Month: September 2010

Basel III

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Additional Capital Requirements


Phase In Schedule

I’ve been looking at the Basel III international banking proposals, and I find them rather weak tea.

The 10¢ tour of the proposal is that they are requiring more capital, 4.5% tier 1 capital (basically capital that can be redeemed for cash in a market essentially immediately), a further capital conservation buffer, and a “counter-cyclical” buffer that would kick in when times are good.

This will all be phased in over a 5 year period starting in 2013.

As to what it all means, I agree with Yves Smith that, “the reality is that a Basel III world will not look hugely different to the one from which the last crisis sprang.”

In particular, there is next to nothing on synchronizing accounting standards, which will send banks to places where they can call a bouquet of flowers a Tier 1 asset, does not deal with the shadow banking system in any meaningful way, and ignores the vast pit of putrescence that is the ratings agencies.

The Next Chapter of the Airbus/Boeing Pissing Contest

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And it does not involve the tanker.

The WTO, after ruling that Airbus was the recipient of illegal state subsidies, has now ruled that Boeing has also received billions of dollars in illegal state subsidies:

The long-running trans-Atlantic spat over government support of the world’s two biggest aircraft makers gained fresh momentum on Wednesday as a trade panel found that Boeing had received subsidies that violated global trade rules, people briefed on the decision said.

American lawmakers said on Wednesday that the subsidies, $5 billion from federal and state agencies, were just a fraction of the $24 billion that Europe had alleged and were far less sweeping than the benefits its rival, Airbus, had received.

But European leaders said that the finding, by a panel of the World Trade Organization, showed that the United States had also relied on subsidies in the fight for plane sales, and that the ruling would help prompt negotiations to resolve the problems.

What is interesting here is that they cite the military contracts that Boeing gets, but also the tax abatements with the WTO board determining that, “Boeing had received subsidies through some of the research contracts from the National Aeronautics and Space Administration and the Pentagon, as well as through tax incentives linked to its facilities in Washington State, Kansas and Illinois.” (emphasis mine)

This is about more than just the Airbus/Boeing subsidies. The WTO just ruled that the shakedowns that business inflict on communities by way of tax breaks are illegal subsidies under the current international trade regime..

This is a good thing.

I’d like to see Congress to find a way to ban this little bit of corporate pay-to play.

I Called It

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This is what the betrayal feels like to me, and I never believed in him.

Remember when I said that Obama would not recess appoint Elizabeth Warren, or use the law to allow her to be the interim head of the Consumer Financial Protection Bureau, because that’s what the DFH’s* would want?

Well, I was right. The White House is now shopping its plan to the media, and ABC’s Jake Tapper has the scoop:

President Obama will announce this week that Elizabeth Warren, the Harvard Law School professor who first proposed the Consumer Financial Protection Bureau, will be named to a special position reporting to both him and to the Treasury Department and tasked with heading the effort to get the new federal agency standing, a knowledgeable Democrat told ABC News.

So she will be a “special advisor”, not a recess appointment, nor the better alternative of an interim appointment.

So, she won’t have authority to:

  • Set budgets.
  • Hire staff.
  • Fire staff.
  • Explicitly write policy.
  • Direct investigations.

But I guess that she will be writing some really nice policy papers.

Matthew Yglesias nails what is going on:

With Warren, Obama showing real innovation in developing odd, satisfying to nobody compromises.

If this is what demoralizes your base. They follow this stuff closely, and the people who stuff envelopes and go door to door are the sorts who do follow this stuff closely, and it takes about 3 minutes to realize that this is a canard.

Honestly, appointing Warren is a no pain all gain alternative, because the American people hate the bankers, but they are afraid of offending people.

<Facepalm>

*Dirty F%$#ing Hippies.

Primary Results

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The races that are of interest to me, and were at all competitive in Maryland are:

  • Democratic primary for Congress in MD-4, where Donna Edwards, who took down the corrupt PG county machine politician Al Wynn last time is facing a challenge from the PG county machine:
    • Results: Edwards sails to victory.
  • Democratic primary for Baltimore County Executive, where I favor Joe Bartenfelder over Kevin Kamanetz, whose mission in life is to put cameras in every parking lot on the county.
    • Results: Kamanetz wins, damn.
  • Republican Primary for Governor: I dislike former Maryland Governor Bob “Bad Hair” Ehrlich, and his opponent, Brian Murphy, won’t win, but it will be interesting to see just how much the fact that Sarah Palin endorsed him gets him votes:
    • Results: Bobby didn’t even break a sweat. Palin does not carry much weight here.
  • I will note that Andrew duck won in the6th Congressional district, so he will face Roscoe Bartlett for the 2nd time in 4 years. He ran a creditable race in a very tough district in 2006. I met him, and he’s a good guy, albeit he is a bit to the right of me. Also note that he is on Matthew Saroff’s Act Blue Page.

