Freddie Mac Acting Chief Financial Officer David Kellermann Found Dead; Apparent Suicide

April 22nd, 2009

Update: Hanging or Gunshot? Not Clear, Apparently

Suicide, though. Definitely a suicide. Trust us.

Via: AHN:

Police are not speculating on the cause of death of Freddie Mac’s acting head, David Kellermann, at this point and will leave it up to the medical examiner, Fairfax County Police Public Information Officer Lucy Caldwell told AHN Media.

Kellermann, 41, was found by Fairfax County Police after being called to his home in Hunter Mill estates in the Reston, VA area Wednesday morning.

However, there were “no signs of foul play. It’s under investigation. Police were called at 4:49 a.m.,” Fairfax County Police Public Information Officer Lucy Caldwell told AHN Media in a telephone interview.

Asked if the death was a suicide, Caldwell said they were leaving that determination up to the county medical examiner. She wasn’t sure if the body had been removed yet or not when AHN spoke to her at 8:30 a.m.

“We were just called to respond to an unattended death and it’s under investigation,” Caldwell said.

Although Caldwell told AHN that police have not yet released the identity of the person who called them, she did confirm to AHN that there were other people present in the house at the time of the death and that there was a gun and a gunshot wound.

—End Update—

Update: Note Sale Delayed Because of Death

—End Update—

Update: Hanging

Ah yes, hanging bankers. See: God’s Banker.

—End Update—

Every once in a while, workers in the sausage factory wind up in the grinder.

Via: Bloomberg:

Freddie Mac Acting Chief Financial Officer David Kellermann, 41, was found dead early today in his home in the Washington suburbs, police said.

The death is under investigation, Fairfax County Police Officer Shelley Broderick said. Broderick said early reports from others in the department indicated Kellermann’s wife reported a suicide, though the cause of death hasn’t been determined by officers at the scene.

The Securities and Exchange Commission and the Justice Department have been questioning executives about accounting practices, according to company filings. Freddie and Fannie Mae, the mortgage-finance companies seized last year by the U.S. government, reported in September that they had received federal grand jury subpoenas and were the subject of an SEC inquiry.

Kellermann’s body was found at about 4:48 a.m. local time at a home in Reston, Virginia, police said. There were no signs of “foul play,” Broderick said.

Kellermann, who joined Freddie Mac in 1992, was promoted from corporate controller to acting CFO in September after the government seized control of the mortgage-finance company following losses amid the worst housing slump since the Great Depression.

As controller, Kellermann was the principal accounting officer, dealing with financial statements and disclosures, according to the company’s Web site.

Kellermann received a master’s degree in finance from George Washington University, after attending the University of Michigan. He was a volunteer board member with the D.C. Coalition for the Homeless, according to the Web site.

Research Credit: S


Feinstein Sought $25 Billion for Agency that Awarded Contract to Spouse

April 21st, 2009

Via: Washington Times:

On the day the new Congress convened this year, Sen. Dianne Feinstein introduced legislation to route $25 billion in taxpayer money to a government agency that had just awarded her husband’s real estate firm a lucrative contract to sell foreclosed properties at compensation rates higher than the industry norms.

Mrs. Feinstein’s intervention on behalf of the Federal Deposit Insurance Corp. was unusual: the California Democrat isn’t a member of the Senate Committee on Banking, Housing and Urban Affairs with jurisdiction over FDIC; and the agency is supposed to operate from money it raises from bank-paid insurance payments – not direct federal dollars.

Documents reviewed by The Washington Times show Mrs. Feinstein first offered Oct. 30 to help the FDIC secure money for its effort to stem the rise of home foreclosures. Her letter was sent just days before the agency determined that CB Richard Ellis Group (CBRE) – the commercial real estate firm that her husband Richard Blum heads as board chairman – had won the competitive bidding for a contract to sell foreclosed properties that FDIC had inherited from failed banks.

About the same time of the contract award, Mr. Blum’s private investment firm reported to the Securities and Exchange Commission that it and related affiliates had purchased more than 10 million new shares in CBRE. The shares were purchased for the going price of $3.77; CBRE’s stock closed Monday at $5.14.

Spokesmen for the FDIC, Mrs. Feinstein and Mr. Blum’s firm told The Times that there was no connection between the legislation and the contract signed Nov. 13, and that the couple didn’t even know about CBRE’s business with FDIC until after it was awarded.

Senate ethics rules state that members must avoid conflicts of interest as well as “even the appearance of a conflict of interest.” Some ethics analysts question whether Mrs. Feinstein ran afoul of the latter provision, creating the appearance that she was rewarding the agency that had just hired her husband’s firm.

