostage’ – legislatively – by four Senators. At a time when the population of the entire nation in 1841′s agrarian society would fit into our 4 largest cities, with plenty of room to spare.

Let’s quickly review some numbers:

17,069,453 = the number of US citizens in the 1841 Census.
17,293,012 = the number of US citizens counted in the 2000 US Census in the following four cities: New York, LA, Chicago, and Houston — figures from this page.
0 = Number of slaves currently allowed under US laws
168 = Number of years since the filibuster rule was originally enacted in the United States Senate in 1841.
96 = Number of US Senators not threatening to filibuster health care as of 11-28-2009.
4 = Number of **Democratic** US Senators threatening to stop health care reform in the Senate.

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Our next question might be to ask a bit more about those 4 Dem Senators who threaten to filibuster on health care reform.

Are they representative of the larger US population and the national interest?
What percentage of the US population do they represent?

In other words, are they fairly typical?
Or are they are tiny, itsy-bitsy minority?

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Let me make this a bit more visual for you:

Number of Senators not threatening to filibuster (including R’s, because with the ‘weak’ Dems, they don’t have to):
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

And now, the 4 ‘weak’ Dems: Landrieu (LO), B. Lincoln (AR), B. Nelson (NE), HoJoe (CT)
XXXX

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Moving right along, let’s do a quick-and-dirty, rough visual of the proportion of Americans whose Senators are holding up health care, because roughly 96% of us have Senators are **NOT** threatening to filibuster.

Using Wikipedia’s numbers, we’ll assume roughly 308,000,000 US citizens.
No illegal immigrants are included in that number; just those of us who can prove to the US Census department that we are citizens.

Of that number, the **total** population of the 4 states of Louisiana, Nebraska, Arkansas, and Connecticut amount to a whooping 4.06%, or 12,550,870 souls.

That leaves about 295,449,130 of us who have Senators not threatening to filibuster on health care at the present time.

Those are really big numbers; to give ourselves a better sense of their rough proportions, the simplest thing is to use dots: at one dot per million, I need to put 295 dots for ‘those of us who DO want health care reform, or at least don’t have a Senator who is threatening to filibuster’.

That will leave me to put roughly 13 dots to represent those with Senators who ARE threatening to filibuster health care reform. (Yeah, the total population is about 12,550,870, but I’ll round up to ’13 dots’ just so they can’t whine that their Itsy-Bitsy-Teenie-Weenie-Minority was ‘undercounted’).

So here goes:

US population (1 dot:million) of those citizens who have Senators who are NOT threatening to filibuster health care reform as of 11-28-2009:

……………………………………………………………………………………….
……………………………………………………………………………………….
…………………………………………………………………………………..

US population (1 dot:million) of those whose Senators are threatening to filibuster health care reform:
………….

Does making a ‘visual’ help you think a bit differently about what’s at stake in the health care reform filibuster posturings?

Does anyone call out Blanche Lincoln, or HoJoe, or Mary Landrieu, or Ben Nelson with actual facts? With demographic data that shows how tiny their state populations actually are — at least, compared with what we might call The National Interest?

I have yet to see a single report in media that used ‘actual population numbers’ to show how much power these small state Senators are wagging around.

This isn’t even a case of the tail wagging the dog.
This is a case of the last half-inch of the tail wagging the dog.

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The Senate filibuster belongs to the era of the sailing ship when 295,000,000+ Americans are being held ‘hostage’ on health care reform by four Senators who represent fewer than 13,000,000 citizens.
I’d call that: Tyranny of the Itsy-Bitsy-Teenie-Weenie-Minority.
And I’m really completely fed up with it.

Your thoughts?