Just to let you all know,

For some reason my calendar on myspace has been acting really strange. For instance, though i put the correct times for shows when i update the calendar, they keeping showing the times a couple hours later. I went to my settings for myspace and according the the site, they have adjusted everything on my page for Mountain Time. This however, still doesn't make sense since its putting much later times.

Here's an example.

This friday I have two shows: One at 8pm with Andy Milne and one at 11pm with Hung. But what can been seen on my profile is Andy at 11pm and Hung at 2am. If it was Mountain Time, it should have read 6pm and 9pm, respectively. You can see my dilema as to how utterly confusing and annoying it is. What myspace is trying to say is that im somewhere in the Bermuda Triangle. (god, how creepy would that be if i really was??? The implications of what life is and what it means...)

On top of this, i can't seem to adjust my page for Eastern Time at all. Its something that is setup automatically by Myspace according to how ones computer is registered.

Not sure if anyone else is having this problem, but I apologize for any confusion or inconvenience this may be causing. Hopefully someone myspace gets back to me. But until then, i hope you all have a great weekend and i hope to see at one of the shows this week! (which btw are all at 8pm, not a 11pm and 2am :D)



Kenny

Well, since ive yet again slacked-off on (isn't that a funny juxtaposition) the blogging, i figured i would write a quickie.


Starting tomorrow night at 8pm and going through till sunday, I have the honor of playing with Andy Milne of Dapp Theory along with Gabriel Alegria and his band doing brand new arrangements and versions of Andy's music. It will be one long set full of some very interesting and cool vibes as Dapp Meets Peru. Also, this coming Thursday, Saturday, and Sunday i have the great pleasure of working with Gabriel's band doing the later set, starting @ 10:30PM. By the way, did i mention that Tutuma has no cover or minimum? Yeah, all of a sudden, this gig just got interesting

Also on deck for this week is the return show for NYC Prog Metaler's, Hung. We will be performing at The Trash Bar in Billyburg Brooklyn at 11pm. This is going to be a real special show and one that you wont want to miss! Its a pretty sick line up, open bar from 8-9 (i wont be there for this, but you can enjoy it!), so just incase jazz isnt your thing, this will be and quickly so.

In other news, Hollands is currently working on a new single for you are thats going to make you want to eat your socks: Trust me when i say to you it will be your summer jam.

The Lonnie Plaxico Group has released its newest CD, Ancestral Devotion, available through his website and anywhere else CDs/mp3's are sold.

Please see my calendar (inwhich myspace insists on putting in Mountain Time, don't know why), for more info on locations and times.

Hope to see all of you who are in the New York area at in the very least, one of these shows!

Cheers,

kenny

Hello everyone,

Figured I would take some time to let you all know about a bit of good news, for once

This coming week will be quite a busy one, but be more detailed, it all starts off with this Sunday.

Sunday the 8th

For those of you in the Boston area, Prog/Death Metaller's Hung will be performing at O'Brien's Pub with Boston Metal Band Scourge. This will truly be Brootal show not to be missed. Besides, what else are you going to do on a Sunday Night? Showtime is 9pm. (for more info, check these guys out at www.myspace.com/hungrocks)

Monday the 9th

This night will be the Triumphant return of the Lonnie Plaxico Group. The long hiatus is finally over, and we're getting ready to bring Brand New Material for your listening enjoyment from our upcoming release, Ancestral Devotion, (a Luplax production). We'll be performing at the Blue Note in Manhattan, show times at 8PM and 1030PM.

Tuesday the 10th

For those of you who may have heard and most of you who haven't, i've recently been working with a brand new outfit called Hope Kills Fear. The group is the brainchild of Carley Coma (of the Candiria fame- please check em' out, they're releasing a brand new record that is quite SICK... www.myspace.com/candiria), and Julia Arias. Normally, Ken Schalk (also of Candiria for the non drummer types ) is the drummer, but since he just had a baby girl with his wife, i've been filling in for him in his places... Mad props and blessings to you Ken... So back to the point, this coming Tuesday will be an amazing showcase for Hope Kills Fear over at Sullivan Hall. Its a not to be missed show, and we'll also be joined by The Perfekts, Pill Hill Radio, and Diablo Royal. Showtime is at 8PM, so come out and support this awesome group of guys, I promise it will be a show Not to be missed. (for more info, check out www.myspace.com/hopekillsfearnyc)

