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It's ebullient here. Was just walking through Georgetown which is crowded with happy revelers but if you've looked at the markets you know the Dow is off about 4 percent at 3:30 and even if it were to recover, it's shows how much deep despair there is about the banking system despite the cappucino, Red Bull and amphetamines that have been applied to the system. A few weeks ago, Bank of America, with its takeover of Merrill Lynch looked like one of the few stable survivors, along with JP Morgan Chase, of this era. Now the Charlotte-based behemoth is in free fall, down nearly 25 percent this afternoon.

All of this strengthens Obama's already very strong hand with Congress. From the western steps of the Capitol, the 535 members saw the power of that crowd spread across the mall. Churlish Republicans may be able to dis Obama, but it's hard to think of any Democrat who is going to screw with him at this point. Power waxes and wanes but the combination of DC-based adulation and Wall Street woes, gives Obama an incredible boost going into his first day at the office.

Ted Kennedy has been taken to the hospital, the news networks have reported, after he suffered a seizure a short time ago at the inaugural lunch on Capitol Hill.

A few minutes ago, Fox News showed Kennedy being taken away in an ambulance as John Kerry, Chris Dodd, Orrin Hatch and others looked on.

Speaking to reporters just now, Walter Mondale said that Kennedy and others at the table were telling old stories to each other, "and then it just stopped." Mondale added that he's heard second-hand that Kennedy is doing better.

Robert Byrd was also seen leaving the event early, being escorted out in his wheelchair, but at this point it does not appear that his symptoms were as serious as Kennedy's.

Late Update: Byrd's spokesman told the local NBC affiliate in West Virginia that Byrd was not hospitalized. Instead, Byrd left the room because he was upset over Ted Kennedy's difficulties.

Late Late Update: The Associated Press reports that officials at Washington Hospital Center say Kennedy is awake and answering questions.

Dick Cheney may now be the former vice president, but a court ruling handed down yesterday, his last full day in office, could make it less likely that we'll ever get a full account of his role in crucial Bush administration decisions.

The Washington Post reports that a federal judge decided that a pledge from Cheney's office that it will turn over key records to the National Archives, as required by law, is good enough. A coalition of historical and nonprofit groups, alleging that Cheney planned to discard or destroy the records, had sued to require that they be preserved.

Claire O'Donnell, a Cheney aide who handles record-keeping, had said in a sworn deposition that the material would be preserved, and Judge Colleen Kollar-Kotelly said she expects that the VP's office "will, in good faith, comply with" that pledge.

But the plaintiffs are concerned that it won't. Stanley Kutler, an emeritus professor of history and law at the University of Wisconsin Law School, and the author of two books on Watergate, told the Post he's afraid that "when the Archives goes to open Cheney's papers, they are going to find empty boxes."

Kutler added that Cheney "spent most of his time making sure he left no footprints. Why did he fight this order so much if he did not have the intent to leave with these papers? I'm guessing that a lot of it will not be there."

Still, on most of the more far-reaching issues in play, the government lost. The court rejected the government's arguments that the plaintiffs lacked standing, and that no court could review the administration's compliance with the Presidential Records Act, under which the case was brought. It also rejected the strange-sounding claim that that act gave the vice president complete discretion to decide how to comply with it. Judge Kollar-Kotelly rapped DOJ for making "constantly shifting arguments."

But on the immediate -- and crucial -- question of the how much of the ex-veep's records are made available to those writing the history of the Bush administration, we may have to trust Dick Cheney. And that hasn't tended to work out too well in the past.

In recent weeks, the evidence that Bernard Madoff's alleged fraud goes back longer, and implicates more people, than we at first knew, has seemed to grow. And over the weekend, the New York Times added to that impression, with a lengthy takeout on a 1992 SEC investigation into Frank Avellino, an accountant tied to Madoff, who has admitted to not keeping conventional records.

Despite several red flags, the probe ended with Avellino paying only a small fine, and it never appears to have questioned Madoff's own operation.

Here's what seems to have happened:

Avellino and Madoff had had ties going back to the late 1950's, when Avellino worked as an accountant at a firm run by Madoff's father-in-law. Madoff even briefly ran his securities business from Avellino's office.

