I posted a brief description of Erika's January 25 heart attack at http://www.trinity.edu/rjensen/Erika2007.htm#HeartAttack2008
She's home now and doing better, although she's still very weak.

Question
What does the FBI consider its most successful operation in the FBI's 100-year history?
On January 27, 2008 the ever-popular television show Sixty Minutes on CBS had the most interesting television module I've ever watched. It's about the long-term interrogation of Saddam Hussein. What is most important in my viewpoint is the illustration of the trade-off between physical torture versus long-term interrogation where the interrogator becomes viewed as a friend by a prisoner who probably reveals far more over the course of time than could ever be elicited by torture, including the form of torture known as sleep deprivation. The FBI (in contrast to the CIA) claims to have never engaged in torture, although in the case of Saddam it might have been a different situation if Saddam posed an imminent threat of dire harm such using weapons of mass destruction in a matter of days on U.S. forces or cities, Israel, Iran, or other "enemies" of Saddam. Although the show does not mention this, torture is often used when time is of the essence and/or in a rage of vengeance.

There was only one interrogator across the many months of interrogation in Saddam's cell. His name was George Piro. Mr. Piro is a young and relatively inexperienced (five years) FBI agent who was chosen largely because of his fluency in the Arabic language. However, Mr. Piro turned out to be far more than an interrogator. He slowly and patiently became Saddam's friend to a point where Saddam pleaded to have Mr. Piro brought to the cell for long periods of time. Indeed Saddam became closer to George Piro than he did with his own sons.

Slowly over the course of many months bits and pieces of extremely revealing information leaked out to George Piro in long and rambling conversations. For example, we've always assumed that Saddam invaded Kuwait in order to control the vast oil fields of Kuwait. This of course is largely true, but the spark that set off the invasion was one short insult to the women of Iraq by the Emir of Kuwait. Saddam had a legendary and in retrospect a suicidal temper.

George Piro patiently waited over five months of interrogation before cleverly introducing a question about Saddam's weapons of mass destruction. Eventually Saddam claimed that he destroyed most of his WMDs that the United Nations inspectors had not already destroyed. But he did not seriously own up to this because it would be a sign of weakness, especially in the face of his dire enemy --- Iran.

There were many, many more important facts that emerged from these many months of interrogation. It turns out that most of what Saddam knew about the United States came from watching old Hollywood movies. He had almost zero knowledge of U.S. politics, governance, media, and power structures. What little he knew always amazed him because those in power were in power for such a short period of time.

Saddam considered Osama Bin Ladin to be a dangerous fanatic. He apparently wanted no relationship with Osama.

My friend Steve Zeff at Rice University raised a question Piro's use during the trial. But the trial was a farce anyway. Did anybody expect Saddam to be found innocent?

Guess what induced Saddam to end his hunger strike during the trial? Piro convinced Saddam that he (Piro) was in big trouble with Bush if Saddam continued the hunger strike. Saddam viewed his friendship with Piro as very solid. Without Piro during the trial Saddam may well have raised much more trouble in and out of court.

For a few days, you may be able to watch the CBS module from http://www.cbsnews.com/stories/2008/01/24/60minutes/main3749494.shtml
The transcript will probably be available for a longer period of time. My hat is off to a very articulate, intelligent, and likeable Agent George Piro.

"A Painful History:  Why have modern democracies been such important innovators of torture?"
by Darious Rejali, Chronicle of Higher Education's Chronicle Review, Volume 54, Issue 20, Page B7, January 25, 2008 ---
http://chronicle.com/free/v54/i20/20b00701.htm?utm_source=cr&utm_medium=en 

Americans were shocked at the photographs of tortured Iraqi prisoners incarcerated at Abu Ghraib. They were horrified by the assault on Abner Louima, the Haitian immigrant molested with the broken end of a broomstick by New York City police officers in August 1997. A decade earlier, they were horrified by revelations that New York police officers had used stun guns to coerce confessions from young Hispanic and African-American suspects in 1985 and 1986.

Our outrage is predictable because we reject the idea that democracies engage in torture. That's something authoritarian states do — in the words of a World War II poster, "the method of the enemy." But torture has been documented in many modern democracies, not just our own.

So why is torture still occurring in democracies? Just bad people in power? Sadists in the police? Human nature? Think again: Whenever we ask ourselves why something is still happening, it's a sign that something's wrong with the way we understand our past.

It is tempting to think of democracies as inherently less likely to torture than authoritarian states are. After all, the people elect democratic governments, and the people don't want to be tortured themselves. Even if we view democracy cynically, as a game in which elites take turns running things, we believe that it has a quiet gentleman's agreement — we don't torture you when we are in power, you don't torture us, and we'll keep it all tidy. However you cut it, we think that democracies are bargains in leniency, and that until recently they had little to do with torture.

But that view is incorrect as a matter of historical record. Indeed, democracies often set the pace in torture innovation. Legalized torture was a standard part of Greek and Roman republics, our ancient models of democracy. Roman judges used various tortures, most famously the short whips, ferula and scutica, to coerce confessions and get information. Torture was also a standard part of Italian republics like Venice and Florence, our other historical models of democracy. Those city-states adopted some of the same techniques as the inquisitors of the Roman Catholic Church. They often used the strappado, a technique in which guards tied a victim's hands behind his back, hoisted him from the ground by means of a hook and pulley, and repeatedly dropped him to the floor. The political theorist Niccolò Machiavelli was subjected to that process thrice. Before World War II, the British, the Americans, and the French all practiced torture: the French in Vietnam, the British in their mandate of Palestine, the Americans in the Philippines, not to mention what our police were doing in cities large and small. Police in democratic states used electrotorture, water torture, painful stress positions, drugs, and beatings. They did so sometimes on their own, sometimes in collusion with local citizens, and sometimes with the quiet approval, if not explicit authorization, of their governments. All this before the Central Intelligence Agency ever existed.

Our memory, however, usually starts with World War II. Torture was something done by the Nazis and then the Stalinists. The good news is that we made sincere and often effective efforts to prevent torture at home and to encourage human rights abroad — the Universal Declaration of Human Rights was adopted by the United Nations in 1948. The bad news is that we came to believe that no one on our side was ever a torturer. Never had been. Being a winner was all about being morally pure.

By torture I mean the systematic infliction of physical torment on detained, helpless individuals by state officials for police purposes: that is, for confession, information, or intimidation. No doubt one could slice torture in other ways, but whatever you want to call these practices, they have a long history in the world's democracies.

Let me be clear: The democratic record of torture is not as bad as that of authoritarian states. Nevertheless, from a scholar's perspective, the relation of torture to democracy requires an explanation. The question is not, Is torture compatible with democracy? Obviously it has been for some time. The questions are: Under what circumstances is torture compatible with democracy? Why were democracies such powerful innovators of torture?

