Month: March 2008

Paulson Proposed Regulatory Changes on Financial Industry

Sec. Paulson just proposed a series of changes, and U.S. Senate Banking Committee chairman Chris Dodd response call it a , “ pitch. … It’s not even close to the strike zone.”

I agree with the distinguished gentleman from Connecticut.

My analysis is that this is an attempt to make fixing things more difficult.

In proposing that the Federal Reserve have additional regulatory authority and responsibility, Paulson is trying to transfer this from executive agencies, which would follow the direction of the next president, to an independent organization which has been loaded to the gills with Bush toadies over the past 8 years.

Additionally, by putting these powers in an organization almost wholly dedicated to monetary policy, it means that other actions, either through fiscal policy (Keynesian budgets), or regulation will get the short end of the stick.

The biggest strike against this is the enthusiastic endorsement from the financial industry. If the people who f%$#ed this up in the first place like the proposed regulatory regime, it’s likely that this regime sucks wet farts from dead pigeons.

Croatia Looking at Gripen

They are considering buying 12 aircraft.

This is not surprising. The Gripen is about half the weight of its next smaller competitor among the 4th gen fighters, and you pretty much pay for planes by the pound (or by the kilo for you metric folks).

I think that the Gripen may very well be the Mirage III of the 4th generation fighters.

It’s small, it’s cheap, it’s designed for austere basing, and by all reports, its avionics are superb.

Neocons Now Going After Brits

Yes, Fredrick Kagan, an chicken hawk idiot in a family of chicken hawk idiots, is criticizing the UK over its withdrawal from Basra last year, and its determination not to involve ground troops now.

Mr. Kagan, you are 38 years old, and according to the wiki, “He earned a B.A. in Soviet and East European studies and a Ph.D. in Russian and Soviet military history, both from Yale University. He worked as an Assistant professor of military history at West Point from 1995-2001 and as an Associate professor of military history from 2001-2005.”

You are young enough to serve, and you have the background to serve. Go serve in this war you love so much.

How Barack Obama Blew the John Edwards Endorsement

I was reading an article discussing what it would take for Hillary Clinton to quit the race, and we had an interesting insight into how Barack Obama blew a possible Edwards endorsement:

In the days after John Edwards’s withdrawal from the Democratic race, the political world expected his endorsement of Barack Obama would be forthcoming tout de suite. The neo-populist and the hopemonger had spent months tag-teaming Hillary Clinton, pillorying her as a creature of the status quo, not a champion of the kind of “big change” they both deem essential. So appalled was Edwards at Clinton’s gaudy corporatism—her defense of the role of lobbyists, her suckling at the teats of the pharmaceutical and defense industries—that he’d essentially called her corrupt. And then, not least, there were the sentiments of his wife. “Elizabeth hasn’t always been crazy about Mrs. Clinton” is how an Edwards insider puts it; a less delicate member of HRC’s circle says, “Elizabeth hates her guts.”

But now two months have passed since Edwards dropped out—tempus fugit!—and still no endorsement. Why? According to a Democratic strategist unaligned with any campaign but with knowledge of the situation gleaned from all three camps, the answer is simple: Obama blew it. Speaking to Edwards on the day he exited the race, Obama came across as glib and aloof. His response to Edwards’s imprecations that he make poverty a central part of his agenda was shallow, perfunctory, pat. Clinton, by contrast, engaged Edwards in a lengthy policy discussion. Her affect was solicitous and respectful. When Clinton met Edwards face-to-face in North Carolina ten days later, her approach continued to impress; she even made headway with Elizabeth. Whereas in his Edwards sit-down, Obama dug himself in deeper, getting into a fight with Elizabeth about health care, insisting that his plan is universal (a position she considers a crock), high-handedly criticizing Clinton’s plan (and by extension Edwards’s) for its insurance mandate.

I will say that this plays into the worst perceptions of Obama, as someone who is far too fond of himself and far too confident in his charm to get people to do what he wants.

You have to be an egotist in order to run a real campaign for President, but the thing that has always disturbed me about Obama is the sense that he thinks that he is so personally awesome, and when he threw gays under the bus in South Carolina, I was wondering who is next.

At this point, I think that it is every major Democratic constituency, because he wants to show that he can reach across the aisle.

BTW, Richard Band Is a Moron

Reference my previous post.

In any case Richard Band, publisher of a well respected Wall St Newsletter is saying that the Dow will hit 16,000 by late 2008 or early 2009.

