Bird & Fortune courtesy of Calculated Risk
Month: October 2009
Remember That Pundit Contest that I Lost?
My initial reaction, upon looking at the bios of the 10 winners, was that they were rather more establishment, and more “WaPo Columnist” (read conservative and mindless difference splitters) than I had hoped.
But I kind of figured that this might be sour grapes on my part, so I would let their biographies, and their submissions, percolate through my brain before I drew a firm conclusion.
Well, Kevin Drum, who already has a job as a pundit, and did not throw his hat into the Washington Post‘s ring, has taken a look at these winners of at this stage, and has a similar impression of them.
This is particularly notable because I am of the opinion that Drum spends too much time being a “mindless difference splitter”, so he is coming from a place that is far closer to the WaPo editorial board than I am.
His take on the winners:
By the way, the ten winners include a Nobel Prize winner, a Bush 43 assistant secretary of commerce (guess which one), a senior correspondent for the American Prospect, an analyst at the Council on Foreign Relations, a former researcher at the Kennedy School of Government, an Atlantic Media fellow, and a small-town newspaper editor. Not exactly a crowd of just plain folks. It might have been more fun to read the other 4,790 entries.
Well, that’s a bit harsher than I would have been, but go and read the Drum’s post…It’s a good read.
Here are my announcement of my submission, and my ding letter, by way of context.
My submission is after the break.
My essay (400 words)
Recently, the Federal Reserve has been on a populist bent, expanding its purview to regulate non bank lenders, issuing rulings on bank overdraft fees, demanding information from financial institutions on compensation, and issuing new consumer protections for mortgages, home-equity loans, and credit cards.
Why? Has the Fed realized that its regulatory regime has failed the general public, or is this the result of increasing calls for change from other branches of government?
This is not a conversion on the road to Damascus, but rather the Fed has decided to employ the strategy of Fabius Maximus, who used delay to give Rome victory over Carthage.
With proposals to audit their books, move consumer protection to another agency, and change the selection process for the regional Fed bank presidents, it is clear that some in Congress are looking to clip the Fed’s wings.
Organizations fight fiercely for their authority, and against external oversight. The recent actions on consumer protections are part of a rear guard action to protect their bureaucratic prerogatives.
This is understandable, but it is a disservice to both the public and the Federal Reserve.
The Federal Reserve’s responsibilities are to maintain a stable currency and stable economy, which involves removing the proverbial “punch bowl” when times are good, in order to prevent inflation, and to provide liquidity when times are bad to allow the economy to recover.
Additionally, the Federal Reserve structure and history make it obsessively focused on protecting the banking system, and, the banking industry. That is why it has eschewed consumer protections until recently: it is loath to reduce the profits of the banks it supervises.
No institution can do this without being firmly protected from politics, since political pressure will always favor immediate growth, even at the cost of future catastrophe. Just look at Zimbabwe.
Consumer protection does not need separation from politics though, it needs to be engaged with those consumers, whom it is charged to protect, and with the representatives who have been elected by these people.
This requires a level of transparency and responsiveness to the public that is antithetical to the primary functions of a central bank.
If the members of the Federal Reserve wish to remain independent, which is both best for the country, and for the Federal Reserve, we should move those functions to other agencies which are more directly answerable to the public.
Nothing too earth shattering, but there are a lot of better thinkers, and better writers, out there, and looking back on it, my invocation of Fabius Maximus was probably a mistake. It’s too Monty Python’s Life of Brian.
What Atrios Said
As Atrios notes, the idea that some “moderate Democrats” are pushing for, a Bipartisan commission to propose spending cuts and tax hikes, is really, really, Really, REALLY stupid.
First, there are no Republicans on the national level who will support any new taxes, and second, look at the “Democrats” who are supporting this.
According to the article, a “group of 10 senators — nine moderate Democrats and an independent,” so and so the article definitively fingers the following people:
- Senator Evan Bayh
- Senator Kent Conrad
- Senator Joe Lieberman (Not explicitly named in the article, but note the quote, it sure as hell ain’t Bernie Sanders.)
MY comment, if you are serious about cutting the deficit, place a Tobin Tax on financial transactions, you raise money, reduce the deficit, reduce speculation for its own sake, and punish the banks.
That’s a win-win-win-win scenario.
Just Came Back From Trick or Treating With the Kids
Can’t believe that it is only about 8:00pm
Dam daylight savings time.
The musical stylings of John Entwhistle and the who:
I saw him do this song when he played The Channel in Boston in 1987.
