Wednesday, December 31, 2008

the temptations ball of confusion

I love this song. We've been through tough times before. Here's hoping we have a good 2009:

"America and its leaders are entitled to a different set of standards and better treatment"

Glenn Greenwald:

Torture prosecutions finally begin in the U.S.

(updated below - Update II)

While fiercely loyal establishment spokespeople such as The Washington Post's Ruth Marcus continue to insist that prosecutions are only appropriate for common criminals ("someone breaking into your house") but not our glorious political leaders when they break the law (by, say, systematically torturing people), the Bush administration has righteously decided that torture is such a grotesque and intolerable crime that political leaders who order it simply must be punished in American courts to the fullest extent of the law . . . . if they're from Liberia:

MIAMI (AP) -- U.S. prosecutors want a Miami judge to sentence the son of former Liberian President Charles Taylor to 147 years in prison for torturing people when he was chief of a brutal paramilitary unit during his father's reign.

Charles McArthur Emmanuel, also known as Charles "Chuckie" Taylor Jr. is scheduled to be sentenced Jan. 9 by U.S. District Judge Cecilia M. Altonaga. His conviction was the first use of a 1994 law allowing prosecution in the U.S. for acts of torture committed overseas.

Even in the U.S., it's hard to believe that federal prosecutors who work for the Bush DOJ were able to convey the following words with a straight face:

A recent Justice Department court filing describes torture - which the U.S. has been accused of in the war on terror - as a "flagrant and pernicious abuse of power and authority" that warrants severe punishment of Taylor.

"It undermines respect for and trust in authority, government and a rule of law," wrote Assistant U.S. Attorney Caroline Heck Miller in last week's filing. "The gravity of the offense of torture is beyond dispute."

The AP article which reported on these proceedings, by Curt Anderson, is almost as illustrative an exhibit of how our country operates as the trial itself is. Marvel at this passage:

Emmanuel had argued in previous court papers that he was being unfairly prosecuted for acts similar to those committed by U.S. personnel in Iraq and elsewhere.

The administration of President George W. Bush has been criticized by some around the world and in Congress for using aggressive interrogation techniques. Justice Department memos were seen as providing legal underpinnings for some of the techniques.

However, administration officials have blamed abuses at places such as Iraq's Abu Ghraib prison on a small number of soldiers or agents and insisted there has been no systematic mistreatment of detainees in Iraq, Afghanistan or the prison camp at Guantanamo Bay, Cuba.

Acts which, when ordered by Liberians, are "criminal torture" meriting life imprisonment magically become, when ordered by Americans, mere "aggressive interrogation techniques." And while not all of the "techniques" used by the Liberians were authorized by Bush officials ("hot clothes irons" and "biting ants shoveled onto people's bodies"), many of the authorized American techniques are classic torture tactics and resulted in the deaths of many detainees and the total insanity of many more.

Worse, AP -- with canine-like subservience -- mindlessly recites the Bush administration's excuses (Abu Ghraib was due to low-level rogue bad apples and "there has been no systematic mistreatment of detainees") without even mentioning the ample evidence proving how false those government claims are. That's standard American "journalism" for you: "Our Government says X, and even if it's false and even if it's intensely disputed, we'll just leave it at that." Doing anything more -- as NBC News' David Gregory pointed out -- is "not their role."

There's something beautifully illustrative about this torture prosecution. Apparently, it's not just appropriate, but necessary and urgent, for American courts to be used to prosecute the leaders of small African nations who order torture exclusively in their own land. Doing that is necessary to uphold what the Bush DOJ calls "respect for and trust in authority, government and a rule of law."

But -- say Bush loyalists and our pliant political class in unison -- the one thing that we cannot tolerate is for American courts to be used to impose accountability on American leaders who authorized illegal torture. And, of course, the only thing worse than doing that would be to subject them to prosecution by another country or, creepier still, an international tribunal. That would be an intolerable infringement of our sovereignty, we say as we prosecute the son of Liberia's President for acts he undertook exclusively inside Liberia.

In Liberia, the Taylor regime, for many years, was genuinely threatened by numerous rebels and revolutionary factions -- ones supported by other countries -- seeking to overthrow the Liberian government. The torture which Taylor, Jr. was accused of ordering occurred during a brutal civil war.

Liberia undoubtedly has its own Jack Goldsmiths and Stuart Taylors who insist that the torture which the Taylors ordered -- though perhaps "crossing a line or two" -- was done for the Good and Safety of the Liberian People and to defend the Government against these foreign and domestic threats. The Taylors undoubtedly have their loyalists who echo our own Cass Sunsteins and Ruth Marcuses, urging that it would be so much better for the country if everyone just let bygones be bygones and looked to the pretty future and the challenges Liberians face and not get distracted by litigating the unpleasant and partisan fights of the past.

But, like most of the alleged principles to which our political elite professes allegiance, America and its leaders are entitled to a different set of standards and better treatment( THERE'S ONLY ONE ). Thus, Charles Taylor belongs at the Hague, being prosecuted as a war criminal. His son belongs in an American criminal court being prosecuted by the Bush DOJ for torture. And George Bush and Dick Cheney belong on their "ranches," enjoying full-scale immunity for the crimes they committed and a rich and comfortable retirement, treated as the esteemed and well-intentioned (even if sometimes misguided) dignitaries that they are. Virtually the only people in the world who fail to recognize this self-evident, ludicrous and disgusting hypocrisy are America's political and media elites and those who are misled by them.( WELL SAID )

UPDATE: Michael Mukasey, who refuses even to say whether waterboarding is torture and has repeatedly acted to protect Bush officials from prosecution, appeared two weeks ago at the U.S. Holocaust Memorial Museum and actually spoke these words (h/t sysprog):

It serves as a daily reminder to the leaders of the free world, and to the many visitors to our nation’s capital, that law without conscience is no guarantee of freedom; that even the seemingly most advanced of nations can be led down the path of evil; and that we must confront horror with action and vigilance, not lethargy and cowardice. . . .

Just as the Museum has focused on present-day mass killings such as those in Rwanda or Darfur, we at the Department are doing what we can to ensure that those responsible for such atrocities are brought to justice. We have provided support to the International Criminal Tribunals for Rwanda and the former Yugoslavia; to the Special Court for Sierra Leone, and to the Iraqi High Tribunal. And where we can, we are bringing our own cases. Both the Office of Special Investigations and the Domestic Security Section – parts of the Department’s Criminal Division – are pursuing cases against perpetrators of those international atrocities who find their way into our country.

