Ted Stevens Convicted on Corruption Charges

Ted Stevens (R-AK) has always been high on my list of Congressional assholes. His push to get the Bridges To Nowhere funded, and subsequent tirade when people dared oppose him on it, shot him up to #1. But his success at bringing home the bacon to his Alaskan constituents made him a favorite. His 38-year career in the Senate made him a force to be reckoned with in Washington.

This summer he was charged with lying about receiving free gifts from VECO, an energy company (oil processing equipment and pipelines) and one of Alaska's largest employers, on whose behalf he intervened, and today he was convicted on 7 counts. "Stevens' conviction hinged on the testimony of Bill Allen, the senator's longtime drinking and fishing buddy. Allen, the founder of VECO, testified that he never billed his friend for the work on the house and that Stevens knew he was getting a deal."

Allen pleaded guilty in May 2007, paying out more than $400,000 "in corrupt payments" to Alaska officials.

"Stevens faces up to five years in prison on each count when he is sentenced Jan. 26, but under federal sentencing guidelines, he is likely to receive much less prison time, if any. Despite being a convicted felon, he is not required to drop out of the race or resign from the Senate. If he wins re-election, he can continue to hold his seat because there is no rule barring felons from serving in Congress. The Senate could vote to expel Stevens on a two-thirds vote."

While Senator Stevens isn't done yet, he's certainly wounded. The next step comes at the voting booth. Voters in Alaska can either come to his aid and dare the Senate to come up with the votes to expel him or stagger away from the trough and perform a coup de grâce on his political career.

\_/
DED

More Money

$85 billion wasn't enough for AIG. They just got another $37.8 billion "loan" from the Federal Reserve. Meanwhile, the executives are away on a $400,000 corporate retreat.

It's all exasperating.

The Dow plummeted 678 points today to close at 8579. That's just stunning. The government keeps throwing money at all of these big name businesses but the stock market is hellbent on dropping like a rock. I'm sure it's an excellent time to buy, assuming you've got the money and the stomach to handle the ride.

Gold is $930/ounce!

All of this should be a clue to the people running the show, but it's not sinking in. I think I heard that Pelosi's talking about another stimulus package. Doesn't Congress realize that most people used the last one to pay off bills?

And the upcoming election is far from reassuring.

I'm going to see Testament at The Webster Theater in Hartford tomorrow night. With all that's going on in the world these days, apocalyptic thrash metal seems fitting. "The Formation of Damnation" indeed.

\_/
DED

Must See 60 Minutes

Being a parent of two young, maniacal imps, I rarely have time to catch something on TV before they go to bed. This Sunday was the exception. I caught 60 Minutes and was quite glad I did.

The first segment, "A Look At Wall Street's Shadow Market," (text and video are at the link) was an explanation of how we got into this current credit catastrophe. Steve Kroft finds the right people to explain the jargon to us laymen. Here's "credit default swap":

Michael Greenberger, a law professor at the University of Maryland and a former director of trading and markets for the Commodities Futures Trading Commission, says they are much simpler than they sound. "A credit default swap is a contract between two people, one of whom is giving insurance to the other that he will be paid in the event that a financial institution, or a financial instrument, fails," he explains.

"It is an insurance contract, but they've been very careful not to call it that because if it were insurance, it would be regulated. So they use a magic substitute word called a 'swap,' which by virtue of federal law is deregulated," Greenberger adds.

These credit default swaps were used to cover the high risk mortgages and everyone who went under or got bailed out was selling them.

Asked what role the credit default swaps play in this financial disaster, Frank Partnoy tells Kroft, "They were the centerpiece, really. That's why the banks lost all the money. They lost all the money based on those side bets, based on the mortgages."

(CBS) How big is the market for credit default swaps?

Says Partnoy, "Well, we really don't know. There's this voluntary survey that claims that the market is in the range of 50 to 60 or so trillion dollars. It's sort of alarming that, in a market that big, we don't even know how big it is to within, say, $10 trillion."

"Sixty trillion dollars. I know it seems incredible. It's four times the size of the U.S. debt. But that's the size of the market according to these voluntary reports," says Partnoy.

He says this market is almost entirely unregulated.

The result is a huge shadow market that may control our financial destiny, and yet the details of these private insurance contracts are hidden from the public, from stockholders and federal regulators. No one knows what they cover, who owns them, and whether or not they have the money to pay them off.

Yeah, so $700 billion is a pittance compared to this market. And in the video, you'll just want to strangle ISDA's CEO, Robert Pickel. ISDA stands for "International Swaps and Derivatives Association" and is "a trade organization made up the largest financial institutions in the world. Many of them are the very same companies that created the vast shadow market, lobbied to keep it unregulated, and are now drowning because of unanticipated risks."

The next segment, "Elite Officer Recalls Bin Laden Hunt," was about the hunt for Bin Laden (Remember him?) back in late 2001. An outfit dubbed, "Delta Force," (No, really. That's what they called it. And you thought that it was just another bad Chuck Norris flick.) was sent in to take out Osama. Obviously they failed, but it wasn't their fault. Their best plans were "overruled" from somewhere up the chain of command and their Afghan allies weren't what they seemed to be. It's almost as if someone wanted them to fail....

The last segment, before Andy Rooney, focused on the race to build the electric car. Lesley Stahl met with Elon Musk, who made his fortune with PayPal and now heads Tesla Motors, arguably the electric car leader. It's taken a year for them to go from Internet sensation to TV news magazine subject. While the sports car is a success, making the family sedan has been more of a challenge. And GM is struggling to get a working prototype of the Chevy Volt in at a everyday man price by 2010. Don't count on it.

I didn't see a mention of Shai Agassi's company, Better Place, which looks to make Israel the first electric car nation. His plan is to sell electric cars while building a network of recharging stations. If your batteries are running low and you don't have time to wait for them to recharge, you can get them swapped out at a service station or from roving vans. Since Israel is small, it's a good test bed. And they've got incentive. Not having oil of their own (but plenty of sunshine), all the money they spend on gasoline goes to support people that are out to destroy them. If it works, maybe it'll take root in sunny cities in the U.S.

While I'll be rooting for them all, I won't hold my breath.

\_/
DED