Well, it appears that Pakistan is refusing to hand over suspects in the Mumbai bombing to India.
Given the level of tension between the two nuclear armed neighbors, there is only reason for this that I can see, that Pakistan knows that if they turn over these guys to India, there is a fairly good chance that some of them will finger their handlers at the Pakistani Directorate for Inter-Services Intelligence (ISI).
It appears that the Obama transition team is not interested in attempts by Bush and His Evil Minions™ to work together on the bailout, and this is of concern to members of the Bush economic team:
But tension is growing: Treasury officials believe Obama aides are being short-sighted in their refusal to offer more policy and lobbying assistance, while the transition team sees an administration looking to be rescued from its own miscues.
Obama and the people around him most likely think that George W. Bush and Hank Paulson and their people are incompetent and corrupt, and they believe to the degree that these folks do not take action, it is a positive development.
Any attempt to work with Paulson or Bush will imply buy ins of their policy, and that it like buying into the ice concession on the RMS Titanic.
We already knew that Japan was in a recession, but the updated data is worse than the initial data. The preliminary number was 0.1%, the prediction was 0.2%, and it came in at 0.5%.
Barry Ritholtz notes that the 4 Week T-Bill was paying 0%, down from 0.4%, and notes that the only reason to do this is if you expect that the next 4 week T-Bill will have a negative interest rate, i.e. that you pay the government money for the honor of lending them your money.
Turns out that he was a a little bit premature, because the 3 month T-Bills actually traded at negative interest rates, “If you invested $1 million in three-month bills at today’s negative discount rate of 0.01 percent, for a price of 100.002556, at maturity you would receive the par value for a loss of $25.56.”
If you want to feel concerned note that this is the Lowest Rate Since 1929…1929….That year sounds familiar.
In the meantime, the Bank of Canada cut its key rate by 75 basis points to a 50-year low, because they are in recession too.
In real estate, the Pending Home Sales index fell, though not by much, and listing prices for homes have continued to fall.
Calculated Risk has a summary of the commercial real estate market, and it ain’t pretty.
In energy, oil is down a bit, likely spooked by the complications on a bailout deal.
The dollar was mixed today, up a bit vs the Pound and Euro, and down a bit vs. the Yen.
Patrick Fitzgerald just arrested Illinois Governor Rod Blagojevich arrested on on corruption charges.
Among the charges is that he tried to sell Barack Obama’s Senate seat.
And, yes, he has a (D) after his name….What’s more he’s one of those DLC type moderates, just like “Dollar” Bill Jefferson in Louisiana.
You know, I’m glad that I come from a clean government state like Maryland.
**cchhgggg**
I think that I just hocked up a hairball, but relative to Illinois, it’s true. 3 of their last 5 governors have done jail tiem.
So, Merrill Lynch’s John Thain and Mogan Stanley’s John Mack have decided to forgo bonuses this year, after the Andrew Cuomo basically read the riot act to their respective firms.
Asking for millions in bonuses when your company is losing money….Failing upwards….Welcome to George W. Bush’s America.
That seems to be basic common sense, but it appears that the government of the Democrat Republic of Congo don’t understand this.
It appears that talks between the government and the National Congress for the Defense of the People (CNDP) led by General Laurent Nkunda have broken down because they want to bring in other militias….You know, the ones that aren’t on a path to seizing half the country, because they do not have their act together:
The Democratic Republic of Congo government at the weekend invited around 20 other armed groups to participate in the talks, aimed at ending fighting in North Kivu province that has displaced a quarter of a million people since August.
The CNDP and the government of Congo are the only players here, and adding 20 people to the table is intended to simply diminish the CNDP.
Um….Hello? You need to get a clue: The CNDP is kicking the ass of your sorry excuse for the army, and can seize much of the region in a few weeks.
I would note that one of the 20 other groups invited is the genocidal Huto FDLR militia, who are the proximate cause of all this, because when they aren’t trying to kill Tutsi women and children in Rwanda, they are trying to kill Tutsi women and children in eastern Congo, though the governments of Congo and Rwanda have agreed to disband the militia.
Fredric Dicker of the New York Post is reporting that reports of Caroline Kennedy being an unlikely replacement for Hillary Clinton in the Senate.
There are two reasons given, the first being that Caroline is at best lukewarm for the job, and the 2nd is that Patterson does not think she has the fire in the belly for the job.
I tend to believe both of these assessments. Caroline is, for a Kennedy at least, intensely private and not particularly assertive.
Additionally, there is the dynastic issue, and Caroline Kennedy has not ever held, or run for, political office, and shows no indications of any real qualifications for the job beyond her last name.
