Author: Matthew G. Saroff

What Will Obama Do if the Dems Lose Congress?

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John Quiggin Crooked Timber says that Obama will start engaging in zero-dimensional-chess:

Translation: Mr Obama and his aides plan a series of pre-emptive capitulations, after which the Republicans will demand the repeal of the healthcare act (or maybe abolition of Social Security). When/if that is refused, the Repugs will shut down the government, and this time they will hold their nerve until Obama folds.

That Republicans won’t work with him, even if he capitulates, is a certainty, if Republicans were to cooperate with him on sending the Keith Olbermann and Rachel Maddow to Gitmo, they would still be primaried by the teabaggers.

The supposition that he will lead with capitulation is almost certain, since this has been his modus operandi over the past 20 months.

Regardless of the outcome, Obama sill see it as an opportunity to do some serious hippie punching.

The zero-dimensional chess bon mot deserves a Pulitzer.

So Not the Next Sarah Palin

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Say what you will about Sarah Palin, but she does not currently get drunk and engage in one night stands:

Three years ago this week, an intoxicated Christine O’Donnell showed up at the apartment of a 25-year-old Philadelphian and ended up spending the night in his bed. Here’s his story—and photos—of his escapade with the would-be Delaware senator.

When one finds a public who makes their mark with sexual “morality,” it does appear that they are railing against what they want to do themselves.

I wil note that the source is Gawker, with all that that entails, and the account is fairly stomach churning, not because of anything that Ms. O’Donnell did or said, but because of the attitude of the source.

Lines like, “When her underwear came off, I immediately noticed that the waxing trend had completely passed her by,” do not make kindly disposed to whoever he is.

In fact, it makes me feel a bit, and only a it, of pity for Ms. O’Donnell.

Getting drunk on Halloween and getting to 2nd or 3rd base really should be nobody’s business …… Unless, of course, you are a very public campaigner against any form of sexual activity out of marriage under all circumstances.

Still, it reads like a bad letter to Penthouse forum.

This is Unambiguously Good News

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It’s “Jobless Thursday,” and the numbers are good, with initial claims falling by 21K to 434,000, the less volatile 4-week moving average fell by 5,500 to 453,250, continuing claims fell by 122K to 4.36million, and emergency claims (those extended past 26 weeks) fell by 414K to 4.36 million.

It’s still to high for a job recovery, it needs to be somewhere south of 400K for an extended period for jobs to recover, but this is only the 2nd time in months that it was below 450,000, so perhaps we are beginning to see the beginning of a trend.

Maybe the Blue Dogs Aren’t the Worst Democrats in Congress

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I think that the Blue Dogs are wrong, but I get the sense that they are motivated by values and ego.

I think that many of them legitimately believe that women cannot be trusted with their bodies, that rich people should not be taxed, and that idiot sons of rich people are entitled to be rich ad infinitum.

The larger New Democratic Caucus (Melissa Bean who The Onion excoriates is a senior member of the caucus), however, is just a bunch of people who want to suck at the tit of big business, as Sebastian Jones and Marcus Stern ably document:

As Congress entered the final weeks of its struggle to overhaul regulation of Wall Street in May, several hundred friends and colleagues slipped out of Washington for a private weekend on Maryland’s Eastern Shore. Most were lobbyists for large banks, pharmaceutical firms, insurance companies, and big-ticket trade groups. However, 28 were members of Congress, and 29 were legislative staffers, all part of a coalition of House Democrats with a business-friendly agenda.

The retreat was held in honor of the New Democrat Coalition, a group of 69 lawmakers whose close relationship with several hundred Washington lobbyists has made their organization one of the most successful political money machines since the Republican K Street Project collapsed in 2007. In the past year and a half, New Democrats have pulled in more than $18 million in campaign contributions from their lobbyist fundraising network. The lobbyists, in turn, have mingled with lawmakers and their staffers at least 850 times during fundraising events and informal get-togethers.

…………

These folks were hamstringing Barney Frank at every turn during work on financial reforms because they worked for the banks, and not the American people.

The Blue Dogs get the press, but when push comes to shove, it’s the New Dems who f%$# us.

Read the rest of the article. It’s long, but it’s long because it is exhaustive.

