I don't know about all the optimism, but the anecdotal evidence I know suggests that rate jacking continues at the card companies.
Another one today about Discover Card. Consumer choice? Pay the jacked rate or end your access to credit ...
Obama's notice of the problems is too little too late.
If anything, they should threaten to regulate FICO, numbers that have turned into a farce. There are stories floating around of people facing falling FICOs, who have actually had improving financial condition! Yikes.
Thursday, April 30, 2009
It's all positive?
Bankruptcy of the Auto Companies
THE DOMINOS START TO FALL - WHAT VALUES WERE VINDICATED, HERE?
I remain intensely skeptical about this move. I view it as a failure of negotiations and the government's foresight and ability to muster enough external leverage.
The Treasury will supply endless financing, while the bond-holders try to sweeten their deal in court. That's ridiculous, right?
...
It's problematic that debt-holders may own an incentive [a CDS] to put a company out of business ...
The Treasury will supply endless financing, while the bond-holders try to sweeten their deal in court. That's ridiculous, right?...
It's problematic that debt-holders may own an incentive [a CDS] to put a company out of business ...
Bond holders think they are going to get a claim that is senior to people's pensions and health care? In this environment? File that under 'what were they thinking'. On the other hand, anyone who thought that bankruptcy would favor the unions was wrong. What are they going to do in round-2, if they don't like the results of round-1 (bankruptcy)? Strike?
This is a disgusting slug-fest, and someone arguably should have sought bigger levers to force an out-of-court, pre-packaged deal.
The first sign that it couldn't be done, without Congress getting involved to get some more leverage, was that Rick Wagoner failed to make it happen. He's a persuasive and well informed guy, so ....
WHAT TO DO, WHAT TO DO
We are setting up a registry for credit-default swaps. Maybe, we ought to get one for the market failures, like this bankruptcy, that are a function of the OTC bond market.
Second, it should become clear what happens to default-swap protections, when it makes sense NOT to take a company into bankruptcy. It's problematic that debt-holders may own an incentive to put a company out of business, especially one that has enormous economic knock-on effects.
Over the Cliff by Ms. California
A lady of modesty (*cough*) will campaign against the outrage of two people getting married. With this, does the proverbial Orange Growers Association have this decade's "contribution"?
The Unbearable Lightness of Being "conservative"
We cannot simply be the party of no; we need to provide a compelling counterpoint to the Obama administration’s tax-spend-and-borrow policies.
-Christie Todd, Bush's EPA Put-Up, Author, It's My Party
-Christie Todd, Bush's EPA Put-Up, Author, It's My Party
HOW 'NO NEW TAXES' CONTINUES TO DESTROY THE COUNTRY
I have a deal to make with the knee-jerk Conservatives.
You first, Ms. Whitman.In other words, you first, Ms. Whitman.
(Oh, please, make it a $3/gallon gas tax. I dare you. In fact, please popularize the notion that there are Conservative groups out there proposing new taxes and collecting members.)
Wednesday, April 29, 2009
One Clubby Senate Seat Switched For Another Clubby Senate Seat
yawn...Obama will give Arlen Specter a reach-around.
Personally, I blame Larry Kudlow and the Club for "Growth" ...
Resting Prosecution Too Early
Douthat comma Ross expresses perhaps an all too common view, that abuse of power, ex post, is okay because it is a 'learning experience':
Not so that we can prosecute – unless the Democratic Party has taken leave of its senses – but so that we can learn, and pass judgment, and struggle toward consensus.
-RD, in NYT
-RD, in NYT
We'd prosecute someone who stole a loaf of bread or disturbed the peace and fine someone who was DUI.
The "legal process" is one from which we can "learn, pass judgment, and struggle toward consensus."
Perhaps, what is required is leniency in the penalty phase. I always thought that stripping these "Patriots" of their citizenship was one apt penalty. If they didn't represent a security risk, that seems to have a special elegance to it, if you think about it. Banishment is a little old-fashioned, but ...
Tuesday, April 28, 2009
Are you now or have you ever been a member of the Federalist Society?
Is it time for a new un-American activities Committee? I know, it sounds preposterous, but see this.
As the sides take form on coming interrogation investigations, the Federalist Society appears to be stepping into the vacuum to defend former Bush administration officials.
The lawyers' group, which was a pipeline for judges in the Bush White House, is hosting a call this morning with National Review writer Andy McCarthy, a former federal prosecutor, lawyer David Rivkin, and Chapman University Law School Dean John Eastman. -Ben Smith, via ASullivan
Now, on the far-right's own logic, we are "at war". We have elevated to head of our forces involved in this war a General (Petreaus) who believes that the way to win does not include waterboarding people, etc.
So, tell me, aren't these people broadly subverting a wartime effort?
Seriously, as a matter of feeding the Right its own medicine. This conclusion is not 'leftwing logic', whatsoever, correct?
Shouldn't we have a list of The Society, at a minimum?
"Pontiac, The Mark of Great Cars"
Another milestone in the long decline of American manufacturing (and the jingle that went with it).
Pontiac - look for it only in the history books and those who remember their Firebirds and Thunderbirds, etc.
Meanwhile, the prospect of a GM bankruptcy is frightening, mainly because I see the law of unintended consequences or unforeseen consequences, for those would would gamble on a courtroom.
Should the Congress have done more to help the government deal with this situation? Should we (the public) know who the GM bondholders are?
Saturday, April 25, 2009
Catholic Conservatism
Thought for the day:
Being a Catholic Conservative is standing athwart history and saying yes to torture.
Update: FOX's Supreme Mullah figurehead, Bill "Trust-no-one-but-me" O'Reilly. is totally on board with a torture-CIA.
Update: Ed Whelan says he's not the man.
We Are The Great White Whale!
FIRST, LEVEL COUNTER-ACCUSATIONS AND ADMIT NOTHING
When you open the papers and find the GOP"s former director of the CIA making a shocking political statement in a piece decrying political statements, you know it is going to be a hot day in Washington:
The days of fortress America are gone. We are the world's superpower. We can sit on our hands or we can become engaged to improve global human conditions. The bottom line is that we cannot succeed unless we have good intelligence.
AS already has this megalomania covered, in ''We're an empire now, and when we act, we create our own reality." Nothing like a prolonged, unfunded, violent nation-building effort to get the GOP's CIA riled up, I guess ...?
The interpretive lines here are not left-right. They are between the right and the far-right. And Cheney made a decision that no one was going to "do more" than him. **
HOW THE CONSPIRACY-TO-TORTURE MANIPULATED THE CONGRESS
If you are given a briefing, in which Committee council is excluded, with a summary that says in bold, 'Everything is totally, TOTALLY legal' and this is needed as much as apple pie, what would you do? Do you think Nancy Pelosi has the history of torture techniques at her fingertips?
