I support the auto bailout, because the consequences would be too dire, but I also agree with this, and it’s funny enough to suspend my usual #@$ing of swear words:
Year: 2008
In Blatantly Obvious News
The Congressional oversight committee for TARP discovers that Hank Paulson and His Evil Minions™ could not find their ass with both hands.
Their findings:
- No comprehensive plan for stabilizing markets.
- It’s unclear whether the equity for the money has been at fair value.
- Lacks transparency
- No followup on how the money is being used
And this is news because????
Election Update
Well, it looks like they have found some more uncounted ballots in Minnesota, specifically, 171 absentee ballots that were discarded for no reason, which bolsters the case of the Franken camp for a review of why ballots were rejected.
Also, this Franken video which puts faces on legal ballots that were rejected, keeps the pressure up too:
Bitch Slap Fight!!!
It appears that the Presidents of the various Federal Reserve banks across the nation are upset with the degree that Brenanke has been acting unilaterally.
They feel that he is undermining their authority and marginalizing their positions.
If I were in their positions, I’d be glad that my fingerprints were not on this.
Defective Even by the Standards of Taser International
Taser, International has always maintained that their little toy that should be treated as a lethal weapon is safe.
They even have studies to prove it.
Only, it turns out that their products do not meet the company’s own dubious standarsa:
A new study has found that the type of Taser stun gun used most by police officers can fire more electricity than the company says is possible, which the study’s authors say raises the risk of cardiac arrest as much as 50 percent in some people.
So, not only is their own science dubious, but their manufacturing processes are too.
Because the Banks are More Important than People
Ben Bernanke has said that he will not use the fed lending facility, already bailing out banks to the tune of trillions of dollars to provide liquidity to the auto makers.
It’s true that Obama can’t get rid of him until the end of his term, but how about asking him to resign?
Canada: Ignatieff to Lead Libs, and Chooses to Fold Like a Bad Poker Hand
It now appears that the other contenders have bowed out of the running and Michael Ignatieff will be the new party leader.
In statements following this, he promptly showed that Steven Harper has his balls in a jar somewhere:
Ignatieff has cautioned against automatically trying to topple the minority Conservative government of Prime Minister Stephen Harper, a strategy that the party had contemplated only last week. Even so, a new Liberal leader is expected to move quickly in a drive to rebuild the party into a credible alternative to Harper’s Conservatives.
It appears that the fact that the Conservatives are on every media outlet in Canada screaming like scalded babies has made Mr. Ignatieff concerned that they might say something bad about him.
To paraphrase Josh Marshall, why would the voters believe that you can fight for them if you cannot fight for yourself.
Stephen Harper put out an austerity budget in the middle of a recession because he’s a lunatic. He tried to gut public campaign finance because he is a lunatic without scruples.
If you won’t work with this man, you will be his bitch.
Because They Would Rat Out Their ISI Handlers
Well, it appears that Pakistan is refusing to hand over suspects in the Mumbai bombing to India.
Given the level of tension between the two nuclear armed neighbors, there is only reason for this that I can see, that Pakistan knows that if they turn over these guys to India, there is a fairly good chance that some of them will finger their handlers at the Pakistani Directorate for Inter-Services Intelligence (ISI).
It’s Because They Don’t Like You That Way
It appears that the Obama transition team is not interested in attempts by Bush and His Evil Minions™ to work together on the bailout, and this is of concern to members of the Bush economic team:
But tension is growing: Treasury officials believe Obama aides are being short-sighted in their refusal to offer more policy and lobbying assistance, while the transition team sees an administration looking to be rescued from its own miscues.
Obama and the people around him most likely think that George W. Bush and Hank Paulson and their people are incompetent and corrupt, and they believe to the degree that these folks do not take action, it is a positive development.
Any attempt to work with Paulson or Bush will imply buy ins of their policy, and that it like buying into the ice concession on the RMS Titanic.
Economics Update
We already knew that Japan was in a recession, but the updated data is worse than the initial data. The preliminary number was 0.1%, the prediction was 0.2%, and it came in at 0.5%.
Barry Ritholtz notes that the 4 Week T-Bill was paying 0%, down from 0.4%, and notes that the only reason to do this is if you expect that the next 4 week T-Bill will have a negative interest rate, i.e. that you pay the government money for the honor of lending them your money.
Turns out that he was a a little bit premature, because the 3 month T-Bills actually traded at negative interest rates, “If you invested $1 million in three-month bills at today’s negative discount rate of 0.01 percent, for a price of 100.002556, at maturity you would receive the par value for a loss of $25.56.”
