Bears, Boats, Battlestar Galactica

We look forward to attending symphony performances at Regency Park every summer, though we only attend the ones that feature the classical masters. If the word "Broadway" is anywhere in the program, we stay away. I admit, though, the attraction is only about 30% for the cultural enrichment. The rest is sitting by the lake, picnicking and alcohol, or, as we've come to refer to it: Yuppie Tailgating.

An important part of Yuppie Tailgating is the shopping. This should take place the afternoon before so as to maximize impulse buying. Given plenty of time to think about the purchases, one might be tempted to get practical. I recommend several different varieties of cheese. For this outting I got Campo de Montalban because its a standby, Port Salut because the cheese lady recommended it and Edel de Cleron. Somebody who clearly knows a lot more about cheese than me wrote that "the flavor of L'Edel de Cleron is perfumed with scents of the Forest and a slight resinous aspect from the bark". Put another way, it's like brie.

If you have cheese, of course you need crackers. I always pick up some stoned wheat thins and this time I tried a multigrain cracker that could also double as a chip. For our crackers we had hummus and thin sliced salami that tasted great with any of the three cheeses. The multigrain went especially well with hummus.

To round out the snacks I picked up an assortment of dark chocolates.

Bearboat was the supreme impulse buy. I thought the label was funny and quirky and though I knew nothing about this wine, I figured a pinot would work pretty well with the snacks I'd assembled. Plus, it's from the Russian River Valley. I'm going to hear the Russian masters. I love symmetry! At $22.00 I felt I was owed a quality, if not exceptional wine. I wasn't disappointed. The wine was especially complimentary with dark chocolate with a hint of cherry and just a tiny bit of oak, not overpowering at all. In short, smooth, very smooth. I'm putting this one on my favorites under $25 list.

The show was lively and dramatic and the selection was really a treat. I love conductor William Henry Curry and the pianist, whose name I can't remember, was a willowy blonde in a huge, flowing, knockout red dress. Rachmaninoff's piano concerto #2 is pretty heavy and if you haven't heard it live, you should. Hearing it outside was both a blessing and a drawback. The nighttime view is great for an earthy feeling to go with the music, but I really wanted to immerse in the sounds. The background of occasional crickets and birds would have been better suited to a lighthearted fare like Vivaldi maybe. Plus, some nimrod drove past the venue blasting his music from open windows at one point. Cretin.

Still, point is, Bearboat is a good wine. Get thee some!

Quote of the Week

In response to a question from Rep. Brad Sherman, CEO's from the major banks were asked to raise their hands if they engaged in credit default swaps:

"We're going to need some oral."
~The House Finance Services Committee Chairman, Barney Frank

Amen brother!

An epic kick in the naughty bits

Just to close the loop on an earlier post regarding the Madoff hearing, the House Financial Services Committee had a second panel before them after Harry Markopolos finished his stunning testimony. The second panel consisted of:

• Ms. Linda Thomsen, Director, Division of Enforcement, U.S. Securities and Exchange Commission
  
• Mr. Andrew J. Donohue, Director, Division of Investor Management, U.S. Securities and Exchange Commission
  
• Mr. Erik Sirri, Director, Division of Trading and Markets, U.S. Securities and Exchange Commission
  
• Mr. Andy Vollmer, Acting General Counsel, U.S. Securities and Exchange Commission
  
• Ms. Lori A. Richards, Director, Office of Compliance Inspections and Examinations, U.S. Securities and Exchange Commission
  
• Mr. Stephen Luparello, Interim Chief Executive Officer, Financial Industry Regulatory Authority

You might be asking yourself, "Did Congress rip these people a new one?" The answer is yes. Yes they did. Watch:

I don't know if any of this will do any good. However, I would not be surprised if this tale ends with somebody hiding a Russian submarine somewhere in the Great Lakes region. I'm just sayin'.

Make yourself heard

You write a couple dozen emails per day, right? Every time there is an issue up for debate in our Congress that you care about, just write two more.

Contact info for your Senator: Write to your Senator!

Contact info for your House member: Write to your Representative!

