Jezebel: Why is this happening now? I know Lehman has been showing signs of weakness for a while now — what was the trigger?
Katharine Parker: Similar to Bear Stearns, LEH had a great deal of exposure to sub-prime mortgage-backed securities. Because of this, they were forced to “write down” nearly $700M last year (devalue their assets), which included commercial property and mortgage exposure. One year later, the economy has not improved, housing prices have not gone back to “hey-day” levels, we have plunged further into a recession and the value of these assets had to be written down again by ~$7.8B, which is the largest net loss in the history of the bank. The bank still continues to have a large amount of exposure to these devalued securities. Wall Street, knowing the impact of this write-down and realizing that LEH would have severe liquidity issues forced the shares of LEH to plunge, resulting in the lack of capital to cover these losses.

J: Why did the fed agree to bail out Bear Stearns and not Lehman?
KP: Bear Stearns was the first to go down and they had a first mover advantage in this case. As this continues and the markets worsen, the Fed cannot continue to use tax payer’s dollars to support investment banks that made huge mistakes and that didn’t take the necessary corrective actions. They are addressing the moral hazard issue. John Thain at Merrill Lynch was smart. As soon as he realized that there were going to be liquidity problems, he began selling assets and raising capital. The government is helping the economy in other ways, i.e., making sure there is available liquidity for regional banks. If we continue to operate in an environment where the Fed bails out every investment bank that fails, we set ourselves up to take risk without consequence.

J:: I know the fed is considering lowering interest rates. Is this a bad call?
KP: No. Although some think a cut will signal panic (like we’re not already in a PANIC???), the facts remain clear: we are in a recession, fears of inflation have abated (due to lower commodity prices and labor costs) and financial stresses have intensified.

J: Beyond the employees at Lehman and the other struggling firms, how does it affect people in finance? And how will affect the rest of us — those who don't work in finance or industries directly dependent on finance?
KP: It affects pension funds, banks (domestic and international, all those that have exposure to the credit default swap market), hedge funds, private equity firms and every entity that has business ties to LEH. It affects institutions that have put their money in LEH because they will now have liquidity issues and it is an opportunity cost of their capital. The credit crunch will tighten, which will not only affect lending to buyout firms and companies for acquisitions, but it will affect the average joe who needs a loan to start his own small business. The fundamentals for entrepreneurship and risk are seriously threatened.

It affects EVERY industry, because we need capital to do business and continue operations. In the current environment, access to capital will continue to be difficult for companies that need even a minimal amount of leverage (debt) to operate. Without the growth of new businesses and the expansion or even continuation of existing businesses, we will inevitably enter a depression.

Consumer confidence overall has plummeted leading to less demand for consumer goods / durables and decreasing discretionary spending. The best companies will be those that sell the fundamentals, those that experience inelastic demand and / or have lower-priced substitutions.

The real estate markets will drop even further. With the flooding of unemployed professionals, supply will come on-stream and people will be forced to move out of high-cost urban centers. Additionally, the constrained amount of capital available to homebuyers will prevent any short-term recovery of real estate values to further fuel the economy. We are in a state of devastation across all areas of finance and business.

Last, but not least. This affects the families, friends and colleagues (at other institutions) of the employees at LEH. We are all saddened by the demise of a really talented group of people.

J:: Is there any hope that things will turn around in the near future, or should we start stuffing our 401K's under our mattresses? What can we do to keep ourselves financially solvent?
KP: Never put money under your mattress. Believe it or not, this is a losing proposition because you can always earn a modest rate of return in very liquid investments and your money will be worth less just by the basic rules of time value. Money markets are still safe. I am mostly in cash right now and have done better than most of my friends who have been trading in and out of their PAs (personal accounts) on a daily basis.

The only thing I am going to do with my money right now besides keeping substantial liquidity is invest in U.S. and European fixed income.

To stay financially solvent, make an investment in yourself and your career through education and hard work. I know it sounds old school, but it’s a great hedge. I don’t know what other advice to give when the world is blowing up.

Related: Wall St. In Worst Loss Since ’01 Despite Reassurances By Bush [NY Times]

MOE: Morning Megan! Nice weekend? Good thing I already know the answer to that question because there are like ninety things we need to discuss this morning, and like, none of them is George Carlin! We should maybe start with how they abandoned that whole election idea in Zimbabwe after Mugabe made the truly salient point in a speech that "How can a ballpoint pen fight with a gun?" And Mugabe has so much more than a gun, and he's been wielding them liberally to assassinate pretty much everyone with the combination of courage, integrity, idealism and purposefulness to openly oppose him.

MOE:

One such target was Better Chokururama, a 31-year-old activist with an appetite for bravado and fisticuffs, nicknamed “Texas” for both the cowboy hats he favored and the moniker of a torture camp from which he once escaped. He was abducted on April 19, and his legs crushed by his captors with boulders.
He said in an interview afterward, as he lay with both legs in casts, that he had told his captors “that beating people would not change anything because the opposition had beaten the governing party, ZANU-PF, in the elections.”
“They laughed loudly,” he said, “then threw me out of the moving vehicle.”

MEGAN: Ah, Zimbabwe. Is it sad, or accurate that I wonder if his statement was coerced? Because he only just got back to the country, and I can't imagine that Better Chokururama (or the 86 people killed, or the 10,000 who've been injured or the 200,000 refugees) would prefer not to cast their vote for Morgan Tsvangirai right now than wait for... something. Mugabe's death or whatever, not that his hand-picked successor will likely be any different.
MEGAN: It almost makes me wish I'd watched the end of Last King of Scotland only when the white dude fucked Amin's wife I was like, ok, seriously, I don't really need to see how this ends, it ain't gonna be good.

