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Good News Everyone, The Economic Crisis Is Over! (Right?)
Posted by Allison Kilkenny, True/Slant on October 30, 2009 at 12:15 PM.

Good news, everyone: The economic crisis is OVER!

Kind of. Today's New York Times reports

The United States has emerged from the longest economic contraction since World War II.

The nation's gross domestic product [GDP] expanded at an annual rate of 3.5 percent in the quarter that ended in September, matching its average growth rate of the last 80 years, according to the Commerce Department.

If life still sucks for you: you're still unemployed, depressed, broke, homeless, or scraping by on food stamps, don't worry. You're not alone. In a recent Wall Street Journal/NBC poll, 58 percent of people said they see the country as being on the wrong economic track.

There's always been a weird disconnect between official economic figures like GDP, "third quarter growth," and average citizens' lives. Basically, things can look great on paper, while low and moderate-income people suffer. It's almost like the official record keepers have no idea what life is like for the guy working the graveyard shift in South Side Chicago.

This is not a new problem. Economic indicators like GDP may work swimmingly in lecture hall theories, but they ignore many factors important to the well being of a society, such as health care or life expectancy.

For example, 80 percent of Americans have reported feeling stressed about the economic downturn. The stress affects women the most, who report increases in symptoms like irritability, anger and fatigue. These kinds of economic downturn byproducts have untold consequences on family, workplace, and societal stability.

This stress can also manifest as insomnia. In West Virginia, the AP reports that nearly 1 in 5 West Virginians said they did not get a single good night’s sleep in the previous month. For West Virginia, a state that ranks at or near the bottom of the nation in several important measurements of health, including obesity, the insomnia epidemic may have its roots in the economy, says Dr. Ronald Chervin, a University of Michigan sleep disorders expert. Chevin says financial stress and odd-hour work shifts can play roles in sleeplessness.

However, insomnia isn't measured in GDP. This disconnect was large enough to attract the attention of economists like the Nobel laureate Joseph Stiglitz, who is trying to come up with a new, broader definition of prosperity. In an interview with Bloomberg, Stiglitz said:

GDP has increasingly become used as a measure of societal well-being and changes in the structure of the economy and our society have made it an increasingly poor one ... So many things that are important to individuals are not included in GDP.

In the model they unveiled, the academics recommend including other factors, such as sustainability and education.

Even the guy who invented the GDP, the late Russian-American economist Simon Kuznets, knew his system had significant shortcomings. He once said, "The welfare of a nation can scarcely be inferred from a measure of national income."

It’s true. Fancy lab room words that seemed benign at the time, like "derivatives" and "sub-prime mortgages," had unforeseen, terrible consequences on average citizens' lives. Similarly, the specialized jargon of "GDP" and "third quarter growth" exist on different planets from the rest of us. While the students at the University of Chicago's Department of Economics say one thing, it appears as though the opposite is happening in our backyards ... again.

Read the rest of the post on the flip side »

An Early Halloween Scare: Immigration Agents Attacking Workers' Rights!
Posted by Amy Traub, DMI Blog on October 30, 2009 at 3:54 AM.

In our recent report on immigration policy and the middle class, I made the case that the exploitation of undocumented immigrant workers threatens to drive down wages, benefits and working conditions for middle-class workers and low-income Americans striving to earn a middle-class standard of living. The solution, I argue, is to provide a path to legal status for the undocumented immigrants: this would maximize the economic benefits undocumented workers, consumers, and taxpayers already bring to the nation and help ensure that exploitation doesn't harm the rest of us.

Unfortunately, that's not the direction the country is going. Instead, a new study by researchers from the AFL-CIO, American Rights at Work and the National Employment Law Project documents a decline in the enforcement of labor standards at the same time the nation has experienced an immigration crackdown in the workplace. The result only worsens workplace exploitation. As the study points out:

"The single-minded focus on immigration enforcement without regard to violations of workplace laws has enabled employers with rampant labor and employment violations to profit by employing workers who are terrified to complain about substandard wages, unsafe conditions, and lack of benefits, or to demand their right to bargain collectively... ICE [Immigration and Customs Enforcement agency] actions have created incentives for shady employers to continue hiring and abusing undocumented workers, since the deportation of their employees may excuse those employers from complying with labor laws."

