Author: Matthew G. Saroff

Duke, Meet Newt

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In the middle of the Republican establishment’s heads exploding over the possibility of a Newt candidacy, Gingrich has been endorsed by former Congressman, and convicted felon, Randall “Duke” Cunningham:

Jailed ex-Congressman Duke Cunningham wants Newt Gingrich to know he’s got the Republican presidential candidate’s back.

Cunningham apparently has been watching the Republican presidential primary debates while spending 100 months in a Tucson, Ariz. federal prison. Cunningham, a Republican who represented northern San Diego, pleaded guilty to conspiracy and tax evasion in 2005 in one of the biggest federal bribery scandals in recent memory.

Cunningham tells Gingrich in an electronic message he says he sent to the candidate last month that his fellow prisoners, and their families, support Gingrich

Heh.

Since When Were Swiss Bank Acounts Acceptable?

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On NPR this morning, one of their bankster apologists was noting that Romney closed his Swiss bank account because recent US crack-downs on tax evaders using these accounts made them politically suspect.

What fairy tale land have these folks been living in?

I’m 49 years old, and for as long as I can remember, “Swiss Bank Account” has been synonymous with  tax evasion and concealing the proceeds of illegal activities.

My conclusion is that these guys must have the political and financial acumen of Little Orphan Annie.

Well, I Was Wrong on My Assessment of His SOTU Statement

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The one thing that I liked, a task force to investigate bank/mortgage fraud appears to be an attempt to undermine any meaningful review of bank and mortgage practices:

New York Attorney General Eric Schneiderman has been celebrated as the progressive Great White Hope. But the danger of assuming leadership is that that individual becomes a target both of attacks and of seduction. And while I’d like to think better of Schneiderman, an announcement earlier this evening has strong hallmarks of Schneiderman falling prey to the combined pressures and blandishments of the Administration and its allies.

………

So get this: this is a committee that will “investigate.” The co-chair, Lanny Breuer, along with DoJ chief Eric Holder, hail from white shoe Washington law firm Covington & Burling, which has deep ties to the financial services industry. Even if they did not work directly for clients in the mortgage business, they come from a firm known for its deep political and regulatory connections (for instance: Gene Ludwig, the Covington partner I engaged for some complicated regulatory work when I was at Sumitomo Bank, later became head of the OCC). We’ve written at length on how the OCC is such a shameless tout for the banking industry that it cannot properly be called a regulator. Similarly, the SEC has been virtually absent from the mortgage beat, no doubt because its enforcement chief, Robert Khuzami, was general counsel to the fixed income department at Deutsche Bank. That area included the trading operation under Greg Lippmann who we have described as Patient Zero of so called mezz CDOs, or to the layperson, toxic mortgage paper that kept the subprime bubble going well beyond its sell date. And we don’t need to say much about the DoJ. It has been missing in action during this entire Administration.

………

It’s clear what the Administration is getting from getting Schneiderman aligned with them. It is much less clear why Schneiderman is signing up. He can investigate and prosecute NOW. He has subpoena powers, staff, and the Martin Act. He doesn’t need to join a Federal committee to get permission to do his job. And this is true for ALL the others agencies represented on this committee. They have investigative and enforcement powers they have chosen not to use. So we are supposed to believe that a group, ex Schneiderman, that has been remarkably complacent, will suddenly get religion on the mortgage front because they are all in a room and Schneiderman is a co-chair?

See also here.

So, this isn’t an attempt to stop law breaking, it’s yet another attempt to cover up law breaking by co-opting people who do want to pursue corruption and law breaking.

It’s like his appointment of Elizabeth Warren to set up the CFPB all over again.

Only About 2½ Years Late

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Tim Geithner has pretty much said that he won’t serve in Obama’s next term:

Treasury Secretary Timothy F. Geithner, the last remaining member of the Obama administration’s original economic team, said he doesn’t expect the president to ask him to stay in office if re-elected.

