I was 11 in 1973, and that hed sounds like Deja vu, but Conyers and Kennedy are calling for a special prosecutor to investigate the CIA tape destruction.
Bush and His Evil Minions™ make miss the openness, honesty, and general humanity of the Nixon administration.
I cannot believe that I just said that.
This good, but I need to say three words: barn door cow.
The high points:
Of course, half of these should be done already by anyone who wants to operate for more than a few years and then leave town ahead of the police.
The farm subsidies are bad policies all around, and the fact that the WTO has opened probe is a good thing.
It costs the taxpayers money, it driver poor 3rd world farmers off their farms (one of the sources of the illegal immigration from Mexico is farmers displaced by subsided American corn).
It appears that the shuttle fleet is grounded until they can resolve the problem with the Hydrogen engine cutoff sensor. (Paid subscription required)
Basically, if there is a problem and the engine runs out of hydrogen before getting shut down
A cutoff is essential before hydrogen depletion to avoid cavitation in the 39,000-rpm. main engine high-pressure fuel pumps that would result in an explosion.
So this is a MAJOR problem.
But wait, there’s more:
The space shuttle fleet is grounded until technicians find and fix a vexing problem with engine cutoff (ECO) sensors—a component that NASA now realizes has likely never worked throughout the 26-year history of the shuttle program.
…..So why do we need an LH2 cutoff system? Simply put, if you need it and the LH2 tank runs dry with the engines at full power with LO2 still coming in, inevitably a catastrophe will occur. LOX-rich shutoffs are ugly in the extreme. This is a crit 1 situation. And it would occur so rapidly that human intervention is not practical.”
What’s going on here is that the shuttle is in the end of life phase, so the pressure to cover-up problems is decreasing, and so we are seeing long term potentially catastrophic loss of vehicle, crew, etc.
The Shuttle has been a pig since day one, and NASA has seen their job as covering up problems so that they can continue to play Captain Kirk.
So, a federal fudge, and a Reagan Appointee at that, has ruled that White House visitor logs are public records subject to the Freedom of Information Act.
Basically, the White House claim that maybe, if terrorists take this data, and some other data, and some pixie dust, they could use it for an attack, was dismissed.
The Bush Admin had transferred the records to the White House in an attempt to claim privilidge, but, “But U.S. District Judge Royce C. Lamberth ruled logs from the White House and Vice President Dick Cheney’s residence remain Secret Service documents and are subject to public records requests.”
BTW, one of the kickers is that there is a similar suit before U.S. District Judge Rosemary Collyer, who Bush appointed, but they decided to consolidate it before Lamberth, despite the fact that Collyer had the older suit, which normally would take precedence.
I think that the judges just told Bush to politely pound sand.
Normally, this sets up a battle with the younger pilots and airlines (they like replacing expensive senior pilots with cheaper junior ones) on one side, and older pilots on the other, but given given the fact that there is a severe pilot shortage as a result of airlines engaging in a 30 year war to pay pilots less and screw them out of their retirement packages, it is unsurprising that this made it into law.
The older pilots need the money to account for their bankruptcy reduced pensions, and the younger pilots have plenty of openings anyway, and the airlines, having succeeded in making the job of pilot suck, just need the additional years.
Bradford Plumer makes a very good point.
While the free market evangelicals constantly say that deregulation is the heart and soul of innovation, this graph of patents for sulfur dioxide emissions:
The Government spent money on reducing sulfur dioxide emissions before 1963, but when they started regulating the actual emissions is when we saw the technology develop?
It’s information like this that leads me to be suspicious of “market driven” procedures. A cap and trade system is a carbon tax, it’s just that speculators, rather than the government get the money….Let’s get it for the tax payers instead.
It makes a big difference if it’s the Senate intelligence committee or the Senate Judiciary Committee version.
The former has retroactive Telco immunity for the illegal wiretaps that the Telcos did for Bush and His Evil Minions™.
Senators are aggressively lobbying Senate Leader Harry Reid on this.