Running the Numbers
The Chance Of Schwarzenegger’s ‘F*ck You’ Acrostic Being Random: One In A Trillion
I kind of figured that.
In California, it looks like it will be Jerry Brown running as the Dem for Governor, because Gavin Newsome has quit the race, because of weak support and poor fund-raising.
Additionally, in the very odd special election for New York’s 23rd Congressional district, Republican Dierdre Scozzafava has suspended her campaign, after coming up short on money and placing 3rd in recent polls.
The numbers were about 35% for Doug Hoffman, the Club for Growth approved Neanderthal, 35% for Bill Owens, the Democratic candidate about whom I know nothing, and about 25% for Scozzafava.
Her name will remain on the ballot, which is, I think a message to Hoffman that he should go Cheney himself, but I’m an engineer, not a psychologist, dammit!*
I think that this puts Hoffman the live dead girl/live boy† favorite in the overwhelmingly Republican district now, though I think that there are a number of people who will vote for Scozzafava anyway, because they do not want to vote for Hoffman, who is a carpetbagger with absolutely no interest in the real issues of the district, but cannot bring themselves to pull the “D” lever.
*I LOVE IT when I get to go all Doctor McCoy!!!
†Edwin Edwards, when discovering that he would be facing David Duke in the Louisiana governor’s race, said that the the only way that he would lose were if he were, “caught in bed with a dead girl or a live boy”.
A Coda on the Bank Failures
If you plot annual rate of bank failures vs time of year, it looks like we might hit 150 bank failures this year.
With 7 Fridays to go, they won’t be doing a closing on Christmas, that’s an 5 failures a week until the end of the year.
My guess would be somewhat less, in the 135-145 failures through the end of the year though.
Note that the data at the start of the year is of a smaller grouping, so inherently noisier.
The trend from June on seems to be clear: that bank failures, which were at around 1½ a week, began accelerating, and it now looks to be averaging around 3/week.
It’s Bank Failure Friday!!!! ( On Saturday)
And here they are, ordered, and numbered for the year so far.
- Bank USA, N.A., Phoenix, AZ
- Community Bank of Lemont,Lemont, IL
- San Diego National Bank, San Diego, CA
- California National Bank, Los Angeles, CA
- Pacific National Bank, San Francisco, CA
- Park National Bank, Chicago, IL
- Citizens National Bank, Teague, TX
- Madisonville State Bank, Madisonville, TX
- North Houston Bank, Houston, TX
Great googly moogly, 9 banks…..That’s the most so far this year…..Last week’s 7 failures tied with the June 24 tally.
Except for that Whole Parachute Failure Thing…..
So, the delayed launch of the Ares I launcher was deemed a success, except, of course, for the whole recovery parachutes failing and damaging the nominally reusable shuttle solid rocket booster derived first stage.
The first stage suffered some significant damage as a result of the failure, though, for now, at least, the rest of the flight is considered to be “nominal.”
I’ll wait for the full report.
Russia Planning Nuclear Rocket
From the report, we are not talking about Orion, or direct thrust from nuclear heating, but rather some sort of electric propulsion system using electricity from a reactor for a proposed mission to Mars.
Something like ion drive, or plasma drive would likely cut transit time by at least ¾ for a manned trip to Mars, and if a ground base were established, a nuclear power supply would handle the reduced solar energy levels there.
I’d take this with a grain of salt, because the cost quoted for this is a bit over US $¾ billion, which sounds like a quote from Never Land.
Update on Saab Bribery Donations in Korea
The allegations are rather different from the run of the mill bribery cases, where someone pays a government official to buy their products.
Instead, it is alleged that Saab paid bribes to get information on Korea’s indigenous fighter program, so as better to compete for business.
SAAB is denying this.
The core of the allegations is that the president of the Security Management Institute (SMI), a private research company, was invited to a trade seminar in Sweden, and that SAAB covered his expenses, to the tune of $17,200.
Me, I’m just confused.
OK…….Count Me Dubious
There are a number of systems to deal with RPGs and similar threats, such as the US and Israeli active protection systems that shoot down incoming rounds, the slat armor used to predetonate HEAT rounds (shown, top), the cloth based TARIAN armor also used to predetonate armor (shown, Bottom), and now Textron has come up with the Tactical Rocket Propelled Grenade (RPG) Airbag Protection System (TRAPS), which uses sensors to detect an incoming round, and than uses an airbag to detonate the warhead far enough away from the hull to minimize damage. (no pictures, sorry)
There are a number of reasons that I am dubious.
