Another Flawless Microsoft Launch

Since I'm in Microsoft Hell, once again today, with p-dog's computer, there is this:

IE8 was released last Thursday and by Sunday, it had managed to garner a 2.59 percent market share that has since then fell steadily to reach 1.86 percent by Monday. Most dedicated IE users seem to have downgraded to the now reliable and stable IE7. -Techtree

Apparently, there is a known exploit, that is frustrated with VISTA, but not XP ... (Computer World).

How many hours of your life have you 'donated' to Microsoft?

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Second Laugh of the Day

Following a wise, staunchly followed, and very useful custom, the FDIC have put up the plan for public comment.

What's funny about that?

Send your comments to "angry" at fdic.gov.

[okay, the person's name is 'angray', but still...]

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Picture of the Day

Bank Executives assure President Obama that they own more Senators than he does ...


David Mills/ New York Times - Article

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Banker Joke of the Day

I was going to take Felix to task for exaggeration in his op-ed, but then he comes up with this cheeky chart:



My favs? Rollover minutes and single-ride metrocards...

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The Party Unable to Persuade...

The Dems look like a party that are unable to actually *move* opinion on an issue.

I cannot think of an issue in which the party has actually swayed opinion, as part of an ongoing debate or dialog.

Maybe I'm just annoyed at the way the GOP was able to move opinion on immigration, so easily (low, but easily).

Maybe, I just *feel* like some of the Senators are just too used to playing defense, that they don't seem to be taking up the heavy - very heavy - burdens of leadership.

Maybe, I'm just being too harsh.

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More Troops

... arrive in Afghanistan 'too late'. [Although, anyone remember Rumsfeld's "five years" website - you'd think that 'victory' was just around the corner and the Taliban were on their 'last gasp' on his calculus.]

Bush's stop gap for inadequate boots-on-the-ground, the air war, has already cost dearly, very dearly, in the currency of counter-insurgency, public opinion.

The amped-up "drone war" in Pakistan may well do the same.

The creeping scope of the Afghan "war" was not hard to foresee.

The hope to exit anytime soon is belied by the fact that the root-causes of the main problems are all fixed in timeframes that are *generational*.

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Small Government Lunatics

The nails in the coffins of "small government" - whatever the heck that ever meant, anyway, except as code for wealth redistribution upwards - look like they might get an able hammering.

Andrew Sullivan thinks that the GOP should come out for the "freedom" from government, by standing up for the 'right' of AIG workers to get paid ludicrous sums of money from a company that stands between us and ... even deeper recession:

It's appalling that 85 Republican congressmen never gave any thought to this consideration in their rush to pander to ignorant fools.

- AS, quoting Bruce Bartlett

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Shut down the OTS

Another reason emerges to shut down the OTS (not the OTC).

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GOP Brings the Crazy, Today

A ONE-NOTE BUDGET WITHOUT NUMBERS

On GOP calculus, "Liberals" are supposed to be embarrassed by Pelosi, Reid, et. al.

Today, the GOP caucus brought a budget without numbers.

Got that? A conceptual budget.

This is not unlike the GOP's war plans at the start of the decade:

Saddam is dangerous. Don't bother me with the details.

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Is there such a thing as an orderly shutdown

...of a financial institution?

Nouriel Roubini thinks so.

My sense is that, for financial companies, one is either in business or not. Is there a ... halfway?

A special insolvency regime would give the Treasury time to figure out whether the unsecured debt of the institutions should be worked out, and how it should be worked out; it also allows a more orderly workout of CDS and other credit derivatives issued by the financial institution.

Why an institution fails is, perhaps, more important than how.

In some circumstances, a failure, no matter how well managed, will cast contagious doubt wide and far, including associated speculative "attacks".

On the other hand, the FDIC regime for banks is really stunningly efficient, even when it ruffles feathers.

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Beefed-up Regulation is in the Air

SWEEPING UP THE WHOLE ROOM

...don't let's forget that one of the immediate problems is also to keep cleaning up where Bush-Paulson were ... too "tired":

The suit grabbed attention because it brought to light worrisome conflicts of interest in the servicing business. Loan servicers act as middlemen between the borrowers paying the loans and the investors who own the mortgages through mortgage securities. They are responsible for monitoring delinquencies and managing billions in monthly payments. With virtually no oversight, this industry has become the new hotbed of opaque mortgage-related dealings.

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GOP-Inspired Disinformation Channel

With so much technical stuff being talked about, including economics, health care economics, and more, FOX is ramping-up their department of disinformation.

Media Matters notes:

Neil Cavuto and Bret Baier falsely claimed that the Employee Free Choice Act would, in Baier's words, "do away with the secret ballot in votes to unionize."

