Just as Rumsfeld wrecked our military, Condoleeza Rice is wrecking the State Department. This is not surprising.
She has always succeeded by virtue of the ability to talk a good game, and by holding Neocon views, not through competence. Her tenure as Stanford Provost was similarly disasterous.
Bank of America, Citigroup and JPMorgan Chase have agreed on the rules for their $75 billion fund to stabilize their various structured investment vehicles (SIV).
What this comes down to is an attempt to stick it to a less savvy investor. These SIVs have no marketplace, and cannot be sold at anything near face value, they are essentially illiquid unless you are willing to take something like a dime on the dollar.
What this fund will do, at least until it runs out, is to function as a faux buyer, so as to create a faux market price, which will allow the banks to dump these off on the stupid.
We need to reinstate the Depression era banking regulations, big time.
It looks like Tuesday (no trading on Monday because of the Memorial Day weekend) will be really ugly.
Major World Indices – Yahoo! Finance
| Symbol | Name | Last Trade | Change | Related Info |
|---|---|---|---|---|
| ^AORD | All Ordinaries | 6,525.70 |
 81.70 (1.24%) |
Components, Chart, More |
| ^SSEC | Shanghai Composite | 5,119.49 |
196.05 (3.69%) |
Chart, More |
| ^HSI | Hang Seng | 27,594.21 |
1,189.20 (4.13%) |
Components, Chart, More |
| ^BSESN | BSE 30 | 19,058.93 |
0.00 (0.00%) | Chart, More |
| ^JKSE | Jakarta Composite | 2,662.22 |
45.45 (1.68%) |
Components, Chart, More |
| ^KLSE | KLSE Composite | 1,402.25 |
11.60 (0.82%) |
Components, Chart, More |
| ^N225 | Nikkei 225 | 15,031.91 |
551.51 (3.54%) |
Chart, More |
| ^NZ50 | NZSE 50 | 4,090.71 |
44.06 (1.07%) |
Components, Chart, More |
| ^STI | Straits Times | 3,492.26 |
107.41 (2.98%) |
Components, Chart, More |
| ^KS11 | Seoul Composite | 1,905.65 |
84.82 (4.26%) |
Components, Chart, More |
| ^TWII | Taiwan Weighted | 8,654.63 |
316.29 (3.53%) |
Chart, More |
Just so you knoow, this is a pretty good indicator that the dollar’s “Wile E. Coyote” moment will be sooner rather than later. So the fact that the central banks of India, Korea, and Columbia have implemented measures to keep the the dollar from tanking is not a good sign.
In Colombia, international investors buying stocks and bonds must leave a 40 percent deposit at Banco de la Republica for six months. The Reserve Bank of India created a bureaucratic thicket to curb speculation by foreign money managers. The Bank of Korea is investigating trading of currency forward contracts to limit gains in the won, now at a 10-year high.
Instead of using currency reserves or interest rates to influence foreign exchange markets, central banks and finance ministries are setting up obstacles to keep the falling dollar from threatening company profits and economic growth. The U.S. currency slumped 10 percent this year against its biggest trading partners, the steepest decline since 2003, while Treasury Secretary Henry Paulson has reiterated that the U.S. supports a “strong” dollar.
This isn’t going to work, and will make the eventual dollar collapse worse.
A US Navy Carrier Battle Group was conducting exercises between Japan and Taiwan, and a Chinese Song class submarine surfaced within visual range of the carrier, the proverbial turd in the punch bowl.
Not only was there a full balttle group out there, but also two American SSNs, and the sub got past them all.
I gotta take the Submariners side on this one….(refer to post title)
McConnell is not doing well in the polls, so he’s started running ads, including one with an endorsement from Alben Barkley II, grandson of former senator and vice president Alben Barkley.
The problem is that Alben Barkley II was convicted of sexual harassment in 1981 for hitting on his secretary.
Oops!
Yep, he’s trying to win over the “Club for Growth” set, so he is proposing to privatize social security.
I believe that this is an idea that has, at best, lukewarm support among the dead enders and Bushists that are the Repulbican party.
This is a good thing. Udall has a much better chance of winning the seat than the other serious candidate, Albuquerque Mayor Martin Chavez.
Hopefully, Pete Domenici will be replaced by a Dem.
It appears that following electionsRussia will attempt to institute constitutional reforms to create a position for Vladimir Putin of “National Leader, which sounds a lot like “president for life”.
I think that to a very large degree, the anti-Democratic forces in Russia are currently in the ascendancy because of Western actions following the fall of the USSR.
We defined democracy as allowing Russian property to be stolen by politically connected people largely for the benefit of Western bankers, actively cheered on Yeltsin when he shelled the Russian Duma, and allowed Boris Yeltsin’s re-election campaign to be neither free nor fair as a result (he controlled all public mass media, and the private mass media was controlled through the Oligarchs, whom he installed).
