Month: April 2012

Still???

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The SEC still hasn’t finished its investigation of Lehman?

It’s been 4 years, and we’ve not seen anything:

The U.S. Securities and Exchange Commission is still probing Lehman Brothers more than three years after the investment bank collapsed during the global financial crisis, agency chairman Mary Schapiro said on Wednesday.

Schapiro told lawmakers it would be inappropriate to comment on a matter that “remains under investigation,” but assured lawmakers that the SEC has conducted interviews with management at the highest levels and has reviewed millions of pages of documents.

“It is still under review,” she said at an SEC oversight hearing before a House Financial Services subcommittee.

Schapiro’s comments come after “60 Minutes” on Sunday aired a segment revisiting the March 2010 findings by Lehman Brothers Holdings Inc’s court-appointed examiner, Anton Valukas.

Valukas’ report said that Lehman used accounting gimmicks and had been insolvent for weeks before it filed for bankruptcy in September 2008.

But we haven’t even seen administrative actions.

Nobody has been banned from the securities industry, no prosecutions, no fines, no nothing.

The fix is in.

Nice Golden Egg, Bird. See the Farmer With the Axe?

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In a development that should surprise no-one following Comcast’s purchase by NBC, Hulu will start requiring a cable account for access:

Viewers who stream network TV shows may soon discover the free ride is not so free.

Hulu, which attracted 31 million unique users in March under a free-for-all model, is taking its first steps to change to a model where viewers will have to prove they are a pay-TV customer to watch their favorite shows, sources tell The Post.

In fact, the move by Hulu toward the new model — called authentication because viewers would have to log in with their cable or satellite TV account number — was behind the move last week by Providence Equity Partners to cash out of Hulu after five years, these sources said.

And it’s not just Hulu making it tougher for cable-cutters to stream shows and other content.

Fox, owned by News Corp., which also owns The Post, is expected to begin talks soon with Comcast on a TV Everywhere deal that will require authentication. Plus, Philadelphia-based Comcast is expected to switch to an authentication model for this summer’s Olympic Games (see story at right).

The move toward authentication is fueled by cable companies and networks looking to protect and profit from their content.

Their content?

With all due respect to the fine gentlemen at Comcast, about the only work of convincing fiction that they produce are their own advertisements.

It also appears to be a violation of their agreement that the FCC required for the NBC/Comcast merger:

“The Federal Communications Commission (FCC) was asked to include as a condition of Comcast’s takeover of NBCU that subscription to a pay-TV service not be required for access to Hulu,” said Public Knowledge President Gigi Sohn. “It is a shame the Commission declined to do so.”

Free Press saw it differently. “This sudden move to big cable’s preferred business model raises serious questions about whether Comcast is violating the conditions of its merger with NBCUniversal,” said the group, “a deal that gave the company a large ownership stake in Hulu.” As a condition for approval of the merger, the cable giant agreed to relinquish any right “to influence, control or participate in the governance or management of Hulu.”

“Where there’s smoke, there’s fire,” said Free Press Policy Director Matt Wood, “or at least a compelling reason to investigate. Under the terms of its acquisition of NBCUniversal, Comcast is forbidden from influencing Hulu’s operations. Today’s announcement looks an awful lot like an example of such influence.”

what is going on here is that they are killing the business in order to maintain control.

In the short run, it may make sense, since this allows them to maintain their monopoly rents on their subscribers, for a while at least.

One of thei early investors, however, bailed out on Hulu:

Hulu.com owners Walt Disney Co. (DIS), Comcast Corp. and News Corp. (NWSA) are close to buying out Providence Equity Partners Inc.’s stake at a price valuing the company at about $2 billion, said two people with knowledge of the matter.

Providence is selling its 10 percent share in Los Angeles- based Hulu for about $200 million after investing $100 million when the venture began in 2007, according to the people, who weren’t authorized to talk publicly.

“This would be the optimal outcome,” David Bank, an analyst at RBC Capital Markets in New York, said in an interview. “The real value of Hulu will be discovered on a longer time frame than what’s likely optimal for Providence.”

