Month: December 2007

C.I.A. Was Urged to Keep Interrogation Videotapes – New York Times

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It now appears that The C.I.A. was told to preserve the torture video tapes.

White House and Justice Department officials, along with senior members of Congress, advised the Central Intelligence Agency in 2003 against a plan to destroy hundreds of hours of videotapes showing the interrogations of two operatives of Al Qaeda, government officials said Friday.

So, they were wold not to by a number of lawyers, and decided to do so anyway, when things started getting hot, with legal and Congressional investigations ramping up.

Sounds like obstruction of justice to me, in fact, I’d call it a slam dunk.

The Buzzy and Cookie Show Has Been Canceled

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Howard J. “Cookie” Krongard is resigning from his position as Inspector General for the State Department.

You may recall that his brother, Alvin B. “Buzzy” Krongard, gave an interview saying thaat “Cookie” was lying about conflicts of interest, (They must really love each other) and that a congressional committee was looking into whether he perjured himself.

So, we will not see the spectacle of the “Buzzy” and “Cookie” show, with frick and frack testifying against one another.

Peggy Noonan Blast Talibaptists

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Really. I mean it. Former Reagan speechwriter, and erstwhile dolphin trainer* Peggy Noonan, a right winger through and through, just called the religious right a bunch of idiots.

She was writing about Romney’s “Mormon” speech, and talks about “a particular fundamentalist strain within evangelical Protestantism”, and she finishes with this:

There was one significant mistake in the speech. I do not know why Romney did not include nonbelievers in his moving portrait of the great American family. We were founded by believing Christians†, but soon enough Jeremiah Johnson, and the old proud agnostic mountain men, and the village atheist, and the Brahmin doubter, were there, and they too are part of us, part of this wonderful thing we have. Why did Mr. Romney not do the obvious thing and include them? My guess: It would have been reported, and some idiots would have seen it and been offended that this Romney character likes to laud atheists. And he would have lost the idiot vote.

My feeling is we’ve bowed too far to the idiots. This is true in politics, journalism, and just about everything else.

Emphasis mine.

This, I think is illustrative of the divide between the Wall Street Republicans and the Talibaptists.

They don’t like each other. They don’t support each other. They just find the other side useful, and Noonan illustrates, as does the Club for Growth going after Huckabee, that there are strains in this relationship.

*She once wrote that Elian Gonzalez was saved from drowning by divinely inspired porpoises.
†Actually, not true, and many of the founding fathers would have been offended by this. They considered themselves spiritual, not religious. Many were deists, and a number, John Adams comes to mind, found religion to be an affront to what they saw as the divine. They thought that it was a con game, used to enrich and empower the falsely pious.

Mitch McConnel Hates Our Troops

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In an interview with the Grayson County News-Gazette, he said the following:

“I won’t tell you everything is great in Iraq; it is not. But we want to keep a steady flow of funds so that we don’t disrupt the military,” said McConnell. “Unfortunately, most of our friends on the other isle are having a hard time admitting things are getting better; some days I almost think the critics of this war don’t want us to win. Nobody is happy about losing lives but remember these are not draftees, these are full-time professional soldiers.

Gee…So I guess he thinks that “full-time professional soldiers” don’t have parents, or wives, or Fiancées, or children, or girl friends.

Or maybe he’s trying to say that it was OK for him, as a draftee in the late 1960s, do give another soldier a hand job in the shower to get out, because he was a draftee, nto a “full-time professional soldier”.

Oh, well.

Real Estate Update

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existing household real estate assets declined $67 Billion in the 3rd quarter. That’s about $200 for every man, woman, and child in the US.

You can see this in declining home equity percentages over time (there are more graphs at the link):

While we’re at it, Morgan Stanley analysts are saying that home prices could be falling for at least the next three years.

.…
The property derivatives market seems to be suggesting that we are in a very different environment, on the heels of market events that could force a housing recession like none ever imagined or experienced,” Morgan Stanley analysts said.

“The fundamental argument for going long housing is that history has never seen such extended periods of house price declines,” Morgan Stanley said. “We think that such arguments have limited credibility because of limited periods of data and over-reliance on analysis using national level data.”

While home price declines for three years or longer have not occurred in recent years on a national level, regional data demonstrates that unusual price increases often lead to sustained corrections, the report said.

….

And then we have Standard and Poors sayint that the mortgage relief program might cause downgrades on some of the related bonds.

Honestly though, I don’t see how the action will make things much worse:

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The share of all home loans with payments more than 30 days late, including prime and fixed-rate loans, rose to a seasonally adjusted 5.59 percent, the highest since 1986, according to a report today from the Washington-based bankers trade group. New foreclosures hit an all-time high for the second consecutive quarter in a survey that goes back to 1972.

….

Here’s How it Works, We Take Iraqi Officers to the US For Training, and They DESERT

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Big surprise there, bombs are not going off daily, nor are death squads roaming the street. All we have is an occasional mall shooter.

