Stupid Senator Tricks

For some reason, it appears that Senator Richard Shelby (R-AL) seems to be overrepresented in such metrics.

In this case, he has a hold on Ashton Carter to become the next Pentagon acquisition chief, because, wait for it, he has not received a guarantee from SecDef Robert Gates that the he would, "make the tanker decision on best-value grounds."

He is concerned that Airbus, which would assemble the aircraft in his state, will somehow be cheated out of the contract.

Ummm...The Airbus A-330 won the contract because it had a larger, more capable aircraft that could be delivered sooner, and had a fly-away cost roughly equal to the Boeing 767.

This is not an issue. The issue is your colleague in the House and Senate, doing the same work for Boeing that you are doing for EADS, will attempt to sabotage the process and get the contract awarded to the Seattle aircraft manufacturer on political grounds.

You do not need a guarantee from Gates or Carter, you need it from your fellow legislators.

Electro-Magnetic Catapult on Ford Class CVN in Trouble

It looks like there are serious problems with the Navy's new Electromagnetic Aircraft Launch System (EMALS), which is intended to replace steam catapults on the new carrier.

The GAO is highlighting potential delays and cost overruns, and the fact that testing is not intended to start until next year, even though the keel of the lead ship, the Gerald Ford, has already been laid.

It makes me wonder if SecDef Gates proposed slowdown on carrier production might be in some part by concerns over the maturity system, as retrofitting steam catapults would involve major changes to the ship, and possibly to its propulsion, which was not designed to supply steam to catapults.

Of course, as always, the US Navy is being less than forthcoming about potential problems, and continues to paint a happy picture, though there are stories suggesting that EMALS would be shelved, though it is unclear if replacing the system with steam would save money or keep the program on schedule, at least for the Ford.

Good Read on Anti-Ship Ballistic Missile

It appears that the impetus to get this all started was the US Pershing II, whose actively radar guided MARV produced a CEP of something under 30m much less than the 75m beam of a Nimitz flight deck.

In any case, this is a good read, and if this technology has been in development since the early 1980s, I can see no reasons that the Chinese are not near the point of being able to deploy such a system.

Modern processors allow for sensor fusion from a number of data sources, and a CVBG puts out a lot of signature.

In any case, I tend to figure that warships these days fall into 2 categories: Submarines, and targets.

This Fast Food Thing is Getting Out of Hand

Zimbabwe Update

Not a whole bunch of conflict lately, and inflation is beginning to moderate, though much of that is because the economy is moving off the local currency.

It's a good sign, as are reports that media restrictions will be relaxed.

It also looks like the MDC majority in Parliament is actually doing something, as they are looking to probe reports of police abuses.

We also have the Blanket gold mine reopening.

Unfortunately, at least on the symbolic level, 19 MDC ministers have accepted the offer of Mercedes Benz autos from Mugabe, which looks very bad.

We also have the IMF doing what it does best, making a financial disaster worse, and crushing the ordinary people beneath its treads.

What Mugabe won't destroy, the IMF will.

South Africa has relaxed restrictions on Zimbabwean refugees, offering a 6 month visa.

Mike Quigley Wins in Race to Replace Rahmbo

No surprise. The real election was in the primary, it's a solidly Democratic district.

One wonders what happens when Rahm leaves his position as White House Chief of Staff, though.

SecDef Gates Warns the Generals

Gates just issued a statement urging legislators to look beyond their districts, but the important statement comes further down:

The thing that is important is to reinforce within the building, in terms of dealing with the Hill, that there is a chain of command,' he said. 'Once the decision is made, and particularly once the president signs off on the budget, then there needs to be discipline about people not conducting guerilla warfare against decisions the president has made.

(emphasis mine)

He is telling the generals that the decisions have been made, and behind the scenes lobbying will be punished.

This has been a consistent problem with the Pentagon for at least 15 years, and it has only become worse in the last 8 or so, and it needs to be shut down.

Military officers should answer questions honestly, but the lobbying for weapons systems is simply corrupt and a repudiation of civilian control.

Good for Bob Gates for putting the Generals on notice.

Economics Update

We have a report that consumer confidence is improving, according to the IBD/TIPP economic optimism index, which rose to 49.1 from 45.3, which is only slightly pessimistic, 50 being neutral.

I have no idea if the folks at at Investors Business Daily/TIPP actually run a good poll, but it does look like consumer confidence is up a bit, though the Federal Reserve's view of the economy remains gloomy.

Certainly with wholesale inventories falling by 1.5% in February, the largest drop in 17 years, there are some bright spots here, because as inventories fall, orders have to be made to restock.

The same cannot be said for commercial real estate, with
mall vacancies at a 10-Year high, and office t rents falling significantly in San Francisco.(-24% year over year !)

Rents fell for apartments in Southern California and nation wide too, which tends to mitigate the impetus for people to buy homes, so I think that the continued increase in mortgage applications is still largely Refi activity.

The credit markets still suck which is why the Fed is looking at offering longer term loans at a higher interest rate for TALF, even as participation in the program is less than anticipated, indicating that investors are still leery of investing in things like mortgage backed securities.

In international finance, Fitch has followed S&P's lead, and downgraded Ireland's sovereign debt.

The Treasury has expanded TARP to cover insurance companies, including some of the very big names, such as Hartford, Prudential, and Met Life.

This Problem is getting smaller, not bigger.

Finally, both oil and the US dollar rose today, on a less then expected inventory for the former, and a flight to safety for the latter.

Bloody Hell!

Another senseless shooting, this one at a religious retreat in California.

What the hell is going on here?

Alberto Fujimori Found Guilty, Sentenced to 25 Years

For running death and kidnap squads while President of Peru.

Unfortunately I don't see the same thing happening in the US with Bush/Cheney.

Obama Embraces and Extends Bush Secrecy Fetish

In a response to the EFF's lawsuit over illegal NSA wiretapping, the Obama has now responded with a claim for executive privilege that is more expansive than that of Bush and His Evil Minions^&trade.

Basically, the Obama DOJ, and this is their ruling, this is the first filing in the case, is saying that, "the Patriot Act bars all causes of action for any illegal surveillance in the absence of "willful disclosure.'"

As Glenn Greenwald says in this analysius, "This is the Obama DOJ's work and only its work, and it is equal to, and in some senses surpasses, the radical secrecy and immunity claims of the Bush administration."

Lovely.

Vermont Lege Overrides Governor Dumhead's Gay Marriage Veto

So it's now the law of the land in Vermont. Great news!!!!!

Hopefully, Vermonters will deal with Governor Jim Douglas at reelection time.

Uruguay Round Agreements Act Held Unconstitutional

The case is Golan v. Holder (originally filed when Gonzalez was Attorney General), and challenged the provision of the URAA that restored copyright to out of copyright works, and rendered derivative works that had been made when there was no copyright illegal, and now a Federal District Court has ruled it an unconstitutional violation of the first amendment, after a remand from the appeals court (PDF of opinion at link).

This is the first time ever that, "a court has held any part of the Copyright Act violates the First Amendment and the first time any court has placed specific constitutional limits on the government's ability to erode the public domain," so it is very significant.

This differs from Eldred, in which the Supreme Court allowed copyright extension, in that the speech of the plaintiffs was already legally created, and so the change was an infringement on their legally created speech (derivative works of then public domain items).

It is my understanding, that this applies only to legally created derivative works, and one would assume, newly created derivatives of those derivatives, but not new derivatives of these works, but I'm an engineer, not a lawyer, dammit!^*

In either case, this is a recognition that IP law is a restriction of the rights of the rest of society, and as such there needs to be a showing a serious state interest in order to override that, and this is IMHO, a major step forward.

