Nick Baumann

Nick Baumann

Senior Editor

Nick is based in our DC bureau, where he covers national politics and civil liberties issues. Nick has also written for The Economist, The Atlantic, The Washington Monthly, and Commonweal. Email tips and insights to nbaumann [at] motherjones [dot] com. You can also follow him on Facebook.

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RIP Michael Hastings. Here's His Advice to Young Journalists.

| Tue Jun. 18, 2013 7:46 PM EDT
Michael Hastings.

Michael Hastings, a respected young journalist for Rolling Stone and BuzzFeed, was killed in a car accident in Los Angeles Tuesday, according to his boss, BuzzFeed Editor in Chief Ben Smith.

Hastings, who was 33, was perhaps most famous for "The Runaway General," his June 2010 Rolling Stone article on General Stanley McChrystal, then the commander of US forces in Afghanistan. President Barack Obama fired McChrystal after the publication of the article. Hastings expanded "The Runaway General" into a book, The Operators, that was published in January 2012 and became a New York Times bestseller.

Hastings first rose to prominence for his coverage of the Iraq war in Newsweek. His then-fiancée Andrea Parhamovich was killed in Iraq in 2007; he later wrote a book, I Lost My Love in Baghdad, about his years in Iraq.

You can find Hastings' Rolling Stone archives here and his BuzzFeed stuff here, but his Newsweek writing is mostly not available online. Rolling Stone's obituary for him is here; Smith's, which is a particularly gutting read, is here.

Hastings aided and mentored many other journalists during his all-too-short career. Last year, he posted his advice for aspiring journalists on Reddit. Here it is:

Okay, here's my advice to you (and young journalists in general):

1.) You basically have to be willing to devote your life to journalism if you want to break in. Treat it like it's medical school or law school.

2.) When interviewing for a job, tell the editor how you love to report. How your passion is gathering information. Do not mention how you want to be a writer, use the word "prose," or that deep down you have a sinking suspicion you are the next Norman Mailer.

3.) Be prepared to do a lot of things for free. This sucks, and it's unfair, and it gives rich kids an edge. But it's also the reality.

4.) When writing for a mass audience, put a fact in every sentence.

5.) Also, keep the stories simple and to the point, at least at first.

6.) You should have a blog and be following journalists you like on Twitter.

7.) If there's a publication you want to work for or write for, cold call the editors and/or email them. This can work.

8.) By the second sentence of a pitch, the entirety of the story should be explained. (In other words, if you can't come up with a rough headline for your story idea, it's going to be a challenge to get it published.)

9.) Mainly you really have to love writing and reporting. Like it's more important to you than anything else in your life--family, friends, social life, whatever.

10.) Learn to embrace rejection as part of the gig. Keep writing/pitching/reading.

Hastings is survived by his wife, Elise Jordan.

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Wall Street Banks Still Engaged in Pre-Crash Shenanigans

| Tue Jun. 18, 2013 1:30 PM EDT
Safe as houses.

Financial reformers cheered this week's news that Wall Street banks were unable to find buyers for a certain type of risky financial product—called a synthetic Collateralized Debt Obligation, or synthetic CDO. But if you think the big banks have given up on slicing and dicing crappy loans and semi-magically turning them into higher-rated, supposedly safer securities, think again. There's still plenty of that happening.

CDOs are types of derivatives—financial products with values derived from underlying variables. With many CDOs, the underlying variable in question is the stream of payments from a group of bundled loans. Synthetic CDOs, the products that the banks were unable to sell, are different from standard CDOs in a key way. This is complicated, so bear with me: Instead of being based on streams of payments from loans, their value is instead based on payments from insurance policies on those loans.

