Year: 2010

Dem Primary Results in Pennsylvania and Kentucky, Returns in Arkansas

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It’s official, Joe Sestak has defeated Arlen Specter for the Democratic nomination for Senate in Pennsylvania.

Rather refreshingly, Specter is staying relatively classy:

Specter also said he called Sestak to congratulate him and tell him he thinks it’s vital to keep the seat in the Democratic Party.

I don’t expect him to aggressively stump for Sestak, first, he’s an 80 year-old cancer survivor, and second, he lost in large part because of his unpopularity, but I expect a joint press conference in the next few days.

And in the Democratic primary for Senate in Kentucky, Conway beats Mongiardo in a close one, so the good Dem beats the faux (anti-abortion, etc.) Dem.

In the special election in PA-12 to replace Murtha, Mark Critz defeated Tim Burns, which means that the Dems hold on to the seat, but Critz is the a seriously right wing Dem, rather far to the right of Murtha, who he worked for as a staffer.

On the other hand, both Congressional campaign committees dumped a lot of money on this, so it’s a good sign that Critz won, and that it was not particularly close.

It’s still to soon for Arkansas, but right now, it looks like it will be headed to a runoff, because neither Blanche Lincoln nor Bill Halter will get 50% of the vote.

As it stands right now it’s Bill Halter with 42.65%, Blanche Lincoln 43.26%, and DC Morrison with 14.09%, with 53% reporting, which means that Halter or Lincoln would need to get somewhere around 58% of the remaining votes to avoid a runoff, which is not going to happen.

The only question now is who will finish in 1st place.

(on edit)

There will therefore be a runoff on June 8.

Primary News: Kentucky

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They are calling the Republican Senate primary for Rand Paul, the son of tea-party godfather Ron Paul:

Political novice Rand Paul rode support from tea party activists to victory in Kentucky’s Republican Senate primary Tuesday night, delivering a jolt to the GOP establishment and providing fresh evidence of widespread voter discontent in a turbulent midterm election season.

Paul had 59 percent of the vote — with returns counted from 29 percent of the precincts — to 37 percent for Secretary of State Trey Grayson, who had been recruited to run by the state’s dominant Republican, U.S. Senate Minority Leader Mitch McConnell.

Make no mistake about it: This is a major loss for McConnell and the Republican machine in Kentucky.

This may make the seat more winnable for the Dems, though it is still a long shot, because the Republican establishment, led by McConnell, is not going to pull the lever for Paul, and might even pull the lever for a Dem.

And, at least in the preliminary numbers, it looks like the Dem won’t be a blue dog type, as, at the time that I am typing this, “Attorney General Jack Conway led Lt. Gov. Daniel Mongiardo, 49 percent to 39 percent.”

Conway is pro choice, pro-union, etc.

I think that this improves the Dems’ chances here, because people will vote for a real Democrat, Conway, ahead of a fake blue dog, Mongiardo.

Again, this may be a reaction to the party machine, which backed Mongiardo.

Eu Passes Restrictions on Hedge Funds

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EU finance ministers have decided to require greater transparency and regulations of hedge funds, despite (also here):

EU finance ministers have agreed a common position on draft EU legislation on managers of hedge funds and other alternative investment firms, opening the door for negotiations with the European Parliament, the co-legislator.

The agreement on Tuesday (18 May) comes despite UK concerns that the Europe-wide law could negatively impact the British economy, with 80 percent of hedge funds currently located in London.

I would note that one of the myths here is that hedge funds and other highly speculative activities benefit the economy as a whole.

They don’t. They suck productive intellect and capital into purely speculative activities, and this makes everyone but the hedgies and bankers poorer.

The US has been fighting this tooth and nail, and claiming that this is protectionism in violation of WTO rules, but I agree with Yves at naked capitalism on what this is really about: “

Yves again. Did you catch that? Look at what the Europeans want: to regulate hedge and PE funds, as in prevent them from engaging in behavior proven to be dangerous (abuse leverage) and give investors more disclosure, and restrict firms that refuse to agree to play by those rules. That is hardly a radical agenda, yet Treasury Department is working in lockstep with the industry to defend its ability to operate with minimal constraints. And note that no one is mounting an argument that these businesses are socially productive and hurting them will hurt the economy because no such argument can be made credibly. Instead, an effort to impose “prudent regulation” is begin branded as “discrimination.” The problem is no one outside the industry will buy the argument. And Team Obama’s zealous defense of these firms again reveals how, despite its efforts to present a populist, pro-reform image, that it will never cross its best friends, the big financiers, in a serious way.

