Off for 2 Days

Rosh Hashanah, so I will be in Shul.

Back on Wednesday evening, so please, do nothing newsworthy until then.

Yea, like that's going to happen after the bailout imploded....This may be the most eventful news days of the decade.

Oh My God Economics Update

I normally don't note stock market swings, but 778 points after House 'Phants kill the Paulson bailout bill?

Surprisingly, the dollar is up and oil is down.

Money with half a brain should be fleeing in the other direction, but it appears that European banks are in real trouble too, because their governments are bailing a bunch of them out.

Not that US banks are doing much better, with Citi getting the bits of Wachovia for magic beans.

So not both the US Federal Reserve and various foreign central banks are shoveling money out the door.

Meanwhile, Iceland did what Paulson should have, when it nationalized the Glitnir bank, as has the UK, which has nationalized mortgage lender Bradford & Bingley.

How to Understand the Economic Crisis

These guys are comedians, but they do a better job of explaining this than journalists and economists.

Obituary: Paul Newman

My mom's favorite actor, she could never say Long Hot Summer, with Paul Newman, without saying, "Yum!"

He is also at the center of my story about how someone can be too concerned about politics.

My Mom's 1st Cousin, Joy, (does that make her my 2nd cousin, or my 1st cousin once removed?) was and is involved in the Washington DC scene, and at one large event, was asked to point out someone in the crowd.

She said, "See the tall handsome man with the striking blue eyes, she is standing to his left."

The person then replied, "So, she's standing next to Paul Newman?"

My mom teased Joy about that one.

More Tanker Mishugas

First, it appears that Northrop-Grumman is entitled to an as yet undetermined cancellation fee, which is yet another reason to think that the entire tanker process is completely fracked.

But here is the kicker, Northrop Grumman's bid was $2.9 billion cheaper:

John Young, the undersecretary for acquisition, technology and logistics, said in an interview at the Pentagon yesterday that under the tanker proposal from Northrop Grumman and its partner European Aeronautic Defence & Space, developing the first 68 aircraft would have cost $12.5 billion, compared with $15.4 billion under Boeing's plan.

So, the tanker version of the A330 had longer range, greater fuel offload capability, the ability to tank and carry cargo, and it was $2.9 billion cheaper.

Let's also note that it was already flying, as Australia's A330 MRTT, as versus Boeing's proposal, an as yet unconstructed model with, "767-200 airframe; over-wing exits from the -300; floors, doors and structurally enhanced wings from the -300F; a cockpit, and the tail section and flaps from the -400ER".

Delightful.

OK, Me Bad. Maybe the Navy DOES Care About Piracy

At least when it involves a ship carrying $30 million worth of, "grenade launchers, piles of ammunition, even battle tanks."

Looks like the Russians are pursuing the pirates too, in the spirit of international cooperation...or maybe just because it was their schwag that got taken.

But according to diplomats and the Russian Interfax news agency, the cargo was 33 T-72 refurbished tanks, "quite a significant amount of ammunition" and grenade launchers. The supplier was a state-owned Ukrainian company. Ukrainian and Kenyan officials emphasized that the arms deal was perfectly legal.

To be fair, three of the crewman were Russian, and I'm sure that the Russians were offended...After all, no one gets to steal and threaten the citizens and businesses of their former republics but them.

JSF Program Managers Get Stroppy

It appears that in some computer simulations of the JSF versus late model SU-35 fighters, the F-35 got clubbed like baby seals.

All in all, this is not particularly surprising. It's a redux of the F-105 (Lead Sled) vs. the MiG-21 of the Vietnam era.

The MiG-35 has a better power to weight ratio, wing loading, and air to air weapons load out, the F-35 carruing only 2 AMRAAMs because the USAF doesn't want a comparison with the F-22, a white elephant that they are still lobbying for.

Needless to say, the Airforce brass is thoroughly unamused by these reports, and they are mounting a PR counteroffensive, including claims that the simulation was an apples to oranges comparison, because the F-35 was carrying all of its weapons internally.

Dude, you carry the stuff on pylons, and you lose stealth. If you lose stealth, you will be clubbed like a baby seal, it's the only advantage that the F-35 has.

My favorite bit of this counter-offensive is this patently absurd claim:

"Advanced stealth and sensor fusion allow the F-35 pilot to see, target and destroy the adversary and strategic targets in a very high surface-to-air threat scenario, and deal with air threats intent on denying access -- all before the F-35 is ever detected -- then return safely to do it again," said Tom Burbage, a Lockheed Martin vice president.

Considering that he is presenting what is called a "flaming datum", so named because a ship burning or sinking was how U-Boats, an early form of stealth vehicle, were determined to be in the area, and then suggesting that he can return to the area and make another attack, is absurd.

Something like 50% of all sub sinkings followed a flaming datum.

In any case, it appears that as part of planning for the dual role missile, A2A weapons carriage will be improved (paid subscription required):

The U.S. Air Force and Navy have begun talks to define the Joint Dual-Role Air Dominance Missile (JDRADM) intended to replace both air-to-air AIM-120 Amraam and anti-radar AGM-88 Harm beyond 2020 and allow the F-35 to defend itself against both opposing fighters and air defenses.

...

Separately, studies into “super-packing” the JSF’s bays to increase the number of weapons carried have come up with a way of loading six Amraam-sized missiles internally, according to the program office. This could be an option for later F-35 capability blocks.

So my guess is that the boyz in blue have seen the same simulations, and are looking to rectify the problem.

Turkey Buys Russian Anti-Tank Missiles

Considering the historical emnity between the two nations, I'm surprised that Turkey bought 80 80 Kornet E (NATO designation: AT-14) laser-guided anti-tank missile systems.

From all I've read though, it's a good system, and being Russian, probably pretty cheap, but I'm still stunned at the Turks buying from the Russians.

Just so You Know that the USAF Does Not Have the Monopoly in the ,"We're To Busy to Do Our Damn Job," Category...

The US Navy, specifically the 5th fleet, is now saying that the piracy off the coast of Somolia is not their job.

Would someone remind them just why the US Navy was built in the first place? Something about Barbary Pirates, IICR.

Updated PAC-3 Looking at 2009 Test

It looks like Lockheed-Martin Missiles and Fire Control^* and the Missile Defense Agency are looking at testing an upgrade to the PAC-3 Patriot SAM in 2009. (paid subscription required)

It looks like the sensor for the hit-to-kill weapon will be much the same as its predecessor, but that range will be doubled and effective altitude increased by a larger diameter motor with a two pulse motor, giving generally improved kinematics.

To do this, they will put the missile in a PAC-2 cannister, the PAC-3 fits 4 missiles in the space of a PAC-2 now, and use folding fins for greater volumetric efficiency, and LM is hopingto be competitive in naval applications too.

^*Full Disclosure, in 1999-2000 and 1996-1998, I worked as a mechanical engineer for what is now Lockheed Martin Missiles and Fire Control, and I have some claim to actually being a rocket scientist.^†
†Yes, I have worked everywhere. Maybe I can't hold down a job, but more likely this has been my role as "technical hit man", where you are parachuted in to take care of a specific need.

Next Man Makes a Move, and the N*gg*r Gets It

If you've ever seen Blazing Saddles,^* you remember the scene where Cleavon Little, realizing that the citizens of Rick Ridge are about to lynch him, holds a gun to his own neck, and then holds himself hostage until he can extricate himself from the situation.

Well, it appears that EADS, parent company of Airbus has watched Blazing Saddles many, many times, because this is the stratagem that they are using to deal with the penalty clauses in their contracts for late delivery:

Aerospace giant EADS has threatened to freeze production of its Airbus subsidiary's flagship military airlifter if clients do not drop penalty clauses for late delivery, a German news report said Sept. 20.
The A400M airlifter. (EADS)

Der Spiegel weekly, trailing its Sept. 22 publication, cited a letter sent by Louis Gallois, the French chief executive of both companies, to the governments of seven countries who have ordered the A400M plane.

Un-dirtyword-believable.

^*If you've never seen Blazing Saddles, you need to rent it and watch it today.

Yeah, Right, We Believe You

So, after what seems like 40 gazillion protests, contractor and congressional dick swinging, and a cloud over the whole program, the USAF hopes to complete the process for selecting a Combat Search and Rescue (CSAR) helicopter by years end, and to award a contract.

Let's just say that I'm highly dubious of this.

How the USAF is Handling Shortage of UAV Pilots

Don't be drinking anything when you watch this...Seriously.

F-35B Opens Doors in Flight

So, they've finally gotten the doos open of the vertical lift system open in flight, hopefully this means a full STOVL flight in the next few weeks, though these wheels seem to be grinding awfully slowly.

To my mind, it is the F-35B, with it's STOVL capabilities, that is really the only variant that brings anything particularly necessary to the table.

It's clear that for a number of reasons, the Harriers in service really do need to be replaced.

DCNS Adds Littoral Submarine to Portfolia

The Adastra appears to be largely derived from the larger, deeper diving, and longer ranged Scorpene, there us 70% commonality, but in a package better suited to countries that do not have to deploy over long distances or deploy much past the continental shelf.

Because the USAF Has WAY too Much Free Time

Well, we now know just how seriously the USAF takes Iraq and Afghanistan, because they just rolled out new dress uniforms.

The uniforms are inspired by those of General "Hap" Arnold.

To be fair, the current leader of the USAF, Air Force Chief of Staff Gen. Norton Schwartz, inherited this matter, his predecessor was the one who pushed the new dress blues, which may explain why he got his ass fired.

Price tag: $125 million. Complete confirmation that the making USAF an independent was a total mistake: Priceless.

Friday Night WTF is That!?!? Blogging

Economics Update

With upwards of 70% of the US Economy being consumer spending driven, it's not good news that the final for consumer confidence missed expectations, 70.3, as opposed to the forecast 71.0, but it does reflect the fact that the final number for economic growth in the 2nd quarter was revised downward.

The fact that August new home sales are the lowest since 1982, which was not a great year for the economy either, points to the fact that the economy sucks in the real world too.

