Archive for November, 2007

November 30th, 2007

cavalry to rescue?

Posted in Money by ed story re Wall Street Journal update report on rumored agreement among banks to not raise mortgage rates when adjustable loans are ready to re-set as way to choke off the seething flood of foreclosures. This won’t solve the more general confidence problem re valuation of complex structured finance securities. But WOULD address the heart of the Main Street problem. Not a “bail out” of Wall Street as sophomoric dogmatists whine, since the lenders would be taking the hit. Treasury’s role seems to be “guidance” — and by getting all the cats in the pool assuring something like level playing field.

U.S. Government, Banks Finalizing Rate-Freeze PlanBy Chris Oliver

Nov. 30, 2007

HONG KONG (MarketWatch) — The U.S. Federal government and leading financial institutions are finalizing details of a plan that would extend low introductory rates offered to some borrowers who took out adjustable rate mortgages, according to reports.

The plan, being hammered out between the Treasury Department and a number of large mortgage lenders, would include subprime mortgage borrowers, the Wall Street Journal reported Friday, citing unnamed sources familiar with the negotiations.

The report said the gist of the plan was to extend the low introductory rates on home loans made to borrowers who will have trouble meeting higher reset rates. Under one scenario, the extension of lower rates could run as long as seven years, the report said.

About two million adjustable rate mortgages are scheduled to reset to higher levels over the next two years.

November 28th, 2007

Trent Lott & Vince Foster –
Long shots ?

Posted in 2008 Elections by ed

Trent Lott announced yesterday or thereabouts that he’s resigning his Senate seat in January. Rather abrupt. Spoke of wanting to “do things” with his wife.

Meanwhile I spy Republican clubhouse unwilling to nominate McCain, Romney or Giuliani. None are GOPhers at heart. All rather … individualistic.

Long Shot One: Trent Lott gets nominated. Familiar. Abides by the rules. Draws the Nixon/Reagan Democrat vote.

Seems Likely: Donkeys will nominate Hillary.

But Then Also Likely: Two weeks after the Donkey Convention … Vince Foster rises from the dead. Stories they were lovers. His wife is already on PBS video, from early 90s, implying and all but explicitly saying this. Skeleton falls from closet.

Long Shot Two: The smear works. And the vote is close enough in the key states to get monkeyed with (third time now) and Trent gets assigned the White House seat in January 2009.

November 25th, 2007

Doom & Gloom Update:
World boycotting U.S.
Summers Says Look Out Below

Posted in Money by ed

From Naked Capitalism:

“Private demand for US financial assets has disappeared”

Larry Summers warns of “Deepening Crisis”

The wages of Bush-Cheneyism are approaching like a 300-foot tsunami. Nowhere to hide, stateside.

November 22nd, 2007

The Dylan Film: I’m Not There

Posted in Movies, Music, These United States by ed


The Dylan film is spectacular. The most exciting american film in years.

Something to see and be thinking about for years.

Must be seen in a theater — the flow of music and people is joyous.

More balanced — as it looks, in its oblique way, into Dylan’s broken relationships with early fans and his first wife — than I’d expected from one or two reviews.

Indeed, one or two reviews had saddled me with worries, going in.

All worries dashed. The energy and courage laid down to make the film have paid off in spades.


Directed by Todd Haynes. Written by same and Oren Moverman. Shot by Edward Lachman. Edited by Jay Rabinowitz.

Interesting reviews online: J Hoberman at the Village Voice. John Anderson at Newsday. By Pete Travers in Rolling Stone. At Not Coming to a Theater Near You. Film Comment. And by writer Robert Sullivan in the NY Times. AO Scott is also in the Times, and applauds, but the Sullivan piece is much richer; he spent six months on it, visiting sets, the editing room, etc.


The reviewers who frowned are in a distinct minority, but include Anthony Lane in The New Yorker — who offers two basic complaints: the film is disjointed and at times confusing, and is insufficiently about the man in his world, and thus allows the “elusive Dylan, once again, to slip away.”

Although I seem to share many of Mr Lane’s thoughts about Dylan, his displeasure with the film seems a bit wooden-headed. To begin, I was never importantly confused. Jonathan Demme (I think it was) seemed right to observe that 30 seconds of confusion in a film are fine but five seconds of boredom intolerable.

What does seem true — to give Lane his due — is that the film is tightly focused on a familiar leitmotif — Dylan’s inability to live in the skin his fame wrapped about him — and thus does not fully treat much else that Dylan fans may be desperately seeking to explore and perhaps grasp.

