The heads-up on GS being bashed by a criminal referral -- that Jim McTague of Barron's provided on Wednesday 28 from Beverly Hills, at the Milken Institute -- turns out to have been 20 hours ahead of the news of a criminal investigation. GS gyrated in thin trading overnight. Bid 150. Ask 155 or 157. The morning tells the tale, but no matter; the GS saga will dominate the Big Warren Buffett chat in Omaha this weekend. Buffett poured $5 billion into GS during the crisis of 2008. Who is sorry now? Rudy Giuliani stalked Drexel until he grabbed a RICO hammer and Drexel collapsed. Is this the end of Lloyd Blankfein Squared? Welcome chaos. Add GS to Greece and the Cameron anti-Euro boom and the easy talk that the EU is in failure, and what you get is uncertainty stew.  Suddenly, jobs are not the only problem for POTUS, Congress and the midterm Democrats.  There goes another fever in the banks too big to rationalize.

Spoke Landon Thomas, NYT, in London, re the trouble with Greece, and he measures that the word "crisis" is not too strong for the Eurozone and the euro following the downgrade of Portugal's and then Spain's debt. Greece is the well-known basket case. The PIIGS are long mentioned as the weakness in the euro that cannot be solved. The cultures of Germany and Greece do not and cannot solve each other. The Greeks believe in paid leisure at age 62 and a public employee contract that resembles sloth from the Berlin POV. Germany believes in total devotion to industry and a matter-of-fact self-denial until and only if a citizen achieves dotage. Portugal and Spain practice joy -- an alien discipline to the dour Northern Europeans. All great wit here.  Love to hear what's wrong auf Deutsch from Angela Merkel -- something deeply Mel Brooks about hearing "must" in the German language.  What does this mean for the US? Any strain on the largest trading bloc after the US is a strain on recovery.  The euro virus certainly does not help hiring.  Thomas tells me that the immediate strain in Europe is the surprises.  No one is in charge.   The Spain downgrade ambushed the new version of calm.  The risk remains the drip, drip, drip of a leak.  It is also the fact that there is no captain of the EU ship of state.  Just the extremely competent crew of the masterful Germans; the grim, thrifty, cautious, resolved, practical, haughty, relentless, ferocious, joyless Germans.  Spoke Don Imus re the German and Greek struggle, and I jested that there was a strange moment for me when, watching a report of the troubled talks in Europe, I imagined an alternative universe where I could hear Mrs. Merkel say to Greece, "Just leave."  ("Or we will wipe you out.")  

Marc Marano, ClimateDepot.com, enjoys himself while identifying the thin-skinned and prickly Michael Mann of Global Warming/Penn State as a ferocious fool who is now claiming to sue a YouTube satire of Michael Mann as a tree-killing greenie. The collapse of the cap and trade bill in the US Senate is entirely a result of the Climategate scandal. Entirely. Marano and others have done a superb job making the sour-puss characters of the Global Warm Team appear human-sized and winningly misguided, like the Snow White dwarf Grumpy. Mann and his colleague Phil Jones of East Anglia, along with the whole of the Climategate/James Hansen/IPCC posse, need sunny vacations and a seminar session on the art of the ridiculous.

The way is should be, the World Champ Yankees with the World Champ POTUS in the White House. And the lesson is that pitching, power, defense and resolve make it through a long season of a round ball against a round bat. The way it should be. Does POTUS learn from the Yankees? Unknown. No apologies in the majors. You step onto the plate and swing for the fences. You take the mound and throw heat. You run out the grounder and you do not give up on a fly, ever. And what is more spectacular than getting waved home against a howitzer arm from right field? The way it should be. The country is ready to move. POTUS does not appear to have the feel for what America is, the American exceptionalism, the New Jerusalem, "the Citty on a Hill."  Watch this, POTUS.  High heat.  Lead, or get out of the way.