It's fitting that the report was released a week before Halloween, since it's full of frightening stories of immigration agents - or local police enforcing immigration law - intervening in ways that facilitate workplace abuses. We read of ICE helicopters hovering menacingly above picket lines; immigration agents who came promptly to arrest workers who had complained about workplace safety; and one story of a worker suffering from a horrific workplace injury, swept up by immigration agents as he entered the courthouse to press a workers' compensation claim. His employer, apparently delighted that he might not have to pay for an injury caused by his business' negligent practices, called out: "I'm sending you back to Mexico... I have no use for you now." If that's not haunting, I don't know what is.

One quibble: the authors offer suggestions for more thoughtful enforcement of both immigration and labor laws, but these horror stories call for bolder solutions. An overhaul of immigration and labor laws would be a better solution still.

Oil Tycoon: Our Troops Died ... We're "Entitled" to Sweet Contracts in Iraq!
Posted by Joshua Holland, AlterNet on October 23, 2009 at 10:48 AM.

After all that, it looks like the Iraqis are cutting some big deals to develop their massive oil wealth -- but with the mushy Europeans and the damn Chi-coms!

Iraq's Oil Minister Hussain al-Shahristani told a Washington conference on Wednesday that his government was happy with the energy auction it held earlier this year. The auction was the first chance for foreign oil firms to compete for Iraqi oil since the U.S.-led invasion in 2003.

BP and the Chinese oil company CNPC were the only firms to win a contract in Iraq's bid round this summer, the first chance for foreign oil firms to compete for Iraqi oil since the U.S.-led invasion in 2003. Seven other oil and gas fields failed to attract bidders on the terms Iraq offered.

But a consortium headed by Italy's ENI (ENI.MI: Quote, Profile, Research) said last week it signed a deal to develop the giant Zubair field for a remuneration fee of $2 a barrel. At Iraq's oilfield auction in June, the consortium refused to go below $4.40 a barrel.

Another consortium headed by Exxon is still in the running for one project, but that doesn't mollify hedge-fund gazillionaire -- and natural gas honcho -- T-Boone Pickens. He's none-too-happy:

Oil tycoon T. Boone Pickens told Congress on Wednesday that U.S. energy companies are "entitled" to some of Iraq's crude because of the large number of American troops that lost their lives fighting in the country and the U.S. taxpayer money spent in Iraq.

[...]

"They're opening them (oil fields) up to other companies all over the world ... We're entitled to it," Pickens said of Iraq's oil. "Heck, we even lost 5,000 of our people, 65,000 injured and a trillion, five hundred billion dollars."

[...]

"We leave there with the Chinese getting the oil," Pickens said.

Nothing new -- In August T-Boone called on the administration to "demand" oil contracts from Iraq before considering a withdrawal ($$). But it is an unusually brazen admission that many energy bigs did in fact consider "blood-for-oil" to be a straightforward deal.

Read the rest of the post on the flip side »

Happy Days Are Here Again for Wall Street but Main Street Is Too Poor to Retire
Posted by Joshua Holland, AlterNet on October 22, 2009 at 10:01 AM.

Goldman Sachs just posted profits of more than 5 bucks per share. Goldman's people will take home more in bonuses this year than at any point in its 140 year history.  Goldman's not alone -- the whole financial sector is up!

My mother is a social worker. She's worked steadily since she was 14 years old. She was looking forward to retiring last year and thought she had it all worked out -- social security, a very small pension from the state in which she works and a modest collection of acorns in her 401(k) were going to allow her some dignified Golden Years. Not luxurious, just dignified.

That was then. Her 401(k) took a deep hit in the financial crisis. Now she's working a part-time job to make ends meet. Because of budget cuts, she just lost that and has been put "on call."

She's not alone, according to a new study (HT: Steven D.):

More Americans plan to delay retirement following steep drops in the value of their savings accounts, data from several new surveys show.

A study to be released on Thursday by Canadian insurer Sun Life Financial Inc found 65 percent of U.S. workers plan to stay on the job at least one more year than planned, an 11 percentage point increase from a similar survey in January.

"There is a huge drop in confidence that has taken place," because of the fall of stock markets since 2007, Wes Thompson, president of Sun Life's U.S. division, told Reuters in an interview. At the same time, longer life expectancies mean individuals need to build up more savings before they stop working.

"It's not retire at 65, get ready to die at 70," Thompson said.

The survey was conducted in September of 2009, when stock markets had already begun their recovery.

Also, a forthcoming study by Prudential Financial Inc found that 66 percent of respondents over the age of 45 said they may need to work longer than expected to afford retirement.

And a recent survey by mutual fund giant Vanguard Group Inc of Pennsylvania found that 45 percent of American investors said putting off retirement was "possible" and the figure was nine percent points higher among people in their fifties.

