Year: 2008

Economics Update

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The Fed cuts rates by 50 basis points.
The discount rate is now at or below the inflation rate, well below the inflation rate using real world inflation.

There are no longer any monetary tools to use that will work, it has to be fiscal (spending), because any lower, and the Fed is paying people to borrow money.

Still, it makes sense, as GDP growth in the 4th quarter was only at a .6% rate annual rate. When you consider the fact that inflation is (at least) 3%, this means that real GDP is falling at more than a 2% rate.

The dollar has fallen currently at $1.4761:€1.0000, and $1.0003:$1.0000 CDN, so the Canadian dollar is above unity again.

And the credit crunch is spreading all over the world, the Swiss bank UBS AG has reported its biggest loss ever, in US real-estate related issues.

We also have Morgan Stanley using some serious weasel words to not call its write downs a loss, when it, “reclassified $7 billion of funded assets and $279 million in unfunded assets from Level 2 to Level 3.”

Of course, the fact that the FBI has dropped some subpoenas on their asses isn’t good news eithr.

Lever 3 assets are ones in which buyers are not easy to find, and it’s rapidly getting to the point where the buyers are getting harder to find than straight Republicans.

It looks like the bond insurers will be downgraded below AAA, which in addition to closing off a lot of their business, and making it harder to raise capital, will likely force investment banks towrite down $70 billion more.

Iraq Forever

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Remember Bush’s comments about troop cuts in Iraq?

He’s “recondidering troop cuts“.

To Bush and His Evil Minions™, winning is staying in, whatever the consequences, because it makes them feel like they did not dodge the draft in the 1960s.

Four months after announcing troop reductions in Iraq, President Bush is now sending signals that the cuts may not continue past this summer, a development likely to infuriate Democrats and renew concerns among military planners about strains on the force.

Mr. Bush has made no decisions on troop reductions to follow those he announced last September. But White House officials said Mr. Bush had been taking the opportunity, as he did in Monday’s State of the Union address, to prepare Americans for the possibility that, when he leaves office a year from now, the military presence in Iraq will be just as large as it was a year ago, or even slightly larger.

The officials, who spoke on condition of anonymity, said Mr. Bush wanted to tamp down criticism that a large, sustained presence in Iraq would harm the overall health of the military — a view held not only by Democrats, but by some members of his own Joint Chiefs of Staff.

Senator Mitch “Private Handjob” McConnell Gets Wealthy Opponent

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McConnell is getting a number of opponents, with Bruce Lunsford throwing his hat into the ring, this gets him, “Andrew Horne and another wealthy candidate, businessman Greg Fischer”, all competing in the primary to face him in the general.

This is a campaign Democrats should make a priority, for the following reasons:

  • Payback for what they did to Daschle, who my spell checker flogs as “Schlemiel”.
    • The campaign against Daschle in 2004 was unprecedented, the parties don’t go after each other’s leaders, and payback is deterrence.
  • McConnell has been the most obstructive minority ever, and he has no respect for the Senate.
  • Mcconnel is consistently polling below 50%, and that makes him vulnerable.

I have no clue who to support in the primary, but I’m not giving money to the DSCC so that they can waste money Landrieu in the ethnically cleansed Louisiana.

Whoever wins though, will go on my Act Blue page.

Have I Mentioned Lately that Albert Wynn is a Complete Tool?

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He’s trying to claim that organizations that have endorsed Donna Edwards are somehow breaking the law.

“There seems to be a vast, dare I say, left-wing conspiracy designed to circumvent campaign finance laws,” Wynn told reporters during a conference call. “Within this scheme, her supporters are coordinating efforts to exceed fundraising limits and engaging in illegal campaign activities.”

Here’s hoping that you are unemployed come January.

Are Telcos Trying to Sabotage Open Access Spectrum Auction

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It appears that bidders on the C-Block spectrum are colluding to keep the bid price low enough to eliminate open access rules.

Though $8.66 billion has been raised in 12 rounds by the auction so far, it still has a long way to run before it loses steam — more than 1000 separate bids were submitted in Tuesday’s closing round. The D block still has plenty of time to attract more bidders, particularly as the price of the C block and other regional licenses escalate. (For complete auction results see the FCC’s Auction 73 page)

Such escalation, though, appears to be exactly what the C-block participants are bent on preventing. The C-block bidders slowed down their pace Tuesday, taking turns bidding on the license every other round. That not only prevented the license from crossing the $4.6 billion reserve threshold, it also served to knock down the minimum bids required to take the lead in consecutive rounds. According to the FCC’s rules, the minimum bid falls each round a license fails to attract a new bidder. The strategy has definitely slowed down the momentum of C-block bidding, but even at the rate of one bid every other round, the license will clear the reserve ceiling in the next two days. To secure the top bid in Wednesday’s open Round 13, a participant will have to pony up $4.29 billion.

