Year: 2010

The Culture at the Fed is Broken

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Charles Plosser, president of the Philadelphia Federal Reserve Bank, is now on record saying that the Federal Reserve should raise interest rates before there is any meaningful recovery in employment:

Federal Reserve policy makers must raise the benchmark interest rate “well before” unemployment falls to an acceptable level in order to keep inflation in check, Fed Bank of Philadelphia President Charles Plosser said.

Plosser forecast the economy will expand 3 percent to 3.5 percent this year and next, faster than the 2.75 percent that he sees as the underlying potential pace. As growth pushes up market interest rates, the Fed’s target for overnight lending among banks should also rise “as long as inflation is near its desired level and inflation expectations are well-anchored,” he said today in a speech in Philadelphia.

I would note that Ben Bernanke has made statements in the same vein: that notwithstanding the charge to the central bank to both control inflation and maintain full employment, the second part means nothing.

Note that Plosser is not a regular voting member of the Federal Open Market Committee (FOMC), though he will get his turn to vote next year.

I lay a lot of this at the feet of Paul Volker (I bet you expected me to say, “Alan ‘Bubbles’ Greenspan”) because he is the modern standard carrier for a Fed chairman: He created the worst recession in 40 years in 1979-81 in order to wring inflation out of the economy.

He was probably right then, though I think that a lot of the inflation was caused by increases in commodity (oil) prices, but now we have Federal Reserve staff who see this, and want to repeat the disastrous tightening of money that caused the 1937 recession.

This is non-sensical, and this, along with the Fed’s repeated role as protector of large investment firms (that one is Alan ‘Bubbles’ Greenspan’s fault) are why reform, and significant turnover, in the management of the Federal Reserve is essential.

Economics Update

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Decline in job openings since 2007
h/t Zero Hedge

The US trade deficit grew by 9.7% in November, largely on the recent run up in oil prices.

The National Federation of Independent Business’s small business optimism index fell for the 2nd straight month in December, indicating that the small business segment is still not ready to start hiring.

In central bank land, the yield on 30-year treasuries fell again, indicating an expectation that rates would remain low, while in China, the central bank raised the reserve requirement for banks by 50 basis points.

In energy, oil continues to fall on the promise of warmer weather.

In currency, the dollar rose, both on investor jitters, and on the Federal Reserve Bank of Philadelphia President being a complete moron and talking up rate hikes. (more on this later)

When I Watch Late Night TV, It’s Stewart and Colbert

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So I really have no strong opinion on what is going on with NBC, with Jay Leno’s 10:00 pm show, an idea that never made sense to me in the first place, being canceled, and NBC now having to juggle Leno and Conan O’Brien.

NBC tried to “split the baby”, by giving Leno the 11:35-12:04 slot, with O’Brien getting the rest of the show, but Conan said no, and so the Jeff Zucker (the head of NBC) clusterf%$# continues.

My reader(s) can debate the relative merits of Conan O’Brien and Jay Leno, I just don’t know.

Conan’s statement is after the break, and it takes the high road:

People of Earth:

In the last few days, I’ve been getting a lot of sympathy calls, and I want to start by making it clear that no one should waste a second feeling sorry for me. For 17 years, I’ve been getting paid to do what I love most and, in a world with real problems, I’ve been absurdly lucky. That said, I’ve been suddenly put in a very public predicament and my bosses are demanding an immediate decision.

Six years ago, I signed a contract with NBC to take over The Tonight Show in June of 2009. Like a lot of us, I grew up watching Johnny Carson every night and the chance to one day sit in that chair has meant everything to me. I worked long and hard to get that opportunity, passed up far more lucrative offers, and since 2004 I have spent literally hundreds of hours thinking of ways to extend the franchise long into the future. It was my mistaken belief that, like my predecessor, I would have the benefit of some time and, just as important, some degree of ratings support from the prime-time schedule. Building a lasting audience at 11:30 is impossible without both.

But sadly, we were never given that chance. After only seven months, with my Tonight Show in its infancy, NBC has decided to react to their terrible difficulties in prime-time by making a change in their long-established late night schedule.

