Author: Matthew G. Saroff

GE-Rolls Gets Smart on F136 JSF Alternate Engine Bid

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With the Pentagon gunning for the GE-Rolls Royce alternate engine, because they want their pig, the F-35 JSF, to fly as soon as possible, and the Pratt & Whitney’s F135 is already paid for, the alternative engine is behind the 8-ball, even if all indications are that it will provide superior performance, and that the competition between the two engines is likely to provide significant cost savings over time.

The F100/F110 competition between P&W and GE saved about 20%, but the basic F-110 was already flying as the F-101 on the B-1 bomber before it challenged the F-100.

The problem is that the services, particularly the Air Force and the Marines, want the JSF right now even more than they want the JSF get it right, and the money spent developing the F136 engine could be used to accelerate keep the schedule from slipping quite so much.

I think that it’s penny wise and pound foolish, but things being what they are, the Pentagon, and Lockheed are right about the fact that once the aircraft enters squadron service, it will be much harder to cancel.

Well, the F-136 team just had a cunning plan.

In fact, it’s so cunning, if you put a tail on it, you could call it a weasel: They are looking at making a firm, fixed-price contract proposal (paid subscription required) for the engine, which would make it a “known known”, as opposed to a “known unknown” (or maybe an “unknown unknown”, I gotta stop trying Rumsfeld-Speak, my head hurts).

In any case, the F136 does have friends on the House Armed Services Committee, who just added money for it back into the budget.

New York Senate Goes Kafka

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Because turncoat State Senator Sen. Pedro Espada, he’s the one who runs the phony charity that he pays himself from while he breaks campaign finance laws, not the one who slashed his girl friend’s face, is now claiming that he actually gets two votes in the State Senate, because when the Republicans elected him president pro tempore of the Senate it gave him the “duties of the Lieutenant Governor” when there is no Lieutenant Governor.

I seriously think that this won’t end until some Senator goes Preston Brooks on another Senator on the floor.

This Entire John Ensign Affair Thing Has Taken a Sinister Turn

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The blockbuster here appears to be that another Senator, Tom Coburn of Oklahoma, was present at at least some of the discussions on this matter between Ensign and his former staffer, though it also appears that there is the suggestion that Ensign was stalking Ms. Hampton after the relationship ended.

Well, it appears that Senator Ensign was slowly backing away from the allegations of extortion over the past few days, and law enforcement has said that there have been no allegations of such.

What is interesting is that Doug Hampton, the cuckolded husband seems to have felt threatened about something, because he sent a letter to Fox News about claiming that he was threatened about 5 days before Ensign went public, and while Fox denies having tipped him off, they now admit having received the letter.

It appears that someone there tipped off the Senator to this, and now that the contents of the letter have been leaked, we’re hearing rumblings of potential extortion again, only Ensign’s office is suggesting that it was his council, who they have not named.

So, murmurings of extortion, but no names, for now, I am betting that this is Bullsh&%.

My guess is that the sequence of events is as follows:

  1. Affair occurs. (agreed to by all sides)
  2. His colleagues in the Senate confront him about the affair in February of 2008
  3. Stalking or a vendetta by Ensign.
  4. Letter to Fox News.
  5. Fox sits on the letter.
  6. Fox tips off Ensign.
  7. Ensign goes public, and starts spreading rumors about extortion.
  8. Ensign’s office starts floating an extortion smear.
  9. Reporters start checking with law enforcement, find no evidence of extortion.
  10. Ensign’s office backs off extortion smear.
  11. Las Vegas Sun gets a copy of the letter, which makes Ensign look like Kathy Bates’ character Annie Wilkes from the movie Misery.
  12. We start hearing the extortion smack again.

Pass the popcorn

Text of Doug Hampton’s letter to Fox News:

Thursday, June 11, 2009
Fox News- Corporate Office
1211 Avenue of the America’s (sic)
New York, New York 10036

Megyn Kelly,

More than any time in my life I understand why people take matters into their own hands. I am disheartened! I have sought wise counsel, tried to do the right thing and continue to run into road blocks (sic) in dealing with a very terrible circumstance and injustice that lives in my life. I am hoping you and Fox News can help.

