Saturday, December 11, 2010

The Monster

The Monster : How a Gang of Predatory Lenders and 
Wall Street Bankers Fleeced America--and Spawned a Global Crisis
Michael W. Hudson
Introduction: Bait and Switch

A few weeks after he started working at Ameriquest Mortgage, Mark Glover looked up from his cubicle and saw a coworker do something odd. The guy stood at his desk on the twenty-third floor of downtown Los Angeles's Union Bank Building. He placed two sheets of paper against the window. Then he used the light streaming through the window to trace something from one piece of paper to another. Somebody's signature.
Glover was new to the mortgage business. He was twenty-nine and hadn't held a steady job in years. But he wasn't stupid. He knew about financial sleight of hand—at that time, he had a check-fraud charge hanging over his head in the L.A. courthouse a few blocks away. Watching his coworker, Glover's first thought was: How can I get away with that? As a loan officer at Ameriquest, Glover worked on commission. He knew the only way to earn the six-figure income Ameriquest had promised him was to come up with tricks for pushing deals through the mortgage-financing pipeline that began with Ameriquest and extended through Wall Street's most respected investment houses.
Glover and the other twentysomethings who filled the sales force at the downtown L.A. branch worked the phones hour after hour, calling strangers and trying to talk them into refinancing their homes with high-priced "subprime" mortgages. It was 2003, subprime was on the rise, and Ameriquest was leading the way. The company's owner, Roland Arnall, had in many ways been the founding father of subprime, the business of lending money to home owners with modest incomes or blemished credit histories. He had pioneered this risky segment of the mortgage market amid the wreckage of the savings and loan disaster and helped transform his company's headquarters, Orange County, California, into the capital of the subprime industry. Now, with the housing market booming and Wall Street clamoring to invest in subprime, Ameriquest was growing with startling velocity.
Up and down the line, from loan officers to regional managers and vice presidents, Ameriquest's employees scrambled at the end of each month to push through as many loans as possible, to pad their monthly production numbers, boost their commissions, and meet Roland Arnall's expectations. Arnall was a man "obsessed with loan volume," former aides recalled, a mortgage entrepreneur who believed "volume solved all problems." Whenever an underling suggested a goal for loan production over a particular time span, Arnall's favorite reply was: "We can do twice that." Close to midnight Pacific time on the last business day of each month, the phone would ring at Arnall's home in Los Angeles's exclusive Holmby Hills neighborhood, a $30 million estate that once had been home to Sonny and Cher.On the other end of the telephone line, a vice president in Orange County would report the month's production numbers for his lending empire. Even as the totals grew to $3 billion or $6 billion or $7 billion a month—figures never before imagined in the subprime business—Arnall wasn't satisfied. He wanted more. "He would just try to make you stretch beyond what you thought possible," one former Ameriquest executive recalled. "Whatever you did, no matter how good you did, it wasn't good enough."
Inside Glover's branch, loan officers kept up with the demand to produce by guzzling Red Bull energy drinks, a favorite caffeine pick-me-up for hardworking salesmen throughout the mortgage industry. Government investigators would later joke that they could gauge how dirty a home-loan location was by the number of empty Red Bull cans in the Dumpster out back. Some of the crew in the L.A. branch, Glover said, also relied on cocaine to keep themselves going, snorting lines in washrooms and, on occasion, in their cubicles.
The wayward behavior didn't stop with drugs. Glover learned that his colleague's art work wasn't a matter of saving a borrower the hassle of coming in to supply a missed signature. The guy was forging borrowers' signatures on government-required disclosure forms, the ones that were supposed to help consumers understand how much cash they'd be getting out of the loan and how much they'd be paying in interest and fees. Ameriquest's deals were so overpriced and loaded with nasty surprises that getting customers to sign often required an elaborate web of psychological ploys, outright lies, and falsified papers. "Every closing that we had really was a bait and switch," a loan officer who worked for Ameriquest in Tampa, Florida, recalled. " 'Cause you could never get them to the table if you were honest." At companywide gatherings, Ameriquest's managers and sales reps loosened up with free alcohol and swapped tips for fooling borrowers and cooking up phony paperwork. What if a customer insisted he wanted a fixed-rate loan, but you could make more money by selling him an adjustable-rate one? No problem. Many Ameriquest salespeople learned to position a few fixed-rate loan documents at the top of the stack of paperwork to be signed by the borrower. They buried the real documents—the ones indicating the loan had an adjustable rate that would rocket upward in two or three years—near the bottom of the pile. Then, after the borrower had flipped from signature line to signature line, scribbling his consent across the entire stack, and gone home, it was easy enough to peel the fixed-rate documents off the top and throw them in the trash.
At the downtown L.A. branch, some of Glover's coworkers had a flair for creative documentation. They used scissors, tape, Wite-Out, and a photocopier to fabricate W-2s, the tax forms that indicate how much a wage earner makes each year. It was easy: Paste the name of a low-earning borrower onto a W-2 belonging to a higher-earning borrower and, like magic, a bad loan prospect suddenly looked much better. Workers in the branch equipped the office's break room with all the tools they needed to manufacture and manipulate official documents. They dubbed it the "Art Department."
