July 31st, 2007
This DOOM & GLOOM SCENARIO is brought to you by www.newcombat.net, where the glass is always empty — Waiter!?
In light of the recent turmoil in the markets,
A FRIEND WROTE: So is this a turning point, a sea change, the beginning of high interest rates, low to no growth, maybe stagflation?
NEWCOMBAT ANSWER MAN: Yes. These things have been on the worry-horizon. Now they will be realized.
FRIEND WROTE: Is this all Warren’s fault?
(That is: Warren J. Spector, an old mutual college friend currently on the hot seat at Bear Stearns (BSC), where he is President and co-Chief Operating Officer. Bear had two “hedge funds” specializing in mortgage bonds fail this past month, and today announced it has forbidden redemptions by investors in a third.)
ANSWER MAN: No. It is not Warren’s fault. It seems he was a victim (paid, according to Forbes Online, about $35 million in 2006) of a nationwide network of venal mortgage brokers who bent rules to write mortgages for (i) “subprime” humans (FICO credit scores less than 625 more or less) and (ii) “Alt-A” humans, like me, who don’t have normal jobs and thus are sent to the “Alt-A” mortgage pool when looking to gamble on real estate.
One of the spectacular failures is happening today. American Home Mortgage. (AHM). A specialist in Alt-A mortgage lending. Stock was trading at $20 two weeks ago; today closed at $1.04. You can get a chart to see what it looks like at:
http://bigcharts.marketwatch.com/advchart
Also check out Countrywide (CFC), which specializes in subprime mortgages. And check out the titans of Wall Street. Merril Lynch (MER). Goldman Sachs (GS). Lehman Brothers (LEH). Bear Stearns (BSC). Barclays (BCS).
And Citibank (C). Bank of America (BAC). JPMorgan Chase (JPM). Wachovia (WB). Capital One (COF).
These boys are too big to fail (aren’t they…?). But they’re not used to being pushed around like this.
The Dow Industrials were down 300 last Thursday, 200 on Friday. Up 80 yesterday. Down 100 or so today. And it seems will be down several hundred tomorrow, at least in the morning, on the AHM failure.
SO WHAT’s ALL THE NOISE ABOUT?
ANSWER MAN: It’s more than a typical “liquidity” crisis (ala when the huge “hedge fund” Long Term Capital Management failed in late 90s).
The difference this time is that the mortgage-bond failures have demonstrated that the Rating Agency (Moody’s, S&P, Fitch) “models” (ie spreadsheets) for evaluating and thus rating “asset-backed securities”, “collateralized debt obligations” and other complex “structured finance” bonds sare seriously flawed.
The implosion nationwide of the housing market, following upon a great expansion of credit under Greenspan (which expansion was possible in good part BECUASE of the structured finance revolution that began in the 80s with the advent of personal computers and spreadsheets) — this implosion, I say, was the first extreme test of the Rating Agency models, and they flunked.
I.e,. mortgage bonds rated AAA (the best) have been failing as wildly as the BBB- bonds (bottom rung of so-called “investment grade”).
Upshot: The global finance system is loaded with more than a trillion dollars worth of these complex bonds and at the moment no one is sure what they’re worth.
You won’t hear this Rating Agency methodology problem talked about on CNN or in the Wall Street Journal yet. For now it’s the mortgage bond failures and the failures these are causing among “hedge funds” and the big lenders in the affected spheres.
But the rating methodology problem is the underlying failure, and it seems likely to cause riotous panic. (Unless everybody decides to ignore it. Say, via a Price Control program instituted by the Fed …)
The mortgage and credit-card businesses rely ENTIRELY on their ability to sell the risk through asset-backed securities. If the market for those securities dries up (as it may well have already — it’s hard to tell because the markets are not public) — the businesses will contract in ungodly fashion. Very hard to get a mortgage or credit card, unless you reside in Richistan and need neither.
Before it’s over we may have to go back to the 1930s for a similar scenario re crisis credit contraction and its dire sequelae.
