Year: 2009

Obama Considering Ditching Karzai

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Not a bad idea, since Karzai and his people are about the only people on the face of the earth worse at governance than Bush and His Evil Minions™:

The Bush administration’s close ties to the corrupt and ineffective Karzai government kept it in power long past its expiration date. During his tesimony, Gates wouldn’t say corruption reached into the “highest” levels of the Afghan government when prodded by one senator, settling for a more political “high levels” of government.

Since the Afghan people view the government in Kabul as corrupt, our propping it up does us no favors. Which is one of the reasons why Obama’s choice for Afghanistan/Pakistan special envoy, Amb. Richard Holbrooke, is such welcome news. Speaking last year at CSIS, Holbrooke made it clear he views Karzai as part of the problem, not the solution. He said the U.S. must stop trying to bolster the Karzai government in Kabul, which he called “weak and corrupt,” and focus more on governance in the provinces. “I don’t believe you can have a strong unitary government running the country from Kabul, its going to be a loosely governed country.” There is little risk of Afghanistan fragmenting, like so many feared might happen in Iraq, he said, as Afghans do not have “separatist tendencies.”

Gee, you think?

FWIW, I do not think that this was malice on the part of Bush, just an unwillingness to admit error.

I’m beginning to think that the willingness to admit error is among the rarest, and most beneficial, traits in a politician.

My Driveway Will Be Much Cleaner

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The Baltimore Examiner will cease publication on February 15.

It’s a free, and right wing, rag, that has continued to leave papers on my driveway whether I want them or not.

I’m not surprised. They set up shop in an expensive area, basically across the street from the Camden Yards ball park, and for a freebie paper, particularly one that sucked on the journalism side, they spent too much money on stuff like that.

Here is the memo to staff from management.

Iraq Denies License to Blackwater

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Iraq has notified the State Department of their decision, and the U.S. government will not renew their contract.

Hopefully, this is the start of a more general withdrawal of the use mercenary forces by the U.S. government.

Of course the problem is not limited to combat contractors (mercenaries), it’s also increasingly obvious that the explosion of contractors throughout the bureaucracy has created an explosion of fraud, waste, and abuse.

The Romans as Inspiration in the Banking Crisis

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Should Barnabas Francus hold the next hearing of his House banking committee atop this cliff?

Tom Ricks notes the similarities between the current financial crisis and the financial crisis of the Roman Empire in 33 CE.

It appears that regulations limiting the amount of interest charged caused a collapse of lending, and from there it became a collapse of property values.

Finally, Emperor Tiberius disperses something over 100 million sesterces to the banks with explicit instructions to lend to anyone who can provide collateral that is double the amount borrowed.

It is a little different, it’s not an insolvency problem, it’s an illiquidity problem, and as I have noted before, the prescription is rather different.

That being said, one of the things that Tiberius did does look rather appealing:

Tiberius also raised funds by accusing Sextus Marius, the richest man in Spain, of incest — almost certainly a trumped-up charge — and then having him thrown headlong from the Tarpeian Rock (see below), a cliff at the edge of Rome’s Capitoline Hill. “Tiberius kept his gold mines for himself,” Tacitus notes.

I want a bigger cliff though.

Speaking of Insubordination

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The presiding judge at Gitmo, Army Colonel James Pohl, is refusing to suspend one of the trials, and has scheduled the arraignment for February 9:

Hours after taking office last week, Obama ordered Guantanamo prosecutors to seek 120-day delays in all pending cases to give his administration time to decide whether to scrap the widely criticized tribunals created by the Bush administration to try suspected terrorists outside the regular U.S. court system.

But the judge, Army Colonel James Pohl, said the law underpinning the tribunals gives the presiding judges sole authority to delay cases. He ruled that postponing proceedings against Abd al Rahim al Nashiri would harm the public interest in a speedy trial.

Note that al Nashiri appears to be one of the “high value” defendants who was water boarded, and he has been held for over 5 years…so much for speedy trials.

Seriously, Bush and His Evil Minions™ did their level best to politicize every level of government, including the military.

This will be poisoning the military and the civilian bureaucracy for decades to come.

Obama Needs to Tell Ray Odierno to STFU

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Because it’s clear that General Odierno is doing his level best to box Obama in on Iraq:

Among those consulted by the president was Gen. Ray Odierno, the top commander in Iraq, who has developed a plan that would move slower than Mr. Obama’s campaign timetable, by pulling out two brigades over the next six months. In an interview in Iraq on Wednesday, General Odierno suggested that it might take the rest of the year to determine exactly when United States forces could be drawn down significantly.

This is borderline insubordinate.

A president needs his generals to tell him, and congress, the truth, but you don’t want them spouting off to the press in order to make your job more difficult.

If this is not slapped down now, it will only get worse.

Senators Levin and Grassley Move to Regulate Hedge Funds

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The Hedge Fund Transparency Act would force hedge funds to register with regulators, file annual disclosures, and cooperate with SEC investigators.

It’s a start.