At first, Glover thought the branch might be a rogue office struggling to keep up with the goals set by Ameriquest's headquarters. He discovered that wasn't the case when he transferred to the company's Santa Monica branch. A few of his new colleagues invited him on a field trip to Staples, where everyone chipped in their own money to buy a state-of-the-art scanner-printer, a trusty piece of equipment that would allow them to do a better job of creating phony paperwork and trapping American home owners in a cycle of crushing debt.
Carolyn Pittman was an easy target. She'd dropped out of high school to go to work, and had never learned to read or write very well. She worked for decades as a nursing assistant. Her husband, Charlie, was a longshoreman.In 1993 she and Charlie borrowed $58,850 to buy a one-story, concrete block house on Irex Street in a working-class neighborhood of Atlantic Beach, a community of thirteen thousand near Jacksonville, Florida. Their mortgage was government-insured by the Federal Housing Administration, so they got a good deal on the loan. They paid about $500 a month on the FHA loan, including the money to cover their home insurance and property taxes.
Even after Charlie died in 1998, Pittman kept up with her house payments. But things were tough for her. Financial matters weren't something she knew much about. Charlie had always handled what little money they had. Her health wasn't good either. She had a heart attack in 2001, and was back and forth to hospitals with congestive heart failure and kidney problems.
Like many older black women who owned their homes but had modest incomes, Pittman was deluged almost every day, by mail and by phone, with sales pitches offering money to fix up her house or pay off her bills. A few months after her heart attack, a salesman from Ameriquest Mortgage's Coral Springs office caught her on the phone and assured her he could ease her worries. He said Ameriquest would help her out by lowering her interest rate and her monthly payments.
She signed the papers in August 2001. Only later did she discover that the loan wasn't what she'd been promised. Her interest rate jumped from a fixed 8.43 percent on the FHA loan to a variable rate that started at nearly 11 percent and could climb much higher. The loan was also packed with more than $7,000 in up-front fees, roughly 10 percent of the loan amount.
Pittman's mortgage payment climbed to $644 a month. Even worse, the new mortgage didn't include an escrow for real-estate taxes and insurance. Most mortgage agreements require home owners to pay a bit extra—often about $100 to $300 a month—which is set aside in an escrow account to cover these expenses. But many subprime lenders obscured the true costs of their loans by excluding the escrow from their deals, which made the monthly payments appear lower. Many borrowers didn't learn they had been tricked until they got a big bill for unpaid taxes or insurance a year down the road.
That was just the start of Pittman's mortgage problems. Her new mortgage was a matter of public record, and by taking out a loan from Ameriquest, she'd signaled to other subprime lenders that she was vulnerable—that she was financially unsophisticated and was struggling to pay an unaffordable loan. In 2003, she heard from one of Ameriquest's competitors, Long Beach Mortgage Company.
Pittman had no idea that Long Beach and Ameriquest shared the same corporate DNA. Roland Arnall's first subprime lender had been Long Beach Savings and Loan, a company he had morphed into Long Beach Mortgage. He had sold off most of Long Beach Mortgage in 1997, but hung on to a portion of the company that he rechristened Ameriquest. Though Long Beach and Ameriquest were no longer connected, both were still staffed with employees who had learned the business under Arnall.
A salesman from Long Beach Mortgage, Pittman said, told her that he could help her solve the problems created by her Ameriquest loan. Once again, she signed the papers. The new loan from Long Beach cost her thousands in up-front fees and boosted her mortgage payments to $672 a month.
Ameriquest reclaimed her as a customer less than a year later. A salesman from Ameriquest's Jacksonville branch got her on the phone in the spring of 2004. He promised, once again, that refinancing would lower her interest rate and her monthly payments. Pittman wasn't sure what to do. She knew she'd been burned before, but she desperately wanted to find a way to pay off the Long Beach loan and regain her financial bearings. She was still pondering whether to take the loan when two Ameriquest representatives appeared at the house on Irex Street. They brought a stack of documents with them. They told her, she later recalled, that it was preliminary paperwork, simply to get the process started. She could make up her mind later. The men said, "sign here," "sign here," "sign here," as they flipped through the stack. Pittman didn't understand these were final loan papers and her signatures were binding her to Ameriquest. "They just said sign some papers and we'll help you," she recalled.
To push the deal through and make it look better to investors on Wall Street, consumer attorneys later alleged, someone at Ameriquest falsified Pittman's income on the mortgage application. At best, she had an income of $1,600 a month—roughly $1,000 from Social Security and, when he could afford to pay, another $600 a month in rent from her son. Ameriquest's paperwork claimed she brought in more than twice that much—$3,700 a month.
The new deal left her with a house payment of $1,069 a month—nearly all of her monthly income and twice what she'd been paying on the FHA loan before Ameriquest and Long Beach hustled her through the series of refinancings. She was shocked when she realized she was required to pay more than $1,000 a month on her mortgage. "That broke my heart," she said.