The most prominent example of those efforts is the recent conviction of Chuckie Taylor Jr., the son of the former President of Liberia, who was convicted of torturing his countrymen. His conviction – the first in history under our criminal anti-torture statute – provides a measure of justice to those who were victimized by his reprehensible acts, and it sends a powerful message to human rights violators around the world that, when we can, we will hold them accountable for their crimes.

Mukasey actually had the audacity to approvingly quote from Robert Jackson's addresses to the Nuremberg Trials, at which this central proposition of Western justice -- now explicitly renounced by America's political and media establishment -- was ostensibly established:

The common sense of mankind demands that law shall not stop with the punishment of petty crimes by little people. It must also reach men who possess themselves of great power . . . .

Unsurprisingly, Mukasey neglected to mention that Jackson, in his opening remarks to the tribunal, called "aggressive war" the "greatest menace of our times," and in his summation, Jackson observed that "the plot for aggressive wars" is "the central crime in this pattern of crimes, the kingpin which holds them all together."

The glaring contradictions in Mukasey's words are too self-evident to warrant explanation. Ponder, instead, the opinion which Mukasey -- by uttering such brazen statements in public and knowing he can do with impunity -- is implicitly expressing about how broken is our establishment media and how distorted is our political discourse.( IT'S A DISGRACE )

UPDATE II: Alberto Gonzales gave a painfully self-pitying interview to The Wall St. Journal this week and announced that the real victims aren't the detainees who were tortured in our secret and not-so-secret prison camps, nor the millions of dead or displaced Iraqis, nor the Americans whose communications were illegally spied upon without warrants. No, the Real Victims of the last eight years are Bush officials like him who face criticism for what they did:

I am portrayed as the one who is evil in formulating policies that people disagree with. I consider myself a casualty, one of the many casualties of the war on terror.

Here we find the predominant -- virtually unanimous -- Beltway mentality: when high American officials break our laws, it's nothing more than "formulating policies that people disagree with." Gonzales cried out: "What is it that I did that is so fundamentally wrong, that deserves this kind of response to my service?" The answers are obvious to anyone paying even minimal attention. Steve Benen points out just some of them here."

We have serious problems when we condone torture on the pretext of safety. Safety can justify just about any war crime. That's why we have the Geneva Conventions in the first place: In order that criminals not plead that they were simply protecting their country. What happened to the anti-relativists, by the way?

"Israel and Hamas both must respect the prohibition under the laws of war against deliberate and indiscriminate attacks on civilians"

From Human Rights Watch:
Disregard for Civilians Underlies Current Escalation
December 30, 2008

Israel and Hamas both must respect the prohibition under the laws of war against deliberate and indiscriminate attacks on civilians, Human Rights Watch said today. Human Rights Watch expressed grave concern about Israeli bombings in Gaza that caused civilian deaths and Palestinian rocket attacks on Israeli civilian areas in violation of international law.

Rocket attacks on Israeli towns by Hamas and other Palestinian armed groups that do not discriminate between civilians and military targets violate the laws of war( TRUE ), while a rising number of the hundreds of Israeli bombings in Gaza since December 27, 2008, appear to be unlawful attacks causing civilian casualties( TRUE ). Additionally, Israel's severe limitations on the movement of non-military goods and people into and out of Gaza, including fuel and medical supplies, constitutes collective punishment, also in violation of the laws of war( TRUE ).

"Firing rockets into civilian areas with the intent to harm and terrorize Israelis has no justification whatsoever, regardless of Israel's actions in Gaza( TRUE )," said Joe Stork, deputy director of Human Rights Watch's Middle East and North Africa division. "At the same time, Israel should not target individuals and institutions in Gaza solely because they are part of the Hamas-run political authority, including ordinary police. Only attacks on military targets are permissible, and only in a manner that minimizes civilian casualties( TRUE )."

Human Rights Watch investigated three Israeli attacks that raise particular concern about Israel's targeting decisions and require independent and impartial inquiries to determine whether the attacks violated the laws of war. In three incidents detailed below, 18 civilians died, among them at least seven children.

On Saturday, December 27, the first day of Israel's aerial attacks, witnesses told Human Rights Watch that shortly after 1 p.m. an Israeli air-to-ground missile struck a group of students leaving the Gaza Training College, adjacent to the headquarters of the UN Relief and Works Agency (UNRWA) in downtown Gaza City. The students were waiting to board buses to transport them to their homes in Khan Yunis and Rafah, in the southern Gaza Strip. The strike killed eight students, ages 18 to 20, and wounded 19 others.

A UNRWA security guard stationed at the college entrance told Human Rights Watch that he used his UN radio to call for medical help. He said the attack also killed two other civilians, Hisham al-Rayes, 28, and his brother Alam, 26, whose family ran a small shop opposite the college entrance. The guard said that the only potential target nearby was the Gaza governorate building, which deals with civil matters, about 150 meters away from where the missile struck. Another UNRWA security guard who also witnessed the attack told Human Rights Watch: "There wasn't anybody else around - no police, army, or Hamas."

The second incident occurred shortly before midnight on Sunday, December 28, when Israeli warplanes fired one or more missiles at the Imad Aqil mosque in Jabalya, a densely populated refugee camp in the northern Gaza Strip. The attack killed five of Anwar Balousha's daughters who were sleeping in a bedroom of their nearby house: Jawaher, 4; Dina, 8; Samar, 12; Ikram, 14; and Tahrir, 18. "We were asleep and we woke to the sound of bombing and the rubble falling on the house and on our heads," Anwar Balousha told Human Rights Watch. The Balousha's three-room house is just across a small street from the mosque.

The two-story Imad Aqil mosque, named after a deceased Hamas member, is regarded by Palestinians in the area as a "Hamas mosque" - that is, a place where the group's supporters gather for political meetings or to assemble for demonstrations, and where death notices of Hamas members are posted. Mosques are presumptively civilian objects and their use for political activities does not change that. Human Rights Watch said that the attack on Imad Aql mosque would be lawful only if Israel could demonstrate that it was being used to store weapons and ammunition or served some other military purpose. Even if that were the case, Israel still had an obligation to take all feasible precautions to minimize harm to civilians and ensure that any likely civilian harm was not disproportionate to the expected military gain.

