Year: 2008

Common Sense Consumer Protection in Arkansas

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Arkansas Attorney General Dustin McDaniel is saying that two recent State Supreme Court decisions mean that payday lenders can be prosecuted under the Arkansas Deceptive Trade Practices Act.

No offense to any reader of mine from Arkansas, and a quick look at the statistics reveals that number over the past 8 months to be 27, but this is the one of the last places that I would expect this.

I do understand that Arkansas is less corrupt than Louisiana, more populist than Texas, and less backward than Mississippi, but I find this to be a very surprising development.

While Arkansas does have a a bit of a tradition of populism, I think that this more important than simply short term politics.

There is an increasingly strong view, society wide, that deregulation of financial markets, from the very small (Payday Lenders), to the very large (Wall Street) have failed.

People realize that in the real world, there are situational and informational asymmetries that require that the government take action to prevent predators from preying on the weak.

Took them long enough.

Best Telecommunications Regulation Joke Ever!

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Courtesy of Harold Feld’s Tales of the Sausage Factory

The intervention of the Jewish holiday of Purim, which is celebrated by getting drunk until you cannot tell the difference between Verizon winning the C Block and Google winning the C Block, kept me from posting sooner.

OK, there aren’t that many great telecommunications regulations jokes, but still, this is really funny….If you are Jewish…..and if you have been following the FCC’s C Block auction.

OK, it’s a limited audience….but I find it funny, OK?

Economics Update

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Oil is holding steady, and the dollar has strenghtened, but Gasonine has hit a new record.

My predictions, which are usually wrong, Oil is pretty much permanently above $100/bbl, the dollar has a way to go down still, probably settling sell south of $1.75:€1.00, and Gasoline prices will break $4.00/gal in a year, and that there will be overshoots on all of them.

But my predictive record sucks wet farts from dead pigeons.

It looks like the Federal Home Loan Banks will be performing the way that God and Herbert Hoover* intended, in that will be making things much worse by bailing out investors in bad mortgage bonds to the tune of $150 billion.

Hoover was a stalwart supporter of doing the wrong thing, back to his days in China, where he supporter what came very close to murder in Chinese mines.

Oh….JP Morgan blinked, and upped their offer on Bear Stearns to $10/share. This is a bailout of two groups of people:

  • The Bear Stearns employees who f&%$ed up the place to begin with.
  • The investors who saw the mess, and said, “Give me some of that.”

They both deserve to lose, and, of course, those people who bought at $5/share just made out like raped apes.

*Hoover created the FHLB system.

Another Day, Another Taser Death

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Well, a few days, and a couple of deaths actually, see here (tasered while in handcuffs), and here.

Let’s be clear on this: as long as Tasers are not designated lethal weapons, they will continue to kill, and as long as the police know that they can use them, and that they do not get automatic review that a peace officer does every time he discharges a weapon, police will continue to abuse this lethal weapon.

The Pope Bitch Slaps Condi Rice

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OK, my opinion of Benedict has improved a bit, though he is still a reactionary idiot.

The title is not mine though, I whole heatedly approve the hed, and will defend it, but that bon mot is not mine, so I cannot take credit for it.

It appears that Pope Benedict XVI has refused an audience for Condolleza Rice.

She had requested an audience in August (you know, in order to play politics with the conventions and the November election).

The pope has denied this request, ostensibly since it was his August holiday, but really for two reasons:

  • Bush and His Evil Minions™ in general, and Condoleeza Rice in particular, were hostile and rude to John Paul II when he sent emissaries out to attempt to prevent the war.
  • Because the US has steadfastly rebuffed requests from the “Holy See” to prevent the ethnic cleansing to of the Christian minority in Iraq.

Condoleeza Rice should not be too upset by this, “Instead of meeting the Pope, Ms Rice had to make do with a telephone conversation with the Vatican’s number two, Cardinal Tarcisio Bertone, who was visiting the US during August on other business.”

So, he won’t talk to her, but his number two will talk to her on the phone.

Girlfriend, maybe he just ain’t into you…You know.

McCain Aggressively Pursued Hagee’s Endorsement

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One of the questions about John McCain’s hookup with Rightwing Bigot Evangelical pastor John Hagee is just who pursued whom.

Obviously, if McCain pursued Hagee’s endorsement, there is a greater obligation for due diligence.

Well, now have this directly from Hagee’s NY Times Magazine interview:

NYT: As a prominent evangelical pastor based in San Antonio, you were recently catapulted into national controversy when you endorsed Senator John McCain for president. Is it true that McCain actively sought your endorsement?

John Hagee: It’s true that McCain’s campaign sought my endorsement.

Mr. “Straight Talk” doesn’t give a damn. There is no corner he won’t cut, nor any value he won’t turn his back on, in order to be president.

Sick

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Just me…Started Feeling at about 3:00pm yesterday.

Spiked at 101°, but now in low grade territory. Just had about a dozen ravioli, the first real meal in about 24 hours, and I’m at about 99.3°.

Not much posting for a while.

Economics Update

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It’s Purim, so let’s lead off with currency.

