Month: April 2009

Breaking: Supreme Court Justice David Souter To Retire

This has been reported by NPR, and confirmed by NBC.

It should get interesting.

I would say that if there is a policy of Republicans to follow, it is to appoint younger justices.

If you look at recent appointments, the Republican appointments were in their early 50s (43 for Thomas), and the Dems (Bryer and Ginsberg) were 56 and 60 respectively.

This was a conscious decision, in order to maximize their tenure.

I would also add, wait for Franken to be seated, in order to forestall a filibuster.

The Best Argument for Draconian Immigration Restrictions

Alan Greenspan saying that illegal immigration aids the US economy, because he’s wrong about everything:

Former Federal Reserve Chairman Alan Greenspan said that illegal immigration makes a “significant” contribution to U.S. economic growth by providing a flexible workforce. Greenspan, appearing before a Senate subcommittee today, said illegal immigrants provide a “safety valve” as demand for workers rises and falls.

On a more serious note, look at what he is saying when you tease out the meaning, he is saying that illegal immigration is good because it drives down wages…..That’s what “flexible workforce” and “safety valve,” mean.

Alan Greenspan has always been a big fan of cheap labor.

There is no doubt that illegal immigration adds to GDP. The question is whether it contributes to per capita GDP, or the slightly more nebulous and hard to measure concept of the well being of our society.

½ of Europe’s population died during the heyday of the Black Death, and it is indisputable that the GDP of Europe was lower in the years following the Bubonic Plague outbreak than before.

What is also indisputable is that the standard of living of those remaining rose at the time, as can be seen through records of increased wages, and the frantic passage of (largely ineffective) laws intended to reign in wages and reduce worker mobility.

The end question is not what our immigration policy should be, but rather what should our society look like, and how to we create an immigration policy most consistent with our professed values that creates this society.

To my mind, this is best addressed by extremely aggressive laws targeting employers who deliberately or negligently hire illegals, and not by harsh measures taken against desperate economic refugees.

The Big Banks Own the Senate

And they do their master’s bidding and kill a cram down amendment, which would allowed bankruptcy judges to adjust mortgage principal for primary homes much in the same way they do for vacation homes and commercial property.

15 Democrats, including newly minted Dem Arlen Specter, voted for banks, and against American families.

The house passed a bill with cramdown, and Pelosi has been insistent that it be included, and conference reports, and this will now go to a conference committee as the bills are different, are not filabusterable.

Here’s hoping that ordinary people win.

Auto Industry Update

Well Chrysler had gone Chapter 11, because of the unwillingness of a number of the smaller creditors to negotiate in good faith.

Those folks are actually better described as hedge funds, and knowing how hedgies work, they doubtless bought debt at a discount for the express purpose of holding it for ransom.

Here is hoping that the BK judge cleans them out.

Meanwhile, back in GM land, its bondholders have made a counter-offer, wanting a 58% stake in the firm, as opposed to the 10% stake offered, so there is a big gap to bridge there too.

Economics Update

To initial jobless claims fell to 631,000 this week, down 14,000 from the prior week, though continuing claims rose by 133,000 to 6.271 million, another new record.

More generally, both personal income and personal spending fell.

We also have the Institute for Supply Management’s Chicago Purchasers’ Index for April rising to 40.1, though this still indicates contraction, just slower contraction, as 50 is the neutral point.

Additionally, mortgage rates are essentially unchanged over the past week. remaining near historic lows.

The markets seem to be anticipating an improvement in the economy, which has pushed oil up and the dollar down, which I think means nothing, but the folks who run those predictive markets rather like.

Now Winston Churchill is a Commie and a DFH*

Because, as Obama noted in his presser, Churchill opposed torture

Obama responded by pointing to the example from the Blitz: ‘I was struck by an article that I was reading the other day talking about the fact that the British, during world war two, when London was being bombed to smithereens, had 200 or so detainees. And Churchill said ‘we don’t torture’, when all of the British people were being subjected to unimaginable risk and threat. And the reason was that Churchill understood you start taking shortcuts, and over time, that corrodes what’s best in a people. It corrodes the character of a country.’


