Author: Matthew G. Saroff

Whiskey Tango Foxtrot?!?!?!? I Agree With Ben Stein?!?!?!

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I must be wrong.

But Ben Stein, the most overrated intellect in America is saying that Goldman Sachs has been ripping off its clients, and that it is wrong:

That is, it, Goldman, has a legal duty to not take advantage of the people to whom it acts as a fiduciary. It also has that duty because of the way it presents itself to the world — with all of its leaders’ talk about the Goldman Sachs “culture”. They don’t present that culture as the value system of Louis “Lepkele” Buchalter of Murder, Incorporated or of Meyer Lansky or Bugsy Segal or The Purple Gang. They sell the company as a prestige house with solid, client-driven values. If they act to betray that trust, it’s illegal.

Either something is profoundly wrong with the universe, or Matt Taibbi and I are wrong about the squid.

I’ll go with the universe hiccuping.

I guess that Ben Stein gets to be right once a millennium, but don’t ask me when he was right in the 1900s.

It’s Bank Failure Friday!!!!

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

  1. First National Bank of Georgia, Carrolton, GA
  2. Florida Community Bank, Immokalee, FL
  3. Marshall Bank, N.A., Hallock, MN
  4. Community Bank and Trust, Cornelia
  5. First Regional Bank, Los Angeles, CA
  6. American Marine Bank, Bainbridge Island, Wa

Full FDIC list

BTW, here it is in chart with a handy, dandy least-squares trend line:

[on edit]: Updated with late failure in Washington State and tweaked graph for readability.

Why US Broadband Sucks

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The Phone Company*

Let’s look at Maine, where the terminally incompetent telco Farpoint is aggressively lobbying against Maine accepting a $24.5 million grant from the federal government to build out broadband networks:

Last month, NTIA gave Great Works internet in Maine $24.5 million toward a fiber optic network. The grant is a classic public/private partnership for a middle mile project that includes, among others the University of Maine.

Fairpoint, Maine’s primary rural LEC, has objected to this “undue competition with the private sector.” This would be funny, given how Fairpoint has become the poster child for the failure of the private sector to deliver on its big promises to rural communities. But Fairpoint’s talking points have ended up in legislation filed by Maine State Senator Lisa Marrache (D-Waterville) and Maine State Rep. Stacey Fitts (R-Pittsfield). Despite the fact that middle mile build out will help companies like Fairpoint (while also helping their competitors), we get the usual ideologically-driven nonsense about how the public sector ought to know its place and leave the driving to the all-knowing and super-efficient firms like Fairpoint — assuming Maine’s rural residents like the prospect of waiting for a bankrupt company [Yes, literally. Farpoint went Chapter 11] to satisfy its creditors and bring them broadband.

While this money would improve access and service for everyone, it would make it easier for companies to compete against Farpoint, the incumbent, so they are fighting this tooth and nail, because their service has been so unbelievably horrible that they know that they will hemorrhage customers if anything near free and fair.

That’s what this is all about.

There is more money in locking out competitors than there is in improving service, so US broad band, driven by private interests, is slower, more expensive, less reliable, and less accountable.

Damn, sounds a lot like out healthcare system.

*The President’s Analyst, see IMDB and Wiki.

How About Paying Them More?

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Yawn, another day, another report saying that the dearth of US citizens interested in majoring in technical fields is a national security threat:

Sure, we’re all plugged in and online 24/7. But fewer American kids are growing up to be bona fide computer geeks. And that poses a serious security risk for the country, according to the Defense Department.

The Pentagon’s far-out research arm Darpa is soliciting proposals for initiatives that would attract teens to careers in science, technology, engineering and math (STEM), with an emphasis on computing. According to the Computer Research Association, computer science enrollment dropped 43 percent between 2003 and 2006.

Umm ………… Hello?!?!?!?

You are asking how to encourage people who have the proficiencies to go into a technical field to do that, as opposed to, for example, becoming a banker or a stock broker.

