The horror….The horror
Month: December 2007
Monetary Policy Driven Inflation on Horizon
Barry Ritholtz’s The Big Picture economics blog shows us a rather interesting picture:
The “continuation” bit is there because Federal Reserve under Alan “Bubbles” Greenspan stopped reporting the statistic, saying that it was not a “useful” statistic.
Rolling the Wiki, we get the following:
- M0: The total of all physical currency, plus accounts at the central bank that can be exchanged for physical currency.
- M1: M0 + those portions of M0 held as reserves or vault cash + the amount in demand accounts (“checking” or “current” accounts).
- M2: M1 + most savings accounts, money market accounts, and small denomination time deposits (certificates of deposit of under $100,000).
- M3: M2 + all other CDs, deposits of eurodollars and repurchase agreements.
So, all the big money transfers and currency injections in the market over the past few months, they are no longer counted by the Fed, but we can see that the overall money supply is increasing at double digit rates over the past year or so.
We’ve already had nearly a trillion dollars dumped into the credit markets over the past month.
Money is being shoveled out the door to attempt to resolve a liquidity crisis. The problem is that it is an insolvency crisis, though hyper inflation may bail that out.
State Department Knew Blackwater Was Cooking Books in 2005
The State Department’s IG report in early 2005 noted that, “that Blackwater cited its profit from the contract as a cost it incurred, and billed the government for it — resulting in what the report called “a pyramiding of profit.”
This is the second most blatant bit of account theft that I have ever heard of, the first being a guy who noted change as an expense for a non-profit group called the MSR.
He did time, and so should the execs at Blackwater.
More Trouble for Anglo-Saxon Capitalism: UK Defisit Soars
The current account deficit has increased 50% to £20 billion in the 3rd quarter.
That’s double what was expected, and it is largely as a result of the credit crunch.
My take is that there were a lot of revenues generated by phony deals on phony securities, and the time to pay the piper is now coming due.
It should push down the Sterling a bit, which is one reason that my year end predictions now look increasingly unlikely.*
*There is also the fact that I can’t predict my way out of a paper bag.
On the Death of Nataline Sarkisyan
My condolences on the Death of 17 year old 19 year old Nataline Sarkisyan.
She died of liver failure resulting from complications of her bone marrow transplant for leukemia, after having a transplant denied (the decision was reversed yesterday) by CIGNA.
That being said, I do not see this indicative of the failure of the health insurance.
Let’s be clear, I do see private health insurance in the US as the primary cause of escalating health care costs, and a reduction in the availability of reasonable health care of a more basic nature.
Unfortunately, the pre and neonatal deaths from lack of prenatal care, and the injuries from things like lack of immunizations do not have faces, but they kill more, and cost us more than this one case.
In any realistic competent healthcare system, she should not have gotten a liver transplant. It was simply too expensive, and the potential to save her life, given that she had leukemia, and her immune system had been largely destroyed by the bone marrow transplant procedure.
Her case actually strikes relatively close to home to me.
From 1982 through 1987, I was actively treated for chronic non-A Non-B hepatitis*, first with steroids, and then with immune suppressants†.
Based on this, I believe that my chance of experiencing liver failure over the course of my life is significantly more than that of the general population.
I do not believe that many of these high tech interventions, and I would include liver transplantation, are an efficient or effective way to spend a limited healthcare dollar.
*I have been regularly tested since, but my numbers have been fine, and so, apart from not giving blood and having annual liver function tests, I am now unaffected by this. I’m allowed to drink.
†Basically, it was treated as an immune system/connective tissue problem, my ANA was at one point 4,000,000:1 (IIRC). It appears that my body was attacking my liver. Except for weight loss, I was asymptomatic, though the steriods (40mg prednisone) was no fun while I was on it.
There’s a New Clown Show In Town
Cynthia McKinney is running for president as a Green.
One wonders how long before the Greens tire of her antics*.
*Trust me, it takes a lot for Greens to tire of someone’s antics, but Cynthia Mckinney will be able to do it.
EPA Director Ignored Staff in Shooting Down California Emissions Regulations
Gee, the Los Angeles Times is saying that a Bush admin political appointee ignored the science and the law when making a decision??? I’m shocked at these allegationsEPA chief is said to have ignored staff – Los Angeles Times
“California met every criteria . . . on the merits. The same criteria we have used for the last 40 years on all the other waivers,” said an EPA staffer. “We told him that. All the briefings we have given him laid out the facts.”
Mass Protests as New Orleans City Council Votes to Demolish Public Housing
They will be replacing less than half the units, at something like 5 times the cost of repairing the old units.
It’s clear, the New Orleans city council wants n****rs out of the city.
Banks Starting to Worry About “Jingle Mail”
Jingle Mail for those of you who don’t know is what banks get when mortgage holders send the keys back.