My name is Doug Hampton. I am a former employee of US (sic) Senator John Ensign. I worked for Senator Ensign in his official government office on Capitol Hill from November 2006 to April 2008. My responsibilities were the oversight of his personnel in Washington as well as the state of Nevada. Duties included budgets, policy and public speaking on behalf of the Senator and his initiatives.

Here is my story. In December of 2007 in the midst of some very difficult personal issues that deeply impacted my family and marriage, Senator Ensign pursued and engaged in a relationship with my wife. Our families were lifelong friends, our children attend school together to this day, and our homes are in neighborhoods across from each other. My wife was the Senator’s campaign treasurer.

There is a tremendous amount (sic) of details and critical facts associated with this story and their relationship that will not be addressed in this letter but are very important and need to be further explored if you choose to meet with me. The purpose of this letter is to establish the framework for discussion and provide enough information to warrant a meeting with you and Fox News. This is the only letter of its kind and no other news stations have been contacted with this information. I have great respect and affection for Fox News and many of your collages (sic). I’m sending this to you because you have a legal back ground (sic) and this story has several legal elements.

The unethical behavior and immoral choice of Senator Ensign has been confronted by me and others on a number of occasions over this past year. In fact one of the confrontations took place in February 2008 at his home in Washington DC (sic) with a group of his peers. One of the attendee’s (sic) was Senator Tom Coburn from Oklahoma as well as several other men who are close to the Senator. Senator Ensign’s conduct and relentless pursuit of my wife led to our dismissal in April of 2008. I would like to say he stopped his heinous conduct and pursuit upon our leaving, but that was not the case and his actions did not subside until August of 2008.

The actions of Senator Ensign have ruined our lives and careers and left my family in shambles. We have lost significant income, suffered indescribable pain and emotional suffering. We find ourselves today with an overwhelming loss of relationships, career opportunities and hope for recovery. Our pursuit of justice continues to place me and my family in harm’s way as we fear for our well being (sic).

Today, Senator Ensign’s responsibility and stature have increased within the US (sic) Senate. His is currently the head of “Policy” for the Republican Party, the number four position within the Parties (sic) leadership team. We on the other hand are completely ruined and left to deal with the aftermath of very evil and completely unjustifiable acts by one of our countries (sic) top leaders.

It appears there may be nothing the law can do to correct and bring justice and restitution to (sic) this terrible wrong that has been done to us. I have sought a number of lawyers who are having difficulty finding charges that may hold up in court. There are either technicalities that exist due to the time period in which I have sought help, or other nuances that quite frankly make no sense to me given the egregious acts and blatant abuse of power by Senator Ensign. From my perspective this whole nightmare is terribly wrong and completely unacceptable and should not be tolerated.

I clearly understand this story is difficult to believe for anyone reading (sic) for the first time. I too would have difficulty believing it, if someone brought me this story. However I assure you it is true and there are facts, a paper trail, phone records and personal witnesses to testify to its truth. It is my belief we are dealing with a very powerful person and an institution in the US (sic) Senate that only the media can pierce to expose the wrong and bring light and focus to what needs to be done? (sic)

Please help me! This should not be how the leadership of our country should be allowed to behave. I need justice, help and restitution for what Senator Ensign has done to me and my family. Regardless of technicalities, regardless of position, regardless of power this cannot and should not be tolerated in our country from our trusted leaders. Will you help? Will you consider a meeting with me to further discuss this story and what can be done to bring justice and correction to this situation?

I love this country and considered it a great privilege to work in the US (sic) Senate. I am bringing this to you and Fox News to address this professionally and correctly. I could have sought the most liberal, Republican hating media to expose this story, but there are people’s lives at stake and justice is about proper process as well as outcome. Senator Ensign has no business serving in the US (sic) Senate anymore! I will send you and (sic) email as well as leave you and your staff messages in an attempt to meet you and your team as soon as possible. I live and work in Nevada but can be in New York within hours, I look forward to your help.

Sincerely,
Doug Hampton

And yes, I am feeling a bit of Schadenfreude about this, pass the popcorn.

That Whole “No Paid Leave Laws” Thing: H1N1 Edition

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It turns out that the place hit worst by H1N1 right now is the good old USA.

