Looks Like Our Neighbors to the North Will Boot the Wingnuts Too

Well, we now have a report from Canada that the Liberal Party and the New Democratic Party have agreed to form a coalition, and that the Bloc Québécois has agreed to be a part of the government too.

Because of this they have asked that the current minority Conservative government be dissolved, as they constitute a majority of the Canadian Parliament, as 77 Liberal + 37 NDP + 49 BQ is 164 of the 308 seats.

I'm not sure how long this would last. The Liberal Leader, Stephane Dion, would be the interim PM, but he announced his resignation as party leader following the recent election, so the new leader would replace him. (more on the machinations here)

Of note is the fact that this would be the first time that the NDP would actually be officially a part of a government.

The Conservatives are screaming Coup, but they got neither a majority of the seats nor a majority of the popular vote.

I think that the proximate cause is a recognition by the Conservatives that with Obama in the White House, one of their main claims to legitimacy, being uniquely positioned to maintain a good relationship with the US President, is no longer operative, so they have tried to impliment some of the more radical elements of their agenda in the expectation that they would lose in the next election:

....Transport Minister John Baird said the minority government won't try to eliminate federal civil servants' right to strike over the next couple of years, as pledged in last week's economic update.

On Saturday, Baird also announced the government had shelved its contentious plan to eliminate political party subsidies that are based on the number of votes received during elections. Parliament is due to vote on a Liberal no-confidence motion on Dec. 8.

The subsidies in question are public financing of campaigns.

Also, Harper is refusing to submit a real stimulis package for the Canadian economy.

In the process, I think that he has gotten the 3 other parties freaked out enough to work together.

BTW, The Blazer Browser Ain't Great Either!

Trying to post via my cell phone is a pain.

The Blazer browser that comes with Palm OS is kind of limited.

Anyone have any suggestions?

I'm looking for better Javascript support, the ability directly bookmark a link, and the ability to view a page's HTML.

It's Official, Traffic on the NJ TPKE Sucks!

Bumper to bumper, topping out at 20 mph....sigh.

OMFG, This is Funny

Rolls Plans ‘Puller’ Open Rotor Work While GE Readies for Noise Tests

It looks like Rolls Plans ‘is looking hard at a "puller configuration" for it's advanced propfan. (paid subscription required)

They believe that the issues involved in mounting the fan in the immediate vicinity of hot exhaust from the core are challenging, so they are looking at a more conventional "turboprop like" layout.

Of course, it's all tradeoffs, as the "puller" configuration has issues of the interaction between the prop wash and the pylons and inlets too, which need to be carefully managed to handle noise, which is generally considered to be the Achilles heel of propfans.

Lame-duck-inosis

I understand that the political appointees in the State Department may wish it otherwise, but the rest of the world understands that Bush and His Evil Minions^™ are lame ducks, and they want no part of any of initiatives.

Case in point, the latest IAEA runing on the Syrian nuclear program:

The U.N. atomic agency approved a contested Syrian bid for nuclear aid on Wednesday, overcoming U.S.-led resistance to the project while Damascus is under investigation for covert activity that could lead to atom bombs.

The United States, Canada and Australia mounted last minute objections to a compromise deal on the project but finally joined a consensus in favor since they could not have won if they forced a rare vote by International Atomic Energy Agency governors, diplomats in the closed meeting said.

(emphasis mine)

They matter very little now. On January 20, they do not matter at all.

Atlas Shrugged Updated for the Current Financial Crisis.

Full disclosure: I have not read Atlas Shrugged. I do not intend to do so, The Virtue of Selfishness in high school was enough unpleasantness for me.

All I have read is the Wiki, and a few excerpts.

That being said, this made me laugh to hard that I think that I broke something.

Atlas Shrugged Updated for the Current Financial Crisis.


BY JEREMIAH TUCKER
- - - -

1.

"Damn it, Dagny! I need the government to get out of the way and let me do my job!"

She sat across the desk from him. She appeared casual but confident, a slim body with rounded shoulders like an exquisitely engineered truss. How he hated his debased need for her, he who loathed self-sacrifice but would give up everything he valued to get in her pants ... Did she know?

"I heard the thugs in Washington were trying to take your Rearden metal at the point of a gun," she said. "Don't let them, Hank. With your advanced alloy and my high-tech railroad, we'll revitalize our country's failing infrastructure and make big, virtuous profits."

"Oh, no, I got out of that suckers' game. I now run my own hedge-fund firm, Rearden Capital Management."

"What?"

He stood and adjusted his suit jacket so that his body didn't betray his shameful weakness. He walked toward her and sat informally on the edge of her desk. "Why make a product when you can make dollars? Right this second, I'm earning millions in interest off money I don't even have."

He gestured to his floor-to-ceiling windows, a symbol of his productive ability and goodness.

"There's a whole world out there of byzantine financial products just waiting to be invented, Dagny. Let the leeches run my factories into the ground! I hope they do! I've taken out more insurance on a single Rearden Steel bond than the entire company is even worth! When my old company finally tanks, I'll make a cool $877 million."

Their eyes locked with an intensity she was only beginning to understand. Yes, Hank ... claim me ... If we're to win the battle against the leeches, we must get it on ... right now ... Don't let them torture us for our happiness ... or our billions.

He tore his eyes away.

.....

There is more, go read.

Those Bastards!!!!!!

So, my kids are watching the Macy's Thanksgiving Parade, and they have a "Fosters Home for Imaginary Friends" float.

On the float, Rick Astley singing "Never Gonna Give You Up".

They Rickrolled me!!!!!!

Update:
The Youtube:


Another edit:

The Wiki for Rickrolling.

New "Piston" Engine Enters the "Mogas" Sweepstakes

The Mistral Engines G-300 (paid subscription required) is a multi fuel Wankel rotary engine.

Though the term "multi-fuel" means that it can run on both aviation (100LL) and automotive (87 Octane) gasoline, it's spark ignited, though their web site states that they are working on Jet fuel capable engines.

Obviously there are fewer parts than a conventional piston engine, there are no conventional valves in a Wankel, but it still has a reduction gear, which was the major maintenance headache in the Thielert engine.

I'm Nearly Mute

So, I'm driving, actually riding shotgun right now, to my mother-in-law's for Thanksgiving, with my finger in a splint.

About 6 weeks ago, I got my finger twisted opening my door, and it has continued to bug me, so I decided to immobilize it for a few days, and load up on asperine.

Look at the picture. It's a mother-in-law joke.....Well, it cracked up the receptionist at the chiroptactor.

Light Posting for a While

Visiting my Mother-in-Law for Thanksgiving.

Quote of the Day

I am starting to get the sneaking suspicion that the same people who planned the war in Iraq and the occupancy are now hard at work, planning for the Federal credit crisis bailout . . .

----Barry Ritholtz

Not Enough Bullets: AIG, Again

They claim to have dropped bonuses, but they made "retention payments" to top level executives, including, "$3 million to retirement services chief Jay Wintrob."

Who is Jay Wintrob?

Wintrob is CEO of AIG Retirement Services Inc., the division that sells annuities. He was chief operating officer of SunAmerica when AIG bought the firm for $19.7 billion in 1998. The business he now heads may sell for about $12 billion, according to Gary Ransom, analyst at Fox-Pitt Kelton Cochran Caronia Waller. Wintrob didn’t return a call seeking comment.

So, he lost about 7.7 billion for AIG, and they feel the need to pay him money to keep him.

We need to start sending these guys to jail.

Elections Updates

A setback for Franken:

The State Canvassing Board, a panel of five arbiters charged with determining the winner in the overtime election tussle between Republican incumbent Norm Coleman and Democratic rival Al Franken, unanimously voted this morning to deny the Franken campaign's request that rejected absentee ballots be included in the recount.