Outside of the Free State, we have some interesting elections as well, mostly on the Republican side, looking at how well the teabaggers do:

  • The biggest election is probably the primary in Delaware, where Christine O’Donnell, a teabagger who is so outrageous that Dick Armey’s Freedomworks Teabagger AstroTurf org endorsed moderate Republican Mike Castle.
    • Results: The teabagger nutjob won by what looks to be about 6%.
  • In the New York Primaries, we have the always happless perennial loser Republican mainstay Rick Lazio running against the batsh%$ insane (he wants to put the unemployed in jail) Carl Paladino.
    • Results: Paladino wins, and Lazio once again proves himself to be the Washington Generals of politics, and Andrew Cuomo is going to be the next governor unless he is found with a dead girl in his bed.
  • And we have the Democratic Party primary in the 15th district, where the scandal plagued Charles Rangel is being challenged by the grandson of the man he beat to become a Representative, Adam Clayton Powell IV.
    • Results: Rangel wins, though he got barely 50% of the vote against his 5 opponents.
  • We have the New Hampshire primary, where in the Republican Senate primary, you have Ovide Lamontagne, who was endorsed by the Manchester Union Leader and is considered more teabaggy versus Kelly Ayotte, who was endorsed by the Palin bot and is considered more mainstream (Yeah, NH is weird).
    • Results: It appears that Ayotte has won, by something like 900 votes out of the over 100,000 cast.

  • Also in New Hampshire, we have the primary in the 2nd CD, where Blue Dog wannabee Katrina Swett is running against Act Blue fave from the Democratic wing of the Democratic Party, Ann Kuster
    • Results: Kusters wins in a walk, which is a surprise, because Katrina Swett is political royalty in New Hampshire, being the daughter of Tom Lantos and the wife of former Congressman Dick Swett.
  • The Washington DC Mayor’s race, where the polls have the incumbent, Adrian Fenty behind Vincent Gray, largely because he is a complete jerk, he is generally considered to have done a good job, and because he has completely alienated the African American middle class in the city, largely because of his support of School Chancellor Michelle Rhee’s policies, which are perceived as having engaged in, “a well-calculated strategy to weed out African Americans from positions in the public school management and classrooms,” in order to pander to the influx of rich white families in the district.
    • Results: Gray wins, and which probably means that Rhee is gone as well, if just because she was , “she abandoned the role of a politically impartial school administrator,” by actively campaigning for Fenty.

I’ll post the updates tomorrow,

That Will Leave a Mark

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Leon H. Wolf reviews Meghan McCain’s book Dirty, Sexy Politics:

This article, of course, is not about capital punishment. It is a book review of Dirty, Sexy Politics by Meghan McCain. However, the above discussion is relevant because I initially had reservations about writing this book review at all. After all, it is clear to everyone who has read Meghan McCain’s twitter feed, her “articles” on The Daily Beast, or her ill-fated campaign blog that Meghan is not a paragon of clear reasoning, exemplar of familiarity with facts, nor a model of English language expertise. And after subjecting myself to 194 continuous pages of her “writing,” it became clear that none of the above-described works truly plumbed the depths of mental vacuity in which Ms. McCain aimlessly and cluelessly drifts.

This presented a dilemma.

It is impossible to read Dirty, Sexy Politics and come away with the impression that you have read anything other than the completely unedited ramblings of an idiot. This being a professional website for which I have a great deal of respect, I searched for a more eloquent or gentle way to accurately phrase the previous sentence – but could not find one.

Sometimes a bad review is a joy, though I would argue that this one is a longer than it needs to be.

Go read.

H/t Ken Silverstein.

Great Googly Moogly!

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There was a guy in Amarillo who wanted to burn a Koran on September 11, but a skater dude took the book away from him. No big deal I guess.

Induhvidual in question, one David Grisham, is a lone crazy, though, seeing as how he is from Texas, he’s not quite so lonely: Texas breeds this sort of Nutjob, see Koresh, David, and the Republican Party of Texas.

What does distinguish this guy from your run of the mill crazy is his day job, he guards a a nuclear weapons plant:

According to George Schwarz, the editor and publisher of the Amarillo Independent, Grisham is an armed guard at the B&W Pantax plutonium plant, north of Amarillo, Texas.

