Month: October 2009

Just When You Thought that the Karzai Family Could Not Get Any Sleazier

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Would you buy a used car from this man?

It turns out that Ahmed Wali Karzai, the brother of Hamid Karzai is multi-tasking something fierce, he’s not just a major figure in Afghan opium production, but he is also on the CIA payroll:

Ahmed Wali Karzai, the brother of the Afghan president and a suspected player in the country’s booming illegal opium trade, gets regular payments from the Central Intelligence Agency, and has for much of the past eight years, according to current and former American officials.

The agency pays Mr. Karzai for a variety of services, including helping to recruit an Afghan paramilitary force that operates at the C.I.A.’s direction in and around the southern city of Kandahar, Mr. Karzai’s home.

The article then notes that this “raises questions” about our current Afghanistan policy.

Well duh!!! The army fights the Taliban, which is supported to a large degree by opium money, and the CIA pays money to one of the biggest opium producers and smugglers in the region, which would imply that in some small part, the CIA is paying the Taliban to kill American troops.

Those boyz from Langley are such kidders.

Here’s a Shocker

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People who got laid off from Boeing have better mental health than those who remained:

Would it surprise you to learn that survivors can suffer just as much, if not more, than colleagues who get laid off? It certainly surprised a team of academic researchers who embedded themselves at Boeing (BA) from 1996 to 2006, a tumultuous decade during which the company laid off tens of thousands. The results of the study will appear next year in a Yale University Press book called Turbulence: Boeing and the State of American Workers and Managers. “How much better off the laid-off were was stunning and shocking to us,” says Sarah Moore, a University of Puget Sound industrial psychology professor who is one of the book’s four authors. “So much of the literature talks about how dreadful unemployment is.”

…

In the greatest surprise of all, the researchers discovered that the people who had been laid off often were happier than those left behind. Many had new jobs, even if they didn’t always pay as well. Over and over, Moore says, average depression scores were nearly twice as great for those who stayed with Boeing vs. those who left. The laid-off were less likely to binge drink, often slept better, and had fewer chronic health problems.

(emphasis mine)

Boeing is claiming that morale has improved since they got the new company president it, but I kind of doubt that.

BTW, this kind of morale is one of the reasons that they are having the problems that they are having with the 787: When you outsource basic engineering to another firm, people in your firm, don’t make the extra effort to examine things that look funny to them.

Signs of the Apocalypse

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A retired chairman of Citigroup writing to the New York Times suggesting that the Glass-Steagall separation between commercial and investment banks should be re-instituted post haste:

To the Editor:

Re “Volcker’s Voice, Often Heeded, Fails to Sell a Bank Strategy” (front page, Oct. 21):

As another older banker and one who has experienced both the pre- and post-Glass-Steagall world, I would agree with Paul A. Volcker (and also Mervyn King, governor of the Bank of England) that some kind of separation between institutions that deal primarily in the capital markets and those involved in more traditional deposit-taking and working-capital finance makes sense.

This, in conjunction with more demanding capital requirements, would go a long way toward building a more robust financial sector.

John S. Reed
New York, Oct. 21, 2009

The writer is retired chairman of Citigroup.

Seriously, this is Stay-Puft Marshmallow Man kind of news.

H/t The Big Picture

Your Moment of Schadenfreude

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!So, it looks like yet another organization has had to downsize. It’s moving out of its headquarters, in the heart of Washington, DC, which they moved into about a year ago, because it’s too expensive for them now.

Who is this organization? Why it’s the Mortgage Bankers Association, of course, who have discovered that their new $76 million dollar digs are no longer affordable:

Since the purchase in May 2008, the U.S. economy has suffered one of the most severe recessions in a century, and the residential and commercial real estate markets have materially deteriorated. These factors, coupled with a challenging leasing environment, led the MBA Board to conclude that continued ownership of 1331 L Street was economically imprudent, and over the long term would impair MBA’s ability to continue providing our members with MBA’s full range of services.

My guess? That they got f$#@ed over by the fine print in their mortgage.

