This week, Guantánamo!!! It was an incredible experience.

We arrived in Gitmo on Friday and stared going around the town, everybody knew Crystle and I were coming so the first thing we did was attend a big lunch and then we visited one of the bars they have in the base. We talked about Gitmo and what is was like living there. The next days we had a wonderful time, this truly was a memorable trip! We hung out with the guys from the East Coast and they showed us the boat inside and out, how they work and what they do, we took a ride around the land and it was a loooot of fun!

We also met the Military dogs, and they did a very nice demonstration of their skills. All the guys from the Army were amazing with us.

We visited the Detainees camps and we saw the jails, where they shower, how the recreate themselves with movies, classes of art, books. It was very interesting.

We took a ride with the Marines around the land to see the division of Gitmo and Cuba while they were informed us with a little bit of history.

The water in Guantánamo Bay is soooo beautiful! It was unbelievable, we were able to enjoy it for at least an hour. We went to the glass beach, and realized the name of it comes from the little pieces of broken glass from hundred of years ago. It is pretty to see all the colors shining with the sun. That day we met a beautiful lady named Rebeca who does wonders with the glasses from the beach. She creates jewelry with it and of course I bought a necklace from her that will remind me of Guantánamo Bay :)

I didn’t want to leave, it was such a relaxing place, so calm and beautiful.

“It’s just a crime the way it puts people in limbo. They first off have gone through the grief of losing their house, then they move out and find out that they still own it and have responsibility for it.”

Four wars, a Moon landing and the rebuilding of Europe: all that and more could have been paid for with the cost of the US government's proposals for saving its banking industry.

Last week's instalment of the great bailout - the government's pledge to buy up to $1tn of toxic assets in conjunction with the private sector - brings the total US rescue initiatives to $11.6tn. Only one other event in the past century has cost more than $1tn, after adjusting for inflation, and that was the second world war. Add in the cost of nine other 20th-century initiatives, from the war on terror to the New Deal, and the total is $7.5tn - less than two-thirds of the banking bailout.

The Marshall Plan, intended to rebuild Europe after the devastation of war, cost less than a hundredth of the value of the banking rescue. Add in the price of two other US economic packages - the New Deal and the Savings & Loan bailout of the 80s - and the $887bn cost is still well under a tenth of today's total.

I have yet to see a culture where truly shared values were proclaimed by fiat from above rather than forged by struggle and through consensus from below, let alone one where the primary responsibilty for tolerance rests with the most impoverished minority group that faces the most intolerance.

Phrase of the Day

Via Greenwald,

Newsweek's Evan Thomas in the magazine's cover story:

If you are of the establishment persuasion (and I am), reading Krugman makes you uneasy. You hope he's wrong, and you sense he's being a little harsh (especially about Geithner), but you have a creeping feeling that he knows something that others cannot, or will not, see. By definition, establishments believe in propping up the existing order. Members of the ruling class have a vested interest in keeping things pretty much the way they are. Safeguarding the status quo, protecting traditional institutions, can be healthy and useful, stabilizing and reassuring.But sometimes, beneath the pleasant murmur and tinkle of cocktails, the old guard cannot hear the sound of ice cracking. The in crowd of any age can be deceived by self-confidence, as Liaquat Ahamed has shown in "Lords of Finance," his new book about the folly of central bankers before the Great Depression, and David Halberstam revealed in his Vietnam War classic, "The Best and the Brightest." Krugman may be exaggerating the decay of the financial system or the devotion of Obama's team to preserving it. But what if he's right, or part right?

In 2003, thousands of American soldiers were unexpectedly uprooted from Afghanistan and sent off to fight in a long and bloody war overseas. After serving multiple tours of duty in Iraq, the vast majority of these troops said they couldn't wait to get back and have their lives return to normal.

Suppose a bank is sitting on a $10 million package of collateralized debt obligations (CDOs) that was put together by, say, Countrywide out of junk mortgages. Given the high proportion of fraud (and a recent Fitch study found that every package it examined was rife with financial fraud), this package may be worth at most only $2 million as defaults loom on Alt-A “liars’ loan” mortgages and subprime mortgages where the mortgage brokers also have lied in filling out the forms for hapless borrowers or witting operators taking out mortgages at far more than properties were worth and pocketing the excess.

The bank now offers $3 million to buy back this mortgage. What the hell, the more they bid, the more they get from the government. So why not bid $5 million. (In practice, friendly banks may bid for each other’s junk CDOs.) The government – that is, the hapless FDIC – puts up 85 per cent of $5 million to buy this – namely, $4,250,000. The bank only needs to put up 15 per cent – namely, $750,000.

