Merrill playing the extortion game as well

Let. Them. Leave. They're threatening to leave in one of the worst hit markets in the global meltdown where everyone is losing money. The British economy has just been listed as one of the last that will recover whenever that day may be. To hell with them all.

CNBC has learned that Brian Moynihan, who replaced former Merrill Lynch chief John Thain as head of the investment banking subsidiary after BofA's merger with Merrill last year, has made what one person at Merrill described as an "emergency trip" to Merrill's London office. The reason: to stem a possible flood of defections of investment bankers, including the head of the international investment bank, Andrea Orcel.

Aside for his dealmaking abilities, Orcel has recently gained a level of fame for earning a $33.8 million bonus in 2008 and attracting the attention of Cuomo. The Attorney General has widened his investigation into the massive bonuses handed out to Merrill executives before its merger with Bank of America was completed, and more importantly, before Merrill announced a $15 billion loss that forced Bank of America CEO Ken Lewis to seek an emergency bailout from the federal government.

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Meet Chris Hughes, the mastermind behind My.BarackObama.com (He's all of 25 now)

Fascinating article in the latest edition of Fast Company about Chris Hughes. He's the behind-the-scenes genius who basically built Obama's online operation. Even the usually stoic David Plouffe is effusive in his praise of Hughes. It gives some interesting background on how the Obama campaign unfolded, particularly the online component. If you ever wondered how Team Obama did it, this is a must read:

Hughes is a technology star whose business is people. At Facebook and in the Obama campaign, he has been plowing what he observes about human behavior into online systems that help real people do what they want to do in their real lives. He helped develop the most robust set of Web-based social-networking tools ever used in a political campaign, enabling energized citizens to turn themselves into activists, long before a single human field staffer arrived to show them how.

"Technology has always been used as a net to capture people in a campaign or cause, but not to organize," says Obama campaign manager David Plouffe. "Chris saw what was possible before anyone else." Hughes built something the candidate said he wanted but didn't yet know was possible: a virtual mechanism for scaling and supporting community action. Then that community turned around and elected his boss president. "I still can't quite wrap my mind around it," Hughes says.

His key tool was My.BarackObama.com, or MyBO for short, a surprisingly intuitive and fun-to-use networking Web site that allowed Obama supporters to create groups, plan events, raise funds, download tools, and connect with one another -- not unlike a more focused, activist Facebook. MyBO also let the campaign reach its most passionate supporters cheaply and effectively. By the time the campaign was over, volunteers had created more than 2 million profiles on the site, planned 200,000 offline events, formed 35,000 groups, posted 400,000 blogs, and raised $30 million on 70,000 personal fund-raising pages.

There were, of course, many players in the Obama victory, starting with the candidate himself. President Obama was not made available for an interview (not surprising given his new set of responsibilities). But Plouffe, sounding very much like the jubilant CEO of a super-successful startup, is clear: "We were very lucky that Chris gravitated to the campaign early." Indeed, a close look at Hughes's efforts and their impact on the campaign sheds new light on Obama's success at the polls -- in both the primary and the general elections -- and offers lessons for any enterprise seeking to tap social networking as a tool.

The guy is amazing.

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Bats... in... space...

This one is actually kind of sad. NASA reports that the poor thing was clinging to the Space Shuttle's engine as it took off. The dorks even blew up a photo of the shuttle taking off, bat-clinging desperately to the side. The photo, appropriately, is entitled "batliftoff":



You can see a high-res version of the batliftoff photo here, and a high-res photo of the poor bat clinging for life here. (Hat tip ABC).

Hey, maybe we can send some AIG employees down to Cape Canaveral and.... Read More......

Nothing says "I'm a Republican running for President" better than rejecting stimulus money for education. So count Palin in.

Via the Anchorage Daily News, we learn that the Governor of Alaska is rejecting almost half of Alaska's stimulus money -- and education is the biggest casualty. She can't let the Governors of South Carolina and Louisiana outdo her. This is like the first Republican primary of 2012:

Gov. Sarah Palin just told reporters that she’s accepting only 55 percent of the federal economic stimulus money being offered to Alaska. The governor said that she will accept only about $514 million of the $930 million headed to the state.

“We are not requesting funds intended to just grow government. We are not requesting more money for normal day-to-day operations of government as part of this economic stimulus package. In essence we say no to operating funds for more positions in government,” Palin said.