In the third incident, at around 1 a.m. on Monday, December 29, an Israeli helicopter fired two missiles into the Rafah refugee camp. One struck the home of a senior Hamas commander; the other struck the home of the al-Absi family, about 150 meters away, killing three brothers - Sedqi, 3, Ahmad, 12, and Muhammad, 13 - and wounding two sisters and the children's mother. Ziad al-Absi, 46, the children's father, told Human Rights Watch that at around 10:30 p.m. on Sunday, armed Palestinians had gathered near their home, firing machine guns at Israeli helicopters. "I and the neighbors argued with the militants, told them this is a populated area and this will put us into peril," he said. According to al-Absi's nephew, Iyad al-Absi, 27, the fighters refused to leave. When their commander arrived at about 11 p.m. and ordered them to leave, they again refused. The fighters finally left at around 11:15, but only after an exchange of gunfire between the fighters and their commander. Al-Absi said that he and his family then went to sleep. He told his nephew and other relatives that there was no further armed activity in the area prior to the missile strike on his house, almost two hours later. Ziad al-Absi said the blast had thrown one daughter onto a neighbor's balcony. The children's mother is in hospital intensive care; the two daughters are also in the hospital.

Human Rights Watch noted that many of Israel's airstrikes, especially during the first day, targeted police stations as well as security and militia installations controlled by Hamas. According to the Jerusalem Post, an attack on the police academy in Gaza City on December 27 killed at least 40, including dozens of cadets at their graduation ceremony as well as the chief of police, making it the single deadliest air attack of the campaign to date. Another attack, on a traffic police station in the central Gaza town of Deir al-Balah, killed a by-stander, 12-year-old Camilia Ra`fat al-Burdini. Under the laws of war, police and police stations are presumptively civilian unless the police are Hamas fighters or taking a direct part in the hostilities, or police stations are being used for military purposes.

"Israel must not make a blanket decision that all police and police stations are by definition legitimate military targets," Stork said. "It depends upon whether those police play a role in fighting against Israel, or whether a particular police station is used to store weapons or for some other military purpose."

Some other Israeli targets may have also been unlawful under the laws of war. Three teenagers were killed in southern Gaza City on December 27, when Israeli aircraft struck a building rented by Wa`ed (Promise), a Hamas-affiliated organization that defends prisoners held by Israel. Israel justified its attack on Gaza City's Islamic University on grounds that laboratories were used to manufacture explosives, but this did not address why a second strike demolished the women's quarters there. Israel also attacked the Hamas-affiliated Al-Aqsa TV, but did not provide a reason. Television and radio stations are legitimate military targets only if used for military purposes, not if they are simply being used for pro-Hamas or anti-Israel propaganda.

Human Rights Watch expressed grave concern about the seriously deteriorating humanitarian situation in the Gaza Strip, which was already dire prior to the latest attacks. A health expert with the International Committee of the Red Cross (ICRC) in Gaza said on December 28 that hospitals were "overwhelmed and unable to cope with the scale and type of injuries that keep coming in." The ICRC noted that medical supplies and medicines were already badly depleted as a result of Israel's prohibition of most imports into Gaza since Hamas took full internal control of the territory in June 2007. In a statement on December 29, the ICRC said that some neighborhoods were running short of water, owing to damage from attacks or fuel and power shortages. The statement also said that prices for food and basic commodities were reportedly rising fast. UNRWA had reported several days prior to the latest escalation of fighting that its stocks of essential commodities were extremely low.

According to the UN Office for the Coordination of Humanitarian Affairs (OCHA), which also monitors security matters in Gaza, Palestinian armed groups fired more than 100 rockets towards Israel on December 27-28; Haaretz, the Israeli daily, reported that on December 29 Palestinian armed groups fired at least 60 rockets into Israel. One of them killed a Bedouin construction worker, 27-year-old Hani al-Mahdi, and wounded 14 others in the coastal city of Ashkelon, north of Gaza; another fatally wounded 39-year-old Irit Sheetrit while she was driving home in the city of Ashdod, 35 kilometers from Gaza. The previous day, December 28, a rocket attack killed another Israeli civilian and wounded four in Netivot, some 20 kilometers east of Gaza City.

Human Rights Watch has long criticized Palestinian rocket attacks against Israeli civilians - most recently, in a public letter to Hamas on November 20 ( ). The rockets are highly inaccurate, and those launching them cannot accurately target military objects. Deliberately firing indiscriminate weapons into civilian populated areas, as a matter of policy, constitutes a war crime. Rocket attacks have killed 19 civilians in Israel since 2005, including those killed to date during the current clashes.

Human Rights Watch has also criticized Israel's policy of severely restricting the flow of people and goods into Gaza, including fuel and other civilian necessities, saying that those restrictions amount to collective punishment against the civilian population, a serious violation of the laws of war ( ). Israel continues to exercise effective control over Gaza's borders and airspace as well as its population registry, and remains the occupying power there under international law. The laws of war prohibit the occupying power from attacking, destroying, or withholding objects essential to the survival of the civilian population. Israel is also obliged to protect the right of Palestinians in Gaza to freedom of movement, to secure access to health care and education, and to lead normal lives."

"so the Federal Reserve's exposure to the credit risk of the underlying mortgages is minimal"

This wasn't the first time that this argument has been used. From EconomPic Data:

"In Excel this is called a Circular Reference Error

Per the MBS Purchase Program FAQ (hat tip Across the Curve):

Assets purchased under this program are fully guaranteed as to principal and interest by Fannie Mae, Freddie Mac, and Ginnie Mae, so the Federal Reserve's exposure to the credit risk of the underlying mortgages is minimal.
Click for ginormous picture

" Down almost 50% from peak levels in less than 2 years! "

EconomPic Data with another graphic of Mr. Mortgage's Scariest Housing- Related Chart Ever:

"Scariest Housing-Related Chart Ever"

Mr. Mortgage, with data from DataQuick, posts the "Scariest Housing-Related Chart Ever" (though he only shows the data... below is the chart):

Down almost 50% from peak levels in less than 2 years! In the comments section, BertDilbert lays out what it all means to California very well:

This decline of housing values in CA is absolutely going to destroy seniors who had counted their house value in their net worth, and planned on that being there for retirement. Add to that what has happened to the value of CA bonds that they were booking income off of. If they were planing on selling those and CA is on the rocks they might be in for a surprise there. Now add in every other asset they held is likely down as well and lots of blue chip dividends they had relied on might be chopped entirely.

Plus add in that CA is going to raise taxes. Where does this leave CA seniors? Those that had planned to retire in CA may no longer be able to retire here. This is going to send them state shopping for sure for a low tax retirement state that they can afford.
Max Rockbin comments:

FIRST: What if the graph showed the few years before this price drop? You would see those same housing prices skyrocketing. Seniors (who presumably mostly owned their homes before that run-up) are still way ahead. They just don't get the windfall from the bubble.