If you want to feel concerned note that this is the Lowest Rate Since 1929…1929….That year sounds familiar.
In the meantime, the Bank of Canada cut its key rate by 75 basis points to a 50-year low, because they are in recession too.
In real estate, the Pending Home Sales index fell, though not by much, and listing prices for homes have continued to fall.
Calculated Risk has a summary of the commercial real estate market, and it ain’t pretty.
In energy, oil is down a bit, likely spooked by the complications on a bailout deal.
The dollar was mixed today, up a bit vs the Pound and Euro, and down a bit vs. the Yen.
It’s Beginning to Look a Lot Like Fitzmas
Patrick Fitzgerald just arrested Illinois Governor Rod Blagojevich arrested on on corruption charges.
Among the charges is that he tried to sell Barack Obama’s Senate seat.
And, yes, he has a (D) after his name….What’s more he’s one of those DLC type moderates, just like “Dollar” Bill Jefferson in Louisiana.
You know, I’m glad that I come from a clean government state like Maryland.
**cchhgggg**
I think that I just hocked up a hairball, but relative to Illinois, it’s true. 3 of their last 5 governors have done jail tiem.
How Very White of Them
So, Merrill Lynch’s John Thain and Mogan Stanley’s John Mack have decided to forgo bonuses this year, after the Andrew Cuomo basically read the riot act to their respective firms.
Asking for millions in bonuses when your company is losing money….Failing upwards….Welcome to George W. Bush’s America.
When the Other Guy is About to Overrun Half Your Country, Don’t Screw Around
That seems to be basic common sense, but it appears that the government of the Democrat Republic of Congo don’t understand this.
It appears that talks between the government and the National Congress for the Defense of the People (CNDP) led by General Laurent Nkunda have broken down because they want to bring in other militias….You know, the ones that aren’t on a path to seizing half the country, because they do not have their act together:
The Democratic Republic of Congo government at the weekend invited around 20 other armed groups to participate in the talks, aimed at ending fighting in North Kivu province that has displaced a quarter of a million people since August.
The CNDP and the government of Congo are the only players here, and adding 20 people to the table is intended to simply diminish the CNDP.
Um….Hello? You need to get a clue: The CNDP is kicking the ass of your sorry excuse for the army, and can seize much of the region in a few weeks.
I would note that one of the 20 other groups invited is the genocidal Huto FDLR militia, who are the proximate cause of all this, because when they aren’t trying to kill Tutsi women and children in Rwanda, they are trying to kill Tutsi women and children in eastern Congo, though the governments of Congo and Rwanda have agreed to disband the militia.
When I Hope that the New York Post is Right
Fredric Dicker of the New York Post is reporting that reports of Caroline Kennedy being an unlikely replacement for Hillary Clinton in the Senate.
There are two reasons given, the first being that Caroline is at best lukewarm for the job, and the 2nd is that Patterson does not think she has the fire in the belly for the job.
I tend to believe both of these assessments. Caroline is, for a Kennedy at least, intensely private and not particularly assertive.
Additionally, there is the dynastic issue, and Caroline Kennedy has not ever held, or run for, political office, and shows no indications of any real qualifications for the job beyond her last name.
My suggestion to Governor Patterson, and it is his choice alone, would be to appoint, I’m not joking here, Elliot Spitzer. It guarantees you of two things:
- You get a real fighter in there.
- He won’t be running for reelection in the 2010 special election.
Fail
So the increase in troops in Afghanistan will be concentrated in and around Kabul.
I guess that Karzai, the Mayor of Kabul President of Afghanistan needs our support.
On a less snarky note, the fact that they are deploying to protect what should be the safest place in Afghanistan is an indication of just how pear shaped this has gone.
And While We are Talking About Failing at Newspaper Publishing
It looks like the New York Times will borrow about $225 million against the value of its headquarters building:
The Times Company owns 58 percent of the 52-story, 1.5 million-square-foot tower on Eighth Avenue, which was designed by the architect Renzo Piano, and completed last year. The developer Forest City Ratner owns the rest of the building. The Times Company’s portion of the building is not currently mortgaged, and some investors have complained that the company has too much of its capital tied up in that real estate.
The company has two revolving lines of credit, each with a ceiling of $400 million, roughly the amount outstanding on the two combined. One of those lines is set to expire in May, and finding a replacement would be difficult given the economic climate and the company’s worsening finances. Analysts have said for months that selling or borrowing against assets would be the company’s best option for averting a cash flow problem next year.
(emphasis mine)
Let’s calmly take a look at this.