The biggest single chunk of stimulus money that Palin is turning down is $160 million for education. There’s also $17 million in Department of Labor funds (vocational rehabilitation services, unemployment services, etc.), about $9 million for Health and Social Services and about $7 million for Public Safety. The full list and the specifics aren’t available from the governor’s budget department yet.

The legislature can override Palin. Education is just not a priority for Sarah Palin -- either for her state or, apparently, her family.

NOTE FROM JOHN: Turning down money for health, social services, and public safety. Then again, Palin always did have a problem with women who were raped, so perhaps this isn't surprising.

Of course, the larger issue here is that by turning down stimulus monies, Republican governors are jeopardizing the success of the stimulus overall. They are jeopardizing our effort to avoid a depression. All because they want to run for president in four years. It's just not clear what will be left in four years for them to run for after their politicization of the economic crisis risks sending our country into another Great Depression by gutting the impact of the stimulus. Folks, these people simply don't care about the consequences of their actions. Whether it's sending our troops into harm's way for a lie, without the right equipment, number of men, or a plan for victory, or turning away stimulus money needed to jump start the entire US and world economy. They just don't care. Winning is everything.

Maybe Sarah Palin is getting some kooky advice from her Scientologist buddy. Read More......

"The Pope is clearly condemning many many people, innocent people, in Africa to death... of course he is."

Best. Interviewer. Ever.

The interviewer is Jon Snow, a British journalist. Amazing. None of the "some say" bs you get from American TV. Seriously, watch this man, and learn.

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More threats and extortion from AIG employees

I'm getting really tired of the "if you come near me, I'll jump" threat coming from AIG employees. Jump already, or shut up.

"Nobody is going to give it back and then stay," said one of the firm's employees. "If they give back the money, then they will walk. And they will walk into the arms of AIG's counterparties."

As I wrote previously, please do run into the arms of a competitor. I'm sure AIG's competitors are hiring heavily right now since, you know, the economy is booming, we're at full employment, and there's really no competition out there from anyone who just graduated from B-school, who was working for an AIG competitor and just lost their jobs in a cutback, or from any of the thousands who worked for any of the other Wall Street firms that are now defunct.

Oh, and I'm sure AIG's competitors are especially interested in hiring the very people who sunk AIG in the first place. Seriously, walk. Or shut up already. Read More......

Bonus bill vote splits House GOP

Passed 328 to 93. 85 Republicans voted for it, 87 against it. Cantor voted for it, Boehner against it. And some good news, a source on the Hill assures me that Pelosi's fact sheet on her Web site, regarding the bonus tax, was unclear, at least in one part. The bonus legislation income cap, which exempts those making under $250,000 a year from the bonus tax, includes the bonuses themselves in calculating that $250,000 income. Meaning, if your adjusted gross income is $101,000 a year and they give you a $150,000 bonus, then your total "income" for purposes of the bonus tax is $251,000 - and thus you're covered by the bonus tax since you make over $250,000 (though possibly only your income above $250k is covered, it's not totally clear). The tax, however, still exempts people working for companies that take less than $5bn in bailout monies, or people who received bonuses before January 1 of this year. Read More......

WSJ: Geithner and Summers weighed in with Dodd over bonus provision

This is just very bad.

"The president goes out and says this is not acceptable and then some backroom deal gets cut to let these things get paid out anyway," said Sen. Ron Wyden, (D., Ore.), author of an earlier, alternative pay amendment, told the Associated Press.

The Obama administration had not tried to hide its concern about the moves to clamp down on executive compensation. Both Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers lobbied Mr. Dodd to make changes.

Administration officials said the Treasury didn't suggest any language or say how the amendment should be changed. They said they noted legal issues that could likely lead to challenges, but was the end of their involvement. The official said Mr. Dodd and Congress made the final changes on their own.

That's good. The Democrats in Congress and the White House are now in a circular firing squad. How did we lose the moral upper hand on this? Read More......

Congressman Kanjorski captures the mood of the public

We're rapidly approaching the day when Obama needs to cut his losses, though we have already passed that date long ago. The response to the most serious economic problem in a long time has been disorganized and only makes people even more concerned about where it's all going. Americans will support a bailout that is deemed fair and that shows a serious effort but not this.

"I was stunned when I learned how bad this was on Tuesday [March 10]," Geithner said. "I shouldn't have been in that position, but it's my responsibility and I accept that."

