Good. It’s about bloody time.
Month: March 2009
Tauscher and the New Dems Water Down Cram Down Legislation
It’s still better than nothing, but Ellen Tauscher desperately needs to be primaried.
Economics Update
Scary Pic of the Day: Upcoming Mortgage Resets Courtesy of Dr. Housingbubble
ADP employment services has released its monthly report, and job cuts are way up with 697,000 jobs lost in February as compared to 614,000 jobs lost in January.
Note that the initial January figure was only 522,000, the the final February figures may very look even worse.
We also have the Institute for Supply Management February non-manufacturing numbers, and they are down from January’s already anemic figures, and the Federal Reserve’s business survey reporting “weaker conditions or declines” in 10 of the 12 regions.
In China, however, the purchasing managers’ index rose in February, to 49, which still shows contraction, but only barely, as 50 is neutral.
In real estate, we have mortgage demand falling last week, largely because borrowers are waiting to see what the Obama mortgage rescue plan is.
In commercial real estate, we have a secondary indicator, with office furniture sales falling sharply.
It’s no wonder that FDIC Chair Sheila Bair is warning that its insurance fund could be insolvent by years end.
Bank failures, ignoring the biggest ones, is on a pace to close 100 banks this year, as compared to the 27 in 2008 or the 3 in 2007.
We are seeing a spike in consumer bankruptcy filings, up 29% year over year in February.
The Chinese economic news drove oil higher, and bad economic news in Japan drove the dollar up.
Obama Starts Dialog With Medvedev on BMD
Barack Obama dispatched a letter to Dmitri Medvedev suggesting that the installations in the Czech Republic and Poland are not a done deal, and that if they can come to a meeting of the minds on Iran, this could be called off.
The installations have always been wrong headed, improperly located, and provocative,* so this is a bit of good news.
*I’ve always said that the provocative bit was a feature, not a bug. A bellicose and militaristic Russia benefits the ‘Phants and their defense contractor friends.
Cook County Commissioner Mike Quigley Wins Primary Rahm’s Old Seat
Here. Word is that he is the 2nd best guy running, after Tom Geoghegan.
He was endorsed by the Tribune, which is probably why he won.
He does not appear to be a part of Mayor Richie Daley’s machine, but I think that this will result in a primary challenge in 2010, not support of his opponent in the special general election.
Geithner and His Evil Minions&trade Go Back to the Bad Bank
Yep, it’s back to bad bank, only this time Geithner has created the fig leaf of private investors to cover up the fact that there will be gross overpayment.
The idea is the government would lend investors the money at sub market rates (ding, subsidy), for non recourse loans (ding, subsidy) to buy the big sh$#pile.
A non recourse loan is, “secured by a pledge of collateral, typically real property, but for which the borrower is not personally liable,” so the if you buy a piece of the big sh$#pile, and it goes bad, you don’t have to pay the loan back.
As a mental exercise, let’s assume that you buy 10 CDOs for $1 million each, and the government loans you 90% of the money to do so. 9 of the 10 are worthless, and you thus lose $900,000.00, with the US government losing $8,100,000.00, but that the 10th, which you bought at 33¢ on the dollar, pays off in full, so your $1million purchase is worth $3,000,000.00, so you pay back the US government, leaving $2,100,000.00, and then split the proceeds, so you and Uncle Sam each get $1,050,000.00.
This means that you cleared $50K on a $1 million investment, and Geithner and His Evil Minions™ just lost $7,050,000.00 of taxpayer money.
Not great, but considering the fact that $10 million was put in, and $7 million of that was lost, it’s pretty good for you.
As Calculated Risk notes it’s another attempt to overpay for bad assets.
Update on the Santelli Story
So, Playboy pulled the posts, but it remains up at the Exiled, and Mssrs. Ames and Levine confirm pretty much every aspect of the story, though, to be fair, Rick Santelli has disavowed any involvement with any of the AstroTurf sites.
That being said, Santelli also canceled tomorrows appearance on The Daily Show, and is declining interviews, which is a polite way of saying, “That’s a fair cop, officer.”