The Obama administration launches a kiss and make up offensive to win back the American supporters of Israel after the last months of POTUS abuse and arrogance toward Israel. Too late. Spoke Ed Koch Thursday 22, and the mayor said, "Trust is broken. Humpty-dumpty." There is only one issue that moves the White House, and that is the issue of money. When the White House political Rasputin Axelrod saw that Jewish checks not only are not flowing to the Democrats but also are flowing to the Republicans, the White House started cooing. Will it continue? Nah. Abbas is invited to the White House in reward for his trite obtuseness and non-performance since last spring. POTUS is convinced that he can bully the Jews and embrace the Arabs. Delusional?  Nah.  Simplistic.  Yep.  Impatient?  Sure.  The staged -for-the-camera event in Jerusalem, featuring so-called right-wing Jews marching and so-called left-handed and right-handed Arabs throwing stones, is a theater piece to restate the themes without much effort in the excellent spring weather in Jerusalem.

Spoke to Charles Bowden, author, Murder City, re the madness of murder in Ciudad Juárez along the Texas border at El Paso.  The mass murder of six Federal police and one child is not exceptional violence for a city that is depopulated and abandoned by Mexican law and order.  President Calderon deployed thousands of Mexican army soldiers into the city starting 2008, and the violence and body count have climbed ever since.  The cartels fight over drugs and turf, but the Mexican army may be fighting over a cut of the profits.   Mrs. Clinton's visit to Mexico City at the end of March, in the company of the full house of secretaries Gates, Napolitano and DNI Blair, was capped by a press conference in which the US restated its position of guns and cash to fight drugs, no possibility of legalizing even marijuana.  The Calderon policy is widely understood as in failure.  The Mexican army and police are part of the problem.  Bowden makes more than an economic analysis.  Bowden presents a case that the murder in Juárez is now without utility.  It is a murder pandemic.  They way to do business, to act in public, is to commit murder.  A currency in murder.  There is a phenomenon of a death house.  Abandoned houses are used to bury the murdered, thousands of bodies still to be discovered.  Sadism and suicide and slaughter are routine daily conduct.  The Mexican border is anarchic.  Mexico may be defeated by a spontaneous gang war.  The Arizona legislature law to deport illegals is fueled by a perception that the border is not secure.  POTUS and the Democrats hope to make political capital out of the immigration confusion.  Lindsey Graham quits the immigration legislation in the Senate when he sees that Harry Reid will move immigration in front of cap and trade (below Graham with Kerry and Lieberman on cap and trade) in order to manufacture a controversy for the mid-terms.  The politics of the border are in play.   Juárez is a warrant that POTUS cannot answer. 

 

The old Obama Senate seat in Illinois, temporarily held by the frail and meaningless Roland Burrris, now becomes the Jonah seat of the Midwest. The Blagojevich ploy to subpoena POTUS - in order to testify in the corruption trial about selling the very same seat -- is now followed by the collapse and FDIC takeover of the Chicago-based, four-branch Broadway Bank that supports Senate candidate Alexi Giannoulias and his enterprising Greek-origin family. Alexi G is supposed to be the once and future young pol of the state.   It is all too plush a melodrama. It needs music. The White House is panicky. Dick Durbin makes much noise when he visits Rahm Emanuel and Val Jarrett to fret about the laughable prospect of the Giannoulias campaign.  How about forcing Alex G to swim with the fishes (he is pals with the Outfit in Chicago) and shovel the unhappy Rahm into the Jonah chair?  It takes a strong man not to break out in song at the sloppy goofiness of the Chicago way.

Spoke Thursday 22 with Russell Gold, WSJ, re the blow-out, explosion, fire and sinking of the BP-rented Transocean super-rig Deepwater Horiizon fifty miles off the Louisiana coast. Eleven are missing and presumed dead and even unrecoverable, but the news is that the rig sank in 5,000 feet of water and the well now leaks oil into the Gulf at 31 barrels an hour. The challenge is to cap the well and to clean up the spill. The bigger trouble is that this was a state-of-the-art deepwater rig. There is yet to be an explanation for the blow-out that defeated all the safety systems. The Big Energy plans in the century all look to deepwater drilling and platforms in the Gulf, off South America and Africa. Unanswered questions. Big Energy leaps into doubt.