Meanwhile, it may be time for the man-who-wouldn't-shut-up to get shut down.

That’s why we need O’Reilly’s corporate advertisers to tell him to shut down his “ambush journalism.”

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Getting ahead of science

For Andrew Sullivan, in case he misses it, intentionally.

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Democrats Didn't Get a Majority Afterall

A group of Senators are living in the past.

In 1993, the three of us, as much younger politicians, stood with great expectations as the last Democratic president was sworn in with big plans, a head of steam and a Democratic Congress ready to begin a new progressive era. In less than two years, it all came crashing down, with disillusioned moderate voters [???] handing the GOP broad congressional victories in 1994.

Two words: transformative politics.

These people don't know its meaning. They want to triangulate, especially on social issues; and they think that is going to bring box-office success.

They will just be re-living their past (but with more perks, this time?), not seizing the day for a new era.

Update from Bayh (via Chris Matthews): (a) health care / Max Bacus, will require 60 votes, if it is sough outside budget "reconciliation"; (b) cap-and-trade will require 60 votes and may fail inside the Democratic caucus, because it 'penalizes' the midwest and doesn't make job-sense outside a global agreement of emissions controls / trading.

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Condoleeza's Do-Nothing Mideast Policy

The long tail of the Bush's policy is coming to roost.

The idea that it was 'safe' to go with whatever Israel wants/wanted leaves the new team with ... almost no options.

The far away most likely thing that is going to happen under Netanyahu is war, of one form or another.

In the 90s, during his tenure, there was more building, faster than ever. He is at it again, but this time the religious right are ... "emboldened", by the long history with Bush-Condi and more besides.

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The Dismal Science

I hate this brand of "pragmatism".

It is important not to let debates over reform block measures for recovery. Desirable reforms are always worth pursuing—and especially worth pursuing in times when the bounds of the politically possible are widened and thus previously-unattainable but always desirable reforms come within reach. But the policies that aid recovery the most and the fastest are likely to be different from the policies that enact desirable longer-term reforms.

-Brad Delong, wimping out

F.D.R. conceptualized - was free to conceptualize - his whole program as a matter of resetting the national agenda.

I cannot see why we ought to believe that 'technocrats' should decide what 'reforms' are worth it and which are not, nor reduce 'saving the economy' to a technical exercise.

Afterall, the technocrats did not rescue us from the problems or successfully forestall them, even when in plain sight.

NO EITHER/OR - THEY ARE FULLY LINKED

Obama's agenda for healthcare cost containment and for energy efficiency and so forth should be done promptly. As I've argued below, there is no "better time", later on down the road.

Obama-Biden priorities can form an important part of a 'recovery script'.

Regulatory changes can spur innovation and demand re-investment by companies (whose inefficient assets are in danger of being 'stranded'), all of which are stimulative.

HUGE energy efficiencies are almost a must-have for a non-inflationary recovery (or reduced-inflation or for just plain heightened optimism about growth-with-low-inflation).

Fixing the schools infrastructure is a critical component of the 'next leg' of investment that could invite. (It's also a new 'Southern Strategy', to save the union, frankly.)

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Dear Ben

Who is going to write up and circulate a proposal?

Isn't the Federal Reserve, the chief regulator, a good place to start? Too political?

Somebody has to take up the ball. Afterall, you've been saying this for six months now, already. Why is there no sense of urgency?:

First, AIG highlights the urgent need for new resolution procedures for systemically important nonbank financial firms. If a federal agency had had such tools on September 16, they could have been used to put AIG into conservatorship or receivership, unwind it slowly, protect policyholders, and impose haircuts on creditors and counterparties as appropriate.

-Fed Chairmen, Ben Bernanke, AIG Testimony, March 2009.

Another thing left undone by Paulson & Co...

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Blodget, anyone?

I can't believe that Henry Blodget, one of the poster children of last decade's bust, is ... on the front pages.

I mean I don't wish him ill or anything, but ... gasp.

Anyway, just because you have to write something everyday, doesn't mean you have to write crap, like this:

The genius of Geithner's plan is that it pawns most of the cost (and most of the risk) off on the taxpayer without the taxpayer noticing.

How has Geithner induced private investors to bid off their gourds for assets? If Henry thinks it is the financing that is available, that's a mistake.

What's more, these potshots come cheap. WHO does Blodget think should bear the risk? The bond holders? How is the American banking system going to "work" with yields on long-term bank debt soaring to 500 bps over, or something, and nearly nothing available in the overnight market?

