Daily Archives: December 20, 2009

Expert navigation advice from the bridge of the Titanic

NYT Editorial: tax fat cat bankers.

Before [Obama] gets over his anger, he might want to take a look at how the British found a way to realign the fat cats’ boundless greed with the public interest: slapping a hefty windfall tax on their bonuses. He still has time to push Congress to enact a similar levy here.

Bankers are likely to scream — threatening to leave the country and arguing that such narrow taxation is unconstitutional. The best in the accounting business will undoubtedly be tasked with coming up with strategies to avoid taxation, by pushing bonuses back in time or with other ruses. No one should be intimidated.

Threats to move overseas are empty. London is out of the picture. The French president, Nicolas Sarkozy, has said he would follow the British lead. Germany and other countries could be persuaded to impose taxes of their own. And it would make little sense for bankers to move halfway around the world to Singapore to avoid a one-off tax that would not affect future bonuses.

A windfall tax on bankers’ bonuses would not be enough, but it would be a start. The government also needs to ensure that all banks reform their compensation practices to better align rewards with performance, good and bad. That is the best hope for curbing bankers’ unbridled appetite for risk.

I suppose the Times editors know exactly the best risks for the free market to take. Sound, cautious loans to established industries like newspaper publishing.

UPDATE: As for the “empty threat” of moving away from the tax man, Goldman Sachs is threatening to move from London to Spain. I hope they do.

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Maybe it’s more of that CIA – Aids plot?

Centers for Disease Control: most cocaine imported into the US laced with opossum dewormer. Good for opossums, maybe, but bad for the human immune system. Hmm – is someone trying to cut down on drug demand by killing the market?

Cocaine’s a hell of a drug, and even more so when laced with another drug that’s commonly used to deworm opossums. Federal agents have found that 69 percent of cocaine shipments seized entering the United States contain levamisole, a veterinary drug linked to serious weakening of the immune system in humans. Here’s the real funny part: no one knows why.

This comes from a recent report by the Centers for Disease Control and Prevention (CDC) on the immune system condition, known as agranulocytosis. The paper tracks 21 cases from New Mexico and Washington State linked to cocaine, including one death, but cautions that many more cases have probably gone under the radar of public health officials.

The Drug Enforcement Administration (DEA) also noted that 69 percent of cocaine shipments seized as of July 2009 contained levamisole. The CDC has since launched a national surveillance effort to continue monitoring the levamisole link to cocaine.

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Health care reform

If even Saturday Night Live can see the folly of supplying health care to  an additional 30 million people while “saving money”, it’s hardly surprising that the Democrats had to buy support for their travesty. The NYT describes just some of those bribes.

But with the Senate health legislation, the term is particularly apt, as the majority leader, Harry Reid, aims to have a vote by Christmas Eve on a bill festooned with decorations.

They include these:

The “Louisiana Purchase,” as it is being called, aprovision for Senator Mary L. Landrieu, Democrat of Louisiana, who obtained an extra $300 million in Medicaidfunds for her state.

The Hawaii exemption, a measure that allows the state to keep its own health care system.

A break on the excise tax on so-called Cadillac health insurance plans for people in the 17 states where premiums are the highest. (The measure was initially intended to apply to the 10 states with the highest premiums, a Senate aide said, but some other senators wanted in and the number was bumped to 17.)

An increase in federal money to cover a Medicaid expansion in Nebraska, home to Senator Ben Nelson, a Democrat. Massachusetts and Vermont also won more money to expand Medicaid, but at much lower levels.

While Mr. Nelson held up the bill for an anti-abortionprovision, he won various other items for his state, including an exemption from the insurance tax for Mutual of Omaha. But the abortion language to which he agreed infuriated some abortion opponents when it was made public on Saturday, threatening the entire bill all over again.

Supporters of the bill say these sugar plums are a small price to pay for the votes to pass landmark legislation that will result in most Americans having health insurance, many with subsidies, and will end some of the insurance industry’s most discriminatory practices.

Lavish Lobbying

But these ornaments are mere baubles compared with some of the neon measures that some lawmakers and lobbyists have fought to keep out of the bill.

Most prominent was the demand by Senator Joseph I. Lieberman, independent of Connecticut, that leaders drop two provisions that the insurance industry and big business had been lobbying vociferously against.

One, of course, was a government-run insurance plan, or public option, which would have competed with private insurance companies. The other was an expansion of Medicare to include some people ages 55 to 64, a change hospitals and doctors fought because it would have meant taking care of more patients at lower Medicare rates.

Insurers also beat back an attempt to strip the industry of a partial antitrust exemption that it has long enjoyed.

To achieve these goals, the lobbying campaign has been lavish, even by Capitol Hill’s inflated standards.

