10……9……8……7……6……5………

Happy new year.

I actually posted it some hours before, and set this to post just before midnight, as I am by this point 3 sheets to the wind courtesy of the products of Rudolph Jelníek, specifically Slivovitz.

It's highly unlikely that I will be hungover tomorrow, as I have a trick that prevents this: my genetics.

Something about my Eastern European Jewish heritage prevents this.

I've never been hung over.

Have I Mentioned that I Love Rachael Maddow?

She hands the Republicans, and the sycophant access journalists who cover them, their asses.

Mark Fiore on the New Year

A pretty good synopses:

It's Called Journalism

Rick Sanchez has John Ensign on, when he bloviates about terrorism, and he quizzes him on his own little scandal, where he paid off the husband and children of his mistress, and Sanchez asks him about how he appears to have encouraged the illegal lobbying activities by former aide:

Completely F%$#ing Delusional

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Part of a trend, not a result of selling out American workers

Rahm Emanuel believes that by voting against the Democratic base, you improve the electoral prospects of the Democrats:

White House Chief of Staff Rahm Emanuel has been telling Democrats a win on the health issue will reverse the slide in public opinion, just as passage of another controversial proposal, the North American Free Trade Agreement, lifted President Bill Clinton in the polls.

Let's be clear: Clinton's popularity did rise after the passage of NAFTA.

It was a part of a trend (see pic). When people finally noticed the passage, a few months later, his ratings fell through the floor, and the Dems lost both houses of Congress.

To be fair, a part of this might have been the collapse of healthcare reform, but NAFTA demoralized labor, and pretty much the entire Democratic base.

A bad bill is worse than no bill, and immeasurably worse than one that passes through reconciliation.

The real problem with Rahm is not that he's determined to offer succor to right wingers because he believes that it will somehow benefit Democrats, but that he's wrong, and incompetent.

H/t A Tiny Revolution

Limbaugh Hospitalized With Chest Pains

In Hawaii, though the interesting bit are the reports of what he said to hospital workers:

Limbaugh, 58, suffered from chest pains, sources said. Limbaugh was sitting in a chair in his ninth-floor hotel room at the Kahala when emergency crews arrived, sources said. He told medical crews that he was taking medication for a back problem, sources said.

(emphasis mine)

Sounds like everyone's favorite junkie is taking opiates again…………Whether or not this is a legitimate need or a relapse, I have no clue.

Economic Quote of the Day

On the subject of raising marginal rates for rich people:

Here's why: in 2007, there were 495,000 tax returns filed for millionaires. That means a significant fraction were corporate CEOs, CFOs, finance people, and professional athletes/best-selling textbook authors/TV celebs.

Peyton Manning makes about $30 million a year -- let's explore his potential behavioral responses to changes in taxes. Let's raise Peyton's taxes by 10%. Under the logic of Alan Liard, Greg Mankiw's student, and under the logic that all economists know to be the truth, people respond to incentives. Peyton Manning is a person, so he responds to this tax hike by working 6% less, and decides now he's going to sit for the Colts playoff games since he makes less money per game, and he enjoys watching Tom Brady play in the playoffs more than being there himself. Doesn't really sound likely, does it?

Of course, Peyton Manning is going to play 16 NFL games and the playoffs even if you raise his taxes considerably. The same is true of a wide variety of other professions -- corporate execs usually have two choices, they can choose to work or not work -- there are no part-time CFO jobs, and it's probably tough to be a "part-time" hedge-fund manager as well... So, let's say Greg the textbook publisher or Chuck the hedge-fund manager decides, due to higher taxes, that they are just going to retire. In that case, the government loses 100% of the taxes Chuck or Greg would have paid! The multiplier is -10!!!

Except, according to logic which is totally obvious to a pre-schooler, if Greg the textbook author doesn't sell textbooks, then Thorstein the textbook publisher will. If Peyton the quarterback doesn't play in the playoffs or appear in Gatorade commercials, then Tom the quarterback will. If the CEO of Anthem, who routinely makes $40 million, quits due to high taxes, Anthem will pay the next CEO extravagantly. If Chuck the hedgefund manager doesn't manage Peyton's money, then Emilio the hedgefund manager will manage Tom's money...

--Thorstein Veblen

(emphasis mine, and I think that the hedge fund manager managing Tom's money would be named Ashok, not Emilio, and he work out of Bangalore, not Wall Street, or at least he would in a system that was truly efficient.)

What he does not note is that the massive amounts of money received is not because they will do the "productive" "work" for only that amount of money, but because Peyton, and Tom, feel that they deserve more than the next best guy at their position.

If you engage in policies that discourage extremely high income, for example, expanding the AMT to include all forms of income, and increasing the marginal tax rate for the AMT (Currently 26%, and which has little/no deductions), at $¼ million by 1%, and by an additional 1% at $250K increments, so that a income beyond $1 million is taxed at 29%, and at $5 million it is taxed at 45%, at $10 million it is taxed at 65%, and it maxes out at 85% at $15 million,^* then you will find that business will be less inclined to ginormous packages,^† and you would see a moderation in this trend.

^*Note that these are marginal tax rates, so the 85% is the tax payed on the dollars earned beyond $15 million, the 50 thousandth dollar would still be taxed at around 20%.
^†Yes, I know, "ginormous package" sounds dirty, but the executive pay levels are obscene.

Back Home

Not a whole bunch of traffic either.

[on edit]
I hate unpacking after getting home.

Ahead Dork Factor 9*

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Only $2,999.99, but shipping is free!!

I present to you the Star Trek: The Original Series: Classic Captain's Chair Replica:

Throw away that Lay-Z-Boy. Here's a life-size throne fit for a captain! With the sci-fi status and geek grandeur of Captain Kirk's command chair in your collection, you can boldly go where no fan has gone before! This full-size prop replica of the U.S.S. Enterprise's captain's chair is designed from detailed drawings supplied by Paramount Studios and is approved by Paramount. It delivers all the accents and details from the historic prop, along with modern lighting, sound effects, and phrases designed to thrill any Star Trek enthusiast. It's the ultimate prize from the Enterprise! The unbelievable captain's chair measures 41-inches tall x 42-inches wide x 39-inches deep. It weighs about 215 pounds! The working swivel seat with wooden handles, leather seat cover, and armrest controls make this the perfect addition to any collection, display, home theater, or museum! The chair, seat of the chair, and arms of the chair are made of wood, with the seat covered in leather. For rigidity, it's mounted on an iron base. Limited edition of 1,701 pieces worldwide. Left-hand arm controls include: Shuttle operation controls Activation of viewscreen Hailing frequencies Right-hand controls include: Red alert Yellow alert Jettison pod Micro tape player Intercom controls With a push of a button, voice clips from the show can be heard: 'This is Captain James Kirk of the U.S.S. Enterprise.' 'Lt. Uhura, open a channel to all decks.' 'Security Alert to all decks. Kirk out.' 'Kirk to Engineering, Mr. Scott."