NO ZOMBIES, I'D PREFER A RECOVERY, IF POSSIBLE

Then, this:

But unless the taxpayer gets stuck with the entire spread, which is probably what Geithner is hoping, banks that sell assets will have to take massive writedowns. This will start the whole cycle of violence again.

The whole idea is to have the banks take their writedowns, sooner, rather than later, to the greatest extent possible. C'mon!

Can you believe that I just had to listen to some gray-haired gentlemen explaining to a CNBC audience that the banks were fine, we just had to let them earn their way out of their problems, over a long time?

I hear such things and I think poor Paul Krugman will be a hermit before the year is out. It's no wonder he didn' t post anything today. The world has gone mad.

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Muscling Wall Street - "Dear Mr. Liddy, Hire Me!"

Did everyone read this brattish crap?

What the hell are they doing to 'wind down' the business, after all this time, that requires 14 hour days?

I can tell you that there are teams running derivatives books, teams that are actively seeking *new* business, not just managing an existing book, that are not working 14 hour days.

AIG FP is doing ... business development? Whaaaa?

Anyway,

Mr. Liddy, if you want, hire me. I can value these securities, probably. If not, I know that there are some professors who would help, most likely, pro bono publico.

I won't work for a dollar, but you really won't have to pay me a quarter of a million, either. I can "watch the store" for a lot less than that.

I've never worked for AIG, so no one would 'blame me'. Please feel free to publish my name and whatever you choose to pay me on the front page of the New York Times.

Don't worry about winding down the business. When the time comes for me to leave, I will (it would be easier to do so, if we had national health care and truly portable retirement benefits, so I hope I can count on your votes for Obama, there....).

If you want to give me a bonus, my partner and I would really like to live in one of those nice homes in Wilton, even if it is a company-owned house. It's a sweet place and we love gay-friendly Connecticut. Plus, it'd be 5 minutes from work!

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Is it a matter of size?

ARE BANKS STILL SO SICK THEY NEED THE HOSPITAL, EVEN AFTER ALL WE'VE DONE SO FAR?

I read this, today. Paul Krugman's take is the most evocative (although I don't agree about a 'subsidy'). His contrast is perhaps too stark, without a gray area.

...if you think that there are some key (large) institutions who need some backfilling, mostly, then the Geithner plan is like an out-patient procedure, rather than an overblown, full hospitalization.

If you really think that the *current* bad asset problem is so bad that only nationalization can fix it, then, of course Paul is right, by definition: the Geithner plan is just whistling past the graveyard. Also, if you think that Geithner's put is already deep-in-the-money, then taxpayers get a better price (zero) on the same assets via nationalization / bankruptcy. At the same time, nationalization is fraught with problems, leaving equally compelling reasons to try a public-private partnership, if one can be fashioned, sufficient to the day.

Bottomline? They *must* get the banks to stop making losses, by this time next year. No small task, because the banking management has considerable discretion over when they realize their losses.

Also, they need to have a 'nationalization' plan or receivership plan ready. The military would plan for all contingencies, and so must they.

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On the other hand, if you think that there are some key (large) institutions who need some backfilling, mostly, then the Geithner plan is like an out-patient procedure, rather than an overblown, full hospitalization.

Let's start with the premise that the goal is to stop the cycle in which deterioration in the bank asset quality leads to deterioration in the real-economy which leads to further deterioration in bank asset quality.

Suppose, to halt the cycle, we put in place a plan that (1) temporarily stops deterioration in the real economy (fiscal stimulus) (2) facilitates the sensible clearing of what bad assets there are (mostly stopping 'corrosive' foreclosure irrationality) and (3) increases bank asset quality enough to allow 'the system' to function again, without props.

Add to the mix the observation that the government has few second chances. Resources, even for the USA, are limited.

Can the recent Geithner plan work (for number three)? (We already know their lack of boldness with #1 and #2).

Suppose that Citibank and Bank of America have $300 billion in bad commercial real-estate. They won't mark this down, rapidly. Instead, it will bleed into their profitability over a long time. Possibly, they will have more giant, negative quarters. This will be bad for the economy, overall. Slim chance there will be a robust recovery, without the banks.

Suppose, under the Geithner plan, they could get that sludge off their balance sheet, into risk-bearing hands, sufficiently capitalized and long-term, that a serious worry about the negative cycle of deteriorating asset quality and real economic activity are greatly mitigated.

Let's say that both organizations are willing to sell half. Let's say the government's stress test says they should sell three quarters. In back-and-forth, they decide to sell two-thirds, or $200.

They are going to take a $30 billion dollar hit, to do so. This is a short-term negative, but very much a long-term positive. The 'transition' is to be accelerated, pushed. That's the point of policy.