Wednesday the 11th

The Beaty Brother's Band will be performing at a special function this coming Wednesday at the infamous Apotheke bar. (www.apothekebar.com/) I cant stress enough how cool and different this spot is, as it definitely has a strong European vibe. But for those of you who enjoy the delights of Absynthe, then this might be a new found place of relaxation and inspiration. We'll be playing tracks off Joe and John's new CD, which will be for sale at a specially discounted rate. Admission is free, and the drinks have a kick that must be experienced. The show starts at 830PM sharp, but the doors will be open at 8 if you want to come hang and grab a drink before the show. (Again, for more info, check out the Bros at www.myspace.com/Beatymusic)

Friday/Saturday, 13th-14th

I will be performing with DBR in a new show called Soundtrack For a Shared Dream. This is a full on Multimedia show, complete with a rather intense and awe inspiring Film. Instead of having the soundtrack pre-recorded, we will be playing along with the film. The first show, Friday, will be at the Tribeca Performing Arts Center, and the following night we will be in Peekskill, NY at the Paramount Center For The Performing Arts. For anyone who enjoys post modern classical, its a must see show with a 5 star ensemble. (IMHO )

In other news, things look like they will be getting much busier Dapp Theory, now that we've signed on with a very prominent European promoter, more on that as it comes, and Resolution 15 is gearing up to go "post" with our new EP that we hope to get out at some point within the next few months. Also, Concorde recording artist and all around swell guy Benny Reid will be shortly releasing his 2nd album through Concorde! We're all very excited about the product, and we will begin setting up dates in the City and abroad in the weeks to follow. Check out his page at www.myspace.com/bennyreid

In other random news, I'm currently reading up and studying up on Massage Therapy. It's been something i've had a curiousity in, and i figured, why not? So we'll see what comes of that.

Hopefully 2009 will be a forward moving year for us all in All of the facets of our lives, and thanks for taking the time to read all of this!

Cheers,

kenny

well,

its been a while, so i'll try to be brief on this one. The title of this note is a quote that i read just now from Super Bowl Producer Ricky Minor in relation to his advice on why Jennifer Hudson Should lip instead of sing. And by lip, i of course mean lip-sync.

The decision just before she was to go out and perform the National Anthem, was made due to the fact that when performing live, "There's too many variables to go live." He also went on to say "I would never recommend any artist go live, because the slightest glitch would devastate the performance."


Obviously, lip-syncing, auto tuning, and backing tracks, beat detective, sound replacing, these are all the wonderful and powerful tools of modern music making. Today the music you hear in your iPods and online streams, the myspace and facebook accounts, All have in some way, shape, or form, been manipulated, molded, and "perfected" by technology and the producers and musicians and bank rollers utilizing it.

"This was such an important performance, because it's the first time everyone has seen Jennifer... But she's in such a great place, with such great spirits, and time can heal her wounds. She's on fire right now and totally grounded."

So as an artist trying to reconcile the evil that was done to her and hers, instead of being allowed the opportunity to be open, vulnerable, in perfect, for the sake of an artist (and might i be clear, a very good singer), to her public and fans, She was asked to Lip-sync the National Anthem. Talk about an incredibly gross disconnect for an Artist and her Audience, as well as for humanity as a whole.

Maybe this stems from the fact that i truly believe we are all one; that we are connected in some unseen way. Perhaps, that thought process seems overtly spiritual or mundane. In todays society, social, mental, and spiritual disconnect run rampant. Its no shock that these days you can be surrounded by hundreds of neighbors and not know the old lady next doors name. And this is reflective in our music today. (pointing directly towards our western culture).

When you think about a lot of the good singers we have in the pop world (and they aren't that many, but the few that are they can "sang"), a lot of them look to their heroes as inspirations. But its not just for their talent. Many times, the connect comes from an identity, a human trait, story, or life experience that pushes the art of the singer to a level that is Uniquely Theirs: A pure moment of true happiness, or pain, suffering, joy, love, anger. Many times, even the seemingly frivolous of songs sung by these individuals, regardless of content, move people to react and to look within themselves. This is the power of Music.