This isn't just an academic exercise. Torture represents a powerful danger to democracies: It creates conditions in which one human being gains absolute power over another, and democrats know that no society can tolerate giving anyone that power, legally or tacitly, without setting loose corruption. Torture destroys the lives of victims and torturers alike, and it sets into motion powerful corrupting forces that destroy the judicial, intelligence, and military institutions that use it. Entire organizations can operate as a state within a state, unaccountable to democratic oversight. When that happens, the slide to authoritarianism is almost inevitable.

But a people that can speak intelligently about cruelty can take steps to protect itself against tyranny. The first step is to recognize that torture has a demand side and a supply side. Consider the demand side first. What circumstances prompt the demand for torture in democracies? National emergencies are probably your first thought. It is easy to imagine that, in war or in the face of terrorism, an imminent threat might lead some people to endorse torture and many others to turn a blind eye. Numerous famous cases fit that pattern. The French turned to torture in a bitter war with Algerian nationalists in the 1950s; the British as they fought to retain control of Northern Ireland in the 1970s. And the Israelis turned to torture in their conflict with Palestinian organizations in the 1970s.

But there are many cases of persistent torture in democracies that don't fit the national-security model, because they occur in the absence of an objective or perceived national threat. Sometimes torture is a local arrangement, usually between the police and businessmen or property holders. The latter two want safer streets, so they don't look too closely at what the police do. Between 1973 and 1991, for example, the Chicago police used torture to extract confessions in high-publicity cases, like when they were hunting for the killer of a policeman. Police techniques included electrotorture, asphyxiation, suspension, and beating. Indeed, in 2006 two special prosecutors, who had spent millions on a report into the activities of the Chicago police, identified the torture of African-Americans, some of whom had confessed and been sentenced to be executed. Most alleged incidents implicated Commander Jon Burge, a decorated veteran of the Vietnam War, and the detectives he supervised.

Another factor that triggers torture is a permissive judicial system. In the 1980s, for example, investigators for the Japanese Federation Bar Associations uncovered numerous cases of torture in Japan, in which police coerced confessions by beating suspects, punching them in the stomach, banging their heads against tables, and slapping them in the face. Many of the Japanese suspects had been accused of ordinary crimes and not held in emergency conditions. But wherever police have the power to detain suspects for long periods without justifying incarceration before a judge, torture will soon follow. And it is especially likely in a judicial system in which judges and juries value confessions. (In the Japanese case, human-rights investigators found that 86 percent of all convictions were based on confessions.)

Decommissioned soldiers can carry torture techniques to civilian jobs as policemen, just as police practices can find their way into military interrogation. That kind of transfer happened twice in American history in the last century. After the Philippine insurgency that followed the Spanish-American War, in the early 20th century, torture techniques used in the islands appeared in police stations throughout the United States, especially in the South, as well as in military prisons for conscientious objectors during World War I. Techniques that first appeared in the hands of soldiers in Vietnam later appeared in the hands of Chicago police. The world is a messy place, and the demands for torture can overlap.

Thus there is nothing special about American history. Torture occurs in old democracies and new, in New York in the 1920s and Johannesburg and São Paulo in the 1990s. The techniques of the current "war on terror" may yet appear in a neighborhood near you in the next 20 years. (As near as I can tell, such transference casts a 20-year shadow.)

While the factors I have described are not always sufficient to lead to torture in democracies, they also are not factors that democracies can do without — so democracies are always potentially vulnerable to torture. It would be difficult to imagine modern democracies without juries of the people. Nor could modern democracies function without bureaucracies to run elections and put laws into effect, and defend them against external threats. But relying on the judgment of ordinary citizens for justice has its dangers. Psychologists tell us that juries believe confessions, even when they know the confessions have been coerced. And bureaucracies are closed organizations of experts: When experts decide that legislatures don't have sufficient will or expertise to do the right thing during a political emergency, they may turn to torture.

Similarly, for various reasons, modern democracies give more weight to property holders, and not just because such states have free-market economies. A traditional argument heard in democracies is that homeowners care more about their neighborhood than renters and homeless people do. If the police use torture to protect them, the good citizens often don't want to hear about it. Indeed, in two trials in the 1980s, the citizens of Chicago failed to convict police officers accused of using torture.

All that tells us why the state, the judge, or the citizen may demand torture, but it doesn't explain what kind of techniques democracies use — call it the supply side of torture. I want to connect that to the second question I asked early in this essay: Why have modern democracies been such important innovators of torture?

We often think that the technique a torturer reaches for has something to do with his or her abnormal psychology. But most torturers are not sadomasochists — organizations try to weed out abnormal individuals who are likely to be disciplinary problems. What is crucial to understand is that most torturers have styles, and they pass those on to the next generation, just like tailors and massage therapists do. Torture is a craft, and, like all craftsmen who work with bodies, torturers are creatures of habit. They combine tortures in predictable ways, and every combination, every style, has a history.

Twelve years ago, I started the difficult project of mapping how torture technology spread around the globe over the course of the last 200 years. I mapped each technique as it changed over the decades, noting who used it, when, how it spread, and its effects. To be sure, it was unpleasant to map how leg clamps and other pressing devices used to squeeze muscles until bones broke appeared in Gestapo interrogations in the early 1940s, then spread in a broad arc from northern France, through Belgium, Holland, and northern Germany to Denmark and Norway, but didn't appear elsewhere in Nazi-occupied Europe. Tracking that kind of trajectory is slow work, but the truth is that social scientists know more about how hybrid corn spreads in Iowa than about how torture techniques spread.

Tracking torture over 200 years yields a surprising conclusion: With some exceptions, very few modern techniques originated with the Nazis, the Stalinists, or the Inquisition. The pattern is weird and unexpected. What has driven torture technology turns out to be something that no one usually considers having anything to do with torture — namely, international monitoring and democracy.

Mapping torture techniques, one can immediately distinguish two kinds of intensely painful physical tortures: those that leave marks and those that do not. All the evidence suggests that the more-scarring techniques started to disappear over the course of the 20th century, as human-rights monitoring increased. Leg clamps, for example, are virtually unknown today.

On the other hand, "clean techniques" are spreading. Of those, the main styles are what I call French Modern and Anglo-Saxon Modern. French Modern is the classic combination of electricity and water; used properly, it leaves few marks. It appeared in French colonies in 1931 and spread across the world. (The Nazis picked it up from the Vichy police.)

Anglo-Saxon Modern is older, a combination of sleep deprivation, exhaustion exercises, and forced standing and other positional tortures, sometimes called "stress and duress" techniques. It has varied origins — some techniques came out of old (illegal) British and French military punishments, others from American police and prison practices, and yet others from the global slave trade. Most of the techniques used by American forces today, either at Abu Ghraib or elsewhere in Afghanistan or Iraq are part of this tradition.

