When Vladimir and Lidia Guryev were taken away from their Marquette Road home by the FBI late last June, and charged with being Russian spies, they left behind the Montclair life that had become home. All their belongings were subsequently seized by the U.S. government. Whether it was “real” or not, the couple — known locally as Richard and Cynthia Murphy — did lead a domestic existence, with many of the trappings that go along with suburban NJ family life. Now, back in Moscow, the couple is demanding some of their possessions back, saying they have no “material value,” but are “dear” to the family, according to an article in RIA Novosti, a Russian state-owned news agency.
The media source reports that a document held by the Russian legal information agency indicates that the Guryevs have specifically requested that their computers, digital photos and video cameras — or at least copies of data recorded on them — be returned.
Should they be given their personal effects back, or does their admitted occupation make the point of American possessions moot?
If we can indulge in some paranoid espionage-style thinking, might their seemingly innocent family photos and videos actually contain information that the Russians want? What are these “dear” photos and videos about? Presumably children’s birthdays, home life and such. Are there Marquette Road neighbors in them? Should Baristaville life be sent to Russia?
Have I read too many John le Carré novels, or does this make you edgy too?
Send it all back. Remember the Rosenbergs.
As the Vodka turns
PAZ, the Guryev’s actually admitted to being spies, though what they accomplished is questionable and times are certainly different now than during the Cold War. The Rosenbergs were another story entirely. Incidentally, my father wrote a book and produced a documentary on them back in the 1970s making the case that there was no strong evidence proving their guilt.
http://www.amazon.com/Unquiet-Death-Julius-Ethel-Rosenberg/dp/0882080520
http://www.filmthreat.com/reviews/21489/
There were probably little microphones in the hydrangeas.
Nellie….I still say send it all back. We have enough trouble right now with terrorism. I’ll take a spy over a terrorist any day….shaken not stirred.
Jury’s still out on the Rosenbergs. There’s some evidence that Julius (although not Ethel) was guilty of spying. One article: http://www.washingtonpost.com/wp-dyn/content/article/2008/09/22/AR2008092202622.html
The Rosenberg children after years of defending their parents admitted at least their father was a spy. Morty Sobell the co-defendant (still be alive?) died admitted his and their guilt.
Keep the stuff. They get nada, nilch.
Don’t send it back. They knew what they were doing. Who knows what is really on there or in any of that information.
And Mr. Rosenberg was a spy. Just because he was a bad spy and his information was useless doesn’t change that it was treason. Just like that shoe bomber guy or the underwear bomb guy – being stupid doesn’t excuse you from being guilty.
We should do like they would do to us.
Send them back family photos,food receipes, doggy pics, house pics and such – but nothing else. Keep in mind that they were here to SPY !
Don’t let the cute pics of the doggies, the children, the flowers & garden and Montclair Cape Cod and the car cloud the REAL deal.
Well, Vladimir and Lidia, if you are so clever to have gotten away with your false identities for all those years, you should be able to re-invent your memories, photos, and videos and share them with your re-invented family members. That way, you can edit out all the dysfunctional moments. What a concept!
Arguably they accomplished little, if anything of their “mission,” but remember that transferring information encrypted in digital photos was among the ways that al qaeda terrorists communicated with each other.
Of course this stuff should be sent back.
Who cares? Send it back if the transport is paid by them. What would you guys say if American spies would like to get their property back out of e.g. Russia ?
>Conan….Dysfunctional moments make up most of dyslife.
deadeye is correct, digital media holds more then the cute doggie pic you see at first glance.
How does one say “GET LOST” in Russian ?
The US gov. should move ahead and sell the house and car to recoup some of the money spent by the FBI. The spies could buy the items back from the US gov. at the auction for seized property.
BTW: Julius Rosenberg was guilty; NY Times article from March 20, 2011.
A Rosenberg Co-Conspirator Reveals More About His Role
By SAM ROBERTS Published: March 20, 2011
http://www.nytimes.com/2011/03/21/nyregion/21rosenberg.html?_r=1&scp=2&sq=julius%20rosenberg&st=cse
This is priceless. Oh, thank you, Baristas! This makes my day.
Though I am disappointed in the divisiveness shown by the posters in this thread. I would have thought that Russian spies caught red-handed in our midst would be something we all–black and white, Jews and Christians and Muslims, rich and poor–could rally around. Maybe we’re too opinionated for our own good.
Erika Bleiberg, whatever book your father wrote, the 70′s were a long time ago and much research has come to light since (not least in that record of Soviet KGB defectors, “The Venona Files”). As a result, almost no serious observer of the Rosenberg matter (save perhaps Pete Seeger and any other unregenerate Stalinists left out there) thiks they were innocent. Try the research of CUNY prof Ronald Radosh for a rational look at the Rosenbergs, for example.In any case, mentioning the Rosenbergs is a bit of a red herring, no?
(And the Meeropols, the Rosenberg sons, are mere perpetual whiners against overwhelming historical proof, akin in their continual haplessness to the now-deceased Alger Hiss and his loyal son Tony.)
If the Montclair spies really want their personal effects back, they do have some hell of a nerve.
Ah the humanity of spy work! What would James Bond do?
I am sorry but most the opinions expressed here remind me of Animal Farm. Put your patriotism aside and follow the rule of law, more specifically property laws.
Please send the pictures to them. It would be a kind gesture and the right thing to do. No parents or children should be deprived of their family pictures and memories. Maybe we’ll all be friends again one day and they’ll come back to visit Montclair.
