Here’s a shocker, the US Government is likely understating the amount of oil flowing out of that busted well in the Caribbean by at least a factor of 10.
Also, they are starting to recover oiled birds on the Gulf coast.
Category: Breaking News
What the Hell is This?
Click for full size
1000+ point move in under an hour
Normally, I don’t follow the stock market, and I follow the imperfect Dow Jones Industrial Market even less, but over the space of what looks to be about ½ an hour, the Dow fell 600 points, and then rose by 400 points.
In percentage terms, that’s about 5½% down and about 4% up in a very short time frame.
I’m wondering if the whiz kids with the high frequency trading robots just screwed the pooch somehow.
(Update)
We now have a potential cause, sloppiness and lack of controls:
In one of the most dizzying half-hours in stock market history, the Dow plunged nearly 1,000 points before paring those losses in what possibly could have been a trader error.
According to multiple sources, a trader entered a “b” for billion instead of an “m” for million in a trade possibly involving Procter & Gamble , a component in the Dow. (CNBC’s Jim Cramer noted suspicious price movement in P&G stock on air during the height of the market selloff. Watch.)
Sources tell CNBC the firm in question that handled the erroneous trade is Citigroup . The bank said it has no evidence of a bad trade but is investigating the situation
We now have some hard numbers:
Here is the time frame, courtesy Scott (from MarketWatch):
2:38 PM: Dow down 360
2:48 PM: Dow down 600
2:51 PM: Dow down 900
Dow is now down around 500 [around 3:40 pm]
Whatever is going on here, it appears that Bloomberg News Service got absolutely hammered, and is now (about 4:30 pm) inaccessible.
OK, Maybe it Wasn’t a Glenn Beck Fan
It appears that authorities are looking for a person of interest with extensive ties to Pakistan regarding the abortive bombing attempt on Times Square.
It is, of course, terrorism, whether it’s an Pakistani-American, or someone who can trace their lineage back to the Mayflower, because, after all, blowing up a bomb in Times Square is terrorism.
The question now is whether it was Mayflower type, or someone with ties to the Islamic world.
In either case, it was someone who did not know how to do it right, so we can pretty much cross off going to one of those al Qaeda training camps, because he clearly did not take IED making 101.
Whiskey Tango Foxtrot: Car Bomb Found in Times Square
Thankfully, it did not go off, but it was sitting there smoking away:
The police discovered a car bomb in a smoking Nissan Pathfinder in the heart of Times Square, prompting the evacuation of thousands of tourists and theatergoers from the area on a warm and busy Saturday evening.
There was no explosion.
“It appears to be a car bomb left in a Pathfinder between Seventh and Eighth” Avenues on 45th Street, said Deputy Commissioner Paul J. Browne, the Police Department’s chief spokesman.
The device, he said, contained “explosive elements” that included “propane tanks, some kind of powder, gasoline and a timing device.”
………
The explosive materials were discovered about 6:30 by a mounted police officer who saw a box with smoke pouring from it in the back of the Pathfinder, Mr. Browne said. The officer called for backup, and the Fire Department and bomb squad.
The Pathfinder’s back window was broken out, Mr. Browne said, and the police sent in a “robotic device” to “observe it.”
Mr. Browne said gunpowder had been found in the vehicle, but not a high-grade explosive. The timing device was a clock attached to wires. The gasoline was in cans and there appeared to be two or three propane tanks.
Apparently, had it worked, it would have been more of a woosh (followed by a weenie roast) than a boom, but still, it’s unsettling.
The composition was gunpowder, unclear if they mean black powder or modern smokeless powder, cans of gasoline, and propane tanks, which sounds to my, “Haven’t blown sh%$ up since I was in my teens,” mind to be a pretty amateur operation.
Still, WTF?!?!?
And the Tanker Saga Continues………
It’s official
There was much hemming and hawing, but the Pentagon offered a 60 day extension for EADS to make the the bid, which will will slip the award of the contract to some time next year and French President Nicolas “Bling Bling” Sarkozy leaned on them to make the bid, so EADS moved forward.