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

Where Real America Is

We have a CBS News Poll, and unlike the pundits, the American public gets it:

• Higher taxes on the rich: Support 74% Oppose 23%
  
• Obama's Budget priorities: Support: 56% Oppose 32%
  
• Auto industry bailout: Support 47% Oppose 38%
  
• Banking industry bailout: Support 33% Oppose 58%
  
• Increase financial regulation: Support 71% Oppose 23%

So, they don't blame the unions for the Auto industry, despite the constant drum beat that this is the problem, they want to soak the rich, they support Obama, and they do blame the bank executives.

Senate Judiciary Committee Approves Patent Update

It looks to me like the Patent Reform Act of 2009, is an improvement, the patent troll crowd are generally negative on it, and Senator Feingold's statement in opposition suggests that it weakens patents too much, which is a good thing.

The real question is what happens in conference.

In my dream scenario, the patenting of software algorithms, tax deductions, business plans, genes, and species would be invalidated, and a litigant could file a suit against a patent as a plaintiff without having to infringe, as is done with civil rights suits.

Why the US Mobile Phone Industry is a Horrible Model for the Internet

The advocacy group Free Press has filed a complaint with the FCC over Apple and AT&T's ban on the use of Skype on their network.

The money quote on this is from a typically clueless AT&T spokesman, "Customers are free to download and use the apps they want, but we have no obligation—nor should we have—to facilitate or subsidize our competitors' businesses."

It sounds reasonable, but what is really going on here is that AT&T is using monopoly power, it is the exclusive licensee for the iPhone in the US, and it's customers incur hefty roaming charges on other networks, in order to lock a potential competitor out on a service that their customers have paid for.

This is why network neutrality is necessary, and it is yet another example as to how the US privatized largely unregulated telco markets do not serve the consumer: it creates businesses whose model is largely predicated on creating, and maintaining, a monopoly.

A Little Gem in the FDIC Job Postings

Peterr at Firedoglake was looking at job postings on the FDIC website, and saw something that was probably not intended for the general public, specifically some job postings by the FDIC that may indicate that there will be some very big fish on a path to be caught in the FDIC's net.

First, there is a posting for a Deputy Chief Accountant (announcement number 2009-EM-0096) who is responsible for, "identifying emerging accounting, auditing, and taxation issues, particularly those raising systemic concerns, for which the timely development of policy guidance for FDIC -supervised and -insured institutions and the Division's examination staff is critical" (emphasis mine).

"Raising systemic concerns?" Sound like anyone we know? As Peterr notes, it looks like part of their duties will be teasing out responsibilities amongst other financial regulators, which may involve putting a finger in the eye of Timothy "Too Big to Allow to Fail" Geithner's Treasury Department.

Additionally, there are two openings for two Senior Large Financial Institution Specialist (announcement number 2009-HQD-B1089) located in New York, NY and Charlotte, NC, which are where the HQ's of Citi and BoA are located, though obviously there are many financial institutions with headquarters in the New York City area, as well as a Chief, Examination Support and Risk Analysis Section (announcement number 2009-HQDEU-1113), who seems to be in charge of "Formulates, refines, and updates supervisory expectations relative to Basel II implementation efforts," which means risk evaluation of banks.

Additionally, we have Treasury announcing a delay in the reporting the results of the stress tests, "until after the first-quarter earnings season."

People do not delay good news.

I wouldn't expect anything this Friday on one of the big 20 financial institutions, but it could get interesting in a few weeks.

Wanker of the Day: Henry Porter

Mr. Porter is complaining about Google and Youtube, because in negotiating with Performing Rights Society, the UK music licensing organization, Google, "took down the videos of the artists concerned," when the PRS demanded £0.22, about $0.40, for each video watched.

I would be surprised if Google grosses $0.04 per video watched on Youtube, and they are demanding nearly half a dollar, so Google tells you to pound sand, and it appears that he's also angry because Google "only" takes down infringing material promptly when notified, when required by law, as opposed to...well, it's not clear, but he thinks it's bad.

Tough.

This is where the idea of IP as "property" as opposed to "temporary exclusive license" gets us, and it does not encourage the useful sciences and arts, which is what it's there for, at least in the USA.

TARP Overseer Calls for Bank Execs to Be Fired

Elizabeth Warren, the head of the TARP oversight commission is calling for executives at TARP recipients to be fired, and their shareholders to be whiped out, saying, "It is crucial for these things to happen. Japan tried to avoid them and just offered subsidy with little or no consequences for management or equity investors, and this is why Japan suffered a lost decade."

It appears that her report will specifically mention Citi and AIG.

Your mouth to God's ear, Dr. Warren.

Election Updates

They have finished counting the 300 some odd absentee ballots in Minnesota, and Franken picked up 90 votes, which puts him ahead even if the throw out the lost ballots counted on election night, or any other scenario, except for Bush v. Gore judicial nullification, so it looks like the fat lady has sung.

In the NY-20 special election Murphy is setting up a legal fund for the clearly telegraphed legal challenges from Tedisco, hoping to get ahead of delaying tactics of the Norm Coleman variety.

Economics Update

Scary Picture of the Day, Industrial Production, Courtesy of Naked Capitalism

The big news is that there are rumors of GM preparing for bankruptcy, and mark my words, if they do go into bankruptcy, it will be because of the bond holders, not the union, and I do not see it working as a prepackaged filing, so we would see massive disruptions amongst all the auto plants of all brands in the US.

Were it not for the GM rumors, the lede would be the continued implosion of consumer credit, with grim February reports showing that U.S. consumer credit falling by $7.48 billion, an annual rate of 3.5%, and homeowner mortgage default rates have increased to 7%, up more than 50% from a year ago.

That being said, it's not just consumers and homeowners in trouble, as the default rate of "speculative-grade corporate borrowers" hit the highest rate since the depression in March.

Meanwhile in a harbinger of things to come in commercial real estate, New York City office rents fell 6% in the Q1 of 2009, and the vacancy rate is at 9.6%, up from 6.1% a year ago.

It is therefore unsurprising that the Business Roundtable’s survey of CEOs is showing falling confidence.

In the meantime, uncertainty, particularly the GM rumors have driven both the Yen and the US Dollar up, and has driven oil down.

The Phrase is "Good Germans"

The term which should be applied to doctors and other medical personnel who aided in torture at Guantanamo and the CIA gulag system.

Note that while the Red Cross did say that medical assistance rendered in furtherance of torturer was unethical even if it was the preserve the life or health of the subject, that the activities of medical personnel did not even fall under this limited scope, but rather that they were, "medical professionals’ role was primarily to support the interrogators, not to protect the prisoners, and that the professionals had 'condoned and participated in ill treatment.'"

This is wrong, and the people involved should never be allowed to participate in patient care ever again.

Not Enough Bullets: Sir Fred Goodwin of RBS

Who despite an (unfortunately non-binding) vote of share holders against his $1 million a year pension of about 90%, is telling RBS to go pound sand, he's keeping the money.

Note that his pension fund was doubled the week that the UK bailed out the bank.

As I've said before, if you are going to go postal.....

When Immigration Policy and Stimulus Intersect

Matthew Yglesias has a post up on the stimulative effects to the economy of legalizing various activities. Item 7 is "Liberalized immigration".

Undoubtedly, this will grow the GDP. That is not the question. The question is whether it will grow the per capita GDP, which is how the overall benefit to society should be defined.

As I noted before, the post Black Death prosperity in Europe was almost certainly at a lower aggregate GDP than before the plague, but because population fell faster than GDP, wages, and standard of living, went up.

