TARP Saves Bank of America

TARP SAVES BANK OF AMERICA....Bank of America received $20 billion in new capital from the Treasury today, along with $118 billion in asset guarantees. Why? Because after buying Merrill Lynch in September they discovered that Merrill's losses were a wee bit higher than expected. And when did they finally figure this out?

Bank of America said it learned of Merrill's losses after the Dec. 5 shareholder vote. And in the days following, both Federal Reserve Chairman Ben Bernanke and Mr. Paulson impressed upon [CEO Ken] Lewis the importance of closing the transaction for the firm's own sake and also warned of the consequences for the country's overall financial system, say people familiar with the discussions.

Bank of America spokesman James Mahoney said: "Beginning in the second week of December, and progressively over the remainder of the month, market conditions deteriorated substantially relative to market conditions prior to the Dec. 5 shareholder meetings. So Merrill wound up making adjustments for the quarter that were far greater than anticipated at the beginning of the month. These losses were driven by mark-to-market adjustments which were necessitated by changes in the credit markets, and those conditions change on a daily basis."

....By Dec. 17, Mr. Lewis went to Washington to discuss what he had already disclosed to Mr. Bernanke in an earlier phone call — that his bank was having trouble digesting Merrill's losses. Mr. Lewis described the losses as monstrous, according to a person familiar with the matter.

At that 6 p.m. meeting, Mr. Bernanke and Mr. Paulson both told Mr. Lewis that failing to complete the Merrill acquisition would be disastrous. The policy makers said abandoning the deal would further destabilize markets, and would hurt the bank, potentially setting off a ripple effect that would exacerbate a fragile situation.

Something here really doesn't add up. What happened in the final three weeks of December that could have caused such a massive change in Merrill's position? Those weeks were actually fairly quiet on the toxic waste front.

Not saying it couldn't happen, but there must be more to this story. Or, alternatively, it's just your standard Wall Street fuckup. I guess that's probably it.

POSTSCRIPT: By the way, does anyone else remember that fawning piece about Ken Lewis and Bank of America that 60 Minutes aired last October? I wonder if Lesley Stahl feels embarrassed yet?

At age 57, Chesley Sullenberger hardly qualifies as a geezer in my book. But as commercial airline pilots go, the man who is being hailed for his flawless emergency landing of a U.S. Airways jet in the Hudson River is certainly getting up there in years.

The San Francisco Examiner summarized their local hero's extensive background:

If a Hollywood producer called central casting in search of an actor to play a pilot in a disaster movie, he would probably wind up with somebody who looked a lot like "Sully" Sullenberger: the silver hair of experience, the trimmed mustache of precision and the kind of twinkly, fatherly eyes that lend confidence when accompanying a friendly "Welcome aboard."
Sullenberger has decades of experience not only flying planes–first F-4's for the US Air Force and since 1980 all kinds of aircraft for US Airways–but of studying and teaching how to fly them more safely. His resume shows experience flying everything from a glider to a jumbo jet.

After both engines blew, Sullenberger reportedly told his 150 passengers to "brace for impact because we're going down" before maneuvering over a bridge and between skyscrapers to land the plane safely on the river. He walked the legnth of the sinking jet twice to verify that noone was aboard before exiting himself. The Wall Street Journal described Sullenberger's handling of what it called "one of the rarest and most technically challenging feats in commercial aviation":

Waiting for Tuesday

WAITING FOR TUESDAY....Ramesh Ponnuru thinks the Obama celebrations have gotten a wee bit out of hand:

At least one segment of the economy is booming: the market in Obama kitsch. The dedicated supporter of the incoming President need not content himself with a T shirt or bumper sticker. Also available are Obama coasters, lava lamps, jigsaw puzzles, mugs, skateboards, toy trains, CDs, DVDs and, of course, commemorative dinner plates....Marvel Comics is running a special Inaugural issue of Spider-Man.

....There is no recent analogue to the madness — er, hopefulness — that has seized Obama's fans. Some journalists have been comparing him with F.D.R. and even Lincoln. To find a similar episode of enthusiasm for an incoming President, you might have to go back to 1829....The new President, Andrew Jackson, was his era's version of change....An unprecedented number of Americans trekked to see him take the oath of office. His Inaugural was a massive party at the White House, one that got so out of hand that Jackson was forced to lodge elsewhere.

I'll grant there's something to this. But there's another side to it: this outpouring of excitement is based as much on relief that George Bush is finally leaving office as it is on optimism about Obama taking over. Obama is obviously a charismatic figure, but if he were succeeding Gerald Ford or Ronald Reagan or George Bush Sr., I don't think he'd be getting half the adulation he is. But Bush has been a lame duck for two long years now, and public weariness over his chronic and all-too-obvious ineptitude has reached depths seldom seen in a democracy. At this point, people would be relieved and hopeful if Mike Gravel were the one taking the oath of office on Tuesday.

It is both Obama's good fortune and his bad luck to be taking over from the most hapless president since Hoover. The t-shirts and coffee mugs and other nicknacks may be a little over the top, but they need to be because they're doing double duty: they're a celebration of George Bush's exit as much as they are of Obama's arrival.

What Bush Left Out of His Flat Farewell

George W. Bush gave his final speech to the nation on Thursday night. I skipped it to see my daughter, who has known no other president, perform with her school chorus. But when I later sat before my television to see how the speech was being punditized on the cable news shows, I was surprised. The water-landing of a US Airways flight in New York City dominated the coverage. There was little chatter--almost nothing--about Bush's farewell.

