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Lehman Brothers Records Discarded?

Rep. Henry Waxman (D-Calif.) just sent a letter to Lehman Brothers CEO Richard Fuld, who's scheduled to testify before the...

| Fri Sep. 26, 2008 5:58 PM EDT

Rep. Henry Waxman (D-Calif.) just sent a letter to Lehman Brothers CEO Richard Fuld, who's scheduled to testify before the House Oversight Committee on October 6, to follow up on a previous document request. Among other things, the committee had sought e-mails and other documents that had been sent or received by Fuld over the past six months. According to Waxman, Lehman blew [PDF] Thursday's deadline to produce the records. And Fuld's counsel has apparently told the committee that he doesn't expect to have much to turn over.

In conversations with Committee staff, your counsel stated that he and his team are working on collecting your e-mails from this time period, but they expect to produce relatively few to the Committee because you were an infrequent user of e-mail.

Your counsel and his team have also informed Committee staff that they do not currently plan to produce any documents sent, received, or reviewed by you during the past six months that are nonelectronic, such as internal memoranda from company officials, assessments of the company's potential liabilities, or warnings of the company's impending collapse. According to your counsel, although these documents did exist at one time, they were typically "discarded."

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Ad Addressing McCain Health Issues Banned by CNN, MSNBC

The ad below was created by Brave New PAC and Democracy for America. CNN refused to run it and MSNBC...

| Fri Sep. 26, 2008 5:56 PM EDT

The ad below was created by Brave New PAC and Democracy for America. CNN refused to run it and MSNBC is pulling it off air after one day, claiming it has received viewer complaints. Bill O'Reilly was slamming NBC for running it, which may have added motivation. What say you? Outside the bounds?

Racist Jokes Tarnish Ricky Gervais Film, Ghost Town

Ghost Town (watch the trailer here) may not be original, but it is amusing. The romantic comedy starring Ricky Gervais (of Britain's "The Office") trails the life of an aloof dentist who can see dead people after a botched colonoscopy. Haunted by NYC ghosts pleading for help with their unfinished business, he proves heartless until the widow (Téa Leoni) of one cheating spirit (Greg...

| Fri Sep. 26, 2008 5:30 PM EDT

Ghost175.jpgGhost Town (watch the trailer here) may not be original, but it is amusing. The romantic comedy starring Ricky Gervais (of Britain's "The Office") trails the life of an aloof dentist who can see dead people after a botched colonoscopy. Haunted by NYC ghosts pleading for help with their unfinished business, he proves heartless until the widow (Téa Leoni) of one cheating spirit (Greg Kinnear) perks up his otherwise lonely life.

The film clings to clichés and wastes screen time on some flat characters, but still manages to glide along on Gervais' dry, charming humor. Devoid of gore and messy back stories, the ghost story stays lighthearted, aside from a tearjerker montage near the end.

It is doubly shocking, then, when Gervais' character twice whips out racist humor that seems both unexplained and excessive. In the first instance, Leoni and Gervais are holding back giggles from her fuddy-duddy human rights lawyer boyfriend when Gervais peeps out that the Chinese are the only ones different from the rest of the human population. Refusing to stop there, he continues by mocking names like "Pong." Later he targets his Indian colleague for tips on how to torture a patient for information (after asking his religion, of course).

Gervais' character is selfish and socially-awkward, for sure, but the racial comments seem contrived and tossed in for cheap laughs. See the film yourself and let us know what you think about movies with racial implications.

—Brittney Andres

Image courtesy of Paramount Pictures.

Friday Cat Blogging - 26 September 2008

FRIDAY CATBLOGGING....Good news: the debate is back on! Hooray! As you can tell, Domino and Inkblot are almost rapt already. They desperately want to know the candidates' plans for bailing out the cat food industry and preventing mass feline panic....

| Fri Sep. 26, 2008 4:24 PM EDT

FRIDAY CATBLOGGING....Good news: the debate is back on! Hooray! As you can tell, Domino and Inkblot are almost rapt already. They desperately want to know the candidates' plans for bailing out the cat food industry and preventing mass feline panic. The other good news is that it means our bingo card drinking game is once again the must-have accompaniment for your evening. Click the link, download a card, and have a drink anytime one of the candidates repeats a phrase in one of the squares. And while you're there, donate a few dollars to help Mother Jones continue to produce great progressive journalism. The drunker you get, the more money you should donate!

I'll be liveblogging the debate, of course — assuming my brain hasn't turned into tapioca by then — so come on back and follow along. I'm hoping McCain staggers on stage in a rumpled, ill-fitting suit with mismatched socks just to show how hard at work he's been trying to save our nation's economy. "Didn't have time to change," he'll blurt out melodramatically, and Jim Lehrer will nod along knowingly. Or something.

