Month: January 2009

Economics Update

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You know that old saying about releasing bad news on a Friday, because everyone is looking toward the weekend?

It’s one of those Fridays.

Let’s start with Ireland, where the Anglo Irish Bank, the 3rd largest in that country has been declared insolvent and nationalized. I’m beginning to think that the “Celtic Tiger” is on its way back to poetic poverty, particularly now that places like Poland and Slovakia are cheaper labor markets.

In the world of recession/deflation, we have the CPI falling 0.7% and industrial production falling 2% in December.

I’m beginning to think that the US will start to resemble Ireland…Without the Poetry bit.

We also have a couple of updates courtesy of Calculated Risk, with Los Angeles Area Port Traffic falling sharply and office vacancy rate rising in Q4.

Note that there are predictions of a 30% drop in office rents, and that exports are dropping more than imports, so this is not a turn around on the deficit.

In retail, we have Toyota North America announcing cuts in production, and Circuit City is going to liquidate, as in, no more Circuit City, no kidding.

In currency, more bailouts to banks means more concerns about the dollar, so it fell today.

In energy, oil was up slightly today, but down most of the day, after the IEA predicted that demand would continue to fall, and retail gasoline was up again, which means that it’s gone up around $0.20/gal since New Years day.

They Tried to Declare an 11 Year Old an Enemy Combatant?

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Seriously, it’s nice that the judge ordered the release of Mohammed El Gharani, who is now 21, because there was no credible evidence to hold him, but among their accusations was this gem.

The government also accused Gharani of belonging to a London-based al-Qaeda cell in 1998, an accusation that Leon questioned. Gharani was 11 at the time, living with immigrant parents in Saudi Arabia, his attorneys said.

(emphasis mine)

So they discovered that they had no evidence, and so they accused him of being a terrorist at age 11???

He was picked up in Pakistan in 2002, when he was apparently 14.

So, he has been at Gitmo for something like 6 years, and doubtlessly tortured “subjected to enhanced interrogation techniques”…For a 14 year old boy, who was accused of being an 11 year old terrorist.

I can’t see this as anything but monstrous, and everyone involved in this process needs to go to jail for a very long time.

I don’t see how you describe anyone involved in the process without invoking Eichmann and the banality of evil.

Not Enough Bullets: Our Banking System is Imploding Edition

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Just 3 months after we threw $350 billion at the banking system, which was more like $9 trillion when you count what the Fed is doing, we have exploding bank losses threatening bank solvency, with one of the main contributors being, “the unexpectedly high costs of shotgun mergers arranged by federal officials last year.”

Thank you Henry Paulson, now we have Bank of America getting in line for a Citi style bailout, because the black hole that is Merrill Lynch is deeper than anticipated, among other clusterf%$#s.

As Atrios says, “Just nationalize the lot of them and end this.”

Stimulus Bill Draft Released By Democrats in Congress

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You can find the full text here.

My quick take, is that I would like to see:

  • More rail investment.
  • More mass transit investment.
  • That the $32 billion for, “to transform the nation’s energy transmission, distribution, and production systems by allowing for a smarter and better grid,” sounds like a giveaway to the electric utilities.
  • The money for broad band should be better defined, so that it goes to public and cooperatively owned agencies and infrastructure only….We already threw billions at the incumbent telcos in the late 1990s/early 2000s with little in the way of results.
  • Flood control is almost always a synonym for pork.
  • The spending on schools should target the poorest districts.
  • The increases in unemployment benefits are the most bang for the buck in generating economic activity, and the increase in food stamps is a close second.
  • I think that the tax cuts are a lose.

That’s based on a 15 minute read of the summary, though.

Election Update

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I have no clue as to what Norm Coleman and His Evil Minions&trade are trying, but the schedule his proposed to the judges who have been assigned to his challenge mean that it would be at least 6 weeks before they finish.

That seems to me to be a good way to piss off said judges.

If he actually thought that he really won, I would imaging that he would be trying to move this along quickly.

I have no clue as to what is going on, except that perhaps Republicans are paying him a lot of money to keep this up so that Franken does not vote in the Senate.

Economics Update

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Well, weekly first time jobless claims at rose to 524,000, and the 4 week moving average was down 8000 to 518,500, and continued claims fell slightly, from 4.6 to 4.5 million. (Scary graph pr0n on right)

I’m not sure how much of this is being effected by the short weeks of Christmas and new years, but it should sort out in the next few weeks.