MOE: I'm not reading you re whether the statement was coerced. "Beating people will not change anything" or "They threw me out of the moving vehicle." The rest of his story, which I omitted, has him getting captured again with some other activists whose bodies showed up a few days later. But there's some other news that I kind of want to get to starting with how the chairman of the chief financial regulatory agency was about as worthless during the whole Bear Stearns debacle as…the old CEO of Bear Stearns! He missed most of the conference calls for birthday parties and went on vacation with his family. Guess that's what you get for expecting someone to police people making nine figure pay packages on a six figure salary!
MEGAN: Well, I meant whether Morgan Tsvangirai was coerced to drop out of the race. He got back from exile to avoid being coerced and dropped out within hours. It seems suspicious to me.

MOE: Ugh, what the FUCK is a former Orange County congressman Reaganite lose doing fucking regulating our financial sector…Oh Morgan Tsvangirai's statement that the election was a violent illegitimate sham of a political process and that he didn't want to start a civil war?
MEGAN: And re: Chris Cox, that's what you get for hiring a guy stupid enough to be a conservative Republican in New Jersey who wasn't exactly known for being hte most go-to Congressman ever to run a regulatory agency when his political ideology is based around smaller government i.e., not regulating. The only good thing about Chris Cox at the SEC is that he's not in Congress anymore.
MEGAN: And by Jersey, I meant California, sorry.
MEGAN: Well, I mean, they already have a civil war. They also put another top party leader in prison and charged him with treason, not that anyone's seen him since.

MOE: Yeah a fucking Reaganite knownothing donothing, God I fucking can't stand those ideological free marketeers whose understanding of the financial sector begins and ends at best with some P.J. O'Rourke essay.
MEGAN: Do people really still read O'Rourke?
MEGAN: Also, he was a Congressman. I'll bet he thought the SEC gig was a step up with fewer actual responsibilities because he has more staff to hold his soft, white hand and do everything for him. Why would he miss a birthday party for regulating anything? He never did in Congress I'll bet you.

MOE: But in the wake of the internet bubble which was followed by the corporate malfeasance fest which was followed by the options backdating debacle how the fuck does someone like Cox get that job? And can Obama make hay out of this? Because I'd rather that than make um oil out of corn but that's neither here/there!
MOE: If anything it makes Obama look less hot to the Brazilians:

“We made a series of mistakes by not adopting a sustainable energy policy, one of which is the subsidies for corn ethanol, which I warned in Iowa were going to destroy the market” and contribute to inflation, Mr. McCain said this month in an interview with a Brazilian newspaper, O Estado de São Paulo. “Besides, it is wrong,” he added, to tax Brazilian-made sugar cane ethanol, “which is much more efficient than corn ethanol.”

MEGAN: But it's the market! The market! Market failures will be regulated by the market and so regulation just damages the ability of the market to correct itself which it will do if you don't overregulate it and so Chris Cox is just doing his job by not regulating the market because regulating it would damage it!

MEGAN: Well, it's a tariff, not a tax, and it's not just on sugar-based ethanol it's on all imported ethanol but McCain's point remains valid. It's incredibly ineffecient and not environmentally sound policy to put tariffs on imported ethanol as a way of additionally subsidizing the construction of ethanol plants in the Midwest that can only be used for corn instead of whatever plant is cheapest. But that's US ag policy: those little family farmers that hardly exist anymore need your tax dollars, dammit, and if a few hundred million or more need to go to multinationals to make sure that a couple farmers won't sell out to them anyway, well, that's the trade-off we all accept to continue fetishizing the family farm.
MOE: Yeah and just to put a number on that…the last agriculture bill was $370 million, yes?

MEGAN: It was a lot, let's just go with that...
MOE: Because fucking agribusiness is so cash strapped right now the leading corn syrup supplier is only commanding a 31% premium over the market price of its shares Man, take a fucking look at this chart. If only I'd been pissed off about ethanol back when I was busy being pissed off about …oil!
MEGAN: Oh, well, ethanol was a better oxegenate for the environment than MTBE, and it seemed so environmentally friendly when the corn growers were all lobbying for it to be a corn-oxygenate back in the day. I mean, it's whole fucking purpose is to allow us to continue driving the exact same automobiles in the exact same way while marginally reducing emissions.
MOE: Anyway suffice it to say the corn industry hasmore than enough money left over to convince America the corn industry is good for America.

MEGAN: It is good, see, sweet delicious corn!
MEGAN: So yellow, so environment-y!
MOE: Ok check out this segue. So that last story was about the corn industry's public relations push to remind Americans that High Fructose Corn Syrup really isn't any worse for you than sugar…and guess what has HFCS in it? Ensure nutritional beverages…Al Qaeda logistics mastermind Abu Zubayda! Which is just one of the numerous fascinating facts we learned from yesterday's A1 Scott Shane story on the interrogation of Khalid Sheikh Mohammed. Did you read that? I highly recommend it.
9:30 AM
MEGAN: Ensure is so disgusting, it's supposed to be a supplement for old people and instead they're marketing it as a meal-replacement solution for healthy people and it's not. Talk about sick PR. But, no, I didn't read the story. I'm sure it's bad.
MOE: Okay, so let me guide you through the important parts of the story: I think the "little farmer guy" who turned in KLS in hopes of earning a quick $25 million and resettling himself and his family under a new identity in the US has to be my fave. Do you think there is some gated community tailored for, like, lottery winners and successful plaintiffs in massive malpractice suits where they could just sort of hide that guy away? Because that could be a fun movie starring Kal Penn.
MOE: But I guess mostly it's a profile of the lead interrogator Deuce Martinez, a wonky egghead analyst who skipped waterboarding classes and played "good cop"

MEGAN: I would snitch on anyone for $25 million, I'm just saying. Didn't we discuss a few weeks ago that the CrimeStoppers programs always end up paying out a ton more money when the economy sucks? I feel like we did.

MOE: Hahaha I really wish I remember what the fuck I read a few weeks ago but I'm just saying I don't think you could interrogate that out of me. Anyway, the whole thing was, well, KLS was waterboarded and subjected to other miscellaneous forms of torture a hundred times, but yeah aren't we sick of talking about the whole torture thing? More weird details! KLS wrote poetry to Deuce's wife! He was captured a few days after the informant sent a text message "I'm with KLS." He was originally transported to Thailand! (Or maybe that was Abu Zubayda) ... Thailand and the US are so close they didn't even have to tell the Thai PM. And Poland is "the 51st state." Really the whole "secret prisons" things seemed to be improving our relations with a lot of foreign countries before Dana Priest discovered them and Bush had them all flown back to Guantanamo.
MEGAN: The Poles just want to be part of the Visa Waiver Program and will do anything to get it. They're the only country in the EU at this point without it, if I recall correctly, but Congress keeps talking about and never passing a bill to let them into it and DHS has no idea.

