“Close your eyes and see green"

Reverend Ike, Who Preached Riches, Dies at 74


The Rev. Frederick J. Eikerenkoetter II, the flamboyant minister better known as the Reverend Ike, who preached the blessings of material prosperity to a large congregation in New York and to television and radio audiences nationwide, died Tuesday in Los Angeles, where he had lived since 2007. He was 74.


“Close your eyes and see green,” Reverend Ike would tell his 5,000 parishioners from a red-carpeted stage at the former Loew’s film palace on 175th Street in Washington Heights, the headquarters of his United Church Science of Living Institute. “Money up to your armpits, a roomful of money and there you are, just tossing around in it like a swimming pool.”

His exhortation, as quoted by The New York Times in 1972, was a vivid sampling of Reverend Ike’s philosophy, which he variously called “Prosperity Now,” “positive self-image psychology” or just plain “Thinkonomics.”

The philosophy held that St. Paul was wrong; that the root of all evil is not the love of money, but rather the lack of it. It was a message that challenged traditional Christian messages about finding salvation through love and the intercession of the divine. The way to prosper and be well, Reverend Ike preached, was to forget about pie in the sky by and by and to look instead within oneself for divine power.

“This is the do-it-yourself church,” he proclaimed. “The only savior in this philosophy is God in you.”

One person who benefited from this philosophy of self-empowerment was Reverend Ike himself. Along with Jim Bakker, Jimmy Swaggart and Pat Robertson, he was one of the first evangelists to grasp the power of television. At the height of his success, in the 1970s, he reached an audience estimated at 2.5 million.

In return for spiritual inspiration, he requested cash donations from his parishioners, from his television and radio audiences, and from the recipients of his extensive mailings — preferably in paper currency, not coins. (“Change makes your minister nervous in the service,” he would tell his congregation.)

He would also, in return, mail his contributors a prayer cloth.

His critics saw the donations as the entire point of his ministry, calling him a con man misleading his flock. His defenders, while acknowledging his love of luxury, argued that his church had roots both in the traditions of African-American evangelism and in the philosophies of mind over matter.

Comment: Prototypical Prosperty Preacher dies. Much more info here.

Friends of Angelo's records all "packed and ready to go"

Update on Friends of Angelo (the sweetheart VIP mortgage deals that average folk like you and I cannot get!!)

Comment: No surprise here:

Democrat resists subpoenaing VIP mortgage records


House Democrats have declined to subpoena available records that might reveal whether other members of Congress got discounted VIP mortgages from subprime lender Countrywide Financial Corp. similar to the sweetheart deals given Democratic Sens. Chris Dodd and Kent Conrad.

Republicans say they are willing to risk that the records now held by Bank of America may show that GOP lawmakers were also "friends of Angelo" who got preferential terms on personal mortgages at the behest of then-Countrywide CEO Angelo Mozilo.

Countrywide, after losing billions of dollars on defaulted subprime loans that triggered last year's financial crisis and the consequent recession, was taken over by Bank of America a year ago.

Rep. Edolphus Towns, D-N.Y., chairman of the House Oversight and Government Reform Committee, said he has other work to do on the causes of and fixes for the financial crisis and will not interfere with other investigations of the VIP loans.

Towns' committee in recent months has focused on how much pressure the Federal Reserve and former Treasury Secretary Henry Paulson put on Bank of America to take over brokerage giant Merrill Lynch, another financial company with losses in the billions of dollars.

The senior Republican on Towns' committee, California Rep. Darrell Issa, has been trying for months to get Towns to subpoena Bank of America for Countrywide's records. He said in an interview with The Associated Press that he asked Towns again this week to issue the subpoena.

Any subpoena must be issued by the committee's chairman. But because Democrats control Congress, there are no Republican committee chairmen. Speaker Nancy Pelosi said through a spokesman Thursday that neither she nor her staff discussed the subpoena with Towns.

Daniel Frahm, a Bank of America spokesman, said the bank is ready to turn over the Countrywide VIP documents if it receives a subpoena. The bank's lawyer sent Issa the same message in a June letter.

"They have it packed and ready to go," Issa said in the interview.

Comment: Records won't be sought because will embarrass Dems!

Demonizing business

Pelosi lashes out against insurance companies


U.S. House of Representatives Speaker Nancy Pelosi on Thursday ramped up her criticism of insurance companies, accusing them of unethical behavior and working to kill a plan to create a new government-run health plan.

"It's almost immoral what they are doing," Pelosi said to reporters, referring to insurance companies. "Of course they've been immoral all along in how they have treated the people that they insure," she said, adding, "They are the villains. They have been part of the problem in a major way. They are doing everything in their power to stop a public option from happening."

Comment: This is a frequent Democratic tactic. Blame the banks, blame the auto makers, blame white Americans, blame Republicans, etc. It is a favorite Barney Frank and Nancy Pelosi tactic.

Bud Light, Red Stripe, Blue Moon

A Cold One at The White House


Yes, folks, the moment you’ve all been waiting for has arrived. The White House has revealed which beers will be consumed during President Obama’s mediation session tonight with Henry Louis Gates, Jr. of Harvard University and Sgt. James Crowley, the Cambridge police officer who arrested him.

The President will drink Bud Light. Professor Gates has apparently opted for Red Stripe, the Jamaican lager, while Sergeant Crowley has selected Blue Moon, a Belgian-style wheat beer.

Comment: Doesn't the President have more important things to do! Updated:

'Beer summit' distracts Obama from health care

Obama convened the "beer summit" after calling both men last week in an attempt to defuse the political fallout from his comment at a news conference that police had "acted stupidly" in arresting Gates at his home after responding to a call from a passer-by about a possible break-in

He invited both men over for beer, to be served at a picnic table near his Oval Office if thunderstorms forecast for Thursday hold off.

Gates, who is black, was taken into custody by Crowley, who is white, after Crowley accused him of disorderly conduct for protesting the policeman's actions. The charges were later dropped.

The comments by Obama, the nation's first black president, inflamed matters further, and the subsequent outcry and constant commentary reached such a pitch that he was forced to acknowledge that he could have been more diplomatic with his words.

"Over the last two days as we've discussed this issue, I don't know if you've noticed, but nobody has been paying much attention to health care," Obama lamented to reporters last Friday.

Comment: Maybe we would all be better off if Obama turned the White House lawn into a German beer garden!

"time is not the enemy & neither are the Republicans"

Mitt Romney: Mr. President, what's the rush?


Health care cannot be handled the same way as the stimulus and cap-and-trade bills. With those, the president stuck to the old style of lawmaking: He threw in every special favor imaginable, ground it up and crammed it through a partisan Democratic Congress. Health care is simply too important to the economy, to employment and to America's families to be larded up and rushed through on an artificial deadline.

Comment: What is needed in health care reform:

  • Tort reform
  • Transparency (that's how free markets work)
  • Choices. (Eg. I do not need Psychiatry coverage! Why should have to pay for it!)
  • Portability
  • Incentives (to be healthy)

About 2012: Mitt is the Republican best posed to be the GOP candidate and win!

Missing from the "Beer Summit"

Will White House beer help nation chill on race?


An older woman approached Whalen, worried that she'd just witnessed two men breaking into a home. That's when Whalen, a first-generation Portuguese-American, called 911 from her cell phone -- alerting police to 17 Ware St. -- the home, as it turns out, of renowned Harvard professor Henry Louis Gates Jr.

Whalen's call -- now clearly the well-intentioned act of a passerby -- ignited a firestorm over race and police relations, a national debate that went all the way to the White House. It was a call she says she never expected to be "analyzed by an entire nation."