With members of Congress realizing that the political backlash from being easy on the banks completely overwhelming any amount of campaign donations that the finance industry can generate, which is why the Senate finance reform bill is getting better, it’s time for Barack and His Evil Minions™ to realize that their political future is connected to taking down the banks.

Hating on Sports Analogies

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Particularly when the person using them does not understand the underlying sport.

Case in point, Greg Sandoval, who in writing about a German court order banning an ISP from providing bandwidth, titles the article, ” Studios score another TKO against Pirate Bay,” in discussing the short-lived offline period.

Less than 12 hours later Pirate Bay was back on line.

I’m not sure if Mr. Sandoval wrote the headline, or if someone else did, but whoever it was, they have no f%$#ing clue as to the sport of boxing, nor what a TKO is.

TKO stands for “Technical Knock Out,” and when it occurs, it’s game over, and someone has lost:

A knockout (also referred to as a K.O.) is a winning criterion in several full-contact combat sports, such as boxing, kickboxing, Muay Thai, mixed martial arts, Karate and others sports involving striking. A knockout is usually awarded when one participant is unable to rise from the canvas within a specified period of time, typically because of fatigue, injury (serious or temporarily incapacitating, e.g. a bleeding cut above the eye can blind a fighter), loss of balance, or unconsciousness; that is, the person may literally be knocked out. A technical knockout (also referred to as a T.K.O.) is often declared when the referee or other judges (such as official ring physician, the fighter, or the fighter’s cornermen) decide that a fighter cannot continue the match, even though he did not fail the count, or, in many regions, a fighter has been knocked down three times in one round.[1] British records refer to TKOs as either “retired”, if the fighter refuses to continue, or “R.S.F.”, for Referee Stopped Fight. In amateur boxing, a knockout is scored as “RSC,” for Referee Stopped Contest. A technical knockout (“Outclassed”) can also be declared if a fighter is ahead by 15 points in a bout.

If you want to use a sports analogy, this is something like a yellow card. It’s inconvenient, and a warning, but the game is still on.

Better yet, Don’t Use a Sports Analogy!!!!

Economics Update

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Well, over the past few days, we’ve had a spate of good news, with the New York Bank of the Federal Reserve’s Empire State index showing continued growth, though that growth is slowing, with the index dropping from 31.9 in April to 19.1 in May.

Additionally, credit card issuers are reporting reduced delinquencies for April.

In real estate, we have the National Association of Home Builders confidence index rising to a 2½ year high in May, as well as an increase in housing starts, though housing permits have fallen, which indicates that the builders are expecting the euphoria to be short lived.

Finally, concerns about the Euro zone, and a related return to recession (we’re out of recession?) have pushed both oil and the Euro down.

Germany Temporarily Bans the Naked CDS

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Notwithstanding Timothy “Eddie Haskell” Geithner’s whoring for the big banks support of so-called naked Credit Default Swaps, Germany’s Federal Financial Supervisory Authority has banned the sale of these insurance like instruments to people who do not have an interest in the continued existence of the insured property, as well as banning naked short sales of stocks, where you sell stocks that you have not borrowed:

The Federal Financial Supervisory Authority has on Tuesday temporarily banned naked short sales of debt securities issued by eurozone countries for trading on domestic stock exchanges in the regulated market. It has also temporarily banned so-called credit default swaps (CDS) where the reference bond and liability are from a eurozone country, and which does not serve to hedge against default risk (naked CDS).

In addition, BaFin has banned naked short sales in the following financial sector companies:

AAREAL BANK AG
ALLIANZ SE
COMMERZBANK AG
DEUTSCHE BANK AG
DEUTSCHE BÖRSE AG
DEUTSCHE POSTBANK AG
GENERALI Deutschland HOLDING AG
HANNOVER RÜCKVERSICHERUNG AG
MLP AG
MÜNCHENER RÜCKVERSICHERUNGS-GESELLSCHAFT AG
These bans apply from 19 May 2010, 00:00, until 31 March 2011, 24:00, and will be reviewed.

