No word on what he said, but HJC Chairman John Conyers (D-MI) has confirmed that he was deposed by committee attorneys on the US Attorney firing scandal.
I’m pretty sure that he lied, because that is deeply embedded in Karl Rove’s DNA.
Month: July 2009
Well, At Least I’m Not in the New York Senate
With nothing going on, and a 31-31 tie continuing, Governor David Paterson has named former MTA chief Richard Ravitch as Lieutenant Governor, who could theoretically cast the tie breaker vote.
The thing is, it appears that he has no authorities to do so, at least not according to the Republicans, Democratic turncoat and poster child for corruption Pedro Espada Jr., and Democratic State Attorney General Andrew Cuomo.
Is Goldman Sachs Running a Scam Right out of The Sting?
Yes, we now have a case of what appears to be industrial espionage, or perhaps geeky security breaches, this is once more pulling back a part of the masque from that great vampire squid wrapped around the face of humanity*, Goldman Sachs.
Specifically, a former programmer at Goldman Sachs, one Sergey Aleynikov, is alleged to have stolen the proprietary program trading software that they use and stored it on a server somewhere in Germany. (Also here and here)
What is interesting is what this software actually does:
The platform is one of the things that apparently gives Goldman a leg-up over the competition when it comes to rapid-fire trading of stocks and commodities. Federal authorities say the platform quickly processes rapid developments in the markets and uses top secret mathematical formulas to allow the firm to make highly-profitable automated trades.
Or as is noted in the criminal complaint:
The Financial Institution has devoted substantial resources to developing and maintaining a computer platform that allows the Financial Institution to engage in sophisticated high-speed, and high-volume trades on various stock and commodities markets. Among other things, the platform is capable of quickly obtaining and processing information regarding rapid developments in these markets.
So basically, we have high speed software to execute computer driven trades in response to market fluctuations, to the tune of about 60% of all of these trades, about $100 million a day,
We also have this tidbit from the prosecutor, “The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways.”
The reality here is that it is being used to manipulate markets in unfair ways, by Goldman Sachs.
Vet74 at Daily Kos explains in a fairly technical way, but basically, this is the scam within a scam from the Paul Newman/Robert Redford movie The Sting, where the man they are cheating, murderous gangster Doyle Lonnegan, believes that they are delaying the ticker tape of race results so as to place bets on horses that have already won.
When they note that the software, “quickly processes rapid developments in the markets,” what they really mean is that this software can pick up on large orders in process, and get their orders in ahead of those orders already in process, and generate profits.
If this were a human transaction, with the agent doing it to a client, it would be called front-running, and it would be a felony.
I’m pretty sure that Goldman does not want everything to come out in court, because, even if it’s legal, the revelations would likely lead to calls for additional regulatory reform.
They just want this gut to cop a plea, extract some sort of non-disclosure agreement, and then make him disappear.
You can tell this, because they are playing some serious hardball here.
They discovered the loss of the code some time in mid June, but held off on notifying authorities until July 1, pretty much guaranteeing that the arrest, and setting of bail would take place over the holiday, and he would have to spend the weekend in jail.
He is out on bail now, but I expect a plea, or a convenient suicide, because the exposure in open court of what amounts to a massive, pervasive, and thoroughly corrupt insider trading scheme is something that the squids* will find unacceptable.
Then again, I am a bit tinfoil hat on such things.
*Alas, I cannot claim credit for this bon mot, it was coined by the great Matt Taibbi, in his article on the massive criminal conspiracy investment firm, The Great American Bubble Machine.
Economics Update
Consumer borrowing has fallen for the 4th straight month, as households continue to deleverage.
The real question is whether this is a long term or a temporary change in consumer behavior.
In banking, interest rates are falling again, with yields on treasuriess falling as more people flock to their relative safety, and falling interest rates on mortgages have boosted mortgage applications.
In currency, concerns over unrest in China have driven both the Yen and the dollar up vs the Euro, though the dollar is has fallen to a 5 month low vs. the Yen.
I think that the currency traders are more sanguine about Japan than about the US.
In energy, increased inventories and concerns about future demand drove the priuce of oil down to near 60.
Reid Shows Sanaty on Healthcare, Rahmbo, on the Other Hand….
It appears that Majority Leader Harry Reid just told finance chair Max Baucus to stop moving the bill to the right in an attempt to get Republican votes:
According to Democratic sources, Reid told Baucus that taxing health benefits and failing to include a strong government-run insurance option of some sort in his bill would cost 10 to 15 Democratic votes; Reid told Baucus it wasn’t worth securing the support of Grassley and at best a few additional Republicans.