It ain’t the time frame, it’s that their interest is in the success of Hulu, and not of the cable companies, and they realized that the management is the cable companies’ moles.

Truth be told, except for the wonderful Alec Baldwin brain sucker ads, this does not really effect me, but it’s seriously galling.

What Has Happened to America?

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It appears that one of the consequences of privatizing prisons is that these private companies are renting out prison labor for a profit:

Sweatshop labor is back with a vengeance. It can be found across broad stretches of the American economy and around the world. Penitentiaries have become a niche market for such work. The privatization of prisons in recent years has meant the creation of a small army of workers too coerced and right-less to complain.

Prisoners, whose ranks increasingly consist of those for whom the legitimate economy has found no use, now make up a virtual brigade within the reserve army of the unemployed whose ranks have ballooned along with the U.S. incarceration rate. The Corrections Corporation of America and GEO, two prison privatizers, along with a third smaller operator, G4S (formerly Wackenhut), sell inmate labor at subminimum wages to Fortune 500 corporations like Chevron, Bank of America, AT&T, and IBM.

These companies can, in most states, lease factories in prisons or prisoners to work on the outside. All told, nearly a million prisoners are now making office furniture, working in call centers, fabricating body armor, taking hotel reservations, working in slaughterhouses, or manufacturing textiles, shoes, and clothing, while getting paid somewhere between 93 cents and $4.73 per day.

Seriously, our country is becoming something profoundly disturbing.

Not Safety and Simplicity, Too Many Parts

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So someone has decided that it might be a good thing to add even more moving parts to a rotorcraft:

A strange, 16-propeller vertical take-off and landing craft has been awarded the Lindberg Prize for Innovation at the Aero-Friedrichshafen 2012 airshow in Germany. It is an example of the unusual configurations made possible by distributed electric propulsion.

This is true. It is unusual.

It’s also completely impractical.

There is not a single multi-engine aircraft that takes off with an engine out, and in this case, there are 16 engines that might fail.

If you lose an engine, you either don’t take off, or, if you are in flight, you set down as soon as you can.

While this aircraft may (according to its inventors) be able to land safely with “several props failed”, it won’t make its destination with even one of the props failing.

If They Buy a White Persian Cat, Call Daniel Craig

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So, a collection of eccentric billionaires have decided to start as company to mine the asteroids:

Some time in the next 18 to 24 months, Planetary Resources, Inc. will launch a series of mass-produced 9″ space telescopes, dubbed Arkyd Series 100 spacecraft. They’re specifically designed to identify which of the roughly 8,900 near-Earth asteroids are both smaller than 50 meters and suitable targets for retrieval back to Earth orbit. These small near-Earth asteroids represent a transient population, with life spans in the millions of years, typically cut short by running into a planet or being thrown out of the solar system by Jupiter.

That mission, according to Planetary Resources co-founder Eric Anderson, will be completed well enough within the ensuing year or two that the follow-up spacecraft, the Arkyd Series 200, can track some of these asteroids as they fly by in high Earth orbit. Still later, Arkyd Series 300 swarm spacecraft can begin launching to survey those asteroids from a closer perspective, gathering information on spin, shape, and composition.

In theory, several spacecraft could be launched every year for as long as necessary. At some point, the company would have enough information to launch spacecraft built to travel to an asteroid and retrieve them over several years, ultimately delivering them to a high Earth orbit. By some time in the next decade, both robotic and manned spacecraft would be waiting in orbit for the asteroids as they arrived.

…………

These angel investors form an amazing list. They include Google’s CEO Larry Page and Chairman Eric Schmidt, Microsoft billionaire Charles Simonyi, Ross Perot Jr., and James Cameron. Charles Simonyi has been to space twice via one of Eric Anderson’s previous ventures, Space Adventures. Ross Perot and James Cameron are also known as adventurers in their own right, and Cameron just returned from a solo submarine voyage to the bottom of the Mariana Trench. All are willing to contribute large sums of money at high risk of loss for what could be a long period of time.

When you look at these guys, Cameron, Perot, the Google Twins, etc., you see a lot of ego.

