It appears that a bill to allow bankruptcy judges to modify mortgages will be introduced in the House some time this week.
Two snaps up.
Month: January 2009
Germany Gets Fiscally Jiggy
Yep, it appears that Germany is taking baby steps away from their inflation phobia, and starting to embark on some serious fiscal stimulus, to the tune of €50 billion over two years.
It’s been 80 years, but the thought of a wheelbarrow of Deutsche Marks for a loaf of bread is still a part of their institutional memory.
Senate Follies
Neither Franken nor Burris were sworn in today.
Burris was turned away because Harry Reid is taking a stand on principle, which he will shortly fold on, and Franken was not seated because the Republicans are using Reid’s brief flirtation with principle as a fig leaf for politics.
And I just heard on Countdown that the head of the Senate Rules Committee, Diane Feinstein,* has said that in fact Burris’s paperwork is in order.
This is FUBAR.
*Full disclosure, my great grandfather, Harry Goldman, and her grandfather, Sam Goldman were brothers.
What the Panetta Nomination Means (Bigger Intelligence Picture Edition)
I know a quick trick to determine the priorities in any program, look at the budget.
The US intelligence is $47½ billion dollars, with about 80% of that amount in the control of the Pentagon.
That actually puts the CIA pretty far down on the totem pole of priorities, and with the creation of the Director of National Intelligence, they no longer give the President the most expensive reading material in the world, the Presidential Daily Briefing.
First, we have a letter from a career military intelligence professional to Josh Marshall who makes a very legitimate point, that recently, particularly over the last 8 years, the CIA has been increasingly cast as an organ of the Pentagon, and that this is not the essential role of the CIA.
The essential role of the CIA is to provide the civilian decision makers, particularly POTUS, with the information that they need to make their decisions, not the provision of targeting data to Predator drones.
So, just who is Leon Panetta, and what does it mean for the intelligence community in an Obama administration?
Obviously, his forceful rejection of torture and warrantless wiretaps is the first thing that comes to mind.
This implies that as DCIA, he will be looking into what happened, and why with the domestic spying and torture, and (hopefully) it will mean the end of these programs. (I’m not enough of an optimist to believe that there will be referrals for prosecution).
Also, there is a bit of almost 20 year old history regarding Panetta and Congressional oversight of intelligence:
And there’s this: in 1990, then-Representative Barbara Boxer (D-CA) introduced legislation that would have required the president to seek approval from the congressional intelligence committees before mounting most covert operations. (Under this legislation, the president could still stage secret ops to save American lives or rescue American hostages without asking permission from the committees.) The measure failed miserably. Only 70 members voted for it, but one was Panetta. Will that vote come up during his confirmation hearings? One wonders if Panetta still supports the idea of greater congressional oversight of CIA clandestine activities.
He was one of 70 people voting for this, so we can be reasonably assured of his support for Congressional oversight: he is unlikely to “go native,” and start stonewalling Congress.
That being said, his real job will be to fight the 800 pound gorilla in the room, the Pentagon, and its institutional imperative towards total control of the complete intelligence apparatus.
Panetta was Chairman of the House Budget committee, head of the Office of Management, and finally Bill Clinton’s White House Chief of Staff, and this background makes him uniquely suited to dealing with the separation of the CIA from the military octopus.
His background is budgets, bureaucracy, and access to the President, and these are precisely the levers that need to be worked in order for the CIA do its job properly.
Someone like Feinstein’s* favorite Steve Knappes, may very well have more hands on experience with intelligence, but he doesn’t have is the ability to thread the various needles, both in the White House, and with the Congress, to create in voice in intelligence agency that is separate from the Pentagon (and to a lesser degree the State Department), has the resources to collect the intelligence.
More importantly, Leon Panetta has the skills to make sure that this intelligence is presented to, and seriously considered by, the President and the rest of the national security apparatus.
*Full disclosure, my great grandfather, Harry Goldman, and her grandfather, Sam Goldman were brothers.
Economics Update
Well, real estate sucks, with pending home sales falling by 4% (BTW, Manhattan apartment prices fell 4% too, so ain’t nothing going up.)
Manufacturing data is out too, and it’s grim, with factory orders falling twice what was forecast in November, and Toyota deciding to idle its plants for 11 days over February and March.
The last time Toyota did this was in the early 1990s recession, and they did it for one day.
Services did better than expected, with the Institute for Supply Management’s (ISM) non-manufacturing index rising. The prediction was that it would fall from 37.3 to 37 in November, but it rose to 40.6.
Better than expected, but any number below 50 still counts as contraction.
