Category: Campaign Finance

Why You Should not Give to the DSCC

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Because, will throw money at people like Blanche Lincoln, who, now that the primary challenge is done, is once again throwing her lot in with the rich bankers who are in the process of destroying our country.

This time, she and John Kyle, he of the “never need to pay for tax cuts for rich folk,” fame, have introduced an inheritance tax bill that is a big wet kiss for the richest families in the United States:

Their proposal would require Democratic leaders to amend the small-business jobs bill with a provision that sets the estate tax at 35 percent with a $5 million exemption. These amounts will be phased in over a 10-year period and also be indexed for inflation. In addition, inherited assets would be taxed at their worth upon transfer, not when the deceased purchased them.

Of course, because of the way the Bush and His Evil Minions™ wrote his tax cuts, there is no inheritance tax at all this year, but next year, it goes back to 55% and a $1 million exemption, and, quite honestly, the “liberal” proposal is a $3.5 million exemption and a 45% rate.

Of course, when given a choice between giving something to rich heirs, and giving everything to those same heirs, Blanche Lincoln goes with giving money to the useless heir class.

The first broad based tax adopted by the founding fathers was an inheritance tax. They did it because they realized that dynastic wealth was corrosive to the republic.

But Blanche Lincoln needs those campaign dollars, so f%$# the budget and American people.

It goes without saying that the Democratic Senate Campaign Committee is backing her to the hilt, which is why you shouldn’t give to the DSCC when they come calling.

Please, God, Let This Be True!

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The rumor is that Larry Summers is dissatisfied with his relative lack of power in the Obama administration, and will soon be leaving.

I am generally not a big follower of the Kremlinology school of politics, which looks obsessively at petty power squabbles amongst the courtiers in the White House, but it appears that Larry Summers, after being denied Treasury Secretary because he was too toxic, was expecting that he would be appointed to replace Ben Bernanke as Fed chair.

Well, Joshua Green at The Atlantic notes that Summers has started demanding perks, such as, I kid you not, “golf dates with the president,”* and that he is most unhappy with his role as head of the Director of the White House’s National Economic Council, and is considering leaving.

Well, all that I can say is, hip hip hurray!

Larry Summers, whatever his academic achievements have been, has been deeply, profoundly and disastrously wrong on every venture into the real world, as evidenced by Mark Ames’ devastating portrait of his performance as a public servant which shows him to be both incompetent and corrupt.

Here’s hoping that Barack Obama does not feel the need to keep him around. Larry Summers is not just the wrong man for these times, he is the wrong time for any times.

Next up, Tim Geithner, and if the Senators place a hold on his successor, then recess appoint Sam Webb.

It is a disaster on both a policy and a politics level to allow senior economic staff to be so captured by wall street.

*Golf Dates? F%$#ing Golf Dates?!?!? How fucking egotistical and petty can you be?

You Keep Using That Word. I Do Not Think It Means What You Think It Means*

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USA Today headline, “In good sign for economy: Hiring rebounds on Wall Street.”

More Wall Street brokers, cutting more deals, with other people’s money, using more and more opaque instruments is supposed to be a, “Good sign for economy.”

It’s a pity that the author, Paul Davidson, apparently understands neither English nor the economy.

*The quote is from The Princess Bride.

Mixed Ruling on Campaign Finance

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This is a consequence of the Citizens United case, and the ruling was that independent advocacy groups can raise donations of any size, striking the $5000 limits but the disclosure requirements stand, and, in a separate ruling, the contribution limit remains for party organizations

The Republican National Committee is promising an appeal of the latter ruling.

It is not an unalloyed bad day for campaign finance reform, but on a scale of 1-10, I’d give it a 3-4.

Economics Update

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Well, they just revised down the 4th quarter GDP numbers down again, to a 5.6% annual rate, the earlier estimate had been 5.9%.

On the brighter side, incomes rose faster than GDP, which gives a boost to the idea that some sort of recovery is going on.

Meanwhile, in high fiance, Ambac’s dance of death continues, with the International Swaps and Derivatives Association, Inc. (ISDA) ruling that the regulator action yesterday constitutes a trigger for bankruptcy CDS contracts.

