Author: Matthew G. Saroff

Our Man in Afghanistan

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Hamid Karzai, whose incompetence and corruption is such that he is now appealing to the most backward of religious impulses, because there is no other reason to vote for him, has just signed into law a measure that legalizes marital rape:

In a massive blow for women’s rights, the new Shia Family Law negates the need for sexual consent between married couples, tacitly approves child marriage and restricts a woman’s right to leave the home, according to UN papers seen by The Independent.

Hamid Karzai, yet another gift that keeps on giving from Bush and His Evil Minions™.

Bankruptcy Updates

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The Department Store Chain Gottschalks twill be filing for liquidation, and mall developer General Growth Properties has managed to put off bankruptcy, for a while at least.

I think that it is likely that GGP will go chapter 11, at which point, Thomas Friedman, whose wife is a Bucksbaum, the family that owns the developer, may have to downsize his lifestyle….I’m so sad for him (not).

Finally, the Sun-Times Media Group has filed for bankruptcy, and before you start wringing your hands over how these are dark days for newspapers, note that Conrad Black and His Evil Minions™, most notably David Radler, looted the company, and have gone to jail for doing so.

In a way, it’s a microcosm of what is wrong with the news business: Bankers take over from journalists, generate fantastic profit margins by destroying journalism at these institutions through draconian cuts, and then they walk away, leaving bleached bones.

What Chris Said

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Chris Bowers, that is

There is a special election in the 20th congressional district of New York tonight. I hope the Democrat, Scott Murphy, wins. However, I am also frustrated that Murphy has received nearly $360,000 on Act Blue from around 2,000 donors. Given that Murphy has made it clear that he will attempt to join the Blue Dogs if he wins the election, the progressive small donor world should not have given him a single dime.

We–participants in blog and email list small donor fundraising efforts–have to completely stop raising money for Blue Dogs. We should not give a single cent to any current member of the Blue Dog coalition. We should not give any money at all to any candidate who refuses to rule out joining the Blue Dogs once in Congress. If we hope to improve Democratic behavior in Congress, this break has to be as public and as thorough as possible.

Agreed.

Scott Murphy may be the very best we can get in that district, and if that is the case, then liberal campaign contributions are better spent elsewhere.

I would “embrace and extend” his message, and include the corporatist “New Democratic Caucus” on the list of people that we should not contribute to.

This goes double for folks in safe Dem districts, which NY-20 is not, Republicans have a registration advantage there, but why pay for someone who will, when the going gets tough, shoot down your agenda?

But I still want Murphy to win, I just won’t give him my money or time.

Economics Update

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Note: Red denotes contraction, and yes, this is scary.

I guess that the lede is that the consumer confidence numbers are out, and that they remain near record lows, at 26, just one point above the all time low reported in February.

If that were not enough, we now have a survey indicating that consumer spending may fall by $1 trillion after the recession is over (by way of perspective, the US total GDP is about $14 trillion) according to the AlixPartners Long-Range Economic Outlook Survey.

That’s a 7% haircut on GDP, exclusive of the secondary effects, closed stores, warehouses, etc., once the economy recovers…..Great googly moogly!

In the meantime, I don’t think that a whole bunch of people will be tapping their home equity, as the Case-Shiller home price indices show a 19% drop in home prices, though it appears that defaults are abating, as private mortgage insurers saw defaults, and claims, fall in February, the first decrease since June, 2008.

Additionally, 2nd home sales fell in 2008, down to 30% of total home sales, from 40% in 2005, and more of these buyers are paying cash, which implies that a lot of the contraction in this market is an inability to find mortgages.

In terms of the general state of the economy, the Restaurant Peformance Index is showing the 16th straight month of contraction (h/t Calculated Risk), and the Philadelphia Fed State Coincident indices have shown a decline in all 50 states (pdf), for both the past month and the past three months (again h/t Calculated Risk).

Meanwhile, we have an indication that the Bank of England is looking at significant inflation, they have adjusted their pension investments to account for it, so I think that they expect the £ Sterling to fall, and inflation to increase in the UK.

In any case, we now have the chief economist for the OECD suggesting that the Federal Reserve would take aggressive action against a precipitous fall in the dollar, and work to maintain its position as a reserve currency.

I think that this is more an attempt to talk up the dollar than anything else, because protecting the dollar would, over the long term at least, require higher interest rates, which would have the economy collapsing like overcooked broccoli.

In any case, the dollar was down today, largely because the flight to safety yesterday following Obama’s announcement that GM and Chrysler were on notice is now over.