But i Guarantee you that anyone singer can think of (Ella, Marvin, Stevie, Frankie, Sammy, etc.,) they did not "perform" perfectly. They probably sang out of tunes more times then has been documented. Or forgotten words. Or lost their cool on stage. Missed a step. I could go on, but the point is, as much as we revere these artist for the amazingly hypnotic performances that have captured the hearts of millions, they were far from perfect. But this is not what our (music) world today brings us to.

Today, Our music is polished. The turtle wax of the digital age and production world of recorded and performed music leaves no room for human error. There is zero tolerance 90%.
or 99% for that matter. Everything must be perfect. The human element these days can be synthesized so well, that the average person and even the average musician, can no longer tell the difference. As was evident in Jennifer's performance yesterday (saw the you tube, she sounded good. But thats because it was pre-recorded). and according to the article, Jaime Foxx even called to tell her how great she did. Even he, someone who knows the industry, didn't pick up on the lip job (or, more likely, he did and was being professionally cordial).

So frankly, we don't need the human spirit in music anymore. And it seems to be, in this day and age, a growing phenomena. Eh, phenomena isn't the right word. Lets call it, status quo. Without getting overtly social/political, its a rather Incredible litmus to where we are as a society by and large, and the direction that humanity has been heading in for quite some time now. We would rather be in the zone of safety, then to take a chance. We relish on the thoughts of security rather then the enigmatic embrace of freedom. We become afraid to make mistakes, and so, we do not push ourselves to learn, to fall, and to pick ourselves up again.

These days, Everything is Instant. within a quarter of any given day, you can be in most places of this country, seen a myriad of films and tv shows and books online, and conversed with anyone or everyone you know around the world. The social assembly line takes everything we have been taught to want and need right into our finger tips, right into to our cell phones and laptops and mp3 players and everything else we touch on a regular basis.
So as a society, we expect our entertainment to be the same way: Fast, simple, easily digestible, and fleeting. Totally becoming impersonal, or at best, touching on a brief nerve humanity within the safety and confines of technology.

I would have loved to hear Jennifer sing for real. Perfect show or not. Out of tune and missing words or spot on. To have someone survive the death of three of their closest family members and still be able to smile and keep holding on, is in fact, Beautiful and Powerful, and to have someone tell her at the last minute, "you know what, its the super bowl. This needs to sound good. So i know you've been wanting to sing and get back out there and do your thing, but, just fake it, because,

'That's the right way to do it."

R15 will be performing its first show of the year @ Crash Mansion ( 199 Bowery Blvd, NYC).

Show time is 10PM, 21+, $10 to get in. You know, the usual suspects.

We will be unveiling new material as well new renditions of old tunes. And do to my flu you may see me projectile vomit on stage. I've already started stalking up on Pea Soup.

Come out and be Brutal.

Kenny

Its been a while since i've last written anything on this website, let alone, checked the damn thing. But i figured i would take some time to let you know whats happening.

The remainder of 2008 has been winding down to close, but 2009 is looking to be a great year! Violin driven Social-politico metal band Resolution 15 is working on a brand new record, (new material, and an old classic made anew), and Dapp Theory is looking to hit the road hard in 09. We're already started to book stuff for Europe and other continents, so hopefully by february we'll have more details and tour dates together. The Richard Padron Project is finishing up the last touches for the new record, so expect to have your mind and ears rocked hard in the 09 by the Blistering, mind melting prowess of Richard Padron's guitar mastery. George Colligan and Mad Science will be going into the studio by the end of this year with a brand new record for all the awesome and wonderful Jazz/Fusion/Awesome goodness you can handle in a single CD (or download). Expect that record to be out sometime early next year. I've also been in the woodshed trying to get my guitar chops together for a new jazz/fusion/metal project that i've had in mind with fellow musicians Jim Robertson and Aurelien Budynek, as well as few other good friends of mine. That record/project is still tba, but the material is being completed as i type and as you read, so hopefully sometime by spring/summer of next year you'll have your first tastes of my new project. And as always, my solo record Second Last Minute is still available for download on iTunes and Amazon.com, so definitely check it out if you haven't already!

As for the political happenings in the world, there are many, and though my mouth and fingers have been silent, my mind is racing to keep up with all the info, so expect the resounding trumpet of this page to continue in the new year.