Also, why does the scale start at $250K? That just makes the chart look steeper than it really is. The numbers are grand enough not to require that kind of trite distortion.
1) If the chart showed the data a few years prior, I agree that it would show those housing prices skyrocketing. However, seniors (who did own their homes before that run up) are not necessarily "way ahead". Over the past 3-5 years, an awful lot of this wealth was already monetized and spent through home equity loans, while many used their $100,000 house that appreciated to $200,000 to pay the down payment for their new $500,000 house now worth $250,000.

In addition, I am positive that some seniors retired on the notion that their home had a specific value (while the others included this inflated price to calculate their wealth). I personally know of multiple individuals who have postponed their retirements these past 6-8 months as their wealth has declined at an alarming rate( A CASEY MULLIGAN POINT ). Those that retired in 2005-06 with the notion that their home was worth 50% more are crushed.

2) Below is the same data with a scale starting at zero. I'll agree that I should have done it this way in the first place, but it sure as hell doesn't make the information look any rosier.

"prosecutors are investigating alleged "false statements," "market manipulation," and "breach of trust"

From Spiegel Online, a German AIG:

A Black Hole in the Banking Bailout

By Beat Balzli, Dinah Deckstein and Jörg Schmitt

Prosecutors in Germany are investigating accusations of insider trading( COLLUSION ) at Hypo Real Estate, the Munich-based mortgage lender that has recieved billions of euros in government bailouts -- the most of any company so far -- as a result of risky investments in US subprime loans.

They arrived early in the morning in large teams and they raided numerous offices and private residences at the same time. In November 2006, the Siemens corruption scandal came to light with a major police raid -- an affair whose first chapter ended several days ago with a multibillion dollar settlement with the United States government.

Former Hypo Real Estate CEO Georg Funke: What will remain of the company will be a shell of its former self.

Former Hypo Real Estate CEO Georg Funke: What will remain of the company will be a shell of its former self.

As news came recently of the Siemens judgment in the US, it almost seemed like deja vu when investigators launched spectacular raids in what could become Germany's next great business scandal.

Yet again, dozens of investigators mounted simultaneous raids on numerous locations. But this time the investigations aren't into corruption. Investigators are looking into charges of speculation, market manipulation, breach of trust and deception, insider trading and incompetence( NEGLIGENCE, FIDUCIARY MISMANAGEMENT, FRAUD, COLLUSION ) among greedy finance managers at the Munich-based Hypo Real Estate, one of the German banks that has been the most deeply entangled in the finance crisis. The sums of money involved in this scandal far exceed those in the Siemens affair.

Just three months ago, the German government, the German central bank (Bundesbank) and several credit institutions agreed to provide HRE with €50 billion ($71.7 billion)( THAT'S MORE THAN THEIR STIMULUS! ) in liquidity to prevent the bank's collapse and a chain reaction( CALLING RUN ) that would have hit other German banks. The government then had to provide an additional €30 billion in credit guarantees to the crippled bank.

The Munich mortgage lender, together with the Irish subsidiary Depfa that it acquired in 2007, had burned massive amounts of money through risky US real estate securities and other reckless business dealings. The company also appears to have covered up the scope of its misdealings. That, at least, is the assumption of public prosecutors who are now investigating HRE executives. According to the search warrant issued, prosecutors are investigating alleged "false statements," "market manipulation," and "breach of trust" by current and former members of HRE's board. In a six-page paper, prosecutors take a tough stance on managers. They claim they made "deliberately false statements" about the company's dramatic situation and that they were guilty of "deliberately concealing" important information and that they had violated their obligation to safeguard company assets.

Prosecutors believe that the company's former board withheld information from the public about the company's true state for more than a year. The Munich public prosecutor's office has also confirmed that it has been investigating the company since February for suspected insider trading among other things. According to several criminal complaints, HRE managers or their relatives and friends are accused of having sold large numbers of HRE shares before the company first warned of its financial woes on January 15. Share prices in HRE have hit rock bottom since the company's financial troubles hit the headlines.

In their search warrant, investigators claim the main reason for the company's current financial misery is that the board failed to take steps( WHAT WERE THESE? ) needed to restructure the company at the necessary time.

Contacted by SPIEGEL, a spokesman refused to comment on the developments. Other executives, however, have defended the company's leadership, saying it had not been given sufficient warning about the true state of HRE.

The former chief excutive, Georg Funke, 53, along with other top executives, has since been fired. The bank's new chief, Axel Wieandt, 42, who was hired in October, has just fired two other members of the management board and announced that by 2011, he will have to lay off more than half of the bank's 1,800 employees. What will remain of the company will be a shell of its former self -- and a raft of unanswered questions.

HRE's holiding company, HRE Holding, was only partially regulated under Germany's Banking Act. The country's banking regulator, BaFin, was in charge of supervising HRE's domestic subsidiaries in Germany and, together with its Irish colleagues, HRE's Depfa unit in Dublin. But it appears that nobody had a complete picture of what was happening at HRE. That led to a disastrous lapse in banking supervision. "So far, we have not been able to comprehensively oversee financial holding companies," a BaFin spokeswoman confirmed.

German lawmakers are now moving to change existing legislation. According to the latest amendment to German securities law, firms can voluntarily subject themselves to the rules and implement systems to reduce their risks. But experts are calling for tougher rules.

"HRE is to Germans what insurance company AIG is to the Americans," said one prominent banker. Both firms were long considered trouble-free, slumbering giants, but in the end, they have emerged as black holes in the industry in which billions in bailout money are rapidly disappearing. The casual approach that had been taken by management should have served as a warning signal long before. As early as May 2007, Michael Thiemann, the manager of HRE subsidiary Collineo, admitted, "You don't have the time to take a close look at each borrower." Shortly afterward, Collineo and Citigroup sold a massive package of highly complex property loan investments, of which almost half were US subprime mortgages.

Recklessness, bravado and greed were the hallmarks of the troop of executives surrounding Gerhard Bruckermann, who ran Depfa -- a company registered under Irish law for the financing of government projects -- before selling it to HRE in the summer of 2007.

Five years earlier he had moved important parts of the company, which was supposedly rock solid but whose management took too many risks, to tax havens in order to save on taxes( GOING OFFSHORE ).

Bruckermann rewarded himself and his management board for such creativity by raising the board's salary by 100 percent in 2003 -- to €20 million. He went on amass an even greater personal fortune: he is believed to have earned €100 million through the HRE deal."

This is clearly illegal behavior. Also, notice the government bailout. Implicit guarantee?

"I can only conclude that there is an unmeasured gloominess in the two indeces."

