Obama Expands the American Warfare State

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Sherwood Ross
May 20, 2009 - Smirking Chimp

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Although the U.S. is not in imminent danger of attack from any country, President Obama's first budget further expands the Pentagon's already dominant global operations.

Not even the prospect of a $3.1 trillion combined budget deficit for this year and next deters him. Let them chop the budget for black colleges and police officer death benefits, the Pentagon and its contractors continue to feast at the champagne-and-caviar table.

It's not as though for eight years the Bush Pentagon hadn't nearly outspent the rest of the world combined on designing deadlier weapons and employing them in illegal wars.

Obama's new $664 billion Pentagon budget is $21 billion higher (four percent) than the final Bush budget. It includes $65 billion for Afghanistan and $61 billion for Iraq. Why?

Well, here's what Defense Secy. Robert Gates told the Naval War College April 17th: "The U.S. must not take its current dominance for granted...its battle fleet, by one estimate, is still larger than the next 13 navies combined---and 11 of those 13 navies are U.S. allies or partners."

(Get that? "Larger than the next 13 navies combined." What's more, nearly every world power is our buddy. So where's the urgent need to spend billions on expansion? And notice his use of the word "dominance.")

Gates went on to boast, "In terms of capabilities, the over-match is even greater. No country in the rest of the world has anything close to the reach and firepower to match a carrier strike group. And the U.S. has and will maintain 11 at least until 2040."

Gates seeks an incredible 2,400 new Joint Strike Fighter planes when the U.S. already is undisputed master of the skies. Think of that: 2,400 warplanes in the absence of an enemy!

At 100 million bucks a pop, that air armada will cost taxpayers over $240 billion.

As Sheldon Filger wrote in the May 16 Huffington Post of the Pentagon's fiscal 2009 outlay: "This stratospheric expendure is equivalent to the combined totals for the next 25 largest military budgets on the planet."

The Pentagon claims it needs to be able to fight two wars at once. However, if it did not go around starting wars it would be hard-pressed to find one. From what quarter does Gates expect an attack? Iran, with a puny military budget 1/100th our expenditure? Recall the last successful strike on U.S. soil was achieved not by a great army wielding sophisticated weapons but by a handful of terrorists with box cutters who hijacked airliners and used our own jet fuel for explosives. Yet the Pentagon expands as if gearing up to fight WWII.

"President Obama's budget continues the decade-long uptick in Pentagon spending, which has grown by approximately 40% since 2000," observes military policy analyst Travis Sloan of the Center For Arms Control and Non-Proliferation.

He notes the Obama budget "appears surprisingly large at first glance, especially in this economic climate." Yet he sees reason for optimism as he believes Obama "will institute critical foreign and defense reforms that will make us safer and spend our money more wisely." That's his view.

Obama's Pentagon budget, however, is certainly not going to make the people of Afghanistan safer. His buildup there comes as Afghan President Hamid Karzai pleads in the strongest terms "for the U.S. to halt air strikes in his country, following attacks...that Afghan officials said killed 147 people," Reuters reported. "We demand an end to these operations...an end to air strikes," Karzai told CNN. (Demand? Puppets don't pull strings.)

Defense Secretary Gates informed West Point cadets April 21st that Afghanistan is about "striking back at the staging ground of the perpetrators of the September 11th attack," claiming "Afghanistan is widely viewed as a war of necessity."

In fact, USA Today reported just a month earlier that public support for that conflict "has ebbed to a new low," according to a Gallup Poll. Americans who regard the attack on Afghanistan as "a mistake" had increased from 9% in 2001 to 42%, a sea change Gates conveniently chooses not to credit.

Gallup also discovered a shift in public opinion from March, 2007, when it asked if the U.S. was spending too much or too little on defense. Forty-three per cent responded "too much" compared with 20 percent who replied "too little." A decade earlier most Americans didn't think the Pentagon was on a spending binge with their taxes.

It's ironic that to prosecute what is now President Obama's war, the Pentagon is inflicting on Afghan civilians the same cruel deaths terrorists visited on New York City. Human Rights Watch dubbed "inadequate" U.S. military measures to safeguard them.