This actually makes sense. Any healthcare reform that works will cripple the Republican Party for at least a generation, so accommodating the Republicans means that you are making sure that the plan will fail.
Meanwhile, on the other end of Pennsylvania Avenue, White House Chief of Staff Rahm Emanuel is doing his best to kill a public option:
It is more important that health-care legislation inject stiff competition among insurance plans than it is for Congress to create a pure government-run option, White House Chief of Staff Rahm Emanuel said.
“The goal is to have a means and a mechanism to keep the private insurers honest,” he said in an interview. “The goal is non-negotiable; the path is” negotiable.
President Barack Obama has campaigned vigorously for a full public option. But he’s also said that he won’t draw a “line in the sand” over this point. On Tuesday, the White House issued a statement reiterating his support for a public plan.
I think that Emanuel believes that a big war chest is the only determinant to winning elections, and he does not want to offend the deep pockets of the insurance industry.
His actions as the head of the DCCC, when he decided to ran the hapless Tammy Duckworth at the expense of Christine Cegelis in the Illinois Congressional 6th district, where he dumped hundreds of thousands of dollars into the primary, and over a million in the general, keeping a Republican in the seat, are a good example of why his “campaign funds trump everything,” philosophy is a complete lose.
Dead Cat Bounce
I’ve been of the opinion that the recent rally in the stock market was a bear rally, and now that the S&P 500 has fallen to its lowest level since May 1, I see vindication for this view.
The underlying economy cannot realistically support the market at its current level.
A Real Progrom toi Help the Economy
The minimum wage goes from $6.55/hr to $7.25/hr on July 24.
The linked article wrings it hands about the “stress” on the job market from the increase, but the reality is that no one has ever been able to find a correlation between increases in the minimum wage and unemployment, and getting more money into the hands of poor people, who spend the money more quickly, is the best way to get the economy moving.
I Question the Metholodology, but It’s Scary as Hell if it is True
There is now a study out that says that over ¼ of homeowners who default have the ability to pay, they are just walking away because they are under water on their mortgages.
If this is true, we are no where near bottom.
Economics Update
So much for green shoots. We now know that delinquencies in loans and credit cards have hit an all time high, and records for this have been kept for 35 years.
We’re also machine orders in Japan falling for the 3rd straight month.
So, we are seeing a continuing pullback in both manufacturing and consumers, so perhaps the focus on reviving the banking incumbents was a bit short sighted.
In real estate, we have the pending home sales rising slightly, and mortgage rates falling, though it must be noted on all home sales reports that the percentage of distressed sales, foreclosures and short sales, has been increasing, so any increase in sales reflects this phenomenon.
In any case, fears of a continued recession have pushed up the dollar and the Yen, while depressing the price of crude oil.
Liberal Advocacy Groups Tell Barack Obam to Go Cheney Himself
A number of groups, most notably Moveon®, have been targeting pro-insurance industry members of Congress, most notably Mary Landrieu, for her opposition to the public option in the health care plan.
Well, Barack Obama, who I think is more motivated to have a health plan pass Congress than he is about getting a good health plan though Congress, because the risks for the latter is higher, has now told these groups to sit down and shut up:
President Obama, strategizing yesterday with congressional leaders about health-care reform, complained that liberal advocacy groups ought to drop their attacks on Democratic lawmakers and devote their energy to promoting passage of comprehensive legislation.
Well, it appears that at least some of the groups out here have realized that Barack Obama can be wrong just like the rest of us mere mortals:
A spokesperson for the Progressive Change Campaign Committee, one of the groups Obama reportedly complained about, confirms to me that the group is upping its buy with a new round of ads attacking moderate Dem Senators like Ben Nelson and Mary Landrieu this coming week. “If congressional staffers are complaining to the White House, that shows they are nervous and what we’re doing is working,” PCCC’s Stephanie Taylor says. “So we should just keep doing what we’re doing.”
Meanwhile, a second group, Change Congress, has not dropped plans for a coming campaign of ads attacking the Senators for taking contributions from health care special interests, Change Congress spokesperson Adam Green confirms. He urged the White House to consider a “good cop, bad cop approach,” suggesting Obama could hold positive rallies in the home states of moderate Dem Senators while Change Congress goes ahead with its ads.
This is a refreshing return to sanity.
Barack Obama has been running against the left to prove his “non-partisan” props for a while now, and it’s time to realize that he is at best an incrementalist, and by the standards of industrialized nations, a right of center incrementalist at that.