*Dirty f%$#ing hippie.

Zimbabwe Update

Not a whole bunch of movement, just updates such as the fact that the Zimbabwe Central Bank (RBZ) took money from private bank accounts, and that Finance Minister Tendai ordered parliament members who received cars from the RBZ to return them immediately.

It’s probably a prelude to the bank chief’s firing.

There is some relatively bright economic news with gold mining companies restarting operations after the government said that they could sell gold directly on the world market, which cuts off an avenue for Mugabe to pay off his associates, and the UK has pledged $21 million in humanitarian aid, and its African neighbors have pledged $400 million in credit lines.

Bank of America CEO Ken Lewis No Longer Chairman of the Board

It was a close vote, but splitting the CEO and Chairman of the Board positions passed, 50.3%-49.7%, and the new Chairman is Walter Massey.

I do not think that this makes much of a difference in day to day operations, but the fact that shareholders went against Lewis and the board on this is significant.

It’s also a big win for AFSME, who campaigned for this, because of Lewis’ aggressive campaign against labor unions.

Auto Industry Update (Chrysler and Dealers)

Well, it looks like the Chrysler/Fiat thing is a done deal, though this would likely be post bankruptcy, because they cannot get the smaller creditors on to agree to concessions:

The Obama administration last night planned to send Chrysler into bankruptcy, replace chief executive Robert L. Nardelli* and pump billions of dollars more into the effort, all in hopes the company can emerge from court proceedings as a reenergized competitor in the global economy.

Government officials clung to 11th-hour hopes last night that bankruptcy could be averted, but talks broke down with Chrysler’s creditors. A bankruptcy filing could happen as soon as today.

The U.S. government’s attempt to save the automaker amounts to another extraordinary intervention in the economy and a landmark event in the history of the American auto industry.

Under the administration’s detailed court strategy, ownership of Chrysler would be dramatically reorganized, the leadership of Italian automaker Fiat would take over company management and the U.S. and Canadian governments would contribute more than $10 billion in additional funding.

I would note that Cerberus would be completely wiped out on this deal, and be left with nothing, but they are not complaining, since they bought Chrysler to flip it to GM, and then found themselves having to run it when GM had its own crisis, and the alternative, that various parties go after them is even less palatable.

In related news, the dealers for both Chrysler, with the aid of the NADA, are lawyering up to deal with the consequences of a bankruptcy, which would void their franchise agreements.

Cutting dealerships is necessary, as Chrysler has about 2¾ times as many dealers per car sale as Toyota, which adds costs and inefficiencies to the system.

*Full disclosure, I worded at GE Transportation Systems (GETS) their locomotive manufacturing unit from 1994-1996, and for about half of my time there, the chief of the division was Bob Nardelli, who I have never met.

It Could Be Worse, I Could Live in Minnesota

And be represented by Michele Bachmann, though she is worth a spit take.

Latest case in point: Suggesting that the Swine Flu outbreak is some sort of Democratic Party plot:

‘I find it interesting that it was back in the 1970s that the swine flu broke out then under another Democrat president Jimmy Carter. And I’m not blaming this on President Obama, I just think it’s an interesting coincidence.’

Except, of course, it happened under Gerald Ford, and the media frenzy over the flu was electioneering largely driven by Ford’s SecDef, Don Rumsfeld, like a bad apple, he keeps turning up.

The stupid, it burns, it burns.

Byron York Thinks that Black People Don’t Count

Or maybe he thinks that they only count 3/5ths.

His claim is that Barak Obama’s support is somehow not real, because he is polling much higher among black voters, which ignores the fact that Democratic Presidents always poll higher among black voters, because they know that the Republicans have become the party of bigotry and segregation.

Simply put, when you see one party as hating you and trying to do harm to you, any representative of an opposing party looks better.

But Byron York, in a perfect reflection of the Republican Party, wants to say that black Americans simply do not count, much like the Republican Party vote suppression apparatus says that black American votes simply should not be counted.

So Much for “I Did It for the Judicial Appointment”

Now Jay Bybee is actively defending the torture memos that he wrote, as opposed what was said by “friends” to the Washington Post, which is that he basically took the OLC job because he had to in order become a Federal Judge.

