Year: 2010

Trials Work

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Ahmed Ghailani, accused of being complicit in the embassy bombings in Africa 19 1998, was acquitted of all but one of the almost 300 charges against him:

White House officials said Thursday that the acquittal of Ahmed Ghailani on all but one of more than 280 criminal charges in the 1998 bombings of U.S. embassies in East Africa would not undermine their effort to try former Guantanamo detainees in civilian court, even as the mixed verdict reignited debate over that policy.

White House press secretary Robert Gibbs said Ghailani – the first former detainee to be tried in federal court – will receive a lengthy prison sentence for his conviction on one count of conspiracy.

Of course, it lazy investigators had not tortured him at Guantanamo in the first place, and instead used their brains and skills, they probably would have gotten dozens of convictions, but even with the sloppy work, the get a conviction.

There is no need for torture of military kangaroo courts. We can use our judges and our laws, right here in the United States.

Of course, we won’t because Barack Obama and Eric “Place” Holder are to wimpy to stand up for our values.

Signs of the Apocalypse, Steny Hoyer Showing Guts Edition

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You got that right, Steny fracking Hoyer is finding a damn backbone:

Steny Hoyer, the number two in the House Dem leadership, told Democrats at a caucus meeting this morning that they would get to vote this year on just extending the Bush tax cuts for the middle class, a senior Dem aide tells me, signaling support for a confrontational move towards the GOP that liberals have been pushing.

Asked if Democrats would definitely get a chance to hold this vote, the senior aide responded: “Definitely.”

Hoyer’s declaration comes as Democrats have been debating the way forward on the Bush tax cuts, and another aide tells me that “more than half” of the Dem caucus supports this course of action.

I approve, but I wonder just who the hell had Steny’s testicles, and why they decided to give it back to him.

Raising taxes on people making more than a ¼ of a million dollars a year is excellent policy, and excellent politics, so it surprises me that Democrats are even thinking about doing this.

Doubtless, they will find a way to screw this up, and I’m sure that Heath Shuler will be leading the way, but I’m still getting a heavy duty umbrella, just in case it starts to rain frogs.

Economics Update

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It’s jobless Thursday, and initial claims rose slightly last week, up by 2000 to 439K, beating expectations, and remaining below the 450-485K range where the number has meandered much of this year, so this is good news.

Additionally, the 4-week moving average dropped to a 2 year low of 443,000 and continuing claims fell fell by 43K to 4.3 million, though extended emergency claims rose by 12K to 4.93 million.

Good news though, the extended claims number drops to 0 on November 30, thanks to the ineptitude of Congressional Democrats.

We also have Philadelphia Bank of the Federal Reserve, where its general economic index exceeded forecasts by a factor of 4, jumping to 22.5.

On the down side, as always, is real estate, where foreclosures are ramping up again, as banks tweak their fraud and corruption fine tune their foreclosure programs and documentation.

Speaking of Mind Blowing Stupidity

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The hed says it all, “The White House, Chamber Of Commerce Attempt Rapprochement.”

What the f%$# are they thinking?

I know that Barack Obama thinks that he is so awesome that people can’t help liking him, and that they like him so much that they will work together for the good of the country, but that is stupid and delusional:

On Wednesday, the intricacies and oddities of the relationship were on full display. For the second time in as many weeks, a member of the Obama cabinet met with Chamber officials. It was not to discuss the sharp elbows thrown during the campaign, when the White House, in no uncertain terms, accused the Chamber of subverting the democratic process by refusing to reveal its donors. Rather, Treasury Secretary Timothy Geithner met with the group’s board of directors to “discuss the state of the economy, jobs, and administration priorities ‘for supporting the competitiveness of American businesses’.”

The Chamber of Commerce has always been a very conservative organization, but it is no longer that: It is now an explicitly partisan player whose goal is the defeat of Obama in 2012 by any means necessary.

They are not the opposition they are the enemy.

And little Timmy Geithner is playing footsie, no doubt with Barack’s approval.

<Facepalm>

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And the Award for Lame Losers Goes to ……

You know that recovery that we seem to be having, well expect it to stop, suddenly, in just a few weeks.

Why, because somehow or other the House Democrats managed to lose a vote on extending unemployment benefits extension, meaning that roughly 5 million Americans will lose their unemployment benefits on November 30.

