Archive for January, 2008

January 31st, 2008

Paul Volcker endorses Obama

Posted in 2008 Elections, Money by ed

The former cigar-chomping Fed chairman credited with killing the stagflation caused by the oil crunch in the 70s.

January 30th, 2008

John Edwards — Next Attorney General

Posted in 2008 Elections by ed

Edwards dropping out of race today.

If a Donkey wins in November (a big “if” in my view), Edwards would make a great attorney general.  From there he could do more to revive the union movement than as Secy of Labor.

January 27th, 2008

When a Trade Goes Bad

Posted in Money by ed

Video of a trader getting toasted, having gone heavily long last Friday, only to watch Asia and Europe crash Monday (while the US was idle in respect of Martin Luther King) and then again on Tuesday before relief began to seep in.

January 24th, 2008

Scientists draw near creating life from scratch

Posted in Frankenstein's Monster by ed

Brave new world that hath such creatures in’t.

January 23rd, 2008

Bond insurers on Skid Row — Saviors Wanted?

Posted in Money by ed

(I posted the following this morning on Jim Cramer’s running column at RealMoney/TheStreet.com in response to people complaining about the Fed move and about talk of “bailing out” the bond insurers. )

We don’t need no stinking saviors. We’re tough hombres.

But the financial system, if a trillion in AAA s-f bonds suddenly have their mkt value cut at knees due to insurance failure, will have to be rebuilt from dust. Maybe our cities too.

I know Gold Bugs have been dreaming about this since Nixon. I’ve no desire for apocalypse. There is nothing normal, cyclical, about what has been going on here since the public distress of Bear Stearns in June, when a banker at CSFB told me, “S&P has put a moratorium on rating new CDOs.” That statement alone meant the finance world refashioned by Excel was broken.

JC is right to worry that the bond insurer crisis can lead to losses measured in trillion at banks worldwide. At which point there is no financial system. How much is an ounce of gold worth in the jungle?

The Free Market and its God of Greed have s__t the bed here, folks, and six months on since the CSFBer’s comment there is no market cure in sight for this partricular and excruciating confidence problem (in methodologies used to eval and rate s-f bonds).

My own thought, since August, is that a two-year price control regime on the wounded bond classes is the best available treatment.

But if the major insurers manage to recapitalize, then, in a rate environment that will no longer be exacerbating the problem, that should be enough. To prevent the general AAA & muni meltdown. We still have hundreds of billions in credit ABS to worry about, owever. Credit card bonds, auto bonds, prime mortgage bonds, maybe even, as apocalypse draws near, the David Bowie bonds …

The fed was created to prevent system failures like 1907 from happening. It is not a philosophy club. It is not the bundesbank nor even the bank of england. If we lived in Adam Smith’s age the dogma, theories and praxis of keeping an economy and society healthy would be different. For better or worse, we live in the age of Excel.

January 22nd, 2008

Hillary’s looking rather hot

Posted in 2008 Elections by ed

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Must say there’s something bracing in Hillary’s mean mien last night in the S.C. debate …

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… and this morning when she spoke of Barack’s frustration.

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The rigorous exercise of campaigning …

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… that pentathlon in the crisp New Hampshire air …

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… has put a sparkle in her eye.

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January 22nd, 2008

South Carolina Food Fightin’ Pretty Funny

Posted in 2008 Elections by ed

This stuff in the Dem South Carolina debate was pretty funny.

And Brawlin’ Bill getting down with his grits.

January 22nd, 2008

Reagan GOP about to blow up?

Posted in 2008 Elections by ed

Rush Limbaugh is telling his radioheads that if McCain is the nominated GOPher it will destroy the party. Also is telling people that neither Gingrinch nor Huckabee are true conservatives.

Interesting to think. If after all the destruction wrought by Bush-Cheney there might be a price to pay — the death of the dreamy reactionary anti-social revolution of the rich that geared up in the 80s behind Reagan’s broad shoulders and sparkly grin. The death of the second Guilded Age, so to speak.

