Bad Boys

I'm a... criminal???

Members of the Pensacola community have pressed the City Council to reconsider a so-called“camping” ordinance passed last summer, particularly the sections of the law that criminalize keeping warm with a blanket, tent or other materials commonly used by the homeless for shelter. At the time of its passage, the ordinance was defended in the Council on the bases that “camping” in public was considered a threat to sanitation, public health, and safety, in addition to being a blight on Pensacola’s “aesthetic” quality.(1)

See, Lloyd, we're more than leaders. We're fine, upstanding
models of American citizenship. Cleave to that, baby boy. L'chaim.

What does "the law of unintended consequences" tell us? Careful what you wish for... For every action... You may get what you pay for, but you pay for everything you get....

Time worn sayings all, leading us down the same road. In the case of EM08, take a look around and notice, not just what's illegal, but what gets indicted, what gets prosecuted. In other words, what has a target on it?

It's easy enough to see that the evil empire dons are above the law, but when we criminalize the homeless, folks, we're nearing the bottom. Even for EM08.

What next, an ordinance against day dreaming?

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

1.  ​Amid freezing temps, Florida town’s ‘camping’ law bars homeless from using blankets
RT, February 12, 2014
 http://rt.com/usa/florida-ban-blanket-homeless-611/

Our Bonds that Blind

Matt Taibbi continues to hound the too big to fail banks, and it's to our advantage. He's done it yet again in an expose' of the rigged game that's government bonds, long held to be the safest investments around. While to some extent that may be true, keep in mind that things have changed over the course of the last few decades as debt loads have exploded at every level. Thinking about buying any Cali bonds? Look at how the governator has shredded our books and then think twice. Then read the last chapter of Michael Lewis' latest and quite excellent book, Boomerang, then think again. Lewis' book -- which profiles the way EM08 played out in different countries such as Iceland and Greece, ominously ends with his home state of California, itself a nation state at about #8 in the world's largest economies. And in case you haven't heard, we are sunk to our eyeballs in debt. And although he wasn't alone, thank you governator, for trashing our future.

Over a year ago I posed a simple question to my good friend Torben who I see eye to eye with on EM08, and while researching over a year and a half ago, I was astounded at the debt loads, not just of credit cards, student loans, car loans... let alone mortgages, but of states and munis. I asked him, "What if Cali defaults on its bonds? Then what?" Torben said, more or less, "Then we're sunk." Cali's far bigger than Greece and as big as Italy's economy! No less than JPMC chairman and ceo (it's a conflict of interest to be both, btw) Jamie Dimon thought the same. And with a self pat on the back, yours truly beat him to the punch. And yet, in spite of a couple of noodnicks like us figuring this out, not a single major mass media merchant I know of has addressed this ticking time bomb.

Personally, I think bonds have been paying off by robbing Peter to pay Paul. That is, because of our unified economy, folks in other states will pay for Cali's tragedy, similar to the way Germany has now become the EU's piggy bank. In other words, the federal government will just keep injecting us with money, because *they* know how important it is to keep California from blowing up the entire world. One thing's for sure, after reading Taibbi's piece, the cat's out of the bag on what a rigged game bonds are. Which means that to add to the long roster of welfare money cons, we can now add red, white and blue bonds.

Nothing means "not a thing." Neither is sacred anymore.

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

[Some of the links in Taibbi's piece may be dead/lost; that's why I always supply the link to the original article. if you need to, just click on the title of the piece. -jp]

How Banks Cheat Taxpayers

by Matt Taibbi

Rolling Stone, 12/27/11

A good friend of mine sent me a link to a small story last week, something that deserves a little attention, post-factum.  

The Bloomberg piece is about J.P. Morgan Chase winning a bid to be the lead underwriter on a $400 million bond issue by the state of Massachusetts. Chase was up against Merrill for the bid and won the race with an offer of a 2.57% interest rate, beating Merrill’s bid of 2.79. The difference in the bid saved the state of Massachusetts $880,000.