A like situation afflicts Pakistan, as the U.S.-made Afghan war spills over its borders. According to AP, "Using unmanned aircraft, American forces have carried out dozens of missile attacks in northwestern Pakistan over the last year. U.S. officials rarely confirm the attacks, but say they have killed a string of al-Qaida commanders. Pakistan's government has publicly protested the tactic, arguing that it kills too many civilians and undermines its efforts to turn tribal leaders away from hard-liners." The UN says 1.5 million Pakistanis have fled their homes, a repeat of the Afghan exodus.

America's Afghan war "is not self defense," writes international law authority Francis Boyle in his new book, "Tackling America's Toughest Questions"(Clarity Press). "Let's be honest. We all know it. At best this is reprisal, retaliation, vengeance, catharsis...(it) constitutes armed aggression. It is illegal. There is no authority for this. It is creating a humanitarian catastrophe for the people of Afghanistan."

Boyle recalls that then Secretary of State Colin Powell promised to produce a "white paper" documenting their case against Osama bin Laden and Al Qaeda but never did, and that Bush failed to get a UN resolution authorizing military force in Afghanistan.

The Pentagon's aim, he says, is to "direct military control of 50 percent of the world's oil supply" in the Persian Gulf region, which the Fifth Fleet was "set up in Bahrain to police, dominate, and control."

Can the Department of Defense operations be construed "defensive" when it is operating more than 1,000 bases abroad and those 11 mobile carrier attack fleets? According to author Hugh Gusterson, writing in The Bulletin of The Atomic Scientists of March 10th: "These thousand bases constitute 95 percent of all the military bases any country in the world maintains on any other country's territory. In other words, the United States is to military bases as Heinz is to ketchup." (If only the Pentagon spilled just that!)

Few realize the Pentagon's collection of bases makes it the world's biggest landlord, about 30-million acres. Excluding Afghanistan and Iraq, USA spends $102 billion a year just to run its overseas bases, according to Miriam Pemberton of the Institute for Policy Studies.

The Pentagon justifies its appetite for, say, 227 bases in Germany in terms of making the U.S. more secure. In fact, though, "Such forward basing of forces," writes James Carroll in House of War(Houghton Mifflin), "was designed to control, by means of 'regime change' and 'prevention,' emerging political trends around the globe, with the unabashed goal of guaranteeing U.S. dominance everywhere." Indications are the American war machine has triumphed over its closest adversary: the State Department. As Reuters columnist Bernd Debusmann wrote May 14th, "The U.S. armed forces, the world's most powerful, outnumber the country's diplomatic service and its major aid agency by a ratio of more than 180:1, vastly higher than in other Western democracies. Military giant, diplomatic dwarf?"

Debusmann goes on to say, "In terms of money, the U.S. military towers just as tall. Roughly half of all military spending in the world is American. Even potential adversaries in a conventional war spend puny sums in comparison...China's defense budget is $70 billion, Russia's around $50 billion."

The picture emerging is ugly. No "victory" in its spreading wars in Afghanistan, Pakistan or Iraq ever will begin to compensate for the vast numbers of Middle Eastern folk needlessly maimed, killed, displaced, and pauperized by U.S. military aggression. "Aggression" is the only word for it and the Middle East's oil supply is the only reason for it. The Pentagon is on its way to tighten its control of the world---with the help of our newest imperial president's enabling budget. The American Warfare State marches on!

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Sherwood Ross is an American reporter who has worked for major American newspapers and magazines as well as international wire services.

Our Loss Is BlackRock's Gain

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Robert Scheer
May 20, 2009 - TruthDig

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How much do you know about the BlackRock hedge fund? Better bone up fast, now that the folks at BlackRock are calling the shots in the government's trillion-dollar bailout program. As both The New York Times and The Wall Street journal reported on Tuesday, BlackRock execs are now directing key elements of the government program at a time when they stand to reap great profits from the fallout of a problem they helped create.

