aXXo revisited: aXXos are everywhere!

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In 2007 I wrote a post about aXXo’s place in the bittorrent downloading community and the irony that surrounded the feud he seemed to be having with Scene rippers and The Priate Bay tracker site.  If that sentence was utter gibberish to you, you might take a look at that earlier post for some definitions and background.

People continue to come to the blog through web searches for things like “axxo gone” or “where is axxo” so I figure I’ll write a little update to bring those guys up to speed with the state of things in 2009. Continue reading

The Economy 101 – Rule #1 of Wall Street: Never Speak About Wall Street.

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I just watched last night’s (3/17) Charlie Rose with Hank Greenberg, Gretchen Morgenson, Carol Loomis & Meredith Whitney. It had too many nuggets of insight that only people who really know the system could render. But they weren’t unpackaged, so I’d like to pose to you guys a few questions that they alluded to.

Much of this post is based on the ongoing analysis and reduction of financial jargon that the NPR program/project Planet Money has undertaken over the previous months. Grab their podcast, download as many as possible and catchup.

Hank Greenberg, the former and long-running CEO of AIG was talking about the bailout money for  AIG as a stopgap measure after AIG’s loss of their AAA rating triggered a requirement for AIG to hold more capital and make insurance payments and wondering aloud that maybe we all would have been better off if instead of a cash bailout the Fed/Gov had simply guaranteed AIG’s contracts (like they did in JP Morgan’s takeover of Citi) to save AIG’s AAA status and/or roll back the collateral requirement trigger – or had congress changed the collateral requirement rules for them to prevent the need for cash capital that keeps getting sucked from the Fed into AIG.  Hopefully we’ll see some analysis of these options.  It’s a confusing mess but really, where is this sort of dialogue among our politicians?  Oh! And I think it was in this podcast episode that they really let it be known just how weak a grasp of the situation and its underpinnings they think congress (and the finance committee in particular) has.  Of course campaigning skills don’t really translate into any other sort of skill as a given.

Another question circulated (brought up by Gretchen Morgenson) was why is the Fed (we taxpayers) are paying 100% (or 100 cents on-the-dollar in Gretchen’s words) of these insurance claims against AIG in a bid to alleviate systemic risk, rather than evaluating each counter-party’s (bank making the claim) contribution(or exposure) to systemic risk and offering a reimbursement (claim payment) based on that (say $0.75 on-the-dollar for less risky banks or something).  Everyone seemed to agree the current method doesn’t make sense as far as its objectives have been explained.  It seems if the government’s interest in saving banks extends only so far as abrogating systemic risk that could spread beyond a bank’s (or Hedge fund’s) own books, then why would we pay top dollar without consideration to their actual needs/risks?   She also mentioned in passing that by paying 100% we had no hope of ever getting more than that back and all the risk was negative, whereas if we payed less in some cases, we have a hedge and potential to recover more value from our input.  Slate.com posted a submission by former governor Eliot Spitzer on Wednesday (3/18) that addresses the same point and asks a series of questions of our monetary masters in DC.

Hank Greenberg also talked about the creation of the AIG Financial Products division, and noted it was really just this small division over in london that has brought the entire company to its knees.  The Washington Post wrote this at 6:10 PM Wednesday on their Site:

AIG chief executive Edward Liddy said moments ago that AIG’s risk-managers were “generally not allowed to go into Financial Products.” Translation: AIG’s Financial Products division — the unit that sold more derivatives than AIG could back, nearly bringing down the company — was not subject to AIG’s own in-house risk-management scrutiny.

After watching this round table on Charlie Rose and seeing Frontline’s show a week or two ago, I have to wonder, how much is the government really in command of the situation, not in terms of controlling it, but more simply in terms of being able to create and consider actionable options? We only hear about what is being done with a cursory nod to it being required to save us all. No one seems to be given any explanation for why the solution was chosen over others or what other avenues were considered.

‘Gotcha Journalism’ = Voter Ineptitude?

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I read a commentary piece yesterday in the Philadelphia Inquirer from the guy who asked Sarah Palin about following Taliban fighters back across the Afghani/Pakistani border while getting some food at the cheesesteak shop (note – not a pizzaria), Tony Luke’s. The internet rumor-mil and the campaign and candidates themselves jumped on the name of the questioner as an anti-Palin reporter from Palin’s home town in Alaska.

It seems that the guy, actually a Temple University graduate student named Michael Rovito, shares his name with a reporter for the Wasilla, Alaska newspaper, The Frontiersman. I get that someone on the internet saw the question being attributed to Michael Rovito and assumed it was the reporter associated with commenting on Wasilla and Palin; that just makes sense. What are the odds that another guy with the same name happened to ask that question, right? But Palin had to know this wasn’t the same guy. Wasilla is a tiny town. She was the mayor and he is one of very few reporters. They must know each other on sight. I’m fairly certain she recognized the man asking her questions as someone other than the Frontiersman’s Michael Rovito, and yet she and the campaign claimed this was ‘Gotcha Journalism’ by a reporter who tracked her across the country to politically trip-her-up.

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