Year: 2009

Have You Heard the Latest Polish Joke

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It appears that the Irish police have been looking for the worst driver in that nation.

One Prawo Jazdy has been ticketed all over the Emerald Isle, but they have been un able to track him down, because each time that he was stopped, his contact information was different.

So the Irish Garda has had capturing this scofflaw as a major priority for some time now.

Well, I’m sure that if any of my readers read Polish are now laughing hysterically, because Prawo Jazdy means “drivers license” in that language.

Move along here, nothing to see.

What David Said

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David Sirota notes that the push by the ‘Phants to cut retiree healthcare and pensions may create a profound change in labor negotiations.

This makes sense. Why negotiate for pension benefits or health insurance for retirees if you cannot trust the company to be there when the bill comes due.

Just go for the money up front:

Now, I think workers should always drive a hard bargain, but I also think that we don’t want to have an economy that effectively tells workers that they should never trust the future commitments of employers and that they therefore should be willing to destroy a company in order to get cash/benefits up front.

And that’s what slashing autoworkers’ health care and retiree benefits would do: It would likely make unions far more rigid in their future negotiations with all employers. That, of course, would be rational behavior by unions – having learned that employers’ future commitments cannot be trusted, they would simply never be flexible in trading wages for future benefits.

Somehow, the right wing thinks that contracts are sacred, so no cramdowns on mortgages, unless, of course they are with their employees, in which case, they are mere scribblings in the sand…..on a beach….before a hurricane hits.

Fear and Loathing in Euro Missile Defense

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Click Pictures for full size images
Tehran to DC


Masshad to Washington, DC


Masshad to San Francisco


Masshad to Rome


Masshad to Madrid


Masshad to Istambul


Masshad to Athens


Masshad to Chicago

I’m thoroughly skeptical of BMD systems to begin with, particularly the current Ground-Based Midcourse Defense system.

The technology for decoys is simply too easy, it’s basically the same as the shiny metalized children’s balloons you can get at party city, and striking a reentry vehicle when closing speeds are in excess of a mile per second seems to me to involve awfully long odds.

I call it “faith based missile defense,” and one of the earliest goals of the Bush administration was to ensure that it be deployed into service come hell or high water, on the theory that once it was there, it would be politically costly to remove it.

OK, so we all know the game, scary Persians are going to lob an IRBM at Europe, so we have to put an Ballistic Missile Defense (BMD) system into Poland, so as to protect everyone.

Thing is, Poland is a pretty crappy place to put a BMD system to protect our NATO allies, and this installation, along with the associated radar at Brdy in the Czech Republic* and it’s gotten the Russians absolutely batsh$# insane.

If you figure out the trajectory of a Ballistic missile,† and the tools to the this can be found in a number of places on the web, the location does not make sense.

It does not protect Turkey, Greece, Spain, Portugal, Bulgaria, Romania, Slovenia, or southern France.

I’ve had discussions with people sho have suggested that it would protect the eastern seaboard, and it would, if you launched the missiles from downtown Tehran, but just like our ballistic missiles are not located on Washington DC or Crystal City, it’s unlikely that they would put their installation there.

They would want to locate it as far away from a potential aircraft carrier, NATO airbases in Turkey, and the US base at Diego Garcia.

This would put a missile base in the North East corner of the country about 500 miles east of Tehran, in the general vicinity of Masshad, the 2nd largest city in Iran.

Suddenly that interceptor in poland does not do such a good job protecting the east coast.

For an attack on the West Coast, it’s path is too far from either Poland, or the base at Fort Greely, and the installation at Vandenberg seems iffy for covering San Francisco and points north.

Now, the folks the Missile defense agency claim that the installation in Poland is unable to intercept Russian ICBMs (bottom picture), but unsurprisingly the Russians do not believe them.

The Russians did offer a site at Qabala, which they rent from Azerbaijan, if the US dropped the Polish installation, but the respons, at least by Bush and His Evil Minions™ was to go pound sand.

In any case, it’s clear that Azerbaijan, Turkmenestan, Uzbekistan, and Georgia would be prime locations for such a site, though there are serious political issues there, but sites in Turkey, Romania, or Bulgaria would provide better coverage of Europe, and might have a shot at intercepting something headed for Chicagoland, which none of the current installations do.

