Elections Have Consequences: Who Hoo!!!!!!!!

Barack Obama's new budget eliminates abstinence-only funding and a kick back program to churches.

From Page 491 of the budget (PDF):

The 2010 Budget proposes a new Teen Pregnancy Prevention Initiative to support community-based and faith-based efforts to reduce teen pregnancy using evidence-based and promising models. In addition, a new Strengthening Communities Fund will help build the capacity of non-profit organizations and State, Local and Tribal entities to better serve low-income and disadvantaged populations. This Budget also proposes funding for (1) a new child welfare initiative, and (2) a human services case management system for Federally-declared disasters. This Budget eliminates funding for Community-Based Abstinence Education, the mandatory Title V Abstinence Education program, the Compassion Capital Fund, and Rural Community Facilities.

The items in bold are two abstinence only education programs, aka the Bristol Palin teen parent plan, and the Compassion Capital Fund is a slush fund for churches set up by Bush and His Evil Minions^™.

Wicked cool!

Latest Blogosphere Sh$# Storm

So, the liberal part of the Blogosphere is all in a tizzy over the article written by CBS sports analyst, and former pro golfer, David Feherty on Bush moving back to Dallas, which contained this bon mot

From my own experience visiting the troops in the Middle East, I can tell you this, though: despite how the conflict has been portrayed by our glorious media, if you gave any U.S. soldier a gun with two bullets in it, and he found himself in an elevator with Nancy Pelosi, Harry Reid, and Osama bin Laden, there’s a good chance that Nancy Pelosi would get shot twice, and Harry Reid and bin Laden would be strangled to death.

Really, really classy, but I'm not outraged. Instead I'm perplexed.

This is what qualifies for humor in the conservative mind?

Seriously, for all the conservative complaints that humorists are biased against them, and the repeated abortive attempts by Fox News to come up with some sort of conservative political news-humor show, it all comes down to the fact that this sh%$ simply isn't funny.

As Pablo Neruda said, "Laughter is the language of the soul,"^* and conservatives are apparrently speaking pig-latin.

^*Unlike Bart Simpson, I am not familiar with the works of Pablo Neruda, I just got the quote from the best Simpsons episode ever, Bart Sells His Soul.

Groundhog Day

Yawn, another day, another claim by the "healthier" of the big banks that they are going to repay the TARP money "any day now".

Of course they are.....Really....Just as soon as they pay back the FDIC loans.

OK, This is Mind-Bogglingly Stupid

If you've been following the saga of the delays of the EADS A400M military transport program, it's clear that the main thing holding up the testing of the aircraft is problems with its massive (10,000+ hp) turboprop engines.

It has now been revealed that this holdup is primarily the result of a bookkeeping error:

Although the A400M program has generally been running late, the pacing item since last year has been the engine - and the principal problem was a failure by Europrop International (EPI), the consortium behind the TP400-D6 engine, to recognize, until little more than a year ago, that the software in the full authority digital engine control (Fadec) did not meet European civil aviation standards.

EPI was basically working to military standards, in which Fadec software is considered to be validated by testing. Civil authorities additionally require a tightly disciplined software development process, in which every change, from the first line of the first version, is documented and traceable. Once the problem surfaced, there was nothing to be done but to go back and start again.

While I generally find system engineering, where you have some anal-retentive bloke going over the specs with a microscope, to be a pain in the ass, I acknowledge that they are needed now and again, but there don't appear to have been any on this project.

25-to-1 Leverage is Not a Healthy Bank

But that is the standard used by the US Department of the Treasury in the stress tests to define properly capitalized.

Great googly moogly.

Army Now Looking at FCS Replacement

And externally, at least, it will look an awful lot like the canceled FCS manned ground vehicle family of vehicles. (FCS-MGV)

After all, if you are looking for something smaller and lighter than existing systems, you still have a box on treads.

That being said, there are some lessons learned here, and hopefully they will be fixed:

• There was too much focus on commonality among vehicles. If you want a tank(ette) version, there is no reason to put it on the same wheelbase as an infantry combat vehicle or command vehicle. The M8 Armored Gun System, which I saw up close in my time at BAE systems,^* was much smaller and lighter, and had a lower height, and hence better concealment. Going with a completely common platform costs more than you save.
• Abandon the lead system integrator (LSI) concept of program development. This contracting concept has failed EVERY time it has been used, and there are already bills out there to ban the practice. It gives lunatics (defense contractors) the keys to the asylum.
• A better understanding on what the program is for. On the FCS-MGV, for example GD was responsible for propulsion and suspension, and BAE Systems was responsible for the track, not because of any special technical abilities of the respective companies, but because of a deliberate policy to spread the money around evenly.
• Implement technologies that are more mature.

^*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.

Israel Has Maintenance Access Issue with F-35

Israel has just been denied access to the computer systems of the F-35 JSF that would be required to maintain the aircraft.

Israel maintains that they need they need access to these systems, because in a wartime scenario, that they would need to repair the systems in real time, while the US maintains that there will be spares that can be replaced under those circumstances.

So Israel is now making noises about looking at the F-15 Silent Eagle upgrade as an alternative to the JSF, which I think is just blowing smoke.

I also think that both sides are talking around the real issues, the first being sticker shock, with a reporter $20 billion for 75 aircraft giving a $266 million price tag, but the second one, and perhaps the one that the Israelis are more concerned with, is the ability to independently integrate their own weapons and their own systems into the aircraft.

There is also the concern, at least amongst those of us who watched the recent Battlestar Galactica series, that there may be an "off" switch somewhere in those millions of lines of code.

Dude, What Did You Expect, an Education

Sam Keller, a former quarterback for Arizona State University, is suing Electronic Arts and the NCAA over their licensing his image for their college sports game:

Electronic Arts Inc. and the National Collegiate Athletic Association were sued by a former college football player who claims athletes’ images are used in video games without their permission and in violation of NCAA rules.

Electronic Arts, the second-largest video-game publisher, circumvents the rules by allowing customers to upload player names directly into games and creating images that closely resemble student athletes to increase sales and NCAA royalties, according to the complaint filed by Sam Keller, a former quarterback for Arizona State University.

Normally, I fall on the side of rather open use of such things, and in the case of statistics for things like fantasy, I would do so anyway, but the fact that thee NCAA is a revolting organization does color my view here.

The equation here, at the top levels of sport anyway, is that the schools will pretend to provide an education, and in exchange the athletes will provide their services for free, and have no part in the billions that the schools rake in for the privilege.

When people complain about things like the lack of a playoff system in college football, they ignore the slave labor upon which this system is built.

Are You Wondering Just How Corrupt the Stress Tests Were

Well, wonder no more. Treasury negotiated the results of the tests with the banks.

Of course if you were a student, and attempted to browbeat your teacher into improving your grade, they would just laugh in your face or demand a bribe, but if you are Ben Bernanke and Timothy "Eddie Haskell" Geithner, they can do it for you for free, or as Joe Btfsplk wrote in the comments section of this story, "Maybe next time, they could give the banksters multiple choice tests," because they certainly failed the true-false test:

The Federal Reserve significantly scaled back the size of the capital hole facing some of the nation's biggest banks shortly before concluding its stress tests, following two weeks of intense bargaining.

Bargaining?

This is supposed to be a test administered by the Treasury and Federal Reserve, not a negotiation.

The banks are in hock to the Treasury and FDIC for hundreds of billions of dollars, and to the Federal Reserve for Trillions, and they negotiated with the banks?