“This clearly gives the appearance of a conflict of interest,” said Kent Cooper, a former federal regulator who specializes in government ethics and disclosures. “To maintain the people’s trust in government, it is incumbent on a legislator to take the extra steps necessary to ensure that when she introduces any legislation that it does not cause people to question her motives or the business activities of her spouse.”

Mrs. Feinstein and Mr. Blum, a wealthy investment banker, are a power couple in both Washington and California who sat behind President Obama during his inauguration in January. Mrs. Feinstein also is mentioned as a candidate for California governor.


Name Not on Our List? Change It, China Says

April 21st, 2009

Chinese newspeak.

Via: New York Times:

“Ma,” a Chinese character for horse, is the 13th most common family name in China, shared by nearly 17 million people. That can cause no end of confusion when Mas get together, especially if those Mas also share the same given name, as many Chinese do.

Ma Cheng’s book-loving grandfather came up with an elegant solution to this common problem. Twenty-six years ago, when his granddaughter was born, he combed through his library of Chinese dictionaries and lighted upon a character pronounced “cheng.” Cheng, which means galloping steeds, looks just like the character for horse, except that it is condensed and written three times in a row.

The character is so rare that once people see it, Miss Ma said, they tend to remember both her and her name. That is one reason she likes it so much.

That is also why the government wants her to change it.

For Ma Cheng and millions of others, Chinese parents’ desire to give their children a spark of individuality is colliding head-on with the Chinese bureaucracy’s desire for order. Seeking to modernize its vast database on China’s 1.3 billion citizens, the government’s Public Security Bureau has been replacing the handwritten identity card that every Chinese must carry with a computer-readable one, complete with color photos and embedded microchips. The new cards are harder to forge and can be scanned at places like airports where security is a priority.

The bureau’s computers, however, are programmed to read only 32,252 of the roughly 55,000 Chinese characters, according to a 2006 government report. The result is that Miss Ma and at least some of the 60 million other Chinese with obscure characters in their names cannot get new cards — unless they change their names to something more common.

Moreover, the situation is about to get worse or, in the government’s view, better. Since at least 2003, China has been working on a standardized list of characters for people to use in everyday life, including when naming children.

Research Credit: J


Bank Bailout May Hurt Taxpayers, Be Open to Fraud

April 21st, 2009

No shit? Had me going there for a second…

Wake me up when someone can tell us where all of that money went.

Via: AP:

Taxpayers are increasingly exposed to losses and the government is more vulnerable to fraud under Obama administration initiatives that have created a federal bank bailout program of “unprecedented scope,” a government report finds.

In a 250-page quarterly report to Congress, the rescue program’s special inspector general concludes that a private-public partnership designed to rid financial institutions of their “toxic assets” is tilted in favor of private investors and creates “potential unfairness to the taxpayer.”

The report, which examines the six-month old, $700 billion Troubled Asset Relief Program, is scheduled for release Tuesday.

Using blunt language, Inspector General Neil Barofksy offers a series of recommendations to protect the public and takes the Treasury to task for not implementing previous advice. The report also commends Treasury and the Federal Reserve for creating some safeguards. [HAHAHA—Emphasis added]

The report’s warnings about the public-private plan’s potential for losses echoes alarms raised by some lawmakers and economists, but Barofksy has significant credibility in Congress and his views are likely to carry ample weight.

Overall, the report says the public-private partnership — using Treasury, Federal Reserve and private investor money — could total $2 trillion. The financial markets responded positively to the program when the Obama administration announced it last month, but the administration is still putting final touches on its implementation.

“The sheer size of the program … is so large and the leverage being provided to the private equity participants so beneficial, that the taxpayer risk is many times that of the private parties, thereby potentially skewing the economic incentives,” the report states.

In particular, the report cited the private-public partnership that would purchase troubled real estate-related securities from financial institutions. Under plans unveiled by Treasury, for every $1 of private investment, Treasury would invest $1 and could provide another dollar in a nonrecourse loan. That money could then leverage a loan from another government fund backed mostly by the Federal Reserve, a step that Barofsky says would dilute the incentive for private fund managers to exercise due diligence.

Barofsky recommends that Treasury not allow the use of Fed loans “unless significant mitigating measures are included to address these dangers.”


Edgar Mitchell: “Our destiny … is to become a part of the planetary community.”

April 21st, 2009

I have no idea what to make out of this. What do you think?

Edgar Mitchell is:

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Via: CNN:

Earth Day may fall later this week, but as far as former NASA astronaut Edgar Mitchell and other UFO enthusiasts are concerned, the real story is happening elsewhere.

