Great googly moogly!
Year: 2009
Bringing on the Stupid, Lynn Jenkins (R-2nd District, Kansas)
She was talking about politics at a town hall, and let slip the following:
U.S. Rep. Lynn Jenkins offered encouragement to conservatives at a town hall forum that the Republican Party would embrace a ‘great white hope‘ capable of thwarting the political agenda endorsed by Democrats who control Congress and President Barack Obama.
I am speechless.
Deep Thought
Demotivator Edition
Sanity Brakes Out in Missile Defense
We now have a report that the US will abandon plans to station missile interceptors in Eastern Europe
Washington will scrap plans to put anti-missile bases in Poland and the Czech Republic and is looking at alternatives including Israel and Turkey, a Polish newspaper reported Aug. 27, citing U.S. officials.
The U.S. plan, intended for defense against attacks from Iran, has met with fierce objections from Russia, which regarded the eastern European bases as a threat to its own security.
…
This is good news. Not only was Eastern Europe a piss poor location for missile defense, because it leaves allies on the southern tier of NATO unprotected, but it is located so as to be a direct threat, and a means of surveillance of, all of the European territory of Russia.
I continue to maintain that the real goal of the missile system was to create hostility, which would, in the perception of the Dick Cheneys of the world, bolster the Republican Party.
Economics Update
Consumer confidence is at a 4 month low for August, Reuters/University of Michigan Surveys of Consumers, which compares with the Conference Board’s reading, which was up a few days back.
Both results are consistent in that they beat expectations, but this confuses the hell out of me. I think that future sentiment has a bigger role in the Conference Board’s survey, which may explain the difference.
We saw consumer spending rise by 0.2% in July, though income was flat, but this should be taken with a grain of salt, as the increase was entirely a consequence of the “Cash for Clunkers” program.
Meanwhile, in banking, the Federal Reserve is reducing the size of its Term Auction Facility (TAF) cash for sh$#pile auctions to banks, largely on the basis of reduced demand for them:
Banks are increasing lending to buyers of high-yield company loans and mortgage bonds at what may be the fastest pace since the credit-market debacle began in 2007.
……
“I am surprised by how quickly the market has become receptive to leverage again,” said Bob Franz, the co-head of syndicated loans in New York at Credit Suisse. The Swiss bank has seen increasing investor demand for financing to buy loans in the past two months, he said.
I’m not surprised. Modern investment banking is about making big bucks by scamming rubes like the one pictured on the right.
Unfortunately, said rube has the power to make every American taxpayer pay for his decisions.
Meanwhile, on the other side of both ponds, we have record unemployment and record deflation, while businesses in the UK cut investment spending at a record rate, so there is not much in the way of green shoots there.
In currency, the dollar fell, and more significantly, the “cost of borrowing dollars for three months slipped below the rate on similar loans in yen for the first time since 1993,” which implies that in the event of a flight to safety, that money will go toward Japan, where returns are now marginally higher.
In energy, oil rose slightly.
While I Would Not Trust Ron Paul with My Lunch Box,
When Barney Frank says that he supports an audit of the Federal Reserve, and that the bill will pass the House in October, and I believe that his assesment is an honest one.
That being said, I think that the Senate is more receptive to Bernanke’s protestations as to the need for opacity independence, and have been more thoroughly bribed by Wall Street are more concerned about market repercussions, while Obama’s economic advisors are Wall Street stooges and influence peddlers very supportive of the current regime at the Fed, which makes his signing a bill dubious.
As to Representative Paul, it’s a case of a stopped clock being right twice a day.
OMFG, We Were Completely Insane in 2006
Perhaps this will refresh your memory.
H/T Calculated Risk
Massachusetts Moving to Accelerate Kennedy Replacement
In 2004, the law was changed to create a replacement by special election, which means that Kennedy’s seat would be empty for at least 5 months, and now the state legislature is looking to change the law so that an interim appointment can be made before the special election.