That’s 5 million Americans who will be unable to make car or house payments of buy much of anything at all.

Figure about $1.5 billion pulled out of the economy a week, or a little bit over ½% of GDP that would just go away.

Not only did they not manage to pass the bill, but it was only a 3 month extension that they managed not to pass, so they failed on a lame half measure.

For some reason known only to God, they tried to pass it under a “suspension of the rules” requiring a ⅔ vote, which it failed, by 258 to 154.

OK, I do know the reason why the Democrats tried to pass this under a procedure requiring a 2/3 vote: If it passes by a simple majority, then people can make a “motion to recommit”, which could kill the bill, and would not pass, or a “motion to recommit with instructions”, where it is sent back to committee with instructions to make amendments, which doesn’t kill the bill.

The problem is that the Democratic Caucus discipline is so lax that if the Republicans try to attach something that Democrats fear might be used in a campaign, like, for example, banning felons from getting UI benefits, then many of the Democrats, fearful for being cast as soft on crime in the next election, will vote for the measure and against the party, and the country, because they have no damn guts.

Of course, the reason that the Dems lost on November 2 was because they have no damn guts, so their solution is even more gutlessness.

Cthulhu on a cruller, it’s lame.

Economics Update

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Well, if you think that the run up to the Federal Reserve’s quantitative easing (printing money) might lead to inflation, you thought wrong, with inflation at 0.2% in October, and the core rate at 0% for the 3rd straight month, and the year over year change was an anemic 0.6%.

The problem is that there isn’t enough inflation.

We also have real estate news, all bad, with housing starts falling, house prices in the US falling 2.8% in September (down 0.8% in the UK), mortgage applications falling, and the AIA’s: Architecture Billings Index, an indicator of future commercial construction, falling in October.

Buh Bye Bean

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Melissa Bean has conceded the election to her Republican opponent Joe Walsh, and honestly, it makes me happy.

I’d feel different if she were the margin for control of the house, but she isn’t, and she is arguably the worst Democrat in Congress, because she sold her soul for campaign donations to the financial industry, and she was the most effective force on Congress for gutting financial regulations.

While she is (until January) was a member of both the Blue Dog and New Democrat Caucus, she was always about raking in the campaign dough from banks, pharma, etc. so that they can stay in office, which shades her more toward the New Dem side, as opposed to the Blue Dogs, who tend to be motivated more by their own misguided philosophy or a desire to appease constituents.

Give me an honest reactionary over a pseudo-moderate careerist any day.

In related news. Lisa Murkowski beat Joe Miller in her write-in bid.

In your face, Sarah Palin.

Speaking of Saroff’s Rule

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Click for full (honking big) size

If a financial transaction is complex enough to require that a news organization use a cartoon to explain it, its purpose is to deceive.

Williambanzai7 at zero hedge finds this description of how mortgage securitization works from an auditor by the name of Dan Edstrom.

The gentleman, “Performs securitization audits (Reverse Engineering and Failure Analysis) for a company called DTC-Systems.”

Of course, Saroff’s Rule does not strictly apply here.

This is not the product of a publication that is generating graphics for the edification of the reading public.

This is a visual aid to a Securitization Workshop for Attorneys, and it is what happened to his own mortgage.

This is not some theoretical mortgage that he looked at. This is his mortgage.

It took him a full year to track it all down, and his business is to do mortgage securitizations.

This happens because complexity is the enemy of transparency, and without transparency, the opportunities to profit by cheating and defrauding your counter-parties increases.

George Soros Implies Support for a Primary Challenge

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Or maybe not, since his people are walking it back a little bit:

According to multiple sources with knowledge of his remarks, Soros told those in attendance that he is “used to fighting losing battles but doesn’t like to lose without fighting.”

“We have just lost this election, we need to draw a line,” he said, according to several Democratic sources. “And if this president can’t do what we need, it is time to start looking somewhere else.”

……

While Soros’s comment gave some attendees the impression that he’d cheer a primary challenge to the president, the point, sources say, was different. Rather, it is time to shuffle funds into a progressive infrastructure that will take on the tasks that the president can’t or won’t take on.