BaFin justifies these steps given extraordinary volatility in debt securities issued by eurozone countries. Furthermore, credit default swaps on the credit default risk of several countries in the eurozone has increased significantly. Against this background, massive short sales of the affected debt securities and the conclusion of naked credit default risk on eurozone countries had led to excessive price shifts, which could have led to significant disadvantages for financial markets and have threatened the stability of the entire financial system.

Faced with these circumstances, BaFin has also banned naked short sales within the selected financial institutions.

It’s a start, and I think that both the naked short and the naked CDS may very well be illegal throughout Europe in the next 6-12 months as a result.

Link in the original German.

(on edit)
My bad it appears that this ban is temporary lasting until March 31, 2011:

Germany will temporarily ban naked short selling and naked credit-default swaps of euro-area government bonds at midnight after politicians blamed the practice for exacerbating the European debt crisis.

The ban will also apply to naked short selling in shares of 10 banks and insurers that will last until March 31, 2011, German financial regulator BaFin said today in an e-mailed statement. The step was needed because of “exceptional volatility” in euro-area bonds, the regulator said.

Makes it less likely that this is part of a trend.

Your Daily Dose of Schadenfreude

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Your moment of Zen:
Rep Souder and his mistress discussing abstinence

Representative Mark Souder (R-IN) will resign after it was revealed that he had an affair with one of his staffers, one Tracy Jackson:

Rep. Mark Souder (R-IN), a champion of abstinence education and traditional family values, will resign effective Friday after an affair with a female staffer in his district office, he announced today.

He said in a statement that he “sinned against God, my wife and my family by having a mutual relationship with a part-time member of my staff.” …

(emphasis mine)

If this video does not appear on The Daily Show‘s moment of Zen, I will send a strongly worded letter of complaint Comedy entral about this.

OK, This is Really Stupid

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Blanche Lincoln went to vote today, but she was turned away because she had already requested an absentee ballot:

Sen. Blanche Lincoln suffered what might be one of the all-time greatest campaign staff fails this morning. According to her campaign staff, Lincoln was initially turned away when she tried to vote at her home her polling place this morning after elections officials discovered she had already requested an absentee ballot be sent to her Virginia home. Poll workers told Lincoln their records showed she had already voted.

So, her photo-op turned into a clusterf%$#.

Sounds typical for Ms. Lincoln.

Afghan Prosecutor Issues Arrest Warrant for US Officer for Murder

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It is alleged that a special forces officer in Kandahar authorized a militia that he armed and trained to break some of their compatriots out of jail, and in the process, they murdered the police chief of Kandahar, Matiullah Qateh:

The militia, which Ranjbar claimed is armed and trained by US special forces, also allegedly killed Kandahar’s head of criminal investigations and two other officers, when they attempted to free one of their members from a courthouse.

“We lost one this country’s best law enforcement officers for the [attempted] release of a mercenary,” said Ranjbar, interviewed for a film to be shown on Channel 4 News tomorrow.

He accused American officials of refusing to hand over evidence or to permit his investigators to interview the special forces commander, known to Afghans only as “John or Johnny”, who he alleges sanctioned the raid.

If the facts are as alleged, the charge would be felony murder under most statutes, though, under the status of forces agreement, this officer would be subject to trial and sentencing by a US court martial, where, I am sure justice would sought with the same vigor that was applied to the Calavese cable car disaster of 1998.*

It gets even more complex, because this militia is also tied to the corrupt, drug running brother of the Afghan President, Ahmed Wali Karzai, is also tied to the militia, and is publicly calling for amnesty for the shooting.

This is a natural, and foreseeable, consequence of employing mercenaries as a matter of course in a war zone.

*A 6 month sentence for negligently killing 20 people.†
†Actually, the pilot was acquitted, despite flying lower and faster than regulations required. They eventually got him on obstruction of justice for wiping the video tapes at the end of the flight.

Oh My God………

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OK, I was a bit of a fan of Dodd, so I was upset, Geithner and Obama hung him out to dry over his doing their bidding on AIG bonuses.

At least the person selected by the powers that be to replace him, Connecticut Attorney General Richard Blumenthal, had a lock on the seat in the general, because the Nutmeg State is very blue.