These are painful forms of torture. Sleep deprivation isn't simply depriving Taliban of their naps. It reduces people's ability to tolerate musculoskeletal pain. It causes deep aches first in the legs and then in the upper body. Animal tests suggest that it makes people more sensitive to pain caused by heat, electricity, and punches. That makes it ideal as a supplement to other painful techniques. Clean torture is not simply a psychological tool, just because it does not leave marks. The history of modern torture tells us one more important point: Whenever we watch, torturers become sneaky. When the news media, the public, or politicians monitor what police are doing during interrogations, the interrogators literally pull their punches.

That makes clean techniques valuable: Allegations of torture are simply less credible when there is nothing to show. In the absence of visible wounds or photographs of actual torture, who is one to believe? Clean torture breaks down the ability to communicate between the victim and the wider community. Stealth tortures are unlike other tortures because they are calculated to subvert that relationship. And frankly, people judge more by what they see than by what they only hear about. Would Americans have been so outraged by Abu Ghraib without the pictures? In fact, the army released information to the news media and public about the abuses before the famous pictures became available, but the public barely took notice.

That is why clean coercive techniques typically show up in democratic states, where inquisitive reporters, active church groups, and human-rights organizations tend to exist in large numbers. And that is also why, as global human-rights monitoring developed in the 1960s, authoritarian states learned to use cleaner techniques.

Electrotorture, for example, was relatively unknown for much of the 20th century, and when it appeared, it was used first by democracies, especially in the United States between 1900 and 1930 and by France in Vietnam in the 1930s. It did not start spreading country to country until the 60s. The contagion effect was staggering after that, with the number of countries using electrotorture doubling almost every decade. The surge began in Latin America and soon spread to the Middle East and Asia, as prisoner reports indicate. In the 1980s, electrotorture reached Africa, and in the 1990s, Southern and, especially, Eastern Europe.

As the shift to clean styles reveals, torturers do pay attention to human-rights monitoring. If they did not, the shift to clean styles would be inexplicable. As would a few other things. Why, for example, do torturers often single out and kill doctors today? Maybe hunting doctors makes better sport than hunting lawyers, but it is more likely that those engaging in torture care about medical monitoring. Since the 1970s, doctors have been on the front line of deciphering how clean techniques work. And so doctors are a threat.

Continued in article

Jensen Comment
It's fate that I should read the above article the morning after re-watching the movie Guarding Tess starring Shirley McLaine as the widow (Tess Carlisle) of a past U.S. President and Nicholas Cage as the Secret Service Agent (Doug Chesnic) assigned to protecting her. This is a wonderful movie mixed with comedy and terror. The widow is eventually kidnapped and buried underground on an abandoned farm. She will surely die if one of the captured kidnappers does not talk. He's lawyered up and refuses to reveal her whereabouts. Tess will surely die within a day. Agent Chenic in desperation tells that captured kidnapper (in a hospital bed) that he's going to shoot off one toe at a time until the kidnapper talks. The kidnapper scoffs at the idea and says that the Federal agents do not torture in such a manner. So Agent Chesnic shoots off the first toe. The kidnapper in a panic tells Agent Cage where to find the buried widow and all ends happily thereafter.

My point from Guarding Tess is that torture in democracies sometimes arises from a sense of urgency where there are only a few hours to save a child, a soldier, a company of soldiers, a battalion, a city, a nation, or the entire world. This urgency is compounded by fear of weapons of mass destruction such as biological poison, nerve gas, or nuclear radiation. In such instances rational people must weight the moral benefits against the moral costs in times of dire urgency. In my viewpoint the acceptability of torture depends upon the cost scale --- most of us who despise torture would condone torture if it's almost certain that torture is the only means of saving the entire world?

But at the same time there's human temperament that may interact in a negative way. At the critical moment in the movie Guarding Tess viewers sense that the urgency of the situation is compounded by Agent Chesnic's growing frustration and anger. It may well be that he would've shot off a toe or two even if he knew the buried kidnapping victim was already dead. This is the kind of torture that underlies Abu Ghraib and other instances of anger and vengeance. This is the kind of torture that arises when murders, sex offenders, and/or torturers show absolutely no remorse and even taunt the courts and the prison guards. This is the torture that the democratic state is morally bound to prevent whenever possible because such torture serves no higher purpose.

But how does the abhorred idea of torture as an act of vengeance differ from virtually every policy in nuclear-armed nations to retaliate if their nations are destroyed by an act of holocaust? Our nuclear submarine commanders are given some discretion if the U.S. is bombed to oblivion by the Soviets, but the general idea is that cheering throngs on Moscow streets are doomed as well. The justification of such a policy ex ante is that this vengeance policy is a deterrent preventing a nuclear power from initiating a first strike. The problem with this policy is that the first strike might be initiated by a madman (a raving mad Hitler or Saddam or Kim Jong Il) who is acting alone relative to the will of his people. The people on the streets of Moscow may not really be cheering. Instead they might be rising up in their own anger at the madman who pushed the red button entrusted to him.

Perhaps this is why nuclear submarine commanders are given an ounce of discretion under a retaliation policy.

More on torture and world efforts to prevent torture --- http://en.wikipedia.org/wiki/Torture

Tidbits on January 28, 2008
Bob Jensen

For earlier editions of Tidbits go to http://www.trinity.edu/rjensen/TidbitsDirectory.htm
For earlier editions of New Bookmarks go to http://www.trinity.edu/rjensen/bookurl.htm 

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For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/.

Bob Jensen's past presentations and lectures --- http://www.trinity.edu/rjensen/resume.htm#Presentations   

Bob Jensen's Threads --- http://www.trinity.edu/rjensen/threads.htm

Bob Jensen's Home Page is at http://www.trinity.edu/rjensen/

CPA Examination --- http://en.wikipedia.org/wiki/Cpa_examination

On May 14, 2006 I retired from Trinity University after a long and wonderful career as an accounting professor in four universities. I was generously granted "Emeritus" status by the Trustees of Trinity University. My wife and I now live in a cottage in the White Mountains of New Hampshire --- http://www.trinity.edu/rjensen/NHcottage/NHcottage.htm

Google Maps Street View --- http://maps.google.com/help/maps/streetview/

Online Video, Slide Shows, and Audio
In the past I've provided links to various types of music and video available free on the Web. 
I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/music.htm

Frontline: On Our Watch (Darfur Video) --- http://www.pbs.org/wgbh/pages/frontline/darfur/

Stanford Humanities Lab (includes video) http://shl.stanford.edu/

Jane Jacobs and the Future of New York (video in the multimedia section)  --- http://futureofny.org/home

Immigration Gumballs --- http://www.youtube.com/watch?v=n7WJeqxuOfQ

Wall Street Journal Video
Jon Friedman says Slate's Ron Rosenbaum is the classiest Web writer today. He says it would be nice if all Web writers cared about their readers as much as he does ---
http://online.wsj.com/public/page/8_0004.html?bcpid=86195573&bclid=212338097&bctid=1388808335

Fifty Years of History in Three Minutes --- http://yeli.us/Flash/Fire.html

Many of the workers on California's Mexican border fence were undocumented workers ---
http://online.wsj.com/public/page/8_0004.html?bcpid=86195573&bclid=212338097&bctid=1379238935

Bobby Fisher died in Iceland on January 17, 2008 --- http://en.wikipedia.org/wiki/Bobby_Fischer
Also see http://www.npr.org/templates/story/story.php?storyId=18212968
In spite of his Jewish heritage, Fischer was openly anti-Semitic and paranoid. He viewed himself as a victim of an international Jewish conspiracy.