For Ameriquest, the fact that Pittman couldn't afford the payments was of little consequence. Her loan was quickly pooled, with more than fifteen thousand other Ameriquest loans from around the country, into a $2.4 billion "mortgage-backed securities" deal known as Ameriquest Mortgage Securities, Inc. Mortgage Pass-Through Certificates 2004-R7. The deal had been put together by a trio of the world's largest investment banks: UBS, JPMorgan, and Citigroup. These banks oversaw the accounting wizardry that transformed Pittman's mortgage and thousands of other subprime loans into investments sought after by some of the world's biggest investors. Slices of 2004-R7 got snapped up by giants such as the insurer MassMutual and Legg Mason, a mutual fund manager with clients in more than seventy-five countries. Also among the buyers was the investment bank Morgan Stanley, which purchased some of the securities and placed them in its Limited Duration Investment Fund, mixing them with investments in General Mills, FedEx, JC Penney, Harley-Davidson, and other household names.
It was the new way of Wall Street. The loan on Carolyn Pittman's one-story house in Atlantic Beach was now part of the great global mortgage machine. It helped swell the portfolios of big-time speculators and middle-class investors looking to build a nest egg for retirement. And, in doing so, it helped fuel the mortgage empire that in 2004 produced $1.3 billion in profits for Roland Arnall.
In the first years of the twenty-first century, Ameriquest Mortgage unleashed an army of salespeople on America. They numbered in the thousands. They were young, hungry, and relentless in their drive to sell loans and earn big commissions. One Ameriquest manager summed things up in an e-mail to his sales force: "We are all here to make as much fucking money as possible. Bottom line. Nothing else matters." Home owners like Carolyn Pittman were caught up in Ameriquest's push to become the nation's biggest subprime lender.
The pressure to produce an ever-growing volume of loans came from the top. Executives at Ameriquest's home office in Orange County leaned on the regional and area managers; the regional and area managers leaned on the branch managers. And the branch managers leaned on the salesmen who worked the phones and hunted for borrowers willing to sign on to Ameriquest loans. Men usually ran things, and a frat-house mentality ruled, with plenty of partying and testosterone-fueled swagger. "It was like college, but with lots of money and power," Travis Paules, a former Ameriquest executive, said. Paules liked to hire strippers to reward his sales reps for working well after midnight to get loan deals processed during the end-of-the-month rush. At Ameriquest branches around the nation, loan officers worked ten- and twelve-hour days punctuated by "Power Hours"—do-or-die telemarketing sessions aimed at sniffing out borrowers and separating the real salesmen from the washouts. At the branch where Mark Bomchill worked in suburban Minneapolis, management expected Bomchill and other loan officers to make one hundred to two hundred sales calls a day. One manager, Bomchill said, prowled the aisles between desks like "a little Hitler," hounding salesmen to make more calls and sell more loans and bragging he hired and fired people so fast that one peon would be cleaning out his desk as his replacement came through the door.As with Mark Glover in Los Angeles, experience in the mortgage business wasn't a prerequisite for getting hired. Former employees said the company preferred to hire younger, inexperienced workers because it was easier to train them to do things the Ameriquest way. A former loan officer who worked for Ameriquest in Michigan described the company's business model this way: "People entrusting their entire home and everything they've worked for in their life to people who have just walked in off the street and don't know anything about mortgages and are trying to do anything they can to take advantage of them."
Ameriquest was not alone. Other companies, eager to get a piece of the market for high-profit loans, copied its methods, setting up shop in Orange County and helping to transform the county into the Silicon Valley of subprime lending. With big investors willing to pay top dollar for assets backed by this new breed of mortgages, the push to make more and more loans reached a frenzy among the county's subprime loan shops. "The atmosphere was like this giant cocaine party you see on TV," said Sylvia Vega-Sutfin, who worked as an account executive at BNC Mortgage, a fast-growing operation headquartered in Orange County just down the Costa Mesa Freeway from Ameriquest's headquarters. "It was like this giant rush of urgency." One manager told Vega-Sutfin and her coworkers that there was no turning back; he had no choice but to push for mind-blowing production numbers. "I have to close thirty loans a month," he said, "because that's what my family's lifestyle demands."
Michelle Seymour, one of Vega-Sutfin's colleagues, spotted her first suspect loan days after she began working as a mortgage underwriter at BNC's Sacramento branch in early 2005. The documents in the file indicated the borrower was making a six-figure salary coordinating dances at a Mexican restaurant. All the numbers on the borrower's W-2 tax form ended in zeros—an unlikely happenstance—and the Social Security and tax bite didn't match the borrower's income. When Seymour complained to a manager, she said, he was blasé, telling her, "It takes a lot to have a loan declined."
BNC was no fly-by-night operation. It was owned by one of Wall Street's most storied investment banks, Lehman Brothers. The bank had made a big bet on housing and mortgages, styling itself as a player in commercial real estate and, especially, subprime lending. "In the mortgage business, we used to say, 'All roads lead to Lehman,' " one industry veteran recalled.Lehman had bought a stake in BNC in 2000 and had taken full ownership in 2004, figuring it could earn even more money in the subprime business by cutting out the middleman. Wall Street bankers and investors flocked to the loans produced by BNC, Ameriquest, and other subprime operators; the steep fees and interest rates extracted from borrowers allowed the bankers to charge fat commissions for packaging the securities and provided generous yields for investors who purchased them. Up-front fees on subprime loans totaled thousands of dollars. Interest rates often started out deceptively low—perhaps at 7 or 8 percent—but they almost always adjusted upward, rising to 10 percent, 12 percent, and beyond. When their rates spiked, borrowers' monthly payments increased, too, often climbing by hundreds of dollars. Borrowers who tried to escape overpriced loans by refinancing into another mortgage usually found themselves paying thousands of dollars more in backend fees—"prepayment penalties" that punished them for paying off their loans early. Millions of these loans—tied to modest homes in places like Atlantic Beach, Florida; Saginaw, Michigan; and East San Jose, California—helped generate great fortunes for financiers and investors. They also helped lay America's economy low and sparked a worldwide financial crisis.
