Month: April 2008

FBI Wants to to Seize Control of the Backbone to See if You Gamble or Watch Pr0n

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Really, I’m serious on this, though this could come as no surprise. It is the organizational imperative for law enforcement to ask for permission to spy on everyone all the time without oversight, as FBI Chief Mueller states:

I think legislation has to be developed that balances on one hand, the privacy rights of the individual who are receiving the information, but on the other hand, given the technology, the necessity of having some omnibus search capability utilizing filters that would identify the illegal activity as it comes through and give us the ability to preempt that illegal activity where it comes through a choke point as opposed to the point where it is diffuse on the Internet

(Emphasis Ars Technica)

Obvious issue that the US does not own the internet, and it appears from his statements that he wants to be able to shut down the traffic with no judicial review, whether it be a BBS that they determine to be “terrorist”, or illegal betting in the form of an office “March Madness” pool, or fantasy baseball.

They will also be able to monitor what you buy at an online bookstore, and the content of your emails.

What’s more, in an increasingly politicized Justice Department, the possibilities for selective prosecution just boggle the mind.

Economics Update

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I think that the best indication that we are well into a recession is that unpaid utility bills, as well as service cutoffs, are going through the proverbial roof. People can’t afford the mortgages, or the utilities, or so it seems.

BTW this is a very good pictorial representation of the credit freeze:

Click pic for PDF. (H/t econobrowser)

Oil hit an all time high, less than a dime less than $120/bbl, which means that inflation is still a problem, but don’t tell helicopter Ben, because the markets have already priced in another rate cut from the Fed.

As I’ve said before, it won’t matter, the fed is pushing on a string, but the fact that the Euro zone looks to be in for a round of slow growth and inflation, aka stagflation, with inflation of over 3% (their goal is 2%), so they will likely raise rates, as the ECB does not have maintaining employment as a part of its charter, just controlling inflation.

Rates going up in Europe should push the dollar down, which is why I find it confusing that the done better against the Euro in the past three days than it has since 2005, but I’m not sure how long this will last, as Japanese investors are moving away from US treasuries, which is significant, as they are the largest holders of US treasuries.

In real estate we have a new record for vacant homes in the US, 2.9%, the highest level since record keeping began in 1959.

Note that this does not include rental properties, and it’s pretty grim.

For those of you who are considering picking up something cheap in foreclosure, be warned, trash outs are way up Trashouts, here are stories from Massachusetts and Nevada.

We are talking serious stuff, sinks and bathtubs ripped out, and in some cases, vandalism along the lines of cement down the pipes. Factor that into a sales price.

I would also argue that it’s likely that we may shortly start seeing violence against people who purchase at auction, so do not enter into this likely.

Passover Finally Over

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After 8 days, I’m seriously jonesing for some Chametz (leavened bread products).

Additionally, with my Orthodox Mother in Law here, we were in full no light switches, etc. mode for 4 of the 8 days of Pesach (actually 5 of 9, when one considers that Shabbat immediately preceded Pesach).

It’s a relief to be able to eat normal food again, though I feel kind of guilty at being relieved.

Years in the desert vs. a few days of eating bad food, I feel kind of wimpy complaining about it.

Off for the Next Two Days, So Here is a Question to Ponder

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Last two days of Passover are Yom Tovim, so I’m off* again.

So here is my question:

Is It Just Me, Or is the Whole World Going to Hell in a Handbasket?

We are having a food crisis, an energy crisis, the economic meltdown, etc., and everything seems to be collapsing at the same time.

Are we heading for some sort of really scary triple witching hour?

Because I have this feeling that something big and awful, at least for the US is barrelling down at us.

*Truth be told, I’m always a little bit off.

Krugman Nails it Again

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As usual, Krugman gets to the heart of the matter

The question Democrats, both inside and outside the Obama campaign, should be asking themselves is this: now that the magic has dissipated, what is the campaign about? More generally, what are the Democrats for in this election?

That should be an easy question to answer. Democrats can justly portray themselves as the party of economic security, the party that created Social Security and Medicare and defended those programs against Republican attacks — and the party that can bring assured health coverage to all Americans.

They can also portray themselves as the party of prosperity: the contrast between the Clinton economy and the Bush economy is the best free advertisement that Democrats have had since Herbert Hoover.

But the message that Democrats are ready to continue and build on a grand tradition doesn’t mesh well with claims to be bringing a “new politics” and rhetoric that places blame for our current state equally on both parties.

And unless Democrats can get past this self-inflicted state of confusion, there’s a very good chance that they’ll snatch defeat from the jaws of victory this fall.

His basic point is a valid one the voters are not looking for reform. They are looking for the policies that make their lives better.

To the degree that a candidate makes reform the message to the exclusion of policy, there is an emptiness that can be exploited.

Level 3 Asset Bingo

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Here is an interesting commentary on the rather dubious nature of some of the assets on wall street.

Here’s Rule No. 1 from Wall Street’s public-relations playbook: If the company you run has big losses on hard-to-value assets, scream your head off about the accounting rules.

And what if the squishy values result in huge gains instead, as they have in the not-so-distant past? Rule No. 2: Stay mum about it for as long as the rules allow.

Basically he is noting that the various brokerages are booking a lot of profits on level 3 assets, but level three assets have no regular market to independently determine value, so we are back to smoke and mirror.

Go read, if you dare.