Beneath this seeking sentiment lies, I suspect, long and commonly held disappointments in the way Dylan piloted himself through stretches of his career. Those of us who suffer with these petty resentments yearn, always, for a triumphant Apologia — a conclusive public Defense — that somehow removes from the hero’s shoe the doo and spent bubblegum he stepped in along the way.

The same desire takes shape with every reading of Hamlet. Yet the promising, brilliant prince’s trajectory always falls and fails to find redemption, or even satisfactory explanation.

Nevertheless, for good reasons, he remains one’s hero.


Mr Haynes clearly set out NOT to make a grand Apology, but rather to present the appearances at play. And this seems the essence of Mr Lane’s complaint — that the filmmaker’s vision fell short for failing to grapple with the heart of the matter.

Two reactions to this complaint:

(i) It’s a question if the grand Apology can, in any form, be mustered. We had a good shot at it a few years ago in No Direction Home, Martin Scorcese’s great documentary. Dylan spoke there at length — interesting, and moving, but confusing as ever — and around the same time had published a collection of scattered remembrances entitled Chronicles. Both doc and book, while gratefully received here, were shot through with contradiction on the familiar ticklish points re desire (to be a poet and a pop star) and responsibility (to other people).

One doubts, then, that Dylan himself has a coherent grasp of the elusive heart of the matter — which leaves Mr Haynes seeming wise, seeming to have taken the best available road, by sticking with the appearances and giving them room to exuberantly play. What Mr Lane desires (on behalf of many, no doubt) may be impossible, in any form, and almost certainly, if embraced as motive of a feature film, would lead to a treacly false artifact. Whereas I’m Not There bleeds truth, such as we have it about Bob, from every frame.

(ii) My sense, reading Mr Lane’s complaint that the history in the film is “paper thin”, is that — in his pique at finding Hamlet again tumbling toward the swordplay — he failed to notice that I’m Not There does indeed deliver the music and its world in their rich mindblowingness, even as the director/writer pursues his relatively narrow interests, and even as he allows his Dylanesque voices free range in declaring they were never a “folksinger” and that “politics” do not exist. The film brings the early music in its time to life, reigniting one’s imagination re same, and this is perhaps its prime raison d’etre, and the reason it will rocket about the world, as Pulp Fiction did a few years back, but with incomparably more staying power. It will stay as long as the Scorcese and Pennebaker documentaries do, and for much the same reasons. As long as people remain curious about Dylan and the interesting times he shared and shaped.


November 22nd, 2007

John F. Kennedy

Forty-four years now since the murder of the first distinctively postwar president.

The NY Times marked the occasion with an article about the Zapruder film that in passing reasserted the notion that Oswald did it.

Earlier this year the Times published a disinformative and dismissive review of David Talbot’s book Brothers, which while editorially messy contains several important new bits of information, and manages to bring the essentials to life in 400 easy to read pages.

The Times, then, still seems on the payroll.
Meanwhile Howard Hunt’s explicit confession (I was just a “benchwarmer” on CIA team) continues to be blacked out in the mainstrea media.

November 19th, 2007

Constant Gardener?
Nigeria accuses Pfizer

I haven’t yet seen this in the American press: Nigeria prosecuting Pfizer for operating a la mode The Constant Gardener.

From the German magazine Der Spiegel:


Nigeria Takes On Pfizer over ‘Killer Drug’

By Hauke Goos

The Nigerian government is taking on Pfizer, the world’s biggest pharmaceutical company. It accuses the company of using a meningitis epidemic to test an unapproved drug on Nigerian children. Eleven children who participated in the tests died and others were left with disabilities. … END QUOTE


The case is rooted in 1996. Perhaps in part inspired Le Carre’s novel? Which was published in 2001.

It seems art, in any case, imitated life.

Meanwhile, as Democratic candidates debate how many tens of millions of Americans should live without health care, the scientific so-called community heralds progress in the immortalization project: the cloning of primate embryos, and the production of stem cells from skin (rather than embryos).

Most news reports and commentators seem to be presuming that the latter innovation removes all/most ethical roadblocks to stem cell work.

If so, according to the technoprophets who briefly came out of the closet at the turn of the millennium — including some of the scientist businessmen running the primary biotech companies involved — the grandchildren of the very rich may perhaps needn’t die unless they want to. Brave new world that hath such creatures in’t.

November 19th, 2007

David Lynch in Berlin

Posted in Movies by ed

From Der Spiegel, David Lynch at large:



David Gets Lynched over ‘Invincible Germany’ Meditation Center Plan

David Lynch has purchased a large property on Berlin’s Teufelberg mountain where he hopes to build a university devoted to Transcendental Meditation. But he is in hot water after his guru chanted “invincible Germany” at a lecture about the project….


