[Borowitz] Goldman Sachs Reveals it Shorted Gulf of Mexico Oil Rig Disaster 1 DAY BEFORE

In what is looming as another public relations predicament for Goldman Sachs, the banking giant admitted today that it made "a substantial financial bet against the Gulf of Mexico" one day before the sinking of an oil rig in that body of water.

The new revelations came to light after government investigators turned up new emails from Goldman employee Fabrice "Fabulous Fab" Tourre in which he bragged to a girlfriend that the firm was taking a "big short" position on the Gulf.

"One oil rig goes down and we're going to be rolling in dough," Mr. Tourre wrote in one email. "Suck it, fishies and birdies!"

Read more...

Find and Execute Face-Saving Exit Plan ASAP!!!

A great war-related reading as always, by Jeff Huber on Antiwar May 04, 2010 (don't miss its conclusion):

The Pentagon’s lame-excuse directorate has a new reason why we’re not winning our woeful war on -ism.

The “Blame Cell,” in its various ad hoc and formal manifestations, has been successfully warding off culpability for the Defense Department’s failures since theKorean War. Our services’ graduate-level war college programs wax operatic about the brilliance of Supreme Commander Douglas MacArthur’s amphibious invasion of the Inchon Peninsula that cut off the North Koreans’ lines of communication and forced them to retreat back above the 38th parallel.

But nobody at our citadels of war knowledge dares mention that El Supremo swiftly afterward snatched oops from the jaws of hurray by continuing to push up the peninsula and scaring the Chinese into joining in on the fun. Nor do our war scholars dwell on how many American boys were ground into hamburger in the ensuing trench warfare that went on for three years before the warring sides agreed to call it a draw. And no one responsible for preserving the military’s mythos openly discusses how Dugout Doug spent most of World War II sitting on his sharply creased rear end in Australia and then took the credit for winning the war in the Pacific that rightly belonged to Adm. Chester Nimitz.

Even more Orwellian is the crying noise the five-sided playpen and its military-industrial-congressional complex allies make to this day about Vietnam. We could have won in Vietnam, the narrative goes, if only the liberal media and the long-haired freaky people had given the military brass more time and more resources. Never mind that we gave military brass over a decade and, at one point, a surge of over a half-million troops to “get the job done.”

The bull feather merchants are maintaining the same traditions in their campaign to shirk accountability for the dismal state of our conflicts in Iraq and the Bananastans. Like MacArthur before him, “King David” Petraeus is lionized as a military genius and considered a potential GOP candidate for president, this despite the fact that his generalship has transformed the western half of Asia into a perpetual exploding cigar. The myth that the Iraq surge accomplished anything persists like the villain in a horror flick franchise, and even after two troop escalations, Pavlov’s dogs of warcontinue to claim our hunting trip in Afghanistan can only be won if it’s properly resourced.

Our mainstream media, the once mighty fourth estate that helped end the Vietnam disaster, doesn’t dare press the Pentagon too hard on its Iraq and Af-Pak shenanigans for fear of being accused of losing another war. It was in this light that the New York Times, the paper so complicit in helping Dick Cheney and Donald Rumsfeld sell the invasion of Iraq with disinformation and covert propaganda, published an April 26 story by the round-heeled Elisabeth Bumiller titled “We Have Met the Enemy and He Is PowerPoint.”

Marine Gen. James Mattis, commander of U.S. Joint Forces Command, says that “PowerPoint makes us stupid,” Bumiller reports. Brig. Gen. H.R. McMaster, who secured the northern Iraqi city Tal Afar in 2005, tells Bumiller that PowerPoint amounts to a “dangerous” internal threat because “it can create the illusion of understanding and the illusion of control.”

Hapless Bumiller asserts, “No one is suggesting that PowerPoint is to blame for mistakes in the current war.” Heavens to Murgatroyd, Betsy. Stupidity and illusions of understanding and control are precisely what have caused our mistakes in Iraq and Af-Pak, and if two high-visibility generals say PowerPoint makes us stupid and delusional, then they’re blaming PowerPoint for the stupid mistakes in our current stupid war.

But for the generals to blame PowerPoint for our stupidity and delusions is, well, stupid and delusional.

McMaster told Bumiller, “Some problems in the world are not bullet-izable.” While that’s true, the same sorts of problems tend not to be essay-sizable or even book-lengthable. Let’s take, for example, the cornerstone document of our Iraq and Af-Pak strategies, the “new” field manual on counterinsurgency (FM 3-24) that Petraeus supposedly wrote.

No piece of literature can convey much if nobody can absorb it. Language is a subjective art, and levels of literacy are hard to define, but I regularly read the likes of Proust, Joyce, Faulkner, and even Clausewitz, and after 15 minutes of perusing the counterinsurgency manual I need surgical tweezers to pick the fine shards of broken glass from my eyeballs. The manual’s critical weakness, though, is what it actually says once you take a fire hose to its dense, prolix jargon. To conduct a successful counterinsurgency operation, the manual insists, requires the host nation to have a reliable and legitimate government, security force, and intelligence apparatus. We’ll never see any of those things in Iraq or the Bananastans, at least not as long as we’re there. But the crux of the counterinsurgency doctrine’s March hare mentality lies in a core tenet of political science that says if your host nation has a reliable and legitimate government, security force, and intelligence apparatus, it doesn’t have an insurgency on its hands and you don’t need to be there.

