Author: Matthew G. Saroff

Economics Update

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Not a great day.

Consumer confidence had the largest plunge ever, from 70.3 to 57.5, and home construction fell to a 17½ year low.

There are some indications that the credit freeze is relaxing, at least temporarily, the short term spread between LIBOR and Treasuries has dropped a bit.

I’m not sure that there is a real thaw, as evidenced by the fact that hedge funds are hemorrhaging money and investors.

The dollar, meanwhile was largely static today.

In energy, oil is back above $70/bbl, but that is likely the result of OPEC holding an emergency meeting to cut production.

Equal Justice Under Law: 9 – Ohio Republican Party: 0

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The Ohio Republican Party got lower courts to approve their voter suppression tactics, which would have allowed them to use things an error in coding a middle initial to prevent people from voting.

Well, by a 9-0 unanimous vote, the Supreme Court told them to go Cheney themselves.

I’m not sure what shocks me more, the fact that the Supreme Court ruled this way, or that it was unanimous.

It’s clear that the ruling was narrow, on the basis that the Ohio Republican Party lacked standing in the suit:

Instead, they said they were granting Brunner’s request because it appears that the law does not allow private entities, like the Ohio GOP, to file suit to enforce the provision of the law at issue.

My guess is that they had 5 votes for democracy, and the other 4 got this narrow ruling, so they wouldn’t look like completely political tools….See Bush v. Gore in 2000.

Quote of the Day: He Said THAT? Edition

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From Joe Kline, which I guess proves the old adage about even stopped clocks being right twice a day:

Ronald Reagan used to say that the most frightening nine words in the English language were ‘I’m from the government and I’m here to help.’ That is no longer true. This year, the most frightening eight words are ‘I’m John McCain and I approved this message.’

(emphasis mine)

That should go a long way towards alleviating the snark shortage.

Not Content With Being a Lame Duck

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Bush is determined to push through rule changes to allow dishonest companies to kill and injure ordinary citizens:

Bush administration officials, in their last weeks in office, are pushing to rewrite a wide array of federal rules with changes or additions that could block product-safety lawsuits by consumers and states.

The administration has written language aimed at pre-empting product-liability litigation into 50 rules governing everything from motorcycle brakes to pain medicine. The latest changes cap a multiyear effort that could be one of the administration’s lasting legacies, depending in part on how the underlying principle of pre-emption fares in a case the Supreme Court will hear next month.

Because they know, just like investment banks, nothing untoward will be done by companies, because the holy market place would punish them for maiming children.

Only to go.

Iraqi Status of Forces Agreement Near Signing

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Irt appears that the new pact calls fortroops to leave Iraqi cities by June with a complete widhdrawal by the end of 2011.

Basically, the Obama plan.

Also, it’s clear that the Iraqis knew that they had the US over a barrel, because immunity for US soldiers is severely curtailed:

U.S. negotiators demanded exclusive jurisdiction over all soldiers and contractors. But Iraq insisted on a role to convince the public that Iraqis – and not Americans – were in charge of their own country.

Under the compromise, the United States would have the primary right to try troops and Pentagon contractors for alleged offenses committed on American bases or during military operations, the officials said.

Such language would presumably shield troops from prosecution for accidentally killing civilians caught in crossfire during authorized combat operations.

But Iraq would have the first option to try U.S. military personnel and contractors for serious, premeditated crimes alleged to have been committed outside American bases and when they were not on an authorized mission, the officials said.

…

American troops would no longer be allowed to detain suspects or search homes without Iraqi legal authorization except in cases of active combat, the officials said. Anyone detained by the Americans must be handed over to the Iraqis within 24 hours

I would note that our status of forces agreements with our NATO allies and Japan give the local authorities far less access to soldiers accused of wrongdoing.

It appears that some members of Congress are having a cow over the potential exposure of US troops to Iraqi justice.

Unfortunately, the Iraqis know that if there is no deal by the election, it will be even worse for the ‘Phants, and applied the old adage, “If you’ve got them by the balls, their hearts and minds will follow.”

Can Central Banks MAnage Asset Bubbles

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Alan “Bubbles” Greenspan said that it was impossible, so all that could be done was to clean up afterwards, though it’s clear that Ben Bernanke is s looking at ways for the Federal Reserve to intervene before bubbles get too frothy.

He’s also looking at how excessive consolidation in banks made the current troubles worse.

This is a clear repudiation of Greenspan’s policies and philosophies.

Kevin Drum nails the problem clearly, at least with respect to housing, when he asks when do asset bubbles become inflationary.