While the Dems throw forth their two revolutionary candidates themselves.

But … yes. I’m dreaming.

January 21st, 2008

Worldwide crash underway / Price Controls the answer

Posted in Money by ed

(This is very disorganized. Will slowly make it more coherent. The sight of hundreds of billions of dollars worth of securities being wiped out in a single session, in Asia and Europe today, somehow muddles the mind and thickens the fingers.)

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1.  Markets in Asia and Europe are absolutely crashing today. The major European indexes down between 5 and 7 percent. Asia between 4 and 5. (Ten percent is usually thought of as a “correction,” and usually plays out across weeks and months.)

Meanwhile the U.S. is idle in respect of Martin Luther King. But the Dow Industrial futures are down over 500 points. (From approx 12,000, with 14,000 the high earlier this year before the stuff hit the fan.)

The Times and general media in general are all careful to place the blame in their headlines on “fears of U.S. recession.” That’s not quite it.

The fear is that financial institutions worldwide are going to take another round of much larger losses as a chunk of bonds much larger than the subprime mortgage bonds get downgraded, go illiquid and begin to fail.

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2.  Coincidentally (?):

(a)  the annual conference of the people who run the world at Davos, Switzerland takes place this week; and

(b)  the NY Times Magazine cover story yesterday was “The Education of Ben Bernanke,” about the new US central banker, a quiet fellow who came to the job after decades in Academia with a valise of papers he’d written about how central banks avert and manage disasters.

3.  Big Ben has been loathe to cut interest rates in face of the mounting disaster. Applying his well worked thoughts, he tweaked the writhing monster throughout the autumn, refusing to make the direct and conventional move (dramatically cut the two bank rates the Fed controls), opting instead for small and eccentric experiments in enhancing liquidity.

He doesn’t seem to have realized that the crisis is not simply a liquidity crisis. Rather: brewing insolvency. At banks and insurance companies worldwide.

4.  In a better world — I mean, one without Bush-Cheney — things might have been very different. But the US budget deficits and trashed dollar — effects of six years of redux Reaganomics — means that Ben has to care for the health of the dollar much more than he might have if the more or less flat Clinton budget had continued post 2000.

Why? To please the people in Tokyo, Shanghai, Hong Kong, Singapore, Bombay, Dubai, Riyadh, Frankfurt, Zurich and London who buy U.S. Treasury bonds with foreign currencies. The weak dollar trashes their investment.

And every time Ben cuts the Fed rates the pressure on the dollar worsens.

In a world with a flat Clinton budget, it wouldn’t matter. Ben could cut rates back down to post 9/11 territory — even Japanese territory (1% or less) — and we’d still have no trouble finding the (much fewer) Treasury customers we needed.

But that’s not the world we live in anymore. Treasury investors using foreign currency have been burnt badly by the dollar’s fall since Bush took office and have been making noise for two years about cutting back on dollar-denominated investments.

If Ben slashes his rates, those people may hasten their steps away from the dollar into gold and swiss francs and euros and pounds sterling and … rubles? Yes, the ruble is now a hard currency. Our Man Vlad’s been working hard.

That’s one big meta-reason, then, one suspects, that Ben has been loathe to cut throughout the fall. Who’s going to pay the Pentagon if our Asian creditors fade their trade? (The Fedspeak never speaks explicitly of such things, of course, but one suspects nevertheless.)

So one must sympathize with Ben a bit. Between a rock and hard place.

Nevertheless, history will record that he fiddled all fall while Rome, yea, verily, the world entyre, caught fire. bernankethumbnail.jpg China’s so recently rocketing market has been in free fall for a month. Nobody wins in worldwide recession complicated by a frozen and insolvent banking system.

5.  Causing the US recessionary pressure, at bottom, is the loss of equity in houses on Main Street nationwide and the credit crunch in money centers worldwide.

The latter was triggered by the surprisingly broad and deep US mortgage bond failures (caused by the all but unprecedented drop in housing prices), then exacerbated by a factor of five or ten by the consequent lack of confidence in the methods eager beavers use to evaluate those and all other complex “structured-finance” bonds.