MEGAN: So what did you miss most about the States besides good burgers? I was shocked in Europe in 1998 when I got served a horsemeat hamburger.
MOE: Well annoyingly I missed that you already covered the story of the rush to buy ships to drill for oil in the News Roundup, which is an interesting tale of the insatiable demand for deep-sea rigs, which cost half a billion dollars apiece, not that that's that's a big deal when, you know, just by way of example, Exxon's earnings before interest/taxes/depreciation/amortizaiton for the past 12 months (during which oil futures have probably averaged half today's price) was $77 billion…
MEGAN: And, hey, if we built them here (ha!) it could revitalize the dying shipbuilding industry.

MOE: South Korean shipyards are making most of these things, incidentally. Didn't we used to have shipyards in this country? I feel like they've all been turned into luxury condo developments and office parks. Where are the world's cruise ships and container ships built?

MEGAN: I think the only thing our few remaining shipyards build are navy vessels. I'm sure the cruise and container ships are all built in low-wage, non-union countries.
MOE: Yeah but that doesn't really describe South Korea and it definitely doesn't describe Singapore.
MEGAN: I have two words that do, though: industrial subsidies.
MOE: Hahaha yes and its evil cousin INDUSTRIAL POLICY.
MEGAN: We have an industrial policy! It's called reducing the capital gains tax! And R&D tax credits.

MEGAN: Well, we could discuss this article in which a former DeLay staffer bothers to notice that Republicans are losing in moderate states by being too Christian conservative and not Republican enough, and rejects calls for the party to get more conservative and praises Rahm Emanuel.
MEGAN: So, he's making friends.

MOE: Is it possible to be in an industry that manufactures single products that weigh thousands of tons, provide the backbone of billions of dollars of global commerce, are giant combustible moving targets for terrorism and pirates and cost $500 million apiece and are generally ordered in eleven or twelve figure (often government) contracts…and not involve the government? No. And you know, shipping isn't going anywhere and shipbuilding = jobs. So why does it seem like the EU and the US just, like, gave that industry to Asia while they took the aerospace stuff? Admittedly I don't fucking know anything.
9:10 AM
MEGAN: I think the margins aren't that great, subsidies aren't passing muster with the WTO and we'd rather spend our government money on bombs and guns than big ass ships.
MOE: See, that is just our problem. The "the margins aren't that great" problem. Well, guess what, Samsung Heavy just raised prices $100 million, so 25%, and they know they could charge more. So the margins are pretty damn good now, because you're not just going to see someone open a competing shipyard specializing in deep-sea vessels down in Bangalore. Beyond that, with all the government intervention, the opaque accounting of the contracts involved, blah blah blah, the margins can seem almost impossible to calculate. Whatever, "the margins aren't that great" is just code for "it's hard." It's hard because the capital expenditures are huge, the labor costs are huge, and the price of fucking up is huge. But the thing about those cyclical industries we're always trying to get out of: for all those reasons the jobs aren't going anywhere.

MEGAN: I don't know that it's just capital intensivity, though. We have plenty of capital intensive industries in this country (like: heavy equipment manufacturing, for whom I used to lobby) that has survived despite it being cyclical and all the rest. I'm going to guess that the reason military shipbuilding has survived while commercial hasn't is partially because the margins on the military contracts are better.
MOE: Hahaha today on Fox they're trying to get everyone to back down from the accepted conventional wisdom that lifting the ban on offshore drilling would take 7 years to have an impact by finding some nutjob who claims it will only take 2. Since so much sentiment is packed into oil prices I suppose he could be right, but then we'd be willing that the markets are somewhat irrational or something?
MOE: Oh god now they're talking about the laxative cake.
MEGAN: I mean, it would take that long to have an impact on supply, not that I think supply is the problem or that drilling offshore would have a huge impact on it. But I'm sure the markets would get all irrationally exuberant about it and prices would dip briefly and then continue on their steady upward path.
MOE: Ah, Obama opted out of public financing.
MEGAN: Because the system is broken! And he has lots of money.
MOE: I love how all the people behind this inane Drill Here. Drill Now. Pay Less campaign are citing polling data that tells us 64% of Americans "Expect It Will Lower Prices." I wonder what those 64% of Americans thought invading Iraq would do! Besides destroy Al Qaeda which was financed by Saddam Hussein who was the half-brother of Barack Hussein Obama's Indonesian father?? Speaking of which, Iraq oil contracts…did you read that story?

MEGAN: 64% of Americans expect it will lower prices because the news media keeps repeating the fact that John McCain and George Bush want to do it to lower prices.
MEGAN: I didn't read the Iraq oil contracts story but, let me guess... corruption?
MOE: Well, the winners of the "unusual" no-bid contracts were Exxon, Shell, BP, Total and Chevron, who won out over some 40 companies including Chinese and Russian ones, and while they only last a year they give those companies a head start international observers are headscratching etc. etc.

It is not clear what role the United States played in awarding the contracts; there are still American advisers to Iraq’s Oil Ministry.