Spoke to Eric Dash, NYT, and Joe Bel Bruno, WSJ, re Goldman Sachs CDO Abacus that was put together by the dynamic duo of Fabrice "The Fabulous Fab"  Tourre and Jonathan Egol. "Black box inside a black box inside a black box," says Dash. Bel Bruno says that Goldman will fight hard and that it admits to nothing. The SEC case turns on the notion that Goldman fooled smart guys to believe that Abacus was constructed to succeed by ACA. There is fresh information that a former John Paulson partner in fact told ACA that Paulson was short the housing market and was involved in constructing Abacus. Of course it is confusing. On purpose. Witness the black box metaphor. The best news is that Lloyd Blankfein will fight the SEC alongside his new hire Greg Craig, late chief counsel of the Obama White House.  An early peek at the strategy is to feed the Fabulous Fab to the Congress.  Orchestra!

Spoke Louise Story, NYT, and Gregory Zuckerman, WSJ, re the events of the winter of 2007 and learned that the fabled billionaire investor John Paulson was regarded as a chump and outsider in the time frame that the SEC identifies for the now-suspect Abacus (and the Fabulous Fab of Fabrice Tourre) deal. Betting against the subprime market was not difficult, because what you had to do was short the ABX index. But betting against the raging uptrend in the ABX was not popular, was not even considered sane. Paulson took what was then understood as the dangerous (and sucker) side of the trade. February 7/8, Paulson watched as the hot New Country subprime mortgage-maker collapsed 36% the day after it reported earnings for 2006 (books cooked) and the ABX sagged five points. John Paulson and friends made $1.25 billion that day; yet over the next seven months they watched as the ABX rallied with the subprime market and much of the February gains evaporated as the stock market set an all-time high. Then cliff-diving. The SEC now alleges that GS chose the chump Paulson in the winter of 2007 because it knew he was a genius for picking the shorts. Nah. They were guessing; they were prying; they were sweating. My information is incomplete. Other banks did the same trade as Paulson and GS. More to come. The SEC seeks to punish the winners on the downside. Pull up a chair and watch the tenor sing.  John Avlon notes correctly that the SEC vote to move against GS and Fabulous Fab was a partisan 3-to-2.  Not a good beginning.  Partisan games make this opera even richer.  Mark Twain again: Man is the only creature who bites the hand that feeds him - as witness Congress biting the banks.

Bill Roggio, Long War Journal, reports that the Iraqi and US kill of two major gangsters in Iraq erodes AQ severely and presses the case for an Iraq stabilized and prosperous. Al Masri was an Egyptian who was recruited by Zawahiri; Al Masri's death is a blow to the AQ high command. The gangster Al Baghdadi was a local thug and his death is regarded as a blow to the morale of the locals.  The Obama administration is correct to claim a success, and POTUS is to be congratulated and cheered for pressing the attack in Iraq.  The 2002 dumb war of State Senator Barack Obama just turned into the smart war of POTUS Obama in 2010.  Win is a win.

Of course it is the German (Teuton) gods who test-fly commercial aircraft through an ash cloud of the angry Icelandic (Viking) volcano god; of course, it is the rest of Europe that sits back and stares at how scary the world is to permit volcanos and winds and the usual unpredictable weather. Is it the Germans, or is it that the Europeans still think Germany would have been a better master than the US for the sixty-five years since Berlin burned? Unknown. Meanwhile, the US and POTUS are busy surrendering to anything wearing a helmet, such as Tehran and Beijing and Caracas. Under the volcano, all things are possible. Who won the Second World War? Germany? Russia? US? Iran? China? This is a trick question, including "incomplete."

