at Fighting Liberals
Won't happen though. They hate him for some reason.
05 February 2009
British the United States on Wednesday of Threats to Conceal Torture
We now have a report that the UK government demanded that court proceedings detailing torture be suppressed because the United States on Wednesday was threatening to end intelligence cooperation if the details were releases:
If you think that your behavior is egregious enough that you need to threaten allies to keep it away from public view, that's a pretty good sign that you should not be doing it in the first place, and that you should be looking at criminal prosecution of the perpetrators.
Two senior British judges accused the United States on Wednesday of threatening to end intelligence cooperation if Britain released evidence about the alleged torture of a Guantanamo detainee.(emphasis mine)
The judges quoted lawyers for British Foreign Secretary David Miliband as saying the U.S. government, by reviewing intelligence cooperation, "could inflict on the citizens of the United Kingdom a very considerable increase in the dangers they face at a time when a serious terrorist threat still pertains."
According to the ruling from High Court judges Lord Justice Thomas and Lord Justice Lloyd Jones, Miliband's lawyers said the threat had existed for some time and was still in place under President Barack Obama's administration.
If you think that your behavior is egregious enough that you need to threaten allies to keep it away from public view, that's a pretty good sign that you should not be doing it in the first place, and that you should be looking at criminal prosecution of the perpetrators.
Ginsburg Has Pancreatic Cancer
It was caught early, but it's not an easy cancer to treat.
This is the the Supreme Court Justice's second bout with cancer.
This is the the Supreme Court Justice's second bout with cancer.
Friends Don't Let Friends Link to the AP
__AP Photo__________"Hope" Poster
With one notable exception,* I have avoided their stories, and used Google News to find an alternate when I found a story of theirs.
Well, the Associated Press moron brigade is at it again, with their suing Shepard Fairey, the artist who created the Obama "Hope" poster, because he based the poster on an AP Photo.
As you can see, it's not a tracing, it's based on a photo, and clearly fair use. The author took the expression, and you can find dozens of pictures with a similar expression, and little else from the photograph, and what's more, it appears that the AP may not even have right to the photograph, as the photographer, a stringer named Mannie Garcia, never signed a contract with the AP:
2) Where you either an employee, or a freelance photographer, as defined by their contract, for the AP when you took this image?I was a temporary hire, filling in for a staffer at the AP. It is my understanding that I was neither a freelancer nor a staffer, but rather a temporary hire. I have never been an AP staff employee, and no, I have never signed an AP contract.3) So, you own the copyright to the image?The ownership of the copyright is in dispute, as per the AP. It is my understanding that since I was not a staffer, and was not a freelancer, and did not sign any contract, that I am the owner of the copyright, but I am in discussions with the AP over this issue.
Needless to say, I will continue not linking to Associated Press stories, and using a Google® News search to find alternates.
*When via typo, they referred to Joe Lieberman as the 2000 Vice Presidential pRick.
Economics Update
Our economy just had one of those days when you wonder why you get out of bet.
First, we have initial unemployment claims spiking to the highest number since October, 1982, 626,000. The consensus estimate had been 580,000.
The more reliable, and less noisy, 4 week moving average was up too, from 543,250 to 582,250, and continuing claims hit 4,788,000, another new record.
In manufacturing, December new factory orders fall 3.9%, well above the estimate of 3 %, and in rental real estate, the MIT commercial property price index posted a record drop, 10% in Q4 of 2008.
In international high finance, the Bank of England its benchmark rate by 50 basis points (½%), to 1%, which breaks last month's record.....Considering that the BoE has been around since 1694, that's a long record.
Across the channel in Euro land, the European Central Bank has left its benchmark unchanged, though I think that this is less from optimism than from the inflation-hawk nature of the ECB's charter, and the fear of the zero rate destroying their ability to manage the economy with monetary means.
Meanwhile, mortgage interest rates have continued their increase, with the 30 year fixed being reported at 5.25%.
With the rate cuts in England, and the ECB still signaling future rate cuts, the dollar was up today.
The dismal job numbers drove oil down.
First, we have initial unemployment claims spiking to the highest number since October, 1982, 626,000. The consensus estimate had been 580,000.
The more reliable, and less noisy, 4 week moving average was up too, from 543,250 to 582,250, and continuing claims hit 4,788,000, another new record.
In manufacturing, December new factory orders fall 3.9%, well above the estimate of 3 %, and in rental real estate, the MIT commercial property price index posted a record drop, 10% in Q4 of 2008.
In international high finance, the Bank of England its benchmark rate by 50 basis points (½%), to 1%, which breaks last month's record.....Considering that the BoE has been around since 1694, that's a long record.
Across the channel in Euro land, the European Central Bank has left its benchmark unchanged, though I think that this is less from optimism than from the inflation-hawk nature of the ECB's charter, and the fear of the zero rate destroying their ability to manage the economy with monetary means.
Meanwhile, mortgage interest rates have continued their increase, with the 30 year fixed being reported at 5.25%.