I recommend that you read the whole article, if just for the delightful evisceration Megan McArdle’s attempted to refute a Freedomworks connection, despite the fact that she, you know, shares bodily fluids a man who was only recently running AstroTurf campaigns for Freedomworks, but finally even she is forced to admit that Freedomworks is hip deep in this:
Meanwhile, I’ve spoken with Brendan Steinhauser, the chap at FreedomWorks who has helped organize the tea parties. FreedomWorks has been, as far as I can tell, completely open about their interest in furthering the tea parties, which is not surprising because they’ve been completely open about opposing bailouts since before Obama took office. As Brendan describes it, he and FreedomWorks were calling for demonstrations against the stimulus even before it passed, but he got the teaparty idea from Michelle Malkin’s blog. FreedomWorks emailed its members and set up a website to encourage people to join in. This seems like pretty standard political organization tactics.
Ms. McArdle must thank her lucky stars every day for Amity Shlaes, because it’s only in comparison to Mrs. Lipsky that she does not come across as a complete tool.
Why David Paterson Less Popular than a Case of the Clap
And maybe even less popular than Dick Cheney, according the the latest Marist poll, 26% favorable, with the poll showing him being trounced by Andrew Cuomo in the primary, and being soundly beaten by Rudolph Guiliani in the general.
I think that his slime campaign against Caroline Kennedy is a part of this, but his bleatings about how you can’t raise taxes on the rich, or they will leave the state, is what really put people over the edge.
His argument is, of course, completely absurd. No one lives in in New York, or at least no one lives in New York south of Albany, because it’s a low cost place to live.
What’s interesting here is that there are a lot of conservatives in New York, particularly in Long Island and upstate, and there is a long tradition of conservatism in those areas, and they hate him too.
I think that this is significant because people are finally beginning to understand that keeping taxes low on rich folk buggers the rest of society (without lube).
After 30 years of soak the poor (and middle class) tax policies, people are finally starting to get it.
As for what looks like a soon to be former Governor Paterson, who missed this shift, and looks like he might be crushed by it, the great Gary Larson put it best:
Economics Update
Will the last entity leaving making cars in the US please turn off the lights?
Toyota’s U.S. sales are down 39.8% to 109,583 units in February – MarketWatch, Ford and GM fell 48.2% and 51.6%, and Chrysler fell 44%.
In real estate, pending home sales fell, but realtors are hawking “affordability,” because, well, otherwise they would have nothing to hawk at all.
Meanwhile, the Federal Reserve is rolling out its Term Asset-Backed Securities Loan Facility (TALF), a lending facility geared toward business, auto, and consumer loans.
It’s buying more more sh%$pile from desperate people, but they have decided that they will ignore the compensation limits, even though some of the money from the $700 billion dollar bailout fund.
Bastards.
We also have some mixed signals with recession indicators, with a record number of cargo ships idle, but over the road trucking showing a slight bump.
Oil is above $41/bbl, and the dollar is a bit weaker, largely on the fact that Australia has not dropped its rates.
Limbaugh blasts Steele, the GOP – Jonathan Martin – POLITICO.com
Last night, I commented on efforts by the Democratic Party to tie Limbaugh to the Republican Party.
I thought that it was a good move, and now it appears that republicans are doing their level best to reinforce that meme.
Michael Steele makes some fairly innocuous comments about Limbaugh not being a leader of the Republican Party, just an entertainer (vid), and then goes on a rant against Michael Steele, suggesting that people should not give to the RNC, and a few hours later, we have a Steele giving yet another Stalin show trial Mea Culpa.
Tim Kaine was on it like white on rice
‘I was briefly encouraged by the courageous comments made my counterpart in the Republican Party over the weekend challenging Rush Limbaugh as the leader of the Republican Party and referring to his show as ‘incendiary’ and ‘ugly.’ However, Chairman Steele’s reversal this evening and his apology to Limbaugh proves the unfortunate point that Limbaugh is the leading force behind the Republican Party, its politics and its obstruction of President Obama’s agenda in Washington. Just this weekend, Rush Limbaugh repeated his claim that he is rooting for the President to fail. The last time Rush Limbaugh said he wanted the President to fail, virtually every single Republican in Congress followed his lead and voted against the President’s plan to create or save 3.5 million jobs.
