Month: April 2009

9th Circuit Deals Blow to Obama Secrecy Stance

The 9th Circuit Court of Appeals has just told the Obama administration that its assertion of a state secret privilege is full of crap.

Binyam Mohamed, a British national who was rendered, and tortured by the CIA, is to be allowed to pursue his lawsuit against Jeppesen, a private transportation company that flew him to their secret gulags:

The court said the government could ask judges to conduct a case-by-case review of whether the disclosure of specific documents would jeopardize national security. But allowing the executive branch to shut down an entire lawsuit whenever an official says its subject is classified would be a “concentration of unchecked power” and lead to abuses, it said.

“According to the government’s theory, the judiciary should effectively cordon off all secret government actions from judicial scrutiny, immunizing the C.I.A. and its partners from the demands and limits of the law,” wrote Judge Michael Daly Hawkins.

I would also note (again) that as a matter of fact, though not of law, that the precedent here, US v. Reynolds, is in fact based on a lie. There were no state secrets involved, the B-29 which crashed was not, as was claimed, on a secret mission or testing secret equipment, as the government implied, but that the the aircraft was in poor condition because of inadequate maintenance.

This is a good decision, and I rather hope that it won’t make it to the Supreme Court, because 4 of those justices will rubber stamp the Bush, and now Obama, policy.

Federal Reserve Determines Interest Rate Appropriate to Economic Situation

Using the “Taylor-rule approach”, basically yet another one of those equations for the economy that the “quants” came up with, and they get a number: negative five percent.

This is why central bankers have no clue what to do.

Of course, if Greenspan had not created the bubble, both in real estate, and in other investments, by pushing interest rates so low and ignoring market abuses, there would still be some marging, but there is no margin, so we are screwed.

Auto Industry Update

Well, Honda automobile lost money, though the whole operation made a slight profit because of their motorcycle business.

Meanwhile, GM is having problems negotiating its bondholders, with the troubled automaker giving what says is a “final offer,” and the bond holders are blowing a gasket over this:

Today’s posturing makes it clear that the company and the auto task force would rather discount the thousands of individual investors and retirees who own GM bonds than undergo earnest negotiations.

I think that the bond holders think that they can do with GM what was done with GMAC, throw a tantrum, and get what they want, but the market has already discounted these bonds by over 85%, and the offer is a better deal than that.

On Chrysler’s side, things look better with both the UAW and the bondholders coming to agreements with the auto firm.

The UAW will a get 55% equity stake in Chrysler, in exchange for concessions, but I’m still a pessimist, and believe that they are getting 55% of what will turn out to be nothing.

I think that the bondholders for GM have unrealistic expectations of the carmaker’s survival.

I would say that even if GM gets the bondholders to an agreement, they still have to figure out how to cut dealerships without declaring bankruptcy.

Getting out of those franchise agreements would be difficult otherwise, unless Congress gets into the act to streamline the process, which I do not expect, since car dealers are big political donors.

Good Read on Swine Flu, By an Expert

John M. Barry, who literally wrote the book on the Spanish Influenza Pandemic, has an article on the Swine Flue outbreak that is a must read.

I also need to read his book.

I had not previously realized that the initial Spring outbreak was very mild, and it was the Autumn outbreak that had the virulence that we now remember the disease for.

Money quote is at the end:

In all four instances [Influenza Pandemics], the gap between the time the virus was first recognized and a second, more dangerous wave swelled was about six months. It will take a minimum of four months to produce vaccine in any volume, possibly longer, and much longer than that to produce enough vaccine to protect most Americans. The race has begun.

Go read.

Ross Douthat is a F$#@ing Moron

So, the latest New York Times OP/ED page conservative affirmative action case has his debut editorial for the paper, and what is his trenchant analysis?

It’s that the Republicans should have nominated Richard Milhaus Cheney as their presidential nominee in 2008.

I guess that’s because Cheney is such a photogenic and friendly dude, whether talking about his penis (top picture), or simply snarling at the American public (bottom).

Of course this is not really what the author believes. He wanted Cheney to run because he would have been beaten like a baby seal while showing how the right wing orthodoxy needs to be repackaged: It’s simply link bait, as Froomkin notes.

He wants people to read him, so Douthat says something outrageous, and finishes with, “And when he went down to a landslide loss, the conservative movement might – might! – have been jolted into the kind of rethinking that’s necessary if it hopes to regain power.”

No. Simply put, he is being a tool to get buzz, and it increasingly appears that the Republican Neocons are simply some sort of truly subversive performance art group.

