It appears that the Federal Reserve is using the same ratings agencies that rated the various subprime and Alt-A mortgage backed securities as AAA to evaluate the collateral offered by financial institutions as a part of the Federal Reserve’s sh%$pile for cash program.
So, Helicopter Ben is relying on the ratings agencies that called moldering corpses AAA….Nice…
Sam Brownback will not run for reelection, as he promised 10 years ago, though it looks like he will be running for Kansas Governor.
In Texas, with Kay Baily Hutchison not running for reelection so that she can run for governor, we have a plethora of hats thrown into the ring in Texas, from both sides of the aisle.
There have been mass arrests throughout Iraqi government centered in the interior ministry. It was initially alleged that it was a coup attempt, but now it is alleged that they were all trying to reconstitute the now banned Baath party.
If those charges sound bogus, even more suspect is that the arrests were made by a unit that answers directly to the Prime Minister, Nouri al-Maliki
It appears that the US general who was the chief liaison with the Interior Ministry has been completely out of the loop, and he has no idea as to whether it will effect the attempts to bring the, “Sons of Iraq”, Sunnis recruited to fight Jihadists in various regions of Iraq into the law enforcement system.
I tend to agree with Robert Farley, who says that this is a power grab by Maliki, and considering his vociferous opposition bringing in the “Sons of Iraq”, my guess is that they will be shooting at Americans again.
OK, it appears that Henry Paulson is taking the lead on the auto bailout, which see how conscientiously he handled dealing with banks, scares the hell out of me.
The big thing here is that if they get the “prepackaged bankruptcies” before Jan 20, they will certainly use it kick the UAW to the street, because that’s what they do, screw workers and unions.
One of the early greats of the game.
He was 94.
OK, the Minnesota Supreme Court has ruled, and it’s confusing.
The Hill says that the court has ruled with the Coleman campaign, and The New York Times says that the ruling favors the Franken campaign.
Both the stories have the same basic synopsis of the ruling (quoting the Times here):
The court ruled that the Coleman and Franken camps, working with the Minnesota secretary of state and the Canvassing Board, must agree on a standard to decide which absentee ballots should be counted. It was unclear precisely how the inevitable disputes between the campaigns would be resolved.
So, if this means that all 3 (4?) parties for each vote, it sounds like a firm “no count,” but if it means that all of them need to establish a standard to which they agree, then I am unclear how that goes, except that, perhaps it ends up before the court again, because I do not expect the Coleman camp to reasonable.
In either case, the process is supposed to be hammered out by December 31 at 4:00pm CDT, which means that the votes would probably be tabulated on January 2….I think.
A more complete, if less definitive description of what is a confusing ruling is available at the Minnesota Independent.
The sticking point to me is whether they have to agree on process or each ballot. The latter leads to the campaigns attempting to game the votes by objecting to votes in areas unfavorable to them.
The court did have strong words for either campaign being unreasonable, but I do not know to what degree this will mean anything.
In fact, there is a part of me that thinks that the Minnesota Supreme Court kicked the can down the road with its decision, and they expect to deal with challenges in January.
In any case, in terms of the actual vote counting, Franken’s challenges having been supported at about twice the rate of Coleman’s challenges, and the counting of his challenges just started, and the current count from the Strib has Coleman up by 5, but Franken winning by 89 based on the challenge percentages, and that is without any of the absentee votes in question being counted.
It’s about time, and I approve of the idea of criminal investigations of wrongdoing by Bush and His Evil Minions™, but because there is no impeachment, the leadership in the House of Representatives and the Senate of both parties are accessories to the crime.
Because of this, we are never going to see a meaningful investigation of what happened in the Bush White House.
Even his opponents are hip deep in the muck that he created.
The only way that this gets to trial is through the mechanism of the International Criminal Court, but the US is never going to sign that treaty, and that is the only duly constituted party out there that has even the remotest possibility of discovering the truth and delivering justice.
As both my readers are no doubt aware, there is in the financial world a large number of assets for which no regular market exists.
Regulations call them “Level 3 Assets”, but I call them “The Big Sh&$pile”, a term that I stole from Atrios.
Normally this means that if you want to sell them, it’s a laborious process to find a buyer and set a price, which differs from “Level 1 Assets”, like stocks, where you can fire up your PC and trade them online.