Afterward, Massachusetts state treasurer Steven Grossman breezily played up the benefits of a competitive bid. "There's always a certain amount of competition going on out there," Grossman said in a telephone interview yesterday. "That's good. We like competition.”

Well … so what, right? Two banks fight over the right to be the government’s underwriter, one submits a more competitive bid, the taxpayer saves money, and everyone wins. That’s the way it ought to be, correct?

Correct. Except in four out of five cases, it still doesn’t happen that way. From the same piece [emphasis mine]:

Nationwide, about 20 percent of debt issued by states and local governments is sold through competitive bids. Issuers post public notices asking banks to make proposals and award the debt to the bidder offering the lowest interest cost. The other 80 percent are done through negotiated underwriting, where municipalities select a bank to price and sell the bonds.

By "negotiated underwriting," what Bloomberg means is, "local governments just hand the bid over to the bank that tosses enough combined hard and soft money at the right politicians."

There is absolutely no good reason why all debt issues are not put up to competitive bids. This is not like defense contracting, where in some situations it is at least theoretically possible that X or Y company is the world’s only competent manufacturer, say, of armor-plated Humvee doors, or some such thing. It’s still wrong and perverse when companies like Halliburton or Blackwater get sole-source defense contracts, but at least there’s some kind of theoretical justification there.

But this is a bond issue, not rocket science. In most cases, all the top investment banks will offer virtually the same service, with only the price varying. Towns and cities and states lose billions of dollars every year allowing financial services companies to overcharge them for underwriting.

It gets even worse in the derivatives markets, where banks routinely overcharge state and local governments for things like interest rate swaps, for one very obvious reason – swaps are not traded on open exchanges, so only the banks know how to price them.

Imagine what NFL gambling would be like if the casinos didn’t publish the point spreads every week, and you’ll get a rough idea of how the swap market works. If you couldn’t look it up, how many points would you give the Dolphins against the Jets next week? Two? Five? Seven? The big casinos know, because they’re taking all that action, that the real number is one point.

In the same vein, exactly how accurately do you think some local county treasurer might be able to guess the cost of an interest rate swap for his local school system? Answer: he’d probably do about as well as you or I would, guessing the odds on a Croatian soccer match.

The big banks know this, which is why there should never, ever be non-competitive bids for those sorts of financial services. In a sole-source contract for a swap deal, you’re trusting a (probably corrupt) Too-Big-To-Fail bank to give you a good deal for a product whose price is not publicly listed anywhere.

There have been numerous investigations and lawsuits across the world connected with this sort of systematic overcharging, from Erie, Pennsylvania to the notorious Jefferson County, Alabama case, to Milan, Italy (which sued Chase and four other banks for misleading them about derivative prices).

In the Erie case, Chase recommended to the locals that they hire a financial adviser to review the deal. What they didn’t tell the local government was that Chase had paid a fee to this adviser, a firm called Investment Management Advisory Group Inc., or IMAGE. They pulled the same scam with the school district of Butler County, Pennsylvania.

And in the oft-discussed Jefferson County case alone, Chase reportedly overcharged the locals $100 million for the crooked swap deals that, in a completely separate outrage, will probably leave Birmingham bankrupt for the next generation.

All of which is exactly what people like the OWS protesters are complaining about when they talk about greed and excess on Wall Street. Nobody is begrudging a bank’s desire to make money, and nobody is saying a bank shouldn’t be allowed to make money, even a lot of money, performing legitimate services for the state and the taxpayer.

But when you put a thumb on the scale in a financial services contract, the costs start to get outrageous very quickly. The banks would still do a very crisp, almost effortlessly lucrative business if they just stuck to submitting competitive bids for legitimate work – but instead of that, they for some reason have to game the system, grease politicians, rig bids, and stick the taxpayer with overpriced products. Which sucks, of course. Hopefully politicians will catch on and go the Massachusetts route more often.