Here's a simplified explanation of what's happening in a synthetic CDO. To make a synthetic CDO, someone—let's call this Person A—has to have taken out what is essentially an insurance policy (called a credit default swap) against the possibility that a grouping of loans will default. Person A is betting that those loans will default. If they do, Person A gets paid; until then, he or she has to make premium payments. To make a synthetic CDO, a bank mashes together the premium payment streams from a bunch of these insurance policies. Generally, banks don't hold on to these products. Instead, they sell them to investors. For simplicity, we'll assume Person B buys the entire synthetic CDO. (In reality, it's broken up into several pieces, which are usually sold to different investors.) Person B is betting that the loans won't default and that Person A will have to keep making premium payments.

Here's the problem. Person A has a huge advantage in this transaction because he's picking the loans he wants to bet against. He can cherry pick the crappiest pile of loans and bet only against them. Person B, the person who owns the synthetic CDO, is taking the other side of that bet. Person B is not simply buying a pile of loans. He's betting on a group of loans that Person A has already bet are going to turn out to be worthless. And that's why the Person Bs of the world are now so wary: they realize that the Person As might know something they don't.

The good news is that the banks haven't been able to find anyone to take the synthetic CDO bet quite yet. But synthetic CDOs, while perhaps the most notorious of the products involved in the financial crisis, weren't the only problem. One of the big underlying issues that led to the crisis was that slicing and dicing loans and selling them off in chunks made them appear less risky to ratings agencies and investors than they actually were. But banks still do that slicing and dicing all the time. Taking the payment streams from a bunch of loans and mashing them together into a standard CDO is still big business for the banks, and there are plenty of buyers. So far in 2013, $38 billion worth of CLOs—CDOs based on business loans—have been sold in the US. That's up from $15.6 billion in the same period last year, according to numbers from the Royal Bank of Scotland cited in the Wall Street Journal earlier this month. Maybe this time the borrowers of the underlying loans are more likely to pay them back, or the ratings agencies have done a better job of assessing how risky each CDO is. Wanna bet?

Flashback: Bush Aides Used Alternate Email Addresses, Too

| Wed Jun. 5, 2013 5:46 PM EDT

Multiple top Obama administration officials have been using secret alternate email addresses to conduct government business, the Associated Press reported Tuesday. Conservatives were already outraged by former Environmental Protection Agency head Lisa Jackson's previously revealed use of an alias, Richard Windsor, to send emails, so this latest news has the potential to create a firestorm on the right.

The Obama administration claims there's nothing to see here, and that officials were using the alternate addresses so they could do their jobs  without having to wade through a deluge of spam. The alternate email addresses uncovered by the AP have all been governmental—the alternate email for Kathleen Sebelius, the secretary of Health and Human Services, was KGS2@hhs.gov, not sebelius@gmail.com, to cite one example. Several government agencies told the AP that the alternate email addresses "are always searched in response to official requests and the records are provided as necessary." Although the addresses themselves may be secret, the emails that are sent to and from those addresses are subject to normal government recordkeeping and public disclosure rules—at least according to the Obama administration.

The AP, however, notes that it "could not independently verify" that the Obama administration did in fact search officials' unlisted email accounts in response to public records requests. In fact, the news agency found only one example of an email from an official's unlisted account being disclosed in response to such a request.

Figuring out whether or not these emails are being properly archived and searched is crucial. During the presidency of George W. Bush, a scandal erupted over Bush aides' use of private, non-governmental email accounts to conduct government business. All emails from federal employees conducting government business are usually subject to public records laws, regardless of what addresses are used to send them. But the Bush-era accounts were, unlike the Obama administration accounts, non-governmental—some, for example, were operated by the Republican National Committee. That means those emails were less likely to be archived and maintained for posterity than emails sent or received by governmental addresses.

If Obama administration officials' secret-address emails are being archived under federal records laws and being properly searched in response to public records requests, they're likely above board. (The administration claims that using alternate email addresses was common under past presidents, too.) If that's the case, the secret email addresses are no more than a modern day equivalent of an unlisted phone number. But if these private emails aren't being properly archived and searched, it may—and should—be a real scandal.

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