It’s probably what should have been done in 2004.
Economics Update
Well, let’s start with the jobless numbers, where the press is reporting that initial claims fell last week, the 4 week moving average fell from 571K to 566.25K, and continuing claims fell by 119K to 6.13 million.
The lede is the fall in initial claims, only the the fall in initial claims was actually an increase:
The NYT article on weekly unemployment insurance (UI) claims carried the surprising headline: ‘first-time U.S. jobless claims fall again.’ The reason the headline is surprising is that claims rose the prior week, from 561,000 to 576,000, a number that was revised up to 580,000 in the new report. So, claims did not fall again.
The 4 week number is much more sound, because this us done all the time: comparing new numbers with revised ones, it’s a pet peeve of mine, along with the fact that no one ever mentions that the fall in continuing claims numbers is largely an artifact of people exhausting their benefits or moving to extended unemployment benefits.
**sigh**
I would also note that the GDP number for the 2nd quarter of 2009 contracted at a -1.0% annual rate, and that this is somehow considered good news.
Still, it looks like the GDP numbers have made people less risk averse, which has pushed Treasuries’ prices down, and their yield up.
Me, I’m more concerned by the fact that the FDIC’s problem bank list has mushroomed to 400.
It appears that the “improving” GDP numbers has reduced the need for a currency safe haven, pushing the dollar down, and they also pushed oil prices up.
Republicans Can Go Cheney Themselves
It appears that the bubble headed bleach blond of DC political coverage, Politico, is reporting that “key conservatives” are warning that liberals may inappropriately politicize Senator Kennedy’s death.
They call it the, “Wellstone Effect,” which I guess means that a legitimate outpouring of grief over the death of a hero will be used by the America hating right wing, and a complicit press, to create the illusion that real human grief is somehow a sinister conspiracy.
As to those right wingers who are somehow all upset that it appears that Kennedy’s name will now go on the healthcare reform bill, let me say this: Teddy Kennedy was at his worst better than your best at their best: Ronald Reagan was not fit to shine the sole of Ted Kennedy’s shoes with his tongue.
Economics Update, Yesterday’s
And actually Tuesday’s too.
Between helping my kids try out recipes for a cooking contest, and general laziness, I’ve let it slide.
In any case, the big news is that consumer confidence beat expectations, and actually went into “optimistic” territory, though as Dean Baker observesmost of the increse in the index is, “Attributable to a 10.1 percentage point increase in the expectations index,” which, “is much more volatile than the current conditions index and has little relationship to spending,” so the numbers are not about hopped up consumers bringing on a recovery.
We also have reports that home sales and durable goods orders have increased, and the American Trucking Association’s Tonnage Index (top pic) all increased in July, though I will address how the home sales/prices may be a Chimera in a later post, and the durable goods orders are not as good as they appears, ex-Boeing and defense, they actually fall:
Orders for non-defense capital goods excluding aircraft, a barometer of business investment, fell 0.3 percent in July after rising 3.6 percent in June.
Additionally, the Philadelphia Fed State Coincident Indicator numbers came out (bottom pic), and all but 4 states are still contracting.
It should be noted that mortgage apps were up slightly this week.
We also had a major downgrade of an insurer, Massachusetts Mutual Life Insurance, which had its rating cut from AAA to AA+ by S&P.
I expect there to be more of this in insurance.
Despite a near record auction, US Treasuries were basically unchanged.
Meanwhile, the consumer confidence drove the dollar up, though oil fell, on the expectation of increases in inventories in today’s report.
Holy Crap. The Fed is Going 1937 on Us
It’s the Recession all over again, with the Fed tightening money as something resembling a recovery begins:
Guess what? The Federal Reserve has not only stopped depositing copious amounts of liquidity into the economy — it now appears to be in the process of making a sizable withdrawal.