6.  “Structured finance” is the most general term for the complex derivative bonds that blossomed in the world with the advent of personal computers and Excel. Mortgage bonds, credit card bonds, auto loan bonds, David Bowie royalty bonds — all these are “Asset Backed Securities”, a large general class within structured finance.

CDOs are bonds that are based on large diversified pools of other bonds, often ABS. CMOs are based on large pools of mortgage bonds. CLOs are based on large pools of loans (loans often used to float Leveraged Buy Outs). SIVs are conduits that often have ABS as collateral and which issue “commercial paper” (very short term cash bonds/loans that financial institutions use to meet day to day cash needs).

All these and more are “structured finance” instruments. In contrast to the old fashioned corporate bond: eg, General Motors needs money, so it pledges its good name and sells IOUs. There are no secured “assets” backing these bonds. Just GM’s word.
The lack of confidence in the methodologies by which banks and rating agencies evaluate s-f bonds is a huge problem and has persisted since June, when two Bear Stearn funds specializing in mortgage bonds went belly up. warrensad1thumbnail.jpeg It should not have happened — ie, ABS rated AAA should not have failed as badly as those rated BBB-, but it seems they often did. Somehow the rating scheme failed to model reality when the pressure came on the underlying assets.

7.  Last week it became headline news that the bond insurers are likely to default. That is, they simply do not have enough money to meet the mounting mountain of claims on the (mostly AAA) s-f bonds they insured across the past decade or so.

The rating agencies (who certify the insurers’s ability to meet their obligations) last week finally went public about this, even though as early as October the word was out on the Street. The agencies put the ratings on watch, then lowered them — then began downgrading the s-f bonds that the insurers insure.

This (along with the new reports of losses at the banks, and very bad reports on the Christmas season from the retailers) is what sent the US markets tumbling last week. And what’s crashing Asia and Europe (and now Canada and Latin America) today.

As I wrote here in October, if the bond insurers fail, a universe of bonds much larger than the subprime mortgage bonds will have to be downgraded, which will lead to much more paper losses (“writedowns”) across an even larger array of financial institutions, many of which will be compelled by their covenants to try to sell the wounded bonds, making them even less attractive and more hard to sell, enhancing the downward spirial.

Losses at banks, insurance companies, pension funds, etc will move from the low hundreds of billions into the trillions.

At which point the “free market” confidence game ends, because the banks, insurance companies, will have negative balance sheets. More liabilities than assets.

Chuck Prince the cavalier CEO of Citigroup, recently fired, had compared the game in July to musical chairs, with a wily grin, acknowledging that when the music stops things may be grim, but insisting that until then he’d just keep dancing.

The music has now stopped. Citi reported almost $20 billion in losses last week. And if the bond insurers fail $20 billion will be a drop in the bucket.

Jumpin’ Jersey Jim Cramer noted a month or so ago that when everybody is insolvent, nobody’s insolvent. Because the music has stopped and the game has ended. That’s where we’ll be. Maybe before things wrap up in Davos at week’s end.

8.  There may be no precedent for this avalanche.

1907 was a system-wide failure but largely contained in the U.S. Today’s is truly global.

The US system was saved (the story goes) in 1907 by the person of JP Morgan, who got a few pals together in a room and came out with guarantees that supported the system til it got back on its feet. The controversial new central bank, the Federal Reserve System, was created in 1913 so that (story goes) such things would never happen again.

The depression of the 30s serves as something of a precedent in that its perhaps primary cause was a severe and protracted credit drought, a misguided reaction to the panic of the 1929 market crash: the central bankers of the day were armed with the wrong theory. Austerity (for the poor) was their cure. It turned a crash into the Great Depression.

9.  Given today’s global crash, everyone will (again) be expecting the US central bank to slash its rates tomorrow morning before the bell. Will Ben finally comply, or stick to his theories well honed across decades in the Ivory Tower?