Mitchell, who was part of the 1971 Apollo 14 moon mission, asserted Monday that extraterrestrial life exists, and that the truth is being concealed by the U.S. and other governments.

He delivered his remarks during an appearance at the National Press Club following the conclusion of the fifth annual X-Conference, a meeting of UFO activists and researchers studying the possibility of alien life forms.

Mankind has long wondered if we’re “alone in the universe. [But] only in our period do we really have evidence. No, we’re not alone,” Mitchell said.

“Our destiny, in my opinion, and we might as well get started with it, is [to] become a part of the planetary community. … We should be ready to reach out beyond our planet and beyond our solar system to find out what is really going on out there.”

Mitchell grew up in Roswell, New Mexico, which some UFO believers maintain was the site of a UFO crash in 1947. He said residents of his hometown “had been hushed and told not to talk about their experience by military authorities.” They had been warned of “dire consequences” if they did so.

But, he claimed, they “didn’t want to go to the grave with their story. They wanted to tell somebody reliable. And being a local boy and having been to the moon, they considered me reliable enough to whisper in my ear their particular story.”

Roughly 10 years ago, Mitchell claimed, he was finally given an appointment at Pentagon to discuss what he had been told.

An unnamed admiral working for the Joint Chiefs of Staff promised to uncover the truth behind the Roswell story, Mitchell said. The stories of a UFO crash “were confirmed,” but the admiral was then denied access when he “tried to get into the inner workings of that process.”

The same admiral, Mitchell claimed, now denies the story.

“I urge those who are doubtful: Read the books, read the lore, start to understand what has really been going on. Because there really is no doubt we are being visited,” he said.

“The universe that we live in is much more wondrous, exciting, complex and far-reaching than we were ever able to know up to this point in time.”

A NASA spokesman denied any cover-up.


Rent-A-Cops: Cash-Strapped Cities Using Private Armed Guards Instead of Police

April 21st, 2009

Via: Wall Street Journal:

Facing pressure to crack down on crime amid a record budget deficit, Oakland is joining other U.S. cities that are turning over more law-enforcement duties to private armed guards.

The City Council recently voted to hire International Services Inc., a private security agency, to patrol crime-plagued districts. While a few Oakland retail districts previously have pooled cash to pay for unarmed security services, using public funds to pay for private armed guards would mark a first for the city.

Hiring private guards is less expensive than hiring new officers. Oakland — facing a record $80 million budget shortfall — spends about 65% of its budget for police and fire services, including about $250,000 annually, including benefits and salary, on each police officer.

In contrast, for about $200,000 a year the city can contract to hire four private guards to patrol the troubled East Oakland district where four on-duty police officers were killed in March. And the company, not the city, is responsible for insurance for the guards.


Fed Should Use Negative Interest Rates to Force Savers to Spend Their Money

April 21st, 2009

Via: New York Times:

In many ways today, the Fed is in uncharted waters.

So why shouldn’t the Fed just keep cutting interest rates? Why not lower the target interest rate to, say, negative 3 percent?

At that interest rate, you could borrow and spend $100 and repay $97 next year. This opportunity would surely generate more borrowing and aggregate demand.

The problem with negative interest rates, however, is quickly apparent: nobody would lend on those terms. Rather than giving your money to a borrower who promises a negative return, it would be better to stick the cash in your mattress. Because holding money promises a return of exactly zero, lenders cannot offer less.

Unless, that is, we figure out a way to make holding money less attractive.

At one of my recent Harvard seminars, a graduate student proposed a clever scheme to do exactly that. (I will let the student remain anonymous. In case he ever wants to pursue a career as a central banker, having his name associated with this idea probably won’t help.)

Imagine that the Fed were to announce that, a year from today, it would pick a digit from zero to 9 out of a hat. All currency with a serial number ending in that digit would no longer be legal tender. Suddenly, the expected return to holding currency would become negative 10 percent.

That move would free the Fed to cut interest rates below zero. People would be delighted to lend money at negative 3 percent, since losing 3 percent is better than losing 10.

Of course, some people might decide that at those rates, they would rather spend the money — for example, by buying a new car. But because expanding aggregate demand is precisely the goal of the interest rate cut, such an incentive isn’t a flaw—it’s a benefit.


Phoenix: Radar Camera Employee Murdered

April 21st, 2009

Via: Arizona Republic:

It has come under attack from protesters, politicians and even a pickax-wielding resident, but sentiment against Arizona’s photo-enforcement program had not turned to bloodshed until Sunday night.

