Sunday, June 20, 2010
Sunday, April 18, 2010
Timothy Leary and Me
I just found a letter tucked into one of the books Timothy signed and gave me almost 25 years ago. It really got me thinking about those days in Hollywood and my neighbor Timothy Leary.
It was the in the early 1980' when we started a business in Hollywood, California and moved into a rental house high up in Laural Canyon. The house was one of those inexpensive bungalows constructed cheaply for low income people during the 1930s'and was set into the side of the Hollywood Hills.
On my left was a road that led up to a similar cottage that was lived in by the then Governor of California Jerry Brown, who was dating Linda Ronstadt at that time and always had a car parked at the foot of the driveway with two plainclosed State troopers.
On my right was another small bungalow set back a ways from mine, but close enough to see and hear whatever was going on inside, was Timothy Leary and his new wife Barbara and her 10 year old son.
I really did not know much about the Professor other than he was in the newspapers pretty often in the 60s'and famous for his "get high and drop out" declaration to young people. We were pretty busy getting the new business started and wasn't in the house much other than to sleep. It was small but had two bedrooms and a large living room kitchen area. My business partner, Bill Lawler, was a big burly guy and looked a little menacing with his dark glasses and leather jacket. He did not want to meet or know the Professor and was pretty apolitical so Jerry Brown was not of any interest to him. I did get pretty friendly with Timmy (as his wife called him) and Barbara.
I found out later that Timmy had just been released from doing hard time in the California prison system by Governor Brown. At first, he and his wife were convinced that we were FBI or CIA placed next door to watch them; and, after two years of listening to his life story, Now, I can truly understand why they would think that was true. But, more about that in another Blog.
It was the in the early 1980' when we started a business in Hollywood, California and moved into a rental house high up in Laural Canyon. The house was one of those inexpensive bungalows constructed cheaply for low income people during the 1930s'and was set into the side of the Hollywood Hills.
On my left was a road that led up to a similar cottage that was lived in by the then Governor of California Jerry Brown, who was dating Linda Ronstadt at that time and always had a car parked at the foot of the driveway with two plainclosed State troopers.
On my right was another small bungalow set back a ways from mine, but close enough to see and hear whatever was going on inside, was Timothy Leary and his new wife Barbara and her 10 year old son.
I really did not know much about the Professor other than he was in the newspapers pretty often in the 60s'and famous for his "get high and drop out" declaration to young people. We were pretty busy getting the new business started and wasn't in the house much other than to sleep. It was small but had two bedrooms and a large living room kitchen area. My business partner, Bill Lawler, was a big burly guy and looked a little menacing with his dark glasses and leather jacket. He did not want to meet or know the Professor and was pretty apolitical so Jerry Brown was not of any interest to him. I did get pretty friendly with Timmy (as his wife called him) and Barbara.
I found out later that Timmy had just been released from doing hard time in the California prison system by Governor Brown. At first, he and his wife were convinced that we were FBI or CIA placed next door to watch them; and, after two years of listening to his life story, Now, I can truly understand why they would think that was true. But, more about that in another Blog.
Monday, April 5, 2010
Chinese Made Drywalls are Poisoness
According to Reuters the Boston Globe reported today that thousand of U.S. homes tainted by Chinese drywall should be gutted, according to new guidelines release yesterday by the Consumer Product Safety Comission.
The guidelines say that electrical wiring, outlets, circut breakers, fire alarm systems, carbon monoxide alarms, fire sprinklers, gas pipes, and dry wall need to be removed.
They go on to state; "We want families to tear it all out and rebuild the interiors of their homes, and they need to start this to get their lives started all over again", said Inez Tenenbaum, Chairwoman of the Comission, the Federal agency charged with making sure that consumer products are safe.
About 3,000 homowners in Florida,Virginia,Missippi, Alabama, and Louisiana have reported problems with the drywall imported from China during the housing boomand after the string of Gulf Coast hurricanes. The drywall has been linked to corrosion of wiring, air conditiong units, computers, door knobs and jewelry along with possible health effects.