Last Thursday, NBC executives told me they intended to move the Tonight Show to 12:05 to accommodate the Jay Leno Show at 11:35. For 60 years the Tonight Show has aired immediately following the late local news. I sincerely believe that delaying the Tonight Show into the next day to accommodate another comedy program will seriously damage what I consider to be the greatest franchise in the history of broadcasting. The Tonight Show at 12:05 simply isn’t the Tonight Show. Also, if I accept this move I will be knocking the Late Night show, which I inherited from David Letterman and passed on to Jimmy Fallon, out of its long-held time slot. That would hurt the other NBC franchise that I love, and it would be unfair to Jimmy.

So it has come to this: I cannot express in words how much I enjoy hosting this program and what an enormous personal disappointment it is for me to consider losing it. My staff and I have worked unbelievably hard and we are very proud of our contribution to the legacy of The Tonight Show. But I cannot participate in what I honestly believe is its destruction. Some people will make the argument that with DVRs and the Internet a time slot doesn’t matter. But with the Tonight Show, I believe nothing could matter more.

There has been speculation about my going to another network but, to set the record straight, I currently have no other offer and honestly have no idea what happens next. My hope is that NBC and I can resolve this quickly so that my staff, crew, and I can do a show we can be proud of, for a company that values our work.

Have a great day and, for the record, I am truly sorry about my hair; it’s always been that way.

Yours,

Conan

It’s Official: New York Fed Subpoenaed By House

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Following revelations that the Federal Reserve Bank of New York instructed AIG not to do full disclosure of its swap deals with the big banks, the chairman of the House Oversight and Government Reform Committee, Edolphus Towns, has formally subpoenaed the Federal Reserve Bank of New York for information relating to the AIG bailout. (Town’s statement is here.)

What is rather surprising is the level of arrogance involved in the bank’s response, where they say that, “We will work with the committee to provide relevant information as appropriate.”

No, that’s not how it works: When you get a subpoena, you don’t provide information that you deem “relevant” or appropriate, you turn over what they are demanding. That’s the definition of a subpoena, and so you turn over what is demanded.

The folks at Zero hedge have the full text of the subpoena:

All documents in the possession, custody, or control of the Federal Reserve Bank of New York, relating to AIG credit default swap counterparty payments, the decision to compensate AIGs credit default swap counterparties at par, and public disclosure of the counterparty payments, including:

  • Emails, phone logs, and meeting notes of the following people: Timothy Geithner, Stephen Friedman, Thomas Baxter, and Sarah Dahlgren;
  • Term sheets, including drafts, relating to AIG’s payments to its CDS counterparties; and
  • Emails, phone logs, and meeting notes relating to public disclosure of AIG’s payments to its CDS counterparties, including disclosure to the SEC.

(emphasis mine)

I think (hope) that Geithner is screwed. This specifically includes Geithner’s emails and phone logs as well.

If they disclose, he gets shown to be hip deep in a possibly illegal bailout, or completely incompetent, and if they stonewall, he has no credibility.

Unfortunately, I see Geithner’s trajectory mirroring that of Rumsfeld: He only gets fired only after a disastrous mid-term election.

Kansas Judge Declares Open Season on Gynecologists

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Sedgwick County Judge Warren Wilbert has ruled that Scott Roeder may present to the jury a defense that his actions were “justifiable homicide”, which carries a 5 year sentence:

”This judge has basically announced a death sentence for all of us who help women,” said Dr. Warren Hern of Boulder, Colo., a longtime friend of Tiller who also performs late-term abortions. ”That is the effect of the ruling.”

Dr. Hern is 100% correct

The facts of the case are not in dispute: On a balmy Sunday morning, Roeder got up from a pew at Wichita’s Reformation Lutheran Church at the start of services and walked to the foyer, where Tiller and a fellow usher were chatting around a table. Wordlessly, he pressed the barrel of a .22-caliber handgun to Tiller’s forehead and pulled the trigger.

Prosecutors charged Roeder with first-degree murder, and the 51-year-old from Kansas City, Mo., later admitted to reporters and in a court filing that he killed Tiller. The prosecution stands ready with more than 250 prospective witnesses to prove it.

