The AIG Bailout

More details from a whitepaper published on the fifth of March:

On February 28, 2008, American International Group, Inc. (AIG), the largest insurance company in the United States, announced 2007 earnings of $6.20 billion or $2.39 per share. Its stock closed that day at $50.15 per share. Less than seven months later, however, AIG was on the verge of bankruptcy and had to be rescued by the United States government through an $85 billion loan. Government aid has since grown to $200 billion. AIG's stock currently trades at less than $1.00 per share.

The Article explains why AIG, a company with $1 trillion in assets and $95.8 billion in shareholders' equity, suddenly collapsed. It then details the terms of the government bailout, explores why it was undertaken, and questions its necessity. Finally, considering a likely legacy of AIG is increased regulation of credit default swaps, the Article describes the current regulatory landscape for CDSs, advocates restoring Securities and Exchange Commission power to regulate them, but cautions against regulating before the CDS market has had a chance to self-correct.
I'm about halfway through, so I don't know about the conclusions. I do like the very cogent description of the mess AIG is in.

How Paulson Used AIG To Throw Goldman Sachs A Big Old Bone

Among a lot of others, mind you.

It's in the WSJ today and branching out from there -- several of the counterparties receiving par payouts for their toxic CDOs now owned by the taxpayers have been identified. The first name on the list is Goldman Sachs:

Among those institutions are Goldman Sachs Group Inc. and Germany's Deutsche Bank AG, each of which received roughly $6 billion in payments between mid-September and December 2008, according to a confidential document and people familiar with the matter.

Other banks that received large payouts from AIG late last year include Merrill Lynch, now part of Bank of America Corp., and French bank Société Générale SA.

More than a dozen firms with smaller exposures to AIG also received payouts, including Morgan Stanley, Royal Bank of Scotland Group PLC and HSBC Holdings PLC, according to the confidential document.
This is big news because the vice chairman of the Fed, Donald Kohn, would not identify any of these companies when he appeared before the Senate Banking Committee on Thursday.

However, it was already known that Goldman Sachs, Societe, and Deutsche Bank had gotten a big payout from the AIG debacle, as this December 17 article from Business Week shows.

I've been trying to understand what happened here. Putting the Business Week article together with the Kohn testimony and this summary of part of the deal and other sources, you get a clearer idea of just how billions in TARP money has been funneled to these institutions. And it stinks.

To help explain what's happened, I've prepared a PDF presentation of this, relying mostly on Kohn's testimony. You can access it at my unrelated website here (pdf).

Let's go back a bit to when Bear Stearns went under. The Federal Reserve worked together with JPMorgan Chase to get JPMorgan a great deal. The Fed created a limited liability company in Delaware, named after the street the New York Fed bank is on, Maiden Lane. Maiden Lane, LLC, received $29 billion in loans from the Fed, and $1 billion in loans from JPMorgan. Maiden Lane used that money to buy up the toxic assets at the heart of Bear Stearns' woes. JPMorgan Chase then purchased Bear Stearns, free of the toxic assets with $30 billion sitting there all nice and tidy. And then JPMorgan bought Bear Stearns at $10 a share (although, remember, Hank Paulson wanted them to sell at $2).

Now this whole deal stunk mightily in the nostrils of Congress, and they saddled the Federal Reserve with some more strigent restrictions on how they deal out the money. And Maiden Lane, LLC, has actually lost $5 billion in value since that time. But that didn't stop them from pulling out the old playbook when AIG came staggering in through the door.

Well, what else was the Fed going to do?

AIG is actually a quite stolid and no-nonsense company for the most part. But one of its arms, AIG Financial Products (AIGFP), was described recently by Ben Bernanke:
"If there is a single episode in this entire 18 months that has made me more angry, I can’t think of one other than AIG," Bernanke told lawmakers today. "AIG exploited a huge gap in the regulatory system, there was no oversight of the financial-products division. This was a hedge fund basically that was attached to a large and stable insurance company.
What AIGFP was pretty wild. First they took out loans on stable assets owned by AIG and used that cash to invest in what would become toxic assets -- the collateralized debt obligations (CDOs) that have become so familiar to ordinary Americans nowadays. These are the complex financial instruments that all sorts of mortgages had been bundled into, sliced up, and rebundled to help minimize risk. AIGFP bought up a lot of them.

