Month: March 2009

Netanyahu is Terrified of His Campaign Promises

No Comments

Benyamin Netanyahu is aggressively pursuing a coalition with Labor, and strange as it sounds, it might happen because Ehud Barak really wants to stay on as head of the Defense Ministry, though some of his fellow Laborites are aghast at the prospect.

I would also take issue with one of the points that the author of the second link, Jeff Barak, has with Avigdor Lieberman being the Foreign Minister: It’s actually one of the two positions where his positions are least likely to cause a problem, because his three basic planks are a two state solution (and as FM he won’t get to draw those boundaries), hostility to the Arab population inside the Green Line, and staunch secularism.

I’d much rather see him being the Minister of Religious Services, but when all is said and done, the FM position keeps him away from internal Israeli politics.

Bernie Sanders Blocks Gensler as CFTC Chairman

No Comments

I wholeheartedly approve of the distinguished gentleman’s decision to place a hold on the nomination of Gary Gensler to be chairman of the Commodity Futures Trading Commission.

Gensler (along with Geithner and Summers, but those guys are water under the bridge) fought long and hard for the Commodity Futures Modernization Act of 2000, first as Assistant Secretary of the Treasury, and then as Undersecretary of the Treasury, which deregulated derivatives and swaps, and is one of the architects of the current meltdown, and Sanders is 100% correct in objecting to his having a any role in further regulation of derivatives.

Then there is also the matter of his brother being hip deep in Wall Street too, running a fund for T. Rowe Price, and Gary Gensler himself is another Goldman Sachs alum.

Enough is enough. We need people who aren’t the ones who created the problem in the first place in charge of policing those who were.

Un-dirtyword-believable, and good for Sanders to stand up for a semblance of competence and honesty in Barack Obama’s economic team.

Common Sense on Pakistan

No Comments

It looks like the White House will be linking future aid to Pakistan to their performance fighting the Taliban and limiting cross border incursions.

This is a very good idea.

There are elements in Pakistan who are still supporting the Taliban, because they see it as a way of offsetting Indian influence in Afghanistan, and much of the military establishment that isn’t doing this is completely focused on a future conflict with India, so they do not spend resources to assert a level of control in the “tribal regions.”

If they realize that spare parts for their F-16s is contingent on their performance in keeping the Taliban from using northern Pakistan as a staging area, maybe elements of the Pakistani security apparatus will get on the ball, as opposed to spending most of their time and energy on planning for an apocalyptic conflict with India.

Economics Update

No Comments

Since we’ve already covered the Geithner political suicide pact economic plan, let’s lead off with housing.

Happy, happy, joy, joy, home sales rose 5.1% in February relative to January, seasonally adjusted, though people not so closely attached to the realty industry have noted that it’s
really a pretty modest rise, or note that home sales have fallen year over year, and that about 45% of these sales are distressed in some manner.

I would say that year over year is the only metric to apply, because the so called “seasonal adjustment” if it ever were valid, has become meaningless in the current collapsing market.

Internationally, we have another member of the 0% benchmark club, as the Bank of Israel has cut its benchmark rate to 0.50%.

In currency and commodities, the dollar is down, because people are less concerned about safe havens, so there is less dollar flight to safety, and copper and oil rose.

It appears that these markets like Geithner’s plans, because, they are over paid and over bonused trader types, I guess.

Governor Paterson Gets Clue

No Comments

So, we now have a New York Post reporter breathlessly reporting that he is planning a “secret” tax hike on the rich.

Well, considering the fact that the Wall Street masters of the universe upon whom he hoped to fund his reelection bid are now less popular than either Dick Cheney or a case of the clap,* this is not surprising, though according to Dicker, Paterson wants to appear to be against the tax hikes while pushing them through, which indicates once again that he has the political instincts of Kathleen Kennedy Townsend, or a packet of Fleishmann’s active dry yeast.*

My guess is that he’s flailing around because the polls show him being crushed by Andrew Cuomo in the primary, and by Rudolph Guiliani in the general by numbers that exceed what a banker can supply to him by the way of campaign funds.

*For some reason, I always confuse the two.†
†I love it when I get to “twofer” footnotes.

Geithner’s* Plan

No Comments

So, the plan has been announced, and it’s pretty much what I said over the weekend: A massive subsidy to big investment firms, and the little guy can’t get in on the “3% down and that’s all you lose” deal.

It’s the buy the sh%$pile with taxpayer money thing all over again….and again….and again.

Geithner has an OP/ED in the Wall Street Journal,† where he rolls out the Treasury’s new weasel words for financial toxic waste, “Legacy Assets.”

I’m sure that he thinks of Chernobyl as an “accelerated sunshine facility” too.