Meanwhile, the apparrent resolution of the Greek crisis has pushed the US dollar down on reduced demand for safe havens, and oil prices fell marginally.

Economics Update

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Well, it looks like real estate will be the suck for some time to come, as new home sales falling to an all time low, while inventory rose to 9.2 months, up from January’s 8.9 months.

The snowpocalypse might have had a little to do with this, but it has nothing to do with the fact that the Architecture Billings Index falling, since that is all about future residential construction.

On the brighter side, durable orders rose, largely on civil aircraft purchases.

In the “why the hell is this happening?” division, treasuries fell and yields rose in the most recent bond auction, despite the fact that the Greek meltdown would normally encourage a flight to safety, which would bid T-bills up.

In any case, the Greek problems have driven the dollar up and oil down.

On the other hand, things are good in New Zealand, if you don’t mind all the rain, with Kiwi GDP growing 0.8% (about a 3.2% annual rate) last quarter.

Economics Update

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Click for full size

H/t Calculated Risk


That bump is the tax credit h/t Calculated Risk

The big news is the upward revision of US GDP in the 4th quarter, though it should be noted that this delta is all inventory shrinking less quickly than expected, everything else was revised down.

Go to Calculated Risk to see a handy table illustrating this.

Meanwhile real estate is grim, with Freddy Mac reporting that delinquencies in single housings rising 16 basis points to 4.03 in January, and existing home sales falling sharply.

As I have said before, we are seeing the effects of the home buyer tax credit, not any real market recovery.

Meanwhile, in the old standards of energy and currency, people are feeling more sanguine about Greece, which means that they are looking for more return, and less safety, which pushed the dollar lower, and the lower dollar drove crude oil higher.

Economics Update

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Chicago Fed Index

OK, the good news is that the Federal Reserve Bank of Chicago’s national activity index was positiver, so we are back to something resembling treading water, and US commercial real estate prices rose 4.1% in December.

Yes, that is a month to month number, and a pretty big jump at that, though it’s worth noting that, “prices are still down 29.2 percent year over year and 40 percent from the peak.”

Additionally, short sales of have jumped again in January:

According to the latest Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions, short sales accounted for a substantial 15.9 percent of home purchase transactions in January. This was well above the share of other distressed property activity – with damaged REO accounting for 13.4 percent of activity and move-in ready REO making up 13.8 percent.

The January figures represent a steady increase in short sale popularity. As recently as November of 2009, short sales accounted for 12.4 percent of the home purchase market, according to the Campbell report, behind move-in ready REO at 12.6 percent and nearly even with damaged REO transactions at 12.3 percent.

I would note that when you add short sales, damaged REO (basically foreclosures), and undamaged REO together, means that at least 43.1% of all sales.

In energy, oil continues to climb, approaching $80/bbl, and in currency, and the dollar was mixed.

Economics Update

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Capital One charge-off rates, H/t Calculated Risk

Well, the New York Federal Reserve Bank just released its Empire State Manufacturing, Index, and it rose more than expected, from 15.9 in December to 24.9 in January, though I have no clue as to how the numbers went up:

……The details of the report were mixed. New orders slowed to 8.8 in February from 20.5 in the prior month. Shipments inched lower. However, inventories were flat in February after 17 straight negative monthly readings. Employment was positive for the second straight month……

I’m a little bit confused, but it appears that what we are seeing here is almost entirely stronger inventories, so as been noted before, it appears to be an inventory bounce.

In consumer credit, things appear to be moderating, in that default rates for the major card companies did not increase last month, or more accurately they didn’t rise last month for major credit card companies, except for Capital One, whose charge off rates rose from 10.14% to 10.41% in January. (See chart pr0n)

In real estate the National Association of Home Builder confidence index rose last month, albeit from an amazingly unambiguously crappy 15 to startlingly unambiguously crappy 17, where 50 is neutral.

In England, inflation rose sharply in January, to a 3.5% annual rate, which really isn’t scary at all, and additionally it should be noted that much of this was driven by the VAT (sales tax) increasing from 15% to a 17.5 as that stimulus measure expired, as shown by the fact that the, “CPIY rate of inflation, which strips out the effect of indirect taxes, fell from 2.8 per cent in December to 1.9 per cent in January.”