They also had friends out there doing the same thing. These companies wanted a kind of insurance on their CDO's, so AIGFP sold them credit default swaps (CDSs). This meant that AIG would be responsible for losses on the CDOs after a deductible of sorts was reached. But since they were all as safe as houses, the money being paid into AIGFP was a windfall. Money for everyone, and all granted under AIG's Triple A credit rating. Nice of them to lend that out to the underregulated, loophole-exploiting Financial Products arm, don't you think?

Of course, the housing market started to tank. And the truth is, AIG had been trying to extricate itself from this godawful mess for a while. They stopped issuing these types of deals back in 2005 when they started feeling squishy about them. They'd been working with regulators to unwind all of this mess.

But then a crisis point was reached. The counterparties who held the loans on their stable assets were starting to ask for their money back. The counterparties who'd bought credit default swaps on their toxic assets were losing cash and starting to call in their CDSs. And AIGFP had not set aside any capitalization against those CDSs -- they didn't have to! They weren't technically insurance. They were derivatives. And AIGFP was having difficulty selling their own toxic assets to meet their obligation to these two sets of counterparties.

This is the essence of a liquidity crunch. The cash has seized up. AIG needed help fast and a lot of it.

On September 16, 2008, the Federal Reserve provided AIG with a huge line of revolving credit. They created a facility with the quirky name Revolving Credit Facility. They put $85 billion inside this facility and opened up a window for AIG. This was the plan -- AIG draws on the credit as they have need to satisfy their obligations. Over time good assets get freed up and/or toxic assets become good boys and girls again. By selling these assets, AIG could then pay back the Revolving Credit Facility. And it had two years to do so, and then, poof! The Revolving Credit Facility is no more and AIG has learned a very important lesson.

And just to make extra sure that the government wouldn't lose any money in the deal, AIG had to place 79.9% of preferred convertible stock into a trust payable to the Treasury. The important thing here to know about preferred convertible stock is that if the Treasury decides to, it can convert this preferred stock into common stock, which means the Treasury really does own a massive controlling interest in AIG at that point.

So that worked, right? Not quite. By October 1, AIG had already drawn out $61 billion of the $85 billion available to it. Yes, you read that right. Two weeks later.

The toxic CDOs were getting worse and worse. They still couldn't sell their own, and the cash collateral calls from the counterparties from whom they'd borrowed were stacking up and the CDSs were mounting as well.

So the Fed took some further steps. They created a second facility for AIG, the Secured Borrowing Facility, that allowed several AIG subsidiaries to borrow up to $37.8 billion more to pay off the cash collateral calls. This was only a temporary fix, meant to buy AIG time to start selling assets and get their own cash flow running again.

Do you think it worked? Does a bear poop in the Vatican?

By November, the economic crisis was deepening and AIG was about to lose its Triple A credit rating. That would have mean immediate needs to pump up their available capital, with more collateral calls and more people bailing out of other financial arrangements. Plus, they did have this thing called actual insurance that they did occasionally like to sell to people, and that business was drying up fast as well. AIG was barely hanging on.

But by November, Hank Paulson had gotten his $700 billion in the Troubled Asset Relief Program and the wheeling and dealing had begun. Bernanke was spitting nails already about the whole situation, so the two of them got together and start thinking about restructuring the entire AIG bailout.

They came up with this. First, Bernanke capped the first facility from September, the Revolving Credit Facility, at $60 billion. He also lowered the interest rate AIG paid on this money and stretched out the loan term to five years. But AIG had to post all proceeds from asset sales into this facility and pay off the $60 billion.

Paulson agreed to give AIG $40 billion in TARP funds in exchange for $40 billion in Senior Preferred Stock in AIG. Fancy!

Then the Fed created two more Maiden Lane corporations, Maiden Lane II and Maiden Lane III. Paulson funded both of these institutions with TARP funds and then both started dealing with AIG's major problems, their own toxic assets and the CDSs on other counterparties' toxic assets.

Maiden Lane II got $20 billion in TARP funds from the Treasury. It went to the AIG subsidiaries that had been borrowing from the Secured Borrowing Facility created in October by the Fed. In exchange, the subsidiaries forked over the toxic assets they held. They were worth $40 billion at par (what AIG paid for them in the first place) but AIG only got $20 billion for them. They took the hit themselves, writing off the rest, and then paid back the Secured Borrowing Facility what they had borrowed.

And, poof! The Secured Borrowing Facility was terminated.

Maiden Lane II has 6 years to repay the TARP money to the Treasury. Its only holdings are these toxic assets bought at about 50 cents on the dollar, so the Fed is betting that the assets will at least be worth that $20 billion plus interest in six years. If there's any money left over after the Treasury is paid off, the Fed gets 67% of that and AIG gets 33%. Cross your fingers!