So, we train them there, then take the most promising back to the US for more estensive training, and they go missing.

They desert, they seek asylum, or they seek asylum in Canada, as a brigadier general did earlier this year.

Things have to be going swimmingly there.

Senate Folds on AMT to Republicans

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Let’s be clear about this, the Alternative Minimum Tax is just a flat tax. You compute the regular, and the AMT taxes owed, and choose the higher. For all the talk of millions of people being hit, it’s not a big deal.

Most of these people, will pay a few hundred bucks more than they would have otherwise.

When the House passed this bill, they closed loopholes for oil companies and phony capital gains for hedge fund managers to pay for it.

There were the votes to do that in the Senate, but not the votes to overturn a filibuster, so the Senate caved, and passed AMT relief without paying for it, violating pay-go.

At the very least, Reid could have insisted that the Republicans talk. We need a real filibuster, not one of these 24 hour talk fests, but one where you take a vote when the guy stops talking.

So far this year, the Republicans have filibustered more times than during any session ever, and each session covers two years.

Enough is enough. If the Republicans want to filibuster, make them filibuster.

Steven Pearlstein Explains the Credit Crunch

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He does not get into the why this crunch has happened, short form is that you had regulators who allowed investment banks to use fairy dust and call it innovation, but its a very good picture regarding what forces are in motion now, and where they are likely to lead.

His OP/Ed is aptly titled It’s Not 1929, but It’s the Biggest Mess Since:

….

The financial giants that originated, packaged, rated and insured all those subprime mortgages were the same ones, run by the same executives, with the same fee incentives, using the same financial technologies and risk-management systems, who originated, packaged, rated and insured home-equity loans, commercial real estate loans, credit card loans and loans to finance corporate buyouts.

It is highly unlikely that these organizations did a significantly better job with those other lines of business than they did with mortgages. But the extent of those misjudgments will be revealed only once the economy has slowed, as it surely will.

At the center of this still-unfolding disaster is the Collateralized Debt Obligation, or CDO. CDOs are not new — they were at the center of a boom and bust in manufacturing housing loans in the early 2000s. But in the past several years, the CDO market has exploded, fueling not only a mortgage boom but expansion of all manner of credit. By one estimate, the face value of outstanding CDOs is nearly $2 trillion.

….

Those are scary numbers, but he goes on to explain why we are in trouble:

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In the simple version, each investor owned a small percentage of the entire package and got the same yield as all the other investors. Then someone figured out that you could do a bigger business by selling them off in tranches corresponding to different levels of credit risk. Under this arrangement, if any of the mortgages in the pool defaulted, the riskiest tranche would absorb all the losses until its entire investment was wiped out, followed by the next riskiest and the next.

With these tranches, mortgage debt could be divided among classes of investors. The riskiest tranches — those with the lowest credit ratings — were sold to hedge funds and junk bond funds whose investors wanted the higher yields that went with the higher risk. The safest ones, offering lower yields and Treasury-like AAA ratings, were snapped up by risk-averse pension funds and money market funds. The least sought-after tranches were those in the middle, the “mezzanine” tranches, which offered middling yields for supposedly moderate risks.

Stick with me now, because this is where it gets interesting. For it is at this point that the banks got the bright idea of buying up a bunch of mezzanine tranches from various pools. Then, using fancy computer models, they convinced themselves and the rating agencies that by repeating the same “tranching” process, they could use these mezzanine-rated assets to create a new set of securities — some of them junk, some mezzanine, but the bulk of them with the AAA ratings more investors desired.

It was a marvelous piece of financial alchemy, one that made Wall Street banks and the ratings agencies billions of dollars in fees. And because so much borrowed money was used — in buying the original mortgages, buying the tranches for the CDOs and then in buying the tranches of the CDOs — the whole thing was so highly leveraged that the returns, at least on paper, were very attractive. No wonder they were snatched up by British hedge funds, German savings banks, oil-rich Norwegian villages and Florida pension funds.

What we know now, of course, is that the investment banks and ratings agencies underestimated the risk that mortgage defaults would rise so dramatically that even AAA investments could lose their value.

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As part of the unwinding process, the rating agencies are in the midst of a massive and embarrassing downgrading process that will force many banks, pension funds and money market funds to sell their CDO holdings into a market so bereft of buyers that, in one recent transaction, a desperate E-Trade was able to get only 27 cents on the dollar for its highly rated portfolio.

Meanwhile, banks that are forced to hold on to their CDO assets will be required to set aside much more of their own capital as a financial cushion. That will sharply reduce the money they have available for making new loans.

And it doesn’t stop there. CDO losses now threaten the AAA ratings of a number of insurance companies that bought CDO paper or insured against CDO losses. And because some of those insurers also have provided insurance to investors in tax-exempt bonds, states and municipalities have decided to pull back on new bond offerings because investors have become skittish.