Please keep in touch and i'll do my best to keep you all posted to when and where i'll be next.

peace,

kenny

This is Your Nation on White Privilege
By Tim Wise
9/13/08

For those who still can't grasp the concept of white
privilege, or who are looking for some easy-to-understand examples
of it, perhaps this list will help.

White privilege is when you can get pregnant at
seventeen like Bristol Palin and everyone is quick to insist that
your life and that of your family is a personal matter, and that no
one has a right to judg e you or your parents, because "every
family has challenges," even as black and Latino families with
similar "challenges" are regularly typified as irresponsible,
pathological and arbiters of social decay.

White privilege is when you can call yourself a
"fuckin' redneck," like Bristol Palin's boyfriend does, and talk
about how if anyone messes with you, you'll "kick their fuckin'
ass," and talk about how you like to "shoot shit" for fun, and
still be viewed as a responsible, all-American boy (and a great
son-in-law to be) rather than a thug.

White privilege is when you can attend four different
colleges in six years like Sarah Palin did (one of which you
basically failed out of, then returned to after making up some
coursework at a community college), and no one questions your
intelligence or commitment to achievement, whereas a person of
color who did this would be viewed as unfit for college, and
probably someone who only got in in the first place because of
affirmative action.

White privilege is when you can claim that being mayor
of a town smaller than most medium-sized colleges, and then
Governor of a state with about the same number of people as the
lower fifth of the island of Manhattan, makes you ready to
potentially be president, and people don't all piss on thems elves
with laughter, while being a black U.S. Senator, two-term state
Senator, and constitutional law scholar, means you're "untested."

White privilege is being able to say that you support
the words "under God" in the pledge of allegiance because "if it
was good enough for the founding fathers, it's good enough for me,"
and not be immediately disqualified from holding office--since,
after all, the pledge was written in the late 1800s and the "under
God" part wasn't added until the 1950s--while if you're black and
believe in reading accused criminals and terrorists their rights
(because the Constitution, which you used to teach at a prestigious
law school, requires it), you are a dangerous and mushy liberal who
isn't fit to safeguard American institutions.

White privilege is being able to be a gun enthusiast
and not make people immediately scared of you.

White privilege is being able to have a husband who was
a member of an extremist political party that wants your state to
secede from the Union, and whose motto is "Alaska first," and no
one questions your patriotism or that of your family, while if
you're black and your spouse merely fails to come to a 9/11
memorial so she can be home with her kids on the first day of
school, people immediately think she's being disrespectful.

White privilege is being able to make fun of community
organizers and the work they do--like, among other things, fight
for the right of women to vote, or for civil rights, or the 8-hour
workday, or an end to child labor--and people think you're being
pithy and tough, but if you merely question the experience of a
small town mayor and 18-month governor with no foreign policy
expertise beyond a class she took in college and the fact that she
lives close to Russia--you're somehow being mean, or even sexist.

White privilege is being able to convince white women
who don't even agree with you on any substantive issue to vote for
you and your running mate anyway, because suddenly your presence on
the ticket has inspired confidence in these same white women, and
made them give your party a "second look."

White privilege is being able to fire people who didn't
support your political campaigns and not be accused of abusing your
power or being a typical politician who engages in favoritism,
while being black and merely knowing some folks from the old-line
political machines in Chicago means you must be corrupt.

White privilege is when you can take nearly twenty-four
hours to get to a hospital after beginning to leak amniotic fluid,
and still be viewed as a great mom w hose commitment to her
children is unquestionable, and whose "next door neighbor"
qualities make her ready to be VP, while if you're a black candidate for president and you let your children be interviewed for a few seconds on TV, you're irresponsibly exploiting them.

White privilege is being able to give a 36 minute
speech in which you talk about lipstick and make fun of your
opponent, while laying out no substantive policy positions on any
issue at all, and still manage to be considered a legitimate
candidate, while a black person who gives an hour speech the week
before, in which he lays out specific policy proposals on several
issues, is still criticized for being too vague about what he would
do if elected.

White privilege is being able to attend churches over
the years whose pastors say that people who voted for John Kerry or
merely criticize George W. Bush are going to hell, and that the
U.S. is an explicitly Christian nation and the job of Christians is
to bring Christian theological principles into government, and who
bring in speakers who say the conflict in the Middle East is God's
punishment on Jews for rejecting Jesus, and everyone can still
think you're just a good church-going Christian, but if you're
black and friends with a black pastor who has noted (as have Colin
Powell and the U.S. Department of Defense) that terrorist attacks
are often the re sult of U.S. foreign policy and who talks about
the history of racism and its effect on black people, you're an
extremist who probably hates America.