I still say that it will come down to the challenges.

Economics Update

Well, it looks like today was the day for all the stuff you wanted to dump before a 4 day weekend.

First, consumer spending fell 1%, well beyond the prediction of 0.7%.

Remember that these days, the Christmas season starts in October for a lot of people.

This is a crushing figure, and it's not just due to falling energy prices, because people are paying down debt too.

The consumer confidence numbers reinforce this. The index is at 55.3, the lowest number since 1980, though still above the record of 51.7 in May, 1980.

Confidence not any better on the business side of things, with
durable goods orders falling 6.2% in October, and no, that's not an annual rate, that is the shrinkage for the month.


The unemployment stats say that weekly jobless claims fell last week, but I'm taking that with a grain of salt for the following reasons:

• Initial claims for state unemployment insurance benefits were a seasonally adjusted 529,000 in the week ended November 22 from an upwardly revised 543,000 the previous week.....Meaning that you compare lower initial numbers versus the later ones from the previous week, and it's a "drop"....yeah right.
• The 4 week moving average, which smooths out the noise, hit a 25 year high. (click for full size pic)

Just in case you are wondering how bad this will get, note that Fitch just cut its ratings on Toyota's bonds to AA from AAA.

Seriously this is a Stay-Puft Marshmallow Man news.

The credit markets are freezing up, though applications for mortgages are up, largely on insanely low interest....I wonder how many applications are rejected though.

I would also note that new home sales declined to the lowest level since 1982, so its not like there are a sh^%load of buyers out there.

As a result of all this, we are seeing a number of rescue packages world wide, with the European Commission announcing a €200 stimulus plan, ]China's central bank cutting rates.

These are probably what drove the dollar up today, and it also drove oil up

That being said, I think that the most troubling indicator is the fact that the 10-year Treasury yield fell below 3%, a new record, and this indicates that the flight to the relative safety of US Treasuries is continuing unabated.

I Hope That This Is False, but I Fear That It Is True

Well, the word is out on the street, or at least the WSJ has heard, that Bush and His Evil Minions^™ don't need to pardon themselves, because the Democrats will sweep this all under the rug for him.

Read the article carefully. It doesn't say it straight out, but with lines like:

While Vice President-elect Joseph Biden suggested interest during the campaign in pursuing a criminal probe, Brooke Anderson, spokeswoman for the Obama transition office issued a statement Monday saying, "No decisions about interrogation issues will be made before the full national security and legal teams are in place."

It leaves very little to the imagination. They are soft pedaling this.

No Secretaries, no Under-Secretaries, no Generals, probably not even any Colonels. Maybe a Major or 2 prosecuted, but mostly enlisted men and NCOs being prosecuted for things that they were told to do by superiors.

A continuation of the Bush policy.

It's just too icky that the previous administration are, you know, a bunch of f$ck&ng war criminals who launched the most brazen assault on the Constitution since Jefferson Davis became a bitch for slavery.

Obama Staffing Update

Paul Volcker will be chairman of the President's Economic Recovery Advisory Board, Austan Goolsbee will serve as the board's staff director and sit on the White House Council of Economic Advisers.

Shoot Me, I Agree with a WSJ OP/Ed

Like me, they ask the question, "Why are Robert Rubin and other directors still employed?"

It's a good question.

Truth be told, my guess is that the Wall Street Journal hates Bob Rubin because he worked for Clinton, and they have CDS.^*

It may be further exacerbated by the fact that his policies were so completely slanted toward the financial services industry, so the cognitive dissonance makes their heads hurt.

For me, it's because he has been consistently anti-worker, pro-Wall Street, and now we know that he's just an incompetent with a good line of crap to feed people.

^*Clinton Derangement Syndrome

Damn, I got Pwn36!!!!!*

Noah Shachtman writes on the likely Robert Gates reappointment as SecDef, and titles it, "Meet the New Boss..."

The Who is my favorite group. Townshend is my favorite composer.

And I missed the opportunity to highlight one of their iconic songs.

Damn.

^*Owned

Good Point

David Lee, writer and producer, nails the issue:

Whenever anyone justifies their bigotry with what I call DHRB (deeply held religious beliefs) we roll over as if that were the end of the discussion.

We have confused respecting a persons right to hold whatever religious beliefs they chose with respecting those beliefs. The truth is there are plenty of DHRB that are simply not worthy of our respect. Can we start with the ones that have no respect for us? Can you imagine an African American respecting someone’s DHRB that the Bible justifies slavery? The right to believe it, yes. The belief itself? No way.

The fact is that there are many people out there who are not so much pro-religion as they are pro-hate, and they use religion as nothing more than a way to provide cover for that hate, and their ideas should not be granted any respect.

Hamdan to Be Repatriated to Yemen

We capture him, we torture him for 7 years, we put him in front of what was intended to be a Kangaroo court, which promptly rules that Salim Ahmed Hamdan was not a terrorist mastermind, he was just a driver, and he should be sentenced to time served plus enough extra time to make sure that Bush and His Evil Minions^&trade are out of office.

Well, it looks like Bush has given up on having his trophy, because Hamdan is to be shipped back to Yemen in the next few days.

Good for him, but this exercise that could best be described as Kafkaesque has harmed the United States and its interest at every step in the process, all because authorizing torture is the only way that Dick Cheney can get a hard on.

Aggressive FDIC Oversight Worrying Banks

It appears that the FDIC just started requiring that banks deemed troubled by the FDIC must start reporting details of all its qualified financial contracts. (QFC)

What are QFC's? Basically they are the big sh*&pile, MBS, CDS, etc.:

QFCs are contracts between a bank and a counterparty, and they include everything from securities and repurchase contracts to currency and credit default swap agreements - some of the same murky derivatives behind Wall Street's biggest blowups.

Why does this scare banks:

Many banks still don't know their exposure to these products or details about the counterparties, which they are also required to provide by the new ruling. The way Bair sees it, they don't know because no one has ever forced them to know.

The bottom line:

If the FDIC rule passes, banks will have to be able to account for their exotic securities. These banks might have trouble.

Definitely, and it would have been far better that it had been done years ago.

California Probing Mormons for Illegal "in Kind" Campaign Contributions

It appears that they neglected to report extensive "in-kind" donations on the Prop 8 campaign:

..... The Church of Jesus Christ of Latter-day Saints failed to report money invested to organize phone banks, send out direct mailers, provide transportation to California, mobilize a speakers bureau, send out satellite simulcasts and develop Web sites as well as numerous commercials and video broadcasts.

It's not the contributions, it's the failure to report that is in question here.

Corrupt Arbitration Update

Well, I haven't checked my blog email for a while, but we did get a note from a representative of American Apparrel regarding my previous blog post, which I am publishing unedited (except for ####ing out some identifying information).

I will follow with a response.

from Ryan #### <####@americanapparel.net>
to msaroff2007@gmail.com
date Sat, Nov 22, 2008 at 11:05 PM
subject Dov Charney
mailed-by americanapparel.net

Matthew,

The reason the arbitration hearing's outcome was predetermined was because the plaintiff gave an unsolicited confession that the accusations were fault and her attorney admitted that the charges were 'bogus.' American Apparel agreed to a proposed settlement only to avoid further legal fees which the case would have occurred had it went to trial. The settlement hinged on press release not because American Apparel attempted to mislead the public but because we refused a settlement that did not include public vindication.

Regardless of your opinion on the arbitration process, the company was a victim of malicious and false prosecution. I would be happy to show you the court documents in Mary Nelson V American Apparel where she was fined $7,500 by the court for falsifying evidence. It is your right to publish as you wish, but in this case, your facts are mistaken and defamatory.

