Year: 2007

Whiskey Tango Foxtrot????! Florida SHORT TERM Funds Parked in CDOs and Other Shaky Investments???

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We are talking accounts used for day to day expenses and salaries, and when it was discovered that. “after learning that the money- market fund contained more than $700 million of defaulted debt”, there was a run on the fund, with over 35%, over $10 Billion of the $28 Billion in the fund, of its assets being withdrawn.

As a result, they have suspended withdrawals from the fund, which may leave some governments unable to pay their employees this week. (See also here.)

It’s gets better:

Stipanovich raised the possibility of having the state pension fund shoulder the risk of some of the troubled securities with a credit-default swap, through which the retirement fund would guarantee the debt in exchange for an insurance premium.

“It will be a wonderful diversifier,” Stipanovich said.

Sink immediately rejected the executive director’s plan.

A “Wonderful Diversifier”???? Talk about throwing good money after bad.

A brief list of bad investments:

  • $168 million of debt from KKR Atlantic Funding Trust cut to D, or default, from B by Fitch Ratings on Oct. 8
  • $356 million issued by KKR Pacific Funding Trust, cut to D from B by Fitch Ratings on Oct. 2
  • $180 million of paper from Ottimo Funding, cut to D from C by S&P on Nov. 9. S&P said an auction of Ottimo’s collateral “did not generate cash proceeds” to repay the asset-backed commercial paper.
  • $175 million of short-term debt issued by Axon Financial Funding, an SIV. It was cut to D from C by S&P when Axon failed to pay liabilities maturing Nov. 26, causing an “automatic liquidation event.”
  • $650 million of certificates of deposit from Countrywide Bank FSB, a unit of Countrywide Financial Corp., that now amounts to more than 3 percent of the pool’s assets. The bank’s rating was cut to Baa1, three levels above junk, by Moody’s on Aug. 16.

In a MONEY MARKET FUND? I’d sooner have Sweeny Todd give me a shave than trust Florida’s financial judgement.

Would Reverent Moon Please Buy the Washington Post Too???

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It would improve the quality of the journalism there no end. We have a front page article saying that a bunch of nuts, who have been thoroughly debunked, are claiming that Barack Obama is a crypto-Muslim.

The more I read stories and opinions from the Post, the more that I am convinced that the entire Watergate affair was just stupid dumb luck.

Journamalist Perry Bacon Jr., today’s worst person in the world!

Lott’s Brother-in-Law Indicted on Bribery Charges

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Well, the fact that his brother-in-law, Rickard “Dickie” Scruggs, was indicted on bribery charges may go a bit of a way towards explaining his leaving the senate.

Scruggs is perhaps best known for suing tobacco companies in multibillion-dollar lawsuits in the late 1990s. But he also acted as Lott’s lawyer, as well as the attorney for many Mississippi homeowners, in a successful lawsuit against State Farm Insurance when the firm denied thousands of claims in the wake of Hurricane Katrina.

So, even if Lott has done nothing illegal, he probably does 3 wrong things before having breakfast, it sounds like it was a good time for him to look at the DC lobbying gig.

Giuliani Used City Money for Visits to Then Mistress, Judith Nathan

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What’s more, he also cooked the books to conceal this:

The documents, obtained by Politico under New York’s Freedom of Information Law, show that the mayoral costs had nothing to do with the functions of the little-known city offices that defrayed his tabs, including agencies responsible for regulating loft apartments, aiding the disabled and providing lawyers for indigent defendants.

But wait, there’s more, he also provided a police driver and city car for his chippie.

In a world of real journalism, this would be the lead story for the next week…In Rupert Murdoch’s America??? Page 12.

All Democrats Should Behave Like This

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There is a lot I don’t like about Hillary Clinton….Hell…..There is a lot I don’t like about bill Clinton…..but Hillary Clinton’s behavior to the press is not one of them.

Read the article about how Senator Clinton and her people hit back at Bob Novak’s bogus story about here digging Dirt on Barack Obama. Not only were they in front of the story, they got Bob Novak to essentially retract the story.

