Month: October 2009

House Moves Against Insurance Company

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We have the House Judiciary Committee voting to strip insurance companies of their antitrust exemption, and the the House leadership is aggressively pushing an expansive model for the public option for health insurance.

This may very well be a winner. I would note that 3 ‘Phants crossed aisle in the HJC vote to strip the antitrust exemption, which is an indication of how unpopular the insurance companies have become.

When ¼ of the Republican members committee of the “party of no” vote for this, it is an indication of just how unpopular they are.

I am still not optimistic about the prospect for meaningful healthcare reform, but I am more optimistic, and is largely because the Democrats have largely found their feet, largely on the (largely true) message that insurance companies are evil.

The Warning

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The story Brooksley Born, and how her efforts to regulate derivatives, on Frontline.

It’s worth watching, even though it’s 55 minutes long.

I think that the description of Alan Greenspan is a very good argument for shorter terms and/or more restrictive term limits on members of the Federal Reserve.

Least Shocking Factoid of the Day

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It turns out that the Federal Housing Administration is ill-equipped to handle the explosion in mortgage loans that it is handling as a result of the private banks pulling back:

The Federal Housing Administration may be under-equipped to manage its exploding market share, according to an internal audit released last week. The report gave the FHA poor marks for its steps to screen lenders that are allowed to sell loans backed by the federal agency.

The FHA’s market share has grown sharply as the private mortgage market collapsed over the past two years, and the FHA now insures around one-quarter of all U.S. mortgages, up from around 2% in 2006. The FHA doesn’t actually make loans, and instead insures lenders against losses. To make FHA-backed loans, lenders and brokers must apply to the FHA to become certified by the agency.

The audit, by the inspector general for the Department of Housing and Urban Development, found that the agency was under-equipped to manage a big inflow in applications by lenders to make FHA-backed loans. The number of FHA-approved lenders more than tripled in 2008 to around 3,300 from 1,000 in 2007.

Gee, you think?

The people what cheated honest folks during the housing boom are going where the money is.

It’s another example of why the entire 60+ year focus on supporting home ownership of our government should be abandoned.

It gives us suburban sprawl, global warming, housing bubbles, mortgage fraud, and various other mishugas, all of it bad….He said from his home, which he bought with a mortgage, in a suburb of Baltimore, MD.

Insider Trading Wiretap May Be Result of Terror Investigation

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On top of his arrest for insider trading, Raja Rajaratnam now faces a civil suit over his alleged funding of the Tamil Tigers terror group.

Mr. Rajaratnam is a Tamil born in Sri Lanka, and he has given to organizations that have later been shut down and accused of funneling money to the LTTE, so it is hardly surprising that he was the subject of a wiretap.

My older post does not mention Tamil tiger link, but suggests that the introduction of wiretaps against Wall Street crooks is a good thing.

Unfortunately, it now appears that the wiretaps may not be a case of regulators choosing a tool to pursue fraud, but just an a terror investigation revealing a different crime.

Congress Passes Hate Crimes Legislation

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Obama is expected to sign it.

One surprise:

The 68-29 vote was a victory for civil rights groups that have long sought to expand the federal statute beyond attacks motivated by religion, race, color or national origin.

The bill, which President Obama is expected to sign, includes penalties for assaults based on a victim’s sexual orientation, gender, disability or gender identity.

(emphasis mine)

For some reason, I thought that disability was already a protected class.

In fact, Sharon,* who does special ed consulting and advocacy, thought that the disabled were already a protected class too.

*Love of my life, light of the cosmos, she who must be obeyed, my wife.

Because Nothing is More Important Than College Football

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Orrin Hatch is asking Barack Obama to investigate college football’s Bowl Championship Series to see if it violates antitrust law.

It appears that BYU and the University of Utah are at a disadvantage, and Hatch thinks something should be done.

Dude, how about a protest song on your next record.

Moron.

I will note that I think that the college sports system needs to be investigated. I think that the players are treated like plantation slaves, but I’m not a US Senator.

ouch

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Russian Woman Gives Birth to Giant Baby:

Russian woman, Svetlana Tagantseva, 28, a resident of the city of Samara, gave birth to a very large baby. The newborn, who looks like a six-month-old boy, weighs 6.75 kilos (15 lbs). The baby boy is 62 cm [24 ½ in (!)]tall.

Doctors of a local maternity hospital say that they have never seen such a large newborn in their entire life.

Svetlana was last seen brandishing a hammer and anvil and mumbling about her husband’s genitals.

Yet More Fed Ass Covering

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Gee, I guess that they aren’t done with trying to pretend that they care about the ordinary folks, because the Federal Reserve has now issued pay guidelines for banks, allegedly in an attempt to reduce risk.

I’ve had multipule posts about the Fed doing this so that they can keep or expand their regulatory purview, including that essay that I sent to the WaPo, and they just keep doing it.

Well, at least it makes my essay that much more timely.

