Author: Matthew G. Saroff

So the Recession is Over?

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The National Bureau of Economic Research has declared that the recession ended in June 2009:

It’s official: The Great Recession ended 15 months ago, in June 2009. That was the word Monday from the economists at the National Bureau of Economic Research, the outfit that tracks the U.S. business cycle based on a variety of economic variables.

By their calculations, the downturn that began in December 2007 lasted 18 months, or the longest on record since the 43-month plunge of the Great Depression. On the other hand, the recession was only two months longer than the 16-month downturns of 1973-1975 and 1981-82, the two other most serious post-World War II periods of falling economic growth. The 2007-2009 downturn was painful but not extraordinary in historical context.

So, my 11 months of unemployment were in a recovery?

We have been in recovery for 15 months?

You’ll also note that this is a pretty mild recovery. The brutal 1981 recession had GDP exceeding peak about 18 months later, and this “recovery,” such as it is, even if we don’t experience a double dip, or just …… dare I say it? …… malaise, and we will be looking at something over 4 years.

Well, this recovery and $3.95 will get you a small Starbucks® latte.

Where I Wish I Could Be on October 30

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Jon Stewart’s Rally to Restore Sanity

Stephen Colbert’s March to Keep Fear Alive

At Jon Stewart’s Rally to Restore Sanity on the National Mall in Washington, DC, heckling people at Stephen Colbert’s March to Keep Fear Alive on the National Mall in Washington, DC.

Unfortunately, I have a prior appointment, I will be at the SCA event, TNT,* and my kids love that event, so I will be there instead.

Still, I think that anyone who can make there should, because if this outdraws Glen Beck and his racist psychopathic ilk, it shows what his numbers really mean.

*Yes, I know that this year, it’s technically the, “Treaty of Troyes,” but it’s TNT and has been TNT for well over a decade.

Jail, please

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Gee, the SEC has determined that Citicorp CEO Chuck Prince and Chairman of the Board, and Clinton era Secretary of the Treasury, Robert Rubin both knew that the numbers that they were feeding investors about their top tranches of mortgage backed securities were crap:

Charles O. “Chuck” Prince and Robert Rubin were among Citigroup Inc. officials who knew 2007 losses were mounting on mortgage assets that U.S. regulators have faulted the bank for not disclosing, a court filing shows.

Prince, the bank’s chief executive officer at the time, and Rubin, who was then chairman, knew the highest-rated segments of subprime mortgage-backed securities were the source of about $200 million in new losses in October 2007, the Securities and Exchange Commission said yesterday in a filing at federal court in Washington. In July, the agency accused the bank and two other executives of failing to disclose $40 billion in subprime assets before losses surged. It didn’t target Prince and Rubin.

Bob Rubin has been Gordon Gecko for a very long time, and if the Obama administration wants to show some real commitment to financial reform, ramping up criminal investigations of his behavior would be a very good idea.

If you put a former Secretary of the Treasury in jail, it goes a long way toward cleaning up the system.

Barack Obama, Go Cheney Yourself

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So while talking at a $30,000 a plate fundraiser in Connecticut, he joked that the Democratic Party base is a bunch of whiny bitches:

Democrats, just congenitally, tend to get — to see the glass as half empty. (Laughter.) If we get an historic health care bill passed — oh, well, the public option wasn’t there. If you get the financial reform bill passed — then, well, I don’t know about this particular derivatives rule, I’m not sure that I’m satisfied with that. And gosh, we haven’t yet brought about world peace and — (laughter.) I thought that was going to happen quicker. (Laughter.) You know who you are. (Laughter.) We have had the most productive, progressive legislative session in at least a generation.

Well, Glenn Greenwald (at link) nails it when he makes it clear that Obama has failed big time in many ways he has not just fallen short, but embraced failure he condemned as a candidates, whether on state secrets, the rule of law on terrorism suspects, the surveillance state, using HAMP as bunco scheme to cheat desperate home owners, state sanctioned assassinations, gay marriage, DADT, or any move at all in support of organized labor.

All this is going on, and there is not even a moment of regret about what might have been. It’s like trying to appeal to the conscience of a house cat.

I am so ready to work my butt off for anyone who is willing to run against him in 2012.

I Still Think That The Appointment of Elizabeth Warren is an Exercise in PR, Not Real Change, But …

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Both Felix Salmon and Barney Frank seem to think that this is the real deal, with Felix noting that, “she has the authority to get the Consumer Financial Protection Bureau up and running as quickly as she can,” and Representative Frank is saying that, “There’s no possibility she would take something like this unless she was fully empowered to do the job.”

Me, I’m with On the other side Yves Smith’s analysis, which says that this is all theater to create the illusion of Obama as a financial reformer:

  • While the bureau is organized under the Treasury, and before it is placed under the Federal Reserve, it has no rule making authority.
  • The organization is operating for an organization, the Federal Reserve that is not only, “subservient to the regulator that is in charge of looking out for the industry,” but is in large part owned by the industry. (look at the structure of the regional Fed banks, they are owned by the big banks)
  • This is an admission that she will not be appointed to the position, so she is already a bit of a lame duck, and will be completely one as soon as someone is nominated for the post.
  • She has admitted that she has no intention of serving as head of the CPFB, which means that she is even more of a lame duck.
  • Many of the organizational and personnel decisions will be deferred to whoever is the appointee.
  • Once a nominee is named, she becomes completely irrelevant.
  • Geithner and Summers still run the show, and are who Obama listens to.*

I’m with Ms. Smith’s last ‘graph:

Needless to say, it would be better if I were proven wrong, but it looks like Warren has made a Faustian bargain. I can only hope if that is the case that she moves quickly to cut her losses.

Simply put, how many times has the Obama administration taken the side of Main Street over Wall Street?