I miss William Safire, who while right wing, had a brain, and could actually string together words in an attractive way.

Between Tierney, Kristol, and now Douthat, it appears that the sure sign that you are really, really, stupid is getting a regular Times OP/ED slot.

Yes, I know, I am really describing him being an asshole, not stupid, but his argument boils down to, “We should have nominated Dick Cheney, and we would have lost much better.”

That’s Doug “The Stupidest Motherf^%$er on the Planet” Feith stupid, and the New York Times already has a surfeit of stupid among their regular columnists, with Maureen Dowd, who covers politics like she is a junior high schooler dissing a classmates choice in shoes.

Still it appears that but it appears that Andrew Rosenthal, the Editorial Page Editor, feels that they need some more stupid.

Stress Test Update

We are already getting reports, and the latest is that preliminary results show that Bank of America and Citigroup are under capitalized.

The truth is that it is very likely that all 19 banking giants are under capitalized, and that Citi and BoA are insolvent, but the tests would be universally seen as a joke if they had cited these two banks as needing more capital.

One area of concern here is that there is a a tremendous opportunity for insider trading and abuse here, and no one knows who has the data, and who doesn’t, so I would expect that some people are trading on this, or will be in the next few days.

F$#@ Kindle, This is Something that Will Revolutionize Publishing

It’s called the Espresso Book Machine, and it prints books on demand.

It literally prints the book and binds it in about 5 minutes from an order.

If you were to integrate a scanner/shredder to do book “returns”, you could eventually run a bookstore without any physical delivery, and only stock those books you sell, plus preprinting stock to put out on your shelves for the things that move faster.

Right now, it’s primarily handling out of copyright works, but the manufacturer is looking to add in copyright works.

List for the machine is about $175,000.00, but that should pay for itself fairly quickly, if just by generating sales that take 5 minutes to deliver, as opposed to 2 weeks, so the customer goes elsewhere.

The big problem, of course, is that book publishers will insist that this new technology will require an even higher profit margin on their part, just like record distributors did with CDs when they came out, even though they were cheaper than vinyl.

Unlike Amazon’s® Kindle®, they can’t turn a book into a $359.00 doorstop because you have a billing or return dispute.

Of course, XKCD was all over this:

Or not, but it’s funny.

Economics Update

Graph courtesy of Wikipedia

Well, we have some legitimately good news, that the Conference Board’s Consumer Confidence Index rose to 39.2 in April, a 12.3 point gain from March, though with the rather neutral year of 1985 being indexed to 100, 39.2 still sucks, as is clear from the graph.

Additionally, while the home prices continued to fall, they are falling at a slightly slower rate, or as Atrios so amusingly notes, “Positive 2nd Derivative!!!*

House prices are still falling, and the rate of decline is the noisiest metric, unless you want to do the change in rate of decline (unless you want to go to something like the 3rd derivative, called “jerk” when dealing with motion).

I would wait and see for a few months before jumping back into the market.

Meanwhile, the flu concerns continue to push oil down, though the positive economic data above has driven the dollar down too, because there is less of a flight to safety.

*If you don’t get the joke because you are not a math geek, don’t despair….At least you are not a math geek, which has to count for something.

Specter Switches Parties

This is obviously the big news of the day, which is that Arlen Specter is changing parties, and becoming a Democrat.

The immediate effect is that Coleman-Franken goes on for another year, because now when Franken gets seated,* the Dems have the votes necessary for cloture.

If you read his official statement, he does not say that he is becoming a Democrat, just that he will be running in the Democratic primary, which is a less than sterling endorsement of the party, though his statement that, “The Republican Party has moved far to the right,” is no endorsement of them either.

Personally, it’s nice having a 60th vote for cloture, whenever the damn Minnesota recount is done,* but fundamentally, I see this as being all about Arlen Specter.

He squeaked out a primary victory in 2004 against wingnut Pat Toomey, and realized that, with moderates increasingly changing party affiliations to independent or Democrat, he had no chance of winning.

As a final thought on him: Quoth the Atrios, who was quoting Harry Reid, “Arlen Specter’s with us except when we need him.”

He’ll be a weasel, and will remain so.

I expect this to continue, particularly with regard to the Employee Free Choice Act (EFCA) labor legislation, which he says he will continue to oppose, despite sponsoring it a few years back.

*Please, just make it stop…..This recount is going on forever!!
Why yes, that little self-destructing man will continue to be a part of my Minnesota recount coverage.

U.S. Looks to Resettle Gitmo Uighurs in US

This is a good thing, though there are still a number of road blocks, most likely bureaucratic resistance, because it’s a black eye for the military’s determination to hold them in the first place, and ‘Phant grandstanding.

