I’m not a fan of Barack Obama, but this performance by Texas State Senator Kirk Watson is inexcusable.
When your supporters appear on any show, they should have a 3×5 card with some facts, and what you’ve done in the Senate should be one of them.
Well, this guy is going to be looking for work in the private sector.
Well, let’s start off with real estate:
First, we have an article asking whether the Federal reserve is refilling the housing bubble. Normally this would not merit comment, but look at the link. Look at the author. Look at the title. It’s Lawrence Yun, chief economist for the National Association of Realtors, and it has the word “bubble” in the title.
When the NAR is calling it a bubble, it’s a bubble.
We also have reports that people are defaulting on subprime loans before they reset, which implies that these people so overbought their houses, that they can’t even afford the “teaser” rates.
We also have single family home starts dropping to a 17 year low, though there has been a pickup in condo and apartment construction (not sure how much is the former, and how much is the latter).
We also have Mortgage applications plummeting 22%, as rates rise in the face of the fed cuts, because no one trust to lend anymore.
The fed is “pushing on a string”.
Finally, we are starting to see Foreclosure tourism, with bus tours of foreclosed homes becoming a regular event in Florida.
It’s an attempt by some realtors and speculators to get the market moving again. Isn’t gonna happen.
In terms of more personal finance, we have an explosion of people tapping their 401(k) accounts for living expenses.
Yep, those private accounts to replace social security sound like such a good idea. As I’ve said before, it’s like eating your seed corn, which is what these folks are doing.
On a more general macroeconomic note, inflation is up, with the CPI rising 4.3% in 2007, and prices rising at a 5% annual rate in January.
On top of all this, the Federal Reserve has cut its forecast for economic growth.
Considering the fact that the official CPI understates inflation, we are probably closer to an 8% inflation rate (prices doubling every 9 years), so I’m calling stagflation, which seems a no brainer, even without oil hitting another record, with it peaking at trading at $101.32/bbl and closing at $100.74/bbl….No…wait….that’s two records.
In terms of the financial establishment recognizing that the problems are far deeper and broader than previously understood, we have Martin Wolf of the financial times saying that, “America’s economy risks mother of all meltdowns“, and we have Portfolio.com wondering if the basic model used to evaluate the complex instruments in the big sh$#pile, or more generally, the prices of options, the Black Scholes Pricing Model, is simply inaccurate, which would render their prices unknown. It’s literally look at the chicken entrails to figure out the prices time.
Basically, the model falls apart, and has always fallen apart:
Good theory. The glitch was discovered only after the fact: When a market is crashing and no one is willing to buy, it’s impossible to sell short. If too many investors are trying to unload stocks as a market falls, they create the very disaster they are seeking to avoid. Their desire to sell drives the market lower, triggering an even greater desire to sell and, ultimately, sending the market into a bottomless free fall. That’s what happened on October 19, 1987, when the sweet logic of Black-Scholes was shown to be irrelevant in the real world of crashes and panics. Even the biggest portfolio insurance firm, Leland O’Brien Rubinstein Associates (co-founded and run by the same finance professors who invented portfolio insurance), tried to sell as the market crashed and couldn’t.
This is what has happened with investment banks and leveraged loans, where they have been left holding the bag on $197 billion in loans to people like private equity buyout specialists that they cannot resell.
In the ever popular world of the bond insurers collapsing, we have Moody’s predicting a $7-$10 billion hit for banks as a result, though I would add at least one zero to that total.
As a result, a unit of private equity firm KKR cannot refinance, and has delayed repaying loans as a result.
Compounding this is the fact that the proposals to split the insurance companies into separate Municipal bond insurance and sh&^pile insurance is making it much more difficult for them to raise the capital they need to stay afloat.
The New York Times has just broken a story on a possible inappropriate relationship between John McCain and a young attractive lobbyist, Vicki Iseman*.
Early in Senator John McCain’s first run for the White House eight years ago, waves of anxiety swept through his small circle of advisers.
A female lobbyist had been turning up with him at fund-raisers, visiting his offices and accompanying him on a client’s corporate jet. Convinced the relationship had become romantic, some of his top advisers intervened to protect the candidate from himself — instructing staff members to block the woman’s access, privately warning her away and repeatedly confronting him, several people involved in the campaign said on the condition of anonymity.
