Merry Christmas

Dear Friends far and near,

A mere 24 hours to Christmas, 2008 is almost in the books. Turning 55 this past Saturday had its pitfalls. No question I look older every time I glance in the mirror so I don’t do it much. The boys tell me to comb my hair. I tell them I am lucky to have hair and I tell everyone I am so old I was a waiter at the Last Supper! This year started off like every year, a whirlwind. We got back from a wonderful holiday and New Years at Pamelot, our farm in Tennessee. A week later we put my Dad on the plane back to Minnesota and a week later grabbed a flight to New York City with the boys. Their first visit to the Big Apple! We stayed in Times Square and took in the sights and sounds of the greatest city on earth. We dined at Carmines, did the Lion King on Broadway, shopped on Canal Street, walked to the World Trade site and covered the financial district which on a weekend was a tad boring for the boys among the canyons of Wall Street but it brought back as it always does the great times I had in 1983 when I trained at 20 Exchange Place with the venerable Kidder Peabody. We also went to the top of Rockefeller Center and the Empire State Building. It was a great trip. Valentines found Pam and me with friends on a private jet to the Florida coast for my one and only round of golf this year. It was a hoot as I sprayed balls up and down the links. A Tiger wanna-be I am not. A couple of weeks later Pam and I headed to Phoenix for the Super Bowl. It is extremely difficult not to have a great time at any Super Bowl function and a super game it was.

Spring break found the gang in Vail doing the whoosh-n-shoosh in the best skiing of my life. It snowed every day and Vail broke the 500 inch mark for the season. Amazing snow but the mule deer herds in the Eagle Valley and Gunnison Basin were hurt, big time. So much for global warming! The summer warmed up and we headed to the great Northwest. Flying into Seattle with Mt. Rainier clear and calling was just a warm-up for a great family vacation. We boarded a seaplane in Seattle and headed for Canada and out into Puget Sound to chase killer whales on a small Zodiac, hiked towards Mt. Rainier and turned back by massive snow drifts and spent July 1st in Victoria, British Columbia, celebrating Canada Day with our neighbors to the north. The weather was great and we enjoyed so much including Butchart Gardens in BC and the Boeing Field Museum. We even were caught in a parade, the Seattle Gay Pride parade as we walked to the Space Needle. The boys saw more than I wanted them to! After getting home we got back into the swing of summer swim season and Hunters job lifeguarding. He turned 16 in June and took the reins of “Red Rover”, my old 1990 Jeep Cherokee. July found Jordan training in the heat for his 5th year of organized football as a 6th grader. As assistant coach we had a great year and won the league championship. Grandpa Doug Parisian came down for the championship game from Minnesota and watched a great football game as we prevailed 12 – 6. Jordan, playing middle linebacker and running back had a great season and gave his all at every practice. A father couldn’t have been more proud. And grandfather either.

Late July found me in Minnesota with friends at the Minnesota Trappers Association summer convention. Probably a finer bunch can’t be found. Always fun and I managed to visit some old haunts that haven’t changed all that much.

School started the second week in August and Hunter began his second year of running cross-country and Jordan busy with football practice. August sports practices are always hot in Georgia. Just imagine. Early September I ran out to my old love, the state of Montana for a few days of trying to shoot a pronghorn antelope with my bow. I succeeded but it didn’t come easy and had to call on a lifetime of experience to bag my animal. It was another priceless trip to Gods last great place. In late September Pam and I headed with friends to the south of France for a week of food and laughs. We loved the beauty of the wine country and the trip was one of our best. October rolled in and before Hunters swim season got underway we found time to head to South Dakota to gun waterfowl and pheasants with some great pals.

I got in some deer hunting in November and dad joined us for Thanksgiving at Pamelot. We have much to be thankful for and good health is a major gift that we enjoy. Dad will turn 86 in a couple of weeks and still goes hard. He is spry and quick with a joke. Some things seem never to change but they will.

In the most unique place I have ever chased whitetail deer, Ossabaw Island, off the coast of Georgia I spent the past few days with some friends gunning small island deer and pigs. We had a blast camping, eating elk steaks, grouper and most of all, laughing. I have never been in such a unique ecosystem that is void of predators and hence such a massive amount of deer and pigs that need to be controlled by rifles. That makes it both coasts I have had the opportunity to enjoy the ocean’s power and currents while deer hunting and for that I am thankful.

Next year will be Hunters senior year of high school and we will be looking at colleges in January. My how time flies and I am very lucky to be a husband and father of such a great family. I say my prayers every day for what the Creator has provided.