MOE: Here the Iraq is calling it a "stop-gap measure" just to get people in and digging etc. etc.
MEGAN: Right. Because what Iraq needs is obviously more US and European-based multinationals exploring for oil that everyone knows is there. Talk about capital intensive industries.
MEGAN: Once they're in there, they'll stay and everyone knows it.
MOE: And all but Chevron were original partners in the Iraq Petroleum Company so it's really like a Restoration of sorts!
MEGAN: Aw, how sweet, it's like a family reunion! Only with more money!
MOE: Holy shit two Bear Stearns executives were just arrested at their homes for…knowingly bilking some investors out of $1.6 billion

MEGAN: Wow, the government cares about that now? Also, by the way, Congressman Maurice Hinchey (D-NY) hs called for the nationalization of U.S. oil refineries.
MOE: Right I'm reading about that. The "Drill Here Drill Now Pay Less" of the Left is apparently some outfit called Oil Change International, or at least they're spinning it that way. Remember that Crappy Hour a few glorious months back when we actually read long stories where we discussed the pros and cons of the global shift toward the nationalization of oil? Yeah I don't really remember either.
MEGAN: Do I remember Crappy Hour yesterday?

MEGAN: Hey, do you remember when we were all shocked that the Air Force mistakenly sent nuclear components instead of batteries to Taiwan? Well, it turns out that they're actually missing like 1,000 sensitive nuclear parts and that's why the dudes got fired. Hopefully we didn't ship those to, like, China or something.
MOE: That reminds me there was something in the paper about Taiwan President Ma Ying-jeou's new China policy which isn't really a new policy, it's just more like an attitude, because Ma is "mainland Chinese" meaning his first language is Mandarin and he came over with Chiang Kai-shek and the last president was a "native Taiwanese" meaning his first language was Hokkien and for most of his adult lifetime he was one of the majority of the population who had Japanese colony nostalgia (this nostalgia did not go over well with the mainland Chinese) .. anyhow but see, we're missing the real meme here, which is Larry Sinclair at the National Press Club.
MEGAN: I sooooo wanted to go, but I had to blog yesterday.
MEGAN: By the way, the HuffPo story on it is even more epic.

MEGAN: I love, too, that they get Clinton supporters on the record being all like, well, the crazy guy might be telling the truth, he really could've sucked Obama's dick.
MOE:

And pay Sinclair did — for the venue and its microphone, as well as for a kilted lawyer (with a suspended license) named Montgomery Blair Sibley, who informed those assembled that his preferences in dress were arrived at as a way to secure comfort for his unusually large sexual organs. "I don't know why men wear pants," he said with a poker face. "It's a function of male genitalia. If you're size normal or smaller, you're probably comfortable with [pants]. ... Those at the other end of the spectrum find them quite confining."
"I asked him to wear a suit and tie," Mr. Sinclair said ruefully. Then, he admitted to suffering from a brain tumor.

MOE: What?
MEGAN: I know, how sad are you that we weren't there? By the way, Sibley was the DC Madam's lawyer and is somehow connected to Larry Flynt and Sinclair was hinting around that he was going to have a special surprise guest so the media showed because they thought Larry Flynt would be there.

• Khalid Sheikh Mohammed thinks the courtroom artist drew his nose too wide. He lost a bunch of weight on the Guantanamo diet and totally turns out to be one of those secretly vain terror masterminds. [USA Today]
• This will shock you: Bob Dylan is voting for Barack Obama. Okay, I was kidding about the shocked part. [Times]
• There was this whole movement afoot to strongarm Barry into picking Hillary over some of his other bros but I think Hillary took a step back and said, "You know, this is bullshit, I don't care anymore, if he wants me he wants me," and although the hardest part about doing that is always the realization that he's probably gonna be all "It ain't me babe," I'm glad she did that. [NY Times]
• You just have to accept that in the Catholic Church shit takes awhile, and that if a priest is accused of pedophilia it might take a few years or even decades to remove him. Now, if he mocks Hillary Clinton and it ends up on YouTube, on the other hand, now that is when you gotta sever all ties right away. [Chicago Tribune] [The Root]
• Well this is a new one: alcohol cutting your risk of arthritis. I pretty much always thought gout was arthritis, and that you get that from wine, so this is pretty awesome news, not that I would even notice I had arthritis what with the shakes and whatnot. [BBC]

• What drives the economy and technological innovation and stuff? In some countries it's known "industrial policy." But in this country since the Cold War it's pretty much been porn, so I don't know what this guy is talking about. [Miller-McCune]
• The recession has driven Saks shoppers to Nordstrom, American Eagle shoppers to Aeropostale and everyone else to BJ's and Costco. [WSJ]
• Black people think Obama needs to remember the Sisterhood. This is not a particularly revolutionary essay but I'm linking to it because I read through it the whole way. [The Root]
• The other day I got an IM from my friend. "Could Lehman seriously become the next Bear Stearns just based on fear that it's the next Bear Stearns?" she asked. "Yup," I replied, and told the fear and greed aphorism. But apparently $60 billion worth of "tough to value" securities is another big reason. [Economist]
• Anyway, the big problem is there's a lot of greed, and not enough fear. Let me explain: we are the Fed, and bankers are dudes. We control the population supply, which seems like a pretty powerful position, but they have more time on their hands and thus much more elaborate ways of fucking with us to the point where we're basically their bitch. Anyway, this is called "moral hazard", which is almost as good a name for an okay first novel as The Undatable. [Economist] [WSJ]
• I'm thinking of changing the name of this feature, to something like "Narrow Thoughts" or "Profundities" or something. Deep thoughts, anyone?
• There is probably something totally awesome and life-affirming about being able to scale skyscrapers but, like…nah, I can't really see the point. [NYT]
• Oh yeah and you fucking dykes have sent me some pretty little sums to help get those feminists out of Basra! Why did I never wait tables on bitches like you? That's right, because we were all waiting tables together.

