Author: Matthew G. Saroff

I’d Call This Kafkaesque, but the Term Seems Wholly Inadequate

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A press release from the ACLU:

Justice Department Asks Intelligence Court To Review New Wiretapping Law In Secret (7/30/2008)

ACLU Says Any Proceedings On New FISA Law Should Be As Transparent As Possible

FOR IMMEDIATE RELEASE
CONTACT: (212) 549-2666; media@aclu.org

WASHINGTON – In a brief filed late yesterday with the Foreign Intelligence Surveillance Court (FISC), the Bush administration asked that any review of the new warrantless surveillance law be kept secret and that the court refuse to accept legal briefs from anyone other than the Justice Department itself. The government is responding to a motion the American Civil Liberties Union filed earlier this month asking the FISC to ensure that any proceedings relating to the scope, meaning or constitutionality of the FISA Amendments Act (FAA) be open to the public to the extent possible.

The following can be attributed to Jameel Jaffer, Director of the ACLU National Security Project:

“The government is proposing that the intelligence court should consider the constitutionality of the new surveillance law in proceedings that will be entirely secret. If the government’s request is granted, the court won’t hear arguments from anyone except the government and those arguments will be presented to the court in secret briefs. At the end of the process, the court will issue a ruling that is also secret. The process the government is proposing is completely unacceptable. Especially because the new surveillance law departs so significantly from the standards that have applied to government surveillance for the last 30 years, any proceedings relating to the new law’s constitutionality should be adversarial and as informed and transparent as possible.”

In a separate legal challenge in the U.S. District Court for the Southern District of New York, the ACLU seeks a court ruling declaring that the FAA is unconstitutional and ordering its immediate and permanent halt. Plaintiffs in the case include Amnesty International USA, Human Rights Watch, the Nation and PEN American Center.

(emphasis mine)

I’m Speechless.

McCain Loses…..

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Time’s Karen Timulty, “So how many more times are the McCain campaign and the Republicans going to repeat what is a thoroughly baseless charge?” (emphasis mine)

The front page of the Washington Post, “For four days, Sen. John McCain and his allies have accused Sen. Barack Obama of snubbing wounded soldiers by canceling a visit to a military hospital because he could not take reporters with him, despite no evidence that the charge is true.” (emphasis mine)

And the New York Times Editorial Board, “Many voters are wondering whether a McCain presidency would be an extension of Mr. Bush’s two disastrous terms. If the way Mr. McCain is running his campaign these days is an indication, Americans don’t have to wait until next January for the answer to that one.” (emphasis mine)

Could it be that the “Straight Talk Express” has worn out the batteries? Because this stuff looks suspiciously like journalism.

Oh Crap! The US-Iraq Forever Deal Seems Back On

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It looks like the status of forces agreement is back in active negotiation, complete with bullsh@% “time horizon”.

The Bush administration’s embrace of a flexible timeline for pulling U.S. troops from Iraq has accelerated negotiations between Washington and Baghdad over a long-term security pact, officials from both sides said.

The optimism marks a turnaround from just a month ago, when big differences seemed to have deadlocked talks over the terms of a continued American military presence in the country. In June, Iraqi Prime Minister Nouri al-Maliki said the talks were at a “dead end,” dimming hopes of reaching a deal by July 31 — a goal the Bush administration has pushed hard to meet.

This month, however, the White House said it had agreed to a “general time horizon” for troop withdrawals, breaking from its long-held public resistance to the notion. The change has helped overcome differences on other issues, such as immunity for U.S. troops, negotiators on both sides said.

…

Great googley moogley.

Economics Update

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Well, you know that the economy sucks when lawyers are being laid off, in this case at Cadwalader, Wickersham* & Taft because the 70% decline in the commercial real estate market had created redundant personnel.

When you consider the fact that Citi will likely write-down its CDOs to the tune of $8 billion, following Merrill Lynch’s $5.7 B writedown of its CDOs, it’s not surprising nothing is moving.

Citi currently values its CDOs at 53¢ on the dollar, but Merrill sold at somewhere between 22¢ and 5.5¢ on the dollar (see this post), so this will be ugly for them, and for a lot of other financial institutions.

Some people are predicting writedowns of over $100 billion for Fannie Mae and Freddy Mac, but it could be worse if there is a rush to the exits.

I think that it’s also pretty likely that the credit crunch had a lot to do with Mervyns, department stores filing for bankruptcy, reorganization, not liquidation, as the straw that breaks the Camel’s back is typically the withdrawal of credit.

Still, we have a decent numbers in the ADP jobs report, which has also strengthened the dollar.