Pam has had a very busy year as she contemplates retirement in about 1,000 days. As the Chief Information Officer of the combined AT&T Wireless and Land-line units her days are hectic to say the least. There is a lot of change at AT&T and she is at the forefront.

From our home to yours I hope that next year is the best year of your life. I still like to believe that the best is yet to come and hope that you do to. Again here’s to a warm and blessed holiday season and a stellar 2009. I want to leave you with one of my favorite Native American prayers.

May the Blessings of the Creator be with you and yours.
May warm winds blow gently upon your home and all who enter.
May rainbows always shine on the shoulder of your life.
May your moccasins make happy tracks on your travels.
May good health be yours to enjoy each day.

With best wishes always,

Paulson's only goal was taking care of Wall Street

Hank Paulson is one of the largest dangers to Americans. Believe it.

WASHINGTON -- Treasury Secretary Henry Paulson said Friday he wants Congress to release the second half of the $700 billion financial rescue package, setting up what is expected to be a bruising dialogue with lawmakers from both parties who have expressed frustration with the way he has navigated the financial crisis.
Mr. Paulson said the $17.4 billion Treasury committed to provide General Motors Corp. and Chrysler LLC means that the government has "effectively" allocated the first $350 billion that Congress authorized in early October for the Troubled Asset Relief Program to stabilize the financial markets. Mr. Paulson said he has "confidence" that "we have the necessary resources to address a significant financial market event." (Read the statement.)
"It is clear, however, that Congress will need to release the remainder of the TARP to support financial market stability," Mr. Paulson said. "I will discuss that process with the congressional leadership and the President-elect's transition team in the near future."
Mr. Paulson's statement signals a shift from recent statements when he suggested he wouldn't ask for the rest of the money. Lawmakers from both parties have blasted Treasury's use of the first $350 billion, which has mostly gone to inject capital into healthy banks as well as troubled institutions such as Citigroup Inc. and American International Group Inc. Treasury originally sold lawmakers on the plan as a way to purchase troubled assets off from financial institutions.
Top Democrats have said they would only negotiate with Treasury on the next $350 billion if Treasury creates a huge plan to help homeowners avert foreclosure. The request could spark a battle with lawmakers unhappy with the bailout who want to add new conditions, such as requiring banks to lend the funds they receive.

Deep Capture

Mary Shapiro, Obama's SEC chief should do lunch with the author of this blog:

http://www.deepcapture.com/

Here is a recent entry from his blog. If any of you have ever walked into an SEC office to bring a complaint against a public company, person or fund you know that the presumption of innocence for the entity you believe needs investigation is on them, not on the person walking in to bring the complaint. I've been there and they act as if they are doing you a favor to even listen to your complaint. Shapiro has done little for FINRA and it will take tremendous change for her to do anything at the SEC. It should be quickly disbanded and a new regulator be put in place that can address the markets of 2009 and beyond. It wouldn't be that hard if politics were taken out of the equation. Unfortunately, it is all politics and money. What else is new?