Here is what I want to know.
Where are the dissenting sections of this briefing?
To rely on secrecy to cover up screw-ups, as Goss appears to do, is such a horrible ruse. Really, we ought to tear down the CIA, to the last stone, and rebuild it.
In a typical intelligence service estimate (and hopefully briefing), one sees (or seeks) risk assessments, not policy pronouncements. One ought to get and be given a sense for where the intelligence could be wrong, what opinions might be shaky and which are not.So, who briefed Congress on the misgivings of all those who thought this program was just not the Queen's purse? Who alerted Congressmen that there might be risks to this program and enumerated what they would be? Or, was this presented as another of Tenet's "slam dunks"?
To rely on secrecy to cover up screw-ups and worse, as Goss appears to do, is such a horrible ruse. Really, we ought to tear down the CIA, to the last stone, and rebuild it. Secrecy does not exist for those purposes, nor should it.
**Accordingly, the political struggle, if there is one, is not just to re-assert a rule-of-law, but to finally take decisive steps to rid ourselves of the poor conceptualizations from the horrid Bush-era that continue to put our nation at risk.
For an example of what we need, see how Zakaria did so admirably in making this transition in the wake of the bombing of the Taj, at first using the crutch-language of the Bush years, then quickly getting past it!
President Obama Keeps His Promises
"I'll tell you what you need to know, not what you want to hear." - Barack Obama
So far, at least on torture, Obama is fulfilling his promise.
Part of the problem is that the fix is still in, in Washington. If someone is looking for Democratic culpability, the largest heap is probably that they helped in the hush-hush.My 10,000 yards assessment is that the clubby Senate got sold by the perpetrators' political party that it would be "bad for the country" to air our dirty laundry. Whether 'We The People' or 'The Club' will have the final say on that, we'll see.
This view gets some backstop, possibly, from the fact that the House is willing to go get 'em, but the Senate wants another year to study and for the inquiry not to be independent.
Friday, April 24, 2009
The Difference Between an Intelligence Agency and Covert Everything
ASKING THE WRONG THINGS FROM THE CIA
"Someone always says, 'if only they just unleashed us, we could do this..."
Torture is cheap and easy. Necessity is the mother of invention. Denied the 'easy', the Agency is forced to pursue building better means.
Visit msnbc.com for Breaking News, World News, and News about the Economy
Two People Who Thought All Misgivings Were Political, Just Politics
Pretending that stuff everyone should reject is just a matter of policy differences ... Cheney is digging in, just as did Tom DeLay, who ultimately smiled into the camera (with that incorrigible quote for why he grinned so).
The Far-Right's New Battle Hymn: "From the Halls of Guantanamo to the Shores of Tripoli .."
ANOTHER REPUBLICAN ADMINISTRATION, ANOTHER MASSIVE CLEAN-UP REQUIRED
I cannot believe my ears this morning. Unless America tortures, we cannot be safe. Wow!
Of course, those stunningly superficial, like Morning Joe, never say "safe enough", because no government can assure us of 100% safety.
I say stunningly superficial, because the Senate report is clear on the matter: we are not safer because of torture.
After almost every post-war GOP Administration, we have to struggle to get our bearings back. Nixon was ready to use the bomb, he got so frustrated. His lies became too
Now we have a likely conspiracy to do torture (still to be proven) ...wrapped up by those who knew the Government levers very well, to look like it was a "policy shift" in the government.
numerous to count, many of them degenerating into open secrets (like Cambodia). Reagan, for all his laudatory pragmatism, dipped into the "black bin" while his second-in-command, George-41, watched and later had to issue pardons all around. George himself narrowly escaped a disastrous turkey-shoot during Gulf-I (thank God for Colin Powell).Now we have a likely conspiracy to do torture (still to be proven) as well as potential Presidential/Vice-Presidential mis-use of the torture room (to support a political agenda for war on Saddam), wrapped up by those who knew the Government levers very well, to look like it was a "policy shift" in the government.
A NEW CLUB FOR NO RIGHT TO LEGALIZED TORTURE
Dick Morris is out promising the FOX audience that "we will be hit again", if we do not torture.
The 'ticking bomb' scenario applies in less than 1% of cases, most likely. We ought not allow that rare exigency to give cover to those who would continue to write torture into the law.
Remember, this is the same political party that is offended if the Majesty of the Law is defaced by a redefinition of marriage to include gay affection. Somehow, it is "okay" if we legalize torture? That's not a redefinition of our values? That's not a far-right, 1%, hyper-politicization of security issues? What it means to be an American isn't redefined for all of us, by that? C'mon!
The vast majority of al qa'ida network data came from regular-way law enforcement.
The idea that we choose between torture and "being hit again" is so bizarre. For starters, ask the bomb crater formerly know as Zarqawi...
Thursday, April 23, 2009
Unforeseen Consequences
The good effort in Afghanistan has, seven years on, destabilized Pakistan (even more).
Pakistan may soon look like Lebanon.
Henri Levi warned us well, having called the place a "maelstrom" in his book, as best I recall. So much light went out when Bhutto was murdered...
Scary Backward, Scary Forward
Andrew Sullivan notes:
The more you think about the role torture played in constructing a false premise for a war where more torture would be unleashed, the more terrifying and dark this chapter in American history becomes.
Don't forget that one of the stated objectives of OIF, via Rumsfeld/Pentagon, was to collect information ...
Yet, while that is one scary part in looking backward, looking forward it is just as frightening, if you follow those who seek to implement torture via "RULE" (Regulate und Legalize). There appear to be those still asserting an Article 2 right to torture ...The other context where I think Andrew's observation counts is the standard by which we come to judge what Cheney, et. al., have used as 'policy formation'. If we really have cause to believe that policy formation is NOT a bona fide description of what was going on behind closed doors, are we allowed to step over claims of privilege, etc.
I know that Holder today is leaving himself an out, saying he doesn't want to criminalize policy differences, but ... that may yet prove to be too fine a line, right?
A Quick Recap of Bush's Legacy of Failed Legal Strategies
A quick review of how Bush-Cheney got off on the wrong foot, thinking that sooo much more was needed to bring al-qa'ida to heel, from a British perspective, is tucked in to the comments at JB's blogologalog.
Right now we are engaged in understanding just how charitable it is to sweep all the impact under the rubric 'misjudgments'.
On point and why it was so critical that Bush-Cheney convince everyone about "war" - they needed it to do what they wanted, not the other way around:
(i) The "global war on terror" is a juridical nonsense. There can be war (declared or not) against defined sovereign states. There can be "punitive expeditions" to subdue lawlessness in places where there is no effective government.