At 215 pounds, it's going to be murder getting it down the stairs to your parent's basement, where the purchaser clearly lives.

I like Star Trek. I saw a few episodes when I was 6. But if you want a captain's chair, and you can't search the net for plans, so you spend 3 grand on a chair in which most of the buttons do not work, or even press down, you are really very lame.

^*Alas, I cannot take credit for this bon mot. It was from Bladesmith at the by invitation only Stellar Parthenon BBS.

Much Better.....

I've been visiting my Mother-in-Law in New York, we saw the Museum of Natural History yesterday, and the Metropolitan Museum of Art today, and I finally managed to give her my Hanukkah Gift to her.

I offered to upgrade the memory on her machine, a Dell Dimension L800r, from it's current 128 meg to 512 meg of ram.

When she got it, it had Windoze ME, but she had to upgrade to Win XP, and with 128 meg, less a couple for video memory, it was slow, particularly after a nasty bit of spyware, and the multiple passes of various software to fix it, created a spaghetti registry.

I ordered the memory online, but they were out of stock, so today, before going to the museum, I hit B&H Photo Video in Manhattan, and picked up 2x 256M DIMMs.

Still slow, but not glacially so, and the CPU actually maxes out without the hard drive light indicating massive thrashing.

It's still slow, but no longer glacial.

Why We Need to Cut the Military Budget by at least 85%

Because, whether the President is a Democrat or a Republican, having an "invade anywhere anytime" military is like giving a loaded revolver and amphetamines to a toddler:

Sen. Joseph Lieberman, (I-Conn) a renowned hawk and one of the foremost champions of the invasion of Iraq, warned on Sunday that the United States faced "danger" unless it pre-emptively acts to curb the rise of terrorism in Yemen.

"Somebody in our government said to me in Sana'a, the capital of Yemen, Iraq was yesterday's war. Afghanistan is today's war. If we don't act preemptively, Yemen will be tomorrow's war," Lieberman said, during an appearance on "Fox News Sunday". "That's the danger we face."

(emphasis mine)

The problem with having a military that is able to invade anywhere, anytime, for any reason, is that there are people, including Joe Lieberman and whoever, "Somebody in our government," is with small brains, and even smaller penises, who will use military power with all the forethought of the aforementioned child on speed.

If you build the military, they will use it recklessly, to the detriment of both the nation and to the military itself.

The current "seabasing" concept being developed in the Pentagon is just the sort of "invasion in a box" that will make this even easier to do, and hence more likely.

The capabilities that we implement actually increase the military death toll, because they encourage insane strategies by the civilian and senior military leadership.

What's more, they starve our economy, it will be costing in excess of $1 million a year per soldier in Afghanistan, and they starve the social safety net, killing our own citizens through lack of healthcare, and over the longer term, through a lack of investment in infrastructure and education.

H/t Attackerman.

My Apologies

My last post was unbelievably lame....Sorry.

Poo of Mass Destruction

So, on another Northwest Flight, a passenger experiencing "gastric distress", spent an extended amount of time in the aircraft lavatory, and when quizzed about his experience, he was less than forthcoming, so we had yet another security freakout.

Needless to say, al Qaeda is planning to start opening restaurants at airports that serve really strong curry, and they will follow it up with sabotage to disable toilet heating, so we will be threatened with icy BM's.<sup>*

*</sup>Icy BM (Bowel Movement)-ICBM, get it?

In Cockpit Vid of Su-27 Climbing to 10,000 Feet

54 seconds from brake unlock, and this appears to be without the use of afterburners.

It appears to be one of the de-miled Su's from those boys in Rockville, Illinois.

Color me impressed.

Of course if I got one, I'd need to get a pilot's license too.

I Take One Day Off, and Look What Happens……

So, some yahoo attempts to sew explosives into his underwear on a flight from Amsterdam to Detroit, and, is tackled by passengers when his attempt at setting it off fails.

I call wannabee. Means of securely detonating a bomb without flames or noise have been the purview of one-eyed, one-handed, three-fingered men since 1944.

This was just sloppy.

Then again, my track record on this is almost 100% wrong.

Remember the Judges Who Took Kick-Backs to Lock Up Kids?

Well, they are also mobbed up:

Reputed mobster William "Big Billy" D'Elia and former Luzerne County President Judge Michael T. Conahan were longtime friends who partied together, used courthouse employees as personal couriers and met frequently to talk court cases over ham and cheese omelets at a Perkins Restaurant & Bakery, witnesses testified Wednesday at a hearing over allegations the men conspired to fix a $3.5 million defamation verdict against The Citizens' Voice newspaper.

Background here.

Visby Corvettes Delivered to the Swedish Navy

The first two of the series, specifically the HMS Helsingborg and HMS Härnösand have been delivered to the Swedish Navy.

It's not big news, but I think that the Visby's are the coolest looking surface combatants out there.

I would note I am still dubious of the effectiveness of full up stealth on surface ships.

Between the ocean environment, and the fact that even the stealthiest ship leaves a visible wake, I'm not sure that it does much, except perhaps reducing jamming power required by a few watts.

Deep Thought

H/t Pundit Kitchen

Happy Santa Day.

Randall Munro at xkcd is a genius.

A Christmas Gift for the Goyim*

Rudolph "I made a Mobbed Up Corrupt Cop My Police Chief" Giuliani has decided against running for Senate.

I think that he realizes that under the stress of a campaign, the real Rudy, as opposed to the one who existed for about 18 hours on 9/11/01, comes out, and that the voters hate the real Rudy.

^*From the Hebrew. Literally it means "foreigner" of "alien", but it is generally used to mean non-Jew.

Pushback on the House on Healthcare Reform

Rep. Louise Slaughter (D-NY), Chairman of the House Rules Committee, has said that the Senate version of the bill is so flawed that the whole bill should be killed, in an OP/Ed that she wrote for CNN.

In addition to a lack of a public option, she lists:

• The Senate bill keeping the insurance companies' antitrust exemption.
• Allowing much higher rates to be charged with older people and people with preexisting conditions.
• Fewer incentives/penalties on employers who do not supply insurance.
• The anti-abortion language, which will have the effect of eliminating abortion coverage in insurance nation wide.

It's unclear as to whether or not she is suggesting reconciliation or not.

Additionally, Representatives Barbara Lee, head of the CBC, and Lynn Woolsey, head of the CPC, are lobbying to kill the bill without a public option.

I would note that part of the dynamic is a push-back against the proposition that the Senate is calling the shots here.

Light Posting for the Next Week

Off to my Mother-In-Laws for winter break.

Any recommendations regarding things to visit in New York City is highly recommended.

Jobless Claims Fall

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H/t Seeking Alpha

Initial claims fell 28K to 452,000, the lowest level of the year, while the 4-week moving average, a less noisy metric, fell to 465,250, with continuing claims falling too.

Note though that extended benefits (green in picture) continue their rise.