The subprime market did not cause the U.S. and global financial meltdowns by itself. Other varieties of home loans and a host of arcane financial innovations—such as collateralized debt obligations and credit default swaps—also came into play. Nevertheless, subprime played a central role in the debacle. It served as an early proving ground for financial engineers who sold investors and regulators alike on the idea that it was possible, through accounting alchemy, to turn risky assets into "Triple-A-rated" securities that were nearly as safe as government bonds. In turn, financial wizards making bets with CDOs and credit default swaps used subprime mortgages as the raw material for their speculations. Subprime, as one market watcher said, was "the leading edge of a financial hurricane."
This book tells the story of the rise and fall of subprime by chronicling the rise and fall of two corporate empires: Ameriquest and Lehman Brothers. It is a story about the melding of two financial cultures separated by a continent: Orange County and Wall Street.
Ameriquest and its strongest competitors in subprime had their roots in Orange County, a sunny land of beauty and wealth that has a history as a breeding ground for white-collar crime: boiler rooms, S&L frauds, real-estate swindles. That history made it an ideal setting for launching the subprime industry, which grew in large measure thanks to bait-and-switch salesmanship and garden-variety deception. By the height of the nation's mortgage boom, Orange County was home to four of the nation's six biggest subprime lenders. Together, these four lenders—Ameriquest, Option One, Fremont Investment & Loan, and New Century—accounted for nearly a third of the subprime market. Other subprime shops, too, sprung up throughout the county, many of them started by former employees of Ameriquest and its corporate forebears, Long Beach Savings and Long Beach Mortgage.
Lehman Brothers was, of course, one of the most important institutions on Wall Street, a firm with a rich history dating to before the Civil War. Under its pugnacious CEO, Richard Fuld, Lehman helped bankroll many of the nation's shadiest subprime lenders, including Ameriquest. "Lehman never saw a subprime lender they didn't like," one consumer lawyer who fought the industry's abuses said.Lehman and other Wall Street powers provided the financial backing and sheen of respectability that transformed subprime from a tiny corner of the mortgage market into an economic behemoth capable of triggering the worst economic crisis since the Great Depression.
A long list of mortgage entrepreneurs and Wall Street bankers cultivated the tactics that fueled subprime's growth and its collapse, and a succession of politicians and regulators looked the other way as abuses flourished and the nation lurched toward disaster: Angelo Mozilo and Countrywide Financial; Bear Stearns, Washington Mutual, Wells Fargo; Alan Greenspan and the Federal Reserve; and many more. Still, no Wall Street firm did more than Lehman to create the subprime monster. And no figure or institution did more to bring subprime's abuses to life across the nation than Roland Arnall and Ameriquest.
Among his employees, subprime's founding father was feared and admired. He was a figure of rumor and speculation, a mysterious billionaire with a rags-to-riches backstory, a hardscrabble street vendor who reinvented himself as a big-time real-estate developer, a corporate titan, a friend to many of the nation's most powerful elected leaders. He was a man driven, according to some who knew him, by a desire to conquer and dominate. "Roland could be the biggest bastard in the world and the most charming guy in the world," said one executive who worked for Arnall in subprime's early days. "And it could be minutes apart."He displayed his charm to people who had the power to help him or hurt him. He cultivated friendships with politicians as well as civil rights advocates and antipoverty crusaders who might be hostile to the unconventional loans his companies sold in minority and working-class neighborhoods. Many people who knew him saw him as a visionary, a humanitarian, a friend to the needy. "Roland was one of the most generous people I have ever met," a former business partner said.He also left behind, as another former associate put it, "a trail of bodies"—a succession of employees, friends, relatives, and business partners who said he had betrayed them. In summing up his own split with Arnall, his best friend and longtime business partner said, "I was screwed."Another former colleague, a man who helped Arnall give birth to the modern subprime mortgage industry, said: "Deep down inside he was a good man. But he had an evil side. When he pulled that out, it was bad. He could be extremely cruel." When they parted ways, he said, Arnall hadn't paid him all the money he was owed. But, he noted, Arnall hadn't cheated him as badly as he could have. "He fucked me. But within reason."
Roland Arnall built a company that became a household name, but shunned the limelight for himself. The business partner who said Arnall had "screwed" him recalled that Arnall fancied himself a puppet master who manipulated great wealth and controlled a network of confederates to perform his bidding. Another former business associate, an underling who admired him, explained that Arnall worked to ingratiate himself to fair-lending activists for a simple reason: "You can take that straight out of The Godfather: 'Keep your enemies close.' "
Excerpted from The Monster by Michael W. Hudson
Copyright 2010 by Michael W. Hudson
Published in 2010 by Times Books/Henry Holt and Company
All rights reserved. This work is protected under copyright laws and reproduction is strictly prohibited. Permission to reproduce the material in any manner or medium must be secured from the Publisher.