The question whether a particular war or punitive expedition is lawful or otherwise is non justiciable - it is a matter on which the judicial branch defers to the executive and the democratically elected parliament.
But the executive cannot cannot escape the consequences of otherwise unlawful conduct by declaring the existence of a conflict which is unknown to the law.
The question whether a particular war or punitive expedition is lawful or otherwise is non justiciable - it is a matter on which the judicial branch defers to the executive and the democratically elected parliament.
But the executive cannot cannot escape the consequences of otherwise unlawful conduct by declaring the existence of a conflict which is unknown to the law.
From "murad":
"In the immediate aftermath of 9-11 the Bush Administration made a series of fundamental misjudgments:
(i) it was decided that foreigners who come to attack the USA within its borders and those who stand behind them were more than criminals. In the belief that the perpetrators would have no rights whatsoever it as decided that the once the President declared war on them, he could do with them what he wished;
(ii) it was considered that the President's war powers would even sanction indefinite detention of US citizens arrested within the USA and they would not have access to the Courts;
(iii) it was considered that as long as prisoners were kept outside the territorial jurisdiction of the US Courts there would be no relief which the US Courts could grant to any detainee;
(iv) it was felt that international treaties did not matter and all that the President needed to do was to to declare that the protections of those treaties did not apply.
In very great measure, matters have been exacerbated by the way the Federal Courts have approached these questions. Issues which in our judicial system would have taken months to go from first instance ex parte application to final consideration by the House of Lords have in your courts taken years to be resolved - and due to the reluctance of the courts to grapple with the real issues - some quite fundamental issues remain unresolved to this day.
By way of example, the US Courts have thus far ducked the question whether it is legally possible to have a "global war on terror" against a non sovereign entity which is unlimited in time, or territorial extent, or as to the persons who can be deemed combatants.
That Orwellian concept enabled the Bush Administration to claim that it was entitled to detain individuals in various countries in breach of local law (for example in Italy, Bosnia, the Gambia and Pakistan) take them to its own facilities and subject them to torture or at least inhuman and degrading treatment.
Then there was the attempt to avoid intervention by the Courts by reliance on the "legal black hole" theory for Guantanamo Bay.
Then there was the determination that the protections of the common article 3 provisions of the Geneva Conventions did not apply to detainees.
I do not think those issues would have troubled the UK Courts at all:
(i) The "global war on terror" is a juridical nonsense. There can be war (declared or not) against defined sovereign states. There can be "punitive expeditions" to subdue lawlessness in places where there is no effective government.
The question whether a particular war or punitive expedition is lawful or otherwise is non justiciable - it is a matter on which the judicial branch defers to the executive and the democratically elected parliament.
But the executive cannot cannot escape the consequences of otherwise unlawful conduct by declaring the existence of a conflict which is unknown to the law.
(ii) For UK officials to detain a person apprehended outside the jurisdiction in circumstances which are in breach of the law of the place of detention or to conspire with officials of a foreign government officials to bring a person into the custody of the UK in breach of the law of the place of apprehension makes the detention of that person unlawful and to prosecute a person within the jurisdiction when his presence is the result of such unlawful acts overseas is an abuse of the process of the Court.
(iii) The "in personam" jurisdiction of the Court over the executive permits the court to grant the remedy of habeas corpus no matter where the detainee is held since the presence within the jurisdiction of a person with power to order release is sufficient - particularly where there is no other court able to exercise control;
(iv) The power of the Crown to dispense from the due application of law was claimed by the Stuart monarchs but was no longer part of our law from the time of the Glorious Revolution of 1688 (and, as an aside, I do not think it is a power of the President under the US Constitution), therefore any decision by a UK official to declare the Geneva Conventions inapplicable to detainees would have been amenable to judicial review and liable to be quashed - a declaration as to rights would have been made and, if that were not observed, a mandamus could go to compel the executive to comply.
I think we have to accept that there is quite a body of public opinion in the USA which believes that US citizens ought to be especially privileged before the law and that foreigners, particularly non-resident foreigners, have no rights.
There are also those who believe that the Executive ought to be given unlimited latitude to detain, and to subject non citizen detainees to inhuman and degrading treatment, if the consequence of those acts is to make citizens safer.
For example, a previous contributer asserts above:-
"I would estimate at least 10,000 dead (maybe much more) if we had simply sat back and allowed a Third, Fourth, and even Fifth Wave of attacks by now. Regardless, IF there's another 9/11 attack now -- after Obama has made such a public show about "NOT doing everything to defend the American people" -- then said people will know exactly who to blame. I hope you will be proud of yourself too."and another asserts:-
Coercive interrogation works for intelligence gathering because you can verify the facts given by the prisoner and thus discount the almost inevitable lies given intentionally or to get the coercion to stop. However, because coercive interrogation will inevitably result in false confessions, this is not a legitimate method to gain admissions which form the basis of a criminal conviction. Thus, upon the capture of a high value target, the President is almost always presented with the choice of using non-coercive interrogation to gain admissible criminal evidence at the cost to gaining timely and actionable intelligence that may save lives or using coercive interrogation to gain intelligence at the cost of gaining evidence for a criminal conviction."
Those are attitudes prevalent in Tudor England and Jesuits were certainly tortured in the reign of Elizabeth I. But I am not unhappy that our understanding has moved on since then.
There is no doubt that, faced with the existence of a terrorist threat, prior to 9-11, it was assumed that the continental United States was safe because sheltered behind its two shining seas. Steps were taken to improve security of US citizens overseas - for example by putting in place security at embassy buildings, the issue of travel advice and the like. But nobody thought of the ease with which a commercial airliner could be turned into a guided missile and there was no real security in that regard.
I remember flying on commercial flights in the USA and being horrified to see that pilots habitually flew their aircraft with the door between cockpit and passenger cabin open. That lesson has been learned. Measures to prevent the same thing happening again have been taken. So there ought to be no repetition of 9-11.
That is not to say that no other terrorist atrocity can happen - whether or domestic or foreign origin
But no government can ever assure 100% safety to all its citizens. Were it to be required to do so, the individual right to bear arms would certainly have to go by the board. It might also be necessary to install devices to prevent any motor vehicle ever being driven by a drunk driver. There is always a trade off between liberty and public safety.
Here in the UK, we are now probably the most surveilled society in the world. If I travel from my local Tube Station to go shopping in the West End, I know that I am under continuous camera surveillance from the moment I enter the Underground Station, all along Oxford Street and back to my return to my local station. When I get back, I may have to go through metal detectors to ensure that I am not carrying a knife - or worse.