Every time you turn on the television or look at Cnn.com or wherever you get your news, consider adding your voice to the discussion, especially when discussion isn't happening. Instead of being frustrated when the Limbaughs shut down intelligent debate with their screaming or when the news outlets devote ten seconds to the recovery bill, but spend five minutes talking about Brangelina and their kids, don't just sit there fuming! Start typing! Just keep it short, be succinct and be clear about what you want them to do.

I absolutely gaurantee that doing this is a helluva lot more satisfying than yelling at the tv.

Harry Markopolos is a hero (even if he doesn't want to be)

Harry Markopolos was an unknown accountant and derivatives expert in Boston who uncovered the Madoff scam back in 1999. He and his team independently compiled the evidence that proved Madoff was running a ponzi scheme back in 2000 when the fraud was only $7 billion and submitted their findings to the SEC. In 2001 when the fraud had grown to $20 billion they tried again and were ignored again. In 2005 Mr. Markopolos wrote a letter to the SEC with the following title: "The World's Largest Hedge Fund is a Fraud", believing that he was handing them the roadmap and the flashlight to go get the crook with neon lights around it in case they still had trouble seeing it. He handed the SEC their case against Madoff on a silver platter, yet the agency charged with protecting investors ignored every warning and piece of evidence they were given for ten years.
Markopolos testified before the House Financial Services Committee today, explaining how he uncovered the scheme. The really amazing thing about this hearing is that the House now wants to know what Mr. Markopolos recommends they do to fix the regulatory problems of the financial industry and what failures he personally encountered in the agencies that were supposed to be listening to his warnings. I have never heard such stark condemnations expressed so eloquently and such complex issues explained so plainly. It's difficult to pick out just a few quotes from this hearing to highlight because he made so many standing ovation worthy comments, so many, in fact, that two of the congressmen petitioned him to take a high ranking job at either the SEC or a new whistleblower agency that would oversee the SEC. He turned them down, but they are clearly going to keep trying to get him on the team.

Congressman Gary Ackerman: "What was the key tipoff that made you think that Bernie Madoff was a fraud?"
Harry Markopolos: "The key tipoff - and it took me about five minutes to figure out that he was a fraud - so it took extensive time and research...I basically read his strategy description and I knew that wasn't the source of his returns. I knew right away by looking at his performance charts. I wish I had a white board and easel here, but I don't so I'm going to give you a hand signal so I can show you what his performance return line looked like. It was a 45 degree angle without any variation. It went in only one direction: Up. It never had variation like the market does."

Congressman Gary Ackerman: "Did somebody hire you to do this investigation?"
Harry Markopolos: "No, I did it on my own."
CGA: "How were you compensated and how much time has this taken out of your week or your year?"
HM: "There was no compensation. We did it for the flag, the flag of the United States of America. We saw him as a clear and present danger to the capital market system and to our reputation as a capital market...When you have a bad player on the field, a dirty player, you want him removed from the playing field. I tried to remove him from the playing field, but the referee wasn't listening."

Congressman Brad Sherman: "Did you have a chance to bring your accusations to FINRA or the NASD?"
Harry Markopolos: "I would have never taken them to the NASD or FINRA. I had a lot of bad experiences as an over the counter trader in the late 80's with the NASD. What I found them to be was a very corrupt self-regulatory organization, where, if you took a fraud to them, they would ignore it as soon as they received it. They were there to assist industry by avoiding stricter regulation from the SEC."

Congressman Gary Ackerman: [Regarding methods for verifying daily stock trades]"The SEC could have done that too?"
Harry Markopolos: "If they knew how to do it, they could have done it and if they had the willingness to do it they could have done it, but they did not."
CGA: "Are you suggesting they don't know how to do that?"
HM: "I'm suggesting that if you flew the entire SEC staff to Boston and sat them in Fenway Park for an afternoon, they would not be able to find first base."

Congressman Brad Sherman: "Are there some mini-Madoffs and medium sized Madoffs; Could somebody do what he did and not be as powerful as he was?"
Harry Markopolos: "There is. I plan on turning in at least a one billion if not bigger mini-Madoff to the SEC's inspector general tomorrow. I hope this time they actually listen to me."