Of course, while all this is going on, Congress is still fighting over bailing out Wall Street, which has lead to a muddled picture for the dollar.

That beins said, it's clear that the energy markets are banking on a recession with both oil and retail gasoline heading lower.

All this uncertainty is why 30 year mortgage rates exploded this week, going from 5.78% last week, to 6.09% this week.

31 basis points in a week....Ouch.

FWIW, the central banks are shoveling cash out the door, which will eventually start devaluing the currency (inflation).

Presented For Your Approval

I would take a bullet for either of them....OK....Not a bullet....but a REALLY big creme pie.

Jimmy Carter John Sidney McCain III Abandons Rose Garden Strategy Campaign Suspension

Heard on the radio. He will be at the debates, and this is so much like Jimmy Carter's adopting, and then abandoning, his Rose Garden strategy against Teddy Kennedy in 1980, it's not funny.

Jewish Extremists Suspected in Attack on Israeli Peace Activist

Ummmm....Folks, this is so not Tikkun Olam.

I hope whoever did this gets caught and prosecuted to the full extant of the law.....And hung from a flag poll by their eye lids.

Must Read on History of Ratings and How they Destroyed Wall Street

Part I and Part II.

Short form: Each time one of the agencies found a new way to call a pile of manure a pony, another organization found an even more extreme way to do so, so as to ensure that they would not lose customers.

A race to the bottom that was inherent in the system.

Another Taser Death

This one is from egregious misuse. Cops tasered a disoriented naked man on a fire escape, and he fell to his death.

He was not a threat to himself or others, and him falling off the fire escape and being seriously injured or killed was foreseeable, so someone should be up on manslaughter charges, because this is clearly a callous disregard for human life.

Gitmo Prosecutor Quits Over Lack of Due Process

Lt. Col. Darrel Vandeveld has quit as prosecutor, claiming that, potential exculpatory evidence has not been provided to the defense in the case of a teenager accused of throwing a grenade at US soldiers in Afghanistan.

Good for him, though the fact that he has refused to testify without immunity indicates that this is worse than just ignoring a bit of evidence.

A Rather Disquieting Headline

US to Lose Financial Superpower Status

It's just a statement by German Finance Minister Peer Steinbrueck, but he is saying what a lot of people have been feeling for a few weeks or months now, that the US-British "Anglo-Saxon" model of capitalism is broken and corrupt.

When You F*#@ Up a Trial THIS Badly.....

When you look at the trial of Saddam Hussein, you have to start with one fact: He was as guilty as hell. He was so guilty of brutality, genocide, and other crimes against humanity, that it would have been impossible not to get him on something.

But still, the Western lawyers who attempted to create a fair trial say that the trial was neither free nor fair.

When someone is this guilty, why on earth does the Iraqi government feel the need to cheat....Why does the US sponsored Iraqi government feel the need to cheat....Why does the Bush and His Evil Minions^&trade Iraqi government feel the need to cheat...And deliver a verdict just days before the 2006 mid terms elections.

Never mind, question answered.

To Be Placed in the Hold for Future War Crimes Trials File

Newly released documents make it clear that members of the Bush administration held specific discussion to specifically authorize torture by the CIA, and Condoleeza Rice has admitted to this in a written statement to the Senate.

I do not believe that we will be able to hold a fair trial in the US, so send them to the Hague, even though the death penalty is off the table there.

Palin Took Blessing From Witch Hunter After He Unleashed Anti-Semitic Screed

I can't believe that I'm quoting aAndrew Sullivan, but he has the video, where he makes this comment at about 1:10:

The second area whereby God wants us, wants to penetrate in our society is in the economic area. The Bible says that the wealth of the wicked is stored up for the righteous. It's high time that we have top Christian businessmen, businesswomen, bankers, you know, who are men and women of integrity running the economics of our nations. That's what we are waiting for. That's part and parcel of transformation. If you look at the -- you know -- if you look at the Israelites, that's how they work. And that's how they are, even today."

(emphasis mine)

And at 7:20 Sarah Palin walks up to stage to accept a blessing from him.

She wasn't just in the audience, she walks up and accepts his blessing after an anti-Semitic screed.

I agree with Andrew Sullivan, when he says, with no small amount of snark, "Sure they vetted her."

Iraq Passes Provincial Election Law

It still has to pass the presidential council, which vetoed the prior version, but this seems reasonably likely.

A good, easily understood analysis of this law, and the handling of the Kirkuk issue (they basically kick the can down the road) can be found at Abu Aardvark.

Simple Answers to Simple Questions

Matthew Yglesias asks:

Is there any chance that George W. Bush appearing on television could do anything other than deepen people’s sense of panic?

NO.

This has been another episode of simple answers to simple questions

Free Sarah Palin

Campbell Brown lets the McCain Campaign have it with their sexist treatment of Sarah Palin:



Heh

Clueless on the DPRK

It's amazing how bloody clueless both Bush and His Evil Minions^™ and the press covering this don't get it, as typified by the hed, "U.S. Bewildered Over N. Korea Nuclear Defiance."

It's very simple. While the folks in North Korea are not particularly trustworthy, there has been a consistent pattern where they have taken steps they have agreed to, and the US has refused to make the steps that it has agreed to.

You could pull the DPRK off the list of "terrorist sponsoring states" in 15 minutes, and you could put them back in 15 minutes, but the brainless trust headed by Cheney and Rice won't do anything ever, because keeping our side of the bargain is to their minds capitulation.

The North Koreans are restarting their Yongbyon nuclear power plant because they have absolutely no faith in the word of the United States to keep the deal.

God Bless The Onion

Point/Counterpoint:

Gov. Palin Has No Experience

vs.

Please Keep Your Voice Down, My Poor Retarded Child Is Sleeping

The Bailout in Clearer Terms

House of Representatives Passed New Credit Card Regulations

It's some fairly minor stuff, but it's a start, though I doubt that it will make it past the Senate, though considering that the distinguished gentleman from MBNA Delaware is otherwise occupied, it's possible.

Basic provisions:

• requires a notice period for interest rate increases
• prohibits interest charges on balances paid during grace periods
• bars issuers from applying payments first to lower-interest debt while debt carrying a higher interest rate remains unpaid.

The Seeds of the Next Crash Have Just Been Sown

The Federal Reserve just eased regulations on minority ownership of banks, raising the percentage of stock ownership allowed to be raised without requiring registration as a bank holding company"

Key changes in the guidelines include allowing an investor to buy up to a 15 percent voting stake instead of the previous 9.9 percent limit. Investors can also buy up to 33 percent total equity interest, including voting and non-voting shares, instead of the 25 percent prior limit.

Allowing greater ownership before regulation, reminiscent of the S&L crisis, when many of these institutions were purchased by developers, who then lent to themselves at unrealistically attractive rates.

Of course, these days, it won't be real estate developers, but private equity firms who can use this to exert influence over banks for capital.

Case in point, the founder of private-equity firm J.C. Flowers & Co., surprisingly enough a guy named J. Christopher Flowers, is buying the First National Bank of Cainesville in Missouri.

Not enough bullets.

H/T Calculated Risk.

Rick Davis Was Getting Freddie Mac Money Until Last Month

John Sidney McCain III's campaign manager's firm was getting $15,000 a month until the government took them over.

Note that Davis is still on the board of Davis & Manafort, and two sources in the story that the money was specifically in order to maintain access to John McCain.

McCain claims to have learned from his Keating 5 experience, but now it appears that he could swim in a sea of knowledge, and emerge completely dry.

Nouriel Roubini Produces Another Must Read

The unraveling of the Shadow Banking System moves to hedge funds as Schmalpha replaces Alpha

Go read.

What Do You Call This?

The punch line is the same as for the joke that starts, "What do you call 100 lawyers at the bottom of the ocean?" (Answer at bottom of post)

The head of the Indian operations of Graziano Transmissioni, Lalit Kishore Choudhary, was beaten to death by employees he had sacked.

I have said on a number of occasions that if you want to go postal, go after upper management first, and it seems that these employees were of a like mind.

The quotes regarding this, show just how callous people are:

A spokesman for the Federation of Indian Chambers of Commerce and Industry said: “Such a heinous act is bound to sully India’s image among overseas investors.”

That is an unbelievably cold statement. Some dude got beaten to death, and the only comment is, "It's bad for business."

Of course, being the Times of London, they are wringing their hands over this, and note the violence at the location selected by Tata for a factory to manufacture its ultra cheap Nano, but refuse to mention the fact that the land in question was stolen from the peasant farmers who had worked it for hundreds of years.

Meanwhile India's Labor Minister has apologized for saying that the murder of Choudhary should, "serve as a warning" to managers to treat workers compassionately."

He was right the first time.

If you want to read a more full throated, and more eloquent endorsement of actions that might make senior executives think twice, you need to go no further than Exiled Online

Live by heartless officialese, die by heartless officialese plus a hammer upside the skull. Nothing could be fairer than that. Proceed with the mob beatifications as soon as we get their names. And somebody find that f@#$-you-Mr.-Cheney guy’s name too while you’re at it. Something about the politeness of the “Mr.” right after the “f@#$ you” really enchants us. This is a guy who understands the importance of human dignity. No doubt, with a little encouragement, he could put together a nice mob.

Damn good writing, and you should read the rest right now.

In conclusion, the philosophical foundation driving our current system is that the "entrepreneurial class" should be able to operate without any external limits on their behavior, and that they should operate without conscience or empathy, and this is a psychotic world view.

As to the riddle at the beginning of the page? The answer, of course, is "A Good Start."

Krugman Calls Paulson a Liar

Flat out, and he uses the "L" word, he quotes David Davies, and notes that "Good ideas do not need lots of lies told about them in order to gain public acceptance.":

So, this morning Hank Paulson told a whopper:

We gave you a simple, three-page legislative outline and I thought it would have been presumptuous for us on that outline to come up with an oversight mechanism. That’s the role of Congress, that’s something we’re going to work on together. So if any of you felt that I didn’t believe that we needed oversight: I believe we need oversight. We need oversight.