Calculated Risk has an interesting post on the subject. Basically, there are a lot of people who are underwater on their mortgages because of home price drops, and even though they can still pay, renting is cheaper, and people might start to walk away from their homes and mortgages.
The folks at CR are estimating that , “somewhere between 10 million and 20 million U.S. homeowners will owe more on their homes, than their homes are worth.”.
I think that the number will be greater, BTW.
Scabs Update: The Daily Show and Colbert Report Too
I won’t be watching, and I suggest that you don’t. It’s crossing a picket line, and the only time I’ve ever done that, it was a one day strike, I wasn’t in the union, and I asked the shop steward if it was a good time to “get a cold”, and he told me that it was fine for me to come to work.
The Weakest of Denials
Dan Froomkin just made a very interesting point about Bush’s press conference:
At a year-end press conference this morning, President Bush staved off questions about White House complicity in the destruction of CIA interrogation videotapes, refusing even to flatly deny that he was personally involved.
Hmmmm…
Swedish Company Tests Hyper Velocity Missile
It’s supposed to be able to achieve Mach 5.5 at sea level, that’s about 4200 miles per hour.
The article makes the suggestion that this might have been designed to be used with a multi transmitter anti-stealth radar system. Basically, you would target the missile on coordinates, and have no terminal guidance, so a shorter flight time would reduce error from the target changing course.
It would also be a potent anti-tank weapon, relying on kinetic energy for a kill, but it does appear to be a bit large for that application, as the 45 kg CKEM and 5 foot long(see picture below) can destroy any known armored vehicle.
The Saab-Bofors vehicle appears to be at least twice that size.
Whisky Tango Foxtrot: The Dems Cave on SCHIP????
What the hell are they thinking????
They just passed a bill extending SCHIP as it currently exists until March 2009. This is acutally a cut, because Bush has issued executive orders to reduce the scope of the existing program.
I understand the extension, but they could have extended it for 3 months, or 6 months, or 9 months, and forced the Republicans to come back to this tremendously popular program, again, and again, and again.
Instead of this, which is a win-win, the kids get their insurance, and the Republicans shoot themselves in the foot, they took it off the table.
**sigh**
Hans von Spakovsky out at FEC
But so is everyone else, because the Republicans are insisting on an up or down vote on all 4 nominees at once.
This means that come January, the FEC will be unable to have a quorum to conduct meetings, but given von Spakovsky’s record, in which it appears that his entire career has been dedicated to suppressing minority votes, it’s a reasonable tradeoff.
A Must Read Book: How to Rig an Election: Confessions of a Republican Operative
Well, the continuing unfolding scandal of the 2002 New Hampshire phone jamming scandal has provided quite a lot of insight into how Republicans work, and How to Rig an Election: Confessions of a Republican Operative, by Allen Raymond, is one of the products of the scandal.
As a result of his being fingered as the fall guy for the phone jamming, he was guilty as hell (served 3 months), but he was a foot soldier sacrificed in an attempt to protect the higher ups.
First, we have a McClatchy review of an advance copy of the book, which notes that James Tobin, he former regional director for both the RNC and the National Republican Senatorial Committee (convicted and now on appeal), made 22 calls to the White House *cough* Rove *cough* in the 24 hours surrounding the phone jamming.
As soon as the investigation started, Tobin and Charles McGee, the executive director of the New Hampshire GOP, denied all knowledge, and basically pretended not to know Raymond. In the days following the election, when Raymond “when he phoned Tobin after Sununu’s 19,000-vote election victory to tell him that a Manchester, N.H., police officer was looking into the scheme, Tobin responded, ‘I don’t know what you’re talking about.'”
Also of interest is his story of the related at TPMmuckraker:
To set the scene: Raymond got a call in 2000* from two former colleagues in New Jersey who ran a consulting shop called Jamestown Associates. They were working for Dick Zimmer, who was running against Rep. Rush Holt (D-NJ), the incumbent, and they were pulling out all the stops. (Ed. Note: This post originally stated that this happened in 2002 — that was my mistake, not Raymond’s.)
They’d already succeeded in getting a Green Party candidate on the ballot to drain liberal votes from Holt (a favorite GOP trick). And they had already put Raymond’s firm to work calling Green-oriented households and urging them to support the Green candidate.
But what came next was “even better”:
[Tom Blakely from Jamestown Associates] called me up and asked, “How do you guys find voice talent?”
“Well, I’ve got a whole catalog of different voices on CDs. I’ve got ‘single Northeastern female,’ I’ve got ‘Southern belle’ — what are you looking for?”
“We’re targeting Democrats of Eastern European descent using a surname select and geopolitical filter.”
“Oh,” I said, quickly doing the polarizing-voter math in my head. “How about ‘angry black man’?”
“Yeah, that sounds good. What’s his voice sound like?”
So I cued up one particular actor’s CD on my computer and put the phone to the speaker. The track I played was one in which the actor was deliberately playing up a street gang character.