Ie I should sell my apartment yesterday.
July 31st, 2007
1. Lisa Pease, a respected JFK researcher, responds negatively to Shane O’Sullivan’s recently unveiled alleged video evidence that CIA goons David Morales, Gordon Campbell and George Joannides were at the Ambassador Hotel in California the evening RFK was murdered. See her blog.
(Navigation note: The blog link actually takes you to the Comments to Pease’s “review” of O’Sullivan, rather than her review itself. For the latter, click the “Show Original Post” link you’ll see atop the Comments page.)
Also note that the Comments include a reply by O’Sullivan.
On its face Pease’s rebuttal lacks substance, in that she doesn’t engage the substance of O’Sullivan’s report.
Rather, she says in rather a priori fashion that she cannot believe the CIA would be dumb enough to send men involved in JFK’s murder to kill his brother. The premises underlying this statement seem to me likely false. She would do better to directly address O’Sullivan’s evidence.
She also implies guardedly that O’Sullivan’s thesis doesn’t congrue with new evidence re RFK’s death currently in her hands but unpublished. One senses this is the gist of her negative reaction.
Nevertheless, she is someone to consider seriously in these matters. Also see her journalistic website — Real History Archives.
And see the earlier, excellent, site about the JFK murder primarily — Citizens for Truth about the Kennedy Assassination, or CTKA — which came out of PROBE magazine, which Pease produced with Jim DiEugenio.
2. A stronger rebuttal has been published by Jefferson Morley (journalist well acquainted with these matters — see his article, posted as the second Comment here) and David Talbot (founder of Salon.com and author of this year’s very good book, focused on Robert Kennedy’s experience post JFK murder, entitled Brothers).
Then again, if you follow up to a great resource page you will find that O’Sullivan’s own rebuttal to Morley/Talbot also has merit.
For now I tend to agree with Sullivan that the Morley/Talbot piece is off-center of its supposedly intended target.
The O’Sullivan BBC video (12 minutes) is also linked at the resource page.
3. O’Sullivan’s video relies heavily on the career and investigations of Bradley E. Ayers — a former Army Ranger captain who was dealt by the Pentagon into the cesspool of the early 60s CIA to train the anti-Castro cubans the CIA was still organizing post Bay of Pigs to harass Cuba.
Ayers has just this year published a book — THE ZENITH SECRET. Which I have just completed reading cover to cover. Despite the microscopic type in which it was set.
ZENITH SECRET is uneven but full of important things. Must be read.
It was published by Vox Pop, a Brooklyn bookstore run by Sander Hicks, the founder of Soft Skull Press and publisher of J.H. Hatfield’s FORTUNATE SON, the must-read biography of baby Bush.)
Having just read ZENITH SECRET and the rebuttals of O’Sullivan’s BBC piece by Morley, Talbot and Pease, I’m in a bit of a Barbaric Bog, sans solid opinion. So for the moment will cease trying to have one.
Instead, a few observations:
(a) Ayers writes in his Epilogue that after
multiple viewings of the Ambassador Hotel ballroom videotapes … my initial identifications [from photos] of Morales and Campbell were confirmed for the record. (p262).
Ayers never mentions Joannides in his book, and I guess he never met him. But he was well acquainted with Morales and Campbell.
(b) Morley/Talbot write, in their short piece:
Gordon Campbell, it turns out, was not the deputy station chief in the CIA’s Miami operation, as O’Sullivan reported. He was a yachtsman and Army colonel who served as a contract agent helping the agency ferry anti-Castro guerrillas across the straits of Florida, according to Rudy Enders, a retired CIA officer, and two other people who knew him.
This contradicts a ton of detail in Ayers’ memoir.
Ayers does identify Gordon Campbell as deputy station chief at JM/Wave (the CIA Miami station), second in command to Ted Shackley, and relates many detailed encounters with both Shackley and Campbell, as superiors to whom he had to report and clear actions.
