TPM News

Our long national nightmare is finally over (probably), and we may have an anonymous bureaucrat in the Office of Management and Budget to thank for it. Last week, it was reported that he (or she) sent a memo to the Pentagon suggesting that the White House had had enough with the term Global War on Terror (GWOT) and would henceforth prefer the term Overseas Contingency Operations (OCO).

Soon enough, though, reporters got wind of it and administration officials--OMB chief Peter Orszag and Pentagon Press Secretary Geoff Morrell--began walking the claim back.

But today, none other than Secretary of State Hillary Clinton confirms it: Whether a directive's been issued or not, the administration has dropped GWOT from its lexicon.

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The Obama administration signaled Monday that it would release Aymen Saeed Batarfi, a Yemeni prisoner held at Guantanamo Bay, as part of President Obama's promise to empty the controversial detention facility within a year. Batarfi's lawyers say he was arrested while on a humanitarian mission, but Justice Department prosecutors allege that he participated in a major al Qaeda battle as more than a humanitarian worker. (Associated Press)

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Poll: Americans Don't Blame Obama For Economy A new ABC/Washington Post poll finds the public agreeing with the Obama administration that it has inherited the problems it has to deal with. Only 26% of Americans think the Obama administration deserves blame for the current economic problems, compared to 80% who blame banks and businesses, 70% who blame the Bush administration, and 72% who blame consumers. President Obama's approval rating remains high at 66%, with 60% approval on the economy specifically.

Obama Going To London For G20, Biden In Washington President Obama and Michelle Obama are headed to the United Kingdom for the G20 summit. They left Washington early this morning, and will arrive in London in the evening. Vice President Biden is in Washington today, just back from his trip to Latin America, and will be planning an upcoming event of the Middle Class Task Force, and will make phone calls to House and Senate members to discuss the budget.

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The Feds are closing in on a criminal fraud case against Joseph Cassano, reports ABC News, which tracked down the former AIG Financial Products czar wearing blue spandex and a sheepish expression outside his home in London. And before you wonder why a Brooklyn College educated swaps dealer with a name like Joe Cassano lives in London again, the answer is probably "taxes" -- and decimating taxes, it may not shock you to know, is fast emerging as the cornerstone of the AIG business model.

An ABC News investigation found that Cassano set up some dozens of separate companies, some off-shore, to handle the transactions, effectively keeping them off the books of AIG and out of sight of regulators in the U.S. and the United Kingdom.

"This is the other very important issue underneath the AIG scandal," said [tax law expert Jack] Blum. "All of these contracts were moved offshore for the express purpose of getting out from under regulation and tax evasion."
And as breathtaking as the sum of taxpayer dollars AIG has managed to put down in its post-crisis nationalized afterlife, the zombie insurer might possibly have indirectly scammed the government out of more money back in its Triple-A days. Today the Wall Street Journal explores AIG's euphemistically-named "tax structuring" business in a story about an IRS battle with Hewlett-Packard over an offshore entity -- or what the IRS terms a "sham that lacked economic substance and a business purpose" -- that AIG set up for the company to collect $132 million in tax credits. AIG's tax business, is "even bigger than the credit-default swaps business that led to the company's meltdown," a person "familiar with the business" tells the Journal. But that might be compartmentalizing things: we are beginning to suspect the credit default swap business and the tax "structuring" business were the same thing -- not just because they served the same end.

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A new Gallup poll finds Americans are closely divided on Tim Geithner's performance, with a large amount of undecideds, as well.

The numbers: Approve 42%, Disapprove 40%. Democrats approve at 61%, Republicans disapprove with 63%, and independents are nearly the same as the overall top-line numbers.

From the pollster's analysis: "It is not a good sign for Geithner, perhaps, that he receives significantly lower approval ratings than does his boss. In the same poll in which Geithner receives 42% approval, Obama receives a 64% approval rating (and a 30% disapproval rating)."

What's it like, the laborious job of "unwinding" hundreds of thousands of mind-numbingly complex derivatives contracts amassed over the years by the inimitable AIG Financial Products? Ask the Wall Street investment banks to whom they've been farming out the work -- it's so painful and time-consuming it feels like the old days, especially the "massively profitable" part. An anonymous derivatives trader tells the blog Zero Hedge:

During Jan/Feb AIG would call up and just ask for complete unwind prices from the credit desk in the relevant jurisdiction. These were not single deal unwinds as are typically more price transparent - these were whole portfolio unwinds.The size of these unwinds were enormous, the quotes I have heard were "we have never done as big or as profitable trades - ever".
Sort of undermines the notion that AIGFP employees needed retention bonuses so that the Great Unwinding might be an "orderly" and modest process conducted by cool heads and not, god forbid, subject to raids from ex-AIGers who'd left to trade against the company's book. Nah, they pretty much "threw in the towel," as Zero Hedge points out, and gave the "winners" on all those bad trades a chance to really earn their bonuses again.

But is the big payout the real shadowy force behind the recent runup in stock prices? Today's stock traders seem worried. Because even if reports that AIG FP has only unwound a quarter of its total trades are true, most investors agree the Treasury is too cash-strapped to do this forever.

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Backing down isn't Rep. John Murtha's style.

The cantankerous House power-broker is under fire for his ties to the PMA lobbying firm, which just shut down amid reports of an FBI probe into its campaign contributions to friendly lawmakers, including Murtha, who have steered millions in federal earmarks to PMA clients.

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The DNC has unveiled its new anti-Rush Limbaugh billboard, set to be put on display tomorrow in Limbaugh's home town of West Palm Beach:



(Click image to enlarge.)

The slogan, "Americans didn't vote for a Rush to failure," was the winner of a contest held by the DNC, in which Democrats across the country submitted their ideas for the DNC to pick from.

Jed Lewison, writing at Daily Kos, observes that GM's Rick Wagoner isn't the only CEO at a bailed-out company to be asked to step down by the government -- a counterpoint to the double-standard question raised today by Sen. Carl Levin (D-MI), Rep. Thaddeus McCotter (R-MI), and numerous media outlets (including TPMDC).

It's true that the Treasury Department and Federal Reserve asked Robert Willumstad to resign after three months in AIG's top spot, and that Fannie and Freddie's CEOs were also asked to resign last year.

Here's where those cases diverge from GM: the government controlled the majority of AIG when it ousted Willumstad and had already placed Fannie and Freddie directly into conservatorship when it booted their CEOs. The government also has become a leading shareholder at Bank of America and Citigroup, while taking the discrete step of lending money to GM ... while planning on showing the door to upwards of half of GM's board in the coming days.

None of this is intended to take a side in the double-standard debate that TPM readers have dismissed as a false equivalency -- merely to observe that it would be equally false to compare the circumstances behind Wagoner's resignation to those behind the AIG and Fannie-Freddie departures.

On Friday, Senate Majority Leader Harry Reid laid the smackdown on progressive grassroots groups that are marshaling their efforts against a group of conservative Democrats. But did the grassroots get the message?

It's becoming difficult not to conclude just that. When reports of Reid's statements broke, I put out calls to some of the more high-profile groups--including Campaign for America's Future (CAF), MoveOn, and Americans United for Change (AUC)--and the response has been...telling.

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