We don need no stinkin limits, or, JPMC: What Becomes a Super Predator Most?

You'd think in the midst of all the ill-feelings toward the mega-banks that they'd let up on the gas. Well, you and I would think. They don't think, they prey, and, fittingly enough, that preying doesn't involve them, but you and I and the rest of the plebes who've built this country on our knees.

No, in fact, mention to jerkoffs of this strata that they should "ease up" and instead they jerk up and cinch the noose a bit tighter. Think Eli Wallach's Tuco standing atop the grave marker - a crucifix - in Leone's The Good, the Bad & the Ugly. But the ending's different in the EM08 version; Clint doesn't mercifully shoot the noose in the end and thus free Tuco, nor does he leave any gold. He just takes it all and rides off.

Now, guess which character you are and which one JPMC (or Goldman or Wells or BofA..) is in that scenario?

http://www.huffingtonpost.com/alfred-gingold/chase-home-finance-rabid_b_664109.html

Alfred Gingold
Writer, actor
Posted: July 29, 2010 03:54 PM

CHASE HOME FINANCE: RABID WEASEL

Our mortgage bank says we have to pay our next door neighbor's water bill.

Last month, we got a letter from Chase Home Finance stating that we were delinquent in our payments. So Chase paid our neighbor's water bill and established an escrow account into which it plans to collect and store such money as it says we owe--at that moment, a cool $82.91, but increasing as Chase adds its "expenditures" towards our actual taxes and water bills, which we have already paid in what is referred to in mortgage circles as "timely fashion."

We were not surprised. This is the third time-the third time that we know of-that Chase has tried to make us pay our neighbor's water bill.

We refinanced with Chase in 2004 at a rate that was, and still is, pretty good, not to mention that it was and still is a fixed rate mortgage. Perhaps it's the fixed rate thing that gets under Chase's corporate skin, because unlike any of the eight other banks who've held our mortgages over the years, Chase keeps trying to make us pay it more money than we owe. The vehicle for this petty larceny is escrow for tax and insurance payments which are, to put it politely, enhanced.

At first, we had no problem with paying our taxes and insurance through Chase. We've had the arrangement with other banks and none of them ever tried to filch more than we owed, or at least not this obviously. My wife and I share bill-paying and check-writing duties, so neither of us noticed the creep of our escrow payments, nor did we connect it with the regular letters from Chase requiring notification of insurance, which we duly sent along. In 2006 we realized something was amiss; our monthly escrow payment was huge. There were phone calls, some of a highly emotional nature, with the affectless warriors of Chase Customer Care. Eventually a polite lady called to tell us in silvery tones that there'd been a mistake, can you imagine, something about unacknowledged notices of coverage, and that we'd shortly receive a check for $4000 and change-funds, we gathered, Chase had been hanging onto for our own good. We allowed as how we'd like Chase to waive our escrow requirement, so we could pay our taxes and premiums ourselves, and the lady told us we could do that.

What she didn't say was "if you dare." To Chase, a home loan with an escrow waiver is an unexploited resource, like the Arctic National Wildlife Refuge.

Since this is the third time in two years Chase has created tax delinquencies that don't exist, we know the drill: We faxed a note to Customer Care illuminating our "concerns," pointing out that our address is not the same as our neighbor's, the water account number is different, the houses are different, the mortgages are different-you know, we're different fucking people. We included copies of the receipts for all the timely tax payments we've made. We referred to, but did not include, the last letter we sent Chase about our neighbor's water bill, from December '09, but we didn't mention the one we sent on the same subject in October '08, as we didn't want to burden Customer Care with too much to think about, much less read. And we ended stirringly by requesting, insisting, demanding that this escrow grift cease immediately.

Reliably, Chase took our remonstrance in stride and ignored it. Our new payment coupon already has a healthy chunk of escrow added, for taxes we've already paid and which Chase claims to have paid too, or intends to pay.

