And here they are, ordered, and numbered.
Month: June 2009
Because There is a Critical Shortage of Ivy League Grads Who Have No Foreign Language Skills at the CIA
The CIA is launching a recruitment drive among laid off investment bankers, because, well, I guess they are sick and tired of people who can learned Arabic, Farsi, Pashtun, and Chinese from their parents, because they don’t fit in at the country club.
Obama’s Reform of Insurance
There is a lot of centralization of regulations at the federal level here.
Whether it’s good or not turns on one bit of information, and I’m not sure if it’s available yet.
If the regulations say that it in no way preempts stricter state regulation, it’s good. If it preempts stricter state regulation, it’s bad.
Because going to a single preemptive regulator is an invitation to regulatory capture that will make AIG look like a lemonade stand.
Obama Not Just Cheney in Drag, but Cheney’s Guardian Angel
Great googly moogly, their latest brief in court is even more absurd than their DOMA brief.
Hell, it’s more absurd than the Twinkie Defense, it’s the Jon Stewart Defense:
A federal judge yesterday sharply questioned an assertion by the Obama administration that former Vice President Richard B. Cheney’s statements to a special prosecutor about the Valerie Plame case must be kept secret, partly so they do not become fodder for Cheney’s political enemies or late-night commentary on “The Daily Show.”
…
….He told the judge that if Cheney’s remarks were published, then a future vice president asked to provide candid information during a criminal probe might refuse to do so out of concern “that it’s going to get on ‘The Daily Show’ ” or somehow be used as a political weapon.
Gee, I wish that I could tell police investigating a crime to go pound sand because somehow it might be embarrassing.
Making this even more absurd is that this argument was first put forward by Bush’s now disgraced acting head of the Office of Legal Counsel Stephen Bradbury. (See also here and here)
Economics Update
It’s a pretty slow day, at least until the FDIC gets into the act this evening.
In any case Treasuries are up up slightly, which means that yields are down, which removes a potential upward pressure on interest rates.
BTW, when one refers to debt instruments issued by the US Department of the Treasury, are they “Treasuries”, or “Treasurys”? I’m not sure.
In the meantime, the idea that the consumer may be engaging in a longer term is bolstered by statements by the CEO Coldwell Banker, who notes that, “The more important ‘move-up’ buyers were absent,” from the market.
People are paying down debt in a big way, as opposed to up-sizing.
All we have left is currency and energy, and the dollar continued to weaken as investors looked more towards return and less toward safety, while both crude oil and wholesale gasoline fell sharply on reports of inventory growth.
Don’t expect to see this at the pump for a while, the AAA reports that retail gasoline was up again, which makes it the 51st day since it’s fallen.
Too True
Financial Innovation, Financial Schminovation
Just look at an instrument called the reverse convertible.
It’s so corrupt that it boggles his mind:
In a reverse convertible, you give $100 to a bank for some period, like a year; it pays you a relatively high rate of interest, say 10%. The $100 is virtually invested (no one actually has to buy the stock) in some underlying stock, like Apple. If at the end of the period the stock is above a threshold, like $80, you get your $100 back; if it is below the threshold, you get the stock instead. (The terms can depend on whether the stock ever went below the threshold and where it is at the end of the period, which makes the deal worse for the investor, but that’s the basic idea.)
The simplest thing to compare this to is just buying the stock. Compared to buying the stock, there are three outcomes:
- The stock ends up below $80: In this case, the reverse convertible is slightly better, because you got the$10 in interest, which is probably more than the dividends you gave up.
- The stock ends up between $80 and $110: Again, the reverse convertible is better, because you got $110 (your principal plus interest); it’s a little better if the stock ends up close to $110, a lot better if the stock ends up at $81.*
- The stock ends up above $110: Here, you do anywhere from a little worse (if the stock ends at $111) to much, much, much worse (if the stock goes over $200).
And then he asks, with no small justification, “What the hell is the point of this product?”
This is why I think that a financial regime needs to be established with the idea that that which is not explicitly approved is prohibited, because the current regime, even under Obama’s updates, gives us this toxic waste.
Post Fires Dan Froomkin
Because it appears that one of their biggest, if not their biggest, drivers of traffic to their site, just too annoying, he had a brew up with the dishonest and delusional Charles Krauthammer about 2 weeks ago, and I’m sure that he and WaPo editorial chief Fred Hyatt comisserated over martinis and vicodin.
Glenn Greenwald is justifiably outraged.
All that I would add is that the WaPo still has space for Paul Wolfowitz.
It’s depressing. They have what I consider to be the finest comics section in the United States.