There isn't $200 billion in private capital to scare up, for distressed assets. But there might well be $35 billion. Therefore, the Geither financing plan gets the job done. It provides a mechanism for banks to manage large chunks of risk, to get them off the balance sheet, to add transparency, to build confidence ... confidence in their debt and equity, once again.

Yes, it requires a put from the Government, but so what? If the put ends up deep in the money, taxpayers would own the assets anyway. Would they own them at a better price? Probably, yes.

So, it does come down to how big you think the problem is (and will become, over the near term). If the problem is large-enough, then a significant source of the wealth that 'fixes' it has to come from bond-holders in individual institutions, not just taxpayers (not that they are wholly separate). Otherwise, Geithner is on track.

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GOP silence on AIG bonus fiasco

Contracts with auto unions are negotiable.

Bonus contracts? Sacrosanct.

hummm....picture even includes a backroom, Senate deal.

Team-Obama have just been way out of whack on this.

Still are.

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Gauging Reaction to Treasury's Bad Asset Plan

The U.S. government is basically using the taxpayer to guarantee against downside risk on the value of these assets, while giving the upside, or potential profits, to private investors, he said. - Stiglitz

I think this is overblown. The taxpayer's have a fancy equity stake, so they have upside, too. [Of course, they could have just taken old-fashioned equity stakes, which would have broadened the taxpayer claim on assets, but ...]

What's more, if the FDIC fees are meaningful, the taxpayer's total investment is less than what will be put up by private investors, who will pay those fees. Therefore, if there is an upturn, the taxpayers will get a better return on total investment than private investors. It is true, they will have larger losses, but that is the price of the plan.

First pass, it seems that the key assumption of the Geithner plan is that it is large enough to work, that the bad-asset problem, future and current, is manageable, using this form of redress, even if economic assumptions all turn out the worst.

It could be that assumption is wrong. If the severity of the situation is large enough, then private-public wealth transfers will be required, and perhaps even some private-private transfers (like bankruptcy/re-organization or pre-packaged bankruptcy).

The good news is that good news is self-reinforcing, so, if the plan gets off to a good start, it could build *some* of its own momentum.

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Thoughts on Treasury's New Plan

Geithner's new plan could work.

It's not fundamentally flawed. Krugman's objections about distortions to price discovery with non-recourse loans can be managed, most likely. Whether a 'better deal' for taxpayers is possible through bankruptcy or nationalization - that's hard to weigh. Certainly a better price on the assets is available via receivership, but that's not the whole story, for that course of action.

The better question is what if the plan does not work.

If they do not get sufficient private capital, what will they do? How deep is the problem, currently, we don't know - so we cannot say if they will be able to force the changes required, using 'stress tests', in the period of time during which they *must* do so, before fiscal stimulus peters out.

I'd say they have to do it all within the next six months, or at least have a very large chunk done by this year's end. Can they make that kind of deadline? If not, then what?

Nevertheless, I have to say, though, that the amount of money that we are throwing at the banks is incredible. The tax-rebate from last year, a large chunk of it used to pay off debts. The tax-cuts of this year, a large chunk of it likely to be used to pay off debts. Paulson's give-away. The 'consolidation' of WAMU and Wachovia and 100+ more others to follow. Geithner's acceptance of participation in swap of preferred for common equity. Rate jack-ups on revolving consumer loans. Second tranches to BOA/Merrill and Citigroup. Buy-downs on mortgage rates. This list astounds.

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Stewart-Cramer Smackdown

Worth watching. Jon Stewart can do a good a pretty good i-view.

The thing that twits me most with CNBC is their _overwhelming_ political bias (and it is bias, not slant).

Are they a mindless 'business appreciation' channel, like the Murdoch Street Journal?

Well, even if you share Stewart's sense that business journalism should be more like honest, investigative reporting (or even show a modicum of intellectual honesty...), it's hard to hold a candle for that, too much, any more than you can expect the White House Press corps to 'get aggressive' to get the story.

Companies manage their image, deftly using carrots and sticks, and they aren't going to sit down with reporters who rake them over the coals. Just like Helen got 'locked out' of questioning Bush, ...

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Uh-oh, Cramer lays another egg, this week

I gave Jim fair warning, but you know Harvard guys ("you can tell a Harvard guy, but you can't tell him much").

Have a look at his uproariously-named 'Obama proof' Monday picks, Baxter (BAX) and Beckton-Dickenson (BDX).

Baxter is tanking today, in an up market. There will be a recall of one of its products ...

And, of course, none of these 'defensive stocks' is participating in the full upswing underway this week.