White privilege is not knowing what the Bush Doctrine
is when asked by a reporter, and then people get angry at the
reporter for asking you such a "trick question," while being black
and merely refusing to give one-word answers to the queries of Bill
O'Reilly means you're dodging the question, or trying to seem
overly intellectual and nuanced.

White privilege is being able to go to a prestigious
prep school, then to Yale and then Harvard Business school, and
yet, still be seen as just an average guy (George W. Bush) while
being black, going to a prestigious prep school, then Occidental
College, then Columbia, and then to Harvard Law, makes you
"uppity," and a snob who probably looks down on regular folks.

White privilege is being able to graduate near the
bottom of your college class (McCain), or graduate with a C average
from Yale (W.) and that's OK, and you're cut out to be president,
but if you're black and you graduate near the top of your class
from Harvard Law, you can't be trusted to make good decisions in office.

White privilege is being able to dump your first wife
after she's disfigured in a car crash so you can take up with a
multi-millionaire beauty queen (who you go on to call the c-word in
public) and still be thought of as a man of strong family values,
while if you're black and married for nearly twenty years to the
same woman, your family is viewed as un-American and your gestures
of affection for each other are called "terrorist fist bumps."

White privilege is when you can develop a pain-killer
addiction, having obtained your drug of choice illegally like Cindy
McCain, go on to beat that addiction, and everyone praises you for
being so strong, while being a black guy who smoked pot a few times
in college and never became an addict means people will wonder if
perhaps you still get high, and even ask whether or not you ever sold drugs.

White privilege is being able to sing a song about
bombing Iran and still be viewed as a sober and rational statesman,
with the maturity to be president, while being black and suggesting
that the U.S. should speak with other nations, even when we have
disagreements with them, makes you "dangerously naive and immature."

White privilege is being able to claim your experience
as a POW has anything at all to do with your fitness for president,
while being black and experiencing racism and an absent father is
apparently among the "lesser adversities" faced by other
politicians, as Sarah Palin explained in her convention speech.

And finally, white privilege is the only thing that
could possibly allow someone to become president when he has voted
with George W. Bush 90 percent of the time, even as unemployment is
skyrocketing, people are losing their homes, inflation is rising,
and the U.S. is increasingly isolated from world opinion, just
because a lot of white voters aren't sure about that whole "change"
thing. Ya know, it's just too vague and ill-defined, unlike, say,
four more years of the same, which is very concrete and certain.

White privilege is, in short, the problem.

New Questions as the Bailout Sparks A War
by Danny Schechter

New York - The Hank and Ben Show was doing so well in the ratings. They crafted a plan -- ok, only 3 pages but still a prodigious effort in an era when so few can agree on the need for heat on a freezing day. But now the great unraveling has begun. Remember Karl Marx's lesson on the dialectic: thesis leads to anithesis resulting in synthesis. Maybe.

They sold the Democrats on the need for a bailout. They made it big so the rest of the world would notice and be impressed. They started out unreasonably demanding total power knowing they would have to compromise and so allow all sides to win something and hence come aboard.

Paulson knew he had to act fast, to make it happen in the same time period in which God was said to created the world. The 7 Day clock was ticking and they seemed headed for the endzone. A former football player, he avoided blocks by Nancy and tackles by Barney and was ready to throw a Hail Mary Pass if all else failed. President Bush was awakened from his slumber, given a script and a role to play in his White House pulpit. When his own party balked, he summarized the problem this way:

"This sucker could go down."

It wasn't clear who was the sucker; the system, the taxpayers or both. But it didn't matter. The credit markets were seizing up. Washington Mutual imploded and the hard rain that Dylan warned us about was falling ominously on Washington and Wall Street at the same time.

Was this the deluge Jackson Browne warned about?

"By the magnitude of her fury in the final hour
And when the sand was gone and the time arrived
In the naked dawn only a few survived
And in attempts to understand a thing so simple and so huge
Believed that they were meant to live after the deluge"

There certainly was a deluge of conflicting opinions, posturing and polemicizing. There was hysteria on the right about the coming of communism which must have amused the Chinese, and anger on the left which expressed itself in protests that the Big Chief Democrats ignored as they compromised (or caved) their way to the table.