I don’t grasp why Morley/Talbot find the point worthy of such attention. Even if they are correct re Campbell’s job description, it hardly touches on the core controversy re the identities of the three men in the Ambassador footage.
And that they cite Rudy Enders as authority seems a bit ludicrous.
(c) Morley/Talbot then report, perhaps gloating, that Enders told them that Gordon Campbell died in September 1962. So he could not have been in Los Angeles in 1968, as O’Sullivan suggests. They provide a photostat death certificate.
But again — the “Gordon Campbell” who Anders says died in 1962 cannot be the deputy chief of station using that name that Bradley Ayers worked with in Miami beginning summer 1963. And this man is the one Ayers has identified in the Ambassador footage.
It seems either Ayers is spewing insane fiction, or Morley/Talbot have been fed the wrong Gordon Campbell, or similarly confused, by their CIA sources.
Nevertheless, Mr Morley in particular is somone whose views in these matters I respect.
4. Another GORDON CAMPBELL Curiosity: His adjutant KARL
(a) Karl in High Company
Ayers reports at length on Gordon Campbell’s Man Friday at JM Wave — a francophone (native french or belgian, he seemed) named Karl.
Ayers had several close encounters with Karl. And reports once seeing him having lunch, at a remote roadhouse between Miami and the Keys, with David Morales, David Atlee Phillips (senior CIA Psy Ops dude, protege of E. Howard Hunt) and Johnny Roselli (mobster hired by high CIAist Bill Harvey to get ihis lame-brained Castro assassination program off the ground).
Recall: Morales, Roselli, Harvey and Phillips are already all near the center of the JFK murder mystery.
At the time Morales was covert ops chief at the Miami station.
Phillips, much senior, had supposedly stepped down to be chief of the Mexico City station, where, he confessed publicly in 1977, he had something to do with the falsification of evidence putting Oswald at the Soviet embassy in October 1963. See Lane’s Plausible Denial.
Harvey had come back from Europe a few years before to be Deputy to Angleton at counterintelligence HQ in Langley, where inter alia they solicited help from MI5’s Peter Wright in assembling an assasination team, mentioning Castro by name. See Wright’s Spycatcher. Harvey was then dispatched to Miami, where Ayers encountered him several times from summer ‘63 on, often accompanied by Roselli.
Ayers writes that he wondered immediately how it was that Karl ranked to be found in such elevated Company company. He did not see Karl’s superior, deputy station chief Campbell, at the lunch.
(b) Karl Murdered by, it seems, CIA
A few months later — Ayers was compelled to be in attendance at Karl’s murder.
?!!?
Ayers writes that he and Karl were taken in a helicopter to reconnoiter the Florida coast, looking for new training grounds for the angry and teeming cubanos.
But then the unknown (to Ayers) leader of the flight pulled a pistol — and forced Karl out the copter door, sans parachute, to his death. Over the wide empty spaces of Eglin Air Force base.
Ayers speculated at the time that he was chosen to witness the execution because his superiors were beginning to worry abou his (Ayers’) attitude: a caution to shut his mouth and get back to work. Since he did not go to the police about the murder, he became, technically, an accessory to it, which he felt left him open to blackmail thenceforth.
(c) Karl a Doppelganger for Lee Oswald
Shortly after Karl’s murder Ayers had his mind blown when he saw replays of the press conference and murder of Lee Harvey Oswald on TV — and realized that Karl was a doppelganger for Oswald. (Recall that an Oswald imposter seems to have been central to the creation of the CIA cover story.)
5. It was only years later, when Ayers read the Warren Commsision Report and realized it was a pack of lies, that he began a career as an investigor of JFK’s murder. The second half of ZENITH SECRET is about this.
His evidence and conclusions, such as they are, in a nutshell:
– Morales was a protege of right-wing Senator Barry Goldwater, the leading militarist in the Senate of the day and GOP presidential candidate in 1964.