But it's Maiden Lane III that is the real piece of work. Keep your eye on the ball...

Maiden Lane III has been funded with $25 billion of the TARP funds (under the same terms as Maiden Lane II), and AIG was told to kick in $5 billion as well. Maiden Lane III has gone to to the counterparties that purchased the credit default swaps from AIG and given them an offer they couldn't refuse - all of their money back.

Here's how it worked. There was around $62 billion of toxic assets (at this point) being held by these counterparties. They gave them to Maiden Lane III for the grand total of $25 billion. Sounds bad, right? Sounds like they took a bad loss for buying such crazy assets in the first place, right?

AIG paid them everything else.

That's right. In exchange for terminating the CDSs they held on AIG, these counterparties received every single cent they ever paid for these crappy assets. They got par. Now it may very well be that these counterparties have more CDOs that weren't backed up by AIG's credit default swaps, and could still be in a world of hurt. But how nice was it that Maiden Lane comes along with TARP funds and brokers them a par payment on these crappy derivatives!

AIG, of course, took the hit here as well. $37 billion writeoff here, plus $20 billion writeoff because of Maiden Lane II, and $5 billion paid to Maiden Lane III... well, it's a good thing old Hank, former CEO of Goldman Sachs, plugged $40 billion extra of TARP funds into AIG, because that spectacular net loss of $62 billion in the fourth quarter could have been $100 billion.

And now we know that one of the two biggest beneficiaries of this incredible money shuffle was Goldman Sachs, which got (according to the Wall Street Journal) 10% of the money paid out through this deal.

Goldman Sachs received full par payment of their toxic assets backed up by AIG, $6 billion worth, thanks to the keeper of the TARP funds, Hank Paulson.

How is this not the definition of moral hazard, the dreaded term so hated by Paulson that he actually let Lehman Brothers collapse to avoid it? Yes, Lehman Brothers was one of Goldman Sachs' competitors, now that you mention it. They get the shaft, Goldman gets a great big bone from Paulson, AIG writes off billions, and the taxpayers are left holding the bag.

But wait, it gets better. In the Business Week December article, not all of this money had been thrown around yet. The figures are incomplete. Here, only $15 billion had come from TARP into Maiden Lane III, and with the $5 billion from AIG, Maiden Lane III had purchased only $46 billion from this counterparties at that point in time. So AIG had paid out $26 billion due to its CDS obligations.

The final numbers are $24.3 billion from TARP. Now they leave AIG's $5 billion in Maiden Lane III to guard against loss of asset value. So that left $4.3 billion to buy up $16 billion more in toxic assets. That was about 25 cents on the dollar for those assets. Yay, us. But of course AIG made up the difference to terminate the CDSs, so these companies also got par for this junk.

How are all of these assets performing in the Maiden Lane LLCs? How does Paulson justify throwing that kind of money at his old company? How much did Paulson know about these CDSs? After all, Paulson wasn't Treasury Secretary until the middle of 2006 and AIG had stopped all sales of these CDSs in 2005. In other words, Goldman Sachs got all of their AIG credit default swaps while Paulson was CEO.

Oh, by the way, Goldman Sachs did post a fourth quarter 2008 loss, $2.8 billion. They still managed to end the year with a $2.32 billion profit, though. I guess that $6 billion from the AIG situation really helped out at the end of the day.

I hope we do as well.

TPM: Maiden Lane I, II, and III

Hoo boy. After Bernanke's appearance today in front of the Senate Banking, Housing, and Urban Affairs Committee to deal with the AIG mess, a rather astute observer wrote Josh Marshall with a succinct explanation of what the Fed's been up to. Brace yourself:
Josh, your reporting on the AIG credit default swap/counterparties issue has been spot-on. But to understand what happened there, you have to understand the Fed's "Maiden Lane" vehicles and how it's used them to avoid what Congress intended with TARP, which was the real story that came out of Dodd's hearing on the AIG mess today. And the roots of it go back to the Bear Stearns rescue last year.