Spending totals for the year will not be known until mid-January. But in the first nine months, health care lobbyists spent at least $396 million, according to the Center for Responsive Politics, which tracks the influence of money on elections and policy.

Because the lobbying intensified in the fourth quarter as both the House and Senate prepared their final bills, the year-end total is likely to shatter the previous record for money spent on a single issue in a single year.

Perhaps not surprisingly, that record was set just last year, when health care lobbyists spent $486 million in anticipation of the legislative action this year.

“If spending this quarter remains on pace with the first three quarters — just on pace — lobbying in the health care sector will obliterate the high-water mark that it set last year,” said Dave Levinthal, a spokesman for the center.

But even those figures do not give the full picture of the cash funneled into lobbying on health care in 2009.

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Is there room on Privacy for a third?

Time to revive that Southwest Air ad campaign, “want to get away?”

A prominent Orthodox rabbi has been caught on tape discussing his apparent love affair with a shiksa he was converting to Judaism — whom he allegedly also pushed to have sex with his friends.

Rabbi Leib Tropper of Rockland County is heard encouraging pretty, blond Shannon Orand of Houston to participate in phone sex and actual sex with men the rabbi knows, including one he calls “the Satmar guy.”

Tropper, who calls the woman “darling” and “cutie pie,” talks about his own love affair with her at one point, saying: “I want to squeeze you.”

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Must be former UAW workers

NYC EMT duo ignores pregnant woman dying in coffee shop because they were “on their break”. “They grabbed their bagels and left,” shop employee tells reporter. Where would we be if people didn’t follow the rules?

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A Christmas present for our Congress, perhaps?

NFL asks players to donate brains.

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Dodging a bullet

Snowstorm cancelled 800 flights. Daughter Sarah was due to fly home from college in California today but was able to move that up to Wednesday. With two kids out west, we’ve (they’ve, actually) suffered this calamity before and it’s no fun. So my sympathies if your own kids are stranded.

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iPhone apps for real estate buyers

I haven’t tried any of these (I will during the holidays, maybe) but here’s a roundup of cellphone apps, some of which sound useful, others not so much. Most are for the iPhone, but not all.

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Shocker! Senator accused of selling his vote on ObamaKare for home state benefits.

Uh, guys? That’s how our wonderful government works. That last principled politician, in my opinion, was Daniel Patrick Moynihan; he was rare, and now he’s dead.

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Use a real estate agent?

The New York Times has an article up that discusses pros and cons (link is to another paper’s site so those of you not registered with the Times can read it). My own belief: like other services, some agents are worth their fee, others not. I do think we’re more likely to bring value to the transaction when we act as buyer’s agents. But check out the article for a full discussion.

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Canadian oil sands

Closer to perfecting techniques that produce a better grade of fuel with less environmental damage. The propeller beanie/pixie dust crowd won’t be impressed but until we come up with something better, we need oil.

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Boys and their toys

D.C. cop brings a gun to a snowball fight. In Greenwich, the snow frolickers would have been tasered.

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A story too good to die

NYTimes

Alligators in the sewers of New York? I have my doubts, but here’s a great story about them or at least, the men who said they were there.

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First Tiger, now Stevie? Oh, say it isn’t so

Teri Buhl’s put up some interesting rumors about hedge funders shunning Steve Cohen’s company out of fear that the FBI’s about to bring him down. True? False? I sure don’t know,* but I find it significant that he and Tiger were seen boarding Privacy yesterday and heading out to sea, alone.

* At least one reader says it’s true. See comments.

Since we all first learned at Dealbreaker that Stevie Cohen’s ex-wife thinks he operates outside the lines of the law- we thought we’d look into who else felt the same.

What we found is that almost everyone in hedge fund land also trades equities like Stevie does – and they’re starting to move away from anything that looks like they’re a mini-me SAC. In fact, there’s a new buzz word the titans who run other billion-dollar funds are using to direct their legions: being `SAC-REMOTE’.

Funds like Blue Ridge, Greenlight, Third Point, Glenview, and Maverick are cutting back on any contact with King Stevie. When we asked major players such as Jim Chanos and others if they’ve been pinging Stevie about a trade lately, you’ll get a very defensive `no.’ Why? Because word on the street is they all think FBI special agent BJ Kang, who is now dogging Stevie, has the goods to deliver the hammer soon in the form an indictment or arrest for insider trading.

Extra measures are being taken to hire data-miners to comb through any and all emails firms and their trading consultants ever sent to anyone at SAC in an attempt to erase them from internet memory. According to traders we talked with, they are even going as far as getting out of trades that might look similar to any of Stevie’s. So it looks like running due diligence on your `SAC risk’ to prove to your investors that you’re clean – like Larry Robbins of Glenview capital just did – is the new `killing it’.