• Barry called his grandma a "typical white person" on WIP, a highly erudite Philadelphia AM radio station, and now typical white people everywhere are left to ponder this. [Wonkette]
  
• Scooter Libby was disbarred. it probably could have happened to a nicer guy, but not one who had written so explicitly about dog fucking! [Wash Post]
  
• "You're acting like it's our fault, and it's not." That's JP Morgan CEO Jamie Dimon to Bear Stearns shareholders. Such a mensch. [NY Mag]
  
• Tibet's whole "independence" idea is catching on with Taiwan just in time to affect their elections. (Wait a second, if Taiwan has its own elections, does it really need independence?) Sigh. [NYT]
  
• A radio interviewer asked Dick Cheney about his dead-bottoming in opinion polls, the squandering of a trillion dollars and the loss of 600,000 or so lives, and Dick Cheney was all like, "So?" No SRSLY. [Wash Post]

• New word alert! "Seduceries." As in, the "Air Jordan of seduceries." [NYT]
• Ugh, Barry and Hillary, if it's not some shit that happened five years ago, it's shit that happened fifteen years ago, and frankly, we are sick. Of this shit. [MSNBC]
• Jennifer Lopez never wore that eighteen-tier Vera Wang gown she ordered to marry Ben Affleck but I'm sure it will go into a museum one day because she is such a very important historical figure. [US Weekly]
• Steve-O blames his alcoholism on the fact that his parents put liquor on his pacifier when he cried on planes as a baby. And so do I. [Us Magazine]
• You know? I am all for regulating the shit out of Wall Street. But if John McCain can't keep Iran and Al Qaeda straight and that is his fucking area of expertise I can't say I'm exactly confident in the ability of career legislators to grasp this shit, and creating a whole new regulatory body when the SEC is underfunded as it is seems a little silly. But hey, whatever, go for it Barney Frank. [Politico]
• No do-over in Michigan. [NYT]

• Obama's slightly racist grandma is not dead, she just doesn't feel like commenting on his speech apparently. Here is a picture of her clutching her grandson for fear of being beaten up by darker-skinned black men. No just kidding, it's just a graduation picture. Sorry to drag you into this, Madelyn Dunham.
  
• ""As easy as it is for those of us who are white to look back and say 'That's a terrible statement!' ... I grew up in a very segregated South. And I think that you have to cut some slack — and I'm gonna be probably the only conservative in America who's gonna say something like this, but I'm just tellin' you — we've gotta cut some slack to people who grew up being called names..." Well Jesus F. Christ Mike Huckabee, if you didn't just win yourself some major days off from Purgatory right there. [Politico]
  
• John McCain keeps randomly linking Iran with Al Qaeda. I'd say he's trying to make this into a self-fulfilling prophecy like happened with Iraq and Al Qaeda so that he can make the 100 years thing its own self-fulfilling prophecy. But he could also be just old. [Huffington Post]
  
• Getting raped on Spring Break is just par for the course these days I guess, but getting raped and then hurled over a sixth-floor balcony is a bit much. [ABC News]
  
• Hillary's packed schedule as First Lady consisted mostly of philanthropic crap, ceremonial visits to foreign countries and REDACTED. Newspapers are still frantically scanning the newly released papers to find out more re our former "co-President" but one thing we do know... [Wash Post]

• One thing is clear: she was in the White House the whole day her husband messed up that intern's dress![ABC]
• A Hillary-supporting preacher estimates the bra size of Obama Girl at 54DD. [YouTube]
• An exclusive report from the front lines in Tibet describes a relatively restrained police reaction to the looting, which didn't go over so well with the ethnic Chinese minority. "One Han teenager ran into a monastery for refuge, prostrating himself before a red-robed Tibetan abbot who agreed to give him shelter." [Economist]
• How thoughtful of Chinese Premier Wen Jiabao to take time out from worrying about his country splitting apart to worry about Bear Stearns. And by "thoughtful" I am pretty sure I think "scary." [China Daily]
• Vote about what kind of liar you think the CEO of Bear Stearns is! [Dealbreaker]
• Michelle Gass a business visionary. First she invented a chocolatey smooth coffee beverage that could be sold at huge markups and used to addict the young and coffee-averse to strongly caffeinated beverages, then she added whipped cream and syrup on top, then she invented a caramel version, and then she invented a diet version. Surely there is no way of creating shareholder valued she could not pull off. [WSJ]
• Scientific sounding study says women should marry men who are fifteen years older than them. I would try to refute it, but so bad at science! [New Scientist]
• Obama is going to be on The View; yay! [ABC News]

From: bfdesigns@optonline.net [mailto:bfdesigns@optonline.net] Sent: Tuesday, March 18, 2008 10:22 AM To: bfdesigns@optonline.net Subject: Bear Stearns

From today's NY Times:

"There was talk Monday that with their life savings nearly depleted, some executives had moved quickly, putting their weekend homes on the market."

Regrettably, there will be much more of this happening, meaning that there will be an increase in sellers, a decrease in buyers.

Therefore it is more important than ever to make sure that your listings are in the best possible condition and if possible, offer added value in the way of furniture and furnishings.

BFdesigns will offer a discounted design/staging fee to anyone who has worked for Bear Stearns in an effort to mitigate whatever personal losses they may have sustained, and to help sell their houses for as much as possible.

Best regards,

Barbara Feldman

BFdesigns

http://www.bfdesignsinc.com

631-xxx-xxxx
631-xxx-xxxx

MEGAN: So, apparently, fidelity is just a big fat lie for everyone now.

MOE: It's biology!
Don't you love political sex scandal-pegged science stories?

MEGAN: Best pun by a scientist ever: "Infants have their infancy; adults, adultery."
But can we have a moment of silence for the end of my nascent crush on brand new NY Governor David Paterson?

MOE: Did you like the detail about how he took the mistress to Day's Inn, but he's also taken his wife to the same Day's Inn? Here she is. Isn't she a beauty? Though to be fair, I've stayed in places about four diamond ratings beneath that place in this town. And I have, like, 20/30 vision.

MEGAN: Like, ok, this I need to understand. Why if he and his wife live in Harlem, did he take her to the Days Inn to fuck her? Like, that's about 30 blocks from the Harlem line, right? So it's not even very far.

Like, I can totally see taking your mistress there, but your wife?

MOE: Yeah I lived in Harlem. That's like a two and a half mile walk and I lived up at 149th.
I bet the fuckin marriage counselor recommended it.

MEGAN: Oh, God, you're so totally right. Men are creatures of habit. He was probably like, I had a ton of great sex in that hotel, I'll just go back there! Rather than, like, shelling out for the W or something.
David, I have seen your wife. She deserved some high thread count sheets and strawberries and champagne from room service, I'm just sayin'.