A close look at quantitative measures of monetary policy reveals a sudden change in trend. After growing at unprecedented rates for well over a year, these aggregates stopped rising several months ago and have since declined, according to data provided by the Federal Reserve Bank of St. Louis.
For example, the monetary base — the raw material for the money supply — has fallen at a seasonally adjusted annual rate of 8% from early April of this year through mid-August, after soaring at a 187% pace during the previous eight months.
I’m a pessimist, and I do not believe that the current recovery is “real”. I think that it is largely being driven by the Fed laundering money and pushing it into the equities markets (stocks), which has pushed up the indices, and that the rising stock market is creating the perception* of a recovery.
But even if I’m wrong, and the recovery is real, if very anemic, this is absolutely the wrong time to put your foot on the break.
*Yes, I know, perception is a BIG percentage of what constitutes a recession, but it is not everything.
The Best Speech that Ted Kennedy Ever Gave
How many good men must we give before we finally face the fact that the weakness in our society is a weakness in ourselves?
It wasn’t his speech at the Democratic National Convention in 1980.
It was in Sitka in 1968, though not too many people heard, or saw it, because it was given to the Alaska state Democratic Party Convention in Sitka in 1968, talking about the assassination of Martin Luther King and its aftermath.
Not a whole bunch of people have heard it, because he gave at the but my mom was in the audience, and she recalled looking around and watching political hacks on either side of her, with tears streaming down their faces.
You can find the speech, along with introductions by both Senator Ernest Gruening and Walter Eugene “Gene” Guess Speaker of the Alaska State House of Representatives, who my father worked with when we were in Alaska.
I downloaded the video to split and Youtube it from the Alaska state archives.
Part 1 of 2
Part 2 of 2
The Most Morally Reprehensible Thing that I Have Heard This Month
As Spencer Ackerman notes in his review of the 2004 CIA inspector general report on torture, amidst all the redacted paragraphs, was this:
The number of detainees in CIA custody is relatively small by comparison with those in U.S. military custody. Nevertheless, the Agency, like the military, has an interest in the disposition of detainees and particular interest in those who, if not kept in isolation, would likely divulge information about the circumstances of their detention.
The translation from the Orwellian, or perhaps translation to the Orwellian, it’s kind of hard to determine here in this specific instance of extreme Newspeak, but it comes to this:
We can’t release torture victims, nor can we try them, because we tortured them, and they will confirm that they have been tortrued.
Seriously, I think that Eric Arthur Blair is spinning in has grave at the speed of a Hitachi Deskstar 7K2000 hard drive.
Edward Moore “Ted” Kennedy 1932-2009
From His 1st campaign for SenateHe was the last of the Kennedy men of his generation.
Signs of the Apocalypse
Rents in New York City are falling:
Manhattan apartment rents fell as much as 10 percent in August from a year ago as tenants gained negotiating power in the recession and forced landlords to offer concessions.
10% ain’t some sort of rounding error.
Real estate has been declining for some time, but the fact that rents, not purchases of condos or co-ops are falling is an indicator that the downturn in real estate has a ways to go before truly hitting bottom.
Judge Orders Federal Reserve to Release Documents under FOIA.
District Judge Loretta Preska has ordered the Federal Reserve to turn over loan and collateral data for their emergency loans under the Freedom of Information Act.
This is very important news for a number of reasons:
- It means that the public will get to review what was actually in this part of the Fed’s “sh$%pile for cash” program.
- It will spawn other FOIA suits.
And most importantly:
- Is an unequivocal ruling by the courts that the Federal Reserve is a federal agency and has to abide by federal rules how they do business.
I’m fairly certain that the Fed will take this all the way to the Supreme Court if it can, because those folks really believe that seeing the man behind the curtain would destroy the United States of America.
They are wrong, of course, but it is clear that this is what they believe.
Breaking: Bernanke to Get 2nd Term
I still say that this is a bad thing.
A stake needs to be driven through the heart of the “rock star” Federal Reserve Chairman, though Bernanke is immeasurably better than the likely alternative, Larry Summers, who has never had a success outside of trading on his political connections and academe.