Oil was up too, though it’s still a bit under $50/bbl.

I’m So Happy With Obama’s DNC Chair

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You know, Tim Kaine, who Obama hand picked as head of the Democratic National Committee, who just signed a bill creating “Choose Life” license plates in Virginia, and has promised to support a bill banning state funding of embryonic stem cell research in the state.

I guess that throwing pro-choice advocates to the wolves is Obama’s way to “reach out to the right.”

Thanks a lot, Barack, for foisting this tool on the Democratic Party.

Reid Is Looking to Fold Cram Down Provisions

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Reid is now saying that he might drop cram down provisions from the housing bill if it threatens passage of the whole package.

Basically, this means that he is going to kill it, because everyone who wants it gone now knows that they can get it dropped by whining.

Seeing as how this was the law until about 1993, the effect on interest rates are minimal, and it’s the only way to renegotiate a mortgage that has been sliced and diced until it has hundreds of owners, cramdown is the single best thing that can be done to help with the current financial meltdown.

New York State to Institute “Temporary” Millionaire’s Tax

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Governor Paterson had been opposed to such taxes, suggesting that it would lead the wealthy to leave the state, but has not capitulated to progressives in the state, who were opposed to the draconian cuts in services that a “no-tax” solution would have required.

Even with this increase, 8.97% from 6.85% for income over $½ million, the top tax rate in New Jersey, is higher, and in any case, if people want to leave New York because it’s too expensive, they already have.

Nice to know that the political forces in New York State who work for the other 99% of the population can actually get meaningful change….for 3 years at least, as the tax is temporary….for now.

An Interesting Development in Autism Spectrum Conditions

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It appears that there is a genetic link between nicotine addiction and autism, in the neurexin-1 gene, which creates an excess of neurexin-1 beta protein, which aids in nerve cells linking up with nicotine like substances to neuro receptors, in people addicted to nicotine.

It turns out that the levels of the protein, and the gene, are deficient in some people on the Autism spectrum.

It raises some interesting questions, though at this point I would be very cautious, and I think that a first step would be to compare smoking and non smoking populations of people on the spectrum.

The fact that quack physician Jeff Bradford has apparently already started putting nicotine patches on his patients should not be viewed as significant by anyone except, perhaps, for malpractice lawyers.

Giving small children nicotine is an invitation to injury or death, because a nicotine overdose can kill someone very quickly.

H/T A Photon In The Darkness.

Now We Know Why Banks Were Profitable Last Month

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Because, using our tax dollars, AIG settled its accounts with the big banks at 100% on the dollar, even while they are refusing to pay on deals with smaller players.

So, not only are we funneling money to the big 5 banks through the TARP, and the TALF, and various Fed facilities, we are also shoveling money in through the back door by way of AIG’s Financial Products Division.

I now have a tough choice….Should I go long in pitchforks, or torches?

Big 3 (Big 2½) Update

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So, the White House does not like GM’s or Chrysler’s reorganization plans, and has given GM 60 days, and Chrysler 30 days to come up with a better plan.

What’s more, they demanded, and got General Motors’ CEO Rick Wagoner’s resignation, and pretty much demanded some sort of alliance deal between Fiat and Chrysler.

The obvious question here is, “Why is the government insisting on Wagoner’s resignation, and not Bank of America’s Kenneth Lewis’s resignation?

In terms of Chrysler-Fiat, it appears that they have come to an agreement on a “framework” for their deal.

One wonders if this deal involves a haircut for Cerberus, which it should.

Economics Update

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I’ll be going into the automotive news elsewhere, so this is pretty short.

First the Celtic Tiger Kitten has been taken to the vets to be neutered, as S&P lowers Ireland’s rating from AAA to AA+.

Ireland played the “cheap labor with good access to markets” game, and lost to former eastern bloc nations, and played the real estate and building game, which everyone lost.

In the housing market, we have defaults on FHA insured mortgages rising with 7.46% of the loans being 90+ days overdue, in foreclosure, or bankruptcy, up from 6.16% at this time last year.

This means that there is still a lot of inventory out there that has yet to hit the market.

In energy, the concerns over the US auto manufacturers has driven oil below $50/bbl, because nothing says short oil supply like house sized SUV, and the same concerns about the economy have driven the dollar up as traders head for safety.

Quote of the Day

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ROTFLMAO!!!

There are two novels that can change a bookish fourteen-year old’s life: The Lord of the Rings and Atlas Shrugged.

One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world.

The other, of course, involves orcs.

Too true.