I just want to say, once again, that low inflation is a part of the problem, and another parts are the inflation hawks, both among regulators and among bond investors.

In currency, the dollar fell on reduced concerns about the Greek financial meltdown, which increased risk appetite.

I am not sure why investors had reduced concerns about Greece though. (I’ll get to the Greek crisis in more detail later)

Additionally, we have a report that the Bank of Japan is planning more quantitative easing if the Yen strengthens to OJ May Expand Easing Should Yen Reach ¥87:$1.00.

In any case, the falling dollar had commodity traders buying oil, which drove the price higher.

Garden State Equality Will No Longer Give to the New Jersey Democratic Party

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I guess that they are sick and tired of supporting Democrats who don’t deliver on their promises:

The largest gay-rights advocacy group in New Jersey has announced it will no longer give money to the Democratic Party.

The move follows the state legislature’s failure last month to legalize gay marriage and amid growing signs that the effort to repeal “Don’t Ask, Don’t Tell” is already faltering.

“No political party has a record good enough on LGBT civil rights that it can rightfully claim to be entitled to our money on a party-wide basis,” said the chairman of Garden State Equality, Steven Goldstein, as quoted at PolitickerNJ.com.

“No longer will we let any political party take our money and volunteers with one hand, and slap us in the face with the other when we seek full equality,” Goldstein added.

It’s mirrors on a state level John Aravosis’s “Don’t Ask, Don’t Give,” donor boycott, and quite honestly, considering how the Democratic Party acts as a party, you just don’t see vigorous party whips on gay rights issues, this may be the only way to get results.

News of the Unsurprising

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It turns out that almost all money donated by HP employees and HP related PACs in the California Senate race is going to Barbara Boxer, not Carly Fiorina.

In fact, more HP money has gone to her GOP challengers, most notably Chuck Devore, than has gone to Carly.

When Carly Fiorina was fired by Hewlett Packard*, employees at every level, spontaneously burst into song.

The song? Ding, Dong, the Witch is Dead!

The idea that HP employees, and HP tied political institutions, view her with anything but unbelievably well justified disgust is not news.

*Sorry, HP, one of her innovations was to drop the “Hewlett” and “Packard” after they stood up to her disastrous policies.

Economics Update

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Scary graph pr0n of the day, option ARM resets
h/t Calculated Risk

Well, today is “Jobless Thursday,” and initial claims unexpectedly rose to 480,000, rather than dropping as forecast, as did the rather more significant 4-week moving average, while continuing claims remained flat, though better productivity numbers might indicate a bit of an upswing.

Additionally, factory orders rose more strongly than forecast in December, which also is good news.

In the class half empty/full division. we have home listings rising for the first time in 18 months, which could presage a turn around in the market (full), or the fact that sellers who were trying to wait out the downturn are finally capitulating to the real estate market (empty), which would indicate further price declines ahead.

Me, I’m a bear on this.

Meanwhile, over on the other side of the pond, the Bank of England kept its benchmark rate at 0.5%, but perhaps more significantly, it announce that it is “pausing” in its quantitative easing (printing money) through buying bonds.

I’m not sure if they are just taking a month to survey the landscape, or if they think that recovery is, “just around the corner.”

Meanwhile, the recent swings in global stock markets, along with the jobs number, have investors worried, which has them buying up dollars, and these concerns also drove oil and other commodities lower.

Economics Update

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In the “recovery, my tuchas” division, we have the latest ADP estimate as to job losses, which shows that yet again, private sector employment fell, though the panglossian financial “journalists”, are now expecting employment to grow this month.

I don’t think so, seeing as how this is when the so-called birth/death adjustment gets rejiggered for the new year (more on this later).

Along with this, the Institute for Supply Management’s index of nonmanufacturing activity continues to remain in the doldrums, which is better than it was early last year, but still does not point to employment increases.

In the nexus of real estate and banking, mortgage applications were up sharply this week, but this was refinance activity, not home purchases.

In the old favorites of currency and energy, the dollar rose on the ADP report, as well as concerns about the potential Greek meltdown, while oil fell slightly on reports of strong inventories.