Afghan "Rape Your Wife" Law on Hold

My guess is that vociferous international condemnation of the new Shia Sharia law, which, amongst other provisions, legalized marital rape, triggered a delay from the Afghan justice department

This is a Real Vote of Confidence in the Geithner/Summers Plan

Treasury has had to push back the application deadline for its latest sh^%pile for cash program, the Public-Private Investment Program, because they are getting complaints, and not getting enough applicants.

Hoocoodanode?

NY-20 Special Election Update

It's unclear to me who is ahead, but Tedisco's (R) campaign attempted to delay counting of the absentee ballots, and the judge ruled against them, which implies that these ballots will trend toward Murphy (D).

Wall Street Self Dealing Again

Zero Hedge is reporting that there are strong indications that Wall Street firms are going back to their Dotbomb era practice of swapping favorable ratings for analysts in exchange for business underwriting their IPOs:

1) First Merrill Lynch/BofA gets clients to subscribe to a massively diluting equity offering (105 million new shares out of 271 million pre-offering shares, or 39% dilution). The offering prices at $7.10/share, a 6% discount to the previous day closing price of $7.49. In the process Merrill pockets an underwriting fee likely equal to 3% of the offering or around $20 million.

2) Minutes after the offering Merrill REIT analyst Schmidt comes out with a report, changing the recommendation on the stock from a Sell to a Buy, thereby getting the vanilla money which makes critical fiduciary decisions merely based on what some sell-side analyst will recommend. As a result Kimco stock rises throughout the day and closes at $9.40, a 25% premium to the closing price, and a 30% premium to offering price of $7.10, which closed that very same day.

...

Go read the rest. It's pretty damning, and yet another indication that at least 1 in 10 of the brokers, executives, and analysts on Wall Street should be under criminal investigation.

Is Dick Cheney Working the Phones to Blackmail Obama?

That's my guess as to why Senate Republicans are threatening the nominationsof Dawn Johnsen as head of the Office of Legal Counsel in the Department of Justice and Harold Koh as the State Department legal counsel if more torture memos are released.

It has been reported that they have told the administration that they will filibuster/place a hold on the nominations unless Obama covers up the torture memos

The people directly involved in this, and hence the ones most likely to face legal or disciplinary action, Alberto "Abu" Gonzalez, John Yoo, David Addington, etc., have no reputation or political pull to get the 'Phant Senators to do this.

So, it has to be someone who:

• Is implicated in the memos.
• Has political pull with the base.
• Has some sort of rapport with Republican members of the Senate, possibly from their days in Congress.

Sounds like Cheney, and as his latest appearances on the Sunday gas bag circuit, it is clear that he is worried that one of his stalwart supporters of torture will roll on him if they are facing real jeopardy.

Auto Industry Update

Once again, it looks like the management at Ford did everything right to face this crisis, and they have executed debt for equity swaps and haircuts to bondholders that has lowered their outstanding debt by $9.9 billion, and lowered their interest payments by about $550 million a year.

On the other side of doing the right thing, we have GM, who says that they
expect to sell their SAAB automobile division by the end of June, as there are 3-5 serious bidders.

I never understood this merger in the first place, SAAB auto was too small for GM, and unlike Ford's purchase of Jaguar, where Ford's quality was marked superior, and was applied to the British sports care maker, GM didn't have anything of value to send to SAAB.

Meanwhile, I get to say a sentence that I rarely get to say, that "The New Republic gets it,"on the auto bailout.

The problem is not the unions. It's the bondholders and banks who are unwilling to deal.

Obama's Bank Plan Worse Than Thought

Jeffrey Sachs has looked at the plan, and his assessment is that it is far worse than previously believed, noting that, "Insiders can easily game the system created by Geithner and Summers to cost up to a trillion dollars or more to the taxpayers."

Basically, it means that the banks can set up off the balance sheet subsidiaries to over pay for the assets, and when they go bankrupt, the federal government is left holding the bag:

Citibank thereby receives $1 million for the worthless asset, while the CPPIF ends up with an utterly worthless asset against $850K in debt to the FDIC. The CPPIF therefore quietly declares bankruptcy, while Citibank walks away with a cool $1 million. Citibank's net profit on the transaction is $925K (remember that the bank invested $75K in the CPPIF) and the taxpayers lose $925K. Since the total of toxic assets in the banking system exceeds $1 trillion, and perhaps reaches $2-3 trillion, the amount of potential rip-off in the Geithner-Summers plan is unconscionably large.

This is so stupid and corrupt that Larry Summers has to be the guy who came up with this.

A Democrat You Should Not Make Donations To

Senator Blanche Lincoln (R-AR), who has come out against the Employee Free Choice Act (Card Check).

Not only that, she is clearly signaling that she will support a filibuster.

Not only is this bad policy, it's also bad politics, since union members vote Democratic, but being from Arkansas, Wal-Mart owns her.

Put your money elsewhere, and give to individual candidates, not the DSCC, which will doubtlessly funnel money to her race in 2010.

Supermarket Checkout Horror

So I'm picking up some groceries at the local Wegmans, and I'm waiting in line, and then I see it...The cover of OK Magazine, and it's got Kathy Griffin in a bikini!!!! (click image for full size...if you dare)

Tekeli Li!!!!!
Tekeli Li!!!!!
Tekeli Li!!!!!
Tekeli Li!!!!!

Major Earthquake Hits Italy

The death toll currently stands at about 150, with about 40K homeless.

SecDef Gates Unveals FY 2010 DoD Budget Proposal

You can read his speech, but here is the nickel tour:
Additions:

• More UAVs
• More ISR Assets
• More Helos
• More Spec Ops
• More Littoral Combat Ships
• More Joint High Speed Vessel (JHSV)
• Accelerate production of F-35
• More money terminal High Altitude Area Defense (THAAD) System and Standard Missile 3 (SM-3)
• More Cyber warfare assets.
• Will go ahead with tanker purchase.
• Start replacement program for Ohio SSBN.

Reductions:

• Delay next generation CGN aircraft carrier (Ford class) by shifting to a 5 year schedule.
• Delay CGX BMD missile cruiser and reevaluate the requirements.
• Delay amphibious ship and sea-basing programs.
• Reduce the number of contractors in the Pentagon, and replace them with government employees.

Surprise, he's saying that Dick Cheney's brainchild when he was Bush I's Sec Def, using the Department of Defense as a way to reward political contributions privatizing functions and expanding the number of contractors, does not work.

Kills:

• Retire 250 of the oldest Air Force tactical fighter aircraft in FY10.
• End production of the F-22 fighter at 187 (current 183 +4)
• End acquisition of C-17s in FY 10.
• Terminate the VH-71 presidential helicopter.
• Terminate the Air Force Combat Search and Rescue X (CSAR-X) helicopter program.
• Terminate the $26 billion Transformational Satellite (TSAT) program, and instead will purchase two more Advanced Extremely High Frequency (AEHF) satellites as alternatives.
• Terminate he second airborne laser (ABL) prototype aircraft, and move program to technology demonstation.
• Terminate the Multiple Kill Vehicle (MKV) program.
• Terminate the DDG-1000 and restart the DDG-51 Aegis destroyers.
• Terminate the Army's Future Combat Systems (FCS) program's vehicle,^* and fold in the technology developed elsewhere.

I love his money quote:

Sixth, and finally, we will significantly restructure the Army’s Future Combat Systems (FCS) program. We will retain and accelerate the initial increment of the program to spin out technology enhancements to all combat brigades. However, I have concluded that there are significant unanswered questions concerning the FCS vehicle design strategy. I am also concerned that, despite some adjustments, the FCS vehicles – where lower weight, higher fuel efficiency, and greater informational awareness are expected to compensate for less armor – do not adequately reflect the lessons of counterinsurgency and close quarters combat in Iraq and Afghanistan. The current vehicle program, developed nine years ago, does not include a role for our recent $25 billion investment in the MRAP vehicles being used to good effect in today’s conflicts.