Not sure of the source, it’s been floating around the innertubes.

Democratic Candidate Takes Lead in Special Election to Replace Gillibrand

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Honestly, even with the new poll numbers, this is a heavily Republican distract, so I my guess would be that the Republican has the advantage, particularly given the low turn out in special elections, so I would expect the ‘Phant to win in this Tuesday’s election.

In either case, Jim Tadesco (R), and Scott Murphy (D) contest is much closer than the district’s fundamentals would suggest.

Patents Reveal Shap of Northrop Grumman Bomber

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Rather unsurprisingly, Northrop Grumman’s design for the “Next Generation Bomber” (NGB) looks rather a lot like the cranked kite concept that has been floating around for some time.

Among other things, it’s supposed to provide much lower drag, and better high altitude performance than the original B-2, giving improved range, though some of the additional range appears to be at the expense of weapons load: word is that payload is in the 20,000 pound range, or about ½ that of its predecessors.

There is an additional interesting bit of information in another Northrop-Grumman patent application, which shows the aircraft with a mustache.

Given the stealth requirements for the aircraft, and the fact that it will generally be operating at high altitude at relatively high mach numbers, the obvious conclusion is that this is a retractable canard, much like the Tu-144 Charger and the Mirage Milan. (in the latter, the retractable canards were actually called a “mustache”)

The advantages on takeoff and landing are clear, giving a whole lot more pitch authority than is generally available with a short coupled tailless design, which can increase max takeoff and landing weight, decrease takeoff and landing speeds, and shrink the landing gear and breaking systems.

It’s Alive!!!!

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It’s beginning to look like the leading candidate for purchasing the assets of Eclipse Aviation may be positioning itself to restart the company as a going concern.

Given the relatively large customer base, and given that the debts of the company will be discharged in bankruptcy, they may be in a position to bring them back in some form, though I would be doubtful of full scale production restarting with the current investment environment.

Friday Night Bank Closings: I’m Scared Now Edition

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Not by the total number of bank closings, there was only one, the Omni National Bank, Atlanta, GA, the 21st of the year. (Full List of closings).

Since I figure that there will be somewhere in the neighborhood of 100 bank closings this year, that is not a surprise.

What is a surprise is Calculated Risk’s report on regulatory actions in California, where 6 more banks have received a cease and desist order from the FDIC, and there are predictions that two thirds of banks in California will be operating under such orders by year’s end.

I honestly cannot imagine that the situation is better in other areas with the largest real estate bubbles, such as Florida, the Las Vegas area, Phoenix, etc.

Space Debris Cleaning, My Ass!

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So, the National Reconnaissance Office and Space Command are looking to set up a ground based laser system to clean up space debris. (paid subscription required)

And I’m Anna Nicole Smith….This isn’t an attempt to set up a cleaning system, this is an attempt to develop a laser based anti-satellite weapon, not withstanding their fig leaf of some sort of multinational effort:

To help offset such a negative reaction, [Andrew Palowitch, director of the “Space Protection Program”]Palowitch says, five lasers could be built and installed in five countries—­Russia, China, India, France and the U.S. All would be ­operated by an international consortium with “everybody participating equally with free access to the particular sites in a coordinated activity.”

Propose a regime, that you could never get the French to agree to, much less China, and then go and develop a satellite zapper on your own.

Seriously, how stupid do they think that we are?

FCS Active Protection System is Not Working

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The Active Protection System (APS) is designed to intercept RPGs, ATGMs, and long rod penetrators, to protect the smaller and lighter manned vehicles of the Future Combat System (FCS), and it now seems that it simply does not work, according to the latest GAO report.

The interesting thing is that the Israelis have a system that does work, Trophy, though it is less ambitious than the APS, but it was rejected and hundreds of millions of dollars directed towards Raytheon.†

One of the interesting bits about FCS is that is as much an industrial base preservation system as anything else, with bizarre separations of work to ensure that various contractors get sufficient workshare.

I believe that the high technology band tracks are the responsibility of the BAE Systems†, and the suspension is the responsibility of General Dynamics, for example, which makes no sense whatsoever.


Army Rejects Trophy


Trophy Promotional Video

*Full Disclosure, I worked for Raytheon a number of times, both in Texas and in Maryland over the past 15 years or so.
†Full disclosure, I worked on the Future Recovery and Maintenance Vehicle, FRMV, “wrecker” variant of the FCS-MGV from 2003-2006 at United Defense (later BAE Systems after the Carlyle Group sold me to buy Dunkin Donuts).‡
‡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.