These security measures do to some extent affront my sense of individual liberty, but I accept that they effectively deter many assaults and other criminal offences or if deterrence fails, enable the apprehension and conviction of the criminals- which at least gets them off the streets. The same has been true for those who attempted recent terrorist attacks. They were tracked on camera the length of the country.
Deterrence means I am still safe to go out largely without fear knowing that my police force can maintain law and order without a whole load of armed cowboys putting me at risk.
I know that I cannot lawfully purchase many kinds of fire-arms. I am pleased that is so. It makes it much less likely that I will be shot. I am told that in some US hospitals, the commonest complication of pregnancy is gunshot wounds and I remember that in Texas I saw quite a few signs on my hosts' house announcing that "solicitors will be shot" - I did not know until then that distaste for lawyers went quite that far.
I suggest that the US Federal Government can no more purport to assure its citizens 100% security against armed terrorists who are prepared to die in the course of their attacks than it can assure every parent that their children will not be shot by some armed lunatic at their local high school.
All risks can be minimised by various measures - but torture and inhuman and degrading treatment of captives actually increases the risk of attacks since it enables the recruitment and motivation of yet more individuals to the terrorist cause.
So to me that argument that "torture works" has no validity. Nor does the lesser argument for other forms of inhuman and degrading treatment. We have to demonstrate that our human rights values are not so fissiparous as that. Certainly we must obtain intelligence, and confessions, and take reasonable precautions. We must seek to prosecute and deter terrorists just as we do with any other serious criminal activity. But we don't cross certain lines.
Otherwise, we might as well have welcomed Herr Hitler with open arms and avoided all the bombing of London and our other cities. But the price we would have paid would have been far greater in the long run."
George Bush's Latest Legacy
"Successful Torture"
Thought for the day:
In the big picture, there is no such thing as "successful torture".
Whatever information we gained from Cheney-esque 'enhancements', we probably could have gotten in other ways ...
Tuesday, April 21, 2009
Bush-Cheney Could Have Avoided This
The Mukasey-Hayden op-ed has to be the Hadrian's Arch over the Bush-Cheney cul-de-sac on torture.
It's so chock-full of barely sharpened pencils that it is almost laughable. THIS is what suffices for policy formation, among our secret services? Be afraid.
What is particularly annoying, on first read, is the ample use of the passive voice and well-situated pronouns, to hide the actors:
Beyond that, anyone in government who seeks an opinion from the OLC as to the propriety of any action, or who authors an opinion for the OLC, is on notice henceforth ...
I doubt that "anyone in government" can walk into the office of OLC and commandeer an opinion, a binding, written, opinion, right?
And this:
Even with a seemingly binding opinion in hand, which future CIA operations personnel would take the risk?
I'd like to challenge this. Did anyone really put the "binding opinions" in the hands of operations personnel?
Trying to protect the reputation of the CIA, rather than rebuild it, is a waste of time, because it doesn't have a good one to protect.
Pretending that more secrecy or greater moral latitude is required for an excellent intelligence service looks more like a dodge, than a serious effort at finally getting a CIA worth the money spent on it.
This is all done to mask the fact that a few people at the Director level or above made decisions and passed them down, most likely.Pretending that more secrecy or greater moral latitude is required for an excellent intelligence service looks more like a dodge, than a serious effort at finally getting a CIA worth the money spent on it.
There are serious answers to most, if not all, of the concerns and questions laid out in this anxiety ridden plea. But, until the listeners are willing to hear, maybe, of what use is it?
Trying to protect the reputation of the CIA, rather than rebuild it, is a waste of time, because it doesn't have a good one to protect. Pretending that more secrecy or greater moral latitude is required for an excellent intelligence service looks more like a dodge, than a serious effort at finally getting a CIA worth the money spent on it.
Fresh off his WMD Successes, Cheney Demands Memos of Success
CHENEY, A STAGGERING WASTE OF TAXPAYER TIME AND MONEY
As long a Cheney wants the record of his limited vision in the open, I'd like to once again "ask" for the amount of money that was spent in Iraq physically searching for WMD to be declassified and tabulated.
I may be wrong, but the last estimates I saw were incomplete, because the final budgeted amount was classified by the Office of the Vice President.
In any case, the massive search of WMD ought to rank as the largest (most costly) search for nothing in history, perhaps short of the fountain of youth.
A SECOND REQUEST: HOW DATA-DRIVEN WAS CHENEY, REALLY?
Today, we lack metrics to know if we are winning or losing the global war on terror. Are we capturing, killing or deterring and dissuading more terrorists every day than the madrassas and the radical clerics are recruiting, training and deploying against us?
-October, 2003, SecDef Rumsfeld
Second, I'd like for the Pentagon's research into this question (see quote) made known.-October, 2003, SecDef Rumsfeld
A couple of reports were compiled but reportedly buried by Rumsfeld because he didn't want the public to lose confidence in the war or whatever.
Monday, April 20, 2009
Oh, That We Could Just Forget The Bush-Cheney Years!
HOW TO BECOME A KING IN AMERICA
Like Colbert and his, "we know they are hardened terrorists because they are at Gitmo", BT puts his finger on the latest circularity to emerge from the Justice Department quadrant of the Bush Administration:
Here is the circularity in the analysis: Time and again the OLC memos conclude that the use of these interrogation techniques do not amount to the intentional infliction of severe physical or mental suffering (the torture standard) based upon the CIA’s own finding that these techniques don’t cross that line. But that is precisely the legal question the CIA (purportedly) is posing to the OLC: Do the interrogation techniques violate the anti-torture statute?
In the broadest sense, it appears that all you have to do is stir up some legal uncertainty, in order to transition from President to King, in America. Afterall, with a simpy OLC memo, you can do what you want, until the Court has ruled on it, at least, which may be a long time, if you get everything classified by the office of the Vice President or otherwise ... (including to make it impossible to get or present the evidence to bring the suit, as was done to librarians).
What is that phrase that Nixon reportedly uttered? "If it's secret, it's legal"? I think that's it. Check Legacy of Ashes.
How much Democracy are you getting, today?
WHY WASN'T 'TORTURE' A SERIOUS CAMPAIGN ISSUE?
Ever vigilant on the torture issue, Andrew notes the following:
National Review, in the Bush era, became a de facto propaganda arm for the government, and no more so than on the question of torture ...
and
The US is a banana republic if this [torture] stuff is allowed to go unpunished.
How many times did the question get put to the candidates of what the 'next President' would do, if the scope and size of what really went on under King George were ever made known?
I can remember NO primary debate in which this came out.
In fact, when Yglesias made his now semi-famous (?) post about what questions 'the media' were not asking during the primaries, this blog put that question upfront on the list.