But what had been expected to be a simple trial was altered Friday when Sedgwick County Judge Warren Wilbert decided he would allow Roeder to build a defense case calling for a lesser charge of voluntary manslaughter because he sincerely believed the May 31 slaying would save unborn children.

This is bullsh#@, and my guess is that this is an artifact of one of two things:

  • The anti-abortion terrorists have one of their own on the bench in Sedgwick County, Kansas.
  • This judge thinks that he’s going to be able to clarify things properly to a jury, which would make them understand the Kansas statute’s concept of, “”an unreasonable but honest belief that circumstances existed that justified deadly force.”

In either case this is not a clusterf%$#, but we won’t see the Obama DoJ getting involved in the Civil Rights area, they have already, “declined to comment, citing an ongoing investigation.”

Obama has always been lukewarm on abortion rights, and now we get to see just how lukewarm he is.

The underoos bomber was not being soft on terrorists, but if the DoJ stays out of this, it’s giving aid and comfort to terrorists.

A Good Start

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He’ll have to pay a fee.


He won’t

The proposal recently mooted by the Obama Administration, to levy a fee on financial institutions in order to recover TARP funds (see also here) seems like a good start.

But between Mssrs. Summers and Geithner, along with the DINO back-bencher pukes on the House Banking Committee, you can be sure that it will be so full of loopholes that the only banks that might have to pay anything will be the mom-and-pop banks who’ve done all the right thing.

Note also that this makes no mention of recouping the facilities that the Federal Reserve has offered, which have gone largely to the very large banks, and banks that have former Federal Reserve board members working for them.

The problem is that people are either:

  1. Bought and paid for, or
  2. Deluded enough to think that the big bankers are essential to the functioning of the American economy.

What really needs to be done is:

  1. These folks, and the industry needs to be convinced to leave the country.
  2. Predator drones armed with Hellfire missiles are used to take them out like other terrorists.

Now there’s a recruiting slogan for the USAF: Join up and blow up a banker.

First Foreclosure???? WTF????

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It appears that Dubai just had its first foreclosure:

Dubai’s housing rout sent prices down 52 percent in the past year, prompting some homeowners to abandon their cars and mortgage payments and flee the country. Not one received a foreclosure notice.

Until now.

Barclays Plc won the sheikdom’s first foreclosure cases in court, clearing the way for lenders holding about $16 billion of Dubai home loans to take action when borrowers don’t pay. Islamic lender Tamweel PJSC, the emirate’s biggest mortgage bank, has several of its own foreclosure claims pending and estimates about 3 percent of its mortgages are in default.

People have been driving their cars to the airport and fleeing, they’ve been throwing people in Debtors’ Prisons, and they just had their 1st foreclosure?

Any relationship between Dubai, and by extension the UAE, and perhaps most of the petro-Kleptocracies to a modern financial or court system is purely coincidental.

I’d also note that any lender that claims that only 3% of its mortgages in Dubai are in default is lying.

Roger Ailes as a Bed-Wetting Coward

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The New York Times has a profile of Fox News chief Roger Ailes.

I glanced at it, and was not particularly impressed, but Jonathan Chait teases what I think is a nugget of truth about the media mogul:

Second, Ailes comes through in the article as paranoid (quite possibly in the clinical sense) regarding his own personal vulnerability to terrorism:

National security had long been a preoccupation of Fox News, and it was clear in the interview that the 9/11 attacks had a profound effect on Mr. Ailes. They convinced him that he and his network could be terrorist targets.

On the day of the attacks, Mr. Ailes asked his chief engineer the minimum number of workers needed to keep the channel on the air. The answer: 42. “I am one of them,” he said. “I’ve got a bad leg, I’m a little overweight, so I can’t run fast, but I will fight.

“We had 3,000 dead people a couple miles from here. I knew that any communications company could be a target.”

His movements now are shadowed by a phalanx of corporate-provided security. He travels to and from work in a miniature convoy of two sport utility vehicles. A camera on his desk displays the comings and goings outside his office, where he usually keeps the blinds drawn.