News N Economics with a good post:

"Two consumer surveys with two slightly different stories

Yesterday the Conference Board released its December 2008 consumer confidence survey index (CCS), which fell 14.9% to 38, a record low. Alternatively, the preliminary December University of Michigan consumer sentiment survey (MCSS) improved 2% to 59.1.

The CCS and MCSS tell slightly different stories based on current and expected inflation rates. I can only conclude that there is an unmeasured gloominess in the two indeces. The CCS respondents are slightly less gloomy about the economy than are the MCSS respondents; they deem the recent drop in commodity and retail prices to be short-lived.

The CCS indicates that consumers are worried about the current state of th economy:
- Current business conditions worsened, with a larger number of consumers saying conditions are bad and a fewer number of consumers saying that they are good.
- Current employment conditions tumbled, with jobs becoming harder to get and less plentiful.

As the chart illustrates, the respondents of the MCSS phone survey were slightly less gloomy than the respondents of the CCS. It is not uncommon for the surveys to tell a slightly different story, but with a 0.89 correlation, they generally move in sync.

Rock-bottom pricing drove the positive MCSS current economic condition responses and boosted inflation expectation (see below), but had negligible effects on the CCS responses. These surveys can sometimes pick up price effects, but in spite of the MCSS' small December improvement, consumers are rightly nervous both now and going forward. I expect that the MCSS will catch up with the CCS, as inflation deceleration slows.( SEEMS RIGHT )

The consumer confidence survey also gives a slew of information about consumer expectations over labor, business climate, and prices.

Consumers expect the labor market to worsen slightly

Consumers expect business conditions to corrode as well

Unlike the current economic conditions index, the MCSS confirms bleak labor market and business conditions going forward. The MCSS reported that 70% of the survey respondents expect the unemployment rate to rise in 2009, and 75% expect the recession to continue throughout 2009.

However, the MCSS and CCS veered miles from each other regarding inflation expectations.

Current price declines have become embedded in the MCSS respondents' inflation expectations only. The CCS consumers expect a 5.8% inflation rate in 2009, while the MCSS consumers expect a 1.7% inflation rate. It is not uncommon for the inflation expectations responses to differ - the inflation correlation betwee the CCS and the MCSS, 0.72, is smaller than that between the overall indeces, 0.89 - but a 4.1% differential is quite substantial.

I appears that either the CCS respondents (a mail in survey rather than the MCSS’ phone survey) are avoiding gas pumps and malls, or are less convinced about the persistence of commodity price declines. Neither the CCSs coincident survey nor its inflation expectations survey are dominantly affected by the recent drop in prices.

The CCS respondents are less gloomy than the MCSS respondents, where the precipitous drop in energy and retail prices is expected to be short lived. The coincident indicators nor the inflation expectations index embed the drop in commodity prices, driven by the global recession.

Rebecca Wilder"

"So inflation seems hard to avoid, irrespective of how the upcoming fiscal moves play out."

Simon Johnson on The Baseline Scenario:

"We know there is going to be a large fiscal surge in the US (the latest estimate is a stimulus of $675-775bn, which is a bit lower than numbers previously floated). This will likely arrive as the US recession deepens and fears of deflation take hold.

The precise outcomes for 2009 are, of course, hard to know yet - this depends primarily on the resilience of US consumer spending and whether large international shocks materialize. But we can have a sense of what happens after the fiscal stimulus has played out (or its precise consequences become clear). There are two main potential scenarios.

First, the fiscal strategy works. In this case, the US pulls out of recession reasonably quickly (perhaps by the second half of 2009). Once this seems likely, the Federal Reserve will want to cut back on its quantitative easing and perhaps even think about raising interest rates. But this will be hard to do for political reasons - the Fed will feel pressed not to quash an incipient recovery, so it will err on the side of keeping interest rates low and credit available on generous terms. At the same time, a great deal of the fiscal stimulus will be working its way through the pipeline for at least two years. The net effect is inflation and presumably a weakening of the dollar (although the latter of course depends on what others are doing around the world.)( I AGREE )

Second, the fiscal strategy does not work. In this case, the US recession deepens and we head into a serious global slump. Some more fiscal stimulus might be offered, but faith in its effectiveness will decline sharply. The next policy move in this case is even more quantitative easing (i.e., essentially issuing even more money). This would not usually be appealing, but the global depression would be fed by and feed into serious deflation, and the consensus will shift from “avoid inflation over 2%” to “any inflation is preferable to deflation”. The net effect is again inflation, at least in the US and probably more broadly.( I AGREE )

Of course, there are other possibilities. The fiscal stimulus could reflate the economy just enough, i.e., so that growth returns to potential (whatever that is after a crisis of this nature), but not “too much” - so that prices increase but annual inflation never rises significantly above 2%. This scenario seems rather too ideal, and to require too many things to go right, to be high probability.( TRUE )

It is also possible that in a global depression/deflation scenario even the Fed could not make inflation positive. But this also seems to be quite a remote possibility.( I AGREE )

So inflation seems hard to avoid, irrespective of how the upcoming fiscal moves play out."

That's what we're hoping for.

"here's a completely subjective rundown of the most noteworthy academic research that sprung forth from academia in 2008."

From Zubin Jelveh, a good resource:

The Year in Research

Once again, here's a completely subjective rundown of the most noteworthy academic research that sprung forth from academia in 2008.

1) Subprime All the Time
What we learned, sort of learned, and should have learned about the financial crisis:

Bubble Psychology or Declining Standards?
Two papers took a relatively similar tact to arrive at very different answers about what started the current mess.

The first, by four Fed economists, found that the information available in 2005-06 should have allowed analysts to deduce the presence of the subprime ticking bomb. The reason that didn't happen, the researches argue, is that analysts just didn't think home prices would fall so rapidly. And why didn't they? Bubble psychology of course.

The second paper, from Uday Rajan, Amit Seru, and Vikrant Vig found that even if analysts' models knew exactly how badly home prices would perform in the future, they would have still failed to predict the subprime outcome. The real culprit, they argue, was lax standards induced by securitization. Their evidence:

We analyze data on securitized subprime loans issued in the period 1997-2006 and demonstrate that interest rates on new loans rely increasingly on hard information characteristics - interest rates become increasingly sensitive to a borrower's FICO score and loan-to-value (LTV) ratio and the distribution of interest rates shrinks over time.

The papers aren't as in much disagreement as it might seem. The Fed economists found that while most analysts were able to predict that a drop in home prices would have disastrous effects on mortgage-backed securities, there was one firm that failed to do so: Standard & Poor's. And the model used by the authors of the second paper was based off one created by ... Standard & Poor's.