Well, not any more. It appears that the Blumenthal, who has repeatedly used his service in Vietnam to justify his support for military tribunals and a continued military presence in Iraq and Afghanistan, has been lying about serving in Vietnam:

At a ceremony honoring veterans and senior citizens who sent presents to soldiers overseas, Attorney General Richard Blumenthal of Connecticut rose and spoke of an earlier time in his life.

“We have learned something important since the days that I served in Vietnam,” Mr. Blumenthal said to the group gathered in Norwalk in March 2008. “And you exemplify it. Whatever we think about the war, whatever we call it — Afghanistan or Iraq — we owe our military men and women unconditional support.”

There was one problem: Mr. Blumenthal, a Democrat now running for the United States Senate, never served in Vietnam. He obtained at least five military deferments from 1965 to 1970 and took repeated steps that enabled him to avoid going to war, according to records.

……

In 1970, with his last deferment in jeopardy, he landed a coveted spot in the Marine Reserve, which virtually guaranteed that he would not be sent to Vietnam. He joined a unit in Washington that conducted drills and other exercises and focused on local projects, like fixing a campground and organizing a Toys for Tots drive.

……

But what is striking about Mr. Blumenthal’s record is the contrast between the many steps he took that allowed him to avoid Vietnam, and the misleading way he often speaks about that period of his life now, especially when he is speaking at veterans’ ceremonies or other patriotic events.

I’m with the Swing State Project’s take on this, “The Dem statewide convention is this weekend. Conceivably delegates could nominate someone other than Blumenthal. If someone else wants to get on the primary ballot via petition, they need to file 7,500 signatures by June 8th (PDF).”

I think that it is probably too late to get the convention to nominate someone else, but there are 3 weeks to get the signatures, though I would make sure to get at least 12,000 because the PTB who selected Blumenthal in the first place will challenge them.

What I do know is that there are hundreds of hours of Blumenthal lying on video and audio tape, and whoever runs against him will play it over, and over, and over again.

He is dead meat.

I’m beginning to think that serving as attorney general or DA should be taken as a strike against those serving higher office.

The Lines Cross, and the White House Backs Away From Specter

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Absolutely brutal, and completely true.


And the lines cross

I understand why the White House supported Arlen Specter in the Democratic primaries, it was a reward for his switching parties, and provided an inducement to other potential Republicans who might consider switching, like uh……… uh……… uh………

OK, there is not another potential switcher, but it all seemed so wonderfully hopey–changey post partisan.

Well, largely on the basis of the fact that Arlen Specter is really all about Arlen Specter, and the fact that Joe Sestak is pointing it out to people (see vid), Arlen Specter is now lagging in the polls, and as the incumbent with good name recognition.

The rule of thumb that the undecideds nearly always break for the challenger by something like 2:1, so I reiterate my statement that Arlen Specter is toast.

So, the White House loses one here, and they are doing something really stupid, which is to walk back their support of Specter now that it is likely that he is going to lose the election:

If this is true, it’s significant: CBS chief Washington correspondent Bob Schieffer is now saying that he has it on good authority that the White House is privately bracing for Arlen Specter to lose tomorrow.

………

I’ve also learned that Veep Joe Biden will not be doing any campaign events for Specter in the final stretch, though it’s not immediately clear how significant this is. Last week, Biden said he’d be doing events for Specter “as needed.”

But a Biden aide confirms for me that no campaign events are scheduled, even though Biden will be in Pennsylvania tonight speaking at his daughter’s graduation. Biden has done radio interviews on Specter’s behalf.

This recognizes a problem with the Obama administration, and for the Clinton and Carter administrations before them: An unwillingness to continue fighting when victory seems unlikely.

I can understand some talking points flowing out about, “an anti-incumbency mood,” and suchlike, but the idea that when faced with less than a 50:50 change of success, the choice is to fold like overcooked Brussels sprouts has negative consequences.

It convinces allies that you don’t have their back, and it convinces opponents that they can take a temporary advantage, and use it to kill a proposal early in the process.

I never thought that they should support Specter, or for that matter Lincoln, but sawing off the branch won’t endear other Democrats with the concept of going out on a limb for Obama.

Read the Shrill One

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He comments on the IMF’s latest report on the fiscal situation worldwide, and notices something buried in the footnotes, that the large structural deficits currently forecast are due to depressed demand and economic activity causing deflation, not government spending.