The most worrisome thing, Madoff not withstanding, is not how hedge funds can break the law, but how much of what they do is legal, since a lot of it appears to be market manipulation and insider trading to my untrained eye.

White House Denies Non-Prosecution Promise

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An unnamed Holder aide is denying that he made any promise not to prosecute torture:

Eric Holder has not made any commitments about who would or would not be prosecuted. He explained his position to Senator Bond as he did in the public hearing and in his responses to written questions.

So it appears that Kit Bond’s statements to the Washington Times are now in dispute.

I really think that Eric Holder and Barack Obama both need to publicly disavow the news report.

Why Media Consolidation is a Bad Thing

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You know that when you go to a new city, you find a different alternative weekly.

What you may not know is that most of them are owned by one company, Village Voice Medis, and VVM has decided to drop all the comics that it is currently running from these publications.

So consolidation gets us a stupid and self-destructive decision, because the conglomerate has to hit “the numbers” for Wall Street, and then it immediately propagates throughout most of the media markets in the US.

Economics Update

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Well, the jobless numbers are out, and they are not pretty with initial claims running at 588,000,continuing claims rising 159,000 to 4.776 million, which is the highest number recorded since the 1967, when they started collecting the data, and the 4 week moving average rose by 24,250 to 542,500.

Additionally durable goods orders fell by 3.7% in 2008.

And if you are wondering if there is a segment of the banking industry that won’t need a bailout, stop wondering.

There isn’t a segment of the banking industry that is not in trouble, as regulators are not moving to inject capital into credit unions, which are traditionally the most conservative, and the safest of the bank like institutions.

The fact that new home sales have fallen to the lowest level ever recorded (recording started in 1963) probably has a lot to do with this.

Also, freight truck tonnage is cliff diving. (H/T Calculated Risk)

Meanwhile, the most healthy of the Big 3 (Big 2½) auto makers, Ford, just reported a larger-than-expected $5.9 billion loss in the last quarter.

In international finance New Zealand is aggressively dropping its benchmark interest rates too, with their central bank 150 basis points (1½%) to the record low of 3.5%.

About the only good news is that it appears that deflationary expectations are easing, as the spread between 10 year Treasury Inflation Protected Securities (TIPS)and 10 year nominal securities has risen about 1% for the first time since November 10.

Meanwhile, the dollar was mixed today, and oil fell on the housing news.

Google Sets Trap for Cable ISPs

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Well, I’m not sure if it is a trap, per se, since they announced its creation with a press release, but it certainly is a shot across the bow directed primarily at Comcast.

Google Inc on Wednesday unveiled a plan aimed at eventually letting computer users determine whether providers like Comcast Corp are inappropriately blocking or slowing their work online.

….

Google will provide academic researchers with 36 servers in 12 locations in the United States and Europe to analyze data, said its chief Internet guru, Vint Cerf, known as the “father of the Internet.”

Google Inc on Wednesday unveiled a plan aimed at eventually letting computer users determine whether providers like Comcast Corp are inappropriately blocking or slowing their work online.

The scheme is the latest bid in the debate over network neutrality, which pits content companies like Google against some Internet service providers.

The ISPs say they need to take reasonable steps to manage ever-growing traffic on their networks for the good of all users. Content and applications companies fear the providers have the power to discriminate, favoring some traffic over others.

Google will provide academic researchers with 36 servers in 12 locations in the United States and Europe to analyze data, said its chief Internet guru, Vint Cerf, known as the “father of the Internet.”

My guess is the first thing that they will discover is that Comcast is crippling competing VOIP applications, I’ve already heard reports of this anecdotally.

Bringing in Cerf was a masterstroke of publicity.

Canada: the Libs Cave

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So the liberals wimp out, and Michael Ignatieff, showing all the moral courage and intellect he showed when he supported the invasion of Iraq gives Stephen Harper’s merry bunch of radicals a “Get out of Jail Free” card, as New Democratic Party leader Jack Layton so ably noted.

What did he get? It appears that he got a statement from the Canadian finance minister that he was, “open to opposition suggestions.”

Ignatieff does not get it, but he just sold the country down the river, and the coalition cannot be reformed in the foreseeable future, so the Conservatives get to continue their goal of making Canada just like Texas.

Economics Update

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Well, the FOMC meeting ended, and they relased statement saying that they will stay at zero interest rates for some time.

Additionally, they are looking at, “Unconventional Measures,” which appear to include buying longer term Treasuries.

It appears that one of those steps is that they will write down a significant of the mortgage backed securities that they picked up in the Bear and AIG bailouts, a sort of voluntary “cram down”.

Europe seems to have stabilized, at least for now, with consumer sentiment steadying.

Meanwhile, mortgage applications fell sharply, as interest rates have risen, from 4.88% at the beginning of the year to 5.22% now, in anticipation of ballooning deficits.

Of course, if reports that Moody’s is considering cutting GE’s triple-A credit rating, are true, we’re in for another big shock.

Both oil and the dollar inched up today.