Tag Archive | "supreme"

An Issue of National Securities


The following post is by Dealbreaker reader and commenter Infinite Guest.

President Obama has nothing to gain by negotiating with Republicans in Congress in order to raise the debt ceiling. The Department of Treasury doesn’t need Congressional approval to issue more debt and it will be a long time before Treasury actually needs to exceed the debt ceiling.

The analyses I’ve read on the topic are nothing if not variable, but they all assume at some level an agreement by all parties on the basic necessity of raising the debt ceiling and the general wisdom of reducing the deficit. The President knows what needs to be done, the Congress knows and so does the electorate. Based on this shared understanding, it follows that those who act in the spirit of compromise will be rewarded and those who act to obstruct
progress will be punished.

Never mind the compelling absence of evidence that any such shared understanding exists; that’s just not how things work.

The President, and this President in particular, is not answerable to Congress. The President is answerable to history, to the voting public, to our allies, to business interests including bond markets and in relatively rare cases to a 2/3 majority in the Senate. When the executive branch and the legislative branch can’t work out their differences the Supreme Court acts as referree. If Congress failed to raise the debt ceiling, history would not be kind to a President who on their advice failed to honor our debts. The bond markets would not be kind, our allies would not be kind and consequentially neither would the voting public. But a President who stood up to a hostile, inexperienced Congress and continued to honor our debts would win support from all sides. There will have been sufficient turmoil and pain following Congressional failure to raise the debt ceiling that everyone on earth will understand who the heroes and villains are.

If Congress failed to raise the debt ceiling, the President could stand up to Congress on Constitutional grounds, in which case he could count on a fairly corporatist Supreme Court to eventually rule in his favor. He could stand up to Congress on National Security grounds, in which case he might even be able to secretly issue fresh debt. He could stand up to Congress on technical grounds for a very long time without provoking a Constitutional crisis or raising the debt ceiling simply by draining the Treasurys out of trust funds and replacing them with other assets. And if he had to break the law, as President, in order to stand up to Congress, then he could break the law on moral grounds, secure in the knowledge that if he is impeached, the Senate doesn’t have enough votes to convict.

What would the electorate think of a President who defies Congress on any or all of those grounds? The Democrats would rally behind him, the Republicans would still oppose him and the independents would admire him for acting independently.

Now alternatively he can compromise to avoid a direct conflict but what’s in it for him? He could give away everything his constituents like and it still wouldn’t be enough to balance the budget. By compromising he snatches defeat from the jaws of victory. Democrats will hate him. Republicans will (rightly) say that they won. Without any drama to overcome through courageous and decisive action, independents will conclude that he’s a weak leader who stands for nothing.

Politics is not about forethought, compromise and the public good. Politics is about personalities and political narratives and the balance of power. This narrative has yet to be written, but in the politics of the debt ceiling, President Obama has all the power and his opponents in Congress have none.



Article courtesy of Dealbreaker

Federal Reserve Takes A Page From Goldman Sachs’ Playabook


If you’re a person who’s living in the past, you were probably very excited to hear that the Federal Reserve would today be releasing secret loan documents detailing who was in some trouble several years ago and who was in some big trouble, in case you were unable to hazard a guess. The Fed originally wasn’t going to share any information, having denied Bloomberg’s request for the details almost three years ago, but was forced to do so under court order. They really didn’t want to but after the Supreme Court said last month they must, everyone came around and said you know what? Sure thing. Happy to do it. You want documents? You’re gonna get ‘em. EVERY SINGLE ONE.

Liking the move Goldman pulled when it sent the Financial Crisis Inquiry Commission thousands upon thousands of documents last year to wade through, some of it germane to the situation, some of it CFO David Vinair sending links to himself from Bon Appetit‘s website for butter pecan ice cream recipes so he wouldn’t forget, the Fed sent Bloomberg and various other news organizations two CD-ROMS containing 894 PDF files and over 25,000 pages of information. Happy hunting.



Article courtesy of Dealbreaker

Brady Dougan Don’t Want To Pay No Stinkin’ Interest To His Ex-Wife


So he was late on some payments, so what? So his lawyer even admits to feeling awkward arguing this case, so what? That woman is not seeing another dime!

Credit Suisse Group AG chief executive Brady Dougan should not have to pay his ex-wife more than $750,000 in interest for being 12 days late with a $7.5 million divorce-related payment, his lawyer told the Connecticut Supreme Court on Tuesday. But justices appeared skeptical of Dougan’s claims and asked his lawyer why Dougan was challenging a clause in his June 2005 divorce settlement. The high court didn’t immediately rule Tuesday.