But, of course, like the Cylons, they have a plan:

The agency doesn’t offer specifics on what kinds of activities might boost computing’s appeal to teens, but they want programs to include career days, mentoring, lab tours and counseling.

Like that will work: Ignore the poor pay and benefits, and the fact that your barista at Starbucks® used to be in IT, but after he got laid off the last time, he couldn’t find another job, because he only knows C++, not C#, because being a computer programmer or an engineer is just so f%$#ing cool.

By definition, people who have the wherewithal to go into science, technology, engineering and math (STEM) are people who can count.

If you want them to take a technical major, you have to promise better pay and benefits.

Duh …………

Economics Update

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Worst post-Depression recession
H/t Economic Policy Institute

So, US GDP grew at a 5.7% annual rate in the 4th quarter, according to the advance estimate from the Bureau of Economic Analysis.

Some points: First, 5.7% is a spectacularly good number, the best in about 6 years, second, I expect that as more data comes in, future revisions will be downward, third, much of this growth was from a low “deflator” number, basically meaning that the numbers were juiced by the extraordinarily low inflation numbers, and fourth, as Krugman notes, it was an inventory blip, with over half of the growth being restocking of depleted inventories, not real growth.

Even with this number, as the graph pr0n shows, we are still down from peak more than any other recession since WWII.

Still, the Reuters/University of Michigan Surveys of Consumers was up more than forecast, to 74.4, and given that consumer spending is most of our economy, it is a big deal.

As to energy and currency, the GDP numbers did what was expected, with the dollar strengthening, and the stronger dollar pushing oil down.

[on edit]
Just in, in 2009, wages and benefits rose the least since statistics began to be kept in 1982.

Funny Headline of the Day

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EU-funded think tanks defend their credibility

It’s not just that they are government funded, it’s the whole idea of think-tanks and credibility being juxtaposed.

Maybe the American Enterprise Institute, the Heritage Foundation, the Cato Institute, the Manhattan Institute, and of course the original wanker think tank, the Brookings Institution, have soured me on the whole concept.

I just see them as exercises in cronyism.

Think tanks have no credibility.

[on edit]
There are any number of advocacy organizations that do good things, but they aren’t think tanks, they actually work in the context of the regulatory process to get things done, rather than just crank out paper for whoever pays their bills.

A good example is Public Knowledge, where they spend a lot of time actually doing things like making arguments before the FCC on regulatory issues.

There are good people in think tanks, but they do their good work elsewhere.

Seriously, This is What is Wrong with America

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Ben Bradley’s wife, otherwise known as Sally Quinn, is a fixture in Washington, and Jamison Foser has a good rundown on just what exactly she is:

You cannot caricature Sally Quinn. Don’t even try. It simply can’t be done. No matter how hard you try to exaggerate her preening self-regard and utter frivolity, she comes right along and shows herself to be worse than you could possibly imagine.

Quinn — who gained fame when The Washington Post was forced to retract her false claim that Jimmy Carter’s national security adviser unzipped his fly during an interview — makes the extraordinary claim in her January 26 column that Carter lost his re-election campaign due to his failure to attend Washington dinner parties. Not only that — according to Quinn, Ted Kennedy ran against Carter because of it:…

She is a failed newspaper reporter (see above), a failed TV reporter, I saw her on the CBS Morning News in the 1970s, and a failed novelist, and is now a serial party girl and hostess.

As was noted some years back in Salon Magazine, “She would go to the opening of an envelope.”

Basically, she married into Washington, DC royalty, in the person of former Post Editor-in-Chief Ben Bradlee, and then did her best to become the queen bee of the Washington social circle.

So, what does this mean? It means that when she writes about why things happen in Washington, DC, it’s because they don’t kiss the ass of the party crowd:

  • Carter lost his bid for reelection, and got a primary challenge from Ted Kennedy, because he and Rosalynn didn’t go to the the Washington parties.
  • Watergate took down Nixon because he didn’t go to the the Washington parties, so he had no support from people like Sally Quinn.
  • The Republicans attempted coup masquerading as an impeachment investigation against Bill Clinton because he and Hillary didn’t go to the the Washington parties.
  • George W. Bush was bad, because, “The Bushes almost never went out and the president was in bed by 9:30, even when they entertained, which was rare,” so they did not go to the the Washington parties.
  • That Barack Obama is icky, because he’s making people work so hard that they do not have time to go to the the Washington parties.