This episode indicates why Hillary is not as bad a candidate as a lot of people say, though I’m still leery about her being the “leader of the free world”.

She handles the press well….and she is not out for them to love her, they are out for them to fear her.

What’s more, it works. Novak backpedaled because the press was scared enough of Hillary and her people to actually press him on his story, which was clearly Rove disinformation.

Of course, then she goes and spoils it all by saying that she’ll appoint Colin Powell a foreign emissary, the man who lied about WMDs before the United nations. Because she’s so tied in with the “very serious people” inside the DC beltway.

My head hurts.

In-F%$#ing-Sane: The Michigan State House

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Well, the state courts have said that it is legal, but with everyone by Hillary Clinton and Chris Dodd having withdrawn their names from the ballot, why should it matter?

Well, now the state legislature is poised to put candidates back on the ballot against their will.

If this is not a bill of attainder, it certainly is a violation of the free speech rights of the candidates, who have the right NOT to run in any state that they wish.

If this passes, it will be in court before the governor’s signature ink is dry.

Besides, I want to see Chris Dodd beat Hillary Clinton.

Oops, I spoke too soon, the House approved the bill, but the state Senate refused to take it up, so iut’s just the house that is batsh$@ insane, not the whole legislature.

Today’s Real Estate Update

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HUD is starting to dump foreclosed homes, teachers, police officers and firefighters in Charlotte, NC can get homes for fifty cents on the dollar, Third-quarter home prices dropped 1.7% from the second quarter as measured by the Case-Shiller index, and houme values are expected to drop $1.2 TRILLION next year, with a drop of $6.6 billion in property taxes.

So a federal agency is marking down homes that they can’t get rid of 50%, house prices are dropping at an annualized rate of about 7% a year, and property tax revenues are falling through the floor, and what is likely a 5+ year decline is only about 14 month along.

Jury Duty Reviews

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Well, a few weeks ago, I got a summons for Jury duty, and today, I had to show up, juror number 635, so I show up to the courthouse in Towson at 9:00am. Parking is paid for, so I go up to level “L”, park, and go into the courthouse.

Taking a left after the metal detector, I then go up a short flight of stairs, hang a right, and get in line. I am given a packet with a jury badge, and $15.00 in cash for expenses.

Once we are all checked in, a woman working for the courts picks up a microphone, and explains the basics of how it works. We are to be sent upstairs by juror number, and then go through voir dire. Given my early diet of Perry Mason, it all seems pretty much second nature to me.

There are monitors arranged throughout the jury room, and they are used to show a brief, and rather cheesy video showing how it is all supposed to work. It was narrated by a judge, and showed pretty clearly just why they use actors to portray them on TV.

While we were waiting, they put a movie on the monitors to entertain us* (more on this later), but about halfway through, the paused it to call jurors 1 through 330 to court for voir dire. They then restarted the film. At about 12:20, most of jurors 1-330 (they only take twelve and a few alternates) returned to the jury room.

At about 12:50 we were sent out for lunch with instructions to return by 2:00pm. They ran the last half of the film again for the benefit of those jurors remaining from the 1-330 cohort.

At about 3:30, Judge Pat Springer came to the room, and thanked us all for our service, and we were free to go.

As a special bonus to this post, I am adding what I hope will be a VERYinfrequent feature of this blog, Jury Duty Reviews:

The movie in question was Secondhand Lions.

Michael Caine: Garth
Robert Duvall: Hub
Haley Joel Osment: Walter
Kyra Sedgwick: Mae

The film was chosen by the court staff was an attempt to find something that would not offend anyone, but still would entertain what would necessarily be an adult audience.

The film covers some fairly well trod ground, with Osmont being the 13 year old child of the feckless mother Sedgwick who is dumped off on his great uncles, Caine and Duvall.

Sedgwick has a minor roll really, and this is essentially a 3 person film, albeit one where they are played by 6 actors, because of the extensive use of flashbacks.

