Author: Matthew G. Saroff

God Help Me, I Agree With Joe Lieberman

No Comments

Yes, the sanctimonious rat-fink is saying that the Senate should postpone its adjournment to make sure that there is time to repeal Don’t Ask Don’t Tell:

Sen. Joe Lieberman (I-Conn.) wants the Senate to stay in session until it’s passed legislation to do away with the military’s “Don’t ask, don’t tell” policy.

Lieberman, a key Senate proponent of repealing the military’s ban on openly gay or lesbian members, doesn’t want the chamber to adjourn until it’s acted on a defense authorization bill that contains a provision to do away with the policy.

Note that Lieberman has been a stronger advocate of repeal than either Barack “Fierce Advocate” Obama or Harry Reid.

For once, we have a bunch of wankers in the room, and Lieberman isn’t one.

And While We Are Talking About People Upset with Obama

1 Comment

At Crooks and Liar, they have thrown in the towel:

That does it. Obama needs to face a strong primary challenger. And no, I don’t care if it costs the Democrats the White House in 2012. Obama had a golden opportunity to have an actual victory — the first he’s had since he killed that fly back in 2009 — and he’s flushing it down the crapper. We cannot have this guy representing us anymore. He is too weak to lead.

While Michael Lerner, editor of Tikkun magazine and the chair of the interfaith Network of Spiritual Progressives, is saying that we need a strong primary challenge from the left to save Obama from himself:

But there is a real way to save the Obama presidency: by challenging him in the 2012 presidential primaries with a candidate who would unequivocally commit to a well-defined progressive agenda and contrast it with the Obama administration’s policies. Such a candidacy would be pooh-poohed by the media, but if it gathered enough popular support – as is likely given the level of alienation among many who were the backbone of Obama’s 2008 success – this campaign would pressure Obama toward much more progressive positions and make him a more viable 2012 candidate. Far from weakening his chances for reelection, this kind of progressive primary challenge could save Obama if he moves in the desired direction. And if he holds firm to his current track, he’s a goner anyway.

Note that both of these comments were before Obama’s sellout this evening.

Friday’s Pathetic Job Numbers

No Comments

Well, it turns out that the ADP estimate was wrong, and the job creation numbers were absolutely pathetic, there were only 39,000 jobs created in November, somewhere around 100K less than is needed to account for growth in the labor market, the unemployment rate went up 0.2% to 9.8%.

And in case you are wondering, that increase in unemployment is not an artifact of the discouraged looking for work, because there was no increase in the labor participation rate, which means that we just had a really bad month.

One month does not a double dip make, but when you realize that this is juxtaposed with the stimulus money tapering down, it is an issue of concern.

Then again, my anecdotal data, job shops calling me, is pretty strong, so YMMV.

It’s Bank Failure Friday!!!! (on Saturday)

No Comments

There were no failures of FDA insured institutions, so the count remains at 149, but we did see a credit union closing:

  1. Constitution Corporate Federal Credit Union, Wallingford, CT

My bad, I am a couple of weeks late on this, the credit union was actually closed on November 19, so I am 2 weeks late.  Here is the full NCUA list

This is the longest stretch so far this year, 2 weeks, without a bank or credit union closure, just so you know.

So, here is the graph pr0n with trendline (FDIC only):

I would note that are now at the point where the utility of the least squares trendline is diminishing, but I’m keeping it here for historical purposes.

I’m With Jane Hamsher on This

No Comments

Barack “I suck up to Wall Street Like 1000 Hoover vacuum cleaners” Obama is not folding on tax cuts for the hyper-rich, he wanted them to keep their tax cuts all along:

It’s been clear for some time that President Obama made the political calculation that he does not want any of the Bush tax cuts to expire. He doesn’t want to be the guy in 2012 running for President on having “raised taxes during a time of recession.”
But the President also doesn’t want the political blowback of angering people who cheered him on the campaign trail when he promised to let the tax cuts expire. And so rather than just come out and just say that, he’s been actively trying to kill a Chuck Schumer deal to keep them from expiring on income of more than $1 million a year. It was a plan that put the GOP in an awkward position, and had thrown them off message in recent days — hard to be the people fighting for the 315,000 families who fall into that category over the 2 million set to lose their unemployment benefits by the end of the year.

