Hundreds of thousands of orders pour in for Turkish shoe thrown at President Bush.

The Fed has set up something called the TALF, the Term Asset-backed Securities Loan Facility, which will offer "low-cost three-year funding to any US company investing in securitized consumer loans" including hedge funds.

Says the Financial Times (reg.req.), "Since the credit crisis erupted, hedge funds have complained that they cannot get the leverage they need to arbitrage away excessive spreads and meet high hurdle rates of return."

It's going to take a lot of money to make the rich people rich again.

From TPM Reader DM ...

Bill Simmons, a sportswriter for ESPN, coined the term "Tysonic". It refers to Mike Tyson, and applies to anyone who has entered a sphere of existence so bizarre, you will believe any news you hear about them, no matter how absurd. Aside from Mike Tyson, Britney Spears is Tysonic. After the turkey interview, I classify Sarah Palin as Tysonic.

As a native Chicagoan, I say Blogo is definitely Tysonic. If someone told me, "Hear about Blogo? He dressed himself up as Elvis, highjacked an Air Yugo flight from O'Hare to Belgrade, and is now living under the protection of Serbia... And he's formed an exploratory committee for 2016."

I'd pause for a moment and say, "Yeah, that sounds right."

Are Bristol and Levi married yet?

Policy statement from Rick Warren's Saddleback Church ...

"Because membership in a church is an outgrowth of accepting the Lordship and leadership of Jesus in one's life, someone unwilling to repent of their homosexual lifestyle would not be accepted at a member at Saddleback Church."

(ed.note: Special thanks to John Aravosis' Americablog.)

Sen. Shelby (R-AL) releases statement about auto bailout ...

"The plan the President announced today gives the taxpayer no upfront assurances that these companies will take the steps necessary to become efficient and competitive. In fact, the only assurance the taxpayer has is that these companies will be back for more money soon. It is unrealistic to think that companies who have failed to make tough choices over decades will get their act together now that they have received a down payment from the taxpayer."

"Congress was wrong to grant the Administration the authority to bail out the financial industry through the TARP in the first place. The President is wrong to use this authority to bail out GM and Chrysler. Instead of pursuing the more responsible course to ensure that these companies restructure through Chapter 11 bankruptcy, the President chose to stick the taxpayer with the tab as he walks out the door. I believe it is a shameful attempt by the President to protect his own legacy. The taxpayer will surely remember him for it."

Blagojevich: "I have done nothing wrong."

Goes on to quote Kipling ...

(Yes, We'll have video soon.)

(ed.note: Special ed.note Deep Thought: Rod Blagojevich may be insane.)

That $700 billion for TARP was a lot of money.

Top Dozen Insights of Conservatives, 2008

Over the last few days a number of readers had told me they were picking up hints that the folks fleeced by Bernie Madoff might themselves come calling for a government bailout. I'd been skeptical. But now it seems like that is exactly what may be coming.

Late Update: On a related note, read Krugman's column today on Madoff and whether he was all that much different from the rest of folks on Wall Street making gazillions and running the economy and country into the ground.

Mark Felt, Watergate's 'Deep Throat', dies at 95.

Norm Coleman appears to be swirling down the drain. And a big reason why is that so many of his challenges -- which had puffed up his lead -- were just completely ridiculous.

This may be the most ridiculous one yet.

From the FT ...

Leading banks from Britain, France and Japan helped investors treble or quadruple bets on Bernard Madoff by lending billions of dollars to "feeder" funds, which placed their money with the alleged fraudster.

HSBC, Royal Bank of Scotland, Nomura and BNP Paribas lent the money without spotting a fraud, and in at least one case without due diligence teams visiting Mr Madoff's brokerage, which held the assets.

The Coleman-Franken Recount has gone on for so long and there have been so many back and forths that for a lot of us it's all become a blur.

But over the last 48 hours, it's become increasingly clear that Al Franken is the odds on favorite to be the next senator from Minnesota.

MSNBC is announcing that Chuck Todd has just been appointed chief White House correspondent for NBC News.

