Month: May 2009
Lend Me Your Ear*
Well, we now have a new theory on the fate artist Vincent Van Gogh’s ear, that rather than having cut it off himself, that it was as a result of a fight with fellow artist, and friend Paul Gaugin:
According to official versions, the disturbed Dutch painter cut off his ear with a razor after a row with Gauguin in 1888. Bleeding heavily, Van Gogh then walked to a brothel and presented the severed ear to an astonished prostitute called Rachel before going home to sleep in a blood-drenched bed.
But two German art historians, who have spent 10 years reviewing the police investigations, witness accounts and the artists’ letters, argue that Gauguin, a fencing ace, most likely sliced off the ear with his sword during a fight, and the two artists agreed to hush up the truth.
This is a definition of friendship of which I was previously unaware.
*You really didn’t think that I could pass up this pun.
Too Much Free Time
I assume no responsibility for any trampling, birdshot removal, or ingested cow poop.
It Looks Like the Classics are Coming Back
First, we have the return of a variant of Spanish Influenza (Swine Flu), and now we have reports of a spike in volcanic activity at Anak Krakatau, which in Indonesian, means “son of Krakatoa,” the small volcanic island that is the the volcano that emerged from the explosion of Krakatoa.
It’s kind of creepy when you think about it, stock market crash, Spanish Influenza, and now this.
What catastrophe is due to revisit us again? The Black Death? The 100 Years War? The Partridge Family?
Facebook Manners and You
L’Affaire Harman and L’Affaire Pelosi
Zachary Roth at TPMMuckraker uncovered this little gem from Newsweek in 2004:
Until a few weeks ago, Patrick Murray was just another ambitious Capitol Hill staffer. As a top aide to Rep. Porter Goss, the Republican chairman of the House intelligence committee, Murray had a reputation as a sharp-tongued partisan lawyer. When Democrats on the committee asked the CIA for information, Murray would cut them off, reminding the agency that only requests backed by the Republican majority should be honored. “He was just impossible,” says one staffer who dealt with him. “He was sarcastic, snide and had this uncanny ability to push people’s buttons.” One former CIA official told NEWSWEEK that Murray leaned on him more than once to declassify information so he could use it to “embarrass the Democrats.” Murray was irritated when the agency declined. He regarded much of the CIA as a nest of obstructionist bureaucrats, time-servers who had schemed to undermine the administration’s policies–especially in Iraq.
(Emphasis mine)
It is best to remember that Bush and His Evil Minions™ had 8 years to politicize the state security apparatus, driving out all but hardcore loyalists who would use the levers of the state in pursuit of their own political, partisan, and personal gain.
They have done their level best to poison the bureaucracy.
As such it is best to wait until a report is fully vetted and final before taking it at face value.
So then, what do we make of the reports that she was briefed in 2002 on the use of torture enhanced interrogation techniques in 2002 (here and here)
NOT ON THE TABLE! NOT ON THE TABLE!
After Pelosi’s non-performance regarding even considering impeachment investigations after the Dems took Congress in 2006 (see pic), I’m not generally inclined to give her the benefit of the doubt, but in this case, with a document that Leon Panetta felt compelled to include a cover letter noting that this is very preliminary.
Additionally, as Emptywheel (link above) notes, this “report” almost instantly hit both the mainstream and wingnut press (HumanEvents dot com).
Additionally, Greg Sargent notices that while there might have been a discussion of torture techniques, it is not clear in the document as to whether the Congress critters were told that the techniques were being used.
I do rather believe that Pelosi knew what was going on, and I would guess that it is at least even money that she was specifically briefed about it being done in an ongoing manner: It would explain her recalcitrance on impeachment, because the scandal could pull her down too.
I would also note that involving members of Congress in torture in this manner, so that they would be inclined to oppose any investigation or punitive action, sounds like SOP for Bush/Cheney.
A Loss in Red Sox Land
I never saw Dom or his brother Joe play, but there is many an older Red Sox fan who would maintain that Dom was a slightly better player, though I think that both Joe and Dom would insist that the best player was Vince, who had a 10 year career in the NL.
Be, all I can say is go Sox.
In honor of the late Steve Gilliard, “F%$# the f%$#ing Yankees.”
Moron
Yep, it’s Timothy “Eddie Haskell” Geithner again, who really does not have a f^%$ing clue.