I had to ferret in backwater reports to find out that Obama had actually said something about it. One quote I found, without Lexis-Nexis at my side. But never, ever did candidate Obama or anyone else have to answer in a competitive electoral format, i.e. in the normal contests of Democracy, so far as I know. The evidence of transgression was mounting (original article pub. 2007).
This silence implicates people well beyond the National Review, even if they proved to be an intellectually eddy on the matter.
Update: and you can think of why not, why the question never made the cut, if it was considered. The issue was a loser for the Democrats, maybe. At least until the facts come to light, to combat the unsupported assertions of Bush, using his Presidential Voice as a substitute for true leadership.
Thursday, April 16, 2009
Whitehouse.gov
Text is still not yet available online for "major" speech (at least that I found, looking in the likely places).
From the press office:
4/13/2009
ADVISORY: Tomorrow: President Barack Obama to Give Major Speech on the Economy at Georgetown University
President Barack Obama will deliver a major speech on the economy Tuesday, April 14th, at Georgetown University. The speech will take place at 11:30 AM EDT in Gaston Hall.
ADVISORY: Tomorrow: President Barack Obama to Give Major Speech on the Economy at Georgetown University
President Barack Obama will deliver a major speech on the economy Tuesday, April 14th, at Georgetown University. The speech will take place at 11:30 AM EDT in Gaston Hall.
Wednesday, April 15, 2009
The torture memos ...
It's not clear what the significance of these last memos will be, is it? Are they going to 'convict' anyone? I doubt it.
Meanwhile, I'm not unsympathetic to the notion that lists of what is done during interrogation should not be generally published, as a matter of course. Enemies of the State are watching. Such lists DO make it into training manuals and so forth.
FOX incites hooliganism across the country
PULL THEIR LICENSE
The stories of harassment and civil unrest spawned by our national rogue media outfit are coming in ... stay tuned.
Ho-Hum in Washington, Another Wartime "Supplemental"
Doesn't this seem like a huge sum of supplemental money?
- $3.6 billion to expand and improve capabilities of the Afghan security force
More classified-activities creep...:
- $3.1 billion for classified activities in support of ongoing counterterrorism operations. These activities include support to military operations, intelligence collection and analysis, and overseas law enforcement efforts.
Would someone please tabulate the entire cost to the taxpayers for the amazing facilities at Gitmo?
- $30.0 million is to implement executive orders for the shut down of the Guantanamo Bay prison and review of the U.S. detention and interrogation procedures;
Should this go through pay-go?
- $250.0 million in total for the Forest Service ($200 million) and Department of the Interior ($50 million) for wildland fire suppression and emergency rehabilitation of burned areas. Funds would be available if existing appropriations will be imminently exhausted.
Senator Hatch, Did You Read This?
I pick on you because you're one of those GOPers who excuse gay-targeted violence as "a tragedy", while refusing federal funds, over and over again.
Anyway,
Public safety officials say Sen. Matt McCoy, a Des Moines Democrat, received the [death] threat by telephone on Monday.
The Looming Health Care Battle - Are We Ready
Scanning through the comments here, it looks like some folks (here, here) are getting past the staid. blogospherical opinion-makers on the subject of what do to about healthcare.
Having listened to the recent President's roundtable, I have to say that even I didn't have an appreciation of the scale of the structural changes that could be required.
Getting cost-rationalization in American healthcare may end up being like turning a battleship. For one thing, we have no consensus or rigorous rank-ordering of the cost drivers. For another, there is no consensus on how to attack 'the problem', although many seem to be suggesting that a 'patient centric' focus is the way to grab a hold of this tiger and tame it.
Anyway, the uncertainty mist allows people like Kling to push scary 'tradeoffs' that we aren't even sure are of principal concern.
Related: Smackdown of the size of the 'frivolous lawsuit' cost driver...
The Economics of Rush Limbaugh
HE'S A FREEBIE
From HuffPo, worth noting that giveaways still make attractive programming, I suppose.
How much of the rest of the Right-wing media is on 'special' support? Well, there is the special case of the Weekly Standard subsidy. The National Review has reportedly and admittedly been a sink hole.
Yet, the Left is still supposed to "respond" to these publications' writers and so forth, from time-to-time, unqualified ...
Here's how a barter deal works: To launch the show, Limbaugh's syndicator, Premiere Radio Networks -- the same folks who syndicate wingnut du jour Glen Beck -- gave Limbaugh's three hours away -- that's right, no cash -- to local radio stations, mostly in medium and smaller markets, back in the early 1990's.
So, a local talk station got Rush's show for zilch. In exchange, Premiere took for itself much of the local station's available advertising time (roughly 15 minutes an hour) and packed the show with national ads it had already pre-sold.
Think Gold Bond Medicated Powder.
It's a very sweet deal for local radio station owners, explained Bill Exline a respected radio broker (he helped people buy and sell local stations). "Not only does the local station get three hours of free programming," Exline explained, "but that's one less local talk-show host on staff they need. It makes small- and medium-market radio properties more profitable and attractive by cutting down staff expenses."
Tuesday, April 14, 2009
15 Minutes to Showtime
So, the question for today is whether Obama will fall prey to the Wall Street expectations game.
No one - no one - wins the Wall Street expectations game, except Wall Street.
We'll see what Rubin told his buddies to tell Obama to say, I guess. Let's hope it isn't to give 'the markets' Hope, unless that's too tautological a hope...
The problem is Pirates - the Answer is a tax break in Somalia
THE GOP TODAY
Political pundits and bloggers should understand how little they know.
Case in point?
Ten years ago, would you have predicted that the GOP would need to get its 'brand' back and that it would do so by a cable opinion channel, FOX, sending something - anything - like Dick's army of teabaggers to the White House?
Anyway, I have a question: If there is a riot, can we pull FOX's cable license for inciting it? They clearly have crossed a line, from reporting to political organizing, right?
Party of Irresponsibility
I caught a bit of a C-Span point-counterpoint with Newt Gingrich and Al Sharpton.
How does Newt get away with suggesting a totally irresponsible, "short-term", defunding of social security obligations as an appropriate response to cyclical downturn?
Isn't that a significant way GM and other companies got into dire straights? They didn't fund their pension obligations all along until it was so bad that the net obligations couldn't even fit on their balance sheet, right?
Now, Gringrich suggests that we can afford a similar 'holiday'? Maybe he didn't hear about Jindal's 'Mankiw moment' ...
The answer is that Paul Krugman cannot be everywhere and the 'institutionalization' of liberal economics is weak ... either that, or the Right knows its economic talking points better than the Left, more often than not.