Now that we’ve got Patricia Cohen’s tell-all lawsuit that reads like another white-collar crime novel in the making, the FBI just received a huge layup. The ex-Mrs.-SAC has flat-out told us Stevie had revealed he used inside info to score a nice profit on trading GE’s acquisition of RCA in 1985. And let’s keep in mind, as Matt Goldstein at Reuters pointed out this week, Stevie denied these allegations (according to Patricia Cohen’s suit, filed last Wednesday). Instead he choose to take the 5th.

Word among journalists is that draft copies of the ex-Mrs.-SAC’s lawsuit had been floating out there for a while but no one thought she’d actually file it. Boy are we glad she did. If we look at another very SAC-friendly story that just happened to be printed by Alex Berenson at the New York Times the same day Patricia filed her juicy lawsuit, we think it shows Stevie knew a woman once scorned for being allegedly cheated out of hundreds of millions was going to be big trouble for him.

The coverage, which some say shows Berenson was played by SAC’s stealth pressmen at Sard Verbinnen to write a ‘defense piece’ before all hell broke loose, was even highlighted that fatal Wednesday by NY Mag’s Jessica Pressler who wrote, “So there you go, readers. The Times isn’t coddling you. It just doesn’t have room for the whole truth.” Ouch!

Let’s just say hedgies going SAC-remote means those famed ‘idea dinners’ the NYT Dealbook likes to write about (get story ideas from) are likely out of the question for now.

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Burn incandescents – save a life

Bitter cold, storms batter Europe in post-Copenhagen celebration.

WARSAW, Poland — Snowstorms and subfreezing temperatures have battered Europe, killing 15 people in Poland alone overnight and wreaking havoc on air, train and car travelers from the Nordics to Italy on the last weekend before Christmas.

France’s civil aviation authority ordered the cancellation of 40% of flights out of Paris’ Charles de Gaulle and Orly airports Sunday through the mid-afternoon.

Storms Batter Europe

Storms Batter Europe

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Chunnel blocked – Continent cut off

No train service under Channel until after Christmas.

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Here’s the real blizzard

Municipal pensions. Everyone knows what’s coming but politicians have always been willing to trade immediate labor peace for destruction down the road,when they are no longer in office to deal with the catastrophe. That day has come.

Walking his shih tzu Sam in sunny Coconut Creek, Fla., easygoing and slightly stooped Henry Licker doesn’t seem like someone who could bring down a city.

But it’s Licker and some 24,000 other NYC Transit retirees whose pension costs helped push the MTA board to vote last week for “doomsday” cuts — including slashing bus and subway lines, and forcing students who got free MetroCards to pay half-fares — to help close a nearly $400 million budget gap.

The transit agency spent $533.6 million on pension expenses last fiscal year, and is expected to pay $550.5 million this fiscal year.

Meanwhile, some 275,000 retired NYC employees — including 69,775 teachers, 44,290 cops, 17,404 firefighters and 13,664 others — cost city taxpayers $6.7 billion this year, as officials dipped into the general revenue to make up pension-investment shortfalls. That’s up from only $703 million in 2000. By 2013, taxpayers will be on the hook for $12.3 billion.

New York City pensions, which increase each year whether the stock market rises or falls, threaten to hit the city “like a tsunami,” one expert said.

Repeat this story nationwide, for every little town and big municipality, then add each states own retired employees, and you might wonder how it’s all going to be paid for. You might – your elected representatives didn’t but then, the bill’s coming due on you.

UPDATE: Judging from at least one reader’s comment, my point that this is a national crisis was not made adequately clear. Here’s a site that’s been documenting this coming disaster for years.

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Well, it’s white, anyway

As of 6:30 this morning, the snow has stopped, leaving us maybe 4″. Not quite what was forecast but enough to anger my mother’s cat Henry – he refuses to go out in the stuff and is quite put out at having to stay in.

So no blizzard, but don’t lose heart. Scusie, moonlighting at Greenwich Time, still manged to file her standard report:

Scene “¦ Greenwich residents Judge Judy and Judge Jerry Shiendlin were seen dining at Valbella in Old Greenwich as well as Regis and Joy Philbin.

Nice to know that some things, including the lady’s column, never vary. UPDATE !! – Fire at Valbella’s! What’s Scusie going to do now?

UPDATE: Marx Brother’s journalism -“Who you going to believe, me or your own eyes?”. The storm has quite obviously left us, leaving nothing like the predicted snowfall, yet our area newspapers are still insisting we were hammered. Here’s the NY Post, for instance, reporting on an imaginary 18″ that fell in New York. Uh huh.

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