Here’s the rip-off as I see it. For an outlay of $750,000, the bank rids its books of a mortgage worth $2 million, for which it receives $4,250,000. It gets twice as much as the junk is worth.

The more the banks holding junk mortgages pay for this toxic waste, the more the government will pay as part of its 85 per cent. So the strategy is to overpay, overpay, and overpay. Paying 15 per cent is a small price to pay for getting the government to put in 85 per cent to take the most toxic waste off your books.

Two hundred schoolchildren in Britain, some as young as 13, have been identified as potential terrorists by a police scheme that aims to spot youngsters who are "vulnerable" to Islamic radicalisation.

People living in the world's poorest communities are eating less frequently and consuming worse food as a result of the global financial crisis, according to a study of the impact of the recession in five developing nations published today.

"There is a sort of very pure democracy and self-governance at play. People are making up the rules of their cluster of tents, deciding what's permitted, just as in any sort of community," she said. "You don't want to romanticise this - it isn't camping - but there is a community, and there is a sense of helping others. We've had a series of storms here recently, and if there's somebody new who doesn't have a tent, people will take them in. It's that understanding that, you know, there's somebody worse off than I am."

Brazil’s President Luiz Inácio Lula da Silva on Thursday blamed the global economic crisis on “white people with blue eyes” and said it was wrong that black and indigenous people should pay for white people’s mistakes.

Greenwald

Like a dozen or so other cities across the nation, Fresno is dealing with an unhappy déjà vu: the arrival of modern-day Hoovervilles, illegal encampments of homeless people that are reminiscent, on a far smaller scale, of Depression-era shantytowns.

For those without a decoder ring, "everyone" being a fiscal hawk means that due to the current financial disaster, they'll soon be coming after Social Security and Medicare...

Three windows at the front of his £2m detached sandstone villa were smashed and the rear window of a black Mercedes S600, parked in the driveway, was destroyed. No one was hurt. Goodwin and his family were not at home at the time and are thought to be living abroad. The former RBS chief was said to be "shaken" by news of the attack while his friends reportedly said the people who vandalised his property had "gone too far".

I have been asking "if the toxic sludge is so under-priced, why isn't Warren Buffet buying it ?" Turns out that Mr Buffet had a better idea, get the US Treasury to pay him to buy it -- he's one of the inventors of the Geithner plan.

The U.S. government is basically using the taxpayer to guarantee against downside risk on the value of these assets, while giving the upside, or potential profits, to private investors, he said.

"Quite frankly, this amounts to robbery of the American people..."

Buying toxic assets is "nice" for banks, but solves nothing. Bailing out AIG, oddly enough, could be seen at least as a step in the right direction - the problem of course being that if you're going to take care of all potential liabilities, the total bill might be in tens of trillions, rather than mere trillions - with a lot of that money going to the smart hedge funds that bet on things going badly in various markets and for various institutions (cf Pauslon above).

Given all that, we have several routes:

* one that gives a lot of money to banks that do not deserve it to solve their asset problem, but still do not make them creditworthy (the current Geithner plan), which gives stock markets a temporary boost, taxpayers permanent pain, and solves nothing;

* one that does help them get rid of their real problem (huge contingent liabilities on bets that are turning sour), but is vastly more expensive than the mind-numbing numbers we're throwing around already, and gives all the money to hedgies: the AIG route, multiplied ten or hundred-fold;

* one that acknowledges that the issue is liabilities rather than assets, and that focuses on the fact that a lot of these liabilities are wholy unrelated to any economic or financial activity, and are contingent rather than actual - ie nobody loses anything if they are cancelled. If a 100:1 bet you made is cancelled, your actual loss is not 100, it is 1 - something that could be paid back to you.

So far, the second route has been used when an emergency beckoned (AIG et al); the first route has been used massively but the Treasury does not seem tired of it yet, and the third one seems anathema.

From the comments

It sounds like you can easily get a generous Geithner Gift. Just pay a million for toxic waste worth a thousand.

Find a friend who has has toxic waste worth a thousand. Give him $150,000 of your own money and a $850,000 Geithner Gift (uh, sorry, loan).

Strangely enough, the waste isn’t worth a million. What a surprise. The government cruelly seizes the waste. How sad. But you and your friend can find consolation in the $849,000.

Please tell me I’ve misunderstood the plan.