“People are determined to help build a progressive infrastructure and make sure it is there not just in the months ahead but one that will last in the long term,” said Anna Burger, the retired treasury secretary of SEIU. “Instead of being pushed over by this election it has empowered people to stand up in a bigger way.”

“There was frustration,” said one Democratic operative who attended the meetings. The main concern was about messaging. I think they are frustrated that the president isn’t being more direct. But I did not get the sense that anyone’s commitment to the progressive movement was wavering… The general consensus is that support has to move beyond being about one person and more about a movement. I don’t know if we’ve moved beyond there.”

So, it could be that Soros is saying that he thinks that liberals should disassociate themselves from the Obama political operation, and go back to funding people 3rd party political operatives, because you can’t trust the Obama team to fight for you, or to fight period. (true)

It’s been well known that the Obama administration, and the associated political operation, has been tremendously hostile to 3rd party political operations, both out of a need to micromanage the message, and because of their ceaseless focus on process at the expense of results.

I think that the message, particularly as put forward by a billionaire, is a shot across Obama’s bow.

I think that there was the intention to tell the Obama White House that if they kept trying to veal pen and defund independent groups, then there is a billionaire out there who is willing to dump a significant chunk of change on making his life difficult in 2012.

For myself, I support a robust primary challenge.

Obama’s weakness, and his eagerness to please the malefactors in this situation (do nothing Republicans, dishonest bankers, etc.) while casting his behavior as liberalism could cripple the party, and the solutions that our country needs, for decades to come, much as Herbert Hoover crippled Republicans and conservatism for a generation.

The difference is that Barack Obama’s PPUT (Post Partisan Unity Schtick) is a refutation of liberalism, while Hoover’s activities were an endorsement of conservatism.

Let There Be No Kings……

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In 1997, I was reading Usenet,* and my wife rushed in, and told me that Diana, Princess of Wales, was in a serious car wreck, and I paraphrased the words of George Washington† to her, noting that the affairs of the British royal family is really not a proper for Americans to exhibit the level of fascination that it does with the subjects of the crown.

Well, I now learn that Prince William and his long time girl friend Kate Middleton will get married, and so I feel compelled to add both of them to my list of They Who Must Not Be Named.

Unlike many of the other denizens of the list, I do so without malice.

I have no knowledge of any specific wrongdoing from either of them, and I wish the happy couple the best.

I just never want to hear about them.

That being said, in homage to our founding fathers, who thumbed their nose at the British crown, I feel an obligation to engage in a snark before consigning them to the list, and the good folks at The Awl found what is likely the best snark on the internet:

In any event, welcome to the best Internet comment ever, from here: “Her parents can’t be overly happy. She has been largely unemployed since she left school and is now marrying someone who has been on welfare most of his life. With the new government’s promise to cut housing benefit and force those who repeatedly turn down work into manual labour I do worry for them.”

Heh.

In any case I have no interests in toothless constitutional monarchs.

*Yes, remember Usenet? It was a wonderful way for people with common interests to get together, but eventually, the trolls, spammers, and the rest of the tragedy of the commons, drove most of the useful dialogue to other technologies.
†Actually, his response to the suggestion that he be king was far more eloquent and evocative:

To Lewis Nicola

George Washington

Newburgh, May 22, 1782

Sir: With a mixture of great surprise and astonishment I have read with attention the Sentiments you have submitted to my perusal. Be assured Sir, no occurrence in the course of the War, has given me more painful sensations than your information of there being such ideas existing in the Army as you have expressed, and I must view with abhorrence, and reprehend with severety. For the present, the communication of them will rest in my own bosom, unless some further agitation of the matter, shall make a disclosure necessary.

I am much at a loss to conceive what part of my conduct could have given encouragement to an address which to me seems big with the greatest mischiefs that can befall my Country. If I am not deceived in the knowledge of myself, you could not have found a person to whom your schemes are more disagreeable; at the same time in justice to my own feelings I must add, that no Man possesses a more sincere wish to see ample justice done to the Army than I do, and as far as my powers and influence, in a constitutional way extend, they shall be employed to the utmost of my abilities to effect it, should there be any occasion. Let me conjure you then, if you have any regard for your Country, concern for yourself or posterity, or respect for me, to banish these thoughts from your Mind, and never communicate, as from yourself, or any one else, a sentiment of the like Nature. With esteem I am.

