YEAH, CUT ANOTHER $100 BILLION, SUSAN COLLINS
Fresh off their stellar "wartime" planning, the GOP now have a hip, techno video to explain how their do-nothing policies might work, to ease foreclosures, fix banking, and mind the output gap, brought on by soaring unemployment started in the Bush-Cheney era:
Friday, February 6, 2009
GOP Come Up With Video to Explain Their Plan to Avoid Economic Disaster
"Weasels" revenge
LIFE OUTSIDE THE PENTAGON
From a duo Francais .."Guide à l'attention des forces américaines en ... 1943"
"Ce petit manuel, très intelligemment préfacé par François Heisbourg expose aux futurs "libérateurs" venant en soutien des forces anglaises comment aborder le peuple irakien pour que leur passage se passe bien.
extrait " Le succès ou l’échec des Américains en Irak dépendra pour une grande part du fait que les Irakiens (c’est
leur nom) aimeront ou n’aimeront pas les soldats américains.
Ce ne sera pas forcement simple. Mais, une fois
encore, faites votre possible"."
And finishes with:
"Pourquoi n'ont il pas réédité ce petit manuel pour Bush, Romsfeld et leurs sbires !
Dommage que la mémoire soit un peu courte."
Thursday, February 5, 2009
Murdoch Street Journal
Rupert Murdoch overpaid for everything:
During this second quarter, the Company recorded an $8.4 billion pre-tax non-cash impairment charge related to goodwill and identifiable intangible assets.-Today, BW
Way to hose your shareholders, RM. How's that mega-cost flat, going?
They've Got a Big Fight on Their Hands, Now
The Senate cloture non-vote fails on the stimulus plans.
Looks like today's progressives are going to have to fight for their values (and hone their own).
Who knew?
Is it time to go to maximum bargaining position and fall in line, yet? Probably. Bastard ruling class.
Overall, this is bad for Team-Obama, who could really use time to put together policy on a host of very, very other pressing issues. It's a terrible waste of time to have to go into the trenches. (So much for Dodd dismissing the value of 60-seats in the Senate...).
Still, there is opportunity. Obama could really flex his muscles. The GOP truly have a weak hand to play, and he could call their bluff in a way that greatly strengthens and elevates him, right out of the gates, before the first turn!
They included all kinds of money for rural America and, just today, centralized poverty in the ...er, faith-based government (gulp). Sounds like it is time to take the fight right to the heart of the conservative base, rural America.
In other words, he needs to "do a Reagan" and go over the heads of "D.C." and right to the people. I think he could pull it off. You?
Dick Halliburton
Still going strong. He sits with The Politico to spout what he must think of as his timeless philosophy:
Listening to GOP Hispsters Prattle On
As I listen to GOP hipsters prattle on and watch, with frustration, a new President grappling with the need to be in full stride from Day One minus 90, I'm reminded of this innocent post title:
What should Bush do now?
The answer to which might be that he could have left early, turning over the Treasury staff and more to the next in line, since he was leaving an empty refrigerator and a leaking roof. (Maybe the reason he was so "classy" was because he grasped the magnitude of the mess he and Rove planned to dump on their opposition party?)
Afterall, where is the Republican plan for the remainder of the economic crisis that is engulfing us, still?
More money for Merrill Lynch? Zero tax rates? That'll do the trick? Another trip by Paulson's Cash-'n'-Carry guy up to the Hill, to tell the Senators that the Administration is 'studying' the foreclosure problem?
More 'Comprehensive Banking and Housing' Schadenfreude
PASSIVE ACCOUNTING ALONE IS NOT PRE-EMPTIVE ENOUGH
Coupled with an aggressive - repeat, aggressive - intervention to hasten, to accelerate the clearing of bad mortgage debts / foreclosures, the end of mark-to-market might make sense (it's too late to use it as a way to halt a panic, if it was, in fact, ever suitable for that).
Otherwise, Geithner's critics are going to say he went for the "Japan option", and what can I say to them? That it's okay to focus on cash-flow "realities"? That might not carry the day...
But Treasury officials would not comment on reports Thursday that changes were being considered to the current accounting standard that requires banks to carry assets such as mortgage-backed securities on their books at fair value, a process known as "mark to market."
More:
Two things.
Given that the foreclosure problem, even under "aggressive" scenarios that involve the ability of bankruptcy courts to modify loans, is one that can be eased but not accelerated, these bleeding assets will be an open wound on bank's balance sheets for a long while. We don't know how bad or how long it could get. If you take a guess of 8+ million foreclosures, then we may not be halfway through, even though the housing market turn was in 2006!
Second, moving to mark-to-market is a signal that the problem is either small enough to 'work through it', in the time and money that you have to stimulate demand for the economy - about 18 months, under the current stimulus plan, as scored by CBO. Or, it means that the problem is too large to handle, 'all at once', toute suite. [There is not enough public transparency, perhaps, to have a position 'in the middle' of those two...].