I’m curious if they were in Gitmno and these were pictures of their kids standing in front of buildings in NYC or national monuments would people above be so happy to return them?
Or do we not understand what a spy or digital media is?
They have to be the worst spies on the planet.
Question: Why doesn’t Montclair go after them for back property taxes?!? Send them a bill!
Hey Sanford, Maybe we can have a parade for them when they come back! kumbaya!
Cathar, thanks for reminding me how long ago the 70s were. I realize — as does my father — that his work was based on the information that was available at the time. Hard to do a documentary on mere speculation. I didn’t initiate the Rosenberg conversation, just gave my dear old dad’s work a shout out, since PAZ brought it up. As a young woman, working with him on an update of the film, I became fascinated by the case, though am not familiar with any of the more recent research, such as Ronald Radosh’s work (I’ll check it out). The Meeropol brothers have stated that their father was involved in espionage with the former Soviet Union, but they contest that there was credible evidence that he passed on secrets about the Atomic Bomb — the crime for which he and his wife were executed. And please, don’t be dissing Pete Seeger, for heaven’s sake. The man is a national hero.
If the Montclair spies really want their personal effects back, they do have some hell of a nerve.
Oh, snap!
Pete Seeger a “National Hero”, really?
Sing a song about flowers disappearing and people forget decades of Stalin and Soviet support and active years as a Communist.
So naive.
Erika, I can see why your dad used his middle initial.
Why is that, Roo?
Google the name without the H, you’ll see.
I have to share this really funny opening line, which oddly comes up No. 1 in the search:
Any doubt about the passing of the era when pornographers waged principled, meaningful battles against the forces of government censorship, vanished in a grimy courtroom in Brooklyn last week at the trial of a fat little man named Alvin Goldstein…
I have one word for them: “Nyet!”
The noive of some people! Seriously, this speaks VOLUMES about the kind of people they are: they want their material possessions back but don’t give a rat’s ass about the lives they’ve runied (i.e., their children, the people they were spying on). {{{Shakes head in disbelief}}}}}
A real ‘hustler’.
Forget James Bond! What would agents 86 and 99 do?
Every time I try to get out, they just pull me right back in…
“Hard to do a documentary on mere speculation…” It must be easier than wrangling those pesky FACTS. Fascinated by the case…until the USSR collapses and all the information comes out, then, oh well, lost interest.
Here’s a reminder: They were SPIES, espionage agents. Spying on America on behalf of a foreign power is BAD, regardless of one’s aptitude or success. We’ve been told that they were mere bunglers, but we’ll never know the truth.
Property laws! Nuff Said!
Pete Seeger is/was (?) a COMMUNIST, as was Woody Guthrie. Listen to “This Land Is Your
Land” in that context. Oh THAT”S what he means…
And Herb, I believe it was SCREW.
Pete Seeger is/was (?) a COMMUNIST, as was Woody Guthrie. Listen to “This Land Is Your
Land” in that context. Oh THAT”S what he means…
Ooooh, scary! Is that what the all caps was supposed to convey? That we’re supposed to be surprised and frightened that folk singers had something bad to say about capitalism during the great depression? Surely context brings some measure of grey area to their political affiliations no?
No, they were reds, which means the personification of pure evil. And of course, all the things that caused the great depression, why we fixed those with the Act of ’33, right? Nothing like that could ever ever happen in 2007/2008, could it?
Thats right Mike. We’re not the reds. Sure the depression was the result of unbridled speculation, but doesn’t discredit an entire political philosophy. You see, it’s more complicated than that. THEY killed millions of people and WE, American ideology that is, prevailed. They lost. Deal with it. We have a capitalist society. My land isn’t your land, unless you buy it from me.
How is any of this their property? It’s all ill-gotten goods acquired under false pretenses. If you think these items belong to liars, spies, criminals, etc., then you must think it’d be okay to falsify your identify and bank accounts to funnel laundered monies and then buy a car. After being indicted for your crimes, you’d feel entitled to getting your car back, right? Wrong. It’s the same thing. It’s hard to believe how much sympathy these spies have. The USA is way too lenient. Or maybe it’s just the extreme liberals who have sympatico for anti-American breeches. Where’s the patriotism?
Typo – identity not identify
The claim for Pete Seeger as a “national hero” only works if one thinks that sitting back silently while, for starters, millions of Ukrainians are purposely left to starve to death and millions more Russians are sent to rot in Siberian labor camps for simply annoying Stalin can somehow be considered “heroism.” No matter how much time he’s subsequently spent on the Clearwater, Seeger’s considerable shilling for a thoroughly evil, murderous system represents appalling moral blindsidedness. It becomes incumbent at some point to choose in terms of genuine courage betweem Seeger and Solzhenitsyn, and I suspect most of us would thus wisely choose the former, the Weavers’ commercial success notwithstanding.
And even in the 70′s, Erika, researchers other than your father paid more careful attention to the actual evidence and declared the Rosenbergs guilty. Perhaps if he’d simply done more or better research, with or without you at his side?
Walleroo, you may jest all you wish about spies and the lives they led. I can only assume from your sad attempts at japery here, however, that you don’t quite understand what it is that spies generally actually do. Their lives are grotty skeins of moral filching and constant compromising of others. That may even be the sort of life you aspire to (based on some of your most recent posts, that is) but should you lean this way of late, I’d recommend the authorities be as quick to confiscate and immolate your personal effects as those of Montclair’s former Russian deep cover agents.