US Comes Out Against Patenting Genes

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This is a big deal, and a case where a very bad actor forced their hand:

Reversing a longstanding policy, the federal government said on Friday that human and other genes should not be eligible for patents because they are part of nature. The new position could have a huge impact on medicine and on the biotechnology industry.

The new position was declared in a friend-of-the-court brief filed by the Department of Justice late Friday in a case involving two human genes linked to breast and ovarian cancer.

“We acknowledge that this conclusion is contrary to the longstanding practice of the Patent and Trademark Office, as well as the practice of the National Institutes of Health and other government agencies that have in the past sought and obtained patents for isolated genomic DNA,” the brief said.

Basically, a company, Myriad Genetics, got a patent on breast cancer genes, it licenses government funded research which found the BRCA1 and BRCA2 genes, and has used this patent to prevent the development of better and cheaper tests, and their behavior was so egregious that the government felt compelled to act.

It’s still up to the judge, but this is a good first step.

Genes have never been an invention, they have been a discovery, and discoveries are not supposed to be patentable.

Economic Quote of the Year*

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Final thoughts from an economist on Armistice Day:

There are plenty people out there (I’ve just seen a documentary on Channel 4 presented by one) who don’t believe in Keynesian economics, but who think that the Great Depression was ended by the Second World War. In other words, paying men to dig holes and fill them in again is a ridiculous policy, compared to the sensible and effective course of action of paying men to dig holes and die in them.

H/t Mithras.

Obama Can’t Win if He Does Not Fight

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There have been numerous reports that the White House will welsh on its promise to begin its withdrawal from Afghanistan in July 2011, and now it’s pushing back, claiming that it will begin a withdrawal on schedule.

I’m inclined to believe that what the Obama administration means by “withdrawal” from Afghanistan is rather like what it meant by “withdrawal” from Iraq, so-called “non-combat” troops and a sh%$ load of contractors, but still, the push-back from the administration from Pentagon leaks is impressively muscular:

The White House vehemently denies that there is any change in policy. “The president has been crystal clear that we will begin drawing down troops in July of 2011. There is absolutely no change to that policy,” said Tommy Vietor, a White House spokesman.

(emphasis mine)

The spokesman is on the record and named, which, for any administration in this situation, is a strong statement.

That being said, we have a pretty good idea where these anonymous statements are coming from, because General, and Bush butt boy, David Petraeus is threatening Afghan President Hamid Karzai on his statements about withdrawal timing:

In what may be one of the most significant breaches between Afghan President Hamid Karzai and the Obama administration, Gen. David Petraeus personally warned Afghan officials over the weekend the U.S.-Afghan partnership could be “untenable” if Karzai wants U.S. troops out of Afghanistan prematurely.

A senior coalition military official confirmed details of what Petraeus said, but asked not to be identified so he could speak more candidly.

………

After reading the article, Petraeus felt the views expressed by Karzai “makes it untenable for us to have a partnership,” the official told CNN.

I’m not sure who the “senior official” quoted is, but you can be pretty sure it is someone who was authorized by Petraeus to make this statement.

You see, according to the Pentagon, and perhaps other elements of the US state security apparatus, we have to be at war forever.

There is a hell of a lot of insubordination from the military on this matter, and unfortunately, Barack Obama is absolutely the wrong sort of person to tell them to shut up and do their jobs, because it means that they would not like him.

Because Doing the Right Thing is Too Hard

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So, once again, after taking a bit of heat from Republicans, Barack Obama and His Evil Minions™ are looking to cave on a core value.

Only this time, it is not a core value of the Democratic party, but rather a core value which our nation was founded, the idea that the King’s power to simply imprison indefinitely on a whim is an anathema to a civilized society:

Khalid Sheik Mohammed, the self-proclaimed mastermind of the Sept. 11, 2001, attacks, will probably remain in military detention without trial for the foreseeable future, according to Obama administration officials.

The administration has concluded that it cannot put Mohammed on trial in federal court because of the opposition of lawmakers in Congress and in New York. There is also little internal support for resurrecting a military prosecution at Guantanamo Bay, Cuba. The latter option would alienate liberal supporters.

The administration asserts that it can hold Mohammed and other al-Qaeda operatives under the laws of war, a principle that has been upheld by the courts when Guantanamo Bay detainees have challenged their detention.