The last time this happened, in 2008, we went through a telephone gauntlet, repeating the story endlessly, receiving assorted "work case numbers," which were never recognized by anyone we spoke with, and collecting the names of every Customer Care Representative we spoke to, which got confusing because they only offer first names. And we continue to pay our principle and interest on time. No response. Zilch.

Eventually we sent certified letters, return receipt requested, to assorted Chase departments-Customer Care, Tax, Escrow Removal-and personally to David B. Lowman, CEO of Chase Home Finance, and Jamie Dimon, CEO of JP Morgan Chase, the mother ship. We made our case, included our documentation and declared that if we did not receive satisfaction we would file reports with the Attorney General's Office, the CAC, the Better Business Bureau and Santa.

Lowman's receipt didn't come back to us for three months, so we were not surprised to hear Dennis Kucinich snap at him for Chase's spectacular foot-dragging on mortgage modification. Yes, foot-dragging seems to be the Lowman Way, except last April, when he told Barney Frank of the House Financial Services Committee hearing that aggrieved Chase mortgage holders should come to him with their concerns, then hot-footed it the hell out of there when a group of them actually did.

Someone evidently read the one we sent to Dimon, because we got a call from an oberleutnant of the Executive Resolution Center (Orwellian, no?), who made it chillingly clear that the only way to get rid of the escrow was to pay it off. Could we find out if we're still paying for the neighbor's water? How about copies of the numerous delinquency alerts Chase claims to have sent us and we never received (maybe the neighbors did)? Not a chance.

Far be it from us to suggest that Mr. Dimon, a man the New York Times calls "a financial superstar" and Huffpo calls "The Most Dangerous Man in America," tells the troops to squeeze a few extra bucks out of non-risky mortgages. I mean, JP Morgan Chase controls 44% of the derivatives market, whatever that may be. $82.06 doesn't even qualify as chump change.

It's the principle of the thing, we suppose. Whether it's billions in dicey investments or just a few bucks of funny escrow, take a shot and if no one's the wiser, no one's the wiser.

It's very different from the attitude Matt Taibbi captured so brilliantly in his description of Goldman Sachs, the "great vampire squid wrapped around the face of humanity, etc." Chase Home Finance is less squid than weasel: a rabid weasel, wrapped around my house, pointy little claws relentlessly poking-behind the sofa cushions, in our wallets, next door on the neighbor's water meter-for any spare change or folding bills it can sweep into its fetid maw before someone shoos it away with a broom.

It is a busy weasel. We thought paying our neighbor's water bill was a mistake too stupid to be anything but honest, but it turns out Chase pulls this stuff all the time. At the ample Chase Home Finance section on the Complaints Board Website, there's a post from a guy Chase is escrowing for taxes on property he doesn't own. On the Chase Home Finance Sucks Facebook Page, we read of a man escrowed for taxes due (and paid) for the year before his mortgage was taken over by Chase.

The Los Angeles Better Business Bureau awards Chase Home Finance an F for reliability, which makes us think Chase really doesn't give a damn what anyone thinks of it--which is exactly the attitude we would recommend to Chase if we were its therapist or mother. Perhaps it shouldn't be surprising, but it somehow is, that the same banks and bankers that thought big enough to drive the whole economy over a cliff also think--and behave--really, really small.

To paraphrase Lady Bracknell: To swindle someone once may be regarded as a mistake; to swindle the same someone in the same way repeatedly looks like a business plan.

I'll be chronicling this episode of our ongoing struggle to pay Chase no more than we owe it on my blog, Joy Buzzer, where this is cross-posted. This time we're hoping to keep our postage expenditures down and to avoid hyperventilating on the phone. My prediction: they'll escrow us for David B. Lowman's water bill.

Socialist Jamie's Welfare Brand of Genius

Evidently Jamie boy's added prognosticator to his res now, right after the last entry for 2008: "Welfare Recipient of the Year," and "Pro Socialist Co-Winner with Lloyd Blankfein." Courtesy of the Telegraph, he spewed that "American investors should be more worried about the risk of default of the state of California than of Greece's current debt woes."