The Senate Passes Obama's Healthcare Bill

The vote was 60-39.

Say what you will, but it's been clear from the start that what Barack Obama and Rahm Emanuel have been interested in is Barack Obama signing a bill called "Healthcare Reform," whether it helped ordinary people or not, and the Senate version fits the description to a "T".

Obama has already made it clear that he wants the Senate bill to be the one out of committee, as shown by his full throated support of the tax on "Cadillac" insurance plan tax.

It means that, in addition to everything else, the bill is anti-union too, because protecting health care for their workers has been the Unions rear guard action for the past 28 years, ever since Reagan made union-busting cool with PATCO.

So, we will now allow insurance companies to levy a tax on ordinary Americans, and Rahmbama just loves that.

I had rather hoped that a few of the Senate Democrats, and those who caucus with them (I'm talking to you Bernie Sanders) would have had the guts to vote for cloture but against the bill, but no such luck.

At the rate things are going, we will get someone even more batsh%$ insane than George W. Bush in 2012, because there is no Republican on the national scene who is saner than he is right now.

Tyler Durden of Zero Hedge Spots Something Odd

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Past 3 Months


From March, when the Rally Started

For the past few months, the market runup has almost entirely happened after hours, when the markets are closed.

In fact, as he (or they, Tyler Durden is a nom de plume) note, "All the upside since September 14th has come exclusively from after hours action." (emphasis original)

The money quote is:

The observant among you will immediately realize what this implies: not only is there no volume breadth to the recent move in the markets, but the actual push higher likely occurs on at most tens of thousands of futures contracts on a daily/weekly basis. The fact that literally several blocks of AH trades, used persistently, can move the market higher by 6% over the past 3 months, even as regular trading accounts for absolutely no part of this move, and that the SEC finds nothing troubling about this phenomenon, should be sufficiently telling about how "efficient" US markets have become.

If someone wanted to manipulate huge markets, they would do it at 3 in the morning, when the markets are small, and no one is watching for the last few months.

He thinks that it's the, "HFT brigade to come in and scalp their trillions of pennies while leaving the market unchanged, then at 4pm handing it off again to leveraged futures manipulation and dark pools," better known as, "That great vampire squid wrapped around the face of humanity,^* Goldman Sachs."

^*Alas, I cannot claim credit for this bon mot, it was coined by the great Matt Taibbi, in his article on the massive criminal conspiracy investment firm, The Great American Bubble Machine.

Talk About the Odd Couple

I'm talking about Jane Hamsher Grover Norquis. who have jointly penned a letter calling for the Attorney General to investigate Rahm Emanuel's activities at Freddie Mac, as well as his role while in congress in obstructing investigations there, with the likely goal of pushing any revelations about his activities beyond the 10 year statute of activities.

Her bill of particulars:

• That while on the board at Freddie Mac, Emanuel signed off regarding gross financial irregularities.
• Participating in actions by Freddie Mac to make illegal in-kind contributions to politicians in the form of hosting fundraisers, including one Rahm Emanuel.
• Writing a law allowing the Office of Federal Housing Enterprise Oversight (OFHEO) to fire its inspector general by dissolving the organization and replacing it, as well as the the Federal Housing Finance Board (FHFB), with the Federal Housing Finance Agency (FHFA).
• It should be noted that the Obama administration has refused to appoint a new IG to its successor organization, and the Obama administration has refused a Freedom of Information Act (FOIA) request on Freddie claiming that, the report from the fired IG was "commercial information".

Now, I understand that Grover Norquist is an bad guy, but you get coverage by getting a diverse coverage for such things, as Hamshire makes clear when she looks at some similar efforts, such as the CAF letter to delay confirmation of Bernanke until there was an audit of the Fed, which was signed by a diverse group of people including, Chris Bowers, Dean Baker, Mark Calabria, James Kenneth Galbraith, Matt Kibbe, Grover Norquist, Phyllis Schlafly (WTF?!?!?), Robert Weissman, and John Whitehead. (Neanderthals in italics)

I've always known that Rahm is intellectually corrupt, his actions. During the Obama and Clinton administrations, as well as his time head of the DCCC show a real hostility to anything but the most corporate of corporatist Democrats, and he has always exhibited a tremendous hostility to liberals.

Now appears that he may be legally corrupt too, but I don't think that Obama would get rid of him short of an indictment, because the President thinks that he needs Rahm to keep the DFHs^* in line.

^*Dirty F%$#ing Hippies
Full letter after break:

December 23, 2009

Attorney General of the United States of America
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001

Dear Attorney General Holder:

We write to demand an immediate investigation into the activities of White House Chief of Staff Rahm Emanuel. We believe there is an abundant public record which establishes that the actions of the White House have blocked any investigation into his activities while on the board of Freddie Mac from 2000-2001, and facilitated the cover up of potential malfeasance until the 10-year statute of limitations has run out.

The purpose of this letter is to connect the dots to establish both the conduct of Mr. Emanuel and those working with him to thwart inquiry, and to support your acting speedily so that the statute of limitations does not run out before the Justice Department is able to empanel a grand jury.

The New York Times reports that the administration is negotiating to double the commitments to Fannie and Freddie for a total of $800 billion by December 31, in order to avoid the congressional approval that would be needed after that date. But there currently is no Inspector General exercising independent oversight of these entities. Acting Inspector General Ed Kelly was stripped of his authority earlier this year by the Justice Department, relying on a loophole in a bill Mr. Emanuel cosponsored and pushed through Congress shortly before he left for the White House. This effectively ended Mr. Kelly’s investigation into what happened at Fannie and Freddie.

Since that time, despite multiple warnings by Congress that having no independent Inspector General for a federal agency that oversees $6 trillion in mortgages is a serious oversight, the White House has not appointed one.

We recognize that these are extremely serious accusations, but the stonewalling by Mr. Emanuel and the White House has left us with no other redress. A 2003 report by Freddie Mac’s regulator indicated that Freddie Mac executives had informed the board of their intention to misstate the earnings to insure their own bonuses during the time Mr. Emanuel was a director. But the White House refused to comply with a Freedom of Information Act request from the Chicago Tribune for those board minutes on the grounds that Freddie Mac was a “commercial” entity, even though it was wholly owned by the government at the time the request was made.

If the Treasury approves the $800 billion commitment to Fannie and Freddie by the end of the year, it will mean that under the influence of Rahm Emanuel, the White House is moving a trillion-dollar slush fund into corruption-riddled companies with no oversight in place. This will allow Fannie and Freddie to continue to purchase more toxic assets from banks, acting as a back-door increase of the TARP without congressional approval.

Before the White House commits any more money to Fannie and Freddie, we call on the Public Integrity Section in the Justice Department to begin an investigation into the cause of Fannie and Freddie’s conservatorship, into Rahm Emanuel’s activities on the board of Freddie Mac (including any violations of his fiduciary duties to shareholders), into the decision-making behind the continued vacancy of Fannie and Freddie’s Inspector General post, and into potential public corruption by Rahm Emanuel in connection with his time in Congress, in the White House, and on the board of Freddie Mac.