The U.S. picked BlackRock to manage the assets once controlled by AIG and Bear Stearns and to analyze the assets of Freddie Mac and Morgan Stanley. And as if that were not enough on its plate, the Treasury Department has just selected BlackRock to be one of the few firms trusted with using U.S. taxpayer dollars to buy toxic assets from the banks and then resell them in a process that presents enormous conflicts of interest with other BlackRock operations.

Bank of America, with a 47% ownership position in BlackRock, is also the owner of what was once Countrywide Financial, which led the pack in selling bad mortgages. The disposition of those failed properties under BlackRock's tutelage will have much to do with BofA's future profitability. As if that were not enough financial incest, the former president and other top executives of Countrywide now run a company created by BlackRock, which is profiting mightily by snapping up the sort of distressed loans that they originally had marketed.

Confused? You're supposed to be. That's the point of a successful hedge fund, a totally unregulated activity in which very rich people pool their money in order to more effectively rip off the rest of us. And BlackRock is at the top of that game, managing $1.3 trillion in assets. But in this round the stakes are far higher because BlackRock, which did a great deal to cause the economic meltdown, has now been put in charge of the government recovery effort.

But don't take my word for it; check out the accounts of BlackRock's leading role in managing the bailout in The New York Times and Wall Street Journal on Tuesday.

The New York Times: "Can a company that is being paid to price and sell troubled assets for the government buy the same kinds of assets for private clients without showing preference? And should the government seek counsel from a company whose clients stand to make or lose billions if those policies are enacted?"

The Wall Street Journal: "BlackRock helped shape the government's toxic-asset plan, which critics have said helps vulture investors buy assets on the cheap while exposing taxpayers to the bulk of losses if the investments sour."

Leading the pack of vulture capitalists profiting from the misery they inspired is the Private National Acceptance Co. (PennyMac), which BlackRock bankrolled. Stanford L. Kurland, chairman and CEO of PennyMac, is the former president of Countrywide Financial. A New York Times story in March headlined "Ex-Leaders of Countrywide Profit From Bad Loans" noted that Kurland's new outfit was profiting from the misery it had helped cause: "After all, the banking behemoth (Countrywide) made risky loans to tens of thousands of Americans, helping set off a chain of events that has the economy staggering."

Countrywide, under Kurland's leadership, specialized in those low "teaser" interest rates that caused people to lose their homes when rates suddenly ballooned. As the Times observed, "Countrywide has become synonymous with the excesses that led to the housing bubble." Now Kurland's new company specializes in buying back those forfeited and at-risk properties for pennies on the dollar and making money off new loans and sales.

"It is sort of like the arsonist who sets fire to the house and then buys up the charred remains and sells it," Margot Saunders, a lawyer with the National Consumer Law Center, told the Times.

"Kurland is seeking to capitalize on a situation that was a product of his own creation," noted Blair A. Nicholas, a lawyer representing Arkansas teachers suing Kurland and his fellow Countrywide executives. "It is tragic and ironic. ... But then again, greed is a growth industry."

And once again the greediest will make out like bandits, with only a few of them ever being held accountable. Kurland sold $200 million in Countrywide stock shortly before the meltdown and, in any case, the spectacular failure of his banking experience only made him all that more employable.

Quoting federal banking officials, the Times reported, "They said it was important to do business with experienced mortgage operators like Mr. Kurland, who know how to creatively renegotiate delinquent loans." Has our president never heard of recidivism?

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Robert Scheer is the editor of Truthdig.

US Army Paid Bonuses to KBR Despite Questions

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Thomas Ferraro
May 20, 2009 - Reuters

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The U.S. Army paid "tens of millions of dollars in bonuses" to KBR Inc, its biggest contractor in Iraq, even after it concluded the firm's electrical work had put U.S. soldiers at risk, according to a source close to a U.S. congressional investigation.

The Senate Democratic Policy Committee plans to hold a hearing on Wednesday to examine KBR's operations in Iraq, and question why the Army rewarded the Houston-based company.

The panel says KBR has been linked to at least two, and as many as five, electrocution deaths of U.S. soldiers and contractors in Iraq due to "shoddy work."

Investigators believe hundreds of other soldiers may have received electrical shocks, the source added. The Army is investigating.