Dougan, of Greenwich, agreed to pay his ex-wife, Tomoko Hamada Dougan, $15.3 million in two installments under the divorce settlement. He paid the $7.5 million second installment 12 days late in June 2006 and gave her an extra $25,000, representing interest for the 12 days at the 10 percent annual rate set by the settlement. But Tomoko Dougan’s attorney, Gaetano Ferro, said the divorce settlement called for interest to be paid back to the date of the settlement, not to the second payment’s due date. Ferro said he was shocked that case was before the Supreme Court, and said Brady Dougan was reneging on the deal he signed. “You can’t go to court and tell the judge it’s fair and equitable, then turn around a year later and say, ‘Only kidding,’” Ferro told the court. In addition to the $15.3 million, Tomoko Dougan also received one of the couple’s homes that was worth $9.6 million, accounts totaling about $143,000 and a 2000 BMW X5, documents show.

Justice Dennis Eveleigh on Tuesday asked Brady Dougan’s lawyer, Gary Cohen, whether he had a problem arguing against the divorce deal’s late payment interest clause after having agreed to it. Cohen responded that it didn’t occur to him when the settlement was approved that the interest clause would be invalid. “It never occurred to me that there would be a breach,” Cohen said. “Hindsight is always 20/20. I think it’s my obligation to my client to advance appropriate arguments on his behalf.”

Court Hears Credit Suisse Divorce Case [AP]



Article courtesy of Dealbreaker

The Fashion Files: Monday!


via guestofaguest.com: Anna Wintour traipses through BROOKLYN, Lady Gaga naked x Terry Richardson = new Supreme campaign (? kinda rad…), Marisa Miller's arm is missing in the Victoria's Secret catalog, Prada has gone B-A-N-A-N-A-S and much, much more! Mara's done all the work for you an[...]

Article courtesy of %source%

Microsoft: Will The Supreme Court Dig Into XML?


The Supreme Court has agreed to hear the appeal of Microsoft (MSFT) and several firms supporting it, in its attempt to reverse a December, 2009 circuit court ruling in favor of i4i, Inc., a Toronto-based document management company that sued Microsoft for patent infringement.
Privately held i4i was awarded $290 million [...]

Article courtesy of BARRONS.com: Tech Trader Daily

Opening Bell: 08.03.10


JPMorgan’s Masters Urges No `Panic’ as Commodities Unit Slips (Bloomberg)
“Don’t panic,” she said in summing up the 35-minute call, a recording of which was obtained by Bloomberg News. “No one’s going to get screwed. We’re not going to do crazy things on compensation at the end of the year.” She hopes the second quarter “proves to be a record bad quarter for us in that there’s nothing but upside from here,” she said. “The outcome was both significantly below plan, significantly below last quarter and significantly below the year-ago linked quarter,” she said. The unit would have been in position to meet goals for the first half except for $83 million in revenue that the company deferred booking during the first six months “for a variety of sensible reasons.”

Tim Geithner: Welcome To The Recovery (NYT)
And also the jungle.

Marc Faber: Fed Printing May Create ‘Final’ Crisis (CNBC)
“Investors should have listened to me already six months ago when I wrote that the Fed will continue to monetize … they will print and print and print until the final crisis wipes out the whole system,” Faber said.

SEC Probes BP Potential Insider Trading (Reuters)
The SEC probe is one of a number of investigations of the company and others tied to the spill. Congressional committees and a presidentially appointed panel are probing various aspects of the spill. The Justice Department is looking at potential civil and criminal violations of federal environmental laws.

Fed Mulls Symbolic Shift in Bond Strategy (WSJ)
The issue: Whether to use cash the Fed receives when its mortgage-bond holdings mature to buy new mortgage or Treasury bonds, instead of allowing its portfolio to shrink gradually, as it is expected to do in the months ahead. Any change—only four months after the Fed ended its massive bond-buying program—would signal deepening concern about the economic outlook. If the Fed’s forecast deteriorates significantly, it could also be a precursor to bigger efforts to pump money into the economy.

Political Ads Off Limits, Goldman Promises (NYT)
Goldman Sachs has pledged not to spend any of its vast corporate reserves on political advertising. The move was an unexpected sign of restraint after a major Supreme Court ruling this year that gave corporations the power to devote unlimited amounts to electing or defeating candidates for federal office. The investment bank quietly revised its statement on political activities on its Web site last week, adding a sentence addressing the powers that were granted under the Supreme Court decision in January, known as Citizens United v. Federal Election Commission. “Goldman Sachs also does not spend corporate funds directly on electioneering communications,” the firm said in its statement. Those communications are generally interpreted to mean advertisements on radio and television broadcasts in the run-up to an election.

The Warren Commission (Portfolio)
As head of the new Consumer Financial Protection Bureau at the Fed, Elizabeth Warren would give bankers agita. Here are a few alternatives who would give them the heart attack they need: Joe Borg, Eric Dinallo, Jim Chanos or Eliot Spitzer.



Article courtesy of Dealbreaker

Microsoft: Supreme Court Rejects Appeal In Alcatel Patent Case


The Supreme Court has turned down Microsoft’s (MSFT) appeal of a jury verdict that found the company violates an Alcatel-Lucent (ALU) patent covering a method of entering information into fields on a computer screen without using a keyboard.
The U.S. Court of Appeals for the Federal Circuit previously ordered the [...]

Article courtesy of BARRONS.com: Tech Trader Daily