Going for the Gold at Goldman
So, the reports are all over that Goldman will seek permission from the Treasury to repay their TARP funds (terms pdf).
The question is why would they retire this low-cost source of funds (5%), when Warren Buffet is out there with 10% preferred dividend for $5 billion? Dollar-for-dollar, that's $250 million dollars in interest expense that would be saved by seeking permission to pay back Warren Buffet first.
The only answer has to be that the corporate officers want their individual, $50+ million total compensation packages back, right? How much is that a signal that the company is being run for them, not common shareholders? If so, isn't that a signal that the incentive problems on Wall Street remain?
Either that, or pretending they are going to repay before they actually get permission to do so will help them at market for the shares, pumping up hope for recovery, etc. ...
Will they give up their bank holding company registration next?
Will taxpayers ever "get back" the tax-law giveaways that got tacked on?
What do you think?
Saturday, April 11, 2009
America the Beautiful, Under George Bush Republicans
ROOM FOR INDIVIDUAL RESPONSIBILITY
Torture was done in your name. America "disappeared people" to "black sites".
The idea that people who are in and run the government do not have to give a full and free account of their actions, when asked, is pretty radical for a democracy (but then again, once the fix is in down in D.C., we don't have much of that, do we?).
I have little hope that anyone will be held accountable by 'the system' for what went on. God knows, the Congress won't even enforce its subpoenas on Rove; and this man, who refuses to sit for the People's House, continues to be a fairly major "celebrity voice" on opinion and pretend-news channels and beyond.
Anyway, I'd like to believe that there is still room for individual responsibility, as much as that threatens people with a narrow view of the chain of command.
Did they have to cherry pick the people who got involved in these interrogations? Did some people refuse? How were the new Bush-Cheney torture polices presented to them?
CNBC Producers - Hopelessly Biased
One of the most under-reported bits of the past week was Lloyd Blankfein's speech on the causes and consequences of the sub-prime meltdown and the panic of 2008. Blankfein is The Man at Goldman, these days.
He starts to say interesting things, including a frank recognition that the financial sector is special:
Financial institutions have an obligation to the broader financial system.
In the very next paragraph, he shoots his credibility in the foot by blaming a Government policy of subsidizing home ownership. [With little rhetorical exception, most U.S. government policies target affordability, usually for low-income, under-served, or first-time homebuyers, not "homeownership" of McMansions.]
Blankfein is, of course, wrong on the facts. Sub-prime lending did not substantially increase home ownership in America.
Tonight, CNBC producers have dug up a clip of a Bill Clinton speech, not setting ownership goals, but touting the arms of government as way to help people live the American dream, which still includes your own home, at least as much as I know it.Blankfein is, of course, wrong on the facts and CNBC's clippings are hopelessly biased. Sub-prime lending did not substantially increase home ownership in America and the vast majority of sub-prime lending was done under Bush-Cheney. What's more, poor credit underwriting standards crept well past the government programs, into the private-only market for jumbo residential mortgages. (We all remember Angelo Mozillo rushing to Congress and getting accommodation from them for the agencies to buy up his jumbos, yes?)
From all that I've read, the incredibly poor choices at Freddie and Fannie can be largely put at the foot of one guy, not "The Government"; and investigating how he got and did his job is still something that may not have been done fully (I certainly don't read everything, so...).
Friday, April 10, 2009
Britain Taking It On the Chin, This Week
A loose lips London mayor (Boris) and a top secret document exposed.
The real worries lay beneath the silly politicians:
"Last year, 9,300 students entered the UK from Pakistan. British colleges now have to register with the UK Border Agency, which last month revealed it had turned down 460 of the 2,100 colleges [!] which had applied for licences to admit international students, because they were bogus establishments sponsoring students as part of an immigration scam."
The Seduction of Hope, Part II
The best way to fix a problem of confidence is secrecy.
Beyond parody (and soooo dangerous).
The Uncalibrated Right Wing
The astonishing (and increased) sum that is already in President Obama's budget for "The Military" of $534 Billion per annum is not enough for Heritage Foundation.
But have a look at the trillions spent, in waste, for being sure the rubble would bounce.
The U.S. Nuclear Weapons Cost Study Project
Put bluntly, we may yet be asked to pay the bill for the Reagan Devolution by giving up social benefits, like government supported healthcare and pension.
Quote for The Day
Not tongue in cheek, either:
Understanding the conservative movement is like analyzing the Hapsburgs.
-Andrew Sullivan
If anyone remains a big-C conservative past thirty, it's embarrassing or hereditary ... [Sorry to repeat this, but I had to listen to Caruso-Cabrera repeat that sickening old saw, with the usual liberal twinge, to her audience, ...]
Wednesday, April 8, 2009
My Kisses threaten Christian Medicine
I couldn't quite believe my ears this morning, when I heard the new ad from Maggie Gallagher's Catholic Comedy-Tragedy Central.
I'm not one to underestimate the blowback to the decisions in Iowa, Vermont, and Sweden. Heck, I was even going to send flowers and ginger cookies to Stanley Kurtz, in honor of the last one. The poor dear. Events just aren't following his script of decline and dissolution, are they?
Nevertheless, the range of their creativity constantly shocks. Apparently, there is something called Christian medicine and it is in danger in California.
Andrew Sullivan has the backstory and video.
Separately, it will be springtime soon, and maybe this assault on happy couples may fall flat:
What's the matter with Kan... Kalifornia?
Iowa. Now 100 reasons to love Vermont even more. What's the matter with California?
Treulich gefuhrt [long (very long), but it's Wagner, so what did you expect?]
Look. The Purcell Trumpet Voluntary, without trumpet. How gay.
AS snags one of the best, I think, with this one:
Oh, for Andrew, here's the infamous Nureyev (as Valentino) Tango:
The Hop-Along Judge Mukasey
What did he know and when did he know it? I'm serious. The guy wasn't confirmed to be a chessboard placeholder for the G.O.P. He was Attorney General of the United States.
Meanwhile, AS has this:
Cheney has all but declared that without torture, America cannot be safe. Gingrich is reiterating that. Rove tried to run the 2006 election on the question of who has the balls to torture terror suspects more brutally. Unless we have clear data that can judge these claims, we cannot dispositively prevent a recurrence.
Leaving aside how unhappy one ought to be about Danner's publication of an IRC report, I'm not sure we really, really, double really need to have data quite of this sort.
Did we really need to run an off-the-books "experiment" in torture to see what the data would turn up?
Did we really need to run an off-the-books "experiment" in torture to see what the data would turn up?Apart from evidence of criminal wrongdoing by Bush, the data is a nice-to-have, in terms of the 'debate'.