I must say I did not expect that. And it seems like an odd choice. Not a bad choice, but not at all what I would have expected from them.

Let me be clear. I'm a big, big fan of Chuck Todd. In addition to being a very shrewd political analyst. He's a great generational turnover from a cadre that's mainly in its 50s and 60s.

But I don't think of him as a beat reporter like that, more of an analyst, an explainer of the details of the whole political scene.

It may be an inspired choice. Just for political smarts I think Todd probably blows away all the competitors for the slot. But not a choice I expected, though even as I write this post I'm starting to warm to the idea.

Thoughts?

Late Update: Grooming him for the future? TPM Reader DC writes, "expanding the resume. More things to come in 3-4 years?"

Later Update: TPM Reader JP's thinking along similar line: "Put me in the "grooming him for the future" column. He's obviously the most talented observer of the political scene on TV today (setting up so many embarrassing interludes with the ignorant Tweety over the last cycle that I lost count). NBC missed a big opportunity in not slotting him right into the Meet The Press Slot. He's miles in front of David Gregory."

In the midst of a scandal like the Madoff story, we need to on guard for a lot of people saying they saw it coming all along even though that's the furthest thing from the truth. But there's enough information out there to suggest that within the small and parochial community of people with the technical knowledge to understand this stuff Madoff's fall from grace did not come as a big surprise.

Though I can't give many details of the identity of the person since the industry is so small, a known reader passes on word from a hedge-fund analyst at one of the big (remaining) financial services powerhouses who says that Madoff was always on their short list of people he and his colleagues thought were crooks.

A bit more concretely, let's go back to Harry Markopolos, the money manager and financial fraud investigator who'd been blowing whistles on Madoff for almost a decade. In the report he submitted to the SEC in 2005, in addition to complex mathematical analyses showing that Madoff's system couldn't work, he said that "I have also spoken to the heads of various Wall Street equity derivative trading desks and every single one of the senior managers I spoke with told me that Bernie Madoff was a fraud."

Again, people say a lot of things, and hindsight is 20/20. But I'm seeing enough stuff like this to make me think that for a lot of people this was no surprise at all.

AP: Rep. Hilda Solis to be Labor Secretary nominee.

TPM Reader EC says that Richard Whitney, who I mentioned a few days ago as a Depression-Era Bernie Madoff, doesn't hold a candle to another contender, Ivar Kreuger, whose fraud was so vast he actually precipitated a reasonably sized market crash in 1933.

Lurking in the background of the blossoming Madoff scandal has been the name Harry Markopolos, a money manager and investment investigator who began pushing the SEC to investigate Madoff almost a decade ago. Tonight the Journal has a lengthy article out describing Markopolos's quest and -- even more interesting -- the documents Markopolos submitted to the SEC to show that Madoff's record of consistent low-double-digit returns simply couldn't be legit. Unfortunately, it's behind their fire wall. But if you've got a subscription, definitely take a look.

Late Update: You can see Markopolos's original filing with the SEC here.

Bloomberg says Obama is likely to tap Illinois Rep. Ray LaHood as Transportation Secretary.

Transportation is a famously disrespected Department, in the sense of being a high or low profile appointment. That's where Bush put his token Dem, Norm Mineta. But given Obama's expected emphasis on infrastructure and green transportation technologies, there's probably more significance to the pick that has recently been the case.

Lawyers for John Walker Lindh (the 'American Taliban'), who has now spent seven years in prison, are asking President Bush to commute his sentence. Not expecting a lot of agreements. And I don't think it's particularly likely. But I think it's the right thing to do.

A lot of rich people have taken a bath courtesy of Bernie Madoff's scam. And a long list of Jewish foundations and charities have been devastated because so many of them put their foundations' endowment money in his hands for safe-keeping.

But it turns out that when it came to their own foundations, his sons knew not to have their dad manage the money.

They invested their foundations' assets with a subsidiary of Lehman Brothers.