It’s no wonder that the Russian people, and the Russian political class, see Democracy as nothing more than the window dressing for an attempt to prostitute their people.
The Center for Economic and Policy Research*, or more accurately Mark Weisbrot, one of its founders has an interesting take on the falling dollar.
His take is that a “strong dollar” policy, which is more accurately described as an “overvalued dollar” policy, is a bad thing. It amounts to a subsidy one imports, and a tariff on imports.
Like most bad policy, there’s a conflict of interest underlying the resistance to having the dollar move to a more competitive level. Robert Rubin is now Chairman of Citigroup. (Both Rubin and Paulson are former CEO’s of Goldman-Sachs). The big bankers and the financial sector generally do not have much interest in promoting growth and high levels of employment in the domestic economy, and certainly not rising wages. For them, inflation is the only real enemy, since it erodes the value of financial assets. (Rising wages are viewed negatively by these people because wage increases are seen as increasing inflationary pressures).
If you read the business press you might have noticed that when unemployment goes up, the bond market generally rallies. That is a reflection of the financial sector’s direct interest in lower inflation and lower wage growth even if it hurts the vast majority of the country. A high, even overvalued, dollar helps hold inflation in check by keeping import prices lower. On the flip side, as the dollar adjusts to a more sustainable level, at least some increase in inflation is inevitable as import prices increase.
Some of our big transnational corporations also like a high dollar because it makes everything they buy overseas – including other companies as well as labor – cheaper for them. And of course for those whose first priority is an affordable vacation in Europe – well they are out of luck when the Euro rises, as it has now, to $1.45.
But for the vast majority of the country, a “strong dollar” is more like a “strong influenza virus” – something to be avoided whenever possible.
I do wish that he had commented on China’s “weak Yuan” policy, because it makes a good counterpoint. Their exports are burgeoning, but inflation is eating them alive right now.
I think that it is clear that a falling dollar will result in more goods and services being produced in the US, but we will also have high inflation, and high interest rates. At the end of the tunnel, the Average American will be better iff, but during the adjustment, when imports costs rise, and there is no domestic capacity to take up the slack, and house prices tank because of higher interest rates, it will be ugly.
*They are a liberal economic think tank. Check out there about us page.
McCain is arranging for a large campaign loan, and coordinating (under the table) with 527 organizations.
Hypocrite
The FCC has (finally) appeared to nitice that Cable is a natural monopoly, and had decided to enforce the so called 70/70 rule*, and it is proposing some new regulations:
It’s about bloody time.
*“The agency may adopt rules necessary to promote “diversity of information sources” once the commission concludes that cable television is available to at least 70 percent of American households, and at least 70 percent of those households actually subscribe to a cable service.”
You remember that the vote on Mukasey was rushed, about 1/2 hour’s notice before the start of debate.
Well, now we have a reason. It appears that Reid cut a deal with teh Republicans to allow for a military funding bill to proceed without money for Iraq and Afghanistan.
I guess that they think that this will provide cover while trying to get the troops out of Iraq. It’s won’t. With George W. Bush at 26%, worse than Nixon, the Bush dogs are still going to fold like wet broccoli when he makes vague noises about “not supporting the troops”.
They still don’t get it. Any opposition to Bush on any issue is both the right thing to do and a political win.
89 years ago. What was then called Armistice Day.
A moment of silence.
I agree 100% with what she says.
I would add that this even applies to the worst of the unions, the California Prison Guards for example, at least as applied to working conditions. I don’t support their lobbying for what amounts to increased incarceration of the population.
I would also add that the alternative, the private incarceration companies, are still 100x worse than the prison guards.
Wachovia is looking at $1.1 billion in losses, much of it tied to it’s 2006 purchase of Golden West Financial Corp. of Oakland, California.
The contageon is spreading.
Norman Mailer is dead at age 84.
I’m kind of embarrassed. I’ve never read any of his stuff.
McCain teed off on Guiliani about Kerik, and in response, Team Rudy brings up the fact that McCain was one of the Keating 5.
I love it when Republicans call each other crooks. It’s about the only time that they are honest.
It appears that Floridahas decided that it will not play nice with Georgia regarding water during the ongoing drought.
I’m not sure why, though with rain predicted in the next week, the point may be moot.
That being said, all this is like two kids throwing spitballs, compared to the inevitable water wars in the Western US, these are arid regions to begin with, they have experienced explosive population growth, and the source of much of the water, the Ogallala Aquifer, is largely primeval water, and recharges very slowly, so this will get very, very ugly.
Of course, global warming makes this all a crap shoot.