Beginning to see a pattern?

I am beginning to pine for Madame la Guillotine.

Anti-Abortion Terrorist Convicted of Murder

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The Jury deliberated only 37 minutes before convicting him of 1st degree murder, which means that they basically voted to convict while waiting to get into the jury room:

In a trial that never became the referendum on abortion that some abortion foes wanted, Scott Roeder, a 51-year-old airport shuttle driver, was convicted today of murdering George Tiller, one the nation’s few physicians who performed late-term abortions.

The jury of seven men and five women deliberated for only 37 minutes. Roeder faces life in prison after being convicted of first-degree murder.

Roeder also was convicted on two counts of aggravated assault for threatening to shoot church ushers Keith Martin and Gary Hoepner as he fled Reformation Lutheran Church after murdering Tiller.

This guy needs to be prosecuted under federal statutes too, and locked up under the most severe restrictions possible at the SuperMax until he breaks, and gives up his accomplices, because it’s clear that they wound him up, and pointed him at tiller.

Russian PAK-FA Flies

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Here is a decent quality picture

The aircraft made its first flight at Komsomolsk-on-Amur, duration about 45 minutes, the Sukhoi’s air field near Russia’s Pacific coast.

Note that this is more of a demonstrator than anything else, and by way of comparison, the BAE EAP, the demonstator for the Eurofighter Typhoon, first flew in August 1986, but entered service in August 2003, a 17 year lag.

To the degree that I can get a look at the cockpit arrangement, and it’s a couple of times that I have paused the videos (below), it appears that the canopy has not gotten any sort of stealth treatment yet.

There also appears to be a fair amount of edge alignment.

This, along with the visible smoke trails from engines, implies to me that this is more a demonstrator than a prototype

The the 2nd video makes that fairly clear that they are staying with the straight inlets and widely spaced inlets of the Flanker and Fulcrum, , so I’m not sure how they keep RCS down. There might be radar blockers in the inlets.

Interesting, they retain the widely spaced straight through inlets of the Flanker and Forger. I wonder how they reduce the RCS, perhaps radar blockers in the inlets.

Also, it appears that agility is a larger priority, as it has a cranked delta wing, which tends to improve nose authority at higher angles of attack.

I wonder if they are operating under the assumption that sensor fusion and increased processing power will mitigate stealth going forward, or they may have decided that lowering RCS to improve jamming efficiency was a more economical path forward than going with extreme stealth.

H/t ELP Defens(c)e

On Paywalls and Newspapers

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Newsday got bought out by the Dolan family, the folks who own Cable Vision, and they promptly put the website behind a subscription wall.

Do you know how many people are willing to buy a $5 a week subscription to the Long Island newspaper?

Well, after 3 months, they have 35 subscribers, so I think that their newsroom outnumbers the web page subscribers.

I think that the folks at the New York Times are in for a world of hurt.

Their pay wall is a bit different, you get a few stories before having to pay, but what it will mean to folks like me is that I won’t link to them unless they have a big exclusive. It’s just not worth it to me.

As it currently stands, I do link to them frequently as a paper of record.

Now, I’m sure that the loss of the eyeballs of my reader(s) does not mean much in the scheme of things, but when their OP/EDs were behind a pay wall, they completely fell off the screen on the internet.

Economics Update

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H/t Calculated Risk

It’s what Atrios calls “Jobless Thursday”, and while the number of people filing for initial unemployment claims fell, it was less than forecast, claims fell t0 470,000, not the estimate of 450,000, the 4 week moving average rose, and the number of continuing claims fell by 57,000 to 4.6 million.

On a brighter side (above link) orders for durable goods did rise in December, as did orders for capital goods, and while the Federal Reserve Bank of Chicago’s economic activity index of fell in December, the 3-month moving average rose.