Whiskey Tango Foxtrot?

In addition, according to bank and government officials, the Fed used a different measurement of bank-capital levels than analysts and investors had been expecting, resulting in much smaller capital deficits.

Again, this is not grading on a curve, this is is everyone getting a gold star.

Yes, Wells threatened a lawsuit, but that was an empty threat, because of the response of the market to their suing the FDIC, Treasury, and Federal reserve would have turned their shares into penny stocks.

Friday Night Bank Failures

Westsound Bank, Bremerton, Washington

The 33rd bank failure this year

Full FDIC list.

Defense Budget Finally Out

So, the details are out, and we have a big, confusing, and sprawling story from a big confusing, and sprawling building, the Pentagon.

Here are some links, and some things that I find noteworthy.

Specific programs:

With $439 million budgeted, the USAF is definitely going full speed on the tanker replacement bidding.

The Next Generation Bomber and the F-136 alternate JSF engine are on the chopping block, and the Gerald Ford class aircraft carrier has been delayed a year to work out the bugs on its electric catapults.

Star Wars takes a hit, with both the multiple kill vehicle and the airborne laser being canceled.

UAV's did very well, with the Raven (shown) getting over 700 orders.

Aviation:

The DEW Line has a rundown.

Classified:

The Pentagon classified budget is now, up above $50 billion, which, on its own, makes the black programs something like the 3rd largest military budget in the world.


US Army:
spending on Helos is up, as are both unmanned vehicles and the number of active duty soldiers.

Navy:

We already know the story, cancellation of the DDG-100, restart of the Brukes, and continued procurement of the LCS, more here, here, and here.

Short version, it's a generally down, but the Navy has done OK.


USAF

Basically, talk to the deer.

The USAF did not fare well, with the end of the F-22 and C-17 production lines, underfunding of the Air Force One replacement, the Joint Dual-Role Air Dominance Missile (JDRADM), and the follow on to the Predator drone, and the cancellation of the TSAT satellite system.

Cost Guard:

Not the Pentagon, it's technically in the Department of Commerce, but its budget is up by about 3%.

Caption Contest

Lend Me Your Ear*

Well, we now have a new theory on the fate artist Vincent Van Gogh's ear, that rather than having cut it off himself, that it was as a result of a fight with fellow artist, and friend Paul Gaugin:

According to official versions, the disturbed Dutch painter cut off his ear with a razor after a row with Gauguin in 1888. Bleeding heavily, Van Gogh then walked to a brothel and presented the severed ear to an astonished prostitute called Rachel before going home to sleep in a blood-drenched bed.

But two German art historians, who have spent 10 years reviewing the police investigations, witness accounts and the artists' letters, argue that Gauguin, a fencing ace, most likely sliced off the ear with his sword during a fight, and the two artists agreed to hush up the truth.

This is a definition of friendship of which I was previously unaware.

^*You really didn't think that I could pass up this pun.

Too Much Free Time

I assume no responsibility for any trampling, birdshot removal, or ingested cow poop.

It Looks Like the Classics are Coming Back

First, we have the return of a variant of Spanish Influenza (Swine Flu), and now we have reports of a spike in volcanic activity at Anak Krakatau, which in Indonesian, means "son of Krakatoa," the small volcanic island that is the the volcano that emerged from the explosion of Krakatoa.

It's kind of creepy when you think about it, stock market crash, Spanish Influenza, and now this.

What catastrophe is due to revisit us again? The Black Death? The 100 Years War? The Partridge Family?

Facebook Manners and You

L'Affaire Harman and L'Affaire Pelosi

Zachary Roth at TPMMuckraker uncovered this little gem from Newsweek in 2004:

Until a few weeks ago, Patrick Murray was just another ambitious Capitol Hill staffer. As a top aide to Rep. Porter Goss, the Republican chairman of the House intelligence committee, Murray had a reputation as a sharp-tongued partisan lawyer. When Democrats on the committee asked the CIA for information, Murray would cut them off, reminding the agency that only requests backed by the Republican majority should be honored. "He was just impossible," says one staffer who dealt with him. "He was sarcastic, snide and had this uncanny ability to push people's buttons." One former CIA official told NEWSWEEK that Murray leaned on him more than once to declassify information so he could use it to "embarrass the Democrats." Murray was irritated when the agency declined. He regarded much of the CIA as a nest of obstructionist bureaucrats, time-servers who had schemed to undermine the administration's policies--especially in Iraq.

(Emphasis mine)

It is best to remember that Bush and His Evil Minions^™ had 8 years to politicize the state security apparatus, driving out all but hardcore loyalists who would use the levers of the state in pursuit of their own political, partisan, and personal gain.

They have done their level best to poison the bureaucracy.

As such it is best to wait until a report is fully vetted and final before taking it at face value.

So then, what do we make of the reports that she was briefed in 2002 on the use of torture enhanced interrogation techniques in 2002 (here and here)

NOT ON THE TABLE! NOT ON THE TABLE!
\

After Pelosi's non-performance regarding even considering impeachment investigations after the Dems took Congress in 2006 (see pic), I'm not generally inclined to give her the benefit of the doubt, but in this case, with a document that Leon Panetta felt compelled to include a cover letter noting that this is very preliminary.

Additionally, as Emptywheel (link above) notes, this "report" almost instantly hit both the mainstream and wingnut press (HumanEvents dot com).

Additionally, Greg Sargent notices that while there might have been a discussion of torture techniques, it is not clear in the document as to whether the Congress critters were told that the techniques were being used.

I do rather believe that Pelosi knew what was going on, and I would guess that it is at least even money that she was specifically briefed about it being done in an ongoing manner: It would explain her recalcitrance on impeachment, because the scandal could pull her down too.

I would also note that involving members of Congress in torture in this manner, so that they would be inclined to oppose any investigation or punitive action, sounds like SOP for Bush/Cheney.

A Loss in Red Sox Land

Dom DiMaggio dead at 92.

I never saw Dom or his brother Joe play, but there is many an older Red Sox fan who would maintain that Dom was a slightly better player, though I think that both Joe and Dom would insist that the best player was Vince, who had a 10 year career in the NL.

Be, all I can say is go Sox.

In honor of the late Steve Gilliard, "F%$# the f%$#ing Yankees."

Moron

Yep, it's Timothy "Eddie Haskell" Geithner again, who really does not have a f^%$ing clue.

In this case, it is his insistence that U.S. banks can earn their way out of the current hole that they dug themselves in:

Treasury Secretary Timothy Geithner is betting that U.S. banks can do something their Japanese counterparts were unable to accomplish in that country’s “lost decade” of the 1990s: earn their way out of trouble.

The stress-test results released yesterday by regulators found that the 19 largest banks face a $74.6 billion capital hole that may be filled mostly by private money. That compares with the hundreds of billions of dollars seen by outside analysts, including the International Monetary Fund, and takes into account banks’ projected earnings over the next two years.

The “stress-test results are an important step forward,” Geithner said in a statement announcing the results. “Americans should know that the government stands behind the banking system and that their deposits are safe.”

...

Geithner told reporters that regulators took a conservative approach to toting up potential credit losses and calculating the industry’s ability to absorb them through increased earnings. The forecast of future profits was at the “quite low end of analysts’ expectations,” he said.

(emphasis mine)

It is quite literally all a confidence game to him: If he can convince the American public to maintain their confidence in the banking system, then they will make so much money, from those FDIC subsidized loans, I guess, that they will earn their way out of this.