Stupidest F&%$ing Guy on the Planet is Fired

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Yes, Georgetown has decided not to renew Douglas Feith’s contract

Speaking of Iraq, the Georgetown Hoya newspaper last week quoted a student saying she was ‘displeased that university officials have not asked’ former Pentagon undersecretary Douglas Feith’to return to teach next year.’

Asked about Feith’s status, Robert Gallucci, dean of Georgetown’s foreign service school, told us that when Feith was hired — something that caused an uproar among the faculty — it was understood he ‘was on a two-year appointment.’ Any decision not to renew should not be seen as ‘a judgment on his performance,’ Gallucci said, noting that Feith’s students’ ‘course evaluations were really good.’

Good move.

A better one would have been never to hire the son of a bitch.

Economics Update

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The dollar is doing better now, $1.5613:€1.0000, as I type this, which is about 3% stronger than when it was above $1.60.

I put down most of the movement over the past week to people betting on what the Fed will do in interest rates, and the consensus that it will not cut.

Oil, however, just went up again, as did gasoline, because of reports of a pipeline attack in Nigeria. The reality is that supplies are so tight that even a minor disruption causes a minor panic.

The New York Times has discovered that the housing crisis has moved to tony Greenwich, CT. And so they cover it with wringing hands, because it interests their readers.

For the rest of us, the fact that the mosts states are having financial meltdowns, and many are near broke, because of falling tax revenues, are a matter of greater concern.

Also, Consumer confidence is at a 26 year low. That’s as in 1982, when we were at 10% unemployment, and so consumers are scaling way back on spending.

In a sign of the apocalypse, Moody’s is downgrading some more of the Alt-A mortgage backed slop. Who knew that a ratings firm would actually do its job.

It’s been a busy day for AMBAC, the monoline insurer, with a report that it may need to seek more capital after posting a $1.66 billion dollar loss for the quarter. Further confirming this report is the fact that their interim CEO is saying that there are no liquidity issues and that its ratings are solid.

S&P is back stopping Ambac on this explicitly stating that the loss will not lead to a downgrade.

Of course if the ratings agencies, or for that matter the financial markets, were at all honest, most the monoliners would already be rated as junk.

Iraq

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The major Sunni parties have agreed in principle to rejoin the Iraqi government, and Moktada al-Sadr has called on his supporters to “to wage open war against the Americans” but forbade them from “raising a hand against another Iraqi citizen.”

I’m not sure how this will all play out.

Since it’s Iraq and Maliki, both of whom have never failed to disappoint, I think that any concessions on the part of ISCI and Dawa would be primarily as a a part of a deliberate strategy to isolate Sadr in time for the elections, so wonders how long this Sunni-Shia rapproachment last, given that it is clearly seen as short term by Malki.

Zimbabwe

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Well, it looks like things are going to get worse, Zimbabwe police raided MDC, and the independent electoral observer, offices in Harrare, looking for evidence of an “attempt to overthrow the country”.

This does not look like it will end well.

Hopefully the talk of immunity for Mugabe in exchange for stepping down, talk in which Mugabe has taken no part, will amount to something.

This has been on a gentle slope down for weeks, but I think that there is a cliff up ahead.

This is Most Unfortunate

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It appears that the UK’s Office of Government Commerce’s new logo will be modified.

Some people have noticed a problem, see here:

Do you see the problem?

OK, tilt your head to the left……

A bit more…..

Nope a bit more…..

See it?

Needless to say, someone there need to take this issue well “in hand”, and get a “firm grip” on the situation.

Obviously, if this is what fourteen thousand quid buys from a graphics house in the UK, there is a problem somewhere.

New Chinese Boomer Deploys to Hainan Island

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The Chinese appear to aggressively moving towards some sort of submarine based deterrent according to this report by the Federation of American Scientists.

They have a satellite picture (commercial resolution) of one of the boomers at a dock:

There appears to be significant development at the Yulin naval base to accommodate this, including tunnels and a demagnetization facility.

The reports that the island is very near the edge of the continental shelf, which means that the subs could get into deep water quickly, which is typically where you want a boomer, except, of course for the fact that US boats have been doing deep water for the past 50 years.

If China gets a meaningful SSBN deterrent, it represents a threat to US military power, though it is probably a stabalizing factor, because it prevents a nut like Lynne Cheney from going postal on a nuclear level on them with nuclear weapons.

And In the Conuing Tradition of Fanboi Pimping for SAAB

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It appears that SAAB has a pretty competitive entry into the smaller AEW field, the Saab 2000 Airborne Early Warning (AEW) system:

SAAB had previously created a system for the Swedish Military based based on a slightly smaller member of this turboprop family.

The E-2 C/D from Northrop Grumman, and the IAI’s Conformal AEW (CAEW) based on the Gulfstream G550 airframe are its nearest competitors.

Things Looking Good for Zack Space

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He won election in Ohio’s 18th district after Bob Ney withdrew following corruption allegations, and now CQ has upgraded the district from “Leans Democratic” to “Democrat Favored”.

Space has $1 million in the bank, as versus $36k for his Republican opponent.

I’m really beginning to think that 2008 will be worse than 2006 for the ‘Fants.

A lot of this is because the people who vote for power will now vote Democratic.

Then again, we know how my predictive powers work.

In a Blow to Fans of Franz Kafka

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Magistrate Judge Schenkier of the Chicago Federal Court has ruled that the government must tell people if they are on the federal terrorism watch list.

The government argued that telling people that they were on the list would reveal state secrets.

Of course when people have petitioned the courts to be removed from the list, the government has argued that they have no standing, because they don’t know if they are on the watch list.

I think that the body cavity searches are a pretty good indicator though.