What the proposal actually did, of course, was explicitly rule out any oversight, plus grant immunity from future review:

Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

He's right too. Paulson wants no oversight as he bails out his buddies.

Overpaying for Assets is Key to Paulson Plan

That's what all of the gobbledy gook that Bernanke and Paulson were spouting before Congress about the value if "held to maturity".

Basically, they are saying to use mark to model, instead of mark to market, and mark to model is what got us into this mess in the first place, see here and here.

FDIC Seizes Washington Mutual

J.P. Morgan Chase bought the assets for $1.9 billion.

To clarify, the "purchase" is not a purchase accounts, those still belong to the account holders. The purchase is of the banking operations, J.P. Morgan now manages the accounts, the banks, etc.

Economics Update

More signs of a recession, durable orders just dropped 4.5%, initial jobless rose by 32,000, to a 7 year high, and existing home sales fell by 2.2% in August.

Meanwhile, the dollar has fallen, largely on concerns about the bailout deal.

Meanwhile, banks are borrowing in excess of $110 billion a day, 39.36 billion from commercial banks, and $88.15 billion from investment banks.

He Came, He Saw, He Queered the Deal

Silly me. I figured that McCain's "suspension" of his campaign was a completely empty gesture which would contribute nothing to any bailout deal.

I was wrong. John Sidney McCain III's high profile involvement, and the White House meeting that his his campaign engineered, just had a deal blow up, because John McCain allied with conservative Republicans in the house to propose yet another tax cut.

About the only good things to come out of his involvement are a couple of bon mots from Democrats, the first from Christopher Dodd, who said that the entire affair sounded more like, "a rescue plan for John McCain than one for the financial system," and the other from Barney Frank, "Senator McCain has said he had to interrupt his campaign and couldn’t do a debate because he had to come here to help us. God save us from such help. But in any case, there is no sign whatsoever that Senator McCain’s got any real role here, so he certainly ought to feel free to go back and debate."

In the mean time, Boehner aHis Evil Minions^&trade make it clear that this is just another exercise in dick swinging for purely partisan gains.

Lovely fellows, I'm glad that I have a daughter, so that I can forbid her to marry them.

Senator Bernie Sanders Calls Larry Kudlow a Socialist

Considering the fact that Bernie Sanders is actually a card carrying socialist, just called Larry Kudlow a socialist:

Larry, if I ask you that the government should intervene like every other industrialized country does and provide health care for all people, you’d say ‘oh no!’ And if I ask you to support government intervention so that we don’t have the highest rate of childhood poverty in the world, you’d say ‘oh no!’ But when Wall Street screws up because of their greed, you say, ‘oh yes, it’s a great idea!’

PWN3D!

Does Kudlow need someone to cut his meat for him or something?

I wouldn't want him around a plastic butter knife.

A Public Service Announcement

From the Rich Pigs of America:

Credit Where Credit is Due

I think that Google^® Adsense^® got it right this time with my post calling bankers wankers:^*



Back in December and January, when John McCain was spending money like...well...John McCain, every time I called him a sick, old man, adsense would serve one of his "Death Star" ads, but this time, when I posted something about whining bankers, and they served an ad for "My Name is Earl" and "The Office", which seems most apropos.

Please note that this is not an inducement for my reader(s) to click on the ads, which is a violation of the Google^® Adsense^® terms of service.


^*Hmmm....there is a rhyme there gotta try and make a rap of it.

Well, This Has Fiasco Written All Over It

It appears that Goldman Sachs is look at buying IndyMac, or at least parts of IndyMac, to build out a retail banking network.

Is it just me, or does this have "Epic Fail" written all over it?

Maliki Says that Bush Wanted Changes in Withdrawal for Electoral Advantage

So Nouri al Maliki said in an interview with al-Iraqiya:

MALIKI: Actually, the final date was really the end of 2010 and the period between the end of 2010 and the end of 2011 was for withdrawing the remaining troops from all of Iraq, but they [the Bush administration] asked for a change [in date] due to political circumstances related to the domestic situation [in the US] so it will not be said to the end of 2010 followed by one year for withdrawal but the end of 2011 as a final date. Agreement has been reached on this issue. They are willing to respond positively because they, too, are facing a critical situation.

Impeach Cheney today.

Impeach Bush tomorrow.

Free Levi

Levi Johnston, America's #1 political prisoner.



Bill Maher is a Genius.

Lehman's New York Staff Still Getting Bonuses

To the tune of $2.5 billion to be distributed amongst 10,000 staff in New York, and a lot of former Lehman employees who are not part of this deal.^*

Running the numbers, these folks will be getting ¼ of a million dollars each, despite that many of the folks are the ones who ran the company into the ground.

Not enough bullets.

^*And any right thinking people.

Itil May Have Been Discovered

Dmitry Vasilyev, a professor at Astrakhan State University, claims to have discovered Itil, the capital city of the Khazar kingdom, a Turkic nation that converted to Judaism around the 10th century CE.

Looks very interesting.

More Received via Email

Received Via Email

Heh

Dear [your name goes here]:

I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.

I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion USD. If you would assist me in this transfer, it would be most profitable to you.

I am working with Mr. Phil Gramm, lobbyist for UBS, who (God willing) will be my replacement as Ministry of the Treasury in January. As a former U.S. congressional leader and the architect of the PALIN / McCain Financial Doctrine, you may know him as the leader of the American banking deregulation movement in the 1990s. As such, you can be assured that this transaction is 100% safe.

This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.

Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.

Yours Faithfully,

Minister of Treasury Paulson

McCain "Suspends" Campaign

It appears that he believes that his campaign the country needs him to go down to Washington so that he can inject politics into the matter.

He is also calling for a delay in the first debate, doubtless because with the financial crisis, there will have to be some questions asked on the economy, though Obama is having none of this, noting that multi-tasking and delegation are crucial skills for a president.

My theory is that he knows that no one is concerned about foreign policy right now, so he wants the foreign policy debate delayed until people will pay attention.

It's also certain that the economy would come up in the debate, even with the ostensible focus on foreign policy, so he's looking to cut and run.

Of course, it may just all be a ploy to distract people from Sarah Palin's disasterous interview with Katie Couric......How the hell do you get owned in an interview by the mistress of softball questions anyway?



H/T This Modern World for the pic

Letterman Rips McCain a New One

Complete with Keith Olbermann

Economics Update

While I am not a strict monetarist by any means, I'm an engineer, not an economist, dammit,^*, I think that the fact that central banks are continuing to shovel money out of helicopters upon the financial markets will eventually create some very real, and potentially severe inflation.

In any case, if the spreads between two year interest rate swaps and treasuries hitting a record, 166.38 basis points, is any indication, all this money is not doing much anyway, except possibly pushing the dollar lower.

It's not not doing much with real estate either, with US existing home sales falling 2.2% in August, and mortgage applications falling 10.6% last week.

This may be why S&P just cut WaMu's credit rating again.

In energy, oil was down a bit on report of decreased demand, and retail gasoline fell for the 7th straight day.

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

More Whining from the Rich Pig Crowd

It appears that the Wall Street bankers, writing the SEC as the American Bankers Association, are objecting to an accounting rule that requires that assets be priced on their balance sheets at a realistic market value.

They find it inconvenient that assets that they won't even try to sell, because they might get 15¢ on the dollar, which would make them technically insolvent.

Dudes, you are broke. You are not broke because of an accounting rule, you are broke because your so called assets on your so called balance sheets are about as popular as the idea of giving Dick Cheney a rim job.

The American Bankers Association, today's wankers of the day.

Karachi, We Have a Problem

We have US sources accusing Pakistani forces aiding the Taliban, and reports that the Pakistanis have shot down a US drone.

This is not moving in a positive direction.

Credit Default Swaps, Barn Doors, and Cows

Well it appears that the state of New York is moving toward regulating some credit default swaps as insurance.

This is actually important, since it has been known for 300 years that insurance is not just any sort of financial instrument.

Basically, when insurance policies are traded as securities, you get fraud. This was learned in bubbles in the British markets in the 1700s, and so insurance is allowed only for those who have the actual loss.

About a decade ago, New York State said that CDS were not insurance, and so they were not subject to insurance regulation, leading to the current orgy of fraud, speculation, and abuse.

That being said, this is too late, and we know this because SEC Chari Christopher Cox is calling for regulation too, and Cox is a Randroid free-marketeer, and as such, never calls for regulation until it is too late.

Because Palin is a Lazy, Uninformed, Idiot

Well it appears that the final details of the debate have been negotiated, and after much whining, I'm sure, the McCain campaign got a bubble for Palin:

At the insistence of the McCain campaign, the Oct. 2 debate between the Republican nominee for vice president, Gov. Sarah Palin, and her Democratic rival, Senator Joseph R. Biden Jr., will have shorter question-and-answer segments than those for the presidential nominees, the advisers said. There will also be much less opportunity for free-wheeling, direct exchanges between the running mates.

Biden will still destroy her, the only question is whether she loses it on stage, and if she does, whether Sarah "Barracuda" Palin goes after him with a knife or a gun.

I mean, after, this woman got completely Pwn3d by Charlie Gibson, which is like being gored by Bambi.

Economics Update

Again, the elephant in the room, the Paulson, "Let's give it to the American Taxpayer without lube," plan is not included here.

First, let's start with the continued deflation of the housing bubble, with home prices down 5.3% in July as compared to the previous year.

This one reason that retailers are forecasting an absolutely dismal holiday season.

It also appears that the Paulson plan, or at least whatever is making its way through Congress is not getting a vote of support from the bond market, with money still fleeing to treasuries, and the spreads between them and short term "safe" private debt remaining historically high.

It's the same with the dollar, which is up a bit vs. yesterday's bloodbath, but still weak.

Of more concern are indications that we are seeing a run on hedge funds.

In any case, oil prices are down a bit from yesterday's hysteria, settling at $106.61/bbl, and retail gasoline is down again.