The guidelines say that electrical wiring, outlets, circut breakers, fire alarm systems, carbon monoxide alarms, fire sprinklers, gas pipes, and dry wall need to be removed.
They go on to state; "We want families to tear it all out and rebuild the interiors of their homes, and they need to start this to get their lives started all over again", said Inez Tenenbaum, Chairwoman of the Comission, the Federal agency charged with making sure that consumer products are safe.
About 3,000 homowners in Florida,Virginia,Missippi, Alabama, and Louisiana have reported problems with the drywall imported from China during the housing boomand after the string of Gulf Coast hurricanes. The drywall has been linked to corrosion of wiring, air conditiong units, computers, door knobs and jewelry along with possible health effects.
Saturday, April 3, 2010
The Continuing Saga of JP Morgan and WAMU
Jamie Dimon, the CEO of JP Morgan recently sent a letter to all shareholders of JP Morgan.
http://files.shareholder.com/downloads/ONE/871752399x0x362440/1ce6e503-25c6-4b7b-8c2e-8cb1df167411/2009AR_Letter_to_shareholders.pdf
For those of you who will read this letter I think you will agree that acquiring Washington Mutual Bank 18 months ago from the FDIC for the paltry 1.9 billion dollars was, by far, the best deal in the history of the banking industry. In fact, some would call it a steal.
He stated in his letter, "Our revenue this year was a record $100
billion, up from $67 billion in 2008. The largeincrease in revenue was due primarily to the inclusion for the full year of WashingtonMutual (WaMu) and the dramatic turnaround in revenue in our Investment Bank."
But what he doesn't tell his stockholders in this letter (but stated in the 10K filed recently) was that JP Morgan may have to give a lot of it back when the Deleware Bankrupscy Court rules on several motions filed by WMI the parent company of WAMU Bank. He agreed with the Debtors in this case to a settlement that at first claimed agreement by the FDIC but was later recanted after the legal scholars at the FDIC realized that Jamie was setting them up to be the fall guy to all the furious Bond and Shareholders that were somehow left out of this Settlement.
Stay tuned, the fat lady is just beginning to warm up.
http://files.shareholder.com/downloads/ONE/871752399x0x362440/1ce6e503-25c6-4b7b-8c2e-8cb1df167411/2009AR_Letter_to_shareholders.pdf
For those of you who will read this letter I think you will agree that acquiring Washington Mutual Bank 18 months ago from the FDIC for the paltry 1.9 billion dollars was, by far, the best deal in the history of the banking industry. In fact, some would call it a steal.
He stated in his letter, "Our revenue this year was a record $100
billion, up from $67 billion in 2008. The largeincrease in revenue was due primarily to the inclusion for the full year of WashingtonMutual (WaMu) and the dramatic turnaround in revenue in our Investment Bank."
But what he doesn't tell his stockholders in this letter (but stated in the 10K filed recently) was that JP Morgan may have to give a lot of it back when the Deleware Bankrupscy Court rules on several motions filed by WMI the parent company of WAMU Bank. He agreed with the Debtors in this case to a settlement that at first claimed agreement by the FDIC but was later recanted after the legal scholars at the FDIC realized that Jamie was setting them up to be the fall guy to all the furious Bond and Shareholders that were somehow left out of this Settlement.
Stay tuned, the fat lady is just beginning to warm up.
Tuesday, July 28, 2009
The Professor and the Cop
The Boston GLobe reported this morning that,"Sergeant James Crowley, the Cambridge police officer who ignited a national debate on racial profiling when he arrested Harvard professor Henry Louis Gates Jr. at his home, can be heard on a recording of radio transmissions to his dispatcher during the incident describing Gates as "uncooperative" and asking her to keep sending backup ."
Now that the tapes of the 911 call to the Police and the subsequent recording of the officers call for backup its clear to me that the only one in that group (including the woman who placed the 911 call) who played the "race" card was the professor. I think it must also be clear to his Harvard compatriots that the good professor, swollen with self importance, lost his cool and became belligerent to the cop. The teaching lesson to be learned in all this in my opinion, is that even Harvard professors need to cooperate with authorities when confronted.