Further, I am troubled by the terms of the current contract, particularly its very unattractive fee structure that gives the government little leverage to promote cost efficiency. Because the vehicle part of the FCS program is currently estimated to cost over $87 billion, I believe we must have more confidence in the program strategy, requirements, and maturity of the technologies before proceeding further.

(emphasis mine)

This translates to, "They are not worth much in a counter-insurgency scenario, and once again the Lead System Integrator (LSI) model of procurement has given us an overpriced piece of crap."

^*Full disclosure, I worked on the Future Recovery and Maintenance Vehicle, FRMV, "wrecker" variant of the FCS-MGV^† from 2003-2006 at United Defense (later BAE Systems after the Carlyle Group sold me to buy Dunkin Donuts).
^†Future Combat Systems-Manned Ground Vehicle. These are the ones that are the tanks and APCs. As opposed to the various unnmanned vehicles, networking technologies, etc. that form the full FCS along with the MGVs.^‡
‡Yes, I have worked everywhere. Maybe I can't hold down a job, but more likely this has been my role as "technical hit man", where you are parachuted in to take care of a specific need.

Orwell Alive and Well in the Obama Whitehouse

One of the things that concerns me the most is Obama's comfort in continuing to support Bush's assault on basic procedural civil rights because they serve to reinforce the power of what is now his office.

Case in point, the Pentagon's "privilege review team", which is now considering charges against a victim of the torture protocols created by the Bush Administration.

What they posted was a cover sheet naming the case, and quoting unclassified portions of a UK court ruling saying that it was up to the US to release it, followed by a version redacted by said privilege review team", which blacked out everything but the title of their report, which is clearly stamped "unclassified":

The privilege team argue that by releasing the redacted memo Reprieve has breached the rules that govern Guantánamo lawyers and have made a complaint to the court of "unprofessional conduct".

Stafford Smith described their actions as intimidation, saying the complaint "doesn't even specify the rule supposedly breached".

So, according to someone at the Pentagon, by sending an unclassified document to the president of the United States of America, they are in violation of regulations, and could face as much as 6 months in jail.

Scary Quote of the Day

Courtesy of The Big Picture"

In fact, let’s learn from history. The only times we have ever seen the stock market surge close to this much in such a short time frame were:

• December 1929
• June 1931
• August 1932
• May 1933
• July 1938
• September 1982

Only in September 1982 and in May 1933 was the equity market embarking on a new bull phase.

Oh Belgium!

Dead Cat Bounce.

Gillibrand Announces Big Fund Raising Quarter

Sen. Kirsten Gillibrand (D-NY) raised in excess of $2.3 million since her Senate appointment.

I think that she is doing this to fend off/scare off a primary challenge from Rep. Carolyn McCarthy (D-NY-04), who is now polling ahead of her 33%-29% in the latest polls, though she is still below the magic 50% safe number for incumbents against Peter King, leading 40%-28% in the general too.

I think that Gillibrand will end up moving to the left over the next few months in order to fend of McCarthy, but time will tell.

I Guess that the AP Boycott by Blogs is Back On Again

Truth be told, I never ended mine, and have used alternate sources for stories where ever possible.

In any case, I try to post a link and a summary, and perhaps a sentence or two, which should fall under fair use.

The article, though is rather odd, as it keeps mentioning Google News and Yahoo, which runs no ads, and is a search service, which would generally be construed as fair use, and Huffington post, which licenses what it publishes from the AP.

Failure Backing Failure

Brown backs Blair for EU president job

'Nuff said.

More on Larry Summers Corruption

It looks like the New York Times is now covering the sweetheart deal he got working for a hedge fund, and we now know that not only was it a part time job that got him paid $5.2 million, but he worked there just 1 day a week!

Truth be told, he may have done more work, as he, "routinely made himself available for private consultations with Shaw’s clients, an attractive perk for investing with the firm, as one client put it."

What this really means is that in 2008, it was clear that he would be a senior official if either Obama or Clinton became President, and clients were attracted by the potential of that access, and he got special treatment as a result:

When investors rushed en masse to withdraw their money from hedge funds last year, Shaw asserted its right to block redemptions from its fund. An exception was made for Mr. Summers, however, because the White House job he was taking required him to divest.

This is deeply corrupt, if not in law, then in fact.

He didn't "have" to divest. He could have placed it in a blind trust.

Economics Update

Scary Economic Pic of the Day Courtesy of Brad Delong
And, yes, the really bad line is right now

The first bit of news is kind of "inside Baseball," with
the central banks of the US, UK, EU, and Switzerland agreeing to currency swaps totaling $285 billion with each other.

Basically this means the banks can borrow that amount from each other in various currencies and then use it to stabilize their currencies.

Truth be told, I have no clue as to what it means, except that there have been rumblings that the Swiss are near a deflationary spiral, and might want to depress the CHF to forestall that.

Since it looks like commodities prices are down significantly, most notably copper and oil over the past 6 months or so, the worries about deflation are not just an abstract concept here.

It also looks like Canada is moving toward quantitative easing (printing money) which is pushing the Loonie down, and the dollar rose against other currencies as well, as people moved into a perceived safe haven.

It's the Semi-Aquatic Egg Laying Missile of Action...*

So, North Korea made another attempt at orbiting a satellite, and it ended up in the drink again, the first stage fell in the Sea of Japan, as intended, but the second stage and payload flew over Japan and then landed in the Pacific Ocean....OOPS!!!

^*What can I say, I make sure to watch all the shows that my kids do, so I know the show.....I actually find it amusing.

Republicans Hate Honest Math: Census Edition

It appears that Obama selection of Robert Groves as director of the US Census has gotten Republicans worried:

Republicans expressed alarm because of one of Mr. Groves’s specialties, statistical sampling — roughly speaking, the process of extrapolating from the numbers of people actually counted to arrive at estimates of those uncounted and, presumably, arriving at a realistic total.

If minorities, immigrants, the poor and the homeless are those most likely to be missed in an actual head count, and if political stereotypes hold true, then statistical sampling would presumably benefit the Democrats.

First, let me note here that the reporter does not have a clue: As a matter of settled law, the Supreme Court ruled that you cannot use a statistical sampling, but instead must use an actual count in Department of Commerce v. U.S. House of Representatives in 1999, so this is a non-issue.

What is not a non issue is that statistical sampling can find people and places that have been under-sampled, and can so create a more accurate census, and a more accurate census is probably a bad thing^™ for Republicans, because white males tend to be the easy folks to count.

The 'Phants don't oppose him because he will, "Politicize the Census," they oppose him because he will do the best job possible within his power.

They don't want someone to do a good job, they want someone to do a piss poor job.

Bush and His Evil Minions&trade Really Did Destroy Everything that They Touched

In this case, it's 401(k) plans that they destroyed, by issuing regulations on automatically subscribed employees that directed them to riskier investments:

Shortly before the first signs of the stock market collapse, the Bush administration made a crucial decision that has propelled an estimated one to two million workers into stock-heavy retirement funds.

Many of the funds in which workers were automatically enrolled dropped more than 25 percent last year, while a more conservative investment strategy rejected by the Bush administration would have resulted in a gain of 4.7 percent.

The administration's decisions came in response to a congressional mandate to encourage more workers to participate in company-sponsored retirement savings plans. The Bush administration came up with a rule that enabled businesses to automatically enroll their workers in tax-free 401(k) retirement plans.

If the workers failed to specify how they wanted their money invested, the company would be required by law to place their retirement money in investment funds that, for the most part, relied heavily on stocks. The administration specifically rejected calls for a more conservative investment option.