After watching the speech on the White House website, I understood why. It was flat and short. Bush said little of interest. He dwelled mostly on 9/11 and the so-called war on terror, once again (and for the last official time) characterizing the invasion of Iraq as part of his effort to take "the fight to the terrorists." He suggested that although the Iraq war was the subject of "legitimate debate," there "can be little debate about the results. America has gone more than seven years without another terrorist attack on our soil."

Was the nation's safety ensured because Bush invaded Iraq and did not finish the fight in Afghanistan? No doubt, he and his ever-dwindling band of defenders will continue to insist that it is so--just as a rooster might insist there is a connection between his crowing and the rising of the sun. And Bush defended himself for having been "willing to make the tough decisions"--as if making hard choices is the same as making wise ones.

Reaching Out

REACHING OUT....Roger Cohen got a bit of attention the other day for noting that Barack Obama's Middle East team has an awful lot of Jewish foreign policy heavyweights but no Arab-American or Iranian-American representatives. "They're knowledgeable, broad-minded and determined," he conceded. "Still, on the diversity front they fall short. On the change-you-can-believe-in front, they also leave something to be desired."

Today Laura Rozen reports that last week Obama had a quiet dinner at the Woodrow Wilson International Center for Scholars and met with a different group:

Among those who attended the off-the-record dinner: Iran scholar Haleh Esfandiari, Pakistan expert Ahmed Rashid (who had flown in from Lahore), Obama friend and foreign-policy advisor Samantha Power of Harvard University (who accompanied PEOTUS to the meeting), incoming White House chief of staff Rahm Emanuel, and a few others. Obama told the group, none of whom reached would discuss the details, that he already felt in the bubble and was trying his best to meet with independent experts.

This all comes through the good offices of Lee Hamilton, all-around Washington wise man and president of the Wilson Center. But why did the meeting have to be such a secret?

Via the SF Bay Guardian's Pixel Vision blog comes this charming little tidbit: what may very well be the first Obama joke made on Comedy Central. It was Bay Area comic W. Kamau Bell who picked the Senator out of almost-obscurity for a bit on black leaders in a stand-up routine back in 2005. He tells the Guardian that Comedy Central actually informed him that it was Obama's first mention by a stand-up comic on the network, so, you know, he's not just spinning. The jokes are, in fact, rather tame, imagining how Obama's name might strike people as a little "too black" if he were to run for president, but for that reason they're actually kind of cute—that was us, just a few years ago! Awww!

Maybe Washington is embracing bipartisanship. Or maybe Barack Obama is too popular to be opposed.

At an "economic recovery working group" held Thursday for members of the House Republican Caucus, the top two Republicans in the House, Minority Leader John Boehner and Whip Eric Cantor, both thanked President-elect Obama for reaching out to them for ideas to add to the stimulus. "Much to his credit, the President-elect has made clear he wants input on this effort not just from members of his own party, but from the Republican Party and from all Americans," said Boehner, sitting at the front of a large meeting room in the Cannon office building stuffed with congressmen, staff, guests, and members of the media. Mitt Romney, who delivered a short prepared statement, echoed their goodwill sentiments.

The rhetoric stood in stark contrast to the Republican opposition faced by former President Bill Clinton. Upon taking office in 1992, Clinton faced steadfast and united opposition from Republicans in Congress, one of several reasons why his presidency got off to a rocky start that included defeats on gays in the military and health care.

Indie 103.1 Goes Off the Air

Indie 103.1Broadcast radio just got a whole lot less interesting, as Los Angeles alternative station Indie 103.1 has announced it will stop broadcasting today, turning to a web-only format. A statement on the station's web site alluded to "changes in the radio industry and the way radio audiences are measured" which forces stations to "play too much Britney, Puffy and alternative music that is neither new nor cutting edge." I love you Indie, but I have to say, that's not exactly a new situation.

MoJo Video Contest: Goodbye, George W. Bush

If you had 30 seconds to say goodbye directly to Bush, what would you say?

We asked MoJo readers in December for their YouTube video responses to this question; today we'll start posting our favorites on motherjones.com.

You can still participate: Just put your 30-second (or so), PG-13 video on YouTube labeled "Mother Jones Goodbye Bush Video" and send us the link at:

mojobushvideo@gmail.com

All styles of video are welcome, from simply talking at the camera to fancier stuff. Bring it on, we say. Just don't forget to include your snail mail address when you email us if you want to win MoJo swag.

Below, the first MoJo Video community tribute to Bush's departure:

Americablog may not know who Daft Punk or Adam Freeland are, but you do, gentle Riff readers, since I post something about the former at least every week or two. But that doesn't make this video, called "Aer OBAMA," any less baffling. The musical accompaniment consists of French duo Daft Punk's "Aerodynamic" (from their 2001 album Discovery) remixed by UK breaks legend Adam Freeland to have a Speak-and-Spell-y Obama theme; the video is a jittery stop-motion story of the President-Elect jetting in from space to, I guess, dance around at a Daft Punk concert. Okay. Let's just stop for a second. I'd like to point something out. First, I'm a huge Obama supporter who blogs for the Mother Jones magazine. Also, I'm a DJ, and in my radio career I managed to actually interview both Daft Punk and Mr. Freeland, to say nothing of the multiple times I've seen them DJ and perform. I've got the political and the musical sides of this pretty much down, so I don't think it's a stretch to say that I, personally, am at the very center of the intended audience for this video. However, it makes absolutely no sense to me whatsoever, and after watching it, I feel vaguely disturbed, not, you know, "hopeful." Plus, isn't sampling a Speak-and-Spell kind of tired? On top of it all, the very idea that France's greatest robot exports would get remixed by a breaks superstar for a stop-motion video featuring a bunch of Kubrick toys all in tribute to an American president is making me feel like the very laws of physics are collapsing around us. Or maybe I've just had too much coffee?