When news organizations reported that Mr. McCain had written letters to government regulators on behalf of the lobbyist’s client, the former campaign associates said, some aides feared for a time that attention would fall on her involvement.
There is no specific allegation of any sort of physical or romantic relationship, but his aides were concerned enough about this that someone had a serious talk to him, and they prevented further contact between McCain and Iseman, forming a sort of a human shield.
Let’s be clear, it’s entirely possible that they never did anything physical. What’s more it could be possible that they never expressed to each other, or to anyone else any romantic feelings.
To put it in a military perspective, fraternization between an Officer and an Enlisted man does not have to involve romance. A BFF (Best Friends Forever) relationship is inappropriate within a chain of command.
That being said, given his involvement with con artist Charles Keating and his role as one of the Keating 5, where he was “just doing favors for a friend”, it is remarkably intemperate. It was insanely reckless.
John McCain has has a reputation for outbursts and instability, and it calls his judgment into question.
To quote a friend of his:
“He is essentially an honorable person,” said William P. Cheshire, a friend of Mr. McCain who as editorial page editor of The Arizona Republic defended him during the Keating Five scandal. “But he can be imprudent.”
This at best brings his judgment, his common sense, and his commitment to really changing things in Washington into question.
The issue is not whether he had sex with that woman. It is why he forged such a close relationship with a lobbyist, and did favors for her after having experienced what he himself calls his catharsis in the Keating matter.
To put it bluntly at best is he reckless, and is he nuts.
*Well, young to me. She’s 40 and I’m 45.
Interesting that, once the SecDef rebuked the Air Force general over his statements on needing more F-22s the USAF pulls its head out of its…..wild blud yonder, and clears the rest of its F-15 fleet.
I guess there were too many people calling this a stunt to try to get more F-22s, and the Gates put his foot down.
The military was unwilling to stuff ballot boxes for him, and now the anti-Musharraf parties are talking coalition, and it looks like they will make it to the 2/3 necessary to remove him.
Musharraf has been hopeless on terror, buttressing his support, now gone, with Pakistani military rather than engaging in meaningful antiterror operations, so good riddance.
The FTC has finally gotten off of its duff, and filed an antitrust complaint against Cephalon for payments to generic drug makers not to make a generic version of Provigil.
Unfortunately with the Roberts/Scalito court, I’m pretty sure that at least 4 of the justices are in big pharma’s pocket.
American Research Group‘s latest poll has only 19% of respondents approving of his job performance.
That’s worse than cancer. Hell, that’s worse than Dick Cheney.
Impeach him now, it’s a political plus.
| Bush job approval | Approve | Disapprove | Undecided |
| Feb 2008 | 19% | 77% | 4% |
| Jan 2008 | 34% | 59% | 7% |
| Dec 2007 | 32% | 66% | 2% |
| Nov 2007 | 31% | 64% | 5% |
| Oct 2007 | 25% | 67% | 8% |
| Sep 2007 | 34% | 60% | 6% |
| Aug 2007 | 28% | 65% | 7% |
| Jul 2007 | 25% | 71% | 4% |
| Jun 2007 | 27% | 67% | 6% |
| May 2007 | 31% | 64% | 5% |
| Apr 2007 | 33% | 62% | 5% |
| Mar 2007 | 32% | 63% | 5% |
| Feb 2007 | 39% | 56% | 5% |
Normally, I’m dubious of this, but given the prestige that the government of the PRC has invested in the Beijing Olympics, I support a boycott of the opening ceremonies over China’s abysmal human rights record and support of the genocidal Sudanese government.
The sports fans don’t care, the athletes are there to play, not march.
Also called advanced turboprop or unducted fan, these engines promise a 30%+ increase in efficiency, more for short hops, which is EasyJet’s bread and butter, so it’s challenging the engine and airframe manufacturers to get it working on a narrow body airliner.
The technology works, it was demonstrated over 20 years ago, but the issues are complexity, reliability, and noise.
Electronic brakes are powered by electric power, electronic brakes are hydraulic brakes with electrical controls, and Airbus has tested the former successfully.