Not unsurprisingly, the Federal Reserve’s Beige Book, a collection of anecdotal economic information reported by the various Federal Reserve banks, was really quote grim.

Unsurprising, considering that foreclosure filings rose 81% in 2008 over 2007.

Housing is not recovering in the near term, even with mortgage rates hitting another record low.

One of the reasons that there will not be a recovery is that commercial real estate is imploding right now, with the volume of loans for office space and rental properties defaulting or becoming delinquent expected to triple in 2009.

In international finance, S&P downgraded Greek sovereign debt, from A to A-, and the ECB cut its benchmark rate to 2%, an all time low.

Not surprisingly, both of these pushed the dollar up today.

The juxtaposition of economic weakness with a stronger dollar drove oil down too.

Confirmation Hearings Today

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I’m not following this particularly closely, as I believe that the overarching policy will be coming from Barack Obama, but we had the two big ones today, Holder and Clinton.

Regarding Holder, he has said that he will review the determination not to prosecute Bradley Schlozman, who clearly lied to Congress, though I would still expect not to see a prosecution.

More heartening is that he explicitly said that water-boarding is torture.

I expect the Republicans to continue to fling poo, but I think that he will be approved.

Also, the Foreign Relations Committee voted for Clinton as Secretary of State 16-1 with Senator “Diaper” Vitter voting against.

Upgrading Freight Rail as Stimulus

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Phillip Longman makes the very good point that while people are talking up bullet trains, they are ignoring freight rail infrastructure.

I used to work as an engineer at GE Transportation Systems* on their locomotives, I was Lead Engineer on the Blower Cab Structure on the AC6000 Locomotive, and as a result, I consider myself to have some background in this industry.

Simply put, it is easier, cheaper, and faster to upgrade or repair existing for rail, and medium speed (say less than 150 km/h) rail than it is to construct new rail for what Atrios calls “Supertrains”.

Cargo transport is energy inefficient in the US, and the upgraded infrastructure would increase speeds, even for short haul passenger rail, and reduce accidents.

Best of all, this is all shovel ready, you don’t need an environmental impact statement, or to go before a planning board, or to seize land by eminent domain to repair and upgrade rail lines.

*Yes, I have worked everywhere. Maybe I can’t hold down a job, but more likely this has been my role as “technical hit man”, where you are parachuted in to take care of a specific need.

Senior Bush DoJ Official Called Perjurer by IG

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The Department of Justice’s report on Bradley Schlozman is absolutely scathing, saying that he:

  • Illegally applied political standards to career attorney hirings.
  • Lied about it to the Senate Judiciary Committee.

But 2 weeks before the new administration, no charges will be filed.

So, we have a flat out statement that he committed perjury, you know the things that the Republicans went Jihad over with Bill Clinton when it was: (a) Arguable, depending on your definition of sex, and (b) Not related to his official duties.

Even so, because Bush and His Evil Minions™ have thoroughly polluted the Justice Department, so the U.S. Attorney’s Office for the District of Columbia has declined to prosecute him.

If anyone out there lives in Kansas, how about filing a complaint with the disciplinary authorities there, because that is where he is practicing law. (more contact information at the link)

Reid Finally Wins One

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Every 2 years, both houses of Congress need to pass an organizing resolution, which specifies things like committee members for the various parties.

Because the Senate is a continuing body, only 1/3 are reelected at a time, and this organizing resolution is subject to filibuster, I was fully expecting the ‘Phants to do Harry Reid like a two dollar whore.

I’m pleasantly surprised that Reid got exactly what he wanted, with no filibuster.

The Democrats gets +3 on most committees, +4 on the Appropriations and Armed Services committees, +1 on the Intel Committee (decreed by statute), +2 on the Joint Economic Committee, and even membership on the Ethics Committee (which is standard).

The reason that this happened, I think, is that if they had continued to operate under the old organizing resolution, the Dems would have been at +5 on Appropriations, which would have made things rather tough for the ‘Phants.

Jesse Jackson, Jr. Just Threw His Hat Into the Ring For Senate in 2010

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Here is the money quote:

Jackson supported Burris’ effort to claim the seat to which he was appointed by Illinois Gov. Rod Blagojevich but criticized him for allowing his supporters to play the race card. This “racialization of the Senate seat is going to be a profound problem for Democrats,” Jackson told Politico.

While I agree with the sentiment, this is Representative Jackson’s first salvo in a primary battle.