Economics Update

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Remember yesterday, when I said that consumer confidence fell? Well, that was the Conference Board. According to Nielsen, U.S. consumer confidence is up for the first time since 2007, as well as most of the rest of the world.

I think that both organizations conduct reputable surveys, but they got different answers because they asked different questions. This is something that one should consider for any survey.

In the world of slightly more objective metrics, we have durable goods orders rising for the 4th time in 6 months, which is good news, but New home sales unexpectedly fell.

I’m not sure why new home sales falling was “unexpected”. They are recorded when the contract is made, and not when they close, whereas existing home sales are recorded at closing, which means that people who had not bought new homes by the end of August, were really pushing it to qualify for the first time buyer tax credit, which require that the deal be closed by the end of November.

The end of the tax credit is why mortgage applications fell, even though rates fell.

In fact the divergence between new and existing home sales (more later) is a real indicator of how much that tax credit is goosing things.

In the world of central banks, the Norwegian central bank raised its benchmark rate, but the New Zealand bank kept its rate steady.

Of course, there is some apples and oranges here, because Norway raised its rate to 1.5%, and the Kiwis kept their rate steady at 2.5%.

In either case, the markets are not being optimistic, with oil falling below $78/bbl, and the dollar and yen strengthening on a flight to safety.

What an Unbelievably Lame Meat Market

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I went to a job fair today down in Rockville, MD.

I have never gotten a lead from going to a job fair, and I don’t expect one now, but I wanted to get some practice in “meet and greet”.

I did get some schwag*, a bottle opener and a 1 liter drinking bottle, but I don’t expect anything else.

45 minutes talking with a dozen or so firms and handing out resumes, and an hour there and back…Time that I will never get back.

*Some people claim that the term is swag, and that schwag is reserved for skanky and low quality weed.

Adventures in Wankitude

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Donald J. Boudreaux writing in (where else) The Wall Street Journal, suggests that insider trading is actually a good thing:

Time to stop telling horror stories. Federal agents are wasting their time slapping handcuffs on hedge fund traders like Raj Rajaratnam, the financier charged last week with trading on nonpublic information involving IBM, Google and other big companies. The reassuring truth: Insider trading is impossible to police and helpful to markets and investors. Parsing the difference between legal and illegal insider trading is futile—and a disservice to all investors. Far from being so injurious to the economy that its practice must be criminalized, insiders buying and selling stocks based on their knowledge play a critical role in keeping asset prices honest—in keeping prices from lying to the public about corporate realities.

Prohibitions on insider trading prevent the market from adjusting as quickly as possible to changes in the demand for, and supply of, corporate assets. The result is prices that lie.

Do you get it? It facilitates price discovery to allow people to make a profit with information that allows them to know which way the price is going.

This is much like the arguments for naked Credit Default Swap (CDS) contracts, where people are getting insurance for items in which they have no interest in its continued existence, and so give people a reason to burn down your house, or at least your bond, and it is just as vacuous.

A look at the Wiki reveals that this guy is a card carrying Randoid puke through and through.

H/t Jeff Matthews Is Not Making This Up, who does a much better job of demolishing this crap than I do, so just go and read his.

For your amusement, here are his last 2 ‘graphs:

Communism didn’t work for the simple reason that those who were first in line stole the means of production from the poor shlubs with whom they were supposed to share those means of production.

And unfettered insider information won’t work, for precisely the same reason.

New York Times Calls Out Obama on Torture

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Their editorial board just called out Obama as Bush II on torture and secrecy.

OP/EDs generally don’t mean much, but I think that the Times, at least in its unsigned editorials, is a barometer of a certain segment of the population, or at least that segment that doesn’t live inside the DC Beltway, and as such, this could mean a trend.

I’d give it about 5 to 1 against it being a trend, but a week ago, I would have said 20 to 1.

Look for the Union Label

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Here is an interesting fact: If you retired from Delphi, the bankrupt GM parts supplier, and you are a member of the UAW, your pension is safe, because the Union fought for contractual assurances that it would be safe, but for non-union middle management? Not so much:

But four months later, Mr. Gump finds himself in a far more perilous condition than his neighbors.