We know that the financial masters of the universe love the subsidies, because players like BlackRock and Pimco are falling all over themselves to get in.

I won’t go over the problems with the plan here, you can look at my Saturday post for that, but the short form is that Wall Street is mugging you.

*Really Barack Obama’s plan, because he is where the buck stops, though a lot of the blame goes to Larry Summers too.
†Which, considering the WSJ’s editorial page reputation for outright deception, is utterly appropriate.

Reality Sets In

No Comments

It appears that the economic Calvanism* of the past 3 decades is on the wane.

Michael Hiltzik notes that one of the characteristics of the AIG scandal is the reemergence of the concept of the “undeserving rich” in the public discourse:

That the point is even open for discussion suggests that a sea change is taking place on the American political scene. For decades, the wealthy have been held up as people to be admired, victors in the Darwinian economic struggle by virtue of their personal ingenuity and hard work.

Americans consistently supported fiscal policies that undermined middle- and working-class interests partially because they saw themselves as rich-people-in-waiting: Given time, toil and the magic of compound interest, anyone could retire a millionaire.

That mind-set has all but been eradicated by the damage sustained by the average worker’s nest egg, combined with the spectacle of bankers and financial engineers maintaining their lifestyles with multimillion-dollar bonuses while the submerged 99% struggle for oxygen.

Here’s hoping that this is a generational change, and not a 15 minute fad.

*Traditional Calvanism sees profit, and wealth, as a sign of God’s grace.

Bush Appointee Incompetent and Corrupt: Afghan Edition

No Comments

It looks like the US and its NATO allies are looking to appoint a Prime Minister to bypass and diminish Hamid Karzai’s role in the day to day operations in the Afghan government.

The US and its European allies are ­preparing to plant a high-profile figure in the heart of the Kabul government in a direct challenge to the Afghan president, Hamid Karzai, the Guardian has learned.

The creation of a new chief executive or prime ministerial role is aimed at bypassing Karzai. In a further dilution of his power, it is proposed that money be diverted from the Kabul government to the provinces. Many US and European officials have become disillusioned with the extent of the corruption and incompetence in the Karzai government, but most now believe there are no credible alternatives, and predict the Afghan president will win re-election in August.

Hooccoodanode that George “Heck of a job, Brownie” Bush would appoint people completely inept and corrupt to critical positions?

New York Times OP/ED Asks if Geithner/Summers/Bernanke is Obama’s Katrina Moment

No Comments

Frank Rich, who I generally find unobjectionable, but also unmemorable, asks this question, and I believe that he may be right.

I believe that Wall Street is being run by, and for, a corrupt class of overpaid crooks, and most of the country agrees with this, but Geithner/Summers/Bernanke believe that these folks posses the unique genius to fix the problem that they have created.

They are wrong, and unless, and until, the campaign to fix these things becomes a campaign against these folks too, a bit of reality that even perennial light weight Maureen Dowd gets, things will get worse.

These people don’t work for their banks or brokerages, they work for their own benefit at the expense of those banks or brokerages.

Body Armor for the Judean People’s Front Crack Suicide Squad

1 Comment

Judean People’s Front Crack Suicide Squad!
What, you haven’t seen Life of Brian? Rent it now!

You may, or not, be aware of the concept of reactive armor.

It’s used on a fair number of armored vehicles out there: It’s a box with explosives in it, and when struck by a round, it explodes, dissipating the jet from a shaped charge or altering the path of a kinetic energy penetrator dart.

Well, someone has taken the next forseeable step, and submitted a patent application for an exploding bullet proof vest:

As Dave Barry would say, “I am NOT making this up!”

Check out patent number 6474213, Reactive stiffening armor system, which proposes:

A reactive armor structure having an outer layer and a reactive element adjacent to and integral with the outer layer is provided. The reactive element provides an amount of support to the outer layer effective to restrain movement of the outer layer and to delay fracture of the outer layer when the outer layer is impacted by a projectile.

I wonder what happens when a limb is in the path of the detonation of:

10. The structure of claim 1, wherein the explosive material has a detonation velocity of from about 2 km/s to about 5 km/s.

…

24. The structure of claim 15 wherein said reactive material comprises a material selected from the group consisting of TNT, RDX, Comp-B, Octol, and nitromethane.

I’m not sure if it would be worse to be the guy in the armor, or the guy standing next to the guy in the armor.

A400M Troubles Continue

No Comments

Best evidence of this is that the seven partner nations in the program have agreed to a moratorium on cancellation until July.

They are not agreeing to continue, they are just saying that they won’t cancel in the next 4 months, because the program is 4 years behind schedule, and well over budget.