*In fact, the radar, which can surveil all the airspace in European Russia, may be more of a sticking point than the missile base in Poland.
†I used Google Maps. Go there, then click “my maps”, and then click on “browse the directory”, and click on the distance measurement tool, and it will compute great circle‡ distances, which is what modern aircraft, and ballistic missiles, do .
‡It’s the shortest distance between two points on a sphere. The straight line on a Mercator projection is actually longer. It’s what you would get if you used a globe, and a tight string between two points on that globe.

Crap

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Avigdor Lieberman, the head the #3 Yisrael Beiteinu Party just threw his support to Benyaman Netanyahu.

The question here is whether Yisrael Beiteinu demand the bigoted part of his party’s platform, or the secular part of his party’s platform to be Likud’s coalition partner.

The nature of Israeli politics is that he can only look for accommodations on one of these issues, particularly since his presence in the coalition would appear rule out a 4 way coalition between the 4 largest parties, Likud, Kadima, Yisrael Beiteinu, and Labor.

Schadenfreude, Sweet Schadenfreude

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Goldman Sachs partners are being forced to borrow money to cover margin calls on their shares:

Several Goldman Sachs partners have leveraged their Goldman Sachs stock to buy alternative investments such as hedge funds & private equity, and they have done so through their Goldman Sachs brokerage accounts.

But Goldman stock has declined in value by more than 50 percent since last spring, meaning that Goldman Sachs is in the awkward position of making margin calls on its own partners, who can’t meet those calls because their alternative investments are underwater and they don’t have enough cash on hand.

Now those partners are being forced to borrow money—millions of dollars—to meet Goldman Sachs’ own margin calls.

(emphasis mine)

That’s some yummy schadenfreude….Until you realize that, even if completely wiped out, they are still worth millions….sigh.

I Have to Admire this Legal Stragegy

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Muntadar al-Zaidi, the Iraqi shoe throwing journalist, has a novel defense against charges that he assaulted a foreign dignitary who was a guest of the Iraqi Prime Minister:

Zaidi, 30, who is charged with assaulting a foreign head of state, posited that Bush’s Dec. 14 trip to Baghdad was not an official visit by a foreign dignitary because he arrived in the country without prior notice and didn’t leave the Green Zone, which at the time was still under U.S. control.

“I am charged now with attacking the prime minister’s guest,” he said stoically, making his first public remarks since the incident. “We Arabs are famous for being generous with guests. But Bush and his soldiers have been here for six years. Guests should knock on the door. Those who come sneaking in are not guests.”

Roughly an hour into the hearing, Presiding Judge Abdul Amir al-Rubaie announced that he would postpone the proceeding until March 12 to seek an opinion from the Iraqi government about whether Bush’s swan song visit to Baghdad was, in fact, an “official” one.

True to form, and unlike the statements made by Chinese Premier Wen Jiabao following a similar incident, when he asked for his show thrower to be released, Bush has made no statement regarding the fate of Zaidi, who has already been tortured by Iraqi authorities.

Economics Update

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Well, we have another Asian economy cratering in Q4 of 2008, with Taiwan’s GDP shrinking at an 8.36 annual rate. Unsurprisingly, they are now predicting a contraction for 2009.

This is “post Berlin Wall coming down shock-treatment elderly begging in streets” numbers.

In the US, producer prices posted a large gain, 0.8%, or about a 9½% inflation rate. I’m not certain if this is good or bad news, as the concern right now is deflation, but the impetus for the jump seems to be massive cash infusions from the Fed and the Treasury, which implies that we may be tiptoeing toward Zimbabwe.

Still, the jobless report was brutal, with initial claims remaining at 627,000, and continuing claims jumping to 4.99 million, the highest number ever.

I wouldn’t expect manufacturing or building to be a part of a recovery any time soon though, as the Philadelphia Fed’s Business Outlook Survey hit a record low, as did the Architecture Billings Index (ABI).

Note that the ABI typically presages construction activity 9-12 months ahead.

Additionally, I think that we are near seeing some of the non AIG insurance giants failing, with the first indicator being that Prudential Financial Inc. being excluded from the Federal Reserve’s commercial paper program, because Fitch Ratings downgraded them.

Note that Prudential Financial Inc. is the parent of Prudential Insurance, and that the insurance division can still use the “Commercial Paper Funding Facility,” for a while, at least.

The dollar fell a bit today, largely on reduced concerns about the smaller nations in the Euro zone going completely broke.

In energy, oil rose, though it is still well below $40/bbl, because of a surprise drop in inventory.

More Calls to End “To Big to Fail”

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We are hearing more calls for breaking up the banking giant, this one from Rusty Cloutier, of MidSouth Bank, a regional institution.

