Author: Matthew G. Saroff

Bush Fired Rove In Church

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Boy, the Avignon president is a really classy guy:

If you’re going to fire someone, you want to make sure you do it in a place where the now-unemployed can’t make a scene.

You know…a place like, say, a church.

That, according to a new book – “Machiavelli’s Shadow” – by former Time magazine reporter Paul Alexander, is where President George W. Bush informed trusted advisor Karl Rove in 2007 that his services would no longer be needed at the White House.

“On a Sunday in midsummer, George W. Bush accompanied Karl Rove to the Episcopalian Church Rove sometimes attended,” writes Alexander. “They made their way to the front of the congregation. Then, during their time in the church, Bush gave Rove some stunning news. ‘Karl,’ Bush said, ‘there’s too much heat on you. It’s time for you to go.’”

It appears that Rove is a screamer, and Bush was afraid that he would be shouted at.

But according to the Republican party, Bush is really brave for sending soldiers to die in Iraq.

Pathetic.

Boy…Firing a man in church because you were afraid he would be angry with you? Bush is one classy dude.

Economics Update

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China, in response to inflationary pressures, and the fact that a number of their banks are insolvent by western standards, just hiked their reserve requirements, meaning that they have to keep more in reserve, and lend less out of their deposits, which, not surprisingly has tanked Asian markets.

Given that the US trade deficit widened under the pressure of rising oil prices, there may be another purpose: to slow things down before US demand drops off a cliff, particularly when Ben Bernanke is signaling rate hike strongly.

In any case, oil fell a bit, but gasoline is still hitting new records, which implies that a lot of money is still going to petro-economies.

It looks like the British Bankers Association may be taking steps to fix the problems with LIBOR reporting, where this critical rate looks increasingly to have been gamed by member banks, by tightening scrutiny on the transactions, though they are still whining about how it will hurt, “What we do here in the U.K. must match others … maintaining competitiveness is essential to the U.K. industry.”

If you crank out phony numbers, it will hurt your bank more than any other thing that you can do.

Meanwhile, back in the good old USA, Q1 delinquencies rose 62% over a year ago.

Zimbabwe: Mbeki “Loses” Letters from, Tsvangirai, Courts Rule Against ZANU-PF

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A letter has reached the South African newspapers from Morgan Tsvangirai pleading with Thabo Mbeki to do something, and his office claims to have “never received the letter”.

Simply disgraceful.

The courts in Zimbabwe actually seem to be doing their jobs though, ordering the release of a jailed opposition MP, and reversing the police ban on rallies, though this may not help much with ZANU-PF thugs using violence to disrupt the rallies.

It’s no wonder that Human Rights Watch is calling for intervention.

30 Years for Driving While Black

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William Thornton IV, a black man, skidded through a stop sign on a rainy night, and struck an SUV, killing its two occupants. He remained at the scene, and there were no drugs or alcohol in him. He had no criminal record.

Despite this, Judge Ric Howard sentenced him to 30 years in jail, after he followed his public defender’s advice, and pled guilty and threw himself on the mercy of the court.

Thankfully, a high powered law firm noticed, but had he been white, would he have served any time at all.

Congress Attempting to Regulate Satellite Launches Without US Content

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The House 2009 Defense Authorization Bill has a section that allows for punitive actions to be taken against “a foreign-owned company that is engaged with the People’s Republic of China in the development, manufacture or launch of certain satellites” (Paid Subscription Required).

This is about Thales Alenia Space, which has communications satellites that use no US content, and they are cleaning up by using the dirt cheap Chinese Long March boosters to launch satellites that have no ITAR (International Traffic in Arms Regulations) components.

It appears that something got Duncan Hunter’s (R-CA) nose out of joint about this, but given the restrictions on what are commercial technology present in the ITAR regulations, it was inevitable that this would happen.

I wonder if the WTO will end up getting involved in this.

The Real Misery Index

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The inestimable Barry Ritholtz notes that the Hedonically-Adjusted, Well-Spun, Nominal Misery Index, the sum of unemployment and inflation, is really 6 pounds of fertilizer in a 5 pound bag, and that if we used the same standards, because both numbers have been massaged into irrelevancy, and that if you used the metrics in place in 1980 or so, we would be at about the same number:

That’s right, we would be looking at 12% inflation and 9% unemployment under some measures.

SEC Looks to Ban Ratings Agencies from Consulting on How to Get Good Ratings

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It boggles my mind that this is allowed:

The U.S. Securities and Exchange Commission may recommend this week that Moody’s Investors Service, Standard & Poor’s and Fitch Ratings be prohibited from advising investment banks on how to earn top rankings for asset- backed securities, according to people familiar with the matter.

This just buggers the mind. These companies were advising investment banks on how to game themselves.

This is not the only change proposed, the SEC is going more generally for transparency in rating:

SEC staff may also propose at a June 11 meeting in Washington that the companies disclose all the data that goes into a rating so competitors can grade bonds even if they weren’t compensated by the underwriter, said the people, who declined to be identified because the rules aren’t final. Moody’s, S&P and Fitch help design securities backed by a stream of payments, making it impossible for them to be impartial raters, a May 2007 academic study by Joseph Mason and Joshua Rosner concluded.

This is Alan “Bubbles” Greenspan’s Randroid utopia of an unregulated market, inside players conspiring to defraud the average investor.

Why Guest Worker Programs are a Bad Thing, Episode 7734

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This time, it’s welders and pipe fitters from South Asia, who were misled, and had to pay outrageous fees, to get H2B visas to work in the US:

The Indian workers say they were deceived by Signal International and labor recruiters when they paid as much as $20,000 for visas they believed would allow them to work and live permanently with their families in the United States. In fact, the H-2B visas are for short-term contracts.

They are now on a hunger strike.

I would note that this problem is not a bug in guest worker programs. It’s a feature.

The goal of guest worker programs is to create an underclass of cheap and easily exploited labor.

Just in Case You Were Wondering

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yes, Virginia, the drug companies do have a policy of secret payoffs to researchers.

A world-renowned Harvard child psychiatrist whose work has helped fuel an explosion in the use of powerful antipsychotic medicines in children earned at least $1.6 million in consulting fees from drug makers from 2000 to 2007 but for years did not report much of this income to university officials, according to information given Congressional investigators.

At some point, we need to start throwing both the people who took, and the people who made, the payments in jail.

New Gitmo Revalation: Pentagon Directed Destruction of Evidence

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The operation manual that the Pentagon gave interrogators directed them to, “destroy their written notes in case of being summoned to testify regarding alleged ill-treatment of detainees”, seehere, here, and here.

In an affidavit signed by [Omar Khadr Defense Attorney] Kuebler, the manual is quoted as saying, “The mission has legal and political issues that may lead to interrogators being called to testify, keeping the number of documents with interrogation information to a minimum can minimize certain legal issues.”

This flies in the face of every tenet of modern law and jurisprudence.

Ignoring the fact that Khadr was a 15 year old child at the time of the event, and should therefore be treated for trauma as a child soldier, the idea that the operations manual calls for destruction of evidence on the theory that it might prove inconvenient is outrageous.

The person who wrote this manual should be jailed, not just fired.