Author: Matthew G. Saroff

Economics Update

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The Misery Index Continues to Rise
H/t My Budget 360

Today will be a slow news day, because everyone is waiting on the Federal Reserve Open Market Committee’s (FOMC) statement tomorrow afternoon.

I think that the big news is that Warren Buffet’s Berkshire Hathaway has bought the Burlington Northern-Santa Fe Railroad, betting on recovery while further reducing his stake in Moody’s Investors Service.

Warren Buffet does not invest in things that he cannot get his head around, which is why he missed the dot com implosion, he couldn’t figure out how they could make money.

So now, he is dumping a financial company for rail, which implies to me that he sees a lot more trouble ahead for the banking industry, even as the economy recovers, and the demand for goods and services increases.

This is further reinforced by the September new factory orders rising by 0.9%.

Also the numbers for automobile sales were remarkably good, considering the “cash for clunkers” sales hangover.

There was strong sales growth for and strong October sales numbers from Ford, GM, Nissan, Hyundai and Kia, while sales for Toyota and Honda were basically flat.


Bummer of a birth mark, Chrysler

As for Chrysler, well…..”Bummer of a birthmark, Hal.

BTW, if you’ve been reading the financial press, you may not that they are touting a 4.4% increase in the MIT Center for Real Estate’s transaction-based index (TBI) index for the 3rd quarter.

One should note, as Calculated Risk does, that this is not the But this isn’t the monthly Moody’s/REAL Commercial Property Price Index (CPPI), which actually showed a drop.

This is an index of, “commercial properties sold by major institutional investors,” and these institutional investors are likely avoiding the distressed properties like the plague.

It should be noted that things are still bad, with business bankruptcy filings rising 7% in October, a change from the drops in filings in August and September.

Gold surges to an all-time high – Nov. 3, 2009: “

Here’s a bonus for the gold bugs, gold hit a new high, $1,084.90/oz (troy) after the Reserve Bank of India announced that it was bought 200 metric tonnes of gold from the IMF. (What’s up with this? Really, I have no clue.)

In energy and currency, both oil and the dollar rose today.

Southerners: A Majority of them are Not Stupid

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The folks at the Plum Line look at a CNN article on their CNN/Opinion Research Corporation survey, and tease out this bit of information:

Another factor that may be boosting Obama’s overall rating is the inevitable comparison with the man he replaced in the Oval Office. Fifty-seven percent say Obama has been a better president than George W. Bush; only a third say Bush’s track record was better.

“Compared to Obama, Bush does fairly well among southerners and rural voters. But even in those categories, a majority still says Obama has done a better job than Bush,” says Holland.

On the depressing side, however is the knowledge that 1/3 of the country are either complete morons, completely insane, or both.

Well, I was Wrong on This One

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The Republicans did release an alternative healthcare reform plan. (230 page PDF)

I had said that they wouldn’t because it would be so awful that it would drive fence-sitters the other way.

It appears that I was right on the 2nd part though, it looks to be te suck. Main features:

  • Removes state jurisdiction from insurance companies. (Freeing the market, don’t you know).
  • Whacks malpractice claims with little or no savings. (Lack of savings has been proven in around a dozen states now.)
  • Assigns pre-existing conditions to very high risk pools, and does not require insurers to cover them.
  • Does not prohibit rescission, the cancellation of insurance when you get sick.
  • Allows employers to form groups to buy insurance, but allows insurance companies to exclude companies with workforces that are too sick, or too old.

Alan Grayson ha the summary weeks ago:

If you get sick America, the Republican health care plan is this: die quickly. That’s right. The Republicans want you to die quickly if you get sick.

Republicans Horrified that N***ers Vote

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Yep, it’s John Fund, whose other claim to fame is to have bedded a mother and her daughter roughly 20 years apart, and when police came to investate a resulting domestic abuse charge, he hid in the bathroom:

Appearing on Fox News’ Glenn Beck, John Fund claimed that Hispanic voters in Camden, New Jersey, are being told that there is “a new way for you to vote, la nueva forma de votar” — an anecdote Fund suggested was evidence of voter fraud in the state’s 2009 gubernatorial election. In fact — as Fund himself wrote in a Wall Street Journal column published hours earlier — that incident actually occurred in Philadelphia in 1993.

Of course, there is also the fact that anyone in New Jersey can vote by mail if they so choose, as opposed to Pennsylvania 16 years ago, where absentee ballots were supposed to be available only to those who could show a good reason to not be in town that day.

In NJ, anyone can mail in a ballot for any reason.

Wanker of the Day

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Blue Dog Jason Altmire, who is wishing for Democratic defeats in the elections:

Centrist Blue Dog Democrats might see their position strengthened if Democrats suffer broader losses Tuesday, one Blue Dog member suggested.