Sorry above, the line should refer to choosing for “the latter,” meaning choosing Solzhenitsyn over the old faker and banjo player.
And Mike91, the outrages that Pete Seeger and other, yep, Reds should have sung out about back in mother Russia and in Russia’s assorted slave states were very well known. Darn nonetheless but Pete and his pals ignored them anyway. This land is not yours if it’s been selected to be part of a mingy, soul-crushing collective farm, comrade.
Personal effects? Does that mean they’ll have to confiscate Liz’s porch? Props to Cathar for using grotty in a sentence on Baristanet.
The Spy Housewifes of Moscow.
Cathar…..This land ain’t our land.
Think again
This land is Wall Sts.
I’ll take your so called commie red pinko Seeger any day.
Amen, Paz. That you can find 3 people in the world who’d blast Pete Seeger
in 2011 for having been a communist in 1936 is pretty head-shakingly unbelievable.
Sure the depression was the result of unbridled speculation, but doesn’t discredit an entire political philosophy
Sure. But what about the second time? Or the third? When does it become obvious that the system needs changing? When wealth disparity is at an all time high? When wages have been stagnant for 30 years? When two income families become the norm?
Is communism the answer? Of course not. But corporations paying no tax on profits and the rich getting richer aren’t exactly working either.
Screw up your taxes and you’ll go down
like a mime w/o makeup
But screw people out of money
and your bonus bound.
All they really want is their micro-Giraffe left behind in their haste to depart the US.
Waleroo, it was either Al Goldstein of SCREW or an editor at Grove Press who quipped that “the good thing about pornography is that it gets people to read who otherwise wouldn’t.”
Yes, Roo, I forgot about Al Goldstein… That was a well-worn joke back in the day for those who knew my family. My Dad has always used his middle initial and, while a film maker, never delved into that genre. Politics were more his speed. Thanks for the blast from the past.
Wall Streets the problem?
How about your President that appoints the head of GE as one of his advisers to his Council on Jobs and Competitiveness
The same GE that:
That gets a $3.2 billion refund in tax credits this year. Even though it didn’t pay a dime in federal taxes in 2010. The worlds second largest company doesn’t pay a dime in taxes and this dope in the WH puts him on a board for jobs and competitiveness.
His pals company has cut its US work force over 20% and continues to move operations overseas and whose foreign profits went from $15 billion to $92 billion the last 10 yrs. The same company that is saying it cant afford the cleanup of the pcb’s they dumped in the Housitonic and caused pollution from the Berkshires to the LI sound. Nope , Wall St is the problem.
Lets blame Wall St, never mind the billions and billions that these companies that have armies of lobbyist (wasn’t Obama running them out of DC?) and friends on both sides of the aisle that use the system but put nothing into it. At least Wall St funds the system more you can say for Obama and his pals.
To have been a Communist in 1936, kit schackner (and you do go on so), was to have been a Communist at the very height of the Moscow show trials and the Ukrainian famine. Thus at the time when Stalin’s bootheel was being most brutally applied. American Commies really were a most pitiful assemblage, and I can never understand how they cleaved to such a faith in the face of so much evidence of horror in Russia. Maybe thery all just read Walter Duranty in the NY Times, who famously assured his readers there was “no famine at all” in the Soviet Union.
To be a defender of Communist policies and programs since then, however, is probably even worse. I have read of the desperate attempts of Pete Seeger and a few pals to defend the fact that Stalin carved up Poland with Hitler. (Even as they all remained conspicuously silent about the Katyn forest massacres.) I can only imagine how similarly they must have dissembled as Russia gathered up its collection of slave states post WWII, as it crushed the Hungarian revolt in 1956, forced the Berlin airlift, etc. It’s okay that you apparently know very little about history, kit schackner, it just puts you on the level of most high school students, but it’s outrageous that you post here as if proud of your ignorance.
And anyone who wishes to catch some sense of the lies “Comrades” told each other during the 30′s and early 40′s could do much worse than to dip into the novels of the period from James T. Farrell (who himself left the party around 1936). These people really were sad and delusional. That one has gone on by playing the banjo and singing folk songs to become beloved does not at all excuse his prominent silence in the face of so many outrages by the Soviet Union, Cuba and their allies. Indeed, it only heightens his curious resort to blinkers through 50 years of history. Even as Pete could always see a glorious, nuke and pollution free environment, he has remained oddly blind when it comes to the evils of world Communism.
As Herb so correctly points out above, GE is a classic example of kowtowing to the administration to achieve their goals, while getting a pass on liabilities of all kinds. Immelt instinctively knew how to position GE to be first at the trough. GE Capital was bailed out, while CIT (without the political leverage) cured their problems through bankruptcy, and without taxpayer assistance. Now Immelt has positioned the company to garner untold subsidies from otherwise unprofitable wind turbine and other pet “green” projects. So far, it’s been one giant risk transfer from the corporation to the taxpayer.
Mike, stagnant wages are a huge problem, but to address it people need jobs and corporations as well as small businesses need real incentives to create them. We need less meddling and more freedom. Less “targeted investment” and more basic latitude to grow and hire. What we have just witnessed is the failed result of government effectively attempting to create wealth through real estate investment. Wall St. was certainly incentivized to participate, but the problem was not spawned by them. There was an active policy in place to provide credit, under non-traditional terms, to borrowers that had been heretofore perceived as having been locked out of the “opportunity” for homeownership. The rest is history. There were many cross purposes and enough moral hazard to be shared by all of the participants in this credit fiasco that was global in scope, not limited just to the U.S. and not confined to housing BTW.