Personally, I tend to place more credence in the transportation based indices, and so the fact that the Baltic Dry Index, an index of shipping costs, fell to a 3 month low, to be the thing that I would hold onto, which makes me bearish ………… Then again, I’m always bearish.

Since I missed the economics update yesterday, I should note that the Federal Reserve Open Market Committee kept its benchmark Fed Funds rate 0.25%, effectively 0%, and while their statement was significantly more upbeat than last time, they are still signaling that the rates will remain low for some time.

Meanwhile, in real estate, Freddie Mac issued a report showing that mortgage delinquencies jumped in December, and new-home sales fell again in December, in yet another indication that the recent activity was an artifact of the tax credit, as opposed to any real market turn around.

One interesting data point, again from Freddie, is that the ratio of people cashing out from their houses to those lowering balances or rates hit an all time low, meaning that people were refinancing to lower their payments, and not using their homes as an ATM.

In the long run, this is a good thing, but in the short run, it runs headlong into the paradox of thrift.

In the more general world of finance and banking, we are seeing skittishness about things like the Greek financial problems, and so there is a flight to quality, which has increased demand for US Treasuries, which has driven the rate on the 1-month treasury to a negative interest for the first time in 10 months, interestingly enough, the T-bill auctions seem to indicate that it’s Americans who are fleeing to quality, as the last auction had robust demand, but foreign buyers seemed to be backing off, at least the foreign central banks.

In consumer debt, credit card charge-offs fell a little in December, which indicates that people are a bit more able to pay off their debt, though the fact that Chase had a “payment holiday” may be a large reason for this.

In the old standards of energy and currency, crude oil fell slightly, while the dollar hit a 6½ month high against the Euro, largely on concerns that Greece will go the way of Ukraine, the Baltic States, or Iceland.

Of course, since Greece is in the Euro zone, when none of the other nations were, that is where it gets pretty hinky.

Full FOMC statement after the break:

Press Release
Federal Reserve Press Release

Release Date: January 27, 2010
For immediate release

Information received since the Federal Open Market Committee met in December suggests that economic activity has continued to strengthen and that the deterioration in the labor market is abating. Household spending is expanding at a moderate rate but remains constrained by a weak labor market, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software appears to be picking up, but investment in structures is still contracting and employers remain reluctant to add to payrolls. Firms have brought inventory stocks into better alignment with sales. While bank lending continues to contract, financial market conditions remain supportive of economic growth. Although the pace of economic recovery is likely to be moderate for a time, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability.

With substantial resource slack continuing to restrain cost pressures and with longer-term inflation expectations stable, inflation is likely to be subdued for some time.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve is in the process of purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt. In order to promote a smooth transition in markets, the Committee is gradually slowing the pace of these purchases, and it anticipates that these transactions will be executed by the end of the first quarter. The Committee will continue to evaluate its purchases of securities in light of the evolving economic outlook and conditions in financial markets.

In light of improved functioning of financial markets, the Federal Reserve will be closing the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, the Commercial Paper Funding Facility, the Primary Dealer Credit Facility, and the Term Securities Lending Facility on February 1, as previously announced. In addition, the temporary liquidity swap arrangements between the Federal Reserve and other central banks will expire on February 1. The Federal Reserve is in the process of winding down its Term Auction Facility: $50 billion in 28-day credit will be offered on February 8 and $25 billion in 28-day credit will be offered at the final auction on March 8. The anticipated expiration dates for the Term Asset-Backed Securities Loan Facility remain set at June 30 for loans backed by new-issue commercial mortgage-backed securities and March 31 for loans backed by all other types of collateral. The Federal Reserve is prepared to modify these plans if necessary to support financial stability and economic growth.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Donald L. Kohn; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh. Voting against the policy action was Thomas M. Hoenig, who believed that economic and financial conditions had changed sufficiently that the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted.

OK, I Didn’t Live Blog the SOTU

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Though thankfully, because of my Eastern European Jewish heritage, I have no hangover.