You know, even a stopped clock is right twice a day, but that's better than George Walker Bush.

Truth be told, they had a reason for this: They were desperately trying to get money to the stock market, in order to prop up prices in preparation for the election, so it's more corrupt than stupid.

Patience My Ass.....

You know, for some time, it seems that any time someone complains that Obama's economic team is too close to the banks, the answer is that we are seeing some sort of chess game, and it's just that the White House is 3 steps ahead of everyone else.

I don't buy it. I think that Larry Summers just jumped the shark into accepting bribes, as this Wall Street Journal analysis of his 2008 disclosure forms shows.

Among other things, he got $5.2 million from hedge fund D.E. Shaw for his thoroughly part time (he was a full time professor at Harvard) position, and he got $2.7 million for speaking, with his fees ranging from, "$10,000 for a Yale University speech to $135,000 for an appearance paid for by Goldman Sachs & Co."

So we know that the market rate for his speeches is about $10K, but Wall Street investment firms were paying more than 10 times that in a year in which the Democrats were favored, and he was likely to be on the team of either Democratic nominee.

A Tiny Revolution went through his disclosure form (PDF) and came up with the following, with Merrill-Lynch being a week after the election, and Charles River Ventures being the day before:

• GIANT BAILOUT SECTOR
• Goldman Sachs: $202,500 (two speeches)
• Citigroup: $99,000 (two speeches)
• JP Morgan: $67,500
• Merrill Lynch: $45,000 (donated to charity)
• DOMESTIC FINANCIAL SECTOR
• Investec Bank: $157,500
• State Street Corporation: $112,500
• Pricewaterhouse Coopers LLC: $67,500
• Lehman Brothers: $67,500
• American Express: $67,500
• Siguler Guff & Company (private equity): $67,500
• TA Associates (private equity): $67,500
• Charles River Ventures (Venture Capital): $67,500
• FOREIGN FINANCIAL SECTOR
• Skagen Funds (Scandinavian mutual fund): $180,000 (three speeches)
• Centro de Liderazgo y Gestion (the Center for Leadership and Management, in Colombia): $112,500
• Association of Mexican Bankers: $90,000
• OTHER
• Securities Industry & Financial Markets Association: $33,750
• Pension Real Estate Association: $67,500
• Hudson Institute: $10,000

It should be noted that the Hudson institute is a very right wing "think" tank which has consistently been dogged by accusations of racism and Islamophobia, and it's at the same "market rate" as Yale.

I can't see this as anything but bribe taking, with the various financial institutions paying forward to get favorable treatment.

What sort of treatment were the looking for? Well, there was probably not a specific request, a quid pro quo, if you will, but something like the White House coming up with phony entities to act as intermediaries in order to skirt Congressional limitations on executive compensation:

The Obama administration is engineering its new bailout initiatives in a way that it believes will allow firms benefiting from the programs to avoid restrictions imposed by Congress, including limits on lavish executive pay, according to government officials.

Administration officials have concluded that this approach is vital for persuading firms to participate in programs funded by the $700 billion financial rescue package.

You know, the threat of being frog marched out of their workplace in handcuffs would work better.

The administration believes it can sidestep the rules because, in many cases, it has decided not to provide federal aid directly to financial companies, the sources said. Instead, the government has set up special entities that act as middlemen, channeling the bailout funds to the firms and, via this two-step process, stripping away the requirement that the restrictions be imposed, according to officials.

Although some experts are questioning the legality of this strategy, the officials said it gives them latitude to determine whether firms should be subject to the congressional restrictions, which would require recipients to turn over ownership stakes to the government, as well as curb executive pay.

The administration has decided that the conditions should not apply in at least three of the five initiatives funded by the rescue package.

...

Enough is enough.

This is more than being too close to the financial sector, this is corruption, and it pervades Obama's economic team.

Larry Summers, and possibly Timothy Geithner, need to spend more time with their families.

Hypersonic Developments

Alliant Techsystems (ATK) isworking on getting its Thermally Throated Ramjet (TTRJ) onto the X-51B hypersonic demonstrator (paid subscription required) that is due to succeed the X-51A demonstrator (2nd pic down) that will be conducting flights later this year.

The flight weight engine is now in test (see inlet diffuser and combustor combination, top pic), and as opposed to using the rather exotic, and difficult to ignite JP-7 that was used for the SR-71, it uses the more common JP-10 missile fuel, with the fuel cooling the combustor walls and being vaporized prior to ignition.

It's interesting in that the boundary between subsonic and supersonic flow inside the engine is controlled thermally, rather than through inlet geometry, with the heat of forward (subsonic) combustion taking the stream to supersonic speed.

In the meantime, the X-51A scramjet demonstrator appears ti be continuing on both budget and schedule, (paid subscription required) largely because the development team has limited requirement creep and "bleeding edge" technology wherever possible, with a first flight in October of this year.

There are a number of potential technical breakthroughs, a hydrocarbon fuel cooled scramjet, unstable aerodynamics, and long powered flight time (300s as vs NASA's 10s for its X-43-A), but structurally, it's simple, with a tungsten nose cone, aluminum structure, and an old fashioned ablative coating for much of its thermal protection.

Additionally, the 4 planned flight tests are designed to be identical, in order to provide redundancy.

While it's not an issue for the relatively slow (!) Mach 5-6 X-51A, future hypersonic vehicles, which can be expected to exceed Mach 10, will have issues with communication, as the speeds create an ionized sheath around the vehicle that will cause a communications blackout, which makes getting telemetry out of a vehicle problematic.

The potential solutions are interesting, ranging from using lasers or magnets to poke holes in the plasma, dropping capsules with the telemetry as the flight progresses, using the plasma to generate a signal, magnetic fields, etc.

No FDIC Bank Takeovers This Friday.

So the count remains at 21.

Russian Carrier Video Pr0n.

Kind of cool.



H/t Galrahn.

France, U.K. To Qualify New Cannon - Defense News

France and the UK are set to qualify a new 40mm case telescoped ammunition cannon for their armored vehicles, and they are looking to be at System Readiness Level 8 ("Actual System Completed and Qualified Through Test and Demonstration") by year's end, with the cannon and ammunition qualified some time in 2012.

When I looked at this system last year, it looked promising, with a much simplified ammunition feed, no need to eject cases, and more punch in the same volume.

CTA International (CTAI), a "joint venture of BAE Systems and Nexter" say that this is compact enough to be a drop in replacement for the Bradley's 25mm Bushmaster cannon, but that it will pack the punch of a 50mm cannon.

FCS MGV on Chopping Block

The Future Combat System Manned Ground Vehicles (FCS MGV)^* are on the chopping block, though it still looks like the howitzer version, the NLOS-C (shown) will still be procured.

The program is over budget and behind schedule, and the vehicles, originally in the 17 ton class (stripped for transport) and C-130 transportable, and now a 27 ton concept requiring larger transports, so this is not unforeseen.

The supporters of the program are claiming that :The development of the FCS network is linked to the development of FCS Manned Ground Vehicles. Each MGV acts as a node in the ground based aspect of the network. So cutting MGVs reduces the viability of the network," but truth be told, if the communications suite can be developed, it can be retrofitted to the legacy fleet and give the desired situational awareness.

There are really only 2 downsides that I see, that the troop carrier FCS MGV, the ICV, carries more troops than the Bradley, which has always been light in that department, and the legacy systems require more fuel and maintenance (the specs for the FCS MGV on maintenance are pretty amazing).

Canceling the MGVs would also serve to put the Pentagon, and the defense industry, on notice about cost and schedule creep, which is desperately needed because the weapons system development process is completely broken.