I appreciate Mr. Chait’s eye for detail, but I disagree with his diagnosis, with the obvious caveat that neither he nor I are mental health professionals.

This is not paranoia. This is hysterical unreasoning terror, and, as strange as it souncs, it actually decreases the level of contempt that I feel for him.

I used to think that Fox News was the We’re all gonna die!!!!!!! network (it’s on one of the screens when I ride the exercise bike) because Ailes was trying to score partisan political points, but I was wrong.

He’s not being a hypocrite, he just is a sniveling coward.

H/t Paul Krugman.

Google Ads: Please Get a F%$#ing Clue!!!!!!

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I’d Sooner Kiss a Wookie!

Oh, for Pete’s* sake!!!!

I don’t know why this happens, but once again Google™ Adsense™ has taking my stridently liberal rants, and decided that they need to use this as a platform for some right wing Scaife supported welfare case.

In this case, it’s the Dennis Rodman of the conservative movement,§ Ann Coulter.

This is getting Seriously old.

*And just who is this Petey guy anyway?†
†Ummm……I know who “Pete” refers to, the alter ego of Spiderman.‡
‡OK, I know that this is not the case, I am making a joke, I can use “the Google” just like everyone else.
§I’m not comparing breast size, but comparing their need to be outrageous because it’s their shtick, and so they have to keep topping themselves.

Live and Learn

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I was working with Charlie on his spelling homework, and he has similar words to work with.

One of the pairs was Stationary/Stationery, with the former meaning not moving, and the latter referring to a sheet of paper.

I’ve been spelling both of them -ary my entire life.

Economics Update

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Slow news day, with the only non-energy/currency news being that non-foreclosure U.S. Mortgage Delinquencies 9.8% in November, a 5.5% increase over October, and a 21% increase year over year.

In the old reliables of energy and currency, we see gasoline prices back in the news, the the price of a gallon of regular unleaded approaching $3.00, though crude oil fell on forecasts of warmer weather in the US and Europe.

In currency, the dollar fell to a 3 week low, largely on the expectation of continued low rates, as well as indications of a recovery, and higher interest rates, in China.

Google Pulls AP Links from Google News

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A picture of falling page views

As you may, or may not be aware, I am not linking to Associated Press stories.

This applies to both stories at the Associated Press, as well as stories at other venues that carry an AP byline.

It’s not absolute: If I cannot find another source anywhere, and the story is IMNSHO important, I will link, with a preference for not linking directly to the AP servers.

I have spiked comment based on the the fact that I could not find another source on a number of occasions, but generally, Google News has managed to bail me out.

Well, Google and the Associated Press are coming up on the end of their current licensing agreement, and as a result, Google has not included any links to the AP site since December 23:

Through much of last year, the Associated Press threw public barbs and veiled threats at Google, while in private it was renegotiating its licensing agreement with Google News. That agreement is believed to be up for renewal at the end of this month, yet no new AP stories have appeared directly on Google News since December 23, 2009. (AP stories licensed by other news sites such as ABC News or the New York Times do continue to appear, however). So what’s going on here? Is that the end of AP stories on Google News?

I’ve been doing some sniffing around, and it is not the AP that is withholding its content. This conclusion is also supported by the fact that older AP content from before Christmas continues to be available on Google News. If the AP were no longer licensing its articles to Google, those older articles likely would also no longer be available. (The AP has talked about withholding news from certain licensees for a set period of time, but those were measured in minutes and hours, not weeks, and it would operate on a rolling basis. The AP stories on Google News just stop on December 23).

The pucker factor at the Associated Press offices right now must be extreme.

Who’d Have Thunk It?

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That the patron saint of dotcom excesses, Henry Blodget is calling for

Latest AIG Revelations: One More Reason Why Geithner’s Got to Go
Posted Jan 08, 2010 11:20am EST by Henry Blodget in Investing, Newsmakers, Recession, Banking

The latest revelations about the New York Fed’s actions in the AIG bailout make one thing clear: Treasury Secretary Tim Geithner must go.

Geithner must go not just because of the emails showing that his New York Fed ordered AIG to keep details of the bailout secret, but because of many other decisions and policies he has championed in the past two years.