Comedic Genius

This guy owes me a whole box of screen cleaners

Obama to Nation: “F$#@ this sh#@, I’m outta here”

September 19, 2008 at 12:21 am · Filed under political humor

In the wake of an epic financial meltdown that threatens to derail the U.S. economy for years, Barack Obama announced he was ending his run for President of the United States, declaring to a stunned nation, “Man, this is bullsh#@.”

In a boisterous and hastily-called press conference, Obama detailed his reasons for the decision. “I was prepared to fight global warming, reform the health care system, repair our crumbling roads, create a 21st century electric grid, find Bin Laden, end the war in Iraq, and bring peace to Israel and the Palestinians. But now you tell me I have to clean up the worst financial mess since the Great Depression too? One that’s going to plunge our economy into a recession for most of my administration while I take the blame? F$#@ that. That’s f$#@ing ridiculous. You guys clean up your own sh#@. I’m outta here.”

....

Read the rest, in all its profane glory, at the link.

Great Economics Writing

Nouriel Roubini The Shadow Banking System is Unravelling, in which he reposts an article in the FT.

Well, He Wasn't Fired for Fighting Sexual Assault

It turns out that Walt Monegan's trip to Washington to secure funding for fight child rape was with permission.

The McCain campaign's response, and they are running the Alaska governor's office right now, is that he may have been approved to travel, but preventing child rape was not approved by the governor.

Whatever these folks are smoking, I want none of it.

The Shrill One Speaks

Paul Krugman makes a very good note here about the performance of Ben Bernanke, that Bernanke overstated the power of central banks in these sorts of financial meltdowns, and that dropping money from above does not work as well as he had previously anticipated.

It's a slightly wonkish post, but for the economics groupies out there, it's a worthwhile read.

Update: Dodd Bill Does Have Bankruptcy Changes

According to Politico.com:

Among the major provisions Dodd is adding:

• Authority for bankruptcy judges to restructure mortgages for homeowners facing foreclosure. This was considered a poison pill in a housing bill that passed Congress earlier this summer, but it has gained much more currency now that Washington wants to bail out Wall Street.

Two snaps up to the distinguished gentleman from Connecticut.

Lawmaker Pushback on Paulson's Plan

I think that it's clear that Paulson's plan will be subject to sagnificant modifications in the legislative process with the Democrats seeing a need for new and stronger regulations, an equity stake in exchange for the bailout, and seeing serious questions raised by the portions of the proposed law that prohibit judicial review.

Of course, if I were them, I'd also be flipping out over the idea of Treasury hiring the Wall Street firms who f%$#ed up in the first place to manage the assets once they are purchased.

I would also note that some Congressmen want some sort of mortgage aid to distressed homeowners to be a part of the plan. (IMNSHO, allowing bankruptcy judges to handle this is the best, cheapest, and most efficient way to handle this).

I should note that the the Wall Street boys hate the idea of restrictions or equity stakes, but they have always wanted, to quote Dire Straits, their , "Money for Nothing".

It does appear, however that the White House and the Congress are narrowing their differences.

Perez Asks Livni to Form Ruling Coalition

Basically, everyone knows that Benyamin, "The Craziest Motherf%$#er in the Middle East," Netanyahu will win a snap election, so this is an attempt to push the election off to a later date.

I don't think that it will work, and my prediction, that Kadima without Sharon will be a distant 3rd in the next elections, stands.

Bailout Plan Appears Even More Sweeping than Proposed

First, let's note that under his proposed plan, Paulson can buy non-American, non-mortgage assets, which sounds an awful lot like some of this money will go to benefit UBS, where Phil "Mr. Congeniality" Gramm, sits on the board of directors......Funny that, huh?

Furthermore, the $700 billion quoted is low. The real reckoning of the cost of the plan is $1.8 Trillion:

• The $700 billion of this plan
• $50 billion from the Exchange Stabilization Fund
• The Fed discount window loans.
• $10+ billion of Treasury purchases of mortgage backed securities (MBS)
• $144 billion in MBS purchases by Fannie and Freddie.
• $85 billion loaned to AIG
• $87 billion in repayments to JPMorgan Chase for loans to Lehman Brothers
• $200 billion for Fannie and Freddie from the Treasury
• $300 billion from the FHA to refinance bad mortgages
• $4 billion to communities to buy and resell abandoned homes.
• $29 billion to JPMorgan Chase's to pay them off for taking over Bear Stearns
• $200 billion made available through the Fed's Term Auction Facility

Someone is getting a haircut, and it ain't Wall Street executives.

Why Friends Don't Let Friends Use AT&T

Because when a company buries customer rights in a 2500 page manual, one can be reasonably assured that they are not customer friendly in their outlook.

Lovely Nuclear Weapons, and the Country is Falling Apart

We have a major truck bombing in Islamabad, with 53 dead.

Pakistan has never been a particularly stable place, but it appears to be getting worse.

Bailout Plan Opinions

Atrios

Deep Thought

Any member of Congress who looks at the plan to give Hank unchecked power to transfer $700 billion from the Treasury to his friends' companies and has any reaction other than 'You've got to be f%#@ing kidding me' does not deserve to hold office.

Krugman opposes the plan, at least in the form presented by Henry Paulson, though he is more receptive to Chris Dodd's version, which requires equity from the firms rescued for buying their part of the big sh$#pile.

Sebastian Mallaby, who normally favors economics for the benefit of rich folk, hates the Paulson plan too.

Brad DeLong is of a similar mind to Krugman.

In The Nation, William Greider calls the Paulson plan a, "historic swindle."

Dean Baker, as is his wont, gets into some fairly specific proposals in some depth, which which I agree.

Robert Reich is less specific, but he does add one specific proposal: allowing primary mortgages to be modified by a bankruptcy judge, with which I also agree.

As for me, I will merely note that Henry Paulson holds hundreds of millions of dollars worth of shares on Goldman Sachs, and the idea that he get a blank check to work this is therefore nuts.

Watching Krugman on Olbermann

Just a thought watching him: He's a really smart guy, but he is profoundly uncomfortable and awkward on television.

Republicans who are drooling morons get some coaching do the dance on TV, and folks like Krugman don't.

It's not fair how much this effects our discourse, but maybe we should set up some sort of liberal org to coach people to do the gasbag bit more convincingly.

Economics Update

Once again, the big story is the bailout, which I will not cover here, it gets its own posts, though I will be dealing with some of the market effects of the proposal, which can be viewed as positive, if you are an optimist, or negative, if you are me.

First, the US dollar took it's biggest hit vs. the Euro in 7 years, because of concerns that this bailout will end up being so expensive that it will debase the currency, and as a result, crude oil climbed the most ever, more than $25/bbl before settling at the end of the day at $120.92/bbl, up $16.37.

You can view the price in oil as a belief among traders that the economy, and hence demand, will be recovering, or you can believe that traders think that this plan will push the dollar over the edge. I think that the contemporaneous fall of the dollar indicates the latter.

The increase in prices appears to be a part of a more general rebound in commodities, though retail gasoline continued its downward path, but gasoline tends to lag oil by a few weeks, as it is actually a manufactured final product, as opposed to a raw material.

In either case, it appears that The Commodity Futures Trading Commission is not taking a close look at oil trading as a result of the volatility today.

The Chicago Fed sees more signs of a recession, reporting a drop in economic activity.

Finally, it there are indications that investors are just beginning to see US treasuries the same way that they did during the Japanese meltdown...You know...the one that lasted fifteen years.

Honestly, if that happens to the US, it will be much worse, because we lack the safety net of Japan.

The Truth About the Surge: It's Ethinc Cleansing

A study of satellite imagery, finding vacant houses by the absence of lights noted that ethnic cleansing was essentially complete by the time that the surge began, and is in fact a major reason for the reduction of ethnic violence. (see here and here)

"Our findings suggest that the surge has had no observable effect, except insofar as it has helped to provide a seal of approval for a process of ethno-sectarian neighborhood homogenization that is now largely achieved," Agnew's team wrote in their report.

(emphasis mine)

Heck of a surge, Davie.

1000 Words on Derivatives

From the article The Real Reason for the Global Financial Crisis:



Go read the rest of the article too.

OK, He's Senile...There, I Said It

Let's be clear, John Sidney McCain III has grown increasingly confused over the past few years, and he's always been erratic, and his calling the chairman of the SEC the chairman of the FEC in a recent speech should give everyone cause for concern.

So Sambo Beat the Bitch!

That's what Sarah Palin is reported to have said about the end of the Democratic primary fight this year, among other bits of casual bigotry:

Besides insulting Obama with a Step-N’-Fetch-It, “darkie musical” swipe, people who know her say she refers regularly to Alaska’s Aboriginal people as “Arctic Arabs” – how efficient, lumping two apparently undesirable groups into one ugly description – as well as the more colourful “mukluks” along with the totally unimaginative “f**king Eskimo’s,” according to a number of Alaskans and Wasillians interviewed for this article.

FWIW, this does not surprise me.

While I have very little in the way of first hand recollections of bigotry in Alaska, (I actually have fond memories of living there, I left there just before I turned 7 in 1969), my mother occasionally related a story about her brush with movie making, specifically a movie called Joniko and the Kush Ta Ta, which was a fairly standard wilderness adventure, where a kid has to travel a great distance in a boat to get help for an injured man, and faces an Tlingit^* equivalent of a demon known as the Kush Ta Ta (or maybe it's his imagination) along the way.

In any case, the child actor playing Joniko, Tony Tucker Williams, broke his arm, and they needed a stunt double, and somehow or other my mother got a call, there were only about 400K people in the state at the time, so it was a small place, from a local working for the production, asking if she knew of a "breed" about 12 years old or so who could work as a stunt double, as the "full bloods" weren't photogenic.

These attitudes are not, or at least were not, that common in the late 1960s, and I don't imagine that the oil wealth entering the state has helped, if the House of Saud is any example.

^*Don't call a Tlingit an Eskimo, it would be viewed in the same manner as someone calling a Spaniard a Frenchman, which is to say not well at all.