^*Full disclosure, I worked on the Future Recovery and Maintenance Vehicle, FRMV, "wrecker" variant of the FCS-MGV^† from 2003-2006 at United Defense (later BAE Systems after the Carlyle Group sold me to buy Dunkin Donuts).
^†Yes, I have worked everywhere. Maybe I can't hold down a job, but more likely this has been my role as "technical hit man", where you are parachuted in to take care of a specific need.

Obama Depressed, Distant Since 'Battlestar Galactica' Series Finale | The Onion - America's Finest News Source

Man, I just love The Onion - America's Finest News Source

12 Dead In Another Shooting Rampage

This one at an immigration services center in Binghamton, NY.

What the hell is going on here? There have something like a ½ dozen of these over the past month.

Federal Home Loan Board Chairman Resigns Over Changes in Mark to Market Rules

FHLB Chairman Charles Bowsher has resigned, saying that under the new rules, he would be unable in good conscience to vouch for the accuracy of the various FHLB banks financial statements following the relaxation of rules by the Federal Accounting Standards Board (FASB) on illiquid assets, and he talked with Jonathan Weil about it:

I was not comfortable as an audit-committee member in signing off on the financial statements, after I became aware of the standards and processes for valuing the mortgage-backed securities

An honest banker, who knew?

A broken, corrupt, and dishonest system....everyone knows that.

Gay Marriage News

The Iowa Supreme Court rules gay marriage legal, and the Vermont house passed a same-sex marriage bill, though the governor is still talking about vetoing it, because it's a distraction during the economic crisis.

Of course, the only way that it is a distraction is if he vetoes it, but he has to win a Republican primary with lots of bigots voting.

The idea that Vermont, which is highly dependent on tourism, would eschew this, which would give a boost to that industry, is, of course, nuts, but the Governor Jim Douglas is a 'Phant, after all.

The down side to this is that we are going to be spending a lot more on wedding gifts.

But seriously, it stuns me how quickly the forces of reason and hope are beating back the voices of fear and bigotry.

Compared to the black civil rights movement, this is light speed.

Banks Are Already Gaming Geithner's Bad Bank Plan

Gee, this is a surprise, banks are looking to buy each others' mortgage backed securities, essentially swapping their own crap for someone else's crap plus a 50+% subsidy.

For once, I find a Republican who has a clue

Spencer Bachus, the top Republican on the House financial services committee, vowed after being told of the plans by the FT to introduce legislation to stop financial institutions ”gaming the system to reap taxpayer-subsidized windfalls”.

Mr Bachus added it would mark ”a new level of absurdity” if financial institutions were ”colluding to swap assets at inflated prices using taxpayers’ dollars.”

I have to say, in reviewing Geithner's history, I do not believe that this was an error, but rather something that he intended.

I believe Geithner is Wall Streets bitch, and that this is just another instance when he strapped on the knee pads.

Massive Rally in Ukraine Triggers Yuschenko Backdown on Elections

I'm not sure how much of this is gamesmanship and how much is unrest over an economy falling at a double digit rate, but Ukrainian President Viktor Yushchenko has now said that he is open to new elections, which is a big walk back, seeing as how he is at 3% in the former Soviet Republic.

Honestly, Ukraine needs to develop a slightly less adversarial relationship with Russia, even if they are not fond of Russians themselves, a stance which the more pragmatic (and less batsh^% insane) Prime Minister, Yulia Tymoshenko, Yushchenko's chief rival understands while he does not.

We Are Doomed

Remember what Jon Stewart did to Jim Cramer and CNBC's predictions, well that hasn't stopped Jim Cramer from making more predictions, and now he is predicting that the "depression is over".

We are unbelievably screwed.



H/T Option Armageddon.

Mr. Obama, Tear Down That Wall!

In his meeting with bank presidents, he said, "My administration is the only thing between you and the pitchforks."

True, and perhaps you would get better results if these people felt fear, rather than smugness.

Economics Update

Scare Pic of the day courtesy of Calculated Risk

Today's lede has to be the unemployment numbers with non farm payrolls dropping 663,000 in March and unemployment (U-3) hitting 8.5%.

It should be noted that if you use the broader U-6 metric, then unemployment is 15.6% up 6.3% from last March's 9.3%.

We also have the number of involuntary part-time workers increasing from climbed by 423,000, to 9.0 million, and the contraction of service industries is accelerating.

The best metric of the employment situation may be the employment-population ration, and it fell to 59.9%, the lowest level since 1985.

BTW, remember when I posted about UK house prices going up for the first time since 2007 in March? Not sop much, alternate data shows another fall in prices.

The dollar rose on a flight to safety after the crappy jobs report, and oil fell for the same reason.

How to Know When Your Ideas are Completely Stupid

When Sarah Palin endorses them.

She's jumped on the let's have a new Senate election in Alaska, bandwagon.

Jon Stewart on Limbaugh Leaving New York

What can I say, but "you go girl," funnier than Governor Paterson, but Stewart is a professional.

Brilliant

Blagojevich Indicted

Not a surprise.

Hopefully, there will be only one or 2 more times when I'll have to spell his damn name again.

link

Is All of AIG a Scam?

Or maybe it's the whole damn system.

The folks at Institutional Risk Analytics have concluded that AIG's reinsurance business was little more than a Ponzi scheme well before it set up its Financial Products division that took down the firm with its credit default swaps (CDS) business:

One of the first things we learned about the insurance world is that the concept of “shifting risk” for a variety of business and regulatory reasons has been ongoing in the insurance world for decades. Finite insurance and other scams have been at least visible to the investment community for years and have been documented in the media, but what is less understood is that firms like AIG took the risk shifting shell game to a whole new level long before the firm’s entry into the CDS market.

In fact, our investigation suggests that by the time AIG had entered the CDS fray in a serious way more than five years ago, the firm was already doomed. No longer able to prop up its earnings using reinsurance because of growing scrutiny from state insurance regulators and federal law enforcement agencies, AIG’s foray into CDS was really the grand finale. AIG was a Ponzi scheme plain and simple, yet the Obama Administration still thinks of AIG as a real company that simply took excessive risks. No, to us what the fraud Bernard Madoff is to individual investors, AIG is to the global financial community.

The crux of this accusation is that they reinsurance contracts that they did not have the resources to back up.

So their reinsurance, essentially insurance bought by insurance companies to insure themselves against a catastrophe, was essentially meaningless, and all the parties involved knew this:

One of the most widespread means of risk shifting is reinsurance, the act of paying an insurer to offset the risk on the books of a second insurer. This may sound pretty routine and plain vanilla, but what most people don’t know is that often times when insurers would write reinsurance contracts with one another, they would enter into “side letters” whereby the parties would agree that the reinsurance contract was essentially a canard, a form of window dressing to make a company, bank or another insurer look better on paper, but where the seller of protection had no intention of ever paying out on the contract.

My guess is that both the CDS and reinsurance business functioned the same way, which means that neither had legally binding contracts.

Essentially, it means that much of the insurance industry, whether reinsurance or CDS, is simply an attempt to deceive regulators, and defraud investors.

This raises an obvious question: if what was largely thought to be the largest insurer in the world was little more than a Ponzi scheme, how many other huge fraudulent enterprises are out there.

H/T The Big Picture.

Bagram Detainees Allowed to Petition for Habeas

Basically, the judge drew a distinction between people caught "on the battlefield" in Afghanistan and those caught elsewhere and transferred to Bagram.

Simply calling it a POW camp, particularly when you are not treating the detainees as POWs didn't cut it for the judge.

Needless to say, the Obama administration is expected to appeal this decision, in yet another case of going to the wall to support Bush era assaults on civil rights.