On his street, he is the only Delphi worker whose pension benefits may be cut. His neighbors all belong to unions and have received a lifeline in an unprecedented deal related to the government-supervised bankruptcy of General Motors, the onetime parent of Delphi. (G.M. spun off the parts division as a separate company 10 years ago.)

Mr. Gump and some 21,000 other salaried workers and retirees are furious that their roughly 46,000 union co-workers at Delphi have had their benefits restored, apparently with government largesse, and they have not.

This is not “government largesse”, of course, it’s because the Union used its clout to protect its people, and got agreements and guarantees from GM as a result.

Mr. Gump, like myself, is an engineer, who as a group are tremendously resistant to the idea of unionizing, and this cost him, and thousands like him at Delphi.

Signs of the Apocalypse: George F. Will Calls Out Dick Cheney

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On ABC’s This Week (Stephanopoulos), they have a discussion of Dick Cheney’s speech, where he says that Obama is taking too long to make up his mind.

George F. Will, yes that George F. Will, takes takes Cheney to task:

“A bit of dithering might have been in order before we went into Iraq in pursuit of non-existent weapons of mass destruction,” Will said on ABC’s “This Week. “For a representative of the Bush administration to accuse someone of taking too much time is missing the point. We have much more to fear in this town from hasty than from slow government action.”

When you have lost the guy who drilled Ronald Reagan for his debates with Jimmy Carter while using Carter’s stolen briefing books, you’ve lost everyone.

Start watching at about -11:10. (the timer on the clip counts down, not up)

Hitler tries a DMCA takedown

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You’ve seen it, the various mash-ups that have been done with the German movie Downfall (Der Untergang), where people take a rant by Hitler, as played by Bruno Ganz, and subtitle it, so it appears that he is ranting about XBox games, losing a parking space, becoming a meme, or Super Bowl Results.

Well, it now appears that Constantin Film Produktion GmbH is hitting Youtube with a flurry of DMCA takedown demands. As Brad Templeton of the EFF Notes, this is absurd. The copies do no damage to the producers of the movie, and people are watching this short bit (about 4 minutes) for the subtitles, not the film.

He makes some very good points about just how absurd the hoops that he had to jump through in order to make the film in full accordance of the DMCA, despite the fact that this is clearly fair use.

Go read,

He also gets jiggy with the Hitler rant, only this time, Hitler is assuming the role of a studio executive, not much of a stretch, and trying to lock down the content.

It’s very funny, and contains the classic line, “Have you seen how good that Führerbunker scene is? Bruno Ganz does a great Hitler!”

Video follows:

Make the Giants Pay for the Failed Giants

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I like this.

It appears that theHouse Financial Services Committee has gotten to work on a resolution (i.e. liquidation) process for failed mega-banks, and at its core is the idea that financial firms with more than $10 billion in assets would pay for the cost of unwinding failed firms:

The proposal would require financial firms with more than $10 billion of assets to pay for the unwinding of a collapsed competitor. The measure would also give the Federal Reserve the power to direct any large financial holding company to sell or transfer assets or stop certain activities if the central bank determined there could be a “threat to the safety and soundness of such company or to the financial stability of the United States.” This suggests the Fed would win new authority to order companies to shrink.

It’s a good step, though I really don’t want this under the Fed.

They have already proved themselves to be completely captured by Wall Street.

And Speaking of Stupid

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Yes, it appears that the US Chamber of Commerce, in a desperate bid for wankitude, had decided to sue the Yes Menfor their phony press release and press conference where they announced that the Chamber would support global warming legislation.

Here is a video of the press conference, complete with a real CoC representative bursting in and calling them out.

With the lawsuit, it will go viral:

Because Republicans are the Grown-Ups, Right

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Are you missing the message?


Does that make it clearer?

It appears that California Governor Arnold Schwarzenegger does not like California State Assemblyman Tom Ammiano, and vetoed a rather ordinary bill regarding how the Port of San Francisco is funded as a result.

The bill was about allowing San Francisco to use certain sorts of public financing with regard to their waterfront.

It appears that Ahnuld unexpectedly showed up to the Democratic Party gala, and while the reception was hostile, Ammiano’s was significantly more hostile than most of the rest of the people in the room.