My Name is Matthew Saroff, and I Approve of this T-Shirt

The shirt is courtesy of Sarah Palin John McCain's VP Pick Sucks:



Note that I have no financial interest in the T-shirt.

I Wish This Were My Congresscritter

Matt Stoller, of Open Left, got the following missive from an unnamed Congressman:

Paulsen and congressional Republicans, or the few that will actually vote for this (most will be unwilling to take responsibility for the consequences of their policies), have said that there can't be any "add ons," or addition provisions. F$#@ that. I don't really want to trigger a world wide depression (that's not hyperbole, that's a distinct possibility), but I'm not voting for a blank check for $700 billion for those mother f$#@ers.

Nancy said she wanted to include the second "stimulus" package that the Bush Administration and congressional Republicans have blocked. I don't want to trade a $700 billion dollar giveaway to the most unsympathetic human beings on the planet for a few f$#@ing bridges. I want reforms of the industry, and I want it to be as punitive as possible.

Henry Waxman has suggested corporate government reforms, including CEO compensation, as the price for this. Some members have publicly suggested allowing modification of mortgages in bankruptcy, and the House Judiciary Committee staff is also very interested in that. That's a real possibility.

We may strip out all the gives to industry in the predatory mortgage lending bill that the House passed last November, which hasn't budged in the Senate, and include that in the bill. There are other ideas on the table but they are going to be tough to work out before next week.

I also find myself drawn to provisions that would serve no useful purpose except to insult the industry, like requiring the CEOs, CFOs and the chair of the board of any entity that sells mortgage related securities to the Treasury Department to certify that they have completed an approved course in credit counseling. That is now required of consumers filing bankruptcy to make sure they feel properly humiliated for being head over heels in debt, although most lost control of their finances because of a serious illness in the family. That would just be petty and childish, and completely in character for me.

I'm open to other ideas, and I am looking for volunteers who want to hold the sons of bitches so I can beat the crap out of them.

Don Young Finally Wins Republican Primary for Alaska's House Seat

That only took a two week recount.

He beat Sarah Palin's bitch, Lt. Governor Sean Parnell in a closely fought race, and due to his ethics problems, the race becomes more likely to become a Democratic pickup in November.

Making a Bad Situation Worse

Well, it appears that the American House fetish and the lobbying of predatory realtors is getting results, as the House Financial Services Committee has approved the markup of H.R. 6694, which re-institutes the insane downpayment assistance program, in which sellers make a payment to non-profits, plus a "service charge", and the non profits "gift" this to a potential home buyer, so that they can qualify for a FHA loan.

Typical scenario: a home owner has a buyer who has no downpayment for a $100K house, so the home seller "donates" $6000 to to a "non-profit" group, which takes a $500 fee, and "gifts" the remainder to the home buyer, so the home buyer now buys the house at $106,000, which the FHA recognizes as 5% down, and so qualifies for a loan.

Of course, the buyer has still put no money down, and they owe more on the mortgate, and the statistics show a much higher default rate.

It does not put people in houses. It creates a default/foreclosure timebomb.

Japan Delays Fighter Competition

Japan has delayed the start of its F-X fighter competition, intended to look for a replacement for its 1960s vintage F-4EJ aircraft.

It appears that they want a full technical packet for the F-22, which is still forbidden to export under US law, in the hope that they can purchase that aircraft.

Give it up, we're just not that into you.

Foreign Relations Committee Tells Condi to Go Cheney Herself

Condoleeza Rice has negotiated agreements with the UK and Australia to allow for smoother transfers of defense technologies between the nations, as ITAR (International Traffic in Arms Regulations) can be a rather ponderous apparatus.

After repeated delays in the State Department supplying information regarding the impact of these treaties on existing statute, U.S. Senate Foreign Relations Committee has decided to defer consideration of the compacts until after Bush and His Evil Minions^&trade are out of office.

Payback is a bitch, bitch.

UK Sees Delays on Its New SSN

The Astute, lead ship in a new class of British SSNs, has had its entry into service delayed by some months as a result of problems in test, so sea trials have been delayed.

The system is currently about 47% over budget, but this number is expected to increase.

Some things are the same the world over.

The Cause of the 777 Crash at Heathrow

BA038 crashed when it lost power on descent on January 17 of this year, and it appears now that the problem was caused by ice accumulation in the fuel system impeding fuel flow.

It flew over Siberia at relatively high altitudes and low fuel flows, and so ice accumulated, and when the throttle was added during descent, ice broke loose, and plugged the fuel lines.

If it wasn't a one in a million thing, it was close.

It's an interesting read.

I Really Love Promotional Videos

Case in point: Northrop Grumman's Scalable Agile Beam Radar (SABR) promotional video, it's a drop in AESA replacement for the F-16's APG-68.

I just love the lightning bolts.

Replacing the M16/M4 and Possibly the 5.56 Round

Well, this is one of those issues that leads to heated discussions, so let's start with my position:

The 5.56 round is just find, and any lethality issues are an artifact that the barrel on the M4 carbine, at 14.5 inches, is too short. The M-16 with its 20 inch barrel does not have the lethality issues.

The solution is to replace the M4 with a Bullpup design with a barrel length of at least 18 inches.

Such a design will still be shorter than the M4, and hence easier to handle in enclosed spaces, such as city warfare.

I would also go with a piston arrangement, as opposed to a gas tube, which to bring too much fouling.

'Nuff said.


In any case, the Army is now looking at an M4 replacement, and is considering going with something like a 6.5mm or 6.8mm round.

This has all the hallmarks of a fiasco to my mind though. They are bidding a new weapon and allowing for a new caliber at the same time, which means that they will not really be able to compare apples to apples.

It should be interesting on the boards for a while though as various gun religions engage in Jihad.

Congress Guts Blackswift Budget

The House completely eliminated the $120 million from the DARPA hypersonic demonstrator project, and the Senate cut $110 million, so the prognosis is not good.

Not surprising. Considering the total lack of budget and program control in DoD acquisition programs, and the demands of Iraq and Afghanistan, the last thing needed is a Mach 5+ demonstrator.

Boo Yah!!!!

I was reading this article about the spate of aerial encounters between Russian bombers and NATO aircraft, and it appears that it gets pilots pumped up on both sides.

Regardless of the political fallout of the situation, pilots on both sides just love this stuff.

In any case, a commenter at this article, after noting that the Russian pilots get only about $800/month, said something very wise:

[R]ather than build JSF or Raptors, why not just take that money, and recruit Russian pilots away? We can move them into foreclosed condo's down in So Beach, pay them twice what they make, and I think save the American Taxpayer a ton of money.

Very wise.

Malaysia Looking at Airborne Radar Purchase

When you consider their airforce, a mix of MiG-29s, Su-30 MKMs, and F-18s, it seems inevitable that they would start to consider some sort of airborne command and control capability, particularly given Thailand's purchase of Saab’s Erieye, Australia's oft delayed Wedgetail, and Singapore's E-2Cs and future deliveries of Phalcons.

I think that over the next few years, we will see a lot posturing, both on the part of the Malaysians and on the part of the companies who want to make a sale to them.

Boeing Shows off Bomber Proposal at AFA Convention

So, now we have some models of the competing Boeing and Northrop Grumman concepts to compare:




Boeing Above



Northrop Grumman Above

Both are clearly designed with stealth in mind, and Boeing's design is rather similar to the B-2, though they have made comments about laminar flow designs to reduce drag. The outer wings, given their narrow chord would likely be laminar flow naturally.

N-G's design looks as if it would more easily accommodate a large weapons bay, which might make it easier to carry ultra heavy bunker busters.

Based on my estimates of scale, both appear to carry less in the way of bombs than a B-52 (20-30 tons), and more in line with something along the line of the B-47 (10-15 tons).

My guess is that given miniaturization of nuclear weapons, and the available of relatively small guided weapons, a larger capacity is considered redundant.

Saab Unveils New Erieye Platform

The EADS Casa's C-295 transport.

I'm thinking that with its high wing design, incorporating the radar directly into the structure would be quite doable, but I think right now, they are looking at minimizing the engineering resources for integration.

The Undeniable Lightness of Being a Rich Pig

We are now seeing sob stories out of Wall Street like this:

'A lot of those people will have to sell their homes, they're going to cut back on the private jets and the vacations. They may even have to take their kids out of private school,' said Frank. 'It's a total reworking of their lifestyle.'

He added that it's going to be no easy task.

'It's going to be very hard psychologically for these people,' Frank said. 'I talked to one guy who had to give up his private jet recently. And he said of all the trials in his life, giving that up was the hardest thing he's ever done.'

The Chinese have the right idea: A bullet to the back of the head for the folks who managed this fiasco.

H/T Kevin Drum.

A Witch Hunter? Palin is Linked to a Kenyan Witch Hunter?

Whiskey Tango Foxtrot?

Well, if you are waiting for the next shoe to drop in the dsyfunctional religious freak show that is Sarah Palin, here it is.

It now appears that everyone's favorite hock mom has said that her election as governor was as the direct result of the prayers of a Kenyan witch-hunter, Thomas Muthee.

I'm not sure which I find more disturbing, the belief that the prayers of a self admitted witch hunter somehow got her elected governor, or the complete self-absorption to think that here elections are somehow the direct will of God.

In either case, it's clear that she is just plain nuts, in a way that makes John Seymour McCain look pretty damn sane.

Here's a hint, girl, if you believe that God is on your side, you are almost certainly arrogant, wrong, and deluded.

Sane people don't believe that God is on their side; sociopaths do. Sane people worry if they are on God's Side.

In any case, here is a vid of her talking about how she sees herself as have being elected by dint of God supporting her.



H/T Group News Blog.

Israel Conditions Number of JSFs Purchased on Ability to Add Domestic Content

Once again, one of the issues with the F-35 JSF is that, to a greater degree than any other fighter aircraft history, the country operating the aircraft will be unable to modify its systems to meet their needs.

It now appears that the Israeli Air Force will purchase the F-35, the number that it purchases will be highly dependent on the ability it will have to install indigenous systems, as the JSF is a remarkably closed system.