My suggestion to Governor Patterson, and it is his choice alone, would be to appoint, I’m not joking here, Elliot Spitzer. It guarantees you of two things:
So the increase in troops in Afghanistan will be concentrated in and around Kabul.
I guess that Karzai, the Mayor of Kabul President of Afghanistan needs our support.
On a less snarky note, the fact that they are deploying to protect what should be the safest place in Afghanistan is an indication of just how pear shaped this has gone.
It looks like the New York Times will borrow about $225 million against the value of its headquarters building:
The Times Company owns 58 percent of the 52-story, 1.5 million-square-foot tower on Eighth Avenue, which was designed by the architect Renzo Piano, and completed last year. The developer Forest City Ratner owns the rest of the building. The Times Company’s portion of the building is not currently mortgaged, and some investors have complained that the company has too much of its capital tied up in that real estate.
The company has two revolving lines of credit, each with a ceiling of $400 million, roughly the amount outstanding on the two combined. One of those lines is set to expire in May, and finding a replacement would be difficult given the economic climate and the company’s worsening finances. Analysts have said for months that selling or borrowing against assets would be the company’s best option for averting a cash flow problem next year.
(emphasis mine)
Let’s calmly take a look at this.
The New York Times dumped hundreds of millions of dollars into a new building in downtown Manhattan, buying it with cash, and now they are concerned about liquidity.
The Times had a building, but for some reason they had to buy a new one, and it had to be in Manhattan, and it had to have everyone in it.
There is no reason, for example, that advertising could not have been put in Brooklyn, or White Plains, or for that matter, Mumbai.
The same goes for the bureaus that cover the other boroughs.
But management wants their shining castle in Manhattan.
This makes me miss Steve Gilliard, because his writing on Salon.com talked about this sort of stupid egotism in detail, and I’m sure that he would have had a field day writing about this.
So, one of the largest media companies in the world has filed for bankruptcy.
A lot of people will say that this shows how badly newspapers are hurting as a business, and they are wrong.
Sam Zell’s model was as follows:
This is a model of someone who does not believe in the product. This is passenger rail in the 1960s, when the railroads decided that they could not compete, so they sucked money out of the operations in order to buy other things, and created a product that no one wanted to buy.
Wall Street has been demanding profit margins in excess of 25%, and you cannot do that and deliver a good product, so they achieve it for a while delivering a bad product, and people like Sam Zell talk about cutting the fat.
The only fat here is between Sam Zell’s ears.
Of course, it is also a very scary metric.
But I agree with Paul Krugman, workforce participation is one of the better metrics that we have to describe the unemployment situation.
However, I do have a problem with the graph, which is that the delta is magnified, by focusing on a range, in this case 61%-65%, as opposed to showing the full range from 1-100%.
I think that these sort of “broken range” graphs serve to overemphasize deltas….though that is a really scary picture, even if it’s done on a full 1-100 scale.
It shows that employment never recovered from the 2001 downturn, and that it’s headed down fast now.
Well, it appears that I missed a rampage by Zimbabwean troops who had not received their pay, but caught the story that Mugabe is looking at retribution against those soldiers:
In a clear sign that President Mugabe’s hold on his state security machinery is starting to crumble, his once-loyal soldiers ran amok across the capital on Monday after they failed to access their paltry wages in the cash-strapped banks. The unarmed soldiers fought with heavily-armed police and several were arrested.
It was the third outbreak of such violence since last Thursday. The sight of rampaging soldiers was then unprecedented. Army sources said an inquiry had already begun, with dozens facing courts martial. Unconfirmed reports say three of the 12 soldiers who took part in Thursday’s riot have been killed.
So it appears that the rank and file in the Zimbabwean Army are starting to lose discipline.
In the short term, this is troubling, in the medium term, it may mean that Mugabe is closer to being out than I would have believed, and in the longer term, it does not bode well for a post ZANU-PF nation.
In the mean time, things are getting worse, with cholera deaths increasing, and there have been public protests about this from health care professionals.
It’s not just cholera though, the UN has run out of funds for food aid, so for many, starvation looms.
On the bright side, we are seeing a bit of backbone from the African community, with
Kenyan Prime Minister Raila Odinga calling explicitly for Robert Mugabe’s removal and he and ANC president Jacob Zuma have publicly declared that that will work together on the crisis, which is clearly a disavowal by Odinga of Thabo Mbeki.
It’s also interesting that the Kenyan Prime Minister has called for a military intervention to depose Mugabe, followed by war crimes trials.
Hopefully, this means that there will be some meaningful movement (meaningful means out) by Robert Mugabe, but I have a feeling that he will not leave while he is still alive.
