Obamas Bad Bargain (the left is becoming unhinged)

The Nation ^ | July 27, 2011 | William Greider

[Huskrrrr]

The most distressing outcome of the deficit hysteria gripping Washington may be what Barack Obama has revealed about himself. It was disconcerting to watch the president slip-slide so easily into voicing the fallacious economic arguments of the right. It was shocking when he betrayed core principles of the Democratic Party, portraying himself as high-minded and brave because he defied his loyal constituents. Supporters may hope this rightward shift was only a matter of political tactics, but I think Obama has at last revealed his sincere convictions. If he wins a second term, he will be free to strike a truly rotten “grand bargain” with Republicans—“pragmatic” compromises that will destroy the crown jewels of democratic reform.

[blasater1960]

I think the Joke is on us. The right. The real americans. We are guilty for decades of allowing out of control spending. And we just agreed to raise our debt by more than the entire economic output of Great Britain or 1/3 of the entire Chinese economy. So, where is that money going to come from? Our other credit card. And the fed is going to put QE3 onto the card as well!

We are going down hard.

[calcowgirl]

Just so you understand their problem with this bill, libs/progressives want no cuts except in defense, another huge stimulus bill (esp with the economy tanking) and tax increases on ‘the rich’ tp pay for it and they want Obama to fight for these things scorched earth.

Thanks for the recap.

I hesitated to ask what the author might mean by "the crown jewels of democratic reform."

[okie01]

I hesitated to ask what the author might mean by "the crown jewels of democratic reform."

1. Higher taxes

2. Defunding of the military

3. Voting rights for illegals

4. More abortions

5. Dachas for all .

[Liz]

Does Obama really want a second term? He STOLE so much money that he may be wild to spend some of it.

ANOTHER CLUE: Is Michelle opening up revolving charge accounts at Tiffany's, Bulgari, Alexander McQueen Couture, Rolls Royce Ltd, Town and Country Real Estate, etc, etc, etc?

[Liz]

THIS JUST IN The New York Times reports: A preliminary prospectus by MFGlobal hedge fund, which ex-NJ Gov Corzine heads, there is a clause that says an extra 1 percent will be paid on five-year notes “upon the departure of Mr. Corzine as our full time chief executive officer due to his appointment to a federal position by the President of the United States and confirmation of that appointment by the U.S. Senate prior to July 1, 2013.” 

There was such a clause in Corzine’s employment contract filed in March but this language is more specific.

It was rumored that if Hillary Clinton had become president Corzine wanted the Treasury job which was held in the Bush administration by Hank Paulson, the G/S insider guy who led the revolt against Corzine at Goldman Sachs. That’s when Corzine spent $185M of his own money to buy a US Senate seat and the Governor's chair.

========================================

ITEM Obama tried like heck to get Corzine reelected---he went to NJ three times---Biden was there twice.

ITEM Obama TV ads for Jon ran relentlessly on pricey NY media.

ITEM The Obama WH micro-managed every aspect of Jon’s campaign, reported the NY times.

ITEM As a final show of support--Obama sent $17.5 BILLION federal stimulus to NJ which disappeared without a trace upon arrival.

ITEM NJ voters threw Corzine out of office anyway. Corzine ended up as CEO of MF Global. MFG stock went up 15% in the pre-trading after-hours announcement.

ITEM Is NJ’s billion dollar pension fund invested in MF Global?

ITEM Is the $17.5 Billion stim invested in MGF?

ITEM Is Corzine going to Treasury to execute a transfer of the $17.6 billion into Obama’s campaign?

[sickoflibs]

RE :"I hesitated to ask what the author might mean by "the crown jewels of democratic reform."

Food stamps? Medicare and medicaid?

[elcid1970]

You mean Mayor Dennis “Burning River” Kucinich?

Anyway, FReepers need to go to the public library and occasionally read The Nation (taxpayer paid for) and wonder what kind of totalitarian control freaks actually subscribe to this statist garbage.

They think Castro, Chavez, and Ortega are failures at bringing socialism and just didn’t try hard enough.

And the classifieds in The Nation will make your hair stand on end.

[CutePuppy]

A preliminary prospectus by MFGlobal hedge fund, which ex-NJ Gov Corzine heads, there is a clause that says an extra 1 percent will be paid on five-year notes “upon the departure of Mr. Corzine as our full time chief executive officer due to his appointment to a federal position by the President of the United States and confirmation of that appointment by the U.S. Senate prior to July 1, 2013.”

As weird as this looks it's actually a very reasonable rate of "conditional insurance premium" to entice the people who are concerned about the possibility of Corzine leaving the fund for Obama's post to still invest in the fund. The mechamism / instrument is a little unusual but not that much different from taking a "key man life insurance" policy by companies where their fate depends on one or few "key" persons (such as inventors or executives) essential to survival of the company.

The major difference between the two is that Corzine's "insurance" is conditional so that MFGH won't have to pay the premium upfront. It also means that they consider the possibility remote, but need to offer an incentive to possible investors who are concerned about the rumors of this very specific scenario. Apparently the bankers from Jeffries & Co., who worked on this bond deal, came up with the shrewd structure that allows the firm not having to pay the "insurance premium" unless the condition/event actually happened.

From Wall St. Stunned by Corzine's Obama Covenant - BL, by Tim Catts, Matthew Leising and Christine Harper, 2011 August 02

MF Global Holdings Ltd. (MF) took the cult of the Wall Street chief executive officer to a new level with a plan to sell bonds that pay a higher rate if Chairman and CEO Jon Corzine quits to accept a job from the U.S. president.

The futures broker is selling $300 million in five-year unsecured notes ..... < snip >

..... “That seems crazy" said William Larkin, a fixed-income portfolio manager who oversees $500 million at Cabot Money Management Inc. in Salem, Massachusetts, and has 22 years of experience. “I've never heard of something like this." ..... < snip >

..... Corzine's employment contract is written with a view to future government service. It stipulates that he'll be paid his $1.5 million retention bonus on a pro rata basis if he leaves to work for any “U.S. federal, state or local government" before March 31, 2014. Five senior Wall Street executives at rival firms, who declined to be identified because they weren't authorized to comment, expressed amazement at the bond offering's unique terms. ..... < snip >

..... “I can't say I've ever seen a provision similar to this one," said Alexander Diaz-Matos, an analyst at New York-based Covenant Review LLC, which analyzes bondholder protections. “Apparently Corzine is a big enough deal to the company that if he leaves, potential investors demanded a little extra protection." ..... < snip >

This is just a variation on the concept of CDS or interest-rate swaps, which is well understood on Wall Street and in financial circles. John Paulson and few others made billions of dollars using CDS betting against mortgage market CDOs / MBS which AIG's London's Financial Products division (mostly) had underwritten.

[o2bfree]

Yes!!! Please vote for Markos Moulitsas in the Democratic Primary!

Let’s elect a Communist in 2012!

[stephenjohnbanker]

” John Paulson and few others made billions of dollars using CDS betting against mortgage market CDOs / MBS which AIG’s London’s Financial Products division (mostly) had underwritten. “

A Paper.....................ROTFLOL!

[Marine_Uncle]

Carter, Clinton. Same deal. Cut defense spending to cover for the lame, blind and halt, and I might add the perfectly healthy who depend on free checks each month. As well as the huge federal projects such as building construction, and every damn conceivable way to piss money away on totally useless projects that in no way bolster the infrastructure in the reality of things, other then increasing the size of the federal government.
And the Russians and Chinese wait patiently. For the big downfall to come to be in the future.