• Death Announcement (Gary Kasparov) --- http://www.youtube.com/watch?v=F-vTSbWmlPs
• Bobby Fisher Tribute http://www.youtube.com/watch?v=f6ctImhqpOg
• Bobby Fischer Tribute --- http://www.youtube.com/watch?v=Ht-OqiuWVMk
• Childhood --- http://www.youtube.com/watch?v=cry_skzgMps
• Clip from Documentary --- http://www.youtube.com/watch?v=f6ctImhqpOg
• Self-Hating Jewish Chessmaster --- http://www.youtube.com/watch?v=DbtWuwQX8Is

The latest prodigy of the chess world is a fourteen-year-old Brooklyn boy named Robert Fischer, who a few weeks ago, at a tournament held in Cleveland, upset some two hundred of his elders and putative betters, including a number of the country’s top-ranking players, to win the United States Open Chess Championship. There have been chess prodigies in this country who flashed to prominence when considerably younger than Fischer, but none has ever captured a major title at such an early age. Honors are beginning to pile up for Robert. The United States Chess Federation has elevated him to the rank of master (some of the wits among his teen-age friends now address him as Master Master Fischer); he has been invited to be one of the ten distinguished players, from all over the world, who will participate in the highly regarded invitation tournament at Hastings, in England, this Christmas; and shortly after that he is scheduled, if the Chess Federation’s present plans work out, to visit the Soviet Union and show off his prowess before the world’s most discriminating mass audience, the Russians having been notorious chess addicts for centuries.
Bernard Taper, "Prodigy," The New Yorker, September 7, 1957 ---
http://www.newyorker.com/archive/1957/09/07/1957_09_07_025_TNY_CARDS_000257152

Burns and Allen Humor and Nostalgia
George Burns --- http://en.wikipedia.org/wiki/George_Burns
Gracie Allen --- http://en.wikipedia.org/wiki/Gracie_Allen

• Gracie has tea with the tax accountant --- http://www.youtube.com/watch?v=5uwPFvWwnQ8
• Let's Dance 32 --- http://www.youtube.com/watch?v=8hJ85oO9qgI
• How George Met Gracie --- http://www.youtube.com/watch?v=_nAesuInmU0
• Gracie's undeveloped talent (better to be a wife than amount to anything) --- http://www.youtube.com/watch?v=NW6GWEi3g3U
• Say Goodnight Gracie --- http://www.youtube.com/watch?v=bEHdvUHxYCU
• Happy Together (Slide Show) --- http://www.youtube.com/watch?v=9vHNfqt7EvU
• On "What's My Line" --- http://www.youtube.com/watch?v=uasS4Crr6Ic
• Gracie Learns French --- http://www.youtube.com/watch?v=PJqfD-tw_pc
• Creative Quotations --- http://www.youtube.com/watch?v=mwvYYlhJ29o
• 100 Years of Laughter Part 1 --- http://www.youtube.com/watch?v=smRTgBkgK94
• 100 Years of Laughter Part 2 --- http://www.youtube.com/watch?v=0Fb3Itn6n1M
• 100 Years of Laughter Part 3 --- http://www.youtube.com/watch?v=EKQR8Uw7Dpg
• 100 Years of Laughter Part 4 --- http://www.youtube.com/watch?v=kkBxN8vUoWI
• 100 Years of Laughter Part 5 --- http://www.youtube.com/watch?v=FAqcaGwi708
• I Wish I was Eighteen Again --- http://www.youtube.com/watch?v=F3c-WBn5cCg
• Old Bones --- http://www.youtube.com/watch?v=mh6saG57kPE
• Good Old Days Bad Old Days --- http://www.youtube.com/watch?v=__1EtK0d8rg 

Carol Burnett Show- Bubba's Teacher (With Maggie Smith)
Carol Burnett --- http://en.wikipedia.org/wiki/Carol_Burnett

• Part 1 --- http://www.youtube.com/watch?v=IK1JlZYYfek
• Part 2 --- http://www.youtube.com/watch?v=vbL0AmDd2as

Liza sings "I'm glad I'm not young anymore" on the David Letterman Show ---
http://www.youtube.com/watch?v=94XUFh7e-OM

Accounting and finance professors should use this video every semester in class!
The best explanation ever of the sub-prime (meaning lending to borrowers with much less than prime credit ratings) mortgage greed and fraud.
The best explanation ever about securitized financial instruments and worldwide banding frauds using such instruments.
The best explanation ever about how greedy employees will cheat on their employers and their customers.
"House Of Cards: The Mortgage Mess Steve Kroft Reports How The Mortgage Meltdown Is Shaking Markets Worldwide," Sixty Minutes Television on CBS, January 27, 2008 --- http://www.cbsnews.com/stories/2008/01/25/60minutes/main3752515.shtml
For a few days the video may be available free.
The transcript will probably be available for a longer period of time.
Bob Jensen's "Rotten to the Core" threads are at http://www.trinity.edu/rjensen/FraudRotten.htm

Free music downloads --- http://www.trinity.edu/rjensen/music.htm

Classical pianist Jon Nakamatsu and clarinetist Jon Manasse perform in-studio --- http://www.npr.org/templates/story/story.php?storyId=17994676

Back to the Sixties (video) --- http://objflicks.com/TakeMeBackToTheSixties.htm

Her musical imagination is boundless,' said Juilliard dean Stephen Clapp, who described her as 'a musical artist with qualities of maturity far beyond her age.'
Sirena Huang: Dazzling set by 11-year-old violinist --- http://www.ted.com/index.php/talks/view/id/45

Jazz Old Time Online --- http://www.jazz-on-line.com/index.htm
There's a vast collection here. Some choices are free; Others are not free.

Maria Elena Holly insists Peggy Sue Gerron's "Whatever Happened to Peggy Sue?" is unauthorised and will harm Holly's name, her reputation and that of her company. "It's very interesting that this woman makes up all these stories," Mrs Holly said from her home in Dallas, US. He never, never considered Peggy Sue a friend."
"Buddy Holly's Widow May Sue Peggy Sue," Sky News, January 12, 2008 --- http://news.sky.com/skynews/article/0%2C%2C30200-1300355%2C00.html
Buddy Holly and The Crickets --- http://en.wikipedia.org/wiki/Buddy_Holly
(Remember "Happiness is Lubbock in my rear view mirror.")
In 1955 Bob Jensen wore horn-rimmed glasses that had no prescription (clear glass).
Buddy Holly's plane crashed in Mason City  about 50 miles from my hometown in Algona, Iowa.