The New York Times dumped hundreds of millions of dollars into a new building in downtown Manhattan, buying it with cash, and now they are concerned about liquidity.
The Times had a building, but for some reason they had to buy a new one, and it had to be in Manhattan, and it had to have everyone in it.
There is no reason, for example, that advertising could not have been put in Brooklyn, or White Plains, or for that matter, Mumbai.
The same goes for the bureaus that cover the other boroughs.
But management wants their shining castle in Manhattan.
This makes me miss Steve Gilliard, because his writing on Salon.com talked about this sort of stupid egotism in detail, and I’m sure that he would have had a field day writing about this.
Tribune Company Files
So, one of the largest media companies in the world has filed for bankruptcy.
A lot of people will say that this shows how badly newspapers are hurting as a business, and they are wrong.
Sam Zell’s model was as follows:
- Borrow lots of money to buy company.
- Borrow lots of money to expand company.
- Borrow lots of money to go private.
- Attempt to maintain a positive balance sheet by gutting the product to cut costs.
- Fail.
This is a model of someone who does not believe in the product. This is passenger rail in the 1960s, when the railroads decided that they could not compete, so they sucked money out of the operations in order to buy other things, and created a product that no one wanted to buy.
Wall Street has been demanding profit margins in excess of 25%, and you cannot do that and deliver a good product, so they achieve it for a while delivering a bad product, and people like Sam Zell talk about cutting the fat.
The only fat here is between Sam Zell’s ears.
A Better Employment Metric
Of course, it is also a very scary metric.
But I agree with Paul Krugman, workforce participation is one of the better metrics that we have to describe the unemployment situation.
However, I do have a problem with the graph, which is that the delta is magnified, by focusing on a range, in this case 61%-65%, as opposed to showing the full range from 1-100%.
I think that these sort of “broken range” graphs serve to overemphasize deltas….though that is a really scary picture, even if it’s done on a full 1-100 scale.
It shows that employment never recovered from the 2001 downturn, and that it’s headed down fast now.
Zimbabwe Update
Well, it appears that I missed a rampage by Zimbabwean troops who had not received their pay, but caught the story that Mugabe is looking at retribution against those soldiers:
In a clear sign that President Mugabe’s hold on his state security machinery is starting to crumble, his once-loyal soldiers ran amok across the capital on Monday after they failed to access their paltry wages in the cash-strapped banks. The unarmed soldiers fought with heavily-armed police and several were arrested.
It was the third outbreak of such violence since last Thursday. The sight of rampaging soldiers was then unprecedented. Army sources said an inquiry had already begun, with dozens facing courts martial. Unconfirmed reports say three of the 12 soldiers who took part in Thursday’s riot have been killed.
So it appears that the rank and file in the Zimbabwean Army are starting to lose discipline.
In the short term, this is troubling, in the medium term, it may mean that Mugabe is closer to being out than I would have believed, and in the longer term, it does not bode well for a post ZANU-PF nation.
In the mean time, things are getting worse, with cholera deaths increasing, and there have been public protests about this from health care professionals.
It’s not just cholera though, the UN has run out of funds for food aid, so for many, starvation looms.
On the bright side, we are seeing a bit of backbone from the African community, with
Kenyan Prime Minister Raila Odinga calling explicitly for Robert Mugabe’s removal and he and ANC president Jacob Zuma have publicly declared that that will work together on the crisis, which is clearly a disavowal by Odinga of Thabo Mbeki.
It’s also interesting that the Kenyan Prime Minister has called for a military intervention to depose Mugabe, followed by war crimes trials.
Hopefully, this means that there will be some meaningful movement (meaningful means out) by Robert Mugabe, but I have a feeling that he will not leave while he is still alive.
In Addition to Firing Him, Give Him a Really Bad Haircut
So the WSJ is reporting that people are starting to suggest that GM fire Rick Wagoner.
Not just the man on the street either. Senator Dodd has explicitly called for his head, as have representatives of investor, and former GM board member, Kirk Kerkorian.
Barack Obama has also implied that there need to be management changes.
This is a no brainer. Mullaly was brought in about a year ago to turn Ford around, and Nardelli’s tenure at Chrysler (full disclosure, I worked for him, though I never met him, at GE Transportation Systems in the 1990s)* is even shorter, so they do not bear full responsibility for the mess that their companies are in, but Wagoner has been CEO of GM for 10 years, and in charge of North American Operations for 4 years before that, so this is his baby that has come crying to Congress.
*Yes, I have worked everywhere. Maybe I can’t hold down a job, but more likely this has been my role as “technical hit man”, where you are parachuted in to take care of a specific need.