First, we should be worried about welfare jerkoffs like YOU Jamie, thieving in our own backyards.

Second, I called Cali way before you ever thought of using it as deflection. For instance see point #8 here, back in October '09.

Third, while the mass media does their usual asleep at the wheel thing, citizen journalists are way in front of the EM08 curve. Don't believe me? Here's one of my recommended EM08 bloggers, "Mish" (see sidebar). He said this over 3 years ago.

Is California Going Bankrupt?
Nov 20th, 2006 | By Michael Shedlock | Category: Macro Economics

History is about to repeat in California as the “state’s cash flood may be receding”:

“It’s familiar: A handful of Californians make a killing on investments, and their tax payments send state revenues soaring. Lawmakers go on a spending spree, without a plan for paying the bills when fortunes turn.

“That was the late 1990s, when the dot-com boom made the state flush, but the gains proved fleeting, and California came perilously close to running out of cash.

“Now, as Gov. Arnold Schwarzenegger prepares a landmark program to expand health care coverage to millions of uninsured residents, economists say the state may not have the funds to pay for it. Although tax receipts rose this year, they say, California is once again on budget quicksand.


“‘I’m at a loss to see how they are going to balance this budget,’ said Stephen Levy, director of the Center for the Continuing Study of the California Economy in Palo Alto. ‘The state got bailed out last time around by a surprise revenue surge. That is unlikely to happen again.’

“The expanded programs in Schwarzenegger’s election-year budget were funded largely by Silicon Valley millionaires — capital gains taxes on people who cashed in Google stock, for example, accounted for nearly $500 million in revenue, several experts said — and by the bubble in the housing market that began to deflate after tax receipts that fueled this year’s spending were tallied.

“‘These surges don’t last forever,’ said Ted Gibson, a former state economist. ‘At some point…that revenue stream will either diminish or completely dry up.’

“The governor Tuesday brushed aside warnings that state coffers could soon start to shrink. Referring to the $37-billion public-works borrowing package voters approved last week, Schwarzenegger said: ‘There will be so much construction activities going on that where the private sector will fall off, the public sector will pick up.’

“‘With our infrastructure bonds, we will again stimulate the economy,’ he said…

“‘We’re going to have a big revenue problem,’ said Christopher Thornberg, a partner at Beacon Economics in Los Angeles. ‘It is going to be a mess and Schwarzenegger in a year is going to wonder why he wanted to be reelected…Sacramento is not going to have the cash to pay for things it wants’…

“In 1965, personal income taxes — one of the most volatile sources of cash for the state — accounted for less than a fifth of the state’s revenues. Now they make up nearly half…

“Schwarzenegger came up with a more dramatic proposal: a cap on state spending that would force Sacramento to sock revenue windfalls away in a rainy-day fund. But after voters rejected his ‘Live Within Our Means Act’ in last year’s special election, the governor changed course, supporting big spending increases for government programs.

“Democrats, too, dropped their call for changes in the tax code as state coffers swelled and more money was on the table — at least temporarily — to fund their policy priorities.

“Now, analysts say, the inaction may come back to haunt the state. The influx of cash ‘we’ve seen in the last couple of years could go in the other direction,’ said Brad Williams, an economist in Hill’s office. ‘It is just a question of when.’”

I am stunned. I should not be, but I am. How can anyone possibly think, “With our infrastructure bonds, we will again stimulate the economy” ? The Arnold sounds like he is bragging that California’s infrastructure is in bad shape. “There will be so much construction activities going on that where the private sector will fall off, the public sector will pick up.”

Perhaps other states should wreck their roads and demolish their hospitals just so they too can be lucky enough to get voters to pass bond issues to stimulate the economy. Dear Arnold, write this down on the blackboard and read it until you understand: Unfunded public sector spending is exactly why this country is in the mess it is in. We have wasted well over half a trillion dollars in Iraq, and exactly what did that stimulus buy us?