A Ponzi Scheme that is Bigger than Bernard Madoff’s
December 13th, 2008 by Mark Mitchell
Bernard L. Madoff’s fraud is “stunning,” says the SEC. It is a crime of “epic proportions.” But, says the SEC, we have nothing to worry about. The SEC caught the bad guy. It “moved swiftly” to protect the integrity of the financial markets.
Nonsense.
The only thing “stunning” is that the SEC continues to condone and even fraternize with the organized mob of hedge fund miscreants who have destroyed hundreds of companies, wiped out the jobs of countless ordinary folks, and brought our financial system to the brink of ruin.
The Madoff case may one day prove to be “epic,” but right now it can best be described as “pathetic” – or just plain “weird.”
Apparently, the SEC began receiving tips from Madoff’s enemies (rival brokerages, private investigators working for rival hedge funds, etc.) several years ago. The commission made inquiries, but took no action.
Then, earlier this week, Madoff purportedly had some kind of nervous breakdown, announcing to his sons that he was a criminal.
If we can believe the news reports, the sons then called the FBI, which dispatched an agent to Madoff’s apartment.
Madoff, dressed in a baby blue bathrobe and slippers, opened the door, and said, “I know why you are here.”
With that, the agent arrested Madoff, and within a few hours the FBI and the SEC had whipped out cases accusing Madoff of wrong-doing, but providing few details.
Indeed, it is clear from reading these cases that the FBI and the SEC know nothing about Madoff’s market making and hedge fund firm except that two employees (Madoff’s two sons) have made the vague claim that Madoff told them, vaguely, that his hedge fund was “a giant Ponzi scheme.”
Madoff’s lawyer says his client has admitted to no such crime.
Children do not usually turn in their fathers to the FBI unless they bear other grudges. And it is standard operating procedure for shady high-finance predators to sniff out and prey on feuding relatives who are in business together.
This in no way suggests that Madoff is clean, but it raises the possibility that even dirtier people orchestrated the demise of Madoff and his hedge fund in order to absorb his more lucrative (and crooked?) market making operation.
An alternative explanation comes from Bill Cara, one of the nation’s more perceptive business writers. He concludes that Madoff “is just the beginning. I don’t know, of course, more than you, but…I think he has in fact indicted himself to cause prosecutors to investigate the entire corrupt system.”
Whatever the real story, it is clear that market makers are accessories to a scheme that is much, much bigger than Madoff.
The key players in this scheme are 20 or so mega-billionaire hedge fund managers, who operate with a supporting cast that includes not just market makers, but also smaller hedge funds, rogue prime brokerages, corrupt lawyers, dishonest journalists, bogus one-man credit rating agencies, dubious index trackers, bribed “experts,” skalawag statisticians, compromised professors, private investigators, crooked financial researchers, captured government regulators, hustlers, felons, thugs and mafiosi.
The mega-billionaires masterminded their scheme in the 1980s, and ever since, they and their progeny have been working together – raiding and destroying public companies for profit. In the rubble of these attacks (there are hundreds of examples) one can almost always find evidence of unrestrained naked short selling (people selling things that they do not possess – phantom stock, phantom bonds, phantom mortgage backed securities, phantom CDOs, all manner of phantom derivatives).
This is the organized exploitation of our national clearing and settlement system – a system that fails utterly to ensure that traders actually deliver that which they have sold. If the SEC and FBI are looking for a “Ponzi scheme” of “epic proportions” – this is it.
Mr. Madoff surely knows something about this scheme. Market makers (Madoff’s operation was among the better known) are exempt from rules prohibiting naked short selling. They can sell stock that they have not yet borrowed or purchased, so long as they are legitimately “making a market” (i.e. maintaining liquidity) — and only if they intend to settle the trade soon after. In practice, however, billionaire hedge fund managers have rented market makers’ exemptions to manipulate markets with phantom securities – a blatant crime that is rarely prosecuted.
While Mr. Madoff is talking to the SEC and the FBI, I am going to begin telling you more about the scheme that is bigger than Bernie. Soon, I will name those 20 mega-billionaires, their supporting cast — and the man who is their guru. The evidence is pouring in – there is much to reveal.
But for now, let me leave you with a quotation from the Financial Industry Regulatory Authority’s “Notice 93-77.” Published in 1993, it reads:
Shortly after the market crash of 1987, “then Treasury Secretary Nicholas F. Brady referred to the clearance and settlement system as the weakest link in the nation’s financial system…Gerald Corrigan, President of the Federal Reserve Bank of New York noted: ‘The greatest threat to the stability of the financial system as a whole was the danger of a major default in one of these clearing and settlement systems…”
“The connection between a crisis in the clearance and settlement system and the financial industry was highlighted by the bankruptcy in 1990 of Drexel Burnham Lambert Group…As described in the [SEC’s] testimony before the Senate Banking Committee, near gridlock developed in the mortgage-backed securities market and in the corporate debt and equity markets where Drexel was an active participant.”
Now that our financial system has come to a screeching halt, read those words for clues as to how much worse things can get – and whom we need to stop to prevent that from happening.
* * * * * * * *
Mark Mitchell is a reporter for DeepCapture.com. He previously worked at the Wall Street Journal editorial page in Europe, Time magazine Asia, the Far Eastern Economic Review, and the Columbia Journalism Review. Email: mitch0033@gmail.com

Bernie Madoff

Can anybody believe that this scum bucket isn't in cuffs and stripes yet?

Why this thief isn't behind bars tonight defies decency. He will get his due and it won't be soon enough.

Ossabaw Island, 2008

In the most unique place I have ever chased whitetail deer, Ossabaw Island, off the coast of Georgia I spent the past few days with some friends gunning small island deer and pigs. We had a blast camping, eating elk steaks, grouper and most of all, laughing. I have never been in such a unique ecosystem that is void of predators and hence such a massive amount of deer and pigs that need to be controlled by rifles. That makes it both coasts I have had the opportunity to enjoy the ocean’s power and currents while deer hunting and for that I am thankful.