Chris Dodd has already made it clear that he will filibuster, and because Reid won’t extend the courtesy that he does to the obstructionist Rethuglicans, this will mean him talking, and talking, and talking, and talking on the floor of the Senate.
It would take Dodd off the campaign trail, but the spectacle would be the best thing that could possibly hit his candidacy.
The following letter was sent to him:
Dear Majority Leader Reid:
We understand that the Senate will shortly be considering amendments to the Foreign Intelligence Surveillance Act. As you know, the Senate Select Committee on Intelligence and the Senate Judiciary Committee have reported very different versions of the FISA Amendments Act, S. 2248, and it is up to you, as Majority Leader, to decide how the Senate considers this legislation.
We urge you to make the version of S. 2248 reported by the Senate Judiciary Committee the base bill to be considered by the full Senate. While the structure of Title I of both bills is the same, and both make improvements over the Protect America Act, the reasonable changes to Title I made in the Judiciary Committee ensure that the FISA Court will be able to conduct much-needed oversight of the implementation of these broad new surveillance authorities, and help to better protect the rights of innocent Americans. While we appreciate the hard work that the Intelligence Committee has done on this legislation, the process by which the Judiciary Committee considered, drafted, amended and reported out its bill was an open one, allowing outside experts and the public at large the opportunity to review and comment. With regard to legislation so directly connected to the constitutional rights of Americans, the results of this open process should be accorded great weight, especially in light of the Judiciary Committee’s unique role and expertise in protecting those rights.
We also believe that the Judiciary Committee bill is preferable because it does not provide immunity for telecom companies that allegedly cooperated with the administration’s warrantless wiretapping program. As this is such a controversial issue, we feel it would be appropriate to require the proponents of immunity to make their case on the floor.
Thank you for your consideration.
Sincerely,
Russell D. Feingold (D-WI)
Christopher J. Dodd (D-CT)
Barack Obama (D-IL)
Bernard Sanders (I-VT)
Robert Menendez (D-NJ)
Joseph R. Biden, Jr. (D-DE)
Sherrod Brown (D-OH)
Tom Harkin (D-IA)
Benjamin L. Cardin (D-MD)
Hillary Rodham Clinton (D-NY)
Daniel K. Akaka (D-HI)
Jim Webb (D-VA)
Edward M. Kennedy (D-MA)
Barbara Boxer (D-CA)
For your convenience, I have highlighted the presidential candidates who have objected.
Yep, he has an article in the Wall Street Journal claiming that it’s not his fault.
Felix Salmon of Portfolio.com pretty much eviscerates him on his lies.
That said, however, the main reason why the housing bust seems to be much worse in the US than elsewhere is surely those ARMs – which, as Greenspan concedes, were a function of low short-term interest rates. They allowed many people to buy houses they couldn’t afford, which in turn created a massive solvency crisis.
Greenspan’s reputation is trashed, as well it should be.
Yesterday, the Fed cut rates, and the market screamed in anguish, because it was not enough.
Well today, the Federal Reserve, and other nations’ central banks, came up with a scheme to deal with the credit freeze that is a result of what amounts to widespread insolvency in the financial markets (here, here, here, here), and here).
Basically, they are flooding the market with currency by lending out large sums of money on the basis of illiquid worthless securities.
Quotes from some of the articles cited above:
You will note that it allows the lending of up to 85 percent of the face value of AAA-rated collateralized mortgage obligations, if there is no observable market value.
…
So much for discouraging future risk taking.
…
The most prominent sign of that is that the Libor, a benchmark for many dollar-loans between banks especially in Europe, has shot up as much as 0.8 percentage points above the federal funds rate. The gap is normally less than 0.2 points. A high Libor rate raises banks’ costs of funds and thus the rates they charge borrowers. In addition, many U.S. homeowners have adjustable rate mortgages with linked to Libor.
…
“Clearly, the Fed is feeling its way in the dark here,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics.