Finally, in other cat news, you'll be glad to hear that after years of negotiations with the USDA, Ernest Hemingway's six-toed cats are once again safe from evil government bureaucrats. "The cats have been living on the grounds for years, and we're not a zoo, carnival or amusement park," said the president of the Ernest Hemingway Home and Museum in the Florida Keys. And that's exactly where they'll stay.

Buying Wall Street

BUYING WALL STREET....Over at the Wall Street Journal editorial page, zillionaire hedge fund guru John Paulson outlines what he thinks is a better alternative for stabilizing markets than the current bailout plan. Paulson, of course, is famous for betting a...

| Fri Sep. 26, 2008 3:46 PM EDT

BUYING WALL STREET....Over at the Wall Street Journal editorial page, zillionaire hedge fund guru John Paulson outlines what he thinks is a better alternative for stabilizing markets than the current bailout plan. Paulson, of course, is famous for betting a couple of years ago that the mortgage market was going to collapse and becoming rich from his foresight, so that makes him worth listening to.

And unlike, say, the blatherings of the House Republican Study Committee, his plan isn't self-evidently idiotic. Basically, instead of having the Treasury buy up toxic mortgage securities, he thinks they should directly recapitalize the financial system by purchasing senior preferred stock in failing banks:

The financial market is stabilized, companies get recapitalized, failures are avoided, debt securities are supported, and time is gained for illiquid assets to mature.

The institutions continue to function, their cost of funding will decline as equity capital increases, and innocent third parties like bank depositors, broker/dealer clients and insurance-policy holders are all protected. The only difference is that potential losses are kept with the shareholders where they belong.

Paulson thinks his plan is superior to the current proposal on several counts — and although I'm not sure he's right about that, that's not what gets me. What gets me is that the Wall Street Journal editorial page is now running pieces that essentially suggest nationalizing failed banks — which is exactly what this plan would do if the required capital infusions are large enough (which they probably would be, since it doesn't take much capital to buy a majority stake in a failing bank). Conversely, I, the liberal, am really queasy with this notion. I'm all in favor of better regulation, but the federal government already owns one of the biggest insurance companies in the world, and I'm not thrilled at the idea of them acquiring any more of Wall Street.

We're in looking glass territory here. Am I too queasy about taking over banks? (That's a serious question. Am I?) Is the Journal too sanguine about it? What's going on?

Mission Creep Dispatch: John Feffer

As part of our special investigation "Mission Creep: US Military Presence Worldwide," we asked a host of military thinkers to...

| Fri Sep. 26, 2008 3:15 PM EDT

feffer.jpgAs part of our special investigation "Mission Creep: US Military Presence Worldwide," we asked a host of military thinkers to contribute their two cents on topics relating to global Pentagon strategy. (You can access the archive here.)

The following dispatch comes from John Feffer, codirector of Foreign Policy In Focus at the Institute for Policy Studies in Washington, DC.

Surrounding China's String of Pearls

In 1919, the English geographer Halford Mackinder argued that control of the "Eurasian heartland" was the key to world domination. Mackinder believed that Eastern Europe was the gateway to controlling this huge landmass stretching from his home country to the far shores of Asia. And indeed, Eastern Europe proved pivotal in the next conflagration, World War II, as well as in the US policy of containing the Soviet Union in the Cold War era.

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Jesus: Twitter Is a Waste of Time

Annoyed by non-believers micro-blogging their hourly moods, eating, and exercise habits?

| Fri Sep. 26, 2008 2:52 PM EDT

Annoyed by non-believers micro-blogging their hourly moods, eating, and exercise habits?

Thank God, Gospelr just solved that messy societal problem for you. And what do you know, Christians are just as boring as everyone else.

A quick scan of Tweets on Gospelr, the Christian Twitter knockoff, reveals such minutiae as:

Adrian:

 

"I had an awesome night at the KPC men's group here in Rogers."

 

 

and

Jesustxtswithu:

 

"Checking out Gospelr, I must say glad to finally be able to "follow" people who Follow Him. Greetings <3."

 

 

Jesustxtswithu's sentiment is, of course, the ostensible reason for the site to exist. But the thing about following people who follow Jesus is that, much like people who don't, they mostly post things like:

As Wall Street Bailout Talks Continue, House Democrats Form a Skeptics Caucus

As Capitol Hill negotiations on the Wall Street bailout proceeded on Friday afternoon, Representative Brad Sherman, a Democrat who has...

| Fri Sep. 26, 2008 2:49 PM EDT

As Capitol Hill negotiations on the Wall Street bailout proceeded on Friday afternoon, Representative Brad Sherman, a Democrat who has questioned the under-construction plan, sent out this brief message to his fellow House Democrats:

Skeptical about the Administration's $700 Billion Bailout Plan?
Dear Democratic Colleague:
Please come to a meeting of the Skeptics Caucus to discuss President Bush's $700 billion bailout bill. One staffer may attend with you.