We also call for the immediate appointment of an Inspector General with a complete remit to go after this information.

We both come from differing political ideologies. One of us is the conservative head of a transparency foundation, and the other is the publisher of a liberal political blog. But we make common cause today out of grave concern for the future of our country in the wake of corruption-riddled bailouts. These bailouts continue to rob Main Street to benefit Wall Street, and, because of that, we together demand the resignation of Mr. Emanuel, a man who has steadfastly worked to obstruct both oversight and inquiry into the matter. Rahm Emanuel’s conflicts of interest render him far too compromised to serve as gatekeeper to the President of the United States.

We will lay out the details further below, and are available at your earliest convenience to meet with you directly.

Sincerely,

Positively Nixonian

It's Called Lying Like a Rug

In support the idea that he will put his name to anything marked healthcare reform, barack Obama gave an interview to the Washington Post, and he told a complete and utter lie:

Those elements are in the House and Senate versions of the legislation; their competing proposals will have to be reconciled in conference committee next year. The House bill includes a government-run insurance plan favored by progressive Democrats; the Senate version does not. "I didn't campaign on the public option," Obama said in the interview.

(emphasis mine)

It takes about 15 minutes on Google and Youtube to see that it's a lie, see the video on the right.

It certainly wasn't something that he pushed hard during the campaign, unlike, for example, his support for repealing Don't Ask Don't Tell, and family benefits for gay couples, where his administration is now aggressively fighting to prevent real progress.

With this level of hypocrisy, it's no wonder that Drew Westen, a psychologist, neuroscientist, and political scientist whose book The Political Brain was widely considered to be the bible of the Obama campaign just wrote a scathing article condemning Obama's unwillingness to lead:

As the president's job performance numbers and ratings on his handling of virtually every domestic issue have fallen below 50 percent, the Democratic base has become demoralized, and Independents have gone from his source of strength to his Achilles Heel, it's time to reflect on why. The conventional wisdom from the White House is those "pesky leftists" -- those bloggers and Vermont Governors and Senators who keep wanting real health reform, real financial reform, immigration reform not preceded by a year or two of raids that leave children without parents, and all the other changes we were supposed to believe in.

Somehow the president has managed to turn a base of new and progressive voters he himself energized like no one else could in 2008 into the likely stay-at-home voters of 2010, souring an entire generation of young people to the political process. It isn't hard for them to see that the winners seem to be the same no matter who the voters select (Wall Street, big oil, big Pharma, the insurance industry). In fact, the president's leadership style, combined with the Democratic Congress's penchant for making its sausage in public and producing new and usually more tasteless recipes every day, has had a very high toll far from the left: smack in the center of the political spectrum.

What's costing the president and courting danger for Democrats in 2010 isn't a question of left or right, because the president has accomplished the remarkable feat of both demoralizing the base and completely turning off voters in the center. If this were an ideological issue, that would not be the case. He would be holding either the middle or the left, not losing both.

What's costing the president are three things: a laissez faire style of leadership that appears weak and removed to everyday Americans, a failure to articulate and defend any coherent ideological position on virtually anything, and a widespread perception that he cares more about special interests like bank, credit card, oil and coal, and health and pharmaceutical companies than he does about the people they are shafting.

………

Leadership means heading into the eye of the storm and bringing the vessel of state home safely, not going as far inland as you can because it's uncomfortable on the high seas. This president has a particular aversion to battling back gusting winds from his starboard side (the right, for the nautically challenged) and tends to give in to them. He just can't tolerate conflict, and the result is that he refuses to lead.

………

What's they're seeing is weakness, waffling, and wandering through the wilderness without an ideological compass. That's a recipe for going nowhere fast -- but getting there by November.

(emphasis mine)

As I've said before, the problem is that he believes that he is likable enough that he can bring people together even when there is no common ground, and the idea of people actually having honest differences of opinion, or of having legitimate political reasons for opposing his policies, appears to be completely beyond him.

Not Enough Bullets: AIG Again

Remember earlier this year, when, after news of massive bonuses to the executives who bankrupted AIG, they promised to return $45 million in bonuses.

Well, once again, we got punk'd by Wall Street:

When word spread earlier this year that American International Group had paid more than $165 million in retention bonuses at the division that had precipitated the company's downfall, outrage erupted, with employees getting death threats and President Obama urging that every legal avenue be pursued to block the payments.

New York Attorney General Andrew M. Cuomo threatened to publicize the recipients' names, prompting executives at AIG Financial Products to hastily agree to return about $45 million in bonuses by the end of the year.

But as the final days of 2009 tick away, a majority of that money remains unpaid. Only about $19 million has been given back, according to a report by the special inspector general for the government's bailout program.

Promises, I guess, are for peasants.

Economics Update

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New Home Sales Not Just Ugly, but Fugly!
h/t Calculated Risk

Yesterday, I noted the jump in existing home sales, and posited that this was almost entirely due to people rushing to get in under the wire on the new home buyer house credit, well today, we have the new home sales numbers, and they plunged by 11.3%, which validates my thesis.

Basically, existing home sales numbers are recorded at closing, while new home sales are recorded when the contract is signed, which means that the new home sales numbers lead existing home sales by 30-60 days, so we have a snapshot of what happens when people rushing to secure a tax credit stop rushing, and it ain't pretty.

It also explains why home mortgage application volume fell.

As I've said before, real estate won't lead us out of a recession, it will follow.

On the other hand, personal income and spending rose in November, which is a sign of improvement, and the latest CNN/Opinion Research and Reuters/University of Michigan surveys show an improvement in consumer sentiment, though of the "slightly less suckage" rather than the "going well" variety..

One interesting development in the 3^rd quarter of this year was that central banks have cut purchases of dollars for reserves to a record low, "30 percent of new foreign-exchange reserves," which implies a slow walk away from the dollar by central banks.

Even so, the dollar rose today, and Oil also rose on a surprise drop in inventories………Which raises the question, why are inventories always surprising folks?

Final Cloture Passes

According to TPM, the Senate has just passed it's 3^rd and final cloture vote.

Good Analogy on AIG

Barry Ritholtz nails it: They are arsonists who then get paid to fight the fire that they set.

London Bankers Discover Taxes in Switzerland Too

Yes, all those bankers who are trying to move to Geneva to avoid the UK Bonus tax have discovered that Switzerland has a 44% tax rate, and that the posh private schools for their kids are already full:

Geneva, touted as a haven for London bankers facing heavier U.K. taxes, may lure fewer than predicted thanks to a housing shortage, crowded schools and a 44 percent income-tax rate.

Barclays Plc President Robert Diamond this month joined a chorus of financial leaders in arguing that the U.K.’s 50 percent tax on bonuses would drive bankers away from London. The Swiss Private Bankers Association said the “arbitrary” tax will boost the allure of Geneva, whose bankers oversee about 10 percent of the world’s foreign-held private wealth.