He seems a very stubborn theorist.
benb.jpg Perhaps red faces at Davos may provoke a change of mind.

Not that cutting Fed rates will solve the problem. It will help stabilize things, however.

10.  To solve the problem something very pre-80s will have to be done, now that the Free Marketeers have shit the bed.

EITHER: the governments will have to buy the bond insurers or otherwise assume reponsibility for that task. With “guarantees” of some sort perhaps. (Joltin’ Jim suggested this past Friday gov’t guarantees of 50 cents on the dollar.)

OR: A price control regime will have to be instituted re the wounded bond classes.

I suggested the latter here in August, to polite chuckles from the few knowledgable readers who glanced at the site.

11.  Price controls would allow the bleeding financial institutions holding the wounded bonds to mark (ie, evaluate for balance sheet purposes) and hold them on their books at a level well above the current near-zero market value that the crisis of confidence (in methodologies) has produced.

In other words. A Man in a Big Suit tells the world: Okay, you got credit card bonds rated AA- at issuance? And nobody wants to buy them? Okay, for the next two years (?) you can mark them at 62 cents (face value $1.00) on yer books. And if you want to sell’m you can’t go under 62 cents.

This would allow the wounded bonds to remain on the books at less than catastrophic marks, which would stop the panicked bleeding each quarter as the banks report tens and scores of billions of paper losses due to frozen markets.

And this would allow the wounded bonds to simply live out their lives, paying most of the interest they’re expected to, one imagines, and returning much more of their principal at wind-up than the current near-zero market values suggest.

During this enforced valuation period things would stabilize, fiscal and monetary policy would begin to heal the housing disaster and other economic underlyings.

The banks would start trusting each other’s balance sheets, and thus start lending to each other, again. And the crippling anxiety of waiting to see how many scores of billions Citibank and Merril will rack up next quarter will go away.

This would be mind-blowing for most “market participants” and “professionals.” It goes against everything their TVs taught them as kids and teenagers during the 80s. The last time we had price controls here was during Nixon. But it is now publicly clear that there is no market cure for this crisis. And if the people in D.C. don’t take their hands out of their pockets everybody’s going down.

Remember the scene in It’s A Wonderful Life where suddenly people are streaking through the street, heading for their banks. That’s what’s coming, folks. Do You Know Where Your Money Is?

I don’t suppose this is very clear. Will come back later and try to make it more so.

My glass is half empty — waiter!?

POST SCRIPT:

Ah. As night falls in New York, Tuesday begins in Asia, with an even more tumultuous drop. At 11:20 pm EST in New York, the Hong Kong market is down over 10%. !!! After five percent yesterday.

And the major index for the Indian market is down 11.5% and trading has been halted. The game is over. The Free Market is again dead.
bombaytues.JPGPeople watching the tickers scream in Bombay Tuesday morning

The problem began in the U.S. and Wall Street is the heart of the securitization world (although London too does a ton of business). The whole world is watching and waiting for Ben and Hank to do something.

I’ve often wondered, since the 9/11 attacks, when the Great Transit would occur and how — the great movement in which Wall Street would cease to be the financial capital of the world, to be replaced by the Tokyo-Hong Kong-Shanghai circle. Would it happen with a bang or, more likely it seemed, a whimper?

(After 9/11 business decreased in New York and increased in Houston and Charlotte, N.C. An interesting Yankee-Cowboy angle on the attacks. If another bomb goes off in New York, Houston bankers will benefit.)

If the Americans, having created the current global crisis, drop the ball, and continue to allow the Free Market to writhe and belch, perhaps this will prove the watershed event in the Great Transit. Are the Americans going to let several trillion in US bonds go down the tubes? What good are they, then, if you’re sitting in Peking?

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January 21st, 2008

Local anti-Jewish Mossado-Rus Terrorist shoots himself in foot (?)

Here’s an odd story about a mad fellow living about five blocks from New Combat central, here in genteel Brooklyn Heights.