It's also clear that the "stress test" was intended as a confidence building measure, whether it is justified or not.

When you look at the dictionary for the definition of "regulatory capture", the process by, "which a government regulatory agency created to act in the public interest instead acts in favor of the commercial or special interests that dominate in the industry or sector it is charged with regulating," you sill see this picture.

Great googly moogly! How stupid do they think that we are?

Who are they anyway? Maybe we can export them to Namibia.

EU Parliament Votes for Sanity

A number of copyright numnuts, in particular Nicholas Sarkozy, want the law to require ISPs to take down an account on an accusation from a license holder, but the Euro Parliament passed language saying that any take-down has to be in court:

But a battle has exploded in the last few weeks over a parliamentary amendment that aimed to prevent countries from passing legislation similar to France's ‘three-strikes' bill that would cut off internet access if users are repeatedly caught downloading music, films and other content without permission of the copyright holder.

...

France, wanting to save what has become a flagship piece of legislation for President Nicholas Sarkozy, whose wife is a pop star, lobbied other member states heavily on the issue.

...

Catherine Trautmann, the deputy responsible for shepherding the legislation through the parliament, said she was confident that the wording in the compromise meant that a court order was required before access could be cut.

French culture minister Christine Albanel meanwhile believed that the compromise meant that websurfers who had their internet access cut had a right to judicial appeal - but only after the deed had been done.

The deal unravelled on Wednesday morning however, when the full sitting of the parliament supported a late amendment 407 to 57, with 171 abstentions, re-inserting stronger language requiring governments to obtain a court ruling before access can be cut.

...

(emphasis mine)

I guess Sarko is big on this because he just knows that record distributors and movie studios are such honest and empathic people that they would never abuse this power.

This will probably push the bill into the next session, which promises to have even more consumer advocates.

Two snaps up.

Economics Update

So, the Bureau of Labor Statistics has its April employment report out, and non-farm payroll employment continued to decline in down 539,000, though this is a slower decline, and beat expectations though the unemployment rate rose to 0.4% to8.9%, a 25 year high.

Under the less restrictive, and to my mind more accurate U6, unemployment rose to 15.8%.

The picture (click for full size) shows the employment fall from peak compared with other recessions.

Meanwhile, wholesale inventories fell by 1.76%, more than the forecast of 1%, as retailers and manufacturers tried to adjust for reduced demand.

We also have some bad news in the financial industry, with Royal Bank of Scotland posting a loss after writing down risky assets, Commerzbank, Germany's 2nd largest bank, reporting an €861 million loss, and our old friend AIG posted a loss of $4.5 billion. (AIG is the gift that keeps on giving.)

Meanwhile, all the optimism over the jobs report (Whee! !he 2nd derivative is positive!)has driven the dollar down and driven oil above $58.bbl.

I Didn't Expect a Bloody Irish Inquisition!

The right to blaspheme is a basic human right. Or it should be in a modern democracy.

If your God can't take me calling him a pig felcher, then he ain't much of a God.

Of course, Ireland, notwithstanding its economic success until recently, is still very much a 3rd world nation, so the Irish Minister of Justice, Dermot Asshole Ahern, has decided to ignore the European Convention on Human Rights, and put forward a bill to make it crime, punishable by a fine of up to €100,000 to, utter or write anything "grossly abusive or insulting in relation to matters held sacred by any religion, thereby causing outrage among a substantial number of the adherents of that religion; and he or she intends, by the publication of the matter concerned, to cause such outrage".

There is no institution that needs the air let out of it than organized religion, and the right of people to do this should not be abridged.

Corruption, Business as Usual in the Financial Markets

Some times you notice something, and think, "I'm gonna have to post about it later," and by the time you do, the story has changed.

This is particularly true in corruption cases, where things move rather quickly.

Case in point, the corrupt, self dealing Chairman of the Federal Reserve Bank of New York, Stephen Friedman, who, "bought shares in Goldman Sachs in December, profiting to the tune of $1.7 million."

Ordinarily not a problem, since the Federal Reserve does not regulate investment banks, but for a little fact, that in September, the Federal Reserve allowed Goldman Sachs to become a bank holding company, and hence was regulated by the Federal Reserve, and most particularly was regulated by, you guessed it, the Federal Reserve Bank of New York.

But of course, as Yves Smith so eloquently notes, "A Conflict of Interest is Not a Conflict of Interest If It Involves Goldman," or as he said to the Wall Street Journal:

Last week, following questions from The Wall Street Journal, Mr. Friedman, 71 years old, disclosed he would step down from the New York Fed at year end. In an interview, he said he made the decision because the waiver letting him own Goldman stock and be a Goldman director expires at the end of the year. He added: "I see no conflict whatsoever in owning shares."

Except of course, as Ms. Smith notes, he bought shares in a company that he was regulating, and he did so before the waiver was approved.

This is insider trading, pure and simple.

Of course, today we see have justice, Wall Street style, as Mr Friedman has resigned, effectively immediately, from the NY Fed.

That's it. He gets to walk way and keep his money, there will almost certainly be no criminal investigation.

This is business as usual, and, yet again, all roads on corruption lead back to Goldman Sachs, the BCCI of Wall Street.

Taking these racketeers down them down must be a government priority.

Because the Political Culture is That Dysfunctional

Matthew Yglesias wonders why we have to beg the government in Islamabad to take action against the Pakistani Taliban as opposed to their begging for help, when it is clear that they are an existential threat to their government.

First and foremost, I think that the level of threat is exaggerated, but more importantly, the political culture of Pakistan is amongst the most profoundly dysfunctional in the world.

It has much to do with its founding as a nation, which was not so much born in nationalism, but British colonial tactic.

Simply put, the British maintained control in many of their colonies, particularly in what is now India and Pakistan, was to encourage ethnic rivalries, and so as movements for autonomy, and later independence, grew in India, the British authorities encouraged Muslim leaders to agitate for a separate state, which they believed would make the independence less likely.

This was followed by the war over Kashmir in 1947-8, in which the British, particularly Mountbatten, continued to meddle in South Asian affairs.

When combined with the later wars, particularly the humiliation suffered in the Bangladeshi war of independence, it left the state security apparatus, particularly the ISI, focused on one goal: to win the next war against India, and secure all of Kashmir.

This is not going to happen. India and Pakistan both have something on the order of 50 combat militarized nuclear warheads, and as such a full out shooting war would result in horrific losses to India, and something very close to the complete elimination of the Pakistani state.

Even so, there remain elements in the military, and the Pakistani intelligence service, the ISI, that remain exclusively focused on the prospect of a final apocalyptic battle with India.

As such, they support extreme Muslim fundamentalists on both sides of the border with Afghanistan, even though these are the same people who are a threat to the stability of the state, because they believe that the conflict with India is the primary focus of the state, and that by supporting these the Taliban, they can minimize India's influence in Afghanistan.

Personally, I think that it's nuts, and a does much harm to Pakistan, but that is what the mind set is.

Mustard?

Great googly moogly!

Commercial Real Estate Crash Hitting

With commercial mortgage delinquencies hitting an 11-Year High, (H/TCalculated Risk) the records only going back 11 years, we are starting to see what might very well be a worse crash in commercial real estate than we saw in housing, because typically, CRE mortgages need to be refinanced every 5 years.

Additionally, we have a report from Deutsche Ban suggesting that ²/₃ of loans backed by mortgage backed securities (CMBS) will not be able to be financed if they come due between now and 2018.