By law, the Fed isn't allowed to buy assets -- it can only lend, as lender of last resort. That was a problem for the Bear Stearns bailout, because JP Morgan said it would only buy Bear if someone else assumed responsibility for the crap. Fed came up with this idea to start a shadow company, called a special purpose vehicle (SPVs were how Enron operated, creating "Chewco" and the like named after Chewbacca - the New York Fed called their SPV "Maiden Lane LLC" for name of the street the NY Fed is located on in southern Manhattan). The deal then was JP Morgan put $1 billion into Maiden Lane, the Fed put $29 billion in cash into it. Maiden Lane paid Bear Stearns $30 billion, which went straight back to JP Morgan as this deal happened simultaneously to JP's purchase of Bear. So Morgan got $30 billion in cash ($29 billion net) and the Fed got stuck owning the crap, but was legally only making a loan to Maiden Lane, who was the legal owner (Maiden Lane was incorporated not in NYC, but in Delaware to avoid paying taxes). By the Fed's own accounting - which is very different from a real company's accounting - Maiden Lane has lost $5 billion between its creation and today.

The same problem happened in AIG, but this time there was no buyer. In Sept, the Fed bought AIG (80%) in exchange for an $85 bill loan. By Oct, it was clear AIG was still dying, so the Fed lent it another $40 billion. This $40 billion was restructured in November when the Treasury put in $40 billion of TARP funds, which was needed to bail out the Fed's loan which had by this time gone bad. But essentially AIG had 2 problems: it had lent out safe securities with real values and used that money to buy shit mortgage backed securities -- this was called 'Secured Lending Facility' which was done right under the nose of the state insurance commissioners. It was in the hole $20 billion. The other problem was the crappy insurance that AIG's financial products company had written on other people's shit mortgage backed securities - the credit default swaps (CDS). When the bad mortgages that AIG insured went bad, the insurance had to pay-up -- but because it wasn't called insurance, but rather derivatives, AIG hadn't reserved any money against it. This had lost about $25 billion.

Using the loophole it had learned during Bear Stearns, the Fed set up two new companies: Maiden Lane II and Maiden Lane III. Two dealt with the secured lending and Three the shitty credit default swaps. The Fed lent each Maiden Lane $20 billion and $25 billion and then Maiden Lane paid off the investors that had either lent AIG the money to buy the shitty mortgage backed securities (ML II) and those who had the shitty mortgages and the corresponding insurance (ML III). To avoid booking a loss on the Fed's balance sheet, because the Fed had some legal problems if either of these Maiden Lanes lost money, and because of a reporting requirement that Dodd had put into TARP which actually required the Fed to report to the Congress and the public about the cost to taxpayers from ML I, the Fed did some creative accounting. They still paid all of the investors off at full value (par), so that they didn't lose anything. But they booked the loss on AIG's balance sheet and kept Maiden Lane clean. This is the hidden story behind how AIG went from losing $38 billion during the first 9 months of 2008 to losing $61 billion in the 4th quarter.

This was all exposed at today's hearing. And despite repeated requests from Senators on both sides - Dodd, Shelby, Corker, Warner - the Fed is still refusing to say who it bailed out through Maiden Lane II and III.
I didn't get to hear this today but I'm going to watch as much as I can at I've embedded the hearing below so you can, too.

I'll be back with more on this once I've seen the video.

Update: It's Donald Kohn, the vice chairman of the Fed, giving testimony, not Bernanke. More up above.

Tumulty: The Health-Care Crisis Hits Home

Karen Tumulty wrote this article for Time. Its thesis was suggested when her brother was diagnosed with kidney failure:

The diagnosis was only the first shock. The second came a few weeks later, in an Aug. 5 letter from Pat's health-insurance company. For six years — since losing the last job he had that provided medical coverage — Pat had been faithfully paying premiums to Assurant Health, buying a series of six-month medical policies, one after the other, always hoping he would soon find a job that would include health coverage. Until that happened, "unexpected illnesses and accidents happen every day, and the resulting medical bills can be disastrous," Assurant's website warned. "Safeguard your financial future with Short Term Medical temporary insurance. It provides the peace of mind and health care access you need at a price you can afford."

...Pat's decision to save some money by buying short-term insurance was a big mistake, says Karen Pollitz, project director of Georgetown University's Health Policy Institute and a leading expert on the individual-insurance market. "These short-term policies are a joke," she says. "Nobody should ever buy them. It is false security that is being sold. It's junk."

That's because diagnosing and treating an illness may not fall neatly into six-month increments. While Pat had been continuously covered since 2002 by the same company, Assurant Health, each successive policy treated him as a brand-new customer. In looking back over Pat's medical records, the company noticed test results from December, eight months earlier. Though Pat's doctors didn't determine the precise cause of the problem until the following July, his kidney disease was nonetheless judged a "pre-existing condition" — meaning his insurance wouldn't cover it, since he was now under a different six-month policy from the one he had when he got those first tests.

