Year: 2008

House to Hold Closed Session over FISA Update

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This is not a common event, and if you have a “blue dog” representative, call him, and make it clear that you will never vote for him for anything under any circumstances if he approves Telco immunity.

I’m still not sure what put some spine in the House dems, but when Pelosi is saying things like, “the president is wrong, and he knows it“, it’s clear that something has given them the will to resist Mr. Nineteen percent.

My theory is that when they left without passing telco immunity, they were overwhelmed at the support that they received, and that they realize that opposing Bush on anything for any reason is a winning tactic.

Of course, Senator Rockefeller is still determined to put telco immunity back in there. My guess is that he was briefed and signed off on it, and thinks that it will harm him politically.

Mulligans in Michigan and Florida

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Michigan seems to be further along, with the Republicans in the state legislature being rather helpful.

The deal seems to be as follows: The state holds a new primary, and the Dems pay for it.

It’s the right thing to do, both politically and morally, but I’ve learned never to trust a smiling Republican, and the Republicans seem awfully helpful right now, which implies that they have found a way to put a proverbial turd in the punch bowl.

Hopefully, this is just my cynicism.

Florida is far more unsettledwith the state Democratic party and Senator Nelson on one side, and the congressional delegation on the other.

My guess is that if MI gets its act together, so will Florida.

From a purely tactical perspective, the Obama campaign has to see any sort of “re-vote”, even a caucus, as a losing proposition, since it adds about 300 delegates to the mix, and a large number of votes, probably a larger number than who voted in January.

Furthermore, the majority of those people will have already pulled the lever.

The Bush Administration Punts on the Mortgage Debacle

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According to Forbes, it’s “tighter standards”, but by the standards of any thinking human being, it’s a big wet tongue kiss on the mouth of the bad players in this drama.

The only substantive proposal is better licensing of mortgage brokers, the rest is voluntary, and it’s clear that Paulson, and the rest of Bush’s cronies, are not interested in reform when they say, “The objective here is to get the balance right — regulation needs to catch up with innovation and help restore investor confidence but not go so far as to create new problems, make our markets less efficient or cut off credit to those who need it.”

Let me explain this in very simple terms, the so-called “innovation” that Paulson is looking to preserve, is deception, complexity, fraud, self dealing, and general corruption.

These “innovations” did not make housing less expensive, or easier to get. They caused housing inflation, and threatened the stability of our housing market, banking system, and society.

This so-called innovation is not something we need to protect. We need to put a stake through it’s black heart.

Economics Update

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It’s been a busy day today, largely due to the imminent collapse of Carlyle Capital, the investment bank of the Carlyle group.

Lenders are seizing its assets:

By yesterday the fund had defaulted on $16.6 billion of debt and said it expected to default soon on its remaining debt. The fund’s $21.7 billion in assets were exclusively in AAA mortgage-backed securities issued by Fannie Mae and Freddie Mac, traditionally considered secure and conservative investments, which it was using as collateral against its loans.

They could not meet margin calls, and their share price has fallen 90%. See also here.

Paul Krugman has a very amusing comment, that the “Carlyle Group should have stuck to what it knows. It’s great at the merchant of death thing; at investment banking, not so much“.

It’s not entirely accurate, but still really funny, I used to work for the Carlyle Group, but they sold me to buy Dunkin Donuts. Seriously. They sold United Defense, where I worked 2003-2006, to BAE Systems.

In any case, the collapse of the Carlyle Capital has the market worrying about other possible collapses, with the Times of London reporting that, “Several hedge funds with assets of more than $4 billion (£2 billion) were on the brink of collapse last night or had halted withdrawals, despite moves by the US Federal Reserve“.

This has also hit US currency with the dollar falling to a 12 year low vs the yen and an all time low vs. the Euro, see here, and here.

The Yen has fallen below ¥100:$1.00, ant the Euro hit a new record of €1.000:1.5625. We are talking big time ugly, and there is still the Yen carry trade, where people borrow low interest Yen and invest the money at higher interest elsewhere, that takes a hit when the Yen strengthened.

The falling dollar also drove the price of oil up to a new record, over $111/bbl, and is part, if not most of the reason that gold broke $1,000.00/oz as a part of the flight from the dollar and concerns about inflation.

There will be more pain.

Speaking of pain, retail sales fell in February by the largest month to month amount in 5 years, 1.1%. The preliminary numbers showing an increase that I reported a week ago were apparently just that, preliminary.

Note that this does not correct for inflation, so it’s even worse.