I may call my Senators and suggest that they vote against this.
A Bit of Meta, and Philosophy
Portrait of the Blogger as a Young AardvarkI post in my own name, with my own face, albeit a face* from 30 years ago.
I came to the decision not to use pseudonyms when I was at school, and I realized that everyone was calling me by my computer ID, Cerebus, as in Dave Sim’s comic book Aardvark, so I spent 2-3 years getting people to call me “Matthew” again.
So, now I stick with my name. It is a matter of personal aesthetics, not integrity, and no level of truth or integrity is intended by my use of my own name.
If you think that I am right, follow the links, and confirm.
If you think that I am wrong, follow the links, and confirm.
In any case, one of the writers (probably multiple writers, according to Felix Salmon) who posts as “Tyler Durden” at the blog financial zero hedge, got outed by the New York Post.
I figure an anonymous blogger who generates enough buzz to have someone hunt them down and out them deserves a look by me.
Zero hedge is now on my blogroll. They have an attitude, and I like attitude.
*And hair, which I miss.
Economics Update
Seeing as how I did not post on Friday, there was a tornado watch, and my kids were freaking, I’ll start with the big story from last week, which was that existing home sales rose to a 2 year high.
Of course, the 1st thing that comes to mind is that the National Association of Realtors (NAR) are supplying this data, and it’s suspect.
The 2nd thing that comes to mind is that a remarkably large portion of these sales are distressed.
The Big Picture runs the numbers more fully (chart pr0n is from this link, click to see full size), and while mentioning these two points, notes some other interesting bits of information:
- “If not for a surprise and suspect 16k increase in Northeast condo sales, Existing Home Sales would have been lower month-over-month and only up 12k units from July 2008, which was the worst year on record for housing.”
- Non-seasonally adjusted data actually shows a decrease, and given the high proportion of foreclosures and short sales, seasonal adjustment is actually not going to be accurate right now; the market is just too fracked right now.
- Prices are still falling.
- Sales less foreclosure activity (bottom pic) is way down.
Furthermore, we are also seeing the effect of the housing cash for clunkers tax credit, which allows a 10% tax credit (max $8K) on purchases for “New” (not owned a house in 3 years) buyers, but the home has to close before November 30, which really means having the sale done in the next 8 weeks or so, so it’s another blip, unless, as CR notes, the NAR and NAHB manage to successfully bribe lobby for an extension.
Note that the tax credit can be used for a down-payment, which further distorts the market.
He have a housing market that is really still heading down, albeit more slowly, despite massive federal subsidies.
If there were really a return to health in the housing market, then Taylor Bean, the 12th largest mortgage company in the US, would not be filing for bankruptcy.
As to housing news for the rest of us, the rate at which mortgage holders who have fallen behind catch up on their payments, the so-called “cure rate”, for holders of prime mortgages, has fallen to 6.6%, down from 45% in the years 2000-2006, and very close to the rate for Alt-A (4.3%) and sub-prime (5.3%).
Meanwhile, treasuries have risen again, driving yields down, though it is unclear how much is risk aversion increasing, and how much is the Federal Reserve buying more of the securities.
It does mean that investors believe that the Fed won’t be raising rates for a while yet, though the Bank of Israel just raised its benchmark rate, which indicates optimism on their part.
My guess is that they are wrong, simply because they are the 1st central bank to do so, and my money is on any first mover jumping the gun.
Then again, they could be right. The Chicago Fed July National Activity Index rose sharply in July, increasing to -0.74 in July from -1.82.
Even though the numbers still show contraction, the delta is impressive.
Meanwhile, in energy, crude oil is at a 10-month high on “green shoots” in the economy, and retail gasoline prices have remained basically unchanged, despite falls at the wholesale level.
The dollar was up slightly, largely in a holding pattern as traders wait for new consumer spending and housing data.