Video h/t Know Your Meme, and technically Caturday is Saturday, but I always do my cat blogging on Friday.
Month: November 2009
Deep Thought
H/t driftglass.
Update on the Fed Audit
Alan Grayson on the Bill
On Tuesday, we were getting reports from there was a conspiracy afoot to emasculate the bill in the dead of night, using an amendment put forward by Representative Mel Watt (D-NC) wherein the GAO could “audit” the Fed, but could not actually get detailed information. It actually made the Federal Reserve less transparent.
Yves Smith rather colorfully, and very accurately described the amendment as, “Tantamount to saying you are permitted to operate a strip club as long as the patrons are prohibited from looking at un or underclad bodies.” (heh)
What followed was a bit of theater, where the opponents of the audit, rolled out economists who argued that the audit proposal was destructive, but neglected to mention their own financial ties to the Federal Reserve:
But far from a broad cross-section, the “prominent economists” lobbying on behalf of the Watt bill are in fact deeply involved with the Federal Reserve. Seven of the eight are either currently on the Fed’s payroll or have been in the past.
The Fed connections are not outlined in the letter sent around to committee members on Wednesday, but are publicly discernible through a review of their resumes, which are all posted online.
It should also be noted that the publishing staff of almost every significant economic academic journal has similar conflicts of interest with regard to the Federal reserve.
Well, despite the best efforts of the Federal Reserve, and Barney Frank, and Mel Watt, the Paul/Grayson audit bill was passed by the House Finance Committee by a vote of 43-26, 15 Dems voted for it, in addition to all the Republicans.
Hopefully, this will progress further, but my guess is that the knives will be coming out on this.
Major props to Ryan Grim of HuffPo, he’s the author of the HuffPo links here, who has been on this like white on Rice.
Bye-Bye Ukraine
Both Sweden and Finland signed on to the new northern natural gas pipeline from Russia to Europe, meaning that in 2012, Ukraine will no longer be the only way for Russian gas to make it to Europe.
This means that gas transit fees to the Ukraine, and the price of natural gas sold to the Ukraine, as well as the gas that is “lost in transmission” (stolen) are all likely to decrease.
In the short term, it means that the Russians want to make sure not to honk off anyone with short term gas disruptions, hence the recent agreement between the two government to waive penalties for Ukraine buying less gas than agreed to in their contract, because they don’t need to when they are an IMF economic disaster zone.
I think that the new pipeline may be why the Azeris are talking about selling their gas to Asia, particularly the Chinese, rather than Europe right now too.
They realize that the Ukrainian pipeline is likely decreasing utility in the future, and they can hook into the Russian system in fairly quickly once the northern pipeline is completed, so having the option to selling to Asian markets is a plus.
More Ass Covering by the Fed
Once again, the Fed discovers consumers in order to forestall an audit, and the Consumer Financial Protection Agency taking over their purview.
This time, the Fed is going after fees on gift cards.
Seriously, is there anyone with two brain cells to rub together who does not understand that the Federal Reserve was hostile to the idea of actually enforcing consumer protections until Congress started about auditing it and taking away some of its enforcement power.
Deep Thought
If the credit crisis is over, and the recession is coming to an end, why are “Citigroup Inc. and JPMorgan Chase & Co. are hoarding cash as if another crisis were on the way?”
Methinks that something wicked this way lurks in off balance sheet entities.
Blue Dog Walking
Rep. Allen Boyd (FL-02), a prominent Blue Dog who voted against the Stimulus and the Healthcare Bill, is trailing state Senate Minority Leader Al Lawson in the primary, with Lawson leading 35%-31%.
Understand that the rule of thumb is that undecideds currently break about 2:1 for the challenger, and Boyd knows this, so he is already running ads in the district.
To be fair, this is not a Blue Dog in a solidly Democratic district, McCain got 54%, but it’s been a Democratic seat for decades (there was a guy who switched mid-term, and he got defeated the next election), and the congressional seat went Democratic by over 20 points.
I think that the district, and the nation, can be better served by someone less inclined to be reflexively right wing.
Of Course It’s Rahm
I’m shocked, shocked to find that gambling is going on here!
The House Hispanic Caucus is blaming Rahm Emanuel for the efforts to completely exclude illegal aliens from the health care system.
While I understand the argument that illegals should not get taxpayer money, to the degree that they participate in the plan, it lowers the cost for the rest of us, so this is literally cutting off one’s nose to spite one’s face.
Rahm Emanuel, and the Obama White House, are shocked (see pic), shocked, to find that there are people accusing them of race baiting on this bill.
Well, it’s not surprising, Emanuel has been demagoguing the immigration issue, with the help of his DINO friend, and clay headed quarterback Heath Shuler for years.
It took a revolt of the House Hispanic Caucus to stop him last time.
Rahm Emanuel’s modus operandi has always been to sh%$ on Democratic core constituencies wherever possible, and this has Rahm’s fingerprints all over it.
What’s more, looking at a time-line of his career, it’s pretty clear that if Rahm wants it, it’s bad for the Democrats.