I think that the new lesson of defense procurement is never buy anything unless you can cancel it when costs escalate and schedule slips.

Geithner’s New Plan: Same Old, Same Old, Failure

No Comments

So, we now have a definitive leak of the features of Geithner’s plan to help the financial system, and it’s the same old, same old: The problem is not that the banks are insolvent, or that their assets are worthless piles of crap, it’s that the markets are just undervaluing them.

The basic provisions:

  • An auction of the big sh#@pile, which is a bad thing, because it only serves to expand taxpayer exposure.
  • The FDIC will lend about 85% of the money to buy this.
    • These FDIC loans will be non-recourse loans, which means that if those assets bought with that particular loan would be used to repay. Any further losses would be eaten by the taxpayer.
  • The Treasury will match, “the private money that each of the firms [4-5 investment firms hired by the Treasury, meaning Goldman and the rest of the usual suspects] puts up on a dollar-for-dollar basis with government money,” which means that the 15% that they have to buy to get the assets is now 7½%
  • The Treasury/Federal Reserve TALF lending program will be used to further expand lending to buy this toxic waste.

This is what Geithner has been pushing for a long time, some sort of program to overvalue assets at taxpayer expense, all while, “firmly against imposing any restrictions on pay for companies investing money in the rescue effort rather than receiving money from it,” except, of course, any participants in this are receiving federal money because of the subsidies.

Dean Baker notes that the that unlike Timothy “Eddie Haskell” Geithner and Lawrence “Shoggoth” Summers and their Evil Minions™, the current market values of the securities are probably accurate, because real estate prices remain 20% above the historical trend, and if houses fall another 20%, these mortgage backed securities now selling for 30¢ on the dollar, which are the very top tranches, would be near a dime on the dollar.

Paul Krugman correctly calls it, “an open invitation to play heads I win, tails the taxpayers lose,” policy, and Calculated Risk and Yves Smith are similarly disparaging, though John Cole is the one who best nails the situation:

The Illness- reckless and irresponsible betting led to huge losses
The Diagnosis- Insufficient gambling.
The Cure- a Trillion dollar stack of chips provided by the house.
The Prognosis- We are so screwed.”

Seriously, tag team of Geithner/Summers may very well be worse for the economy than Hank Paulson.

For your amusement, here is Rep Brad Sherman (D-CA) opening up a can of whup ass on the CNBC Wall Street apologists

Adblock

Boeing Unveils LO F-15

No Comments

It appears that Boeing is looking to extend the life of the F-15 Eagle with a technological update (also here and here) called the Silent Eagle.

The two most obvious changes are creating weapons bays in the conformal fuel tanks and the canted tails, though it is also reported that there is a fair amount of radar absorbent material (RAM) added, including a frangable gun cover that hearkens back to how armorers treated the guns in WWII.

There are apparently no radar blockers in the inlets, even though Boeing has extensive experience with them in the F/A-18 E/F, because of potential export issues.

This implies that Boeing has decided (correctly IMHO) that they have no chance of selling these to the USAF, who have eyes for nothing for the F-22 and F-35.

They are suggesting a $100m unit price, though it is not made clear in any of the articles as to whether this is unit price, or fly-away cost.

The implication is that $100m will be cheaper than the F-35 JSF, and perhaps this is less an exercise to sell more F-15s than it is to sell more F/A-18E/Fs by implying that the JSF will break 9 figures in cost.

If they are implying this, they are probably right. The JSF shows a lot of signs of cost escalation and schedule slippage.

Powerpoint courtesy of The DEW Line, video of missile actuator courtesy of Boeing.

Potential Rafale Sale to Libya

No Comments

It makes sense.

Khaddafi has signed a deal for 6 months exclusive negotiations for the Rafale.

This purchase actually makes sense for Libya, because they have a reasonable chance of being able to continue to operate the aircraft even in the face of an embargo by the US, such as the sort that grounded the Venezuelan F-16s, and the competitors, the Eurofighter Typhoon, and SAAB Gripen, both have significantly more US content.

This would be the first foreign sale of the Rafale, and I’m sure that the French foreign ministry and Dassault are both drooling at the prospect.

The Navy is Doing This Because the USAF Can’t Be Bothered

No Comments

After years of ground troops begging for something lower, slower, and with more short field capability, it is the US Navy that is considering a solution, the Super Tucano turboprop trainer configured for the light attack mission.

You could probably buy 50 of these aircraft for the price of one JSF, and it can loiter over the battle area for a much longer period of time, and spot things that the fast movers would miss.

Shades of the A-1 Skyraider, which wasn’t a USAF idea either.

Naval aviation is fighting it, because, well, has a propeller and all, but it looks like this will actually be used, because it’s what the guy on the ground needs.