The company denies responsibility for any of the electrocutions, saying it is proud of its work and that its employees make great sacrifices to get the job done.

KBR was part of Halliburton Co until two years ago. Former Vice President Dick Cheney served as Halliburton's chief executive from 1995 to 2000, when he became George Bush's running mate.

During the Bush administration, some critics claimed Cheney's deferred compensation from the company represented a conflict of interest and questioned Halliburton's winning of lucrative government contracts in Iraq.

Military reports have criticized KBR's work in Iraq in recent years. Yet afterward, the company received "tens of millions of dollars in bonuses," said the source, who declined to be identified.

"We want to know why," the source said.

The military was invited to send a witness to testify at Wednesday's hearing, but the committee agreed to let it submit a written statement instead, the source said. Witnesses who are expected to attend include a former KBR electrician.

On Tuesday, the Army had no immediate comment when asked about the bonuses.

THREAT OF FIRE

A September 30, 2008, letter to KBR from an officer in the Defense Department's Defense Contract Management Agency had harsh words for the company.

"We cannot overemphasize the significance of the lack of sustained electrical support services being provided by KBR in Iraq to maintain the minimum life, health and safety standards in support of our warfighters," wrote Captain David Graff, an agency commander.

A February 2007 report by the agency also raised concerns about KBR and its subcontractors in Iraq -- while acknowledging the difficulty of working in a war environment.

"Primary safety threat, theater wide, is fire due to the inferior 220 electrical fixtures found throughout Iraq," it said. "Improper installation, substandard equipment purchases (such as light fixtures) and heavy usage appears to be the three primary causes of these fires."

U.S. lawmakers have raised concerns about the U.S. military's increased use of private contractors in Iraq and Afghanistan and have said KBR and other companies should be held accountable.

KBR spokeswoman Heather Browne said, "KBR remains proud of the work it performs in Iraq."

"We remain committed to engaging in a transparent and more importantly, a fact-based dialogue on this issue while pledging continued full cooperation and support to the military."

The Senate Democratic Policy Committee is the research arm of the Senate Democratic leadership and often conducts investigations of its own.

What Was I Fighting For?

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Rick Reyes
May 18, 2009 - The Nation

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Note The following commentary is based on an interview by Z.P. Heller, editorial director of Brave New Films.

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I was on liberty in Australia, dancing at a club I can't remember sometime around midnight, when it happened. The music shut off and an announcement came on: "America is under attack. Head back to your ships." This was the worst--the impossible. This was September 11, 2001.

I witnessed firsthand the ineffectiveness of US military strategy in Afghanistan. We need a more clearly defined mission, an exit strategy and a commitment to diplomacy rather than a military solution.
..Back at my ship, ambulance sirens blared. Hundreds of Marines stood on deck, anxiously awaiting word. Someone said the Pentagon had been attacked. My platoon sergeant stood up and delivered a fiery speech filled with "No one [expletive] with America!" and "We're going to kick some ass!" Later that night, the same sergeant turned to me asked me if I was ready.

Without giving it a second thought, I replied, "This is what I joined for."

Flash forward to a few weeks ago, as I recalled those words testifying before Senator John Kerry and the Senate Foreign Relations Committee. I sat where a young Kerry was once seated as he awoke the nation to the grim realities of war in Vietnam. I explained to the committee that I always desired to serve my country, ensure basic freedoms and fight for justice and the American way. This had been my dream since childhood, a way to honor my Mexican immigrant parents who worked tirelessly to give my family a better life, a way out of an East Los Angeles neighborhood plagued by gang violence. Yet what I witnessed and experienced during a seven-month deployment in Afghanistan followed by another in Iraq has forever shattered this once noble ambition.

As an infantry rifleman in the Marines Corps, I saw so much of these wars through nightly patrols. We were trained to approach a point of interest on foot, coordinating with translators whose sole vested interest in supplying us intelligence was to earn money and aid. We would gather information that often proved faulty, and question locals to the point we felt comfortable conducting a raid. After receiving an order, we would ransack homes, destroying windows and doors, chairs and tables, families and lives--detaining and arresting anyone who seemed suspicious. The problem, of course, was that it was impossible to distinguish militant Taliban members or Al Qaeda from innocent civilians. Everyone became a suspect.