And Kit, Let’s all sing together: “If I had a hammer…” Oh, THAT”S WHAT HE MEANT!
Cathar, Thanks for the brilliant and instructive posts. Much of what you have related has never been adequately taught, certainly until well into a university level history curriculum. The predictable result is illustrated in the current debate in which people have established strong opinions while uninformed of basic objective facts.
Does this mean Trini Lopez was also a Commie ? ( albiet he did play a badass red Gibson ) ….
Cathar, Spot on. Well done.
Now Immelt has positioned the company to garner untold subsidies from otherwise unprofitable wind turbine and other pet “green” projects.
Tell you what, lets end all subsidies for oil production, and transfer it to ‘green’ projects. They could use the billions, and the taxpayer isn’t out any extra money. The oil companies will raise prices, but heavens knows they can’t survive without record profits.
What we have just witnessed is the failed result of government effectively attempting to create wealth through real estate investment.
Or, what we have just witnessed is the failed result of players in capital markets creating and selling snake oil, which then drove the market for snake oil mortgages. I tend to believe a great number of these mortgages (and fly-by-nights like Countrywide) would not have existed without a market for MBS (and the insurance in case they failed. Thanks AIG!).
We need less meddling and more freedom.
That’s right, let’s repeal Dodd-Frank! That weakened, watered down bill that doesn’t even address the real issues. Why, even that’s too much legislation. The market players promise that this time they’ll be good.
Just saw 5 minutes ago on FNN that Dodd – Frank will cost over a billion $ to enact and most likely will never be implemented.
The players in capital markets created instruments to bundle and pass on the bad loans because the government forced financial institutions to make these risky loans or be penalized. The cause of most of the problem was the Community Reinvestment Act which had been created long before the financial industry created instruments to defray and profit from the risk.
We can go on with this all day but Wall st simply created an instrument to defray the risk of bad government policy that they were forced to adhere to.
Can we get back to the President of ‘change’ and his corporate cronies living off the tax payer and not kicking in, or that Communist Pete seegar.
Had Lidia and Vlad uploaded their lives to facebook like the rest of the world, they’d still have access to it all.
@ deadeye your knowledge and analysis of GE and the current market place is similar to mine. Well done. Truth is we no longer operate close to the capitalist ideal. We are a mixed economy with special interests in each political camp taking turns raiding tax dollars. I would expect you to support mike 91′s call to end all oil subsidies with no transfer to green projects but in fact the monies should rightfully remain in the pockets of the earners. I doubt most people evaluate the philosophy behind their voting records.
@cathar well said. How easy it is to forget but I do wonder how many people really know this history.
@Dag, I think we’re on the same page.
@Mike, You make a good armchair quarterback, but you really don’t understand doodlysquat about capital markets and securitization. It would be instructive for you to dig through the ProPublica site and read through some of their articles on the financial crisis. They’re all die hard lefties, but their journalism is solid.
I prefer my die-hard lefty journalists from Bloomberg. In fact, 50% of subprime mortgages were made by mortgage service companies, which were not subject to CRA (an act which, since its passage in 1977, had been weakened by no fewer than 6 changes over 22 years). Another 30% of the mortgages were made by bank affiliates or thrifts which operated under little or no supervision — certainly not under the thumb of big, bad CRA bureaucrats.
But the song has a nice ring, so I guess folks will continue to hum it.
The players in capital markets created instruments to bundle and pass on the bad loans because the government forced financial institutions to make these risky loans or be penalized.
Really? Then how do you explain the rise of predatory lenders like Countrywide?
The cause of most of the problem was the Community Reinvestment Act which had been created long before the financial industry created instruments to defray and profit from the risk.
So what were the banks doing between the signing of the CRA and the creation of these instruments? And the Fed disagrees with this statement. And it doesn’t explain the failures of commercial mortgages.
Mike, You make a good armchair quarterback, but you really don’t understand doodlysquat about capital markets and securitization.
Thanks for the comment, deadeye. Instructive and informative. Really.
Not only do they have the nerve to ask for their stuff back, but they are filing a tax appeal as well. Curse you Boris and Natasha.
Mike, Believe it or not I spent considerable time writing a reply prior to my last post, but I had to do something else, and it was erased. Commercial mortgages were also originated into a robust securitization market. Most CMBS deals were known as “fusion” deals in that there was a core portfolio of sometimes very large loans, and smaller loans were effectively considered “filler.” Most CMBS investor due diligence consisted of evaluation the top 10 loans, although detailed analysis was available on the whole portfolio. The rationale was that the performance of the top 10 loans would be a proxy for how the deal would fare. The investors in the credit sensitive lower rated bonds, the sponsor and special servicer would take heroic measures to insure the best possible outcome, so there was a perceived alignment of interests between parties.
Given that the first generation of commercial real estate securitizations hit a rough patch, between 98 and 00, when securitization facilitated the underwriting of loans that would not otherwise have been made at the cap rates and terms (sound familiar) it was conventional wisdom that this second generation was better underwritten, less prone to over building, and generally stronger than the first. Much of this was bull market complacency, and loans began to be underwritten very aggressively, with the expectation of rising rents and property valuations. In short, vulnerable to a reversal at some point.