Ryan ######

Truth be told, I don't care about Dov Charney, Mary Nelson, or the legion of sexual harassment charges that have dogged the former.

I thought that I made that clear in my first post, but perhaps I did not.

My issue was about the arbitration system and it's gleeful and knowing participation of that arbitration system in an abuse of the legal process.

If someone went into a court of law under these circumstances, where the court case was merely to confirm an existing agreement, there would likely be very well deserved judicial sanctions all around.

There are a number of potential ways to handle this which do not involve a judicial process, a sworn affidavit, a joint news conference, some combination of the two, etc.

However, to use arbitration solely for the purpose of creating a press release is an indication that the arbitration process is hopelessly corrupt.

The supporters of arbitration suggest that it is like the courts, only, "streamlined". This case shows that it is not.

It shows that arbitration is an ethical vacuum.

Not Enough Bullets: Wachovia Edition

After driving their bank into the ground, senior Wachovia executives in line for almost $100 million in severance packages.

Good Note on Financial Regulation

In an article in the Guardian, economist Dean Baker notes that Timothy Geithner has been pretty much inside everything that has happened in financial regulation in the past decade or so, and it gives him gas:

Geithner was in the middle of all this [the Robert Rubin aggressive strong dollar policy that evicerated US manufacturing], even if not a lead actor. While this should not be forgiven – this recession and the millions of lives that are being ruined is not funny – it is not clear that Obama had very much choice.

Though he does acknowledge that there may not have been much of a choice:

In this respect, Obama faced the same sort of problem as those hoping to de-Ba'athify Iraq following the overthrow of Saddam Hussein. It would have been almost impossible to establish a government without including members of the Ba'ath party, since membership was a virtual requirement for holding a position of responsibility under Saddam.

Similarly, it would have been almost impossible to get to the top echelons of power, or even the middle ranks, during the Clinton-Bush years without giving lip service to the policies of one-sided financial deregulation and bubble-driven growth that were so fashionable at the time. The real question is whether Geithner has learned anything.

(emphasis mine)

I would that there are some bigger questions to ask in all of this:

1. Is part of the problem that the financial services industry became too large relative to the rest of the economy?
2. Did this create excessive exposure for the rest of the economy to downturns of increasingly speculative activities?
3. If 1 and 2 are true, how do you go about shrinking the financial services industry.

Stupid Lame Ducks

Well, the US is threatening Russia over it not complying completely with the cease fire agreements, in this case my guess would be over their disinclination do withdraw from portions of Abkhazia that Georgia seized a year of so ago:

Russia is still failing to meet its ceasefire obligations with Georgia and Washington's European allies must not overlook this and rush to embrace Moscow, a senior U.S. official said on Tuesday.

Matthew Bryza, Deputy Assistant Secretary of State for European and Eurasian Affairs, said Moscow must pull back its forces as agreed in a French-brokered ceasefire that ended the war in August before there could be "business as usual."

Mr. Bryza, you are a complete idiot.

No one cares what you thing. You will be gone in 8 weeks, along with the rest of your skeevy incompetent associates, and the Russians and the Europeans know this too.

Please, just have a steaming helping of STFU.

Alms for the F*ck&ng Clueless

Specifically, one Jay Nordlinger of the National Review Online, who just posted an article titled, "GOP life on the down low, &c. "

My guess is that this guy is not up on cultural slang.....Like shooting fish in a bloody barrel.

H/T Matthew Yglesias for the catch.

Election Updates

The recount in Minnesota is getting increasingly conentious in Minnesota, with ballot challenges on the increasing on both sides, (click image for current graph) and the Franken campaign expressing concerns about missing ballots to the Secretary of State.

Additionally, the Franken campaign is claiming that Norm Coleman and His Evil Minions^&trade are using bogus challenges to keep his total above Franken to influence the canvassing board, which will make the final decision on challenged ballots.

It's going to be a while before this is all sorted out.

Economics Update

Gee, the updated numbers for US GDP are in, and they have gotten worse, going from an annual rate of contraction of -0.3% to -0.5%.

In an effort to staunch the bleeding, the Federal Reserve has announced a new sh#@pile buy:

The Federal Reserve announced on Tuesday that it will initiate a program to purchase the direct obligations of housing-related government-sponsored enterprises (GSEs)--Fannie Mae, Freddie Mac, and the Federal Home Loan Banks--and mortgage-backed securities (MBS) backed by Fannie Mae, Freddie Mac, and Ginnie Mae. Spreads of rates on GSE debt and on GSE-guaranteed mortgages have widened appreciably of late. This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally.

They are also opening up a facility for
consumer and small business loans.

This took down 30 year mortgage rates to a record low, down 1-1/8 percentage point to 4-7/8.

Of course, right now, the banks are so skittish that they are unlikely to do a mortgage unless the property is sold at a seriously depressed price anyway.

This is actually good sense, as the Case-Schiller home price index fell 17.4% year over year.

That's probably why the Libor is trending up again. Too much uncertainty, so banks want more for their overnight loans.

Then again with the number of banks characterized as "troubled" by the FDIC jumped from 117 in the 2nd quarter to 171 in the 3rd quarter, the highest number in 13 years.

It's no wonder that some of the technical wonks who watch the stock market are noting that this is the most volatile market ever, with average daily swings over the last 50 trading days of 3.82%.

By way of comparison, this number was 0.33% in February.


Oil fell a bit to day, to $50.77/bbl, and I think that the markets are starting to wonder about just how much money that the Federal Reserve will print, so the dollar fell on the news of the new Fed lending facilities.

Not Good for Chambliss

Palin to Stump for Chambliss

Doesn't anyone remember what happened the last time Palin was in close proximity of a large turkey?

Obama Staffing Update

Nell Lancaster at a Tiny Revolution has a very good point, "President-elect Obama just made public the choices for his administration's 'economic team.' What sort of signal does it send that a Secretary of Labor was not among them?" (emphasis mine)

On the good news side of the equation, we have John Brennan withdrawing his name from consideration as head of the CIA.

I guess that all the DFHs^* objecting to his consistently pro-torture, pro rendition, and anti-civil rights statements won.

We are also seeing reports that Robert Gates will be the choice for SecDef, and that he would continue in the role that he assumed under Bush and His Evil Minions^™ for at least a year into the Obama administration.

Not too impressed with that. I have not trusted him since Iran Contra, and defense procurement is completely out of control, and a change is needed.

Gates is not a change the system kind of guy.

^*Dirty F%$#ing Hippies, which is what bloggers who care about right and wrong are, you know?

Florida Ban on Gay Adoptions Thrown Out

This is just plain common sense, and the case involves a gay man who took in two abused kids as foster children, but the Florida Department of Children & Families wants to continue to pay this guy to be a foster parent, so they are appealing.

This is the second ruling on this in the past 3 months.

It turns out that Florida in a fit of Anita Bryant induced insanity, passed a law prohibiting gay adoption in 1977.

Eclipse Aviation Files Chapter 11

Well, first they missed a payroll, and noe Eclipse Aviation has filed for reorg under Chapter 11, but it also, "simultaneously announced an offer for the sale of its assets for a combination of cash, equity and debt to an affiliate of Etirc Aviation, its largest shareholder."

It looks like there may be an auction, and they filed in Delaware (where else) to get Debtor in Possession funding.

Like I said, put a fork in them, they are done.

God is Great

So says New York Post

..... although we didn't think it would be possible to silence Ann Coulter, the leggy reactionary broke her jaw and the mouth that roared has been wired shut . . .

The fact that I'm amused makes me a bad person....Oh well...