(Emphasis mine)
Nouriel Roubini says that this is, “Too Little Too Late To Address the Fundamental Problems of the Financial System.”
I tend to agree with Dr. Roubini, but he’s a bear, as I have been, for the past few years.
Honestly, I think that what is going on here is the beginning of a major devaluation of US currency, so people will be paying back loans in devalued dollars.
Basically, it’s using inflation to get out of the problem. It was done during the Great Depression, and the amount ov exotic and dishonest leverage in 1929 is far less than now.
He does not get into the why this crunch has happened, short form is that you had regulators who allowed investment banks to use fairy dust and call it innovation, but its a very good picture regarding what forces are in motion now, and where they are likely to lead.
His OP/Ed is aptly titled It’s Not 1929, but It’s the Biggest Mess Since:
….
The financial giants that originated, packaged, rated and insured all those subprime mortgages were the same ones, run by the same executives, with the same fee incentives, using the same financial technologies and risk-management systems, who originated, packaged, rated and insured home-equity loans, commercial real estate loans, credit card loans and loans to finance corporate buyouts.
It is highly unlikely that these organizations did a significantly better job with those other lines of business than they did with mortgages. But the extent of those misjudgments will be revealed only once the economy has slowed, as it surely will.
At the center of this still-unfolding disaster is the Collateralized Debt Obligation, or CDO. CDOs are not new — they were at the center of a boom and bust in manufacturing housing loans in the early 2000s. But in the past several years, the CDO market has exploded, fueling not only a mortgage boom but expansion of all manner of credit. By one estimate, the face value of outstanding CDOs is nearly $2 trillion.
….
Those are scary numbers, but he goes on to explain why we are in trouble:
….
In the simple version, each investor owned a small percentage of the entire package and got the same yield as all the other investors. Then someone figured out that you could do a bigger business by selling them off in tranches corresponding to different levels of credit risk. Under this arrangement, if any of the mortgages in the pool defaulted, the riskiest tranche would absorb all the losses until its entire investment was wiped out, followed by the next riskiest and the next.
With these tranches, mortgage debt could be divided among classes of investors. The riskiest tranches — those with the lowest credit ratings — were sold to hedge funds and junk bond funds whose investors wanted the higher yields that went with the higher risk. The safest ones, offering lower yields and Treasury-like AAA ratings, were snapped up by risk-averse pension funds and money market funds. The least sought-after tranches were those in the middle, the “mezzanine” tranches, which offered middling yields for supposedly moderate risks.
Stick with me now, because this is where it gets interesting. For it is at this point that the banks got the bright idea of buying up a bunch of mezzanine tranches from various pools. Then, using fancy computer models, they convinced themselves and the rating agencies that by repeating the same “tranching” process, they could use these mezzanine-rated assets to create a new set of securities — some of them junk, some mezzanine, but the bulk of them with the AAA ratings more investors desired.
It was a marvelous piece of financial alchemy, one that made Wall Street banks and the ratings agencies billions of dollars in fees. And because so much borrowed money was used — in buying the original mortgages, buying the tranches for the CDOs and then in buying the tranches of the CDOs — the whole thing was so highly leveraged that the returns, at least on paper, were very attractive. No wonder they were snatched up by British hedge funds, German savings banks, oil-rich Norwegian villages and Florida pension funds.
What we know now, of course, is that the investment banks and ratings agencies underestimated the risk that mortgage defaults would rise so dramatically that even AAA investments could lose their value.
….
As part of the unwinding process, the rating agencies are in the midst of a massive and embarrassing downgrading process that will force many banks, pension funds and money market funds to sell their CDO holdings into a market so bereft of buyers that, in one recent transaction, a desperate E-Trade was able to get only 27 cents on the dollar for its highly rated portfolio.
Meanwhile, banks that are forced to hold on to their CDO assets will be required to set aside much more of their own capital as a financial cushion. That will sharply reduce the money they have available for making new loans.