Rep. Jason Altmire (D-Pa.) argued that an election night rebuke for Democratic candidates across the nation could lead some in the party to rethink their plans on healthcare reform and other issues.

Seriously, he needs to be primaried, and possibly needs a Green Party challenger in the general.

An Idea So Good It Will Never See the Light of Day

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As a part of the Consumer Financial Protection Agency, Congressmen Alan Grayson, Wm. Lacy Clay, and Brad Miller have proposed the “Financial Autopsy” amendment.

The summary is:

Today we will offer the “Financial Autopsy” amendment. The Grayson/Clay/Miller amendment is essential to attacking the root problem of consumer bankruptcy and foreclosure because it requires the CFPA to do a financial audit of products that have caused the highest rates of bankruptcy and foreclosure annually. Not later than March 31st of each calendar year, the CFPA will list these anti-consumer products, submit their conclusions on why these products “fail” consumers, the companies and employees that underwrote these products, and authorizes the CFPA to take action to restrict these products.

Financial Autopsy Amendment:

  • Requires the CFPA conduct a “Financial Autopsy” of each state’s bankruptcies and foreclosures (a scientific sampling), and identify financial products that systematically led to a large number of bankruptcies and foreclosures.
  • Requires the CFPA report to Congress annually on the top financial products (the companies and individuals that originated the products) that caused consumer bankruptcies and foreclosures.
  • Requires the CFPA take corrective action to eliminate or restrict those deceptive products to prevent future bankruptcies and corrections
  • The bottom line is to highlight destructive products based on if they are making people “broke”. Thank you for your consideration, we hope you will join us in supporting this amendment.

This is brilliant. As opposed to coming up with rules that some quant will be paid 6 figures to evade, simply identify bad financial products by seeing which ones make people go bankrupt.

The problem is not specific financial products, it’s the fact that there are looters out there, and they will continue to find ways to loot people.

The solution is to look for the looting, and take away tool sets as they are used to do this.

At the link above, the author, “George Washington” suggests that the reports should be updated monthly, to eliminate the delay in response, and Karl Denninger argues that it needs to prevent minor tweaks to allow for reissuance of the products, and that it should have provisions to allow the victims to claw back their money.

These are all good points, but this is an amazingly good starting point.

I’ll Believe it When I See It

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So, the House Republicans are now claiming that they will be floating out their own healthcare reform program “really soon now”:

Republicans in the U.S. House of Representatives plan to offer an alternative to Democrats’ massive healthcare reform bill that would not raise taxes or require people or businesses to buy health insurance, the House Republican leader said on Sunday.

It’s not gonna happen.

First, the Republicans are simply too invested in “No”, and second, their proposal will have to hew to the ideology of their caucus, which will make it so absolutely appalling that it will send Blue Dogs gibbering to demand a public option,

Not….

Gonna….

Happen….

So We Have a Bunch of Homophobe-Phobic Idiots in the White House

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Barack Obama’s former campaign organization, Organizing for America, just sent out mass emails to Maine voters in preparation for the elections.

Well, with the best chance yet to defeat an anti-gay marriage plebiscite, in years, what to they have to say about the Maine’s hate amendment?

Why, nothing, of course.

Just go out and vote, because Barack Obama and His Stupid Minions™ all cut their political teeth on the “Don’t Ask Don’t Tell” fiasco in the early 1990s, and so they live in fear of bigots.

The degree to which the Obama administration has internalized the idea that civil rights for gays are simply a captive special interest group who can be thrown under the bus is appalling.

Text of email after flip.

From: “Mitch Stewart, BarackObama.com” info@barackobama.com
Date: Mon, 2 Nov 2009 14:10:17 -0500
To: From: “Mitch Stewart, BarackObama.com” info@barackobama.com
Date: Mon, 2 Nov 2009 14:10:17 -0500
To: xxxxxxxxxxxxxxx
Subject: Get out the vote in Maine

Mitch Stewart
Director
Organizing for America
Subject: Get out the vote in Maine

XXXX —

One year ago, we made phone calls, went door to door, and proudly cast our ballots to elect Barack Obama and bring real change to this country.

Tomorrow is Election Day once again in Maine. It’s as important as ever for you to get out to vote. And just like you did last year, bring friends, family, and co-workers with you when you go to the polls.

(Click here to find your polling location. http://my.barackobama.com/page/m/55c1033d/507aca42/d7167d3d/118862ba/2515913445/VEsH/ )

http://my.barackobama.com/page/m/55c1033d/507aca42/d7167d3d/118862ba/2515913445/VEsE/

On Election Day last year, we knew that victory was just the beginning — that the hardest work was still ahead of us. We didn’t build this movement for a single election or issue.