Obama Staffing Update

Timothy Geithner as Secretary of the Treasury, and Lawrence Summers, aka the human stain, as director of the National Economic Council.

Lawrence Summers, crap. This man leaves a trail of misery wherever he goes.

Melody Barnes, to head the Domestic Policy Council.

Christina Romer as head of the Council of Economic Advisers, she's cut her teeth in the study of depression era economic, like, here is the scary part, Ben Bernanke.

Peter Orszag director of the Office of Management and Budget.

Ben Stein Gets Completely Pwn3d*

Peter Schiff completely owning financial pundits, including the unbelievably stupid Ben Stein (at 4:00_ proving that he's a better comedian than he id an economist.

And he sucks as a comedian.



^*Owned.

Gee, that Would Be Sad

How Tom Daschle scares conservatives, because they think that if he fixes healthcare, the average citizen will see a benefit, and thus be inclined to trust government to work.

There you have it, Conservatism is terrified by the possibility of making people's lives better.

Can you imagine a more morally bankrupt ideology than one that demands failure?

Big Bonuses Make You Stupid

That's the short read on Dan Ariely's reseasrch, he is a professor of behavioral economics at Duke University:

We did this study in India, where the cost of living is relatively low so that we could pay people amounts that were substantial to them but still within our research budget. The lowest bonus was 50 cents — equivalent to what participants could receive for a day’s work in rural India. The middle-level bonus was $5, or about two weeks’ pay, and the highest bonus was $50, five months’ pay.

What would you expect the results to be? When we posed this question to a group of business students, they said they expected performance to improve with the amount of the reward. But this was not what we found. The people offered medium bonuses performed no better, or worse, than those offered low bonuses. But what was most interesting was that the group offered the biggest bonus did worse than the other two groups across all the tasks.

(emphasis mine)

So, we have people over compensated and for work that mostly really does not to be done, (financials have exploded relative to the rest of the economy over the past few decades) and given bonuses for under-performing, and now we find out that the bonuses make them do a crappier job.

Delightful.

$7.7 Trillion

So far US Pledges to the financial industry exceed $7.7 trillion.

Current money actually laid out? $4.2845 trillion. To put that in perspective:

That's $4,284,500,000,000 and more than what was spent on WW II, if adjusted for inflation, based on our computations from a variety of estimates and sources.

Yep, that's what you get when finance industry guys manage the finance industry for 35 years.

F&ck NO!!!!

We now have reports that Hank Paulson is considering asking for the 2nd $350 billion installment of TARP.

Great googley moogley.

I'm just saying.

He's lied every step of the way. He's been wrong every step of the way.

He has studiously cushioned his friends from consequences, creating moral hazard, every step of the way.

Give him nothing....Except perhaps Robert Rubin as a cell mate.

More Corruption in the Siegelman Case

Now it appears that the US Attorney for the district, who was married to a Republican operative, and allegedly recused herself....Well, not so much:

It was those connections that led Ms. Canary, under pressure, to publicly withdraw from the Siegelman case in May 2002 — she “completely recused herself,” said the acting United States attorney, Louis Franklin — as proof that the prosecution of Mr. Siegelman would be free of partisan bias.

Yet in her complaint, the Justice Department employee, Tamarah T. Grimes, cited several instances suggesting Ms. Canary maintained a close watch on the case. Ms. Grimes said a legal aide in the office reported on Mr. Siegelman’s trial to Ms. Canary or her top deputy “every day, sometimes several times per day by telephone.” Once, she observed Ms. Canary “frantically pacing in the executive suite” after a courtroom blowup, “pleading with someone” to get on the phone to “tell Louis he has to control his temper.”

Ms. Grimes also disclosed an e-mail message written by Ms. Canary commenting on legal strategy in the case and suggesting to aides that Mr. Siegelman not be allowed to “comment on court activities in the media.” Ms. Grimes, who is also in a dispute with the department related to her accusations that the Siegelman prosecution team had harassed her, cited the affidavit of a former legal aide in the Montgomery office, Elizabeth Jane Crooks, who wrote that “the morning that the trial started, the U.S. attorney herself carried food and beverage over to the courthouse to support the ‘Trial Team.’ ”

Some more people who need to go to jail to show what's wrong.

To quote Pat Boone, they "should be displayed publicly and have all of his fingers and toes broken, and then publicly executed so they who think [that] those like the
imprisoned Manson and Sirhan are glamorous -- will think differently."

Though to be fair to Mr. Boone, he was talking about a neo-Nazi murderer who went after children in a day care center, but the offense against society here is at least as corrosive.

The Sad Tail of Citi

So the US government is putting in $20 billion for non-voting preferred stock and guaranteeing over $300 billion in securities.

They are getting only 8% on this, and remember that Citi's market cap was $22 billion. That $20B should have given the Feds 90% control of the company.

They should have taken it over, and fired (no golden parachute) upper management...Particularly Robert Rubin.

Instead, it's a suspension of dividends, and some cosmetic restrictions in executive pay.

Paul Krugman nails it:

Mark Thoma has the rundown of informed reactions. A bailout was necessary — but this bailout is an outrage: a lousy deal for the taxpayers, no accountability for management, and just to make things perfect, quite possibly inadequate, so that Citi will be back for more.

Amazing how much damage the lame ducks can do in the time remaining

Paul Kedrosky goes into a bit more detail in Good Bank, Bad Bank, and F$#ked Bank ($# mine):

Here is the gist:

• Citi will carve out $300-billion in troubled assets, which will remain on its balance sheet
  • The first $37-$40-billion in losses on those assets will go to Citi
  • The next $5-billion in losses will hit Treasury
  • The next $10-billion in losses will go to the FDIC
  • Any more losses will go to the Fed
• There will be no management changes at Citi, because, you know, they are all fine and upstanding people who have done nothing wrong
• There will be some compensation limitations, but those have not yet been made clear

To be clear, this is not a "bad bank" model. Assets are not, apparently, being taken off the Citi balance sheet and put into another entity walled off from the Citi biological host. Instead, they are being left on the Citi balance sheet, but tagged and bagged for eventual disposal via taxpayers. In other words, we are, given the size and nature of the maneuver, creating a new variant on the good/bad bank model that I hereby christen "f$#ked" bank. You do that, of course, when removing all the toxic assets from a "good" bank's balance sheet would leave no bank behind at all.

(emphasis mine)

You know, I was wrong when I said that Robert Rubin should be fired. He should be pursued by criminal authorities with the same Javertian intensity that that corrupt prosecutor did in the Julie Amero case (previous post).

Robert Rubin needs to go to jail for a very long time.

Julie Amero, Innocent, But Prosecutors Still Extort a Guilty Plea

You may remember the story.

She was substitute teaching, and because the sysop at her school turned off the spyware protections, her computer was innundated with sexually oriented popups.

They charged her with providing pornography to minors, and she faced up to 40 years in jail.

She lost a baby, and after a judge threw out the conviction:

In June of 2007, Judge Hillary B. Strackbein tossed out Amero's conviction on charges that she intentionally caused a stream of "pop-up" pornography on the computer in her classroom and allowed students to view it. Confronted with evidence compiled by forensic computer experts, Strackbein ordered a new trial, saying the conviction was based on "erroneous" and "false information."

The "false information" was the prosecution presenting a detective with a few hours of computer training as a forensic expert.

But the prosecutors have continued to pursue her, and finally, they managed to Well, coerce a guilty plea for disturbing the peace, and force her to give up her teaching license.

I'm not sure as to whether this is just hubris, or fear of a lawsuit, but it should be against the law....In fact, it may be, depending on how you read the law.