There is a concept in trading called “correlation.” Various securities are perceived to have definable behavioral correlations to each other. Correlations can be strong, weak, or even inverse, but when the s— hits the fan, liquidity evaporates and everyone goes to raise cash at the same time. In such an instance many heretofore marginally correlated securities behave exactly the same. They fall precipitously in value with little regard for underlying fundamentals. Derivatives can amplify such moves as well, in that whether they are being used to manage risk, or to synthetically reference cash bonds, the effect is as though there is a larger volume of securities in the market.
Now, after Lehman failed, and given their large portfolio of CRE backed loans and bonds, the markets seized up, liquidity evaporated and correlations went to 1. That is, people weren’t making relative value decisions, they were selling everything in sight while they could.
The commercial real estate market is populated with adults that have large amounts of capital at risk. They can usually work things out between themselves, but sometimes a deal just shouldn’t have been made. There have been, and will need to be additional recapitalizations, but the market is well off it’s bottom, and securitization is coming back.
Now Mike, how exactly were you impacted by the performance of the CMBS market? The only way I could think of is potentially as a REIT investor?
I wouldn’t be too hard on the spies, really. They DID live here for some time and they have, in addition to making a request for their stuff back, submitted their picks for the top burger in baristaville.
They picked Five Guys, apparently in the mistaken belief that it was communally owned.
Are you suggesting deadeye that those unable or unwilling to string together sentences full of acronyms and arcane terms (teachers excel at this as well) are therefore unaffected by such a collapse in this economic sector? By that logic, only homeowners need worry about the housing market — all you renters and the trolls who live under bridges are fine!
Croig, You are correct. At the time people were very glad that these loans were being originated privately, their risk theoretically borne by myriad credit investors. There was a perception that FNMA and FHLMC had dodged a bullet by supporting the market by buying only the AAA bonds, rather than backstopping these transactions. Speculation, but in the absence of the private market, given the benign perception of the risk, the agencies would have stepped further into the breach. They did, however, loosen their standards significantly in terms of loan eligibility for their guaranteed pools. What we are seeing now is the wholesale attempt to get the surviving institutions to buy back large numbers of loans in which the data was falsified, etc. Interestingly, this is occurring after a protracted period during which banks were allowed to significantly rebuild their capital bases, almost like they were expecting it…
@ deadeye ” I want to sit at your feet and drink from the cup in your hand”
Commercial mortgages were also originated into a robust securitization market.
Great, but was their origination affected by the CRA? Because the only reason I brought up commercial real estate was to counter Herb’s contention that the financial crisis was caused by the anti-redline law.
I suppose its a nice summary of CRE securitization and market behavior, but I don’t know if anywone asked for it. Heck, you may be answering the voices in your head, I don’t know.
Mike, You need to frame your questions more succinctly. You asked about the failure of commercial mortgages. I answered.
Mike, You need to frame your questions more succinctly. You asked about the failure of commercial mortgages. I answered.
No, you need to work on your reading comprehension. I said “And it [blaming the CRA] doesn’t explain the failures of commercial mortgages.”
So, sorry but I never asked for an explanation of the failure of the CMBS market. I did however find interesting your comment that correlation between securities is 1 in a panicky market. The best laid plans and all that.
Shouldn’t you be pushing some papers around in your cubicle Mike?
Shouldn’t you be pushing some papers around in your cubicle Mike?
Well, that only takes a minute. There, see! Done! Now, did you have anything interesting to say, or are you still in a snit?
I’m getting over it. BTW, FHA insures mortgages on multifamily properties which are securitized into single property pools, or maybe several properties in a particular area, as do the agencies. If the building meets certain criteria, and is within their lending area, a bank can buy the security to obtain CRA credit without taking the actual risk of lending on the property. That’s how section 8 housing gets financed..and it basically never defaults unless the building becomes uninhabitable.
I don’t know about Trini Lopez’s politics, but a long forgotten American who was in fact a “card-carrying Communist” was Russia’s top pop star and action movie staple during the 60′s and 70′s. His name was, I recall, Dean Reed and every now and then he made fitful efforts to repeat his success among comrades worldwide. (He is, for example, a member of Oliver Reed’s outlaw gang in the western “The Shooting Party.) I don’t even know if he’s alive and I’ve never actually heard any of his recordings, but I once worked near the CPUSA’s bookstore and they always stocked his records (and they were records back then). Dean Reed even, charmingly, supposedly did a few duets with Pete Seeger for his Russian record label, but I’ll bet Pete doesn’t want those songs popping up in any box set of his own.
I also had a co-worker who was a bona fide party member back in the 80′s, he’d even lived in Pyongyang for a year. I remember he was so proud when his eldest daughter of three followed him into the party. Nice guy, but a bona fide fossil in terms of his politics. Had all the right cliches down pat and he was a very skilled copy editor, but for all his years of class consciousness he never made too much money. The sleepers in Montclair lived much better. They should settle for having had that in lieu of asking for their personal effects back.
Really, too, given what espionage generally consists of in this day and age, spies, especially sleeper agents, should never assume they have any “personal effects” whatsoever.
cathar, was that commie bookstore on 13th between 5th and 6th in Manhattan?
I believe it was, croiagusanam. Our offices at the time (it was an advertising magazine) were on 5th between 11th and 12th. Never saw Gus Hall hanging out there, however.