With the rate cuts in England, and the ECB still signaling future rate cuts, the dollar was up today.
The dismal job numbers drove oil down.
04 February 2009
Adult in Charge
Note this quote from an interview:
Think about that for a second....A president admitting error....Like a non psychopathic adult....
In evening interviews on broadcast and cable television networks, Mr. Obama said he took responsibility for the errors. “And so I’m frustrated with myself, with our team,” he told NBC, “but ultimately my job is to get this thing back on track because what we need to focus on is a deteriorating economy and getting people back to work.”(emphasis mine)
He added, “I’m here on television saying I screwed up and that’s part of the era of responsibility.”
Think about that for a second....A president admitting error....Like a non psychopathic adult....
TPMMuckraker | Talking Points Memo | U.S. Attorney Scandal: Feds Probe Domenici for Obstruction of Justice In Iglesias Firing
Murray Waas is reporting that a grand jury is investigating former Senator Pete Domenici for obstruction of justice for his role in the US Attorney firing scandal.
My sense is that this is going to be big, because Waas is a very good investigative reporter, and he has a nose for things that end up big.
My sense is that this is going to be big, because Waas is a very good investigative reporter, and he has a nose for things that end up big.
Complications in the Iraqi Elections
It appears that the al-Hadba Gathering, a Sunni Arab party, did well enough in local elections in Nineveh province to take control of the provincial council from the Kurds, which means that they have control of it and its its capital, Mosul.
The party, and its leader Atheel al-Nujaifi, took a fairly explicitly anti-Kurdish line during elections, and needless to say, the Kurds, who had previously held 31 of the council's 41 seats, are not amused and are suggesting some level of electoral fraud.
While not a part of the Kurdish autonomous region, they Kurds have maintained that Mosul should be incorporated into this area.
The party, and its leader Atheel al-Nujaifi, took a fairly explicitly anti-Kurdish line during elections, and needless to say, the Kurds, who had previously held 31 of the council's 41 seats, are not amused and are suggesting some level of electoral fraud.
While not a part of the Kurdish autonomous region, they Kurds have maintained that Mosul should be incorporated into this area.
Barack Obama Just Became Judd Gregg's (R-NH) Bitch
You see, a day after being nominated by Obama, Senator Gregg recused himself on all votes on the stimulus package.
The thing is, in order to break a filibuster, you need 3/5 of all senators, so a non vote is the same as a no vote.
So he just announced that he will be voting to support any filibuster on the stimulus package.
First, he demanded that a Republican replace him, and now he has declared that he will support a Republican filibuster.
Now is the time to tell that rat-bastard that you changed your mind, because you heard the rumor about him and the 16 year old boy, Mr. President
The thing is, in order to break a filibuster, you need 3/5 of all senators, so a non vote is the same as a no vote.
So he just announced that he will be voting to support any filibuster on the stimulus package.
First, he demanded that a Republican replace him, and now he has declared that he will support a Republican filibuster.
Now is the time to tell that rat-bastard that you changed your mind, because you heard the rumor about him and the 16 year old boy, Mr. President
Economics Update
Well, the ADP Monthly Survey estimates that 522,000 jobs were lost in January, and while the Institute of Supply Management’s non-manufacturing index rose, it's still below 50, 42.9, which means more contraction on the way.
These aren't official government figures, but those figures, due out Friday, are expected to be grim:
Meanwhile, the dollar is up on expectation of further Euro zone rate cuts, and oil was down 46¢, continuing its love affair with the $40/bbl price.
These aren't official government figures, but those figures, due out Friday, are expected to be grim:
In its report on Friday, the Labor Department is expected to show 525,000 jobs were lost throughout the economy in January and the jobless rate is expected to rise to 7.5 percent.
Meanwhile, the dollar is up on expectation of further Euro zone rate cuts, and oil was down 46¢, continuing its love affair with the $40/bbl price.
What the Hell Are They Smoking?
To replace Tom Daschle at HHS, Karen Tumulty of Time Magazine is suggesting Willard "Mitt" Romney, and Craig Crawford CQ Politics is suggesting Newt Gingrich!
Either these people are completely insane, or they are amazing performance artists....Or maybe both.
Either these people are completely insane, or they are amazing performance artists....Or maybe both.
Get Used to Saying Governor Cuomo
Because the New York Times is now calling out David Paterson about leaking damaging information about Caroline Kennedy.
Stupid, really stupid.
It's clear that Paterson didn't want Kennedy, and neither did I, but it was well within his purview to simply say, "No", particularly after her disasterous performance in interviews and her prior lack of involvement in politics, even to the level of voting in primaries.
Going after her with a whispering campaign is stupid, and it makes his chances of losing the next primary much more likely.
Jeebus, this is stupid.
Stupid, really stupid.
It's clear that Paterson didn't want Kennedy, and neither did I, but it was well within his purview to simply say, "No", particularly after her disasterous performance in interviews and her prior lack of involvement in politics, even to the level of voting in primaries.