Also the Block D auction seems to be stalling, my guess is that this is a result of Cyrene Call corruption issues. This block is supposed to be shared with public safety agencies, with said agencies having complete control in an emergency, and to be open access.

Bush’s Phoney War on Earmarks

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When Republicans were in power, he never batted an eyelash at earmarks, which are something like ¾% of the budget, but now he’s decided it’s a good time to go to war against them.

Oh…me bad…He’s thinking that NEXT fiscal year is a good time to start this “war on earmarks”, so he’s just “announcing” them at this SOTU speach.

Even the Republicans are calling weak:

But if he was seeking to placate the fiercest foes of earmarking, he failed. Rep. John Shadegg (R-Ariz.) called Bush’s plan “weak.” Thomas A. Schatz, president of the conservative Citizens Against Government Waste, labeled it “fiscal snake oil.”

Well, I guess it meats steroids.

Charlie Pierce Speaks

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Charlie Pierce on Altercation:

As I was watching the debate the other night — the Democratic one where Anderson Cooper came on afterwards and got to pretend to be Angelo Dundee — I was struck by Senator Obama’s resolute assertion that he was the candidate that can come to Washington and work with “independents and Republicans” to get things done. (One of his new ads has him sitting next to Dick Lugar, a Republican senator only slightly more relevant today than is Arthur Vandenberg.) I was struck even harder by it as I watched the Democratic Senate go supine, selling out poor Chris Dodd and the Constitution, and concocting retroactive alibis for the Telecom giants in a week where we finally got the empirical count of prewar Iraq lies. Here’s my deal with His Barackosity. Take the list of Republican congresscritters, House and Senate. Make me a list of 10 of them with whom you think you can work to achieve anything close to the progressive goals you have said you want to achieve. Give me an honest run, and I guarantee you that you can’t do it. You may get “something done” but it’s not going to have anything to do with anything resembling the values of the party you seek to represent. This is a party that has to be forcibly disenthralled from its lunatic base.

Let’s make it clear, Obama has a fairly unique background, and he’s a bright guy, he was the head of the bleeding Harvard Law Review.

He has been dazzling people for years to convince them to get his way, and if someone does not hate you with a blinding white hot passion, it frequently works.

Republicans live on that level of hate.

They hated Bill and Hillary, etc. too.

Kentucky: Breathalyser Code Must Be Turned Over to Defense

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This is a good decision. The idea that one is allowed to present a number from a black box which no one in the court can fully understand is ludicrous.

Excerpts from the Court of Appeals of Kentucky’s opinion:
A subpoena may be quashed only upon a showing that compliance therewith would be unreasonable or oppressive. We do not believe the commonwealth and CMI have made this showing.

The request is not unreasonable because its purpose is to challenge the validity of the breath alcohol readings produced by the Intoxilyzer 5000 instrument, which is anticipated to be used at trial in support of the Commonwealth’s DUI charge against House. The reading was also used to support the aggravating factor of driving with a breath alcohol reading of .18 or more.

Relevant evidence is admissible unless excluded by some other rule. Because a flaw in the computer source code of the Intoxilyzer 5000 would be consequential to the accuracy of the reading intended to be relied upon by the commonwealth, such evidence is relevant and admissible. Accordingly, requesting the computer code to test the verity of the readings produced by the instrument is not unreasonable.

Prison study to investigate link between junk food and violence

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Nope, this is not a punchline. It’s an actual study that they are conducting in the UK.

The university will lead the £1.4m study in which 1,000 males aged 16 to 21 from three young offenders’ institutions in England and Scotland will be randomly allocated either the vitamin-and-mineral supplements or a placebo, and followed over 12 months.

In a pilot study of 231 prisoners by the same researchers, published in 2002, violent incidents while in custody were cut by a more than a third among those given the supplements. Overall, offences recorded by the prison authorities fell by a quarter.

It certainly would explain the relatively high crime in the US.

We have effectively been giving borderline nutrition to the poor, and it shows up in crime statistics, just like Nixon’s removal of lead paint from the market correlates to the crime drop of the 1990s.

Economics Update

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Economic schizophrenia, Consumer Confidence Falls, But Durable Orders Jump. Mr. Benanke is not sleeping well tonight.

Home ownership rate has biggest drop ever. A 1.1% drop in the percentage of occupied homes.

Everyone’s favorite not-so-whiz kid, Jerome Kerviel, is claiming that his superiors at French Bank Societe Generale knew of his activities, but took no action because it pumped up its profit numbers.

The First Bank Failure of 2008, the Douglass National Bank of Kansas City, Missouri.

The FBI has initiated investigations of 14 firms regarding subprime irregularities. Kind of makes the FBI sound like Metamucil.

They did not identify the companies. But the probes reached across the industry to include developers, subprime lenders, companies that securitized loans and investment banks that held them, said Neil Power, head of the FBI’s economic crimes unit.

Contrywide: $422 million Q4, and 1/3 of its sub-prime mortgages are delinquent. Well I got this prediction right.