Two days later, Geithner told the White House. The last-minute disclosure irked some of the president's senior advisers, but they refuse to point fingers now, saying the timing had little impact on the outcome or the president's public statements this week.

"Would I have liked an earlier warning system on this? Yeah," said David Axelrod, a senior White House adviser. "Would it have markedly changed things? Probably not. The legal constraints are the legal constraints."

One source familiar with the discussions said the company had provided details about the bonuses to senior Treasury officials at least a month ago. A Treasury spokesman said last night that was not true.

Democrats and Republicans in Congress are increasingly questioning how Geithner could not have known about the bonuses, given his past role in AIG's bailout, which has totaled more than $170 billion.

"I'm sick and tired of hearing the administration and the Secretary of the Treasury say, 'I just found out about it,' " Rep. Paul E. Kanjorski (D-Pa.) said yesterday.

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Dems to offer legislation protecting big chunk of TARP bonuses

They are categorically insane.

Charlie Rangel, the guy who came to AIG's rescue on Monday, telling other House members not to dare try to tax AIG's exorbitant bonuses, now has legislation to "fix" the problem, and Speaker Pelosi appears to have endorsed it. I'll let Speaker Pelosi explain the details of the legislation, lest my head explode:

As a result of extraordinary abuses of the public trust by companies rewarding employees with excessive compensation while receiving billions in taxpayer assistance, Congress introduced legislation to recover taxpayers’ dollars.

• The bill would apply a separate income tax rate of 90 percent to bonuses received by individuals from companies which have received at least $5 billion from TARP. It would also apply to bonuses paid by Fannie Mae and Freddie Mac.

• For this purpose, bonuses will be defined as any retention payment, incentive payment, or other bonus which is in addition to regular employee compensation payable on a periodic basis.

• The special tax rate only would apply to individuals and families with overall income (including income other than bonuses) in excess of $250,000.

• The bill applies to payments received after December 31, 2008.

So let me explain the Pelosi-Rangle bill in simple English.

1. If you get a $4.99 billion bailout from the American taxpayers, give all the bonuses you want.

2. Even if your company falls under this legislation's restriction on bonuses, if you as an individual make $249,000 a year, you're exempt and can get all the bonus you want! Would a $10m bonus be too high for the Dems on the Hill? Hell no! $10m is middle class!

3. If you're a company that got a bailout before January 1 of this year, bonus away!

Are they freaking insane? Why does a company that got a $4.9bn bailout, or even a $2bn bailout, get to hand out $10m bonuses to their top employees? The Democrats don't think that little story is going to infuriate the American people? And why are you and me paying, in a year in which we're not even sure if we're gonna have a job, for anyone's bonus on Wall Street? Let alone someone making $249,000 a year? Who came up with that brilliant idea?

Oh, and get this. The Dems are suggesting that if you work on Wall Street, you can get a full, unlimited bonus, perhaps in the millions, even if you make $249,000 a year. But if you work on main street, and earn more than $75,000 a year, the Democrats in Congress just passed legislation making sure that you don't get the full $8,000 first-time homebuyer tax credit, because you're too "rich." See, if you make $75,000 a year NOT on Wall Street, you're "rich" according to the Democrats in Congress. But if you make $249,999 a year on Wall Street, you get a free handout, courtesy of the American people!

Think that's just a fluke? Think again. The Dems did the same thing with Obama's stimulus tax rebate. Remember that little $400 tax cut we were all supposed to get? In fact, if you make more than $75,000 a year, they start to take away your tax cut because - let's all say it together now - YOU'RE RICH!

So to recap: To the Dems in Congress, if you make more than $75,000 a year and work on Main Street, you're rich and undeserving of federal help. But if you make up to a quarter of a million a year, and work on Wall Street, you're middle class and the sky's the limit. And even better, you $75,000 a year people are actually paying for the $249,000 a year people to get their benefits!

These people are categorically insane. Read More......

Wash. Post: "Pope Benedict XVI is wrong."