• Peggy Sue --- http://www.youtube.com/watch?v=XccBx9rp4eo

• Buddy Holly Live --- http://www.youtube.com/watch?v=3b3MINe5AZg

• That's be the Day --- http://www.youtube.com/watch?v=N9G-PL2BpOk

• Oh Boy! --- http://www.youtube.com/watch?v=4PYXZEkAC4E

• That's Be the Day --- http://www.youtube.com/watch?v=pribHw93OPc

• Mike Berry Tribute --- http://www.youtube.com/watch?v=qDdn8000pAE

• Maybe Baby --- http://www.youtube.com/watch?v=DbcLhalxq_k

• The Day the Music Died --- http://www.youtube.com/watch?v=xkDAykXwO_Q

• The Crash Site --- http://www.youtube.com/watch?v=qKMDbQtRbXQ

Bob Jensen listens to music free online (and no commercials) --- http://www.slacker.com/ 

Photographs and Art

Online Books, Poems, References, and Other Literature
In the past I've provided links to various types electronic literature available free on the Web. 
I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/ElectronicLiterature.htm

Free Library (in topic categories) --- http://www.thefreelibrary.com/

Powell's Books --- http://www.powells.com/picks

Famous Quotes --- http://www.citate-celebre.com/famous-quotes/best-quotes-by-famous-people/

The Bulwer-Lytton Fiction Contest --- http://www.bulwer-lytton.com/

Digital Library Books Page --- http://digital.library.upenn.edu/books/

East of the Web Short Stories --- http://www.eastoftheweb.com/short-stories/

East of the Web Interactive --- http://www.eastoftheweb.com/hyperfiction/index.html

George Burn's Creative Quotations (Video) --- http://www.youtube.com/watch?v=mwvYYlhJ29o

Links by Logos --- http://www.allmyfaves.com/

Global Incident Map --- http://www.globalincidentmap.com/home.php

The map itself has a running default setting for the "last eight days." This may be an issue since even the many terror-prone parts of the world do not have reported incidents every week. Also in Africa many crimes like rape go unreported. I think the database depends heavily on police reports. Police reporting and record keeping in many corrupt parts of the world, especially in Africa, are highly limited and politically corrupted.

It is possible underneath the map to change the reporting period. The Sudan and Nigeria are not ignored entirely in longer time frames, but once again I think the police reporting problem is an issue in these nations. Chad in particular appears to be problematic.

I did find the map useful for certain levels of detail in nations with better police reporting. For example, I had no idea that on January 20, 2008 animal rights activists in Wellington, New Zealand are suspected of lethally poisoning the milk of two medical research workers.

Bob Jensen

One of Liberia's most notorious rebel commanders, known as Gen. Butt Naked, has returned to the nation his troops terrorized to confess, saying he is responsible for 20,000 deaths. Joshua Milton Blahyi, who now lives in Ghana, returned this week to face his homeland's truth and reconciliation commission, this time wearing a suit and tie. His nom de guerre is derived from his platoon's practice of charging naked into battle, a technique meant to terrify the enemy. Other warlords, though, have refused to ask forgiveness, dismissing a commission many in Liberia see as toothless.
"Ex-warlord Confesses to 20,000 Deaths," CNN, January 21, 2008 --- http://www.cnn.com/2008/WORLD/africa/01/21/liberia.general.ap/index.html

"It's mostly a choice between Clinton and the other one --- Omega. I intend to vote for Clinton."
Nevada voter in Los Vegas in an interview with an ABC News crew, January 18, 2008. His statement was aired on ABC News that night. It appears that he seriously could not think of Obama's name. He planned to vote for Clinton.

A senior British diplomat has admitted that Polish immigration to Britain has spun out of control. Paul Fox, who is consul general at the British Embassy in Warsaw, said that the influx of Poles in the last three years was "one of the largest immigrations Britain has ever seen, in such a short time". . . More than two million Poles have left Poland since it joined the European Union in 2004, with up to one million heading to Britain and Ireland.
Harry de Quetteville, London Telegraph, January 19, 2008 --- http://www.telegraph.co.uk/news/main.jhtml

I'm sorry," Reyes said. "There is much that I regret. If I could turn back the clock, I would."
As pointed out in the Opinion Journal, January 18, 2008 Reyes' choice of words is truly ironic since he was convicted of options "backdating." When he committed the fraud he truly did turn the clock back. Now he would like to turn it back again since he got caught.

The antiquated Securities and Exchange Commission's computer system prevents investigators from safeguarding U.S. market integrity. "It's like working with one hand tied behind their backs," Republican Sen. Chuck Grassley commented about the Dec. 17 release of the Government Accountability Office (GAO) report he'd initiated — "SEC: Opportunities Exist to Improve Oversight of Self-Regulatory Organizations." Why can't the government with the world's most advanced computer technology and capabilities equip its agencies with state-of-the-art systems allowing them to better monitor markets and transactions, including illegal activities? In response to the GAO criticism, SEC Chairman Christopher Cox acknowledged, "additional information-technology changes such as these may help the [SEC] enforcement staff to effectively analyze trends, manage current caseloads and focus areas of investigation." But all federal officials — not just at the SEC — should worry about much more than insider trading. Take terror financing. So far, no U.S. official at any level, including presidential candidates from both parties, has publicly addressed how radical Muslim groups and Islamic terror organizations raise major sums to facilitate the murder of Americans in Afghanistan, Iraq and elsewhere, among other things.
Rachel Ehrenfeld & Alyssa A. Lappen, "Terror's Financiers," The Washington Times via The New Media Journal, January 19, 2008 --- http://www.newmediajournal.us/staff/ehrenfeld/2008/01192008.htm

Time Magazine's Person of the Year --- http://www.time.com/time/specials/2007/personoftheyear/
Time Magazine's account does not jive with the facts!
Many of Putin's defenders . . . contend that Russia's democratic retreat has enhanced the state's ability to provide for its citizens. The myth of Putinism is that Russians are safer, more secure, and generally living better than in the 1990s -- and that Putin himself deserves the credit. . . . [But] in terms of public safety, health, corruption, and the security of property rights, Russians are actually worse off today than they were a decade ago. The murder rate has . . . increased under Putin, according to data from Russia's Federal State Statistics Service. In the "anarchic" years of 1995-99, the average annual number of murders was 30,200; in the "orderly" years of 2000-2004, the number was 32,200. The death rate from fires is around 40 a day in Russia, roughly 10 times the average rate in western Europe. Nor has public health improved in the last eight years. Despite all the money in the Kremlin's coffers, health spending averaged 6% of GDP from 2000 to 2005, compared with 6.4% from 1996 to 1999. Russia's population has been shrinking since 1990, thanks to decreasing fertility and increasing mortality rates, but the decline has worsened since 1998. Noncommunicable diseases have become the leading cause of death (cardiovascular disease accounts for 52% of deaths, three times the figure for the United States), and alcoholism now accounts for 18% of deaths for men between the ages of 25 and 54. At the end of the 1990s, annual alcohol consumption per adult was 10.7 liters (compared with 8.6 liters in the United States and 9.7 in the United Kingdom); in 2004, this figure had increased to 14.5 liters. . . . Life expectancy in Russia rose between 1995 and 1998. Since 1999, however, it has declined to 59 years for Russian men and 72 for Russian women. At the same time that Russian society has become less secure and less healthy under Putin, Russia's international rankings for economic competitiveness, business friendliness, and transparency and corruption all have fallen. . . .
Michael McFaul and Kathryn Stoner-Weiss in the January/February 2008 issue of Foreign Affairs, The Wall Street Journal, January 18, 2008, Page A13 --- http://online.wsj.com/article/SB120062520244399763.html