The President argued against the Schumer deal, we are told, because he was concerned about “the cost [to the deficit] and the risk of redefining the middle class as those making over [should read under] one million.”

The President’s argument is, of course, pure crap.

I think that when we look at Barack Obama’s performance on issues of real reform, it’s clear that he falls short of his rhetoric because he does not want real reform.

Financial reform was mostly smoke and mirrors, with small steps, like the Consumer Financial Protection Bureau, being driven by a need to avoid totally alienating his base in 2012.

The same goes for taxes, or for the give-away to health insurers that is laughably called healthcare reform.

Go read the rest.

Don’t Audit the Fed

No Comments

Waterboard their lily white flabby asses until they release the data that they are required to!

Even though the (weak tea) Dodd-Frank financial reform bill requires the Federal Reserve to release data on the collateral that they received for loans during the crises, the “sh%$pile for cash” program, so that people can see the risks that they took, the Fed is withholding this data:

The Federal Reserve withheld details on individual securities pledged as collateral by recipients of $885 billion in central bank loans, denying taxpayers a measure of the risks they faced from its emergency aid.

The central bank yesterday released data on 21,000 transactions from $3.3 trillion in emergency lending to stem the financial crisis. July’s Dodd-Frank law required the Fed to disclose the names of borrowers, the size and interest rates of loans, and “information identifying the types and amounts of collateral pledged or assets transferred.”

What is going on here is that the Fed is trying to cover its ass, and the only question is whether what they did was merely myopic, or actually illegal.

My money is on the latter.

H/t Yves Smith.

The Wheels of Justice Turn Slowly

No Comments

In Nigeria, where they intend to charge Dick Cheney for bribery for his activities as head of Halliburton:

Nigeria will file charges against former U.S. Vice President Dick Cheney and officials from five foreign companies including Halliburton Co. over a $180 million bribery scandal, a prosecutor at the anti-graft agency said.

Indictments will be lodged in a Nigerian court “in the next three days,” Godwin Obla, prosecuting counsel at the Economic and Financial Crimes Commission, said in an interview today at his office in Abuja, the capital. An arrest warrant for Cheney “will be issued and transmitted through Interpol,” the world’s biggest international police organization, he said.

And the Wikileaks tapes reveal that the Obama administration went hammers and tongs against Spanish judicial investigations of torture by Bush administration officials.

So it appears that the rich and powerful evil-doers are more likely to be prosecuted in Nigeria, and more likely to be protected in the United States.

H/t emptywheel.

Economics Update

No Comments

It’s jobless Thursday, and unemployment rose, but it remains below the 450,000 range that I have been harping on,with new claims rising by 26,000 to 436,000, the 4-week moving average falling by 5,750 to 431,000, continuing claims rising by 53,000 4.27 million, and extended benefits rising by 377,000 to 8,91 million.

Truth be told, since this is reporting from a short week because of the Thanksgiving holiday, I’m not sure if it means much.

In real estate, pending sales for existing homes jumped by 10% in October, which is surprisingly good news, though it may not translate in to quite so many closing, since mortgage rates are rising, which may complicate the life of your average home buyer.

Another Day, Another Sellout by an Obama Flunky

No Comments

This time, it’s FCC Chairman Julius Genachowski making a proposal that would place a fig leaf on the elimination of net neutrality.

There are a number of problems:

  • It does not cover wireless, except for vague language.
  • Paid priority is acceptable so long as it is not “unjust and unreasonable,” which allows Comcast to gig over the internet video to prop up its cable business.
  • It is likely not legal, since the court of appeals has already said that the FCC has little or no authority to regulate to regulate Title I (information services), and the plan refuses to reclassify the services as Title II (communication services), where there is explicit statutory authority.
  • How actual infractions would be handled are unclear.

I would also point you at comments by the President of Public Knowledge, and would further note that PK, as well as Harld Feld’s commentary on Wetmachine are probably good starting points for developments.

The FCC meeting will be on December 21, and the Republicans on the board, 2 of the 5, have already announced that they will oppose any regulation, so it’s possible that Genachowski will have to move in the consumer’s direction to deal with his more consumer friendly board members.

Finally, Some Competence

1 Comment

The House just passed the “Democratic version” of the tax cut extension, with the support of only 3 Republicans, and the opposition of of 20 mostly Blue Dog and mostly lame duck Democrats.

I don’t expect to make it through the Senate, but this is both good politics and good policy.