A bit of up news is that Calculated Risk’s Credit Crisis Indicators are showing improvement today.
But with all this going on it is no surprise that consumer bankruptcies rose by nearly a third in 2008.
The problem with the 2005 act was that people don’t declare bankruptcy on a whim, they declare bankruptcy when they fall of the tight rope that is middle class existence in the United States, and there is no safety net to catch them.
In currency, the dollar rose against the Euro, largely on the expectations of further rate cuts by the ECB.
In energy, oil finished the day down, but it spent part of the day above $50/bbl for the first time in about a month.
What the Panetta Nomination Means (Inside Capitol Hill Baseball Edition)
First on the inside baseball angle, it appears that some of the intel war horses, particularly in the Senate, are upset at the choice, and how it was made public.
Both Senators Feinstein* the new Intel Committee chairman, and Rockefeller, the outgoing chairman, have strongly expressed reservations about the appointment, based largely on their feelings that he lacks the experience to handle the CIA.
Someone, probably on the one of the two Senators’ staff, stated to NPR (I heard it on Morning Edition), that Leon Panetta was the least experienced appointment to head the CIA since John McCone in 1961.
That is not true.
A quick perusal of the DCIs gives a 1976 appointment who was significantly less experienced: 4 years in Congress, UN Ambassador, and Envoy to China before his appointment, as compared to Pannetta’s 16 years in Congress, his chairmanship of the House Budget Committee, with heading the OMB, and serving as Clinton’s chief of staff.
That relatively inexperienced DCI? George Herbert Walker Bush, who is still viewed with the affection that 6-year-olds reserve for Santa Clause among CIA old-timers.
What is interesting is that it appears that Feinstein* and Rockefeller, were blind sided by this announcement, while relatively less senior Senator Ron Wyden (D-OR), was briefed and supports the decision, and this sentiment is mirrored by House intelligence committee chairman Silvestre Reyes and Rush Holt, Chairman of the House Select Intelligence Oversight Panel.
Additionally, you have Senators Pat Roberts Barbara Mikulski (scroll down), and Russ Feingold, , with Evan Bayh (true to form) waffling.
We are now hearing a sort of an apology by Joe Biden, “I’m still a Senate man and I always think this way: I think it’s always good to talk to the requisite members of Congress,” said Biden. “I think it was just a mistake,” but it’s a fairly perfunctory apology.
I do not think that this is an accident. We have a transition team that has professional OCD. They have a job application form that kills more trees than Paul Bunyan, and famously tight lips, people like this don’t “forget” to notify the current and former Chairmen of the Senate Intel Committee.
This is Chicago style payback for something, and it has at least tacit approval from the top (PEBO).
So, they Rockefeller and Feinstein* f^%$ed with Barack Obama over something, and now he’s dropping something on them by way of lesson….It’s not a piano, it’s more like emptying a chamber pot on their heads.
Gee, I can’t imagine what on earth they could have done to Barack Obama that would have thought that he was being messed with? I don’t know, maybe something that had Keith Olbermann going special comment on him? Something like that disgraceful telco immunity bill that Rockefeller and Feinstein* pushed so hard through the Senate?
We know that Obama voted for the bill, but it was painfully clear that this was not something that he wanted to deal with at that time, it being mere weeks after he cinched the nomination, and it was equally clear that it was a phenomenally bad bill.
Barack Obama, or someone very senior in his staff, believe that Rockefeller and Feinstein pushed the bill to cover their own posteriors. They are accessories to illegal wiretaps and torture, and while Congressional immunity may protect them, they would much rather not have to find out how a judge rules.
I think that this is why you have seen the meticulously botched roll-out of Leon Panetta: It’s botched enough to turn the knife, but not botched enough prevent the nomination from leaving the Senate Intelligence committee.
I’ll post about what I think the bigger picture is in terms of what this means for the intelligence establishment later. (I actually find that bit more interesting)
Anyway, that’s what I think. I could be wrong, and Atrios could be right:
It’s about the club, insider knowledge and privilege, and, yes, crimes, criminals, and their enablers.
Gotta keep it in the family, otherwise who knows what might happen?
*Full disclosure, my great grandfather, Harry Goldman, and her grandfather, Sam Goldman were brothers.
Richardson Out as Secretary of Commerce
He’s under a grand jury investigation for allegations of pay to play.
I think that he was pushed out by the Obama transition team, who felt that he soft pedaled the suspicions.
Good Nesw on the, “Bigots Want Your Stuff,” Front
The bigots who want to leave the national Episcopal church because its to tolerant of “te gay”, have just lost one in court.