Still, I don't know if that explains all of the difference between the two papers' results. It could be that, ultimately, analysts trusted S&P's model more than their own, or that a firm's MBS business didn't use their own analysts' models. Research by Efraim Benmelech and Jennifer Dlugosz of Harvard of 3,912 CDO tranches issued by different firms found that the tranches "all seem to conform to the same CDO model." That model being S&P's.

A Central Figure
I was a big fan of Yale and AIG's Gary Gorton highly informative paper arguing that declining lending standards couldn't account for the subprime blowup, but then I read this quote from him in December 2007 at an AIG investor meeting:

"We stopped writing [the CDO] business in late 2005 based on fundamental analysis and based on concerns that the model was not going to be able to handle declining underwriting standards."

Hard to Break Bad Habits
If bubble psychology was even partly responsible for our current woes, can we learn not to repeat the same mistakes? The results of a study of 100 German money managers isn't promising: Even when the managers were aware of the existence of behavioral biases, they didn't feel it applied to them.

The Credit Crunch Is Real
In the aftermath of Lehman's bankruptcy in September, some Minnesota Fed economists boldly claimed that the credit crunch was in large parts a myth.

But a survey of CFO's by Murillo Campello of the University of Illinois and John Graham and Campbell Harvey of Duke showed that 80 percent of firms with lower credit ratings had to cut back on R&D, employment, and capital spending because of the crunch.

Other work by Harvard's Victoria Ivashina and David Scharfstein found that new lending "declined substantially during the financial crisis across all types of loans."

Short-Sales Bans and Small-Scale Asset Repurchases Don't Work
In response to the Panic of 2008, the government pulled out most of the stops to calm markets including a short-sale ban and the infamous TARP I. New research shows that the first was useless while the second would only work if very large amounts of money were devoted.

The Aftermath for Wall Street
After a decades-long ascent, the financial sector is likely to contract for an extended period, suggests research by NYU's Thomas Philippon, who also shows, to no one's surprise, that bankers had become overpaid.

2) White Guilt
My favorite non-subprime paper this year came from Devin Pope of Wharton and Justin Sydnor of Case Western who found that on the peer-to-peer lending site, a listing with a picture of a black person was 25 to 35 percent less likely to get funded than a listing with a white person with similar a profile. But despite this, risk-adjusted returns on loans to blacks were lower than the average return for all loan, implying that lenders weren't discriminating enough.

3) Global Warming and Growth
Melissa Dell and Benjamin Olken of M.I.T. and Benjamin Jones of Northwestern show:

First, higher temperatures substantially reduce economic growth in poor countries. Second, higher temperatures appear to reduce growth rates, not just the level of output. Third, higher temperatures have wide-ranging effects, reducing agricultural and industrial output, investment, innovation, and political stability.

4) Counterintuitive Claims

China Helps America's Poor - That was the claim of a controversial paper from University of Chicago economists Christian Broda and John Romalis.

What Resource Curse? - It turns out that being resource rich probably doesn't mean that a country is doomed to totalitarianism, say Stanford's Stephen Haber and Victor Menaldo.

5) If Women Ruled the World
Two papers gave us a glimpse of what that might be like. The first, by Uri Gneezy and John A. List of the University of Chicago and Kenneth Leonard of Columbia, found that in the matrilineal Khasi culture of India, women were more competitive than men, and just as competitive as men from a very male-dominated society. (Other work this year showed that women can become more competitive under affirmative action.)

The second paper, by M. Marit Rehavi of Berkeley, looked for a link between the percentage of women in a state's legislative body and budgetary priorities. Surprisingly, expenditures on health was the only category that increased as the relative power of women grew.

6) Trading on the News
Two different studies showed that algorithmic trading strategies relying on the text of news stories and analyst reports can be profitable.

7) Forensic Economics
More researchers turned to data to uncover potential wrongdoing. NYU's David Yermack found uncanny timing of stock gifts by CEOs to their own family foundations. Meanwhile, M.I.T.'s Mozaffar Khan and Hai Lu of the University of Toronto showed some compelling evidence of significant front-running on Wall Street. (Front running is when brokers execute trades for their own account, or tip-off favored clients like hedge funds, before filling customers' orders.)

8) Core Inflation or Not?
A Philly Fed researcher says headline inflation is a better predictor of future inflation. A DC Fed economist disagrees.

9) Did Fast Food Cause the Obesity Epidemic?
Michael Anderson and David Matsa, economists at UC Berkeley and Northwestern, examined this question and came to the surprising conclusion that, no, there is no correlation between eating out and weight gain.

But another recent study says Anderson and Matsa's finding isn't quite right. Janet Currie of Columbia University and Stefano DellaVigna, Enrico Moretti, and Vikram Pathania of Berkeley focus solely on fast food as opposed to all restaurants, and conclude that "among 9th grade children, the opening of "a new fast food restaurant within a tenth of a mile of a school is associated with a 11 percent increase in the obesity rate in that school. There is no discernible effect at .25 miles and at .5 miles."

10) Odds and Ends
Three more studies worth mentioning:

  1. Wal-Mart didn't cause the obesity epidemic either.

  2. Why does New York City have such relatively few married women with jobs?

  3. Priests, just like CEOs, respond to pay incentives.

And that's it. I know, a lot to digest -- but you have all of 2009 to get through it!"

"top brass will get paid based on something having to do with exotic metrics like performance and profitability"

A pretty funny and apt post from Clusterstock:

Citi (C) Execs Pay To Be Based On Something Called "Performance" (C)


vikramPandit.jpgCitigroup (C) is set to announce a very bizarre compensation scheme indeed, according to CNBC. Details are sketchy, but it sounds as though top brass will get paid based on something having to do with exotic metrics like performance and profitability. We'll have to wait to learn more, but get this, if the firm's fortunes continue to deteriorate, then execs may get reduced pay. Odd, right?( IT'S UNHEARD OF! )

The plan calls for Citi's most senior executives, including the CEO, to take the biggest hits in compensation when the firm's bottom line suffers. Senior executives will receive much of their future cash and stock bonuses in a deferred fashion that is "vested" in three years time when the executive can claim ownership to the money.

The plan will also feature a clawback provision where the firm can recoup money from top executives if the performance of the firm sours after a big payday, in addition the top five executives at the firm will receive no severance if and when they leave.

Citigroup officials say the plan was developed internally by Pandit himself, but they confirm that they have been discussing executive compensation reforms with officials in the federal government, which have been increasingly more involved in Citigroup's operations since the big bank asked for its most recent bailout.

Citi isn't the first firm, where something's gotten in the water. Morgan Stanley (MS) has also announced a bonus scheme that allows for clawbacks. Again, it all seems to be based on this idea that pay should somehow reflect how well one did at their job this year. Developing..."