I am sure that the country will soon witness a televised "group hug" between Gates, Obama and the Cop. I am hoping that Gates will admit he "lost it" and apologize. But
now that he is a media darling I am afraid that his view of himself will be too bloated with self importance and it wont happen.
Now that the tapes of the 911 call to the Police and the subsequent recording of the officers call for backup its clear to me that the only one in that group (including the woman who placed the 911 call) who played the "race" card was the professor. I think it must also be clear to his Harvard compatriots that the good professor, swollen with self importance, lost his cool and became belligerent to the cop. The teaching lesson to be learned in all this in my opinion, is that even Harvard professors need to cooperate with authorities when confronted.
I am sure that the country will soon witness a televised "group hug" between Gates, Obama and the Cop. I am hoping that Gates will admit he "lost it" and apologize. But
now that he is a media darling I am afraid that his view of himself will be too bloated with self importance and it wont happen.
Wednesday, July 1, 2009
Thinking about Michael Jackson
I have been thinking a lot about Michael Jackson and the hanger-ons' hovering around his estate like vultures after seeing the photo in the Boston Globe printed in Sunday, June 28th edition. The photo shows Michael's father Joe Jackson and Al Sharpton during a press interview. They were, in the absence of a documented will, claiming the estate and custody of Michael's three children.
How in the world does Al Sharpton get into these situations with black celebrities so often? He is a marvel at knowing where to be at critical moments and the interesting thing is that he has that much access to people like the Jackson's. I remember Sharpton and the black college soccer team and Imus. He is a professional black celebrity parasite; but is there anything here for him to feed on? I don't think so,
Joe Jackson's is in deep financial trouble, he is hoping that gaining his son's estate will bail him out. His wife was awarded custody of the children but he did not get what he really wants, access to his son's assets like the Sony music catalog containing Beetle, Neil Diamond and others like them. It turns out that there is a Will and although the kids are in his wife's custody, the assets will be in a trust fund run by two of Michael's business partners.
Here is an article that describes the financial problems the Trust inherits:
"Michael Jackson delighted people around the world with his music, inspired countless amateur moonwalkers with his moves and had an untold, but surely huge, effect on the sales of individual white gloves.
The pop superstar, who died unexpectedly on Thursday, also kept a lot of people in high finance very busy. His wealth, and, later in his career, his expanding debt, became fodder for deals with private equity firms like Fortress Investment Group and Colony Capital as well as big banks like Citigroup and Bank of America.
In the process, his fantastical Neverland Ranch in California was nearly put on the auction block — saved only when one investment firm swooped in to buy the related debt from another firm, with hopes of backing, and profiting from, a revival of Mr. Jackson’s career.
A lot of Mr. Jackson’s monetary dealings have been conducted in private. But several of the pivotal moments have been described in media reports over the years.
Driving many of the deals was Mr. Jackson’s increasingly unmanageable debt load — something that private equity firms can probably relate to these days.
A 2006 article in The New York Times said the principal drains on Mr. Jackson’s finances may have been “monumentally unwise investments that apparently produced equally colossal losses” — and, later, the payments to service his debt.
A financial adviser to Mr. Jackson described how he might have frittered away $50 million on things like amusement-park ideas and “bizarre, global kinds of computerized Marvel comic-book characters bigger than life.”
In 2003, Fortress Investment, a private equity and hedge fund firm that has since gone public, bought some of Mr. Jackson’s loans from Bank of America after the pop singer missed some payments. Shortly before Christmas in 2005, Fortress threatened to call the loans because of his delinquency, The Times reported.
A few months later, a new deal was reached, as part of a $300 million refinancing structured by Citigroup.
Mr. Jackson’s financial problems continued, however, and in spring of 2008, it looked as if Fortress would foreclose on the Neverland Ranch. But Colony Capital, a private equity firm led by Thomas Barrack, stepped in to buy Mr. Jackson’s loan from Fortress, averting an auction.
A few months later, the deed to Neverland was transferred to Sycamore Valley Ranch Company, a joint venture between Mr. Jackson and Colony.