While CMBS are only about ¼ of this market, it's not unreasonable to assume that we could see similar numbers in the same range for other forms of financing, as the property remains under water.

Even if that number is only 20-30% of outstanding commercial markets, we are looking at a death spiral that will make the housing bubble pop look tame.

Just So You Know, There Are No Grown-Ups In Charge

Alan Grayson (D-FL) questioning the Inspector General for the Federal Reserve, and it appears that no one is in the process of reviewing any Federal Reserve activities.

Un-dirtyword believable.

The Federal Reserve needs to be reformed and made more transparent.

I don't know of any specific allegations of corruption, but when you are seeing 9 trillion in transactions, and not even the attempt to see what is going on, I cannot imagine that someone out there is not lining their own pockets.

More Evidence that the Fix Was In on the Stree Tests

As Peter Boockvar observes, they can raise the capital through a simple accounting trick

Considering that they’ve already received $45b in preferred stock from the US taxpayer, an accounting maneuver of converting that to common can, Voila, cure their capital needs without raising a penny of new money, a move that even the magician David Copperfield would be in awe of.

Just delightful.

Everyone gets a gold star, and all the test takers are cheating.

Tom Ridge Not Running for PA Senate

I don't think that he could have won the primary anyway, but this puts former head of the Club for Growth Pat Toomey in the driver's seat for the 'Phant 2010 PA Senate Nomination.

Also, considering that Toomey is a very heavy duty wing-nut, it puts whoever wins the Dem primary at a substantial advantage in the general election.

I even if I thought that a primary contest would make it more difficult for Dems to hold the seat, and I don't, I just cannot see a decent candidate losing in Pennsylvania if they don't screw it up.

Economics Update

I think that we have some promising news here, though, eternal bear that I am, believe it to be a pause rather than the start of a turn around.

That being said, first time jobless claims fell, as did the less noisy 4 week moving average (see pic), which makes 4 weeks for the 4 week moving average, though continuing claims rose 56K to 6.351 million, indicating that this might more that businesses are running out of people to lay off than people are being rehired.

That being said, the fact that the April retail sales numbers beat expectations is just generally good news.

I'm not sure, however, how they managed to beat expectations, what with consumer credit dropping a record $11.1 billion in March, which indicates that the consumer is retrenching.

My guess is that this is an artifact of tax refunds.

In Europe, we have the Bank of England holding rates steady and the ECB cutting rates by 250 basis points (¼%), and both have expanded their programs of "quantitative easing" (printing money).

These actions were not particularly aggressive, which meant that the dollar Euro, because they are simply less likely to debase the currency as much as Uncle Ben (Bernanke).

The concerns about the US money supply are also finding their way into the US Treasuries market, with interest rates on the latest bond sales exceeding expectations, because investors are worried about monetarily driven inflation.

Still, reading the tea leaves on real estate, things are not going well, with delinquencies on dues to homeowners associations, which tend to foreshadow mortgage defaults, growing rapidly from 2.8% last June to 5.3% today.

Additionally, you have condo and apartment sales in Manhattan declining precipitously, with sales falling 48% year over year. (!)

The fact that mortgage rates are trending higher is not a help here.

In the world outside of real estate, the transportation based indicators are not showing any sign of recovery either, with Suez Canal April revenues falling 22.7% YoY.

Still, oil traders are betting on increased demand for oil, which translates into increased economic activity, and so crude rose today.

Gee, This is Credible

The BJP is saying that if the US rescinds a tax break used to outsource workers that they will remove India from the nuclear deal with the US, and buy their civilian reactors from the French.

Note that the tax break subsidizes shipping jobs from America to India, but then again, as the spectacle of appropriations bills and the agriculture bill show, everyone wants their subsidy.

Of course, the French don't subsidize outsourcing software and support to India, and the number of Francophones is relatively small in India, so the couldn't move much business there if they tried.

Additionally, the BJP, the Hindu Nationalist (or as I like to call them, Fascist) Party is not the party in power, that's the Congress Party, though there is a campaign ongoing.

It's electioneering, and means nothing, though if I were Barack Obama, I would call their bluff.

It would not even effect the nuclear industry for the next few years, as lead times are very long for such projects.<sup>*

*</sup>Full disclosure, I did work for a brief time in the nuclear industry last year, on plant shutdown and cleanup of waste.

More Info on the Georgia Mutiny

Well, I asked for background on the Georgian mutiny, and I just got it.

This wasn't a coup attempt. This was a mutiny in the classic sense of the term, with an armored brigade (!) being ordered to take action against peaceful demonstrators, and the commander, Colonel Mamuka Gorgiashvili, with, one assumes, at least the tacit the consent of his subordinates refused to deploy against peaceful protesters.

He defied orders and remained in barracks.

This is probably significant, the state security apparatus has been a bulwark of Saakashvili rule, but it is by no means an attempt to disrupt the NATO maneuvers or a coup.

It's Official, the "Stress Test" Was Just Theater

We are getting reports now of what Timothy "Eddie Haskell" Geithner's stress test has determined, and it's clearly not reality.

Bank	Needs Capitalization	Amount
Bank of America	Yes	$34 B
Wells Fargo	Yes	$15B
Citigroup	Yes	$5B
Morgan Stanley	Yes	$1-2B
Goldman	No
MetLife	No
JP Morgan Chase	No
Bank of NY Mellon	No
American Express	No
Capital One	No
BB&T	No

This is a damn joke.

You have one "oh my God" number, for Bank of America, and it's about 50% of their market cap, but Citi, which is clearly in much worse shape is somehow better capitalized by a factor of 6.

This is simply not true, even after BoA's disastrous acquisition of Merrill Lynch and Countrywide.

Also note this joint statement from the Treasury Department, Federal Reserve, FDIC, and Office of the Comptroller of the Currency, which, to my untutored eye, appears to say that they are going to go with their cockamamie scheme to claim that capital is increased by swapping preferred for common stock.

It's an accounting trick, and what's more, it's one where the taxpayer has just taken a second haircut.

They are making great theater by pretending to talk tough and giving a month for the banks that need to to present a plan to raise capital, and 6 months to have this plan in action, but it's all a lie, since the plan may very well be, "suck on this, taxpaying rubes".

I disagree with former IMF chief economist Simon Johnson's analysis, which is that they are selectively leaking to create confusion in order to keep people from looking at whether the test was too hard on the banks.

I think that his analysis is incomplete. The "stress test" begins and ends with public relations. It's a sham, and it has always been a sham, intended to show that the government was serious about reigning in the big banks, without actually engaging in the necessary actions, like seizure of insolvent institutions that would actually be required for it to work.

Maine Governor SignsSame Sex Marriage Bill Into Law

Another win for civil rights.

Economics Update

Surprise, surprise, the press is noticing that foreclosures are no longer just some sort of phenomenon effecting poor people who got subprime loans:

Chuck Dayton put down a quarter of the $950,000 purchase price when he bought his house in Newport Beach, Calif., in 2004. He was making $500,000 a year with his drywall company and he expected home values to keep rising.

Then the mortgage market collapsed, new construction stopped and builders no longer needed his services. Dayton, 43, went into default four months ago because he couldn’t afford payments on the three-bedroom home, located within a block of the Pacific Ocean. He hopes his lender will agree to sell the seven-year-old house for less than he owes to avoid a foreclosure.