Reviews are Coming in On Obama Regulation Plan
And there is a lot of skepticism, particularly about expanding the Federal Reserve’s regulatory role, because, as Alan “Bubbles” demonstrated, you could end up with an incompetent lunatic running the most opaque organization in Washington, see here, here, here
They should be concerned. While insulation from oversight and public input might be a good thing when one manages the monetary system and has to create a recession to reign in inflation, it is not when you are talking about regulating agencies.
I think that this is something that Lawrence Summers wanted, because he believes that Obama will appoint him to succeed “Helicopter” Ben Bernanke, and he wants more authority at what he sees as his future position.
One thing that does concern me is that one of the biggest failures in this of failures, the corruption in the way ratings agencies like S&P and Moody’s operate, is largely untouched.
I’m unimpressed, but I agree with Paul Krugman when he says, “One thing I was concerned about was whether this consumer financial protection agency would be toothless , but the opposition of [a bank lobby group] makes me believe that it’s not such a bad idea after all,” when he talks about moving the regulation of consumer loans out of the Federal Reserve and move it to a dedicated consumer credit protection agency.
It’s too little, too timid, and too friendly to the forces that created this in the first place.
Tom Daschle Would Suck Off a Corpse for a Cheeseburger
To quote great Matt Taibbi, and there is no better evidence of this than his eagerness hook up with Viagra pitchman Bob Dole to kill the public option in healthcare reform, because, after all, his job is to lobby for, among other unsavory paracites, health insurance companies:
“While I feel very strongly that consumers should have the choice of a national, Medicare-like plan, my colleagues do not. . . But we were concerned that the ongoing health reform debate is beginning to show signs of fracture on the public plan issue, so in order to advance the process of developing bipartisan legislation and to move it forward, it’s time to find consensus here,” Daschle said.
So, Daschle’s solution is to have no real healthcare reform, but tho throw billions (trillions?) at his clients in the insurance industry and placing a mandate on the rest of the country.
Tom Daschle makes me happy that Harry Reid is now Senate Majority Leader….I can’t believe that I just said that.
Wankers of the Day
The nutjobs at PETA, who are complaining about Obama swatting a fly during an interview.
Seriously, if they weren’t able to make gullible celebrities strip for the camera, they would have no credibility at all.
Economics Update
Well, I’ve missed a point on jobless claim numbers, which came out today, and showed increasing initial jobless claims, from 605,000 to 608,000, still into what Atrios calls “holy crap” territory, but that continuing claims fell from 6.74 million to 6.69 million.
I generally find continuing claims to be a better metric, but, as Susie Madrak notes, continuing claims do not count people whose benefits have been exhausted.
I’m not sure how to account for this in the data, but it is a factor.
On the other hand, we do have some unequivocally good news in the April vehicle miles driven statistics from the DOT for the first time in 20 months, which could be an indicator of a recovery, though gas prices nationally are about a buck cheaper, which may also be goosing the driving numbers.
We also have the index of leading economic indicators rising, a good sign, though the Philadelphia Fed’s Business Outlook Survey improved significantly, though it still shows contraction, so it’s an positive 2nd derivative.
It also looks like yesterday’s report of declining mortgage bond yields did predict today’s report of falling mortgage rates, with the 30 year fixed rate dropping 21 basis points (0.21%) to 5.38%, which should relieve some of the pressure on housing.
Still, with Midtown Manhattan office rents falling, down 28% year over year (!), the other show in real estate, the commercial side, is clearly dropping.
A note on the recent rise in interest rates, the real yield (interest -inflation) on 10 year treasuries is at a 15 year high, over 5%, which indicates that that inflation fears might be overblown.
The energy and currency markets have viewed today’s news as generally positive though, with oil rising, though Nigerian unrest contributed to this, and the dollar falling.
Obama to California: Drop Dead*
I can;t say that I blame Barack Obama on the decision not to provide aid to California.
Unlike the situation with some cities in the 1970s, where much of the problem came from the fact that they were taxed to create suburban and exurban sprawl, getting little in return, California has had a failed government for at least the past 30 years, and the people who committed this crime are not the politicians, though they have been willing accomplices, but rather the whole population of the state, who have, though overuse and abuse of the initiative process, created this situation.
It’s not just prop 13, which capped property taxes to the benefit of corporate land owners, it’s a whole series of policies that have created mandates on the budget without a way to generate revenue.
I would suggest, in a sort of “fighting fire with fire” way, that someone in California circulate a new petition for a law that would require that anything passed by the initiative process that still has the force of law be brought up for a new vote every 10 years, or more accurately, every general statewide election closest to 10 years, so as not to have to pay for special elections, just the cost of putting it on the ballot.
I think that there would be a lot of trash that would be discarded, but would not be by the cowards in California state politics.