Just a few weeks ago, Mr. Barrack expressed optimism about Mr. Jackson’s career and his plans for a concert series in London. “You are talking about a guy who could make $500 million a year if he puts his mind to it,” Mr. Barrack told The Los Angeles Times.
While the wrangling over Mr. Jackson’s Neverland Ranch was among the most visible signs of his financial troubles, the debt ran far deeper. Over the years, he amassed hundreds of millions of dollars in other loans to finance his lifestyle.
The collateral for those loans is not his real estate, but Mr. Jackson’s stake in Sony/ATV Music Publishing. It’s a valuable asset: It holds a portfolio of thousands of songs, including rights to 259 songs by John Lennon and Paul McCartney."
How in the world does Al Sharpton get into these situations with black celebrities so often? He is a marvel at knowing where to be at critical moments and the interesting thing is that he has that much access to people like the Jackson's. I remember Sharpton and the black college soccer team and Imus. He is a professional black celebrity parasite; but is there anything here for him to feed on? I don't think so,
Joe Jackson's is in deep financial trouble, he is hoping that gaining his son's estate will bail him out. His wife was awarded custody of the children but he did not get what he really wants, access to his son's assets like the Sony music catalog containing Beetle, Neil Diamond and others like them. It turns out that there is a Will and although the kids are in his wife's custody, the assets will be in a trust fund run by two of Michael's business partners.
Here is an article that describes the financial problems the Trust inherits:
"Michael Jackson delighted people around the world with his music, inspired countless amateur moonwalkers with his moves and had an untold, but surely huge, effect on the sales of individual white gloves.
The pop superstar, who died unexpectedly on Thursday, also kept a lot of people in high finance very busy. His wealth, and, later in his career, his expanding debt, became fodder for deals with private equity firms like Fortress Investment Group and Colony Capital as well as big banks like Citigroup and Bank of America.
In the process, his fantastical Neverland Ranch in California was nearly put on the auction block — saved only when one investment firm swooped in to buy the related debt from another firm, with hopes of backing, and profiting from, a revival of Mr. Jackson’s career.
A lot of Mr. Jackson’s monetary dealings have been conducted in private. But several of the pivotal moments have been described in media reports over the years.
Driving many of the deals was Mr. Jackson’s increasingly unmanageable debt load — something that private equity firms can probably relate to these days.
A 2006 article in The New York Times said the principal drains on Mr. Jackson’s finances may have been “monumentally unwise investments that apparently produced equally colossal losses” — and, later, the payments to service his debt.
A financial adviser to Mr. Jackson described how he might have frittered away $50 million on things like amusement-park ideas and “bizarre, global kinds of computerized Marvel comic-book characters bigger than life.”
In 2003, Fortress Investment, a private equity and hedge fund firm that has since gone public, bought some of Mr. Jackson’s loans from Bank of America after the pop singer missed some payments. Shortly before Christmas in 2005, Fortress threatened to call the loans because of his delinquency, The Times reported.
A few months later, a new deal was reached, as part of a $300 million refinancing structured by Citigroup.
Mr. Jackson’s financial problems continued, however, and in spring of 2008, it looked as if Fortress would foreclose on the Neverland Ranch. But Colony Capital, a private equity firm led by Thomas Barrack, stepped in to buy Mr. Jackson’s loan from Fortress, averting an auction.
A few months later, the deed to Neverland was transferred to Sycamore Valley Ranch Company, a joint venture between Mr. Jackson and Colony.
Just a few weeks ago, Mr. Barrack expressed optimism about Mr. Jackson’s career and his plans for a concert series in London. “You are talking about a guy who could make $500 million a year if he puts his mind to it,” Mr. Barrack told The Los Angeles Times.
While the wrangling over Mr. Jackson’s Neverland Ranch was among the most visible signs of his financial troubles, the debt ran far deeper. Over the years, he amassed hundreds of millions of dollars in other loans to finance his lifestyle.
The collateral for those loans is not his real estate, but Mr. Jackson’s stake in Sony/ATV Music Publishing. It’s a valuable asset: It holds a portfolio of thousands of songs, including rights to 259 songs by John Lennon and Paul McCartney."
Thursday, June 4, 2009
GM Pension Funds Used Illegally?