I think that the money quote is, “In that context, we gave our best, honest advice, based on our good-faith analysis of the law.”

It’s an attempt to say that it’s reprehensible, but not criminal, and hence does not fall under the the bailiwick of, “treason, bribery, or other high crimes and misdemeanors,” though that might be small comfort, since the first impeachment and conviction was really because the subject was probably clinically insane, the charges were “drunkenness and unlawful rulings,” and the latter sounds a like Bybee.

When the Rude Pundit Isn’t

He isn’t rude, that is, at least after the first paragraph, where he compares Republicans to fattie amputee midget S&M fetishists who draw a line when someone sends them links to child porn:

Some conservatives have actually gotten queasy with the release of the torture memos and the Senate Armed Services Committee report on the same. Maggie Gallagher, who has lived for years now off the lucre she makes from her hatred of gay marriage, once praised the illegal data mining that Bush’s NSA did: “When exposed to information about efforts like this by President Bush, I am not outraged. I’m deeply grateful. And worried now about who might die now that The New York Times has published this information.” Now, in the National Review Online (motto: “Is anyone still reading this sh$# beyond bloggers who need something to argue with?”), Gallagher writes, “I personally believe torture is wrong. We shouldn’t do it. Even if it means me, my husband, and my two sons get blown up. Seriously, if I had to choose I’d say: Death is common to us all; torture is a choice.” It’s as impassioned an anti-torture statement as anyone on the Left has made.

($#@ of swear words mine, as is the emphasis)

He’s right. Maggie Gallagher gets it.

Go read the rest.

Spanish Judges Opens Torture Inquiry On Gitmo

So, it looks like the Spanish judges are ignoring the recommendation of the Spanish Attorney General, and proceeding with an investigation.

The best outcome of this investigation, IMNSHO, is that this forces the US government to pursue the perpetrators of these crimes, though the fact that this will tend to prevent Bush and His Evil Minions&trade from traveling freely around the world because of concerns regarding torture is an added plus in any case.

Now For the Criminal Investigation

Neel “Cash and Carry” Kashkari is finally leaving as head of the TARP.

I have no knowledge of whether or not he actually broke any laws, though describing the management of the program as “criminal,” is certainly appropriate, but I do think that the DoJ and SEC should investigate because it smells bad.

I do not think that it is at the level of a grand jury investigation….Yet….But you won’t know what’s under the rocks until you turn them over.

Certainly, the program was an example of corruption and regulatory capture though.

Economics Update

Great Googly Moogly, the new GDP numbers are in for the first quarter, and they show that the economy contracted at a 6.1% annual rate, which follows a 6.3% rate for Q4 of 2008, the worst contraction for a 6 month period in 50 years.

There is a bright spot, however. As Calculated Risk notes, is that sectors that have been traditionally leading are doing better than those that typically lag a recession, which might point toward a bit of a moderation.

At least we are not Lithuania, whose economy contracted by 12% year over year.

It’s news like this that makes the Federal Open Market Committee (FOMC) statement minor economic news.

Basically, they said, “We think that it’s getting worse more slowly, and we can’t cut rates any more, but we will keep shoveling money out the door, and we are watching inflation, really we are.”

If that means anything, it’s beyond me, but it appears that the
Fed’s aggressive asset purchase program will not be further expanded, which implies that they think that we are at/near bottom.

In other banking news, remember yesterday’s stress test update, which fingered BoA and Citi?

Well, there are now reports that at least 6 of the 19 banking giants are under capitalized, hoocoodanode?

Meanwhile, in real estate, we have mortgage applications falling by 18%, and it appears that there is a tidal wave of troubled commercial mortgages on the horizon, with, “volume of commercial mortgages at risk of default has quintupled since the beginning of 2008.”

One of the interesting things here is that commercial real estate loans are generally short term, 5 years or so, so people who have to refinance into the teeth of the recession and credit crisis may be up a certain creek without a paddle, even though they would be otherwise solvent.

Meanwhile, oil rose on the slightly positive Fed statement and reports of a drop in gasoline inventories, while the dollar fell on on optimism about the world economy.