After 33 years of wrestling with insurance companies, Deborah Haile, payment coordinator at the San Antonio Kidney Disease Center, where Pat went for treatment, has pretty much figured out the system. So when I put in my first desperate call to her, on Aug. 20, 2008, she offered to make another run at Assurant. Within an hour, Haile called back, her voice bristling with anger. "Cancel that policy," she advised me. "Your brother is wasting his money on premiums, and he's going to need it."
The underinsured, which as Tumulty puts it, is "the shadow problem facing an additional 25 million people who spend more than 10% of their income on out-of-pocket medical costs." And they usually don't realize it until disaster hits. They think they're covered.

John Aravosis of recently discovered how antiquated his prescription drug coverage was when they began denying his asthma medication at the end of last year, and John has the best self-employed health insurance with the most prescription drug coverage available. When he first got the insurance, $1500 a year was adequate. But as the premium rose, the ceiling on coverage didn't and the drugs got more and more expensive. He even discovered that if he used a mail-order company to provide his needed medication cheaper, his co-pay would increase. Can there be a more Walgreen's-friendly rider?

Today President Obama brought together the major players in a White House Forum on Health Reform:

If we want to create jobs and rebuild our economy and get our federal budget under control, then we have to address the crushing cost of health care this year, in this administration. Making investments in reform now, investments that will dramatically lower costs, won't add to our budget deficits in the long term -- rather, it is one of the best ways -- in fact maybe the only way -- to reduce those long-term costs.

Now, I know people are skeptical about whether Washington can bring about this change. Our inability to reform health care in the past is just one example of how special interests have had their way, and the public interest has fallen by the wayside. And I know people are afraid we'll draw the same old lines in the sand and give in to the same entrenched interests and arrive back at the same stalemate that we've been stuck in for decades.

But I am here today and I believe you are here today because this time is different. This time, the call for reform is coming from the bottom up and from all across the spectrum -- from doctors, from nurses, from patients; from unions, from businesses; from hospitals, health care providers, community groups. It's coming from mayors and governors and legislatures, Democrats, Republicans -- all who are racing ahead of Washington to pass bold health care initiatives on their own. This time, there is no debate about whether all Americans should have quality, affordable health care -- the only question is, how?
There are going to be plenty who yell about socialism. These ninnyheads should be ignored. The general welfare of Americans is best served by all of its citizens gaining access to some basic levels and more of health care, and all of our society will be better served by eliminating the scourge of medical bankruptcies. America pays more per capita for health care than any other nation by far, and yet we still rank far below most other industrialized nations in all other leading indicators of a healthy populace. It is time for this state of affairs to end.

The Benefits Of Being Fat

I've been losing weight now since the middle of November. I needed to do it, my cholesterol numbers were looking a little iffy, and I weighed more than I ever had in my life. I was around 225 and actually bought a chair that told me I weighed too much to sit in it safely. That was it. I called up Nutrisystem and started their plan.

Part of the plan is what they call the Mindset Makeover. It's not a plan that brainwashes you to do Nutrisystem. Stop saying that. It's a plan that brainwashes you into thinking in a healthy way about your appetite and your goals. The only thing "Nutrisystem" about it is that it's from them and it has Nutrisystem all over the paperwork. But it's just a way of learning to set goals and follow them through.

But in following it, you have to think through why you're overweight or obese and how to get yourself out of it. And a lot of people on the forums talk about how they slide back into old habits and nothing seems to work. Well, I realized that there's got to be something that's keeping us there, that's keeping us fat. There must be some kind of benefit to being fat that we keep exploiting. And so I thought about it and came up with three benefits of being fat that we have to sacrifice before we are what AA calls "entirely ready" to get on with a lifestyle change like losing weight.

I put this together into a blog post at Nutrisystem, and the response was so positive, I thought I'd put here on my main blog. Enjoy!

I had to say goodbye to smoking. It was like a bad relationship. It took some time, but eventually you can say goodbye to all of it. The good isn't all that great, and the bad is pretty bad, indeed. But I had to be ready to give up what I liked about smoking -- the nicotine, having something to do with your hands, etc. It was only then that quitting smoking finally took.

Well, it's the same thing with being fat. There are benefits to being fat. Let's list them together, shall we?

1. Being fat is a great way to constantly punish yourself.

That's a benefit? Oddly enough, it is. Not everybody is like this, but I fear a great many of us are. I won't go into reasons why we might feel like we need to punish ourselves because I'll bet as soon as you read that sentence, you recognized whether it was true about you or not.