Going after her with a whispering campaign is stupid, and it makes his chances of losing the next primary much more likely.
Jeebus, this is stupid.
Iran Really Launches a Satellite This Time
We have both the report from Iran, and a report from JSR that they have observed the satellite and 2nd stage in orbit.
So it appears that they actually did it this time.
If you look at the launch (video below), I notice something odd, no ice, which implies the use of less efficient room-temperature propellants, which makes the technology more applicable to military uses, as it can be stored fully fueled in as silo or on the back of a TEL.*
*Transporter/Erector/Launcher
So it appears that they actually did it this time.
If you look at the launch (video below), I notice something odd, no ice, which implies the use of less efficient room-temperature propellants, which makes the technology more applicable to military uses, as it can be stored fully fueled in as silo or on the back of a TEL.*
*Transporter/Erector/Launcher
Kyrgyzstan To Close US Airbase
President Kurmanbek Bakiyev of Kyrgyzstan Kjust announced his intention to close the Manas air base at a press conference with Russian President Dmitry Medvedev.
He is claiming that the US is not paying enough, and my guess is that the Russian aid also announced influenced him:
I think that there are elements in the US military, and elements in the past administration (Cheney, Rice, etc.) who have been rather strong supporters of the "ring of steel" concept, so it's not like they are paranoid for nothing.
From a tactical perspective, the loss of Manas is crushing, as it will, leave Pakistan as the only supply route available.
He is claiming that the US is not paying enough, and my guess is that the Russian aid also announced influenced him:
Russia, meanwhile, was ready to pay. The Kyrgyz president collected pledges of a $2-billion discounted loan and a $150-million grant. The Russian government also agreed to cancel Kyrgyzstan's $180-million debt and to build a hydroelectric power plant.I think that Russia does not want Afghanistan to fall back into the Taliban's hands, but I also think that they see the bases in former Warsaw Pact and FSU nations as being a deliberate attempt to create a "ring of steel" in order to contain Russia.
I think that there are elements in the US military, and elements in the past administration (Cheney, Rice, etc.) who have been rather strong supporters of the "ring of steel" concept, so it's not like they are paranoid for nothing.
From a tactical perspective, the loss of Manas is crushing, as it will, leave Pakistan as the only supply route available.
The Devil is in the Details
Because Obama's plan to limit executive pay to $500K to TARP recipients will sink or swim on the loopholes.
Larry Summers' suggestion that, "Executive compensation above a specified threshold amount be paid in restricted stock or similar form that cannot be liquidated or sold until the government has been repaid," is one such loophole, because if the restricted stock has dividends, it's back to the races.
One of the things that needs to be understood is that Wall Street's excessive salary structure is not just a symptom of the current banking problem, it's one of the causes, because the excessive leverage and incompetent risk taking made year over year results so remunerative that it encouraged byzantinely complex instruments.
As a note, it's actually not the executives who will get hit hardest by this:
It's the "compensation consulting firms", whose business model is to get paid lots of money from CEOs and Boards of Directors to recommend high salaries to those very same CEOs and Boards of Directors, who lose the most.
It sure beats working for a living.
Larry Summers' suggestion that, "Executive compensation above a specified threshold amount be paid in restricted stock or similar form that cannot be liquidated or sold until the government has been repaid," is one such loophole, because if the restricted stock has dividends, it's back to the races.
One of the things that needs to be understood is that Wall Street's excessive salary structure is not just a symptom of the current banking problem, it's one of the causes, because the excessive leverage and incompetent risk taking made year over year results so remunerative that it encouraged byzantinely complex instruments.
As a note, it's actually not the executives who will get hit hardest by this:
“That is pretty draconian — $500,000 is not a lot of money, particularly if there is no bonus,” said James F. Reda, founder and managing director of James F. Reda & Associates, a compensation consulting firm. “And you know these companies that are in trouble are not going to pay much of an annual dividend.”(emphasis mine)
Mr. Reda said only a handful of big companies pay chief executives and other senior executives $500,000 or less in total compensation. He said such limits will make it hard for the companies to recruit and keep executives, most of whom could earn more money at other firms.
It's the "compensation consulting firms", whose business model is to get paid lots of money from CEOs and Boards of Directors to recommend high salaries to those very same CEOs and Boards of Directors, who lose the most.
It sure beats working for a living.
03 February 2009
F%$@ing Stupid Idea
Barney Frank has a good basic idea, that of a federal regulator with the power to regulate all financial transactions with regard to systemic risk, and then he jumps the shark completely by suggesting that this regulatory authority be placed in the Federal Reserve.
Seriously. Much of the Federal Reserve has not only gone native, but are to some degree actually owned by the commercial banks.
Any organization that was headed by Alan "Bubbles" Greenspan 20 years should be kept as far away from managing systemic risk as possible.
It's like giving an infant a loaded revolver.
Seriously. Much of the Federal Reserve has not only gone native, but are to some degree actually owned by the commercial banks.