These days it means that there are no buyers at all, for these Byzantinely complex instruments that the financial whiz kids created, so they are, for intents and purposes, worthless.
Well, it now looks like employees of Credit Suisse will be getting pieces of The Big Sh&$pile instead of cash for bonuses this year:
Credit Suisse Group AG’s investment bank has found a new way to reduce the risk of losses from about $5 billion of its most illiquid loans and bonds: using them to pay employees’ year-end bonuses.
The bank will use leveraged loans and commercial mortgage- backed debt, some of the securities blamed for generating the worst financial crisis since the Great Depression, to fund executive compensation packages, people familiar with the matter said. The new policy applies only to managing directors and directors, the two most senior ranks at the Zurich-based company, according to a memo sent to employees today.
Talk about just desserts.
Me, I would also use them for severance packages for “the most senior ranks” of employees too, but I like to twist the knife.
We have reports now that the Army War College is doing studies on the use of the military against US citizens during times of unrest.
A new report by the U.S. Army War College talks about the possibility of Pentagon resources and troops being used should the economic crisis lead to civil unrest, such as protests against businesses and government or runs on beleaguered banks.
“Widespread civil violence inside the United States would force the defense establishment to reorient priorities in extremis to defend basic domestic order and human security,” said the War College report.
The study says economic collapse, terrorism and loss of legal order are among possible domestic shocks that might require military action within the U.S.
Not surprising as the Posse Comitatus act has been whittled down to nothing over the past few years.
So, the OTS and the Treasury Dept have formally approved new more consumer friendly rules. Unfortunately, we will have to wait until 2010, so expect for banks to bone you as much as possible in the interim.
It has now been reported that Muntader al-Zaidi, of shoe throwing fame, has apologized and pled guilty, along with asking for leniency from the court.
It is likely that if one were to review the court transcripts, that the translation from the Arabic would be, “Whatever you say. Please stop breaking my fingers.”
Ron Kirk, US Trade Representative.
I would note that I’ve had some experience with the guy. I lived in Arlington while this guy was mayor of Dallas, and he is an unbelievably big corporate whore….Which, given the role of trade rep, may make him remarkably qualified for the post.
There is an open seat on the Federal Reserve, and Daniel Tarullo will be named for it.
Two interesting points here, he is not an economist, and he is a part of the Center for American Progress, which means that he has good liberal credentials.
Representative Hilda Solis (D-CA), Secretary of Labor.
She is probably one of the 10 most pro-labor members of Congress.
Movement conservative Paul Weyrich.
He was 66.
The U.S. Court of Appeals for the Second Circuit has found that the Patriot Act’s gag rule associated with national security letters is unconstitutional:
The appeals court invalidated parts of the statute that wrongly placed the burden on NSL recipients to initiate judicial review of gag orders, holding that the government has the burden to go to court and justify silencing NSL recipients. The appeals court also invalidated parts of the statute that narrowly limited judicial review of the gag orders – provisions that required the courts to treat the government’s claims about the need for secrecy as conclusive and required the courts to defer entirely to the executive branch.
This is a victory against one of the most Kafkaesque aspects of the security state created by Bush and His Evil Minions™, which allowed the FBI to demand evidence without a warrant, and prohibited the recipient of a letter from talking to a lawyer to challenge the letter.
The United Nations court in Tanzania has convicted Colonel Theoneste Bagosora and two accomplices of genocide and crimes against humanity, and sentenced them to live in prison.
December 2008 Business Outlook Survey – Philadelphia Fed.
Calculated Risk gives us the following graph pr0n on the relation beteween the Philly Fed index and recessions
30-year mortgage lowest in 37 years of Freddie Mac survey – MarketWatch
Also note the Institute for Supply Management’s manufacturing index, which, as Bondad Notes, has fallen off a cliff over the past two months.
If you go to the ISM’s report, you will see that the pretty much everything is down, and down significantly:
The two industries reporting growth in November — listed in order — are: Apparel, Leather & Allied Products; and Paper Products. The industries reporting contraction in November are: Nonmetallic Mineral Products; Fabricated Metal Products; Textile Mills; Printing & Related Support Activities; Machinery; Electrical Equipment, Appliances & Components; Primary Metals; Transportation Equipment; Furniture & Related Products; Plastics & Rubber Products; Computer & Electronic Products; Chemical Products; Petroleum & Coal Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Wood Products.