Maybe I’ve watched one too many bond films, butthe idea that these guys want to go and place a number of asteroids, each about ½ a million tons (50m of solid iron weighs that) at a Lagrange point, where they can be given a nudge toward, for example, Fresno, unless we meet their demands.

I’m wondering what their nefarious demands will be.

Not Enough Bullets

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The banksters have discovered another way to pay their obscene levels of executive pay, they push poor customers to high fee products:

An increasing number of the nation’s large banks — U.S. Bank, Regions Financial and Wells Fargo among them — are aggressively courting low-income customers like Mr. Wegner with alternative products that can carry high fees. They are rapidly expanding these offerings partly because the products were largely untouched by recent financial regulations, and also to recoup the billions in lost income from recent limits on debit and credit card fees.

Banks say that they are offering a valuable service for customers who might not otherwise have access to traditional banking and that they can offer these products at competitive prices. The Consumer Financial Protection Bureau, a new federal agency, said it was examining whether banks ran afoul of consumer protection laws in the marketing of these products.

In the push for these customers, banks often have an advantage over payday loan companies and other storefront lenders because, even though banks are regulated, they typically are not subject to interest rate limits on payday loans and other alternative products.

Some federal regulators and consumer advocates are concerned that banks may also be steering people at the lowest end of the economic ladder into relatively expensive products when lower-cost options exist at the banks or elsewhere.

“It is a disquieting development for poor customers,” said Mark T. Williams, a former Federal Reserve Bank examiner. “They are getting pushed into high-fee options.”

“We look at alternative financial products offered by both banks and nonbanks through the same lens — what is the risk posed to consumers?” said Richard Cordray, director of the bureau. “Practices that make it hard for consumers to anticipate and avoid costly fees would be cause for concern.”

Seriously, we should have tarred and feathered these f%$#s, not bailed them out.

Here’s hoping that the CFPB takes a look at this.

The “Educational Reformers” in a Nutshell

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Doug Lynch, University of Pennsylvania’s vice dean of its Graduate School of Education was found to have been lying about having a PhD, and nothing happened, until the Inky found out, at which point he was first put on leave and then he resigned.

It appears that the university wasn’t going to do anything meaningful until it became public:

Earlier Wednesday, Penn officials said they became aware of the misrepresentation a couple of months ago, taking unspecified “appropriate sanctions” but deciding to leave Lynch in his leadership role.

That changed after The Inquirer placed a call to Penn president Amy Gutmann for comment. The university then issued a one-sentence statement from Stephen J. MacCarthy, vice president for university communications.

“Doug Lynch has been placed on administrative leave pending the outcome of an ongoing investigation,” MacCarthy’s statement said.

As to why he was kept on, it was because he was so in tune with the educational reform “crap on teachers” orthodoxy:

Since joining Penn, Lynch has become a lightning rod for controversy. He has pushed entrepreneurial methods and supported programs such as Teach for America, which puts bright college graduates who lack education degrees in some of the nation’s toughest public schools for a two-year commitment.

A February 2011 feature on him in Penn’s alumni magazine said: “What happens when you unleash an entrepreneurship evangelist on an education school? Meet Doug Lynch, the vice dean bent on making Penn GSE a hub for social entrepreneurs, venture capitalists, and next-generation educational reform.”

Because bringing in the private sector will allow Wall Street to do to our schools what they did to our retirement savings.

It appears that everyone in the educational reform is a fraud on some level.

H/t Atrios.

Skylon Development Continues Apace

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Aspiring space plane manufacturer Skylon is beginning test with their key heat exchanger technology:

UK engineers have begun critical tests on a new engine technology designed to lift a spaceplane into orbit.

………

Its major innovation is the Sabre engine, which can breathe air like a jet at lower speeds but switch to a rocket mode in the high atmosphere.

Reaction Engines Limited (REL) believes the test campaign will prove the readiness of Sabre’s key elements.

This being so, the firm would then approach investors to raise the £250m needed to take the project into the final design phase.