Nothing so clearly illustrates the intellectual and moral bankruptcy that produced the likes of MacArthur and Petraeus as the Bumiller-echoed complaints by our top generals that their inanity and lack of connection with reality are the fault of presentation software.

If anything, bullet-izing military issues is in keeping with a sound principle of warfare that the Pentagon seems to have ignored for over half a decade: simplicity. The April 2010 report to Congress on Afghanistan prepared by unidentified henchmen of Gen. Stanley McChrystal is 150 pages of gobbledygook that could have been far better stated with a single elegant PowerPoint slide:

•  Our Objectives Are Unachievable
•  Our Strategy Is Hallucinatory
•  This War Has Nothing to Do With National Security Whatsoever
•  Find and Execute Face-Saving Exit Plan ASAP!!!

Read more by Jeff Huber

• Measures of Ineffectiveness – April 26th, 2010
• Heart of McDarkness – April 19th, 2010
• COIN of the Realm – April 12th, 2010
• McCrackers – April 5th, 2010
• The Desert Ox – March 29th, 2010

The Global Crisis of Legitimacy

Stratfor has just published an interesting article. Here some snippets:


"Financial panics that appear natural and harm the financial elite do not necessarily create political crises. Financial panics that appear to be the result of deliberate manipulation of the allocation of risk under the law, and from which the financial elite as a whole appears to have profited even while shareholders and the public were harmed, inevitably create political crises. In the case of 2008 and the events that followed, we have a paradox.
...

The crisis was rooted in the appearance that it was triggered by the behavior not of small town banks or third world countries, but of the global financial elite, who took advantage of the complexities of law to enrich themselves instead of the shareholders and clients to whom it was thought they had prior fiduciary responsibility.


This is a political crisis then, not an economic one. The political elite is responsible for the corporate elite in a unique fashion: The corporation was a political invention, so by definition, its behavior depends on the political system. But in a deeper sense, the crisis is one of both political and corporate elites, and the perception that by omission or commission they acted together — knowingly engineering the outcome. In a sense, it does not matter whether this is what happened. That it is widely believed that this is what happened alone is the origin of the crisis. This generates a political crisis that in turn is translated into an attack on the economic system.


The public, which is cynical about such things, expects elites to work to benefit themselves. But at the same time, there are limits to the behavior the public will tolerate. That limit might be defined, with Adam Smith in mind, as the point when the wealth of the nation itself is endangered, i.e., when the system is generating outcomes that harm the nation. In extreme form, these crises can delegitimize regimes. In the most extreme form — and we are nowhere near this point — the military elite typically steps in to take control of the system.



This is not something that is confined to the United States by any means, although part of this analysis is designed to explain why the Obama administration must go after Goldman Sachs, Lehman Brothers and others. The symbol of Goldman Sachs profiting from actions that devastate national wealth, or of the management of Lehman wiping out shareholder value while they themselves did well, creates a crisis of confidence in the political and financial systems. With the crisis of legitimacy still not settling down after nearly two years, the reaction of the political system is predictable. It will both anoint symbolic miscreants, and redefine the structure of risk and liability in financial corporations. The goal is not so much to achieve something as to create the impression that it is achieving something, in other words, to demonstrate that the political system is prepared to control the entities it created.
...

We see a similar crisis in Europe. The financial institutions in Europe were fully complicit in the global financial crisis. They bought and sold derivatives whose value they knew to be other than stated, the same as Americans. Though the European financial institutions have asserted they were the hapless victims of unscrupulous American firms, the Europeans were as sophisticated as their American counterparts. Their elites knew what they were doing. 

...

Europe thus has a double crisis. As in the United States, there is a crisis between the financial and political systems. This crisis is not as intense as in the United States because of a deeper tradition of integration between the two systems in Europe. But the tension between masses and elites is every bit as intense. The second part of the crisis is the crisis of the European Union and growing sense that the European Union is the problem and not the solution. As in the United States, there is a growing movement to distrust not only national arrangements but also multinational arrangements. 



But for now, the important thing is to understand that both Europe and the United States are facing fundamental challenges to the legitimacy of, if not the regime, then at least the manner in which the regime has handled itself. The geopolitical significance of this crisis is obvious. If the Americans and Europeans both enter a period in which managing the internal balance becomes more pressing than managing the global balance, then other powers will have enhanced windows of opportunities to redefine their regional balances.

In the United States, we see a predictable process. With the unease over elites intensifying, the political elite is trying to stabilize the situation by attacking the financial elite. It is doing this to both demonstrate that the political elite is distinct from the financial elite and to impose the consequences on the financial elite that the impersonal system was unable to do. There is precedent for this, and it will likely achieve its desired end: greater control over the financial system by the state and an acceptable moral tale for the public.

The European process is much less clear. The lack of clarity comes from the fact that this is a test for the European Union. This is not simply a crisis within national elites, but within the multinational elite that created the European Union. If this leads to the de-legitimization of the EU, then we are really in uncharted territory.

But the most important point is that almost two years since a normal financial panic, the polity has still not managed to absorb the consequences of that event. The politically contrived corporation, and particularly the financial corporations, stands accused of undermining the wealth of nations. As Adam Smith understood, markets are not natural entities but the result of political decisions, as is the political system that creates the allocation of risk that allows markets to function. When that system appears to fail, the consequences go far beyond the particular financials of that event. They have political consequences and, in due course, geopolitical consequences.


This report is republished with permission of STRATFOR