He shouted, “You Lie,” and then walked out of the Governor’s speech saying that he should, “kiss my gay ass” which is an understandable reaction to a guy who vetoed Harvey Milk day.

Totally immature and classless, and so not surprising from a man who suggested that he wanted to flush Arianna Huffington’s head down the toilet in the gubernatorial debates.

You can see the letter, at least for now in all its glory straight from the Governor’s web page, (PDF), but in case you can’t I have a copy of the PDF below thanks to the magic of ScribD.

AB1176 Ammiano Veto Message

Gee, Here is a Surprise

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When president of the New York Fed, Timothy “Eddie Haskell” Geithner cut a secret deal on the credit default swaps of AIG.

It appears that AIG had already negotiated haircuts, on the order of 60¢ on the dollar, for the credit default swaps, but then Geithner stepped in, and decided to pay the counter parties, which included, big surprise, that great vampire squid wrapped around the face of humanity,* Goldman Sachs:

Part of a sentence in the document was crossed out. It contained a blank space that was intended to show the amount of the haircut the banks would take, according to people who saw the term sheet. After less than a week of private negotiations with the banks, the New York Fed instructed AIG to pay them par, or 100 cents on the dollar. The content of its deliberations has never been made public.

The argument was that some of the counter parties would have gone belly up if Geithner had not overpaid them, but I’m with John Carney of Clusterstock:

No doubt regulators would say that paying full price was necessary. But it was not.

A far better move would have been to transparently bailout firms that needed the additional capital instead of doing it in an under-handed way. Even better would have been to have forced those firms with too much exposure to AIG to seek out new capital in the markets, possibly converting debt to equity and wiping out existing shareholders. Goldman Sachs claims that it didn’t need the AIG bailout bucks to survive–a claim whose truth we’ll never actually know because of the bungled operation of the bailout.

Gee, I wonder why it was never made public?

Timothy Geithner should be fired, hell he should be fired and tarred and feathered.

*Alas, I cannot claim credit for this bon mot, it was coined by the great Matt Taibbi, in his article on the massive criminal conspiracy investment firm, The Great American Bubble Machine.

What the $#@! Were They Expecting?

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So, Microsoft teamed up with Seth MacFarlane for a Family Guy/American Dad special, and when they saw the show, they dropped it like it was nude pictures of Joe Lieberman.

They had promised, “an upcoming television event devoted to the comedy of Seth MacFarlane, creator of Family Guy, American Dad and The Cleveland Show” that would be, “unique Windows 7-branded programming that blends seamlessly with show content”.

So far, so good, but what they also got was”

According to reports, Redmond marketeers sat in on the recording of the variety special. While Windows marketing messages were presumably seamlessly integrated into the schtick, so were jokes about deaf people, the Holocaust, feminine hygiene and incest.

While Microsoft was clearly reaching for a hip and edgy audience, they presumably meant the “check me out, I’ve got an extra shot in this latte and I’m wearing an Hawaiian shirt” kind of edgy.

I am wondering if these guys ever watched Family Guy or American Dad, because this is pretty much what he does for humor.

Or, to quote Eric Duckman:

Bunch of thin-skinned, no-humor pansies! You tell them an ice-breaker or two about women’s libbers, gays, environmentalists, several minorities, the homeless, couple of religions, anorexics, obese people, the handicapped, old farts, baldness, and people who walk real goofy because they’ve just had a vasectomy, and suddenly, they get all sensitive, like I offended one of them or something!

Economics Update

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Case Shiller Graph Pron (Both) Courtesy Calculated Risk


Woah: Las Vegas -55%, Phoenix -53%, Miami -46.9%

In the, “Well, this can’t be good,” category, we have the Conference Board’s Consumer Confidence Index fell, with the numbers for the current economic situation falling to a 26 year low.

Still, we have seen the Case-Shiller home prices rising for the 4th straight month, though, with the expiration of the first time home buyer tax credit, and the end of the home buying season, I do not expect this to continue.

In the old standbys, oil was largely unchanged, remaining just below $80/bbl, and the dollar rose on concerns about the consumer confidence numbers.