………

Sabre is part jet engine, part rocket engine. It burns hydrogen and oxygen to provide thrust – but in the lower atmosphere this oxygen is taken from the atmosphere.

The approach should save weight and allow Skylon to go straight to orbit without the need for the multiple propellant stages seen in today’s throw-away rockets.

………

But it is a challenging prospect. At high speeds, the Sabre engines must cope with 1,000-degree gases entering their intakes. These need to be cooled prior to being compressed and burnt with the hydrogen.

Reaction Engines’ breakthrough is a module containing arrays of extremely fine piping that can extract the heat and plunge the intake gases to minus 140C in just 1/100th of a second.

Ordinarily, the moisture in the air would be expected to freeze out rapidly, covering the pre-cooler’s pipes in a blanket of frost and compromising their operation.

But the REL team has also devised a means to stop this happening, permitting Sabre to run in jet mode for as long as is needed before making the transition to a booster rocket.

The technology, first mooted in the early 1980s, is using the cryogenic hydrogen to extract oxygen from the air up to about 30,000m, and then convert to onboard oxygen for the rest of the journey.

The heat exchanger is a full size flight representative component so this is significant, but I really don’t see this becoming an actual aircraft without a major government backing.

Some background on Skylon here.

It’s Bank Failure Friday!!!!

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

  1. Bank of the Eastern Shore, Cambridge, MD
  2. HarVest Bank of Maryland, Gaithersburg, MD
  3. Inter Savings Bank, fsb D/B/A InterBank, fsb, Maple Grove, MD
  4. Plantation Federal Bank, Pawley’s Island, SC
  5. Palm Desert National Bank, Palm Desert, CA

Full FDIC list

Last week, I was noting how much the closure rate had slowed down, and I predicted less than 50 closures this year, and this week we see 5 closures.

Go figure.

So, here is the graph pr0n with last years numbers for comparison (FDIC only):

GPD Growth Slows

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If people are planning on a robust recovery, they will be disappointed:

The economic recovery slowed more than expected early this year, raising fears of a spring slowdown for the third year in a row and giving Republicans a fresh opportunity to criticize President Obama’s policies.

The United States gross domestic product grew at an annual rate of 2.2 percent in the first quarter, down from 3 percent at the end of last year, according to a preliminary report released Friday. It was the first deceleration in a year, but it was not nearly as severe as other setbacks in the last couple of years.

Yeah, it sucks, but not so badly, until Angela Merkel manages to accomplish her goal of blowing up Europe though a misguided push for austerity.

Well, Duh

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Congress just completed a study of torture by the CIA, and they discovered that it didn’t work:

A nearly three-year-long investigation by Senate Intelligence Committee Democrats is expected to find there is little evidence the harsh “enhanced interrogation techniques” the CIA used on high-value prisoners produced counter-terrorism breakthroughs.

People familiar with the inquiry said committee investigators, who have been poring over records from the administration of President George W. Bush, believe they do not substantiate claims by some Bush supporters that the harsh interrogations led to counter-terrorism coups.

The backers of such techniques, which include “water-boarding,” sleep deprivation and other practices critics call torture, maintain they have led to the disruption of major terror plots and the capture of al Qaeda leaders.

One official said investigators found “no evidence” such enhanced interrogations played “any significant role” in the years-long intelligence operations which led to the discovery and killing of Osama bin Laden last May by U.S. Navy SEALs.

Torture has never been about good intelligence.

Torture’s supporters don’t care about what the record shows.

They support torture because it makes them feel like real men.

It’s some sort of sick and twisted perversion.

I’m Cynical as to the Motives Here

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So, after expressing concerns about the Cyber Intelligence Sharing and Protection Act (CISPA), the White House has now threatened a veto:

The White House has said that the Cyber Intelligence Sharing and Protection Act (CISPA), currently before the US House of Representatives, lacks enough privacy protections in its current form and will probably be vetoed if passed.

A statement from the White House Office of Management and Budget said that, while the importance of protecting the national infrastructure from online attacks is paramount, it “strongly opposes” the bill because it lacks proper oversight, could seriously damage individuals’ privacy and hands over responsibility for domestic cybersecurity to the NSA, rather than to a civilian body.