For Congressional testimony, especially about financial matters, this was some riveting stuff. It's amazing to me that Markopolos did all this thankless, unpaid work and kept at it for a decade while people who are paid to do this work didn't lift a finger. Markopolos cited incompetence and corruption in these federal agencies. I agree with him, but I think simple apathy might be playing a big hand here too. What incentives does anybody at the SEC have to investigate these matters? People in government service typically don't get promoted for being stars at their jobs; promotion is pretty much dependent on time served. It makes riding your desk and keeping your head down a much more attractive option.

Based on the ire of the Congressmen and women participating in today's hearing, I think whoever is about to get served tomorrow by Mr. Markopolos is going to have about 1 hour to get to a bus station because I doubt the SEC will be allowed to ignore him ever again. Nevertheless, he should consider posting his latest findings in a public forum, so that the people can also play a hand in demanding that our watchdogs do their jobs. A blog, perhaps ;)

Mr. Markopolos doesn't seem to want any notoriety from this (yet) and he seems uninterested in trying to make a buck off what could easily be overnight celebrity status, so I'm not going to post a picture of him. How about this image of a burnt up computer instead?

Oh, is it?

Rep. Barney Frank plans to call the heads of major bailed-out banks to testify before his committee next week, two aides to the House Financial Services Committee chairman said.

For Frank and other backers of the bailout, known as TARP, or the Troubled Asset Relief Program, the problem is that its purpose is to prevent a total collapse of the global financial system. Because of the way politics works, it's difficult to get credit for preventing harm rather than doing good.

"It's like wearing dark pants and pissing down your leg," Frank said before the bailout vote in October. "It gives you a warm feeling, but no one knows you did it."

I just have nothing to say to this.

Absolutely Fascinating - maybe Fabulous

My latest internet obsession is Politifact.com.

From their About page

PolitiFact is a project of the St. Petersburg Times to help you find the truth in politics.

Every day, reporters and researchers from the Times examine statements by members of Congress, the president, cabinet secretaries, lobbyists, people who testify before Congress and anyone else who speaks up in Washington. We research their statements and then rate the accuracy on our Truth-O-Meter – True, Mostly True, Half True, Barely True and False. The most ridiculous falsehoods get our lowest rating, Pants on Fire.

We also rate the consistency of public officials on our Flip-O-Meter using three ratings: No Flip, Half Flip and Full Flop.

We created the Obameter to help you assess the Obama presidency. Our reporters have compiled a database of more than 500 individual promises that Barack Obama made during the campaign. We research and rate their status as No Action, Stalled or In the Works and then ultimately determine whether it earns a Promise Kept, Compromise or Promise Broken.

I've been a fan of fact checkers for a long time, but the first time I clearly remember signing on was after watching Bowling for Columbine, which I thought was a good movie and maybe even made a lot of good points, until I did the fact checking and discovered that Michael Moore dances around the truth like a puppy around a vaccum cleaner. I don't care how much I might agree with your position, if you're going to use half-truths and made up statistics to make your case, I'm not listening anymore.

I love that so many people have access to a platform (these interwebs) to express their ideas and that more and more people every day have access to that information. The drawback to all this information is that we don't have time to read and analyze all of it, so the discourse (if you can call it that) is often reduced to whoever is talking the loudest or whoever comes up with the most conveniently memorable soundbite. It's also true that we're probably going to read whichever publication seems to lean in tandem with our own views. It's more likely that readers of the Drudge Report are the more heavy handed variety of right winger and those people are very unlikely to read the Huffington Post, therefore it follows that a lot of people are only being exposed to ideas that they already agree with - hence, no real discourse.

I just started reading Politifact, so I don't know enough about it yet to determine if it's really just presenting the facts and has no leaning either way. I don't really want to read a presentation of the "facts" that just spoonfeeds me what I already wanted to hear. Just a simple "Obama said blah, blah, blah. Is it true? Yes or no?" On the surface that seems to be exactly what it is.

Politifact will still be unable to escape criticism for one simple reason, though. It can't present, in real time, full disclosure of every single thing that every congressman, senator, cabinet member and executive staffer says, every day, all the time. They have to select what they're going to research and discuss, which opens the door for accusations of bias. For every Sarah Palin comment they flag as False, a bunch of Palin supporters will protest that the coverage is unfair because she said just as many things that are true. See, you really can't win, but I'm going to watch them try and see how it shakes out.