The following article was published on the WEB but is so damaging , in my view, to what the administration seems to be advocating with GM's Auto Union dues that I felt it needs to be re-published. The author, Greg Palast, is very convincing, in my opinion.
Grand Theft Auto: How Stevie the Rat bankrupted GM
by Greg Palast
Monday, June 1, 2009
Screw the autoworkers.
They may be crying about General Motors' bankruptcy today. But dumping 40,000 of the last 60,000 union jobs into a mass grave won't spoil Jamie Dimon's day.
Dimon is the CEO of JP Morgan Chase bank. While GM workers are losing their retirement health benefits, their jobs, their life savings; while shareholders are getting zilch and many creditors getting hosed, a few privileged GM lenders - led by Morgan and Citibank - expect to get back 100% of their loans to GM, a stunning $6 billion.
The way these banks are getting their $6 billion bonanza is stone cold illegal.
I smell a rat.
Stevie the Rat, to be precise. Steven Rattner, Barack Obama's 'Car Czar' - the man who essentially ordered GM into bankruptcy this morning.
When a company goes bankrupt, everyone takes a hit: fair or not, workers lose some contract wages, stockholders get wiped out and creditors get fragments of what's left. That's the law. What workers don't lose are their pensions (including old-age health funds) already taken from their wages and held in their name.
But not this time. Stevie the Rat has a different plan for GM: grab the pension funds to pay off Morgan and Citi.
Here's the scheme: Rattner is demanding the bankruptcy court simply wipe away the money GM owes workers for their retirement health insurance. Cash in the insurance fund would be replace by GM stock. The percentage may be 17% of GM's stock - or 25%. Whatever, 17% or 25% is worth, well ... just try paying for your dialysis with 50 shares of bankrupt auto stock.
Yet Citibank and Morgan, says Rattner, should get their whole enchilada - $6 billion right now and in cash - from a company that can't pay for auto parts or worker eye exams.
Preventive Detention for Pensions
So what's wrong with seizing workers' pension fund money in a bankruptcy? The answer, Mr. Obama, Mr. Law Professor, is that it's illegal.
In 1974, after a series of scandalous take-downs of pension and retirement funds during the Nixon era, Congress passed the Employee Retirement Income Security Act. ERISA says you can't seize workers' pension funds (whether monthly payments or health insurance) any more than you can seize their private bank accounts. And that's because they are the same thing: workers give up wages in return for retirement benefits.
The law is darn explicit that grabbing pension money is a no-no. Company executives must hold these retirement funds as "fiduciaries." Here's the law, Professor Obama, as described on the government's own web site under the heading, "Health Plans and Benefits."
"The primary responsibility of fiduciaries is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits."
Every business in America that runs short of cash would love to dip into retirement kitties, but it's not their money any more than a banker can seize your account when the bank's a little short. A plan's assets are for the plan's members only, not for Mr. Dimon nor Mr. Rubin.
Yet, in effect, the Obama Administration is demanding that money for an elderly auto worker's spleen should be siphoned off to feed the TARP babies. Workers go without lung transplants so Dimon and Rubin can pimp out their ride. This is another "Guantanamo" moment for the Obama Administration - channeling Nixon to endorse the preventive detention of retiree health insurance.
Filching GM's pension assets doesn't become legal because the cash due the fund is replaced with GM stock. Congress saw through that switch-a-roo by requiring that companies, as fiduciaries, must
"...act prudently and must diversify the plan's investments in order to minimize the risk of large losses."
By "diversify" for safety, the law does not mean put 100% of worker funds into a single busted company's stock.
This is dangerous business: The Rattner plan opens the floodgate to every politically-connected or down-on-their-luck company seeking to drain health care retirement funds.
House of Rubin
Pensions are wiped away and two connected banks don't even get a haircut? How come Citi and Morgan aren't asked, like workers and other creditors, to take stock in GM?
As Butch said to Sundance, who ARE these guys? You remember Morgan and Citi. These are the corporate Welfare Queens who've already sucked up over a third of a trillion dollars in aid from the US Treasury and Federal Reserve. Not coincidentally, Citi, the big winner, has paid over $100 million to Robert Rubin, the former US Treasury Secretary. Rubin was Obama's point-man in winning banks' endorsement and campaign donations (by far, his largest source of his corporate funding).