“He’s not going to ask me to stay on, I’m pretty confident,” Geithner said in an interview with Bloomberg Television today. “I’m confident he’ll be president. But I’m also confident he’s going to have the privilege of having another secretary of the Treasury.”

Geithner, 50, has led President Barack Obama’s efforts to pull the U.S. economy out of the worst recession since World War II, including overseeing bailouts of automakers General Motors Co. and Chrysler Group LLC, which have since emerged from bankruptcy. Before joining the administration in 2009, Geithner was president of the Federal Reserve Bank of New York, playing a key role in the government’s rescue packages for banks including Citigroup Inc. (C) and Bank of America Corp. (BAC)

Well, after completely f%$#ing the economy, the financial system, and the Democratic Party, through your relentless ass kissing of Wall Street, I guess that your work is done.

It should be noted though, the Cossacks work for the Czar.

FOMC Says that Rates Should Stay Low for 2-3 Years

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I would expect Republicans’ head to explode, because they will see this as “support” for Obama.

The Fed’s Open Market Committee is saying that it expects rates to remain at near zero until at least late 2014.

The big news is that they have announced an explicit inflation target, 2%, for the first time ever.

While this is a refreshing step towards Fed transparency, we are in a debt overhang and a liquidity trap, and we should targeting a higher inflation rate, as this devalues debt and gives greater effect to low interest rates.

To my mind, they should be targeting 6-8%, but I’d take 4%.

Full Fed statement after the break.

Press Release

Release Date: January 25, 2012

For immediate release

Press Release

Release Date: January 25, 2012
For immediate release

Information received since the Federal Open Market Committee met in December suggests that the economy has been expanding moderately, notwithstanding some slowing in global growth. While indicators point to some further improvement in overall labor market conditions, the unemployment rate remains elevated. Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed. Inflation has been subdued in recent months, and longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth over coming quarters to be modest and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that over coming quarters, inflation will run at levels at or below those consistent with the Committee’s dual mandate.

To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.

The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Sarah Bloom Raskin; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who preferred to omit the description of the time period over which economic conditions are likely to warrant exceptionally low levels of the federal funds rate.

2012 Monetary Policy Releases

Obama Goes for Accelerated Review of Healthcare Reform

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The Obama administration has decided not to appeal to the full 11th circuit court and go directly to the Supreme Court, which means that we could see a ruling as early as June.

I’m not sure what the tactics are here.

There are three legal questions here

  • The first question is whether they can rule on the mandate at all, since the anti-injunction act of 1869 prohibits suits against taxes until the tariff is actually levied.
  • The second question is whether if part of the law is struck down, is the entire law struck down. (severability)
  • The third question (and the biggie) is whether or not the mandate is constitutional. 

The third question is a slam dunk based on precedent, but I expect at least 4 of the justices to go full Bush v. Gore and find some contrived form of logic to ignore that.

It pretty much comes down to Justice Kennedy, but he ruled for Bush in Bush v. Gore, so I think that Obamacare is toast.

Well, We Have Mixed News on the Scott Walker Front

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The good news is that some of his former staffers are facing more charges:

A new round of criminal charges is coming soon against at least a couple of Gov. Scott Walker’s former county staffers for doing extensive campaign activity while on the taxpayers’ dime, sources say.

The charges – which should be filed by District Attorney John Chisholm’s office in the next week or two – will be part of the long-running John Doe investigation of Walker’s aides and associates during his tenure as Milwaukee County executive.

Already, the probe has led to multiple felony charges against Walker’s onetime deputy chief of staff, Tim Russell, and former county veterans official Kevin Kavanaugh. They are accused of taking more than $60,000 in donations intended for Operation Freedom, an annual event at the county zoo for veterans and their families.

Russell’s domestic partner, Brian Pierick, was also hit with two felony counts for child enticement.

That’s the good news.