Accidentally shot himself in the hand. Cops wondered why, took a look in his apartment and found half a dozen pipe bombs and bomb-making equipment. Handguns, sniper rifle and silencers. Let’s see here … Crossbows and arrows. A machete …

Apparently the fellow, Ivalyo Ivanov, had been suspected of, and has now confessed to, spraying violent anti-Jewish grafitti on the local brick walls, some of which date back to Colonial days.

Seems to be one of those mad skinned-head neo-fascist Russian nationalist types you’re always imagining.

Oh, except that he told the cops that he was “trained” by Mossad.

And “Russian?”  Maybe not. One paper says he was born in Bulgaria.  Another somewhere in the mideast. And his lawyer says he is jewish, a third paper says.

The neighbors say they found him across the years very personable. “He seems like a really nice guy, a really gentle person.”

Huh. The bomb factory/apartment seems to be owned by a well known health official (once associated with Mayor Rudy G) who has been living with mad Ivan for years:

“Michael C. Clatts, 50, a medical anthropologist and researcher who is the director for the Institute for International Research on Youth at Risk at National Development and Research Institutes in New York. Mr. Clatts, who owns a unit in the building, according to property records, was commissioned by the Giuliani administration to study New York’s homeless teenagers.”

The Odd Couple, eh what?

What a funny story …

January 20th, 2008

Reaganitis

Frank Rich (former NY Times theater critic who turned to sociopolitics a few years ago) is almost always worth reading. This weekend he’s recalling Reagan as so many of the current contestants strive to stand in his shadow.

I posted this comment in reaction at the Times website:

Reagan was the first Charlie McCarthy president of the postwar. Bush pere and Clinton resisted the notion. But baby Bush, twice installed by illegitimate elections, seems its well-rooted redux. “There is a cancer on the presidency …”

None of the current GOPhers fit the Grand Old clubhouse mold. But Romney, a rich genial knucklehead anxious to please people, would make, despite his faith, a fine Charlie McCarthy.

As for the Dems: Only four have successfully negotiated the South in the Electoral College since Truman’s squeaker in 1948, and of those the only non-southerner had a prominent Texan on the ticket as VP. I don’t yet see how Obama overcomes this problem.

And I fear that Hillary, if nominated, will be blown out of the water by a blue valentine from Vince Foster.

And, of course (as the Times magazine recently pointed out), much more of the country is using hackable voting machines this time than last.

Best guess today, then, is that Knucklehead Romney is the next man to sit in Washington’s chair.

Bush-Cheney’s repeated illegitimacy, their assault on the law, their prosecution of the most destructive foreign policy in our history …

Destruction seems the theme. All the result of nothing more organized than a 50-car pile up on the interstate? I doubt the presidency, when dust settles, will be found to have survived. The seat seems Charlie McCarthy’s in perpetuity.

And given that the Congress was bought and neutered a while back with TV ad money, this leaves the Pentagon and the secret police as the essence of what Washington is. Old republics don’t die, they just fade away.

Same old stuff …

Perhaps, on second thought, Ford was the first Charlie McCarthy prez of the postwar. If so, perhaps it’s okay to overlook him nevertheless, since he was never elected (even as VP) and did little but play golf while Rummy and Cheney kept shop.

Obama’s paen in Las Vegas this week to Reagan is less than shocking. His vision is for an entirely new businesslike coalition, whereas the visions of both Hillary and Edwards grasp the essence of the class war that the rich renewed in the US during the 80s, and argue for going back to a balance where the working class is not utterly at the mercy of the owner-operators. They are reactionaries. Obama is futuristic, or, otherworldly.

Re McCain it remains difficult to believe the GOP machine would give him the nomination. Perhaps in utter despair. In which case the prime thing one hopes he would push would be campaign finance reform, which has long been dear to his heart.

Yet as far as I’ve seen, he’s been perfectly silent about it on the trail. Trojan Horse?