This is then followed by a a number of refis to take out equity, and a negative amortization loan.

A bubble market, with toxic products feeding the frenzy. No wonder Zillow dot com just completed a survey showing that ¼ of home owners are under water.

Even those who followed the old rules, 20% down and 30 year fixed, ended up buying into the appreciation story, with refinancing and exotic mortgages creeping into their home values.

And while fear fear has temporarily put a halt to the worst excesses, the declining job market, continues to mean that these people will stay under water.

The most recent reports, private ones from payroll check processor ADP, and the rather Dickensianly named outplacement firm Challenger, Gray & Christmas, don't show a turnaround, though in a classic bit of journamalism, the fact that private sector employment fell by 491,000 is somehow good news.

Meanwhile in currency, the dollar weakened slightly, largely on uncertainty about both what the ECB will do the Euro rate, and the results of the banking stress test (more on that later).

In energy, both oil and natural gas were up, oil to a 5 month high, and the largest single day increase for natural gas in 2 months.

Stress Test Leaks: BoA In Trouble, Whither Citi?

Well, the rumors are out there, and the latest is that the test will report that Bank of America needs $34 billion in additional capital.

Bank of America 3 Month Share Price

(By way of context, BoA is trading at about $11½ with a market cap of $74 billion, which means that it needs to sell new shares roughly equivalent to half of its outstanding ones in order to properly capitalized by the standards of Timothy "Eddie Haskell" Geithner's Treasury Department.

Note, of course that this is based on their so called "worst case" stress test, which is already more optimistic than what we have seen in the past 3-4 months.

Citi 3 Month Share Price

That being said, if the numbers are bad for BoA, they must be truly horrific for Citi, which is generally considered to be in the worst shape of the big 19 banks, which has been trading at about $3½, with a market cap of 19.2 billion, and if they need to raise anything near to 30 billion, they will be back in penny stock land for good.

I would also note that if these numbers are accurate, and they might not be, I think that the indications are that the stress test was conceived to make sure that everyone "got a gold star," which would make reality even more alarming.

(click pictures for full size)

It Ain't the Crime, It's the Coverup

Barack Obama promised that the people who engaged in torture at the CIA would not be subject to prosecution, but it appears that this guarantee will not apply to people who actively destroyed evidence of torture:

When president Obama decided to release the Bush-era Justice Department's interrogation memos last month, he tried to calm an anxious CIA by publicly declaring that operatives who "reasonably" relied on them would not face criminal prosecution. But agency officials still have plenty to worry about. Despite Obama's assurances, a Justice Department special counsel is quietly ratcheting up his probe into a closely related subject: the CIA's destruction of hundreds of hours of videotape showing the waterboarding of two high-value Qaeda suspects. At the same time, a Senate panel is planning the first public hearing dealing with CIA interrogations, including testimony from a star witness: Ali Soufan, the former FBI agent who vigorously protested the questioning of one of the detainees, terror suspect Abu Zubaydah.

....

You can see my old post on this here.

Interestingly, these tapes were destroyed when both Congressional investigators, and a Federal Court Judge were demanding information of this sort.

While no one may go to jail for the torture, it is likely that some people, Michael Hayden, Porter Goss, and Jose Rodriguez who was the director of the CIA's operations directorate.

In a way, this might be better, because their defense against torture is protected by the OLC memos, as flawed (garbage really) as they are, but they did not receive an OLC memo to obstruct justice and destroy evidence.

There is a Context in Georgia

But I am not sure what it is, so the report of a tank battalion mutinies in Georgia is concerning, but I do not know what it means.

I still believe that the Russians have thoroughly penetrated the Georgian state security apparatus, so I don't see this as being part of a Russian backed coup. It would have been more extensive and better organized if it had.

It is likely, however, that the Russians were aware of what was going on before the Georgians, and certainly they view the events with no small amount of schadenfreude, but I think that whatever happened here had a lot more to do with what is going on in Georgia than with Russia.

That being said, I have yet to see anyone, anywhere give more specifics than, there was a mutiny, and the Georgians accused the Russians.

Perhaps there is something to be found on Georgian or Russian language sites, but I can't read either tongue.

My guess would be that there are elements in the Georgian military not happy with the NATO exercises, but that is only a very uninformed guess.

Former Bush Officials Work to Soften Ethics Report on Interrogations - washingtonpost.com

It looks like the Justice Department's ethics report on the torture memo authors will not recommend a criminal investigation, but it will recommend disciplinary action by the local bar associations, and this has Bybee, Yoo, and Bradbury are doing the level best to use whatever connections they have to make the report milder.

I do hope that this will bet both of them disbarred, but I think that a criminal investigation is really in order, but these folks are merely the sociopaths (Yoo) and careerists (Bybee and Bradbury) who could be reliably counted on to ignore the law in drafting the memos.

We need to work this up the chain, which will doubtless expose obstruction of justice by higher-ups.

For the good of the country, Cheney and Rumsfeld need to spend the rest of their natural lives in jail, so that people inside the DC Beltway stop thinking that rules do not apply to them.

Senate Democrats Define "Loyal Democrat"

Well, Arlen Specter just got pwn3Ð (owned) by the Democratic Senate caucus, which denied him seniority.

I don't blame Specter for the joke about wanting Coleman to win, but the idea that he would get full credit for his seniority rankled the people who were a few years behind him, and then on Sunday he said that he would not be a loyal Democrat on MTP.

Notwithstanding Harry Reid's reported promise that Specter would keep his seniority, the Democratic caucus had other plans on this.

I am not sure who is more amused by this, Republithugs, or Democrats.

Ummmm....It's a Fracking Joke!

In an interview in New York Times Magazine, Arlen Specter is quoted as saying that he supports Coleman in the Minnesota Senate race.

Here is the full context:

Q: With your departure from the Republican Party, there are no more Jewish Republicans in the Senate. Do you care about that?

A: I sure do. There’s still time for the Minnesota courts to do justice and declare Norm Coleman the winner.

Q: Which seems about as likely at this point as Jerry Seinfeld’s joining the Senate.

A: Well, it was about as likely as my becoming a Democrat.

It's a joke....It's not a good one, but it's a joke.

As a comedian, well, he's no Al Franken.....Come to think of it, as a Senator, well, he's no Al Franken....

Economics Update

Well, here's a big surprise, credit card delinquencies are up.

Truth be told, this is a lagging indicator, seeing as how closely it is tied to unemployment.

I would note that so called "marginally attached workers," which is workers who are still looking for work, but are no longer looking hard enough to be counted, has risen significantly, see pic.

Then again, remember the increase in construction spending I mentioned yesterday?

Private construction spending actually fell slightly in March so the increase I was stimulus spending.

Also, note that the Institute for Supply Management’s index of non- manufacturing businesses, basically a measure of activities in the services, fell in April, albeit at a slower pace than the past few months, so you can decide whether the glass is half full or half empty.

We have another retailer filing bankruptcy, this time Chapter 11 reorg,
Filene's Basement.

Here's one for nostalgia's sake, another monoliner insurer has been downgraded, Fitch cuts Assured Guaranty from AAA to AA, which means that their insurance, which basically leases out their credit rating, is done.

We have more evidence of credit loosening though, with the
LIBOR falling below 1% for the first time ever for overnight interbank loans.

I'm not sure if this is confidence in banks, or confidence in government bailouts though.

In currency, the dollar gained vs the Euro, largely on the expectation of an ECB rate cut, which in turn is based on the largest drop in European producer prices in over 20 years.