His "explanation", when caught having recommended Bear, Stearns, on The Today Show was a bit incongruous. Well into the downturn, he told everyone to sell everything, that's true. Yet, he continues to recommend stocks to buy!

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Aretha's Chapeau

...still going strong.

From today's Financial Times (pic-link):



"She appeared at his inauguration in a magnificent hat. She even sang a song. But who would have guessed that the Queen of Soul would be such an acute guide to the new US president’s foreign policy?"

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"What if we are wrong?" "What if we are wrong?" "What if we are wrong?"

DECISION MAKING UNDER UNCERTAINTY - LESSON A

We have good news, so far, about Obama's decision-making process. On one account, at least, he forces people to speak-up during meetings, in contrast to his immediate predecessor. God knows, he's surrounded himself with enough opposing opinions, so 'imagination bias' doesn't appear to be an issue.

The tealeaves suggest that he's not asking, "What if you are wrong, guys?", enough. That is one very important question, when time is at a premium but resources are not scarce (yet).

This is my read of the tea leaves, based on today's NYT story about the Treasury. In a crisis, you prep three and hope to get one. Same for Krugman's ear-to-the-ground analysis of why the housing/banking proposals may have lacked detail, initially: in a crisis, you prep three or four viable alternatives, you don't flesh out just one (so long as you have the staff to do it), because time is short and you cannot afford to go back to square one, if you decide to 'switch course'.

Of course, Paulson & Co., in true Bush fashion, and no 'plan b', even one enumerated, especially for housing.

A NATIONAL SECURITY ADVISER EQUIVALENT

Apart from a vision, and yes, even recognition, of what to do "comprehensively", there is one other area for attention.

...team Obama do not seem to have grasped that the old methods of organization are not sufficient...

Whisper reports are that there is lack of coordination among the economic advisers, both inside and outside. Readers here will know that I've already suggested that team Obama do not seem to have grasped that the old methods of organization are not sufficient. As I put it, they need something akin to the real Situation Room, but for the U.S. economy. They don't need fluffy advisory panels, with amorphous responsibility lines and no way to marshal huge amounts of data and situational analysis in a short period of time, as has the military.

The National Security Adviser, a cabinet-level role, is supposed to handle the inter-agency coordination, to get Chiefs, State, and CIA/DNI from pulling apart.

They may need (or may have needed?) something like that for economics.

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Scripting Economic Recovery

HASS OBAMA'S ECONOMIC TEAM THOUGHT ABOUT THE WHOLE OF THE RACE TRACK?

Warren Buffet said some really good things, this morning, but the rightwing press may distort them (especially to try to stir up trouble and doubt, given their failure wishes).

Buffet is wrong about not tackling "controversy", I think, except maybe things that will divert too much time from the Administration. Obama wasn't just elected to fix the economy. What's more, if Obama-Biden spin out, 'on the economy' or otherwise, the nation will be delivered into the hands of Rush Limbaugh, right now. Just think about that. ...

'Take care of the "social stuff" later' is not going to work.

If one waits, the next calling card will be that the new programs are in danger of choking off the nascent recovery. The time is now, to the extent they have the preparation and capacity to mount the kind of fight needed to get their idea into law.

MASTER OF EVENTS

Summers, Geithner, and Orzag have the outline of a fairly good script (Christina Romer I've only heard talk publicly once - does she keep a media schedule?). They all just need to fill it out, especially the banking and housing parts - and in other important ways, and take it on the road.

Investing in efficiencies during slack times is a good idea, both in healthcare and energy. When scripting a recovery trajectory, such are the kind of thing that investors will relish.

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Cramer Misses Stem Cell Stock Rally

While he was busy whining, he appears to have missed the stem cell bounce, another "bull-market somewhere". This is the kinda bounce that makes him look like a hero to his spoon-fed listeners...

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Are Democrats Getting "Credit" For Fiscal Fixes?

THE G.O.P. WINDBAG - ARE THEY EVEN A POLITICAL PARTY, OR JUST A SLOGAN AND A RADIO SHOW?

Via Oberman, powerful stuff:

IS GOP GRANDSTANDING 'LOYAL OPPOSITION'?

DEMS RESTORED PAY-GO, INCLUDED IRAQ/AFGHANISTAN ON-BUDGET, AND DID ZERO "HIDDEN" EARMARKS ON $800B STIMULUS BILL

Now, of course, we know how seriously the GOP grandstanded - yes, grandstanded - on the balanced budget amendment during Clinton years, soaking up valuable time, lots of valuable time, from the business of government. Clinton, of course, on the advice of Rubin, raised taxes, as had Ronald Reagan early in his term, and went for "pay-go".