In the long run, I think that follow-on orders for the aircraft may be hindered by this, as operators, and nations becoming operators, find out the degree to which they have to jump through hoops to integrate upgrades and new systems that were routine in prior aircraft.

John Sidney McCain III Loses the ... Wall Street Journal Editorial Board???

OK, the full throated condemnation of McCain's call to fire Cox from the SEC, which calls him "Un-Presidential", is not something I would have expected from the wingnuttiest OP/ED page in the nation.

Number 3421 on the List of Things that I'd Never Say

God Bless Jerry Brown.

He's always rubbed me the wrong way, but his decision to accurately label the Califoria hate initiative is a very good thing:

Those voters were much more likely to oppose the measure when read Brown's wording (58 percent against it and 30 percent for it) than those in the same category who were read the old version of Prop. 8 (42 percent against and 37 percent for it), according to the Field Poll.

The Brown language reads, in part: "Eliminates the right of same-sex couples to marry." The original version read, in part: "Limit on marriage."

No big surprise here...If you tell the truth people vote now on this abomination.

Please, God, Please Make This So!

Barney Frank is saying that Congress will look at limiting executive pay as a part of any bailout package.

I'm Matthew Saroff, and I unreservedly approve this idea.

As to the limit: The salary of the President of the United States, with the possibility of an equal bonus.

That's around 800 grand a year, which is fine by me, and a real haircut for these contemptible greedy f%$#s

Steve Gilliard Would Be Happy

The last game ever to be played at Yankee Stadium will be played tomorrow, with the Orioles and the Yankees fighting for the basement.

I'm not sure if Steve would give a damn about that, but the fact that the Yankees will be out of the playoffs for the first time in 13 years, that would make him smile.

Oh...Yeah....F@#$ the F@#$ing Yankees.

Economics Update

If you think that this crisis is over, it's not even close, as evidenced by the fact that 40% of US money market funds posted no returns yesterday:

More than 40 percent of U.S. taxable money market mutual funds posted zero return Thursday amid persistent turmoil in the credit markets, fund tracker Lipper said Friday.

Lipper said 560 of the 1,263 classes of taxable money funds it tracks earned no return Thursday. This compared with 73 classes that posted zero return Wednesday and 63 Tuesday.

A lot of taxable money mutual funds "put up big fat zeros yesterday," said Jeff Tjornehoj, senior research analyst at Lipper in Denver. "This is unprecedented in recent history."

Expect to see the phrase, "unprecedented in recent history," a lot in the next few months.

Part of this was no doubt the rather large gyrations in US T-Bills over the past few days, which went almost to 0% a on Thursday, because people were so concerned about finding safe havens. The 3 month T-Bill was at 0.22% Thursday, before heading back up to 0.91% on Friday following announcement of various rescue plans for the financial markets.

The dollar rose in response to the bailouts too, as did oil, though gasoline is down for the 3rd straight day, as that market adjusts to the realities of Hurricane Ike.

That being said, even with the rescue packages, Moody's is still looking at cutting its ratings on monoliner insurers Ambac and MBIA.

Also, it now looks like Morgan Stanley is still looking at merging with a commercial bank, even if the news of the bailout plans may have helped.

Attack of the Super-Strength Cyborg Penguins

It's not my headline, though I wish that I had come up with it.

It's an article on powered underwater exoskeleton called the Performance Improving Self Contained Exoskeleton for Swimming (PISCES^*) that has people flapping like penguins.

It's penguins....It's always the penguins.

^*People spend way too much time on developing cute acronyms.

Russia Test New SLBM

The Bulava missile, which reportedly has an 8000 km range and 10 MIRVs, though some reports say that it can fire MaRVs.

I don't think that this has anything to do with the Georgia kerfluffle, but you never know how that issue might have influenced the choice of the timing for the tests.

TP400 Testbed Completes Full Power Run

Seeing as how the TP400 engine is the major delay item on the A400M transport, the fact taht they have finally done some full power runs on the C-130 demonstrator, this is a long overdue positive sign.

It is still an open question as to whether EADS will be able to get the A400M into the air before year's end though.

Raytheon Eyes Sidewinder-X Upgrades

It appears to be a significant improvement on the original AIM-9X, with lock on after launch, and could drive the move to a new rocket motor, the rocket motor on the AIM-9X is the same as previous models, as it would allow launches to longer range.

From all I know about the missile, the kinematics (basically range and long range maneuverability) are not that good, having a single pulse motor (with thrust vectoring, you want lower thrust at the start in order to make the vectoring work better) and being smaller (5" body diameter as vs 6") than many of its competitors.

Looks Like the DDG-100 May Be More F$#@ed Up than Previously Found

Well, it looks like the sad saga of the DDG-1000 Zumwalt destroyers may become even sadder, as there are now doubts that the two ships purchased may never sail.

Noah Schactman cites a report from Defense News:

Issues have arisen in guaranteeing the seals between the composite construc­tion panels of the huge Zumwalt deckhouse... [where] all of the ship’s major sensors... are em­bedded in the structure, and all of the ship above the first super­structure level is contained...

[O]ne source familiar with the situation said the Navy is so wor­ried about the problem that it has been canvassing other manufac­turers of composite structures to see if an alternate production source could be found.

So will any Zumwalts be built?

... Sen. Susan Collins, R­-Maine, and a key supporter of the DDG-1000, told Defense News, “I still expect the Navy’s going to abandon the DDG-1000.”

It sure sounds to me like the ships cannot be built right now.


Background here.

ATK Looks to Take Drone Market to Anti Ship Missile

This is not surprising. The SS-N-27 Sizzler is a tough nut to crack to create a viable simulator, and in doing so, it means that ATK will have accumulated the expertise necessary to create a full up missile version.

I would not be at all surprised if they have the missile on the market in the next 5-7 years.

Background here.

And in the Never Ending Quest for Budget Dollars.....

Yep, some of the whiz kids at the National Defense University are pitching the idea that they need funding to protect us all from terrorists who would use Wizard of Warcraft to rehearse attacks on all of us.

Yes, it's real, see, they've got PowerPoints, and everything, complete with a conversation using code words, simulated, of course.

See how they simulate some seriously Kule d00dz haxor terrorists?

So they need to pay someone play Warcraft in order to look for this non-existent problem.

I want the job....I REALLY want the job.

In reality, if terrorists want to engage in virtual training, they will do it on a private server...Just like you see people do with Doom....

After all, who wants to be in the middle of planning to nuke the VP residence, when some n00b comes up and starts asking stupid questions?

If this is why my taxes are so fracking high, I'd rather pay for Sarah Palin's bridge to nowhere.

I Still Think that the Dutch are Sandbagging SAAB over their F-16 Repladement

But they are certainly making it look like a real competition. The Swedes needed extra time to get approvals for data release from the US, and the Dutch MoD extended the deadline on the bid to 30 September.

I still do not believe that the Dutch are serious about considering an alternative to the Lockheed-Martin JSF, they simply have invested too much time and effort, but they are doing their best to look fair about the process.

DPRK Testing New Missile Engine

It appears that they are in response to the US refusing to take them off the terrorist list, as was previously agreed to.

Seriously, taking them off the list is just a stroke of a pen, and can be reinstated with a stroke of a pen, but Bush and His Evil Minions^&trade are so busy swinging their dicks that they are convincing the North Koreans that this is all some sort of ploy to destroy them.

Fracking with paranoids for giggles when they have missiles and nukes is stupid, but for Bush and His Evil Minions^&trade, stupid is as stupid does, I guess.

Marine Corps Eyes M249 SAW Replacement

It looks like the Marines are looking at partially replacing their belt fed M249 SAW with a lighter magazine fed automatic rifle.

They are hoping for a 12 lb weapon to replace the 17 lb SAW.

Given that they are also dropping the quick change barrel as a way to get there, and using a slower rate of fire to deal with barrel heating this implies a significant drop in firepower.

Not having served, I'd appreciate any comments from people who have about the merits of such a change.

The US army is looking for a lighter weapon too, but they are sticking with the high rate of fire and belt feed.

U.S. Navy Ship Building Frack it Up Again

Specifically, the fact that naval inspectors flagged the New Orleans, the 2nd of the San Antonio class LPDs, as degraded in basic combat capabilities, despite the fact that the US Navy formally accepted the ship.

It's bad enough that the San Antonio could not deploy with its strike group earlier.

Our defense procurement system is at least as broken as our financial system.

Japan Looks at F-15 Updates, Indigenous Stealth Projects

They really want the F-22, but it appears that this is simply not going to happen, so they are looking at F-15 upgrades and a stealth platform of their own, the ATD-X.

Honestly, for legitimate defensive needs, the upgraded F-15 is all the JASDF needs. It's actually superior for cruise missile interception, since it has a larger antennae than the F-22, and AESA radars have already been fitted to some export models.

Robotic Helicopter Puts on Autonomous Airshow

I'm uncertain that this means much in the scheme of things, it's a demonstration of a UAV helicopter controller that can "learn" as it executes maneuver, but this a couple of cool videos:

Another Bank Closed

Ameribank, Inc., of Northfork, West Virginia.

That makes 12 for the year, and 5 of those were in the past 2 months.

Palin Invitation to Iran Protest Withdrawn

It looks like once Hillary Clinton and refused to share a stage with Sarah Palin, someone got some common sense, and realized that inviting her was a bad idea, so the whacko with the Tina Fey glasses has been disinvited.

Everyone wins, except for John Sidney McCain III, Sarah Palen, and Mahmoud Ahmadinejad.

Funny how their interests seem so similar.

Georgian President Saakashvili More Like Bush Than I Had Thought

Certainly, he's adopted the Bush mantra, "Never tell the truth when a lie would do," when he denies spending money lobbying the United States.

Dude, we have the paperwork filed by senior McCain adviser's Randy Scheunemann's company, Orion Strategies, showing the payments to them totaling 800 grand.

The Other Palin for President

Honestly, I'm more of a Terry Jones or John Cleese supporter, but I can live with Michael Palin.