The bad news is that under Wisconsin law, until a date is set for the recall election, Walker has no limits to his fund raising, and the Koch suckers have been showering him with money:

The Walker campaign announced on Tuesday that he raised $4.5 million in just the period from December 11 through Jan 17, and has over $2.6 million on hand. In all, he has raised $12 million since January 1, 2011.

“Governor Walker’s message of moving Wisconsin forward continues to resonate with voters,” said communications director Ciara Matthews. “It is this message, and the success of the governor’s reforms, that have inspired people to contribute to his campaign in overwhelming numbers. These donations will allow us to fight back against this baseless recall and ensure Governor Walker can continue to lay the foundation for a more successful Wisconsin and keep government working on the side of taxpayers.”

The press release notes that the donations came from a total of 21,443 contributions, including 16,406 of contributions of $50 or less. But under the surface, it becomes clear that Walker has been taking advantage of a key aspect of the state fundraising law for recalls — that until the election is officially triggered, the targeted incumbent can bring in unlimited donations.

That’s a f%$# load of money. It’s like $2½ for each man, woman, and child in the badger state.

The optimist in me hopes that the money wont matter. The pessimist in me …………

My Take on Obama’s State of the Union Speech

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I didn’t expect to be impressed, and I wasn’t.  I’m really not one of his fans.

Quick bullet points:

  • His nods to populism seemed to be insincere.  I really don’t believe that we’ll see any effort to crack down on, for example, Chinese trade/currency manipulation.
  • He couldn’t resist inserting yet another “there are people on both sides” who are nasty bit, as was his digression about milk spill regulations, and icky regulations.
  • Raising taxes on millionaires, and banning congressional insider trading and lobbying by campaign bundlers are winners, but won’t pass this Congress.
  • His statements on spending war savings on infrastructure is nothing new.
  • His call for establishing a financial crimes unit is probably a good idea, assuming that it is not just rearranging deck chairs.
  • I liked his shout out to Richard Cordray heading the CFPB.  It was pretty much his only “in your face” to the ‘Phants.

Jon Stewart Must Love Newt

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He does look a bit stunned though

Because the obvious hypocrisy and venality that is Newt must make his job easier.

Stewart’s observation to Newt’s fake outrage:

You imagined your wife, while she was dealing with having MS, would be open to you having sex with another lady you’d already been having sex with for six f%$#king years!” Stewart said. “I think you’ve got a pretty good imagination dispicability-wise.

And then there is Gingrich’s claim to be running as an outsider:

You are the Washington outsider? When Washington gets its prostate checked, it tickles you.

Watch the video. It’s a good way to spend 8 minutes and change.

Oh, This is Prize.

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Freddie Dalton Thompson, whose 2008 presidential campaign debacle I called the “Fred Thompson Clown Show,” has endorsed narcissistic sociopath Newt Gingrich for president:

Former Sen. Fred Thompson, the real life lawyer perhaps best known for playing one on television, announced his endorsement of Newt Gingrich Monday evening.

“I have come to the growing realization that Newt Gingrich is the guy who can articulate what America is all about,” Thompson said of the former House speaker on Fox News.

This is kind of a clown show two-fer.

Well, Here’s One Announcement Obama Won’t Make at the SOTU

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He might be making some comments about working toward a sellout to settlement with the big banks and the mortgage services.

The reason that he won’t be touting the settlement is because there is no settlement:

FOR IMMEDIATE RELEASE
January 23, 2012

STATEMENT FROM [Iowa] ATTORNEY GENERAL TOM MILLER [Obama toady Lead AG in the negotiations]

(CHICAGO, Illinois) State Attorneys General from both parties, along with our federal partners, are today discussing the details of the progress we have made so far in settlement negotiations, including the terms we must still resolve. We have not yet reached an agreement with the nation’s five largest servicers, and we won’t reach a settlement any time this week.