Morales grew up dirt poor in Arizona. But found work as a teenager in the Goldwater family empire, and came to Barry’s notice. Goldwater then paid to put Morales through college in Arizona and California.
– In 1963, Morales was a flamboyant visitor to Goldwater’s senate offices. Bursting in without appointment. Embracing the staid Senator …
– Goldwater participated in JFK’s murder by ordering the transport of two suitcases of campaign contribution cash from Las Vegas (given to the courier by Robert Maheu (ie Howard Hughes) and mobster Joe Bannano), one suitcase to a man using the name Gordon in a Dallas motel and the other to David Morales in a New Orleans motel.
(a) MORALES BIOGRAPHY
Note that Ayers is the primary researcher of Morales’s life and career, upon whom the likes of Noel Twyman (Bloody Treason), Pease and now Shane O’Sullivan have all relied.
Morales was Director of Operations (dirty work) in the Miami CIA station during the 18 months or so Ayers was there as director of combat training for cubano insurgents. Morales was the infamous leader on the ground of the 1954 CIA coup in Guatemala and of Bay of Pigs martyrs on the beach in 1961.
Ayers reports that Morales was also one of the first six men hired, in 1948, as black ops operatives by the fledgling CIA. And that he was a fearsome figure in Miami 14 years later — that even Shackley, chief of station, often withered in his presence.
Morales was subpoenaed to appear before the House of Representatives Select Committe on Assassinations in 1978. Instead he died, at age 53.
Ayers gently doubts this story, noting that Morales’s gravesite in Arizona seems to have been fiddled with.
Possible, perhaps, then, that Morales’s death was faked in 1978 to avoid the HSCA subpoena and to ease his transit into retirement and another identity.
Which brings to mind Rudy Enders telling Talbot/Morley that “Gordon Campbell” died in 1962, and waving a piece of paper in their faces to prove it.
(b) BARRY GOLDWATER?
Ayers produces a source — a smart and circumspect Phoenix woman named Pearl, daughter of a man on Goldwater’s business staff for nearly 30 years — who at length details the alleged involvement of Goldwater in the JFK murder.
She says that her father — Pepe — told her, shortly before his death, that he was asked by Goldwater in November 1963 to drive up to Nevada to collect a large cash campaign contribution. (Goldwater was running for Pres in 1964.)
Pepe did so — collecting two suitcases of cash from Robert Maheu (infamous mysterious US intelligence agent then serving as chief exec of Howard Hughes’s business empire in Las Vegas) and Las Vegas mobster Joe Bananno.
Pepe then drove to Dallas, called a phone number, and delivered one suitcase to a man in a Dallas motel going by the name of Gordon, the day before JFK’s murder.
(Recall: Morita Lorenz, the woman at the heart of attorney Mark Lane’s PLAUSIBLE DENIAL case — in which Howard Hunt sued a magazine for libel (without success) for running a story that placed him in Dallas during the JFK murder …
Recall, I say, that Lorenz testified in court that she drove from Florida with CIA assassin Gerry Hemming, CIA and mob goon Frank Sturgis, and several cubans, with two trunk-loads of guns, and that they were paid by E. Howard Hunt for those guns with lots of cash in a Dallas motel the night before the murder.
(The obvious tasty speculation, of course, is that the cash Pearl’s father delivered to Gordon [Campbell? Or Hunt using that name?] in a Dallas motel the day before the murder was the cash that Hunt gave Hemming, Lorenz & co for their guns in a Dallas motel the evening before the murder.)
Pepe then drove to New Orleans and delivered the second suitcase to David Morales in a motel there early on November 22, 1963.
======
Curious.
Too tired however to try to make more of this at the moment.
One has to read Ayers’ book to develop confidence in his reportage. It does seem however that to dismiss him in toto — as Lisa Pease does — would be to conclude he is a raving maniac writing whole-cloth fiction.
And that is certainly not my impression.
Rather, he reminds me of Col. Fletcher Prouty, whom I admire and whose writings have not only withstood the test of time, but become more and more apt to our increasingly unhinged sociopolitical landscape.