“Legislation should address core critical infrastructure vulnerabilities without sacrificing the fundamental values of privacy and civil liberties for our citizens, especially at a time our Nation is facing challenges to our economic well-being and national security,” the statement reads.

“The Administration looks forward to continuing to engage with the Congress in a bipartisan, bicameral fashion to enact cybersecurity legislation to address these critical issues. However, for the reasons stated herein, if H.R. 3523 were presented to the President, his senior advisors would recommend that he veto the bill.”

Yea! The White House is standing up for privacy.

Or maybe not:

“The Administration strongly opposes H.R. 3523, the Cyber Intelligence Sharing and Protection Act, in its current form,” the White House said in a statement released Wednesday afternoon. “H.R. 3523 fails to provide authorities to ensure that the nation’s core critical infrastructure is protected while repealing important provisions of electronic surveillance law without instituting corresponding privacy, confidentiality, and civil liberties safeguards.”

CISPA’s sponsors, House Intelligence Chairman Mike Rogers, R-Mich., and ranking member Dutch Ruppersberger, D-Md., dismissed the White House statement.

“The basis for the administration’s view is mostly based on the lack of critical infrastructure regulation, something outside of our jurisdiction,” the pair said in a statement released during the House Rules hearing. In addition, the sponsors pointed out that the White House objects to the bill’s current form, which doesn’t contain the latest changes hammered out with civil liberties groups.

(emphasis mine)

Maybe I’m a bit of a cynic, but I’m thinking that their objection is that it does not grant enough power.

If we look at the Obama administration’s prior behavior, their concerns for civil liberties or transparency have always taken a back seat to expanding executive power. (Basically Dick Cheney with abortion support)

Also, as PC Magazine notes, the Obasa administration made exactly the same sort of statements about the National Defense Authorization Act (NDAA), which allows for indefinite detention of American citizens, but decided to sign it anyway.

In any case, the House just called what is likely his bluff, and they passed CISPA and sent it to the Senate.

I’m not optimistic.

White House Statement after break:

CISPAvetostatement

So Not a Surprise

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Michelle Rhee is speaking at a conference of for profit colleges, which, considering their record of taking students’ (actually our, through the student loan program) money without providing any, you know, education:

Republic Report previously reported that former President George W. Bush will be speaking at the annual meeting of APSCU, the leading association of for-profit colleges, on June 22 at the Mandalay Bay Hotel & Casino in Las Vegas. For-profit colleges get $32 billion in student aid from your tax dollars every year, but many are marked by deceptive recruiting, low-quality programs, sky-high prices, and high dropout rates.

………

Finally, some really depressing news: APSCU has announced the conference’s “additional speaker,” and it’s former District of Columbia Public Schools chancellor Michelle Rhee, now the CEO of education advocacy group Students First. If you’ve been on the fence about Rhee, not sure if she’s a sincere reformer with real results or a union-busting elitist aimed at replacing public education with charters, private schools, and online learning companies, you may find cause to jump off the fence now. By speaking at the annual meeting of the most cynical group of “educators” ever assembled — Wall-Street owned businesses that enrich their CEOs and ruin students’ lives at taxpayer expense and then hire armies of lobbyists to protect their privileges — Rhee has made her preferences very clear. (It’s always possible that she agreed to speak with the intent of telling the for-profits to clean up their act, but I doubt it.) Rhee staked her career on the concept of shutting down underperforming, bad schools. And now she will address a room full of them.

(emphasis mine)

For this, she will get a 50 grand speakers fee, but Michelle Rhee has always been a fervent devotee of pump and dump education, as evidenced by increasing evidence of her tolerance for fraud to create the illusion of success.

Considering the record of for-profit colleges, they are a perfect match.

Another Shareholder Revolt

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Unfortunately, it was unsuccessful, but the attempt by GE shareholders to exert greater control over management was pretty damn close:

Shareholders in General Electric have come close to winning a vote that would have given them more direct control over the the largest US industrial group by market capitalisation against the wishes of its board.