The first is that it combines all the disadvantages of a passive system (single use) with those of an active system (expensive sensors), and also because it would appear to be particularly vulnerable to the tandem round system used in the RPG-30. (bottom 2 pictures)
I would also note that it does seem to suffer the same problem as all such systems developed under the Aegis* of the Pentagon:
The progress of TRAPS has not been as fast as one might expect. It was first unveiled at an Army trade show back in October 2006, after spending $3.5 million in Pentagon cash the previous year. Phase II testing is still to take place, and an operational system will be some way down the line. Janes notes the timing of the latest tests –- Textron is bidding to be part of the Army’s new Joint Light Tactical Vehicle (JLTV) program.
It’s running late, and it appears to be over budget.
Ecuadorian Helo Crash Air Show
Thankfully, there were only minor injuries at the crash, which occurred during an armed forced day celebration, but in keeping with my policy of never letting a crash with video and a happy ending go unnoticed, here it is.
I will say that it is kind of surreal how the marching band never misses a step in the video as the helo comes down.
H/t Graham Warwick
Best Answering Machine Message Ever
Sharon,* a teacher before becoming an educational consultant, found this to be a hoot.
*Love of my life, light of the cosmos, she who must be obeyed, my wife.
15 Years Ago
I plighted Sharon’s* troth.
We were married on October 30, 1994.
If we can get the kids to bed early enough, we’ll plight some more troth tonight.
*Love of my life, light of the cosmos, she who must be obeyed, my wife.
Star Wars and the Holy Grail
It does raise an interesting point.
Deal Reached in Honduras
It looks like the standoff has ended, and that Manuel Zelaya will be returning to serve the last 3 months of his term.
Of note is that neither Zelaya, who is constitutionally forbidden from running, nor Roberto Micheletti who took control following the coup, will be running.
The question is whether a free and fair election, and a free and fair campaign, can be run now.
H/t Calculated Risk,
The Artist should have his website up shortly
You know with this recession being over and all, maybe someone should tell the consumer, because consumer spending fell by 0.5% in September, the biggest drop in 9-months.
So consumers are skittish, as a new consumer sentiment survey, this time the Reuters / University of Michigan Survey of Consumer Sentiment Survey, fell in October, down to U Michigan survey, 70.6 from 73.5 in September.
So, that’s like 3 different consumer sentiment surveys that I’ve seen in the past 3 days, one up, and two down.
You have permission to be confused.
There are still a lot of people hurting out there, as shown by the Fannie Mae single family delinquency numbers for August. (see graph pr0n)
I am not seeing even a smidgen of a moderation there.
In the central bank world, the banks appear to be slowly walking back from the extreme measures that they took a year ago, with the Federal reserve re-instituting regulations that it suspended which allowed banks to supply capital to affiliates, which is generally a no-no, and the Bank of Japan is slowly pulling out of the credit markets.
Basically, they are trying to slow-walk their quantitative easing (printing money) measures.
It does not mean that they will be raising rates soon, but it does mean that there is a very gradual tightening of money going on.
In any case, the consumer spending numbers have rattled the markets, pushing US treasuries higher.
In stocks, the VIX, an index of stock volatility spiked upward by 24%, which indicates that market participants are expecting major swings in the stock market.
The bearish news today also pushed oil down, on demand concerns, and pushed the dollar up, on a flight to safety.
I will not be the Washington Post’s “Next Great Pundit”:
Thank you for entering the first season of the America’s Next Great Pundit contest. You didn’t make the judging easy for us. Not only did we get nearly 5,000 entries, but a great many of those entries were really quite excellent — smart, interesting, funny, well written and well argued. So while we’re sorry to say that we can’t include you as one of our ten finalists this time around, we hope this isn’t the last time we hear from you. We hope you’ll follow the rest of the contest and participate as voters. But even more important, we hope you’ll pitch us more of your work. The various ways you can send various types of pieces are outlined here:
Thanks again for giving this a try. We enjoyed reading.
So it goes.
Not surprised. There are lots of folks who write and think better than I do.
I will note that the Post still publishes Krauthammer, Will, Applebaum, Broder…TANJ.*
In any case, congratulations to Burton Richter, Courtney Martin, Darryl Jackson, Jeremy Haber, Maame Gyamfi, Kevin Huffman, Mark Esper, Lydia Khalil, and Zeba Khan.