The main story today about the bailout is that House Republicans are raising objections to the proposal and blocking a deal. But there are House Democrats worried that the deal-which would let the federal government buy up $700 billion of bad paper from Big Finance firms-- is moving too fast and is too problematic. How many? Let's see who shows.

Debate Prediction: Nothing Major Will Happen. Nothing Ever Does

So the debate is on. What's going to happen? Well, if you believe the McCain campaign, their man has it...

| Fri Sep. 26, 2008 2:37 PM EDT

So the debate is on. What's going to happen?

mccain_debate_ad.png Well, if you believe the McCain campaign, their man has it in the bag. The ad at right is already running on the web. It was spotted by Chris Cillizza.

For my part, I actually don't think candidates ever really win or lose these things. Following the debate there will be approximately one zillion mouth-hours spent by TV pundits and campaign surrogates talking about how candidate A delivered a commanding performance or how candidate B convinced America that he is presidential enough for the job, but historically the best a candidate can expect to get coming out of a debate is a 2.25 point bounce. When Bush lost 2.26 points coming out of the first 2004 debate with Kerry, it was the largest single-debate swing since 1988.

The best a candidate has ever done over the course of an entire debate season (there are, as you almost certainly know, two or three debates every campaign), is a 3.5 point bounce, which Bush got in 2000 after his three debates with Gore. The average swing after a debate season, dating back to 1988, is a paltry two points. And there's nothing to say that that two point bounce isn't wiped out by the events of the campaign's homestretch.

Analysis of the debate is of course welcome. But when the talking heads reach into their bag of sports analogies and tell you that one of the candidates "landed a knockout punch" or "hit a home run," don't believe them. It's a safe bet that both candidates did well enough to reassure their supporters but not well enough to swing an appreciable number of undecideds. Journalists would spend their time better by fact-checking the candidates, searching for hypocrisies or panders, and examining the candidate's answers for reflections of character, readiness, and future policy decisions.

(Much love to fivethirtyeight.com for help with the numbers.)

Update: Really good video on the history of presidential and vice-presidential debates over at PBS.

Betting on the Bailout

BETTING ON THE BAILOUT....Brad DeLong on the modified Paulson plan:To get get a $500B macroeconomic gain in production and employment, Paulson wants to take on a position with an expected value of -$100B. But the true value of that position...

| Fri Sep. 26, 2008 2:09 PM EDT

BETTING ON THE BAILOUT....Brad DeLong on the modified Paulson plan:

To get get a $500B macroeconomic gain in production and employment, Paulson wants to take on a position with an expected value of -$100B. But the true value of that position could be anywhere between +$200B and -$400B. Looks like a good bet to me.

I think that's right. In fact, I think the bet might even be a little better than that. With the equity provisions now in place, along with the plan's implied commitment to do whatever it takes to keep the economy stable even if it requires more than just the current bailout, there's a pretty good case to be made that taxpayers are unlikely to lose money on the deal. Conversely, although $500 billion seems like a reasonable guess about the cost in GDP contraction of doing nothing, there's a sizeable chance of it being way worse. In that sense, it's sort of like global warming, where you really have to pay attention to the small but nontrivial chance of catastrophe.

Still, at a minimum Brad is right: it's $100 billion vs. $500 billion. That's an easy bet. He also has about the best short summary of yesterday's events I've seen:

John McCain announces he is suspending his campaign, cancels on David Letterman, gets made-up for and does an interview with Katie Couric, goes and talks to the Clinton Global Initiatiive the following day, persuades Bush to call a meeting at the White House, gets to Washington DC in the afternoon, goes and talks to the House Republicans, goes to the meeting, sits in the back of the meeting and is evasive, and when the meeting breaks up, three things are clear:

  • John McCain won't say what financial rescue packages he supports or opposes.

  • George W. Bush won't say that support for Paulson is a test of Republican loyalty.

  • The House Republican caucus doesn't support their leaders.

  • The House Republican caucus doesn't have an alternative plan.

That's quite an accomplishment. It is hard to read it any other way than as John McCain rallying the House Republicans to blow up the bipartisan agreement that was being negotiated. The House Republicans don't want to do anything to hold CEOs accountable, to protect taxpayers, protect homeowners, or provide oversight. The Treasury rejected the not-quite-ideas they put forward at the White House meeting last week.

And he passes along this nugget from Politico:

According to one GOP lawmaker, some House Republicans are saying privately that they'd rather "let the markets crash" than sign on to a massive bailout. "For the sake of the altar of the free market system, do you accept a Great Depression?" the member asked.

God save us from the Republican Party.