But says that he is not the father of their child.
Damn. Well, at least he is not the VP pick.
Author: Matthew G. Saroff
Georgia Shells South Ossetian Capitol, Escalation Ensues
I’m not sure why Georgia chose this time to start shelling South Ossetian capital of Tskhinval, but this sort of behavior has elicited the expected Russian response, and they have started sending additional “peacekeepers” to the region.
The Guardian has an interesting analysis, if just because it avoids the common wisdom available on a Google News search that somehow the Georgians shelling a city full of women and children is Russian aggression.
Their analysis is that this was a well planned offensive, and that they hoped to catch the Russians off balance, with Putin in Beijing for the Olympics, and it now appears that they were wrong:
Observers had little doubt that the operation to take South Ossetia back under Georgian control bore the hallmarks of a planned military offensive.
It was not the result of a ceasefire that had broken down the night before – it was more a fulfilment of the promise the Georgian president, Mikhail Saakashvili, had made to recapture lost national territory, and with it a measure of nationalist pride.
((emphasis mine)
It appears that the US has been aggressively supporting and training the Georgian army for some time, and this may have contributed to Saakashvili’s belief that he could get away with it.
I’m wondering if this isn’t a screw up, and that Bush and His Evil Minions™, particularly Cheney, might have been looking for something like this just before the election, for electoral benefit, but their boy in Tbilisi pulled the trigger too early.
The Credit Meltdown: The Problem Was Too Little Risk
Steve Waldman at Naked Capitalism makes a very good point: the problems that led to the credit crunch were not excessive risk taking, but rather an excess of risk aversion.
Essentially, people were not looking to take risks, they were looking at good rates of return from little or no risk, so, for example, since, “Housing never declines in value,” it was safe, and prices “always” go up.
The same goes for the Yen carry trade, where people made money by borrowing in Yen, and investing in dollars, and making money off the spread.
This also gave us the various tranches of CDOs, which are now collapsing.
Investing in risk would be things like alternative energy projects, or improvements in productivity, or new ways to feed the world, and there was no investment in these areas following the dotcom boom.
All the “innovation” that we saw was merely an attempt to break the relationship between risk and return, and it failed.
Nuclear Regulatory Commission Looks at More Public Disclosure
Given the record of the NRC toward disclosure, the idea that this is a major break with the past.
Steven Aftergood take on it is that Congress is breathing down their necks because, they were not notified of a major safety event:
According to David Lochbaum, a nuclear safety engineer with the Union of Concerned Scientists, the triggering event in this case was congressional outrage at the NRC’s concealment of a major “nuclear safety event” in 2006 at the Nuclear Fuel Services plant in Erwin, Tennessee.
In that case, approximately 35 liters of highly enriched uranium solution leaked and spilled, creating the possibility of a criticality accident, i.e. an uncontrolled chain reaction. Yet “NRC failed to notify the public or Congress for 13 months regarding this serious incident,” complained Rep. John Dingell in a July 3, 2007 letter (pdf) to NRC Chairman Dale E. Klein.
If I were a member of Congress, that would piss me off.
If I lived near Erwin, Tennessee, I’d consider putting my house up for sale.
Citi Settles on Auction Rate Securities Fraud Probe
They have settled with NY State AG Andrew Cuoma by agreeing to buy back $7 billion in auction rate securities and paying a $100 million fine, and to, “Use its ‘best efforts’ to liquidate” an additional $12 billion in ARS by the end of 2009.
This is about the fact that Citi, and most of the other banks involved in the auction rate securities, sold these as being just as liquid as a money market account, and the market then froze up, locking up $300+ billion.
I would expect increased pressure for other bankers to settle too.
Hamdan Sentenced to 66 Months, Gets Credit for 61, Out in 5
The prosecutors were asking for 30 years to life, but it’s pretty clear that Hamdan was just some poor schmuck who chauffeured bin Laden because he needed a job:
The sentence was a stunning rebuke to prosecutors who had insisted on a prison term of at least 30 years and portrayed Hamdan throughout the trial as a hardened al-Qaeda warrior. The jury of six military officers convicted him Wednesday of supporting al-Qaeda by driving and guarding bin Laden and ferrying weapons for the terror group, but he was acquitted of terror conspiracy.