In one instance, my squad leader gave me orders to pursue possible terrorists leaving the scene in which we had established a perimeter. My four-man fire team and I followed these suspects undetected for about 100 yards along an exposed ravine. When we were four feet from them, I drew my M-16 and pointed it directly at their faces, yelling, "Get down on the ground!" We beat them in search of nonexistent weapons, breaking limbs in the process. Later that day, I learned these men were innocent. Another time, my squad and I detained, beat and nearly killed a man, only to realize he was merely trying to deliver milk to his children. These raids compelled me to tell Congress we have been chasing ghosts in Afghanistan and Iraq.

Amazingly, these patrols were all the same, whether I was in the desolate desert near Camp Rhino--the US-led coalition's first strategic foothold in Afghanistan--or stationed outside Basra in Iraq. The terrain was different, but what remained the same was the manner in which we carried out missions, the unconscionable acts of violence and collateral damage that followed, and the ever-present paranoia that every Muslim could be a terrorist. These raids even ended the same way. We would compensate the family whose home we had invaded, offering to fix or pay for broken furniture before moving on to the next village, where kids would throw rocks at us and give us the finger. To my knowledge, I never detained or arrested anyone guilty of a crime.

I witnessed firsthand the ineffectiveness of US military strategy in Afghanistan and Iraq. However, I didn't fully grasp the extent of these failed foreign policies or our government's deception until I returned home from war. Realizing there never were weapons of mass destruction, and that we would have difficulty tracking terrorists even if we had committed all the troops in our military, I felt as though my patriotism had been exploited for political gain. A select few were profiting from these wars, while the majority of Americans shouldered the enormous tax burden.

To me, the lesson learned in Afghanistan and Iraq was that the US flexed way too much muscle. We have ships, planes, helicopters, tanks, hovercrafts, trucks, Humvees--everything imaginable. But how effective is such military might against extremists who blend in with innocent civilians and fight guerrilla warfare? Moreover, how effective can it be when we leave civilians little alternative but to support extremists?

That is why the proposed $94.2 billion supplemental war-funding bill will be a complete waste of taxpayer dollars, as we continue to pursue a military solution for a political problem. Similarly, the 21,000 additional more troops will be a "drop in the bucket" in Afghanistan, as my esteemed colleague Andrew Bacevich has said. Bacevich, a retired colonel who served in Vietnam and lost a son in Iraq, sat next to me at the Senate Foreign Relations Committee hearing. He urged Congress to question the effectiveness and immense cost of fighting the "Long War" in Afghanistan and Iraq.

Congress must hear more voices like ours before escalating the war in Afghanistan any further. More veterans need to speak out, and as a society we must get beyond the public perception that veterans are a product of war. We are not a product. We took an oath to serve and protect, to make sacrifices for the greater good. It's an oath everyone ought to honor, and not just by thanking us for our service. In my mind, we are not seeing more veterans speak out because there is a sense that if they do, they will be letting go of something they truly believe in; they will be going back on their oath and their sacrifices will have been in vain. That is not the case.

A number of veterans and I are forming a group called Vets for Rethinking Afghanistan. We will voice our dissent in Congress, testify before the Senate Foreign Relations Committee and meet with any Representatives willing to listen. We will raise awareness about how our military occupations in Afghanistan and Iraq have been counterproductive. We will express the dire need for the Obama administration to provide both an exit strategy and a more clearly defined mission and we will explain how dangerous it is for the US to use humanitarian aid as a bargaining chip to advance a flawed military agenda without giving diplomacy a real chance. Please join me in this cause.

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Rick Reyes, a retired corporal in the US Marine Corps, served in Afghanistan in 2001 and in Iraq in 2003. He is a member of Iraq Veterans Against the War and is now a businessman in Los Angeles.