Any organization that was headed by Alan "Bubbles" Greenspan 20 years should be kept as far away from managing systemic risk as possible.
It's like giving an infant a loaded revolver.
A Perfect Storm Benefits Netanyahu
In addition to the assault on Gaza achieving basically nothing, it now appears that the increased popularity of lunatic bigot Avigdor Lieberman and his Yisrael Beitenu party have made Netanyahu appear sane and moderate to the Israeli electorate by comparison, so people are feeling more comfortable about him.
This really sucks.
This really sucks.
Obama nominates Gregg for Commerce
Interestingly enough, Gregg had proposed abolishing the Department of Commerce at one point.
Details here.
Details here.
Tom Daschle Withdraws as Head of HHS
Nominally, he withdrew because of tax questions, but there are reports that this New York Times OP/ED convinced him to withdraw.
When even the New York Times realizes that you have functioned as an über lobbyist and calls you on it as game over.
Matt Taibbi was far more colorful in his description of Daschle and his revolving door porfiteering, "Tom Daschle would suck off a corpse for a cheeseburger."
When even the New York Times realizes that you have functioned as an über lobbyist and calls you on it as game over.
Matt Taibbi was far more colorful in his description of Daschle and his revolving door porfiteering, "Tom Daschle would suck off a corpse for a cheeseburger."
Economics Update
To no one's surprise, the Federal Reserve has extended its multi-trillion dollar so called liquidity facilities another 6 months, better known as the sh$tpile for cash program:
The Federal Reserve is broken as an institution. It is run by and for the banks.
We also have aggressive stimulus programs ramping up in Australia and Japan.
Meanwhile, real estate and construction continues to be a disaster with US construction falling 1.4% in December and 5.1% for 2008, the largest drop since records began being kept in 1993, and the Homeownership rate has fallen to the 2000 level, so much for Bush's "Ownership Society....In stead of owning, we got pwn3d.* With current equity losses of US home owner pegged at $3.3 trillion, a new record on vacant homes 19 million.
Even alleged good news in real estate, that the Pending Home Sales Index rose in December is pretty hollow, because, money quote from CR, "The biggest gains were in areas with the biggest improvements in affordability."
So, if your house prices have dropped by 40+%, as they have in parts of California and Florida then homes might be moving...Otherwise, not so much.
Still real estate is not as bad off as the auto industry, with GM and Chrysler offering buyouts to all of their hourly workers, Ford posting 40.2% drop in January U.S. sales, and GM dropping 49%, Chrysler down 55% LLC, with the Japanese car makers seeing their sales dropping about 30% each
BTW, it appears that China may be headed for a period of economically induced social unrest, because more than one in seven rural migrant workers, more than 20 million, are unemployed.
In a nation that has systematically eliminated its safety net, 20 million pissed off unemployed people can make a lot of trouble.
In energy, I'm not sure if $40/bbl is the bottom, or if OPEC cuts are working, but oil was up today, and it appears that we have found a bottom there.
In currency, there dollar was down as there was less "flight to safety."
*Leet speak for "owned".
In addition to prolonging the currency swap lines that were due to expire on April 30, the U.S. central bank said it would extend through October 30 a host of other programs providing liquidity to the U.S. commercial paper and money markets, and to large Wall Street firms.They've already spent in excess of 8 trillion dollars bailing out insolvent banks, but they think that more of the same will help.
The Federal Reserve is broken as an institution. It is run by and for the banks.
We also have aggressive stimulus programs ramping up in Australia and Japan.
Meanwhile, real estate and construction continues to be a disaster with US construction falling 1.4% in December and 5.1% for 2008, the largest drop since records began being kept in 1993, and the Homeownership rate has fallen to the 2000 level, so much for Bush's "Ownership Society....In stead of owning, we got pwn3d.* With current equity losses of US home owner pegged at $3.3 trillion, a new record on vacant homes 19 million.
Even alleged good news in real estate, that the Pending Home Sales Index rose in December is pretty hollow, because, money quote from CR, "The biggest gains were in areas with the biggest improvements in affordability."
So, if your house prices have dropped by 40+%, as they have in parts of California and Florida then homes might be moving...Otherwise, not so much.
Still real estate is not as bad off as the auto industry, with GM and Chrysler offering buyouts to all of their hourly workers, Ford posting 40.2% drop in January U.S. sales, and GM dropping 49%, Chrysler down 55% LLC, with the Japanese car makers seeing their sales dropping about 30% each
BTW, it appears that China may be headed for a period of economically induced social unrest, because more than one in seven rural migrant workers, more than 20 million, are unemployed.
In a nation that has systematically eliminated its safety net, 20 million pissed off unemployed people can make a lot of trouble.
In energy, I'm not sure if $40/bbl is the bottom, or if OPEC cuts are working, but oil was up today, and it appears that we have found a bottom there.
In currency, there dollar was down as there was less "flight to safety."
*Leet speak for "owned".