As you can tell, I not a big fan of the settlement, and I think we can thank the people who have opposed the deal as currently structured, most notably Yves Smith, who has done yeoman work on teasing out the details and communicating what it all means for months, the recent condemnation of the deal by AFL-CIO President Richard Trumka is also significant. (And, as an FYI, everyone’s favorite right wing nuts, Judicial Watch, has filed suits to get related documents)

This resembles the groundswell that led to Obama vetoing HR 3808, which allowed some states shoddy documentation practices to go national.

With the increasing complaints from consumer activists about the settlement.

What are the problems?

Well on the micro level (courtesy of Yves Smith), it gives the banksters an incentive to pawn the losses off against the the mortgages that they recapitalized, avoiding the hit themselves, and giving it to pension funds, it incentivizes targeting the largest loans, and so benefits the richest, and there are no meaningful mechanisms to enforce good behavior from the mortgage servicers.

On the macro level, let’s roll Simon Johnson:

The financial sector has been the Obama administration’s Achilles’ heel. Despite coming to power in the middle of the greatest financial crisis since the Great Depression with a broad mandate for “change,” the administration has consistently deferred to big banks and done its best to keep them in business “as is.”

(Read the rest, really).

The real underlying message much of the disgust with how the government in general, and the Obama administration in particular function is that there has been a failure to stop the looting, and start prosecuting.

New Gingrich, Whiny Bitch

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It appears that Newt just can’t get his debate on without a dawg pound in the audience, so hew is threatening to skip debates if they don’t allow the audience to cheer and boo, because it’s important to allow the audience to boo the golden rule, and cheer allowing grannies to die:

Newt Gingrich insists his fans will not be silenced.

Mr. Gingrich, a former House speaker, on Tuesday morning threatened not participate in any future debates with audiences that have been instructed to be silent. That was the case on Monday, when Brian Williams of NBC News asked the audience of about 500 people who assembled for a debate in Tampa to hold their applause until the commercial breaks.

In an interview with the morning show “Fox and Friends,” Mr. Gingrich said NBC’s rules amounted to stifling free speech. In what has become a standard line of attack for his anti-establishment campaign, Mr. Gingrich blamed the media for trying to silence a dissenting point of view.

“I wish in retrospect I’d protested when Brian Williams took them out of it because I think it’s wrong,” Mr. Gingrich said. “And I think he took them out of it because the media is terrified that the audience is going to side with the candidates against the media, which is what they’ve done in every debate.”

Seriously, it appears that Gingrich can’t be at his best without an audience of inbred sociopath teabagger bigots, I guess.

He’s the perfect Republican.

Sarko Gets One Right

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The French have passed a law making it illegal to deny the existence of the Armenian Genocide.

I don’t approve laws forbidding speech, but I DO approve of pushing back on the Turkish aggressive policy of denial and disinformation regarding historical fact.

The cynic in me thinks that Nicolas Sarkosy was motivated by the political calculus that bashing Turks would sell with the Neanderthal set in the upcoming election though.

One final note:  Serdar Argic, eat my shorts.

Obama’s War on Open Government Continues

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They are going after a CIA officer who revealed our chain of gulags and torture:

The Justice Department on Monday charged a former CIA officer with repeatedly leaking classified information, including the identities of agency operatives involved in the capture and interrogation of alleged terrorists.

The case against John Kiriakou, who also served as a senior Senate aide, extends the Obama administration’s crackdown on disclosures of national security secrets. Kiriakou, 47, is the sixth target of a leaks-related prosecution since President Obama took office, exceeding the total number of comparable prosecutions under all previous administrations combined, legal experts said.

Kiriakou, who was among the first to go public with details about the CIA’s use of waterboarding and other harsh interrogation measures, was charged with disclosing classified information to reporters and lying to the agency about the origin of other sensitive material he published in a book. He faces up to 30 years in prison if convicted.

Seriously, this sh%$ is just evil.

There have been more prosecutions of leakers in 3 years of the Obama administration than there had been over the prior two hundred and twenty years.

This is despicable.