November 17th, 2007

OPEC summit rather interesting

Posted in Mideast & Oil by ed

Here’s an al-Jazeera story about the OPEC summit — only the third in the organization’s history (ie, where the heads of state are in attendance).

Hugo Chavez calling upon the organ to take a stand against US threats to attack Iran and (Chavez says) Venezuela.

The Saudi king trying, in response, to maintain an even, “apolitical” keel — rather impressive given the growing rift between the Saudis and Bush-Cheney.

Oil meanwhile still within shooting distance of $100 a barrel.


November 12th, 2007

Airbus vs Boeing – geopolitics or just business?

Posted in Geopolitics, Mideast & Oil by ed

Both Airbus and Boeing have been having production problems as of late.

Yet at the big air show in Dubai this weekend, all the big orders went to Airbus, with a decided tilt there from the Persian Gulf kingdoms in particular. A story is copied below.

I wonder if it’s more than just business. Boeing of course is a big Pentagon contractor, old club member of the military-industrial complex.

And Saudi Arabia and the other south coast emirates are all rather pissed at Bush-Cheney for (i) preaching “oil independence” (since the ethanol initiative in 2004 or 5) and (ii) blaming the high price of oil on production shortfalls (whereas in fact it seems increasingly clear that current $90 oil has a lot to do with largely unpublicized US strategic reserve stockpiling).

So maybe throwing all the business to Airbus was a way to express displeasure with the Bush-Cheney-Pentagon leadership as of late. If the Likud grand strategy is (as I think) to degrade US ties to both Europe and Saudi Arabia, while strengthening its own, then, again, this embrace of Airbus — ie Europe — by our arab allies might be taken as a businesslike complaint.

Perhaps even a message that attacking Iran is a bad idea. (Perhaps in reaction to the story out of France last week that the US and Israel have set up joint “working committees” to deal with Iran’s alleged nuclear weapons program. )

Similar perhaps to the message the Chinese are sending about selling dollars.


Airbus snares $50 bln in orders at Dubai Air Show
Boeing left licking its wounds as Middle Eastern carriers spurn Dreamliner

by Aude Lagorce, MarketWatchNov 12, 2007

LONDON (MarketWatch) — European airplane maker Airbus has scored a major victory over U.S. rival Boeing Co. with a series of major orders, worth close to $50 billion at list prices, from Middle Eastern carriers at the Dubai Aerospace Air Show.

Over the last two years Dubai has joined Paris and the U.K.’s Farnborough air shows as a major battleground for the two aircraft makers thanks to rapidly expanding Gulf-based airlines such as Emirates, Etihad and Qatar Airways. The show has grown in sync with the industry, which is in its third year of record demand, spurred by new aircraft and the expansion of budget airlines.


November 11th, 2007

London Fundits re Credit Crisis

Posted in Money by ed

South Bank fundits (London) explain the subprime meltdown & related.

It’s Credit and Crunchy

Subprime Sentiment

Jolly old town …

November 9th, 2007

The Berlin Wall Cracks


Eighteen years ago this evening the the Berlin Wall was cut open by the East German authorities.

History failed to end. The world began anew.

November 9th, 2007

Bush: I Don’t Want the War

The following — best read aloud! — was generated by passing a five-word window across a passage from Bush’s loathesome chat with the Spanish prime minister in February 2003, weeks before launching the war in Iraq. (I actually deleted one word for euphony — you’ll probably notice.)

I don’t want the war
don’t want the war I
want the war I know
the war I know what
war I know what wars
I know what wars are
know what wars are like

I know the destruction and
know the destruction and death
the destruction and death that
destruction and death that comes
and death that comes with
death that comes with them

I am the one who
am the one who has
the one who has to
one who has to comfort
who has to comfort the
has to comfort the mothers
to comfort the mothers and
comfort the mothers and widows
the mothers and widows of
mothers and widows of the
widows of the dead

Of course for us that
course for us that would
for us that would be
us that would be the
that would be the best
would be the best solution

Besides it would save us
it would save us fifty
would save us fifty billion

November 8th, 2007

Doom & Gloom Update:
Derivatives crisis accelerates as U.S. hordes oil

Posted in Geopolitics, Mideast & Oil, Money by ed

This Doom & Gloom update brought to you by, where the glass is always empty — waiter?!

It’s earnings season and financial companies are reporting their losses and markdowns re structured finance bonds tainted one way or another by the collapse of housing prices and increased mortgage defaults.

Many companies gave estimates of these back in September, when people thought things were stabilizing after an ugly July and panicked August.