Naturally, once the GOP was given responsibility - yes, responsibility, they went right ahead and ditched pay-go in Bush's first year and ran up yet another of the largest cumulative deficits in the history of the Republic, offering off-budget "supplementals" that got littered with all things nice for the GOP Senators and Congressman (and that's before the Abramoff wing of the party is considered).

Today, this week, right now, the GOP are grandstanding - yes, grandstanding - on "earmarks" and "pork" and "spending right". Just listen to Lindsey Graham, if you don't believe me, who appears to have a short-short memory. It was the Democratic Congress that restored pay-go, not after Obama, but after taking back the House in 2006. If I'm not mistaken, we wouldn't even have the lists of earmarks that we have now, if the Democratic Congress hadn't pushed through more daylight (not enough, but still).

Even the margin of defeat for proposals dealing with removing earmarks is getting narrower under the Democrats. Here's the last time, that I can recall, at least, that the Senate voted on ...well, all the Republicans could propose was to cap earmarks, not remove them:

Club for Growth Knocks McConnell for Earmark Vote
by Walter Alarkon, April, 2008

The earmark-loathing Club for Growth has chastised Senate Minority Leader Mitch McConnell on Wednesday for opposing an amendment seeking to strike new earmarks from the 2005 highway bill. Sen. Jim DeMint (R-S.C.) had offered the which also called for cap on earmarks already in the bill.
...
The Wednesday vote on the DeMint's amendment failed 78-18, with bipartisan support.

A NEW ERA OF RESPONSIBILITY - IS THE CONGRESS DOING ITS PART?

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Apparently, outgoing and indicted Republicans can get their earmarking done! You can't make this stuff up, no matter how 'worthy' these projects (USA Today):

The short-term budget, which Congress failed to complete last year and is now headed to a Senate vote this week, includes seven projects worth $1.2 million for Rick Renzi, a former Republican congressman indicted in 2008 on charges stemming from a land deal in Arizona. It also includes $1 million in projects requested by former senator Larry Craig, R-Idaho, arrested in 2007 as part of a sex sting.

Apparently, the abuses of the past are not burned into the collective conscience, yet (Johnathan Turley writes):

As the former Republican chairman of the House Transportation and Infrastructure Committee, Young was the guy to see, a Member who had long filled his campaign coffers with money from business interests seeking earmarks. With his equally controversial colleague, Sen. Ted Stevens, he pushed an appropriation for $223 million to build the infamous “Bridge to Nowhere” in Alaska.

At least in the short-term, a key concern is how does one make 'local appropriation' accountable and transparent and ... formulaic.

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Flush You Ken Starr

I know it's impolitic, but it's what in my heart right now.

I've scanned over some of the reports of Pepperdine's cold-hearted Pharaoh. I'm not particularly optimistic about a court ruling on the CA "amendment".

See, it is one of those times, for me, when you reflect on just how precious time is and how little there is to waste on the recrudescent dead-enders and resulting put-downs of an arguably frustrated careerist like Starr.

I know he is just the empty-hearted vassal for a broader ignorance; but he is so smug, wielding his bitter, scrape-the-barrel formalisms, n'est pas?

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Muscling back Wall Street

Jim, Jim, Jim. Apparently, how to play well with others isn't in the cards.

Cramer could be focused on recommending stocks that will do well during the re-investment (and growth) that will be forced by the changes coming under Obama. Instead of 'finding the bull market', he's spinning his head off.

Anyway, TheStreet.com was conceived, no doubt, as a way for him to get his research paid for by unsuspecting subscribers. One wonders if "his" analysts bring him their warnings and ideas, long before "Cramerica" gets to hear them. God knows, his show disclaims that all ideas may have been disseminated elsewhere first - how do they get away with that, anyway?

Meanwhile, the blogosophere is catching up to him, because of the ranting going on with him and the bumper-car business channel he belongs to. Remember how he couldn't stand to be on with Larry Kudlow because it was too political? Now look at him.

Here goes, what Cramer really thinks about "Cramerica":

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To fully appreciate the Jim Cramer angle a little journey to his past is in order. This is from Cramer himself:

"We had it down to a science in 1992: my wife would pick stocks that technically looked ready to go up, or she would keep track of merchandise to see what was down to tag ends. She would then generate a list of stocks that could move quickly on good news. Jeff would then go to work calling the companies to try to find anything good we could say about them. I would call the analysts to see I they were hearing anything. When we found a stock that looked ready technically to break out, or where the supply had been mopped up, and Jeff found something positive at the company, and I knew the analyst community didn’t know anything positive, we would load up with call options and common stock and then give the good news to our favorite analysts who liked the stock so they could go do their promotion. That would get the buzz going and we would then be able to liquidate the position into the buzz for a handsome profit." (Confessions of a Street Addict, page 61).

