Author: Matthew G. Saroff

It Sucks to be Blanche Lincoln Right Now

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The polls say, “Bummer of a birthmark, Blanche.”

Her poll numbers are in the toilet, and she looks unelectable in the general election, and now Lieutenant Governor Bill Halter has announced that he is running against her in the Democratic Primary, and the AFL-CIO has decided to come out against the Senator from Wal-Mart and the Insurance Companies Arkansas to the tune of a $3 million independent expenditure.

And, yes, I’ve added Mr. Halter to my Act Blue Page as well.

This is one of the cases where it’s a win-win.

We have a pseudo-Democrat who will lose anyway, and by taking her out in the primary, we have a chance a real Democrat taking the seat.

When Your Sellout to the Banks Offends Chuck Schumer………

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So Chris Dodd has come up with a “bipartisan” proposal for protecting consumers from predatory financial institutions, he wants to make it the Federal Reserve’s job:

The chairman of the Senate banking committee is seeking Democratic support for a Republican proposal to house a new consumer-protection regulator inside the Federal Reserve, a compromise that could clear the way for bipartisan legislation on financial reform, according to sources familiar with the negotiations.

Embracing the proposal marks a turnaround for Sen. Christopher J. Dodd (D-Conn.), who has lambasted the Fed repeatedly over the past year for not protecting borrowers from lender abuse. It is unclear whether other Fed critics, both Democrats and Republicans, will follow suit. The Fed already is responsible for writing consumer-protection rules, but it did not prohibit some of the most abusive mortgage and credit card lending practices during the housing boom.

The proposal by Sen. Bob Corker (R-Tenn.) would place a presidential appointee inside the Fed with an independent budget and a mandate to write rules protecting consumers. Those rules, however, would be enforced by existing banking regulators.

Of course, the Fed is already the consumer protection agency, and they failed, and they don’t provide information to Congress, or to anyone else.

Even Chuck Schumer (D-NY) thinks that this is a bad idea, and Schumer’s career is largely based on raising campaign money from Wall Street fatcats:

Chairman Dodd is to be commended for working so diligently to come up with a bipartisan compromise on financial services reform, which demands urgent attention. But in my 20 years of trying to get the Federal Reserve to properly protect consumers, it has been an uphill, and very often unsuccessful, battle. I am very leery of any consumer regulator being placed inside the Fed.

You know, if you’ve lost Chuck Schumer on this idea, it’s time to tell the Republicans to go Cheney themselves, and jam them up and make them vote against financial reform, over, and over, and over again.

The regional Federal Reserve banks are literally owned by the banks, and the presidents of these regional banks hold a lot of sway, and 5 of these bankers sit on the FOMC, and we are to expect an organization that has already shown itself to be both hostile to consumer protection and unresponsive to consumer complaints to somehow protect consumers?

I know that Mr. Dodd wants to make sure that he has a source of income when he leaves office in 2011, but he has a pension coming to him of something in excess of $120,000/year, so he should be fine.

Stop sucking up to the banks, sir.

Deep Thought:

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It appears that the Republicans have successfully prevailed upon Jim Bunning (R-KY) to end his filibuster, so the emergency unemployment extension will proceed.

Additionally, the Republicans are suggesting that the distinguished gentleman from Kentucky is suffering from overwork, so they are suggesting:

  • That he take a vacation.
  • And go to Sea World in Orlando.
  • And let his hair down.
  • And go swimming.
  • And meet Tillicum up close and personal as a part of a whale watching junket.

That is all.

Karl Rove and Jeff Gannon in DC Gay Marriage Love Tryst?

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Ummm, no, he probably didn’t, but if Karl Rove were to be tagged with this rumor, it would very much be just desserts, since he started false whispering campaigns like:

  • Alleging that John McCain fathered a black daughter.
  • That former Texas Governor Ann Richards was a lesbian.
  • That a judge was a pedophile.

So, by the standards of Karl Rove, this is a fair question.