The makers of antidepressants like Prozac and Paxil never published the results of about a third of the drug trials that they conducted to win government approval, misleading doctors and consumers about the drugs’ true effectiveness, a new analysis has found. In published trials, about 60 percent of people taking the drugs report significant relief from depression, compared with roughly 40 percent of those on placebo pills. But when the less positive, unpublished trials are included, the advantage shrinks: the drugs outperform placebos, but by a modest margin, concludes the new report, which appears Thursday in The New England Journal of Medicine. Previous research had found a similar bias toward reporting positive results for a variety of medications; and many researchers have questioned the reported effectiveness of antidepressants. But the new analysis, reviewing data from 74 trials involving 12 drugs, is the most thorough to date. And it documents a large difference: while 94 percent of the positive studies found their way into print, just 14 percent of those with disappointing or uncertain results did.
Benedict Carey, "Antidepressant Studies Unpublished ," The New York Times, January 20, 2008 --- http://www.nytimes.com/2008/01/17/health/17depress.html 

Lawyer and women's rights activist Seyran Ates told me it is very difficult to reach women isolated behind their walls of silence. Contact is usually made only with the few who are brave enough to scale those walls and seek refuge in a woman's shelter. For Muslims in Europe, the main issues — discrimination by host societies, difficulty in finding jobs, and family conflicts — have remained more or less the same since I first started looking at immigrant communities in Europe. But with regard to Muslim women, I've seen changes — albeit in different directions and at different paces. It is still hard to say where these changes will lead. But at a time when Europeans are beginning to question the notion of multiculturalism that often leads to separate, parallel societies, authorities are now looking to Muslim women in the belief that their empowerment can facilitate their communities' integration into mainstream societies. And Muslim women themselves, better-educated and more experienced than their mothers and grandmothers, are beginning to grapple with the obstacles and abuse facing women in both their communities and in the broader society.
Sylvia Poggioli, "Issues for Muslim Women in Europe Evolve," NPR, January http://www.npr.org/templates/story/story.php?storyId=18226044

Have you been in an airport recently and maybe seen a gaggle of America's heroes returning from Iraq? And you've probably thought, "Ah, what a marvelous sight. Remind me to straighten up the old 'Support Our Troops' fridge magnet, which seems to have slipped down below the reminder to reschedule my acupuncturist. Maybe I should go over and thank them for their service." No, no, no, under no account approach them. Instead, try to avoid making eye contact and back away slowly toward the sign for the parking garage. You're in the presence of mentally damaged violent killers who could snap at any moment. You hadn't heard that? Well, it's in the New York Times: "a series of articles" – that's right, a whole series – "about veterans of the wars in Iraq and Afghanistan who have committed killings, or been charged with them, after coming home." It's an epidemic, folks. As the Times put it: "Town by town across the country, headlines have been telling similar stories. Lakewood, Wash.: 'Family Blames Iraq After Son Kills Wife.' Pierre, S.D.: 'Soldier Charged With Murder Testifies About Postwar Stress.' Colorado Springs: 'Iraq War Vets Suspected in Two Slayings, Crime Ring.'"
Mark Steyn, "Some fictional horrors of war," Orange County Register, January 19, 2008 --- http://www.ocregister.com/opinion/war-times-iraq-1962198-one-home

There is this whole business of the new politics. Well I got a taste of the new politics today. We need a new politics where we all love each other. You’ve heard all that. There’s a radio ad up in the northern part of Nevada telling Republicans that they ought to just register as Democrats for a day so they can beat Hillary and go out and be Republicans next week and vote in the primary. Doesn’t sound like the new politics to me. Today when my daughter and I were wandering through the hotel, and all these culinary workers were mobbing us telling us they didn’t care what the union told them to do, they were gonna caucus for Hillary. There was a representative of the organization following along behind us going up to everybody who said that, saying 'if you’re not gonna vote for our guy were gonna give you a schedule tomorrow so you can’t be there.' So, is this the new politics? I haven’t seen anything like that in America in 35 years. So I will say it again – they think they're better than you.
Bill Clinton complaining of Culinary Workers Union intimidation in the Nevada caucuses, as quoted by Ben Smith, Politico, January 19, 2008 ---  http://www.politico.com/blogs/bensmith/0108/Bill_Clinton_claims_he_witnessed_voter_suppression.html  

Bill Clinton today accused the union backing Barack Obama of illegally blocking its workers from backing his wife in an orchestrated campaign of "voter suppression" in Nevada's Democratic caucuses. Mr Clinton, who spent 90 minutes at the Mirage Casino in Las Vegas today shaking voters' hands, was told by several workers that their union, which has backed Mr Obama, has told them they could not register to vote unless they supported the Illinois senator.
"Bill Clinton accuses Obama-backed union of vote rigging," London Times, January 19, 2008 --- http://www.timesonline.co.uk/tol/news/world/us_and_americas/us_elections/article3217097.ece

In American pop culture, the face of abortion is often a frightened teenager, nervously choosing to terminate an unexpected pregnancy. The numbers tell a far more complex story in which financial stress can play a pivotal role. Half of the roughly 1.2 million U.S. women who have abortions each year are 25 or older. Only about 17 percent are teens. About 60 percent have given birth to at least one child before getting an abortion. A disproportionately high number are black or Hispanic. And regardless of race, high abortion rates are linked to hard times.
David Crary, "Most women who abort are mothers Ability to care for kids a key factor," Seattlepi.com, January 18, 2008 --- http://seattlepi.nwsource.com/national/348000_abortion19.html

