Matt Taibbi puts the spotlight on the rating agencies

The financial meltdown could never have happened if the ratings agencies hadn't rated crap loans as excellent. It would have brought the entire corrupt system to a halt. Matt Taibbi is whipping these culprits with some stunning evidence that has recently come to light.

Thanks to a mountain of evidence gathered for a pair of major lawsuits, documents that for the most part have never been seen by the general public, we now know that the nation's two top ratings companies, Moody's and S&P, have for many years been shameless tools for the banks, willing to give just about anything a high rating in exchange for cash. In incriminating e-mail after incriminating e-mail, executives and analysts from these companies are caught admitting their entire business model is crooked. "Lord help our fucking scam . . . this has to be the stupidest place I have worked at," writes one Standard & Poor's executive. "As you know, I had difficulties explaining 'HOW' we got to those numbers since there is no science behind it," confesses a high-ranking S&P analyst. "If we are just going to make it up in order to rate deals, then quants [quantitative analysts] are of precious little value," complains another senior S&P man. "Let's hope we are all wealthy and retired by the time this house of card[s] falters," ruminates one more.
Here's Taibbi's conclusion:
What's amazing about this is that even without a mass of ugly documentary evidence proving their incompetence and corruption, these firms ought to be out of business. Even if they just accidentally sucked this badly, that should be enough to persuade the markets to look to a different model, different companies, different ratings methodologies. But we know now that it was no accident. What happened to the ratings agencies during the financial crisis, and what is likely still happening within their walls, is a phenomenon as old as business itself. Given a choice between money and integrity, they took the money. Which wouldn't be quite so bad if they weren't in the integrity business.
This is an engaging and detailed article that will leave you frustrated that it's business as usual for the ratings agencies. Excellent reporting and phenomenal writing by Taibbi.

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The credibility problem of the Fed

What is the Fed good at? Not much, according to Jessie Eisenger of ProPublica:

Investors . . . have almost no confidence in the Federal Reserve or the economics profession. And for good reason. It's impressive that the Fed and many economists have successfully predicted the path of interest rates and inflation in the wake of the worst financial crisis in a generation. But neither the central bank nor academicians managed to predict or prevent the crisis in the first place. The failure dwarfs the accomplishment. The Fed's track record is out-and-out abysmal.The Fed began its lender-of-last-resort role in 2007, but did little to avoid or minimize the financial crisis. Once it hit, it did the right thing to flood the markets with money, but — along with the Treasury and a passive Justice Department — let banks and top executives off the hook. And now, asset prices are going wild. Junk bonds are up. Stocks are up. Housing in Phoenix and Brooklyn is going mad. This prebubble euphoria only undermines the Federal Reserve's fragile credibility. It reinforces the notion that it seems to know only two things: how to inflate bubbles and how to studiously not recognize them.

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Lee Camp brings it

Over the past week, I've watched about 20 episodes of Lee Camp's Moment of Clarity. Camp has the technique down well. Be well informed, then let it fly with equal parts wit and sharp sword. His targets are those who hurt or disparage honorable ordinary people. His videos are well-planned and executed, with the timing of an experienced comedian. Take a look at any of the four posted episodes below, and I suspect that you will become a Lee Camp fan too.

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Facts and figures on American tax evasion

Shame on those many American tax evaders, those who we euphemistically say are "investing offshore." Here are some stunning facts and figures, from the Tax Justice Network:

The very existence of the global offshore industry, and the tax free status of the enormoussumsinvestedbytheirwealthyclients,ispredicatedonsecrecy:that is what this industry really “supplies” as it competes for, conceals, and manages private capital from all over the planet, from any and all sources, no questions asked. We are up against one of society's most well entrenched interest groups. After all, there’s no interest group more rich and powerful than the rich and powerful, who are the ultimate subjects of our research.

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Democracy in action–American style–in Afghanistan

"Democracy" in action in Afghanistan is described in the NYT:

KABUL, Afghanistan — For more than a decade, wads of American dollars packed into suitcases, backpacks and, on occasion, plastic shopping bags have been dropped off every month or so at the offices of Afghanistan’s president — courtesy of the Central Intelligence Agency. All told, tens of millions of dollars have flowed from the C.I.A. to the office of President Hamid Karzai, according to current and former advisers to the Afghan leader.
How has this cash benefited anyone?
[T]here is little evidence that the payments bought the influence the C.I.A. sought. Instead, some American officials said, the cash has fueled corruption and empowered warlords, undermining Washington’s exit strategy from Afghanistan.
Yes, this is democracy in action, American Style, complete with large amount of secret cash being transferred. And this is in addition to the two billion dollars per week that we have been wasting in Afghanistan for a decade. All of this occurring at a time when American politicians claim that they don't have enough money to provide the basics for Americans.

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