They have entered into entered into negotiations with L-3 as a key supplier, which is basically a way for them to put a bit of a US front on the program tanker.
So, EADS has decided to go it alone, without a US partner, and bid for the contract.
I think that a lot of this is really about maintaining a presence, so as to keep lines of communication open with the members of Congress and the Pentagon staff for future bids, but as Stephen Trimble notes, they do seem to be doing their best to play to win, as evidenced by the talking points they are sending out to Congress, which are a harsh slam of Boeing, noting the fact that their plane is flying, and works, while Boeing’s proposal is not flying, and that the 767 tankers sold to the Italians and Japanese still have issues with their hose and drogue systems.
Because the new contract gives very little in the way of credit for exceeding the basic requirements, this means that their best chance to win this is to show that Boeing cannot be expected to fulfill a contract on time and on budget.
Considering Boeing’s record, this is probably true, but considering EADS’ record **cough** A400M **cough**, it is also true for them.
Charlie Crist Announces Independent Run for Senate
He’s left the Republican Party to run for the Senate as an independent.
The reason that he gives is that the, “political system [is] broken.”
I think that he would have gotten a few more votes out of telling the truth, which is that, “The nutjobs in the Florida Republican party are running the asylum now.”
In related news, John Cornyn, head of the RSCC, wants his money back.
If Crist has any brains, he will tell him, and anyone else, to go pound sand, that they contributed to a conservative candidate for Senate, and he is still that.
He could play it as Reagan did with his, “I am paying for this microphone, Mr. Breen.,” moment.
Greece Grabs IMF/EU Lifeline
Not surprising considering that the yields on their latest 2-year bond spiked to 11.61%, so they have asked for the activation of the financial rescue package:
Describing his country’s economy as “a sinking ship,” the Greek prime minister formally requested on Friday an international bailout, testing the solidarity of the European Union as never before.
“We drew up a plan, we took difficult and painful measures,” Prime Minister George A. Papandreou said in a nationally televised address. “But the markets did not respond.”
Concerns about the Greek budget deficit — an estimated 13.6 percent of gross domestic product last year — have pushed interest rates on Greek bonds above those of emerging countries like India and the Philippines, leading to talk of a potential default and years of stagnant growth.
(emphasis mine)
Note that as screwed up as Greece is, and it is arguably the closest to 3rd world nation status among the Euro zone members, it ain’t the Philippines.
Part of the reason for the spike is clearly heard panic mentality, but my guess is also that some of the wonderful new instruments that have come into existence over the past 20 years, credit default swaps (CDS) and the like, which make it profitable to bet on a neighbor’s house burning down, and then torching it.
These instruments magnify both risk and volatility, and this is why they need to be severely restricted or banned.
Breaking: Vampire Squid* Charged by SEC for Subprime Fraud!
The SEC has charged Goldman Sachs and one of its VPs with, “defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter.”
It sounds to me like they assembled a particularly crappy CDO at the request of a hedge fund, most likely the now infamous Magentar:
The SEC alleges that Goldman Sachs structured and marketed a synthetic collateralized debt obligation (CDO) that hinged on the performance of subprime residential mortgage-backed securities (RMBS). Goldman Sachs failed to disclose to investors vital information about the CDO, in particular the role that a major hedge fund played in the portfolio selection process and the fact that the hedge fund had taken a short position against the CDO.
“The product was new and complex but the deception and conflicts are old and simple,” said Robert Khuzami, Director of the Division of Enforcement. “Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party.”
So it sounds like Goldman Sachs assembled CDOs, a form of mortgage backed security, at the request and to the specifications of the hedge fund Magetar, which demanded that the CDOs that it funded be as crappy as possible so that it could win on bets against high rated tranches.
This was apparently fairly common knowledge on the street, and Goldman did it anyway, and then sold the instruments as being “rock solid”. Oopsie
Background, and links to Pro Publica‘s and This American Life‘s stories on Magnetar’s, “burn down your neighbor’s house for the insurance money,” investment strategy are here.