The White House has made it clear that President Obama will ultimately make the decision, and a federal prosecution of Mohammed and four alleged co-conspirators has not been ruled out, senior officials said. Still, they acknowledge that a trial is unlikely to happen before the next presidential election and, even then, would require a different political environment.

You see, even after they tried a child soldier using laws that were made up after the actions, and using evidence derived from torture, Republicans are still saying bad things about them, so now, they will now just stop trials altogether.

Due process is just too politically inconvenient.

There is a point where moral cowardice crosses a line, and becomes actively evil, and emulating the practices of the worst despots in history out of electoral consideration is way over that line.

Economics Update

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The good news is that foreclosures fell in October, the bad news is that this was just temporary, as the banks paper over their fraudulent, and likely criminal, behavior.

An better indicator of the indicator of the health of the housing market right now is house prices, which fell 5% in the three months ending in October.

Outside of real estate though, the numbers look better, with retail sales rising significantly and credit card card defaults falling, though one month does not a trend make, particularly with sales numbers being driven by volatile auto, food, and fuel sales.

On the other side of the Pacific though, things are looking up as the South Korean central bank boosted its benchmark rate by 25 Basis Points (¼%), implying that they are now more worried about their economy overheating than about a double dip recession.

Your Pentagon in Action

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The US Navy’s newest amphibious warship, the San Antonio Class, has been deemed, “not survivable in combat,” in results from Pentagon testing:

Northrop Grumman Corp.’s $1.68 billion amphibious warship, designed to transport Marines close to shore, wouldn’t be effective in combat and couldn’t operate reliably after being hit by enemy fire, according to the Department of Defense’s top testing official.

……………

The San Antonio-class vessel’s critical systems, such as electrical distribution, ship-wide fiber optics and voice- communications networks, aren’t reliable, according to Michael Gilmore, the Defense Department’s director of operational test and evaluation. The ship’s armaments can’t effectively defend against the most modern anti-ship weapons, Gilmore said.

……………

“Survivability” for the San Antonio means the degree to which the vessel “is able to avoid or withstand” an attack “without sustaining an impairment” of its ability to accomplish a combat mission, he said.

His conclusion that the San Antonio is “not survivable” doesn’t mean, however, that the hull and structure can’t withstand a blow from an anti-ship missile due to inherent weaknesses, Gilmore said. In fact, the Northrop ship’s hull construction is “improved” in comparison with the four classes of ships it will replace, he said.

The inmates (Pentagon) are running the asylum.

Giving Great Hed

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As in headline, not oral sex, is Barry Ritholtz, who, writing for Bloomberg, notes that one should, “Kiss Your Assets Goodbye When Certainty Reigns.”

His basic thesis is that when you have unanimity of opinion, the markets are almost always disastrously wrong:

History teaches that whenever the opposite occurs — when certainty overwhelms uncertainty — the herd tends to be wrong. In rare instances, when there is a near-total lack of uncertainty in the market, the outcome is usually a spectacular disaster.

It’s a good read, and probably a very good investment strategy.

What the Nobel Laureate Says

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No, not Paul Krugman, George Akerlof:

As economists such as William Black and James Galbraith have repeatedly said, we cannot solve the economic crisis unless we throw the criminals who committed fraud in jail.

And Nobel prize winning economist George Akerlof has demonstrated that failure to punish white collar criminals – and instead bailing them out- creates incentives for more economic crimes and further destruction of the economy in the future. See this, this and this.

OK, that’s one Laureate, but here is a second, Joe Stiglitz:

An institutionalized system of skewed incentives allowed Wall Street bankers and other corporate executives to gamble with America’s wealth and then get away largely scot-free after the house of cards came tumbling down, plunging the U.S. into the worst economic crisis in decades and destroying trillions of dollars of wealth worldwide.

That’s the analysis of Joseph Stiglitz, an internationally renowned economist and winner of the 2001 Nobel Prize in economics. ………

Of course, this will not happen unless the politicians are forced to, because in general, the establishment believes that the big Wall Street Banks must be free to rape and pillage innovate, and in the specific case, Obama likes Timothy Geithner, Larry Summers, and Robert Rubin, and any investigation of the fraud would doubtless have at least one, and possibly all three, of them in the dock facing criminal charges.