Photographic journey of the last days of Rainbow Records

West wall @ Rainbow Records - note the Beatles sketches - done by a teen-aged regular customer

Note too, the prominence of the Pulp Fiction movie ad - and the classic psychedelic Dylan

Lovely in pink

It's a one, two, three what are we all fightin' for; don't ask me now I don't give a damn,
Next stop is Vietnam and it's a five, six, seven open up them pearly gates
Well there ain't no time to wonder why, "whoopee we're all gonna' die."


Stunning poster of the Marilyn Monroe / Jane Russell ode to transvestitism

Zappa - by Dariya  Trot


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Vargas girl overlooking some real good sh#t

Blurry shot - I must have had a hard-on for some of these CD's

Quintessential CDs - I want 'em ALL

Where to even begin - at the beginning with the Stones

Repeating it, because you can't go all ga-ga over the stones and not the Beatles

BAD FINGER -  oo la la

Bad Finger Centered

Grandma's head - John Thominet's working background

John changing a customer's life

Trevor's art work

It was 63 years ago today (20 plus 43) - Sgt. Pepper taught the band to play
They've been goin' in and out of style
But they're guaranteed to raise a smile
So let me introduce to you
The act you've known for all these years
Sergeant Pepper's Lonely Hearts Club Band

How does THIS grab you, darling?

Speaks for itself

If you were to enter the store at any of its 11-7 M-F hours, or 10-4 Sat, you would probably hear Fleetwood Mac within a half of an hour, if not sooner.

Steak 'n Shake Waitress superb, hiding out - no pitchers, pullEEZE

Friday, December 10, 2010

Afghanistan and the War Legend

There is much to consider in the following analysis from STRATFOR:

Afghanistan and the War Legend is republished with permission of STRATFOR.