From the Times Mag's piece on Robert Gibbs which is coming out this weekend ...

The paradox of this scene was that the Obama campaign's communications strategy was predicated in part on an aggressive indifference to this insider set. Staff members were encouraged to ignore new Web sites like The Page, written by Time's Mark Halperin, and Politico, both of which had gained instant cachet among the Washington smarty-pants set. "If Politico and Halperin say we're winning, we're losing," Obama's campaign manager, David Plouffe, would repeat mantralike around headquarters. He said his least favorite words in the English language were, "I saw someone on cable say this. . . ."

Late Update: In the real world, the Obama campaign lavished far better treatment on Politico than the liberal blogs ever received. --gs

Over the last few days, as we've been devoting a lot of coverage to the Bernard Madoff story, a number of readers have written in to say, "You're saying all this stuff about how he kept his scheme hidden. But you haven't been clear enough on what he actually did."

So let me try to clear this up, or explain why I don't think we really can clear it up yet.

The truth is that as yet we know very, very little about just what Madoff was doing or where the money went. One of the few official reports was in yesterday's statement from SEC Chairman Christopher Cox which noted that Madoff kept several sets of false books, etc. But that's hardly surprising.

Most of the assumptions stem from Madoff's own words describing it as a "Ponzi scheme" and his confession that he'd swindled some $50 billion. But calling something a Ponzi scheme covers a lot of territory. And it doesn't tell us that much in terms of where all the money went, whether it was a scam from the git-go or evolved into one, or much of any detail, etc.

I would also suggest one further note of caution, though this is much more speculative.

On its face Madoff is confessing to everything. He's saying he's a fraud and he swindled people out of $50 billion. So it's hard to see what he's holding back. That said, he appears to be maintaining the pretense that he managed the entire swindle on his own -- that none of the family members who were intimately involved in running the fraudulent part of his operation had any idea what he was doing. And that seems preposterous on its face.

It's understandable that he wouldn't want to pull his whole family down, and that his family wouldn't want to be pulled either. But I think it's worth keeping open the possibility that behind Madoff's maximal confession of guilt -- and in addition to wanting to protect his family -- there's more people he's trying to protect or secrets he's trying to hide.

The Journal (sub.req.) says that the SEC IG investigation mentioned below will likely scrutinize the relationship between Madoff neice, Shana Madoff, who was the firm's chief securities compliance counsel and Eric Swanson, a senior inspections and compliance official at the SEC until he left in 2006.

Madoff and Swanson married last year.

From the statement released late today by SEC Chairman Christopher Cox ...

A bit of information on just how Madoff operated ...

Although the information I can share regarding an ongoing investigation is limited, progress to date indicates that Mr. Madoff kept several sets of books and false documents, and provided false information involving his advisory activities to investors and to regulators.

And what the SEC's internal review has come up with so far ...

Since Commissioners were first informed of the Madoff investigation last week, the Commission has met multiple times on an emergency basis to seek answers to the question of how Mr. Madoff's vast scheme remained undetected by regulators and law enforcement for so long. Our initial findings have been deeply troubling. The Commission has learned that credible and specific allegations regarding Mr. Madoff's financial wrongdoing, going back to at least 1999, were repeatedly brought to the attention of SEC staff, but were never recommended to the Commission for action. I am gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations or at any point to seek formal authority to pursue them. Moreover, a consequence of the failure to seek a formal order of investigation from the Commission is that subpoena power was not used to obtain information, but rather the staff relied upon information voluntarily produced by Mr. Madoff and his firm.

Cox has initiated an SEC Inspector General's investigation into why red flags about Madoff's operation went unheeded with the "mandatory recusal from the ongoing investigation of matters related to SEC v. Madoff of any SEC staff who have had more than insubstantial personal contacts with Mr. Madoff or his family."

Goldman Sachs moves into the coveted 1% tax bracket.

Senate Republicans ask for documents on Eric Holder's role in the Elian Gonzales case.

Throwing a shoe at someone doesn't signal respect in the Arab world the way it does in ours.