It’s not true, as Jon Ponder notes in his post, “Did Karl Rove Leave His Wife For Jeff Gannon?“

Still, the story does contain “truthiness,” as Stephen Colbert would say.

Quote of the Day

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Via Atrios:

I think we’re long past the time when most print newspapers could’ve been saved by simply providing a better product, but I also think there was a window to save, if not the print versions, the institutions which published them. Obviously the WaPo can survive as long as Kaplan Test Prep [The Washington Post] makes enough to keep them afloat, but I do wish more journalists bemoaning the losses in their industry would recognize that at least to some degree ceasing to be relevant and authoritative publications is a part of the problem. Why should people read them when they have to spend a lot of time figuring out when they’re being bullsh%$#ed?

I’ve said it before, many times: One of the problems with newspapers is that their management does not believe that newspapers can survive, so their business plan is to suck the marrow out of these institutions, not to provide good product.

You saw this phenomenon with the American rail industry in the 1970s.

From that Communist Rag The Financial Times

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Wolfgang Münchau proposes an outright ban on naked credit default swaps: (CDS)

I generally do not like to propose bans. But I cannot understand why we are still allowing the trade in credit default swaps without ownership of the underlying securities. Especially in the eurozone, currently subject to a series of speculative attacks, a generalised ban on so-called naked CDSs should be a no-brainer.

Naked CDSs are the instrument of choice for those who take large bets against European governments, most recently in Greece. Ben Bernanke, the chairman of the Federal Reserve, said last week that the Fed was investigating “a number of questions relating to Goldman Sachs and other companies in their derivatives arrangements with Greece”. Using CDSs to destabilise a government was “counter-productive”, he said. Unfortunately, it is legal.

As I have noted for some time, the Credit Default Swap is insurance, and there is a very good reason that the British Parliament passed the Marine Insurance Act of 1746, which required, “anyone seeking to collect on an insurance contract to have an interest in the continued existence of the insured property,” as well as, “precluding a buyer from insuring property for more than it’s worth.”

This should not be SEC slap on the wrist stuff. This should be illegal unenforceable contracts, and you go to jail stuff.

Harold Ford is Not Running for NY Senate

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I guess he finally realized that it was moving from long-shot to fiasco:

Harold E. Ford Jr., the former Tennessee congressman who has sought to parlay his star power and Wall Street connections into a political career in New York, has decided not to challenge Senator Kirsten E. Gillibrand in the Democratic primary this September, according to friends and advisers.

After traveling the state on a closely watched tour, he told friends that he could prevail but feared that an ugly campaign would leave the winner drained of cash and vulnerable to a Republican challenger at a time when the Democratic Party controls the United States Senate by a slender majority.

“I’ve examined this race in every possible way, and I keep returning to the same fundamental conclusion: If I run, the likely result would be a brutal and highly negative Democratic primary — a primary where the winner emerges weakened and the Republican strengthened,” Mr. Ford wrote in an opinion article to be published in The New York Times on Tuesday.

Don’t let the door hit you on your butt.

Not Much Posting Tonite Period

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I was trying to backup my February posts, and it kept breaking the archive page into little bits.

It looks like this is a feature because a few bloggers had huge front pages, with lots of blogger images, and they decided to have an algorithm break up the pages into digestible chunks.

They are all “It’s going to make everything so much faster.”

The problem is that for some blogs, it made them single posts on the first page.

Luckily that did not happen to me, because I use Imageshack®, which significantly reduces the load that “the Google” sees, and because compared to some of the photographers who blog there, it’s pretty much text based.

On the other hand, means that the monthly archives that I save to a MS Word® file are now broken up into 5-10 separate pages, and it means that it breaks Google’s searches that access archive pages, because it will serve a page that now has only a 15% or so chance of having the post in question.

So, yes, the good folks at Blogger, which is owned by Google, broke Google search, and yes, many of the folks who use blogger are pretty incensed, and the response of the PTB at blogger is that the users are blogging wrong somehow.

Apparently their motto, “Don’t be evil,” is orthogonal to, “Don’t be incompetent and arrogant assholes.”