Why? Because of our antediluvian workplace and worker protections.

We are the only industrial nation that does not require paid sick and vacation time, so, “infections among healthcare workers suggest that people are showing up at work sick — meaning that workplace policies may be contributing to its spread.”

You think that the American workplace, with its inducements to come in sick might contribute to the spread of disease?

Who would have thunk it?

Obama’s Reform of Insurance

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There is a lot of centralization of regulations at the federal level here.

Whether it’s good or not turns on one bit of information, and I’m not sure if it’s available yet.

If the regulations say that it in no way preempts stricter state regulation, it’s good. If it preempts stricter state regulation, it’s bad.

Because going to a single preemptive regulator is an invitation to regulatory capture that will make AIG look like a lemonade stand.

Obama Not Just Cheney in Drag, but Cheney’s Guardian Angel

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Great googly moogly, their latest brief in court is even more absurd than their DOMA brief.

Hell, it’s more absurd than the Twinkie Defense, it’s the Jon Stewart Defense:

A federal judge yesterday sharply questioned an assertion by the Obama administration that former Vice President Richard B. Cheney’s statements to a special prosecutor about the Valerie Plame case must be kept secret, partly so they do not become fodder for Cheney’s political enemies or late-night commentary on “The Daily Show.”

…

….He told the judge that if Cheney’s remarks were published, then a future vice president asked to provide candid information during a criminal probe might refuse to do so out of concern “that it’s going to get on ‘The Daily Show’ ” or somehow be used as a political weapon.

Gee, I wish that I could tell police investigating a crime to go pound sand because somehow it might be embarrassing.

Making this even more absurd is that this argument was first put forward by Bush’s now disgraced acting head of the Office of Legal Counsel Stephen Bradbury. (See also here and here)

Economics Update

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It’s a pretty slow day, at least until the FDIC gets into the act this evening.

In any case Treasuries are up up slightly, which means that yields are down, which removes a potential upward pressure on interest rates.

BTW, when one refers to debt instruments issued by the US Department of the Treasury, are they “Treasuries”, or “Treasurys”? I’m not sure.

In the meantime, the idea that the consumer may be engaging in a longer term is bolstered by statements by the CEO Coldwell Banker, who notes that, “The more important ‘move-up’ buyers were absent,” from the market.

People are paying down debt in a big way, as opposed to up-sizing.

All we have left is currency and energy, and the dollar continued to weaken as investors looked more towards return and less toward safety, while both crude oil and wholesale gasoline fell sharply on reports of inventory growth.

Don’t expect to see this at the pump for a while, the AAA reports that retail gasoline was up again, which makes it the 51st day since it’s fallen.

Financial Innovation, Financial Schminovation

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Just look at an instrument called the reverse convertible.

James Kwak has a hard time wrapping his head around this until he realizes that it’s nothing more than a way for bankers and brokers to screw their customers.

It’s so corrupt that it boggles his mind:

In a reverse convertible, you give $100 to a bank for some period, like a year; it pays you a relatively high rate of interest, say 10%. The $100 is virtually invested (no one actually has to buy the stock) in some underlying stock, like Apple. If at the end of the period the stock is above a threshold, like $80, you get your $100 back; if it is below the threshold, you get the stock instead. (The terms can depend on whether the stock ever went below the threshold and where it is at the end of the period, which makes the deal worse for the investor, but that’s the basic idea.)

The simplest thing to compare this to is just buying the stock. Compared to buying the stock, there are three outcomes:

  1. The stock ends up below $80: In this case, the reverse convertible is slightly better, because you got the$10 in interest, which is probably more than the dividends you gave up.
  2. The stock ends up between $80 and $110: Again, the reverse convertible is better, because you got $110 (your principal plus interest); it’s a little better if the stock ends up close to $110, a lot better if the stock ends up at $81.*
  3. The stock ends up above $110: Here, you do anywhere from a little worse (if the stock ends at $111) to much, much, much worse (if the stock goes over $200).

And then he asks, with no small justification, “What the hell is the point of this product?”

This is why I think that a financial regime needs to be established with the idea that that which is not explicitly approved is prohibited, because the current regime, even under Obama’s updates, gives us this toxic waste.