Missing in most of our media coverage which reported the drama as a sit-com while focusing on the political debate to be or not to be, was any sense of whats really behind this -- a debt we cannot manage or wish away.

We are bankrupt and this may be a going out of business sale, as foretold by the Iranian President who said the US Empire is spent. Noted the Journal Inquirer.com:

... even if it can work -- that is, prop up insolvent financial institutions -- the Treasury's proposal is still a proclamation of the collapse of the whole U.S. financial system. Even if some financial institutions are saved, the collapse will manifest itself in other ways, probably ways more damaging to the public. For who cares if Goldman Sachs and Morgan Stanley endure if the issuance of $700 billion more in government bonds drives interest rates way up, diverts credit from the private economy, devalues the already sinking dollar, and sends commodity prices soaring again?

Lordy, Ms. Claudy!

Across the pond where the Bank of England was joining other central bankers including the Fed in pumping additional billions into money markets, the right wing magazine of Tory leanings, The Spectator ran a piece that said; "FACE IT, MARX IS HALF RIGHT ABOUT CAPITALISM." Oh the pain in that admission. The article focused on DEBT, the 'd'-word that is so often conspicuous by its absence:

Trading the debts of others without accountability has been the motor of astronomical financial gain for many in recent years.

....This crisis exposes the element of basic unreality in the situation - the truth that almost unimaginable wealth has been generated by equally unimaginable levels of fiction, paper transactions with no concrete outcome beyond profit for traders. But while we are getting used to this sudden vision of the Emperor's New Clothes, there are one or two questions that, in government as in society at large, we at last have a chance to ask. Some of these are elementary and practical. Given that the risk to social stability overall in these processes has been shown to be so enormous, it is no use pretending that the financial world can maintain indefinitely the degree of exemption from scrutiny and regulation that it has got used to. To grant that without a basis of some common prosperity and stability, no speculative market can long survive is not to argue for rigid Soviet-style centralised direction. Insecure or failed states may provide a brief and golden opportunity for profiteering, but cannot sustain reliable institutions.

And so they too call for more regulation to save capitalism from itself.

Perhaps that's why usually conservative money managers are backing the bailout as James Quinn explains in an article that calls the US the Titantic.

As I've watched the various business networks over the last few weeks, I sense desperation and fear among the commentators, pundits, and "experts". It is a fear based upon self interest. Their lives depend upon the masses keeping their money invested in the market. They have overwhelmingly been in favor of the bailout bill. I wonder why. Jim "Mad Money" Cramer, who has a net worth of $100 million, is in favor of the bill. Larry "Free market capitalism is the best path to prosperity" Kudlow, a multi-millionaire, is 100% in favor of a socialist bailout of the criminal investment banks. They support this "blank check" to a government that is already $9.65 trillion in debt, because they want to maintain their lavish lifestyle, multiple estates, and prominent positions in society.

So as the contradictions mount, the real audience that Hank and Ben are playing to are the investors and banks in Asia who have kept our economy afloat. It is they who are losing confidence. China is warning its banks not to pump more money into the USA. We are dependent on their largess, on OCM (Other country's money) and as they go, we go. This reality is not being made clear as the Republicans and Democrats trade accusations or just stop talking to each other.

I fear President Bush may finally be right: "This sucker could go down." Part of me thinks that may not be a bad thing--but, alas, I know better. What we really need is debt relief but that's the stuff of another column.

I remember as a kid, other kids would say, "Hey, when you point at me, three fingers are pointing back at you." Somehow, that statement is still profoundly true. Scary.
and on to the daily read...


McCain Blasts Wall Street Failure, Neglects To Mention His Adviser Helped Cause It
by David Corn

As the news broke of the Lehman Brothers meltdown and the rest of the latest financial crisis, John McCain, speaking at a campaign rally in Florida on Monday, angrily declared, "We will never put America in this position again. We will clean up Wall Street. This is a Failure."
If McCain wants to hold someone accountable for the failure in transparency and accountability that led to the current calamity, he should turn to his good friend and adviser, Phil Gramm. (Timothy A. Clary/Getty Images)

And in a statement released by his campaign, McCain called for greater "transparency and accountability" on Wall Street.