And it doesn’t stop there. CDO losses now threaten the AAA ratings of a number of insurance companies that bought CDO paper or insured against CDO losses. And because some of those insurers also have provided insurance to investors in tax-exempt bonds, states and municipalities have decided to pull back on new bond offerings because investors have become skittish.
If all this sounds like a financial house of cards, that’s because it is. And it is about to come crashing down, with serious consequences not only for banks and investors but for the economy as a whole.
That’s not just my opinion. It’s why banks are husbanding their cash and why the outstanding stock of bank loans and commercial paper is shrinking dramatically.
…..
This may not be 1929. But it’s a good bet that it’s way more serious than the junk bond crisis of 1987, the S&L crisis of 1990 or the bursting of the tech bubble in 2001.
While this is interesting, I’m dubious that it will result in any changes, at least not without a larger Dem majority in Congress and a Dem in the White House.
Between veto threats, and a reflexively anti-regulation Republican party, we are not there yet, but it’s good that it is entering the dialog.
It looks like Congress is going after one of Abramhoff’s legacies, poor working conditions an immigration issues in the Marianas.
It looks like some real worker and immigration protections are going to be implemented.
One of the ways that having a Democratic congress makes a difference.
I get the sense that the serious of complex investmentsts that Atrios calls “The Big Sh@$pile” were aggressively dumped off on a lot of states and municipalities over the past few years, because it now appears that
Montana’s Short Term Investment Pool, another money market like investment. And again, there appears to be a run on this.
We’ve got the same thing going on in King County, WA (Seattle).
But here is the scary quote:
Montana has completed a thorough review of its subprime exposures. Less than 1% of the underlying assets of its SIVs are subprime, South said, with the rest being bank debt and prime and commercial mortgages.
“It’s not a subprime issue anymore, it’s an asset-backed commercial paper issue now,” South added.
Translated into English, this means that the entire us investment system is now unsafe.
This law basically amounted to exile from the state, as it prohibited “registered sex offenders from living within 1,000 feet of schools, churches and other areas where children congregate”, and the Georgia supreme court has ruled it unconstitutional.
There were a number of problems with the law:
Honestly, it’s not like pedophiles can’t drive. I understand that the case that brought this on was a sex offender that was living near a day care center and re-offended, but this should be handled through the corrections process, such as longer sentences, and probation conditions.
Brad Miller (D-NC) and Linda Sanchez (D-Ca) have proposed legislation in the house, and there appears to be a push for this in the Senate.
It is anticipated that this could reduce foreclosures by 2 million.
One of the wierd things that I discovered in reading this is that, Judges already have this power for “Vacation homes, farms and investment properties.”
But not for principal homes…Weird.
If this passes, it may save the mortgage industry from itself.
Private equity firms are being pressed to give out more information about how they operate.
If this gets written into statute or regulation, it would be a good thing.
The New York Times is reporting that 43 Contractors have been taken into custody. It appears that the contract that they had was for resupply, and that these guards covered the resupply contract, and were not a part of any American security contract.
At this point, none of the detained are believed to be American.
I think that this is a shot across the bow of all the contractors by the Iraqi army.
Something that I hadn’t thought about before, but when a property is foreclosed on, renters are frequently evicted. As a result, renter protection was included in the House mortgage reform act, and Chris Dodd has proposed the same in the Senate.
Generally the protections come in the form of requiring purchasers continue leases of for 6 months following foreclosure.
Considering that about more than 10% of all foreclosures are non-owner occupied, and as the Times notes, “This figure probably underestimates the problem, according to the association, because buildings receive tax benefits if they are registered as owner-occupied”, we could see well in excess of 100,000 tenant evictions.
Fannie Mae has changed the way it computes credit loss ratio, a measure of the quality of its loans.
Bigger numbers are bad, and under the new scheme, the number is 4 basis points, but under the old scheme, it would have been 7½ basis points.
I believe that Fannie is the 2nd biggest issuer of debt in the world, and the fact that the quality of their loan portfolio is almost twice as bad as their numbers suggest is scary.