And we know — now more than ever — that our voices and votes are critical to continuing this movement for change and in shaping the outcome of the issues that are most important to us like health insurance reform and creating jobs to turn around the economy.

So please remind friends and family to go vote and bring them with you to your polling location tomorrow.

Thanks,

Mitch

Mitch Stewart
Director
Organizing for America

Paid for by Organizing for America, a project of the Democratic National Committee — 430 South Capitol Street SE, Washington, D.C. 20003. This communication is not authorized by any candidate or candidate’s committee.

Stay classy, Rush

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Yeah, Rush Limbaugh is now saying that former Republican candidate in New York’s 23rd district has, committed bestiality by endorsing the Democrat in the race.

Seriously, when one inventories the number of times that Limbaugh uses a sexual metaphor to describe someone that he does not like is striking.

I’m thinking that Mr. Limbaugh has issues, but then, that has been a likely ever since he returned from the Dominican Republican with a bunch of Viagra®.

Economics Update

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Commercial Real Estate Delinquencies
$ billion


Percentage
CRE Data H/t Realpoint (PDF) and FT Alphaville


ISM Employment Index v BLS Manufacturing Employment H/t Calculated Risk


Construction Spending

Yeah, we are in some sort of recovery, though I still think that the underlying problems, particularly as pertain to finance and real estate, have not been addressed.

The Institute for Supply Management’s Manufacturing index rose to 55.7 in October, up from September’s 52.6 and its Manufacturing Employment index rose to 53.1, the first time that this index has broken 50, showing expansion, since April 2006.

On the other side of the Pacific, we have Chinese manufacturing growing for the 8th straight month.

Real estate news appears to be improving too, with construction spending rising in September, and the NAR’s Pending Home Sales Index rising for the 8th month in a row.

This news has had the anticipated effects in currency and energy, with the dollar falling on an increased risk appetite, and oil rising in expectation of increased demand.

Those Stupid Bastards Took the “Teabagger” Sexual Innuendo, and Set the Dial to 11

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Ooh, baby, you are so talented! And they are so dumb!

Yep, a group of wing-nuts* have created a website dedicated to fighting Acorn and the Working Families Party up in New York State.

So he/they got a domain, and chose a name for the movement:

Great googly moogly, this is stupid.

H/t Some Guy With a Website

*Or maybe just 1, there isn’t a whole bunch of traffic or posts there, it just consists of reposts of New York Post articles.

The Mask Falls

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Orrin Hatch admits that the real reason that Republicans oppose healthcare reform is because it would benefit Democrats:

Hatch asserted that the health bills, which he believes represent a “step-by-step approach to socialized medicine,” will lead to Americans’ dependence on Democrats for their health and other issues.

“And if they get there, of course, you’re going to have a very rough time having a two-party system in this country, because almost everybody’s going to say, ‘All we ever were, all we ever are, all we ever hope to be depends on the Democratic Party,’ ” Hatch said during an interview with the conservative CNSNews.com.

“That’s their goal,” Hatch added. “That’s what keeps Democrats in power.”

What it is all about is that they are afraid that, like the New Deal, the passage of successful programs will give the Democrats a generation in power.

It’s not about what is right for the country, it’s about power.

It’s Official, Ford UAW Votes Down Concessions

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This is no big surprise, the UAW has voted against wage and benefit concessions to Ford.

It would have been the 4th round of concessions since 2005, and the rank and file said, “Enough is enough”.

Basically, they are not in the mood to make more give-backs when the stockholders, including the Ford family, are kept whole.

Additionally, I think that the Ford workers really do believe that they make a better car than their competition, something which is born out by 3rd quarter results, where Ford posted a profit of nearly $1 billion, largely on the fact that it was the US manufacturer to do best on the cash for clunkers program, because Bill Ford, even in the days of the SUV, was committed to making good quality smaller automobiles.

In a way, they are a victim of their own success: Their workers believe in their ability to make a good product that people will buy.

Ron Paul Says Fed Audit Legislation is Gutted

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If this is true, then it is very bad news, but seeing as how Ron Paul’s goal is to destroy the Fed, I’ll wait until I see a statement from someone who is less whack-a-doodle wingnuttish.

Here is what Paul said:

Paul, a member of the House Financial Services Committee, said Mel Watt, a Democrat from North Carolina, has eliminated “just about everything” while preparing the legislation for formal consideration. Watt is chairman of the panel’s domestic monetary policy and technology subcommittee.

I just put a call into Representative Alan Grayson’s office, he is a co-sponsor of the bill, but there is no statement from him about this yet.