Wrong!
Nancy Pelosi is now saying that any financial transaction tax must be internationally agreed on:
Any tax imposed on financial transactions would have to take effect internationally to keep Wall Street jobs and related business from moving overseas, U.S. House of Representatives Speaker Nancy Pelosi said on Thursday.
“It would have to be an international rule, not just a U.S. rule,” Pelosi said at a news conference. “We couldn’t do it alone, we’d have to do it as an international initiative.”
This is wrong on a number of levels:
- There is already such a tax in the UK, and it has been there for years, and London’s “The Street” still rivals Wall Street.
- The US had a tax on stock purchases well into the 1960s, and it did not chase investors over seas.
- The idea that much of the financial industry would go elsewhere is a bad thing is simply misguided. Above a certain proportion of GDP, it becomes a source of parasitic loss, and detracts from our economic well-being.
- If we wait for international consensus, it will never happen.
I’m just saying.
Zimbabwe Update
The big news is the political fight over a bill to reform the Reserve Bank of Zimbabwe, which after much conflict, was finally passed by Parliament.
What likely led to this meeting of the minds was evidence that the incompetent and corrupt management of RBZ Director Gideon Gono was driving away potential donors and foreign investors.
That being said, I do not think that the RBZ bill was why China has signed an $8 billion investment deal.
In any case, Gono was last seen attempting to strong-arm banks into lending to expropriated farms, which is not surprising as the ZANU-PF is stepping up its farm seizures for corrupt bureaucrats program.
In any case, the unity government is holding cabinet meetings again, which is a good sign, I guess.
Of more significance is the fact that Botswana President Ian Khama is calling for new elections and explicitly blaming the ZANU-PF for the lack of progress.
It’s nice that someone involved the SADC “Enable Mugabe Program” is pushing back.
Additionally, we are starting to see protests in Europe against the SADC’s support of Mugabe: Zimbabwe Vigil has petitioned the EU to suspend all aid to members of the SADC, which is a start.
More significant, though may be the fact that PM Morgan Tsvangirai is to meet with Libyan President Muammar Gaddafi, current chairman of the AU.
This is a positive development for a number of reasons:
- Gadaffi won’t run like a scared kitten at Mugabe’s accusations of being a “neocolonialist stooge”, because, after all, Ronald Reagan tried to kill him, and he blew up Pan Am flight 103.
- As head of the AU, he words have a lot of influence.
- As an oil exporter, his dollars have a lot of influence.
- Gadaffi is very interested in getting credibility on the world stage, and by taking on Mugabe aggressively, he gets that credibility with almost no risk involved.
So, after massive smuggling, murders by the authorities, and forced labor, the Kimberley Process decides against suspending Zimbabwe’s certification as a being not “conflict diamonds”, despite a
report from their own investigators saying that they should be suspended.
This reveals the Kimberly process a complete and utter joke, and on queue, once the threat of suspension is lifted, the New Reclamation Group Ltd. mining company sweeps in with a contract.
There is a promise by the Zimbabwe government not to export diamonds until measures are in place to prevent abuse, but I don’t trust this very much, if it comes from the Prime Minister’s office, then it means nothing, and if it comes from Mugabe, it’s a flat out lie.
Of note, The Rapaport Group and the RapNet Diamond Trading Network have announced that they are “implementing an immediate trading ban on all diamonds from Zimbabwe due to severe human rights violations in Marange,” and Leber Jeweler Inc. has announced the same.
Meanwhile, outside of the diamond trade, things continue apace, with Mugabe and the ZANU-PF planning to introduce a law which would require that foreign owned companies be majority black owned. Note: not even the majority locally owned, this is determined by the pigmentation of the equity holders.
ZANU-PF has become the party of Apartheid in Zimbabwe.
We also have continued use of the state security apparatus to intimidate the opposition, with the head of the national trade union being arrested on trumped up charges, as well as the increasingly bizarre trial of deputy agriculture minister-designate Roy Bennett.
What do we have on the case of Bennett, we have a judge who made statements at the trial of the chief witness against Bennett that indicate bias. This is important because this witness, Peter Hitschmann, has recanted his testimony and alleged that it was extracted by torture.
We also have the police presenting weapons that were not seized from Bennett’s house as evidence, and that the Defence is has a request to have the police log books on this matter made available to them, and the police, as well as the attorney general, are vociferously fighting this.
The Crazy Will Not End
A 52% Of Republicans believe that ACORN stole the election for Barack Obama in 2008.
This is not going to end well. These people are even stronger than the folks who claimed that Ross Perot stole the election for Clinton in 1992.
One needs to understand the difference between the opposition and the enemy, and understand that you cannot negotiate with the former.
Unfortunately, you can count the former in without running out of fingers.
New York’s Top Court Says that Public Institutions Can Recognize Out-of State Same Sex Marriages
Good.
Up Yours Tony Blair
So says the EU, who picked Belgium Prime Minister Herman Van Rompuy as the new European Union President.
Blair was trying hard to get that position, but my guess is that the whole “War Crime/Bush’s Poodle” thing did him in.