What's more, if there are programs to be run, like project Able Danger, that's when we might look at datasets, to some degree, to see if our massive $40+ billion, annual, fancy-classified-budget really has much merit. I suspect that most of these programs, even if they have positive 'data points', would get shut down on any kind of serious-going cost-benefit analysis.
Spanning the Globe
DOWNWIND OF THE DISH
Shouldn't a minister try not to break one live on CNN? - Andrew Sullivan
Apparently, there is context for this statement. Still, it must be part of the joy of blogging that such edits become possible.
Sunday, April 5, 2009
It's Five Minutes to Midnight
The "Axis of Evil" is at it, again.
"The launch today of a Taepodong-2 missile was a clear violation of United Nations Security Council Resolution 1718, which expressly prohibits North Korea from conducting ballistic missile-related activities of any kind," Obama said in a statement.
Saturday, April 4, 2009
Regulations
By opening its matryoshka, Glenn Greenwald is finding out what a small place Wall Street is.
I couldn't agree more that a more serious going investigation ought to be conducted. If that is frustrated by those in high places, it's a huge dysfunction.
As for traded CDS and their associated structured products, in particular, it does seem, even at this late date, that we have yet to come to a collective conclusion about whether these particular derivatives belong in a special category of risk(s), even among types of derivative instruments.
Still, before lamenting a lack of regulation, Glenn could spend some time thinking about what regulation he'd like to see and why. It makes a difference. It requires understanding what went wrong, on a case-by-case basis most likely, and thinking about how regulators could fix it.
For example, what firm are we talking about with this quote from the article he references?When housing prices crashed, the loans also went south, and the massive debt obligations in the derivatives contracts wiped out banks unable to cover them.
I could be wrong, but I seriously doubt it was derivatives, over-the-counter (OTC) or otherwise, that toppled the great Seattle bank (WaMU) or even Wachovia. Even the problems that drown Countrywide, Angelo Mozillo's dreamcart, were not related to OTC derivatives.
The failure to regulate probably most directly relates to the case of AIG, who reportedly set-up their infamous Financial Products division in a way to dodge what regulation there was. I should look it up, but I think they ended up directly under the Office of Thrift Supervision. That's right. What became a huge, complex, derivatives operation was quite possibly classified as a "Thrift" in U.S. law ...
Could the same risk in the case of AIG have been any collection of unregulated hedge funds? Conceptually, yes: a bunch of unregulated (non-reporting, slimly capitalized) entities with systemically important one-way bets. Practically, it's not quite as likely as that, because AIG had a 'AAA' rating, which it used to engage in the type of "regulatory arbitrage" business, helping out European banks by insuring debt instruments that wouldn't qualify without an added guarantee. You could make the case that a savvy regulator might have disallowed credit guarantees for that purpose ... but that's a different Oprah. It's worth noting that such a savvy regulator might NOT have "saved" AIG, who somehow concurrently bet the firm on a traditionally dreary business called 'securities lending'...
The general (indirect) failure to regulate probably relates to regulatory risk reporting, akin to the call reports that are filed by bank holding companies. Something like the lopsided risks that AIG was running might have appeared on even the most basic of aggregate position reporting.It's not clear whether regulation would have helped, because the CDS market appears to have grown in ways that proved problematic to it.It's not clear whether regulation would have helped, because the CDS market appears to have grown in ways that proved problematic to it. The paperwork supporting the books grew and grew. When a crisis hit, a crisis like Lehman in which losses were suddenly larger than priced/anticipated, it appears that few had an immediate grasp of what all their counter-party risks were, exactly, and how to get out, go in reverse, cancel-correct. A temporary "shut down" appears to have occured, while everyone sorted that out, to some unknown degree, against the backdrop of heightened perceptions of settlement risks, to boot.
A really forward-looking regulatory scheme might have forestalled that kind of shut-down. It's doubtful that the schema proposed by the CFTC in 1996 would have been that insightful. As it was, demands for collateral proved to be a systemic vasoconstrictor, including a Repo-market lock-up. No regulation probably could have stopped a general deleveraging (intense among hedge funds), and the dry-up of financing for arbitraging inefficiencies created by a massive one-way dash for protection.
The long history of fighting regulation of the OTC market is not entirely sordid, in the sense that many of the dire predictions of OTC disaster, going back to the early 90s, never materialized. What's more, the patchwork of global regulatory schemes have always created the additional, vexing pitfall of "havens", making the role of the Chief Regulator like fighting a Hydra. It's not quite as bad for 'traditional banks', but still.
One could make a strong case that the *real* problems of the past have been with the Corporate Office that does not understand the products that they are selling, even at basic levels. This is a failure to elevate the right kind of management, not of the OTC market, per se. It's hard to tell whether passing "product approval" to regulators, who may be similarly challenged (or paid off by lobbyists), is an obvious public good. Still, one should be open to the possibility that credit products / guarantees may be the exception to the rule ...Beyond managment's ability to understand the individual risks, did Glenn ever have a look at the staggering amount of collective real-estate debt on the balance sheet of global warship, Merrill Lynch, as it headed for the rocks, spraying its pirate masters with multi-million dollar payouts until the very end? Beyond managment's ability to understand the individual risks, did Glenn ever have a look at the staggering amount of collective real-estate debt on the balance sheet of global warship, Merrill Lynch, as it headed for the rocks, spraying its pirate masters with multi-million dollar payouts until the very end? How is THAT related to OTC derivatives? Technically, it is, to the extent that they wrote liquidity puts (including the implicit ones) that forced them to suck back stuff they had sold or set-up SPVs that they had to take back on balance sheet, because they "failed". But, in the bigger picture, in that context of prudently managing the risks of the firm, those are not the 'causes', just the mechanisms by which disaster was invited, right?
From a regulatory point of view, many of those problems relate to having accounting rules and enforceable capital requirements that are adequate to the risks being run and that do not distort the marketplace. As for just bad management, that relates to the ability of 'the system' to avoid too big to fail. Even big, diversified firms can go awry enough to hit the skids.
Last, those interested in yet another layer of perspective, read about the case of Conseco & Green Tree Financial, the Connecticut firm that went bankrupt, before "sub-prime" was anything but a technical term among loan professionals. David Brooks thinks its more about stupidity than about greed or that otherwise clever managements were duped by their own cleverness or by traders? What a belly laugh.
In these great United States
Overheard on CNN:
"[the Binghamton shooter] ... apparently frustrated over not being able to master the language of English."
Pause and think about that sentence.
Netanyahu's Pre-emptive War
U.S. SET TO BECOME VICTIM OF EVENTS IN MID-EAST, SHORTLY
Andrew has been doing work keep the ganja from the mideast flowing on his blog.