In this case, it is his insistence that U.S. banks can earn their way out of the current hole that they dug themselves in:
Treasury Secretary Timothy Geithner is betting that U.S. banks can do something their Japanese counterparts were unable to accomplish in that country’s “lost decade” of the 1990s: earn their way out of trouble.
The stress-test results released yesterday by regulators found that the 19 largest banks face a $74.6 billion capital hole that may be filled mostly by private money. That compares with the hundreds of billions of dollars seen by outside analysts, including the International Monetary Fund, and takes into account banks’ projected earnings over the next two years.
The “stress-test results are an important step forward,” Geithner said in a statement announcing the results. “Americans should know that the government stands behind the banking system and that their deposits are safe.”
…
Geithner told reporters that regulators took a conservative approach to toting up potential credit losses and calculating the industry’s ability to absorb them through increased earnings. The forecast of future profits was at the “quite low end of analysts’ expectations,” he said.
(emphasis mine)
It is quite literally all a confidence game to him: If he can convince the American public to maintain their confidence in the banking system, then they will make so much money, from those FDIC subsidized loans, I guess, that they will earn their way out of this.
It’s also clear that the “stress test” was intended as a confidence building measure, whether it is justified or not.
When you look at the dictionary for the definition of “regulatory capture“, the process by, “which a government regulatory agency created to act in the public interest instead acts in favor of the commercial or special interests that dominate in the industry or sector it is charged with regulating,” you sill see this picture.
Great googly moogly! How stupid do they think that we are?
Who are they anyway? Maybe we can export them to Namibia.
EU Parliament Votes for Sanity
A number of copyright numnuts, in particular Nicholas Sarkozy, want the law to require ISPs to take down an account on an accusation from a license holder, but the Euro Parliament passed language saying that any take-down has to be in court:
But a battle has exploded in the last few weeks over a parliamentary amendment that aimed to prevent countries from passing legislation similar to France’s ‘three-strikes’ bill that would cut off internet access if users are repeatedly caught downloading music, films and other content without permission of the copyright holder.
…
France, wanting to save what has become a flagship piece of legislation for President Nicholas Sarkozy, whose wife is a pop star, lobbied other member states heavily on the issue.
…
Catherine Trautmann, the deputy responsible for shepherding the legislation through the parliament, said she was confident that the wording in the compromise meant that a court order was required before access could be cut.
French culture minister Christine Albanel meanwhile believed that the compromise meant that websurfers who had their internet access cut had a right to judicial appeal – but only after the deed had been done.
The deal unravelled on Wednesday morning however, when the full sitting of the parliament supported a late amendment 407 to 57, with 171 abstentions, re-inserting stronger language requiring governments to obtain a court ruling before access can be cut.
…
(emphasis mine)
I guess Sarko is big on this because he just knows that record distributors and movie studios are such honest and empathic people that they would never abuse this power.
This will probably push the bill into the next session, which promises to have even more consumer advocates.
Two snaps up.
Economics Update
So, the Bureau of Labor Statistics has its April employment report out, and non-farm payroll employment continued to decline in down 539,000, though this is a slower decline, and beat expectations though the unemployment rate rose to 0.4% to8.9%, a 25 year high.
Under the less restrictive, and to my mind more accurate U6, unemployment rose to 15.8%.
The picture (click for full size) shows the employment fall from peak compared with other recessions.
Meanwhile, wholesale inventories fell by 1.76%, more than the forecast of 1%, as retailers and manufacturers tried to adjust for reduced demand.
We also have some bad news in the financial industry, with Royal Bank of Scotland posting a loss after writing down risky assets, Commerzbank, Germany’s 2nd largest bank, reporting an €861 million loss, and our old friend AIG posted a loss of $4.5 billion. (AIG is the gift that keeps on giving.)
Meanwhile, all the optimism over the jobs report (Whee! !he 2nd derivative is positive!)has driven the dollar down and driven oil above $58.bbl.
I Didn’t Expect a Bloody Irish Inquisition!
The right to blaspheme is a basic human right. Or it should be in a modern democracy.
If your God can’t take me calling him a pig felcher, then he ain’t much of a God.