I’ll give you hint, it’s a non-positive integer.

She will be out in 6 months, and my guess is that she will discover that she cannot get her phone calls answered on November 3.

*But remember, the Cossacks work for the Czar.

Murkowski to Mount Write-In Bid for Alaska Senate

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Pass the popcorn:

U.S. Sen. Lisa Murkowski, who lost Alaska’s GOP primary last month in a stunning upset to a tea-party backed rival, announced Friday that she’s mounting a write-in candidacy in a bid to hold onto her job.

Murkowksi told supporters at a late afternoon rally in Anchorage that she’s worried about Republican nominee Joe Miller’s extremist views, as well as the Democratic candidate’s inexperience.

The decision follows Miller’s surprise win in last month’s primary. Murkowski acknowledged she made mistakes during the primary campaign, but promised she’ll be more aggressive this time in running against Miller.

I think that she will talke more votes from teabagger Miller than remarkably-liberal-for-Alaska McAdams.

Jimmy Carter: Still a Wanker

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It appears that Mr. Carter still cannot get over his hatred of Teddy Kennedy, so he’s going after a dead man, blaming Kennedy for killing his healthcare proposal.

Just as classy as ever, I see.

He still thinks that the Kennedy challenge in 1980 is what cost him the White House. It’s wasn’t.

What killed his chance for a 2nd term in 1980 was one James Earl Carter, was elected with much hope, but found to be a sanctimonious jerk.

I would note that this assessment does not include my opinion that Carter is a war criminal on par with Henry Kissinger because he and Zbigniew Brzezinsk decided to purchase a civil war in Afghanistan, knowing creating untold suffering in that nation and its neighbors.

It’s Bank Failure Friday!!!! (Delayed for Holiday)

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I’ve been off line for Yom Kippur, so this is a day late.

And here they are, ordered, and numbered for the year so far.

  1. ISN Bank, Cherry Hill, NJ
  2. Bank of Ellijay, Elllijay, GA
  3. First Commerce Community Bank, Douglasville, GA
  4. The Peoples Bank, Winder, GA
  5. Bramble Savings Bank,Milford, OH
  6. Maritime Savings Bank, West Alis, WI

So, after 3 weeks with only one bank closing, we have 6 this week, plus the one credit union closed below.

This number appears to be on the fast track for breaking 150 this year.

Full FDIC list

And here are the credit union closings:

  1. Industries Puerto Rico Federal Credit Union,

Full NCUA list

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.

A Depiction of the Levels of Hell?

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Click for full size (640 KB)

Your tax dollars at work

Or maybe just a description of development, procurement, and life cycle support costs of a weapons system for the Pentagon ……… but I repeat myself.

The problem here is that each one of these steps represents a place where some private contractor can sit astride the process and extract a toll.

This why it takes 25 years and billions of dollars to develop the next fighter aircraft, when the P-80 was delivered just 180 days after the go ahead was given.

If this is what the past 50 years of developments in systems engineering have given us, perhaps, just maybe, there are some deep flaws in the underlying assumptions of that profession.

The source for the link is the Defense Acquisition University, and yes Virginia, there is a Defense Acquisition University, and they have a handy, dandy interactive flash version available on site.

Senate Appropriations Committee Pulls F136 Alternate Engine Funding

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In addition to zeroing out the alternate engine, they also cut 10 production aircraft from the FY 2011 for failure of the program to execute per schedule.

This implies to me that neither cut could have gone through on its own, but together, both those who have concerns about the JSF, and those who don’t want the engine got enough of what they wanted to support each other.

Meanwhile GE/RR is ramping up efforts to reverse this decision, noting, among other things, that the budget numbers that the Pentagon is putting forward on the F136 engine are sketchy at best.

H/t ELP Defens(c)e Blog

Brazil to Delay Fighter Acquisition Decision

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Brazilian President Luiz Inacio Lula da Silva will now make the decision after elections but before he leaves office:

President Luiz Inacio Lula da Silva will decide who gets Brazil’s multi-billion dollar contract to build jet fighters after the October elections but before he leaves office on Jan. 1, his defense minister said Sept. 7.

The finalists now battling it out in the final stages of the tender are France’s Rafale made by Dassault, Sweden’s Gripen NG by Saab, and the F/A-18 Super Hornet manufactured by U.S. giant Boeing.

Da Silva favors the Rafale, because he thinks that there are more opportunities for technical transfer and other cooperation with the French, while the military favors the Gripen, which will be the least expensive aircraft over its life time, having half the engines, and half the weight of the two competitors.

As to the F/A-18, tech transfer is rather iffy, but the unit price is likely the lowest, and it might help with cooperation with any US military operations in Latin America.

My guess is that he will choose the Rafale, he has already expressed a strong preference for the aircraft.

At this point, there is no intention to use it on Brazil’s aircraft carrier, but that possibility might push them towards either the Rafale-M or the F/A-18 E/F, both of which are carrier capable.

People With Way Too Much Free Time

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The Terran Research Ensemble, who are putting on an Opera in Klingon:

On Friday in The Hague, Netherlands, the Terran Research Ensemble raised the curtain on “U,” the first Earth opera performed entirely in Klingon. “U” is the Klingon word for “universe” or “universal,” and the opera tells the story of Kahless the Unforgettable, said to be the first Klingon emperor.

“Klingon are known as passionate opera lovers but at the same time very little was known about Klingon opera here so as far as I was concerned that was a very interesting challenge to try and make an authentic, or as authentic, something out of that as possible,” U co-creator Floris Schonfeld told Reuters and The BBC.

I will say that is only the 2nd most absurd juxtaposition of art and language, after the effort by South Africa in the Apartheid days to translate Shakespeare into Afrikaans:

Hamlet: Mein Papa der schpook!