For instance, Yep: He means it
What I haven't seen seriously discussed is what an Israel attack will do within the region.
Iran might retaliate through Iraq, at least in the short term. That could pin U.S. forces down there for ... a generation and threaten the regional collapse that everyone thought had been avoided so far. (Hey, I made the case for a "precipitous" withdrawal, but that's not the Washington consensus ...).
The quite obvious bottomline is that the current Israeli government cannot stomach an Iranian bomb. This makes them easy for the Iranians to manipulate.
Soon, we may well see a Krauthammer piece outlining how much of a non-event it will be to bomb Iran, downplaying the aftermath. Followed by FOX et. al. beating the war-drums in similar fashion.
Meanwhile, the Palestinians ... have no downside to non-cooperation, so their situation goes on. Their talks in Cairo to "unite" have broken down, for now.
How easy is it to be a Republican?
I wonder what the history is of all the Democrats ever lining up on a budget quite like the GOP's members did this week.
I honestly don't know, but it sure makes it look easy to be a Republican. I mean, you'd expect some diversity of opinion in a caucus their size, right?
I'LL TAKE PETER FOR $1,000, ALEX
Geithner has all the spotlight the past two weeks, but Peter Orzag is really the unsung hero, so far.
Here is a quiet competence on the CBO's revisions, last week.
Clip of the Week
There is just something incredibly infectious about Joe's uncontrollable laughter. It's like a classic scene from Faulty Towers or something.
No need to watch beyond half-way point.
I just have to laugh at those elite Conservatives who think liberals are just balls of mindless emotion.
Friday, April 3, 2009
Market Cheerleading
THERE AND BACK AGAIN
See, if you step back, you see why it is possible to "over-interpret" stock market moves.
During February, the outlook worsened, based on a few housing market indicators. During March, the outlook didn't improve, but the acceleration to the downside stopped.
In the stock market, that was worth a huge sum. Shows how risky things are, right now. We just had a big round-trip past a new precipice, that's all.
Meanwhile, here is a chart comparing where we are vis-a-vis the Japan real-estate bubble cycle (Nikkei all-time high, Dec-89, US stock high, Oct-07). Either it has a wealth of information or it means nothing ...:
GAO Investigation?
Allegedly, AIG is getting its faced ripped off as it seeks to unwind its risk.
To be honest, AIG's economic motivation for these unwinds remains unclear (to me). The number of corporate downgrades has continued apace in 1Q09, so it is entirely possible that they are/were still losing money, despite everything. They may have, at last, decided to throw-in-the-towel at any price, or something... Qien sabe?
After the third restructuring of their rescue, I kinda figured that any "hits" would work through the income statements in 4Q08, especially for Goldman, who were alleged to be one very key counterparty-risk in all the Paulson-Blankfein conspiracy theories (and floor rumors during the week of AIG's first botched rescue attempt). Nothing obvious did come through (I thought).
Now, I'm not sure which books are unwinding, IF the above account has merit.
Vexing problem #59841:
You've just ripped the face of AIG with a massive trade that, not only books a profit at the time of the trade, but will likely be highly profitable to the firm over the upcoming year. Do you have a "right" to a massive bonus?
The Ambivalence Wrapper
That's the Obama enigma: boldness wrapped in caution rooted in an ambivalent relationship to the status quo. This is why Obama will, by turns, challenge not only his entrenched adversaries but also his natural allies.-E.J. DionneI can't tell you how fast this "boldness" is going to unravel if it is wrong, given how team Obama have played their hand out publicly.
At the end of day, it would be nice to know that there is a plan b. We wouldn't fault the Army for making contingency plans. In fact, we insist that they do. Therefore, if the Treasury is caught flat-footed, should big medicine be needed, who will have sympathy? They've had all this time to prepare, afterall.
Market Babble
WHEN TRADERS MAKE NOISE
Did you hear Cramer today? Last fall, he said that TARP had taken "great depression two" off the table. Then, he started advising people to buy Obama-proof stocks and talking about a "garden variety depression" (gasp!). Today? Well, apparently the depression is 'over'.
One wonders if he has ever held a position longer than 30 days. Not that one shouldn't be nimble or willing to change their mind, but ... seriously, Jim?
If you want a preview picture of what the hardline, GOP, retrograde rant will look like, eventually, catch up with how Larry "The Screaming Reaganite" Kudlow sounded today: monetary policy did it all, everything else was not pro-growth.
Thursday, April 2, 2009
FASB Puts Banks In Control, More Fully
FASB'S SPRING HAT FANTABULISM
Managements, especially bank managements, will decide when to realize losses that the market has already recognized, if it is judged that the transactions that formed the 'market' were fire-sale, i.e. not "orderly on the weight of the evidence".
This puts a LOT of say-so into Bank hands. On the other hand, it does remove a mechanism in which market pessimism can become self-reinforcing, by dragging down bank asset quality as 'measured' by markets charging huge liquidity premia... (a reason why stocks likely rose, today).
It does appear that banks will have to disclose their valuation assumptions. We'll see how comprehensive those disclosures are.
The cash flows will be the cash flows. FASB's rulemaking, of course, doesn't do anything to alter that simple truth for all, including legacy assets.
If commercial real-estate loans or private-equity loans go bad, so that they are no longer on accrual-basis, flipping this switch isn't really relief of any kind. For spikes in defaults in pooled securities or collateralized securities, this change has the effect of merely pushing the realization of losses down the road.
Pushing losses down the road (while talking up prospects) is a reason why today's bank stock prices would rise and a reason for those trying to write a policy script for recovery to be afraid, because the timing is now expanded, the pain-to-be-taken rendered chronic, not acute....
The idea that bank capital is 'protected', even in the short term, is an illusion (bank control is what is protected, arguably). The reality is that stronger institutions will 'mark down' as quickly as possible, under normal circumstances, putting pressure on the weaker ones.
Who ever said that accounting wasn't fashionably exciting?
G-20 Hoopla
UNLIKE DAVOS, THE SPECIAL OLYMPICS OF WORLD FINANCE
The scope of these summits is sometimes breathtaking.
The communique continues the theme that there is going to be a new category of firm, one for 'systemically important'. I'm not sure at all how that is going to stick. We'll see.
China gets its structural trade advantages 'codified' for another 12 months. Everyone is 'hands off' trade, even the stuff that is long overdue to be scrutinized.
Credit rating agencies will be regulated.
What are they going to do? Waive fingers at them, periodically? I mean, if they didn't go out of business, if the franchise didn't collapse after it was compromised at the core, what gives with 'regulation'?
[trivia: what board of directors now has the former President of a major ratings agency?]
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