'Party of No' Obstructs Extending Unemployment Benefits, Democrats Let Them
Posted by BarbinMD, Daily Kos on October 21, 2009 at 10:15 AM.

While Republicans may be publicly wringing their hands over unemployment numbers (while gleefully calculating how they can use them to their advantage in 2010), they continue to block legislation that would extend unemployment benefits:

Hedge Fund Mogul Isn't the Only One to Listen to Kenny Rogers' 'The Gambler' over and over
Posted by Jan Frel, AlterNet on October 19, 2009 at 5:58 PM.

I remember the smells of PBR in the air, jocks wearing white baseball hats swizzling lacrosse sticks in their hands, and the sound of ping pong balls bouncing into plastic Solo cups like it was yesterday. But it was really the mid-'90s. This was a frequent late-night high school experience in NW Washington, DC. -- some preppy party I didn't want to be attending, and probably wasn't really welcome at. It just so happened that it was either go to these parties, or don't go to any parties at all.  If I could name a theme song for these people and their parties, it would be Kenny Rogers' 'The Gambler.' I once heard that song play at a Beer Pong session at least 10 times in a row. "One more time!" Imagine watching a room full of heaving jock guys n' gals, chanting the lyrics of the most commercialized and insipid country and western singer of the '80s for half an hour, as though they were reciting Rumi or... as though it had a drop of meaning. I guess it had meaning for them.

What does disgraced Galleon Hedge Fund founder Raj Rajaratnam have to do with this? It has been revealed that “Raj paid $4 million to have Kenny Rogers come to a birthday party at his house and sing his favorite song, ‘The Gambler,’ over and over again. Kenny refused to go on after a dozen times.”

Every person has their price, seemingly to a point. Kenny's pride at the $4 million level equaled 12 consecutive performances of that song. And then he drew the red line. Must have been an interesting moment. Fair to assume that with a hedge fund ego on the loose, the cost of Kenny's appearance was printed on the guest invitation. You can imagine everyone at the party making that calculation in their heads, especially Raj at the moment of refusal. Here's a video below, so the uninitiated can get a sense of the milquetoast tune that the my high school booze-hound classmates and egomanaical hedgefunders get off on.

Hillary Clinton Gives "Shameless Pitch" for Crooked Corporation in Russia
Posted by Jeremy Scahill, Rebel Reports on October 19, 2009 at 9:50 AM.

On a recent visit to Moscow, U.S. Secretary of State Hillary Clinton said she was there to deliver a "shameless pitch" to the start-up Russian airline Rosavia to sign a major contract with Boeing to purchase a new fleet of aircraft from the U.S. aerospace giant. "This has been a consistent commitment on the part of the United States Government here in Moscow to promote this, because it really does illustrate very powerfully what we can do together," Clinton said during an October 13 visit to Boeing Design Center Moscow. She said the Export-Import Bank of the United States "would welcome an application for financing from Rosavia to support its purchase of Boeing Aircraft, and I hope that on a future visit I'll see a lot of new Rosavia-Boeing planes when I land in Moscow."

Boeing is the leading aerospace company in the world and a major U.S. defense contractor. Overall, it is the third largest U.S. government contractor with some $24 billion in annual federal contracts. The company does more than $60 billion in annual sales.

Boeing is also a major recidivist corporate crook.

Since 1995, Boeing has paid $1.5 billion in fines to settle more than 30 instances of misconduct, according to the non-partisan Project on Government Oversight. According to POGO, these include multiple violations of the Arms Export Control Act, including selling defense technology to Russia and China showing "blatant disregard" for State Department directives. According to POGO, Boeing settled cases with the U.S. government for:

• In 1995-96, violating the Arms Export Control Act, involving the transfer of rocket data to China.

• In 1998, violating the Arms Export Control Act and the International Traffic in Arms Regulations by exporting technical data and defense services to Russia, the Ukraine, Norway and Germany "without the required approvals from the Department [of State] and, in other circumstances, violated the terms and conditions of approvals that were provided by the Department."

• In 2001, violating the Arms Export Control Act and the International Traffic in Arms Regulations in connection with its involvement in the Australian military’s Wedgetail project "by violating the express terms and conditions of Department of State munitions license and other authorizations, by exporting defense articles and defense services without a munitions license or other authorization, and by omitting material facts from its applications for munitions licenses or other authorizations."

• Between 2000 and 2003, violating the Arms Export Control Act. According to the State Department, Boeing sold to China and other countries 94 commercial jets with the gyrochip embedded in the flight boxes without obtaining an export license and in "blatant disregard" of State Department directives.