I remember some little beady-eyed, black-bearded type who lived above the place. He frequented the late lamented Bells of Hell on 13th street and constantly carped about the greedy and unresponsive landlord, who was in fact the owner of the shop and a proud card-carrying Red. His love of the common man, however, apparently did not extend to a rent paying nerd who found the absence of heat in the winter and the presence of vermin in the summer to be objectionable.
The Working Class can kiss my ass!
Deadeye, I’d be interested to know if your comments about CMBS, especially in relation to the CRA, mean that you believe that the CRA was a significant contributor to the financial crisis. I assume you don’t believe it directly caused CMBS’s difficulties in ’08, as one could potentially infer from your last post. But even in residential mortgages, the lack of quality underwriting in neighborhoods not affected by CRA argues strongly against it being a main cause.
In my opinion, the main contribution of government/regulators to what I see as largely a private sector-caused crisis is that they elevated the importance of the (private) ratings agencies. Investors bought structured notes even a casual observer could see were not investment grade simply because of a AAA rating issued by a rating agency which was often conflicted.
More important were the intellectual arrogance and laziness prevalent in the private sector at the time. Financial firms came to the opinion that their ability to apply mathematical models to every security somehow meant they understood it and could manage its risk. My firm, for example, was effectively only hiring PhD’s in ’06 and ’07. They were amazing at producing complex models full of Greek letters, but less impressive in their understanding of the assumptions in their models.
The laziness was primarily the result of the asymmetric payoff profile for traders (and money managers), especially Wall Street prop traders. Since they reaped great rewards for making money and little consequence when they lost, they had great incentives to take risk and little incentive to question their assumptions. This problem was, and is, prevalent across the industry.
I don’t mean to excuse the often fraudulent activities of mortgage brokers, borrowers, structured-note sellers, etc., but I think what allowed these to take place was the skewed reward system and arrogance of the buyers of the securities they created. Either way, I think it was largely a failure of the private sector.
Oh, and by the way, I think it’s ridiculous to even consider giving back anything to people sent here to spy, regardless of how bad they may have been at it.
ASposa nailed it! You’re new around these parts, aren’t you? I hope you post more often–you seem to actually understand what you’re writing about although your acronym use is WAY too low.
What he (or she) said!
I’m with you, Tud (again)!
But while I heartily hitch my wagon to the new star Asposa (as in, “You’re asposa take the garbage out on Wednesday night”), I’m pissed that the Ph.D.’s get blamed again!
Actually, it’s as in A.Sposa but Baristanet no longer allows periods in user names (unless I could have changed the “appear as” portion – techmology is not my thing). I’m not blaming the PhD’s, but rather the managers who think that knowledge of theoretical math is all one needs to succeed in finance.
You know what they say about getting a PhD: you learn more and more about less and less until you know everything about nothing.
(But I still want that damn degree…was wondering if I could condense two MS degrees into a doctorate.)
But yes, I really thought Asposa’s post was spot on and not politically slanted. Re: the name, maybe this is what it’s all about?
http://www.flickr.com/photos/parnasso/3267358508/
@ ASposa “I don’t mean to excuse the often fraudulent activities of mortgage brokers, borrowers, structured-note sellers, etc.” You also completely omitted the government’s role. To blame the financial melt down only on the private sector suggests to me a political point of view no matter how well stated. I believe that Greenspan said his intent was to provide homes for people who in relative recent history could not afford a mortgage. Therefore, government candy was offered to the private sector by way of policy as was noted by deadeye above. Greenspan’s justifications surprised me when I first read them because it was so unlike his very early writings. But then he crossed over to the dark side when he joined the FED.
Tudlow .. it’s that dark side thing again .. love that phrase
But Dag, you have made it no secret that if there is “the force” and “the dark side” (my son is big into Star Wars right now), you feel that the dark side is always the gov’t, which seems to be your new hero deadeye’s view, too. It’s always stay on message! Free market good, big gov bad! And I appreciate another viewpoint on here to be frank with you and it’s all the more interesting that it came from someone on the inside.
Yes I confess I’m a free market idealist and look with major skepticism on the role the government plays in our lives.
I’ve got a great Darth Vader stashed somewhere in this house. Eons ago hubby made an appearance at a Halloween party in it. I of course was Princess Leia.
I remember the Bells of Hell, croiagusanam. (Better that than the bellys of Rhymney, I suppose.) Had a pint or two there myself.
For some reason I recall, perhaps mistakenly (?), a duo called Turney and Kirwan of Wexford playing there, too. And Larry Kirwan went on to later have some success leading Black 47 (though I was always surprised they haven’t ever become anything more than a sort of NY metropolitan area favorite).
The bookstore was crowded, messy and reeked of cigarette and pike smok. It seemed the perfect place for would-be Prince Peter Kropotkins to hang out, was always full of earnest-loking guys in wire-rimmed glasses trying to impress frizzy-haired girls with talk of the “class struggle.” That the comrade in charge wasn’t much of a landlord doesn’t surprise me, either. He probably believed in the necessity for suffering as a precursor to a genuine workers’ revolution, that his tenant should shut up and read his Engels.
Their lives are grotty skeins of moral filching and constant compromising of others. That may even be the sort of life you aspire to (based on some of your most recent posts, that is)
Where have you been, cathar? I haven’t had insults of such quality hurled at me in quite a while. Oh, happy days are here again.