The Pantex plant describes its mission as “maintaining the safety, security and reliability of the nation’s nuclear weapons stockpile. The facility is managed and operated by B&W Pantex for the U.S. Department of Energy/National Nuclear Security Administration.”

The Wiki callse Pantex, “America’s only nuclear weapons assembly and disassembly facility.”

It’s a good thing that Timothy McVeigh didn’t know this guy, or his bomb wouldn’t have been a bunch of fertilizer.

Un-Dirtyword-believable.

This is Called Polishing a Turd*

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The corn syrup industry has applied to the FDA to be able to call its high fructose corn syrup “corn sugar”:

The Corn Refiners Association, which represents firms that make the syrup, has been trying to improve the image of the much maligned sweetener with ad campaigns promoting it as a natural ingredient made from corn. Now, the group has petitioned the United States Food and Drug Administration to start calling the ingredient “corn sugar,” arguing that a name change is the only way to clear up consumer confusion about the product.

I have seen other similar things, the rebranding of prunes as dried plums, for example, but in the case of corn syrup, where we have an an industry producing a product that produces a product that generates significant about its safety, as opposed to a product like prunes whose use as a regularity aid has made it the butt† of jokes.

I don’t approve, but I do not see a place to comment on the FDA’s web site.

*Yes, I am aware that the Mythbusters did in fact polish turds using a Japanese technique called Dorodango, but we are referring to the cliche, not reality.
†Pun not intended.

Jon Stewart on Religious Tolerance

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Well really, it’s less about tolerance than it is an equal opportunity slam at the extremists in general, noting that when you take the Tanakh, Christian Bible, or Koran literally, you see violence, and hatred, and perhaps the problem is that taking the text literally.

There is also the prize line, “Who’s funding these radical Christian clerics?”

FCC Finally Approves White Spaces

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Basically, the FCC will be developing standard for unlicensed spectrum used on the spaces between TV channels to create a sort of super WiFi, using what is called “Sense and Avoid” technology.

It’s taken a long time to get here, largely because two groups, the broadcasters who wanted to be paid for something they didn’t have a license for and never used, they claimed interference issues, and the users and manufacturers of many wireless microphones, who had been using the spectrum illegally for years.

Technically, it is a good range of spectrum, it’s the analogue TV spectrum, so it goes a decent distance and penetrates walls and basements well, but more important is that it is unlicensed, which means that the use of the spectrum will be highly competitive, because, unlike wire, or the spectrum owned by wireless telcos, anyone can supply a service, as long as it complies with the technical requirements.

“Unlicensed” here means that anyone can operate the equipment, but that the equipment itself would have to be approved by the FCC before a sale is made.

This has a real potential to compete with the incumbents, and the barriers to providing service are low enough that there should be a fair number of entrants.

Not Gonna Happen……

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The latest polling on the Texas governor’s race has the Republican Rick Perry leading Bill White by 42% to 41%, which, given that undecideds generally swing against the incumbent (Perry) means that White could actually win this election, and might therefore be able to have a significant influence on redistricting.

The same goes for this poll, which has Perry up by 39% to 33% shows that the race is pretty close.

Obviously, the specifics of the polls make a difference, but this should be interesting in November, particularly given the ability of Governor Goodhair to put his foot in his mouth.

In any case, the phrase, “Margin of Error” figures prominently, as will the dynamics of early voting.

I Now Know How The Daily Show Writers Feel…

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The Mustache of Insanity

Because former recess appointee UN ambassador John Bolton is saying that he might run for President:

During recent appearances on Fox News, Bolton has been asked whether he would run for president. “Well, you know it’s a great honor when people ask me that question, and I have been asked that question,” Bolton said on Wednesday. “I don’t think anybody involved with politics should worry about that until after the elections this fall.”

He also said: “I’m not saying no. That’s right.”

This promises to be easier to ridicule, and even more funny, than the Freddie Thompson Clown Show presidential campaign of 2008.

I so want him to run.

Do you know that it’s been over 100 years since we elected a president with facial hair (Taft, 1908).

IRS Investigates Chamber of Commerce for Tax Fraud

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The Internal Revenue Service is investigating whether or not, “the group mixed funds for charitable and noncharitable political purposes in violation of tax codes.”

It’s pretty clear that most of the 501(c)3s that are attached to lobbying groups have nothing to do with what should be educational purposes:

Cyrus Mehri, a Washington lawyer who brought the I.R.S. complaint on behalf of U.S. Chamber Watch, said in an interview that the chamber’s current political activities were, in effect, being underwritten with money intended for charitable work.