Obama said there’d be days like this

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David Goldman
May 19th, 2009 - Asia Times

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The administration has been wise to manage expectations about economic recovery. Obama said there'd be days like this, in which the universal consensus of economic recovery would be confounded by a 46% decline in multi-family housing starts month on month. The Federal Reserve and Treasury have created a bottom of source at the cost of nearly $10 trillion in actual or contingent liabilities of the federal government, but they cannot change the basic problem: the biggest bulge of prospective retirees in American history has the biggest savings gap of any generation in history. That means a vast shift away from consumption and towards saving over at least a decade. Barring a surge in exports (of what? to whom?) that means reduced economic activity. Bottom-feeding (trading in foreclosed houses on Main Street and in distressed securities on Wall Street) keeps the life functions of the economy going at zombie levels, but that's it.

The signs of life in the credit and asset securitization markets have a great deal to do with cheap federal financing. There's a good summary of what TALF does in this regard in the May 18 Fortune (hat tip to the Daily Bail):

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Imagine if you were not really in the market for a house but the government came along and said that it would finance 94% of a home's purchase price with a mortgage rate of less than 3%. Still not interested? Wait, Uncle Sam has some additional sweeteners: if you do the deal and buy the house for only 6% down, you also get the equivalent of rental income every month to the tune of at least an annualized yield of 10% of the purchase price.

But wait there's still more: if, say, after two years, you decide you don't want the house any longer, you can just walk away from it. No need to pay the balance of the mortgage (it won't affect your credit rating), and you can keep the rental income received to date.

That's essentially the deal that Treasury Secretary Timothy Geithner has offered qualified professional investors who participate in the so-called TALF (Term Asset-Backed Securities Loan Facility). Two months into the program as the first TALF- backed deals hit the market, you can see why the likes of hedge fund Fortress Investment Group are drooling over it. "I'm a big believer in the impact that TALF can and should have," Fortress CEO Wes Edens said on a May 6 investor call, adding that he expects that Fortress will be "a big participant" in the TALF program "three to six months from now."
The first few TALF deals — one for Ford Credit (the financing arm of the automaker), another for American Honda Receivables Corp., a third for the student loan company Sallie Mae and a fourth for motorcycle icon Harley Davidson — shed some light on our tax dollars at work.

"I've had accounts that dropped everything they were doing to take a look at this TALF financing," one Wall Street trader explained. "It was like nothing they had ever seen. It beats any financing that the private sector could ever come up with. I almost want to say it is irresponsible." For instance, Prudential Financial, Inc. (PRU, Fortune 500), the large insurer and investment manager, borrowed $786 million from the TALF as of March 31 and put up only $50 million to do so, some 6.4% of the deals.

In case you're not totally conversant with the alphabet soup of financial remedies emanating from the Obama Administration, here's a brief refresher: Geithner and the Federal Reserve announced the launch of the TALF in March. The TALF is a $200 billion (on its way to $1 trillion) non-recourse lending program to private investors as a way to encourage them to buy newly underwritten securities backed by auto loans, credit-card receivables and student loans, among other asset classes. (The TALF program is set to extend, in June, to the issue of new commercial real-estate mortgage-backed securities.)

These securitizations were once upon a time a key component of the so-called "shadow" financing system that helped raise trillions of dollars of capital worldwide. Of course, the securitization and sale of mortgage-backed securities was one of the leading causes of the current financial crisis as the people who took out the underlying mortgages started to default upon them in unexpected numbers. Still, Geithner has determined, correctly, that getting these securities circulating again is crucial to restoring the health of the credit markets. The Treasury designed the program, but it is the Federal Reserve that provides the government's share of the capital. "The increase in the TALF is expected to help stimulate both new issuances and the removal of assets from bank balance sheets," Credit Suisse wrote to its shareholders on May 8.

Investors interested in borrowing from the TALF program have to be approved by the Treasury and then, once approved, have to set up an account with a broker-dealer that is subject to a variety of the usual terms and conditions. The investor then must indicate a desire to buy, say, at least $10 million of one of the dozen or so deals, worth an aggregate of around $25 billion, which have come to market since the TALF program was set up in March. An early test for TALF was a May 5, $1.5 billion car-receivables securitization for American Honda Receivables Corp. and underwritten by JPMorgan Securities (JPM,Fortune 500) and BNP Paribas Securities. Investor demand for the deals so far is said by one trader to be "strong" and the deals are selling well. The real market test, though, of TALF will come when the first deals involving CMBS (Commercial Mortgage Backed Securities) start coming to market in the next few months.