This is Cramer's big secret. He figured out early that the way to make money betting on stocks was to rig the game - control the news and you control a stock's value. Now he has his own TV show.

Nicholas Maier worked for Cramer until 1998. He quit and wrote a book about it called, Trading with the Enemy: Seduction and Betrayal on Jim Cramer’s Wall Street (New York: HarperCollins, 2002). Here's an excerpt showing that Cramer was into naked short selling early on:

Jim turns toward his head trader. "Mark, sell ten thousand Bristol Myers."

"We never bought any Bristol Myers," Mark replies.

"We own the calls," Jim corrects Mark impatiently, aggravated by the delay.

"So sell it short?" Mark asks for clarification. Mark knows that according to the SEC rule book, selling stock you don’t already own (even if you do own the call options) must be marked and executed as a short sale.

"You are confusing me with someone who gives a shit. Just sell it! I said hit the fucking bid!" adds Jim, not interested in wasting time over petty semantics. Skirting the "plus tick" rule in this case won’t necessarily make us a lot of extra money, but in Jim’s eyes, the rule is still an unenforceable annoyance. "And don’t ever ask me that again!" (Trading With the Enemy, pages 70-71).

The story of Jim Cramer cannot be fully presented here. But here's an excerpt ...

Does one need more?

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Energy, Pushing and Shoving

Go Joe (and John)! I second this motion!

The industry always feels like it's unfairly burdened. Always. If the energy industry put as much of its time and money into lowering emissions as the energy industry puts into lobbying and lawsuits, we might actually make some progress.

Ohio Coal
Live Earth: The Weeks After, The 50 Dirtiest Power Plants, Part II
Live Earth: The Weeks After, The 50 Dirtiest Power Plants

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Squawking by CNBC

They call it the "Squawk Box", but they might as well have called it the Kiernan-Cabrerra Political Hour, this morning.

Apparently, we are supposed to judge how good a job they are doing, how good their journalism is, by (a), whether they can be blamed for moving markets, and (b), maybe, by whether Charlie Gasparino is breaking news (with wind?) this week.

Somehow, I think balanced minds will be able to use the same 'ol standards that have always defined good news reporting (and even good opinion making...).

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How Callous is Jim Cramer?

On last nights show (3/5), I heard this line:

"...even if it turns out to be a garden variety depression."

Just stop for a second and think how ingrained callous and comfortably above-it-all you have to be to dismiss a giant, labor-shedding event like a depression as "garden variety".

(Stop the Obama distortions, Jim, and we'll leave you alone. Your hedge fund buddies had it good for a long time, now they have to pay their part, too. They will still be taxed less than the big firms, so the hedge industry is not 'at risk', right?)

As for stock-picking, we had a long discussion of multi-brand hell, Coors-Molson-Miller-X45948305, that ended with no clear recommendation from Jim ...

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Joy Global

Jim Cramer wants people to invest in fossil fuel delivery systems?

It might be an interesting trade. Who knows?

Or, it might just be Jim helping his hedge fund buddies dump their positions onto a willingly-led 'Cramerica'.

[Stop the Obam-distortion hate, Jim ... and we'll let you be.]

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Stocks Rally

HOW WRONG WAS CNBC YESTERDAY?

Does this mean that we can look forward to Chris Matthews NOT treating Jim Cramer like he was ... more than a really good stock picker?

I gather that Jim's hedge-fund buddies don't like the carried-interest provision, that will crimp their style. We get it.

Maybe, just maybe, they can lay off the over-the-top 'socialism' lip-biting and grand pronouncements about a Federal Budget that actually tries to solve some long-term problems.

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Testimony Redux

Peter Orzag is turning out to be a god-send to Obama-Biden, deflecting the worst that the GOP spin machine throws at him with alacrity.

Ben Bernanke ... I don't know what to think. I don't like these dodges that there continues to be no framework to deal with 'too big too fail'. As the chief regulator, should the FED take part in suggesting an approach? Is that too political for the FED? Should Volker do it? Should the loyal opposition seize the day (especially that Senator from South Carolina who inquires a lot, but never seems to have any legislation himself)?

Tim "Timmeh" Geithner ... He's getting closer to articulating, concisely, a vision. He still needs to sharpen it up and take it on the road, when the time is right. A visit to those who do public speaking skills would still be a nice thing for him to do....

Separately, I found out yesterday that Marty Feldstein was on the board of AIG's Financial Products group ... gulp!