While it is hard to claim that the Dot Com boom was inflationary, it’s clear that the housing bubble was. These were not abstract financial assets, they were essentials of life that people pay for, but the Fed, and the BLS, specifically gamed the inflation data so as not to have to count double digit increases in the cost of shelter as inflation.

Of course Alan “Bubbles” Greenspan, who hates wages, but loves unearned income, would never subscribe to the idea that this was inflationary, but he’s a complete wanker.

Sarah Palin Her Emails, and Her Blatant Disregard for the Truth

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Or perhaps is’s a disregard for reality. With her, it’s hard to tell.

In any case For what it’s worth, the Anchorage Daily News just cut her a new one* over her claims of vindication.

In any case, we now have her ordered to preserve her private emails from her Yahoo account, given that they are likely official records under the scope of Alaska’s law.

It also looks like the State Personnel Board’s investigation into Troopergate will be more aggressive than envisioned. It appears that the lead investigator, one Tim Petumenos, is a real pit bull, who has, “broadened to include other ethics complaints against the governor and examination of actions by other state employees.”

Then again the intent was not to cover up forever, it was to push it past election day, which it will.

In any case, in response to a request from the press for copies of emails to Todd “The First Dude” Palin from state officials, Palin is now saying that it will requre a payment of $15 million to process such a request, and that the records will not be turned over before the election.

What else is she hiding? This has gone from a standard Republican stonewall to something that would make Dick Cheney blush.

*Full disclosure, I actually helped to design designed a tool to, “cut a carcass a new one”, the Jarvis Products bung dropper. You can see a video of it in action here.

White Space Passes Tests With Flying Colors

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The FCC Office of Engineering Technology just finished its tests on “white space devices”, which operate in the space between television channels, and they have determined that they work without interfering with licensed TV channels in the spectrum.

Basically, these devices are supposed to detect which channels are in use by broadcast TV, and avoid those specific frequencies, which will open massive amounts of spectrum to small relatively low power devices.

It should be noted that there are strong forces opposed to such an application:

Opponents to the Google’s white spaces plan have included not just T-Mobile, but also the National Association of Broadcasters (NAB) and the wireless microphone industry. These two groups contend that interference will be caused to HDTV and other digital TV signals if mobile devices start operating in currently unused white spaces next to spectrum allocated by the FCC for TV broadcasting.

And this opposition occurs without regard to whether there is interference, they object to the possibility of interference from infringing devices.

The fact is that the broadcasters and T-Mobile want to find a way to make money off of unused spectrum, and the wireless microphone industry has been a laboratory for interference problem, since they have been operating illegally in this spectrum for well over a decade, despite complaints from the public safety community (see here and here for some of Harold Feld’s marvelous takes on the hypocrisy of the Wireless mike industry).

I’m not sure where this is all going to go, though the fact that FCC chairman Martin is optimistic on open use of the spectrum is encouraging.

Note though that he is a short timer, and we don’t know who his successor will be after Bush and His Evil Minions™ leave office.

Economics Update

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We are all, as Bender is wont to say, “totally boned”, and you need to look no further than the fact that :NASCAR is experiencing cash flow problems because financially strapped sponsors are bailing.

About the only good news is that collapsing demand appears to be keeping inflation in check.

BTW, the crisis just hit Phil Gramm’s bosses, as the Swiss government was just forced to bail out UBS.

Don’t expect a turn around in the real estate martket, because mortgage rates just posted their largest increase since 1987.

This might explain why the National Association of Home Builders/Wells Fargo housing market index has fallen to an all time low, 14, where a neutral reading is 50.

In the real world of manufacturing, industrial production and the Fed Bank of Philadelphia’s general economic index both plummeted to levels not seen in over a decade.

With a very strong indicatrions of a recession, commodities, in particular oil ($69/84/bbl!!!) and gasoline, continued their falls.

What takes this from an economic down turn to an apocalypse are signs of the apocalypse, and one of the is when Americans consumers save, rather than spend their money.

If you want another sign of the apocalypse, how about banks cutting back on issuing credit cards, because they need to hold additional reserves against defaults.

When banks cut back on what is probably their most profitable business, you know something is up.

Jobless claims for the week aredown, but week to numbers are noisy, and the it’s an artifact of the fact that we’ve had a hurricane free few days.

The dollar strengthened a little. I think that there are two competing pulls here: the concern that the US is no longer the financial colossus striding the world, and the habit of going into the dollar when times are uncertain.