First, the dollar is a bit stronger vs the yen, but I think that the trend, and the underlying fundamentals, are in the other direction. No secrets here, just the combined federal and balance of payments deficit, along with the rise of the Euro as a reserve currency (brief primer here on what a reserve currency is), will push the dollar down.

There is an article in CNN Money about why there will be no bailout of the greenback by other nations central banks, but it misses an important point, that this bailout has been ongoing for over a decade.

The dollar is now falling in spite of the best efforts of the central bankers.

And in the “economists are always late to the game” news, the Economic Cycle Research Institute (ECRI) says that we are definitely in a recession.

Not to worry though, as majority of Americans think economy will turn around in 2009. I expect that the predictive powers of the American public will not be as good as mine.

We are looking at a deep and long recession, as credit contracts, and the stagnant wages of the past 30 years catches up with us. This will be worse than 1982, when unemployment broke 10% (Ronnie added the military to the count to keep the number below 10%), and real (i.e. subtracting inflation) interest rates in excess of 6%.

I think that it will be worse.

In the short term, the Visa IPO that I erroneously derided seems to have given a lot of banks some breathing room. It’s generated a significant amount of cash, which should help with upcoming liquidity issues….for a while, at least.

Still, banks will be leery of making loans even to exemplary credit risks, for some time to come.

In the world of companies in trouble, S&P is considering downgrades to Goldman and Lehman, and it has downgraded National City’s outlook rating.

However, this is all pretty mild compared to where Thornburg Mortgage which, in order to prevent margin calls (people demanding their loans be paid back now) for the next year, gave its creditors the following:

  • To generate liquidity, it will issue “convertible bonds paying 12 percent annual interest”.
  • The bonds can be converted to stock at about $0.72/share.
  • This means that existing stockholders will have their equity diluted by a factor of 9.
  • Without conversion, the interest rate would be in the 25% range (!!!)
  • The assets that it is protecting through these bonds yield somewhere around 6%, but they cannot be sold now. They hope that the market will improve in a year.

Michigan Getting Very Ugly Very Fast, Florida Getting Better

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As I said a few days ago, the issue of whether folks who voted in the Replithug primary could vote is a legitimate one, but it’s Obama who has everything to lose here. For Clinton, any resolution has an upside.

So, the Michigan re-vote plan has died in the state senate, because the Obama people were objecting to the exclusion of Republican voters.

I understand the principal, but on all other levels, it is mind-bogglingly stupid.

I agree with Jeralyn Merritt’s take onObama’s preferred solution, a 50-50 split of delegates. This is explicitly preventing a legitimate vote with a legitimate count. You are in Bush buddy James Baker territory.

The math is bad for Clinton right. It’s very, very bad. If there were a revote in Florida and Michigan, Hillary would need to win by about 20% to improve her position, which is not going to happen absent an Elliot Spitzer type revelation.

By playing hardball on this, Obama is opening the door for a fight in the credentialing committee and a floor fight at the convention.

It’s worse than a sin, it is a mistake.

In Florida, however, things are looking brighter, with a proposal to give ½ the delegates according to the Jan 29 votes, and the remainder according to the nationwide split of votes received.

Verizon Big Winner in 700 Mhz Auctions

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No Google, though I think that the Goog was playing to lose, they just wanted to ensure open access on part of the spectrum.

The auctions were quite successful, with the exception of the “D Block”, the which was supposed to cover emergency first responders too, which is now under a corruption investigation as to whether Morgan OBrien and Cyren Call, who vetted the bids, were self dealing. (The answer is pretty clearly, “yes”)

Prosecutors Threatened by LA US Attorney Over Public Corruption Unit shutdown

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Note that they were investigating Republican Jerry Lewis (no relation) at the time that the office was closed, which my guess is a lot of the reason for this.

LA Times has the scoop:

But in interviews with The Times, several members of the disbanded unit challenged that explanation, saying the move was intended to punish lawyers for a perceived failure to produce and for bad-mouthing their boss, U.S. Atty. Thomas P. O’Brien.

The lawyers described a meeting last week in which an angry O’Brien derided attorneys in the office for working too few hours, filing too few cases and for speaking ill of him to subordinates.

They said O’Brien also threatened to tarnish their reputations if they challenged the official explanation for the unit’s dismantling in conversations with reporters. Members of the unit contacted by The Times either spoke on the condition that they not be named or declined to comment. Several said they wanted to talk about the situation but feared reprisals if they did so.

Critics of the move said they were concerned that it would severely limit the office’s ability to file long-term, complex corruption cases involving elected officials and other high-profile figures.

FCC Forbids Exclusive Telco Deals With Apartments

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This is the correct decision, which is why I’m surprised that the FCC made it:

Regulators on Wednesday unanimously approved a rule banning exclusive telephone service agreements in apartment buildings, giving tenants their pick of providers.

The five-member Federal Communications Commission said in a release that exclusive contracts between carriers and apartment-building owners “hurt consumers and harm competition, with little evidence of countervailing benefits.” It noted that the deals have also blocked residents from getting bundled voice, video and high-speed Internet service packages.

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