Well, I'll mention one -- one of the worst ones. We deserve to be punished because we let ourselves get this fat! That causes a vicious feedback loop. We need to be punished because we let ourselves get this fat, so we keep shoveling the food in.

So our fat becomes both our sin and our absolution. We learn to put up with the stares, the inconvenience, and the health problems because after all, who put us into this mess? We did! And that becomes an odd comfort -- at least we're shouldering our own cross!

A more rational response to this is to get rid of the fat, get it down to a healthy level. Then you can take a sense of accomplishment from making yourself better and keeping yourself better. Continuing my religious analogy, Jesus was only on the cross three hours, right? At some point, he was finished with it. When are we going to be finished with our cross of lard?

2. Being fat is a great way to protect ourselves from other people hurting us again.

Again, I don't have to go into details here because you'll recognize the truth of this if it applies. It's so much easier to avoid pain if you can convince the pain to avoid you. A great way to make sure somebody who could hurt you stays away is to make sure these people are repulsed by you.

Fat becomes a powerful defensive weapon in this constant struggle. There are others -- avoiding society, anti-social behavior and demeanor in unavoidable society -- but fat ranks right on up there. It's the choice of people who don't really want to avoid society at all (the stereotype of the jovial fat person is based on a kernel of truth, a really large kernel).

However, this is one you probably need some outside help with. When the fat goes away, the shield goes with it, and if you don't fix the root problem, a relapse is one bad scene away.

Hey, tired of all the psychobabble? Here's one we can all agree on.

3. Being fat is just so dang easy to do.

Shoving a pizza down your gullet is the easiest thing in the world to do. Pizzas taste GOOD. They are designed to taste good. We used to have to chase our food around in Africa for days, and now we can put Papa John's on speed-dial. "Yes, I would like my usual with extra cheese sauce." Ding-dong! You're a fat ass.

When you get past the genetic inclination to obesity, you still end up with a lot of lazy fat asses. Fat, after all, is stored energy. To lose it, you've got to burn it. And there's only two ways to start burning all that stored energy -- eat less food and get your body into motion.

I'm finding that my body is losing some muscle along with the fat. The overall trend is a loss in body fat percentage, but it is slow. Part of that isn't so surprising -- I don't need as much muscle because I'm not lugging around all that much fat anymore! Fat people have to be strong because just walking to the mailbox is resistance training!

I love that picture of happyhoward holding onto the two 50 lb bags of dog food. He used to have 100 excess pounds of fat on his body 24/7/365! Folks, you are carrying your gym with you right now. I'm not going to discourage anybody from buying a gym membership or a Wii Fit or a BodyBugg, but you have everything you need to lose weight right now. Find time two or three times a day to walk your home gym around the block. Haul your home gym up the steps instead of parking it in the elevator.

Losing the weight means we lose these benefits of being fat and we have to be ready to give them up. If not, right back up the scale you will go, because it's an established comfort zone. We can help each other be entirely ready to give up these benefits, but in the end it's up to those three people in the mirror: me, myself, and I.

No more self-flagellation! No more hiding! No more stalling! Let's do this.

Just so you know, I started the program November 14, 2009 at 230 (after a nice Goodbye to Food tour). Now I'm down to 190.6 pounds as of this morning.

Cafe Wellstone In Second Life

I'm at the Cafe tonight, after a rather lengthy post I put together at DU. Enjoying some early Randy Newman...

Cafe Wellstone is run by the General of Jesus' General. He got bit by a hobo spider last night, but seems to be much better today. Thank goodness...

I found a smashing Irish hat in my inventory.

It says it's for a lass, but I think it fits a hobbit just fine.

Secret Bush Memos Released

On a Monday. Welcome to the new administration:

The Obama administration threw open the curtain on years of Bush-era secrets Monday, revealing anti-terror memos that claimed exceptional search-and-seizure powers and divulging that the CIA destroyed nearly 100 videotapes of interrogations and other treatment of terror suspects.

The Justice Department released nine legal opinions showing that, following the Sept. 11, 2001, terrorist attacks, the Bush administration determined that certain constitutional rights would not apply during the coming fight. Within two weeks, government lawyers were already discussing ways to wiretap U.S. conversations without warrants.

The Bush administration eventually abandoned many of the legal conclusions, but the documents themselves had been closely held. By releasing them, President Barack Obama continued a house-cleaning of the previous administration's most contentious policies.

The shame in this is not that they are exposed but that they were written in the first place.