MOE: I bet you can get "room service" from that hotel. It just comes from the local diner and they will totally mess up your order but as a plus they'll charge you $7.95, no matter what you got. I wonder if the Day's Inn is one of those hotels where there is a microwave in every room and free microwave popcorn with an advertisement for a Grey Line Bus tour on the packaging.

Soooooo...should we talk about Pastor KKKRazy?

MEGAN: Ah, The Reverend Not-Wright

MOE: The Reverend Wright wing conspiracy!
According to Fox News, he's sorta like Hitler.
Hitler did some great things1

MEGAN: Well, he does have a 'stache, I guess that seals it. I mean, except for the whole part where he's black and stuff.

MOE: He fixed the economy!

MEGAN: By starting a war!

MOE: Yeah well! Nicer guys have tried that and failed!

MEGAN: Well, several years into Hitler's war the economy in Germany tanked, too. Apparently, it's not that great for the economy unless you win and stuff.

MOE: So anyway, Obama is supposed to address the problem of the pastor who changed his life being some sort of Stalinist Che Guevara Islamofascist black supremacist firebrand and it's happening this morning at the Constitution Center in Philadelphia, which is only about two blocks away from my old apartment (sigh!) and I hope they air it on Fox News because, for one, the sound isn't working on any of my other news channels and two, I love Fox News. They just interviewed Mr. Feeley from Mr. Roger's Neighborhood. Can you IMAGINE naming a character on a kid's show "Mr. Feeley" now? No! It's unthinkable! Anyway, let's really get into the Pastor Wright thing. I feel like no one in the media has a real opinion about this guy because everyone has had at least one boyfriend who has made more ridiculous utterances and, you know, it's not like Obama touched dicks with this dude. On the other hand, he's supposed to be some sort of spiritual adviser. But, like, "spiritual adviser" — what do any of us know about that? So we're all circling around one another, trying to figure out whether anyone cares, whether this is going to totally sink his campaign or just fly over their heads and... and...I still don't know what I think.

In other news, Obama has a black Chinese math nerd brother by another mother. Maybe if the Dalai Lama steps down the Chinese government can make him the official reincarnated Dalai Lama.

MEGAN: Well, CNN keeps running the clip where he says that Hillary Clinton doesn't know what it's like to be a black man in a country run by rich white people and I'm sort of failing to see that as being controversial. Are we arguing that the country isn't run by rich white people? The median income in this country is less than $45,000 a year and Congressmembers make more than $150,000 and the President makes more than $200,000.
Well, but the Dalai Lama would still be the Dalai Lama, only he just wouldn't be the political-leader-in-exile anymore.
MOE: No but he's apparently going to step down from his exiled title if the violence doesn't stop.
I'm not sure what the succession plan is but I would really love it if it involved an Obama.

MEGAN: That would be too much for me to handle in the morning.
MOE: I do love how Roger Cohen paints the picture of this guy as a "potential problem" for Obama. Because the Clinton clan is full of such upstanding citizens.

MEGAN: Lovely people, even.

MOE: Anyway, so...what is the worst thing this guy Wright has said anyway? "God Damn America" or that the government created AIDS? Did you ever date one of those guys who told you crack cocaine was invented in a CIA lab? Because I have. And this was before Wikipedia, so I finally had to Nexis the fucking story and all the ensuing retractions to shut him the hell up. Not that I really felt like defending the CIA! But the thing is, it took a lot of time for me to get it up to want to refute any of the retarded things he said, even though I loved him, and I sort of feel like that must be Obama's thing, like...blah blah blah. Anyway, as it turns out it doesn't seem like Obama spent that much time in church anyway.

MEGAN: Oh, but he used to say he went every week! I can't say that I dated a guy who thought crack cocaine was a CIA plot against white people (although, hello? FBI would've made more sense conspiracy theorists) but I've definitely heard it and it totally still holds sway among many people in this country. And, hell, fucking South African President Thabo Mbeki thinks we hatched AIDS to keep Africans from breeding and shit, so, you know, apparently it's pretty widely believed that we're coordinated and shit.

MOE: Oh man I just rewound my Fox and they were interviewing that black republican ex Lt Governor of Maryland and he was talking about how a "spiritual adviser" is a really important force in your life, he knows because he used to be in a monastery. Um, was Barack Obama in a monastery? Because I don't remember that part. It's like his Chinese African brother! (Oh my god, Chinese African! Do you think he is involved in Sudanese blood oil??) Anyway, whatevs! I'm about to change the subject. Can you handle this?
I actually read almost the entire account of the Week That Shook Wall Street and I have a takeaway.
MEGAN: Wow, no wonder we got started late. That's longer than Crappy Hour itself!

MOE:

Chief Executive Officer Alan Schwartz was out of pocket. Although Bear Stearns had been struggling with mortgage-related losses and problems in its wealth-management unit, Mr. Schwartz was hosting a Bear Stearns media conference in Palm Beach, Fla. On Wednesday morning, he left the conference briefly to do an interview with CNBC in an effort to deflect rumors about liquidity issues at the firm.

Steve Black, co-head of J.P. Morgan's investment bank, returned early from vacation in the Caribbean, spearheading the bank's efforts with his J.P. Morgan counterpart in London, Bill Winters. Mr. Black's role was pivotal. He was a longtime associate of J.P. Morgan Chief Executive James Dimon. And Mr. Black had a long relationship with Bear's CEO, Mr. Schwartz, dating back to the 1970s, when the two were fraternity brothers at Duke University.

At 5 a.m. Friday, Mr. Geithner, Mr. Paulson and Federal Reserve Chairman Ben Bernanke, calling in from home, joined a conference call to debate whether Bear should be allowed to fail or whether the Fed should lend it enough money to get through the weekend. At 7 a.m. they settled on the lifeline option.