In the latest sign of rising shareholder activism in the US, a proposal at GE’s annual meeting in Detroit on Wednesday to allow shareholders to make decisions about the company “by written consent” won the support of some 47.5 per cent of the votes cast.

This would have meant that shareholders would not have had to call a special meeting to push through corporate change. The motion was backed by Institutional Shareholder Services and Glass Lewis, the corporate governance advisory firms.

There was also a significant vote for appointing an independent chairman of the board, which was backed by 22 per cent of the votes cast, although that was lower than the 35 per cent support the proposal won last year.

I think that shareholders are beginning to understand that management will keep them in the dark, and then f%$# them like a drunk school girl if they don’t make changes.

You gotta love the American MBA culture.

I Try to be Tolerant of Other Religions, But………

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I understand that people want to worship their God in their own manner, but the Islamist in Egypt may be taking it a bit too far.

How much too far? How about legalizing necrophilia:

Egypt’s National Council for Women (NCW) has appealed to the Islamist-dominated parliament not to approve two controversial laws on the minimum age of marriage and allowing a husband to have sex with his dead wife within six hours of her death according to a report in an Egyptian newspaper.

The appeal came in a message sent by Dr. Mervat al-Talawi, head of the NCW, to the Egyptian People’s Assembly Speaker, Dr. Saad al-Katatni, addressing the woes of Egyptian women, especially after the popular uprising that toppled president Hosni Mubarak in February 2011.

She was referring to two laws: one that would legalize the marriage of girls starting from the age of 14 and the other that permits a husband to have sex with his dead wife within the six hours following her death.

You know, I can understand wanting to kiss your spouse goodbye, (no tongue, please) but this is completely nuts.

Of more significance, is the fact that they are also trying to remove a woman’s right to an education, and the right for a woman to initiate a divorce.

If it gets any more insane, Egyptian politics will start looking like a Focus on the Family convention.

H/t JR at the Stellar Parthenon BBS.

Yeah, Austerity Works

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The UK is officially back in recession:

When David Cameron became PM, and announced his austerity plans — buying completely into both the confidence fairy and the invisible bond vigilantes — many were the hosannas, from both sides of the Atlantic. Pundits here urged Obama to “do a Cameron”; Cameron and Osborne were the toast of Very Serious People everywhere.

Now Britain is officially in double-dip recession, and has achieved the remarkable feat of doing worse this time around than it did in the 1930s.

Britain is also unique in having chosen the Big Wrong freely, facing neither pressure from bond markets nor conditions imposed by Berlin and Frankfurt.

Yep, the UK is now doing officially doing worse than it did in the great depression.

Why is anyone still listening to the austerity monkeys?

Oh Yeah, There Were Primaries Yesterday

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Actually there were 5, and Romney won them all.

What is interesting however were 2 Congressional races in Pennsylvania:

U.S. Rep. Tim Holden, Pennsylvania’s longest-serving congressman, lost his re-election bid in the Democratic primary, while Rep. Mark Critz beat fellow Democratic incumbent Rep. Jason Altmire in another contest that shook up the state’s House delegation.

Newly-configured congressional district lines put in place by the Republican-controlled state Legislature affected the dynamics in each closely-watched race.

Holden, who was elected to Congress in 1992 and was one of its conservative, so-called Blue Dog Democrats, lost Tuesday to personal injury attorney Matt Cartwright, who spent nearly $400,000 in the race.

Asked to assess his victory, Cartwright said “It’s a combination of things, number one, the redistricting, and number two, my own core political beliefs are a much better fit for the new district.”

The only bad news in these two elections is that Critz and Altmire could not both lose.

Still Critz is a bit less bad than Altmire.

BTW, as an aside, if you are considering supporting Democratic Congressional candidates this cycle, take Howie Klein’s advice, and don’t take a DCCC endorsement for granted, particularly since its head this cycle is former Blue Dog Steve Israel.  (You can see examples of their hacktacular calls at the link)

We need fewer of these right wing pukes in congress, not more, and most of the DCCC’s red to blue targets are faux Dems.