Economics Update

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H/t Calculated Risk for the September Philly Fed chart Pr0n

Since the tech bubble burst, the economy has been running on the consumer and on home sales, and both consumer confidence and home prices continue to disappoint.

Additionally, new home sales remain at pathetic levels, and mortgage applications increased, largely in response to lower rates.

Also, we did see the Philadelphia Bank of the Federal Released its State Coincident Indexes for September, and more states were up than down, though those advances were, once again, anemic.

The Definitive Word on Hamp

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David Dayen summarizes it in a paragraph:

This is just a truism based on the Treasury Department’s own design for HAMP. Every trial modification payment reads as a default to the credit reporting companies. The Treasury Department could have set it up so that didn’t happen; they chose not to intervene in that reality. All of the money between the trial modification and the original payment that borrowers don’t pay during their trial period gets tacked on as part of the unpaid principal balance at the end. The servicers also tack on late fees. Treasury could have banned that. They chose not to intervene. The servicers can proceed with foreclosure operations during the trial period, arguing that the borrower is in default. They can’t actually foreclose (also in some cases they have). But they can go through the legal process. Treasury could have put a stop to that. They didn’t. Borrowers keep getting told they have to miss a payment to be eligible for HAMP. Treasury actually didn’t put that into the design. But they haven’t sanctioned a single servicer for this or any other violation of the program guidelines. They could have done something. They didn’t.

(emphasis mine, though inspired by Big Tent Democrat‘s similar exercise.)

I think that Mr. Dayen is far more forgiving than I am. He implies that it was combination of incompetence and timidity.

I think that it was actual malice. I think that the Treasury Department deliberately chose to deceive homeowners, because they thought that it would give the banks some breathing space.

I Hate The Onion

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Not only does the truth hurt, it leaves a nasty mark!

Their headline, “Democrats: ‘If We’re Gonna Lose, Let’s Go Down Running Away From Every Legislative Accomplishment We’ve Made’“:

WASHINGTON — Conceding almost certain Republican gains in next month’s crucial midterm elections, Democratic lawmakers vowed Tuesday not to give up without making one final push to ensure their party runs away from every major legislative victory of the past two years.

Party leaders told reporters that regardless of the ultimate outcome, they would do everything in their power from now until the polls closed to distance themselves from their hard-won passage of a historic health care overhaul, the toughest financial regulations since the 1930s, and a stimulus package most economists now credit with preventing a second Great Depression.

“There’s a great deal on the line, and we know it isn’t going to be easy for us,” said Senate Majority Leader Harry Reid (D-NV), speaking from the steps of the Capitol. “But if we suffer defeat, we will do so knowing we cowered away from absolutely anything we produced that was even remotely progressive or valuable in any way.”

If you’ll excuse me, I will now hit myself in the head repeatedly with a hammer, because that is more pleasant than facing this reality.

Here is a hint for the Democrats: If The Onion is writing an article, and it describes your campaign strategy, you are being a f%$#ing moron.

Better Than I Expected

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Elana Kagan just cast her first vote on the death penalty, and actually her very first vote as a Supreme Court Justice, and she voted to stay an execution:

Washington…Justice Elena Kagan cast her first recorded vote on the Supreme Court late Tuesday, joining the liberals in dissent when the high court cleared the way for the execution of an Arizona murderer.

The 5-4 ruling overturned orders by a federal judge in Phoenix and the U.S. 9th Circuit Court of Appeals in San Francisco that had stopped the execution by lethal injection of Jeffrey Landrigan.

His lawyers, in a last-ditch appeal, had raised questions about one of the drugs used in the execution. Since the only U.S. manufacturer of sodium thiopental had suspended production, Arizona officials said they had obtained a supply of the drug from a British company.

A judge had put the execution on hold because she said she was “left to speculate” whether this drug was safe for its intended use.

Hopefully this indicates that she was not quite the squish that I thought she might be when Barack Obama nominated her.

Optimism Can Kill You

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Barbara Ehrenreich looks at the cult forced optimism in the United States, and how it is both dangerous and prevents people from challenging real problems in society.

I was particularly taken by her observation about just just how much mandatory optimism was a part of the infrastructure of the totalitarian Soviet state as well.