*Here is the historical reference to New York’s budget crisis in the 1970s.
Will Helicopter Ben Lie?
Because he will be testifying before the House Committee on Oversight and Government Reform as to whether or not he told Bank of America CEC Ken Lewis to break the law, and it appears to me that he has three options legally, admit to a felony, lie, or take the 5th, and if he takes the last route, Larry Summers is Chairman of the Fed before the July 4th weekend.
Moving Away from the USD as a Reserve Currency
Russia and China are taking steps to ease and encourage trade between the two countries in Rubles and Yuan.
This includes Ruble denominating Russian energy sales to China.
Whether this is a blip or a trend, only time will tell, but I’m inclined to believe that it is the latter.
Calling Cheney’s Bluff
There is a 2004 report by the CIA on torture, the so called “Holy Grail,” (also here) and, according to Congressional sources who have seen the classified document, it completely demolishes Dick Cheney’s arguments.
It shows what we already know: Torture does not work, and torture did not work.
This should be released, but Obama and His Clueless Minions™, will try everything possible to prevent it, because the more evidence that comes out, the greater the push for prosecutions, because it will show what was done, and that Bush and His Evil Minions™ were told that it did not work.
The Obama administration believes that he needs bipartisan support to implement his agenda, and that prosecutions and investigations of Cheney/Rumsfeld/etc. will prevent this.
The truth is that neither Social Security or Medicare/Medicaid passed with very few Republican votes(none in the case of Social Security), and the benefits of these programs are legion.
The other fact is that the big items on Obama’s agenda would require Republicans to cut their own throats to support him.
Republican support of new financial regulation and stimulus would require them declare that their guiding governmental philosophy since Reagan is a failure, and Republican support for a good public healthcare option would add at least 20 years to their time in the minority, because everyone in the United States would see the personal benefit to “big government”.
Simply put, it is not realistic to expect people to commit suicide for you, particularly when they are your opposition, but Obama continues to work for this, because, he believes that reasonable discourse and his eloquence will work.
This is a delusion. Not only do today’s Republicans not understand the concept of loyal opposition, it is not reasonable for them to support him, because the political fallout is all negative for them.
$13.9 Trillion
That’s what the Federal Reserve and the US Treasury have committed to spending to bailout the banks
That’s roughly 90% the GDP of the US.
We could give everyone healthcare for about 5½ years with that money, but we are bailing out rich corrupt idiots instead.
In the Event of Rapture, I Do Pet Sitting
Seriously, for only $50.00, people in the Kansas City area can get someone to take care of their pets while they go to heaven.
He’s an atheist, so there is no risk of him being taken too.
I wonder how much he made.
Makes me think of the Depeche Mode song, Blasphemous Rumor.
I’ve Need Help to Grok Twitter
Because it appears to be a remarkable tool for heckling people.
I’m logged in, and I can search for stuff, but it appears that a lot of people who use it find a lot of utility that I simply miss.
Case in point: Pete Hoekstra (R-Clueless) got today’s talking point, which was that being a Republican in the current Congress was a lot like the Iranian protesters being beaten and shot:
Iranian twitter activity similar to what we did in House last year when Republicans were shut down in the House.
Great googly moogly, it’s stupid, and there are hundreds of parodies out there, including a blog which has LOLZed some of the tweets:
Economics Update
So, we have the inflation numbers for May, and the CPI was up 0.1% over April, and down 1.3% year over year, the biggest price decline since April, 1950.
The deflation would have been worse, but for the ramp up in retail gasoline prices, which continues on its tear, with prices having risen for 50 straight days.
In the mean time, banking is getting interesting, with S&P cutting ratings on 18 major banks, including Wells Fargo, Capital One, BB&T.
Additionally, you have credit default swaps (CDS) have shown their largest 3 day in over 3 months, which indicates that there is a belief that the risks of default on corporate bonds is getting worse.
The fact that treasuries have staged a mini-rally, with prices up and yields down, is either a measure of concern about corporate bonds, or relief about the low inflation numbers, I’m not sure which.
Real estate is full of mixed signals. Mortgage applications fell to a 7 month low, largely on the relatively high interest rates, but mortgage bond yields have been falling for a week, which would point toward lower rates in the future.
The low inflation is perceived, to be a good marker for recovery, which pushed the dollar down, because of less demand for the $US safe haven.
Oil is getting just plain flaky. It finished the day up, to $71.03/bbl, though it dropped like a stone earlier in the day following news that gasoline stockpiles rose by 3.4 million bbl this week.
I’m not certain where oil is going, but the recent volatility seems to indicate that it is going somewhere in the near term, probably up.