Thaddeus McCotter at a Tea Party in New Hampshire on Tax Day, then off to Michigan to attend a Tea Party that evening. Busy, busy. The peculiar salute to the New Hampshire (and elsewhere) Tea Party by POTUS Bill Clinton does cap a sparkling week. What is wrong with the Tea Party? Very, very little. It is a long way from the start last year. Sharp, sophisticated, focused, organized, spontaneous and dogged. Makes the pols tremble. It does not have a single issue. It is people who balance budgets and make do and expect their taxes to go to sensible services and not much else.  Not to bankers, bonuses and boondoggles like the Cornhusker Kickback and the cap and trade delusion.

Bush Derangement Syndrome is nostalgia, whereas Obama Derangement Syndrome is a current event; and the surprisingly sentimental and rested Karen Hughes accepts the ungracious quips of an unseen Texas Tribune editor with measured manners. Is ODS the same as BDS? Sure; and this means what?  Team Obama is especially offended by the eccentricities of the opposition.  POTUS is said to be prickly.  POTUS does enjoy trash-talking the oppo.  The Obama Did It crowd is not articulate; just as the Bush Did It crowd was not the best of dinner guests.  More interesting to me is how the ODS translates into the midterm turnout.  Evidence now is that the DCC is abandoning hope of adult, married, suburban, taxpayer voters and concentrating on the youth vote for turn-out.  Why this despair and long-shot dreaminess with a majority in both Houses and the popular (mostly) president?  Because both the Cook Report and Rothenburg Report point to a wave that begins at 30 seats going GOP and builds to much, much more, perhaps as high as 50, and I have heard the number 100 just to make you smirk.  The GOP does not deserve its prospects; it is the default Other in the duopoly.  Last eve, Minority Whip Eric Cantor twice mentioned how he is working closely with Majority Leader Steny Hoyer.  Getting ready to trade places???

Alan Grayson pops up one of three Democratic Progressive members of Congress who declare they remain against the war in Afghanistan and want the money spent on workers (especially teachers) in their districts.  Good politics for the Democratic base; good logic; smart.  Reminds that POTUS has not solved the war for the voters he needs for 2012, the pacifists and anti-military professionals.  Waiting for Lefty is at hand.

Tea Party arranging spectacular portents of a bolide in the heart of the heart of the country. More on the rising Thursday 15, re AZ-8, where the so-called moderate sophomore Gabrielle Giffords, wife of an astronaut, now faces a wall of Iraq and Afghanistan war veterans on the R side who are battling in the primary to confront Giffords. Money is not a problem for Tucson.  The Democrats have made it easy to attach portents to the midterms.  The GOP recruiting continues rich, young, energetic, cocky, broad-based.  CQ demotes Giffords to "leans Democrat," which is the lowest you can go and still be in your incumbent seat.  Giffords looks like toast for her Yes vote on healthcare, and she will spend her money on TV explaining how she counts on the "silent majority" to support (save) her.  Oops.  Isn't that the RMN crowd, now forty years older?  Giffords is a product of anti-war recruiting in '06 by Emanuel and Pelosi; she has exhausted her base; she fails the this-is-now test. 

 

The GOP in the Senate will fight the Dodd financial reform bill, will fight it on the basis of the credit card cops and on the basis of the the too-big-to-fail special category. The Dodd bill will grind to a halt. The House has already passed its fairy tale version of financial reform. Nancy Pelosi orders no more tough votes for the House before the midterms. The Dodd legacy bill is a debating forum, no more. JP Morgan Chase reports earnings in hours, looking to be positive and healthy. The four big banks are healing with lots of Fed help.  The Democrats will attack the four big banks.  The GOP will attack the big Dems for attacking the four big banks.  POTUS will obfuscate.  Heigh ho.  Citi lives, and it will probably hire Dodd.  WAMU is collateral damage; so is the housing market.

Tidy, persuasive, witty and straight-forward remarks by Thaddeus McCotter at the SRLC.  "A simple country lawyer from Detroit . . . I live in Southeastern Michigan . . . We are all called on once again to defend freedom , , ,"  Pleasant and trenchant.