Dow 36,000 writ small, I guess, because the only way I see it hitting that number that soon (a 33% appreciation) is inflation hits 50%.

I dunno, maybe he’s banking on some sort of Bush is not the President rally, but this still makes him stupid.

More Iraq

Busy past few days.

Basically, even though undoubtedly better equipped, and possibly better trained, the Iraqi Army and Police are getting their asses handed to them, because they are completely unmotivated. Unlike the Hakeem family, the army and police really don’t like fighting for the idea of greater Iranian hegemony in Iraq, which is clearly the goal of the current government.

Sadr is the only major Shia player who isn’t in the Iranian’s pockets, but he’s the one we are targeting air strikes at.

In any case, after some It appears thatfits and starts, negotiations finally got underway, with an Iranian general brokering the cease fire which is not in effect, if only barely (see here, here, and

If you are wondering who won this, just reflect on Sadr’s terms for a truce, release of all Sadrists not convicted of crimes, and amnesty for members of the Mahdi militia.

This is a victory for him, and for Iran.

California Eschews Bond Insurers

It’s interesting how often financial reporters miss the forest for the trees.

Case in point, we have California Treasurer Lockyer telling Warren Buffet’s new bond insurance business to go pound sand.

The core of the dispute is that bond ratings agencies have low rated municipal debt as compared to commercial debt for years.

This has meant that entities like the state of California have had to buy bond insurance to get AAA rates, despite the fact that the risk of default is negligible:

“We’re selling water in a desert; we should be rated to reflect that,” said Cary Casey, who oversees bonds at the Southern Nevada Water Authority in Las Vegas that have a AA+ rating from Standard & Poor’s. Casey said he’s not interested in Buffett’s insurance. “He’s no savior.”

The first municipal bond insurance policy was sold in 1971 by Ambac. The near bankruptcy of New York City in 1975 bolstered demand for the industry, said Richard Larkin, research director at brokerage Herbert J. Sims & Co. in Iselin, New Jersey, and a former chief municipal rating officer at S&P.

New York City creditors were paid in full. When Orange County, California, filed the largest municipal bankruptcy in 1994, only one issue defaulted and no principal or interest payments were missed, according to Moody’s.

“The legalized extortion has been going on since before I became mayor of Somerville in 1990,” said U.S. Representative Michael Capuano, a Massachusetts Democrat on the House Financial Services Committee. Capuano said he was forced to buy bond insurance, even though his town of 80,000 had never defaulted and the state provided backup guarantees.

Emphasis mine.

Bond insurance to municipalities have been a protection racket for years, and not it turns out that the insurers, not the municipalities, are the ones with the problem.

I think that as we tease out the credit collapse, we will find many more examples of systemic corruption and extortion by Wall Street firms.

The FSM may be wrong, these guys are pirates, and global warming proceeds unabated.

787 Partners Reorganizaton

One of the central “innovations” of Boeing’s 787 plan was the idea of bringing in suppliers in as fully involved partners, where they would bear much of the risk, and be responsible for much of the design and engineering.

Recent developments appear to indicate that Boeing is walking away from this policy.

Boeing has just bought out Vought Aircraft’s ownership stake in Global Aeronautica, which means that Boeing and Alenia now each own half of the enterprise.

Vought will still be a supplier for the 787, particularly the aft fuselage, but their more senior role in design and engineering has been taken over by Boeing.

I expect to see more in the way of recentralization by Boeing on the 787 to come, with yet more on their next project, a replacement for the venerable 737.

Full disclosure, the CEO of Vought Aircraft, Elmer Doty, was head of my division* when I worked at United Defense/BAE Systems.

*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.

Good Politics, Good Policy on Iraq

42 Democrats are promising to submit legislation for an immediate withdrawal from Iraq if elected.

At least one of the 42, Donna Edwards, is pretty much already in, as she defeated the incumbent in the primary, and it’s one of the safest Dem seats in the country.

What needs to be done is to lean on the Bush Blue Dog Democrats.

If we see a few more “Mini-Tets” in Iraq, which I think is likely, then more people will sign on to something like this.

Torture Tapes Destruction May Prevent Fair Trials

While I’m sure that Bush and His Evil Minions think that fair trials, much like military service, are for losers, it comes as no surprise that the torture and subsequent destruction of the torture tapes is making holding something resembling a fair trial difficult.

We can’t have kangaroo courts if we expect anything but a further souring of our already toxic relations with the rest of the world, but after an orgy of law breaking and ass covering by people working in our name, it looks like kangaroo courts is all we got.