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Tracking AIG

I don't read TheStreet.com; but for those who aren't used to thinking about the big numbers floating around, those having trouble sizing the scope of what is going on and are not yet inured to it all, here is a piece of reporting that lays out some comparison figures.

An example:

No. 5: $3.6 billion in goodwill impairments. That's the same amount that: a.) Merrill Lynch paid in bonuses the night before Bank of America took control; and b.) the increase that veterans groups have called for in health care.

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Another Two-Term Republican President Destroys Evidence

LAURA AND GEORGE MacBETH

The electorate will never learn.

92 interrogation tapes destroyed.

Got that? We may have faced 92 'ticking bomb' scenarios (!!!), to borrow the Krauthammer-FOX apologist mis-direction. We'll never know. Except, of course, we DO know and that is why they had to be destroyed.

JOHN McCAIN'S WINGMAN (AND HIS "WIDE STANCE" DEFENSE)

Meanwhile, it is no wonder that John McCain, III, never had to request an earmark. His buddy Senator Kyl was doing it but calling it something else, like a "wide stance".

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Democrats Cut Costs - GOP is SOOO Jealous and REALLY scared

DEMOCRATS MOVE TO SEIZE GOP BRAND IMAGE

Obama's team are willing to take an axe to various programs and push through others. They've already got street-cred on earmarks, whether that waivers or not. They've pushed the lobbyists out of overwhelming influence, at least in the WH.

Despite Bush's calls to "rein in spending", the GOP never did.

That's the earmarking, wartime-endless-"supplemental" and do-nothing Congresses of the leave-a-deficit-and-problems-for-the-next-guy GOP.

David Brooks can't find anything to quibble with, so he goes "gestalt" - he's got general anxiety:

But the Obama budget is more than just the sum of its parts.

I mean, seriously, it's a budget. Just savor that (knee-jerk?) over-intellectualization, from Brooks.

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Joe "I love Jack Welch" Kiernan, Finally Melts Down

CNBC, 6:00 a.m., Tuesday, March 3, 2009.

Apparently, the proximate cause is some Rupert Street Journal editorial he's read and regurgitated, almost thoughtlessly.

The Banks aren't worth anything in America (at least, to people who owned their shares - their Executives, of course, ... well, that's another story).

We are finding that out in the 1Q09, in ways that Paulson & Co., under Bush, never leveled with the public about.

Apparently that is Team Obama's fault, on CNBC's calculus.

[Personally, I'm waiting for Michelle "Wound-Up" Carusso-Cabrera to meltdown, but I think I might be waiting a long time. Unless she hosts with Larry Kudlow - that's like a Scorpio-Scorpio on-air pairing.]

Update2: he's still regurgitating the same piece, Day+1, forcing it on Orzag
Update, below the fold:

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Update: More Wall Street nonsense.

Hey, I'm frustrated, as well, that the Obama team didn't have plans ready to go from day minus 90; but Art Cashin suggesting that there is a wiff of frustrated recovery in the air?

Look, we're coming up to an important home-sales number he didn't even mention, this morning, which could emphasize how glum it is and AIG just put up the largest corporate loss in history, casting a shadow over all asset quality, once again. Yet, it is Obama's fault?

This is why the calls for Team Obama to stay credible with "the markets" is a wasted effort.

Of course, they should pay attention, but they aren't going to get an honest ear, from the press or the participants. Just focus on getting the job done, as clearly and consistently and "masterfully" as possible, I say, and ignore the knee-jerk rightwing.

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Treasury: "some taxpayer money to fly coach"

DEBT HOLDERS SHOULD PARTICIPATE IN FURTHER 'LET'S MAKE A NEW, NEW, NEW DEAL'

I've been a big advocate of doing what is necessary, but these exchange programs that give taxpayers common equity, rather than first-class seating, are gaseous.

At least for Citi, they forced some changes to the corporate governance. Also, it is finally a frank recognition that the pay-out period imagined by Paulson and his Cash-n-Carry guy was a fantasy (as was the strike price).

For AIG, it looks like they cut the size of one of the supplemental facilities.

I would have preferred it (pun intended) if some of the Citi debt-holders had taken a haircut (i.e. pre-packaged bankruptcy-like stuff).

We cannot continue mightily to subsidize debt, during a debt-deflation.

Update: It's not just debt. It might be nice if the future Treasury invited Citi to do its exchange alongside fresh, private capital, common-stock investment.

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Obama Budget a Smash Hit

Still reviewing the proposal, but I have to say that this is such a smash hit, you can see why the GOP are so strident.

If Team Obama press the messages of this budget well, the GOP might be resigned to nigglers-for-life.

You can see why they are spinning so desperately.

More later.

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