They took her baby, her career, and her health, she has been in and out of hospital since this all started, and they kept going after her, because they were unwilling to do the right thing.

If only she played Lacrosse, perhaps the DA's license to practice law would be pulled.

Reinventing Government Initiative is Inherently Corrupt

The WaPo has a story about how Countrywide Mortgage went regulator shopping to find a more compliant agency, they ended up going with the Office of Thrift Supervision, who wooed the now disgraced mortgage lender. Why?

Winning Countrywide was important for OTS, which is funded by assessments on the roughly 750 banks it regulates, with the largest firms paying much of the freight. Washington Mutual paid 13 percent of the agency's budget in the fiscal year ended Sept. 30, according to OTS figures. Countrywide provided 5 percent. Individual firms tend to make a larger difference to OTS finances than other bank regulators because the agency oversees fewer companies with fewer assets.

Yes, let's make sure that regulators are paid by the industries that they regulate.

Let's make sure that regulators are forced to compete for who they regulate.

That way, they won't regulate at all.

January, 20 bitches.

Chuck Schumer (D-NY) is looking at a $500-700 billion package, and he wants it on Obama's desk for inaugeration day.

Economics Update

I think that we have to start with the fact that U.S. Treasury Credit Default Swaps risk premiums just hit record levels.

If that sounds arcane and obscure, that's because it is, because the brokers like it that way, but here is a slightly clearer statement, returns on insurance against a defaults on US Treasuries hit a new high....Meaning that investors are pricing in the possibility of a US government default.

This means that a Lot of people are betting that the full faith and credit of the United States of America means nothing.

The US defaulting is the Stay-Puft Marshmallow man moment of US society, and an increasingly large segment of the investing world is betting on it.

At its core, the problem is that this bubble is something that people cannot walk away from, housing and shelter, and the realtor-pimps are now saying that existing home sales are softening, though the staid New York Times is saying that home prices are plunging.

Existing home sales down over 3.1%, and prices down 11.3% year over year.

In the mean time, the Citi bailout is pushing on both currency and energy, with
the dollar falling, because people realize that the printing presses are running non-stop.

That being said, the falling dollar is not helping the ruble, where the Russian central bank has reduced support for the currency for the 2nd time in as many weeks.

It also drove oil up about a fin spot, though retail gasoline prices fell for 68th straight day.

It's not going to get better any time soon, because MasterCard is reporting falling retail sales.

Meanwhile, Calculated Risk's Credit Crisis Indicators are slightly worse today.

The Newest Action Figure

Zimbabwe Update

Well, Annan and Carter are calling for the SADC to get off their tuchases and do something, which is unlikely to happen, since they've already tried to fob off a phony deal on the MDC.

Thabo Mbeki and most of the leadership of the Southern African Development Community do not want just resolution, because it's a gun pointed to most of their heads, since much of their opposition comes from the trade union movement too, so a victory will embolden them, which is why they suggested a fictitious "joint ministry" for interior, which is one the primary tools used by Mugabe to maintain control through harassment, violence, and intimidation.

In the meantime, the MDC says that any deal it signs must involve real and profound power, which is not surprising.

ZANU-PF is so blatantly corrupt that they changed an agreed upon document out before signing. (link)

They also note that the illegal detention of MDC activists by agents of the ZANU-PF do not give them cause to believe that talks would be worthwhile.

On the brighter side, if there can be said to be a brighter side in Zimbabwe, it appears taht the general populace has gotten so desperate that they are fighting back against Zimbabwean troops:

Hundreds of angry Zimbabweans attacked soldiers carrying out a crackdown on illegal foreign currency trading in the capital Harare on Monday in a further sign of the country's collapse.

The crowd hurled stones at the troops and chanted "beat the soldiers," accusing them of hitting and robbing people during the currency operation.

On the darker side, there has been an outbreak of cholera, killing at least 500, and the response of Mugabe and his associates has been to shut down the municipal water supply, which is more like trying to put a fire out with gasoline than anything I could possibly imagine.

Seriously, while Gordon Brown is calling Iceland a terrorist state, the ZANU-PF government of Zimbabwe is a terrorist government, and a declaration by the US and UK, with the associated freezing of assets held by high level government officials might do something.

These folks are engaging in a terror campaign to maintain power.

Election Updates

Well, Franken is still down, but Nate Silver of fivethirtyeight.com says that his math has Franken to winning the recount by 27 votes.

He notes that his number have error bars much larger than 27 votes though, but Nate did call a Begich win the day after the election.

That being said, he is also not considering either the thousands of challenged ballots or rejected absentee votes, and those numbers dwarf his error bar too.

Meanwhile, in the Georgia Senate runoff, the 'Phants fracked up big time. They sent out a mailing to Republithug voters to get thm to vote by absentee ballots, and neglected to mention that they should sign the applications:

Many of the unsigned requests came in the form of cards printed by the Republican National Committee and mailed to voters. Republican U.S. Sen. Saxby Chambliss is in a tight battle to retain his seat by beating Democratic challenger Jim Martin.

The signature line on the RNC cards is easy to miss since it appears after an entry asking voters to enter an address different from their permanent one. Georgia doesn’t require voters to give a reason for voting by absentee ballot.

OOPS.

We also have Tom Perriello certified as defeating racist scumbag Rep. Virgil H. Goode by 745 votes. Goode is likely to ask for a recount, but the margin is actually large enough that it's unlikely to matter.

One interesting thing about all this is that because the certification was so late, Perriello couldn't take part in the office lottery for freshmen.

Not to worry though, he gets what's left and that's Virgil Goode's office, which, because Goode was a 6 term incumbent, is a very nice office. Heh.

Finally, though not technically an election, but Biden aide Ted Kaufman has been selected to replace the him when he becomes Vice-President.

The Citi Bailout

No details, but considering that it's George W. Bush and Hank Paulson and Their Evil Minions^™, mu guess is that it:

• Will be a givaway.
• Won't address the underlying problem (fire Bob Rubin).
• Won't be adequate under even those terms.

As details come in, and as I read stuff from people who actually have a clue about this crap, I'll update.

MN Election Update

There are indications that the Coleman Campaign is being aggressive with challenges, probably to attempt to ensure that they go into the canvassing board with a lead, because they do not like the trend.

In any case, the Colman campaign is now eschewing its earlier statements about not talking the canvassing board's decision to court.

So Coleman is definitely nervous....I would note that the swings are much smaller than in Florida, indicating a better balloting process.

Gail Collins is on some Very Strong Meds

gail Collins is suggesting that George W. Bush resign for the good of the country so that Barack Obama can start implementing his policies.

Ignoring the precedent, which is very bad, that it would set regarding presidents and serving out their their terms, the idea that Bush would resign, when he is already burrowing political appointees into the civil service and creating regulations in order to knee cap him is delusional.

George W. Bush is all about George W. Bush, and he believes that he is on a mission from God (which will hopefully take him to The Hague at some time), and the rejection of ego inherent in such an action, because it is an acknowledgment of his failure on a spectacularly grand scale.

It won't happen.

OK, This is Just Creepy

Think Progress notes a bit of parody that came distressingly close to reality, a cover of Life magazine based on a movie in which Tina Fey was John McCain's running mate.

I hate living in an era where parody consistently predicts reality.

Why Bush Caved on Iraqi Demands in SOF Agreement

Short version: Bush needed the agreement, and the Iraqis didn't.

They knew that if there was no agreement, that they would win, and Bush and His Evil Minions^&trade would lose, so they could drive a very hard bargain.

Bush was prisoner of his own ego.

Russian Sub Update

There are 3 items, and I don't believe the first 2:

The Russian Navy is due to receive Severodvinsk 2010. Yeah right.....Considering the delays and cost overruns in their shipyards, the Indian carrier comes to mind, this is not going to happen on schedule.