There's just one more day to send in your nominations for the 2008 Golden Duke Awards. Today, we meet the judges who will choose the winners.

Full-size video at TPMtv.com.

Like with children, I don't like to play favorites with the Book Clubs we host over at TPMCafe. But this one, because of the personnel and the especially because of the timeliness of the subject matter is one you really don't want to miss. We're discussing the rereleased version Paul Krugman's The Return of Depression Economics and Crisis of 2008. We're discussing it with Krugman, Bob Reich, Brad DeLong, Mark Thoma, Susan Feiner, Jo-Ann Mort, Dana Chasin and Dean Baker. Click here to join the conversation.

Over the last few days I've been chatting with various folks who did business in one form or another with Bernie Madoff's firm. And it seems clear that there were numerous aspects of his operation -- not just the weirdly consistent returns, but the mechanics of the operation -- that gave ample reason to question what Madoff was up to. These inside views -- or views on the margin -- are very helpful in allowing us to piece all this together (of course, your confidentiality will be guaranteed). But for those who are keeping track, the oddest thing about the story so far is how the SEC was alerted repeatedly over the last decade of potential problems with the investment arm of Madoff's operation. They actually did open a few looks into his firm. But they never seemed to look in the right places. They'd look at the non-problematic part of the operation and not the part on the 17th floor where all the weird stuff was going on. Or they'd push for changes that would give them greater access to his books and then never follow up on that greater access.

Astronomers can't see black holes directly. They identify them by inferring their existence by their gravitational effect on nearby celestial bodies. And I'm similarly curious what's the gravitational force that appears to have kept the SEC from giving Madoff a good hard look.

From the Strib ...

Four of Minnesota's biggest legal guns have cast their shadows over two lawsuits that have drawn the attention of the FBI.

They have been retained by U.S. Sen. Norm Coleman; his wife, Laurie; Jim Hays, her insurance company employer; and Nasser Kazeminy, a multi-millionaire friend of the Colemans who is accused in the lawsuits of sending them money in 2007 through Hays' company. Coleman's Senate ethics form reports no such payment.

Sen. Ken Salazar (D-CO) will be President-Elect Obama's nominee for the Interior Department.

(To be clear, Interior is a very big deal for Western states like Colorado. I'm well aware of that. But I continue to be surprised how many relatively young senators -- Salazar is 53 and he was elected in 2004 -- are willing to give up their seats to serve in Obama's cabinet.)

Certainly many details differ. But, as TPM Reader EG notes, the story of Richard Whitney (an overview of whose life I've copied from his wikipedia entry) was at least broadly reminiscent of the unfolding story of Bernard Madoff ...

Richard Whitney (August 1, 1888 - December 5, 1974), was an American financier, president of the New York Stock Exchange 1930-1935, and a convicted embezzler.

...

At the same time that Richard Whitney was achieving great success, his brother George had also prospered at Morgan bank and by 1930 had been anointed as the likely successor to bank president, Thomas W. Lamont. While Richard Whitney was assumed to be a brilliant financier, he in fact had personally been involved with speculative investments in a variety of businesses and had sustained considerable losses. To stay afloat, he began borrowing heavily from his brother George as well as other wealthy friends. After obtaining loans from as many people as he could, Richard Whitney turned to embezzlement to cover his mounting business losses and to maintain his extravagant lifestyle. He stole funds from the New York Stock Exchange Gratuity Fund as well as from the New York Yacht Club where he served as the Treasurer. In addition, he stole $800,000 worth of bonds from his father-in-law's estate.

Having retired as President of the NYSE in 1935, Whitney remained on the board of governors but in early March 1938 his past began to catch up to him when the comptroller for the NYSE reported to his superiors that he had established absolute proof that Richard Whitney was an embezzler and that his company was insolvent. Within days, events snowballed and Whitney and his company would both declare bankruptcy. An astonished public learned of his misdeeds when on March 10 he was officially charged with embezzlement by New York County District Attorney Thomas E. Dewey. Following his indictment by a Grand Jury, Richard Whitney was arrested, and eventually pleaded guilty. He was sentenced to a term of five to ten years in Sing Sing prison. On April 12, 1938, six thousand people turned up at Grand Central Station to watch as a scion of the Wall Street Establishment was escorted in handcuffs by armed guards onto a train that delivered him to prison.