Obama’s Assassination Catch-22

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If you are targeted by this administration for assassination, then only you can challenge this in court, but the Obama administration will sniff out your communications with your lawyers in order to find and kill you:

On Saturday in Somalia, the U.S. fired missiles from a drone and killed the 27-year-old Lebanon-born, ex-British citizen Bilal el-Berjawi. His wife had given birth 24 hours earlier and the speculation is that the U.S. located him when his wife called to give him the news. Roughly one year ago, El-Berjawi was stripped of his British citizenship, obtained when his family moved to that country when he was an infant, through the use of a 2006 British anti-Terrorism law — passed after the London subway bombing — that the current government is using with increasing frequency to strip alleged Terrorists with dual nationality of their British citizenship (while providing no explanation for that act). El-Berjawi’s family vehemently denies that he is involved with Terrorism, but he was never able to appeal the decree against him for this reason:

Berjawi is understood to have sought to appeal against the order, but lawyers representing his family were unable to take instructions from him amid concerns that any telephone contact could precipitate a drone attack.

Obviously, those concerns were valid. So first the U.S. tries to assassinate people, then it causes legal rulings against them to be issued because the individuals, fearing for their life, are unable to defend themselves. Meanwhile, no explanation or evidence is provided for either the adverse government act or the assassination: it is simply secretly decreed and thus shall it be.

Exactly the same thing happened with U.S. citizen Anwar Awlaki. When the ACLU and CCR, representing Awlaki’s father, sued President Obama asking a federal court to enjoin the President from killing his American son without a trial, the Obama DOJ insisted (and the court ultimately accepted) that Awlaki himself must sue on his own behalf. Obviously, that was impossible given that the Obama administration was admittedly trying to kill him and surely would have done so the minute he stuck his head up to contact lawyers (indeed, the U.S. tried to kill him each time they thought they had located him, and then finally succeeded). So again in the Awlaki case: the U.S. targets someone for death, and then their inability to defend themselves is used as a weapon to deny their legal rights.

This is deeply repulsive, and, unfortunately, it is the new normal, and the next president, whether it be in 2012 or 2016, will accept this and extend these policies, just as Obama has, and things will get worse again.

Roberts Court Gets One Right

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They have ruled by 9-0 that a warrant is required to plant a GPS tracker on someone’s car.

The the majority opinion was that  the physical installation of a tracker was a trespass, and hence required a warrant, while 4 justices, Alito, Ginsburg, Breyer, and Kagan argued more broadly that it “impinged on the expectation of privacy.”

This is not a distinction without a difference.  The former position leaves issues like, for example, tracking a cell phone, unclear, and you can be sure that lazy members of the law enforcement community will exploit this ambiguity.

Motherf%$#er

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Jake Burris, the campaign manager for Ken Aden’s (D) had his cat beaten to death by some teabagger scum:

Police were investigating Monday after a cat belonging to the family of a Democrat’s campaign manager was beaten to death and the word “liberal” scrawled across its side.

The cat belonged to the family of Jake Burris, who manages Democrat Ken Aden’s bid for Arkansas’ 3rd Congressional District.

Burris was returning to his Russellville home with his four children when he found the cat on his doorstep Sunday night, the Aden campaign said in a press release.

The mixed-breed Siamese cat had one side of its head bashed in to “the point the cat’s eyeball was barely hanging from its socket,” the release said.

Aden told Reuters that the event was “horrible, to say the least.”

If we find out who did this, I would hope that the US Attorney finds a way to treat this as terrorism, and go full Patriot Act on his ass.

Why the USAF Should Be Abolished, Part MLXVII

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The US Army has real and current needs for transport, and the USAF response to addressing those needs is to do their beat to ensure that they are not met: (paid subscription required)

………

Apparently, this sentiment does not apply to the interservice skirmishes at the Pentagon. The U.S. Army and Air Force are in the final throes of hashing out an updated agreement on the time-sensitive, direct-support airlift mission, the latest chapter in a years-long saga over how to ship supplies to remote soldiers despite two wars and one stunted buy of Alenia’s C-27J.