Bernie Madoff on the stock market

http://www.youtube.com/watch?v=auSfaavHDXQ

Prison wouldn't be enough for this guy........

Why Franklin Raines isn't behind bars belies the issue of politics. I guess it's taxpayers be damned. I say throw away the key if and when justice is ever served.


Dec. 9 (Bloomberg) -- Former Fannie Mae Chief Executive Officer Franklin Raines faulted regulators and lawmakers for encouraging the mortgage-finance company and its competitor Freddie Mac to expand into riskier loan products with limited oversight.

“It is remarkable that during the period that Fannie Mae substantially increased its exposure to credit risk its regulator made no visible effort to enforce any limits,” said Raines, who was ousted in 2004 and accused by federal investigators of accounting manipulation. Raines made his comments in written testimony being delivered today to the House Oversight and Government

Reform Committee in Washington.
Raines, his successor Daniel Mudd, and former Freddie Mac CEOs Richard Syron and Leland Brendsel told the committee that it was a struggle to meet the companies’ dual mandates as profit- making, shareholder-owned corporations that were also required to promote affordable housing, according to the written testimony. Congress pressured the companies to finance more and lower-income borrowers while the regulator did little or nothing to curb their increasing exposure to riskier mortgages, the executives said.
Representatives Henry Waxman and Darrell Issa disputed that account, saying the companies played a primary role in the housing slump and made reckless bets that hurt the market.
“Their irresponsible decisions are now costing taxpayers billions of dollars,” Waxman, the committee chairman, said at the hearing. Waxman said the CEOs ignored the “warnings of risk” and ended up following the market instead of leading it.

Well Capitalized
Raines said the companies’ regulator, the Office of Federal Housing Enterprise Oversight, didn’t seek to restrict the amount of credit risk.

“The regulator limited its intervention to the size of the on-balance sheet mortgage portfolio and the attendant interest rate risk,” Raines said. “Indeed, right up until the time Fannie Mae was placed into conservatorship, the director of Ofheo maintained that the company was well capitalized to withstand the losses it would face.”

Ofheo, which was reorganized with expanded powers this year as the Federal Housing Finance Agency, placed the companies in conservatorship Sept. 6 after regulators discovered that losses at the two largest sources of U.S. mortgage financing were preventing them from fulfilling their mission of supporting the housing market, officials have since said.
Up until the companies were taken over, Mudd said the FHFA “declared us in full compliance with our capital requirements.”

Full Compliance
“At the time the government declared conservatorship over the company, we were still maintaining capital in accord with the relevant regulatory standards, and we were still -- along with Freddie Mac -- the principle source of lending to the mortgage market,” Mudd said in written testimony.
Fannie and Freddie, which own or guarantee $5.2 trillion of the $12 trillion U.S. home loan market, have accounted for 70 percent of all mortgages originated this year, according to the FHFA.
Mudd said the takeover of Fannie was unnecessary, and a “more modest” form of government action would have been enough to keep the business sound.
“While I deeply respect the myriad challenges facing the Treasury Department and the regulator, I did not believe that conservatorship was the best solution for Fannie Mae,” Mudd said in his testimony. Mudd said he argued for “more modest government support” that could have been used to raise private capital, “basically something more like the program many banks are eligible for now,” according to the testimony.

No Man’s Land
Mudd said lawmakers ought to rethink the structure of Fannie and Freddie as shareholder-owned companies with a public mission and “whether the economy would be better served by fully private or fully public” government-sponsored enterprises. With the U.S. housing market in a “freefall,” he said the companies could not “flourish” under the constraints of a business model that required them to support the entire market.
“I would advocate moving the GSEs out of No Man’s Land,” Mudd said. “Events have shown how difficult it is to balance financial, capital, market, housing, shareholder, bondholder, homeowner, private and public interests in a crisis of these proportions.”
Raines and the other executives echoed that sentiment.
“The GSE model is a far from perfect way to achieve the goal of using private capital to achieve the public purpose of homeownership and affordable rental housing,” Raines said. “However, if the public policy goal remains the same, it will be hard to find a model that has more benefits and fewer demerits than the model that worked reasonably well for almost seven decades at Fannie Mae.”

Never forget...........

'The most terrifying words in the English language are: I'm from the government and I'm here to help.' - Ronald Reagan