Holder Confirmed By the Senate
With 21 'Phants voting against, largely, it appears, because the report in the Moonie Times saying that he would not prosecute torture was in error, and he actually has refused to rule out prosecutions.
02 February 2009
An Interesting Perspective on the Big Sh%$Pile
The New York Times has an article on how difficult it would be value the bad financial instruments that banks are holding, and they relate the story of a bond:
Let me make an observation here, if the financial institute thinks that this is worth 97¢, and S&P thinks that it is worth 87¢, then this is a top tranch of bonds. It's the best of the best, and it most recently traded at a 62% loss.
The banks are completely insolvent, and paying them off is much more expensive than declaring them insolvent, stripping out these assets, and then holding them like the Swedes did.
What's more, if we go with Timothy "Eddie Haskell" Geithner's "Bad Bank", the same people will remain in charge, and because they were bailed out, they, and their successors will leaarn nothing, and so we will seem the same errors, over, and over, and over again.
Seize the banks as insolvent. Break them up into tiny pieces which are small enough to fail, and fire the upper management and stiff the shareholders.
Either that, or we can, as Ripley said in Aliens, "We take off and nuke the entire site from orbit. It's the only way to be sure," as
But getting this right will not be easy. The wild variations on the value of many bad bank assets can be seen by looking at one mortgage-backed bond recently analyzed by a division of Standard & Poor’s, the credit rating agency.(emphasis mine)
The financial institution that owns the bond calculates the value at 97 cents on the dollar, or a mere 3 percent loss. But S.& P. estimates it is worth 87 cents, based on the current loan-default rate, and could be worth 53 cents under a bleaker situation that contemplates a doubling of defaults. But even that might be optimistic, because the bond traded recently for just 38 cents on the dollar, reflecting the even gloomier outlook of investors.
Let me make an observation here, if the financial institute thinks that this is worth 97¢, and S&P thinks that it is worth 87¢, then this is a top tranch of bonds. It's the best of the best, and it most recently traded at a 62% loss.
The banks are completely insolvent, and paying them off is much more expensive than declaring them insolvent, stripping out these assets, and then holding them like the Swedes did.
What's more, if we go with Timothy "Eddie Haskell" Geithner's "Bad Bank", the same people will remain in charge, and because they were bailed out, they, and their successors will leaarn nothing, and so we will seem the same errors, over, and over, and over again.
Seize the banks as insolvent. Break them up into tiny pieces which are small enough to fail, and fire the upper management and stiff the shareholders.
Either that, or we can, as Ripley said in Aliens, "We take off and nuke the entire site from orbit. It's the only way to be sure," as
Not Enough Bullets: Can’t Live on $150 to $180,000 Edition
It appears that for investment banking types an outrageous salary is not enough.
They also need bonuses. Bonuses whether their company makes money or not. Whether their company is on the bederal dole or not.
It's because....It's because....I don't know why, but the rules don't apply to them.
BTW, the last paragraph of the story is the killer:
Andred Lahde got it right when he called them, "The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government."
They also need bonuses. Bonuses whether their company makes money or not. Whether their company is on the bederal dole or not.
It's because....It's because....I don't know why, but the rules don't apply to them.
BTW, the last paragraph of the story is the killer:
“Without a doubt, $18 billion is a lot of money, but it’s a drop in the bucket on Wall Street,” said Gustavo Dolfino, president of the WhiteRock Group, a headhunter for the banks. “These bonuses are down, and the salaries are not enough for these people. They can’t live on $150 to $180,000, so they haven’t saved any money. They put it on credit lines and at bonus time, they thought they’d pay it off.Median family income is $49K/year, and they cannot live on three times that.
Andred Lahde got it right when he called them, "The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government."
Zimbabwe Government Formed, Etc.
It appears that their parliament has passed a bill allowing for a unity government, as a result of the strong-arming of former South African president Mbeki and the South African Development Community (SADC).
As I've said before, I think that this will work as well as Nkomo's incorporation into Zimbabwe government, as in not at all.
Meanwhile the EU will maintain sanctions against ZANU-PF officials, even though the
African Union has asked them to be lifted.
This is a good thing. The upper levels of ZANU-PF are nothing more than thieves, and denying them easy access to banks to hide their ill-gotten gains is a good start, particularly when Zimbabwe was just forced to issue new dollars worth a trillion times more than the old ones, because of hyper-inflation.
As I've said before, I think that this will work as well as Nkomo's incorporation into Zimbabwe government, as in not at all.
Meanwhile the EU will maintain sanctions against ZANU-PF officials, even though the
African Union has asked them to be lifted.
This is a good thing. The upper levels of ZANU-PF are nothing more than thieves, and denying them easy access to banks to hide their ill-gotten gains is a good start, particularly when Zimbabwe was just forced to issue new dollars worth a trillion times more than the old ones, because of hyper-inflation.
GDP Numbers Artificially Inflated by TARP
Barry Ritholtz has the goods.