I May Put a Sarah Palin Bumper Sticker On My Car
Not mine, it was posted on the by invitation only Stellar Parthenon BBS.
We Want Your Immortal Soul
Seriously, there is a Latvian banker who is demanding borrowers souls as collateral, Viktor Mirosiichenko of the Kontora loan company:
Clients have to sign a contract, with the words “Agreement” in bold letters at the top. The client agrees to the collateral, “that is, my immortal soul”.
Mirosiichenko said his company would not employ debt collectors to get its money back if people refused to repay, and promised no physical violence.
I hope that this is not the face of market reform in other parts of the former Warsaw Pact nations.
Major Suckage
Srsly.
My contract with BD ended on Thursday, so I’m looking for work with unemployment (U-3) approaching 10%.
Tonight, we went down to Catonsville to see fireworks, and our car got towed.
We’re waiting for a cab to take us down to bail out our car.
July is not starting well.
Another Thought on Sarah Palin
My thoughts on Sarah Palin surprise resignation remains that she quit to run for President.
Simply put, I have been receiving reports of her hubris and self-important behavior from my dad since before the election, and I think that she really believes that God wants her to be President, and with what shee sees as the increasingly vitriolic campaign of the Republican establishment against her, she feels the need to “talk directly to the people,” specifically the people of Iowa and New Hampshire.
I think that she honestly believes that if she can meet enough voters 1 on 1, then she can win the caucus and primary.
I should note that my position is not the consensus in the blogosphere, which is that there is either a major scandal or health issue about to rear its head.
Palin’s bizarre performance at her announcement would indicate something sudden, but both the recent very public push-back from the DC ‘Phants and a potential scandal falls in that category.
In either case, I long for the day when she goes on my They Who Must Not Be Named list.
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Lawsuit Alleges Faulty Stealth Coatings on F-22
Darrol Olsen alleges that Lockheed-Martin covered up problems with the stealth coatings on the F-22. (See also here.)
Considering this guy’s pedigree, he worked on stealth coatings for the F-117 and B-2, and the considerable problems that the F-22 has had with its stealth coatings, it’s readiness and maintenance requirements have underperformed, I’m inclined to believe that there is some merit in the lawsuit.
My guess is that LM will eventually settle with him, and we will hear no more of this.
Kyrgyz Airbase Reopens to US Use
For a payment of $60 million, and no doubt a delivery of desperately needed vowels, the Manas airbase at Kyrgyzstan will be re-opened to US military traffic to Afghanistan.
The new deal limits transport to only non-military goods though.
Warplanes: China Developing Dedicated Jamming Aircraft
China is apparrently developing a dedicated electronic attack aircraft based on its JH-7 attack aircraft.
The JH-7 is a fixed geometry attack aircraft similar in size to the Panavia Tornado, and it has been sighted bedecked with numerous jamming pods.
Boeing’s Looks at Re- Winging 777
It appears that Boeing is concerned about the threat that the Airbus A350 might be in the market.
It’s larger than the 787, but is following Boeing’s lead on propulsion and structural technologies to lower operational costs, and so the Seattle (Chicago) based manufacturer is worried that they might be facing a repeat of the 767/A330 fight that they had over a decade ago, which the A330 won decisively.
So, Boeing is looking at a significant stretch to the 787, and at re-winging the 777 with a lighter weight composite structure. (paid subscription required)
I’m not clear if this is just some blue-sky thinking, or if Boeing is really spooked by the repeated delays, and the cancellation of orders, on its 787 Dreamliner.
A Wacky Tilt-Rotor Concept From DARPA
It’s called the Folding Advanced Stopped Tilt Rotor (FASTR), and the basic idea is that you have some sort of variable cycle engine which powers tilt rotors on takeoff, and after you get to speed, the rotors are stopped, folded back, and the engines convert to turbojets.
I’m inclined to believe that this won’t amount to anything, as the weight penalties of a stop start folding rotor and variable cycle engine would likely make any advantages irrelevant, but it’s DARPA’s job to try out weird stuff like this, and see what happens.
Veto Threat on F-22 and F136 Authorizations
President Obama has threatened a veto on both programs.
I’m of a mixed mind on the programs.
While it is clear that the F-22 is overpriced, and does not address foreseeable threats, the F136 alternate engine for the JSF seems like a good idea.
The P&W F100/GE F110 engine competition saved a lot of money, and produced more reliable engines.
What’s more, the F136 seems to have more growth potential than the F135, and this is needed, particularly for the STOVL F-35B.
Additionally, the funds to continue F136 development are about the cost of procuring just 2 more F-22s.