January 18th, 2008

N. Burns “retiring” from State = Something wicked this way comes

Posted in Geopolitics, Mideast & Oil by ed

Alarm: Nicholas Burns, the most sensible and worldly person atop Rice’s State Department (number three, more or less, as Undersecy for Political Affairs), the leader of the peace camp within the administration and point man on Iraq within the Department, just announced he is retiring.

At age 51.

To be with his family, sez Rice. And to attend to his daughters attending college. Although he doesn’t yet have another (lucrative) job lined up.

International affairs are his life. I doubt he would resign the Department at 51 unless something is very wrong.

It’s a good guess that this means the war camp within the White House, led by Cheney, has won a battle between Bush’s ears. (See ref to Burns-Cheney battle in this NY Times story re Iran from last summer.)

A battle over what? Iran is the obvious guess. April has long been on some calendars for an attack there.

Perhaps the faux gunboat thing two weeks ago was indeed more than it seemed. (The threatening language, it seems to have turned out, that the Navy reported as basis for it’s imminent attack on the Iranian boats, was not from the boats but from a rather well known wiseguy CB radio buff in the area who regularly buffets the americans across the airwaves. An innocent mistake by the Navy not to have realized …)

Oil on bad economic news has gone down to the 90 level from 100. If it jags today and early next week, it might be read as support of the notion that more war is in the works from Bush-Cheney.

January 17th, 2008

Doom & Gloom Update: Meltdown

All my worst dreams here going back to July are being realized this week.

The two top bond insurers — MBIA and Ambac — were down 30% and 50%, respectively, today, after the rating agencies (Moody’s, S&P) finally fessed up and put their ratings on watch for imminent downgrade.

This means “credit events” will be triggered in the … trillions? Many billions, let’s says, worth of bonds — many of them structured finance bonds like the mortgage bonds — in the world.

Meanwhile the banks this week have been reporting new rounds of writedowns on their mortgage and similar bonds. 18 billion at Citibank. Ten or so at Merril Lynch. But the thing is, once the bond insurers are no longer rated AAA-capable, then … The subprime mess becomes a drop in the bucket.

The Bush-Cheney regulators remain silent. And the Fed Bank chairman today gave a merely lukewarm chat to the House of Representatives, betraying little of what’s wrong and promising that the Fed is prepared to cut rates “substantially” if the need arises. If the need arises …?!

The Reps in the House praised him without exception.

And tomorrow Bush is being pushed before cameras to talk about a “fiscal stimulus” package. (FDR, suddenly?)  But the tax rebates he’s going to propose are meaningless in this crisis. Maybe somebody can buy a couch. If they have a house.

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In short: A meltdown on the order of 1929 — I don’t just mean stocks — I mean the major institutions that comprise the financial system — is in progress before our eyes and the regulators are …

“Brownie, you’re doing a great job!”

It’s rather remarkable — that the feckless negligence evinced in Bush-Cheney foreign policy since 2001, and the criminal carelessness seen in the wake of Katrina, is now showing itself as the financial system melts.

Also interesting that most of the hope for mending the broken institutions — banks, brokers, bond insurers, insurance companies — lies overseas. Citibank, for one, will be forever changed by this: no longer an american bank. And it’s interesting that the man just appointed to salvage the sinking ship is not an american.

What’s wrong began in the 80s, with the culture of greed and ignorant cynicism that the media began broadcasting, rather abruptly, after the three tv networks were bought out — this whole movement a reaction by corporate elite to the “chaos” of the 60s and 70s, when the well educated working class that sprung up after the war asserted itself.

Today the hustlers at the banks and law firms believe greed is good as the sky is blue. They were told that as kids and teenagers in the 80s; they know little of history before Reagan.
Anyway. It is impossible to exaggerate the damage done already and the ramifications going out a year and five years. Mortgage loans will be as hard to come by as a winning lottery ticket. Or … I guess that’s an exaggeration.

January 17th, 2008

Author of “Liberal Fascism” vs Jon Stewart

If memory serves, this young lobbyist, author of new Hillary-bashing book “Liberal Fascism”, is the son of Lucianne Goldberg, the Upper West Side crone who handled Linda Tripp and thus outed Monica Lewinsky.