Charles Schumer and Jon Kyl vie for an Academy Award nomination for supporting actor when they exchange long-distance nods of agreement that the next POTUS pick for SCOTUS will be routine, dull, unexciting, perhaps even anti-glamorous. The Democrats have exhausted their own nerves with the wacky healthcare dance after the shopping spree of the last fifteen months. The Senate Democrats have nothing left for a fight on SCOTUS. Also, there are at least two likely Democratic re-elects in the Senate who are in danger, Boxer and Specter, who would be plunged into the abyss with a screaming match over a "legislate from the bench" nominee.  Examine the likely Democratic losses: Arkansas, North Dakota, Nevada, Illinois, Delaware, Indiana, with possible losses in Colorado, Pennsylvania, Wisconsin and California -- and there is a narrative that says the GOP takes the Senate as well as the House. The Democrats are deep inside a hardshell tortoise of a plan just now, hoping the thunder passes by.  SCOTUS will be a snoozer.  But then there is always the chance that POTUS will need to pick a fight because of some other policy crash.

Gifted agitprop, two-sided: the pounding paranoid attack side on the strangely leaderless Democrats, and the sentimental resurrection side with the usefully non-Washington GOP governors. What strikes me most is that there is no center to the Democratic camp (POTUS is another face) and there is no dominating A-team to the Republican camp.  This is team play without much attention to who is POTUS, who is Speaker, what state is led by what governor.  I see Barbour, Christie, McDonald, Pawlenty, Jindal.  Did I see Daniels?  Of course, there is Reagan.  This is not Gilbert and Sullivan.  Closer to neo-Puccini.  "Butterfly." (Below)

A new documentary based upon some of the material collected by colleague Charlie Pellegrino for his sweeping narrative, "Last Train from Hiroshima." The strangest detail of the attacks is that more than a few who survived Hirsohima on August 6 then entrained for their relatives, or their work, in Nagasaki; and were bombed a second time on August 9. The whole story is creepy and numbing and astonishing. Sixty-five years later, it still makes little sense. The world was mad in 1945. Whoever survived still cannot explain the madness. More were mass-murdered in the firebombings of Tokyo than died from the atomic weapons.  It was industrial murder.  The Allies and Axis manufactured corpses.  It is as if we are peering into the history and culture of another planet.  It is as if it is all make-believe.

  

POTUS hooks his drive into the pines, then lays it up only to miss the green and catch a trap. Sarah Palin at the Southern Republican Leadership Council confab, playing calmly on the dog-leg par 5, hits the green in three and drops a fifteen-footer without hesitation. Does POTUS obsess about Sarah? Does he realize he makes it a snap for her with his hook drives and self-caught traps? "Now, the president," Sarah says, "with all the vast nuclear experience that he acquired as a community organizer, as a part-time Senator, and as a full-time candidate, with all that experience, still no accomplishment to date with North Korea and Iran."

Spoke Lee Hotz, Wall Street Journal, re the fresh announcement that a father-and-son team, Matthew and Lee Berger, reveal a wholly new version of the australopithecines. The story of the discovery is Hollywood. Lee Berger, a prominent paleontologist, located a series of unexplored caves in South Africa near Johannesburg by using Google Earth. Working in the bush, with his nine-year-old son Matthew nearby playing with Matthew's dog, Tau, Lee Berger heard his son call out, "Daddy, I found a fossil."  (I suspect Tau found the bone.)  Father thought it was an antelope bone and took it up to dazzle the child with the analysis. It turned out to be what may be the clavicle of a never-seen-before and yet-unnamed hominid.  About 4 feet tall, with long arms, gangly legs, and having a delicate human face and small teeth, the hominids (they found an adult female and a male child) had a small brain. Dated to 1.78mya to 1.95mya, this new find was coterminous with more robust and bigger-brained hominids elsewhere in Africa.  Did we develop in parallel genuses, not serially but independently.  Are we today, homo sapiens sapiens, a survivor of the vagaries of the last two million years?   Not the survival of the fittest, but rather the survival of what worked in the neighborhood that worked, at the time that it worked?  We are not inevitable?  We are accidental?  