Senate Budget Bill Forces Fed to Name Names

In response to the Federal Reserve impeding attempts to get information as to the institutions that they have aided, the Senate has inserted a provision in the budget that would, "require the Fed to identify each firm it has given assistance to, how much the assistance was worth, and what the firm is doing with the money.."

Unfortunately, it appears that it won't make it to the President's desk, at least not according to a, "senior Democratic Senate aide," but it would be a good thing.

Signs of the Apocalypse

David Whoreowitz (Horowitz) is making sense loony toon, fellow traveler with cop killers, and all-around bigot, is saying that the right wing attacks on Obama have been profoundly unhinged.

When this man is the voice of reason in a discussion, the rapture, or at least some helium filled blow up sex dolls, is not far off.

OK, So Fire Away

In an interview with Katie Couric, Tim Geithner said that firing bank CEOs is an option if they are not properly managing their firms.

Bank of America CEO Ken Lewis is not properly managing his firm.

Even if you ignore the disaster that is Merrill Lynch, the purchase of the toxic waste dump known as Countrywide Mortgage was his doing, and an unmitigated disaster, what's more, he's been calling you, and the whole Obama administration a bunch of C%&$suckers, saying that he will repay the TARP money to be done with you...Only not right now, because BoA is a bit short on folding green at the moment:

In his latest media appearances, including an interview on CNBC, Lewis said that BofA would repay taxpayers for the $45 billion in TARP proceeds his bank received. Eventually. (Lewis also said he ”regrets” having taken that much, saying the bank took more than it needed, describing the total as ”his mistake.” From this vantage, seems like the government’s … but po-tay-to, po-tah-to, right?)

But he quickly added that the economy will have to rebound. And then several quarters will have to pass.

Seriously, it's like that bit in Bull Durham, when Crash is ejected from the game for calling the ump a c%&$sucker.

You call the ump a c%&$sucker, and you are ejected.

Eject Ken Lewis, the self-important, pampered, anti-union, incompetent prima donna from the game, or ask for the full $45 billion back tomorrow, and initiate an investigation of how AIG unwound their swaps at 100%.

Video of interview here.

Alaska Republicans: Go Cheney Yourselves

In the wake of the DoJ's decision to drop charges against Ted Stevens, Alaskan Republicans are calling for Mark Begich to resign so that they can get a new election for Senate.

Because, you know, some people probably voted for Begich because Stevens was a convicted felon, because, you know, no one ever votes on information that might not be 100% accurate.

Let's be clear, Ted Stevens is still a completely corrupt son of a bitch, even if the Beltway Bozos and their Evil Minions^™ are now wringing their hands over the injustice, as Zachary Roth ably makes clear:

But even leaving criminal wrongdoing aside, no one disputes that Stevens accepted hundreds of thousands of dollars worth of home renovations and gifts (remember that massage chair?) from a supporter who had a slew of business interests that Stevens was in a position to affect as a powerful federal lawmaker and appropriator. That's what we call "corrupt".

I would add that he also did this supporter a lot of favors.

If the DoJ had done its job, Ted Stevens would die in a jail cell, and he still deserves that.

FASB Re-Enables Crooked Incompetent Bankers

Under pressure from bankers, and their lackeys in Congress, the Federal Accounting Standards Board has relaxed mark-to-market rules.

This means that bankers can go back to creating more of the big sh$#pile, and calling it a pony:

Changes to fair-value, or mark-to-market accounting, approved by FASB today allow companies to use “significant” judgment in gauging prices of some investments on their books, including mortgage-backed securities. Analysts say the measure may reduce banks’ writedowns and boost net income. Firms could apply the changes to first-quarter results.

The FASB just got pressured to allow liars accounting again. This is a bad thing.

"Significant judgement", my ass. Wall Street has no judgment at all.

Credit Where Credit is Due

In response to Rush Limbaugh saying that he would sell his condo and leave New York because of the income tax increase, Governor David Paterson has told him Don't let the door hit your butt on the way out:

If I knew that would be the resultI would’ve thought about the taxes earlier.

I still think that David Paterson is a tool, but I have to give him credit for the perfect response.

Good riddance to bad rubbish.

Economics Update

We have the weekly unemployment claims report, and it is not pretty, with 669,000 new claims, an increase of 12,000, the 4 week moving average was up 6,500 to 656,750, and the continuing claims hit 5,728,000, up 161,000.

Note that the initial claims number constitutes a 26½ year high, and continuing claims are at the 9th all time record level in 9 weeks.

Meanwhile, the credit news is not good, with Calculated Risk's Credit Crisis Indicators somewhat improved, though still at pretty awful levels, but Moody's downgraded $1.76 trillion in corporate debt in the first quarter of 2009, and both credit card charge-offs and home equity loan delinquencies have climbed to record levels.

In real estate commercial real estate defaults hit a new record, and the formerly unassailable real estate of Manhattan is sales volume falling 48%, though house prices rose in the UK for the first time since 2007.

Additionally, the Feds efforts to lower mortgage rates appear to be working, with the 30 year fixed mortgage rate hitting a new low.

In the meantime, auto industry analysts are doing handsprings over the March auto sales figures, because annualized sales figures rose to 9.86 million up from February's rate of 9.12 million, though dealer incentives also rose 5%.

Your call as to whether an 8% increase of awful, the normal annual sales runs at about 16 million, is something to crow about.

In either case, other manufacturing had an uptick, with Chinese manufacturing increasing for the first time in 4 months, and US factory orders rising for the first time in 7 months.

In Yurp, the European Central Bank cut its rates by only 25 basis points (¼%), less than expected, and as a result the Euro strengthened vs the US dollar, though the ECB President has said that more rates might be forthcoming

In energy, the rising stock market (Dow above 8k for the first time in about 7 weeks) has driven oil higher.

Reviewing Dick Cheney's Security Clearance

So I was reading this account of a Seymour Hersh interview on Fresh Air in which he says that Cheney loyalists have been "burrowed" into sensitive government positions, and continue to feed him information:

"I’ll make it worse. I think he’s put people left. He’s put people back. They call it a stay-behind. It’s sort of an intelligence term of art. When you leave a country and, you know, you’ve been driven out the, you know, you’ve lost the war. You leave people behind. It’s a stay-behind that you can continue to have contacts with, to do sabotage, whatever you want to do. Cheney’s left a stay-behind. He’s got people in a lot of agencies that still tell him what’s going on. Particularly in defense, obviously. Also in the NSA, there’s still people that talk to him. He still knows what’s going on. Can he still control policy up to a point? Probably up to a point, a minor point. But he’s still there. He’s still a presence."

(Audio at bottom)

And the first thing that went through my head was, "People from the NSA are talking to a guy who orchestrated the outing of a covert CIA agent?"

Then I realized that the real question was, "Why does Richard Bruce Cheney still have a security clearance?"

Based on my reading of the entire Lewis "Scooter" Libby case, it's clear that Patrick Fitzgerald had concerns that Cheney was aware of the leaks on some level, though he lacked any hard evidence (missing emails anyone?) to go any further.

That being said, a security clearance is not a legal procedure, it's an administrative procedure, and to a significant degree, it is necessary for the holder of this clearance to show that they not a security risk, either intentionally or through negligence.

There is also an additional duty to report any credible potential security violations to the appropriate authorities.

This is a lower standard of proof than, for example, the Intelligence Identities Protection Act, or obstruction of justice statutes.

There is therefore a significant concern that Dick Cheney violated the terms of his clearance, and pending an investigation, his clearance should be suspended pending an investigation.

Unlike a government employee whose livelihood is dependent on having a clearance, this should not provide an undue burden, and a hearing, with witnesses, including Lewis "Scooter" Libby and Mr. Cheney, testifying under oath, would be an appropriate venue to decide whether or not he was either deliberately or negligently cavalier with sensitive intelligence data.