Afghanistan and the War Legend


As many of you know, Robert Merry joined STRATFOR as publisher in January. While primarily focused on our business (bless him) he is also a noted reporter (years with The Wall Street Journal as Washington correspondent and head of Congressional Quarterly). Bob knows Washington well, while STRATFOR has always been an outsider there. Since Bob brings a new perspective to STRATFOR, we’d be foolish not to take advantage of it. This analysis marks the first of what will be regular contributions to STRATFOR’s work. His commentary will be titled “Washington and the World” and will focus on the international system through the eyes of official Washington and its unofficial outriders. In this first analysis, Bob focuses on the thinking that went into President Barack Obama’s Aug. 31 speech on the end of U.S. combat operations in Iraq. As with all of STRATFOR’s pieces, it treats political leaders as rational actors and avoids ideology and advocacy. Both are in ample supply in this country, and there is no need to add to it. Bob is not trying to persuade, praise or condemn. Nor is he simply providing facts. He is trying to understand and explain what is happening. I hope you find this of value. I learned something from it. By all means let us know what you think, especially if you like it. Criticisms will also be read but will not be enjoyed nearly as much.
— George Friedman, STRATFOR CEO

By Robert W. Merry

U.S. President Barack Obama’s Aug. 31 Oval Office speech on the end of U.S. combat operations in Iraq had many purposes: to claim a measure of credit for largely fulfilling one of his major campaign promises; to thank those who have served and sacrificed in the cause; to spread the balm of unity over any lingering domestic wounds; to assure Americans that it has all been worth it and that no dishonor was attached to this foreign adventure, which was opposed by many in Obama’s own party and by him from the beginning.

Of all those purposes, and any others that might have been conceived, the need to express assurance of the war’s validity — and honor in its outcome — is by far the most important. Any national leader must protect and nurture the legend of any war over which he presides, even those — actually, particularly those — he has brought to a close. The people need to feel that the sacrifice in blood and treasure was worth it, that the mission’s rationale still makes sense, that the nation’s standing and prestige remain intact.

In terms of America, nothing illustrates this more starkly than the Vietnam experience. This was a war that emerged quite naturally out of a foreign policy outlook, “containment,” that had shaped American behavior in the world for nearly two decades and would continue to shape it for another two decades. Hence, one could argue that the Vietnam War was a noble effort entirely consistent with a policy that eventually proved brilliantly successful. But the national pain of defeat in that war spawned an entirely different legend — that it was a huge mistake and a tragic loss of life for no defensible purpose. The impact of that legend upon the national consciousness could be seen for decades — in war-powers battles between the president and Congress, in a halting defense posture often attributed to what was called the “Vietnam Syndrome,” in the lingering civic hostility engendered when the subject emerged among fellow citizens, in the flow of tears shed daily at Washington’s Vietnam Memorial.

So the presidential responsibility for the legend of war is no trivial matter when young Americans begin returning home in body bags. A wise president will keep it well established in his mind in selling a war, in prosecuting it and eventually in explaining it at its conclusion.

This important presidential function posed two particular challenges for Obama during his Oval Office speech: First, his past opposition to the war in Iraq created a danger that he might appear insincere or artificial in his expressions, and second, it isn’t entirely clear that the legend can hold up, that the stated rationale for the war really withstands serious scrutiny. Yes, America did depose Saddam Hussein and his regime. But the broader aims of the war — to establish a stable, pro-Western regime in the country and thus maintain a geopolitical counterweight to the regional ambitions of Iran — remain unfulfilled. The president handled the first challenge with aplomb, hailing the war’s outcome (so far) while avoiding the political schisms that it bred and delivering expressions of appreciation and respect for his erstwhile adversaries on the issue. Whether he succeeds in the second challenge likely will depend upon events in Iraq, where 50,000 American troops remain to support Iraqi security forces and help maintain stability.

But Obama’s effort to preserve the war’s legend, which was ribboned throughout his speech, raises the specter of an even greater challenge of preserving the legend of a different war — the war in Afghanistan, which Obama says will begin to wind down for America in July of next year. It remains a very open question whether events will unfold in that nettlesome conflict in such a way as to allow for a reassuring legend when the troops come home. That open question is particularly stark given the fundamental reality that America is not going to bring about a victory in Afghanistan in any conventional sense. The Taliban insurgency that the United States is trying to subdue with its counterinsurgency effort is not going to go away and, indeed, the Taliban will likely have to be part of any accommodation that can precede America’s withdrawal.

Thus, the Obama administration has become increasingly focused on what some involved in war planning call “the endgame.” By that, they mean essentially a strategy for extricating the country from Afghanistan while preserving a reasonable level of stability in that troubled land; minimizing damage to American interests; and maintaining a credible legend of the war that is reassuring to the American people. That’s a tall order, and it isn’t clear whether the nearly 150,000 U.S. and allied troops in Afghanistan, under U.S. Army Gen. David Petraeus, can affect the magnitude of the challenge one way or another.

