Have we declared victory on health insurance reform yet? I confess I don't keep up with the access bloggers as much as I should, so maybe I didn't get the memo. Anyhow, the Versailles consensus that declaring victory is distinctly preferable to achieving it works for finance, too. James Kwok:

Gillian Tett has an article criticizing the idea that CoCos — contingent convertible bonds — will solve the “too big to fail” problem. ...

Contingent convertible bonds, a.k.a. contingent capital, are the latest fad to hit the optimistic technocracy in Washington and London. A contingent convertible bond is a bond that a bank sells during ordinary times, but that converts into equity when things turn bad, with “bad” defined by some trigger conditions, such as capital falling below a predetermined level. In theory, this means that banks can have the best of both worlds. They can go out and borrow more money today, increasing leverage and profits (which is what they want). But when the crisis hits, the debt will convert into equity; that will dilute existing shareholders, but more importantly it means the debt does not have to be paid back, providing an instant boost to the bank’s capital cushion. In other words, banks can have the additional safety margin as if they had raised more equity today, but without having to raise the equity.

Sounds ideal! Where do I sign up?

Lord Byron, Don Juan, canto I, verse CXVII:

And Julia's voice was lost, except in sighs.

Until too late for useful conversation ;
The tears were gushing from her gentle eyes,

I wish, indeed, they had not had occasion ;
But who, alas ! can love, and then be wise?

Not that Remorse did not oppose Temptation ;
A little still she strove, and much repented.
And whispering "I will ne'er consent " — consented.

Pravda:

After claiming for months they couldn't vote for a bill without the strongest possible government-run insurance option, liberals are putting aside their disappointment over the weaker version in the legislation for a historic chance to remake America's medical system.

"The current language is far weaker than what I would have preferred, and I think that is also true of the Progressive Caucus," Rep. Emanuel Cleaver, D-Mo., a member of the Congressional Black Caucus, said Friday. "But because I did not come up here to participate in gridlock and acrimony, I have told leadership that I am willing to compromise."

Indeed. The temptation to engage in yet another narrative of weakness is almost overwhelming. But isn't it more fair to say, "Mission accomplished?"

Via ThinkProgress, both the Baucus Bill and the plan put forward by Pelosi will enroll some more people but most will not be in the Public Option and it will not cover everyone:

CBO: Public Option To Attract Only 6 Million Enrollees & Doesn’t Offer Lower Premiums

The public option would attract about 6 million enrollees by 2019 and charge premiums that are “somewhat higher than the average premiums for the private plans in the exchanges.” This is because the public option would “engage in less management of utilization” by its enrollees and “attract a less healthy pool of enrollees,” the office concludes. Moreover, since the House bill expands Medicaid up to 150% of the federal poverty line, it’s possible that the enrollees that would have enrolled in the public option went into Medicaid instead.

Below is a comparison of the relevant provisions in the House and Senate Finance Committee legislation:

	CBO Score Of House Bill	CBO Score Of Baucus Bill
Costs	Reduce deficits: $104B/10yrs Cost: $894B/10yrs Spends on subsidies: $605B/10yrs On Medicaid/CHIP: $425B/10yrs On Small Employer Credit: $25B/10yrs	Reduce deficits: $81B/10yrs Cost: $829B/10yrs Spends on subsidies: $461B/10yrs On Medicaid/CHIP: $345B/10yrs On Small Employer Credit: $23B/10yrs
Insured	Uninsured reduced by: 36M Uninsured in 2019: 18M In Exchanges: 30M | Public Plan: 6M In Medicaid: 15M	Uninsured reduced by: 29M Uninsured in 2019: 25M In Exchanges: 23M In Medicaid: 14M
Revenue	Mandate penalty: $33B/10yrs Pay-Play penalty: $135B/10yrs New taxes: $572B/10yrs	Mandate penalty: $4B/10yrs Free rider penalty: $23B/10yrs New taxes: $196B/10yrs
Medicare and Medicaid	Total savings: 426B/10yrs Medicare Advantage: $170B/10yrs	Total savings: 404B/10yrs Medicare Advantage: $117B/10yrs

With a Single Payer solution it would be everybody in and nobody out - AND it would save a heck of a lot more money for everyone.