The California Supreme Court has ruled that the parish property they are on belongs to the national church, not them:
The state high court said it could resolve the St. James lawsuit by looking to property deeds, state law, the local church’s articles of incorporation and the national church’s canon and rules.
Although the deeds showed the local church owned the property, the parish had agreed to be part of the greater Episcopal Church of the United States and to be bound by that church’s rules, the court said.
The church added a section to a canon in 1979 that said parishes held property in trust for the greater church.
“The local church agreed and intended to be part of a larger entity and to be bound by the rules and governing documents of that greater entity,” Chin wrote.
Justice Joyce L. Kennard wrote separately to say that no secular institution would be permitted to take someone’s property that way.
Good for them.
Obama Decides to Try to Kowtow to Republicans
Well, it now appears that Barack Obama is looking at about $300 billion of the stimulus package being taxcuts.
Why? Because he wants to get more than 80 votes in the Senate.
This is delusional, and it is wrong. The Republicans don’t care about making government work for the people, and if it doesn’t work, he will get the blame anyway.
Anything worth passing will not get Republican votes. Obama need only remember that Social Security passed without a single Republican vote….Not one.
I agree with Josh Marshall when he says, “Can someone help me come up with an argument for why the Obama stimulus plan isn’t turning out to be a painful joke?“
The Shrill One, Paul Krugman, makes the best point on his blog:
Look, Republicans are not going to come on board. Make 40% of the package tax cuts, they’ll demand 100%. Then they’ll start the thing about how you can’t cut taxes on people who don’t pay taxes (with only income taxes counting, of course) and demand that the plan focus on the affluent. Then they’ll demand cuts in corporate taxes. And Mitch McConnell is already saying that state and local governments should get loans, not aid — which would undermine that part of the plan, too.
He follows up with another good point in his column, that Republicans are already, “setting up roadblocks to stimulus legislation while posing as the champions of careful Congressional deliberation,” and then he follows up with the point that action needs to be taken quickly, and Republicans have no interest in taking action at all.
They believe that action in and of itself is evil.
Hilzoy notes, tax cuts give among the smallest GDP bang for the buck:
Not Enough Bullets: Weekend at Bernie’s
Madoff, that is.
The prosecution wants his bail revoked. It appears that he has been transferring a significant amount of valuables to 3rd parties.
It appears that he has mailed in excess of $1million in items to friends and relatives:
The decision by Bernard Madoff and his wife to ship jewelry and others valuables to family and friends may land him behind bars sooner rather than later.
Assistant U.S. Attorney Marc Litt of the Southern District of New York told a magistrate judge Monday that Madoff and his wife Ruth mailed in excess of $1 million in valuables late last month despite a court order in a related civil case requiring the accused mastermind of a multi-billion dollar Ponzi scheme not to dissipate assets.
Most of the material has since been returned and handed over to federal authorities, but Litt said the transfer amounted to changed conditions that warrant Madoff detention as he awaits trial or a guilty plea on one of the largest frauds in history.
Defense attorney Ira Sorkin of Dickstein Shapiro said the mailing of the valuables, which included watches, a pair of cuff links and even a $200 pair of mittens, had nothing to do with allowing Madoff to remain free on bail.
$200 mittens?
Well, that was Fast
Silvio Berlusconi dis something that George W. Bush could only dream of, he partially privatized the Italian social security system.
Well, the “beneficiaries”, of the policy, the roughly 1.2 million people who made the switch to privately managed accounts, are now screaming like defrauded Italians, (which they are) because their accounts have gone south with the markets, and the management fees have taken most of what is left, and now they want their bailout.
How many times does this have to happen until people realize that taking a safety net, and making it a revenue stream for a broker is a bad thing?
Obama Staffing Update
Leon Panetta: C.I.A. Director.
What is interesting here is two things, he does not have previous intel experience, being Clintons Chief of staff for a time, and that he has Panetta op/ed forcefully stated his opposition to warrantless surveillance and torture.
Clearly, as a former CoS, he will know how to run a bureaucracy, and how to get the President’s attention, which should be helpful, though I still find it an odd pick.
We also have some more appointments at the Department of Justice
- David Ogden for Deputy Attorney General;
- Elena Kagan, Solicitor General;
- Tom Perrelli, Associate Attorney General;
- Dawn Johnsen, Assistant Attorney General for the Office of Legal Counsel.
No knowledge of them, though Glenn Greenwald is generally happy over the above appointments, and positively ecstatic over Dawn Johnsen.