[on edit] I am looking at moving to WordPress, but I will give it a month or so and fiddle.

Russian S-400 Triumf SAM Enters Service

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Click for full size

It’s about 3 years behind schedule, which when compared to the Patriot Missile, which was entered design in 1969, but did not enter service until 1984, but the S-400 Triumf (NATO designation SA-21 Growler) has officially entered Russian army service.

It is arguably the most capable SAM in service, with a 400 km range, and a significant ATBM capability, as well as an active radar seeker, which was not present in the S-300 (SA-20 Gargoyle).

It claims to have a significant anti-stealth capability, and based on some numbers I ran a few years back, it would appear that the system could detect an F-22 at a range of at least 15 miles, perhaps more, if some of the advances in signal processing and computers work as advertised.

H/t ELP Defens(c)e Blog.

JSF Update

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Well, US deputy secretary of defense William Lynn has publicly stated that there will be a 13 month delay in the completion of initial operational test and evaluation (IOTE).

Note that this is a 12 month slip from schedule announced in 2008, not from the 2005 schedule, which the 2008 schedule was a slip. It’s not 2 full years behind the 2005 schedule, so IOTE is supposed to be completed in 2015, as opposed to 2013.

Note also, that independent evaluations are showing even more slippage, not surprising given that they are cannibalizing airframes on the assembly lines to keep the test aircraft flying.

Additionally, it’s over budget, and will likely suffer a Nunn-McCurdy breach, meaning that the price has escalated to more than 150% of the contract, and it will have to be recertified.

On the brighter side, the F-35B has performed its first first short landing:

Iceland May Have Found Its Economic Salvation

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With banking having left the nation dunned by creditors demanding something more than $20,000 from every man woman and child in the tiny island nation, Iceland may have found a replacement, and this one may actually produce something of real value.

Specifically, they are looking at “passing the strongest combination of source protection, freedom of speech, and libel-tourism prevention laws in the world“: (see also here and here)

On Tuesday, [Feb 16] the Icelandic parliament is expected to introduce a measure aimed at making the country an international center for investigative journalism publishing, by passing the strongest combination of source protection, freedom of speech, and libel-tourism prevention laws in the world.

Supporters of the proposal say the move would make Iceland an “offshore publishing center” for free speech, analogous to the offshore financial havens that allow corporations to hide capital from authorities. Could global news organizations with a home office in Reykjavík soon be as common as Delaware corporations or Cayman Islands assets?

“This is a legislative package to create a haven for freedom of expression,” Icelandic member of parliament Birgitta Jónsdóttir confirmed to me, saying that a proposal for comprehensive media law reform will be filed in parliament on Tuesday, and that whistle-blowing specialists Wikileaks has been involved in drafting it. There have been persistent hints of an Icelandic media move in recent weeks, including tweets from Wikileaks and a cryptic message from the newly created @icelandmedia Twitter account.

It might not be a big market, but with a population of 320,000, it does not need to be, and we all win.

I think that the libel tourism laws might be the most significant, if it can be structured in a way that has meaning; Too many times, the UK’s draconian libel laws are used as a cudgel against free speech.

It’s one of the questions I’ve always wondered about regarding the internet: Why haven’t countries used this to their advantage, rather than just knuckling to the US acting as laptog to the RIAA, MPAA, and other acronyms.

H/t Murray Waas.

I Can Still Tell the Difference Between Dick Cheney and Alan Grayson*

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It’s Purim, and I am not yet drunk enough to satisfy the Rabbis, so it’s time for some more alcohol, or as I like to call it, “Bourbon Renewal.”

*According to the Talmud, a person is required to drink until he cannot tell the difference between ‘cursed be Haman’ and ‘blessed be Mordecai,’ though opinions differ as to exactly how drunk that is. A person certainly should not become so drunk that he might violate other commandments or get seriously ill. In addition, recovering alcoholics or others who might suffer serious harm from alcohol are exempt from this obligation.