What is interesting is the parliamentary maneuver used to get it passed by a simple majority.

Normally, you need a ⅔ majority vote in the House to pass the bill without the possibility of a motion to recommit, basically a motion to amend and send back to the originating committee, and the Republicans always come up with stuff that will make weak kneed Democrats vote with them, typically having to do with sex offenders, or in this case, Wall Street tax cuts to make the Blue Dog/New Dem squishes tremble.

Well, Nancy Pelosi found a work around:

Brace yourself for some procedural jargon: Dems once believed they were faced with two mixed options for holding this vote. The first was to hold an up-or-down vote under the normal rules. But that would give Republicans the opportunity to introduce what’s known as a motion to recommit — a procedural right of the minority that would have allowed them to tack an extension of tax cuts for high-income earners on to the legislation.

The second option — suspending the rules — would have foreclosed on that right, but would have required a two-thirds majority of the House for passage: 290 votes, an impossible hurdle.

But Democrats figured out a way to avoid this. They’re attaching their tax cut plan as an amendment to a separate bill [the Airport and Airway Extension Act, to wit]. That legislation already passed the House, and has just been returned from the Senate. The rules say it can’t be recommitted. So the GOP’s hands are tied.

You can blame Obama for the election debacle. You can blame Harry Reid. Don’t blame Nancy Pelosi.

She knows what she has to do, and she does it.

Democrats were savaged because they were perceived as being unable to deliver, but Nancy Pelosi was not a part of that problem, she was just the victim.

We are Unbelievably Screwed

No Comments
“March of 2000, of course, was the peak of the internet bubble.”

Small investors are holding less cash than at any time since March 2000.

This means that small investors are pulling money out of bank accounts, where returns are low, but the accounts are guaranteed, and putting the money in the stock market seeking greater returns.

Time for another crash in the market, because as a group, small investors are the idiots who enter the market just before they run out of idiots.

Person writing this, Joe Weisenthal, clearly thinks so too, or he would not have referenced the dotbomb bust in the last line of the article (reproduced as a caption to the chart pr0n).

Economics Update

No Comments

We get the official numbers on Friday, but ADP’s private employment survey shows a 93,000 increase in private employment in November, which is the best number in about 3 years, though this alone is still a bit smaller than the natural growth in the labor market.

Also on the plus side, we have the Federal Reserve Board’s  Beige Book showing mild expansion, construction spending rising in October, and car sales for GM, Ford, and Chrysler up significantly in November.

On the so level, we have the Institute for Supply Management’s manufacturing index falling, but still showing slow growth.

On the minus side, we saw mortgage applications falling sharply last week.

Why Reaching Across the Aisle is a Stupid Idea

No Comments

Arizona Republican John Kyle has announced that he will not allow a vote on the START treaty unless the Democrats capitulate on tax cuts for people making more than $¼ million a year.

I am not disappointed by Kyle, I expect this behavior from post-Reagan Republicans. What does disappoint me is the behavior of Barack Obama, who continues to think that he can dazzle them with his awesomeness and reach across the aisle.

As my brother notes, “Since being ‘nice’ doesn’t work, a sane course might include not being nice….“

Well, This is a Surprise

No Comments

In the latest twist to the legal travails of Sergey Aleynikov, who is accused of theft of Goldman-Sach’s illegal market front-running high frequency trading software is now arguing that the code in question was open source, so there was no theft:

Sergey Aleynikov, who is accused of stealing Goldman Sachs’ source code used in high-frequency trading, argued that he was standing up to the investment bank’s proprietary claims on open-source code, not trying to steal private codes to use at a competing trading firm.

Mr Aleynikov, a former computer programmer at the bank, is accused of downloading proprietary code related to high-speed trading systems in June 2009 for use at a new job at a competing firm.

While this statement may actually be true, it does strike me as a rather low percentage defense.

Unfortunately, it also implies that we will not be getting any details on how the Vampire Squid and its Wall Street co-conspirators might actually be gaming the system with their co-located high speed trading systems during the trial.

Federal Reserve Releases Dodd-Frank Audit Results

1 Comment

So they are out, they are voluminous, and I have neither the time nor the expertise to to review them all, I here is what I’ve seen in other people’s commentaries.

We see loans at absurdly low rates and self dealing, the Fed’s commercial paper program was dominated by European banks, and surprise, surprise, Goldman Sachs actually needed the aid that it claimed to only grudgingly accept.