Very quietly, top officials of the Obama administration have initiated a number of reviews inspecting every aspect of this endgame challenge. Some involve influential outside experts with extensive governmental experience in past administrations, and they are working with officials at the highest levels of the government, including the Pentagon. One review group has sent members to Russia for extensive conversations with officials who were involved in the Soviet Union’s ill-fated invasion of Afghanistan in the 1980s. Others have traveled to Pakistan and other lands, including the United Kingdom, Germany and France, to master the diplomatic implications of any Afghan exit strategy.

It’s too early to determine just what impact these review groups will have on administration thinking, which appears to remain in a state of development. But it can be said that at least some of these outside experts are pressing hard for an endgame approach that moves beyond some earlier thinking about the war and its rationale. For example:

* The need to involve Afghanistan’s neighbors in any accommodation that would allow for at least a reasonably graceful American exit. In addition to next-door Pakistan, these likely would include Russia, India and perhaps even Iran. All have a stake in Afghan stability, and all have their own particular interests there. Hence, the diplomatic game will be extremely difficult. But it is worth noting that during the U.S. invasion of Afghanistan, Russia served as a facilitator of U.S. cooperation with the northern ethnic tribes, and Russians even provided personnel and vehicles to America’s Northern Alliance allies. Iran also helped facilitate the invasion by suggesting security for American pilots faced with ditching over Iranian territory.
* The necessity of working with local power centers and finding a way of developing a productive discussion with the different ethnic groups that need to be part of the Afghan endgame. How to do that reportedly was one question posed to Russian officials who were involved in the Soviet Union’s Afghan experience and who had to deal with insurgent leaders on the way out.
* A probable requirement that the United States relinquish any hope that a strong central government in Kabul will form and bring about stability in the country. Afghanistan has never had a strong central government, and the various ethnic and religious groups, local warlords, tribes and khans aren’t going to submit to any broad national authority. Their mountainous homeland for centuries has afforded them plenty of protection from any invading force, and that isn’t going to change.
* A probable need to explore a national system with a traditionally weak central government and strong provincial actors with considerable sway over their particular territories.

Underlying all this is a strong view that the U.S.-led International Security Assistance Force cannot impose an endgame. The Taliban are not going to submit to U.S. blandishments for negotiation as a result of any fear of what will happen to them if they don’t. That’s because they are winning and possess the arms, wiles, knowledge of terrain and people and insurgency skills to keep on winning, irrespective of what Petraeus does to thwart them. Besides, the tribes of Afghanistan have demonstrated through the centuries that they have the patience to outlast any invader.

If the Taliban won’t negotiate out of fear of what the U.S. military can do to them, the question becomes whether they will negotiate out of a sense of opportunity — as a means of bringing about the U.S. exit that American government officials increasingly seem to want as well. There are indications the Taliban might be interested in participating in such a negotiated American exit, perhaps in exchange for some kind of international recognition. At this point, however, there is no firm evidence that such an approach could prove fruitful, and hence this question remains one of the great imponderables hovering over America’s presence in Afghanistan.

But, if that does prove possible, the question of America’s war legend will loom very large indeed. Those involved in the review groups reportedly are well aware that the nature of the U.S. departure will inform the legend, and they are intent on crafting an outcome that will honor America’s Afghanistan war dead and U.S. war veterans. In other words, in this view, there must remain a narrative that explains why America was there, what was accomplished, and why the departure was undertaken when it was. It must resonate throughout the nation and must be credible.

This poses another fundamental question: Is there an inherent inconsistency between the outlook emerging from these governmental review groups and the recent pronouncements of Petraeus? Many of the review-group participants seem to be working toward what might be called a “graceful exit” from Afghanistan. Yet Petraeus told The New York Times on Aug. 15 that he does not see his mission in such small terms as a “graceful exit.” Rather, he said his marching orders were to do “all that is humanly possible to help us achieve our objectives.” By “our objectives,” he seemed to mean establishing, through military force, a sufficient degree of stability in the country to allow a negotiated exit on American terms, with his Iraq record serving as the model. Even if that is possible, it certainly will take considerable time. The general made clear in the Times interview and in others that he fully intended to press Obama hard to delay any serious troop withdrawal from Afghanistan until well beyond the July 2011 time frame put forth by the president.

Thus, the nature and pace of withdrawal becomes another big question hovering over the president’s war strategy. Many high-ranking administration officials, including the president, have said the pace of withdrawal will depend upon “conditions on the ground” when July 2011 arrives. Obama repeated that conditional expression in his Iraq speech the other night. But that leaves a lot of room for maneuver — and a lot of room for debate within the administration. The reason for delaying a full withdrawal would be to try to apply further military pressure to force the Taliban to become less resistant. That goal seems to be what’s animating Petraeus. But others, including some involved in the review groups, don’t see much prospect of that actually happening. Thus, they see no reason for much of a withdrawal delay beyond the president’s July deadline — particularly given the need to preserve the country’s war legend. The danger, as some see it, is that an effort to force an outcome through military action, given the unlikely prospect of that, could increase the chances of a traditional military defeat, much like the one suffered by the Soviets in the 1980s and by the British in two brutal military debacles during the 19th century.