“It’s a joke, it’s lobbying,” said Tim Dawson, an analyst at Geneva-based brokerage Helvea AG. “People are dreaming if they think the London investment banking world is going to move. There is more office space in Canary Wharf than in the whole of Switzerland,” he said, referring to London’s second financial district.

I also think that the bankers "misunderestimate" the degree to which people actually want them there, making city centers prohibitively expensive for ordinary people while they make demands for subsidies from lawmakers.

If there is a lesson from the Minaret fiasco in Switzerland, it's that they don't like foreigners there, whether they are hard working immigrants from the Middle East, or parasites from London.

House Ethics Office Closes Murtha Probe

This development is not surprising.

While Murtha has been up to his eyeballs in corrupt people over the years, basically using them for support, much like in Abscam, he does them favors, but does not personally benefit.

It's a weird setup he has.

Teleli Li!!!!! Teleli Li!!!!! Teleli Li!!!!! Teleli Li!!!!! Teleli Li!!!!!

It looks like poor harvests will create a coffee shortage in 2010.

No coffee?!?!!??

Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn

Deep Thought

H/t Pavlovian Obeisance

Learning to Appreciate Keyboard Cat

Franken and Lieberman again.

Whiskey Tango Foxtrot?

Remember Parker Griffith, the DINO Congressman who turned 'Phant today? (link)

Well he, donated $1,500.00 to Howard Dean in 2004.

He also donated a grand to Harry Reid in 2003, and $500 to Evan Bayh in 2006, and $500 to Harold Ford in 2005.

And yes, I am banging my head against the keyboard over this.

For the other three, I can kind of get, but for Howard Dean, the candidate from the Democratic Wing of the Democratic Party?

I is confused.

Economics Update

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H/t Barry Ritholtz

New home sales, effect of tax credit h/t Barry Ritholtz basic graph h/t Calculated Risk


H/t Calculated Risk

So, we have another revision of the GDP numbers for the 3^rd quarter, and the GDP number falls again, down from an initial estimate of 3.5% to the first official figures of 2.8%, and now it has been revealed that the GDP grew at just 2.2%. (top pic)

The more accurate data that comes in, the worse the news.

As an aside, the US Bureau of Economic Analysis always does this, that is to say that the numbers get worse when better data comes in, which implies a systemic problem that needs to be fixed.

On the other hand, the UK initial numbers were revised in the opposite direction, with a contraction of -0.2%, up from the initial estimate of -0.3%.

The news from down under is not grand either, with the New Zealand economy's GDP missing forecasts.

Still, the Philadelphia Bank of the Federal Reserve's State Coincident Index looks better (bottom pic), with at least marginal levels of growth in 1/3 of the states.

On the other hand, we had some good news in real estate, where the National Association of Realtors has reported existing home sales rose 7.4%, to the highest level since February 2007:, though even the NAR admits that this is largely due to people rushing to buy houses before the home buyer tax credit expires.

As both CR and Barry Ritholtz note (2^nd pic), this a function of changes and/or perceived changes in tax policy, so December will give a real picture of where the housing market is.

It should be noted that a remarkably unpleasant milestone was passed though with, the number of mortgages in national banks, which report to the OCC, reporting that for the first time ever, over one million mortgages were in foreclosure in the 3^rd quarter.

Additionally, we are seeing signs of problems among small banks and businesses, with more small bank TARP recipients not paying dividends [on edit: a clarification, they are not paying dividents on their RARP money, so they are technically in default], and small business bankruptcies are up 81% YoY in California.

In energy, OPEC kept oil production levels flat, but has promised to more rigorously enforce the current limits, which is a de facto (but rather small) cut in production, which drove oil higher, even though the dollar rose on the surprisingly strong home sale report.

Good Riddance to Bad Rubbish

What Republicans Said About Griffith in 2008

So, a DINO who said that he would not vote for Pelosi as speaker in 2010, Representative Parker Griffith (AL-5), just made it official and declared himself a Republican.

My guess is that he expects the 'Phants to win in 2010, and in any case, he won a 52-48 bright red district, and so his reelection is easier.

The Democrats should run the ads that the Republicans ran against him in 2008……over……and over……and over again.

Now to get the rest of the Blue Dog coalition and New Democrats to leave the party……If only 1/3 of them lose reelection as 'Phants, the Dems stay in control, and the party doesn't have to deal with those reactionary corporatist whores.

[on edit]
It looks like the Republican running for the seat,Les Phillip, is staying in the race too, so expect a primary fight.

[another edit]It looks like the DCCC dropped $1,076,370 on this moron in 2008.

Seriously, nice job Rahm Emanuel and Chris Van Hollen, this one stinks almost as bad as spending millions to muscle out Christine Cegelis and run the hapless Tammy Duckworth up against Pete Roskam in 2006.

News Flash: Bernanke is an Idiot

The Kaplan Test Prep Company Washington Post actually does some reasonably good news gathering now and again, even if their OP/EDs are complete crap.

Case in point is this history of the Federal Reserve's mis-steps in dealing with the housing bubble and the related sub-prime debacle.

Their lede is a speech that Bernenke gave in 2007, where he, "Assured the bankers and businessmen gathered at the Westin Hotel on Michigan Avenue that their prosperity was not threatened by the plight of borrowers struggling to repay high-cost subprime loans," because, most banks were not involved at all with sub-prime lending, which was false, and transparently so:

He was wrong. Five of the 10 largest subprime lenders during the previous year were banks regulated by the Fed. Even as Bernanke spoke, the spillover from subprime lending was driving the banking industry into a historic crisis that some firms would not survive. And the upheaval would shove the economy into recession.

Just as the Fed had failed to protect borrowers from the consequences of subprime lending, so too had it failed to protect banks.

(emphasis mine)

So, it's clear that the Fed, and Ben Bernanke were clueless, but it gets worse:

A warning ignored

In January 2005, National City's chief economist had delivered a prescient warning to the Fed's board of governors: An increasingly overvalued housing market posed a threat to the broader economy, not to mention his own bank and others deeply involved in writing mortgages.

The message wasn't well received. One board member expressed particular skepticism -- Ben Bernanke.

"Where do you think it will be the worst?" Bernanke asked, according to people who attended the meeting, one in a series of sessions the Fed holds with economists.

"I would have to say California," said the economist, Richard Dekaser.

"They have been saying that about California since I bought my first house in 1979," Bernanke replied.

This time the warnings were correct, and the collapse of the California real estate market would bring down the nation's fourth-largest bank, the largest casualty of the financial crisis.

(emphasis original)

This is egregious enough that one of Bernanke's most stalwart supporters, Paul Krugman calls him out, with charts:

The point is that there was indeed a huge CA bubble in the 80s, which burst painfully. Nor was this an obscure bit of knowledge: in fact, people like Calculated Risk and yours truly were quite explicitly using the great California bubble of the 80s as a model for what was going to happen nationally.

