Month: February 2009

Levin and McCain Look to Give Nunn-McCurdy a Steroid Injection

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They are proposing the Weapon Systems Acquisition Reform Act, which is intended to add some teeth to the 1983 Nunn–McCurdy Amendment.

Nunn–McCurdy requires congressional notice when a program goes 15% over budget, and termination when it goes 25% over budget, unless the DoD certifies it as “essential to the national security,” but this has come to mean very little, as evidenced by the F-22, DDG-1000, FCS, JSF, EFV, LCS, etc.

According to Senator Carl Levin, the measure includes:

  • Address problems with unreasonable performance requirements by requiring DOD to reestablish systems engineering organizations and developmental testing capabilities; make trade-offs between cost, schedule and performance early in the program cycle; and conduct preliminary design reviews before giving approval to new acquisition programs;

  • Address problems with unreasonable cost and schedule estimates by establishing a new, independent director of cost assessment to ensure that unbiased data is available for senior DOD managers;

  • Address problems with the use of immature technologies by requiring the Director of Defense Research and Engineering (DDR&E) to periodically review and assess the maturity of critical technologies and by directing the Department to make greater use of prototypes, including competitive prototypes, to prove that new technologies work before trying to produce them; and,

  • Address problems with costly changes in the middle of a program by tightening the so-called “Nunn–McCurdy” requirements for underperforming programs.

What is interesting here is that this is juxtaposed with the appointment of Ashton B. Carter as Undersecretary of Defense for Acquisition.

Carter is a Harvard professor, and has no ties to the defense industry. His career has largely involved criticizing the defense industry while at Harvard’s Kennedy School of Government, and he served as Assistant Secretary of Defense for International Security Policy under Clinton.

The Iron Triangle types do not like him, which means that I do, though I hope that he has the bureaucratic chops to make this work.

Well, That Makes 3 F-22 Shootdowns in Excercises

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Stephen Trimble had a walkaround at Electronic Warfare Appreciation Day at Andrews AFB, and he noticed noticed this EA-18G “Growler” electronic warfare aircraft.

Look at the bottom picture: the pilot bagged an F-22 in exercises at Nellis.

This does raise an interesting question, how does an aircraft largely dedicated to electronic warfare bag what is supposed to be the hottest jet out there.

I think that it comes down to the fact that the F-22 had to get close to burn through the jamming, and once it did, its size, the aircraft is roughly as large as an F-14 Tomcat, made rather more visible to the Mark 1 eyeball than the F/A-18.

This raises an interesting question as to the effectiveness of the aircraft in a heavily jammed environment: will this require the Raptor to get close enough to its target that it is then in a visual conflict, where it will be more visible than its opposition.

Hrm….

Defense Procurement at Its Finest

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So, it appears that the electromagnetic catapult on the Ford is behind schedule and over budget, and the contractor is asking for more money, because if they have to go back to steam, they have to tear up the ship, including its engineering plants.

So, they will get the money, and they will deliver late, and, unless I miss my guess, we will seeing a F/A-18s hitting when the catapults fail, as the bugs are worked out, at cost plus.

Zimbabwe Update

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So, now we have a “unity government”, only Mugabe continues to make appointments unilaterally, though Tsvangerai is disputing them, for what that is worth.

In any case, we are seeing an increase in political violence, and government elements allied with the ZANU PF are continuing arrests and detentions of political prisoners, including a “terrorism” charge against senior MDC official Roy Bennett, who is still in detention despite a court order realeasing him on bail.

Seriously, one of the two only good pieces of news coming out of here are reports that Robert Mugabe has bought a $5.7 Million house in Hong Kong, because that might mean that he is preparing to leave.

The other good bit of news is that the new Finance Minister, and Tendai Biti (MDC) is starting to pay some wages in foreign currency.

If Tsvangerai and Biti are smart, they will make sure that the foreign currency goes to organizations that aren’t just a bunch of Mugabe’s thugs.

Unsurprisingly, the seizure of farms is continuing unabated, because it’s about the only currency left for Mugabe to use to buy continued support.

CDOs: How Bad Will It Get

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This is why our banks are insolvent. Even without the increases in leverage that have been created over the past 15 or so years, when you see losses like this:

The real shocker, though, is what has happened after those defaults. JPMorgan estimates that $102bn of CDOs has already been liquidated. The average recovery rate for super-senior tranches of debt – or the stuff that was supposed to be so ultra safe that it always carried a triple A tag – has been 32 per cent for the high grade CDOs. With mezzanine CDO’s, though, recovery rates on those AAA assets have been a mere 5 per cent.

Your bank is toast.

That’s 30¢ on the dollar for the best of the best, and just down from that, it’s 5¢ on the dollar.

This is why the big banks are insolvent.

Economics Update

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Well, the revised GDP numbers are in for Q4 of 2008, and they are a horror-show, with GDP declining 6.2%, when the initial numbers had been -3.8%.