As the years passed, Avellino gradually shifted the focus of his business from accounting to raising money for Madoff's investment business. Then in 1992, the SEC received marketing materials showing that Avellino and his partner, Michael Bienes, had promised investors returns of up to 20 percent a year. Suspecting a Ponzi scheme, the government launched an investigation.

Avellino's explanation was simply that Madoff -- by then one of Wall Street's biggest stock traders -- was managing the money. Avellino said that if Madoff ever fell short of achieving a 13-20 percent return for investors, then Avellino and Bienes would make up the difference.

And that seems to have satisfied the SEC. As the Times puts it:

No one at the securities commission seems to have questioned why Mr. Avellino and Mr. Bienes offered clients a double-digit guaranteed return on money that they did not even control. Nor do the records offer any hint that the commission considered whether Mr. Madoff, rather than Avellino & Bienes, might be operating a Ponzi scheme.


Avellino returned money to investors, paid a fine, and shut down his business.

But when an audit was conducted by Price Waterhouse, it was discovered that Avellino didn't keep proper records. When Price Waterhouse asked Avellino to do so for 1992, he refused, writing:
"My experience has taught me to not commit any figures to scrutiny when, as in this case, it can be construed as 'bible' and subject to criticism. In this present instance, quite severely. I explained how the profit and loss can be computed from the records you now hold in your possession that Bernard L. Madoff and I supplied."


Still the SEC did nothing, and by the end of January 1993, the audit, too, was over.

Madoff and Avellino appear to still have ties. Madoff's current lawyer, Ira Sorkin, represented Avellino during the 1992 investigation. There's also this:
.In 2003, the Avellinos bought a $4.5 million house in Palm Beach less than five blocks from Mr. Madoff's house there. Their Manhattan apartment is similarly close to Mr. Madoff's apartment.


And Avellino may have been wired into Madoff's alleged fraud right up until the end. the Times reports:
A lawsuit claims that Mr. Avellino warned his housekeeper, who had invested with him, that her money was lost 10 days before Mr. Madoff's fraud became public.


There have been no indications that Avellino is a target of the SEC's current Madoff investigation. But at the least, he's a figure worth keeping an eye on.

A stunning moment, a great speech. I don't think any single line will enter the lexicon like Kennedy's "ask not" or FDR's "the only thing we have to fear is fear itself." Obama's "age of responsibility" seemed flat, forgettable. But the moments that punctuated it like the call for the end of "childish things" gave it a momentum that made it greater than the sum of its parts.

There was a liberal, JFK hawkishness about the speech that I found compelling. There was the martial memory of Valley Forge, but also "we will defeat you" and we "will not apologize for our way of life." There was the expected outstretched hand to the Muslim world--made all the more powerful by the once verboten word Hussein echoing across the Mall. But the stern words about terrorism were more extensive and explicit and impressive than I would have expected. I loved his challenge "to those leaders around the globe who seek to sow conflict, or blame their society's ills on the West"--the West, there's a phrase you don't hear a lot anymore. It was a shot at the like of Hugo Chavez. He used the word "war" and promised our enemies "defeat." The explicit defense of the market and capitalism was unexpected and refreshing. Kind of wish he'd mentioned Fallujah along with Normandy and Khe Sahn. (If you think Iraq and Vietnam were the wrong wars, then Fallujah belongs in that line as much as Khe Sahn, since he was discussing service not policy.)

The linkages with the past, the "for us", rhetorical device gave it the historical lift. Has the word "swill" ever been used in an inaugural?

That said, I thought the dis of Bush-era interrogation measures and civil liberties shortcuts was also stronger and more explicit than I would have thought. It was a pretty bald shot at his predecessor.

And the Joe Lowery's finish, humorous and poignant, was a incredible finish, far better than having, say, Obama invoking King by name. If there's any better living witness to the King years, it's hard to think of one. Mercifully, the phrase "yes, we can"--powerful but now hammered to death--was left in the campaign file.

By the way, on the oath flub, someone who works with Roberts told me that he had practiced the oath extensively. It seemed to me that Roberts flubbed and not Obama, but I'll leave that to the replays.

In his inaugural address, President Barack Obama sought to lay out two separate but very much complementary messages. Part of the address was expressed in terms of what it his administration will not be -- the Bush years. Beyond that, and more importantly, he laid out an extensive positive vision of what he believes America and indeed the whole world can be, motivated by a faith in American culture .