I am glad to hear deadeye and herb rough up GE. I read the Times story on Friday and it gave me the heebie jeebies (and even use the word kowtow, which is one of my all time favorites). To see Obama bringing Immelt into the sanctuary is galling.
Please stick around, ASposa. We need you.
Miss Taggart, I didn’t blame the financial meltdown only on the private sector, although I did say it was largely a failure of the private sector. There’s a lot of blame to be placed in such a colossal mess (and some of it does belong on the government), but I think until I hear more detailed arguments as to why the private sector being constrained by the public was the real cause of the financial crisis I’m going to stick with what my experience tells me.
Also, no offense but I think Kira Argounova was the better character – quite possibly my favorite.
$$$$$ is my Anthem
Asposa is absolutely correct. CRA was the kernel, the idealogical font from which the mutated oraganism sprouted, but the fundamental real cause of the crisis,in my opinion and as I’ve said before in these pages, was indeed stupendous intellectual arrogance on both sides of the equation, and a failure of the private sector. Very few structured credit investors can claim that they were led down the garden path by Wall St. Investors took a very proactive approach, and regularly provided input as to the structure and composition of deals, and were making what they thought to be informed decisions. The overarching problem was attempting to distill all trading and investment decisions down to extraordinarily complex model supported decisions that were intuitively and fundamentally unsound. An excellent example of this, but certainly not the only one, was Merrill Lynch’s systematic removal of seasoned mortgage trading managers, and replacing them with structured finance salesmen that had, in their own estimation, limited understanding of U.S. capital markets, much less a granular knowledge of mortgage. trading, in pursuit of revenue without regard for risk. Incidentally, one of these individuals was just denied a $73mm compensation claim, as per B’Berg yesterday, after his yeoman’s effort at destroying the firm. (I have never had any connection to Merrill). There should be a special circle in hell for those that committed fraud, or knowingly breached their fiduciary duties to investors.
In the final analysis, this was a demand driven phenomenon, all of the participants thought they were getting exactly what they wanted, homes, cash equity, real estate commissions, highly yielding investments, revenues, and bonuses, until the wheels came off.
So, in the words of Forrest Gump, That’s all I’ve got to say about that…
I surmise, deadeye, that you’ve already made a killing on the markets (at least I hope so) and are taking a breather.
I’m sure your analysis of the fiasco of the past three years (plus) is correct. The pointy heads got it wrong, their elaborate models didn’t capture true risk, and the rest of us were greedy bastards, too. Got it. So how do we prevent it from happening again? Whose wings get clipped? How do we fix Wall St and Main St?
Please don’t send me a ppt presentation, and don’t tell me that we should all just behave next time. I want synthesis and recommendations! (Oh, and please be succinct, I have a limited attention span.)
@ deadeye and ASposa Question – Without CRA and the somewhat tarnished political concept that most people benefit from home ownership, would the earthquake on Wall St have occurred?
Roo, There is an invisible self correcting mechanism at work. Wall Street won’t won’t devote resources or create products for which there is no demand. Structured finance, which grew out of all proportion, has found it’s footing with an appropriate investor base, and is humming along. Investors that once embraced highly complex risk now look for simplicity. Surviving mortgage lenders/servicers with legacy portfolio issues still have lots of wood to chop, but we need an active mortgage origination model that is built upon rational lending standards. Originate to sell, with no retained risk alignment, didn’t work. Overly rigid regulation will stifle what is a necessary engine of economic growth. After all of the proposals are floated, something workable and grounded on market principles rather than fiat regulation should emerge. One avenue is to change the status of mortgage loans to full recourse. This would discourage speculation, and contrived default. In return, lenders should be flexible with borrowers and open to renegotiation of terms if warranted.
Wind down the agencies, over time, but purposefully, while the private market recovers to fill the void. Far more easily said than done. Someone other than taxpayers needs to assume the risk, and those institutions should not have an implicit taxpayer backstop. A market will develop, along with missteps and problems that need to be corrected before they become catastrophic.
In derivatives, what we witnessed is the first real failure of a new market which had never experienced anything but robust growth and broadening participation. Participants should impose rules for margin, capital adequacy, and counterparty risk that should be applicable universally. The market could still function as it should, but without the surprise factor of ex post facto failures.
Investment bank’s proprietary trading grew astronomically and has been curtailed through regulation, but it still exists somewhere, under a different umbrella. Proprietary trading isn’t inherently a bad thing, but there should be a true “Chinese Wall” between what the house is doing and customer trading. Remember the Goldman hearings when they painfully tried to portray proprietary trades as market making activities?
Bank’s risk disclosures must be far more transparent. This can be accomplished only by engaging more competent regulators. Pay them more, and give them some tools. How galling was it to watch the steady stream of loss disclosures, most of which were arguably know well in advance of their release to the public.
Allow insolvent institutions to fail.
Sensible, deadeye, thanks. My favorite line was your last. Requiring insolvent institutions to fail is pretty radical, though. It would involve breaking up the banks into small pieces–something they would fight tooth and nail, no? And what do we do when the pieces grow?
And is this really you? Advocating regulators with teeth? Is this the deadeye I know? Have I misjudged you?
And what about those bastions of chaos, the hedge funds? Does the Wild West need a sheriff?
Hedge funds manage risk capital for qualified borrowers. My only issue there is the herd mentality that prevails. There is less independent thinking than it appears. Everyone tends to crowd the same trades and squeezes the margins. The transfer of information can become an issue, like what is playing out with Galleon now. Hedge funds are already limited in their leverage by their Wall Street counterparties with whom they have financing lines, but the introduction of margin requirements and oversight of aggregate positions in derivatives would help.