Gates was arrested by Cambridge police Sgt. James Crowley for disorderly conduct, a charge that was later dropped. Exactly what happened inside Gates' home may never be known, but it seems clear that the key players in this saga brought their own personal history with race to the moment. That was true of Gates and Crowley, as well as the nation's first African-American president.

All three will meet for a beer today at the White House to help chill the furor over Gates' arrest and, in Obama's words, try to turn the events of the past two weeks into a "teachable moment."

It's a bit ironic, said Whalen's attorney Wendy Murphy, that the three people who "reacted badly" will sit down together while the "one person who did not overreact" will be at work Thursday. "Maybe it's a guy thing," Murphy said, adding of Whalen: "She doesn't like beer anyway."

3 amigos get suds; she gets scorn


She will not get a beer with the boys. Lucia Whalen has not been invited to the White House.

The three amigos — Henry Louis Gates Jr., James Crowley and Barack Obama — will throw back some cold ones on the South Lawn on Thursday as the whole world watches this “teachable moment” on race in America.

And they deserve a drink. They have been through so much! How they have suffered!

In reality, only Whalen, the woman who called 911 on July 16 to report a possible break-in at the Cambridge, Mass., home of Gates, acted responsibly from beginning to end in this whole affair.

And she doesn’t even get a free drink out of it.

Instead, she has been reviled. She has been scorned. She was pilloried in the mainstream media and abused in the blogosphere. “Whites like Lucia have bigotry programmed into them,” one Cambridge blogger wrote. “Her description of the two black males is just so, so bigoted. Not only that, it could have led to people getting shot unnecessarily.”

Facts? Truth? We don’t need no stinkin’ facts! And the truth is too slow! In this age of instant communication, we must publish conclusions first — no matter how hurtful or how dangerous — and then let the truth catch up.

In fact, Whalen did not describe “two black males” breaking into a house. She volunteered no racial description at all when she called. (When she was then asked by a police dispatcher to describe the two men, Whalen said “one looked kind of Hispanic, but I’m not really sure.”) Whalen didn’t even say the two men were trying to break into the house.

Here, from the actual 911 tape, is what she said: “I don’t know what’s happening. I don’t know if they live there and they just had a hard time with their key, but I did notice they had to use their shoulders to try to barge in.”

It was a proper call. It was the call of a good and responsible citizen. And the police showed up, which is what they are supposed to do.

After that, guys began behaving badly.

You can make a pretty good case that Gates, Crowley and Obama all acted hastily and regrettably. Gates, returning home with a head cold after a 20-hour flight from China, reacted angrily to being confronted in his own house by a police officer. Crowley overreacted by arresting Gates on a bogus disorderly conduct charge. And Obama, who had the most time to think about his actions and is, after all, the president of the United States, admitted he lacked all the facts but, nonetheless, publicly accused the Cambridge police of acting “stupidly.”

So who is the one person who acted properly in all of this? Lucia Whalen.

Her reward? “People called me racist and said I caused all the turmoil that flowed, and some even said threatening things that made me fear for my safety,” Whalen said Wednesday.

Comment: The President acted unwisely to involve himself in this! Whalen was herself a target of racism and continues to be scorned!


Blue Dogs both "bite" and "bark"

'Blue Dog' Democrats Hold Health-Care Overhaul at Bay


Blue Dogs have emerged as pivotal players in the national health-care debate, a swing group that the White House is wooing more intensely to keep its initiative on track. The group, which accounts for about one-fifth of House Democrats, wants to make sure the health-care plan isn't too expensive for small businesses and hopes to keep the government's costs down. They don't want private health insurers to compete with a federally funded plan, and seek to reduce the share of lower-income Americans who would receive health-care subsidies.

Following a week in which the Blue Dogs challenged several key planks of the Democratic plan, most lawmakers agree a delay in the House legislation is likely. The House is set to adjourn next week, and unless lawmakers decide to stay in Washington for a few extra days, a decision would be put off until after Labor Day.

The Blue Dogs' clout arises from simple math -- they account for 52 seats in the House, enough to topple any law in cooperation with Republicans -- and some irony. Hungry to retake Congress, Democrats actively recruited moderate candidates in conservative districts. The strategy was strikingly successful in recapturing the majority. But now the Democrats are learning the price as they try to enact their agenda.

The power of the Blue Dogs was on full display Friday, when they humiliated California Rep. Henry Waxman, one of the most liberal Democrats on Capitol Hill. Late last year, Rep. Waxman had shown his power by gaining control of the Energy and Commerce Committee, wresting the chairman's seat from Congress's most senior Democrat. On Friday morning, Rep. Waxman went before cameras and fired a blast at seven Blue Dogs on his committee who have blocked the health legislation from proceeding to the House floor for vote.

The chairman said he was done negotiating with them. "We're not going to let them empower the Republicans to control the committee," he said.

Hours later, the Beverly Hills Democrat was back in front of reporters with one of the seven, Rep. Mike Ross of Arkansas. "Our colleagues have pulled us both back and said let's all take a deep breath, that nothing is irreconcilable," the chairman said.

The Blue Dog Coalition came together after the Democrats' loss of Congress in 1994. Some representatives, mainly Southerners, believed the party's losses stemmed from a drift to the left. They decided to take a name that played on the old term "yellow dog," Southern Democrats who were ostensibly so loyal they would vote for a yellow dog if it ran on the party's ticket.

One of the founding members, former Rep. Billy Tauzin of Louisiana, had paintings of blue dogs in his office by artist George Rodrigue, prompting some of the roughly 20 lawmakers to joke that they were yellow dogs who'd been "choked blue" by the party's liberals. Rep. Tauzin later switched to the Republican Party.

The Blue Dogs' numbers expanded with the election of lawmakers such as North Carolina Rep. Heath Shuler, an ex-Washington Redskins quarterback who opposes abortion, gun control and gay marriage. Democrats begged him to run for Congress in 2006, believing he could win his rural, religious district. The coalition retains a Southern sensibility but many of its members now come from other areas. Nineteen members, called "Blue Pups," won seats in the past two elections.

Beyond health care, the Blue Dogs have helped delay a climate-change bill and block legislation that would make it easier for unions to organize.

That frustrates liberals, who say the Democratic Party's victory last November, including a 256-178 majority in the House, gives it a once-in-a-generation chance to enact a liberal agenda.

Comment: More on Heath Shuler. Minnesota Congressman Collin Peterson (MN 7th distrist) is another Blue Dog.


VIP Mortgages: "friends of Angelo"

Dodd, Conrad told deals were sweetened


Despite their denials, influential Democratic Sens. Kent Conrad and Chris Dodd were told from the start they were getting VIP mortgage discounts from one of the nation's largest lenders, the official who handled their loans has told Congress in secret testimony.

Both senators have said that at the time the mortgages were being written they didn't know they were getting unique deals from Countrywide Financial Corp., the company that went on to lose billions of dollars on home loans to credit-strapped borrowers. Dodd still maintains he got no preferential treatment.

Dodd got two Countrywide mortgages in 2003, refinancing his home in Connecticut and another residence in Washington. Conrad's two Countrywide mortgages in 2004 were for a beach house in Delaware and an eight-unit apartment building in Bismarck in his home state of North Dakota.

Robert Feinberg, who worked in Countrywide's VIP section, told congressional investigators last month that the two senators were made aware that "who you know is basically how you're coming in here."

"You don't say 'no' to the VIP," Feinberg told Republican investigators for the House Oversight and Government Reform Committee, according to a transcript obtained by The Associated Press.

The next day, Feinberg testified before the Senate Ethics Committee, an indication the panel is actively investigating two of the chamber's more powerful members:

• Dodd heads the Banking Committee and is a major player in two big areas: solving the housing foreclosure and financial crises and putting together an overhaul of the U.S. health care system. A five-term senator, he is in a tough fight for re-election in 2010, partly because of the controversy over his mortgages.