….
Like shooting fish in a barrel.
OK, This is Just Scary
Some of Bush’s executive power legal opinions have been released.
They are so extreme that started walking it back in October of 2008, and they effectively repealed them on January 15, 2009.
The short version of the opinions is that, “All your constitution are belong to us.”
We are talking about suspension of the 4th amendment and 1st amendment completely.
Why John Yoo still has a law license, much less a teaching position at UC Berkeley, is astonishing.
[updated]
As Glenn Greenwald notes:
The essence of this document was to declare that George Bush had the authority (a) to deploy the U.S. military inside the U.S., (b) directed at foreign nationals and U.S. citizens alike; (c) unconstrained by any Constitutional limits, including those of the First, Fourth and Fifth Amendments. It was nothing less than an explicit decree that, when it comes to Presidential power, the Bill of Rights was suspended, even on U.S. soil and as applied to U.S. citizens. And it wasn’t only a decree that existed in theory; this secret proclamation that the Fourth Amendment was inapplicable to what the document calls “domestic military operations” was, among other things, the basis on which Bush ordered the NSA, an arm of the U.S. military, to turn inwards and begin spying — in secret and with no oversight — on the electronic communications (telephone calls and emails) of U.S. citizens on U.S. soil.
And the villagers inside the Beltway still see no need for an investigation.
Meanwhile, in the Other War that We Are Losing
I’m shocked, shocked to find that gambling is going on here!
It appears that opponents to the Mayor of a small part of Kabul President of Afghanistan, Hamid Karzai is attempting to move up the date for a presidential election from August to April, in order to prevent his rivals the time necessary to organize and campaign.
Seriously, this is a guy that the US put there, because he a close contact of the CIA in Poppy Bush’s time, and because of his ties to American energy companies, and we’re surprised that he wants to game the election process in his Favor?
Is there anything that Bush and His Evil Minions&trade touched that didn’t turn to crap?
OK, Now We Have Evidence of a Crim
About a year ago, I noted that the CIA had destroyed 2 of their tapes of their torture sessions interrogations.
It appears that I was wrong, they didn’t destroy some of their tapes, they destroyed nearly 100 tapes, 92 in fact.
This is going to continue unless this is pursued up the chain of command, and those in authority at the deputy director, director, and presidential levels are prosecuted.
Those below them need their clearances pulled forever if they cooperate, and jail time for those who do not cooperate.
Our intelligence services will continue to create more terrorists until this is rooted out of both the intelligence services and the body politic.
Yes
Glenn Greenwald asks, “Is Obama embracing the lawless, omnipotent executive?” by endorsing a position that the President, and the President alone has the authority to determine what classified documents it must release under court order.
This has been another episode of simple answers to simple questions. (apologies to Atrios)
It’s disgraceful, but not unsurprising. After all, how often do you see an executive voluntary give up authority that a predecessor successfully asserted?
Timothy “Eddit Haskell” Geithner and His Evil Minions&trade Have Lost
James Baker, “chief of staff and Treasury secretary for President Ronald Reagan and secretary of state for President George H.W. Bush,” on his management of the problems of America’s banking giants.
When you have James “Evil Capitalist” Baker saying that you are placing too much faith in private ownership, you have not just jumped the shark, but you have jumped Carcharodon megalodon, and probably an entire school of the prehistoric giant shark….
on a Big Wheel tricycle….
Naked…..
While blowing a slide whistle….
With a clown nose on….
While giving yourself a tattoo…
On your own genitals.
Belgium*, Just Belgium
Rod Blagojevich gift that keeps on giving, Roland Burris, has launched a web site dedicated to his reelection.
Great googley moogley, please make it stop.