That being said, I watched, and drank every time he cock-punched the DFH’s,* so most of my thoughts are probably not that valuable, or coherent.

That being said, he did call for the repeal of the Military’s “Don’t Ask Don’t Tell” policy, and now Valerie Jarrett is saying that he is, “committed to getting it done.”

Now, let’s see what happens when Ben Nelson and Joe Lieberman get all pissy about it.

See video (11:35, and the interview with Jarret starts at about 3:05, and the exchange on DADT is at about 10:45)

*Dirty F%$#ing Hippies.

Well, All Signs Point to a Senate Appointment of Ben Bernanke Soon

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The current whip count has more than 50 Senators voting for him, and because Wall Street wants him, it appears that arms are being twisted in the Senate to get Senators who vote against him to vote for cloture, because, I guess, a stimulus package to reduce unemployment, or a fix to America’s broken healthcare plan, both of which required 60 votes to clear the Senate are less important than reappointing Wall Street’s lapdog at the Federal reserve.

Paul Krugman nails it in one sentence

I can hardly think of anything more calculated to solidify the view that Wall Street doesn’t have to play by the rules that apply to everyone else.

We have had reports of a number of Senators, including Barbara Boxer, who now appears to have a contentious reelection bid ahead of her.

I think that the two are tied together: Voting for Bernanke is voting for Wall Street, and your opponent can make hay of it.

Harry Reid took a slightly lower key approach, announcing his support for Helicopter Ben late on a Friday evening, so it would not get much press, and the wording is intended to make it sound conditional (it’s not). Faint praise indeed.

FWIW, if you vote for cloture, your opponent will make just as much hay of it.

Interestingly enough it is the arguments for his reappointment that make the best argument against his reappointment.

For example, we have a story saying that a Bernanke defeat would rattle Wall Street and so might precipitate a double dip recession.

It’s wrong on a number of levels, not the least of which is that we are going to have a double dip recession anyway, because, between new defaults in residential and commercial real estate and the increase in oil prices, the so-called recovery that we have seen won’t happen.

The bigger point though is the reason that Bernanke leaving the post would rattle the financial markets is because that they feel that if they screw up royally, then Bernanke will bail them out by pumping money into the system or slashing rates.

Wall Street is looking at a “Bernanke put,” which much like his predecessor’s “Greenspan put,” (both described at the same link) create moral hazard and encourage risk taking.

It’s pretty clear that Ben Bernanke is aggressively lobbying Senators to get reappointed, see his promises of transparency in the Federal Reserve that he made in a meeting with Dick Durbin, but it is just as true that all the moves toward transparency and consumer protection will end once he is reappointed and the audit bill is killed.

At this point, I think that the only chance that he won’t be reappointed lies with the accusations by Senator Jim Bunning and Darryl Issa that Bernanke is lying about his involvement in the AIG fiasco, and relying on those two lying chowder-heads is not something that I am particularly sanguine about.

The Racism of Our Press

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Whenever someone flings a shoe at someone as a gesture of contempt, the press seems compelled to note that this action is an Arab gesture of contempt.

As Matthew Yglesias notes, when commenting on a shoe throwing incident involving Sudanese President Omer Hassan Al-Bashir, throwing shoes means, “you suck!” in every society out there:

My continuing question about this shoe-throwing business is in what culture, exactly, is it not the case that throwing a shoe at a guy giving a speech is a sign of contempt? I recall going as far back as when shoes were thrown at Iyad Allawi media types calmly explaining that this is an insult “in Arab culture.” But is the message really so unclear that we needed to break out our handy-dandy Arab cultural translation manual for? I think one thing that makes the shoe-toss such an effective gesture of protest against figures in the global news is that the message is loud, clear, and unambiguous to an audience from any culture. You’re talking to an audience, I’m in the audience throwing a shoe at you—it’s disrespectful.

You see, young Yglesias, the press is, or believes that their audience is, full of racists, and so they feel the need to describe the behaviors of brown people as if they were tour guides on safari.