Barack Obama's real thinking about Israel and the Middle East continues to be an enigma. The words he chose  in an address to AIPAC create a different impression than the composition of his foreign policy advisory team.  Several advisors have evidenced a history of suspicion and worse toward Israel. One of his advisors in particular, Robert Malley, clearly warrants attention, as does the reasoning that led him to being chosen by Barack Obama . . . Simon Malley loathed Israel and anti-Israel activism became a crusade for him-as an internet search would easily show. He spent countless hours with Yasser Arafat and became a close friend of Arafat. He was, according to Daniel Pipes, a sympathizer of the Palestinian Liberation Organization --- and this was when it was at the height of its terrorism wave against the West . His efforts were so damaging to France that President Valerie d'Estaing expelled him from the country. Malley has seemingly followed in his father's footsteps: he represents the next generation of anti-Israel activism. Through his writings he has served as a willing propagandist, bending the truth (and more) to serve an agenda that is marked by anti-Israel bias; he heads a group of Middle East policy advisers for a think-tank funded (in part) by anti-Israel billionaire activist George Soros; and now is on the foreign policy staff of a leading Presidential contender. Each step up the ladder seems to be a step closer towards his goal of empowering radicals and weakening the ties between American and our ally Israel.
Ed Lasky, American Thinker, January 23, 2008 --- http://www.americanthinker.com/2008/01/barack_obamas_middle_east_expe.html

Eight years ago, in her first campaign for the Senate, Hillary Rodham Clinton was scrambling to put out fires with a troublesome New York minority: Jewish voters. Now, she's emerged as the candidate with the bulk of establishment Jewish support as the presidential campaign moves to Nevada, home to Las Vegas and the fastest-growing Jewish community in the country.
Ben Smith, "Clinton besting Obama in bid for Jewish vote:  Six years of fence-mending begins to pay off," Twin Cities, January 18, 2008 --- http://www.twincities.com/ci_8015135?source=rss&nclick_check=1

Spain arrests 14 terror suspects Spain is still haunted by the Madrid bombings - carried out by Islamists Bomb-related material has been found during raids in Barcelona which led to the arrest of 14 people suspected of links with an Islamist terror network. Spanish Interior Minister Alfredo Perez Rubalcaba said the suspects included 12 from Pakistan and two from India. Local media reports that the Spanish intelligence agency had warned France, the UK and Portugal that a terror cell was preparing an imminent attack . . . Bomb-related material has been found during raids in Barcelona which led to the arrest of 14 people suspected of links with an Islamist terror network. Spanish Interior Minister Alfredo Perez Rubalcaba said the suspects included 12 from Pakistan and two from India. Local media reports that the Spanish intelligence agency had warned France, the UK and Portugal that a terror cell was preparing an imminent attack.
"Spain arrests 14 terror suspects," BBC News, January 19, 2008 --- http://news.bbc.co.uk/2/hi/europe/7197562.stm

Pakistani police have arrested a teenager who was allegedly part of a five-man squad in the plot to kill opposition leader Benazir Bhutto last month, security officials said Saturday. The suspect, 15-year-old Aitezaz Shah, was arrested from the northwestern city of Dera Ismail Khan on Friday while planning a suicide bombing over the Muslim festival of Ashura, they said on condition of anonymity. Shah told interrogators he had been part of a back-up team of three bombers who were tasked with killing former premier Bhutto if the original December 27 attack by two men had failed, the officials added. ... He allegedly said the attackers in the team that killed Bhutto were called Bilal and Ikramullah -- the same names mentioned in an alleged telephone conversation between Mehsud and another militant the day after Bhutto's death.
Edward Morrisey, The Captain's Quarters, January 19, 2008 --- http://www.captainsquartersblog.com/mt/archives/016681.php 

Picture this: the electric plant which supplies 70% of electricity to the Palestinians in Gaza is in Ashkelon. The Palestinians in Gaza have been shooting kassam rockets at the plant ever since the "disengagement" i.e. the abandonment of Gush Katif. Now, Palestinians are crying that they don't have enough electricity. They are complaining about Israeli sanctions against them. They are going to the U.N. The truth is, Israel has not stopped supplying electricity to Gaza. Not only that, but Israeli electric company employees are risking their lives to do so.
January 20, 2008 email from naomiragen@mail-list.com

al Qaeda Hires Yale Law School Lawyers
War is a continuation of politics by other means, the German strategist Carl von Clausewitz famously observed in his 19th-century treatise, "On War." Clausewitz surely could never have imagined that politics, pursued through our own courts, would be the continuation of war. Last week, I (a former Bush administration official) was sued by José Padilla -- a 37-year-old al Qaeda operative convicted last summer of setting up a terrorist cell in Miami. Padilla wants a declaration that his detention by the U.S. government was unconstitutional, $1 in damages, and all of the fees charged by his own attorneys. The lawsuit by Padilla and his Yale Law School lawyers is an effort to open another front against U.S. anti-terrorism policies. If he succeeds, it won't be long before opponents of the war on terror use the courtroom to reverse the wartime measures needed to defeat those responsible for killing 3,000 Americans on 9/11 . . . Padilla's complaints mirror the left's campaign against the war. To them, the 9/11 attacks did not start a war, but instead were simply a catastrophe, like a crime or even a natural disaster. They would limit the U.S. response only to criminal law enforcement managed by courts, not the military. Every terrorist captured away from the Afghanistan battlefield would have the right to counsel, Miranda warnings, and a criminal trial that could force the government to reveal its vital intelligence secrets.
John Yoo, "Terrorist Tort Travesty," The Wall Street Journal, January 19, 2008; Page A13 --- http://online.wsj.com/article/SB120070333580301911.html

Biased Media:  At the last minute in 1998 NEWSWEEK magazine killed a story that was destined to shake official Washington to its foundation:
A White House intern carried on a sexual affair with the President of the United States! The DRUDGE REPORT has learned that reporter Michael Isikoff developed the story of his career, only to have it spiked by top NEWSWEEK suits hours before publication. A young woman, 23, sexually involved with the love of her life, the President of the United States, since she was a 21-year-old intern at the White House. She was a frequent visitor to a small study just off the Oval Office where she claims to have indulged the president's sexual preference. Reports of the relationship spread in White House quarters and she was moved to a job at the Pentagon, where she worked until last month.
"NEWSWEEK KILLS STORY ON WHITE HOUSE INTERN, Drudge Report, January 17, 1998 --- http://www.drudgereportarchives.com/data/2002/01/17/20020117_175502_ml.htm
Jensen Comment
I doubt that Newsweek would've killed this had it be President Bush. I've never seen a favorable article about President Bush in NBC's Newsweek Magazine. This is consistent with NBC's liberal bias. The DRUDGE REPORT has learned that tapes of intimate phone conversations exist. I doubt that you will find these tapes for the historical record in the Clinton Library.