Read the rest of the post on the flip side »

Cindy McCain Bankrolled Conference That Called for Ban on Mercenaries
Posted by Jeremy Scahill, Rebel Reports on October 16, 2009 at 8:30 PM.

A little-publicized U.S. Naval Academy conference named after Senator John McCain and bankrolled by his wealthy wife, Cindy, issued a call earlier this year for the U.S. government to ban the use of armed private security contractors like Blackwater in U.S. war zones, stating bluntly, "contractors should not be deployed as security guards, sentries, or even prison guards within combat areas."

"[T]he use of deadly force must be entrusted only to those whose training, character and accountability are most worthy of the nation's trust: the military," reads the executive summary of the U.S. Naval Academy’s 9th Annual McCain Conference on Ethics and Military Leadership, which was held in April at the Annapolis Naval Station. "The military profession carefully cultivates an ethic of 'selfless service,' and develops the virtues that can best withstand combat pressures and thus achieve the nation's objectives in an honorable way. By contrast, most corporate ethical standards and available regulatory schemes are ill-suited for this environment."

In 2001, Cindy McCain, who may be worth as much as $100 million, first endowed the McCain conference "in honor of her husband" with a $210,000 gift that was specifically intended to fund conferences that would "bring together key military officers and civilian academics responsible for ethics education and character developments."

According to the Fall 2009 newsletter, "Taking Stock," published by the U.S. Naval Academy's Stockdale Center for Ethical Leadership -- the host of the McCain Conference -- among the speakers at the 2009 event was none other than Erik Prince, the owner of Blackwater. Prince’s company is the most infamous of those engaged in the type of armed activity explicitly condemned by the conference's leadership.

The executive summary released by the McCain conference was recently highlighted in a report completed on September 29 by the Congressional Research Service on the use of private contractors. That report said that the U.S. is "relying heavily" on armed contractors in Iraq and Afghanistan and suggests their use could continue to rise. The report also states that misconduct and the killing of civilians by armed security contractors "may have undermined U.S. counterinsurgency efforts in Iraq and Afghanistan."

Despite the fact that the McCain conference, which publicly advocated against the use of armed contractors in combat areas bears Sen. McCain's name and was bankrolled by his wife, when it has come to making this a major issue on Capitol Hill, the Arizona Senator has been largely silent. In 2007, Sen. Bernie Sanders and Rep. Jan Schakowsky introduced the Stop Outsourcing Security Act, which sought to do precisely what the McCain conference called for two years later: to ban the use of mercenaries in U.S. war zones. McCain did not endorse or co-sponsor that legislation, which would certainly have benefited from his support (neither did then-Senator Barack Obama). Responding to a reporter's question on the campaign trail in July 2008 about whether he believed that U.S. troops and not private guards should protect U.S. diplomats in Iraq, McCain said, "I'd like it, but we don't have enough. Yes, and I'd love to see pigs fly, but it ain’t gonna happen.”

Read the rest of the post on the flip side »

To Profit-Driven Contractors: All Rape Cases Must Go Before the Law, Period
Posted by Sady Doyle, Comment Is Free on October 16, 2009 at 1:30 PM.

Say, here's a concept: if you act to keep violent criminals out of jail, you are probably not working in your country's best interests, and shouldn't be called upon to defend it. It's a notion that was passed into law recently, with U.S. senator Al Franken's amendment to the defense appropriations bill stating that military contractors which prohibit their employees from taking rape and sexual assault cases to court would not receive funding or contracts from the U.S. government.

The impetus for the bill -- and the resistance against it -- sheds light on how rape can be excused or minimized and how the interests of corporations can take priority over human life.

In Baghdad in 2005, Jamie Leigh Jones claims, she was gang-raped by her colleagues at KBR, a former subsidiary of Halliburton. Her injuries, including torn pectoral muscles, tearing of her vagina and anus and ruptured breast implants, were confirmed by a physician, who said they were consistent with rape. He then handed the rape kit over to her employer, KBR. And KBR, according to Jones, locked her in a storage container, posted an armed guard outside of her door and denied her food and water.

The rape kit given to KBR disappeared, not to be seen again until 2007. When it resurfaced, it was missing doctors' notes and photographs -- which, along with the fact that Jones was drugged and could identify only one of her assailants, effectively annihilated her chances in a criminal case. KBR also denied her the right to take them even to a civil court, saying that what had been done to her was a mere "personal injury in the workplace," and could -- according to her contract -- be resolved only by arbitration.