The agreement is being made between the chiefs of staff of both services. At issue is how the time-sensitive airlift mission will be handled; this includes the shuttling of small loads of supplies to forward Army units in the field.

………

The last installment of this tug-of-war took place in 2005 when, during his first major speech to the Air Force Association, the then Chief of Staff of the Air Force, Gen. T. Michael Moseley, announced he wanted a new light cargo aircraft. This was considered odd as the Army was in the midst of setting up its future cargo aircraft program, which was then crafted to replace old C-23 Sherpas and provide more immediate access to commanders for cargo support. At the time, the Army moved ahead with its own program because it felt that it had lackluster support by the Air Force to properly back its needs.

………

Moseley’s push, along with his similar and later move to take over the Army’s burgeoning UAV force, was seen as an abrupt roles-and-missions grab by the Air Force in the midst of these two wars. In the case of the cargo aircraft role, the USAF won.

At the direction of then-Defense Secretary Robert Gates, in 2009 the Air Force took over authority for the C-27J buy and control of the direct-support mission; service officials said they would combine the use of C-27Js and C-130s to provide cargo lift for the Army (though Army officials had long complained that C-130 support was inefficient owing to underloading of these larger aircraft).

Army officials say that in actuality, the CH-47 Chinook fleet has been unduly burdened in providing timely support because the helicopters are used to shuttle goods from C-130s that land at hubs to the remote locales where soldiers are stationed.

“The major rub to us is responsiveness and not efficiency,” says one Army official who requests anonymity. “When a part is needed at the front line, it flies” and shouldn’t have to wait for enough requests to fill a C-130, the official adds. “We are more about effectiveness than efficiency, and [the Air Force is] more about efficiency than effectiveness.”

……………

Two C-27Js were deployed to Afghanistan in late July 2011 and quickly started flying operational direct support missions, Gen. Raymond Johns said last fall. The C-27Js are apportioned to Army officials there via Tacon (tactical control), although USAF pilots fly the missions, but the C-130s are not. This means the C-27Js are specifically set aside only for intratheater/direct-support missions under Army authority. Though C-130s are used for this mission, they can be reassigned elsewhere in the area, if needed, Johns said.

Army officials are less than satisfied with the Air Force’s delays in delivering C-27Js to the field. At least six were to be in Afghanistan by now, and why they have not been deployed is the “golden question,” the anonymous Army official said.

One industry official says the Army is “trying to hold the Air Force’s feet to the fire to do what they signed up for” in the 2009 pact.

Alenia has delivered 13 of 21 C-27Js on contract. Originally, Alenia officials projected the U.S. market for the C-27J (including Army/Air Force buys) to support as many as 125 aircraft. Tierney said that in 2005, the Army’s projections set a low risk of handling the mission with a fleet of 78 C-27Js and a moderate risk at 54. When Gates shifted the C-27J program from Army control to the Air Force, the buy shrank to 38 aircraft.

So basically, the army has a real and current need, and the USAF’s response is to hijack it, sabotage the purchases, and not deliver it.

The creation of an independent air force from the U.S. Army Air Forces has not shown itself to be a step forward in military efficiency.

FWIW, there are historical precedents.  During the Vietnam war, the Air Force took over the operation of smaller cargo aircraft, (the Otter/Caribou if I recall) and promptly decided that they could only fly into air strips that were capable of handling the much larger C-130, eliminating much of their utility.

Quote of the Day

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Courtesy of the The Rude Pundit:

You got that? The whore who fronts for an industry owned by multinational megacorporations like NewsCorp, Sony, and Viacom is actually attacking BoingBoing.net owners Happy Mutants LLC for using the internet for some evil agenda to steal Chipmunk movies just because they went on a one-day strike. That’s a bit like Ted Bundy accusing a student nurse of having a messy dorm room just before bludgeoning her to death.

He is, of course, describing former Senator Chris Dodd’s pimping for big media in has capacity as chief lobbyist for the MPAA.