• Conrad chairs the Budget Committee. He, too, shares an important role in the health care debate, as well as on legislation to curb global warming.

Both senators were VIP borrowers in the program known as "friends of Angelo." Angelo Mozilo was chief executive of Countrywide, which played a big part in the foreclosure crisis triggered by defaults on subprime loans. The Calabasas, Calif.-based company was bought last July by Bank of America Corp. for about $2.5 billion.

Mozilo has been charged with civil fraud and illegal insider trading by the Securities and Exchange Commission. He denies any wrongdoing.

Asked by a House Oversight investigator if Conrad, the North Dakota senator, "was aware that he was getting preferential treatment?" Feinberg answered: "Yes, he was aware."

Referring to Dodd, the investigator asked:

"And do you know if during the course of your communications" with the senator or his wife "that you ever had an opportunity to share with them if they were getting special VIP treatment?"

"Yes, yes," Feinberg replied.

Bryan DeAngelis, Dodd's spokesman, said Feinberg has repeatedly made allegations of special treatment that were not true.

"As the Dodds have said from the beginning, they did not seek or expect any special rates or terms on their loans and they never received any. They were never offered special or sweetheart deals and if anyone had made such an offer, they would have severed that relationship immediately."

Comment: Ethics violations! Why our government does not work!


How Sarah Lukemire paid her way through college

College on the pay-as-you-go plan


Here's her advice for getting a degree sans college loans:

Save money. Lots of it. Sarah figures she's a natural-born saver, but she also credits her father for instilling this important virtue. "When I was, like, 14, my dad was, like, 'You might want to start thinking about saving for college. It's expensive.'" She took his advice to heart and began to save at least 50 percent of her earnings.

Sound tough? "Put any and all spare money into an account and tell yourself that account's off limits," she said. Sarah would stop by the bank and make a deposit, even if she had just a few bucks in her pocket. "If it was out of my hands, it was kind of like 'out of sight, out of mind.'''

Using these strategies as a teen, she saved enough money to pay for her first two years of school.

Work. A lot. "I started working when I was probably, like, 13 and I was baby-sitting. I pretty much saved all of my money," she said. Most of her jobs paid above minimum wage and she never worked someplace where she liked to shop. "I had friends that were working at Abercrombie & Fitch because they got a discount on their clothes. Well, guess where their whole paychecks went?"

Also, she always worked at least 25 hours per week while in college. "I killed myself the first semester of college," she admits. It took a while for her to learn how much work she could handle on top of her college courses. "I obviously couldn't go out with my friends as much as I wanted to. You have to make sacrifices."

Be cheap and practical. She only drives cheap and reliable used cars and only buys clothes on sale. She remembers her dad telling her, "You can have the cute car and clothes and everything you want now and nobody is going to remember that in five years."

Instead of buying textbooks at the campus store, she'd copy down the ISBN number and head online to comparison shop, buying them at deep discounts. She also sold her textbooks when she was finished to recoup some of the cost.

Sarah also lived at home instead of in the dorms at the University of Northern Colorado. Her friends in the dorm would say, "It's so much fun, you're missing out on your whole college experience.'' But today, some of these friends are struggling to make student loan and car payments and can't even begin to think about buying a house.

Have a healthy fear of too much debt. "I did not want to get into trouble with money and have to worry about paying back all of those loans," Lukemire said. "I knew that as soon as I got out of college, I did not want to have the pressure" of paying down debt. When asked why she thinks so many of her peers have a different attitude about debt and savings, she replied: "I think it's the whole attitude of 'I'll worry about it later. ...' Or they've simply thought about saving too late. It's hard when you're 14 to save all of your money when you want to spend it on other things."

Take school seriously. Sarah had some classmates who didn't care if they flunked a class because their parents were paying. Others switched majors and paid for several extra courses. Then there are students who took out college loans without much thought about paying them back one day. There's been a belief in our society that any student loan debt is good debt. That's beginning to change.

Sarah doesn't want to give the impression that paying for school herself was a cinch. She admits that sometimes she was jealous of freewheeling students with more financial leeway. But today she has no regrets about paying for school on her own. "It definitely teaches you a lot about life in general when you actually have to worry about your finances" before you're out of college.

Comment: My daughter paid her way through college. She started working at 14.

Ban High-Frequency Trades?

Schumer Presses SEC for Ban on ‘Unfair’ High-Frequency Trades


Charles Schumer, the third-ranking Democrat in the U.S. Senate, asked the Securities and Exchange Commission to ban so-called flash orders for stocks, saying they give high-speed traders an unfair advantage.

Schumer’s letter to SEC Chairman Mary Schapiro yesterday raised the stakes in a debate over the practice offered by Nasdaq OMX Group Inc., Bats Global Markets and Direct Edge Holdings LLC, which handle more than two-thirds of the shares traded in the U.S. With flash orders, exchanges wait up to half a second before they publish bids and offers on competing platforms, giving their own customers an opportunity to gauge demand before other traders.

“This kind of unfair access seriously compromises the integrity of our markets and creates a two-tiered system, where a privileged group of insiders receives preferential treatment,” Schumer wrote in the letter.

Flash orders make up less than 4 percent of U.S. stock trading, according to Direct Edge and Bats. They have drawn criticism from the Securities Industry and Financial Markets Association, which is Wall Street’s main lobbying group, and Getco LLC, one of the biggest firms that uses high-frequency trading strategies to make markets in stocks and options. NYSE Euronext, owner of the world’s largest exchange by the value of companies it lists, told the SEC in May that the technique results in investors getting worse prices.

Schumer, a member of the Senate Banking Committee, said he will introduce legislation to ban flash orders if the SEC doesn’t act on his request.

Comment: I agree that the SEC should look into this practice! See earlier post.


Blue Dogs to the rescue

House healthcare talks break down in anger


House healthcare negotiations dissolved in acrimony on Friday, with Blue Dog Democrats saying they were “lied” to by their Democratic leaders.

In advance of a subsequent press conference called by House leadership, Blue Dog liaison Rep. Dennis Cardoza (D-Calif.) said the healthcare bill should be staying in committee.

"I expect the committee process to proceed," Cardoza said.

The seven Blue Dogs on the Energy and Commerce Committee stormed out of a Friday meeting with their committee chairman, Henry Waxman (D-Calif.), saying Waxman had been negotiating in bad faith over a number of provisions Blue Dogs demanded be changed in the stalled healthcare bill.

“I’ve been lied to,” Blue Dog Coalition Co-Chairman Charlie Melancon (D-La.) said on Friday. “We have not had legitimate negotiations.

“Mr. Waxman has decided to sever discussions with the Blue Dogs who are trying to make this bill work for America,” Melancon said.

Although those Blue Dogs were supposed to be headed back into another meeting of the Energy and Commerce Democrats, their anger was visible.

If the two sides cannot reach an agreement, the only hope for passage of the bill in the House will be to go straight to the floor, an option leaders shied away from endorsing but said was an option.

But the Blue Dogs issued dire warnings to leaders contemplating that approach.

"Waxman simply does not have votes in committee and process should not be bypassed to bring the bill straight to floor,” Rep. Mike Ross (D-Ark.), the lead Blue Dog negotiator, said on Friday. “We are trying to save this bill and trying to save this party.”

Comment: Office site

Black officer supports Crowley "100%"

Black officer at Gates home during arrest said scholar acted strange, supports arrest


A black police officer who was at Henry Louis Gates Jr.'s home when the black Harvard scholar was arrested says he fully supports how his white fellow officer handled the situation.