Ah, yes, apparently. According to the less than reliable Wikipedia:

QUOTE

Goldberg’s career as a pundit was launched following his mother Lucianne Goldberg‘s role in the Clinton-Lewinsky scandal, when he wrote about the “media siege” on his mother’s apartment in the New Yorker.[3] [4]

Goldberg has spoken of his mother and the Lewinsky scandal:

“My mother was the one who advised Linda Tripp to record her conversations with Monica Lewinsky and to save the dress. I was privy to some of that stuff, and when the administration set about to destroy Lewinsky, Tripp, and my mom, I defended my mom and by extension Tripp…I have zero desire to have those arguments again. I did my bit in the trenches of Clinton’s trousers.”
END QUOTE

The country is in the sewer. Would the Goldbergs might join it.

January 13th, 2008

Heilbrunn book on Likud Lobby

Posted in Mideast & Oil, Reading by ed

Jacob Heilbrunn has put out a book whacking the so-called Neo-cons. Here’s the Times review.

Reviewer says JH is mystified as to how the Neo-Cons wormed their way into baby Bush’s White House. This is something I’ve been wondering and writing about for six years.

Something Oedipal was at work, perhaps, in that Perle & Wolfowitz are old enemies of his father.

The parallel question is why did the NY Times run a magazine cover story in 1999 or 2000 introducing Dubya to the world as a compassionare conservative (thereby making him overnight the front-running GOP)? I’ve always suspected it had something to do with Bush taking Perle & Co. on as advisors to his campaign.

Apparently it’s all a mystery to Mr Heilbrunn as well. Will have to read the book.

January 10th, 2008

Bloomberg and Kerry in the game

Posted in 2008 Elections by ed

1. Reports today that Bloomberg has been doing intensive polling nationwide to assess his chances as an independent. Also that he’s looking to spend a billion if he runs. (Supposedly has about $20 billion.)

If Hillary is the Donkey, seems she would benefit quite a bit from a Bloomberg run. Obama less so; ie, seems the Bloomberg drain might be more evenly divided between Obama and the GOPher.

2. Odd and unsavory for John Kerry, as the head of the Party in a sense, to come out so early on to endorse Obama — even from his own perspective re having influence on the race and ideas as things develop.

3. I guess Obama will win the Nevada caucuses. South Carolina … Who knows.

Apparently both Florida and Michigan cannot send delegates to the Donkey convention because they violated Dem Party rules by sched’ing their primaries prior to Super Tuesday. ??

Many are the ways dem Donkeys screw themselves.

January 9th, 2008

Plunge Protection Team kinda goes public

Posted in Money by ed

Here’s an article about the federales’ Plunge Protection Team.

Says they’ve been out of action since 9/11 — but that’s not true, most traders believe. They’ve went into action when Bush-Cheney went into Iraq to create the Market That Won’t Go Down, which didn’t, for three years, in support of the misguided Clean Break war.

January 9th, 2008

New Hampshire

Posted in 2008 Elections by ed

Obama’s quasi-concession speech was beautiful and brilliant. And Huck’s was bright and warm.

I’m very glad Hillary won. When she first ran for the Senate in New York she impressed local pros with her hard work, travelling the upstate counties. She worked hard in New Hampshire, under a lot of pressure. I admire her balls.

If nothing disturbs the Republican field, the best guess seems that Romney will prevail in the end. But it remains clear that neither he, McCain, Huckabee nor Guiliani fit the clubhouse mold, and the GOP is a club. I guess Romney is the closest, and he certainly seems anxious to please people. Seems he’d really rather be hosting Late Night …

The superiority of Hillary, Obama, Edwards, McCain, Huckabee, Richardson, to the people who’ve been in the White House the past seven years is hard to exaggerate. There’s something encouraging in realizing this.

The mission is to get the GOP out of the White House for a while. Not clear how best to do that yet.