Oil is down on reports of large inventories.

Why Primary Arlen Specter?

Because he's just switched parties, and he is already running against the Democratic party, when he said, "No. And you misquote me, David. I did not say I would be a loyal Democrat. I did not say that. And last week, after I said I was changing parties, I voted against the budget because the budget has a way to pass health care with 51 votes, which undermines a basic Senate institution to require 60 votes to impose closure on key issues. …I did not say I am a loyal Democrat," on Meet the Press this Sunday.

Arlen Specter has been, and continues to be, primarily all about Arlen Specter.

It should be noted that there has already been some pushback on Specter by the Senate Democrats, who are angry enough about Harry Reid's promise that Specter be given his full seniority that the Senate Majority Leader was forced to backtrack from that promise, instead saying that the status of Specter's seniority is up to his colleagues.

Airbus, Boeing Open Rotor Ideas Diverge

It appears that both while Boeing and Airbus are looking at "open rotor technology:, they are moving in different directions (paid subscription required), with Boeing focusing on an on-wing tractor propeller, and Airbus looking at a fuselage mounted pusher propeller. (shown)

Seeing as how air flows the same way on both sides of the Atlantic, the questions is what the differences are in their requirements.

Based on my rather uneducated gut, my guess is that a pusher system, at least one with a the tails arranged as shown would be quieter, because the tail structure masks the prop noise to a degree, and that the tractor propeller on the wing would be more efficient, because the it would be in less turbulent air.

Additionally, the airflow over the wing from the puller props might marginally improve short field performance.

Any thoughts?

Completely Not Surprised

It turns out that KBR contracts constitute the "vast majority" of fraud referrals in Iraq.

To refresh your memory, it used to be a part of Halliburton, which paid Dick Cheney before, and during, his stint as Vice President.

Hoocoocanode?

I Hope that They Are Lying

the Chrysler creditors, the ones who pushed the automaker into Chapter 11, are claiming that the White House threatened the reputations of the firms involved in order to get them to accede to their demands

In an interview with a Detroit radio host, Frank Beckmann, Mr. Lauria said that Perella Weinberg “was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight.”

I hope that the WH was threatening to destroy the reputations of the firms involved.

Shame is a legitimate tactic to coerce cooperation, though the idea that Obama would use the, "full force of the White House press corps," is absurd on its face.

Now to start playing hardball with Goldman Sachs.

Obama to Go After Offshore Tax Havens

This is actually a very good idea, see also here.

Of course, you will hear a lot of hand wringing about "free trade," and "global competitiveness," but the real reason that there will be objections is because these folks believe that only the little people pay taxes.

Personally, I would go further, and label the worst of them as money laundering nations, which is what they are, and forbid US banks from doing business with them.

Getting Old

OK, so I am now firmly in my late 40s, and I've been putting my glasses on my forehead for close work for about a year, and it's time for me to get a new prescription, and I got bifocals.

Presbyopia catches up with us all.

In any case, the lenses are of the no line variety, and I'm still adjusting (I think that they may have gotten my left (dominant) eye wrong.

Economics Update

We have some good news in real estate, with pending sales of existing homes posting their first back to back increase in almost a year, and construction rose unexpectedly.

Note however, that the pending homes sales numbers are for homes going into contracts, and has been diverging from closings lately, largely because of financing issues.

I'm a bull, and Yale economist Robert Shiller, of the famed Case-Shiller real estate index, is somewhat bearish too, saying that the improvements in real estate are "fragile".

Sometimes, markets pause for a breath on the way down, just as they do on the way up.

That being said, the lending situation does seem to be loosening up, as spreads are falling, which means that money is cheaper.

Still, banks are predicting more loan losses from the economy contracting according to a Federal Reserve report.

Meanwhile the generally good news has driven oil up, on the expectation of increased demand, and driven the dollar down, as people leave the safe haven of the $US.

39 Years Ago

L'Affaire Harman: In Which a Journalist Accuses the Bush Administration of Law Abiding

I've been following this for some time, and now we have a credible explanation from Laura Rosen as to why a further investigation might have been quashed by Alberto Gonzales, that you did not break the law until Dick Cheney and His Evil Minions^™ told you to break the law:

3. Did Goss no longer have authority to certify the FISA Warrant when the call in question happened? The Time 2006 magazine piece on Harman coming on the radar in the Aipac case says that the tapped conversaation in question in which the possible alleged-by-some quid pro quo occurred was in "mid 2005." A former intelligence official familiar with the matter told me that Goss had certified a FISA warrant to target Harman based on that intercepted communication, but didn't know exactly what time it had occurred.

But a former intelligence community source tells me that DCI Goss no longer legally had the authority to certify FISA warrants at all beginning January 1, 2005 when the law creating the Office of the Director of National Intelligence went into effect. So if Goss did try to certify a FISA warrant to target Harman in 2005, sources tell me that would be unkosher at best, and legally suspect. That authority was no longer in the Director of Central Intelligence's hands and had gone to the Director of National Intelligence.

(Emphasis original)

The idea that the Bush White House was paranoid about various players pursuing their own agendas is not hard to believe, since both paranoia and ignoring the law was SOP for them, and they would naturally assume that everyone else would do the same.

On a note regarding the coverage of the coverage, it gets more interesting.

BTD at Talk Left notices that Jeff Stein who broke the Harman wiretap story for CQ, threw a hissy fit over suggestions that he was spoon fed self-serving leaks from Porter Goss's staffers when he was in Congress and the CIA, aka the "Gosslings".

Of note is that he complains about Ron Kampeas at JTA, and Laura Rosen at Foreign Policy magazine, but studiously ignores Zachary Roth at TPMMuckraker, who actually lists the most prominent "Gosslings":

• Patrick Murray
  
• Jay Jakub
  
• Michael Kostiw
  
• Merrell Moorhead

Who are a veritable rogues gallery of weirdness, as Roth makes clear when he notes that, "It says something about this crew that perhaps the best-regarded of them [Michael Kostiw] had his career derailed for shoplifting pork products."

Stein does not deny that they are his sources in his rant, and given his studious avoidance of the article that names the "Gosslings" even while not outing them, it certainly reasonable to conclude that one of his major sources, and more likely most of his major sources for his initial story, are these "Gosslings".

That being said, the problem with what appears to be ass covering and political vendettas is that there appears to be no way that they can all lose.

As Atrios notes when he rightly excoriates Harman for her new found discovery of the potential for abuse of surveillance, there are no good guys here:

The absurdity is obvious. Dirty f@#$ing hippies like me were horrified at the illegal warrantless wiretapping program and general expansion of the surveillance state in part because of the potential for political abuse (frankly, given the rubber stamp FISA court and rubber stamp Congress what other point would there be?). Jane Harman and her pal Joe Klein heaped scorn on dirty f@#$ing hippies for such crazy views. Harman gets caught up in what appears to be a perfectly legal wiretap not aimed directly at her, though the release of the details of it might be evidence of the kind of political abuse possible in any surveillance program. Suddenly Harman is a staunch defender the right of People Like Jane Harman to not be wiretapped.

(@#$ mine)

"Stress Test" Results Delayed

They were supposed to be announced tomorrow, but the results will be delayed until Thursday.

A delay means bad news. If it had been good, Geithner and Summers would already be crowing about it.

Also note that Austan Goolsbee is saying that the delay is, "A disagreement by banks over the results of the tests," which also implies bad news, because the bankers would never object to an overly optimistic projection, which would make them money off their stock options.