Vermont Senate Rejects License Extension for Nuke Plant

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Maybe it was the fact that Vermont Yankee has been leaking radioactive tritium into the ground water for some time:

The Vermont Senate blocked efforts by Entergy Corp. to win a 20-year license renewal for its Vermont Yankee nuclear power plant, an action that could encourage opponents of nuclear energy in other states.

The Senate vote, which was 26 to four, marks the first time a license renewal has been thwarted, and it sets the stage for the plant’s closure by 2012, when the license expires.

The vote was striking because the state relies on the plant for a third of its electricity. In the past, license renewals have been routine, allowing energy companies to squeeze more life out of aging plants. To date, the NRC has renewed 59 reactor licenses, and 19 are pending.

The vote, which reflected fears about safety after leaks of radioactive tritium were discovered at the plant last year, is a blow to Entergy, which had planned to spin off six reactors, including Vermont Yankee, into the nation’s first stand-alone nuclear power company, to be called Enexus Energy Corp.

Notwithstanding the ability of the nuclear power industry to lobby for subsidies and tax breaks, the problem is that people who have nuclear power know that the plants never finish on schedule, never finish on budget, and are expensive sources of power even with the subsidies.

This plant is 38 years old, and its cooling tower collapsed in 2004, so maybe this is a good time to shut it down.

This is a Case to Watch

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Sergey Aleynikov, a senior programmer for Goldman Sach’s high frequency trading software, has been indicted for software theft.

It’s alleged that he took the software, and sent copies of it to a server in Germany.

This case is odd.

First, the entire high frequency trading thing smells of corruption: The idea is that by having servers colocated in the market, you pick up a few milliseconds speed, and so can execute trades between when someone else requests a buy, and when their transaction is actually executed.

To my, admittedly untrained, gut this sounds identical to front-running, which is illegal.

Additionally, the twists and turns of the trial, where Aleynikov’s lawyers made some fairly routing requests for things like his personnel file to show that he was not a disgruntled employee, had the squid’s* lawyers seriously freaking out, and suggesting that charges should be dropped.

I think that there are some very real bits of corruption that might be uncovered in the trial, though the prosecution, defense, and judge might very well find a way to suppress that, because, after all, it’s Goldman Sachs, and rule number 1 of Goldman Sachs is that Goldman Sachs has friends in high places, so it always gets what it wants.

My prior posts are here.

*Alas, I cannot claim credit for the bon mot describing Goldman Sachs as a, “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” This was coined by the great Matt Taibbi, in his article on the massive criminal conspiracy investment firm, The Great American Bubble Machine.

Oshkosh Truck Bid Survives Contract Protests

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BAE Systems and Navistar International have had their protests on the FMTV contract award to Oshkosh overturned by the Army:

Oshkosh Corp. fended off a challenge from two competitors, keeping a U.S. Army contract to build armored trucks valued at as much as $3 billion. Oshkosh shares jumped in late trading.

Today’s decision by the Army lifts a stop-work order placed last year after losing bidders BAE Systems Plc and Navistar International Corp. protested to the Government Accountability Office, the Army said in a statement. The companies said the Army didn’t fully weigh the risk in Oshkosh’s proposal for the Family of Medium Tactical Vehicles, or FMTVs.

The GAO in December determined that the Army didn’t consider that Oshkosh lacked key equipment, allowing the company to receive the same high production-capability rating as BAE, which had made the trucks since 1991. The agency asked the Army to reevaluate the bids.

I’m not surprised, it was a lower bid, and the truck itself is designed to be assembled out of component parts with little, if any machining, welding, etc. being done at the plant.

At least that was the scheme when I worked there.* They did not intend to have a machine shop or an electrical shop, because they expected everything to come in to specification from the vendors.

If this is a fixed price contract, the only risk here is that of Oshkosh.

*Full disclosure I worked at Stewart & Stevenson, Tactical Vehicle Systems, in Sealy, TX on the FMTV in 1992 and 1993.†
†Yes, I have worked everywhere. Maybe I can’t hold down a job, but more likely this has been my role as “technical hit man”, where you are parachuted in to take care of a specific need.