There are two potential outcomes:
- A tepid settlement followed by an inconsequential fine.
- That the string is being pulled, and a whole lot of stuff comes unraveled.
I hope for the latter, but I expect the former.
*Alas, I cannot claim credit for the bon mot describing Goldman Sachs as a, “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” This was coined by the great Matt Taibbi, in his article on the massive criminal conspiracy investment firm, The Great American Bubble Machine.
Full complaint and embedded PDF of the filing are after break:
SEC Charges Goldman Sachs With Fraud in Structuring and Marketing of CDO Tied to Subprime Mortgages
FOR IMMEDIATE RELEASE
2010-59Washington, D.C., April 16, 2010 — The Securities and Exchange Commission today charged Goldman, Sachs & Co. and one of its vice presidents for defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter.
Additional MaterialsThe SEC alleges that Goldman Sachs structured and marketed a synthetic collateralized debt obligation (CDO) that hinged on the performance of subprime residential mortgage-backed securities (RMBS). Goldman Sachs failed to disclose to investors vital information about the CDO, in particular the role that a major hedge fund played in the portfolio selection process and the fact that the hedge fund had taken a short position against the CDO.
“The product was new and complex but the deception and conflicts are old and simple,” said Robert Khuzami, Director of the Division of Enforcement. “Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party.”
Kenneth Lench, Chief of the SEC’s Structured and New Products Unit, added, “The SEC continues to investigate the practices of investment banks and others involved in the securitization of complex financial products tied to the U.S. housing market as it was beginning to show signs of distress.”
The SEC alleges that one of the world’s largest hedge funds, Paulson & Co., paid Goldman Sachs to structure a transaction in which Paulson & Co. could take short positions against mortgage securities chosen by Paulson & Co. based on a belief that the securities would experience credit events.
According to the SEC’s complaint, filed in U.S. District Court for the Southern District of New York, the marketing materials for the CDO known as ABACUS 2007-AC1 (ABACUS) all represented that the RMBS portfolio underlying the CDO was selected by ACA Management LLC (ACA), a third party with expertise in analyzing credit risk in RMBS. The SEC alleges that undisclosed in the marketing materials and unbeknownst to investors, the Paulson & Co. hedge fund, which was poised to benefit if the RMBS defaulted, played a significant role in selecting which RMBS should make up the portfolio.
The SEC’s complaint alleges that after participating in the portfolio selection, Paulson & Co. effectively shorted the RMBS portfolio it helped select by entering into credit default swaps (CDS) with Goldman Sachs to buy protection on specific layers of the ABACUS capital structure. Given that financial short interest, Paulson & Co. had an economic incentive to select RMBS that it expected to experience credit events in the near future. Goldman Sachs did not disclose Paulson & Co.’s short position or its role in the collateral selection process in the term sheet, flip book, offering memorandum, or other marketing materials provided to investors.
The SEC alleges that Goldman Sachs Vice President Fabrice Tourre was principally responsible for ABACUS 2007-AC1. Tourre structured the transaction, prepared the marketing materials, and communicated directly with investors. Tourre allegedly knew of Paulson & Co.’s undisclosed short interest and role in the collateral selection process. In addition, he misled ACA into believing that Paulson & Co. invested approximately $200 million in the equity of ABACUS, indicating that Paulson & Co.’s interests in the collateral selection process were closely aligned with ACA’s interests. In reality, however, their interests were sharply conflicting.
According to the SEC’s complaint, the deal closed on April 26, 2007, and Paulson & Co. paid Goldman Sachs approximately $15 million for structuring and marketing ABACUS. By Oct. 24, 2007, 83 percent of the RMBS in the ABACUS portfolio had been downgraded and 17 percent were on negative watch. By Jan. 29, 2008, 99 percent of the portfolio had been downgraded.
Investors in the liabilities of ABACUS are alleged to have lost more than $1 billion.