Roland Burris not only thinks that he can win a primary, but that he can win a general, but at this point, I think that Dick Cheney is more likely than he is to win a state wide election in the state of Illinois.
*I mean this in the meaning of the Hitchhiker’s Guide to the Galaxy:
Less offensive words have been created in the many languages of the galaxy, such as joojooflop, swut and Holy Zarquon’s Singing Fish.
The use of bad language can have unforseen circumstances. One example is the war between the G’gugvunts and the Vl’hurgs, caused by a casual remark made by Arthur Dent being mistaken as a terrible insult.
Simultaneous Babel Fish translation also means that any being can be rude to any other being without the need for extensive explanations. This has also started many wars.
The reason the Earth has been shunned for so long is also due to a language problem. On Earth, Belgium refers to a small country. Throughout the rest of the galaxy, Belgium is the most unspeakably rude word there is.†
†Rumor has it that this came from Douglas Adams’ experience hitchhiking across Europe. He got where he needed to generally, but not in Belgium, so he had to walk across the whole country.
Economics Update
Yeah, I know, I don’t normally do the stock market indices, but the Dow fell to below 7000 today, and closed at 6,763.29, a 12 year low, and you can be sure that this spooks both the markets, and the regulators.
More significant is the fact that personal savings in the US are way up, and as the graph from Calculated Risk shows.
It’s been over a decade since personal savings were that high, and while generally this would be a good thing™, right now the fact that people are deleveraging means that the economy is driven even further down.
It makes sense personally, but in the aggregate, it makes things worse.
Interestingly enough, even with the increase in savings, consumer spending rose in January by 0.6%, which was unexpected, as did incomes, bu 0.4%, which was also a surprise.
I think that it is a one month thing, though it might be the “Obama Effect,” making people more willing to spend now that a Bush and His Evil Minions™ are no longer running things, but in either case the effect is small, and unless we see increases for the next few months, things won’t get better.
We also saw the Institute for Supply Management’s manufacturing index rise to 35.8 from 35.6, beating expectations of a fall to 33.8, but note that this means merely that it’s contracting slightly less implosively than it would otherwise: any number below 50 is a contraction, and this makes 13 straight months of contraction.
The full link to the ISM monthly report is here, and it should be noted that their employment index is at all time (since 1947) low.
In real estate, construction dropped to a 4½ year low.
Meanwhile, the AIG bailout, and the concerns that it raises has driven oil down on concerns of more turmoil in the banking system, and has driven the dollar up in a flight to safety.
Jim Bunning Hints that He May Resign
It’s an open secret that the Republicans do not want Jim Bunning to run for reelection in 2010, and it appears that the former hall of fame pitcher has said in private conversations that he will quit the Senate and allow Democratic Governor Steve Beshear to appoint his successor if the party establishment tries to push him out.
If he quits, with or without Franken, and with or without a successor, the Dems have cloture without a single Republican vote.
Heh.
What the Shrill One Said
Go read the latest Krugman OP/ED, he is at the top of his game:
Mr. Bernanke cited “the depth and sophistication of the country’s financial markets (which, among other things, have allowed households easy access to housing wealth).” Depth, yes. But sophistication? Well, you could say that American bankers, empowered by a quarter-century of deregulatory zeal, led the world in finding sophisticated ways to enrich themselves by hiding risk and fooling investors.
And wide-open, loosely regulated financial systems characterized many of the other recipients of large capital inflows. This may explain the almost eerie correlation between conservative praise two or three years ago and economic disaster today. “Reforms have made Iceland a Nordic tiger,” declared a paper from the Cato Institute. “How Ireland Became the Celtic Tiger” was the title of one Heritage Foundation article; “The Estonian Economic Miracle” was the title of another. All three nations are in deep crisis now.
(emphasis mine)
Keynes was right when he warned on how unrestricted torrents of capital could destabilize destroy an economy.
Sebelius to Head HHS
I really wanted Howard Dean, but Kathleen Sebelius is better than corporate whore and über lobbyist Tom Daschle. (Wasn’t fond of him when he was Dem leader in the Senate either)