Post Fires Dan Froomkin

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Because it appears that one of their biggest, if not their biggest, drivers of traffic to their site, just too annoying, he had a brew up with the dishonest and delusional Charles Krauthammer about 2 weeks ago, and I’m sure that he and WaPo editorial chief Fred Hyatt comisserated over martinis and vicodin.

Glenn Greenwald is justifiably outraged.

All that I would add is that the WaPo still has space for Paul Wolfowitz.

It’s depressing. They have what I consider to be the finest comics section in the United States.

Reviews are Coming in On Obama Regulation Plan

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And there is a lot of skepticism, particularly about expanding the Federal Reserve’s regulatory role, because, as Alan “Bubbles” demonstrated, you could end up with an incompetent lunatic running the most opaque organization in Washington, see here, here, here

They should be concerned. While insulation from oversight and public input might be a good thing when one manages the monetary system and has to create a recession to reign in inflation, it is not when you are talking about regulating agencies.

I think that this is something that Lawrence Summers wanted, because he believes that Obama will appoint him to succeed “Helicopter” Ben Bernanke, and he wants more authority at what he sees as his future position.

One thing that does concern me is that one of the biggest failures in this of failures, the corruption in the way ratings agencies like S&P and Moody’s operate, is largely untouched.

I’m unimpressed, but I agree with Paul Krugman when he says, “One thing I was concerned about was whether this consumer financial protection agency would be toothless , but the opposition of [a bank lobby group] makes me believe that it’s not such a bad idea after all,” when he talks about moving the regulation of consumer loans out of the Federal Reserve and move it to a dedicated consumer credit protection agency.

It’s too little, too timid, and too friendly to the forces that created this in the first place.

Tom Daschle Would Suck Off a Corpse for a Cheeseburger

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To quote great Matt Taibbi, and there is no better evidence of this than his eagerness hook up with Viagra pitchman Bob Dole to kill the public option in healthcare reform, because, after all, his job is to lobby for, among other unsavory paracites, health insurance companies:

“While I feel very strongly that consumers should have the choice of a national, Medicare-like plan, my colleagues do not. . . But we were concerned that the ongoing health reform debate is beginning to show signs of fracture on the public plan issue, so in order to advance the process of developing bipartisan legislation and to move it forward, it’s time to find consensus here,” Daschle said.

So, Daschle’s solution is to have no real healthcare reform, but tho throw billions (trillions?) at his clients in the insurance industry and placing a mandate on the rest of the country.

Tom Daschle makes me happy that Harry Reid is now Senate Majority Leader….I can’t believe that I just said that.

Economics Update

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Well, I’ve missed a point on jobless claim numbers, which came out today, and showed increasing initial jobless claims, from 605,000 to 608,000, still into what Atrios calls “holy crap” territory, but that continuing claims fell from 6.74 million to 6.69 million.

I generally find continuing claims to be a better metric, but, as Susie Madrak notes, continuing claims do not count people whose benefits have been exhausted.

I’m not sure how to account for this in the data, but it is a factor.

On the other hand, we do have some unequivocally good news in the April vehicle miles driven statistics from the DOT for the first time in 20 months, which could be an indicator of a recovery, though gas prices nationally are about a buck cheaper, which may also be goosing the driving numbers.

We also have the index of leading economic indicators rising, a good sign, though the Philadelphia Fed’s Business Outlook Survey improved significantly, though it still shows contraction, so it’s an positive 2nd derivative.

It also looks like yesterday’s report of declining mortgage bond yields did predict today’s report of falling mortgage rates, with the 30 year fixed rate dropping 21 basis points (0.21%) to 5.38%, which should relieve some of the pressure on housing.

Still, with Midtown Manhattan office rents falling, down 28% year over year (!), the other show in real estate, the commercial side, is clearly dropping.

A note on the recent rise in interest rates, the real yield (interest -inflation) on 10 year treasuries is at a 15 year high, over 5%, which indicates that that inflation fears might be overblown.

The energy and currency markets have viewed today’s news as generally positive though, with oil rising, though Nigerian unrest contributed to this, and the dollar falling.