I wonder how long this will last?

"Still, in current circumstances a glimmer of hope is better than nothing."

From Macroblog, some good news:

Good news in income growth?

One of my New Year’s resolutions is to be more consistent in responding to questions and comments from the loyal readers of macroblog. Though it remains the case that time constraints prohibit a response to all worthy queries, we’re still listening. Next year we’ll endeavor to give a shout back just a little more often.

In that spirit, I received an interesting inquiry from reader Robert Schumacher:

A cursory examination of the monthly trends in real disposable income in light of the NBER official business cycles suggests to me that a sustained rise in disposable personal income (at least three if not four months) signals the end of the recession is at hand. In that real disposable income rose in October and November how are we to interpret this amidst the dire economic forecasts for the coming year?

It does seem, as Robert suggests, that a sustained rise in real disposable income is characteristic of a typical recession’s end. Using a graphical device from a few posts back, here’s a look at the trajectory of disposable income up to and after December 2007 (the start date of the current recession according to the NBER Business Cycle Dating Committee), compared with the average experience of the previous seven recessions dating from 1960:


As in the previous post, “time 0” represents the peak of a business cycle, or the month a recession begins. The average length of US recessions from 1960 through 2001 was 10.7 months, so the line indicating 10 months from the peak roughly coincides to the end of the average recession over this period.

On average, Robert’s conjecture looks right on track( I AGREE ). In the typical case, growth in real disposable income stalls and then begins to pick up three or four months before recession’s end. If you smooth through the spike associated with the stimulus package of late spring, income growth was roughly flat through August but has increased since (and at a reasonably good clip). That would seem to portend well for all of us—and I assume it is all of us—hoping for a sooner rather than later end to the current contraction.

The picture is equally encouraging if we look at the income series preferred by the Business Cycle Dating Committee, which subtracts out transfers (that is, payments made to the public by the government):


That’s all encouraging, but there is a caveat: Individual results may vary. Here are the comparisons for the long-lived (16-month) recessions of 1973–75 and 1981–82:



In these two recessions—which are arguably better benchmarks than the average at this point—income measures were not such reliable harbingers of expansion( NOTHING IS WRITTEN ).

Still, in current circumstances a glimmer of hope is better than nothing. ( I AGREE )

By David Altig, senior vice president and director of research at the Federal Reserve Bank of Atlanta

"The morning of New Year's Eve was a memorable one for me. My first novel was accepted. Not an ambitious volume": I WISH

Who could resist?:

"Not George Washington is a semi-autobiographical novel by P. G. Wodehouse, written in collaboration with Herbert Westbrook. It was first published in the U.K. on 18 October 1907 by Cassel and Co., London.

The book is a humorous, fictionalised account of Wodehouse's early years as a journalist (Wodehouse edited the By The Way column for the defunct UK newspaper The Globe from 1904 to 1909).

The tale is told from several viewpoints, and the character representing Wodehouse is named James Orlebar Cloys

Chapter Six:


(James Orlebar Cloyster's narrative continued)

The morning of New Year's Eve was a memorable one for me. My first novel was accepted. Not an ambitious volume. It was rather short, and the plot was not obtrusive. The sporting gentlemen who accepted it, however--Messrs. Prodder and Way--seemed pleased with it; though, when I suggested a sum in cash in advance of royalties, they displayed a most embarrassing coyness--and also, as events turned out, good sense.

I carried the good news to Julian, whom I found, as usual, asleep in his hammock. I had fallen into the habit of calling on him after my Orb work. He was generally sleepy when I arrived, at half-past eleven, and while we talked I used to make his breakfast act as a sort of early lunch for myself. He said that the people of the house had begun by trying to make the arrival of his breakfast coincide with the completion of his toilet; that this had proved so irksome that they had struck; and that finally it had been agreed on both sides that the meal should be put in his room at eleven o'clock, whether he was dressed or not. He said that he often saw his breakfast come in, and would drowsily determine to consume it hot. But he had never had the energy to do so. Once, indeed, he had mistaken the time, and had confidently expected that the morning of a hot breakfast had come at last. He was dressed by nine, and had sat for two hours gloating over the prospect of steaming coffee and frizzling bacon. On that particular morning, however, there had been some domestic tragedy--the firing of a chimney or the illness of a cook--and at eleven o'clock, not breakfast, but an apology for its absence had been brought to him. This embittered Julian. He gave up the unequal contest, and he has frequently confessed to me that cold breakfast is an acquired, yet not unpleasant, taste.

He woke up when I came in, and, after hearing my news and congratulating me, began to open the letters that lay on the table at his side.

One of the envelopes had Skeffington's trade mark stamped upon it, and contained a bank-note and a sheet closely type-written on both sides.

"Half a second, Jimmy," said he, and began to read.

I poured myself out a cup of cold coffee, and, avoiding the bacon and eggs, which lay embalmed in frozen grease, began to lunch off bread and marmalade.

"I'll do it," he burst out when he had finished. "It's a sweat--a fearful sweat, but----

"Skeffington's have written urging me to undertake a rather original advertising scheme. They're very pressing, and they've enclosed a tenner in advance. They want me to do them a tragedy in four acts. I sent them the scenario last week. I sketched out a skeleton plot in which the hero is addicted to a strictly moderate use of Skeffington's Sloe Gin. His wife adopts every conceivable measure to wean him from this harmless, even praiseworthy indulgence. At the end of the second act she thinks she has cured him. He has promised to gratify what he regards as merely a capricious whim on her part. 'I will give--yes, I will give it up, darling!' 'George! George!' She falls on his neck. Over her shoulder he winks at the audience, who realise that there is more to come. Curtain. In Act 3 the husband is seen sitting alone in his study. His wife has gone to a party. The man searches in a cupboard for something to read. Instead of a novel, however, he lights on a bottle of Skeffington's Sloe Gin. Instantly the old overwhelming craving returns. He hesitates. What does it matter? She will never know. He gulps down glass after glass. He sinks into an intoxicated stupor. His wife enters. Curtain again. Act 4. The draught of nectar tasted in the former act after a period of enforced abstinence has produced a deadly reaction. The husband, who previously improved his health, his temper, and his intellect by a strictly moderate use of Skeffington's Sloe Gin, has now become a ghastly dipsomaniac. His wife, realising too late the awful effect of her idiotic antagonism to Skeffington's, experiences the keenest pangs of despair. She drinks laudanum, and the tragedy is complete."

"Fine," I said, finishing the coffee.