With numbers like this it’s no wonder that the FDIC is reporting that the banking industry posted an aggregate net loss for a quarter for the first time since 1990.

If we are expecting real estate to rebound any time soon and save us, I wouldn’t hold my breath with condo developers trying auctions to move properties, and And apartment buyers walking away from deposits….Six and seven figure deposits….in Manhattan.

I would also note that the consumer does not appear to be their either, with the finally tally for the Consumer Confidence Index falling to a 29 year low.

With numbers like this, it’s no surprise that S&P is considering downgrading the ratings on $140 billion of prime jumbo mortgage CDOs, and non-prime mortgage origination hit a 17-year low last year.

Real estate, and hence banking, is in a sad enough condition that the FDIC has instituted a temporary emergency rate hike in order to bolster its reserves.

More generally, we have The Institute for Supply Management’s Chicago Purchasers’ Index showing continued contraction. It rose to 34.2 from 33.3, but anything under 50 means contraction, and the 30s are significant contraction.

The fact that GE cut its dividend to 10 cents from 31 cents indicates that no one is doing well here.

The same is going on overseas, with most of eastern Europe in dire straits, getting emergency loans totaling about $31 billion, and Japanese factory output falling, and new jobs drying up.

The revised GDP figures drove both oil and the dollar down.

Jeebus: Over a Month Out of Office, and Bush and His Evil Minions&trade Still Shock Me

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So, we know that Dusty Foggo, who was installed by then CIA head Porter Goss, was corrupt, but the court files from his trial are stunning.

He went to jail for taking bribes from Brent Wilkes, who was also bribing Randall “Duke” Cunningham, but we now know that he was alwo sleeping around with his wife with a woman who was also sleeping with a Russian spy, and Porter Goss knew this, and hired him anyway.

Un-dirtyword-believable.

Bailouts for Citi and Other Banks

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Let’s start with the numbers: City is currently trading at less than $1.50 a share, but the US government is converting its preferred shares to common stock at a price of $3.25/share, that’s around $12½ billion of taxpayer dollars down the hole.

Between the US Government, and various sovereign wealth funds, it means that existing shareholders have gone from 100% of the bank to 26% of the bank….Let’s be clear about it, they are insolvent, that’s the only reason that the management and the shareholders aren’t screaming bloody murder right now.

This is insane.

Good News on Student Loans

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We have some change we can believe in, Obama is calling for an end to federal subsidies to private student loan providers.

Seeing as how the private system has resulted in:

  • Higher costs to borrowers.
  • Higher costs to the federal government.
  • Corruption in the financial aid departments of universities.

It makes a lot of sense to stop subsidizing providers of an inferior service.

Obama would use the money saved for Pell Grants.

Obama Budget Plan

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It’s a decent plan, though once again, it appears to not go quite far enough.

  • He’s rolling back the Bush tax cuts at the top tax brackets, though I think that the max marginal rate should made far higher, something like the 70% we had pre-Reagan for income above $5 million/year or so.
  • He’s spending $634 billion on expanding healthcare access, which is good, but the real need exceeds $1 trillion.
  • Closes some of the more egregious tax loopholes.
  • Cuts farm aid to big farms

He is also estimating a decent bit of revenue from a carbon cap-and-trade system, which I think is in error. He underestimates the costs of enforcement, speculative pressures, and evasion, which is why I favor a straight carbon tax.

And Now Republicans Come Out in Favor of Giving AIDS to Children

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If you ever wondered just how immoral the Talibaptist wing of the Republican party is, look no further than state Senator Dave Schultheis (R-Colorado Springs), who is opposed to testing pregnant women for AIDS, because it would lead to treatments to reduce the chance of their children catching the disease, and their children having AIDS is appropriate punishment for their promiscuity.

The frightening thing is that coming from Colorado Springs, home of James Dobson’s Focus on the Family, a significant portion of his constituents likely agree:

  • What he said during the debate: “This stems from sexual promiscuity for the most part and I just can’t go there. We do things continually to remove the consequences of poor behavior, unacceptable behavior, quite frankly. I’m not convinced that part of the role of government should be to protect individuals from the negative consequences of their actions.”
  • What he said afterward: “What I’m hoping is that yes, that person may have AIDS, have it seriously as a baby and when they grow up, but the mother will begin to feel guilt as a result of that. The family will see the negative consequences of that promiscuity and it may make a number of people over the coming years … begin to realize that there are negative consequences and maybe they should adjust their behavior. We can’t keep people from being raped. We can’t keep people from shooting each other. We can’t keep people from jumping off bridges. People drink and drive, and they crash and kill people. Poor behavior has its consequences.”

For all those wankers (that’s you Lord Saletan) who think that we can engage in meaningful negotiations with the abortion criminalization crowd, understand that they want to eliminate all forms of birth control, and re-institute criminal penalties for “fornication”.

In fact, they want to give children AIDS to punish their parents.

You can no more find common ground with them than you can with al Qaeda.