They are also claiming that they will scrap all decommissioned nuclear submarines by 2012. See above.

The one that I do believe is reports that the Russians Russia will not lease the Akula II class nuke boat, Nerpa India.

Idon't think that the recent fatal accident has anything to do with this. I think that this was always a ruse by the shipyard to get funding to finish the boat, with the goal of delivering it to the Russian navy.

IDF Shocked by JSF Price Spike

Well, the numbers that the Israelis are seeing :

"Defense News" reports that Ministry of Defense and Israel Air Force officials are "stunned by projected program costs for their Israel-unique version of the F-35" Joint Strike Fighter (JSF), manufactured by Lockheed Martin Corporation (NYSE: LMT). IAF and Ministry of Defense officials are struggling to pare a hefty list of customized subsystems and add-ons that threaten to ground the aircraft as unaffordable.

"Defense News" states that, in September, US F-35 program officials gave rough price and availability data to their Israeli counterparts, who reacted with sticker shock to the price tag of $200 million per plane. Since then, both sides have been seeking a new configuration that can meet IAF performance and budget requirements. The IDF had expected to pay about $2 billion - $80 million per plane - for the first 25 aircraft.

My money is on the Israeli numbers being closer to the truth than the Norwegian ones.

Doubtless, there costs with integrating Israeli systems into the airframe, but it's increasingly clear that the high end estimates for cost are accurate, and largely unaffordable.

LockMart Stealth Video

It's a nice primer on stealth. (3:40)

George W. Bush Broke Our Army

That's, or at the least the conclusion that the US Army is broken, is the conclusion of well respected army analyst Andrew Krepinevich in a Center for Strategic and Budgetary Assessments report.

His basic points:

• The quality of enlisted men and officers is decreasing despite significant pay hikes.
• Physical, educational, and "moral" (i.e. criminal conviction) standards have been lowered for recruits.
• NCO quality is suffering, because enlisted men ill suited to leadership are being promoted to NCO status.
• Falling reenlistment numbers.
• Increased use of stop loss to maintain staffing levels.
• The Army is attempting to create units that are simultaneously configured for both conventional and counterinsurgency warfare, and thus under performing at both.

He does not explicitly finger Bush, but Iraq is clearly mentioned as a part of the problem.

His recommendations:

• Make 15 Army BCTs dediucated to counter-insurgency/peacekeeping.
• Delay expanding the army until personnel quality issues are resolved.
• Cancel the FCS, which has dubious utility in a counter-insurgency scenario, and is sucking up too much budget.

It is likely that the ill effects of Iraq will weigh on the army for more than a decade.

Interesting Regulatory Take on Open Rotor Engines

Are they unducted fans, are they high tech propellers, or are they, as one wag put it, a bunch of bananas whirling around.

I don't know, and it appears that regulatory authorities are in a similar conundrum.

The regulations if they are classed as turbofan blades are stricter, and thus the would add more weight, and the regulations if they were classed as a propeller.

It's a non-trivial issue that needs to be resolved.

40 Years in the Desert is Reorganizing as a Bank Holding Company

Because that way, much like Amex and GMAC, I can go to the treasury and get some of that money.

The South Should Be Irrelevant in American Political Discourse

Brad Delong finds some graphs that show a big difference between the South and the rest of the nation.

As he aptly puts it, "The whites in the heartland of today's Republican Party just do not vote--and do not think--like the rest of us do."

Simply put, in the rest of the nation, the greater contact with black people in your daily lives, the less bigoted you are, and in the south, the he greater contact with black people in your daily lives, the more bigoted you are.

One of the founding principles of the United States is the melting point. At the core of the melting pot is the idea that once you know the other, you will accept the other.

Anything else is un-American, and should have no part in our public policy discourse.

Elections Update

Well, the Strib running count of the Minnesota Senate race has the margin at 170, with 977 Franken challenges, and 1005 Coleman challenges.

It's clear that this will turn on the challenges.

3 More Banks "Eated", as Atrios Would Say

FDIC Bank Closing Page:

• PFF Bank and Trust, Pomona, CA
• Downey Savings and Loan, Newport Beach, CA
• The Community Bank, Loganville, GA

Chinese Carrier Ambitions

Last week, I noted that the Chinese showed a carrier in drydock in a mockup of a new port facility, and this week, we have a senior official in the Chinese Defense Ministry, Major General Quan Lihua, suggesting that China is looking at acquiring a carrier, though not to, "use it to pursue global deployment or global reach."

Yeah, right.

This is About Pork, Nothing Else

Well, it looks like the US Navy is looking at moving a carried from Hampton Roads, Virginia to Mayport, Florida, near Jacksonville, and the Virginia Congressional delegation is throwing a fit over this.

This is not surprising, the presence of that carrier pumps something like ½ a billion dollars into the local economy.

The Navy is arguing that, "The five East Coast carriers should be dispersed as a hedge against a natural disaster or attack that could shut or cripple the sprawling Norfolk base."

So, in order to hedge against natural disaster, you want to move the ships into hurricane alley, otherwise known as Florida.

Of course the idea that foreign power will launch a sneak attack on the base is ludicrous.

SecNav John Lehman did this in the 1980s, on the argument that it would make more difficult for Soviet subs to shadow fleet movements, but it was a crap argument then.

Of course, these days the USSR is no more, and the Russians can't deploy a significant portion of their fleet and the Chinese are a decade from a meaningful submarine fleet, so there is no risk of attack.

The reality was that Lehman wanted to do this because it created more constituencies for his vision of a 600 ship navy, because a large number of small bases gets you the support of many congresscritters, where as one large base just gets you 1 or 2 districts support.

With the Navy claiming that their ships and aircraft are wearing out and need to be replaced, they still want to drop a billion dollars on the move, not because of military need, but because of political need.

More on the JSF Norway Buy

So, we have the statement by the Prime Minister that Norway has settled on the F-35 as its F-16 replacement.

What I find interesting is this article, which says Norway will pay $2.54 billion for 48 aircraft, because that figureds to $52 million per aircraft, which is less than half the unit costs I've been seeing.

Something is seriously whack with those numbers, which, as the Norwegian PM notes in his statement, is less than the Gripen, which is half it's weight, and you pay for aircraft like you pay for ground beef, by the pound.

It may be that the money already put into the program by Norway as a JSF partner is being counted, but there have to be some seriously heavy duty "Jedi mind tricks" in the accounting too.

An Interesting Article on the Gripen

And specifically on how SAAB will ensure that the upgraded Gripen NG will remain cost effective: (paid subscription required)

Moreover, Gripen NG embodies a new business model that aims to cut costs even with low production rates. “The market is extremely price-sensitive,” and the build approach for the new version reflects this, says Bob Kemp, marketing director for Gripen International.

In the past, Gripen embraced technologies that designers modified to fit specific needs—as was the case with the General Electric F404 engine that Volvo turned into the fighter’s RM12 powerplant. For the Gripen NG, Saab went directly to GE and asked for an F414, the latest version of the F/A-18E/F’s engine with minimal changes. The F414G features some adjustments to the full-authority digital engine control and power supply, largely because Gripen is a single-engine fighter (whereas the F/A-18E/F has two engines). This seemingly innocuous change allows Saab to reduce engine costs 20%, even though the F414 is a higher thrust engine with a greater sticker price than the F404.

(emphasis mine)

Another possibility in this model is the use of some commercial systems, with even greater cost/performance advantages.

It's why I think that it will be see a successful export market. even though it just lost in Norway, because these aircraft, and pretty much all of the high end military systems out there, have gotten too damn expensive.