The complaint focuses on loans and grants totaling about $18 million that were made beginning in 2003 to a nonprofit affiliate, the National Chamber Foundation, by the Starr Foundation, a charity started by the founder of A.I.G. and now led by Maurice R. Greenberg, the insurer’s former chairman.

Lawyers for Chamber Watch said their research, based largely on public tax filings, found that none of the principal on some $12 million in loans had been paid back and that the money appeared to have been given to the chamber’s foundation for unrestricted use.

This actually strikes close to home for me, as I actually incorporated a 501(c)3 tax exempt organization, Arisia, and while I don’t regret doing so, it got the organization a lower postal rate in its early, pre everyone-has-email, days, which helped a lot.

That being said, it’s a group that basically holds a science fiction convention every year, and the fact that it was legal to register as a tax exempt educational organization, as opposed to a non-profit membership organization, a 501(c)7 where contributions are not tax deductible, still bothers me.

There is a lot of abuse in the tax exempt organization regulations, whether it is science fiction conventions generally, the Chamber of Commerce’s faux charity, or the various think tanks out there, and it really needs to be fixed.

There is a Reason that I Declared them “They Who Must Not Be Named”

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But that hasn’t stopped the Voice of American from recruiting them to try and pacify angry people in the Middle East:

In what is evidently an attempt to mitigate the damage caused by Koran-burning pastors, the US government will attempt to dissuade outraged citizens of the Middle East from joining al-Qaeda by beaming Paris Hilton, Kim Kardashian and Britney Spears across the Voice of America’s airwaves.

According to Press Gazette, Splash News and Pictures will provide a half-hour weekly show packed with meaty celebutardiness, aimed at winning the hearts and minds of those still undecided whether Holy War or Hollywood is the way to go.

First, I will note that if VoA is doing this, the Arab world is going to try and beat us to death with their bare hands.

Second, I have not yet put Kim Kardashian on my list of They Who Must Not Be Named, but ………

Wait for it ………

Wait for it ………

Wait for it ………

She is now.

Great googly moogley.

SNATCHING DEFEAT FROM THE JAWS OF VICTORY

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The Democrats, Again, of course.

After Boehner’s surprise statement, it looks like the Obama White House is trying to take advantage of this, and paint the Republicans with the “Daddy Warbucks” brush and splinter the Republican caucus, which is good, but a aide for the House leadership just said that the house will not vote on the tax cuts, which is significant because the Constitution says that tax bills have to start with the house.

My guess is that this is someone Steny Hoyer’s office, who is attempting to suck up to the Blue Dog types, who are trying to insist on tax cuts for the big donors.

And on the Senate, we have the preening sociopath narcissists Ben Nelson says that he might support a filibuster, while Mr. “That contemptible rat-f%$# who isn’t with us on everything but the war” Joe Lieberman both saying that he will support a filibuster.

What is good politics and good policy right now is for Barack Obama to say that he will veto any bill that grants tax breaks to people making more than a $¼ million.

It would be useful to show that Obama can draw a line in the sand, because at this point, no one believes that he can.

So Not Done In Iraq

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More combat action from our troops, notwithstanding the fact that our combat presence has ended:

American military units fired on insurgents while supporting Iraqi troops northeast of the capital on Sunday, Iraqi officials said. It was the second such episode since the United States declared an end to its combat operations in Iraq less than two weeks ago.

There were no American casualties in the fighting in Hudaidy, a village about 50 miles from Baghdad that has long harbored members of the Sunni insurgent group Al Qaeda in Mesopotamia.

They are just, “advisers,” and Oceania has always been at war with East Asia.

How Barack Obama Could Appoint Elizabeth Warren, and Why He Won’t

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Under the Dodd-Frank bill, there is a provision that allows Timothy Geithner to appoint a head to the Consumer Financial Protection Bureau until such time as the Senate approves a nominee:

According to the bill’s language, the Treasury Secretary has sole authority to build the new agency before it’s ultimately transferred to the Federal Reserve. That includes anointing a person to head the effort on his behalf, and under his authority. The interim head would serve until the President’s nominee is confirmed by the Senate.

That person could be Elizabeth Warren.

And the legislation doesn’t appear to contain a deadline for a Presidential nomination, experts say, which means Warren could start the agency from scratch, put her people in, begin cracking down on predatory and abusive lenders, and initiate a culture that would put consumers’ interests above those of the nation’s most powerful financial institutions.

What is interesting here is that this is not a recess appointment, and so is not subject to the limitations, such as the requirement that their appointment expires at the end of the current Congress in January, 2010.