Sgt. Leon Lashley says Gates was probably tired and surprised when Sgt. James Crowley demanded identification from him as officers investigated a report of a burglary. Lashley says Gates' reaction to Crowley was "a little bit stranger than it should have been."

Asked if Gates should have been arrested, Lashley said supported Crowley "100 percent."

Comment: Why are Senators Kerry and Kennedy silent about this? Or Congressman Mike Capuano who represents this district. Stand up and be counted!

Is "high-frequency" trading unethical arbitrage?

Stock Traders Find Speed Pays, in Milliseconds


Yet high-frequency specialists clearly have an edge over typical traders, let alone ordinary investors. The Securities and Exchange Commission says it is examining certain aspects of the strategy.

“This is where all the money is getting made,” said William H. Donaldson, former chairman and chief executive of the New York Stock Exchange and today an adviser to a big hedge fund. “If an individual investor doesn’t have the means to keep up, they’re at a huge disadvantage.”

For most of Wall Street’s history, stock trading was fairly straightforward: buyers and sellers gathered on exchange floors and dickered until they struck a deal. Then, in 1998, the Securities and Exchange Commission authorized electronic exchanges to compete with marketplaces like the New York Stock Exchange. The intent was to open markets to anyone with a desktop computer and a fresh idea.

But as new marketplaces have emerged, PCs have been unable to compete with Wall Street’s computers. Powerful algorithms — “algos,” in industry parlance — execute millions of orders a second and scan dozens of public and private marketplaces simultaneously. They can spot trends before other investors can blink, changing orders and strategies within milliseconds.

High-frequency traders often confound other investors by issuing and then canceling orders almost simultaneously. Loopholes in market rules give high-speed investors an early glance at how others are trading. And their computers can essentially bully slower investors into giving up profits — and then disappear before anyone even knows they were there.

High-frequency traders also benefit from competition among the various exchanges, which pay small fees that are often collected by the biggest and most active traders — typically a quarter of a cent per share to whoever arrives first. Those small payments, spread over millions of shares, help high-speed investors profit simply by trading enormous numbers of shares, even if they buy or sell at a modest loss.

“It’s become a technological arms race, and what separates winners and losers is how fast they can move,” said Joseph M. Mecane of NYSE Euronext, which operates the New York Stock Exchange. “Markets need liquidity, and high-frequency traders provide opportunities for other investors to buy and sell.”

The rise of high-frequency trading helps explain why activity on the nation’s stock exchanges has exploded. Average daily volume has soared by 164 percent since 2005, according to data from NYSE. Although precise figures are elusive, stock exchanges say that a handful of high-frequency traders now account for a more than half of all trades. To understand this high-speed world, consider what happened when slow-moving traders went up against high-frequency robots earlier this month, and ended up handing spoils to lightning-fast computers.

It was July 15, and Intel, the computer chip giant, had reporting robust earnings the night before. Some investors, smelling opportunity, set out to buy shares in the semiconductor company Broadcom. (Their activities were described by an investor at a major Wall Street firm who spoke on the condition of anonymity to protect his job.) The slower traders faced a quandary: If they sought to buy a large number of shares at once, they would tip their hand and risk driving up Broadcom’s price. So, as is often the case on Wall Street, they divided their orders into dozens of small batches, hoping to cover their tracks. One second after the market opened, shares of Broadcom started changing hands at $26.20.

The slower traders began issuing buy orders. But rather than being shown to all potential sellers at the same time, some of those orders were most likely routed to a collection of high-frequency traders for just 30 milliseconds — 0.03 seconds — in what are known as flash orders. While markets are supposed to ensure transparency by showing orders to everyone simultaneously, a loophole in regulations allows marketplaces like Nasdaq to show traders some orders ahead of everyone else in exchange for a fee.

In less than half a second, high-frequency traders gained a valuable insight: the hunger for Broadcom was growing. Their computers began buying up Broadcom shares and then reselling them to the slower investors at higher prices. The overall price of Broadcom began to rise.

Soon, thousands of orders began flooding the markets as high-frequency software went into high gear. Automatic programs began issuing and canceling tiny orders within milliseconds to determine how much the slower traders were willing to pay. The high-frequency computers quickly determined that some investors’ upper limit was $26.40. The price shot to $26.39, and high-frequency programs began offering to sell hundreds of thousands of shares.

The result is that the slower-moving investors paid $1.4 million for about 56,000 shares, or $7,800 more than if they had been able to move as quickly as the high-frequency traders.

Multiply such trades across thousands of stocks a day, and the profits are substantial. High-frequency traders generated about $21 billion in profits last year, the Tabb Group, a research firm, estimates.

Comment: Doesn't smell right to me!

Pat Buchanan's quick hits

Has Obama's luck run out?


  • The cap-and-trade carbon emissions bill, with its huge costs to be passed on to U.S. producers and consumers, as China opts out, seems an act of national masochism
  • The $787 billion stimulus bill
    has done zip to stimulate the economy. Less than 10 percent of the money has gone out the door, which makes one wonder why it was called a stimulus package.
  • ... things are not going Obama's way. He is 10 points below where Nixon was after a full year, and on economic issues – unemployment, the deficit, spending – he is under 50 percent. This presidency is not yet in trouble, but it is sure headed that way.

Comment: Obama's gaffe on the Crowley - Gates case certainly didn't help! - Obama remark on Gates’ arrest angers cops


United broke his guitar

Singer's airline tune YouTube hit


A strung-out musician who blames United Airlines for breaking his prize guitar has taken revenge by writing a song that has become a YouTube hit.

Dave Carroll composed "United Breaks Guitars" after his Taylor acoustic was damaged at Chicago's O'Hare airport.

The fretting Canadian said he wrote the tune after months of trying to get the carrier to pay compensation.

United Airlines said the 41-year-old musician's song would be used for internal customer service training.

Mr Carroll says his instrument was wrecked by clumsy ground staff as he switched planes last year in Chicago, en route between Halifax and Nebraska.

Comment: My favorite Sis works for American

Obama Defends ... Commissioner "deeply pained"

Obama Defends Criticism of Cambridge Police in Arrest of Gates


Cambridge Police Department Commissioner Robert C. Haas said in a press conference late Thursday that his department was "deeply pained" by the president's comments yesterday.

"We take our professional pride very deeply. ... And when I talked to the officers... you could see they were really stunned," Haas told reporters, adding that they took "those comments to heart" and "were very much deflated."

Haas said the department "deeply regrets the situation" but also stood behind Sgt. James Crowley, who arrested Gates for disorderly conduct.

"I believe that Sgt. Crowley acted in a way that's consistent with his training and national standards," Haas said. "I don't believe in any way that his actions were racially motivated."

"Based on what I have seen, he maintained a professional decorum through the entire situation and maintained himself in a professional manner," Haas added.

Haas said a professional panel will be assembled to investigate and analyze the incident, and added that, "The whole story hasn't been told."

Comment: Hey President Obama ... quit micromanaging the country!

Updates on the Crowley / Gates "racial profiling" incident

Cop who arrested black scholar is profiling expert


he white police sergeant criticized by President Barack Obama for arresting black scholar Henry Louis Gates Jr. in his Massachusetts home is a police academy expert on racial profiling.

Cambridge Sgt. James Crowley has taught a class on racial profiling for five years at the Lowell Police Academy after being hand-picked for the job by former police Commissioner Ronny Watson, who is black, said Academy Director Thomas Fleming.

"I have nothing but the highest respect for him as a police officer. He is very professional and he is a good role model for the young recruits in the police academy," Fleming told The Associated Press on Thursday.

The course, called "Racial Profiling," teaches about different cultures that officers could encounter in their community "and how you don't want to single people out because of their ethnic background or the culture they come from," Fleming said.