The difference is not just everyone being covered but HUNDREDS of BILLIONS of DOLLARS saved every year:   Read more…

Isn't it time to have a Democratic President? A long quote from Taibbi, but a good one. And I'm glad we're starting this discussion now instead of in 2010 or, heaven forfend, 2012:

I’m personally of the opinion that our main problem lay with the fact that the Democratic Party as currently constituted is more afraid of losing the financial support of Wall Street and the health insurance industry and the pharmaceutical industry than it is of losing progressive voters. In fact, I think I’ve put that wrong, because it implies that the Democratic Party pushes the agenda of industry insiders out of fear. That is a misread of the situation, I think.

TechFlash:

Combat climate change by pumping liquid sulfur dioxide into the stratosphere through nozzles in a hose lifted more than 15 miles into the atmosphere using helium-filled balloons. As described by [former Microsoft technology chief Nathan Myhrvold] in an interview this week, the idea behind this "Stratoshield" would be to dim the sun in critical areas of the world by just enough to reduce or reverse the effects of global warming.

So, when will this expensive, complex, and unproven Rube Goldberg- and Windows Vista-like device kick in, anyhow?

I look at it this way, if they ever bring back "The Wire," this could make for some interesting plot lines:

An unusual pension benefit for police and firefighters could cost Baltimore $164.9 million next year, nearly double what the city is now paying and a figure that the city's finance director says taxpayers cannot afford.

That phrase jumped out at me over at Angry Bear; I'll be interested to see if it propagates.

LOLfed, as usual, puts it all in perspective:

From Bloomberg, a shocking – shocking – tale of cocaine usage among bankers. I had no idea! The story here is not so much the blow as it is the sudden cessation thereof, as the finance-minded do the math and realize how much their eightball budget has been cut back as of late.

It’s no wonder 90% of all US money has Bolivian marching powder on it, with this being so popular in banking. ...

That's why money is flowing into bank stocks. There's no place else to go.

Of course, you can't separate finance from the real economy so eventually the bank stocks will reflect reality - that they are still in for heavy loan losses in addition to the bad assets they kept on their books when the USG bailed them out.

Although, all things considered, perhaps a dying economy isn't our biggest problem since we also have a dying planet.

Happy Tuesday!

This is interesting from Bloomberg:

Goldman Sachs Group Inc (GS.N), legendary for its clout in Washington, has inexplicably halted its political fund-raising machine.

The strange twist comes at a time when Wall Street's biggest and most powerful investment bank, nicknamed Government Sachs by critics, seems in other respects to be just as politically involved as ever.

By all accounts, its senior executives are in close contact with Washington regulators, the lobbyists on its payroll include some of the best connected, and it continues to spend heavily to influence government.

Bloomberg:

“The financial sector polluted the global economy with toxic assets and now they ought to clean out,” Stiglitz told reporters today in Istanbul, where he’s attending the International Monetary Fund and World Bank annual meetings. He said a tax is “much more feasible today” than in the past.

The IMF will study ways to tax the financial industry at the request of Group of 20 leaders, Managing Director Dominique Strauss-Kahn said last week. He dismissed the “very simplistic” idea of the so-called Tobin tax, a global charge on currency trades which he said would be difficult to implement.

I meant to post on this awhile back, but RL intervened, and so but I want to lay down a marker, because this is an important story to watch.

It seems Our Betters are in the process of deciding that more of us will never have jobs, like, ever again. Fortunately, few of us will lose our homes, because of HOLC... Well, fortunately, none of us will die sick and poor because we have single payer, so health care is a right... Oh, wait.*

I've tried to draft this post for the past couple of weeks and it isn't working. So I've decided to try stream of consciousness so the readers could do the work for me. Kind of like mad libs Joyce. So here it goes:

We are a country built on paper (mortgages, securities, etc.) We don't make things any more. We make paper. That is by design. It's what our elites wanted, sell off the industrial base, keep the paper.