BTW, here is a nice bit of video from Aviation Week:

USAF Looking at Another Bite at the Raptor Apple

Despite the best efforts of the Pentagon, which has determined that further F-22s are not necessary, the US air force is still trying to buy more of the gold plated fighters. (paid subscription required)

Of course, the USAF has said for years that they need 381, but now because they see that this number is impossible, they are trying to go for about 100 aircraft less, specifically something in the 250-275 range.

There is a word for this behavior, insubordination, and the civilians who are constitutionally in charge need to put a stop to this.

Prepping for Bean Burrito Night at 350 km Altitude

Well, it appears that NASA has created an robotic nose to sniff the air in the space station.

It's called the ENose, but as all Futurama fans, yours truly included, know, it should be called the Smell-O-Scope.

And Now the Existing F-22 Fleet is Becoming Unaffordable

That is the unintended message from Pentagon acquisition executive John Young, who is asking for $8 Billion to upgrade the first 100 or so jets.

And it's not just upgrades, the operational costs are spiking too:

But that's not all the next Pentagon leaders will have to debate about the super-secret Raptor, he said. He said operational tests have showed the plane is "proving very expensive to operate."

Those tests have shown what he called a negative trend, meaning the "maintenance man-hours per flying hour has increased through those tests. The last one was a substantial increase."

Young also expressed concerns about the plane's mission-capable rates, saying recent marks in the "62 percent kind of range" are "troubling." He also said data shows the plane "meets some but not all" of its key performance parameters."

Seriously, the Airforce won't take budgeting and maintenance issues seriously until we take an entire generation of the Air Force's latest and greatest to the Boneyard, Davis-Monthan AFB and chop them to bits while the UASF Chief of Staff is forced to watch.

This crap is absolutely out of control.

Russians Looking to Buy Israeli Drones

I can understand why they might want the sysytms, but I figure that the likelihood of the US allowing the tech transfer involved to actually allow drone sales to the Russians is about as likely as Sarah Palin doing a PhD dissertation on Claude Levi-Strauss's theory of structuralism.

NG Announces Plug-In Tactical Laser

The good folks at Northrop Grumman Space Technology have announced a 15kW solid state laser module.

It's a rack mount, though at 15 kW, your backplane on your rack better have some heavy duty busbars.

Still, the fact that what appears to be a fieldable electrically powered laser is available for military deployment, though it is unclear as to how soon this would actually hit series production, seems to be an important development.

Certainly, it is a step up from the expensive and messy chemical lasers that we are seeing in places like Boeing's airborne laser, which would appear to need an environmental impact statement each time that it fires.

Northrop Grumman Announces the FIRESTRIKE™ Laser, World's First Weaponized Solid-State Laser for U.S. Military Services:
'This is a rugged electric laser with power levels, beam quality and runtime suitable for offensive and defensive military utility. Also available is a newly designed laser current source assembly (LCSA), which is compact, and specifically developed to precisely meet FIRESTRIKE(tm)'s power needs. Combined with advanced electro optical and/or infrared sensors, the FIRESTRIKE(tm) laser can provide self-defense, precision strike and enhanced situational awareness capabilities.'

Interesting Note on Stealth Aircraft

In this Aviation Week article on research into more making electronic systems on aircraft more efficient: (paid subscription required)

Goals of the Air Force Research Laboratory’s Integrated Vehicle Energy Technology (Invent) program include extending range and endurance 10-15%, increasing power and thermal capacity by 10-30%, overcoming cooling challenges in low-observable platforms, and reducing life-cycle costs.

Because the stealthy F-22 and F-35 dump their heat into the fuel, they are “flying Thermos bottles,” says Steven Iden, AFRL’s Invent program manager. The heat loads in the F-35 are up to five times what they are in the F-16, he says, and could increase by another factor of four in a future laser-armed fighter

...The Invent power and thermal management system will extract, store and reuse electrical power and adaptively use the heat sinks available, including fuel, low-observable ram air, and heat exchangers in the engine fan duct and the “third stream” provided by the Advent engine. This is a third flowpath introduced on Advent to vary the bypass ratio.


....

In the F-35, regenerative energy from the power-by-wire flight-control actuators is dumped into heavy resistor banks, which produces heat. For Invent, AFRL is looking to develop an “electrical accumulator” that would store the energy and use it to meet peak power demands from the systems, similar to a hydraulic accumulator.

(emphasis mine)

On further thought, this is not surprising, as a cooling scoop for external air is typically a non-stealthy feature, though the degree of the problem surprises me.

It restricts time spent on the ground at idle, and increases the unusable fuel in the tanks, as it has to be used for component cooling .

I CAN HAZ CHIROPRATIK!

Too much catnip.

Citi Dead Pool

Well, we have the stock tanking by 25% yesterday, and Its CEO Vikram Pandit denying reports that it is looking for a buyer.

I dunno, its market cap has dropped from $274 billion to $21 billion in a couple of years, and $21 billion sounds a lot like a handful of beans.

We have reports that "non core" assets might be sold off, and there are leaks that notwithstanding Mr. Pandit protestations, that they are looking to merge with someone.

Zimbabwe

It looks like Mugabe is going to be forming a government unilaterally. They have already sent a copy of the legislation to form the government to Thabo Mbeki, who will doubtly side with Mugabe again.

Thankfully, Mbeki is no longer South African president, because if he were, he would never have moved to withhold 300 million rand ($28 million) in Zimbabwe aid over the stalled negotiations.

That's a positive development, and occurred only because the ANC forced Mbeki out of the presidency.

Well, This is One Way to Get Out of Debt

It appears that the Ecuadorian debt audit commission has found serious and pervasive irregularities in the debts that it owes.

This is not surprising, foreign debt to third world nations is typically geared toward maximizing the shafting of the recipient countries, and not the niceties of western accounting:

Ecuador's debt audit commission said it uncovered "illegality and illegitimacy" in the country's foreign obligations, findings that may give President Rafael Correa the legal basis he's sought to halt bond payments.

The commission said in a 172-page report that the global bonds due in 2012 and 2030 "show serious signs of illegality," including issuance without proper government authorization. Correa, who last week withheld a $30 million interest payment on the 2012 bonds while he awaited the audit, said today that the country's bonds due in 2015 also are marred by irregularities. He called the audit results "truly disastrous" and "conclusive."

It appears that they are looking at filing criminal charges.

It's likely true that the audit committee's review is accurate. The question is whether the western banking interests can get him to knuckle under, and if not, what happens when other 3rd world nations follow Ecuador's example look at their debt deals closely.

Switzerland?????

According to Crooked Timber, it's Switzerland that is the next western nation to be hit by the credit crisis:

Not only major institutions but whole national economies are up for grabs now. The national bankruptcy of Iceland seems likely to followed by something similar for Switzerland. As Citi itself points out, UBS and Credit Suisse are bigger, relative to the Swiss economy, than Kaupthing was for Iceland. Felix Salmon (also predicting doom for Citi, has been all over this).

Go read the whole article, whose main thesis is that the financial markets are heading toward either very aggressive regulation, or government ownership, or both.

But still, what hit me in the gut was the Swiss possibly being broke....That's amazing.

I gotta go short Swiss chocolate futures.

Obama Transition News

This is all from generally solid, but not officially confirmed.

• Hillary Clinton will take the job of Secretary of State....I'm not entirely sure why, she's Senator for life from the state of New York.
• Timothy Geithner will be nominated as Secretary of the Treasury. Thank God that it was not Larry Summers.
• Bill Richardson is favored to be nominated as Secretary of Commerce.

Election Updates

The recount in Minnesota proceeds apace, though it appears that the number of ballot challenges from both sides is increasing, and Coleman is is still ahead by around 140 votes.