Police union condemns Obama's comments


President Obama's Wednesday night criticism of Cambridge, Mass., police has drawn a rebuke from the Fraternal Order of Police (FOP).

The criticism comes after Obama said Cambridge police officers acted "stupidly" when they arrested Henry Louis Gates, a friend of the president's, after he broke into his own home. Gates was arrested on disorderly conduct charges, which were then dropped. The president said it highlights ongoing problems with race relations in the U.S.

Jim Pascoe, executive director of the FOP's legislative office, noted that before Obama made the remarks, the president acknowledged that he was only vaguely familiar with what happened.

"That being the case, it's unfortunate that he chose to say anything," Pascoe said. "He wasn't there, and he doesn't know what happened."

Pascoe said it appears that Gates was the "provocateur" because he called Officer James Crowley a racist instead of producing identification as requested.

Bill Cosby ’shocked’ at Obama’s statement on Harvard prof’s arrest


On a Boston radio program this morning, Bill Cosby suggested that President Obama spoke too soon on the controversial arrest of Harvard professor Henry Louis Gates.

“I’ve heard about five different reports [on the details of the arrest],” Cosby said on Boston’s WZLX. “If I’m the president of the United States, I don’t care how much pressure people want to put on it about race, I’m keeping my mouth shut.”

“I was shocked to hear the president making this kind of statement,” Cosby said referring to the president’s remarks during last night’s press conference.

Comments: Will Obama apologize to Crowley? He should!

Crowley: "I am not a racist"

Comment: Obama plays the race card: Despite not knowing all facts (see quote below) and his admission that he is "a little biased", Obama calls the police officer's actions stupid! See full police report below.

Obama: Police who arrested professor 'acted stupidly'


President Obama said that police in Cambridge, Massachusetts, "acted stupidly" in arresting a prominent black Harvard professor last week after a confrontation at the man's home.

I don't know, not having been there and not seeing all the facts, what role race played," Obama said Wednesday night while taking questions after a White House news conference.

Cambridge authorities dropped disorderly conduct charges against Henry Louis Gates Jr. on Tuesday.

Obama defended Gates on Wednesday night, while admitting that he may be "a little biased," because Gates is a friend.

"But I think it's fair to say, No. 1, any of us would be pretty angry; No. 2, that the Cambridge police acted stupidly in arresting somebody when there was already proof that they were in their own home; and, No. 3 ... that there's a long history in this country of African-Americans and Latinos being stopped by law enforcement disproportionately."

The incident, Obama said, shows "how race remains a factor in this society."


Police Report


Officer in Gates case says he won't apologize


Sergeant James Crowley, the Cambridge police officer who arrested Harvard professor Henry Louis Gates Jr. last week and touched off a firestorm of controversy, said today he would not agree to Gates's demand for an apology.

Crowley also said the arrest was not racially motivated. "I am not a racist," he said in an interview this evening in his hometown of Natick.

Crowley arrested Gates, a leading authority on African-American history, last Thursday during the investigation of a report of a break-in at Gates's home in Cambridge. The arrest happened just after Gates arrived home from the filming of a PBS documentary in China. His front door was stuck shut, and his taxi driver helped him pry it open.

According to the subsequent police report, a woman called to report two black men trying to force their way into a house. Crowley said in the report that Gates became disruptive and was arrested for disorderly conduct, but Gates has denied that he was disorderly.

Comment: Gates and Obama played the race card!


Minnesotan and popularizer of WD-40

John S. Barry, Main Force Behind WD-40, Dies at 84


The company says surveys show that WD-40, the slippery stuff in the blue and yellow aerosol can, can be found in as many as 80 percent of American homes and that it has at least 2,000 uses, most discovered by users themselves. These include silencing squeaky hinges, removing road tar from automobiles and protecting tools from rust.

Mr. Barry was not part of the Rocket Chemical Company in 1953, when its staff of three set out to develop a line of rust-prevention solvents and degreasers for the aerospace industry in a small lab in San Diego. It took them 40 attempts to work out the water displacement formula. The name WD-40 stands for “water displacement, formulation successful in 40th attempt.”


John Steven Barry was born in Minneapolis on Aug. 31, 1924. He earned a degree in mechanical engineering from the University of Minnesota, then enlisted the United States Navy in a program for officer candidates, under which he studied at Harvard and Columbia.

He then earned a master’s degree in business from the Massachusetts Institute of Technology and went to work for 3M. He was soon recalled by the Navy to serve in the Korean War.

He returned to 3M and worked for it and other companies until he succeeded his father-in-law, Cy Irving, as president of what would soon become the WD-40 Company. After resigning the company presidency, Mr. Barry stayed on as chairman until 2000.

Comment: Wiki: WD-40. Note U of M and 3M connection.

Will health care "reform" be Obama's 'Waterloo'?

Dems Start To Push Back Hard To Prevent A 'Waterloo'


A telling episode recounted by Senate Finance ranking member Charles Grassley reveals the Obama administration might be more worried than they are letting on that a Republican senator's comparison of the healthcare overhaul to Waterloo might be dangerously close to the truth.

Grassley said he spoke with a Democratic House member last week who shared Obama's bleak reaction during a private meeting to reports that some factions of House Democrats were lining up to stall or even take down the overhaul unless leaders made major changes.

"Let's just lay everything on the table," Grassley said. "A Democrat congressman last week told me after a conversation with the president that the president had trouble in the House of Representatives, and it wasn't going to pass if there weren't some changes made ... and the president says, 'You're going to destroy my presidency.' "

Comment: I hope so!

Quake moves New Zealand 12"

Massive quake moves NZealand closer to Australia


A massive 7.8 magnitude earthquake last week has moved the south of New Zealand closer to Australia, scientists said Wednesday.

With the countries separated by the 2,250-kilometre-wide (1,400-mile-wide) Tasman Sea, the 30 centimetre (12 inch) closing of the gap in New Zealand's southwest won't make much difference.

But earthquake scientist Ken Gledhill of GNS Science said the shift illustrated the huge force of the tremor, the biggest in the world so far this year.

Comment: Now that's some power!

WFC "beats street"

Wells Fargo Earnings Topped Forecast in Quarter


Wells Fargo joined most other big banks in reporting a big second-quarter profit even as losses from failed loans kept rising.

The bank said Wednesday that its earnings, which rose 47 percent from a year earlier, were aided by the acquisition of the struggling Wachovia Corporation in December.

Wells Fargo said its earnings after payment of preferred dividends came to $2.58 billion, or 57 cents a share, up from $1.75 billion, or 53 cents a share, a year earlier.

The earnings surpassed the 34 cents a share forecast of analysts surveyed by Thomson Reuters. Wells Fargo’s revenue of $22.5 billion also beat their forecast.

Comment: But so far this morning the stock is down a buck and a half!

TIZA challenged by the ACLU

ACLU suit against TIZA moves forward


A court ruled Tuesday that the Minnesota chapter of the American Civil Liberties Union (ACLU-MN) can sue Tarek ibn Ziyad Academy (TIZA), Islamic Relief and state education commissioner Alice Seagren for constitutional violations after allegedly using taxpayer money to illegally promote religion.

Lawyers for TIZA, Islamic Relief, and the education commissioner argued that ACLU-MN did not have the standing to sue, but U.S. District Judge Donovan Frank sided with ACLU-MN.

“[T]he challenged funding here is to a single charter school which, by the admission of Defendants, is attended by choice largely by Somali students who practice the Islamic Religion,” read the order on the motion to dismiss . “It seems unlikely that a parent or student of TIZA, who presumably attends the school because of its particularized program, would challenge the program of choice.”

The judge said that because ACLU-MN members are taxpayers, they have a stake in what happens to the funds given to TIZA.