He notes that the Bureau of Economic Analysis (BEA) notes the effect in their report:
You'll notice that that the BEA is saying that the TARP is just a transfer payment, and hence is not counted as GDP, but I would argue that in overpaying for assets and preferred stock, these expenditures find their way into the numbers indirectly.
Ritholtz says that the effect is close to 8% of Q4 GDP, I'd say a bit less, say 2-4%, because the money finds its way into the economy indirectly and slowly, but in either case, it makes the GDP numbers worse than they seem.
If any bankers want to correct me, please do so.
He notes that the Bureau of Economic Analysis (BEA) notes the effect in their report:
Troubled Asset Relief Program(emphasis mine)
In October 2008, the Emergency Economic Stabilization Act of 2008 established
the Troubled Asset Relief Program (TARP). Among its provisions, the act authorized the Department of the Treasury to purchase or insure up to $700 billion in assets to alleviate the financial crisis. By the end of the fourth quarter, the program had disbursed $243 billion to banks and other institutions in exchange for shares of preferred stock and warrants. The program also disbursed a $4 billion loan to General Motors in the fourth quarter.
Purchases of financial assets are generally not recorded in the GDP accounts (though they appear in the Federal Reserve’s flow of funds accounts). However, when the Treasury purchases a financial asset (other than a loan) at more favorable terms than are available in private markets, BEA records a portion of the purchase as a capital transfer, calculated as the difference between the actual price paid for the financial asset and an estimate of its market value. This treatment is consistent with the recommendations of the newly updated international guidelines, System of National Accounts 2008. For the fourth quarter, in most cases BEA’s estimates of these capital transfers are based on Congressional Budget Office estimates, which are prepared on a net present value basis. The recording of a capital transfer in the GDP accounts does not affect GDP or net government saving, but does reduce net government lending or borrowing.
You'll notice that that the BEA is saying that the TARP is just a transfer payment, and hence is not counted as GDP, but I would argue that in overpaying for assets and preferred stock, these expenditures find their way into the numbers indirectly.
Ritholtz says that the effect is close to 8% of Q4 GDP, I'd say a bit less, say 2-4%, because the money finds its way into the economy indirectly and slowly, but in either case, it makes the GDP numbers worse than they seem.
If any bankers want to correct me, please do so.
Iraqi Regional Elections
The Iraqi tribes at the center of the "Anbar Awakening" are alleging fraud by the Sunni religious party and threatening violence while we have reports that ISCI and the religious parties have suffered losses.
There probably won't be official results for the next few days, and I'm not sure how contradictory reports, or at least contradictory perceptions, will play out here.
There probably won't be official results for the next few days, and I'm not sure how contradictory reports, or at least contradictory perceptions, will play out here.
Not Enough Bullets: The Ever Reliable AIG
AIG is looking getting more US government aid to unload its dodgy assets because at this point it has only been able to unload about $1b in assets, and that money had to go to retention payments:
I'm not just referring to the people who actually sold insurance here, I'm referring to the people who actually set up the CDS catastrophe that took the company down:
What's more, the driver was drunk, sending a text message, getting a blow job, and speeding at about 150 mph when they plowed into an orphanage.
Again, heads I win, tails you lose remuneration, bonuses to the tune of over a million dollars per employee to the folks who bankrupted the company.
So far, AIG has announced sales of only a few smaller businesses that, at least based on deals where a sale price was announced, will earn it a little over $1 billion. That is about what AIG is paying employees in retention payments to keep them from leaving for rivals, which could further erode the value of its units.They need to pay money to the the very people who ran the company into the ground, in an employment scenario where no one on Wall Street is hiring, because they are worried they might go somewhere else.
I'm not just referring to the people who actually sold insurance here, I'm referring to the people who actually set up the CDS catastrophe that took the company down:
American International Group Inc., the insurer saved from collapse by government money after losses on credit-default swaps, offered about $450 million in retention pay to employees of the unit that sold the derivatives, according to two people familiar with the situation.They are not just paying people who were passengers at some car wreck in another division, they are paying the driver of the car that crashed.
About 400 workers at the financial products unit may get the money in two installments, said the people, who declined to be named because details of the payments were confidential. The business was responsible for about $34 billion in writedowns since 2007 as the market value of swaps AIG sold to banks plunged amid the subprime mortgage market collapse.
What's more, the driver was drunk, sending a text message, getting a blow job, and speeding at about 150 mph when they plowed into an orphanage.
Again, heads I win, tails you lose remuneration, bonuses to the tune of over a million dollars per employee to the folks who bankrupted the company.
Cutting the Cord: The Lines Cross
US spending on cell phones has now exceeded spending on residential land lines.
One wonders how much of this is increased cell phone uptake, and how much is consolidation and profiteering by the wireless providers.
One wonders how much of this is increased cell phone uptake, and how much is consolidation and profiteering by the wireless providers.
Economics Update
Consumer spending fell for the 6th straight month in December, and all of 2008 turned in just 3.6% increase, the worst year over year number since 1961.