She had a dream
And boy it was a good one
So she chased after her dream
With much desire
But when she get too close
To her expectations
Well the dream burned up
Like paper in fire
- John Cougar Mellencamp

How do you organize/protest in a country built on paper?

Fire?

Or, to ask the question in a more sophisticated way, who are the "strategic defaulters"? The LA Times asked that question:

Who is more likely to walk away from a house and a mortgage -- a person with super-prime credit scores or someone with lower scores?

The answer may surprise you -- especially if this was your narrative:

[OBAMA] In the past, if you found yourself in a situation like this, you could have sold your home and bought a smaller one with more affordable payments. Or you could have refinanced your home at a lower rate. But today, home values have fallen so sharply that even if you made a large down payment, the current value of your mortgage may still be higher than the current value of your house. So no bank will return your calls, and no sale will return your investment.

"You can't afford to leave and you can't afford to stay. So you cut back on luxuries. Then you cut back on necessities. You spend down your savings to keep up with your payments. Then you open the retirement fund. Then you use the credit cards. And when you've gone through everything you have, and done everything you can, you have no choice but to default on your loan. And so your home joins the nearly six million others in foreclosure or at risk of foreclosure across the country, including roughly 150,000 right here in Arizona.

Except that's not what is happening. At all.

During the primaries, many lamented how self-identified "progressives" were willing to use false charges of racism, misogyny, and every tool that the right developed in the 1990s to smear both Clintons (along with some new and special smears of their own), to elect a candidate they deemed "progressive," much like themselves. But that's all blood under the bridge, right? I've gotten over it. And personally, I never liked the "progressive" label much anyhow, because I didn't see that the word had an answer to the question "Progress in what direction?"* Now, of course, we're getting better answers.

It never occurred to me that there might be a problem with "progressivism" in itself. But now Robert Johnson of New Deal 2.0 raises the issue. Now that we're in the midst of The Big Fail, is progressivism a FAIL, too? Johnson takes off from Taibbi's article, and puts it in context:

In Matt Taibbi’s vivid and provocative new article in Rolling Stone, “The Great American Bubble Machine,” the man absolutely screams.

Taibbi’s rage is filling an emotional void. It is a reaction to what is missing after this profound speculative episode that the IMF suggests will cost over $4 trillion in losses on balance sheets and untold trillions in lost output. It is fury over a crisis that is, by any measure, the most profoundly damaging episode since the 1930s (and the Bank for International Settlements Annual Report released this week strongly suggests that the burden on stockholders is far from over)....

There is an age-old tension that emerges in situations like this. You can feel it yourself. We know things are not right but do not exactly know why. Finance is complex. Since the progressive era, trust in “experts” has often been suggested as the best way for society to handle such complex phenomena. We are encouraged to delegate to the likes of leading academics, the Federal Reserve, the Treasury Secretary, and financiers themselves to keep an eye on the public interest. Public officials are explicitly employed to undertake this task on behalf of society. Those in the private sector often appeal to experts, encouraging public. deference to their superior knowledge. Experts are thought to be the custodians of the nation’s health. ...

The problem now is that the experts and leaders from finance [and not only finance] have failed us miserably. They have let us down and we know it. We do not trust in the system. [That is the problem, not confidence.] No one thinks the Federal Reserve did a bang-up job in the years preceding this crisis. The failure is much more profound in the private sector, yet for the most part that failure goes unacknowledged. Even with losses and bailouts, we have to fight over bonus payments to those who feel entitled, despite the cost they have imposed on their stockholders and, more importantly, society.

There's been a lot of material that's been beyond parody in the New Yorker lately, but I think this one takes a big slice of Marie Antoinette's cake. Appallingly, the editors have actually devised a department heading for this sort of story: "Team Obama"*

Last week, members of the steering committee for Generation Obama—a grassroots group that organizes young professionals—held an after-work meeting in a conference room at a marketing firm on Third Avenue. The theme was reaching out.

Good, good...

[If you're coming here from Digby's comments, that's a result of a campaign to deny a (pro-single payer, pro-finance reform, feminist-friendly) blogger fuel for the winter, and help him avoid foreclosure, by causing a fundraiser to fail. I rest my case. -- lambert]