The SEC’s complaint charges Goldman Sachs and Tourre with violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Exchange Act Rule 10b-5. The Commission seeks injunctive relief, disgorgement of profits, prejudgment interest, and financial penalties.
# # #
For more information about this enforcement action, contact:
Lorin L. Reisner
Deputy Director, SEC Enforcement Division
(202) 551-4787Kenneth R. Lench
Chief, Structured and New Products Unit, SEC Enforcement Division
(202) 551-4938Reid A. Muoio
Deputy Chief, Structured and New Products Unit, SEC Enforcement Division
(202) 551-4488
Embedded PDF of filing:
OK, Extended Unemployment is Finally on its Way to Obama’s Desk
They had to break 2 filibusters, but the bill is now on its way to President Obama for his signature.
The bill also included COBRA subsidies, a waiver of Medicare reimbursement cuts, and the national flood insurance program.
Hopefully, this means that I will be able to apply for extended benefits soon.
Breaking: Stupak Retiring
Bummer of a birth mark, Bart
So, after making a bid for national prominence by grandstanding on a woman’s right to choose, and getting a primary challenger, the Teabaggers are still hating on him, and Rachel Maddow uncovered the fact that he was getting bribed with below market rents while he was living at “C Street,” so he will not run for reelection:
Representative Bart Stupak of Michigan, who played a central role with fellow anti-abortion Democrats in negotiating a compromise in the final hours of debate that allowed the health care overhaul bill to pass, said on Friday that he would not seek re-election.
Mr. Stupak, a nine-term incumbent, has been under intense pressure from anti-abortion groups and others since the health care bill passed last month. At his request, President Obama signed an executive order outlining the prohibitions against the use of federal funds for abortion. But anti-abortion groups dismissed the executive order and pledged to defeat Mr. Stupak, whom they had once championed.
Let’s be clear here: The Teabaggers would always have supported a Republican in the general, because they are a Republican movement.
In fact, it could be argued that they have captured the Republican party.
And when you never had the Teabaggers, or the Republican party, and you’ve just told the Democratic party to go Cheney yourself, you do not have much left to win an election with.
BTW, here is his challenger, and now putative nominee, Connie Saltonstall’s Act Blue page.
Give generously, to keep the idiots at the DCCC and DNC from trying to anoint a Conservadem between now and the primary.
Justice Stevens to Retire
Obviously, the question now is who Obama will nominate to succeed him.
My predictions:
- They will be Protestant
- Stevens is the only Protestant on the court, the rest are Catholic or Jewish.
- They will be a woman and/or a minority.
- Because it will be his way to pander to the base when he chooses a basically conservative nominee.
- They will be tepid, at best, on Roe v. Wade and a woman’s right to choose in general.
- Since Barack Obama has always been tepid, at best, on Roe v. Wade and a woman’s right to choose in general.
- They will generally favor a very expansive definition of the powers of the Presidency.
- Since Barack Obama has aggressively asserted a very expansive definition of the powers of the Presidency.
- They will generally be rather pro corporate, though not as much as Scalia, Thomas, Alito, Roberts, and Kennedy.
- Since Barack Obama is ……… You get the picture.
- They will not be particularly pro organized labor.
- Obama has clearly been tepid on labor issues, as shown by his efforts to soft pedal the EFCA (Card Check).
What I would like to see, beyond ideology, is that:
- They not have worked as a prosecutor, which tends to set people off on a legal path that is hostile to the rights of the accused.
- That they not, and have not been, a sitting Federal Judge, which is increasingly the norm, and we need more diversity of experience in there.
- Nominating someone who is publicly an atheist.
Things that could make this amusing, but will not happen:
- Nominating Bill Clinton, just to make the ‘Phant’s heads explode.
- Nominating a Muslim.
- Nominating Hillary Clinton, just to make the ‘Phant’s heads explode.
But these will not happen.
Court Rules Gene Patents Illegal
It is generally true that bad people push the law until it breaks, and the folks at Myriad Genetics are a truly nasty bit of work.