The way the TALF works in practice is this: The amount of equity an investor has to put up, or the "haircut" as the TALF documents call it, depends upon the assets involved, the term of the loan or lease of the underlying asset (say, a car) and the credit quality of the underlying borrower. A loan to buy a three-year security backed by a group of credit-card receivables from high-quality borrowers would require an investor to put up 6% of the capital — a 6% "haircut" — and then can borrow the rest from the TALF through his brokerage account. To buy a two-year high-quality credit-card receivable security, a borrower would put up 5% of the face amount of the securities purchased. Auto receivables require as 12% equity investment for a three-year security. Small business loans require 5% down. Student loans require 10% down for a three-year deal.

An investor interested in a $10 million slice of three-year credit card receivable would put up 6% of the money — $600,000 — and borrow the balance of $9.4 million from the TALF at a rate of three-year LIBOR plus 100 basis points (Attention K-Mart shoppers, that's 2.85% at this moment.) Depending on all sorts of assumptions, the yields on these investments are said to be in the 11% to 15% range, especially attractive since the TALF loans are non-recourse to the borrowers — you can just walk away and lose only your underlying equity investment and the collateral but you are not held responsible for the unpaid portion of the TALF loan itself.

In addition, the TALF loan is not marked-to-market so if the underlying collateral deteriorates in value, the investor is not required to put up more equity. What's more as the car payments or credit-card payments on the underlying security are made, the payments are distributed to the government and the investor on equal footing — that means the investor starts getting paid back at the same time as the government even though the government is the senior secured creditor and even though an investor has put up only a small fraction of the original money. One private equity investor, who would not normally have looked at investing in such a deal but did, called this particular aspect of the TALF "shockingly good."

But who will the TALF deals be shockingly good for — the players on the field or those of us in the bleachers? If what Geithner calls "our lending facility with the Fed" does its job and jumpstarts the credit markets then the extraordinary concessions the government has made to attract private capital may have been worth it.

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There's no jump starting, just a push, and the push lasts as long as the $200 billion that the government has to push with. It's not a recovery, but a constructed bottom over which risk assets will range trade.

Ex-Bush Henchman Wants to be "CEO of Afghanistan" (Literally)

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Jeremy Scahill
May 19, 2009 - Common Dreams

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This story that is developing with the big oil-Bush buddy Zalmay Khalilzad is amazing in how crude it is. Khalilzad of course was one of Bush's top diplomatic henchmen in Afghanistan, Iraq and elsewhere and an original signer of the Project for a New American Century, whose global conquest agenda was adopted as official US policy under Bush. Well, good ol' Zal apparently wants to be president of Afghanistan, but he missed the May 8 deadline to file. So, instead, he is now cooking up a plan with the US-puppet president, Hamid Karzai, to become the "chief executive officer of Afghanistan." That is not a joke. That is exactly how The New York Times described Khalilzad's desired position:

The position would allow Mr. Khalilzad to serve as "a prime minister, except not prime minister because he wouldn't be responsible to a parliamentary system," a senior Obama administration official said. Taking the unelected position would also allow Mr. Khalilzad to keep his American citizenship.

Administration officials insisted that the United States was not behind the idea of enlisting Mr. Khalilzad to serve in the Afghan government, and they gave no further details on what his duties might be.

A plan that puts Mr. Khalilzad near the top of a Karzai government would provide the Obama administration with a strong conduit to push American interests in Afghanistan…

You cannot make this stuff up.

It was bad enough that the US imported Hamid Karzai who would be ripped to shreds in about 2 seconds if the US military pulled out of Afghanistan. Now, the Obama folks want to actually impose tolerate one of Bush's cronies as a non-elected "CEO" of an occupied country where his job is described in corporate terms so that he can "push American interests."