If floating bonds will stimulate the economy enough to pay for themselves, why not float a trillion dollars worth of them? If printing presses were the key to prosperity, Zimbabwe could easily be the richest nation in the world.

NCPA

The National Center for Policy Analysis (NCPA) is writing about “California’s Mega-Bonds”:

“Tired of exasperating traffic jams, aging schools, and inadequate affordable housing, Californians have launched a new era of public works construction. California voters agreed Tuesday to finance the program by issuing $37.3 billion in bonds — an amount greater than the annual spending of any other state.

“As a growing federal budget deficit has eroded financial aid for highways and other projects, debates have simmered in recent years in state capitals about how to pay for them.

“Critics say California voters made a mistake:

*
The borrowing will top $73 billion once the bonds are paid off with interest in 30 years, thrusting the state deeper into debt just as it is rebounding from the dot-com bust
*
That could lead to cuts in funding for social services and other programs, they warn.

“Supporters — most prominently, Gov. Arnold Schwarzenegger — argue:

*
The benefits of highway and public transit improvements, better-equipped schools, and reduced threats of flooding will be worth the cost
*
That is especially true, they say, in a state predicted to swell by the population of Ohio over the next 10 years.

“The four propositions will spend $19.9 billion on roads and public transit, $10.4 billion on school construction, $4.1 billion on levees and other flood-control projects, and $2.9 billion on affordable housing.”

The California Model

The Boston Herald dove off the deep end by proposing, “California’s $37.3 Billion Public Works Rebuilding Program Could Be Model for Other States”:

“California voters agreed Tuesday to finance the program by issuing $37.3 billion in bonds — an amount greater than the annual spending of any other state.

“‘Voters said they are willing to bear the costs and are unwilling to wait for the feds to get their act together,’ said Everett Ehrlich of the Center for Strategic and International Studies, a Washington think tank. ‘That California would see it in its best interest to go it alone and make such a sizable new investment in its future is in many ways new and different’…

“Allan Zaremberg, president of the California Chamber of Commerce, said passage of the mega bonds will become a catalyst for discussions nationwide about funding infrastructure.

“‘This is a real victory for people who have the economy in mind,’ Zaremberg said. ‘Gridlock costs money. It’s really important to maintain our infrastructure.’”

For starters, voters most assuredly are NOT willing to bear the costs. Did Californians vote to live within their means? No, Californians rejected Proposition 76: The California Live Within Our Means Act. Did Californians vote for any tax hikes? Once again, the answer is no. So where is the money going to come from? Future generations? Spending that pays for itself? A hope and a wing and a prayer? As for this being a “real victory for people,” I would say that Zaremberg’s ideas are downright dangerous.

California may have a model, all right, but that model is the road to ruin and bankruptcy.

Housing

The Desert Sun is writing, “Housing market drag on state until 2008″:

“The downturn in the housing industry will continue to depress the state’s economy for most of next year before stabilizing in 2008, the legislature’s top budget analyst predicted Wednesday.

“Legislative budget analyst Elizabeth Hill forecast that residential construction will fall by 4.4% in 2006 and by an additional 13% in 2007.

“Then the analyst said it should stabilize with about 175,000 permits issued annually through 2012.

“‘I think the real story in terms of California’s economy as well as the nation is what is happening in the real estate industry,’ Hill said.

“She noted that the real estate industry, which includes developers, contractors, real estate brokers, title companies, and financial institutions, make up 15-20% of the state’s private sector economy.

“The slowdown in this industry was the largest single factor in a sharp decline in personal income growth, resulting in a drop in withholding tax payments from over 10% in the first half of 2006 to less than 5% in the third quarter, Hill reported.

“‘California has been hard hit by what has happened in the overall real estate sector,’ she said. ‘That is the main reason we see the softness in California’s economy through 2007 and the rebound in 2008′…

“Overall, Hill projected the state budget would end 2006-07 with a $3 billion reserve, but then run short by about $5 billion in each of the following two years and by $1.2 billion annually through 2012 without cuts, tax or fee increases, or borrowing…

“The current real estate slowdown also could affect state and local governments through what Hill called a ‘more subdued’ growth in property tax revenues.