This whole episode makes me think considerably worse of my former department head.

(emphasis mine)

Bernanke was saying that there had never been a housing bubble and crash in California, despite the fact that there had been one that popped and bottomed out just 10 years before.

This man should not be in charge of a pastry shop, much less the Federal Reserve Bank of the United States of America. I'm not sure how he even became the head of the econ department at Princeton....He seems far to feckless for that.

Another Snow Day

Yesterday was given, seeing as how the snow on Saturday was a December record, and a near all time record, about 20 inches, but they actually did a good job clearing the streets, so I figured that the kids would be in school today....Not happening.

Tomorrow is the last day of school before Winter break, and I have no clue as to whether or not they will have class tomorrow, but it doesn't make sense for them to do so now.

Slavery is Legal in the United States Again

The Supreme Court has refused to rule on an appellate case that not only declared that, "torture and religious humiliation are permissible tools for a government to use," but also ruled that anyone unilaterally declared an enemy combatant is not a "person" under the legal definition of the law.

This is quite literally the identical legal reasoning behind the Dredd Scott case:

"Another set of claims are dismissed because Guantanamo detainees are not ‘persons’ within the scope of the Religious Freedom Restoration Act – an argument that was too close to Dred Scott v. Sanford for one of the judges on the court of appeals to swallow," he added.

The Dred Scott case was a decision by the United States Supreme Court in 1857. It ruled that people of African descent imported into the United States and held as slaves, or their descendants — whether or not they were slaves — were not protected by the Constitution and could never be citizens of the United States.

And still, Obama is appointing sane conservatives to the bench, only to see them filibustered and delayed by the 'Phants, because sanity has a known liberal bias.

Not feeling hopey changey right now.

H/t naked capitalism.

Good News For Me (I Hope)

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H/t Calculated Risk

We just had a report in the New York Times that there has been a recent upsurge in temporary employment.

Seeing as how I've been doing contract (temp) technical for 16 years now, hopefully this means that I am a bit closer to ending my coming-up-on-6-months stint of unemployment.

Mexico City Marriage Equality

Same Sex marriage is now legal in Mexico City, but the bigoted "Defense of Marriage Act" (DOMA) still stands in the US Senate.

Elections Have Consequences: Aerial Cattle Car Edition

The Transportation Department has now forbidden airlines from keeping passengers on a plane for more than 3 hours while it waits on the tarmac.

This is a long overdue change.

And yes, I realize that there appears to be some dissonance from my prior post, lambasting Obama and His Stupid Minions^™ on cutting another taxpayer funded giveaway to AIG fat cats.

The thing is, Obama is not every special interest's bitch, just the FIRE (Finance, Insurance, and Real Estate) sector.

Airlines are not part of FIRE, so they don't get a pass.

More Change We Can't Believe In

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Well, isn't that special?

Kenneth Feinberg, AKA the "pay czar", has folded like wet broccoli on AIG salaries:

Feinberg said the insurance company also will be allowed to pay the employee incentive payments worth about $4.3 million, made up of an annual long-term restricted stock grant worth about $1 million and a stock grant valued at about $3.3 million on the grant date.

That's just marvelous.

Maybe we should return to the days of Dwight Eisenhower, and raise the maximum marginal tax rate to 91%, it would help deal with the pillaging parasites.

More Evidence that the Healthcare Bill Won't Benefit Us

The stock prices for health insurance, for profit hospital chains, and pharmaceuticals rose sharply on the news that the Senate succeeded in cloture.

They see the bill as a win for us, which makes it a lose for the rest of us.

Economics Update

More bad news in real estate, with commercial real estate prices falling to a 7-year low, and the latest figures on home prices showing a year over year decline of 7.8%.

More generally, the Chicago Bank of the Federal Reserve's economic index rose slightly in November, from -1.02 in October (indicating growth below the historical trend) to -0.32 (indicating growth below, but closer to the historical trend).

We also had good news in Japan, where exports rose sharply.

In treasurys, bond prices fell, as investors moved into US equities.

To move into those equities, foreign investors bought dollars, which drove the dollar, and the rising dollar drove oil down.

Quote of the Day

All other things being equal, the progress of the health care reform debate is looking good for me personally because I had invested heavily in futures contracts on cross-party histrionic nonsense.

Josh Marshall

Man, does he have me pegged, and he's never even heard of me.

Saab Not Dead Yet.

Rule 1 of this blog:
Never miss a chance to invoke Monty Python

Well, it looks like the Saab automobile manufacturer may be back from the dead, with Spyker reentering negotiations, and there are nibbles from other firms. (also here)

There are two paragraphs of note in the story:

Spyker said Sunday it has submitted a renewed offer including an 11-point proposal addressing issues that arose during the due diligence process.

……

GM—which had previously entered talks with Spyker after a deal with Swedish luxury car builder Koenigsegg collapsed last month—had set an original deadline of Dec. 31 to seal a deal.

My guess as to what this means is that GM is spend a lot of time dicking with potential bidders, either in terms of an unwillingness to allow the transfer technical rights and data to the prospective bidders, or in terms of financial issues, particularly in terms of the dealers and access to GMAC financing for those dealers.

Unlike Pontiac or Saturn,^* Saab, small though its sales are, has the advantage that it actually has a devoted and nigh-fanatic following who are willing to pay a premium for the product, and so there are companies, particularly in the very end super car field, who are interested in purchasing it, because it gives them a way to go mass market with some of their more esoteric technology.

If there is a mass market car company that will implement things like friction stir welding on its models to go with an all aluminum body at a reasonable price, it would be Saab, and I can see how a supercar manufacturer like Spyder, or Koenigsegg, might use the interplay between the low-volume hand made autos and the (relatively) high volume Saab to create a sort of "technical echo chamber" to move the implementation of this technology along.

^*Actually, Saturn did too in the mid 1990s, with people literally going on vacation to their manufacturing facility in Spring Hill, Tennessee, but once GM realized that people loved their cars, they spent the next 10 years doing their level best to piss off employees and customers, because if Saturn could make cars that people liked, it would put too much pressure on the rest of GM.

Too True

From Matt Bors.

Now go to his web page, and buy his stuff

Someone Else Who Tries to F%$# Us Like a Bitch

I'm not kind of bummed that I riffed on that scene in Pulp Fiction yesterday, because there are so many people who want to f%$# us all like a bitch.

Case in point, Verizon, who is claiming to the FCC that charging exorbitant cancellation fees should be supported because it helps the poor:

Verizon defended its early termination charges for cellphone contracts Friday, telling federal regulators that the high fees help the poor by making it more affordable for them to access the mobile internet.