Bernanke, who came to the job with a refreshing humility — a desire to be less an oracle like Greenspan than a plain-speaking technocrat —faces exactly this sort of crisis now. Ever since last summer, a meltdown in financial markets has led to daunting losses in the banking industry and throughout Wall Street. Despite having written extensively on how to deal with such episodes, Bernanke has thus far been unable to reinstill a sense of confidence. His faith in modern forecasting models notwithstanding, he failed to foresee that the sudden rise in homeowner defaults, which triggered the crisis, would have such far-reaching effects. And the monetary medicine that he has prescribed, including some of the very tools that he lovingly detailed in his research, have yet to produce a turnaround.
Roger Lowenstein, "The Education of Ben Bernanke," The New York Times Magazine, January 20, 2008 --- http://www.nytimes.com/2008/01/20/magazine/20Ben-Bernanke-t.html

A real recession may have started, although in the fourth quarter of 2007, aggregate hours worked increased, as they did in the third quarter, and oil prices have declined. Economic fears can, however, become self-fulfilling by paralyzing decisions to consume and invest. Often, the wise response to an economic correction is "Don't just do something, stand there," because the market is doing the right things. But corrections provoke political competition to provide relief. And when government "fine-tunes" the economy with "demand management," it responds to economic conditions as they were, not as they have become. The ameliorative measures Congress will legislate, perhaps by March, will be responsive to economic conditions indicated by statistics collected many months before the measures will begin to affect economic behavior, if they do affect it.
George F. Will, "Stimulating Talk, Redux," Newsweek Magazine, January 28, 2008 --- http://www.newsweek.com/id/96369

Forget the glitzy restaurants of New York and London: only in Zimbabwe would a hamburger actually cost millions of dollars. The central bank of the southern African country has a issued a 10million Zimbabwe dollar note. The move increases the denomination of the nation's highest bank note more than tenfold. Even so, a hamburger in an ordinary cafe in Zimbabwe costs 15 million Zimbabwe dollars.
"Zimbabwe bank issues $10million bill - but it won't even buy you a hamburger in Harare," London Daily Mail, January 19, 2008 --- http://www.dailymail.co.uk/pages/live/articles/news/worldnews.html?in_article_id=508840
Jensen Comment
You chuckle, but the day is coming when the U.S. will print a $10 million U.S. dollar bill that won't buy a hamburger, because U.S. politicians from both parties no longer can say no to doomsday entitlements --- http://www.trinity.edu/rjensen/Entitlements.htm 

Accounting and finance professors should use this video every semester in class!
The best explanation ever of the sub-prime (meaning lending to borrowers with much less than prime credit ratings) mortgage greed and fraud.
The best explanation ever about securitized financial instruments and worldwide banding frauds using such instruments.
The best explanation ever about how greedy employees will cheat on their employers and their customers.

"House Of Cards: The Mortgage Mess Steve Kroft Reports How The Mortgage Meltdown Is Shaking Markets Worldwide," Sixty Minutes Television on CBS, January 27, 2008 --- http://www.cbsnews.com/stories/2008/01/25/60minutes/main3752515.shtml
For a few days the video may be available free.
The transcript will probably be available for a longer period of time.

Bob Jensen's "Rotten to the Core" threads are at http://www.trinity.edu/rjensen/FraudRotten.htm

January 29, 2008 reply from Jim Fuehrmeyer [jfuehrme@nd.edu]

Bob, you don’t know me, but I’m new to academia – I took early retirement from Deloitte & Touche in Chicago to teach accounting & auditing. I replied to the email, but it was rejected so I’m going to send you my two cents. It’s probably a bit naïve, but what the heck.

Two things:

First, when do we start asking “the question” about sub-prime lending in the first place? People who make the loans, sell the loans and invest in the loans are making money (and now losing money) off of folks who have no business being placed in a position to get easy credit to begin with. I’m sorry, but I find it disgusting. I have no sympathy for investors in these instruments and no sympathy for the lenders who originated the loans.

Second, whether the (SPE) standard is 10% or 3% or 0.01% so long as there’s a political process around that allows for the banks that have “no continuing involvement” with the loans to be in a position to amend them, we’re going to continue to live with the fiction that these financial instruments can be off balance sheet. If the QSPE purchaser of the loans doesn’t have the ability to amend them, I find it difficult to understand how one argues it truly owns them; that it has the risks and rewards of ownership. These securitized loans should be on balance sheet – and I think that would put the breaks on sub-prime lending.

Jim Fuehrmeyer

January 29, 2008 reply from Bob Jensen

Hi Jim,

Thank you for the reply. May I share it with the AECM and in my SPE module?

Actually the Sixty Minutes show is very, very good with respect to your first question. The two main problems were as follows:

1. Too many employees all along the way wanted to make a quick buck even if it screwed their employers and customers.
2. Real estate valuation for lending purposes has always be ridden with fraud (remember the S&L fiasco back in the 1980s). The fraud simply heated up in the sub-prime bubble to a point where appraisers were valuing houses at 125% or more of any realistic market value. Buyers loved it because they could borrow more than value. Some borrowers took out second and third mortgages and pocketed the cash. Then when the real estate market took a nose dive, borrowers discovered that the value of their homes was way below what they owed on their property. They walked away from their homes rather than continue to pay off the debt.

What the Sixty Minutes show did not stress is the inadequate accounting internal controls all along this lending chain from a house in Stockton to a bundled securitized financial instrument sold to a European bank. Internal controls were either not put in place or ignored all along the chain. And the auditors themselves signed off on these bad internal controls just like they did in the S&L bubble.

Did the perpetrators all along the chain know the risks of these poor internal controls? Absolutely, at least up to the point where the final buyers of the financial instruments that thought mortgaged-backed securities had more value than the collateral itself. Was Merrill Lynch and the NYC banks parties to the fraud just as much as the crooks that originally brokered the fraudulent mortgages in Stockton --- Absolutely!!!!

Bob Jensen

"Creative Class, Dismissed:  Students take the arts' nobility as gospel until they meet a heretic named Jean-Jacques,"
by Laurie Fendich, Chronicle of Higher Education's Chronicle Review, Volume 54, Issue 20, Page B10, January 25, 2008 ---
http://chronicle.com/weekly/v54/i20/20b01001.htm?utm_source=cr&utm_medium=en

Recently I've been teaching, in a couple of undergraduate seminars, Jean-Jacques Rousseau's Letter to d'Alembert on the Theatre (1758), the most provocative essay on the arts ever written. It is about the unintended effects of theater — which, for Rousseau, stands in for all of the arts — on an audience. The essay is an impassioned rebuttal to the 1757 entry on Geneva, written by Jean Le Rond d'Alembert, in the huge Enlightenment project, Encyclopédie, in which d'Alembert says that Geneva would be an even finer city if only it didn't have laws banning theater. Rousseau says that, au contraire, theater would actually be harmful to the citizens of Calvinist Geneva and tries to prove that the prohibition is a good thing.

To my students, Rousseau's astonishing position collides head-on with the TV-drenched, movie-dependent, iPodified, grind-dancing world in which many of them spend a good part of their lives. The idea that their world of stories and entertainment — even in its more respectable precincts such as Masterpiece Theatre and U2 benefit concerts — could possibly be harmful to them is the furthest thing from their minds. In studying Rousseau's essay, my students directly confront their stormy love affair with mass culture. They learn the extent to which their youthful values are already in deep conflict with one another. They experience — albeit in fitful spasms — a sense of urgency about their lives, realizing with a kind of awe that their college years mark