The first looks like overconfidence, in the absence of some hard-hitting estimates of what is required. The second looks like a bad signal to send, possibly. I'd much prefer an aggressive approach, like putting some real Treasury money at risk and leveraging it via the Fed. It keeps the Fed in its role of 'deep pockets' and it keeps the banking system as close to a transparent, functioning arm of the economy as possible.
But, I've said too much already...
Ring Fence Concept as a Clean-the-Decks Strategy?
LOOK AWAY, RUN AWAY, OR ENGAGE? ABORT, RETRY, IGNORE?
No One Knows
New idea is to pass out a bunch of government guarantees to fix the problem.I don't like it, much, at all.
- It doesn't get around the problem of pricing - how much do you guarantee and for how long?
- What do you guarantee - the assets or the institution? (What if a foreign bank bids for the shares of a U.S. mega-bank? Do they trade with or without the guarantee?).
- There is no risk sharing, public-private - the taxpayer takes up the "long tail" (that's just stupid, I think).
- There is no debt removal from institutions (as required during a debt-deflation?).
- It offers no control over timing - all those guarantees could come due simultaneously. It also looks profoundly rosey-eyed, unless there is compelling reason to believe that such guarantees would never be cashed-in. (Remember the Bush failures of hope-for-the-best, don't-plan-for-the-rest?)
Most of all, it doesn't do anything to accelerate the market clearing of bad-debts, consumer or institutional, either into strong hands of private investors or the long-term hands of the government or some combination of the two. (It doesn't leverage the power of the Fed to solve the problem, either...it relies solely on the Treasury).
We have just about 18 months of 'big stimulus' to work with, because of the way "Reinvestment in America" has been rushed together.
Will Citibank's balance-sheet be clean by then? American Express? GE Capital's? BOA's? The Great American consumer? The housing market adjustment, as accelerated under Obama (hey, a guy can hope), complete?
Can we really expect no more losses in the banking sector after 18 months? I mean, it's almost completely unreasonable to expect a turnaround, if the banks are still making losses. Afterall, they could get by with zero capital, so long as they are not making losses, yes?
Just the facts, Ma'am
About that deflation risk
Paradox of thrift
Paul K and maybe Larry S seem to be setting themselves up to realize that, in a debt deflation, the best _policy_ might be to ... er, ease the debt burden ratio, one way or the other.
Do whatever it takes: outright cancellation (pre-packaged bankruptcy, but less-so liquidation), debt-for-equity, and fixing the stupid bankruptcy reforms of 2005, and anything else that economically equates to 'paying negative interest rates'. Artificial incomes ... probably not enough to do the trick, if the problem is large or intractable or sentiment already firmly in the wrong direction.
Wealth transfer is often a dirty word; but, in my opinion, those most worried about it lost their discipline during the high-flying years, a discipline forged in fire during the 1930s ... Time to pay the piper, sadly - and no joy in that, for anyone.
Eat the Lemon
IN SEARCH OF CHERRY SOCIALISM
The foot pounding to avoid lemon socialism, in which citizen-taxpayers "agree" to socialize the risks and privatize the returns can be heard across the plains. Openly agree, one should say, to contrast with the regular way, which is to have it hidden in laws and regulations (from both parties) that enable misalignment of risks and rewards.
But, these days, we have to eat the lemon. At least on the banking side.
Until the house is actually falling down, Obama's team will never socialize the big banks, fully, despite that the best case for it might be purging a generation of dead-head management and elevating some people who really do know the risks of modern financial products and markets. (Cleaning out corporate boards is another good idea, as should have been done wholesale at Merrill and Lehman, right?).
So, what other choice is there?
PICK THE SIZE OF YOUR LEMON, PEEL, THEN EAT
The best combination is for the Treasury and Fed to work together. The Treasury provides the risk capital and the Fed has available infinite leverage (at least for a time).
The private sector, particularly the distressed assets crew, knows how to value assets no one wants, much. The best of all worlds is to share risk-capital with the private sector, to scare-up a public-private partnership, and leverage it with the Fed-Treasury combo. That's one way to get past the problem of government getting duped in setting/taking a price on things its bureaucrats don't understand.
Another risk-sharing is to pre-package large-bank bankruptcies, allowing banks (and some non-banks) to trade-out of their debt-obligations at or near market prices. A restructuring of their liabilities will allow further risk-sharing with public funds. How? Well, the Treasury can 'substitute' the erased liabilities with recourse provisions. The banks sell assets at a price to the Treasury, who picks up an amount of risk consistent with the Treasury's economic forecasts, but the banks share or assume risk that the realized asset values come in below that.
Thus, exchanging debt obligations for recourse guarantees is another public-private risk sharing that might work, if it is enough in the mid-term to avoid a terrible, terrible long-term.
