Beatings and Shootings Continue in Iran

It appears that the Iranian government sees no choice but to crack down even harder. Perhaps they realize if they give in to the protestors they'll be thrown out of office.

Today, the regime is threatening to play an even stronger card.

Earlier Monday, the elite Revolutionary Guard issued its sternest warning so far in the post-election crisis. It warned protesters to "be prepared for a resolution and revolutionary confrontation with the Guards, Basij and other security forces and disciplinary forces" if they continue their near-daily rallies.

The Basij, a plainclothes militia under the command of the Revolutionary Guard, have been used to quell streets protests that erupted after the election result was announced.

The Guard statement ordered demonstrators to "end the sabotage and rioting activities" and said their resistance is a "conspiracy" against Iran. On Sunday, acting joint chief of the armed forces Gen. Gholam Ali Rashid issued a thinly veiled warning to Mousavi, saying "we are determined to confront plots by enemies aimed at creating a rift in the nation.

Let's hope this does not turn into a horrible massacre. The only way out of it, is if the army disobeys orders.

The Collapsing Life of Lenny Dykstra

ESPN has an incredible article by Mike Fish, on ex-Met and Phillies' great Lenny Dykstra. His business dealings can only be described as pathological. This is a gripping read. It's not an ESPN puff piece. There's too many parts to excerpt, so I won't bother. (Read the whole thing here.)

Easterbrook on the AIG Fiasco

It's not often you get the clearest financial writing from a football column, but Greg Easterbrook segues into the AIG fiasco in Tuesday Morning Quarterback today. (The link is for the entire column, scroll down to the sub headline: Regrettably, TMQ was Right About Something to find the entire AIG commentary.)

On the big outrage, of the $172 billion taxpayer-funded giveaway, we now know much of it used to cover credit-default swap debts AIG refused to honor. Large amounts went to foreign banks, such as Deutsche Bank and Societe Generale of France. AIG simply handed over payment in full, without negotiating. When AIG was days from insolvency, it should have said to Deutsche Bank and others, "If we go bankrupt, you will stand in line with all the other creditors at the bankruptcy court and be lucky to get 10 cents on the dollar. Would you accept 50 cents on the dollar to settle instead?" Negotiating with creditors to avert bankruptcy is a standard business tactic; General Motors and Chrysler have been doing this for the past few months. As the Wall Street Journal recently reported, a year ago Merrill Lynch was owed credit-default swap payments by an insurer called XL Capital, and after negotiations, Merrill accepted 13 cents on the dollar.

But instead of negotiating a reduction of debt, AIG simply immediately handed over full value. After all, the money was coming from taxpayers' pockets, and when has anyone cared how much taxpayer money is wasted? Goldman Sachs was the largest single recipient of AIG's paid-in-full taxpayer-funded gift, receiving $13 billion. Merry Christmas! And now we learn that [CEO Edward] Liddy owns at least $3 million worth of Goldman Sachs stock -- whose price was shored up by the paid-in-full taxpayer gift. AIG's tax-funded gift to Goldman Sachs couldn't possibly have had anything to do with Liddy's stock, could it? The worst sin is that the Washington muckety-mucks running the tax-money giveaway team did not require AIG to negotiate down its counter-party obligations. Bernanke and Henry Paulson, who approved AIG's actions last fall, deserve to be run out of town on a rail for their irresponsibility in management of public funds. Meanwhile, can anyone imagine that if a French or Germany insurer owed money to an American bank, that the French or German governments would ever pay one single centime or pfennig, let alone cover the entire debt immediately?