If all this sounds like a financial house of cards, that’s because it is. And it is about to come crashing down, with serious consequences not only for banks and investors but for the economy as a whole.

That’s not just my opinion. It’s why banks are husbanding their cash and why the outstanding stock of bank loans and commercial paper is shrinking dramatically.

…..

This may not be 1929. But it’s a good bet that it’s way more serious than the junk bond crisis of 1987, the S&L crisis of 1990 or the bursting of the tech bubble in 2001.

Israelis Looking at Air Launched Microsats

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Israel already has its own independent launch capability, and as a result of launching targets for its Arrow ABM system, it also has a background in a properly sized air born launcher for quick response (Paid subscription required).

It would be based on the Blue Sparrow and Black Sparrow targets, which are launched from an F-15.

One of the things driving this are the constraints on Israel’s current launcher:The program to field a tactically responsive launcher is shaped by Israel’s unique geographic constraints: The existing Shavit rocket has to be fired west-to-east across the Mediterranean to avoid violating the airspace of Israel’s neighbors. The launch direction also restricts Shavit’s payload potential, which in turn has limited the size of Israeli military communications and surveillance satellites.

Using an aerial launcher will allow launches with earth’s rotation, giving greater payload.

Bill Donohue and His Merry Band of Bigots Call “Golden Compass” Anti-Catholic, American U.S. Conference on Catholic Bishops Disagrees

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The Catholic League has represented itself as the voice of American Catholics while ignoring statements by the religious hierarchy. This time, it’s directly disagreeing with the Bishops, calling for a boycott, while the USCCB, “thought that series helped reinforce faith, and finds value in Golden Compass.”

At some point, I’d like to see someone in the Catholic church with legitimate religious authority disavow Donohue and the rest of those anti-Semitic bastards.

Pentagon Support for Useless, Overprices Boondoggle Gains Strength

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Yes, after years of lobbying, it looks like the Pentagon may support buying more F-22s.

It’s expensive, it’s designed for use against the non-existent Warsaw Pact, it has no advantages in a counter-insurgency campaign, and it is highly limited (the JSF is a far better bomb truck).

Additionally, any new production will have to update computer hardware and software, because the original architecture is obsolete.

Yet another indication that the USAF should be reintegrated into the Army. This is a toy for the wild blue yonder set.

State Department Contractor Who Created Corrupt and Unsafe Baghdad Embassy Still Running Construction (and Krugman Owns Cheney)

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Note that this guy is not career State Department.

State Dept. retains manager of troubled embassy project

Warren P. Strobel | McClatchy Newspapers

last updated: December 06, 2007 08:22:34 PM

WASHINGTON — A State Department project manager banished from Iraq by the U.S. ambassador and under scrutiny by the Justice Department continues to oversee the construction of the much-delayed new American embassy in Baghdad from nearby Kuwait, State Department officials disclosed Thursday.

James L. Golden, a contract employee, is still managing the $740 million project, said Undersecretary of State Patrick Kennedy, the department’s top management official.

“Mr. Golden is still . . . our project manager, and still is working with the contractor, at their base in Kuwait,” Kennedy said.

One State Department official with detailed knowledge of the unopened embassy expressed outrage that his superiors haven’t replaced Golden.

…

(Emphasis mine)

So, this guy is so bad at what he does, that he got thrown out of the Green Zone, but he’s still managing construction.

When one considers the shoddy and unsafe construction, and allegations of corruption and slavery, one wonders why this guy is still getting paid.

So, which company does he work for, and what sort of political connection with Bush and His Evil Minions™ is keeping him on the job?

I should note that the inestimable Paul Krugman puts in his two cents on this too:

Back when Hillary Clinton described Dick Cheney as Darth Vader, a number of people pointed out that this was an unfair comparison. For example, Darth Vader once served in the military.

Here’s another reason the comparison is invalid: the contractors Darth Vader hired to build the Death Star actually got the job done.

Hate Crime Expansion Defeated in Senate

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Basically, it was attached to an emergency spending bill funding Iraq, could not get the votes in the house, because about 30 Dems would not vote for a war funding bill under any circumstances.

This means that the bill is dead for this year, though I think that it will come up again next year.

I can’t help but think that this is a shot across the bow of Pelosi, who has been rather timid compared to Reid on challenging Bush on Iraq.

Expanding the law to cover hate crimes against gays has to be a huge issue in her district, and it being pulled is going to result in her office catching hell from her constituents.

Honestly, I think the that Bush will veto anything that this is attached to anyway, so we need to wait for a Dem president, so the anti-war congressmen have made the right decision.

CIA Destroyed Torture Tapes

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According to reports, “They were destroyed in part because officers were concerned that tapes documenting controversial interrogation methods could expose agency officials to greater risk of legal jeopardy, several officials said.”

So in addition to crimes against humanity, we have conspiracy to obstruct justice. Considering that this information was extant when the 911 commission and the Judge in the Moussaoui trial specifically asked for this sort of information.