Read the rest of the post on the flip side »

The Dow and the Down and Out
Posted by Robert Greenwald, Brave New Films on October 16, 2009 at 8:23 AM.

While markets surged past 10,000, the official unemployment rate stood near 10 percent. The United States is in a unique historical position. People on top are doing extraordinarily well, but in the real world the middle class is collapsing. The top 1 percent owns more wealth then the bottom 90 percent. CEOs of large corporations earn 400 times what their workers make. That is not what America is supposed to be about. With all the issues we are dealing with -- from health care to global warming to wars in Afghanistan and Iraq – please do not forgot what is happening to tens of millions of our brothers and our sisters out there who are struggling hard to keep their heads above water.

Senator Sanders Unfiltered is a weekly web program produced by Brave New Films. Submit your own video question for next week's show here.

Why This Economic "Recovery" Will Be the Worst of Your Lifetime
Posted by Ian Welsh, Open Left on October 13, 2009 at 12:37 PM.

It seems that Summers is congratulating himself for having saved the world from the Great Depression:

The Obama administration has helped pull the U.S.  economy back from the "abyss" with aggressive efforts to spur growth and  stabilize financial markets, a top White House adviser said on Monday…

…"Thanks largely to the Recovery Act, alongside an aggressive financial stabilization plan and a program to keep responsible homeowners in their homes, we have walked a substantial distance back from the economic abyss and are on the path toward economic recovery," Summers wrote to House Republican leader John Boehner.

All they did was throw cash at the problem, without dealing with the underlying issues, which is why they didn’t manage (as Jerome points out) to kickstart ANY net private spending.  They didn’t break up major banks.  They didn’t allow bankruptcy judges to rewrite mortgages.  Their mortgage program kept hardly anyone in the house.  And their money for financial firms did not increase lending by one cent.

So, as a Stirling Newberry likes to say "the economy breathes fine, as long as we don’t unplug the life support machines."

That’s all they did - throw the economy on life support by hooking it up to a money spigot, then wander off and have a cup of coffee and tell each other how brilliant they were, not noticing that they hadn’t actually cured the patient.

This is going to be the wost “recovery” of your lifetime, unless you’re in the financial sector at a relatively high level.  Bank profits have recovered but ordinary people are not, in a generation, going to see a full recovery from this clusterfuck - employment will not recover to pre-recession levels before the next recession, and I don’t expect it to recover after that recession either.

At this point, in fact, I am expecting this to turn into a double dip recession—this "recovery" will not have any significant legs.

Read the rest of the post on the flip side »

30 GOP Senators Vote to Defend Gang Rape
Posted by Charles Lemos, MyDD.com on October 8, 2009 at 11:16 AM.

It is stunning that 30 Republican members of the United States Senate would vote to protect a corporation, in this case Halliburton/KBR, over a woman who was gang raped. The details from Think Progress:

In 2005, Jamie Leigh Jones was gang-raped by her co-workers while she was working for Halliburton/KBR in Baghdad. She was detained in a shipping container for at least 24 hours without food, water, or a bed, and "warned her that if she left Iraq for medical treatment, she'd be out of a job." (Jones was not an isolated case.) Jones was prevented from bringing charges in court against KBR because her employment contract stipulated that sexual assault allegations would only be heard in private arbitration.

Offering Ms. Jones legal relief was Senator Al Franken of Minnesota who offered an amendment to the 2010 Defense Appropriations bill that would withhold defense contracts from companies like KBR "if they restrict their employees from taking workplace sexual assault, battery and discrimination cases to court."

Seems simple enough. And yet, to GOP Senator Jefferson Beauregard Sessions of Alabama allowing victims of sexual assault a day in court is tantamount to a "political attack" at Halliburton. That 29 others, all men, chose to join him in opposing the Franken amendment is simply mind-boggling.

Read the rest of the post on the flip side »

Why Have Mainstream Media Neglected the Recession's Human Costs?
Posted by Katrina Vanden Heuvel, The Nation on October 6, 2009 at 6:00 AM.

When it comes to the media, we hear a lot of talk about a conservative-liberal divide, or the thoroughly discredited idea of a liberal bias. But the divide worth paying attention to is between those who are represented (and listened to) in media coverage, and those who aren't--namely the powerful, and then everyone else.