They were held at Guantanamo Bay for years despite the fact that they were not terrorists, and they were tortured at the request of the Chinese government, and they have no where else to go.

Just in Case You Were Wondering How Tied Into Wall Street Geithner Is….

The New York Times has a rundown of his ties, and the behavior that this has engendered:

Timothy F. Geithner, who as president of the New York Federal Reserve Bank oversaw many of the nation’s most powerful financial institutions, stunned the group with the audacity of his answer. He proposed asking Congress to give the president broad power to guarantee all the debt in the banking system, according to two participants, including Michele Davis, then an assistant Treasury secretary.

The proposal quickly died amid protests that it was politically untenable because it could put taxpayers on the hook for trillions of dollars.

“People thought, ‘Wow, that’s kind of out there,’ ” said John C. Dugan, the comptroller of the currency, who heard about the idea afterward. Mr. Geithner says, “I don’t remember a serious discussion on that proposal then.”

But in the 10 months since then, the government has in many ways embraced his blue-sky prescription. Step by step, through an array of new programs, the Federal Reserve and Treasury have assumed an unprecedented role in the banking system, using unprecedented amounts of taxpayer money, to try to save the nation’s financiers from their own mistakes.

And more often than not, Mr. Geithner has been a leading architect of those bailouts, the activist at the head of the pack. He was the federal regulator most willing to “push the envelope,” said H. Rodgin Cohen, a prominent Wall Street lawyer who spoke frequently with Mr. Geithner.

There is no failure in Wall Street that Geithner does not think should be subsidized by the taxpayer, or as Yves Smith says, “Geithner is a creature of the financial establishment.”

What is important here is that this was page 1 on the New York Times, which is a recognition by the main stream media that this is a problem, and they used his calendar while President of the New York Fed, showing private meetings and lunches with Wall Street executives, as a part of this.

The use of the calendar is very competent shoe leather journalism, and as Ms. Smith notes, it is exceedingly rare to see it used in a story.

If you scroll down toward the bottom of the story, you discover that the bill drafted to give the Treasury the authority to take over large institutions was drafted by Wall Street lobbyists, literally.

The draft bill sent to Congress sent contained metadata that showed it was from a law firm that represents lobbyists.

Seriously, if the problem is that the banking industry and its ethos are dysfunctional, and I believe this to be the case, you could not find a worse steward of this crisis.

And the MSM is beginning to notice,

Swine Flu Update

The caveat here is that the only country with enough cases for any real data is Mexico, and their public health system is awful, so the numbers are suspect, and there are a lot of untreated TB, asthma, and HIV, but it appears that most of the deaths so far have been young adults.

This may just be an artifact of the fact that Mexico is missing cases, etc., but it could point to an immune system response known as a Cytokine storm it was the reason that Spanish Influenza in 1918, and SARS more recently, disproportionately effected young adults.

Bybee Broke the Law Because He Wanted to be a Judge

Friends of one of the torture memo authors have been waging a campaign to rehabilitate him by explaining his motives, which is, unfortunately, at the end of the article:

“The whole idea that the Constitution is based on a kind of wariness of mankind’s tendency to grab power, that is an idea I got from Jay,” McAffee said. “So the whole idea of uninhibited executive power, from him, does seem passing strange.”

Bybee’s friends said he never sought the job at the Office of Legal Counsel. The reason he went back to Washington, Guynn said, was to interview with then-White House counsel Alberto R. Gonzales for a slot that would be opening on the 9th Circuit when a judge retired. The opening was not yet there, however, so Gonzales asked, “Would you be willing to take a position at the OLC first?” Guynn said.

Being unable to answer for what followed is “very frustrating,” said Guynn, who spoke to Bybee before agreeing to be interviewed.

Gee, he was a movement conservative who thought he deserved a Federal judgeship, so he authorized torture, even though he knew that it was wrong.

That does not make his circumstances better, it makes them even more indefensible.

He did it because he was a career Apparatchik, not out of any conviction or perceived need.

Bonus video:

John Podesta calls for Bybee’s impeachment.

The Fix is In on the Stress Tests

It appears that the stress test results will say that only one bank will need additional capital.

This is bullsh@#. The result that only one bank has issues, and they are small was pre-ordained from the start.

Because they don’t want to say that banks are insolvent, and if they said that no banks had issues, the fix would be obvious, so they went with only 1 bank.

It looks like the good doctor (Roubini) agrees. He is saying that the stress tests are not “serious”.

Teck of a job, Timmy.