Obama acknowledged the troubles facing the country at home and abroad -- but assured the country that we will succeed:

Today I say to you that the challenges we face are real. They are serious and they are many. They will not be met easily or in a short span of time. But know this, America - they will be met.

On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord.


Obama spoke of America as a country that has throughout its history expanded the reaches of freedom and prosperity, and reminded the country that we enjoy our quality of life today because of the work of others who came before us:

For us, they packed up their few worldly possessions and traveled across oceans in search of a new life.

For us, they toiled in sweatshops and settled the West; endured the lash of the whip and plowed the hard earth.

For us, they fought and died, in places like Concord and Gettysburg; Normandy and Khe Sahn.

Time and again these men and women struggled and sacrificed and worked till their hands were raw so that we might live a better life. They saw America as bigger than the sum of our individual ambitions; greater than all the differences of birth or wealth or faction.

This is the journey we continue today.

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The following is the full prepared text of President Barack Obama's inaugural address.

My fellow citizens:

I stand here today humbled by the task before us, grateful for the trust you have bestowed, mindful of the sacrifices borne by our ancestors. I thank President Bush for his service to our nation, as well as the generosity and cooperation he has shown throughout this transition.

Forty-four Americans have now taken the presidential oath. The words have been spoken during rising tides of prosperity and the still waters of peace. Yet, every so often the oath is taken amidst gathering clouds and raging storms. At these moments, America has carried on not simply because of the skill or vision of those in high office, but because We the People have remained faithful to the ideals of our forbearers, and true to our founding documents.

So it has been. So it must be with this generation of Americans.

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Since we spilled a lot of pixels late last week on the question of whether taxpayers might get back the money the Treasury spent on the financial bailout, it's worth noting that, according to Congress's in-house accountant, we certainly haven't yet.

The Congressional Budget Office released a report Friday afternoon which found, as summarized in a post on the CBO website: "We expect the government to recover about three quarters of its initial investment" of $247 billion. In other words, according to CBO projections, we'll likely make back around $183 billion, but will still be down around $64 billion.

Of course, that's only one small data point in an enormous sea of complexity. It covers only the first third of the $700 billion allocated by Congress -- a figure that could still grow even further. More importantly, the major factor in determining what we get back will be the ongoing solvency of the banks we "invested" in -- something not even the CBO can predict.

But it at least gives us a preliminary measure. If, when all is said and done, we'd made back three quarters of the money we put in, and avoided a complete financial collapse, a lot of people would see that as an acceptable result. But we're a long way from that point right now.













"The Congressional Budget Office estimated Friday that taxpayers could lose $64 billion on investments made with the first third of the $700 billion Troubled Asset Relief Program, despite assurances by U.S. officials that the rescue could make money for the U.S. government."

Will join the deluge of those using Twitter to discuss the inaugural. You can follow me today and everyday at @TPMMatt.

See below.

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I braved three parties last night and each said something about this moment we find ourselves in.

The first was Bipartisan Policy Center, founded by the likes of Tom Daschle and Bob Dole, and promotes bipartisan policies. My old boss, Walter Isaacson, spoke, as did Ron Brownstein, whose Second Civil War does an excellent job of chronicling how our politics became so divided. Amidst the plates of hummus and baba ganoush, there was a feeling that Obama really could bridge partisan divides.

Scene change: Went over to MoveON/SEIU party which was groovy. It was held at a Georgetown art gallery displaying dozens of Obama related pieces of art as part of the Manifest Hope project. Aside from the Belvedere Vodka, there were plenty of hipsters in black, no members of Congress as best I could tell, and Moby and Michael Stipe.

It's telling of the moment that MoveOn is as enthused as any group of avowed bipartisans. The grassroots organization will continue to play a major role in organizing and, as one person involved in progressive politics told me at the party, "giving Obama the political space to do what he needs to do and to say things in a plausibly deniable way" that a Democratic Party or White House organization couldn't. I take it seriously. If any group presaged the Obama organization, it's MoveOn. (The irony of it is having begun as an anti-Clinton-impeachment group--Move On meant move on from the Starr-era investigations--it became such a bane of Hillary Clinton's during the primaries.)

The mother of all fetes was the Huffington Post soiree at the Newseum, the massively impressive homage to journalism built by ailing news organizations. (So that's where the money went!)

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