Every once in awhile, the Washington Post editorial page gets something right and we must acknowledge it. Today is one of those times. In a editorial titled, "Condom Sense: Pope Benedict XVI is wrong," the Pope gets lambasted and deservedly so. Pope Benedict XVI is wrong on condoms. He is so wrong that he puts lives in danger:

While on a flight to Cameroon on Tuesday to begin a weeklong journey through Africa, Pope Benedict XVI said, "You can't resolve [the AIDS epidemic] with the distribution of condoms. On the contrary, it increases the problem." In a perfect world, people would abstain from having sex until they were married or would be monogamous in committed relationships. But the world isn't perfect -- and neither is Pope Benedict's pronouncement on the effectiveness of condoms in the battle against HIV/AIDS. The evidence says so.

Are condoms foolproof protection against infection by HIV, which causes AIDS? No. Sometimes they break, and sometimes people put them on incorrectly. Still, doctors on the front lines of the fight against the AIDS epidemic established long ago that the use of condoms greatly diminishes the transmission of HIV, the cause of a disease that has no cure. That the pope chose to question the value of condoms in fighting the nearly 28-year-old scourge while heading to the continent whose people are most affected by it is troubling. According to UNAIDS, the Joint United Nations Program on HIV/AIDS, sub-Saharan Africa is the epidemic's center, with 67 percent of the world's 32.9 million people with HIV and with 75 percent of all AIDS deaths. Heterosexual intercourse is the "driving force" of the epidemic.

The pope's comment was so alarming that a spokesman for the French Foreign Ministry said, "We consider that these statements endanger public health policies and the imperative to protect human life."

The pope, the leader of the Catholic Church, violates the "imperative to protect human life." Benedict is dangerous. Admittedly, I'm not the best Catholic, but I think deliberately endangering the lives of others flies in the face of everything Jesus Christ actually taught.

Pope Benedict XVI is wrong. Read More......

She couldn't march in her city's parade on St. Patrick's Day, but Chris Quinn did talk to the President and Ireland's leaders at the White House

On Tuesday, I noted that NY City Council Speaker Christine Quinn, one of the most powerful officials in New York City, once again wasn't marching in her city's St. Patrick's Day parade. A group of homophobes run that event and refuse to allow any gay representation. It's archaic.

So, Chris found another venue to celebrate what she said was always a "high holiday in the Quinn household." She was invited to the White House to celebrate with the leaders of Ireland and other famous Irish-Americans. Chris wrote about that event over Huffington:

I arrived almost embarrassingly early, fearful of long security lines. I eventually made my way to a reception in the Map Room, where I had the opportunity to speak briefly with the President. I told him and Mrs. Obama that I was the first Irish, first woman, and first openly gay Speaker of the New York City Council.

I told the President how grateful the Irish-American Community is for his strong and continued support of the peace in the North of Ireland. I then expressed my desire that he support issues of full LGBT equality, and suggested that a good early action would be to support a recent federal court ruling in San Francisco, requiring benefits to be extended to the same sex partners of court employees.

Our conversation flowed seamlessly from talk of the struggle for equality in the North of Ireland, to the ongoing fight for LGBT rights. And it set the tone for what would be a night of such interaction. I spoke with leaders from Ireland and openly gay political leaders from the U.S. about the broad struggle for civil rights of which we are all a part.

The event was a picture of inclusivity and the intermingling of cultures: I saw Sinn Fein President Gerry Adams and Deputy First Minister Martin McGuiness, Shaun Woodward, the British Secretary of State for Northern Ireland, and openly gay DNC treasurer Andrew Tobias all celebrating together. President Obama spoke about his own Irish heritage, tracing a great, great, great grandfather back to the same county as Brian Cowen, the Irish Taoiseach, or Prime Minister.

It reminded me that in the past year we've seen our nation elect an African American president, and we've seen peace come to the North of Ireland. It reminded me of how absurd it is that we allow a small number of small minded individuals to tell an entire group of people that they cannot march proudly and openly in their parade. It reminded me that each day we move closer to inclusion and equality. And it made me proud to be Irish, proud to be a member of the LGBT community, and proud to be an American.

Very cool.

You'd think that by now the homophobes who run the NYC parade would notice that people of Ireland are much more progressive and more respectful. Read More......

Thursday Morning Open Thread

Good morning.

As Chris notes below, the American people are really, really cranky about the AIG bonuses. It is one of those things that "everyone" is talking about. The gall. Seriously, for years, we've heard the government bashed by conservatives, big business types and Republicans. But, the government saved the financial industry from tanking. Now, those Wall Street types have redefined the term "Welfare queens." That was a derogatory term used by Reagan to denounce mythical welfare cheats. But, we're actually seeing Wall Street's Welfare Queens now. They live very large because of our tax dollars.