July 31st, 2007
The following (from a story by David Weidner at Marketwatch.com) neatly expresses the American corporate mindsoul:QUOTE
A few weeks ago, Charles Prince, Citigroup’s CEO, famously said the bank was gladly lending even though there have been ample observations, from even the most modest of sources, that the credit market was overheated. See full story.
“When the music stops, in terms of liquidity, things will be complicated,” Prince told the Financial Times. “But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.”
The problem, of course, is that Citigroup is bracing to be stuck holding more leveraged bridge loans than it bargained for. If Citi can move the debt off its balance sheet, it’s likely the bank will have to pay a premium to dump it on some other investor, Citi’s CFO, Gary Crittenden said. That, of course, is going to mean charges and other costs when the bank reports in the third quarter.
As one Citigroup insider said to me the other day: no one’s dancing anymore.
END QUOTE
July 28th, 2007
According to the New England Journal of Medicine. The BBC reports:
Cat ‘predicts patient deaths’
A US cat that is reportedly able to sense when a nursing home’s residents are about to die is baffling doctors.
Oscar has a habit of curling up next to patients at the home in Providence, Rhode Island, in their final hours.
According to the author of an article in the New England Journal of Medicine, the two-year-old cat has been observed to be correct in 25 cases so far.
Staff now alert the families of residents when he sits down next to their ailing loved one.
Oscar meows in protest if removed
from the room of a dying patient
“He doesn’t make many mistakes. He seems to understand when patients are about to die,” David Dosa, a professor at Brown University who carried out the research, told the Associated Press news agency.
Oscar was adopted as a kitten at Steere House Nursing and Rehabilitation Centre.
The cat is said to do his own rounds, just like the doctors and nurses at the home, but is not generally friendly to patients.
Although most families are grateful for the warning Oscar seems to provide, some relatives ask that the pet be taken away while they say their last goodbyes to their loved ones.
When put outside the room, Oscar is said to pace up and down meowing in protest.
Thomas Graves, a feline expert from the University of Illinois, told the BBC: “Cats often can sense when their owners are sick or when another animal is sick. “They can sense when the weather will change, they’re famous for being sensitive to premonitions of earthquakes.”
A doctor who treats patients at the home said she believed there was probably a biochemical explanation, rather than the cat being psychic.
July 26th, 2007
For the first time French fighter jets land on an American aircraft carrier (the Enterprise (dispatched as noted two weeks ago) in the Mediterranean — exercising).
Meanwhile Dow INdustrials were down 300+ half an hour ago, currently down 265.
Wells Fargo has closed its third-party subprime mortgage business. Ie will no longer take such loans from mortgage brokers.
Meanwhile the Wall Street houses are melting. Lehman (LEH), Goldman Sachs (GS), Bear Stearns (BSC), Merrill Lynch (MER) and Barclarys (BCS). Melting. As the yen surges against hte dollar.
Here’s a report from Bennet Sedaca at Minyanville.com :
QUOTE Whenever I want some really good, really accurate market color I go to a friend of mine with 35 years of experience including 15 years as a head Treasury trader for two major ‘primary dealers’. So I just called him and got the following response about ’structured product’. It ain’t pretty.
- ‘Massive loss of confidence among young traders that have never seen a lack of liquidity’
- ‘There aren’t enough seasoned, weathered traders to deal with this mess’
- ‘Traders don’t know how to deal with illiquity as they are used to a permanent bid and always tighter spreads’
- Dealers are bidding 10 points back of normal because they already have too much inventory’
- ‘In many cases there is no market’
- Inventories at the banks is huge and they will have to get marked to market next week causing many funds to go under’
- ‘We need one headline like ‘Buffett to buy Chrysler deal at X price’ to clean up market’
He said he tried to sell $25,000,000 of an A rated CDO and his desk bid 75 even though they believed it was worth 90.
END QUOTE