Pass the Popcorn

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The Federal Reserve has decided not to appeal the decision of the Federal Courts to turn over information on its sh%$pile for cash loans to Bloomberg News:

The Federal Reserve won’t join a group of the largest commercial banks in asking the U.S. Supreme Court to let the government withhold details of emergency loans made to financial firms in 2008.

The central bank’s decision not to appeal makes it less likely the high court will hear the case, said Tom Goldstein, a Washington lawyer who has argued 22 cases before the high court since 1999 and whose Scotusblog website tracks the panel.

The Clearing House Association LLC, a group of the biggest commercial banks, filed the appeal today. Under federal rules for appeals, a lower court’s order requiring disclosure remains on hold until the Supreme Court acts. Kit Wheatley, an attorney for the Fed, confirmed that the central bank won’t join the appeal. David Skidmore, a spokesman for the central bank, did not immediately respond to requests for additional comment.

The bank group is appealing a federal judge’s August 2009 ruling requiring the Fed to disclose records of its emergency lending. Bloomberg LP, the parent company of Bloomberg News, sued for the release of the documents under the Freedom of Information Act.

Obviously, the Supreme Court could still decide to hear the case, but the Fed pulling out indicates that they no longer see this sort of disclosure as a systemic threat, which in turn makes it less likely that SCOTUS will take up the case.

I think that it is now a question of “when” not “if” the data gets released, and I think that it should prove to be very interesting.

Background here.

Payback is a Bitch

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When you look at the Democratic Party Congressional caucus, the people who are most threatened with losing their jobs are the Blue Dogs:

More than half the members of the Blue Dog Coalition—the organization of moderate to conservative Democrats in the House—are in peril in next week’s election, a stark indicator of how the balloting could produce a Congress even more polarized than the current one.

The author of the article says that this is worrying because the Blue Dogs are, “a kind of human bridge, connecting left and right in the House,” but my take is rather more positive: It’s these rat f%$#s that were in large part for blocking and weakening every serious policy initiative that the Democratic party, and it is this perceived lack of accomplishment that has put off voters.

Truth be told, it’s not that payback is a bitch, it’s that payback is making them it’s bitch.

People don’t want to vote for Democrats because they are perceived as timid, and the people who forced this are reaping the whirlwind.

Heh.

If They Are Looking Into it, It’s Only Because They Need to Figure Out the Coverup

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I am referring to the fact that the Federal Reserve has announced that it will investigate the foreclosure problems:

Raising pressure on banks, the Federal Reserve is wading into the investigation of whether mortgage lenders cut corners and used flawed documents to foreclose on homes.

Major banks are already under investigation by state officials with subpoena power, who could force them to detail how they handled hundreds of thousands of foreclosure cases.

Federal Reserve Chairman Ben Bernanke added weight to those efforts Monday by saying the central bank would look “intensively” at policies and procedures that might have allowed banks to seize homes improperly.

“We take violation of proper procedures very seriously,” Bernanke said in remarks to a housing-finance conference in Arlington, Va.

Call me a cynic, but I think that this is all about creating the appearance of investigating foreclosure fraud without actually finding any wrong doing, because they are the Federal Reserve, and that’s how they roll.

Holy Sh%$

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Treasury has sold its inflation protected securities with a negative yield for the first time ever:

Inflation-protected securities sold at negative yields for the first time ever on Monday as traders anticipate that the Federal Reserve will start a new round of asset purchases.

Analysts said that asset purchases by the Fed would lead to a higher inflation rate and a positive return on the bonds.

The $10 billion auction of the five-year bonds sold at a negative yield of 0.550 percent, according to the Treasury Department. The results of the auction of the securities, known as TIPS, came as indexes on Wall Street edged higher, buoyed by recent strong corporate earnings and a rise in housing sales. The previous lowest yield for the TIPS was in the auction on April 26, when the yield was 0.550 percent.

“It is saying that there is a true demand for inflation securities, because people perceive the quantitative easing program is enabling a higher inflation rate in the future,” said Tom di Galoma, head of fixed-income rates trading at Guggenheim Partners.

Basically, this means that “the market,” a nebulous thing whose predictive powers I think are overrated, is nonetheless predicting deflation.

Time to break out those helicopters, Ben.