Don’t Give to the DNC

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Contributions to the DNC Paid This Man to Sabotage Healthcare Reform

Here’s a shocker, the DNC just spent nearly ½ a million dollars for the Nebraska State Democrats to run a campaign commercial for Ben Nelson’s obstructionism:

Turns out, though, that it’s [see attached video] not a Ben Nelson campaign ad. It’s hard to read the disclaimer, but the ad was paid for by the Nebraska Democratic Party. It’s one of a series of ad touting Nelson’s “courageous” effort to bring down real health care reform. More of the ads can be seen here and here.

So, one wonders, where did the Nebraska Democratic Party get the money to pay for these TV ads?

We already know that they are doing nothing about LGBT civil rights, now we know that since Howard Dean has left the chairmanship, they oppose meaningful healthcare reform too.

Find your candidates, and donate to them. The DNC, DCCC, the DSCC, and OFA are going to spend your money on people like Ben Nelson.

Supreme Court Eviscerates Campaign Finance Reform

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Basically, the Supreme Court just said that corporations can run any sort of ad that they want:

A divided U.S. Supreme Court struck down decades-old restrictions on corporate campaign spending, reversing two of its precedents and freeing companies to conduct advertising campaigns that explicitly try to sway voters.

The 5-4 majority, invoking the Constitution’s free-speech clause, said the government lacks a legitimate basis to restrict independent campaign expenditures by companies. The ruling went well beyond the circumstances in the case before the justices, a dispute over a documentary film attacking then-presidential candidate Hillary Clinton.

“When government seeks to use its full power, including the criminal law, to command where a person may get his or her information or what distrusted source he or she may not hear, it uses censorship to control thought,” Justice Anthony Kennedy wrote for the majority. “This is unlawful. The First Amendment confirms the freedom to think for ourselves.”

They have just deliberately created a “Wild West” for campaign finance, and they did it because they bought into the myth of Obama small donors (he out-raised from Wall Street fat cats against both Clinton and McCain).

About the only bright spot on this is that Sotomayor has given indications that she opposes she is dubious of the according of “person” status to corporations, which was done by a court clerk in the footnotes (no, I am not joking) in Santa Clara County v. Southern Pacific Railroad. (see Sotomayor’s comments here)

There is a decent chance that Obama will get another opportunity to appoint another Supreme Court justice before 2012, and it’s very important to counterbalance the nut-jobs that Bush put in.

Not Enough Money

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New York Governor David Paterson says that he has $3 million in cash on hand for his reelection bid.

When I say, “not enough money,” I don’t mean that that $3 million dollars at this point in the election cycle is not impressive, and sufficient for a state wide election in New York.

Under most circumstances, this would be an impressive haul, but the problem is that there isn’t enough money in the world for him to get reelected.

If Andrew Cuomo runs against him in the primary, he loses the primary.

If Andrew Cuomo doesn’t run against him in the primary, he loses the general election, whether his opponent is Rick Lazio, Rudy Giuliani, indicted former state Senate Majority Leader Joseph Bruno, or Biff the Wonder Dog,* he loses the election.†

The electorate find him incompetent, ineffectual, and they don’t like him personally, and it’s not going to change in the next 11 months.

*A virtual kewpie doll to whoever gets the geek reference toward said dog.
†OK, if the Republicans nominate Sarah Palin to run against him, I give him a 60% chance of winning, but that dog will kick his ass.

Economics Update

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H/t Calculated Risk

Well, the ADP private employment survey is saying that the private sector lost 84,000 jobs in December, and the Institute for Supply Management’s non manufacturing index rose to 50.1, up from 48.7 in November, and not as good as forecast, but still showing a smidgen of growth.

Real estate was rather grim though, with mortgage applications hitting (seasonally adjusted) a 6 month low, and mortgage purchase applications (top pic) hitting a 12 year low.

Basically this means that people are not buying homes, they are just refinancing, though, with interest rates inching up, they aren’t doing that as much either.

Additionally, a feature of suburban blight, the strip mall, is taking a hit with vacancies hitting 10.6%, an 18 year high.

I keep saying it, but no one listens: we need some inflation here.

In energy, the cold weather drove both crude oil and natural gas higher, while in currency, the dollar fell slightly vs. the Euro, as traders make up their minds about whether to be optimists of pessimists.