Clouter, as CEO of a bank, obviously has an axe to grind, as the prospect of the banking giants getting massive bailouts makes it difficult for him to raise capital.

Right now, this doesn’t seem to be on the agenda, but three weeks none of the very serious people in Washington DC were willing to discuss it as anything but a joke, but yesterday hell froze over, and Alan Greenspan, longtime friend of Ayn Rand, said that it was the least bad solution.

Hopefully, we will see this bubble up over the next few weeks/months.

H/t Calculated Risk

Fire Robert Gates Today

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There is a fight brewing about whistleblowers in government service, and Robert Gates is fighting tooth and nail to stop meaningful whistleblower protections.

This is more than a fairness issue, this is a national security issue. The government, including defense and intelligence, simply do not work, and much of this comes from a lack of accountability, which has gotten worse over the past 8 years because of secrecy fetish of Bush and His Evil Minions™.

Excessive secrecy is a far greater threat to our national security than is excessive disclosure.

Google Adopts Take No Prisoner Policy Against Patent Trolls

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About 2 years ago, Google made a policy decision to stop settling law suits with patent trolls, including going after them for legal fees.

I think that we will see a lot more of this from companies with deep pockets, because paying people to make them go away has resulted in an explosion of law firms whose business model is to find dodgy undeveloped patents, and then use those to extract nuisance money.

It’s a protection racket.

It’s a good development, but the real solution is to change the law:

  • Eliminate the patent court, because when you create a body that just handles patents, patents handle everything.
  • Eliminate software, business plan, species, gene, and tax deduction patents (yes, you can patent a tax deduction).
    • Note that genetic technology can and should remain patentable, it’s the genes and the species that were not patentable until about a decade ago.
  • Treat patents like civil rights laws, allow the person who is restricted by the to file suit against the holder of the patent.

Patents are not about property, they are about encouraging innovation,* and our current regime is discouraging innovation.

*The Copyright Clause of the Constitution, “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” (emphasis mine)

Israel Demanding Shalit Return in Exchange for Truce

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It’s not going to happen, because if Hamas cuts a deal to release Shalit, even if it gets a truce and (somewhat more) open borders, it cuts its own throat.

Because Hamas’ credibility comes in large part from its absolutist positions,* a negotiation which results in Shalit’s release would be seen by many of their supporters as a capitulation and a defeat, and this would compromise their political viability, both in Gaza and in the West Bank.

The short form is that if Hamas did this, they would be signing their own death warrant.

*I was going to use the “takes no prisoners” metaphor, but given the situation here, it just doesn’t work.

Kyrgyzstan Makes it Official

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The Kyrgyz ruling party voted to close the airbases.

It comes down to three things:

  • The Kyrgyz wanted a better deal.
  • The initial deal mostly gave money to family the now overthrown despot, and the Kyrgyz were honked off by that.
  • A Kyrgyz citizen was shot on base by a US soldier, and no meaning action was taken by US authorities against the soldier, inflaming local anger.

This, along with Russia giving them a better offer, was more than enough for them to kick us out of their airbase.

Economics Update

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Well, I guess the lede is that the Federal Reserve is cutting its 2009 economic forecast….Reality has a way of doing that.

Real estate is ugly today, with housing starts and applications for building permits falling to record lows, which is not surprising as it’s clear that there is a significant overhang in inventory.

That overhang in inventory is why builder sentiment is at the staggering number 9, with 50 being neutral.

It’s not pessimism, it’s sanity.

We did get another jump in mortgage applications, but that’s just a refi surge when the numbers go below 5%.

We also saw a record slide in GDP for OECD nations in Q4 of 2008.

On the brighter side, I’m not in the Ukraine, where industrial output shrank by 34.1%, which is return to the stone age type numbers.

We also have record lows from Taiwan’s central bank, which cut its benchmark rate to 1.25%.

We also have some insurance news, including our friends the monoliner bond insurers.

First, we have MBIA splitting itself. It’s separating its municipal bond insurance from its mortgage backed securities interests, which is likely a good thing in the long run, though S&P downgraded them from AA to BBB+, which, while not junk bond status, is rather too close to junk bond status for comfort.

Additionally, Moodys cut ratings mortgage insurers MGIC, Radian, Republic, and Genwort.

We are actually seeing some indications that the price drops in commodities are dropping, most notably the Baltic Dry Index of shipping costs has doubled recently, which indicates more cargo, particularly in terms of raw material.

Obama’s housing rescue plan appears to have strengthened the dollar, and driven oil up today.