Of course, if Mssrs Cheney or Libby were to make untrue statements in the process of giving their testimony, that would be a matter for the federal prosecutors.


Youtube link

File Under: I Used to Be Disgusted, Now I Try to Be Amused

It appears that the Treasury Department is stonewalling the body charged with monitoring the various bank bailouts.

But "without a clearer explanation" about parts of the program, "it is not possible to exercise meaningful oversight over Treasury's actions," said Elizabeth Warren, a Harvard Law School professor who leads a special congressional oversight panel monitoring the TARP program. Her comments came in a Senate Finance Committee hearing on the bailout program.

Noting that TARP passed Congress six months ago, Warren said that her group has repeatedly called on the Treasury Department to provide a clear strategy for the program — and that "the absence of such a vision hampers effective oversight."

Dr. Warren, this is not a but, it's a feature.

Geithner is a former Federal Reserve Bank of New York president. Opacity and secrecy are how they think that it's supposed to work.

That's the whole idea behind the Federal Reserve system.

Reports that GM Wants to Force GM Into Bankruptcy

We have reports that appear to be leaked from the White House that say that they want to see GM go through some sort of preplanned bankruptcy here, and here.

I don't see this happening, and I tend to agree with Yves Smith's analysis that says that this would be next to impossible, because you would have to essentially get all the creditors to agree ahead of time.

Smith suggests that a realistic timetable for a bankruptcy would be over a year, and the analysis of the cascade effect on auto parts suppliers is that no one in the United States, including Toyota, Nissan, and Honda, would be able to make automobiles for something on the order of a year, because it would force the already tightly strapped auto parts suppliers into bankruptcy too.

I see this as primarily a way to apply pressure to two parties, the UAW and Pimco, who runs the world's largest bond fund.

I think that Pimco is particularly a problem. Their behavior in the GMAC bailout was to dig in their heels, and make everyone else take a haircut, and all indications are that they are doing the same thing with GM.

25 Votes In NY-20

That's how much Murphy(D) is leading Tedisco(R).

2 Weeks before absentee and provisional ballots will be counted, and Tedisco has already filed suit.

Nobel Laureate Stiglitz and Black Swan Author Blast Obama and Geithner

Joseph Stiglitz calls the plan, "Obama’s Ersatz Capitalism," in a New York Times OP/ED, where he runs the numbers and shows that the plan is at least a 50% subsidy to the private buyers, and Black Swan author Nassim Taleb says Geithner’s bank recovery plan will fail, and simply socialize losses and privatize gains.

They are both good reads.

Legislation to Curb NSL Abuse Introduced

Jerrold Nadler (D-NY) and Jeff Flake (R-AZ) have introduced legislation to curb the widely abused National Security Letters (NSL) and significantly increases the standards, and the opportunity for judicial review.

It still allows FBI field supervisors to issue them, but it is still an improvement.

Colman-Franken: The Fat Lady is Warming Up

The election court has ruled against the Coleman campaign's request that 1,400 absentee ballots be reviewed, instead allowing only 400 to be reviewed, many of which were stricken by the Coleman team.

With a 225 point vote gap, this comes very close to being "game over" at least in the state courts.

I think that one of the interesting subtexts here is that the 'Phants have donated very large sums of money just to tie this up, and that Cornyn is suggesting that they will continue to refuse to seat Franken, which does not bode well for Republicans in Minnesota.

But, great googly moogly, make it stop!

I'm Not Sure if This is an April Fool's Gag

But Dickipedia is prize:

Dickipedia is a monolingual (English), Web-based, free content encyclopedia project with information about people who are dicks. The word "dickipedia" is a portmanteau of the word "encyclopedia" and the word "dick." Dickipedia does not contain information about people who are detectives.

Economics Update

Well, the job loss report from payroll processor ADP is out, and according to them, there were 742,00 job losses in March, well above the 655K forecast.

Part of this is driven by continued declines in construction spending, as Calculated Risk notes and graphs (see graph pr0n).

As he notes, non-residential construction spending is following residential spending off a cliff.

There was also an increase in the NAR's pending home sales index, though it remains firmly in the horrible range, at 82.1, up from 80.4, with 100 being the average level of pending home sales in 2001.

Still, mortgage applications are up again, though this is largely still refi activity.

The Institute for Supply Management's Manufacturing Index mirrors the pending home sales index, in that it is up, to 36.3 from 35.8, but still in a firmly contracting posture, as 50 is neutral.


On the other side of the Pacific, we are seeing Japanese business confidence numbers fall to record lows.

The news in the auto industry, whether foreign or domestic is grim, with sales numbers for GM, Toyota, Ford, Chrysler, Honda, and Nissan all falling significantly.

We also see the Fed printing money to buy $6 billion in Treasuries, so as to keep the interest rates down.

In currency, the dollar is up on risk aversion again. Investors are concerned about the G-20 meeting, though I'm not sure if the concern is about nothing being done, or something being done....Maybe it's a bit of both.

In energy, oil fell on strong inventory reports.

Aprils Fools Jokes: A Sampling

Here is a sampling.

The biggest whopper is Finance Committee Chairman Max Baucus, D-Montana, saying that using budget reconciliation to pass healthcare or environmental reform though dispite his, ""repeated concerns that doing so would damage bipartisan cooperation in the Senate."

Bipartisan cooperation in the Senate....That's a good one....What? He was serious????? Never mind.

Then we have Grauniad newspaper dropping paper, and going all twitter.

A sample from the archives, "JFK assassin8d @ Dallas, def. heard second gunshot from grassy knoll WTF?"

Google has CADIE: Cognitive Autoheuristic Distributed-Intelligence Entity, which includes printable 3-D glasses and a CADIE powered submarine.

Also Gmail Autopilot^™ by CADIE. Never have to read email again, CADIE will reply to all your email for you. (I actually want something like this)

Expedia has $99 Flights to Mars.

Qualcomm has new wireless convergence models, like the WolfPigeon, CrocodEagle, and SharkFalcon

Technologizer’s First Forty-Five Fabulous Years!:

Not everybody remembers that Technologizer began as an online service. When we launched in April of 1964, there were only three IBM mainframes in the world powerful enough to receive us, we charged an hourly access fee of $15,000, and our network ran at 300-bpw (bits per week).

Opera Face Gestures: 'nuff said.

And Amazon is appealing to the Ron Paul crowd with Floating Amazon Cloud Environment(FACE), "Using the latest in airship technology, we've created a cloud that can come to you."

Stevens to go Free

The DoJ is dropping charges because of rampant proprietorial misconduct.

That does not mean that Ted Stevens is not guilty as hell, though.

Now, how about looking at Don Siegelman?

Obama May Be Close to Settling Bush Missing Emails Case

It's not clear if this means that many of the emails will be retreived, or if it's just closing the barn door after the cow has left the barn, but the mutual agreement to withdraw motions on both sides for 3 months.

My money is on the cow-barndoor thing, because Bush and His Evil Minions^™ were doubtless working overtime on destroying incriminating information.

Where the Bailout Money is Going

CNN has a handy interactive chart, though Bloomberg, using slightly different math, gives us a figure of $12.8 Trillion, or over 90% of last year's GDP.

Meanwhile, as has been noted earlier, AIG has been cutting sweetheart deals with the banking giants, and now the GAO, the investigative branch of Congress, is saying that the Treasury Department is being too lax in its policies on repaying AIG counterparties, confirming once again that Tim Geithner is the large banks', and large Wall Street firms' bitch.

There is no need for AIG to pay off at 100¢ on the dollar here, and the insistence that they do so is an excuse to pump more money into insolvent banking giants.