In it efforts to restructure, Chrysler is completely shutting down for 2 weeks in July, that’s everyone who is getting the vacation, not just the guys on the line for retooling. They are claiming that it will, “boost productivity and efficiency”, but my guess is that a lot of folks people will have their vacations extended to forever.

Finally, no monoliner insurer bad news today, or perhaps I missed in in everything else going on, but Countrywide Financial continues to see climbing foreclosures, with the Frbruary rate of 1.64% being more than twice that of a year ago of 0.80%.

I really think that the deal for Bank of America to buy them will fall through, because what looked like a decent deal a few months ago is increasingly looking like a significant overpayment.

Senator Looking at Lavish Lifestyles of Televangelists

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The thing that the media will cover, of course, is the expensive cars, private jets, and so on that many of these “prosperity preachers” have.

There is actually a very real issue here. Churches, unlike every other 501(c)3 tax exempt organization, is not required to file a publicly accessible 990 form.

I incorporated a 501(c)3 tax exempt organization and chase the paperwork through the IRS in 1990 as a non-lawyer, Arisia.

When I was involved in running it, gross revenues were less than $50,000/year, and now it’s probably less than $200K/year.

For any church, considering building, maintenance, salaries and benefits for, preacher, secretary, education director, and janitor, you are well above $500K on anything but the tiniest church.

It’s too expensive for them, but it’s not too expensive for us.

They object to form 990s because they do not want their parishioners to know that they are wasting their money on their own inflated lifestyles.

Check out the Trinity Foundation a Christian reform organization that has been talking about this for years.

McCain’s Other Pet Bigot

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It’s not just Hagee.

Even closer to McCain is Televangelist Rod Parsley, who believes that America was founded with the purpose of destroying Islam.

It appears he knows nothing of the Treaty of Tripoli.

Art. 11. As the Government of the United States of America is not, in any sense, founded on the Christian religion; as it has in itself no character of enmity against the laws, religion, or tranquillity, of Mussulmen; and, as the said States never entered into any war, or act of hostility against any Mahometan nation, it is declared by the parties, that no pretext arising from religious opinions, shall ever produce an interruption of the harmony existing between the two countries.

But bigots tend to believe whatever they want to believe.

Bigotry is, after all the Republican party has these days.

Clinton and Obama Split Over Florida and Michigan – New York Times

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There seems to be a divergence of opinion on what to do do with Florida and Michigan between the campaigns.

Basically, the preferred solution for the Clinton Campaign is to seat them as is, with a revote being second, while the Obama Campaign, favors (in no particular order), not seating the delegates, splitting the delegates 50/50, or holding a caucus.

Not surprising, they both chose alternatives which they believe benefit them most.

A mail revote is eminently doable, and has the advantage of keeping the troublemaker Republicans in Michigan who vote for the weakest candidate, because mail only goes to registered Democrats.

The time frame is doable too. 3 weeks to get the money, 3 weeks to do the printing and mailing.

Total costs would likely be in the high single digit million dollar range.

There is only one that I find truly offensive, and it’s not refusing the delegates seating. After all, rules are rules, and the legislators in FL and MI knew what they were getting into when they voted for this.*

It’s the 50/50 split. The idea behind this, and the person putting this forward is Chris Dodd, not the Obama campaign, is that the will of the voter does not matter (that is that the 50/50 vote split means), but that the political movers and shakers get to hobnob as delegates at the convention.

It means no democracy, but lots of corrupt patronage.

*Truth be told, I have a little sympathy for the Florida Legislators. They had the date move attached to paper trails on ballots, which needs to be done in a state like Florida.

The HELOC Trap for Banks

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It seems that banks are having a problem with 2nd mortgages and Home Equity Lines of Credit (HELOC).

Because these loans are 2nd in line after the initial mortgage, an increasing number of consumers are simply not paying. With their home under water, they know that a foreclosure on these loans will recover no money at all, so instead, they are paying the 1st mortgage and credit cards.

It is, for example, hitting JP Morgan, which did not do subprime lending to any large degree.

More On Olbermann after Sleeping on It

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Still impressed with the delivery and the sincerity, but he should not have referenced Orlando Patterson’s unhinged, and quite frankly bigoted screed, he clearly complains that some of the children “appear Latino” on the stock footage, in which he finds a the ad analogous to “Birth of a Nation”.

His comment was intense, well delivered, and sincere, it was, however, in this specific instance, which was less than 1/5 of this special comment, was wrong.