Of course, in a civilian court, much of the evidence that got him that sentence would not have been even have been admissible.
I’m not sure when he is technically due to finish his sentence, but for his sake, I hope that it is after January 20, 2009, because I would expect retribution from Bush and His Evil Minions™.
Employee Fired for Refusing to Donate to Romney
An executive at Huron Consulting Group has filed a complaint that he was fired, in part, for not donating to the Mitt Romney campaign (he is also alleging age discrimination):
The company denies that charge. But officials confirm the authenticity of emails showing that the CEO of the Chicago-based corporate consulting firm, Gary E. Holdren, repeatedly linked his requests for donations to Huron’s business prospects. The emails were provided to The Wall Street Journal by Mr. Pimentel.[the complainant]
In another email, dated Sept. 21, 2007, Mr. Holdren wrote, “I wanted to thank all of you who contributed to Mitt Romney. You can’t realize how much leverage this gives Huron going forward to ask various people for business.”
Other emails from Mr. Holdren refer to conversations with Mr. Romney, deals Huron supposedly won from Romney supporters at other firms and promises to reward Huron executives with “business for your contributions.”
It’s why, when Republicans talk about running government like a business, you should run the other way. It’s all graft and back scratching.
2007 Mortgages Going Bad Almost 3X as Fast as 2006 Mortgages
2007 is not going to be a good year for mortgages. The percent of seriously delinquent after 12 months is 0.97% for mortgages issued in the first half of 2007, as opposed to 0.33% for those issued in 2006. Freddie Mac reported 1.38% at 18 months as compared to 0.38% for 2007 and 2006 respectively.
The defaults in 2006 aren’t really hitting the banks yet, and we’ve still had 7 bank failures….What happens when 2007 really hits?
Municipal Bond Rates Skyrocketing
One consequence of the credit crunch is that even with a Fed Funds rate of 2%, interest rates for everyone are going up.
Nowhere is this more obvious than in municipal bonds, where you also have the collapse of the monoliner insurers making getting a good rating more difficult.
The article gives an example, where the Bay Area Toll Authority refinanced $700 million in bonds at 5.33%, when last year it was 4%.
That’s an additional $9.31 million that they have to carry, and we are seeing this across the country, so new roads and bridges, and needed maintenance on existing infrastructure, are all being deferred.
I don’t see it getting any better for a while.
Boeing No-Bid On Tanker?
There are a number of possibilities as to Boeing’s response to the new RFP, but the possibility that Boeing would refuse to submit a proposal to the RFP.
While I don’t think that Boeing would be serious about a no-bid, it would be an interesting ploy to either get the terms and conditions reset to something more favorable, get a split order, or to get the Congress to give them the contract through legislation.
I actually think that this strategy is only marginally less likely than Boeing submitting a shortened 777, because I don’t think that they could meet a timetable for the bids or delivery with that.
H/T The DEW Line
Unintentionally Funny Line of the Day
Detroit Mayor Kwame M. Kilpatrick was sent to the county jail for violating his bond by going to Windsor, Ontario without the court’s permission.
Hizonner Kilpatrick is on trial for perjury and other charges as a result of a sex scandal with his assistant.
Kilpatrick’s office said that his chief of staff, would serve as acting mayor, so that:
Residents can be assured government will continue to operate as usual.
In Detroit…..Somehow….Not so reassuring.
Poverty Now Driving Women to Egg Donations
They can get $5-10K for donations, and the economy is driving a surge in donations.
Poor women selling a part of their body out of financial need. How long until it’s kidneys like in India?
500
And Monkeys Will Fly Out of My Ass
The consultancy firm Johnson & Assoc. is predicting that bonuses on Wall Street will be lower this year because the firms have lost so much money.