The Institute for Supply Management's factory index was better than expected, but still an anemic 35.6, but better than the consensus prediction of 32.5, but 50 is neutral, so anything under 50 signifies more contraction.
In inflation, the "Treasury Real Yield" is at a 16 month high.
The Treasury Real Yield is the spread between TIPS (Treasury Inflation Protected Securities) and regular treasuries, and is a measure of investor expectations of inflation....Which means that they are expecting more inflation.....Which is a good thing in this topsy-turvey economy.
Meanwhile in the Celtic kitten, Ireland is looking at injecting €8 billion into its troubled banks.
In Russia, and it looks like speculators are betting very heavily against the Ruble, which just hit a new low.
With Russia having already burnt through about 1/3 of its reserves in an unsuccessful attempt to maintain the currency, this could get very ugly.
Shrinking consumer demand has oil prices dropping again, and has pushed the dollar down against the Yen and Euro, though it improved against the sick man of Europe, the British Pound.
The Institute for Supply Management's factory index was better than expected, but still an anemic 35.6, but better than the consensus prediction of 32.5, but 50 is neutral, so anything under 50 signifies more contraction.
In inflation, the "Treasury Real Yield" is at a 16 month high.
The Treasury Real Yield is the spread between TIPS (Treasury Inflation Protected Securities) and regular treasuries, and is a measure of investor expectations of inflation....Which means that they are expecting more inflation.....Which is a good thing in this topsy-turvey economy.
Meanwhile in the Celtic kitten, Ireland is looking at injecting €8 billion into its troubled banks.
In Russia, and it looks like speculators are betting very heavily against the Ruble, which just hit a new low.
With Russia having already burnt through about 1/3 of its reserves in an unsuccessful attempt to maintain the currency, this could get very ugly.
Shrinking consumer demand has oil prices dropping again, and has pushed the dollar down against the Yen and Euro, though it improved against the sick man of Europe, the British Pound.
Almost Forgot, Banks Shuttered on Friday
MagnetBank, Salt Lake City, UT
Suburban Federal Savings Bank, Crofton, MD, and yes I mentioned the possibility that Suburban Feceral would be the first MD bank to fail since 1992 on Thursday.
Ocala National Bank, Ocala, FL
That's 6 banks shuttered in January total. (list here)
Suburban Federal Savings Bank, Crofton, MD, and yes I mentioned the possibility that Suburban Feceral would be the first MD bank to fail since 1992 on Thursday.
Ocala National Bank, Ocala, FL
That's 6 banks shuttered in January total. (list here)
Broken News and Accusations of Witchcraft
So I'm surfing the net and come across PZ Myers on his blog Pharyngula talking about an ACLU press release about a student in Oklahoma who was suspended for allegedly placing a hex on a teacher which resulted in a "mystery illness".
So I set fingers to keyboard, and write a ferociously critical piece, invoking knowledge, Texas, and, of course Monty Python and the Holy Grail, and while I'm Googling to see the outcome of the case I notice something in the ACLU press release:
It's from almost 9 years ago, and the events in question occurred 10 years ago, and Lifetime made a TV Movie about it, but that still does not mean that you can't have a minor Blogasm over this. (Google Search Link)
I'm just glad that I noticed the dateline before I made a complete ass of myself.
For those of you wondering, the judge dismissed the case, and assessed legal fees against the parents, who then dropped the case in exchange for the fees being waived.
I still need an excuse to invoke Monty Python though....I'm Jonesing for it right now.
So I set fingers to keyboard, and write a ferociously critical piece, invoking knowledge, Texas, and, of course Monty Python and the Holy Grail, and while I'm Googling to see the outcome of the case I notice something in the ACLU press release:
ACLU of Oklahoma Files Federal Lawsuit on Behalf of Student Accused of "Hexing" a Teacher (10/26/2000)(emphasis mine)
It's from almost 9 years ago, and the events in question occurred 10 years ago, and Lifetime made a TV Movie about it, but that still does not mean that you can't have a minor Blogasm over this. (Google Search Link)
I'm just glad that I noticed the dateline before I made a complete ass of myself.
For those of you wondering, the judge dismissed the case, and assessed legal fees against the parents, who then dropped the case in exchange for the fees being waived.
I still need an excuse to invoke Monty Python though....I'm Jonesing for it right now.
01 February 2009
Update on Gregg as Commerce Secretary
It appears that Judd Gregg is demanding a promise that anyone who the (Democratic) governor appoints would caucus with the Republicans, and the word is that the rather Broderiffic Governor of New Hampshire, John Lynch would likely do this anyway.
Screw it. Why give a 'Phant a leg up in the 2010 election in a state that is increasingly blue.
Update:
OK, the NY Times is reporting that there is a rumor that former NH Senator Warren Rudman would be appointed as a caretaker:
Screw it. Why give a 'Phant a leg up in the 2010 election in a state that is increasingly blue.