The Federal Communications Commission asked the nation’s largest wireless carrier earlier this month to explain why it had raised the fees for breaking a mobile phone service contract to $350 for its smartphones. In a response that gave no ground to an increasingly active FCC, Verizon said the fees were a necessary and good way to subsidize expensive smartphones so that users don’t have to pay for the hardware up front, so long as they sign a two-year contract.

That arrangement “enables many more consumers, including those of more limited means, access to a range of exciting, state of the art broadband services and capabilities (.pdf),” Verizon VP Kathleen Grillo wrote. “The company’s pricing structure therefore promotes the national goal of fostering the greater adoption and use of mobile broadband services.”

Verizon raised the fees in November, with a $10 discount for each month of the service contract fulfilled for smartphones. Even so, if a customer cancels on the last day of their 2-year contract, they’d have to pay Verizon $120 for early termination.

It appears that in Verizon's eyes, we all look like bitches that they really really want to f%$#………Without Lube.

What John Said

John Aravosis, that is:

President Obama doesn't seem to lack the will to fight on matters of principle, rather, he seems to lack the will to fight on anything.……

…

…We know that when you fight for something in politics, you can very often win. But if you don't fight, you'll never win. We are upset at the President and the Congress because no one fought for the public option, for the President's own campaign promise. (As David Gregory rightly noted to David Axelrod during the same broadcast.)

(emphasis mine)

We are not angry because he refused to fight for our own values, we are angry because he has refused to fight, period, full stop.

It's not the morals, or lack thereof. It's the cowardice.

Virgin Unveiling

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So, Virgin Galactic has unveiled its SpaceShipTwo space tourism ride.

You can see a cheesy video at the bottom.

RQ-170 Sentinel Revealed

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RQ-170


What are the fairings on top are for, maybe antennae?

So, I was wrong, when I suggested that there was no reason for the USAF to be flying a stealthy UAV in Afghanistan and that someone was Photoshopping a Burt Rutan project.

I was wrong.

The configuration is interesting, because while it is clearly low observable, the location of the exhaust is fairly conventional, rather than discharging on top of the wing, which implies that, despite it clearly being a LO design, it's not a "LO is the be all and end all of the design" vehicle like the F-117 and B-2 are.

The USAF has now admitted to fielding the RQ-170 Sentinel UAV in Afghanistan as well as the fact that it was developed at Lockheed Martin's Skunkworks.

It appears to have been developed in response to the diplomatic brouhaha that resulted from the interception and forced landing of an EP-3 at the beginning of the Bush Administration.

It should be noted that the RQ designation means that it is unarmed, (paid subscription required) and the linked article also gives a reason for the USAF to deploy a radar evading UAV to Afghanistan:

“Don’t get enamored with current conditions,” [Air Force deputy chief of staff for ISR, Lt. Gen. Dave] Deptula cautions. “We don’t know what the future will bring.” While operations in Afghanistan will be “more complex than ever,” the future is “not only going to be about irregular warfare.”

Beyond 2011, the Air Force’s first priority and the destination of the next dollar to be spent “if I were king for a day,” Deptula says, “would be for long-range [reconnaissance and] precision strike. That’s the number-one need.
The “black” Sentinel was seen in 2007 at Kandahar, Afghanistan. Two photographs surfaced this year via the Secret Defense Blog.

“We cannot move into a future without a platform that allows [us] to project power long distances and to meet advanced threats in a fashion that gives us an advantage that no other nation has,” he notes. “We can’t walk away from that capability.

It's all about the Benjamins. The USAF is deploying this to Afghanistan because they think that it will help them in their budget fights against other services.

Russians Adapt Cruise Missile to Conventional Warhead

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AS-18 Kazoo variant


AS-15 Kent Variant

We now have evidence that the Russians are modifying their cruise missiles to accommodate conventional warheads. (paid subscription required)

You can notice on both the Kazoo (top) and the Kent, forward surfaces have been added, probably to accommodate a center of gravity that has moved forward due to a heaver conventional warhead replacing the previous nuclear payload.

Additionally, the Kazoo appears to have some electro-optical sensors, which are likely used to improve terminal accuracy, reported to be 2-5 meters.

Considering their experience in Georgia, where they aircraft to anti-aircraft systems that they had designed, the renewed focus on stand off weaponry is not a surprise.

If It's In The Weekly Standard, They Are Either Liars of Incompetent

Well, the good folks at Defense Tech flag an article by John Noonan at The Weekly Standard suggesting that Iran's new solid fuel multi-stage missile represents a quantum leap in missile capabilities:

I'm a little late coming in on the latest Iranian missile salvo, but there a few salient points still worth mentioning. First, the Sajjil-2 is a solid fuel rocket. That's the type of power source that we use in our own Minuteman III rockets, as solid fuel is stable in flight and requires no preparation time ahead of a launch. Liquid fuel, which powers the Iranian Shahab-3 fleet, is highly corrosive and sloshes around in a rocket's downstage, destabilizing flight and degrading accuracy. It's so toxic that the fuel eats away at a missile's internal tanks, and thus needs to be inserted right before launch. That prep time is important, as it gives us a little extra warning prior to a hostile missile launch, which could be used to kill Iranian birds before they fly. With this new Sajjil-2 system, Iran has the ability to keep their missiles hot and ready for execution, killing any chance of an advanced warning or neutralization actions prior to a launch.

………

(emphasis mine)

I understand that John Noonan, like most of the staff of The Weekly Standard, wants to bomb Iran, and wants Iran bombed, but this does not justify his not telling the truth, and in the two areas that I've highlighted, he's not telling the truth:

• The need to load the fuel immediately before launch.
  
• Simply not true. The US and Russia started using storable liquid propellants, nitrogen tetroxide oxidiser and a hydrazine UDMH mix propellant in the both the Titan II, and SS-18, and had them in ready for immediate launch for years, perhaps 15 seconds from when the button is pushed until the missile exits the silo.
  
• Fuel sloshing
• Fuel tanks have baffles to prevent sloshing. The tanks are specifically designed to avoid this issues, and while it may be "rocket science", it's a problem that has been solved for years.
  
• The numbers accuracy for both the Titan (900m), and the SS-18 (250m) show that these missiles accuracy, much like their solid fuel counterparts, is a function of the guidance system, not any fictional sloshing.

Let's be clear, for ICBM's, solid fuel is better. There are a whole bunch of problems, as exemplified by the Titan II silo explosion that resulted from a workman dropping a socket that punctured a tank.

Additionally, if you want to go with a mobile launcher, it's somewhere between insane and impossible to transport a loaded liquid fueled rocket.

Additionally, the operational costs of a liquid fueled system are higher, with, for example routine replacement of seals and X-Rays of the tanks to verify fuel levels.

So, a solid fueled ICBM, or IRBM is marginally more capable, and much simpler to operate, but running around with your head on fire about it indicates that one is either incompetent, or dishonest.

What Does Matthew G. Saroff Look Like?

Original Courtesy of Quentin Tarantino, with typography by mdaisey

What?

What country are you from?

What, what?