“We are grateful that the judge held that we have standing in this case,” Chuck Samuelson, executive director of ACLU-MN, said Tuesday in a statement. “We believe that it is important to ensure that taxpayer funds are used appropriately. TIZA has received millions of dollars of taxpayer funds and we have the right to question how these public funds are being used.”

Comment: Previously noted here: A Minnesota state sponsored Muslim school?


Climate change apology

Sec. Clinton visits India, urges help vs. terror


U.S. Secretary of State Hillary Rodham Clinton opened a three-day visit to India on Saturday by urging India not to repeat American mistakes in contributing to global pollution, and she passionately defended U.S. demands for help in fighting terrorism.

"We acknowledge now with President Obama that we have made mistakes in the United States, and we along with other developed countries have contributed most significantly to the problem that we face with climate change," she said. "We are hoping a great country like India will not make the same mistakes."

She was referring to Obama's statement in Italy earlier this month that the U.S. had "sometimes fallen short" of its responsibilities in controlling its carbon emissions.

Speaking at a news conference on the pool side patio of the Taj Mahal Palace & Hotel, which was strewn with bodies after terrorists attacked this coastal city last November, she cast India and the United States as allies in the fight against terrorism.

Comment: Obama has apologized to the Muslims, to the blacks for slavery, and now Hillary to India for climate change! This administration is good at the apologies!

Stimulus dollars hard at work!

Response to Drudge Item on Recovery Act Funding - Statement from Agriculture Secretary Tom Vilsack


"Through the Recovery Act, the U.S. Department of Agriculture has made $100 million available to the states for The Emergency Food Assistance Program (TEFAP), which acquires food that is distributed to local organizations that assist the needy – including food banks, food pantries, and soup kitchens.

The Recovery Act funds referenced in press reports allowed states to purchase ham, cheese and dairy products for these food banks, soup kitchens and food pantries that provide assistance to people who otherwise do not have access to food. This program will help reduce hunger of those hardest hit by the current economic recession.

The references to "2 pound frozen ham sliced" are to the sizes of the packaging. Press reports suggesting that the Recovery Act spent $1.191 million to buy "2 pounds of ham" are wrong. In fact, the contract in question purchased 760,000 pounds of ham for $1.191m, at a cost of approximately $1.50 per pound. In terms of the dairy purchase referenced, USDA's Farm Service Agency (FSA) purchased 837,936 pounds of mozzarella cheese and 4,039,200 pounds of processed cheese.

While the principal purpose of these expenditures is to provide food to those hardest hit by these tough times, the purchases also provide a modest economic benefit of benefiting Americans working at food retailers, manufacturers and transportation companies as well as the farmers and ranchers who produce our food supply."

Comment: so much for volume pricing! We send $$ to Washington ... they buy ham for $ 1.50 per lb. A better way ... tax us less ... give us our $$ back ... and we can buy it for .79 per lb.!

Terrorist complains "about the stench in the cell"

Mumbai Attacker Admits Guilt


He has complained about the stench in the cell where he is kept apart from the general jail population.

Mr. Kazmi said the flush for the toilet in Mr. Kasab’s cell was not working. He had earlier asked for a inexpensive perfume, an Urdu language newspaper and the permission to walk on the veranda outside his cell.

Comment: You really feel sorry for him don't you!


Tipping Point?

Socialist America sinking


Taxes drove the American Revolution, for we were a taxaphobic, liberty-loving people. That government is best that governs least is an Americanism. When "Silent Cal" Coolidge went home in 1929, the U.S. government was spending 3 percent of gross domestic product.

And today? Obama's first budget will consume 28 percent of the entire GDP; state and local governments another 15 percent. While there is some overlap, in 2009, government will consume 40 percent of GDP, approaching the peak of World War II.


While the hardest-working and most productive are bled, a third of all wage-earners pay no U.S. income tax, and Obama plans to free almost half of all wage-earners of all income taxes. Yet, tens of millions get Medicaid, rent supplements, free education, food stamps, welfare and an annual check from Uncle Sam called an Earned Income Tax Credit, though they never paid a nickel in income taxes.


China saves, invests and grows at 8 percent. America, awash in debt, has a shrinking economy, a huge trade deficit, a gutted industrial base, an unemployment rate surging toward 10 percent and a money supply that's swollen to double its size in a year. The 20th century may have been the American Century. The 21st shows another pattern.

"The United States is declining as a nation and a world power with mostly sighs and shrugs to mark this seismic event," writes Les Gelb, president emeritus of the Council on Foreign Relations, in CFR's Foreign Affairs magazine.

Comment: Our country is dying!

Cagney reincarnated as a cat?

Comment: My Brother sent me this photo of a cat swimming - has that James Cagney look!

Obama "lowers expectations retroactively"

The President Moves the Economic Goalposts


So what's a president to do when the promises he made about his economic stimulus program fail to materialize? If you're Barack Obama, you redefine your goals and act as if America won't remember what you said originally. That's a neat trick if you can get away with it, but Mr. Obama won't. His words are a matter of public record and he will be held to them.

When it came to the stimulus package, the president and his administration promised, in the words of National Economic Director Larry Summers, "You'll see the effects begin almost immediately." Now it's clear that those promised jobs and growth haven't materialized.

So Mr. Obama is attempting to lower expectations retroactively, saying in an op-ed in Sunday's Washington Post that his stimulus "was, from the start, a two-year program." That is misleading. Mr. Obama never said if his stimulus were passed things might still get significantly worse in the following year.

In February, Mr. Obama said this about the goals of his stimulus package: "I think my initial measure of success is creating or saving four million jobs." He later explained the stimulus's $787 billion would "go directly to . . . generating three to four million new jobs." And his Council of Economic Advisors issued an official analysis showing that the unemployment rate would top out in the third quarter of this year at just over 8%.

That quarter began on July 1, and unemployment is now 9.5%, up from 7.6% when Mr. Obama took office. There are 2.6 million fewer Americans working than there were on the day Mr. Obama was sworn in. The president says now that unemployment will exceed 10% this year, and his advisers say it will remain high through much of next year.

Earlier this year, Mr. Obama assured us that most of the stimulus money "will go out the door immediately." But it hasn't. Only about 7.7% of the stimulus has been spent in the six months since its passage, and more of it will be spent in the program's last eight years than in its first year. So now the president claims he said something different. "We also knew that it would take some time for the money to get out the door," Mr. Obama said in his weekly radio address on Saturday.

Comment: No surprises. Meanwhile the debt clock keeps ticking!


Citigroup claim denied

Judge rejects Citigroup claim


A federal judge in New York City rejected the claim by Citigroup Inc. that its unsuccessful attempt to purchase Wachovia Corp. last fall was protected by an exclusivity arrangement.

Wachovia was bought by Wells Fargo & Co., which offered a higher price.

Judge Shira Scheindlin on Wednesday ruled the Emergency Economic Stabilization Act made the Citigroup exclusivity contract unenforceable

Comment: Didn't think it would go far. Earlier post: "While I'm not a lawyer, I think that the Citicorp legal challenge will soon evaporate. "

Updated (thanks to Jeremy Cobb): Federal Judge Finds Bailout Act Voids Citigroup's Bid for Wachovia


The emergency bailout package passed by Congress in October voided an exclusivity agreement that Citigroup had for buying embattled Wachovia Corp. in a deal that was ultimately trumped by Wells Fargo, a federal judge has ruled.

Rejecting Citigroup's bid for as much as $60 billion in damages against Wells Fargo, Judge Shira A. Scheindlin ruled Wednesday that §126(c) of the Emergency Economic Stabilization Act (EESA), passed on Oct. 3, 2008, renders the exclusivity agreement unenforceable.