I see this as a completely appropriate homage to Screaming Lord Such.

Bolivian Governor Arrested

The arrest of Leopoldo Fernández of Pando is likely tied to the unrest there recently, though the accusation is that he supervised the massacre of peasants, which is a not uncommon activity of political leaders in that part of the world.

In any case, it looks like Bolivia is not cooling down, and my guess is that Bush and His Evil Minions^&trade are doing their best to make sure that it won't cool down.

Politics 101: Criticizing Your Opponent Makes Her Less Popular

So says Matthew Yglesias, so say we all.

Ding, Dong, the Witch is Dead

I am not calling calling Carly Fiorina a witch. This is rather a reference to the report that when Fiorina was fired from HP, that people there started singing the song spontaneously.

I imagine that after a series of gaffes, McCain staffers are singing it to, because following her latest screw-up, where she said that neither Palin nor McCain (later modified to include Obama and Biden) were qualified to run a large company, she has been kicked off the campaign circuit.

Of course, experience at HP would appear to indicate that she wasn't qualified to run a large company either.

Your Daily Palin Update

Well Palin has now gotten her AG to instruct her employees not to honor subpoenas from the state senate, and the Anchorage Daily News cuts them a new one on this.

McCain doesn't get it. Sarah Palin is not Cindy McCain, and the press won't sweep this under the carpet for the "Maverick Straight Talker".

Heck, they wouldn't sweep it under the carpet for Cindy McCain these days, they've been wringing their hands about how McCain now, and when you have a cover-up this blatant, people will keep looking.

Mindless paranoid secrecy is almost always the worst course of action, which is why it's so ironic that it bit them on the butt with Sarah Palin's email.

It seems that she was using Yahoo Email for much of her correspondence with staff, and someone from 4chan hacked into her email (here, here, and here), and then posted what they found on Wikileaks.

Note to self: Never ever piss off anyone from 4chan.

Pakistani Military Told to Shoot at Americans

It appears that the Pakistanis have gotten a bit hot under the collar about US incursions, as they have just authorized firing on US troops if they cross the border:

"The orders are clear," Maj. Gen. Athar Abbas said in an interview. "In case it happens again in this form, that there is a very significant detection, which is very definite, no ambiguity, across the border, on ground or in the air: open fire."

Jeff Stein of CQ politics, makes a very good point here, that Pakistan increasingly seems to resemble Cambodia before the Khmer Rouge.

• The Cambodians tolerated the North Vietnamese, the Pakistanis the Taliban.
• The US engaged in cross border bombing to target their opponent.
• The US escalated to cross border troop actions.
• The effect of the escalation was to drive the local populace to our opponents.
• The leader of the country was ousted.

There is one difference though, which Mr. Stein notes: Pakistan has nuclear weapons.

Remember When I Said that this Election Cycle was Getting Odd?

Well, it now appears that the Virginia Republican Party is holding a rally for minority outreach, and the lead speaker is George Allen.

George "Macacca" Allen headlining a minority outreach event?

Honestly, the source is not The Onion.

Lawyers File Ethics Complaint Against Monica Goodling

They have drafted a letter asking the Virgina Bar to investigate former DoJ lawyer Monica Goodling, which is about the only way that anything close to justice will happen, since Michael "Bush's Bitch" Mukasey has refused to prosecute clear violations of the law.

Background here.

Can Everyone STFU About the Level of Support that Clinton is Giving Obama?

She was scheduled to give a speech at protest against Iranian President Mahmoud Ahmadinejad going to opening ceremonies, and she pulled out when she found out that Sarah Palin had been invited too.

Protesting against Ahmadinejad in New York is political gold, and Clinton dropped out of the rally, and has been campaigning in Florida and other states, because she supports the Obama's campaign for President.

How it Should Be Done

The Democrats are worried about the offshore drilling issue being used against them. They know that it's bogus, but it's also VERY easy to demagogue.

What do do?

Pass a bill that allows it, but contains provisions that will make the Republicans vote against it.

Include things like:

• Reducing the distance to shore from 100 to 50 miles when the Republicans want it much closer.
• Having the states receive no royalties from new drilling, which makes legislative approval next to impossible.
• Eliminates $18 billion in tax breaks for big oil.
• The bill would also force the release of 70 million barrels of oil from the nation’s emergency reserves
• Provide tax breaks for efficient building construction and companies that promote bicycle commutes
• Require all utility companies to generate at least 15 percent of their power by alternative fuels by 2020.

The senate will never pass this, it will never get pasty filibuster.

All of which have Bush threatening a veto, so you have a trifecta: The Dems vote for it, the Repugs vote against it, and then they have to vote to support Bush's veto.

Job well done.

And In the Department of the Bloody Obvious

meIt turns out that if surgical residents work less than 80 hours a week, then there are fewer complications from the surguries that they perform.

Hoocoodanoed??

Our Friend the TED Spread

The TED spread is the difference in interest rates between the LIBOR rate, which banks use to lend each other money over night, and the 3 month US Treasury bill.

While interest rates go up and down, generally the TED spread is fairly constant....But not now.

It just hit a record high.

It's not that the LIBOR has gone up much, but that so many people want T-Bills right now, because they see nothing else as safe, that they have bid down the interest rates on that instrument.

Your Regular Georgia Update

There are rumblings in the Council of Europe about ejecting both Russia and Georgia, which just goes to show what memberships in the Council of Europe are actually worth, seeing as how this was shortly followed by Russia signing treaties with South Ossetia and Abkhazia guaranteeing protection in the event of an attack.

Still Jaap de Hoop Scheffer, the NATO secretary general, has declared that Russia cannot block Georgiaan membership in NATO, which implies that Jaap de Hoop Scheffer has not read the NATO charter, which states that there can be no extant border disputes for a nation to be brought into NATO.

The only way for Georgia to get into NATO at this point would be to recognize the independence of South Ossetia and Abkhazia, and somehow come to a consensus on what the borders were.

American Psychological Association Votes to Prohibit Helping Torture

The depressing part is that the vote was far closer than it should have been:

The vote, 8,792 to 6,157 in a mail-in balloting concluded Monday, may help to settle a long debate within the profession over the ethics of such work. Psychologists have helped military and C.I.A. interrogators evaluate detainees, plan questioning strategy and judge its psychological costs. The association’s ethics code, while condemning a list of coercive techniques adopted in the Bush administration’s antiterrorism campaign, has allowed some consultation “for national security-related purposes.”

The referendum, first posted on the Internet as a petition in May, prohibits psychologists from working in settings where “persons are held outside of, or in violation of, either International Law (e.g., the U.N. Convention Against Torture and the Geneva Conventions) or the U.S. Constitution, where appropriate,” unless they represent a detainee or an independent third party. The association’s bylaws require that it institute the policy at the next annual meeting, in August 2009.

And in the Financial Collapse Race, WaMu is Coming up on the Right

Well it appears that Washington Mutual is trying to find someone to buy them, and their large institutional investors have have agreed to waive a stock dilution clause, which, along with reports that US Regulators are helping them look for a buyer does not bode well for the company.

In any case, it appears that Citi has given the deal a pass.

Meanwhile, in an excercise of remarkably good journalism, Matthew Garrahan of the Financial Times went to the bank, and saw that people are queuing up to get their money out.

Dead bank walking.

Livni Wins Kadima Leadership Election

I really don't think that her victory in a tight race to replace Olmert as head of the Kadima party will amount to much.

Kadima was very much the party of Ariel Sharon, who is gone, and I would not surprised to see them in 3rd place next election. I peg Benyamin, "The Craziest Motherf%$#er in the Middle East," Netanyahu winning it.

Then again, my knowledge of Israeli politics is neither broad nor deep, that way madness lies.

Economics Update

Again, as this seems, this is only the so called little stuff, because there is a lot of big stuff again

I've been firmly in the recession camp of the, "Is it recession yet," dispute, and the the Leading Economic Indicators falling again reinforces that notion, though the fact that the Philadelphia Fed Factory Index rose runs counter to that, but as it is the first rise in 10 months, I put that one in the outlier category.

Meanwhile, the weekly, and this week affected by hurricanes, new filings for unemployment rose to 455K and housing starts fell to a 17 year low, even as mortgage rates continue to fall.

Of course, not too many people can get the loans these days, because all the money is fleeing to treasuries.

Gas prices tick higher - Sep. 17, 2008

Housing Starts Plummet to 17-Year Low in August - Economy * US * News * Story - CNBC.com

In energy, eased off of a bit, as did gasoline for the first time in 9 days, as the panicking over Hurrican Ike moderated.

Finally, I just want to say that Tom Toles is a bloody genius:

Money Market Funds Freeze

This is why money is fleeing into treasuries because stuff that is supposed to be as good as cash is freexing up, and people cannot get their money.

So we had a Bank of New York Mellon Corp institutional money market fund just fell below $1/share, meaning you can't get all your money out, and the $15 billion Putnam Prime Money Market Fund money market fund just shut down, because of "redemption pressures", i.e. a run on the bank.

If that weren't scary enough, The Reserve's Primary Fund is also below par, and includes retail as well as institutional investors:

Reserve Primary has both institutional and retail accounts. "This appears to be the first case where a retail investor will lose money in a money market fund." said Peter Crane, president of market research firm Crane Data in Westborough, Mass., though he called the situation "an anomaly."

My investment advice: Buy stocks in safes, because people won't be trusting banks much longer.

Got Schwag?

Went to a Career Fair down in Greenbelt today.

I really hate these things, but I went, handed out my resume, and got Schwag, free handouts, from potential employers, mostly pens, though a TLA (three letter acronym) government agency had a combined tape measure, level, and pen on a belt clip.

Now Palin is Now Plagiarizing Her Lies

Remember when political operatives maintained that Sarah Palin's teleprompter broke and that she had to "wing it"?

Remember, that reports watching the speech, who were in a position to see the teleprompter, and saw that she was reading from a fully working teleprompter, and they could actually read it as she was talking, and that she followed the directions, such as adding emphasis at underlined texts, and pausing when the instruction "pause" was there.