• Barack Obama has always been black, but since he was raised by a white mom in Hawaii and Jakarta he did not always have much in the way of a black community, and so when he moved to Chicago he started attending this black church where the pastor says the sort of hyperbolic shit pastors often say, only the media doesn't really cover the hyperbolic shit that gets said at black churches the way they cover the shit that gets said at white churches because black people aren't constantly trying to equate abortion with the Holocaust or replace the Constitution with the Ten Commandments, maybe because they just aren't as bossy as white religious people because they've never been in a position of societal dominance, which is actually something of which they are both aware and not exactly stoked about, and when you are a preacher you kinda play to that. So, like, Obama is going to try and address all of this in a speech tomorrow night. [CNN]
  
• And good luck Barry: your pastor's approval rating roughly on par with Al Qaeda's. [Rasmussen]
  
• But the church people love him! [ABC News]
  
• A leading pimp says Eliot Spitzer must have been a sex addict if he had to pay for any of his sex. [NY Mag]

• Nancy Pelosi hearts Obama anyway. [NY Observer]
• Maybe she has sex dreams about him? [Slate]
• "Roger Magro thought his wife Crystal was 'full of baloney' when she told him she and her co-workers had purchased a Powerball ticket worth more than $276 million...Magro said his wife plans to continue working in the tax office, but he resigned Monday from his job as a sheriff's deputy." [Pittsburgh Channel]
• Was a Republican DOJ conspiracy behind the Spitzer sting? Probably. Does that make the scandal any less fun? Hard to say.
• You know what? I am so happy the market rewarded JP Morgan with a huge stock market gain today for its courageous decision to buy Bear Stearns for $2 a share in an unprecedented transaction practically guaranteed by the government to make them shitloads of money. Yes, that is what the financial sector needed today. All that and the Dow rose twenty points. [WSJ]

MOE: Hey hi what's up shit is pretty fucked huh.
MEGAN: It makes me a little glad I never leave my house. Hooray for blogoraphobia.
MOE: Okay, first things first: there are violent protests in Tibet, and China has to quell them in a way that doesn't make Stephen Spielberg look good, and now the protests have spread to other provinces.
Tibet has long been a pretty sweet separatist province to have, what with the exiled leader advocating nonviolence and spending most of his time with Beastie Boys etc. etc.
MEGAN: And getting to meet practically every head of state in the world, albeit unofficially...
Except for, obviously, those countries in Africa rapidly becoming Chinese client states.
MOE: China has a whole other separatist province called Xinjiang and no one pays attention to those guys. Because they're angry Muslims. Hey Sudanese Islamofascists? How's about some CONSISTENCY??
MEGAN: Wait, didn't we care about that for like 2 seconds last week when Al Qaeda did a video of training there? I didn't realize that we'd forgotten to care about that.
MOE: Hey, look, a story about a recent thwarted hijacking attempt by a Uighur Al Qaeda girlbomber! I think the Chinese government thinks you should care again.
MEGAN: Oh, thanks nameless Chinese propagandists newswriters!
Anyway, so, how soon until they start beating monks in the streets and we issue some sort of vague milquetoast protest about it that in no way compares to our reaction to the monk beatings in Myanmar? Or did I blink and miss it?
MOE: Oooooh, think Laura Bush drop her cookie sheet again and get on the phone with Hu Jintao?
MEGAN: Maybe she could send him cookies? I'll bet some chocolate chip ones could go a long way toward repairing US-China relations
MOE: I
Yikes, that disappeared.
MOE: Okay yeah so, it's very tricky what is happening with Tibet, but either way, it led to an incredibly cerebral discussion of Bjork on the comments over the weekend, did you see? My father was impressed with Bjork's timing on that one, but perhaps if he knew Bjork's tears cure cancer (too bad she never cries) he wouldn't be so surprised. Interestingly, this week Taiwan is holding elections, and he's headed out there. Taiwan is interesting because, you know, they really have it best, as "splittist" provinces go. Elections, democracy, a decent standard of living, no painful shared history of, like, cannibalism or Cultural Revolution or any such thing. The pro-China Kuomintang party is supposed to win though.
MEGAN: Interesting. Wait, now, Taiwan's pro-China even though China considers them a rogue provice? Taiwanese politics are so hard to understand. Is it possible that China's financing the Kuomintang or something
MOE: hahahaha well China's financing the entire economy, sort of like ours. The thing is that the Kuomintang came from mainland China and fled to Taiwan, with numerous palace treasures and such, in 1949. There they found a happy population of ethnic Chinese who spoke another dialect and also, Japanese because the Japanese colonized it, and proceeded to pretty much subjugate them until the seventies, when a democracy movement began burgeoning and our relations with the mainland made it a lot easier for Jimmy Carter to pressure the Kuomintang to treat the "ethnic Taiwanese" better. Somewhere in there Chiang Kai-shek died, his much nicer son Chiang Chingguo took over, and a kind of slow, steady democratization took hold. The thing is that most Chinese, no matter what dialect they speak, are pretty pragmatic and rational and no one wants war with China, but while they have us around a lot of them also don't feel like taking shit from China. On the other hand, of course, Taiwanese control most of the factories in China. It's complicated.
MEGAN: [Awkward segue alert] As complicated at Dina Mattos McGreevey's sex life?
MOE: Hey, good call. That conversation was certainly venturing into prurient and meaningless territory so I'm glad we can now focus our attention on The McGreevey-driver threesomes. I think my favorite part is that they were described as "intense" "hard-core consensual sex orgies".That sounds so...cardio! It's a good thing too I guess if they all started with get-togethers at T.G.I.Fridays.
MEGAN: Like, taking a date to TGI Fridays is so Jersey and let us not pretend that it is not because it is. Also, their intense 3-way orgies (which, can an orgy really only involve 3 people?) always involved one of the guys jacking off while one of them fucked Dina.
But what's sort of really interesting to me is that in earlier publications, he's said not to have started working for McGreevey until 2000, which throws off his timeline I think, and that Dina's divorce lawyer wants financial records about financial records and correspondence with McGreevey's rich boyfriend. Also, apparently, they're due in court soon to litigate over the money McGreevey is hiding from Matos so that he doesn't have to pay as much in child support and alimony. Fucker. Like, aren't gay men supposed to be the good ones?
MOE: Um yeah they shared a room at the TRUMP PLAZA in Atlantic City. Here is what I have to say about that; okay, there is a hotel room shortage in Atlantic City, sure. But if if you are the governor you get the "casino" rate and that is seventy bucks. "It became almost laughable — I would never have my own hotel room," Pedersen said. Okay, so a few things: what does this mean about Silda Spitzer? How long has the New York Post been sitting on this story just waiting for everyone to remember that they once for a brief moment cared about Dina Matos McGreevey?
MEGAN: I'm personally hoping that Silda's sunning herself on a beach somewhere foreign and being served tropical alcoholic beverages by inappropriately young but attractive cabana boys.
And that she and Eliot didn't fuck around with 3rd parties because it's one thing imagining Gay McGreevey jerking off and another entirely grosser thing to have to picture Eliot Spitzer in a wide variety of sexual situations
Excuse my while I go wash my brain out with bleach. Maybe you could talk about the financial markets and i'll try to think of something to say that makes it sound like my summer interning for the Bank of New York wasn't a complete waste of time for everyone involved?
MOE: Okay, well, the government is going to have to print money to bail out the banks because they made the financial instruments so complicated no one has a fucking clue how much, if anything, they're worth, and everything is so interconnected that it could all collapse like in the Asian Financial Crisis unless the Fed steps in and offers a quarter trillion dollars to save it. Or something.
Here it is explained by someone named Dave Wilson who is on some email list that my ex-boyfriend is on.