Those September estimates are proving to have been much too small. Eg today, a mortgage company:

“IndyMac Bancorp reported a third-quarter loss of $2.77 per share vs. a 50-cent loss expectation that basically was management’s stated best guess from early September.

Boy, that’s badly written — but means that in September the company said they thought they would lose 50 cents, but in the weeks since things have gone so badly so quickly that the loss increased by a factor of five. In four or six weeks.

The same is showing up in the reports and conference calls of the major banks and brokers. Merrill Lynch wrote down about 11 billion — the first big broker to fess up — and the board promptly fired the boss (who happens to be black).

Then this past weekend Citibank announced writedowns of about the same amount, while firing the chairman and CEO there — Chuck Prince — a funny guy. Just weeks before the summer swoon he amused folks by comparing high finance to musical chairs.

This is what happens when the music stops:


Then in September, when asked what he intended to do about Citi’s problems, Prince replied, “I wanna kick ass!”

So the list of top execs who have been embarassed and released to a life of luxurious retirement grows. The first was our old college friend Warren Spector, the erstwhile president and heir apparent at Bear Stearns.

Meanwhile Goldman Sachs reported stellar earnings, shocking everybody — but something like a third of those “earnings” were related to “Level III” assets that have no market and are reported based on nothing but the opinion of management as to what they are worth.

So this week Goldman has been sinking on rumors that they too soon will be announcing horrendous writedowns.

Another way to look at it — from the good folks at equity vs level III assets:


If we look at the major institutions and divide their Level III assets by their equity capital base, we arrive at the following calculations:

  • Citigroup: Equity base: $128 billion, Level III: $135 billion. Ratio: 105%
  • Goldman: $39 billion, Level III: $72 billion. Ratio: 185%.
  • Morgan Stanley: $35 billion. Level III: $88 billion. Ratio: 251%.
  • Bear Stearns: $13 billion. Level III: $20 billion. Ratio: 154%.
  • Merrill Lynch: $42 billion. Level III: $16 billion. Ratio: 38%.


These numbers are astounding — and poor Merrill, taken to the woodshed for fessing up — is actually in much better shape than its peers.

Do you see? Goldman says it has, when all assets and liabilities are accounted for, $39 billion in equity capital underlying its operations and obligations.

But that bottom-line number INCLUDES a management-marked $72 billion in Level III assets (structured finance bonds, for the most part) that cannot be evaluated because no market exists for selling them.

And the big Merrill and Citi markdowns this past week were acknowledgments that management’s prior peg for these illliquid assets was pie in the sky given the mortgage bond failures and attendant problems re ratings methodology (which latter problems affect the entire universe of structured finance instruments, which is measured by trillions).

Here’s a rather comprehensive scan of the Level III business by the great folk at Naked Capitalism.

Another recent sign of disaster is the impending collapse of the bond insurers, which were cruising along until October, when they got cut off at the knees.

Ambac. Ugh …



The PMI Group. Ouch …



MBIA. Argh …

Why should you care?

Many AAA (top) rated bonds ARE rated so highly because they have “credit enhancement” — which often means they are insured for principal and sometimes interest by these bond insurer companies.

But — you probly see this coming.

But because there have been suddenly so many mortgage bond and related failures, the bond insurers are suddenly having their capital stressed. Jersey Jim Cramer at this past weekend declared himself certain they will simply fold — that they don’t have the money to meet their obligations by a long shot.

And if the bond insurers fold or merely begin to default — all those AAA bonds that they insure are going to tumble and get downgraded and perhaps default. The widening gyre, you see. The center cannot hold. Sumpin’ wicked dis way comes.

Meanwhile Turkey’s invading Iraq and Pakistan seems about to blow itself up.

And the U.S. is secretly stockpiling oil, in preparation it would seem for the enlarged mideast war that would crack open should Israel or the U.S. or both attack Iran. A business story last week reported that the USG is accepting payment in kind from the oil distributors — ie, accepting barrels of crude rather than cash for taxes and fees. (This story came and went in a day with no followup — ie was blacked out. Good luck finding it now. I didn’t save a copy, unfortunately. Will try to find one somewhere.)

And today oil set an all time record ($97 and change) and gold closed at $825, just $3 under the all time closing price set in 1980.

And yesterday the triumphant Euro set a new high against the American peso.

Call me Chicken Little but the sky is falling down.

Maybe we don’t really need sky though … Going to be living in caves:


November 8th, 2007

Rickie Lee Jones — Happy Birthday

Posted in Music by ed

The celestial one is … can’t quite recall.

minniecunningham.jpg Here’s a nice radio show she did this past February in Minnesota while on tour.