The video featuring turmoil in Bishkek, Kyrgyzstan, a small and remote land-locked nation of 5.5 million Russian- and Kyrgyz-speaking Moslems and Christians, makes a neat connection to the pending conversation between POTUS and Russia President Medvedev in Prague. The nuke treaty is a distraction.  The Great Game twist is that Moscow moves on Bishkek as Washington moves on Tbilisi.  Coincidence?  POTUS and his administration suffer the worst relations of Washington with the Kremlin since the early 1980s, when Andropov and Reagan squared off.  Sparring over surrogates is a measure of the contempt demonstrated by both sides.

Spoke Steve Schippert, ThreatsWatch.com, re the Nuke Posture Review from the Obama administration, and learned that POTUS makes the exceptions of Iran and North Korea when identifying how he will and will not respond to an attacker.  Gone is the ambiguity of a nuke response.  Instead, POTUS provides clarity -- and the sort of clarity that emboldens belligerents and worries allies.  POTUS does not believe in nukes as a weapon.  He aims to eliminate nukes from the planet.  POTUS ambition is self-concsiously vain.  What is critical to POTUS is his peculiarly pacifist opinion of nukes, not the history of nor deterrence of nukes.

    

Spoke Connie Guglielmo, Bloomberg, re iPad first weekend to learn that Apple forecast 300k units sold in the first day, April 3, including store purchases and pre-orders to be picked up in the stores. My purchase online is not reported yet, and that number will add to the total. The low-balling analysts predict 700-850k sold in the quarter; the highest number is 1.4. The wi-fi version is all that is ready now. The 3G model comes later in April. Connie Guglielmo's observation is that Apple will watch to see which version, and what type of memory package, become popular, and then will respond with a focus on that model.  My contribution is that my teenaged daughter is far more eager than my teenaged son to see and possess the iPad.  This means: Smash hit with the people who drive the universe, the Teen Angels. 

Spoke to Conor Daugherty, WSJ, re the beginning of the struggle between the municipalities and the state and local government unions. The lifetime benefits are at the center of the debate. The taxpayers of Los Angeles and California no longer choose to sustain the rising costs of the pensions and the healthcare provisions for the government workforce. This will be a long tussle. The taxpayers have the vote.  A contract is only as good as the vote says it is.  SEIU and AFSCME will resist.  The UAW resisted, too.

Neat V. Putin move to stand and deliver beside Hugo Chavez, the boss of the Axis of Good. The Kremlin moves to crack open the Monroe Doctrine even as the Obama administration continues its affection for Saakashvili at Tbilisi. The Great Game makes the leap into the Western Hemisphere. What suits Putin for now is to make the chess move.   Red Knight to Caracas.  Big news in Macau, too.  Recall that handshake with Chavez in the first months of the Obama administration?  POTUS does not have a hand free to counter the bishop.

Am ready to iPad. But am not ready to deal with AT&T's network.  A compromise is to wait for Verizon. What the MacBookPro lacks is a wireless connection when outside of trusted hotzones. Then again, how connected is enough?  The BlackBerry is still the trusted email tool, and this makes the iPad a junior version of the MacBookPro screen.  A novelty.

Umarov's threats to the FSB and to Putin's and Medvedev's authority are substantial and active. The Dagestan attack in March was sophisticated, with a VBIED across the street from an FSB HQ and then a suicide vest-wearing impostor in an FSB officer's uniform infiltrating the police line to kill as many as possible. Umarov calls himself the Emir of the Caucasus. This is the face of radical jihad in Russia. Fred Burton, Stratfor, identifies Umarov as Putin's Bin Laden. An explanation for why the Kremlin will keep Tehran intact is that Russia needs radical Shias (the Twelvers) to block the jihadists of the Arabian Gulf.