The solution is therefore for governments to engage in stimulus activities of the sort that put an end to the great depression, while (hopefully) avoiding that whole “World War” thing:

It takes careful reading to discover what’s really going on:

The persistence of deficits reflects permanent revenue losses, primarily from a steep decline in potential GDP during the crisis, but also due to the impact of lower asset prices and financial sector profits.

(emphasis mine)

Aha. Most people who look at the IMF report will, I suspect, read it as telling a tale of government profligacy getting us into a hole. But what the report actually says is quite different: it says that the financial crisis has made us permanently poorer, which among other things reduces revenue, and governments have to tighten their belts to make up for that loss.

He is correct when he says that the IMF’s burying the lede means that , “[T]he report isn’t literally misinformation, but in practice it’s likely have that effect.”

This and $8.95 Will Get You a Starbucks

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BP is claiming success at its latest attempt to ameliorate the oil spill:

After two false starts, engineers successfully inserted a narrow tube into the damaged pipe from which most of the oil is leaking.

“It’s working as planned,” Kent Wells, a senior executive vice president of BP, said at a briefing in Houston on Sunday afternoon. “So we do have oil and gas coming to the ship now, we do have a flare burning off the gas, and we have the oil that’s coming to the ship going to our surge tank.”

I’ll wait for independent verification, thank you very much, and BP is not in the least interested in independent verification:

BP has resisted entreaties from scientists that they be allowed to use sophisticated instruments at the ocean floor that would give a far more accurate picture of how much oil is really gushing from the well.

So I doubt that a meaningful amount of oil is coming up to the boat.

“The answer is no to that,” a BP spokesman, Tom Mueller, said on Saturday. “We’re not going to take any extra efforts now to calculate flow there at this point. It’s not relevant to the response effort, and it might even detract from the response effort.”

Yes, I Posted Nothing Yesterday

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Click for full size


Brains!!!!!


Brains!


Brains…………


You know………


Hot Marshmallow, Hershey® Bar, and Graham Crackers would do nicely too…


Giant animated food, sounds like another horror movie…


But the kids are happy.

Natalie had a music competition in Hershey, PA which included entrance to the Hershey Park, so the rest of us got some (discounted) tickets to the amusement park, and we made a day of it.

It was a lot of fun, even if the Boardwalk, where most of the water rides are, was not yet open.

We had a lot of fun.

I made an interesting observation: The appearance of a child eating fresh, hot, S’mores is almost indistinguishable from that of a Zombie eating human brains.

It Looks Like the Hedge Fund Tax Loophole May Be Gone Soon

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As some of you are aware, the bulk of hedge fund managers’ income is taxed at the capital gains rate of 15%, rather than the 35% on amounts in the 6+ figure range that mere mortals pay.

Basically, they get a slice of the increase in price of their assets, even though they never put a dime of their own money in. It’s called “Carried Interest.”

Well, it appears that both Max Baucus (DINO-MT), who slowed down healthcare refiorm waiting for non-existent republicans to come on board, and Barack Obama’s Director of the Office of Management and Budget, Peter Orzag, have decided that it would be a good think to put a stake through the heart of this loophole in the interest of deficit reduction.

The money quote is this:

Hedge fund managers make hundreds of millions of dollars (and often billions) annually. Does anyone really think they will suddenly slam on the brakes if they have to pay the same tax rate as the janitors who clean their offices?

This makes this both good policy and good politics………For the win.

Shadenfreude

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It appears that Rush Limbaugh is having problems selling his New York City penthouse apartment, so he has cut his asking price by $1 million.

I guess his little tantrum about New York raising taxes by a few pennies on rich pigs is costing him some change.

I noted this real estate transaction about 2 months ago, (Yes, the pictures are at the link, and yes, they are hideous) when I commented on the fact that his taste in decorating was less than refined.

It’s Bank Failure Friday!!!!

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And here they are, ordered, and numbered for the year so far.

  1. Satilla Community Bank, St. Marys, GA
  2. New Liberty Bank, Plymouth, MI
  3. Southwest Community Bank, Springfield, MO
  4. Midwest Bank and Trust Company, Elmwood Park, MN

Full FDIC list

So, we have seen 4 bank failures in the past 2 weeks, which is pretty awful, but better than the 22 in the 3 weeks prior to that.

So, here is the graph pr0n with trendline (FDIC only):