…………………

This is a time for Obama to fish or cut bait.

He is either a captive of the FIRE (Finance Insurance Real Estate) sector, or he represents the American people, and Geithner, and to an even larger extant Lawrence Summers are an artifact of the former.

H/t The Big Picture.

Funny, That

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The Republicans for Choice political action committee (PAC) collects money to support pro-choice Republicans running for office.

The odd part of this is that Republicans for Choice PAC doesn’t actually give much of the money to said candidates:

Since the PAC’s formation in 1990, documents show that Republicans for Choice has raised and spent more than $5.5 million. But a Center for Public Integrity analysis of the PAC’s more recent filings — along with data from CQ MoneyLine, which tracks political giving — reveals that over the past decade less than five percent of the committee’s spending has gone to political candidates, other political committees, or independent expenditures. Since 2005, just about one-half of one percent of the PAC’s nearly $1 million in spending has gone to federal or state campaigns, according to a review of records. By comparison, Federal Election Commission data show the average federal PAC in the recent 2007-2008 cycle dedicated about 35 percent of spending to contributions aiding federal candidates. A comparison to other PACs on both sides of the abortion debate shows that similar groups spend a much greater portion of their funds on candidates and campaigns.

Where did RFC’s money go? Much of the group’s spending has been for consulting companies owned by the PAC’s chairwoman, Ann E. W. Stone. Those firms — along with payments to reimburse Stone’s expenses for travel, entertainment, and automobile repairs — comprise more than two-thirds of RFC PAC’s expenditures since 2006. And hundreds of dollars more went to pay for Stone’s parking tickets.

This should not be a surprise.

For folks who follow Talking Points Memo, this sort of self dealing is rather common among Republican fund raising groups.

Linda Chavez has earned a healthy living doing this, as has a PAC dedicated to electing minority Republicans.

Basically, if you are donating to pro-life or minority Republicans through a 3rd party firm, you should assume that less than ½% makes it to candidates.

The Massachusetts Senate Race Just Got Weird

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The normal part is a Boston Globe poll that has Democratic candidate Martha Coakley holding a solid 15 point lead over Republican Scott Brown, which is unsurprising in this solidly blue state, but Public Policy Polling shows Brown with a 1 point lead, indicating that the real issue here is whether or not the Democrats can mobilize a thoroughly demoralized base.

The difference here has to be the criteria for likely voters.

That’s a bit odd, but the fact that Scott Brown Posed Nude in Cosmopolitan Magazine in 1982. (Pics are at the link, I don’t post Republican pron.)

It will be a bad thing of Coakley loses, though it would be a good wake up call the people who are busy sucking up to bankers and insurance companies.

Technology Finally Gives Us Something Worthwhile

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The toilet dunk proof cell phone:

Most people would shudder at the thought of putting their mobile phones in the dishwasher. This is precisely what Seal Shield invites you to do with its new SEAL CELL handset. Or put it in the sink for a regular clean up.

The phone is water resistant (and not waterproof as we wrote carelessly earlier) and coated with an antimicrobial glaze to reduce mould, mildew and odour build-up. It looks destined mostly for hospital use: Seal Shield specialises in washable IT equipment for the healthcare sector. The company says (http://www.prnewswire.com/news-releases/seal-shield-announces-worlds-first-dishwasher-safe-cell-phone-80697162.html) it devised the phone to help reduce the risk of worldwide cross contaminations, including H1N1, Norovirus and MRSA.

Win.

I have Pepsi-Syndromed phones, and I look forward to an expansion of this technology.

Here’s to You, Mrs. Robinson

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Hey, hey, hey…hey, hey, hey

No, really. In this case however, the Mrs. Robinson in question is Iris Robinson, wife of Peter Robinson, the head of the, “conservative Northern Ireland Unionist party.”

She has spent much of her public life campaigning against gays, implying that they will molest children and young adults.

Well, now, this 60 something paragon of morality has been caught having an affair, and, I almost forgot to mention this, she was screwing a 19-year old boy.

Lovely people, wot?

H/t Americablog and The Stranger.