Year: 2008

Hamdan to Be Repatriated to Yemen

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We capture him, we torture him for 7 years, we put him in front of what was intended to be a Kangaroo court, which promptly rules that Salim Ahmed Hamdan was not a terrorist mastermind, he was just a driver, and he should be sentenced to time served plus enough extra time to make sure that Bush and His Evil Minions&trade are out of office.

Well, it looks like Bush has given up on having his trophy, because Hamdan is to be shipped back to Yemen in the next few days.

Good for him, but this exercise that could best be described as Kafkaesque has harmed the United States and its interest at every step in the process, all because authorizing torture is the only way that Dick Cheney can get a hard on.

Aggressive FDIC Oversight Worrying Banks

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It appears that the FDIC just started requiring that banks deemed troubled by the FDIC must start reporting details of all its qualified financial contracts. (QFC)

What are QFC’s? Basically they are the big sh*&pile, MBS, CDS, etc.:

QFCs are contracts between a bank and a counterparty, and they include everything from securities and repurchase contracts to currency and credit default swap agreements – some of the same murky derivatives behind Wall Street’s biggest blowups.

Why does this scare banks:

Many banks still don’t know their exposure to these products or details about the counterparties, which they are also required to provide by the new ruling. The way Bair sees it, they don’t know because no one has ever forced them to know.

The bottom line:

If the FDIC rule passes, banks will have to be able to account for their exotic securities. These banks might have trouble.

Definitely, and it would have been far better that it had been done years ago.

California Probing Mormons for Illegal “in Kind” Campaign Contributions

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It appears that they neglected to report extensive “in-kind” donations on the Prop 8 campaign:

….. The Church of Jesus Christ of Latter-day Saints failed to report money invested to organize phone banks, send out direct mailers, provide transportation to California, mobilize a speakers bureau, send out satellite simulcasts and develop Web sites as well as numerous commercials and video broadcasts.

It’s not the contributions, it’s the failure to report that is in question here.

Corrupt Arbitration Update

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Well, I haven’t checked my blog email for a while, but we did get a note from a representative of American Apparrel regarding my previous blog post, which I am publishing unedited (except for ####ing out some identifying information).

I will follow with a response.

from Ryan #### <####@americanapparel.net>
to msaroff2007@gmail.com
date Sat, Nov 22, 2008 at 11:05 PM
subject Dov Charney
mailed-by americanapparel.net

Matthew,

The reason the arbitration hearing’s outcome was predetermined was because the plaintiff gave an unsolicited confession that the accusations were fault and her attorney admitted that the charges were ‘bogus.’ American Apparel agreed to a proposed settlement only to avoid further legal fees which the case would have occurred had it went to trial. The settlement hinged on press release not because American Apparel attempted to mislead the public but because we refused a settlement that did not include public vindication.

Regardless of your opinion on the arbitration process, the company was a victim of malicious and false prosecution. I would be happy to show you the court documents in Mary Nelson V American Apparel where she was fined $7,500 by the court for falsifying evidence. It is your right to publish as you wish, but in this case, your facts are mistaken and defamatory.

Ryan ######

Truth be told, I don’t care about Dov Charney, Mary Nelson, or the legion of sexual harassment charges that have dogged the former.

I thought that I made that clear in my first post, but perhaps I did not.

My issue was about the arbitration system and it’s gleeful and knowing participation of that arbitration system in an abuse of the legal process.

If someone went into a court of law under these circumstances, where the court case was merely to confirm an existing agreement, there would likely be very well deserved judicial sanctions all around.

There are a number of potential ways to handle this which do not involve a judicial process, a sworn affidavit, a joint news conference, some combination of the two, etc.

However, to use arbitration solely for the purpose of creating a press release is an indication that the arbitration process is hopelessly corrupt.

The supporters of arbitration suggest that it is like the courts, only, “streamlined”. This case shows that it is not.

It shows that arbitration is an ethical vacuum.

Good Note on Financial Regulation

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In an article in the Guardian, economist Dean Baker notes that Timothy Geithner has been pretty much inside everything that has happened in financial regulation in the past decade or so, and it gives him gas:

Geithner was in the middle of all this [the Robert Rubin aggressive strong dollar policy that evicerated US manufacturing], even if not a lead actor. While this should not be forgiven – this recession and the millions of lives that are being ruined is not funny – it is not clear that Obama had very much choice.

Though he does acknowledge that there may not have been much of a choice:

In this respect, Obama faced the same sort of problem as those hoping to de-Ba’athify Iraq following the overthrow of Saddam Hussein. It would have been almost impossible to establish a government without including members of the Ba’ath party, since membership was a virtual requirement for holding a position of responsibility under Saddam.

Similarly, it would have been almost impossible to get to the top echelons of power, or even the middle ranks, during the Clinton-Bush years without giving lip service to the policies of one-sided financial deregulation and bubble-driven growth that were so fashionable at the time. The real question is whether Geithner has learned anything.

(emphasis mine)

I would that there are some bigger questions to ask in all of this:

  1. Is part of the problem that the financial services industry became too large relative to the rest of the economy?
  2. Did this create excessive exposure for the rest of the economy to downturns of increasingly speculative activities?
  3. If 1 and 2 are true, how do you go about shrinking the financial services industry.

Stupid Lame Ducks

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Well, the US is threatening Russia over it not complying completely with the cease fire agreements, in this case my guess would be over their disinclination do withdraw from portions of Abkhazia that Georgia seized a year of so ago:

Russia is still failing to meet its ceasefire obligations with Georgia and Washington’s European allies must not overlook this and rush to embrace Moscow, a senior U.S. official said on Tuesday.