Doug Georgianni, 51, of Cave Creek, was shot and killed while sitting in a van alongside the highway and monitoring cameras that snap photos of speeders.

Phoenix police arrested Thomas Patrick Destories, 68, on Monday in connection with the murder. Police said Destories was not photographed speeding, but they refused to speculate on any possible motives.

“Whether you agree or disagree with photo enforcement, what happened last night, folks, was an act of cold-blooded murder,” state Department of Public Safety Director Roger Vanderpool said at a Monday news conference.

The shooting led both photo-enforcement providers in Arizona, Redflex and American Traffic Solutions, to suspend use of the mobile-enforcement vans until they can reassess their security procedures.


Food, Inc: “A Civilized Horror Movie”

April 20th, 2009

Via: Variety:

With a constituency limited to anyone who eats, “Food, Inc.” is a civilized horror movie for the socially conscious, the nutritionally curious and the hungry. Yes, it has a deceptively cheery palette, but helmer Robert Kenner’s doc — which does for the supermarket what “Jaws” did for the beach — marches straight into the dark side of cutthroat agri-business, corporatized meat and the greedy manipulation of both genetics and the law. Doc biz may be in the doldrums, but “Food, Inc.” is so aesthetically polished and politically urgent, theatrical play seems a no-brainer, though it won’t do much for popcorn sales.

Corn is the vegetable-as-villain in “Food, Inc.,” which builds on the work of nutritionists, journalists and activists Eric Schlosser (“Fast Food Nation”) and Michael Pollan (“The Omnivore’s Dilemma”) to show how multinationals have taken over the production of food. As the movie tells us, corn — which today assumes dozens of ubiquitous identities, notably high-fructose corn syrup — is kept at unrealistically low prices by the government, is fed to animals that haven’t evolved to eat it (such as the cow), causes those animals to develop maladies that must be treated with antibiotics (which are passed on to consumers), and has led to the mutation of new strains of the E.coli virus, which sickens tens of thousands each year.

The whole mess is exacerbated by opportunistic politics — tools of Big Agriculture running the very regulatory agencies that are supposed to protect us — and consumers who have become accustomed to eating whatever they want whenever they want, in quantities they don’t need.

Fast food is presented as having turned meat production into a sadistic exercise in animal torture, something that’s been seen in documentaries before, and it isn’t pretty. But “Food, Inc.” delves deeply into the case of Monsanto, which has monopolized the growing of corn by patenting the biology inside it — and has been allowed to litigate against insurgent farmers through court decisions rendered by the likes of Supreme Court Justice Clarence Thomas, a onetime Monsanto lawyer. The whole system, “Food, Inc.” tells us, is fixed.

That the filmmakers dress up all this information in glossy graphics, splashes of color and Mark Adler’s often buoyant (and ironic) score is ingenious, because the artifice of the film’s aesthetic is always subtly emphasizing the artificiality of the food. Schlosser and Pollan are eloquent Virgils guiding the viewer into the third circle of food hell. But then Joel Salatin — a major figure in “Omnivore’s Dilemma” who owns and operates a self-sustaining poultry-and-pig farm in Virginia’s Shenandoah Valley — arrives to throw some natural light onto the proceedings and illuminate just what can be done to salvage agriculture and our digestive systems.

Salatin is an infectiously enthusiastic champion of his own system, and the film needs him, because others in the movie — such as a working-class Los Angeles family that can’t afford fruit but can afford Burger King — keep showing the insanity of the system.

Disturbing as it is, “Food, Inc.” doesn’t present some doomsday scenario. People can make a difference, it says: After all, look what happened to Big Tobacco.

More: Official Site

Research Credit: Eileen, Lagavulin


Britain: Schools Turn to Bouncers for ‘Crowd Control’ During Absent Teachers’ Lessons

April 20th, 2009

Via: Guardian:

Bouncers, ex-soldiers and former police officers are being brought into schools to provide “crowd control” and cover absent teachers’ lessons, a teacher has revealed.

One school, thought to be in London, employed two permanent cover teachers through an agency for professional doormen, the National Union of Teachers annual conference in Cardiff heard today.

Bouncers, who more usually work nights keeping order in pubs and clubs, are being employed in schools because they are “stern and loud”, said Andrew Baisley, a teacher at Haverstock school in Camden, north London.

“I know of bouncers being employed specifically because they are bouncers to cover lessons,” he told the conference.

Recruitment agencies are advertising for people with “ex-marine, prison officer, bouncer, policeman, fireman” backgrounds to become supervisors, who do not need to have any teaching qualifications to oversee lessons.


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