It is set in Texas, and Cain does his accent very well. Duvall does not do an accent, but his manner of speaking fits in well with the Texas location. Thankfully, Osmont does not attempt an accent all.

Duvall, as always, is impressive, as is Caine, who can sometimes disappoint, and Osmont does a very creditable job in playing a 13 year old.

Your kids will love this movie, and it’s entertaining for the adults.

It’s funny and…I’m sorry, but I have to say it….Heartwarming.

*Yes, I know, it’s technically a public performance in violation of US IP laws, because it qualifies as a “public performance”, but I’m not ratting them out to the MPAA.

Sharif Back in Pakistan, Calls for Ouster of Musharraf

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You may remember that the last time he came back to Pakistan, he was forcibly sent back to to sojourn with the House of Saud, but this time, he’s back, and he’s calling for Musharraf’s scalp.

Sounds like a movie…Like one I’ve heard before, called The Fall of the Shah of Iran.

I hope that this is not a remake…..Because a nuclear armed Mullah would not make my top ten list of movie favorites.

I Wish that I Were a Right Wing Moron

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You may not remember the last time that I quoted Amity Shlaes. It was an indirect quote by way of Rich Karlgaard, who is so stupid, that he should be getting a personal aide to cut his meat, where Karlgaard implied that the reason for the 1937 recession was that “the investor class” were somehow sick and tired of FDR’s “soak the rich policies”, when even the most solidly Chicago School economist could tell you that it was caused by a reduction in federal spending to balance the budget.

Well, Amity Shlaes is at it again, suggesting that potential shortfall in Social Security in 30+ years should be kept at a level of bare survival for 1935, the date of establishment of the program.

As an FYI, 45 million Americans did not have indoor plumbing in 1930, and you had similar numbers in terms of electricity. This was out of a total population of 123 million, giving about 37% of the population without these amenities.

So, why do I wish that I were a right wing moron? Because Amity Shlaes is a senior fellow in economic history at the Council on Foreign Relations, and with those connections, she makes more in 90 days than I do in a year.

The right wing intellectual infrastructure is an artifact of subsidies for bad ideas and opaque thought processes, which since people like the Coors family and Richard Mellon Scaife are aggressively buying*, leads to more bad ideas and opaque thought processes through the invisible hand of the market place.

*I believe that over the past 30 years, these folks have spent over two billion dollars, that’s $2,000,000,000.00, or about $800 for every man, woman, and child in the US, for think tanks and related activities. When you add in Olin, Bradley, DeVos (Amway), and the rest of these folks who never worked a day in their lives for their money, you are probably well over $3 billion….A quick Google shows spending of just the major organizations from 1990-2000 to be $1B.

Alterman on Stevenson

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Eric Alterman explains why comparing Obama to Adlai Stevenson is not a compliment.

Stevenson was a snob, and in many ways, not much of a liberal. He charmed intellectuals with his calls for a commitment to “cold-eyed humility” and a recognition that “our wisdom is imperfect and our capabilities … limited.” Though he might have been a classier fellow than General Eisenhower, bookwise — an ironic egghead after their own hearts — his politics were frequently indistinguishable from the plain-spoken military man. (When following his election loss, a woman tired to soothe his feelings by telling him that he had “educated the country,” Stevenson replied: “Yes, but a lot of people flunked the exam.” Stevenson’s high opinion of his own intellect helped define in the public mind the “effete liberal” stereotype. Yet Stevenson was hardly less committed to the Cold War than Eisenhower, and though he opposed McCarthyism, he had no problem with dismissing teachers for being Party Members or using the Smith Act to prosecute others. In this regard, he epitomized the weak-kneed response of so many liberals to what was among the most significant threats to civil liberties in the history of the republic, and later, the cause of much disillusionment on the part of young leftists with their tut-tutting liberal elders. In keeping with his profile in cowardice, Stevenson also opposed both public housing and what he called “socialized medicine.” He had little sympathy for much of the New Deal and a great deal of trouble making up his mind about the repeal of Taft-Hartley Act. Regarding the great moral and political and political issue for American liberals, civil rights, he was notably AWOL. (In this respect, he was less brave, and less liberal than the much-derided Truman.) Yes, the Kennedys treated Stevenson unconscionably, but Irving Howe aptly termed “Adlaism” to be “Ikeism … with a touch of literacy and intelligence.”