Accountability on Wall Street, My Ass!!!

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Have you heard the latest? John Meriwether is setting up a new hedge fund.

Just who is John Meriwether, you ask?

Why he is a noted hedge fund manager, he:

  • Established Long term Capital Management
    • Which imploded in 1999, threatening to take down the entire financial system, until Alan “Bubbles” Greenspan used the Federal Reserve to bail his ass out.
  • Established JWM Partners.
    • Which he closed 3 months ago after losing 44% of his investors’ money.

So, after all that, he’s STILL in line to get to play with billions of dollars of other people’s money, and skim 2% of the principal, and 20% of any profits (HAH!!!) that he might earn.

Will no one rid us of these parasites?

I’m not suggesting murder, but I am saying that if I was on a jury, I would vote to acquit.

Congress Passes Limits on Military Aid to Pakistan

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Basically, after the clusterf%$# that was support for Pervez Musharraf and His Evil Minions™ by George W. Bush and His Evil Minions™, where military aid to Pakistan went to parts unknown, Congress has placed restrictions on military aid to ensure that it will go to fighting the Taliban and al Qaeda, and not to building up the military for a war with India…And yes, maybe it will reduce graft a bit too:

Military payments to Pakistan must be in the interests of U.S. national security and mustn’t “affect the balance of power in the region,” according to a provision attached to the defense authorization bill passed yesterday by the Senate.

The restriction comes as the Pakistani army continues its biggest offensive against militants in the northwestern tribal region bordering Afghanistan, where 28,000 soldiers have been deployed to fight guerrillas blamed for 80 percent of terrorist attacks in the country.

It’s about fracking time that we made it clear to Pakistan that we would not be supporting another useless and bloody war with India.

Economics Update

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Unemployment Chart Pr0n Courtesy Calculated Risk


Adjusted vs. Nonadjusted Claims Courtesy of J. Bradford DeLong


10 Year SA vs NSA, H/t The Reconstruction

It’s what Atrios calls “New Jobless Day,” and initial claims rose by 11K to a seasonally adjusted 531,000, but the 4-week moving average, which I consider to be a better metric, was basically flat, falling by 750 to 532,250, and continuing claims fell 98K to 5.92 million.

BTW, look at the graphs of the seasonally adjusted vs the non-seasonally adjusted numbers on the right.

I’m not sure how well the adjustments work in the current crisis, but it does smooth out the numbers somewhat, but you can clearly see some artifacts, January 2009, of the adjustments.

It’s even clearer in the bottom graph which goes back 10 years: Seasonal adjustment generally works, except when it doesn’t.

There is a potential cloud on the horizon from China, where authorities are starting to talk about reducing their economic stimulus package because of inflation concerns.

There is a possibility that a reduction in stimulus may have an oversize effect, particularly since official Chinese economic numbers are pretty Mickey Mouse.

If this is the case, it might put a further crimp in world trade.

In any case, the Conference Board’s Index of Leading Economic Indicators rose for the 6th straight month in September.

Calculated Risk: Apartment Rents “Plunge” in the West: also means that house prices have to fall to get back in line with rent to own ratios

In any case, the unemployment numbers drove oil prices down slightly, to $81.19/bbl, and the dollar strengthened slightly vs the Euro and yen.

Now With Whale Penis Leather Seats

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Dartz Prombron Monaco Red Diamond Edition

Just when you think that the world cannot get more crassly commercial, we are told that a Russian armored car manufacturer has created the Dartz Prombron Monaco Red Diamond Edition, which has:

  • Whale-penis leather upholstery.
  • Gold Plated bulletproof windows.
  • A Tungsten exhaust system.
  • Diamond and ruby encrusted gauges.

As well as a Kevlar skin, because, if it’s an armored car, you want a Kevlar skin.

Great googly moogly.

H/t Marginal Revolution.

Economics Update

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Unemployment by State, h/t Calculated Risk


Architectural Billings Index, h/t Calculated Risk

Permanent Layoffs, h/t macroblog, which led Calculated risk to note that that it’s not a jobless recovery, it’s a “job-loss” recovery

The Federal Reserve’s Beige Book, a collection of “anecdotal” data (it’s really more than “anecdotal”, but you know economists) about the economy, was released today, and it shows that the economy is stabilizing, with that data showing either flat, or slight upticks, in economic activity.

We also got the state by state unemployment report for September, and it is ugly. (see bottom pic)

In real estate, mortgage applications fell sharply on higher rates, and the Architectural Billings Index rose, but remained below 50, indicating further contraction in nonresidential construction

The news in the Far East was pretty good though, with the decline in Japanese exports slowing to a 10-month best, and China’s GDP growing by 8.9% year over year, though Chinese statistics are always somewhat suspect.

In energy, oil rose to a 1-year high, $81.37/bbl, and the dollar weakened to a 14 month low, hitting $1.5014:€1.0000, so the buck and a half barrier is broken again.