"In a deferential postscript," said Julian, "Skeffington's suggest an alternative ending, that the wife should drink, not laudanum, but Sloe Gin, and grow, under its benign influence, resigned to the fate she has brought on her husband and herself. Resignation gives way to hope. She devotes her life to the care of the inebriate man, and, by way of pathetic retribution, she lives precisely long enough to nurse him back to sanity. Which finale do you prefer?"

"Yours!" I said.

"Thank you," said Julian, considerably gratified. "So do I. It's terser, more dramatic, and altogether a better advertisement. Skeffington's make jolly good sloe gin, but they can't arouse pity and terror. Yes, I'll do it; but first let me spend the tenner."

"I'm taking a holiday, too, today," I said. "How can we amuse ourselves?"

Julian had opened the last of his letters. He held up two cards.

"Tickets for Covent Garden Ball tonight," he said. "Why not come? It's sure to be a good one."

"I should like to," I said. "Thanks."

Julian dropped from his hammock, and began to get his bath ready.

We arranged to dine early at the Maison Suisse in Rupert Street-- table d'hôte one franc, plus twopence for mad'moiselle--and go on to the gallery of a first night. I was to dress for Covent Garden at Julian's after the theatre, because white waistcoats and the franc table d'hôte didn't go well together.

When I dined out, I usually went to the Maison Suisse. I shall never have the chance of going again, even if, as a married man, I were allowed to do so, for it has been pulled down to make room for the Hicks Theatre in Shaftesbury Avenue. When I did not dine there, I attended a quaint survival of last century's coffee-houses in Glasshouse Street: Tall, pew-like boxes, wooden tables without table-cloths, panelled walls; an excellent menu of chops, steaks, fried eggs, sausages, and other British products. Once the resort of bucks and Macaronis, Ford's coffee-house I found frequented by a strange assortment of individuals, some of whom resembled bookmakers' touts, others clerks of an inexplicably rustic type. Who these people really were I never discovered.

"I generally have supper at Pepolo's," said Julian, as we left the theatre, "before a Covent Garden Ball. Shall we go on there?"

There are two entrances to Pepolo's restaurant, one leading to the ground floor, the other to the brasserie in the basement. I liked to spend an hour or so there occasionally, smoking and watching the crowd. Every sixth visit on an average I would happen upon somebody interesting among the ordinary throng of medical students and third-rate clerks--watery-eyed old fellows who remembered Cremorne, a mahogany derelict who had spent his youth on the sea when liners were sailing-ships, and the apprentices, terrorised by bullying mates and the rollers of the Bay, lay howling in the scuppers and prayed to be thrown overboard. He told me of one voyage on which the Malay cook went mad, and, escaping into the ratlines, shot down a dozen of the crew before he himself was sniped.

The supper tables are separated from the brasserie by a line of stucco arches, and as it was now a quarter to twelve the place was full. At a first glance it seemed that there were no empty supper tables. Presently, however, we saw one, laid for four, at which only one man was sitting.

"Hullo!" said Julian, "there's Malim. Let's go and see if we can push into his table. Well, Malim, how are you? Do you know Cloyster?"

Mr. Malim had a lofty expression. I should have put him down as a scholarly recluse. His first words upset this view somewhat.

"Coming to Covent Garden?" he said, genially. "I am. So is Kit. She'll be down soon."

"Good," said Julian; "may Jimmy and I have supper at your table?"

"Do," said Malim. "Plenty of room. We'd better order our food and not wait for her."

We took our places, and looked round us. The hum of conversation was persistent. It rose above the clatter of the supper tables and the sudden bursts of laughter.

It was now five minutes to twelve. All at once those nearest the door sprang to their feet. A girl in scarlet and black had come in.

"Ah, there's Kit at last," said Malim.

"They're cheering her," said Julian.

As he spoke, the tentative murmur of a cheer was caught up by everyone. Men leaped upon chairs and tables.

"Hullo, hullo, hullo!" said Kit, reaching us. "Kiddie, when they do that it makes me feel shy."

She was laughing like a child. She leaned across the table, put her arms round Malim's neck, and kissed him. She glanced at us.

Malim smiled quietly, but said nothing.

She kissed Julian, and she kissed me.

"Now we're all friends," she said, sitting down.

"Better know each other's names," said Malim. "Kit, this is Mr. Cloyster. Mr. Cloyster, may I introduce you to my wife?"

"This sparrow who comes to sit at my window is a poetic truth more than a natural one."

This poem is usually on mind, and it feels especially profound to me today:

The Sparrow

(To My Father)

This sparrow

who comes to sit at my window

is a poetic truth

more than a natural one.

His voice,

his movements,

his habits--

how he loves to

flutter his wings

in the dust--

all attest it;

granted, he does it

to rid himself of lice

but the relief he feels

makes him

cry out lustily

which is a trait

more related to music

than otherwise.

Wherever he finds himself

in early spring,

on back streets

or beside palaces,

he carries on


his amours.

It begins in the egg,

his sex genders it:

What is more pretentiously


or about which

we more pride ourselves?

It leads as often as not

to our undoing.

The cockerel, the crow

with their challenging voices

cannot surpass

the insistence

of his cheep!


at El Paso

toward evening,

I saw--and heard!--

ten thousand sparrows

who had come in from

the desert

to roost. They filled the trees

of a small park. Men fled

(with ears ringing!)

from their droppings,

leaving the premises

to the alligators

who inhabit

the fountain. His image

is familiar

as that of the aristocratic

unicorn, a pity

there are not more oats eaten


to make a living easier

for him.

At that,

his small size,

keen eyes,

serviceable beak

and general truculence

assure his survival--

to say nothing

of his innumerable


Even the Japanese

know him

and have painted him


with profound insight

Into his minor


Nothing even remotely


about his lovemaking.

He crouches

before the female,

drags his wings,


throws back his head

and simply--

yells! The din

is terrific.

The way he swipes his bill

across a plank

to clean it,

is decisive.

So with everything

he does. His coppery


give him the air

of being always

a winner--and yet

I saw once,

the female of his species

clinging determinedly

to the edge of

a water pipe,

catch him

by his crown-feathers

to hold him



hanging above the city streets


she was through with him.

What was the use

of that?

She hung there


puzzled at her success.

I laughed heartily.

Practical to the end

it is the poem

of his existence

that triumphed


a wisp of feathers

flattened to the pavement,

wings spread symmetrically

as if in flight,

the head gone,

the black escutcheon of the breast


an effigy of a sparrow

a dried wafer only,

left to say

and it says it

without offense,


This was I,

a sparrow.

I did my best;


--William Carlos Williams