And, note to Tim Geithner: Let's hope you've figured out by now that you work for Obama, not Wall Street. Your old pals in the biz are making you look really bad. They're not your friends now. So, start working for the American people.

Start threading the news... Read More......

Gallup: 76% want government to block or recover bonuses

This has been a serious problem for months so it's still not clear what is going on between Dodd and Obama on who asked for what bailout language. Either way, it doesn't look good nor does it help the case of the floundering Geithner. Obama is in a deep hole with this problem and does not have the right team to move forward. He can either stay with Timmy or cut his losses now and find a grown up who is more focused on helping the country as a whole instead of remaining friends with Wall Street. As I've said before, Obama is making a mistake if he thinks this is not going to drag him down. The entire process including bringing in Geithner and his team has been chaotic and that does not help bring confidence to anyone.

Three in four Americans (76%) want the government to take actions to block or recover the bonuses insurance giant AIG paid its executives after receiving federal bailout funds.

The results are based on a one-night Gallup Poll conducted March 17, 2009, after reports that AIG, the recipient of about $170 billion in federal aid, recently paid its executives $165 million in bonuses. AIG contends it had to pay the money because of existing contracts that were in place before the company received bailout funds. On Capitol Hill Wednesday, members of the House Financial Services committee said they were determined to get the money back, demanding from Chairman and CEO Edward Liddy the names of the bonus recipients.

Answering questions from lawmakers, Liddy acknowledged that doling out the bonus money was "distasteful." Reports about the AIG bonuses have dominated the news cycle this week, with lawmakers and journalists chiming in about taxpayer "outrage." In the Tuesday night Gallup Poll, 59% of Americans said they were personally "outraged" by the bonuses. One in four (26%) said they were "bothered" and just 1 in 10 (11%) said they were not that bothered.

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UK unemployment hits 2 million

This number is higher than when New Labour and Blair took over in the 1990s, so it is just another nail in the coffin for Gordon Brown and Labour. The IMF expects the UK to stay in recession longer than others in Europe which is no surprise due to the over-reliance on banking/finance to juice the economy in recent years. The only factor not forcing a change today is the Conservative party itself. Few people think the Tories have much positive change in their own arsenal.

Gordon Brown was under increasing pressure to combat rising unemployment tonight after figures showed the deepening economic crisis caused a record jump in the jobless total last month.

As the headline figure of people out of work rose above two million, Brown clashed with Tory leader David Cameron in bitter exchanges at prime minister's questions in the Commons.

Speaking hours after the release of figures showing that the number of people claiming unemployment benefit rose by 138,400 in February – the biggest rise since records began in 1971 – the prime minister said: "Any person losing their job, or in fear of losing their job, is a matter of personal regret for me and for the whole government. We are prepared to spend money to help the unemployed. We are not going to walk by on the other side, we are going to help them."

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Congress requests Merrill bonus details

It's about time Congress steps up the pace, though it's still lagging behind Cuomo. For some reason, the Democrats seem content to drag their feet with going after Wall Street despite the coast-to-coast and beyond anger at the greed and destruction. Maybe the Democrats are convinced this will simply blow over and nobody will care during the next election cycle. That's quite a gamble considering the US will either still be in recession or barely positive in the second half of 2010.

The chairman of the House Committee on Oversight and Government Reform has asked for records on the $3.62 billion of year-end bonuses at Merrill Lynch, to see if the panel was misled about the payments, the Wall Street Journal said.

The move comes against the backdrop of widespread outrage that insurer AIG , kept alive on a U.S. government bailout of up to $180 billion, was paying its employees bonuses of $165 million.

Representative Edolphus Towns made the request in letters sent Tuesday to
Bank of America CEO Kenneth Lewis and Raymond Calamaro, who served as outside counsel for Merrill, the paper said. Bank of America acquired Merrill on Jan. 1.

In a Nov. 24 letter, Calamaro wrote to the committee that "incentive compensation decisions for 2008 have not yet been made", and said directors would do so at year-end, the paper said.

But Merrill's compensation committee had approved the 2008 bonuses in a Nov. 11 vote, according to testimony later given to New York Attorney General Andrew Cuomo, who is conducting his own probe, the paper said.

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