Given that Boeing is going more “all electric” with the 787, I’m surprised that Airbus was first, but in any case, this is the future for aircraft, and eventually, probably for cars.
If the fat lady isn’t singing, at least she is doing vocal exercises in preparation to going on stage.
The 6 month truce between the US military and the Mahdi Army expires this month, and Muqtada Sadr is suggesting that he will not renew it.
If these folks go back to war, it will get ugly fast, and the so-called success of the surge will be demonstrated to be a failure.
By about 11%.
Mark Penn is a moron.
Judge Robert Somma, a Federal Bankruptcy Judge, was pulled over for DUI, while reportedly wearing a woman’s dress, heels and stockings, and carrying a purse.
And not just any dress, but a, “Somma was wearing a cocktail dress, fishnet stockings, women’s heels and fumbled through a purse for his driver’s license.”
FWIW, he blew a BAC of 0.12%.
Yes, George W. Bush appointed him. Quel surprise.
$15M, is it just me or are these fund raising stats mind boggling.
Remember, Obama is raising money even faster.
The prosecutor wanted 25 years, the probation officer recommended over 50 years, but the judge went with the low side.
It appears that the judge did not buy the prosecution’s argument that it was all Wilkes, and believed that Randy “Duke” Cunningham was not a mind bogglingly stupid pawn, but shared some responsibility in this.
However, the judge has sent him to jail immediately, no bail on appeal, because he deemed Wilkes a lying sack of sh%$. (My words, not his)
While oil has broken $100 in the course of a trading day, this is the first time that it has closed above $100, $100.01/bbl, with a peak of $100.10 hitting in the middle of the day.
Gas is above $3.00 again.
I understand how a refinery fire can get gasoline prices to jump, but I am not sure why the explosion and fire at Alon USA’s Big Spring, Texas, refinery would drive up oil costs. It seems to me that a reduction in refinery capacity would reduce the demand for oil.
Perhaps this facility is one of those tuned to the Venezuelan “sour” crude, and so it’s increased demand for light sweet crude.
The Judge has modified his injunction, replacing a permanent injunction against keeping the site up with a temporary injunction against hosting the specific documents in question.
Additionally, Wikileaks has been given an opportunity to file a response, the first ruling was between Julius Baer and the Domain Name service Dynadot LLC, with no input from Wikileaks.
It appears that the Wikileaks folks were not given any notice of the proceedings.
It appears that US banks have borrowed massive amounts of money from the Federal Reserve, over $50 billion, using assets that have very little value in the market right now. They get money for shovels of the big sh&#pile
Credit Suisse will be writing down $2.8 billion because of “pricing errors” of assets (also here), and has suspended the traders involved.
Errors, my ass. If these were “errors” as opposed to fraud and/or bad systems, the net would be closer to $0.
It is now expected that the U.K. government will keep British home mortgage giant Northern Rock nationalized for years, in order to avoid a massive exposure to the taxpayer.
In the increasingly dire world of insurance, we have predictions that bond insurer splits may lead to an explosion of lawsuits, as the separation valuable (municipal) side and the insolvent (big sh$%pile) side involves a lot of loss for the holders of non-municipal paper. Additionally, MBIA’s CEO has stepped down, and has been replaced by his predecessor.
Deck chairs, Titanic.
In the lawsuit category, we have investor activists calling for more accountability in management, which is generally a prelude to shareholder suits and the like.
Finally, we have inflation in China hitting an 11-year high, 7.8%. It’s likely that this will drive interest rates up in China, placing downward pressure on the US dollar.
And if that doesn’t make you think that it will soon be raining brokers in Wall Street, Noriel Roubini is predicting between 10 and 15 million home owners simply walking away from their homes, because they will be underwater with their mortgages, and cannot afford their resetting mortgages.
Maryland Governor Martin O’Malley (I still love saying that) is instituting emergency regulations for mortgages and mortgage loan companies, see here and here.
First, they are requiring loan servicers to give advance notice to the state, so that state agencies might be able to help.
Additionally, it looks like administrative action may be taken against what appears to be one of the bad actors in this, Ocwen Financial Corp., which appears to have no one answering the phones.