This is a Good Idea
Once again, Sheila Bair shows that she, a George W. Bush holdover, is the only one in this administration who gets it.
She is proposing that the FDIC require that the rates paid underwriters and ratings agencies be determined by the performance of the instruments that they handle:
he Federal Deposit Insurance Corp. may force underwriters and raters of asset-backed securities created by banks to be compensated based on the bonds’ performance, an agency official said.
Such a requirement may be part of new rules for bank securitizations that the FDIC staff proposes at an agency board meeting next month, Michael Krimminger, special adviser for policy to FDIC Chairman Sheila Bair, said today in a telephone interview.
I’m sure that Timothy “Eddie Haskell” Geithner hates this idea, because it makes his Wall Street peeps responsible for their actions, but that’s how he rolls.
Unfortunately, the scope is limited, because the FDIC’s rules only apply to banks, and not their parent companies, but this is an idea that should be implemented industry wide.
It would cost Wall Street a lot of money, but f$#@ them, they have a lot of our money to begin with.
God Bless the Onion
Area Man Passionate Defender Of What He Imagines Constitution To Be:
…..
“Right there in the preamble, the authors make their priorities clear: ‘one nation under God,'” said Mortensen, attributing to the Constitution a line from the Pledge of Allegiance, which itself did not include any reference to a deity until 1954. “Well, there’s a reason they put that right at the top.”
“Men like Madison and Jefferson were moved by the ideals of Christianity, and wanted the United States to reflect those values as a Christian nation,” continued Mortensen, referring to the “Father of the Constitution,” James Madison, considered by many historians to be an atheist, and Thomas Jefferson, an Enlightenment-era thinker who rejected the divinity of Christ and was in France at the time the document was written. “The words on the page speak for themselves.”
…..
Brilliant.
OK, this is Scary
Remember yesterday, when I said that 1 in 16 (6.25%) homes was delinquent or in foreclosure?
That number counted only those people who were more than 60 days delinquent, and it counted all homeowners.
If you count all delinquent mortgages, not just 60+ days, and do so as a percentage of the mortgages, not homeowners, then 14.41% of all mortgages were either behind a payment or in foreclosure, the highest number recorded since this statistic started being collected by the Mortgage Bankers’ Association in 1972.
That’s 1 in 7 mortgages.
We are unbelievably screwed.
Economics Update
Click for full size
The Number Needs to be Under 400,000
H/t Calculated Risk
The Index of Leading Economic Indicators rose for the 7th straight month, indicating that a recovery is underway, as does the Philadelphia Bank of the Federal Reserve’s survey of manufacturing hitting 16.7, the highest level since June, 2007.
Unemployment though, is not cooperating, with initial unemployment claims unchanged from last week, they are still 505,000, unemployed is still on a pace to increase.
Basically, if it is above 400K, it still sucks, and this applies to the 4 week moving average too, which fell to 514,000, down 6,500
The continuing claims numbers are better, down 39,000 to 5.61 million, but still pretty grim too.
I would note that the continuing claims number does not count people who have moved to extended benefits, and that jumped 119,000 to 4.16 million.
You do the math 39,000 on the up side, 119,000 on the down side, gives us 80,000 of ugly.
In any case, concerns about continued growth, which I think were driven by the lack of improvement in first time claims, has people fleeing to safety again, with yields on 3-month Treasury Bill maturing in January going negative for the first time since December of last year, because people are willing to pay to keep their money safe for the next month or so..
Additionally, we have the Bank of Japan sending out signals that it will be keeping rates low, because it is concerned about deflation.
These concerns have driven oil down and the dollar and yen up.
This is What You Get When You Go For Bipartisanship
Not only were there bogus tax cuts in the unemployment extension, in order to pick up a few Republican votes, it now appears that the extended benefits will expire at year’s end, because they were paying attention to the end of the year when they passed this bill just 2 weeks ago.
If the Republicans want to stop a bill like this, one that has a huge majority supporting it, they should be made to express their opposition on the floor. Spending a few months cajoling them is counter productive.
Stewart on Palin
When he says:
When you peel back the pretty, shooty layers of the Palin onion, there’s no onion. It’s just a conservative boiler plate mad lib: ‘Freedom is good and taxes are–ooh I need an adjective–how about, I don’t know, silly?’ And the worst part it’s a mad lib delivered as though it were the hard-earned wisdom of a life well lived.
It’s just magical, and it starts at 3:40, though the first part is amusing too.
It’s not as good as Stephen Colbert’s takedown of her (scroll down). But it is very good.
The Senate Healthcare Bill is Out
And, no surprise, it is much weaker tea than the house version:
Here is how the merged Senate bill compares to the legislation passed in the House. The merged Senate legislation has lower affordability standards, covers less people, invests less in prevention, does not require all large employers to provide health insurance, and includes a weaker public option. But the bill goes further in controlling health care spending and reducing the deficit.
I still don’t think that we will get a bill that will provide meaningful healthcare reform.
Too many people *cough* Barack Obama *cough* just want something that they can call healthcare reform.