It appears that someone was feeding Neanderbloggers and Drudge a load of crap

Well, now, apparently having run out of her own lies, Palin now feels compelled to use someone else's lies:

At a fundraiser in Canton, Ohio, this evening, Alaska Gov. Sarah Palin had an interesting description of her speech to the Republican convention.

“There Ohio was right out in front, right in front of me," Palin said. "The teleprompter got messed up, I couldn’t follow it, and I just decided I’d just talk to the people in front of me. It was Ohio.”

It really is pathetic when a Republican runs out of lies to tell.

On the bright side for Ms. Palin, I do believe that it is a sign of the coming "Rapture", which she has been waiting for with baited breath.

It's Definitely the Weird Season

You may recall Vito Fossella, who dropped out of his race for reelection after he was busted for driving drunk from his wife to his mistress, both of whom have borne him children.

Well, the Republicans selected Francis H. Powers, whose son Francis M. Powers was running against him on the Libertarian ticket.

And then Francis H. Powers died.

Well, it now looks like Vito Fossella is considering re-entering the race.

The political gods are smoking some serious dope in Staten Island.

Sarah Palin Hates Rape Victims

In a new twist of Troopergate, the McCain campaign is saying that Palin fired public safety commissioner Walt Monegan because he was "insubordinate" over budget issues:

On May 7 of this year, Randy Ruaro, the governor's deputy chief of staff, complained in an e-mail to Rehfeld, the budget director, that Monegan's department "is constantly going off the reservation."

"The last straw" leading up to Monegan's firing, Van Flein wrote, was Monegan's planned trip to Washington, D.C., to seek funding for a new, multimillion-dollar sexual assault initiative the governor hadn't yet approved.

So, not only did she sign off regarding charging rape victims for rape kits, she is now saying that fired her public security director because he was looking for money to help rape victims.

Remember, Alaska has the highest per capita rape rate in the nation, and it appears that Palin is determined to punish the victims.

This is repugnant.

1000 Words, McCain/Palin

Tom Toles

A Very Good Read on the Economy

Titled The End of Leverage. Money quote:

An enormous hoax has been perpetrated on global financial markets during the past 10 years. An American economy based on opening containers from China and selling the contents at Wal-Mart, or trading houses back and forth, provides scant profitability. Where the underlying profitability of the American economy was poor, financial engineering managed to transform thin profits into apparently fat ones through the magic of leverage.

This paragraph illustrates why I am such a bear.

In 1929, the US was an energy exporter, and the most robust manufacturer in the world.

Today, it's all arbitrage with other people's money....We have nothing left to fall back on.

Go read it.

Borat Economics

Felix Salmon of Condé Nast notes:

It's not just hedge funds, either, which could end up being the vector by which crisis is spread. It could be a big insurance company, or it could be a series of failures of small and medium-sized banks. Or it could come out of left field entirely: the "shadow banking system" is now so big and so global that for all we know a series of bad decisions by a mid-level technocrat in Kazakhstan could precipitate cataclysm across America and the world.

(emphasis mine)
I would note that Borat Sagdiyev hails from, "Glorious Nation of Kazakhstan".

It does raise the point that when markets are deregulated to the degree they are, people will stomp all over the line in an attempt to maximize short term gain, and this raises the possibility that minor actions will have major effects on the economy.

That's why we need regulation in the first place. Enlightened self interest absent common sense regulation, gives way to unenlightened, and uninformed self interest, which invariably becomes bubbles and fraud.

H/T Kevin Drum for the catch.

Breathalyzer Firm Must Turn Over Source Code

In Arizona, Pima County Superior Court Judge Deborah Bernin has told breathalyzer manufacturer CMI to turn over the source code for their devices to the defendants.

This is more than just a legal ploy to get out of a drunk driving charge,^* there actually appear to be some reliability issues with the device in question:

Allegedly inconsistent, odd or inexplicable results involving the Intoxilyzer 8000 have led to legal action in six states (Florida, Louisiana, Massachusetts, Minnesota, Tennessee and New Jersey as well as Arizona). A Florida judge also ordered CMI to hand over the source code running the controversial devices but the firm has refused to comply, earning it $1.2m in fines as a result.

I support this ruling, even without the history of problems. Having a closed box that just says, "guilty" is not acceptable.

^*Full disclosure, my mom was killed by a drunk driver when I was 14.

Finally!

It looks like the Obama campaign has concluded that "behold my incredible awsomeness" is not a winning strategy, so they have reversed themselves, and they are telling Democrats that they should "get serious" about contributing money to "independent" groups to attack McCain.

Nice that they finally got a clue that they need a a way to point out the many problems that McCain has with his temperament, ethics, philosophy, intellect, and health.

They are right to go after McCain's character, after John Sidney McCain has no character, it's just a pity that they are this late to the game.

Iran Improving Nuke Centerfuges

So says the IAEA, and I'm sure that Darth Cheney is lobbying for an airstrike.

Palin Refuses to Cooperate with Investigation

They are claiming that the investigation approved by a unanimous bipartisan vote of the Alaska Senate is too political...Though the announcement came from the McCain Campaign, not the governor's office.

I gotta check if Lieberman is showing up again on the Intrade Prediction Markets:

Ukrainian Government Coalition Collapses

It appears that President Viktor Yushchenko and Prime Minister Yulia Tymoshenko^* have a major difference of opinion regarding foreign policy.

It appears Yushchenko is natavist Ukrainian nationalist bellicose nut, and Tymoshenko merely hates the Russians with a white hot passion, so she doesn't want to start shooting at Russians today, so the President thinks the PM is some sort of traitor.

^*Why can't news happen in places where I can spell the damn names.

Stupid Lawsuit of the Day

Merrill Lynch shareholders suing, because they think that they did not get enough from Bank of America to buy them.

If BoA shareholders sued, they would have a case, because Merril shows every sign of being like Countrywide, where every few days/weeks, more unpleaseantness will be found as rocks are turned over.

BoA bought itself another money pit.

I approve of the right to litigate, but this is a stupid lawsuit.

AIG Nationalized

The FRB: Press Release:

The Federal Reserve Board on Tuesday, with the full support of the Treasury Department, authorized the Federal Reserve Bank of New York to lend up to $85 billion to the American International Group (AIG) under section 13(3) of the Federal Reserve Act. The secured loan has terms and conditions designed to protect the interests of the U.S. government and taxpayers.

The Board determined that, in current circumstances, a disorderly failure of AIG could add to already significant levels of financial market fragility and lead to substantially higher borrowing costs, reduced household wealth, and materially weaker economic performance.

Fragility, huh? If this economy had any more of a glass jaw, it could shave with Windex^®.

BTW, the following is a lie:

The interests of taxpayers are protected by key terms of the loan. The loan is collateralized by all the assets of AIG, and of its primary non-regulated subsidiaries. These assets include the stock of substantially all of the regulated subsidiaries. The loan is expected to be repaid from the proceeds of the sale of the firm’s assets. The U.S. government will receive a 79.9 percent equity interest in AIG and has the right to veto the payment of dividends to common and preferred shareholders.

The Fed is treating this as a liquidity problem but in fact, it's an insolvency problem. There is not enough assets to pay back the Fed.

Meanwhile, In Iraq

Female suicide bomber kills 20.

It's likely to get worse as the Maliki government continues its assassination campaign against the Awakening councils

David Brooks Disses Sarah Palen

I waiting for monkeys to fly out of tuchas, because he just called Sarah Palin unqualified to be president

David Brooks?

Economics Update

You know that there is a problem, when I open with ratings downgrades.

We have S&P downgrading Washington Mutual to junk status, and even more significantly, AIG, the largest insurance company in the world has been downgraded by Fitch Ratings to A from AA-, and S&P and Moody's downgraded them too, from to A- from AA- for S&P, and to to A2 from Aa3 for Moody's.

This is ugly, and it is not surprising that the costs of corporate bond insurance has skyrocketed on what is called "counterparty risk" by the MBA types, and the belief that you are dealing with a bunch of lying bastards foo the rest of us.

It's the same reason that the costs of overnight borrowing has gone up too, with the LIBOR more than doubling from 3.10625% to 6.43750%.

No one knows when the next shoe is going to drop, and even the additional $70 billion that the Fed dropped out of helicopters wasn't much help.

It's why we're seeing Thornburg Mortgage struggle under a sudden onslaught of margin calls.

When Goldman Sachs earnings 70%, even though they hedged against the real estate crash, you know that no one is making money.

And at the end of all this the Fed decided to leave interest rates unchanged, which is not surprising, since they are already pushing on a string.

Meanwhile, the dollar is behaving like my cat when he gets outside in a rain squall, it really did not move, but you can see the conflict between fear driving people to dollars, and the fear of the US financial meltdown driving people away from the dollar.

We actually saw consumer prices fall, driven by falling energy prices (oil is now about $91.15/bbl on demand concerns from the financial meltdown)

Gasoline still went up, driven by the came hurricane refinery concerns that have driven prices over the past 4 or so days.

John Sidney McCain III Invented the BlackBerry

No, this is not a report from Declan "Draw By Crayon Libertarian" McCullagh, this is an actual claim from the McCain campaign:

Asked what work John McCain did as chairman of the Senate Commerce Committee that helped him understand the financial markets, the candidate's top economic adviser wielded visual evidence: his BlackBerry.

"He did this," Douglas Holtz-Eakin told reporters this morning, holding up his BlackBerry. "Telecommunications of the United States is a premier innovation in the past 15 years, comes right through the Commerce Committee. So you're looking at the miracle John McCain helped create and that's what he did."

It would be less laughable if he had not become chair of the commerce committee until 1997, by which point, RIM had been in existence for seven years.

How the Chicago Boys Wrecked the Economy

Some times you come across something about which you have nothing to add but an admonition to go and read it.

Thisinterview with Michael Hudson falls in this category.

So go and read it.

Why We Love The Rude Pundit

Here, the Rude one taking on Sarah Palin.

Very funny....rude...but very funny.