Additionally, the efforts by government institutions continue with Federal Reserve extending its loan program to Wall Street banks, “Cash for Trash,” from mid-September to January 30 and the SEC has extended its naked short-selling ban until August 17.

In energy, oil is up, and retail gasoline is down.

*Interestingly enough, I probably would not have even noticed the story, but for the fact that the name Wikersham was there. he first political story that I have any recollection about was about that ship, and the problems that developed as a result of cabotage related issues with the Jones Act, which required it to stop in Canada between American ports,

I actually rode on the ship when my family was leaving Alaska.

More Evidence that Arbitration is a Racket

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This sad tail of corruption as a feature, not a bug, in arbitration courtesy of Jane Bryant Quinn.

Short story, people screwed over in auction rate security deals will likely have to be heard by arbitrators whose own companies are the subjects of actions by people screwed over in auction rate security deals.

This will be an issue that I will start dunning candidates on, because binding arbitration is a racket.

CIA Starts Leaking Dirt on Pakistani ISI

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Pakistan denies this, but we have reports that a CIA operative met with Pakistani and presented evidence of close links and support between al Queida and the people in the Directorate for Inter-Services Intelligence (ISI).

Pakistan’s state security apparatus is focused on a war with India, and when it’s not focused on that, it’s looking at reducing Indian influence in the area, so at allies with Maulavi Jalaluddin Haqqani, which provides sanctuary for al Queida.

These people are not reliable allies with regard to combatting al Queida, the Taliban, or terrorism in general as a result.

More Taser Abuse

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The police come across a 16 year old boy lying on the street, having fallen from an overpass, and having a broken foot and broken back, and it appears that the officers Tasered him 19 times because he ignored their requests to get up, so they tortured him.

And then we have the second death in as many months in the Charlotte jail from Taser Abuse. In the first case, they tasered someone for 37 seconds…but that cop is still on the force.

This won’t change unless/until Tasers are classified as lethal weapons.

Boeing Looks for New Ways to F%$@ Up Labor Management Relations

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It looks like Boeing, the only company incompetent enough to get engineers to go out on strike and stay out,* is playing chicken with it’s unions again, though this time it’s the International Association of Machinists (IAM), who are far more likely to strike than the Society of Professional Engineering Employees in Aerospace (SPEEA).

There may not be much that Boeing is good at, but forcing its employees out on bitter strikes is one of the few.

With the 787 at least 14 months behind schedule, they can’t afford a strike, but they are still pushing to screw the employees on pensions and healthcare.

Smooth move guys.

*The SPEEA went out for 40 days in 2000, despite the fact that it was a bunch of engineers, who generally hate unions, and the union was up to that point considered a joke.

Merrill Lynch CDO Sale at Far Less than 22¢ on the Dollar

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Yesterday, I wrote about a 5.7 billion write-down that Merril was taking on CDOs.

It turns out that the numbers, which showed them getting 22¢ on the dollar are completely bogus. They took an even bigger haircut than reported.

Nouriel Roubin has the details, but the cliff notes version is:

  • Merrill financed the purchase.
  • The finance rate is at sub market rates.
  • The security for the deal is the same CDO crap that they are selling
  • Merrill has, “would absorb any losses on the CDOs beyond $1.68 billion”

Their face value is $30.6 billion, so this figures to a 5.5¢ on the dollar worst case.

WTO Talks are Done, for Now at Least

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Issues between the US and India and China over farm exports killed the deal.

Not surprising. As Krugman notes, trade deals are not about real free trade, but rather “enlightened mercantilism”, so he doesn’t see it as the end of the world.

I am actually far less of a free trader than he is, and I see the current deals as damaging people far more than it helps people, so I think that some changes, including more transparency in adjudication bodies and the elimination of the idea that regulation is a taking, should be a core value to proceed.

FDIC Puts Brakes on overed Bonds

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As I wrote earlier, Treasury Secretary Hank Paulson is pushing a new (for the US, at least) sort of bond, the covered bond, to unfreeze the mortgage credit markets.

Well, it looks like the FDIC just put up a road block, saying that it is considering limiting these new bonds to 4% of bank liabilities.

It has expressed concern about the instruments might place additional risk on them:

“The FDIC is concerned that unrestricted growth, while the FDIC is evaluating the potential benefits and risks of covered bonds, could excessively increase the proportion of secured liabilities to unsecured liabilities,” the agency said. In other words, Back off my insurance fund. The agency did say it would consider revising its guidance after it has a chance to evaluate the effect of covered bonds on banks.

The FDIC could refuse to cover these bonds in the event of a bank failure, and as such, if they institute this policy, it may very well put a stake through the proposal’s heart.

Of course, these days, all real estate loans are risky instruments.