Basically, they discovered the genes BRCA1 and BRCA2, which predispose one to breast cancer, and had received a patent on the genes, and offered a not particularly good and very expensive test for the genes, and using their government granted monopoly, they were prohibiting any and all competing tests or research on better tests for these genes.
The judge has now ruled that the genes are a discovery, and not an invention, which makes them non-patentable, except, perhaps in Germany.*
The VC’s are wringing their hands, because patent protection helps with their pump and dump schemes, but development has been continuing apace on genes that are not covered by these patents:
Some biotechnology investors and executives say that lack of patent protection for DNA could diminish investment and remove incentives to develop tests. That could slow the move toward so-called personalized medicine, in which genetic tests are used to determine which drugs are best for which patients.
James P. Evans, a professor of genetics at the University of North Carolina, said that would not necessarily be the case. There is thriving competition in areas like testing for mutations that cause cystic fibrosis or Huntington’s disease, even though no company has exclusivity.
“It’s quite demonstrable that in the diagnostic area, one does not need gene patents in order to see robust development of these tests,” he said.
Note that this does not prohibit patenting the tests, it just prohibits patenting the genes.
This is a good ruling: the patenting of genes, or for that matter the patents of hedging techniques, as is the case in Bilski, which the Supreme Court will heard arguments for in November.
IP law is, at its core, public interest law (it’s in the constitution), and patents on business methods, species, and genes, do not serve the public interest
*This is what got us that Mercedes ad where they say that they have a patent on crumple zones, but “Never enforced the Patent”. They never enforced the patent, because it is not recognized anywhere else in the world.†
†I believe Germany changed their patent laws at some point in the 1970s.‡
‡I offer the caveat that these comments in the footnotes regarding the Mercedes patent are recollections of a conversation over a decade ago vague 20+ year old memories though, so YMMV, though a Google search does have people who recall the ad.
Chinese Automaker Buys Volvo Auto from Ford
The price was $1.8 billion, which, once again, is not much more than a few magic beans.
South Korean Ship Sunk
It was in a patch of water that is disputed by the DPRK and the ROK, but right now the South Korean authorities are saying that it’s not clear if the sinking was the result of hostile activity.
Should be an interesting next few days.
Dennis Kucinich to Votefor Healthcare Bill
He announced it yesterday afternoon.
Of course, we haven’t seen the pressure that he got applied to the Blue Dogs, once again proving that you don’t count if you are a liberal.
Ummmmm…Whiskey Tango Foxtrot?
We have a report that Denmark is withdrawing from the JSF program, and will instead purchase F/A-18 E/Fs.
Here is the Danish report translated.
I’m not surprised.
When you compare the $50 million F/A-18, with the let’s-be-serious-here $100 million + F-35, and the fact that with global warming and the potential opening of the Northwest Passage, the Danes will need to patrol around Greenland, it gives a 2nd engine has some real value.
Then again, we could have a denial tomorrow.
Waiting for the 3rd Shoe to Drop
11 days ago, my wife’s car’s timing belt broke.
This morning, at about 7:10, while stopped behind a school bus, I was rear-ended, and pushed into the car in front of me.
If anyone saw a black 2 door small hatchback driving rapidly along Gwynnbrook east of Owings Mills Blvd with some damage to the grill (or so I assume, I never saw the front), please contact me.
I don’t hurt, at least not yet, and the car drives fine, though I am not sure if I can open the hood which is bent.
Still, on the assumption that these things happen in 3s, I’m expecting demonic possession of our lawn mower.
Posted via mobile.
Theodore C. Olbermann, 1929-2010
Keith Olbermann’s father died this afternoon.
My condolences to the family.
Senate Majority Leader’s Wife & Daughter in Accident
They were rear ended by a semi-truck, and the injuries are described as serious but not life threatening:
Both Reid-Barringer and Reid were wearing seatbelts and were transported to Inova Fairfax Hospital in Falls Church. The driver of a 1997 Jeep Grand Cherokee and the driver of a 2007 Chevrolet Cobalt, also involved in the crash, were transported to the hospital with non-life threatening injuries.