With GM's last dying dimes about to fall into one pocket, and the Obama Treasury in his other pocket, Morgan's Jamie Dimon is correct in saying that the last twelve months will prove to be the bank's "finest year ever."
Which leaves us to ask the question: is the forced bankruptcy of GM, the elimination of tens of thousands of jobs, just a collection action for favored financiers?
And it's been a good year for Señor Rattner. While the Obama Administration made a big deal out of Rattner's youth spent working for the Steelworkers Union, they tried to sweep under the chassis that Rattner was one of the privileged, select group of investors in Cerberus Capital, the owners of Chrysler. "Owning" is a loose term. Cerberus "owned" Chrysler the way a cannibal "hosts" you for dinner. Cerberus paid nothing for Chrysler - indeed, they were paid billions by Germany's Daimler Corporation to haul it away. Cerberus kept the cash, then dumped Chrysler's bankrupt corpse on the US taxpayer.
("Cerberus," by the way, named itself after the Roman's mythical three-headed dog guarding the gates Hell. Subtle these guys are not.)
While Stevie the Rat sold his interest in the Dog from Hell when he became Car Czar, he never relinquished his post at the shop of vultures called Quadrangle Hedge Fund. Rattner's personal net worth stands at roughly half a billion dollars. This is Obama's working class hero.
If you ran a business and played fast and loose with your workers' funds, you could land in prison. Stevie the Rat's plan is nothing less than Grand Theft Auto Pension.
It doesn't make it any less of a crime if the President drives the getaway car.
******
Economist and journalist Greg Palast, a former trade union contract negotiator, is author of the New York Times bestsellers The Best Democracy Money Can Buy and Armed Madhouse. He is a GM bondholder and card-carrying member of United Automobile Workers Local 1981.
Palast's latest reports for BBC Television and Democracy Now! are collected on the newly released DVD, "Palast Investigates: from 8-Mile to the Amazon - on the trail of the financial marauders." Watch the trailer here.
Grand Theft Auto: How Stevie the Rat bankrupted GM
by Greg Palast
Monday, June 1, 2009
Screw the autoworkers.
They may be crying about General Motors' bankruptcy today. But dumping 40,000 of the last 60,000 union jobs into a mass grave won't spoil Jamie Dimon's day.
Dimon is the CEO of JP Morgan Chase bank. While GM workers are losing their retirement health benefits, their jobs, their life savings; while shareholders are getting zilch and many creditors getting hosed, a few privileged GM lenders - led by Morgan and Citibank - expect to get back 100% of their loans to GM, a stunning $6 billion.
The way these banks are getting their $6 billion bonanza is stone cold illegal.
I smell a rat.
Stevie the Rat, to be precise. Steven Rattner, Barack Obama's 'Car Czar' - the man who essentially ordered GM into bankruptcy this morning.
When a company goes bankrupt, everyone takes a hit: fair or not, workers lose some contract wages, stockholders get wiped out and creditors get fragments of what's left. That's the law. What workers don't lose are their pensions (including old-age health funds) already taken from their wages and held in their name.
But not this time. Stevie the Rat has a different plan for GM: grab the pension funds to pay off Morgan and Citi.
Here's the scheme: Rattner is demanding the bankruptcy court simply wipe away the money GM owes workers for their retirement health insurance. Cash in the insurance fund would be replace by GM stock. The percentage may be 17% of GM's stock - or 25%. Whatever, 17% or 25% is worth, well ... just try paying for your dialysis with 50 shares of bankrupt auto stock.
Yet Citibank and Morgan, says Rattner, should get their whole enchilada - $6 billion right now and in cash - from a company that can't pay for auto parts or worker eye exams.
Preventive Detention for Pensions
So what's wrong with seizing workers' pension fund money in a bankruptcy? The answer, Mr. Obama, Mr. Law Professor, is that it's illegal.