So the WSJ is reporting that people are starting to suggest that GM fire Rick Wagoner.
Not just the man on the street either. Senator Dodd has explicitly called for his head, as have representatives of investor, and former GM board member, Kirk Kerkorian.
Barack Obama has also implied that there need to be management changes.
This is a no brainer. Mullaly was brought in about a year ago to turn Ford around, and Nardelli’s tenure at Chrysler (full disclosure, I worked for him, though I never met him, at GE Transportation Systems in the 1990s)* is even shorter, so they do not bear full responsibility for the mess that their companies are in, but Wagoner has been CEO of GM for 10 years, and in charge of North American Operations for 4 years before that, so this is his baby that has come crying to Congress.
*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.
Well, first some definitive news, Democrat Mary Jo Kilroy has beaten Steve Stivers in Ohio’s 15th district. She was behind on election night, but the provisional ballots came from her electoral stronghold, the certified vote has her winning by 2411 votes.
On the other hand it looks like Republican John Fleming has defeated Democrat Paul Carmouche by just 356 votes in LA-4.
Things are still up in the air in Minnesota, with the Franken campaign withdrawing more challenges, and Minneapolis has
called off the search for the missing ballots, and will just report what was counted on election day.
As always, it should come down to the challenges in Minnesota.
Ian Walsh of FDL notes that the entire situation with the Republic Windows sit-down strike was likely triggered by the $350 billion stimulus package. Basically, following the receipt of bailout money, banks like Bank of America, which had a $50 million line of credit out to the manufacturer, decided that it made sense to hoard cash so that they could buy other banks, so they cut off Republic Windows, which proceeded to collapse like broccoli cooked in a British boarding school kitchen.
It’s amazing how much damage Hank Paulson and His Evil Minions™ have been doing to the country.
Interestingly enough, it now appears that there is some push-back, with Barack Obama supporting the strikers:
“When it comes to the situation here in Chicago with the workers who are asking for their benefits and payments they have earned, I think they are absolutely right,” Obama said Sunday at a news conference announcing his new Veterans Affairs director. “What’s happening to them is reflective of what’s happening across this economy.
Additionally, Illinois Governor Rod Blagojevich has ordered all Illinois agencies to stop doing business with Bank of America.
In 1936-7, the workers in Flint had to contend with National Guardsmen and police trying to evict them.
In 2008, not so much.
It appears that the US Army is looking to employing mercenaries private contractors as security guards at forward operating bases (FOBs), because, you know, the presence of heavily armed mercenaries operating largely with impunity in the countryside worked so well in winning the hearts and minds of the people of Iraq.
No, this is not The Onion, this is just the latest bunch of Pentagon whiz kids at work.
But the reports of mass layoffs of Wall Street Brokers fills me instead with Schadenfreude.
I feel sorry for the janitors, and the receptionists, but for the brokers…I just want to go “neener-neener.”
It really reflects more poorly on me than it does on them.
This little anecdote from the New York Times:
The crisis is on display here. Starla D. Darling, 27, was pregnant when she learned that her insurance coverage was about to end. She rushed to the hospital, took a medication to induce labor and then had an emergency Caesarean section, in the hope that her Blue Cross and Blue Shield plan would pay for the delivery.
Our system is not just broken. Our system is insane.
Well, it appears that those companies that still have traditional pension plans want Congress to give them a waiver so that they do not have to make contributions during this downturn.
They think that it will be too much of a burden, and it may force them to cancel these plans altogether.
Hmmmm….It seems that this problem started when they went with highly aggressive investment plans in order to minimize their contributions, and then they got caught in the dotcom bubble…..And after that, they wanted more liberal rules so it wouldn’t be a burden.
Basically, they are saying that they don’t want to buy when the market is down….which is half of the classic investment goal “buy low and sell high” as I understand it….So they are asking for permission to piss their money down the drain with a poor investment policy.
Note that GM, has largely moved out of equities, and so were largely insulated from the downturn….I would also note that this strategy also reduces the costs of managing the funds.
Is it just me, or has every “innovation” in pensions and pension funds over the last 30 years had the effect of actually decreasing return on investment.
That’s kind of like the rest of the financial sector: You get sold a bill of goods by an investment bank, and they get lost of fees, and you get the hole in the doughnut.
Ben Stein has been calling him a wimp for not reviewing his (un)intelligent design agitprop “documentary” Expelled, so Ebert decided to oblige him.
Damn, that was not pretty. It was funny, and well written, but in the final analysis, it was like watching Muhammad Ali at his prime going after Jerry Lewis in a boxing ring.
He completely pwn35 (owns) Stein.
Go read.