What ain't no country that I ever heard of. They speak English in what?

What?

English, muthahf%$#er, do you speak it?

Yes.

Then you know that I'm saying!

Yes.

Describe what Matthew G. Saroff looks like!

What?

Say what again! Say what again! I dare you! I double dare you muthahf%$#er! Say what one more God Damned time!

He's white! He's bald! …… He could stand to lose 40 pounds!

Does he look like a bitch!

What?

(Bang! screaming)

Does … he … look … like … a … bitch!?!?!

Nooooo!!!!!

Then why are you trying to f%$# him like a bitch David?

Axelrod promises to push for drug re-importation after healthcare reform
By Kevin Bogardus - 12/20/09 09:59 AM ET

A senior White House adviser said Sunday that the Obama administration will push forward on safe re-importation of pharmaceutical drugs after the healthcare reform bill is finished.

As a candidate in 2008, President Barack Obama promised to allow cheaper drugs to be re-imported into the United States from Canada and other countries. He also co-sponsored legislation that would allow re-importation as an Illinois senator. The Pharmaceutical Research and Manufacturers of America, a key White House ally in the healthcare reform push, has lobbied heavily against re-importation, though, and would likely not support the final bill if it was included in the package.

Speaking on CNN’s "State of the Union," David Axelrod, Obama’s top political aide, said the White House still favors drug re-importation and wants to move forward on it.

Do I look like an idiot? After fighting tooth and nail to keep drug re-importation out of the healthcare bills, you are going to fight to bring it back, like you promised during the campaign, just like you promised to repeal "Don't Ask Don't Tell", promote marriage equality, and to go after people who broke the law in the Bush administration?

Barack Obama and His Evil Minions^™ are trying to f%$# anyone who wants to improve healthcare, and that means that they are trying to f%$# Matthew G. Saroff, and Matthew G. Saroff don't like to be f%$#ed by anyone except Mrs. Saroff.

Not Enough Bullets: Credit Card Companies Edition

In particular First Premier Bank Credit Cards, which is charging 79.9% interest:

Here’s something you don’t see every day: A credit card with a $75 dollar annual fee, a $300 limit, a $29 penalty for being late or over limit… and an interest rate of 79.9 percent? Welcome to First Premier Bank, a sub-prime credit card issuer.

First Premier is just following the new regulations found in the Credit Card Reform Bill passed by Congress and signed by our President this past year. Apparently, Congress set out to curb the abuse that has become all-too-common in the credit card industry… you know, like exorbitant fees and interest rates from 20-40%… so they asked the banking lobby to come up with something acceptable and this is the result. So, there should be no one surprised when other credit card issuers follow suit as expected.

You know, it's this kind of crap makes cynicism rule in politics.

Why the Naked CDS Should Be Banned: Part McCMLXXVII

Yes, once again we have Goldman Sachs that great vampire squid wrapped around the face of humanity,^* using naked Credit Default Swaps, (CDS) which are basically insurance policies, with the crucial differenc being that you can insure your neighbor's home, and collect when you burn it down, something forbidden in other insurance products since 1746.

You see Goldman Sachs bought naked CDS, and then interfered in its reorganizing its debt so that it could collect:

International Brotherhood of Teamsters President James Hoffa said Goldman Sachs Group Inc. is creating derivatives trades that would profit from the bankruptcy of YRC Worldwide Inc., the trucking company trying to avert failure with a debt exchange.

The most profitable securities firm in Wall Street history “is actively soliciting bond trades for clients and underwriting credit-default swaps to benefit from a failed exchange and resulting bankruptcy,” Hoffa, the union leader, wrote in a letter dated yesterday to Goldman Sachs Chief Executive Officer Lloyd Blankfein.

YRC, the biggest U.S. trucker by sales, is extending the exchange offer deadline to Dec. 23, after investors holding 75 percent of its debt initially agreed to the exchange, below the 95 percent required by bank lenders. As of 5 p.m. in New York yesterday, participation fell to 57 percent, the Overland Park, Kansas-based company said in a statement. The company said it believes some bondholders have withdrawn because they want to tender their notes only on the expiration date.

The company has faced opposition to its plan to exchange $536.8 million of notes for equity from bondholders who also own derivatives that pay out in a default, according to people familiar with the matter. The Teamsters’ pressure comes as Goldman Sachs is under fire from other labor groups over its role in the subprime mortgage crisis.

This is precisely why the Marine Insurance Act of 1746 was passed, and why the writing of new naked CDS instruments should be banned, and existing naked CDS contracts should be rendered unenforceable.

There is a difference between making money off of someone else's misfortune, and making money by causing someone else's misfortune.

^*Alas, I cannot claim credit for this bon mot, it was coined by the great Matt Taibbi, in his article on the massive criminal conspiracy investment firm, The Great American Bubble Machine.

Deep Thought

H/t Pundit Kitchen

60……Until Leiberman Knifes Everyone Again……

We now have reports that Reid and Obama have managed to cajole Senator Ben Nelson into not filibustering the helathcare bill:

Senate Democratic leaders achieved a breakthrough Saturday in the drive for health overhaul legislation, securing the 60 votes needed to ensure passage after a late-night deal on abortion coverage locked in the support of Nebraska Sen. Ben Nelson.

The bill is at best marginally better than what we have now, it might be a bit worse, since the mandate in a monopoly situation is a disaster, and the abortion language allows states to forbid insurance companies to cover abortions.

Let's be clear, insurance companies don't customize their plans unless forced to, and over the next few years, this will have the effect of eliminating abortion from insurance coverage, as NOW notes:

Statement of Terry O'Neill, NOW President

December 19, 2009

The so-called health care reform bill now before the Senate, with the addition of Majority Leader Harry Reid's Manager's Amendment, amounts to a health insurance bill for half the population and a sweeping anti-abortion law for the rest of us. And by the way, it's the rest of us who voted the current leadership into both houses of Congress.

The National Organization for Women is outraged that Senate leadership would cave in to Sen. Ben Nelson, offering a compromise that amounts to a Stupak-like ban on insurance coverage for abortion care. Right-wing ideologues like Nelson and the Catholic Bishops may not understand this, but abortion is health care. And health care reform is not true reform if it denies women coverage for the full range of reproductive health services.

We call on all senators who consider themselves friends of women's rights to reject the Manager's Amendment, and if it remains, to defeat this cruelly over-compromised legislation.

###

I'll still be calling my Senators, and asking them to vote against the bill and against cloture.

DC Same-Sex Marriage Bill Law……Sort Of

Mayor Adrian Fenty has signed the bill, but there is still a 60 day Congressional review period, because DC citizens don't have full civil rights more generally, and I think that you will see a concerted effort by the 'Phants/Blue Dogs/Closet cases, and other various bigots in Congress to repeal this.

Economists Should Not Do Rap

Ever!!!!

That being said, this is a pretty good short (9:11) video on the relative merits of Keyenes and Hayek.



H/t naked capitalism