In fact, in this assessment, Stevenson come across far more like Joe Lieberman than even the troubled nobility of “Hamlet”.

White House Attempting to Foist Permanent Military Presence in Iraq, Chris Dodd Says No Bloody Way

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The White House and the genocidal ethnic cleansers Iraqi government have released a statement of principles that amounts to an agreement to have US troops in Iraq FOREVER.

Chris Dodd has released a statement vehemently disagreeing with this:

Frankly, it’s hard to believe that the Administration is just beginning to figure out what the future bilateral relationship with Iraq should look like after more than four years of military occupation. But, this declaration of principles is more notable for what it doesn’t say than what it does. It does not require Iraqi leaders to make substantive progress on their political benchmarks nor does it end US military involvement in Iraq. Indeed, Senator Dodd is fearful that the lack of clarity on the long-term presence will be used as a justification by this Administration for a permanent military presence in Iraq, at precisely the time when we should be declaring the opposite. In a Dodd Adminsitration, there will be no permanent bases in Iraq.

Update:
Obama and Clinton have now declared themselves to be members of the “No Permanent Bases” caucus too.

Arabs Bail Out Citigroup…AGAIN!!!!

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In 2001, Saudi Prince Alwaleed bin Talal rescued Citigroup, and this time, it’s the Abu Dhabi Investment Authority.

BTW, look at the terms:

  • They get a 4.9% stake.
  • In exchange for its investment, ADIA will receive convertible stock in Citigroup yielding 11% annually. (They are making the loan at 11%, when junk bonds get 9%, WTF????)
  • The shares are “required to be converted into common stock at a conversion price of between $31.83 and $37.24 a share over a period of time between March 2010 and September 2011.” (It’s currently trading at $29.75, the lowest since 2002, so this means that the conversion essentially means that they are very nearly paying for this investment)
  • This gives them a bigger stake in the firm than Saudi Prince Alwaleed bin Talal. (remember him?)

If this company isn’t functionally insolvent, then its management needs to go to be fired, and criminally investigated, because the only way a non-insolvent company takes a deal this bad is if someone is breaking the law.

Investors have increasingly expressed concerns about Citigroup’s “tier 1” capital levels — a common measure of a bank’s capital adequacy — which for the first time in years fell below its 7.5% target in the third quarter. Although the bank is still considered to be well capitalized, investors worried that Citigroup would be forced to cut its dividend.

H/T The Big Picture.

Trent Lott’s Retirement Announcement…Made Alone

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Seriously, when was the last time that you saw a major political figure making a retirement announcement without his family there, or at least his entourage?

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Something funny is going on here.

The current conventional wisdom is that he is doing this because he wants to avoid the two year wait that is required if he waits until after January 1 by the new ethics reform laws, but the fact is that he can do an awful lot, and get paid for it, as a “consultant” anyway.

Of further interest is that because he is resigning in an odd numbered year, Mississippi is required to hold a special election within 90 days, and with the DSCC flush, and the RSCC flat broke, this actually provides a small chance of a Democratic pickup in what would be a low turnout election.

There is the possibility is that some sort of scandal is brewing, most likely either something related to the VECO bribery that has ensnared the entire Alaska congressional delegation, or sex.

It it’s sex, it could be either the DC Madame, or the promised revelations by Larry Flynt.

My money would be on sex, particularly of the gay variety, since any bribery allegations would still end up seeing the light of day if he left.

Then again, this might just a big F$#@ you to Bush, who gleefully knifed him over his Strom Thurmond comments.