Many of the experts involved in the Afghanistan review effort see a link between the departure of U.S. combat troops from Iraq, as described by Obama in his Oval Office speech, and the imperative to fashion an Afghanistan exit that offers a war legend at least as comforting to the American people. Certainly, the importance of the war legend was manifest in Obama’s Iraq speech. First, he repeatedly praised the valor and commitment of America’s men and women in uniform. Even in turning to the need to fix the country’s economic difficulties, he invoked these U.S. military personnel again by saying “we must tackle those challenges at home with as much energy, and grit, and sense of common purpose as our men and women in uniform who have served abroad.” He expressed a resolve to honor their commitment by serving “our veterans as well as they have served us” through the Department of Veterans Affairs, emphasizing medical care and the G.I. Bill. And he drew an evocative word picture of America’s final combat brigade in Iraq — the Army’s 4th Stryker Brigade — journeying toward Kuwait on their way home in the predawn darkness. Many Americans will recall some of these young men, extending themselves from the backs of convoy trucks and yelling into television cameras and lights, “We won! We’re going home! We won the war!”

But, as Obama noted in his speech, this is “an age without surrender ceremonies.” It’s also an age without victory parades. As he said, “we must earn victory through the success of our partners and the strength of our own nation.” That’s a bit vague, though, and that’s why Obama’s speech laid out the elements of the Iraq success in terms that seemed pretty much identical to what George W. Bush would have said. We succeeded in toppling Saddam Hussein. We nurtured an Iraqi effort to craft a democratic structure. After considerable bloodshed, we managed to foster a reasonable amount of civic stability in the country so the Iraqi people can continue their halting pursuit of their own destiny. Thus, said the president, “This completes a transition to Iraqi responsibility for their own security.” He added, “Through this remarkable chapter in the history of the United States and Iraq, we have met our responsibility. Now, it’s time to turn the page.”

That’s probably enough of a legend to fortify the good feelings of those young men yelling of victory from the backs of Stryker Brigade vehicles on the way out of Iraq. But getting to even that degree of a war legend in Afghanistan will be far more difficult. And, as the endgame looms in that distant land, the administration will have to grapple not only with how to prosecute the war and foster a safe exit but also with how to preserve a suitable legend for that war once the shooting stops.

This might explain why my blogging efforts tailed off for a while

This must have been a difficult e-mail to compose!

From my licensed social worker, about three weeks after had me "voluntarily" confined to Elgin Mental Health Facility.

Hi Mark,
I know you have been through a lot since we last met.  If you would like to continue meeting with me, I could see you on Tuesday Dec 14th at 3pm.

Whatever you decide, know that I am wishing you well.


Since, to quote Tull, "I may make you feel, but I can't make you think," I replied with enough information to at least give her ticks of sleeplessness at night - for the rest of her life:

Thanks for doing the best you knew how

Try to learn from it and do better with your clients for the future.

Bi-polar disorder:  What is the etiology?  Nothing but behavioral standards.  The poor person labeled "bi-polar" has to fight like a trapped animal to escape the clutches of those who label.  Read Thomas Szasz.

Same goes for alcoholic.  We can understand the etiology of alcohol poisoning.  We can rarely understand the behaviour of one who has immersed themselves in alcohol for daze on end - walking around with a BAL between 0.10 and 0.24.  Their behaviour we find "unsettling," "frightening," "poorly considered," "rude," etc.  But from within the framework of the specific individual's historical retrospective, it might all be quite logical; and even if we had half a clue, we might come to the same conclusion.

These two (bi-polar, alcholism) are NOT medical conditions which can be treated by traditional western medicine.  Those so labeled, of course, ARE sick; but theirs is a sickness of the heart; a sickness of the soul; they have lost one or more of the three things needed to sustain life beyond food, water, shelter: (1) something to DO, (2) something to LOVE, (3) something to HOPE FOR.  When those three can be returned, to be seen within the clutches of possibility, THEN (and only then) will the afflicted person be able to remake themselves whole.

YOUR job, as mentor, is to help them see.

You can no more help me see, but, perhaps I can help you feel.

Be well; enjoy those small moments of stillness when the universe whispers, "the Lord of hosts is near."

Warmest regards, and profound gratitude,


(Thank you for your help.  I no longer need your assistance. You done did good kid.)


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