Greenwald also reveals that Sen. Dianne Feinstein* and Sen. Jay Rockefeller are upset because they Panetta is not an “intelligence professional”, and because they feel that they were not consulted sufficiently.
*Full disclosure, my great grandfather, Harry Goldman, and her grandfather, Sam Goldman were brothers.
Maliki to Bush: Drop Dead
Nouri al-Maliki is now saying that he will not allow Iraq to be used as a base to threaten their neighbors:
Prime Minister Nuri al-Maliki told Iran’s Arabic news channel on Friday that Iraq “will not let Iraq be a launching ground to threaten any country,” Al-Alam said on its website.
Just in case you are wondering, why yes, we have spent hundreds of billions of dollars and thousands of lives to put Iran’s bitch in control of Iraq.
The Stupidest Thing Written …….. On December 19, 2008
It might be a the stupidest thing ever written on other days, but the internet is a vast place, so the the suggestion that increasing broadband internet access will lead to fascism may not be the stupidest thing ever written, but it is the stupidest thing that I’ve read in a long time.
It appears that Andrew Keen (who else, seriously, just wiki him) is alarmed at the fact that part of Barack Obama’s stimulus package will be directed toward expanding broadband access across the United States, and it might be, “Inadvertently laying the foundations for a return to fascism, the political catastrophe of the 1930’s.“
You see, the according to Mr. Keen:
The 1930s fascists were expert at using all the most technologically sophisticated communications technologies—the cinema, radio, newspapers, advertising—to spew their destructive, hate-filled message. What they excelled at was removing the the traditional middlemen like religion, media, and politics, and using these modern technologies of mass communications to speak with reassuring familiarity to the disorientated masses.
There are a couple of problems here:
- They did not control these media until after they came to power.
- The middlemen dominated the cinema, radio, newspapers, and advertising, then, as they do now, it was that they supported the fascists, because they thought that they might prevent the Bolsheviks from coming to power.
If you read the rest, I’m sure that you can find more.
Canary in a Coal Mine?
When I started predicting a financial meltdown 5 years ago, I didn’t know a CDO, CDS, or MBS from a hole in the wall.
Truth be told, I’m only barely past that now.
What I was predicting was a real-estate crash followed by a recession, followed by a loss of status as a reserve currency, which would drive the dollar down and interest rates up.
So, I was really only right on one thing, the real estate crash, at least for now, which I figure is pretty good for someone with one economics course under his belt.
That being said, the recommendation by Akio Mikuni, president of the Japanese credit ratings agency Mikuni & Co., that Japan should unwind its holding in US Treasuries could be seen as a first step for the rest of the sequence:
The dollar may lose as much as 40 percent of its value to 50 yen or 60 yen from the current spot rate of 90.40 today in Tokyo unless Japan takes “drastic measures” to help bail out the U.S. economy, Mikuni said. Treasury yields, which are near record lows, may fall further without debt relief, making it difficult for the U.S. to borrow elsewhere, Mikuni said.
Interestingly enough, Mikuni is not suggesting flight from the US market, but rather that, “Japan should also invest in U.S. roads and bridges to support personal spending and secure demand for its goods as a global recession crimps trade.”
He’s talking about a Marshall Plan for America.
I’m wondering if this is just one (rather influential) guy spouting off, or the first few steps in a rush to the exits.
Election Update
Minnesota first earlier, so now, let’s lead with Illinois.ABC News: Burris Credential Rejected by Senate Parliamentarian, which is no surprise.
Somehow, I think that Reid will get run over, like he always does.
In the meantime, the Minnesota Canvassing Board has certified Franken the winner, by 225 votes.
Note that state law precludes the issue of an election certificate can be issued for at least a week, and the Coleman camp says that it intends to mount a challenge in the courts.
That being said, the Minnesota Supreme Court has just rejected a challenge by Coleman, which claims that 654 ballots were improperly excluded.
I’m not surprised. They already ruled on this, and Coleman would need to pick up 225 votes, or 34.4% of the total, which would mean that he would need to outpoll Franken by over 2:1, which is simply not in the realm of reality.
The Senate Democrats want to seat Franken, at least provisionally, but Cornyn and the rest of the ‘Phants are promising a filibuster.
Finally, here is a little bonus feature for my reader(s), the future Senator for Minnesota, in tights, doing Mick Jagger : (H/T Josh Marshall)
Economics Update
Just so you know, the whole auto industry is in a tailspin.
All the auto manufacturers are seeing sales fall by more than 30%, with Chrysler falling by a whopping 53%, year-over-year.