That will be quite a book. David Remnick is writing on Obama, race and American politics.

One of the key details behind the prosecution of the Duke Cunningham case was that Mitch Wade went straight to the authorities on like Day One of the scandal. I'd need to go back to my reporting notes to get the exact timeline. But basically from the moment it was clear that Duke had some serious explaining to do, Wade was there at the US Attorneys office, 'fessing up and asking what he could do to help.

That's got to be the best practices approach to how to come out of one of these scandals without spending a good chunk of the rest of your life in prison. But I'd say he did about as well from this sentence as you could possibly imagine. Wade flagrantly and repeatedly bribed a sitting member of Congress and he's going to do 2.5 years in prison.

Mitchell Wade sentenced to 30 months, $250,000 fine.

to cover stuff like this?

From the WaPo ...

Meanwhile, Paulson repeatedly told lawmakers that he did not plan to use bailout funds to inject capital directly into financial institutions. Privately, however, his staff was developing plans to do just that, Paulson acknowledged in an interview.

TPM brings on a new class of interns each season. Right now we've taken our Winter applications, but we're putting out a special call for a TPM Publishing Intern. We're looking specifically for someone with some nice design and tech skills to work with us creating special projects and helping us out with site development. Ideally this candidate will be an html and css ninja, have some Photoshop and Flash chops and maybe have dabbled in javascript or php.

Winter cycle interns will work closely on projects relating to the presidential transition and the start of the new Congress.

For more details, click here.

Why is Carly Fiorina still on TV?

In a now much-cited 2001 article (MAR-Hedge (RIP) No. 89 May 2001) raising questions about Bernard Madoff's improbably consistent rates of return, here's how Madoff himself addressed doubts by many in the industry who said his numbers just didn't add up ...

Madoff, who believes that he deserves "some credibility as a trader for 40 years," says: "The strategy is the strategy and the returns are the returns." He suggests that those who believe there is something more to it and are seeking an answer beyond that are wasting their time.

Another big name who apparently took a bath courtesy of Bernard Madoff.

Like most of us, if I'm honest with myself, I really only know how Secret Service protection works from the movies or how, going on my own common sense, I figure it works. The folks who protect the president are professionals. So I want to be extremely tentative and cautious about second-guessing their work from a bit of news video that leaves many key details unanswered.

But watching the video of the Iraqi journalist throwing his shoes at President Bush, I could not help but notice that it took an uncomfortably long period of time for anyone to get to the assailant and, even more, much longer than I would have expected for anyone who looked like Secret Service to get to the president and block his body or get him out of harm's way.

I guess the point here is that this was a very confined space. Presumably the Secret Service controlled access to the degree that they were confident there were no unauthorized weapons in the room. And they wouldn't have to worry about someone with a gun at a greater distance. So they may have been less worried about jumping in front of the president, etc.

Maybe I'm just over-analyzing this. And obviously a president can't be under lock and key at all moments, with Secret Service agents ready to throw him to the floor at a moment's notice. But for an American president, any moment in Iraq has to be considered a very high risk situation. So it did make me wonder.

On a totally unrelated note, I was genuinely impressed by the president's quick ducking response. In all seriousness, if you watch the video, the guy was extremely close to the president (maybe fifteen feet?). He threw the shoe very hard and very accurately. Given how out of the blue the whole bizarre incident was I think the reporter would have beaned most other folks in that situation.

We'll be doing an official announcement on Monday. But just between you and me, this year's judges are ... Rick Hertzberg, Susie Bright, John Dean, Dahlia Lithwick and TPM alums Paul Kiel and Spencer Ackerman.

Weisberg takes a stab at the 'what's the most crooked state' contest.