A revealing new study on media coverage of the economic crisis--released Monday by the Pew Research Center's Project for Excellence in Journalism (PEJ)--shows that little attention has been paid to how the worst collapse since the Great Depression impacted ordinary Americans. PEJ examined 9,950 stories that ran between February 1 and August 31 on television, radio, cable, newspapers and online. It found that a whopping 38 percent were focused on three topics--the banking industry and its bailout (15 percent), the stimulus package (14 percent), and the US auto industry (9 percent). In contrast, housing, including the subprime crisis, mustered only 6 percent of the news coverage, as did unemployment. (The PEJ study points out that "The percentage of Americans who were looking for but unable to find work actually outpaced the attention the subject received in the press.") Reporting on "retail sales, food prices, the impact of the crisis on Social Security and Medicare, its effect on education and the implications for health care combined accounted for just over 2 percent of all the economic coverage."

There was also a significant geographical bias to the coverage. Seventy-six percent of the stories were focused on either New York (44 percent) or DC (32 percent). Even coverage of the auto industry--only one-sixth of those stories came from Detroit, two-thirds from New York or DC! And stories on labor issues and worker layoffs--the people most severely affected--accounted for less than 1 percent of stories on the auto industry.

Finally, the report points out which voices the media was listening to. Government officials drove nearly one-third of the stories, business leaders just over one-fifth. Ordinary citizens and union workers combined acted as the catalyst for only 2 percent of the stories about the economy, PEJ writes.

If we were a vibrant democracy we would hear a fuller range of people's voices--not just the angriest raging at town hall meetings, but the quiet (or sometimes not so quiet) despair of the jobless, or those losing their homes, or unable to pay the bills, or choosing between food and medicine. The Nation has continued to keep a focus on these voices and others, just as it has throughout its 144 years.

Some of the articles that come to mind are Kai Wright's cover story on the mortgage crisis in which he writes, "We hear a lot about the big picture of the mortgage crisis. But [Veronica and George Gallon] reveal what it looks like in the micro." Naomi Klein looks at grassroots uprisings around the world against contemporary deregulated capitalism, and her article co-written with Avi Lewis focuses on direct action against layoffs by workers. John Nichols wrote an excellent piece on the impact of the crisis on state and local government budgets and services, and another on autoworkers in Kenosha, Wisconsin. William Greider wrote about the potential impact of the crisis on Social Security, Medicaid and Medicare.

Read the rest of the post on the flip side »

No Matter Who Loses, Goldman Sachs Wins
Posted by Digby, Hullabaloo on October 6, 2009 at 5:20 AM.

No matter who loses, Goldman wins:

Goldman Sachs stands to receive a payment of $1bn -- while U.S. taxpayers would lose $2.3bn -- if embattled commercial lender CIT files for Chapter 11 bankruptcy protection, people familiar with the matter said.

The payment stems from the structure of a $3bn rescue finance package that Goldman extended to CIT on June 6 2008, about five months before the Treasury bought $2.3bn in CIT preferred shares to prop it up at the height of the crisis. The potential loss for taxpayers would be the biggest to crystalize so far from the government’s capital injection plan for banks.

The agreement with Goldman states that if CIT defaults or goes bankrupt, it "would be required to pay a make-whole amount" that totals $1bn, the people familiar with the matter said.

While Goldman is entitled to demand the full amount, it is likely to agree to postpone payment on a part of that sum, these people added. A CIT filing last week said that it was in negotiations with Goldman "concerning an amendment to this facility."

Goldman said: "This would not be a windfall payment. The make-whole payment is simply the present value of the spread to be earned over the life of the facility."

CIT declined to comment. In an effort to prevent bankruptcy, it is working on a debt exchange offer that would virtually wipe out equity holders. In the event of bankruptcy, Goldman would reap more than $1bn because it also holds credit insurance that would be paid off.

Goldman said: "The credit default swaps Goldman Sachs purchased to prudently manage the risk associated with the CIT financing are not a directional ‘bet’ on CIT, but were bought to protect against the possibility of a precipitous decline in the value of the collateral."

It's not a windfall payment it's business, strictly business.

Read the rest of the post on the flip side »

On Jobs Front, This is the Worst Recession Since World War Two
Posted by Joshua Holland on October 5, 2009 at 12:30 PM.

This is a sad and fascinating graphic, courtesy of Calculated Risk:

 

 

(click for larger version)

 

Do click and enlarge -- as you can see, the loss of jobs we've experienced in the current downturn runs deeper than in any recession since World War II.

And it's not just the number of jobs that matters -- remember that the period following the 2001 recession was the first "recovery" in which median incomes never bounced back to what they'd been before.

Also, read this [via Atrios].