In 1974, after a series of scandalous take-downs of pension and retirement funds during the Nixon era, Congress passed the Employee Retirement Income Security Act. ERISA says you can't seize workers' pension funds (whether monthly payments or health insurance) any more than you can seize their private bank accounts. And that's because they are the same thing: workers give up wages in return for retirement benefits.
The law is darn explicit that grabbing pension money is a no-no. Company executives must hold these retirement funds as "fiduciaries." Here's the law, Professor Obama, as described on the government's own web site under the heading, "Health Plans and Benefits."
"The primary responsibility of fiduciaries is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits."
Every business in America that runs short of cash would love to dip into retirement kitties, but it's not their money any more than a banker can seize your account when the bank's a little short. A plan's assets are for the plan's members only, not for Mr. Dimon nor Mr. Rubin.
Yet, in effect, the Obama Administration is demanding that money for an elderly auto worker's spleen should be siphoned off to feed the TARP babies. Workers go without lung transplants so Dimon and Rubin can pimp out their ride. This is another "Guantanamo" moment for the Obama Administration - channeling Nixon to endorse the preventive detention of retiree health insurance.
Filching GM's pension assets doesn't become legal because the cash due the fund is replaced with GM stock. Congress saw through that switch-a-roo by requiring that companies, as fiduciaries, must
"...act prudently and must diversify the plan's investments in order to minimize the risk of large losses."
By "diversify" for safety, the law does not mean put 100% of worker funds into a single busted company's stock.
This is dangerous business: The Rattner plan opens the floodgate to every politically-connected or down-on-their-luck company seeking to drain health care retirement funds.
House of Rubin
Pensions are wiped away and two connected banks don't even get a haircut? How come Citi and Morgan aren't asked, like workers and other creditors, to take stock in GM?
As Butch said to Sundance, who ARE these guys? You remember Morgan and Citi. These are the corporate Welfare Queens who've already sucked up over a third of a trillion dollars in aid from the US Treasury and Federal Reserve. Not coincidentally, Citi, the big winner, has paid over $100 million to Robert Rubin, the former US Treasury Secretary. Rubin was Obama's point-man in winning banks' endorsement and campaign donations (by far, his largest source of his corporate funding).
With GM's last dying dimes about to fall into one pocket, and the Obama Treasury in his other pocket, Morgan's Jamie Dimon is correct in saying that the last twelve months will prove to be the bank's "finest year ever."
Which leaves us to ask the question: is the forced bankruptcy of GM, the elimination of tens of thousands of jobs, just a collection action for favored financiers?
And it's been a good year for Señor Rattner. While the Obama Administration made a big deal out of Rattner's youth spent working for the Steelworkers Union, they tried to sweep under the chassis that Rattner was one of the privileged, select group of investors in Cerberus Capital, the owners of Chrysler. "Owning" is a loose term. Cerberus "owned" Chrysler the way a cannibal "hosts" you for dinner. Cerberus paid nothing for Chrysler - indeed, they were paid billions by Germany's Daimler Corporation to haul it away. Cerberus kept the cash, then dumped Chrysler's bankrupt corpse on the US taxpayer.
("Cerberus," by the way, named itself after the Roman's mythical three-headed dog guarding the gates Hell. Subtle these guys are not.)
While Stevie the Rat sold his interest in the Dog from Hell when he became Car Czar, he never relinquished his post at the shop of vultures called Quadrangle Hedge Fund. Rattner's personal net worth stands at roughly half a billion dollars. This is Obama's working class hero.
If you ran a business and played fast and loose with your workers' funds, you could land in prison. Stevie the Rat's plan is nothing less than Grand Theft Auto Pension.
It doesn't make it any less of a crime if the President drives the getaway car.
******
Economist and journalist Greg Palast, a former trade union contract negotiator, is author of the New York Times bestsellers The Best Democracy Money Can Buy and Armed Madhouse. He is a GM bondholder and card-carrying member of United Automobile Workers Local 1981.
Palast's latest reports for BBC Television and Democracy Now! are collected on the newly released DVD, "Palast Investigates: from 8-Mile to the Amazon - on the trail of the financial marauders." Watch the trailer here.
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