“The recent real estate boom led to a 35% increase in property tax revenue between 2001-02 and 2006-07 after adjusting for inflation.

“Hill is forecasting that the annual growth in property taxes will drop from 12% in 2006-07 to below 6% in 2009-10, and then rebound modestly.”

The Landing

Once again, we have a prediction that seems to amount to a soft landing. The landing will be anything but soft. In fact, once the downdraft in California gets going, people may be wondering if there will be a landing at all.

During the boom times, no one pays down debt or saves for the future. That is because booms are artificial by nature. We had a boom based on easy money and shrinking credit standards. There is no way to pay down debt, because the boom itself was based on an expansion of debt, not genuine growth and savings. What extra tax revenue did come in was wasted. Now here we are less than one year from the biggest housing boom in history, and California somehow needed to float another $43 billion in bonds.

We produced an enormous housing bubble of unprecedented magnitude. What do we have to show for it? A GDP of 1.6% and sinking fast. It is taking more and more and more credit just to stand still.

Rest assured California is going to need even more bonds in the years to come (if it expects to keep spending money it does not have). The housing bubble has now popped, but the consequences have only begun. The bottom is going to fall out of income and property tax collection. Unemployment is going to soar along with bankruptcies. In a state where one out of 50 working-age adults is a real estate agent, there is bound to be severe problems in a property bust.

Back in December 2005, Tom McClintock writing for ChronWatch wrote about “Arnold and the California Bond Bombshell”:

“Bonds are seductive. They promise immediate gratification, but they conceal a heavy price. They are certainly the most expensive way to finance projects, costing $2 to retire every dollar of debt. Moreover, the state’s borrowing capacity is finite, requiring careful attention to priorities, since debt once issued cannot be rescinded — only repaid. And every dollar borrowed by this generation reduces the ability of the next generation to meet its own needs…

“Gov. Schwarzenegger is now dealing with the result. He must restore the public works built by a generation of giants while discharging a mountain of pointless debt racked up by a generation of spendthrifts. Only by rigorously applying these principles can he hope to do so.”

Arnold has made a stand. He and the voters of California have agreed to float $43 billion in bonds on top of $30 billion or so in existing bonds. In effect, the voters of California seem to think they got something for nothing. But life doesn’t work that way. Given there is no realistic way to pay this debt back, California is headed for bankruptcy. No, don’t expect an announcement tomorrow, or even next year, but the die has been cast.

Regards,
Mike Shedlock ~ “Mish”
November 20, 2006
Author Image for Michael Shedlock
Michael Shedlock

Mike Shedlock (Mish) is a registered investment advisor representative for SitkaPacific Capital Management. His blog Mish’s Global Economic Trend Analysis includes commentary every day of the week. Mike is also a contributing “professor” on Minyanville.

Again: You've been Gangbanked

It's bonus time, or rather, past bonus time, and so what does one of the king jerkoffs of the world do? Why, he announces what his bonus is, as if saying "I'm not hiding anything, so see what a good person I am?"

Nah.

The element of this kind of pr that really chaps my ass is how insulting it is, obviously in blind hubris, but for the very fact that he puts it out at all. Because the assumption is that you'll buy it and go, "ok." And even if you don't buy it, wtf are you going to do? You're powerless; you aren't on tap at CNBC or Charlie Rose to give your 2 cents, much less write a NYT column. What are you going to do, blog about it fer gawd's sakes?

HO hum; Lotta good that'll do.

There's also a stupid side bar video; "FDIC: Bonus Culture Needs to Change." This is how stupid our Bizarro World is, what we've been reduced to.

Last, there's a link to this story:

BofA spends $4.4B on its Wall Street bankers

In it, the average comes out to $440k for 10,000 employees.