The judge's resolution of the issue gets rid of most, but not all, of Citigroup's case for damages pending before Manhattan Supreme Court Justice Charles Ramos. The action before Ramos had been stayed pending Scheindlin's decision.

The ruling does not affect a constitutional challenge to the Emergency Economic Stabilization Act that Citigroup may pursue in federal court, where a conference before Scheindlin is scheduled for July 22.

Citigroup had what it thought were exclusive rights through Oct. 7, 2008, to close a deal for $2.1 billion, or $1 per Wachovia share. The transaction would have been made with some assistance by the FDIC, which was invoking its authority under §13 of the Federal Deposit Insurance Act to take action where there is the possibility of "systemic risk" to the economy. The FDIC insisted that, unless the deal was closed by Oct. 6, Wachovia would be forced into receivership.

On Oct. 2, Wells Fargo jumped in with a $15 billion offer for Wachovia, approximately $7 per share. Significantly, the deal required no assistance from the FDIC. The merger was announced on Oct. 3, the same day the act was passed.

On Oct. 4, Citigroup sued in state court, charging Wachovia with breach of contract and Wells Fargo with tortious interference with contract. The case was first removed to federal court but later was remanded back to state court and Justice Ramos.

The same day, Wells Fargo and Wachovia filed their own actions in federal court seeking a declaratory judgment that their transaction was valid. Within a week, Citigroup dropped its attempt to block the sale but insisted it would continue its damages claim.

Scheindlin's decision in Wachovia Corp. v. Citigroup, Inc., 08 Civ. 8503, was the first by a federal judge interpreting §126(c), which renders unenforceable an agreement restricting the ability to acquire any insured depository institution where the FDIC exercises its authority under Federal Deposit Insurance Act §§11 or 13.

Federal budget: "an unsustainable path"

Congressional Budget Office: The Long-Term Budget Outlook


Under current law, the federal budget is on an unsustainable path, because federal debt will continue to grow much faster than the economy over the long run. Although great uncertainty surrounds long-term fiscal projections, rising costs for health care and the aging of the population will cause federal spending to increase rapidly under any plausible scenario for current law. Unless revenues increase just as rapidly, the rise in spending will produce growing budget deficits. Large budget deficits would reduce national saving, leading to more borrowing from abroad and less domestic investment, which in turn would depress economic growth in the United States. Over time, accumulating debt would cause substantial harm to the economy.

Comment: Meanwhile Biden: ‘We Have to Go Spend Money to Keep From Going Bankrupt’

Long term home value apppreciation

Home Ownership Was Never a Road to Riches


Home appreciation nationally has run about 1% above inflation over time.

The big price run-ups from the late 1990s through 2006 or 2007 were an aberration. The biggest value you derive from home ownership isn’t appreciation. “It’s being able to live in it,” Prof. Mayer says, and avoiding the rent you would otherwise have to pay.

Once you add in imputed rent and subtract property taxes, Prof. Mayer estimates, my 2% annual home-ownership return looks more like 6%.

That’s why you should buy as much home as you need—but no more. A bigger home than you need isn’t an investment—it’s an extravagance, the equivalent of renting a bigger apartment than you need. You may choose to do so, but that doesn’t make it a smart move financially.

Another reason home ownership isn’t the road to riches: Most houses—especially the old ones my wife and I favor—are money pits.

Comment: My economic sense tells me that homes should appreciate at approximately the inflation rate.

VAT: a liberal politician's delight

Higher taxes, anyone?


... liberals are clamoring for … higher taxes. Partly because of changes endorsed by presidents from Ronald Reagan to Barack Obama, approximately 60 percent of taxpayers now pay either no income tax (43 percent) or less than 5 percent of their income. Because one cannot raise significant money by that tax without nicking the middle class, or without bringing millions of people back onto the income tax rolls, attention is turning to a value-added tax.

A VAT is levied at every stage of production. Like the cap-and-trade carbon regime now being constructed, a VAT is a liberal politician's delight: It taxes everything, but opaquely. Before he became an economic adviser in the Obama White House, where wit can be dangerous, Larry Summers said: Liberals oppose a VAT because it is regressive and conservatives oppose it because it is a money machine, but a VAT might come when liberals realize it is a money machine and conservatives realize it is regressive.

Comment: More on VAT here.

George Will on government efficiency:

... before embarking on Stimulus III, note that only about 10 percent of Stimulus II has yet been injected into the economy. This is not the administration's fault, the administration's defenders say, because government is cumbersome, sluggish and inefficient. But this sunburst of insight comes as the administration toils to enlarge governmental control of health care, energy, finance, education, etc. The administration guesses that these government projects will do better than the Postal Service (its second-quarter loss, $1.9 billion, was 68 percent of its losses for all of 2008) and the government's railroad (Amtrak has had 38 money-losing years, and this year's losses are on pace to set a record).

"the sum total of wealth accumulated in human history"

Do You Owe $23 Quadrillion?


An unidentified computer glitch has led Visa to overcharge several of its cardholders for routine purchases at drug stores, gas stations, and restaurants, to the tune of $23,148,855,308,184,500.00 each. These charges, as far as we can tell, exceed the sum total of wealth accumulated in human history. Affected cardholders were assessed a $15 overdraft fee. Count this as a cautionary tale for advocates of all-digital currency. The charges have reportedly been reversed, but we’d love to hear from anyone who, through this snafu, accumulated a black hole of debt.

Comment: I was discussing this with my wife, who is a technology manager at a major bank. She hypothesizes that a negative number somehow got into the database. By the way - our bank not hit by this glitch.


"Honey you over spent on the Visa card!"

Visa card surprise: $23,148,855,308,184,500


A "small number" of Visa cardholders were surprised to find that recent purchases cost them a little more than expected — $23 quadrillion, plus change.

In New Hampshire, Josh Muszynski said he swiped his debit card at a gas station to buy a pack of cigarettes and when he later checked his account online found that he had been charged the 17-digit number — a stunning $23,148,855,308,184,500.

Comment: You could pay for it with these. 10 of these is 1 quadrillion. The Visa charge is 23 quadrillion. More on large numbers.

More from CNN:

Glitch hits Visa users with more than $23 quadrillion charge


A technical snafu left some Visa prepaid cardholders stunned and horrified Monday to see a $23,148,855,308,184,500 charge on their statements.

That's about 2,007 times the size of the national debt.

Josh Muszynski, 22, of Manchester, New Hampshire, was one Visa customer aghast to find the 17-digit charge on his bill. Adding insult to injury, he had also been hit with a $15 overdraft fee.

He noticed that his debt exceeded the world GDP while making a routine balance inquiry on his online Bank of America account. According to his statement, he had spent the profound sum in one pop at a nearby Mobil gas station -- his regular stop for Camel cigarettes.

"Very, very panicked," he jumped in his car and sped to the station.

Had they perhaps noticed any "outrageous" charges come across their books recently, he inquired of the cashier there. She checked the records. They had not. Video Watch the story of an astounded customer in Memphis, Tennessee »

Muszynski wondered aloud what he might possibly have asked to purchase for such an astronomical price. "Can I buy Europe on pump 4?"

He next called Bank of America, the issuer of his Visa prepaid debit card. The bank kept him on hold for two hours, during which time he contemplated the impossibly bleak financial future that might await him. He also felt a stab of fear that he had saddled all his unborn grandchildren -- and their grandchildren -- with a lifetime of debt. "Down the generational line, nobody would have any money."

Finally, a bank representative told him that the $23 quadrillion charge -- and the $15 overdraft fee -- would be stricken from his account.

Muszynski compared the giant debt reprieve to receiving "an amazing Monopoly card that says, 'Bank error in your favor.' "

In a statement, Visa said the rogue charges affected "fewer than 13,000 prepaid transactions" and resulted from a "temporary programming error at Visa Debit Processing Services ... [which] caused some transactions to be inaccurately posted to a small number of Visa prepaid accounts."