In the Georgia runoff, Barack Obama has now recorded an ad on behalf of Jim Martin.

Lies Republicans Tell

In the (I can't believe that I'm quoting them) New Republic, they have a very good analysis of the labor costs of the Big 3 (Big 2½), and it confirms what I have been saying, that $70/hour cost of a UAW employee is a lie, and attempts to equate the cost retirees with the current labor costs in order to attack unions.

It turns out that, after the latest round for cuts, the hourly rate and benefits for current workers are probably a bit less than the transplants.

The Big 3's (Big 2½) labor problem is not the cost of its workforce, it's the fact that it has been contracting its labor force for 4 decades, and management has systematically underfunded pensions, and now they find themselves in a vice.

Good News About the Iraq SOF Deal

It appears that the deal not only rescinds immunity for mercenaries contractors, but it does so retroactively, meaning that they could be liable to stand trial in an Iraqi court for earlier actions, like shooting wildly into a crowd at a Baghdad traffic circle:

A new U.S.-Iraq security agreement doesn't specifically prevent Iraqi officials from bringing criminal charges retroactively in cases such as the September 2007 shooting deaths of 17 Iraqi civilians by contractors protecting a State Department convoy, officials told security company officials during meetings in Washington Thursday

Good.

Hopefully this should get the mercenaries contractors out of Iraq, which would be good for both the Iraqis and our troops, who will find the Iraqi people a little bit less pissed off at Americans.

The CIA Brings Back the 1970s

It appears that the good folks at Langley are murdering people again, and not over terrorism, but over drug trafficking.

And they are lying to Congress and investigators about it.

The more things change....

Economics Update

Well, let's start with where I got it really wrong, energy, where oil closed below $50/bbl, and retail gasoline prices fall below $2.00/gallon.

I was completely wrong on both counts about my predictions.

In the meantime, the credit crunch is savaging an industry highly dependent on venture capital, biotech.

In the long run, that may be a good thing, because when they aren't making money, they aren't lobbying Congress, which makes health care reform, at least for prescription drugs, that much easier.

In terms of the overall credit crisis, things still stink, though Calculated Risk's Credit Crisis Indicators are neutral in terms of spreads, there has been an incredible flight to US Treasuries, driving rates down to record lows.

Of course, we could be in Europe, where both manufacturing and services are dropping like a stone, and the Euro bank Prez is telegraphing another rate cut

½ a Billion Dollars

That's what the Obama campaign raised this election cycle.

Woah.....

Succumbing to Peer Pressure

Palin giving a post turkey pardon interview while other turkies are slaughtered behind her.

I didn't want to post this, but the peer pressure from the liberal blogosphere proved too strong.

Damn you John Aravosis!

Truth be told, I also saw this on MSNBC Countdown, where they blurred out the nasty bits, and supplied some very amusing headlines to go along with it. (click on picture for full size)

The Arbitration Industry is Hopelessly Corrupt

Normally, this is the sort of crap I don't give a damn about, specifically Dov Charney, CEO of American Apparrel, and his raft of sexual harassment lawsuits, but the machinations of this specific case show just how unbelievably corrupt this system is.

You see, Mr. Charney settled with one of his victims, and part of the agreement was that in addition to the money and a non disclosure agreement, that they enter into a "special" arbitration:

Los Angeles' 2nd District Court of Appeal revealed in an unpublished ruling Oct. 28 that attorneys for Charney, CEO of American Apparel Inc., a public company known for its racy ads, had conspired with lawyers for former sales manager Mary Nelson. Both sides had agreed, the ruling says, to enter into an arbitration whose outcome was preordained to favor Charney, and agreed to a press release stating that Charney "never sexualized, propositioned or made any sexual advances of any nature whatsoever toward Mary Nelson." Nelson, in turn, would get $1.3 million if she kept the settlement secret, according to the ruling.

The 2nd District, in an opinion authored by Justice Paul Turner, said that settlement -- which never went through -- would have raised "considerations of illegality, injustice and fraud." The court also held that the purpose of the proposed press release "was to mislead journalists and the public."

Of course this raises the obvious question:

The attempted under-the-table agreement raised some questions about whether JAMS Inc. arbitrator Daniel Weinstein -- a retired San Francisco Superior Court judge and co-founder of the 20-year-old JAMS -- had gone along with the ruse.

The answer is that it would have been impossible for him not to have known, of course, because of the precedent that they wanted used:

The appellate decision lays out the sham arbitration of the settlement. It stipulated that the arbitrator would absolve Charney of the sexual harassment claims based solely on his consideration of a California case, Lyle v. Warner Brothers Television Productions.

In that case, the California Supreme Court in 2006 reversed a lower court's finding that a writer's assistant on the television show Friends did not come up with enough evidence for a "hostile work environment claim" by contending that the writer used sexually explicit language during the writing of the show.

Any arbitrator, particularly one who is a retired Superior Court Judge, would look at the filings and think that one side was deliberately throwing the case. At that point, they would be required by legal ethics to notify the bar.

Thought for The Day: Marriage Equity

Link

That Economic Data is Worse than It Looks

One of the common things that I've noticed since I've started following government economic data is that the preliminary data comes in better than the final data.

When you compare month to month, you are comparing preliminary data to the prior month's final data, so the delta, which is what the press covers, looks much better than what it is in reality.

Well, Dean Baker just caught a doozy on October industrial production data.

In bullet points:

• September hurricanes artificially depressed that month's stats.
• September data was then revised down.
• October preliminary data, which showed a "rise" is flat when comparing preliminary to preliminary.
• If you look at just manufacturing data, which strips out the noisier utility and mining segments, that number is down from September manufacturing data.

Republican Party Has Lost The Economist

In an editorial, they call the 'Phants, a Ship of fools, and lambast them for systematically becoming anti-idea and anti-thought over the past 30 years.

It's a good read, and the last sentence, "Richard Weaver, one of the founders of modern conservatism, once wrote a book entitled “Ideas have Consequences”; unfortunately, too many Republicans are still refusing to acknowledge that idiocy has consequences, too," had me cleaning my screen.

While there is much wrong with the Republican party, they are correct that the anti-intellectual anti though bent of the modern Republican party is at the core of much of this.

It's a good read.

Scary Picture

Really scary picture

Calculated Risk did a graph of stock indices during the most severe market meltdowns since 1929:



My only complaint with the picture is that the stock market does not equal the economy.

5 Gitmo Detainees Ordered Released

This ruling is significant for a number of reasons, not the least of which that the judge used very strong language to express his displeasure with the government:

Ruling from the bench, Judge Richard Leon of U.S. District Court in Washington said that the information gathered on the men had been sufficient to hold them for intelligence purposes, but was not strong enough in court.

"To rest on so thin a reed would be inconsistent with this court's obligation," he said. He directed that the five men be released "forthwith" and urged the government not to appeal.

Also note that Judge Leon is a major wingnut, so this is not some wild eyed liberal "legislating from the bench."

Senator Harkin To Introduce Bill to Force Derivatives Onto Regulated Exchanges

I think that it's a good idea, because the markets need transparency:

Senate Agriculture Committee Chairman Tom Harkin plans to introduce a bill Thursday that would force all over-the-counter derivatives, including credit-default swaps, onto regulated futures exchanges.

The problem for some folks, like hedge funds and former Lehman employees is that this will shut their business model down, because it is predicated on secrecy.

It's not a problem for me, though. Just shut it down, and the stuff that continues, let a Commodity Futures Trading Commission with serious teeth aggressively enforce this.

Any business model that is predicated on information asymmetry and secrecy is dishonest at its foundations, and should be restricted.