If McCain wants to hold someone accountable for the failure in transparency and accountability that led to the current calamity, he should turn to his good friend and adviser, Phil Gramm.

As Mother Jones reported in June, eight years ago, Gramm, then a Republican senator chairing the Senate banking committee, slipped a 262-page bill into a gargantuan, must-pass spending measure. Gramm's legislation, written with the help of financial industry lobbyists, essentially removed newfangled financial products called swaps from any regulation. Credit default swaps are basically insurance policies that cover the losses on investments, and they have been at the heart of the subprime meltdown because they have enabled large financial institutions to turn risky loans into risky securities that could be packaged and sold to other institutions...

Lehman's collapse threatens the financial markets because of swaps. From Bloomberg:

Bond-default risk soared worldwide as the collapse of Lehman Brothers Holdings Inc. sparked concern than the $62 trillion credit-derivatives market will unravel....
Lehman, the fourth-largest securities firm until last week, has been one of the 10 largest counterparties in the market for credit-default swaps, according to a 2007 report by Fitch Ratings. The market, which is unregulated and has no central exchange where prices are disclosed, has been the fastest-growing type of so-called over-the-counter derivative, according to the Bank for International Settlements.
"The immediate problem is the derivative default swaps market, in which a plethora of institutional accounts and dealer accounts are at risk,'' Bill Gross, manager of the world's largest bond fund at Pacific Investment Management Co. in Newport Beach, California, said in an interview with Bloomberg Radio yesterday. "It induces a tremendous amount of volatility and uncertainty.''

Barclays Capital analysts have estimated that if a financial institution with $2 trillion in credit-default swap trades were to fail, it might trigger between $36 billion and $47 billion in losses for institutions that traded with the firm. So the Lehman fiasco--caused in part by the use of unregulated swaps--could lead to ruin elsewhere in the economy.

Gramm is responsible for the rise of the wild and woolly $62 trillion swaps market. And he was chairman of the McCain campaign and a top economic adviser for McCain--until he dismissed Americans worried about the economy as "whiners." After that comment, McCain dumped Gramm. But was Gramm truly excommunicated from McCain land? Last month, he attended a meeting of McCain's top supporters in Aspen, Colorado. And at a dinner that day, McCain singled out Gramm for praise. Last week, failed Republican presidential candidate Ron Paul revealed that Gramm, now an exec for Swiss banking giant UBS (which also lost billions of dollars due to subprime loans and swaps), had recently called him as part of a McCain effort to win Paul's endorsement. Paul turned Gramm down. (Both Gramm and Paul are Texas Republicans.) Gramm's Paul-courting effort seems to indicate that the fellow who has done much to cause the current financial troubles (and who was once considered a possible Treasury secretary should McCain win the White House) is back in the good graces of the McCain campaign.

Shortly after McCain promised he would "clean up" Wall Street, Alaska Governor Sarah Palin, his running mate, appeared at a Colorado rally on Monday morning and proclaimed that "John McCain and I will put an end to the abuses in Washington and Wall Street that have resulted in this financial crisis." She promised a McCain administration would "reform the way Wall Street does business." (She was short on details and spent more time discussing Colorado sports stars from Alaska.) What neither she nor McCain has explained is how they plan to be able to reform Wall Street when they are being assisted by 177 lobbyists and the guy who greased the way to the current crisis with a backroom legislative maneuver. If McCain and Palin are serious about never putting America "in this position again," they ought to consider seriously writing down any economic advice they get from Phil Gramm.

Another interesting read on the very topic i just posted about, but this time, the headline (and article) focuses more on deregulation and its affects. Anyway, read on, its fun!

kenny

Wall Street Crisis Is Culmination of 28 Years of Deregulation
Monday 15 September 2008
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by: David Lightman, McClatchy Newspapers


A Lehman Brothers's stock specialist watches the market drop 500 points as a reaction to his company filing for bankruptcy. (Photo: Reuters)
Washington - No one cog in the federal government's machine of financial regulation let down the country by failing to prevent the latest shakeout on Wall Street. The entire system did.

"They just haven't done a particularly good job," said James Barth, a senior finance fellow at the Milken Institute, a nonpartisan research group based in Los Angeles.