“Mrs. Reid has a broken nose, broken back and broken neck. Lana has a neck injury and facial lacerations. Both Mrs. Reid and Lana are conscious, can feel their extremities, and according to doctors their injuries are non-life threatening,” Jon Summers, a spokesman for Sen. Reid (D-Nev.), said in a statement late Thursday afternoon.
One note here: Wear your damn seatbelts.
No Bid From Northrop
Their official statement is here, and I have a full quote after the break.
So, Northrop Grumman does not think it worth their while to bid. There is a possibility that EADS might bid for the contract on their own, but given their current cash flow issues (A380, A400M, and upcoming needs for developing the A350), I don’t see it happening, particularly when their chances are essentially nil without the fig leaf of some American “partner”.
So, Boeing will get he bid, and they know that they have no competitors, so the taxpayer is going to be done without lube.
Statement From Northrop Grumman on U.S. Air Force Aerial Refueling Tanker Program
WASHINGTON, D.C. – March 8, 2010 – The following is a statement from Wes Bush, Chief Executive Officer and President of Northrop Grumman Corporation (NYSE:NOC), concerning the U.S. Air Force aerial refueling tanker program.
“After a comprehensive analysis of the final RFP, Northrop Grumman has determined that it will not submit a bid to the Department of Defense for the KC-X program. We reached this conclusion based on the structure of the source selection methodology defined in the RFP, which clearly favors Boeing’s smaller refueling tanker and does not provide adequate value recognition of the added capability of a larger tanker, precluding us from any competitive opportunity.
“Northrop Grumman fully respects the Department’s responsibility to determine the military requirements for the new tanker. In the previous competition, Northrop Grumman was selected by the Air Force as offering the most capable tanker for the warfighter at the best value for the taxpayer. However, the Northrop Grumman and EADS team is very disappointed that the revised source selection methodology now dramatically favors Boeing’s smaller refueling tanker. We agree that the fundamental military requirements for the new tanker have not changed since the last competition, but the Department’s new evaluation methodology now clearly favors the smaller tanker.
“We continue to believe that Northrop Grumman’s tanker represents the best value for the military and taxpayer – a belief supported by the selection of the A330 tanker design over the Boeing design in the last five consecutive tanker competitions around the globe. Regrettably, this means that the U.S. Air Force will be operating a less capable tanker than many of our Allies in this vital mission area.
“Our prior selection by the Air Force, our firm belief that we provide the best value offering, and the hard work and commitment of the many individuals and communities on our team over many years made this a difficult decision for our company. But we have a fiduciary responsibility to our shareholders to prudently invest our corporate resources, as do our more than 200 tanker team suppliers across the United States. Investing further resources to submit a bid would not be acting responsibly.
“We have decided that Northrop Grumman will not protest. While we feel we have substantial grounds to support a GAO or court ruling to overturn this revised source selection process, America’s service men and women have been forced to wait too long for new tankers. We feel a deep responsibility to their safety and to their ability to fulfill the missions our nation calls upon them to perform. Taking actions that would further delay the introduction of this urgent capability would also not be acting responsibly.
“We recognize that our decision likely creates a sole-source outcome for Boeing. We call on the Department to keep in mind the economic conclusions of the prior round of bidding as it takes actions to protect the taxpayer when defining the sole-source procurement contract. In the previous round, the Air Force, through a rigorous assessment of our proposal, determined that it would pay a unit flyaway cost of approximately $184 million per tanker for the first 68 tankers, including the non-recurring development costs. With the Department’s decision to procure a much smaller, less capable design, the taxpayer should certainly expect the bill to be much less.”
Northrop Grumman Corporation is a leading global security company whose 120,000 employees provide innovative systems, products, and solutions in aerospace, electronics, information systems, shipbuilding and technical services to government and commercial customers worldwide.
CONTACT: Randy Belote
(703) 875-8525
randy.belote@ngc.com