Additionally, it seems to me that the reports themselves will be rather sketchy, with important details not being made available to the public.

Denmark Delays Fighter Purchase

It looks like their decision on an F-16 replacement has been pushed to the fall, to allow the formulation of a new National Defense Strategy (basically a budget white paper).

The competitors are the JSF, F/A-18, Gripen, and my guess is there are a number of reasons here, that they want more time to get firmer cost figures on the JSF, which seems to get more expensive daily, and see if they can afford it, and they see the the delay to extract price concessions.

I think that a lot of countries, like Denmark, which were likely JSF buyers, are looking at the numbers, and getting sticker shock.

Chinese Move Aircraft Carrier, Possibly for Refit

The partially completed Soviet aircraft carrier Varyag was sold by the Ukraine to China a few years back, and it was thought that it would be converted to a casino.

Well Galrahn came across photos of the ship being moved across the Dalian shipyard in what appears to be a prelude toward bringing the hull up to operational standards.

My guess is that it will never see operational service, but that it will be used for training and development of an indigenous carrier capability.

Another Deep Thought

I was waiting in line for a roller coaster at Hershey Park, and thought, "I forgot my chess board......damn."



Link

Posted via mobile phone.

My Bad

On my last bank fail post, I listed the total number of bank failures this year at 28. This in error.

That number is just those banks closed by the FDIC, and I got it by totalling their Full list.

If you go there, and click on the most recent closing, it gives the current tally, which is 32 for the year.

Additionally, I neglected to mention the significance of the failure of Silverton Bank.

Silverton Bank was a large institution, providing services for other banks, about 1500 of them, not consumers.

It was a clearing house for payments, credits, and it repackaged loans among multiple banks.

As such, this may trigger further bank failures.

Posted via mobile phone....While in line for a roller coaster at Hershey Park.

Israeli Firms Unveils Small Cargo UAV

Urban Aeronautics is now showing its 'Fast Mule' ducted fan UAV.

It's supposed to exceed 250kts and it is, "is 20% larger and 50% heavier," than the MULE UAV, which (from the UA Website) has a payload of about 750 lbs, so I'm guessing that this aircraft's payload is in the ½ ton range.

It looks wicked neat, though.

Gripen NG Going With Swash Plate AESA Radar

While there are a number of advantages to AESA radars, including reliability, flexibility, range, and low signature, there are also disadvantages, most notably cost, weight, and look angle.

An AESA radar will typically offer inferior performance at significant angles off boresight, and a narrower field of view.

It appears that SAAB is following Eurofighter's lead, and will offer a swashplate AESA radar for Gripen NG (see picture), in partnership with Radar supplier Selex, offering a "scan angle of up to 100°" (off boresite).

This should address one of the concerns of potential customers, though there is still the whole "chicken-egg" thing, where the customer does not want to be the only foreign customer for the system, or support and upgrades become prohibitively expensive.

SAAB's brochure is here. (PDF)

NASA Head is So Far Up It's Ass it Resembles a Klein bottle

Remember that permanent moonbase that NASA has been pushing for the past few years????


OOPS!! just kidding!

After four years of bold talk about focusing its return-to-the-Moon programme on a permanent international outpost at the Moon's southern polar Shackleton crater, NASA now suggests its plans may stop at less ambitions Apollo-style sorties.

Seriously, it appears that NASA looks at its long term goals with the same seriousness as your average LOLKat on a catnip binge.

As I've said before, these are people who let Star Trek inform their decisions way too much.

AFRL Develops Directional Fusing for A

The Air Force Research Laboratory (AFRL) is looking at fuses and configurations that would allow a warhead to direct the bulk of its shrapnel toward the target, as opposed to distributing it more or less evenly in all directions.

This intended to be a part of the Joint Dual-Role Air Dominance Missile (JDRADM), a missile intended to replace both the AMRAAM AAM and the HARM ARM.

I'm a bit dubious of packaging both of these roles into one missile, but the fusing and warhead tech here looks promising.

Russia: Turkey Seeks To Buy Air Defense System - Defense News

About 7 months ago, I noted that Turkey was looking to buy Russian SAM Systems.

We have another report , and this adds the S-400 (NATO Code Name SA-21 Growler) to the list.

It is arguably the most capable SAM system in the world with a range in excess of 400 km, and a sophisticated control system that may allow for some anti-stealth capabilities through sensor fusion and data processing, along a significant anti-missile capabilities, which might very well provide coverage from something fired from Iran.

What is interesting here is that the story is not that the manufacturer is saying that Turkey wants the system, not that a contract has been inked, and the system has yet to be exported, and I am not sure that if I were Russian authorities, I would want a NATO ally, who would be very likely to pass along data on this system to the US, to get their mitts on this.

Air Force Clueless Over UAVs

And this is a deep cultural problem, not a simple case of a penny wise and pound foolish mistake.

What is going on is that both the Army and the USAF operate models of the Predator drone, but the Army's loss rate is much lower because the USAF has refused to incorporate an auto-landing system on their UAVs:

Outgoing Pentagon acquisition czar John Young sharply criticized the Air Force today in his last meeting with reporters, saying the service had refused to budget for auto-landing gear for Predator UAVs even though the Air Force has lost a substantial portion of these to landing accidents. The new undersecretary of defense for acquisition, technology and logistics, Ash Carter, was sworn in this afternoon.

Young said the Air Force has lost one-third of the 183 Predators it has bought, and one third of those have crashed because of ground control issues. (Young’s spokesman, Chris Isleib, later sent an email to reporters slightly changing the numbers. “Since 1994 the Air Force has procured 195 Predators. 65 have been lost due to Class A mishaps,” he said.) Isleib added that of the 65 mishaps, 36 percent are laid at the door of human error and “many of those attributable to ground station problems.” About 15 percent of the total was destroyed during the landing phase, Isleib clarified in his email. (For a very human and honest portrayal of the difficulties of flying a Predator, catch this briefing by a NASA pilot who has flown them.)

Young said he told the Air Force to “move as fast as possible to auto-land.” A clearly irritated undersecretary of defense for acquisition, technology and logistics told reporters “it will not surprise you that the Air Force is resisting this.” No cost estimates are available yet for equipping the Predator fleet with auto-land.

Young drew a sharp contrast with the Army’s Shadow UAV, saying it had lost very few aircraft to landing mishaps because it possesses auto-land capability.

What is going on here is a calculus that is very close to the USAF's raison d'etre.

The air force is about pilots flying things, and pilots land what they fly, so if you add an auto-land system, then why do you need a pilot, as opposed to some sort of weapons system operator, who might *gasp* even be an enlisted man.....horrors!

Another example of why spinning off the USAF as an independent service has not served the military, or the taxpayer, well.

Friday Night Bank Failures

28 so far this year.

America West Bank, Layton, UT

Citizens Community Bank, Ridgewood, NJ

Silverton Bank, N.A., Atlanta, GA

Full FDIC list.

Oh, we also have a German bank, Hypo Real Estate (HRE), that specialized in loans to developers being nationalized by the German government, albeit in a confusing, slow motion sort of way.

And finally, there is Accredited Home Lenders Holding Co., a San Diego, California based mortgage banker filed for Chapter 11 bankruptcy, listing debt of as much as $500 million and assets of less than $50 million.

Lol Flu

A Note on Comments

I see the comments as primarily a service to my reader(s).