Given the history of American business, and Wall Street in particular, in the past few decades, I wouldn’t bet on it.
Only the little people pay for senior executive’s mistakes.
The Sick Old Man Can No Longer Hold His Own With the Press
It appears that McCain’s press availabilities are becoming severely limited.
Truth be told, part of this may be the Rove protégés, who like to be tough to the point of vindictiveness to the press, but I’ve seen seeming awfully confused lately, and I’m beginning to wonder if he’s not on the far slope of some sort of dementia.
He’s not even doing regular press conferences now.
In either case, the press has had its feelings hurt.
DoJ Subpoenas Bush Admin Vote Suppression Specialists
I would note that the DoJ having to subpoena former DoJ lawers, even political appointees, is almost unheard of, but it’s pretty clear that former Civil Rights Division* head Bradley Schlozman, and Hans “der Novotenfuhrer” von Spakovsky, former counsel to the Assistant Attorney General for Civil Rights are under some serious legal jeopardy, with credible allegations of perjury before Congress, and also appeared to be hip deep in the hiring scandal.
Dudes, bring your toothbrushes.
*Who says that irony is dead?
Russia Looking for More Time in Iran Nuke Situation
Truth be told, I think that they, along with most of the world, are hoping that really looking to move it to the next administration, which they hope will be less crazy.
If it’s Obama, they are probably right, but if it’s John Sidney McCain III, the sick old man has more of a hair trigger on the military option than Bush and His Evil Minions™ ever did.
Economics Update
Well, the jobless numbers came out, and they suck. The weekly numbers rose by 7,000 to 455,000, a 6 year high, when predictions were for a drop to 433K, and the 4 week moving average, which is less noisy, rose to 419,500, a 5 year high.
At least our misery has company, with the ECB holding rates steady, saying that “risks to economic growth were starting to materialize”, which is a signal that Euro zone rates will remain steady.
Of course, our relentlessly optimistic financial press has to try to make s%$# into Shinola in housing, where they are touting a 5.3% month to month gain, which as Barry Ritholtz so eloquently notes, this is unmitigated crap, and driven by seasonal differences more than anything else, and the numbers are down year over year.
Additionally, we do not know how many of these are short sales in lieu of foreclosure.
We also have retail experiencing major suckitude now that the rebate checks have run out. To the degree that people are spending any more, it’s on necessities, and they are running up their credit cards to do this, because the banks are cutting back on HELOCs.
Meanwhile, oil rose on supply concerns after Kurdish rebels blew up a Turkish pipeline, though gasoline is down for the 21st straight day.
In the world of insurance, the largest US insurer, American International Group wrote down more than $11 billion in holdings, and is making noises about selling more shares to raise capital.
Musharraf Faces Impeachment
It looks like this was pushed by the fact that impeachment has increasingly seemed the only way that the ruling coalition would stay together, but I see it as a good thing, as Musharraf has been bad for Pakistan, bad for the US, and ineffective against terrorism in the reason.
Of the two political leaders, Asif Ali Zardari, and Nawaz Sharif, it has been Zardari who has been least eager to move in this direction, probably because if Musharraf is impeached, then his pardon of Zardari regarding his corruption might be called into questions.
It will be a close thing thouhg, as a 2/3 vote is required.
Musharraf is taking it seriously. He has canceled his trip to the Beijing games in order to marshal political support, which probably means getting support from the Pakistani military, though with the head of the military, General Ashfaq Parvez Kayani, repeatedly stating that he wanted the military to stay out of politics, I’m not sure how much support is there.
Boycott Threatened Over Association of American Law School Conference Location
There are objections to holding it at the San Diego Manchester Grand Hyatt, which is owned by Douglas Manchester, who has donated 125 grand to California’s anti-gay marriage initiative.
Surprise. Outside of your cloistered world, Mr. Manchester, some gays have positions of authority and influence, and they don’t like lining the pockets of bigots.