Update:
OK, the NY Times is reporting that there is a rumor that former NH Senator Warren Rudman would be appointed as a caretaker:
But there are no guarantees that Mr. Lynch would pick a Democrat: New Hampshire prizes its political independence, and the governor is a moderate. Some analysts say he could turn to a well-regarded Republican — former Senator Warren Rudman has been mentioned — to serve as a kind of caretaker to fill out the remainder of Mr. Gregg’s term, which expires at the end of 2010.This might work, as Rudman is fairly clearly a vote against cloture almost all the time, and he won't run in 2010.
Diamond Aero-Diesel Gets Euro Certification
I have been following the story of Thielert's insolvency, and Diamond Aircraft has been hit particularly hard by the loss of their engines, which were a major part of their business strategy.Diamond has now certified Austro AE 300 turbo-diesel, which it has been feverishly working on since Thielerts troubles, which means that it can start shipping aircraft with the highly efficient, and perhaps more importantly, jet fuel compatible, engines shortly.
They still need type certificates, but that should be relatively straightforward, as their engine uses the same Mercedes block as the Thielert, and so fit and mounting should be very similar.
More Defense Procurement BS, the Boeing Wedgetail
After $3.5 billion (Aus) it won't meet specifications, and it is going to be 4 years late.
And the government of Australia's response appears to be to say, "Thank you sir, can I have another," they are revising the terms of their contract to match what Boeing isn't delivering.
There is already so much money down the drain that Boeing owns the Australian ministry of defence.
And the government of Australia's response appears to be to say, "Thank you sir, can I have another," they are revising the terms of their contract to match what Boeing isn't delivering.
There is already so much money down the drain that Boeing owns the Australian ministry of defence.
Russian Defense Recapitalization Threatened by Financial Meltdown
Vladimir Putin committed to major new spending on the Russian military. He has committed to 1 trillion rubles ($30.5 b) on new procurement, upgrades, and R&D.(paid subscription required)Notwithstanding this spending, the Russian defense industry is still not in great shape, as commercial credit has largely dried up:
Putin met with industry leaders recently at Tactical Missile Corp. headquarters in Korolev, a Moscow suburb. The package unveiled by Putin includes the injection of 35 billion rubles in additional capitalization and the allocation of 100 billion rubles as a state guarantee on bank loans. Along with the loan guarantee, there is a further 15 billion rubles to compensate for high interest rates.(emphasis mine)
Additionally, there is likely to be further rationalization (mergers and tighter integration) among manufacturers, as is evidenced by the continuing submergence of MiG in United Aircraft Corp. (UAC) with Sukhoi firmly in the lead.
In terms of likely purchases, the Russian air force is looking for upgraded Su-27s (SU-35 shown) in the near term, and the Indo-Russian PAK-FA in the long term.
Talk About Gold Plated Weapons Systems
The US Air force is looking to buy 2½ inch diamonds as gunports for a high power microwave weapon.
Obviously, they will be synthetic diamond, and diamond already is used for high performance heat sinks, but 2½ inch diamonds? It sounds like something out of James Bond.
Obviously, they will be synthetic diamond, and diamond already is used for high performance heat sinks, but 2½ inch diamonds? It sounds like something out of James Bond.
Is the A400M Cursed
In addition to everything else, it appears that the Airbus A400M is significantly overweight.
The first 6 produced will be 12 tons overweight, and the production models are looking at a 5-7 ton weight problem, which means that it would have to enlarge the wing to meet performance guarantees.
The first 6 produced will be 12 tons overweight, and the production models are looking at a 5-7 ton weight problem, which means that it would have to enlarge the wing to meet performance guarantees.
Further Delays in Indian MMRCA Competition
There is still no word on when when field trials will start for the Medium Multi-Role Combat Aircraft fighter competition. (paid subscription required)
One of the issues that complicates this is mother nature: If the demonstrations do not finish by July, then they run into delays as a consequence of the monsoon season.
Current competitors for the medium fighter are the, "Boeing F/A-18, Lockheed Martin F-16, Eurofighter Typhoon, Mikoyan MiG-35, Saab Gripen, and Dassault Rafale."
It's intended to replace their fleets of older model MiG-21s, which are at end of life.
My guess would be the the MiG-35 has the inside track, the Indian AF already has operational experience with the MiG-29, though the least expensive over the life time is very likely the Gripen.
It's unclear to me whether SAAB is submitting the base Gripen, or the improved Gripen NG.
One of the issues that complicates this is mother nature: If the demonstrations do not finish by July, then they run into delays as a consequence of the monsoon season.
Current competitors for the medium fighter are the, "Boeing F/A-18, Lockheed Martin F-16, Eurofighter Typhoon, Mikoyan MiG-35, Saab Gripen, and Dassault Rafale."
It's intended to replace their fleets of older model MiG-21s, which are at end of life.
My guess would be the the MiG-35 has the inside track, the Indian AF already has operational experience with the MiG-29, though the least expensive over the life time is very likely the Gripen.
It's unclear to me whether SAAB is submitting the base Gripen, or the improved Gripen NG.