And at the end of that story is this gem:

AIG doling out $100 million more in bonuses

And yet, I really can't blame them. What they're doing is morally reprehensible, but illegal? Not the way Uncle Scam and they composed it. In fact, it's very logical that these shitheads are doing what they are; it's their economic imperative.

Who we absolutely can and should blame are:

1. Ben Bernanke
2. Hank Paulson
3. Tim Geithner
4. Chris Dodd
5. Barney Frank
6. Larry Summers

And then there're juniors, like Neel Kashkari, a former Goldmanite, instrumental in TARP under Paulson, and now landed in a plumb job with bond house PIMCO.

These are the men who acted on behalf of you and I... and sold us and future generations down the river.

Truth is the CRAs and their corrupt, conflict of interest relationship with the banks are a prime reason any of this crap got started. It smacks of fraud; basically, lying about the financial products the banks were flooding the market with as being investment grade AAA rated.

But it doesn't end there - the rest of the "refs" also bear responsibility, in this case the regulating bodies such as the SEC and the CFTC - the CFTC's Brooksley Born being an exception, and the industry analysts with the notable exception of those who I've mentioned who have had the courage to tell it like it is, among others; Nomi Prins, Gretchen Morgenson, Meredith Whitney, Catherine Austin Fitts (who I haven't written on yet, but plan on), Peter Schiff, William Black, Matt Taibbi, Michael Lewis, and David Cay Johnston. (see sidebar "EM08 Analysts to Trust")

It's also a perfect example of how this incarnation of a republic can catastrophically fail, because as you recall, the initial TARP vote failed due to immense public outcry.

Then in just a matter of a week or so, it "somehow" "miraculously" passed.

Who flipped and why? Don't you want to know?

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

JPMorgan's Dimon scores $16M bonus
By David Ellis, staff writer
February 5, 2010: 11:22 AM ET

NEW YORK (CNNMoney.com) -- JPMorgan Chase Chairman and CEO Jamie Dimon will take home a nearly $16 million bonus in restricted stock and options for leading the bank to a big profit last year.

In a company filing with the Securities and Exchange Commission Friday, the New York City-based bank said Dimon would collect nearly 200,000 shares of restricted stock and more than a half million in options.

According to a source familiar with the matter, Dimon did not receive a cash bonus. Wall Street firms in general have migrated from paying their employees large cash bonuses to stock and options in response to public outcry over bonuses and in an effort to tie employee compensation to company performance.

Based on Thursday's closing price of $38.35 per share, Dimon's restricted stock payment would be worth about $7.5 million.

His significantly larger options payment however, would only translate into profits if JPMorgan Chase's (JPM, Fortune 500) stock price climbs above $43.20 per share.

Both payments are to be deferred over several years and are subject to so-called "clawback" provisions, which can reclaim pay from workers whose actions may damage the firm's long-term financial health.

Including the $1 million base salary Dimon received for the year, his total pay package for 2009 is nearly $17 million.

Dimon received no bonus in 2008 and a $28 million bonus in 2007.

In a year when the banking industry struggled due to massive mortgage and consumer loan losses, JPMorgan Chase fared relatively well compared to many of its peers.

Last month, the bank revealed it earned $11.73 billion in 2009, more than twice what it earned just a year earlier. That translated into a better year for JPMorgan workers, including the 25,000 employees working on Wall Street.

The company said it spent $9.33 billion to pay workers in its investment banking division, an increase of $1.6 billion from a year ago. That figure includes salaries as well as money set aside for bonuses and works out to an average annual compensation per employee of nearly $380,000.

All eyes are now focused on Goldman Sachs (GS, Fortune 500), which has yet to disclose its year-end bonuses for its top executives.

While members of Goldman's management committee declined to take cash bonuses for 2009, there is still speculation that its executives could collect a windfall in stock and options. The Times of London reported earlier this month that company CEO Lloyd Blankfein could receive a bonus payment of close to $100 million.