Theoretically, if Warren were appointed, she could serve for decades without Senatoriual approval.

So, Warren could be appointed, and be on the job, tomorrow, and the only way to remove her would be for the Republicans not to filibuster her in the Senate, and hope that she is defeated by 51 votes on the floor, which won’t happen, because any Democrat who votes against her has the party base campaigning against him or her in the next election cycle.

So, why don’t I think that Obama will do this? Because in so doing, he would energize the Democratic Party base, who would then come out and vote for Democrats in 2010:

Within hours and possibly minutes I expect the president will name Elizabeth Warren to lead the new consumer protection agency, and if he does, the Democratic base will erupt and turn out to vote in far greater numbers than any current poll suggests.*

The thing is that I believe that there are two dominant schools of thought in the White House:

  • Those who believe that appealing the the base will always be a net loser in terms of elections. (Rahm)
  • Those who actively hate the Democratic Party base, which they see as irrational, unrealistic, a part of the hyper-partisan atmosphere in Washington, and terrifying to the fictitious middle of the road voters in off year elections. (Barack Obama)

Basically, in order for such an act to be taken, the core philosophies of the power centers in the White House have to be repudiated by the people who hold them.

This won’t happen, because even if these decisions help the party, they diminish the power of Emanuel and Obama’s philosophies within the party, which makes it a sort of perverse manifestation of the Iron Law of Institutions, (on edit see this Google link, because one of the purity asshole brigade at Wikipedia deleted the link) which states that, “the people who control institutions care first and foremost about their power within the institution rather than the power of the institution itself.”

*I would note that the author is already wrong, having posted this on Thursday, September 9, and we have had no announcement.

Boehner Blinks

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After threatening to take down any tax proposal that did not keep the tax breaks for the Leona “Only the little people pay taxes” Helmsley rich folk, David “Nicotine Stained Face” Boehner has agreed to support tax cuts for the remaining 98% of us.

I think that this is really a change in tactics: He knows that he cannot stop the tax cuts from expiring in the House, and that there is a realistic chance of taking the house, so he will go with the electoral politics that show that over ⅔ of voters support letting the “rich bitch” tax cuts expire, so he will let the Senate, where the chances of a Republican take over are smaller, filibuster this to death.

My response to both of them would be to remind them that the inheritance tax goes way up next year if nothing is done, and if something reasonable does not get through the Congress, then there all the taxes come back full force, but of course, I’m not being all hopey-changey and attempting bipartisanship.

Personally, I’d take the top rate, cutting at somewhere north of 10 million a year, back to around 94%, but then again, I’m just a DFH.*

*Dirty F%$#ing Hippy.

This is a Google Adsense On Drugs, Any Questions?

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One Step Forward, One Step Back

Well, Google™ Adsense™ gets one right, for a change.

I live in Maryland, and I am a Democrat, and in any case Robert “Bad Hair” Ehrlich is a complete prat.

I would also note that in 2004, I exchanged about 20 words with Martin O’Malley, and was convinced that he would be president one day.

He is an impressive candidate, and I think that it is likely that he will throw his hat into the ring in 2012 2016.

This ad takes you to Martin O’Malley/Anthony Brown campaign’s home page.

But after they get one right, they put up an ad for the Freedom Works teabagger AstroTurf 9/12 rally. (sorry, no link to those evil f%$#s, not even with the “nofollow” tag.)

I wonder why about 95% of the political ads that show up on my page are all about conservative causes though.

As for the rest, they seem to be HAMP scams.

**sigh**

Don’t Ask, Don’t Tell Ruled Unconstitutional

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One of the interesting things here is that the judge, Virginia Phillips, has ruled that, the policy has a, ” ‘direct and deleterious effect’ on the armed services, which will make the overturn at the appellate level more difficult, since appeals are typically based on matters of law, and this is a determination of fact, but note that I’m an engineer, not a lawyer, dammit!*

The judge will be issuing an injunction against separations, but will be giving the government time to appeal before doing so, so I expect another round of accelerated witch hunts in the Pentagon over the next few weeks.

This is an acid test of the Obama administration’s dedication to gay rights. If they go for a stay, i.e. keep expelling gays from the military, during appeals, they are not merely doing their duty to defend existing laws, as they have previously argued, they are actively and aggressively anti-gay rights.

My money is on Obama making the wrong decision both morally and politically, and going full bore against this decision, because I think that, much like Bill Clinton, there is a level of political, if not personal revulsion, against “te ghay” that drives them to do truly stupid and hateful things.

*I LOVE IT when I get to go all Doctor McCoy!!!