She was here in New York in midsummer. A tremendously soulful show.

And check out this video fallingup.jpg for “Falling Up” from the new album.

Then check out her website — full of great stuff.

See a brief review of the new album here.

Then buy the album! The Sermon on Exposition Boulevard.


Her music has helped keep me alive these decades in the wilderness.

November 8th, 2007

AFP: U.S., Israel set up joint “working committees” on Iran

Posted in Mideast & Oil by ed
AFP – November 9, 2007

Israel and the United States have agreed to appoint two working committees in order to hone a joint strategy against Iran’s nuclear ambitions, public radio reported on Friday.

Deputy Prime Minister Shaul Mofaz headed discussions on the matter in the United States this week, it said.

One committee will deal with intelligence on Iran’s nuclear drive and the other with international sanctions, the chief weapon in an effort to convince Tehran to halt uranium enrichment.

The next formal discussions between Israeli and US officials on Iran will be in two months in Israel, the radio station reported.

On Thursday, Mofaz called for Mohamed ElBaradei to be removed as head of UN nuclear watchdog the International Atomic Energy Agency, saying he had turned a blind eye to Iran’s nuclear ambitions.

Public radio quoted unnamed Israeli officials as saying the Mofaz delegation to Washington fed precise intelligence to the United States, alluding to satellite photographs.

Israel and the United States are leading the campaign against Iran’s nuclear programme, believing it to be a cover to develop an atomic bomb.

Tehran insists its activities are aimed solely at producing electricity for a growing population once fossil fuels run out.

Israel considers Iran its chief enemy after repeated statements by President Mahmoud Ahmadinejad that the Jewish state should be wiped off the map.

It belongs to the UN nuclear watchdog but is not a signatory to its key Non-Proliferation Treaty, and is widely considered to have the Middle East’s sole – if undeclared – nuclear arsenal.

November 7th, 2007

Judgment Day? China tells dollar to get lost

Posted in Geopolitics, Money by ed

Looks like something nasty and long in preparation may be ready to blossom.

China today (overnight in the USA):

“Cheng Siwei, vice chairman of the Standing Committee of the National People’s Congress, was quoted by wire services as saying China should shift more of its $1.43 trillion of currency reserves into “stronger currencies,” such as the euro, to offset “weak” currencies like the dollar.”

The dollar has tanked overnight — another big step and all time high for the Euro, and nearing the long-standing line in the sand on the yen (110 yen per dollar).

In the past Japan has always defended that 110 line (by buying dollars), to keep its manufacturers healthy (ie to allow them to sell cars and electronics to the US market at attractive prices). Whether they will step in front of this roaring Chinese bus is now a big question.

Here’s a chart of the Dollar Index (measuring it against a small basket of the other major currencies) going back to about the time Bush-Cheney took office.

Gold is up another $19 on top of the $12 it soared yesterday. $842 or so. $875 is the all time record from 1980 (although that’s not an inflation-adjusted figure — taking inflation into account means we are still a ways below the all time high).

Oil up to a new record, $98 and change. People were anticipating a pull back at the momentous $100 figure but if China indeed starts selling dollars in bulk the price of oil (in dollars), in the world Bush-Cheney have set on fire, will veer parabolic.

The U.S. stock market futures are down large. Murdoch (formerly Dow Jones) Industrials down, eg, 180 points (at 8 in the morning).

Recall what shape we were in when Bush-Cheney took office. Oil in the high teens (today near $100). The federal budget in the black or nearly so. The dollar worth about 50% more against the Euro than it is today. The wages of sin in international affairs is economic calamity.

November 6th, 2007

Some things to paste about

Posted in These United States by ed

You can drag these right off the page here and stick’m wherever you want.

The first three I took from a block called Genius of Insanity:




This one somebody just paid over $33 million for at a Christies auction in New York.  Yours free at TNC:


November 6th, 2007

Look Homeward, Angel

Posted in Reading, These United States by ed

This is the angel sculpted by Thomas Wolfe’s father, to mark a grave, and then brooded upon by the protagonist in Wolfe’s autobiographical first novel, Look Homeward, Angel.

All that took place in Asheville, North Carolina, Wolfe’s hometown.

Today however the statue sits in the first town south along the interstate, Hendersonville, in a historic graveyard atop a knoll.


A little road runs up the knoll, terminating in a little loop at one of the graveyard’s entrances. The road seems to have been part of the cemetery once, — an elegant driveway — but at some point was privatized and populated with small houses.

I bought one such house this past spring. (At the very height of the housing boom, it seems.) It sits on the loop, about forty yards from the graveyard.

Homeward would seem to be heavenward.

As you were.