Of course, Ireland, notwithstanding its economic success until recently, is still very much a 3rd world nation, so the Irish Minister of Justice, Dermot Asshole Ahern, has decided to ignore the European Convention on Human Rights, and put forward a bill to make it crime, punishable by a fine of up to €100,000 to, utter or write anything “grossly abusive or insulting in relation to matters held sacred by any religion, thereby causing outrage among a substantial number of the adherents of that religion; and he or she intends, by the publication of the matter concerned, to cause such outrage”.
There is no institution that needs the air let out of it than organized religion, and the right of people to do this should not be abridged.
Corruption, Business as Usual in the Financial Markets
Some times you notice something, and think, “I’m gonna have to post about it later,” and by the time you do, the story has changed.
This is particularly true in corruption cases, where things move rather quickly.
Case in point, the corrupt, self dealing Chairman of the Federal Reserve Bank of New York, Stephen Friedman, who, “bought shares in Goldman Sachs in December, profiting to the tune of $1.7 million.“
Ordinarily not a problem, since the Federal Reserve does not regulate investment banks, but for a little fact, that in September, the Federal Reserve allowed Goldman Sachs to become a bank holding company, and hence was regulated by the Federal Reserve, and most particularly was regulated by, you guessed it, the Federal Reserve Bank of New York.
But of course, as Yves Smith so eloquently notes, “A Conflict of Interest is Not a Conflict of Interest If It Involves Goldman,” or as he said to the Wall Street Journal:
Last week, following questions from The Wall Street Journal, Mr. Friedman, 71 years old, disclosed he would step down from the New York Fed at year end. In an interview, he said he made the decision because the waiver letting him own Goldman stock and be a Goldman director expires at the end of the year. He added: “I see no conflict whatsoever in owning shares.”
Except of course, as Ms. Smith notes, he bought shares in a company that he was regulating, and he did so before the waiver was approved.
This is insider trading, pure and simple.
Of course, today we see have justice, Wall Street style, as Mr Friedman has resigned, effectively immediately, from the NY Fed.
That’s it. He gets to walk way and keep his money, there will almost certainly be no criminal investigation.
This is business as usual, and, yet again, all roads on corruption lead back to Goldman Sachs, the BCCI of Wall Street.
Taking these racketeers down them down must be a government priority.
Because the Political Culture is That Dysfunctional
Matthew Yglesias wonders why we have to beg the government in Islamabad to take action against the Pakistani Taliban as opposed to their begging for help, when it is clear that they are an existential threat to their government.
First and foremost, I think that the level of threat is exaggerated, but more importantly, the political culture of Pakistan is amongst the most profoundly dysfunctional in the world.
It has much to do with its founding as a nation, which was not so much born in nationalism, but British colonial tactic.
Simply put, the British maintained control in many of their colonies, particularly in what is now India and Pakistan, was to encourage ethnic rivalries, and so as movements for autonomy, and later independence, grew in India, the British authorities encouraged Muslim leaders to agitate for a separate state, which they believed would make the independence less likely.
This was followed by the war over Kashmir in 1947-8, in which the British, particularly Mountbatten, continued to meddle in South Asian affairs.
When combined with the later wars, particularly the humiliation suffered in the Bangladeshi war of independence, it left the state security apparatus, particularly the ISI, focused on one goal: to win the next war against India, and secure all of Kashmir.
This is not going to happen. India and Pakistan both have something on the order of 50 combat militarized nuclear warheads, and as such a full out shooting war would result in horrific losses to India, and something very close to the complete elimination of the Pakistani state.
Even so, there remain elements in the military, and the Pakistani intelligence service, the ISI, that remain exclusively focused on the prospect of a final apocalyptic battle with India.
As such, they support extreme Muslim fundamentalists on both sides of the border with Afghanistan, even though these are the same people who are a threat to the stability of the state, because they believe that the conflict with India is the primary focus of the state, and that by supporting these the Taliban, they can minimize India’s influence in Afghanistan.
Personally, I think that it’s nuts, and a does much harm to Pakistan, but that is what the mind set is.
Mustard?
Great googly moogly!
Commercial Real Estate Crash Hitting
With commercial mortgage delinquencies hitting an 11-Year High, (H/TCalculated Risk) the records only going back 11 years, we are starting to see what might very well be a worse crash in commercial real estate than we saw in housing, because typically, CRE mortgages need to be refinanced every 5 years.
Additionally, we have a report from Deutsche Ban suggesting that 2/3 of loans backed by mortgage backed securities (CMBS) will not be able to be financed if they come due between now and 2018.