The full Federal Reserve press release is after the break:

Press Release

Release Date: December 1, 2010

For immediate release

The Federal Reserve Board on Wednesday posted detailed information on its public website about more than 21,000 individual credit and other transactions conducted to stabilize markets during the recent financial crisis, restore the flow of credit to American families and businesses, and support economic recovery and job creation in the aftermath of the crisis.

Many of the transactions, conducted through a variety of broad-based lending facilities, provided liquidity to financial institutions and markets through fully secured, mostly short-term loans. Purchases of agency mortgage-backed securities (MBS) supported mortgage and housing markets, lowered longer-term interest rates, and fostered economic growth. Dollar liquidity swap lines with foreign central banks helped stabilize dollar funding markets abroad, thus contributing to the restoration of stability in U.S. markets. Other transactions provided liquidity to particular institutions whose disorderly failure could have severely stressed an already fragile financial system.

As financial conditions have improved, the need for the broad-based facilities has dissipated, and most were closed earlier this year. The Federal Reserve followed sound risk-management practices in administering all of these programs, incurred no credit losses on programs that have been wound down, and expects to incur no credit losses on the few remaining programs. These facilities were open to participants that met clearly outlined eligibility criteria; participation in them reflected the severe market disruptions during the financial crisis and generally did not reflect participants’ financial weakness.

The Federal Reserve is committed to transparency and has previously provided extensive aggregate information on its facilities in weekly and monthly reports. As provided by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, transaction-level details now are posted from December 1, 2007, to July 21, 2010, in the following programs:

  • Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF)
  • Term Asset-Backed Securities Loan Facility (TALF)
  • Primary Dealer Credit Facility (PDCF)
  • Commercial Paper Funding Facility (CPFF)
  • Term Securities Lending Facility (TSLF)
  • TSLF Options Program (TOP)
  • Term Auction Facility (TAF)
  • Agency MBS purchases
  • Dollar liquidity swap lines with foreign central banks
  • Assistance to Bear Stearns, including Maiden Lane
  • Assistance to American International Group, including Maiden Lane II and III

Additionally, discount window and open market operation transactions after July 21, 2010, will be posted with a two-year lag.

The data made available Wednesday can be downloaded in multiple formats, including Excel, at www.federalreserve.gov/newsevents/reform_transaction.htm. The Excel files allow users to search, sort, and filter the data for each program in multiple categories. The site also provides explanations of each program as well as definitions for the data elements.

In the case of broad-based facilities, details provided include the name of the borrower, the amount borrowed, the date the credit was extended, the interest rate charged, information about collateral, and other relevant credit terms. Similar information is provided for the draws of foreign central banks on their dollar liquidity swap lines with the Federal Reserve. For agency MBS transactions, details include the name of the counterparty, the security purchased or sold, and the date, amount, and price of the transaction.

The Root of the Irish Economic Problem

No Comments

So, they have cut a deal for the Irish to cut their own economic throats, but I think that all the commentary misses the big picture on the Republic of Ireland.

Before the boom, Ireland was a 3rd world country that happened to be a part of the EU.

At the height of the bubble, Ireland was a 3rd world nation that was part of the EU, and part of the Euro zone, which drove a speculative frenzy being driven by massive foreign cash flows.

It was still, and remains, a 3rd world nation that was a part of the EU.

To be fair, it might better be called a 2-¾ world nation, but still…..

No Comments

Never doubt the ability of Democrats to completely f%$# up the basic business of government. Remember the food safety bill that the Senate recently passed? Well it’s <a href=” />unconstitutional because it is a revenue bill that originated in the Senate, when the Constitution explicitly requires all revenue bills to originate in the house:

In what amounts to an epic constitutionality #fail, Senate Democrats may have blown their chances to see their food safety bill signed into law.

The U.S. constitution requires that any revenue-raising bill must originate in the House of Representatives. To honor this provision, the Senate often finds a discarded old House bill, strips it bare, and uses it as a “shell” and passes it back to the House.

They somehow forgot to do that this time.

Now House and Senate Democratic leaders are scrambling to figure out some procedural hocus-pocus that will allow them each to pass identical pieces of legislation before they leave for the holidays.

So our choice today is between the forces of evil and the gang that can’t shoot straight.