With industrial production cratering, it is no surprise that first time job claims are still at a high level, though they have retreated from last week’s catestrophic numbers, and the 4 week rolling average is up, though continuing claims are down, though I can’t tell if that’s from claim exhaustion, people giving up, or people going back to work, though my money would be on one, or both, of the first two.
Over on the other side of the pond, corporate sentiment is falling in Germany, and the ECB is taking rate cut like steps, even if they are not technically rate cuts, to boost the economy.
In the intersection of real estate and banking, the rate for a 30 year fixed mortgage hit the lowest number ever recorded, and records go back 37 years, though Calculated Risk (again) notes what the rate is for Jumbo loans, which not handled by Fannie and Freddie, who now have an explicit guarantee from the government, the numbers are very different:
As an example Wells Fargo is offering a 30 year fixed at 4.75% (up to $417K), but their rates are 7.375% for loans above that limit.
That’s a 7.375% is 55% more than 4.75%. That’s a lot of flight to safety.
In currency, the dollar is up a bit, which is not surprising. It’s enough time for the shock from the Fed’s rate cut to have worn off.
I still think that hte trend for the dollar is weaker.
In oil, even though OPEC announced large production cuts, fell below $36/bbl.
It could be that oil traders do not believe that the cuts will be followed, or that they think that the economy is so bad that it does not matter, or that there are still people who need cash and are selling oil contracts to get it.
My vote would be for all three.
Now we have Dan Meridor Ze’ev Benyamin Begin and Moshe Ya’alon joining forces with Benyamin Netanyahu, though based on their history, they hate each other.
The story talks about his moderating some of his talk, but anyone who has an even passing acquaintance with Bibi Natanyahu knows that this is just talk.
It’s happening because he’s going to win, with current polls showing him outpolling Kadima 32 seats to 26, and labor possibly dropping to single digits, perhaps even 4th place.
As to the fall of Labor, while security is always the 800 pound gorilla in the room, Labor used to have a role on social and economic issues, and over the past 30 years, Labor (big L) has abandoned labor (little L) for Thatchernomics.
While the Israeli economy has grown, there are increasing disparities between rich and poor, and severe poverty is on the rise, and the 3 mainstream parties have all abandoned the issue.
Seriously, this is the state of ‘Phant ideology.
Lindasy, “Majikthise” Beyerstein notes that this is why Republican oppose any form of public insurance:
Mark Hayes, a Republican health policy adviser to the Senate Finance Committee, said Republicans have concerns because the government plan might have access to price controls and other tools not available to private insurers. This could lead to lower premiums in the government plan, which would cause most consumers to migrate out of the private market, he said.
Do you notice what Mark Hayes is saying.
He is saying that the government will provide a better and cheaper service, and so this will damage the private providers of under-performing products.
If the private sector works so well for keeping people insured, surely the private sector would beat the public sector….except, of course, that it doesn’t.
One of the questions in the last election cycle was, “Why was the Seattle Times so aggressively hostile to Darcy Burner?” In her close loss to Dave Reichert.
They went so far as to misstate her degree in order to claim that she had lied about her education.
Well, now we know why they hated her, and sent their reporters out with orders to lie.
It appears that Ms. Burner ran the Committee for a Two Newspaper town, which prevented the Seattle Times from using its joint operating agreement with the Seattle Post-Intelligencer to shut the publication down, and eventually forced the Times to make $24 millions in payments to keep the JOA going.
Losing the possibility of a monopoly in Seattle advertizing was probably even more expensive to the Times than was the payment, and so when she won the Democratic Primary for congress, it was payback time.
I know, it’s an almost 2 month old analysis that I’m linking to, but I just noticed it…My bad.
No, I am not referring to the 1040A income tax short form, or the even shorter 1040EZ form. I am referring to the form required to apply for the Treasury Department’s TARP program, which is only two pages long.
So, now we know why we don’t want to release any more money to Hank Paulson or Neel “Cash & Carry” Neel Kashkari: They are not even applying the due diligence to these loans that Alt-A lenders applied to liar loans.