We don't have enough rich people


There may be reasons to tax the rich more, as a lot of people in Washington are talking about doing.

But to raise taxes on them, and only them, to pay for the country's most ambitious proposals like health care reform, is a problem, experts say.

If nothing else, it makes for some bad math.

"We don't have enough rich people. We could tax the wealthy to extraordinary levels. But we cannot afford everything we want," said Ken Kies, a former director of the Joint Committee on Taxation and currently a tax lobbyist for businesses including insurers.

Yet, rich households are the focus of several revenue generating proposals to help pay for health care reform and other endeavors.

Comment: Not enough "rich" people to pay for all the programs. I don't consider myself as one of these "rich". Most of the Obama tax plans are for millionaires, couples with a gross income over $ 250,000, etc. But the reality is that their is giant disincentive for those who create to wealth, to continue fueling that engine.

A return of "the projects"?

Obama mulls rental option for some homeowners


U.S. government officials are weighing a plan that would let borrowers who have fallen behind on their mortgage payments avoid eviction by renting their homes instead, sources familiar with the administration's thinking said on Tuesday.

Under one idea being discussed, delinquent homeowners would surrender ownership of their homes but would continue to live in the property for several years, the sources told Reuters.

Officials are also considering whether the government should make mortgage payments on behalf of borrowers who cannot keep up with their home loans, tapping an unused portion of a $50 billion housing aid kitty.

As part of this plan, jobless borrowers might receive a housing stipend along with regular unemployment benefits, the sources said.

Comment: A history of "the projects"

Health Care Reform?

House Democrats Health Plan (PDF)

Comment: This will simplify our lives?

Updated: The GOP and "the flowchart"

Rep. Kevin Brady (R-TX) whose office, he said, read the entire 1,100-page Democratic bill last night and created the chart said, "This chart identifies the 31 new federal programs, agencies and commissions by mandate that will be in between patients and their health-care providers."

Brady then pointed at a graphic on the chart that said “HCA Commissioner” and equated the position to a health czar. "This is the new czar, the health-care commissioner,” he said. “He'll make the decisions on what medicines you deserve to have, what treatments you can get and what doctors you can see."

Remember that in 1994, on the Senate floor, Republicans unveiled a flow chart they created, which derided the White House's health-care plan. The chart played a role, certainly, in derailing health reform then.


Adrian Rogers: "You cannot multiply wealth by dividing it"

Adrian Pierce Rogers

You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity. What one person received without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is the beginning of the end of the nation. You cannot multiply wealth by dividing it.

From my Brother: "Probably the biggest spectacle of our lifetime will be the financial failure of "our" Republic"

Peer to Peer Lending - 2 year checkpoint

Prosper is Back! (We mean it this time)


Finally… the moment we and so many supportive and loyal Prosper community members have been waiting for… after nine long months of navigating the rapidly changing regulatory landscape, we are thrilled to announce that Prosper’s registration statement with the SEC has been declared effective. Prosper lenders can once again invest directly in fellow Americans and small businesses!

Although this has been an excruciatingly long and frustrating process, especially considering that it has played out during the worst credit crisis in 70 years, this is a watershed moment. Prosper is the first Internet auction-based P2P loans marketplace and trading platform to have its SEC registration declared effective, which means the SEC is permitting Prosper to facilitate auctions in a way that has never been done before.

Comment: My experience (now 2 years into this):

  • I've made money but not as much as I had hoped. But thus far it has beaten the returns of a 3 year CD.
  • The stats:

    • 84 loans total (most for $ 50)
    • 17 have been paid in full
    • 3 defaulted (Grading: A, C, D). I was stupid to make the C and the D level loans!
    • 2 are in collections. One B and one AA.
    • 61 are current
    • Detailed stats available here.

  • Contrasting my other investments (401K), I've done much better with Prosper.
  • I'm still not ready to jump in deep with any real commitment of significant funds.
  • My go forward policy is to reinvest returns in $ 25 chunks only in AA loans with an expected return of 5.5%.
  • I don't expect to add new funds to the mix until the economy improves and I have great confidence in Peer to Peer Lending

Economic pessimism

The Economy Is Even Worse Than You Think


How could this happen when Washington has thrown trillions of dollars into the pot, including the famous $787 billion in stimulus spending that was supposed to yield $1.50 in growth for every dollar spent? For a start, too much of the money went to transfer payments such as Medicaid, jobless benefits and the like that do nothing for jobs and growth. The spending that creates new jobs is new spending, particularly on infrastructure. It amounts to less than 10% of the stimulus package today.

About 40% of U.S. workers believe the recession will continue for another full year, and their pessimism is justified. As paychecks shrink and disappear, consumers are more hesitant to spend and won't lead the economy out of the doldrums quickly enough.

It may have made him unpopular in parts of the Obama administration, but Vice President Joe Biden was right when he said a week ago that the administration misread how bad the economy was and how effective the stimulus would be. It was supposed to be about jobs but it wasn't. The Recovery Act was a single piece of legislation but it included thousands of funding schemes for tens of thousands of projects, and those programs are stuck in the bureaucracy as the government releases the funds with typical inefficiency.

Comment: Read the full WSJ article for the reasons. A tax cut would have been a better solution


Essential Air Service: Example of government waste

Rural air travel subsidies gain big budget boost


A much-criticized subsidy for rural air travel would get a budget increase of more than 40 percent under a spending bill unveiled in the House on Monday.

The legislation approved by a House Appropriations subcommittee would give $173 million in the upcoming budget year to the Essential Air Service, which provides subsidies to small airlines to fly unprofitable routes. That's a $53 million increase.

In many cases the flights are nearly empty. In other instances, such as flights between Buffalo Niagara International Airport and Jamestown, N.Y., just 76 miles away, it's quicker to drive than fly.

The Bush administration sought unsuccessfully to cut the subsidies, which keeps flights going to 107 communities spread across 31 states in the continental U.S. and 45 tiny towns in Alaska. But the Essential Air Services program enjoys strong support among lawmakers; in April, 22 senators wrote White House budget director Peter Orszag to demand more money for it.

"Simply put, the Essential Air Service program was a promise made to rural America, and a promise that must be kept," the senators wrote.

Among the reasons for big increase is the upheaval in the airline industry, including higher fuel prices, and the larger subsidies required to attract new carriers into the program after other airlines drop out.

Indeed, the subsidies also have a new benefactor in President Barack Obama, who requested the big increase in his February budget submission despite acknowledging that the program is inefficient.

Comment: Kathee sometimes travels to Des Moines. She figures that driving to Des Moines is a better deal (even with the travel time) than flying. My last business trip to Des Moines, 3 of us rented a car and drove!

Pay up or we kill them (the zoo animals)

Patrick accuses zoo officials of scare tactics


On Friday zoo officials released a statement saying the funding reduction might require them to shutter both zoos. Then on Saturday, they issued a statement that said state bureaucrats - and not animal-care professionals - would be responsible for deciding whether some animals would have to be killed if the zoos closed.

Another stupid idea: They could have a "big game hunt" as a fundraiser.

Stupid sayings from the Michael Jackson memorial

I may not have the exact quotes but these two statements really nauseated me:

Stevie Wonder: God needs Michael Jackson in heaven!

Unknown speaker: The King of Pops will meet the King of Kings!

I really don't know Michael Jackson's relationship to Christ and I hesitate to speculate. This report suggests he was a Christian: 'King of Pop' Accepts 'King of Kings' Weeks Before His Death

This much I do know, much of Jackson's lifestyle certainly was not consistent with a genuine profession of faith.