On the topic of failure, I mean going forward. Letting Lehman go was like throwing gasoline on a fire. By allowing them to fail, they opened a loophole for Barclay’s to pull back from their acquisition plans under the pretext that they needed a shareholder vote that couldn’t be gotten over the weekend. Barclay’s would have bought Lehman in a deal similar to Bear Stearns, the markets would have continued to function to some extent, and incalculable amounts of money would not have been lost in the ensuing tsunami that overwhelmed the markets. When teaching lessons in moral hazard, one should have a reasonable idea of the costs and consequences. Instead, Barclays bought Lehman out of bankruptcy and garnered an enormous windfall. I also believe that the FED, basically simultaneously, became aware that Merrill was a far greater problem, in imminent danger of collapse, and that the BofA deal was a shotgun wedding with an absurdly high dowry.
Investors, not borrowers…
Yes deadeye the issue of the regulators and their competence is significant. My understanding is that they are generally government drones not only impressed with the people they are regulating but that lack the knowledge or choose not to ask the right questions. This of course has been told to me by someone who has had direct contact with such and I know not of personal experience.
What do you think, ASposa?
Regulators want to join GS, JP, et al for a bigger paycheck. There’s an incestuous relationship between the regulators and the regulated.
Who will regulate the regulators?
First, regarding CRA, etc. yes I think the meltdown still would have happened, as it was more a result of a poor incentive structure and market participants’ unreasonably high confidence in their abilities/insight than markets struggling to overcome a misdirected government fiat.
I agree with Deadeye’s comments regarding securitization – it was/is a very useful tool for efficiently transferring risk from those who don’t want it to those who do (for a price). His comments also serve to dispute (another poster’s) earlier comments that the securitization market only came about due to banks’ tortured efforts to overcome CRA.
Regarding prop trading, I think more important than a Chinese Wall would be to remove the implicit government guarantee, and subsequent funding advantage, from firms engaged in it. Yes, that means some dismantling of the major banks.
I agree that improved/standardized margining and disclosure of derivatives would help, especially since I don’t agree that hedge funds are limited in their ability to take risk (leverage is really a poor proxy for risk, in my view). When times are good, which is the only time that matters since that’s when the system’s risks really build, margins historically have decreased enough to be irrelevant in many hedge funds’ investment process.
I also think, however, that the demonization of hedge funds in the popular press/political arena is wrong-headed. Their contribution to the financial crisis was miniscule compared to others’. What particularly galled me about the steady stream of belated loss disclosures was that they were invariably preceded by claims that hedge funds were lying about banks’ losses to profit from shorting their stocks.
I apologize for the late reply but that will be an ongoing problem for me.
One more thing. DagT, I think the bulk of Greenspan’s actions were entirely consistent with his early views. Especially in his lack of desire to regulate or oversee the markets, he showed the same confidence that the market would always be right that was at the heart of his early views.
I don’t think hedge funds were demonized in the financial crisis, at least not the recent one. That they had little to do with things going awry, compared to the banks, is pretty much conventional wisdom.
Not sure I follow “I don’t agree that hedge funds are limited in their ability to take risk.” You think that even though hedge funds are greatly leveraged, they’re not necessarily taking on too much risk?
And what exactly galled you? That banks were trying to scapegoat the hedge funds for their losses?
Maybe it’s because I work for a hedge fund, but on some level I see the focus on hedge funds’ risks and activities as an attempt to shift the focus from the real culprits.
What galled me was the while the banks were lying about how much they were losing, they were also saying “whatever you may have heard about our losses is just lies used by short sellers to decrease our stock price.”
The hedge fund/risk point: I don’t really agree with Deadeye’s statement that counterparties meaningfully limit hedge funds’ ability to take risk. I say that because when markets appear calm, the amount of money counterparties force hedge funds to set aside to support (collateralize in a sense) a trade is miniscule. Banks tend not to demand much collateralization when times are good – instead, competitive forces often push margin requirements to, or close to, zero.
I should not have put in the bit about leverage versus risk, but it’s a pet peeve of mine. Some people think that leverage is all that matters, but it’s really just a proxy for how much risk someone is taking. Almost any risk related question is better addressed with a specific question than with the general “how many times are you levered?”
Thank you, Asposa, for your comments. One can learn a great deal from you.
As I was reading about hedge funds and my eyes glazed over and my mind wondered to hedge hogs, I wondered if perhaps it is how many of my students feel when they read about the electron transport chain.
Nyet! Nyet! Nyet! Did they leave a nice samovar? I’d love one to make my daily teas with. Spasibo!!
@ ASposa i read Greenspan first in ’63 when his essay “The Assault on Integrity” supported the profit-seeking business person as the “unexcelled protector of the consumer”. His premise was that it’s in the self interest of every businessman to maintain a stellar reputation . In fact his position on shoddy or dangerous behaviors of said business persons was linked to a sharp reduction of the market value of a product even if it’s resources remained intact. So yes, his recent comments regarding his dismay at the lack of self regulatory efforts of Wall St during the lead up to the melt down were consistent with his long ago held views. However in ’66 he penned “Gold and Economic Freedom” which seems to be in direct contradiction to his acceptance of his position with the FED. The FED being IMO the king of regulatory agencies.