Matthew Bryza, Deputy Assistant Secretary of State for European and Eurasian Affairs, said Moscow must pull back its forces as agreed in a French-brokered ceasefire that ended the war in August before there could be “business as usual.”

Mr. Bryza, you are a complete idiot.

No one cares what you thing. You will be gone in 8 weeks, along with the rest of your skeevy incompetent associates, and the Russians and the Europeans know this too.

Please, just have a steaming helping of STFU.

Election Updates

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The recount in Minnesota is getting increasingly conentious in Minnesota, with ballot challenges on the increasing on both sides, (click image for current graph) and the Franken campaign expressing concerns about missing ballots to the Secretary of State.

Additionally, the Franken campaign is claiming that Norm Coleman and His Evil Minions&trade are using bogus challenges to keep his total above Franken to influence the canvassing board, which will make the final decision on challenged ballots.

It’s going to be a while before this is all sorted out.

Economics Update

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Gee, the updated numbers for US GDP are in, and they have gotten worse, going from an annual rate of contraction of -0.3% to -0.5%.

In an effort to staunch the bleeding, the Federal Reserve has announced a new sh#@pile buy:

The Federal Reserve announced on Tuesday that it will initiate a program to purchase the direct obligations of housing-related government-sponsored enterprises (GSEs)–Fannie Mae, Freddie Mac, and the Federal Home Loan Banks–and mortgage-backed securities (MBS) backed by Fannie Mae, Freddie Mac, and Ginnie Mae. Spreads of rates on GSE debt and on GSE-guaranteed mortgages have widened appreciably of late. This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally.

They are also opening up a facility for
consumer and small business loans.

This took down 30 year mortgage rates to a record low, down 1-1/8 percentage point to 4-7/8.

Of course, right now, the banks are so skittish that they are unlikely to do a mortgage unless the property is sold at a seriously depressed price anyway.

This is actually good sense, as the Case-Schiller home price index fell 17.4% year over year.

That’s probably why the Libor is trending up again. Too much uncertainty, so banks want more for their overnight loans.

Then again with the number of banks characterized as “troubled” by the FDIC jumped from 117 in the 2nd quarter to 171 in the 3rd quarter, the highest number in 13 years.

It’s no wonder that some of the technical wonks who watch the stock market are noting that this is the most volatile market ever, with average daily swings over the last 50 trading days of 3.82%.

By way of comparison, this number was 0.33% in February.

Oil fell a bit to day, to $50.77/bbl, and I think that the markets are starting to wonder about just how much money that the Federal Reserve will print, so the dollar fell on the news of the new Fed lending facilities.

Obama Staffing Update

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Nell Lancaster at a Tiny Revolution has a very good point, “President-elect Obama just made public the choices for his administration’s ‘economic team.’ What sort of signal does it send that a Secretary of Labor was not among them?” (emphasis mine)

On the good news side of the equation, we have John Brennan withdrawing his name from consideration as head of the CIA.

I guess that all the DFHs* objecting to his consistently pro-torture, pro rendition, and anti-civil rights statements won.

We are also seeing reports that Robert Gates will be the choice for SecDef, and that he would continue in the role that he assumed under Bush and His Evil Minions™ for at least a year into the Obama administration.

Not too impressed with that. I have not trusted him since Iran Contra, and defense procurement is completely out of control, and a change is needed.

Gates is not a change the system kind of guy.

*Dirty F%$#ing Hippies, which is what bloggers who care about right and wrong are, you know?

Florida Ban on Gay Adoptions Thrown Out

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This is just plain common sense, and the case involves a gay man who took in two abused kids as foster children, but the Florida Department of Children & Families wants to continue to pay this guy to be a foster parent, so they are appealing.

This is the second ruling on this in the past 3 months.

It turns out that Florida in a fit of Anita Bryant induced insanity, passed a law prohibiting gay adoption in 1977.

Eclipse Aviation Files Chapter 11

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Well, first they missed a payroll, and noe Eclipse Aviation has filed for reorg under Chapter 11, but it also, “simultaneously announced an offer for the sale of its assets for a combination of cash, equity and debt to an affiliate of Etirc Aviation, its largest shareholder.”

It looks like there may be an auction, and they filed in Delaware (where else) to get Debtor in Possession funding.

Like I said, put a fork in them, they are done.

Obama Staffing Update

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Timothy Geithner as Secretary of the Treasury, and Lawrence Summers, aka the human stain, as director of the National Economic Council.

Lawrence Summers, crap. This man leaves a trail of misery wherever he goes.

Melody Barnes, to head the Domestic Policy Council.

Christina Romer as head of the Council of Economic Advisers, she’s cut her teeth in the study of depression era economic, like, here is the scary part, Ben Bernanke.

Peter Orszag director of the Office of Management and Budget.

Big Bonuses Make You Stupid

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That’s the short read on Dan Ariely’s reseasrch, he is a professor of behavioral economics at Duke University:

We did this study in India, where the cost of living is relatively low so that we could pay people amounts that were substantial to them but still within our research budget. The lowest bonus was 50 cents — equivalent to what participants could receive for a day’s work in rural India. The middle-level bonus was $5, or about two weeks’ pay, and the highest bonus was $50, five months’ pay.

What would you expect the results to be? When we posed this question to a group of business students, they said they expected performance to improve with the amount of the reward. But this was not what we found. The people offered medium bonuses performed no better, or worse, than those offered low bonuses. But what was most interesting was that the group offered the biggest bonus did worse than the other two groups across all the tasks.

(emphasis mine)

So, we have people over compensated and for work that mostly really does not to be done, (financials have exploded relative to the rest of the economy over the past few decades) and given bonuses for under-performing, and now we find out that the bonuses make them do a crappier job.

Delightful.