The truth takes only a few words (to borrow a famous phrase from Chief Joseph). This might be the American solution, one that contrasts with the way that Europe have done so far and that Japan did a long while ago.
I wrote this in 20 minutes this morning. I have no idea what is taking weeks and weeks to revise, inside the Obama team, unless it is regulatory structure redesign.
Obama-Biden Stimulus
I'm not commenting, since it's obvious that non ruling-class input is not desired and untimely.
This Bill is a rush-job. The lack of vision, masked by an 'urgency factor', will show, down the line.
There will be after-the-fact ... "stimulus", though:
President Obama will address a joint session of Congress on Feb. 24, an administration official said, giving the equivalent of a State of the Union speech that promises to continue his grim assessments of the nation's struggling economy. -WaPo
I'm sorry. I know I am supposed to support the President. But sometimes candor is the best service.
The total number of homes vacant was once again at its highest level since records started in 1960. 2.2-million homes are now without owners, matching the record set in first quarter 2008.The Census Bureau listed 75.5-million non-rental properties in the U.S. during the fourth quarter of 2008.
The Dem plan has money for, say, 2 million homes to 'weatherize' ...
Wednesday, February 4, 2009
Thought for the Day
Superbowl XLII
Everybody look to your left, then look to your right. One of these people will be infected with HIV in 2009 alone, by number in the USA. Just under half of those will be gay men.
XLII - Glendale (AZ) - 71,101
Day One
Team Obama are in an impossible position, from day one.
They are voting huge sums of money, that will make or break them politically and otherwise, in all probability; but they don't have their programs off-the-shelf, ready-to-go, for understandable reasons.
So, today, we have this (disgusting) confusion:
February 7, 2009 marks the ninth annual National Black HIV/AIDS Awareness Day (NBHAAD).
This is a national community mobilization, HIV testing, and treatment initiative, which promotes awareness of, and access to, services for African Americans. The theme for NBHAAD 2009 is "Black Life is Worth Saving."
Of all racial and ethnic groups in the United States, HIV and AIDS have hit African Americans the hardest. The reasons are not directly related to race or ethnicity, but rather some of the barriers faced by many African Americans.
Senate Dems drop $400 million in HIV prevention funding from package
By LOU CHIBBARO JR, Washington Blade | Feb 3, 3:40 PM
Responding to mounting pressure from Republicans, Senate Democratic leaders and the Obama administration agreed last Friday to drop a $400 million spending provision from the president’s economic stimulus plan that would have funded HIV prevention programs.
The provision was packaged by supporters as a sexually transmitted disease prevention effort, with most of the funding allocated for STD and HIV testing and prevention programs carried out in states and cities.
National AIDS advocacy groups said the proposal’s HIV-related funding was especially needed in communities where the economic recession has resulted in severe cutbacks in HIV testing and prevention programs.
Monday, February 2, 2009
Judd Gregg? C'mon.
AN OBAMA MISSTEP?
I'm sorry, but I'm not interested in Judd Gregg. At all.
Guy voted alongside the GOP on the articles of impeachment for Clinton.
Was a R-ubberstamp (NH) for Bush-Cheney, voting irresponsible debt-spending for Iraq (read the whole link for lotsa color) and refusing to support even basic benchmarks for progress or keen oversight.
He was on the wrong side of hate crimes legislation, joining the filibuster in 2002.
I had hoped for him to be voted out in 2010, not to hang around in a position that will set him up to be Governor or something ...
If the hope is that there is some 'moderate' Republican freshman to come up behind him, then ... the price seems too high.
Smithsonian Wants Aretha's Inauguration Hat
Immortalized ...
Access Hollywood, via MSNBC
updated 5:07 p.m. ET, Sun., Feb. 1, 2009
LOS ANGELES - The Smithsonian Museum wants Aretha Franklin’s Inauguration Day hat.
The Queen of Soul’s big-bowed headgear has become a hot property since the legendary singer wore it to belt out “America the Beautiful” at President Barack Obama’s Jan. 20 inauguration.
....
“I am considering it. It would be hard to part with my chapeau since it was such a crowning moment in history. I would like to smile every time I look back at it and remember what a great moment it was in American and African-American history. Ten cheers for President Obama,” she said in a statement, according to New York Magazine.
updated 5:07 p.m. ET, Sun., Feb. 1, 2009
LOS ANGELES - The Smithsonian Museum wants Aretha Franklin’s Inauguration Day hat.The Queen of Soul’s big-bowed headgear has become a hot property since the legendary singer wore it to belt out “America the Beautiful” at President Barack Obama’s Jan. 20 inauguration.
....
“I am considering it. It would be hard to part with my chapeau since it was such a crowning moment in history. I would like to smile every time I look back at it and remember what a great moment it was in American and African-American history. Ten cheers for President Obama,” she said in a statement, according to New York Magazine.
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