My guess as to Chrysler is that the American public realizes on some unconscious level that Cerberus is a pump and dump operation that cannot be trusted.
In real estate, construction spending was down by 0.6% from October to November, which was better than the consensus estimate of 1.4%, which to my mind is a serious WTF number. 1.4% a month is Sta-Puft Marshmallow man time.
In central-bank land, we have reports that the Federal Reserve and the ECB are working together to avoid deflation, which indicates that central bankers on the both sides of the pond are scared.
The ECB’s only charter is to control inflation, but now they are trying to figure out how to get inflation back into their economies.
No surprise that we are still seeing a flight to safety that is driving the dollar up against both the Euro and Yen.
In energy, oil is up again, largely on concerns about the Middle East, and retail gasoline was up 1.4¢/gal, the 6th straight day in a row, which seems to indicate that gas prices will be rising in the near future.
Finally, here is a pretty picture:
It’s a measure of the ISM Manufacturing index (I mentioned this last week). The graph is courtesy of The Bonddad Blog, and he accurately describes this as “cliff diving”.
Time to Dump Reid?
Truth be told, I’ve had thoughts about dumping the Democratic Party Congressional leadership regularly, every waking minute in the case of Steny Hoyer, but I’m beginning to think that Reid may do a passable job of maintaining order in the Democratic caucus, he is is simply hopeless when dealing with opponents of that caucus.
In l’affaire Joe (Lieberman), he collapsed like a bunch of brussel sprouts too overcooked for consumption at a British boarding school, and now he is mishandling the seating of both the Burris (Blagojevich) and Al Franken.
First, we now have his “stand on principle,” followed by statements yesterday that negotiation was possible.
Then we have the reports that he’s having the Senate Parliamentarian reject Burris’s credentials for lack of a Secretary of State signature, which might be inspired, except for the fact, as Majikthise notes, the governor has a stack of papers pre-signed by the SoS for convenience, and may have used one, and that the Illinois Secretary of State has explicitly said that his signature is not required.
Follow this up with a generous dose of credible reports that Reid lobbied Blagojevich against appointing a black man to replace Obama. (Yes, I know, he didn’t, lobby against a black person as Senator, just all the possible black politicians in the state who might have the stature to do this. It’s a distinction without a difference.)
Finally, we have his tactics backfiring against Al Franken, with the Republicans promising a filibuster against seating the Senator-Elect from Minnesota using his arguments.
Also note that any delay in seating either of them makes it more difficult to break a filibuster: 98 Senators means 59 votes (all the Dems + Lieberman + 2 Republicans), 99 Senators means 60 votes, (all the Dems + Lieberman + 2 Republicans), and 100 Senators means 60 votes ((all the Dems + Lieberman + only 1 Republican) to get cloture.
Seriously, I’m beginning to think that he’s moonlighting as Senate Majority Leader, and that his day job is as the coach of the Washington Generals.
Election Update
Not sure where to start, Minnesota, or Illinois….coin flip….Minnesota.
Well, after counting the absentee ballots that both campaigns agreed to, Al Franken’s lead over Norm Coleman has grown to 225. He added 176 votes while counting 933 ballots, which means that Franken polled 18.9% better on absentee ballots.
It appears that Obama’s push on early and absentee balloting paid off here.
Seriusly though, it’s game over, and Harry Reid and Chuck Schumer have both called for Coleman to concede.
The vote is expected to be certified some time today, at which point Coleman is expected to mount a challenge in the courts, but the burden of proof will then be on him.
In the mean time, Harry Reid is sounding a bit more conciliatory towards Roland Burris, saying that, “there’s always room to negotiate.”
I’m not sure what is going on here, except that Harry Reid has gotten played by Rod Blagojevich something fierce.
Obama Getting Rolled by Pentagon and NASA?
It now appears that people in the Pentagon and in NASA are feedinb Obama and his transition team scare stories about a Chinese manned program to the moon:
President-elect Barack Obama will probably tear down long-standing barriers between the U.S.’s civilian and military space programs to speed up a mission to the moon amid the prospect of a new space race with China.
The argument is that the Chinese will be able to put a man back on the moon before the US’s goal of 2020.
It should be noted that planting a flag on the moon means nothing.
That China is making strides in space development is true, and the military implications are a legitimate concern, and the idea of replacing NASA’s Ares vehicles with existing vehicles, which means military launchers because NASA has meticulously destroyed the opposition on their end, is a good thing.
But this whole “race to the moon” thing is 6 pounds of sh%$ in a 5 pound bag.
If Obama and his team believe this, I have some ballots in Florida for them to count.