Then again, McCain is hardly a Republican. The big question with him is whether he would push a campaign finance reform bill. Something strong along these lines would fix the Congress, assuming the Roberts Supreme Court let it pass. Alas. Fantasies.

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January 7th, 2008

Surprise: Recession

Posted in Money by ed

U.S. economy in recession, Merrill’s Rosenberg says

By Rex Nutting, Marketwatch.com
Jan. 7, 2008

paulson.jpg WASHINGTON (MarketWatch) — The U.S. economy is in a recession, David Rosenberg, chief North American economist for Merrill Lynch, wrote Monday.

“Friday’s employment report strongly suggests that an official recession has arrived,” Rosenberg said in a note to clients.

Other Wall Street economists have said much the same thing.

“The key question now is how deep the recession will be and how long it will last,” wrote Richard Berner and David Greenlaw, economists for Morgan Stanley, in a note to clients on Monday.

Over the weekend, Harvard economist Martin Feldstein said he believed there was a greater than 50% chance of a recession in the United States this year. Feldstein is on the committee of academic economists who typically determine when recessions begin and end.

January 7th, 2008

Iowa Votes / Demise of the Presidency

Hard to imagine a black man winning the Electoral College vote. (All the Southern Strategy stuff is history?) But Obama’s presence and success in the race seems to be throttling Hillary’s themes. A new way for the Donkeys to self destruct.

I still worry that if she gets the Dem nod, Vince Foster will be shot out of cannons to smear her. Maybe she would survive.

(I wish she would address it now. Does no one else recall the PBS Frontline show where Foster’s widow went on at length about the Hillary-Foster relationship? Even if the journalists have agreed to let sleeping dogs lie, does Camp Clinton think the GOPhers will do same if/when she’s nominated?)

I guess Edwards is the best candidate, although I can see he’s been a bit shrill lately for the corporate press — as the latter has increasingly refused (the Times certainly included) to seriously cover him. Reminiscent of 2000, when it was the Times (in a Sunday mag cover story) that overnight made baby Bush the Repub front runner.

So I guess I’m not optimistic re ousting the GOP. Obama is viable in the EC only in a world turned utterly on its head (which is not to say “impossible”). Hillary seems likely to get smeared with a blue valentine from Vince. And the corporatacracy has nixed Edwards.

Thus doesn’t seem to matter much — re electability — who the GOPher is. Looks to be the Donkeys’ election to lose. As in 2004.

I like Obama very much but his campaign is as ill advised a notion as I can remember seeing. In 2000 it was Ralph Nader. But today the stakes are higher (that is, we know they are higher), and Nader was never proclaimed front-runner. Nevertheless he cost Gore Florida and New Hampshire and thus the election.

Times reports today that the Draft Bloomberg campaign is alive and well. Seems he would run as a post-primaries Independent, if he does. And probably drain more support from the GOP than the Dems, as Perot did in 92, allowing Clinton to win with 43% of the vote.

Is this then the Donkeys’ best hope? A gay technocrat-billionaire from Fun City who don’t know the difference between a government and a corporation?

Meanwhile the world from Palestine to India is on fire. May be very different (again) before the November elections. Perhaps that means McCain. Or the cancellation of elections under martial law in the wake of a disaster.

Or perhaps it means it matters little who sits in that chair. Reagan was the first ventriloquist dummy of the postwar era. With him began the business of running a White House with a poster boy. Bush pere and Clinton resisted the notion. Baby Bush seems to mark its well rooted redux. The death of an institution. Seems doubtful that the occupant in 2009 will be able to put Humpty Dumpty back together again.

The Congress was bought and neutered (via television ad money). No doubt the state can stagger on without a real White House too. That leaves the Pentagon and the secret police as the essence of what Washington is. Sorrows of Empire.

Interesting that the collapse of the Soviet Union has been followed by the collapse, in an important sense, of the United States — i.e. the end of the world that the world wars left behind.

Does the failure of American democracy have a cost internationally? Kenya, for example?