There's currently a kind of cascade failure happening throughout the financial community, spurred
both by extraordinary levels of borrowed money that was used to speculate (it's like those mortgages that were issued for 110% of the value of the house, except that type of "investment" has, unbeknownst to most people, actually been taking place in pretty much every investment sphere you can think of); if those speculative investments go South, investors have to come up with lots of cash, fast, (this is known as a margin call) meaning they wind up selling everything they own to raise cash, which then depresses the value of the stuff the investors had to sell (as well as similar stuff owned by others) since suddenly there's a lack of scarcity combined with a suspicion on the part of would-be buyers that perhaps this stuff is being dumped for reasons other than a need for quick cash...

Last fall, the former Treasury secretary confessed to Fortune magazine that until the mortgage storms broke over his head in the summer of 2007, he was unfamiliar with the kinds of complex mortgage structures with which Citi's own balance sheet was packed. Almost certainly, the gulf between competence and compensation on Wall Street has never been wider.

"Why not set an example of Bear Stearns, the guys who have this record of dog-eat-dog, we're brass knuckles, we're tough?" asked William A. Fleckenstein, president of Fleckenstein Capital in Issaquah, Wash., and co-author with Fred Sheehan of "Greenspan's Bubbles: The Age of Ignorance at the Federal Reserve." "This is the perfect time to set an example, but they are not interested in setting an example. We are Bailout Nation."

• It is not the best time to visit the capital of Tibet. A peaceful monk-dominated demonstration gave way to angry looting/arson/chaos/etc. over the past few days, and now the streets of Lhasa are full of tanks and teargas and fires. Probably a hundred have died, which makes this worse than Tiananmen kinda. It's a good thing our government is so unpreoccupied and globally respected right now so we will be able to respond in a way that is decisive and credible and hopefully ends the violence soon! [NYT]
  
• China is blaming the Dalai Lama's "clique" for "masterminding" the riots from his exile in India. He's urging his clique not to resort to violence. [Reuters]
  
• Oh yeah, and China is also blaming Bjork. [NME]
  
• Our government gets to spy on us easier now, though not as easy as the Senate would have it. [Wash Post]
  
• Oh, yeah, and now the fuckers who brought civilization A Shot At Love With Tila Tequila care about democracy? [IAmTRex]
  
• Hugo Chavez did not declare war on Colombia. [Bloomberg]

• Bear Stearns is fucked. You care because: the whole time the investment bank was figuring out what to do with its massive holdings of subprime mortgages everyone was suddenly getting nervous about, the CEO was getting toked up, and also because, after their credit rating got downgraded today it borrowed $3 billion from JP Morgan, which in turn borrowed $3 billion from the Fed under some "Depression Era Law" or something like that, I really don't know Marin79 because I've been watching footage of whores all week, but the Fed thing is just the sort of unusual desperate measure that makes all those pricks on Wall Street feel really vulnerable all of a sudden, so...keep that in mind if you're looking to hate fuck. [WSJ]
• And that potsmoking CEO...is at a bridge tournament! [WSJ]
• "And ... And ... And! God! Has got! To be sick! Of this shit!" More on Obama's crazy but sometimes enjoyable pastor. [Fox News]
• ""The love of money as a possession...will be recognized for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease." Hey look! Keynes was right about a lot of things, but not that. [Project Syndicate]
• Americans living in Asia are voting in huge margins for the candidate who spent his childhood in Asia, writes an American who lives in Asia! Identity politics: not just for poor folks and middle aged women! [WSJ]
• Chris Rock and Anthony Pellicano. Honestly, we didn't talk about this because I don't think Chris Rock is a rapist. Do you? Seriously. So anyway, he hired Pellicano. Not the classiest move, but whatever, he was afraid. There are these tapes. Pellicano is scum. The lady seems like she gives real rape victims a bad name. Also she wears white. I dunno, you discuss. [Gawker]
• Ashley Alexandra Dupre played Sandy in Grease. At some point, you won't care anymore. [Huffington Post]

• Read this new book on how comic book McCarthyism of the 1940s. [NYT]
• Find out more about the five year freeze on funding to the National Institute of Health I've been hearing so much about from doctors and scientists who, for whatever reason, do not trust the private sector to cough up money to research all the ways you might save lives. [Broken Pipeline]
• Borrow this book from the roommate I convinced to buy it and then maybe...
• FIND AN ACCOUNTANT OMG. Um, maybe I should actually do that one! Have a good weekend guys!
• Think of a funny comment re Bjork/Paul Janka/Ben Bernanke that will show up marin79 and also, "woodland creatures."