While CMBS are only about ¼ of this market, it’s not unreasonable to assume that we could see similar numbers in the same range for other forms of financing, as the property remains under water.
Even if that number is only 20-30% of outstanding commercial markets, we are looking at a death spiral that will make the housing bubble pop look tame.
Just So You Know, There Are No Grown-Ups In Charge
Alan Grayson (D-FL) questioning the Inspector General for the Federal Reserve, and it appears that no one is in the process of reviewing any Federal Reserve activities.
Un-dirtyword believable.
The Federal Reserve needs to be reformed and made more transparent.
I don’t know of any specific allegations of corruption, but when you are seeing 9 trillion in transactions, and not even the attempt to see what is going on, I cannot imagine that someone out there is not lining their own pockets.
More Evidence that the Fix Was In on the Stree Tests
As Peter Boockvar observes, they can raise the capital through a simple accounting trick
Considering that they’ve already received $45b in preferred stock from the US taxpayer, an accounting maneuver of converting that to common can, Voila, cure their capital needs without raising a penny of new money, a move that even the magician David Copperfield would be in awe of.
Just delightful.
Everyone gets a gold star, and all the test takers are cheating.
Tom Ridge Not Running for PA Senate
I don’t think that he could have won the primary anyway, but this puts former head of the Club for Growth Pat Toomey in the driver’s seat for the ‘Phant 2010 PA Senate Nomination.
Also, considering that Toomey is a very heavy duty wing-nut, it puts whoever wins the Dem primary at a substantial advantage in the general election.
I even if I thought that a primary contest would make it more difficult for Dems to hold the seat, and I don’t, I just cannot see a decent candidate losing in Pennsylvania if they don’t screw it up.
Economics Update
I think that we have some promising news here, though, eternal bear that I am, believe it to be a pause rather than the start of a turn around.
That being said, first time jobless claims fell, as did the less noisy 4 week moving average (see pic), which makes 4 weeks for the 4 week moving average, though continuing claims rose 56K to 6.351 million, indicating that this might more that businesses are running out of people to lay off than people are being rehired.
That being said, the fact that the April retail sales numbers beat expectations is just generally good news.
I’m not sure, however, how they managed to beat expectations, what with consumer credit dropping a record $11.1 billion in March, which indicates that the consumer is retrenching.
My guess is that this is an artifact of tax refunds.
In Europe, we have the Bank of England holding rates steady and the ECB cutting rates by 250 basis points (¼%), and both have expanded their programs of “quantitative easing” (printing money).
These actions were not particularly aggressive, which meant that the dollar Euro, because they are simply less likely to debase the currency as much as Uncle Ben (Bernanke).
The concerns about the US money supply are also finding their way into the US Treasuries market, with interest rates on the latest bond sales exceeding expectations, because investors are worried about monetarily driven inflation.
Still, reading the tea leaves on real estate, things are not going well, with delinquencies on dues to homeowners associations, which tend to foreshadow mortgage defaults, growing rapidly from 2.8% last June to 5.3% today.
Additionally, you have condo and apartment sales in Manhattan declining precipitously, with sales falling 48% year over year. (!)
The fact that mortgage rates are trending higher is not a help here.
In the world outside of real estate, the transportation based indicators are not showing any sign of recovery either, with Suez Canal April revenues falling 22.7% YoY.
Still, oil traders are betting on increased demand for oil, which translates into increased economic activity, and so crude rose today.
Gee, This is Credible
The BJP is saying that if the US rescinds a tax break used to outsource workers that they will remove India from the nuclear deal with the US, and buy their civilian reactors from the French.
Note that the tax break subsidizes shipping jobs from America to India, but then again, as the spectacle of appropriations bills and the agriculture bill show, everyone wants their subsidy.
Of course, the French don’t subsidize outsourcing software and support to India, and the number of Francophones is relatively small in India, so the couldn’t move much business there if they tried.
Additionally, the BJP, the Hindu Nationalist (or as I like to call them, Fascist) Party is not the party in power, that’s the Congress Party, though there is a campaign ongoing.
It’s electioneering, and means nothing, though if I were Barack Obama, I would call their bluff.
It would not even effect the nuclear industry for the next few years, as lead times are very long for such projects.*
*Full disclosure, I did work for a brief time in the nuclear industry last year, on plant shutdown and cleanup of waste.