After listening for a few seconds, Blakely said, “That’s the guy!”
So we had the actor record a spot over the telephone saying, “I’m calling as a Democrat, asking you to vote for the Democratic nominee. We need your vote for Holt.”
I’m not saying that all Eastern European whites are racists, but, no matter where or when an election is held, there is a always a cultural divide that you can rely on. The message was “I’m ghetto black calling you, racist Ukrainian guy, and scaring the crap out of you because you probably think that if you don’t vote for the Democrat I’m going to come to your house and take care of some business.”
The calls were extremely highly targeted, household by household, no message ever left on an answering machine. We wanted the message heard only by people whose reaction would be “I’m not voting for Holt because he uses scary black men to call my house.”
We made calls to Democratic union households supporting Zimmer, taped by actors putting on thick Spanish accents, figuring union workers were the voters who felt most threatened by immigration. The objective was to get them to throw up their hands and stay home on Election Day. We were just forcing those people to make a decision that was true to who they really were. If you want to question someone’s character, look to the people who stayed home because of those calls.
Remember — they were Democrats; they were supposed to be the tolerant ones.
Zimmer lost the election by 481 votes and the Green Party candidate picked up 2 percent in the polls.
Seriously, if it weren’t for bigotry the Republicans would barely outpoll the Monster Raving Loony Party.
BTW, you have to love this comment by Raymond, “As for his three months in a Pennsylvania prison, he wrote: ‘After 10 full years inside the GOP, 90 days among honest criminals wasn’t really any great ordeal.'”
Eisenhower Executive Office building burns
Truth be told, it’s a ceremonial office, but this cartoon is too good not to show.
Monoliners Heading for a Crash?
This post is kind of an extension of my previous post about ACA and MBIA.
First, a definition, care of The Daily Telegraph:
Monoliners are specialist insurers who earn fees by lending their AAA ratings to US states, counties, and cities for bond issues – the safest corner of the credit industry.
The nasty twist is that most have ventured into mortgage debt to spice returns. They now face enough losses to threaten their AAA standing.
A downgrade means that every bond bearing their guarantee must be downgraded pari passu. Pension funds and institutions will be forced to liquidate sub-AAA holdings. A fresh cascade of distress sales will ravage the $2,400bn ‘muni’ market.
The unthinkable now looms. Moody’s said it was “somewhat likely” that top insurer MBIA would fall below the AAA capital requirement: Fitch warns of a “high probability” that CIFG Guaranty and Financial Guaranty will be placed on negative watch.
Does this sound familiar? It does to me.
Remember the people who were renting their credit to people with poor credit so that they could qualify for loans? It got shut down 6-12 months ago by all the major credit report agencies.
This is pretty much the same, only multiplied by about 100 million.
The forest issues is simple: a business – the monoliners’ insurance of securities and holding of risky ABS securities – that is fundamentally based on having a AAA rating is a business that does not deserve a AAA rating in the first place: it is clear to all that if a monoliner were to lose its AAA rating the essence of its business model would fail and such monoliner would have to close shop. But in any industry you have firms that can do business and thrive with an AA or A or even lower rating, even among major financial institutions. Here we have instead an industry that would go bankrupt as soon as its AAA rating is lost: by definition this is not an industry that can deserve a AAA rating. So the issue is not one of how sound these monoliners are managed or whether they have enough capital or whether they can raise new capital to maintain their AAA status. There is a fundamental and conceptual flaw in a business model that is conditional on a AAA rating and that is in a business that insures assets and firms that do not have a AAA rating. This is analogue to the voodoo finance of taking subprime and BBB mortgage backed securities and turning them into AAA by the black magic of CDO tranching.
This is not as the good Doctor Roubini admits, a painless process. This would involve losses in excess of $200 billion, but it is clear that this is a fraudulent practice, and the fact that the ratings agencies are giving these folks time to raise capital before a downgrade is merely supporting a “rotten business model”.
Steve Gilliard’s Colonial War Series
The late Steve Gilliard did a marvelous 37 part series on the history of colonial wars. Boor at Daily Kos has put together an index of his series.
It is invaluable reading if you want to understand the problems inherent in empire.
Tancredo Drops Out of Presidential Race
Mukasey Limits White House Access to Investigations
This was the policy before the tenure of Abu Gonzalez, when political operatives had unlimited access to the DoJ, and now we are back to a situation where WH operatives will not have the access exert undue political influence on ongoing investigations:
The original policy authorized more than 40 Justice Department officials and 400 White House officials to know about ongoing investigations, according to Sen. Sheldon Whitehouse of Rhode Island, a leading Democratic proponent of changing the policy.
During the Clinton administration, seven White House and Justice officials were permitted to receive such information.
Justice Department spokesman Peter Carr said Mukasey’s new policy mirrors the Clinton administration’s, but allows more officials to receive details about national security matters.
This is my first pleasant surprise from Bush and His Evil Minions&trade in a long time.