As such I use a light hand, pretty much only deleting obvious spam.

As such, opinions stated in the comments are ENTIRELY those of that specific commenter.

Posted via mobile phone.

H1N1 "Swine Flu" Virus Electron Microscope Image

Deep Thought

The juxtaposition of a cat, an old sock filled with Catnip, and a fishing poll with something dangly on it can provide the opportunity for almost limitless amusement.

Update on Goss, Harman and AIPAC

First, Laura Rosen has a convincing, but not definitive account that the wiretap of Harman was part and parcel of a hit job by Porter Goss and his "Gosslings".

Some data points:

• It appears that people are arguing that Gonzalez backed off the investigation of Harman almost a year after the the New York Times had published its story on the wiretaps.
• The leak of this information to Time Magazine in 2006 came 3 days after Harman released a report under the auspices of her being the ranking member of the House Permanent Select Committee on Intelligence (HSPCI) on the Randall "Duke" Cunningham affair, and both Goss and his "Gosslings" frequented Cunningham's booze and prostitute laden soirees:

Indeed, my read of a more recent CQ piece about then DNI John Negroponte also telling Goss not to brief the House leadership about Harman caught on the wiretap is that Negroponte was also trying to shut down what he thought was a rogue effort to pursue investigation of Harman. One now wonders if the reported Negroponte-Goss tensions that ultimately ended in Goss being forced to resign were also fueled by his concerns about Goss's and the Gosslings' actions on the Harman matter, and not just the Foggo matter. As we now know, by the way, the Foggo matter is not at all unrelated to the Cunningham case and the HPSCI report that Harman released. Remember: Foggo got the number 3 job at CIA because Goss's staff recommended him to Goss. Indeed, many members of Goss's staff had played poker with Foggo and the Cunningham case defense contractors for years (remember the Watergate poker parties?). And my understanding is that when Goss was chairman of HPSCI, Foggo had served his staff as a kind of mole against Tenet and other suspected-unloyal-to-Bush types inside the CIA. So Team Goss and the Gosslings had reasons to squirm when Harman released that report. I need to check when the Foggo indictment actually came down, but I don't believe he was indicted yet at the time Harman released that report in October 2006. So that case against Foggo and the wider Cunningham investigation still moving may have unnerved people in Goss-land for multiple reasons when Harman released that report.

....
October 2006 is one month before the midterms when the Democrats would retake the House. And with the Democrats expected to win, who would get the chairmanship of HPSCI would have been a live issue for those who cared about these things, including about what kind of oversight even of past actions at CIA might have occurred. Oversight - and in particular Democratic-led oversight - that might have included looking into actions taken during Goss's tenure as CIA director from 2004-2006. That tenure included, as Marcy Wheeler has pointed out, the CIA's destruction of videotapes recording harsh interrogations of terrorism suspects -- which Harman may have been briefed about. The episode is serious - it's now the subject of investigation by a special prosecutor. Goss's tenure also included the whole Foggo corruption matter which was still playing out in 2006, indeed, which played a big role in Goss being forced to suddenly step down as CIA director in May 2006.

So it's beginning to sound like someone was going after the person most likely to investigate both the torture tape destruction and the connections between Goss staffers and disgraced Congressman Cunningham.

Most of this appears to be moot, because prosecutors are dropping the case against the AIPAC lobbyists, which is a good thing, because the precedent intended by this case was to criminalize the receipt of any classified material by an American citizen without any espionage being involved, and could be very easily extended to journalism.

Economics Update

Well, we have good news to start, with the Institute for Supply Manufacturing Index rising to 41, beating expectations, and the University of Michigan Consumer Sentiment Index rising to 65.1.

I'm not sure if this is a turn around or just a pause, since 41 is still contraction (50 being neutral for the ISM Manufacturing Index), and 65.1 for consumer confidence is well below the baseline of 100 which was set in December 1964.

Additionally, U.S. March factory orders fell 0.9%, and Japanese prices are showing deflation again, both of which mitigate against a prompt recovery.

Still, optimism on the economy drove oil to above $53/bbl.

As to the dollar, it was up vs. the Yen, and down vs. the Euro, I think largely on the bad news from Japan and the "good" news on orders and consumer confidence.

Remind Me Never to Play Poker With Barack Obama

Because that's just what happened with the Chrysler bankruptcy, as this article titled Chrysler Lenders Tried Obama’s Patience, Lost Game of Chicken shows.

They are making noises about how unfairly they have been treated:

An anonymous group of 20 Chrysler lenders calling itself the “Committee of Chrysler Non-Tarp Lenders” said in a statement yesterday that they’d been treated worse than junior creditors during negotiations in violation of “long-recognized legal and business principles.” They said they were owed $1 billion.

And they are technically correct that they are secured creditors, but their security is not equal the full value of the loans, more like 10-20% of the outstanding amount, and they are vulture capitalists who intended this shakedown in the first place, as evidence by the fact that they, "paid from 50 cents to 70 cents on the dollar for their Chrysler loans," (my money is actually on their purchasing this debt for less than 50¢ on the dollar).

Now they are whining, and they are the ones who will be taken into court and have the fingers pointed at them.

This is a very big shot across the bow for creditors for General Motors.

In completely unrelated auto news, the April sales figures are out, and they are bleak, with GM -33%, Ford -32%, Honda -25%, Nissan -38%, Hyundai -14%, Daimler -31%, and Toyota -42% year over year.

Not Enough Bullets: UK Edition

Of course, because of their strict gun laws, we may have to implant the bullets manually:

City bankers are to reap nearly £7bn in bonuses this spring even though the government has been forced to pump tens of billions into the banks to prevent them collapsing.

The good news is that this is down from its £14.1 billion peak in 2007.

The bad news is that these folks still say that they need this with a straight face.

As my British friend would say, "Fecken bollocks Numpty wankers!!"

Just in Case You are Sleeping Well

We have an enormous crisis looming in commercial real estate, because, unlike home ownership, these loans are typically for a short period, 5 years typically, and at the end of the term, you need to refinance, and right now, the property owners are under water:

Thousands of commercial mortgages valued at hundreds of billions of dollars are approaching their renewal dates, and by some estimates, two out of three no longer will meet the original loan conditions and won't be able to refinance. With prices for commercial properties expected to plunge, a vicious cycle could unfold, much as it has in the nation's housing market.

The interesting thing here is that hese mortgages could be modified by a bankruptcy judge (cram down), they are performing loans, and it's where the sensible banks did their business, which means that they will get hammered.

I see another government bailout.

Copyright Maximalists Lose One

CBS runs a fantasy football league, and the NFL, and NFLPA were threatening a lawsuit over the ownership of the statistics and player names so CBS got to court first, and won a judgment:

BS Corp.’s Internet unit won the right to use National Football League players’ names and statistics for free in fantasy sports leagues it sponsors after a judge ruled the information is in the public domain.

A federal appeals court decision in 2007 that companies operating fantasy leagues have a First Amendment right to use names and data of baseball players without paying a licensing fee applies to football as well, U.S. District Judge Ann Montgomery said in Minneapolis.

This is really basic stuff. You cannot copyright information in the United States, only unique expression or arrangement of that data, such as Westlaw's citation system for court cases.

The statistics, and the attachment of them to player names, teams, and player numbers, is simply not a unique arrangement or expression of data.

That being said, restrictions of data under an IP regime is the end goal of copyright maximalists, and would make all of society a far poorer place.