Kathleen Day, a spokeswoman for the Center for Responsible Lending, a consumer-oriented research group, explained the regulatory lapses more starkly: "The job of regulators is that when the party's in full swing, make sure the partygoers drink responsibly," she said. "Instead, they let everyone drink as much as they wanted and then handed them the car keys."

Analysts and politicians are raising serious questions about the nation's financial regulatory system, which dates to the New Deal era.

On Monday, one Wall Street bank, Lehman Brothers, filed for bankruptcy protection and another, Merrill Lynch, sought comfort by selling itself to Bank of America for $50 billion. Earlier this year, the government helped enable the sale of faltering investment bank Bear Stearns to J.P. Morgan Chase, and more recently took over mortgage giants Fannie Mae and Freddie Mac.

Such troubles were supposed to have been prevented, or at least mitigated, by regulatory systems that the nation began to put in place after the banking system collapsed at the start of the Great Depression.

Many banks at the time were badly wounded by their personal and financial ties to securities trading. The 1933 Glass-Steagall Act, and later the 1956 Bank Holding Company Act, mandated the separation of banks, insurance companies and securities firms.

Those and many other federal laws stabilized the banking and securities markets, but by the 1970s, a stumbling U.S. economy led to a change in America's political-economic values. Ronald Reagan led a movement that came to power in 1980 proclaiming faith in free markets and mistrust of government. That conservative philosophy has dominated America for the past 28 years.

Even after taxpayers had to rescue deregulated savings and loans, or S&Ls, with a $200 billion bailout in the late 1980s, the push to loosen regulation paused only briefly.

In 1999, President Clinton signed the Financial Services Modernization Act, which tore down Glass-Steagall's reforms by removing the walls separating banks, securities firms and insurers.

Under President Clinton and his successor, the government became eager to promote home ownership. Interest rates were low, the market grew for loans to borrowers with weak credit and private-sector mortgage bonds boomed. About 38 percent of those bonds were backed by subprime loans. They are at the root of today's financial crisis.

A generation ago, banks, credit unions and S&Ls issued home mortgages that they retained on their books as an asset. The lenders had a stake in receiving full repayment of the loans from creditworthy borrowers.

But in recent years, mortgages began to be sold to firms that cobbled the loans together to create mortgage-backed securities, or mortgage bonds. Loans to the least creditworthy borrowers carried the highest risk but gave the highest returns, so banks and other institutional investors bought loads of them. Except no one was policing the creditworthiness of the borrowers.

The process helped more people buy homes, and a booming mortgage-bond market, led by investment banks, was in full swing by 2005.

When borrowers who had secured loans with adjustable interest rates, however, found their rates going up, many were unable to pay. That meant that holders of bonds backed by these mortgages were stuck with securities worth much less than their face value - or nothing at all. That created a solvency crisis for the banks that loaded up on them - and virtually all of them had.

Some regulatory agencies issued warnings, but credit-rating agencies still said that the bonds - and the banks that issued and bought them - were safe. It turns out, of course, that many were not.

"There was a view that the secondary market excesses could be prevented by the broader application of risk-evaluation models by the investment firms," said Barry Bosworth, senior fellow in economic studies at the Brookings Institution, a Washington think tank. "In fact, risk evaluation is more of an art than a science, and the (private-sector) institutions fooled themselves," said Bosworth, a former adviser to President Jimmy Carter.

With Congress eager to expand home-ownership, regulators felt pressure to deal lightly with mortgage loans to low-income households, and virtually no one proposed national regulation of non-bank lenders or mortgage brokers.

Had regulators questioned sub-prime lending, they would have been harshly criticized, said Edward Kane, a professor of finance at Boston College.

"Imagine what congressional committees would have said," Kane said. "They would have asked about affordable housing. It was a no-win situation for regulators,"

Warning signs began to appear. At least nine federal agencies oversee some part of the mortgage market, and from 2004 to 2007, at least three had issued warnings about risky loans.

Still, none was willing to end the financial revelry.

"It was another example of an asset bubble that appears periodically. An economy will disregard risk, and when people see another investor making money by investing in an asset, others will throw caution to the wind," explained Nicolas Bollen, professor in finance at Vanderbilt University's Owen Graduate School of Management in Nashville, Tenn.

In such an environment, said Day, of the Center for Responsible Lending: "No one wanted to kill the goose that laid the golden egg."