Friday, February 29, 2008

Nice Frame

In Hillary's desperation, she's apparently trotted out a fear-mongering ad in Texas. That's no big news. What I find interesting is the Obama response:

"We don't think the ad is going to be effective at all. Senator Clinton already had her red phone moment -- to decide whether to allow George Bush to invade Iraq. She answered affirmatively. She did not read the National Intelligence Estimate. She still, curiously, tries to suggest that it wasn't a vote for war, but it most assuredly was...

"This is about what you say when you answer that phone. What judgment you show...She, John McCain and George Bush gave the wrong answer."
Or how about this one in response to the McCain/Bush attacks:
With their words today, George Bush and John McCain called for staying the course with an endless war in Iraq and a failed policy of not talking to leaders we don’t like, but Americans of all political persuasions are calling for change. The American people aren’t looking for tough talk about fighting for 100 years in Iraq, because they know we need to end this war, finish the job in Afghanistan, and take the fight to al Qaeda. The American people aren’t looking for more of a do-nothing Cuba policy that has failed to secure the release of dissidents, failed to bring democracy to the island, and failed to advance freedom for fifty years, because they know we need to pursue new opportunities to achieve liberty for the Cuban people.
Bada boom!

I think Obama and his team will do fine against the Republican attack team by simply outsmarting them.


Quote Of The Day

Via Froomkin, discussing Tony Snow's appearing on Stephen Colbert's show:

When Snow acknowledged that "we all knew the president would be unpopular because of the war," Colbert interjected:

"He's not that unpopular. The latest poll have his approval rating at 19 percent. Which is low for a president, but high for a fetish."


Big Trouble

We all know there's a "housing crisis". But do you really know just how big it is?

Goldman Sachs economists estimate that as much as $3 trillion in mortgages could be underwater by the end of the year, leaving 30% of the country's outstanding mortgages in negative equity. Since there is roughly $1 trillion in subprime mortgages outstanding, that means a large amount of better-quality mortgages, such as prime and Alt-A -- a category between prime and subprime -- will be attached to negative equity.
As equity goes negative, more and more people are simply walking away from their houses. There used to be a stigma to abandoning a house/loan and bankruptcy. But when many of your neighbors are doing it, why not just join the crowd?

Bush/Paulson et. al. continue to claim that they'll let the "market" work out the problems (while they quietly support the big boys with Fed policy), but eventually they'll have to act. When something like this situation gains momentum, it can snowball into a very serious depression, i.e. the more people that walk away, the more housing inventory, the lower houses are worth, the more people have to walk away.



We should all hang our heads in shame:

The Washington Post leads with a new report that reveals more than one in 100 adults in the United States is behind bars. Holding the rank as the country that imprisons more people, both in terms of raw numbers and as a percentage of population, is hardly a cheap proposition, as states spend almost $50 billion a year on corrections.


The report by the Pew Center on the United States that found a total of 2.3 million people are incarcerated highlights how minorities have been particularly affected by the tougher sentencing laws imposed in the 1980s. One in 15 black men, and more specifically, one in nine black men ages 20 to 35, are behind bars. For Hispanic men, the figure is one in 36. Although the violent-crime rate has decreased 25 percent since 1987, spending on corrections has increased 127 percent (adjusted for inflation). Meanwhile, many believe that nonviolent criminals could be better served by other types of punishment, including community service, which would be far cheaper. "Getting tough on crime has gotten tough on taxpayers," a Pew director tells the NYT.
I want to note that the statics in the study include children. That's right. A number like "1 in 100 people in jail" includes children.

There are three aspects to this that are disturbing. First, our drug policies and laws account for a fair number of these folks. I'd like to know exactly how many, but I'd be willing to bet you that convictions for drug use and the drug trade are a whooping part of the whole thing.

Second, where does the U.S. get off complaining about any other countries treatment of human rights? Aside from our recent propensity to torture, we imprision more people than any other country in the world. More. Than. Anyone.

Finally, economics play a huge part in this. Crime rate and economic growth are directly related. The less wealth available to the entire population, the higher the growth in crime. So everytime we have conservatives, who often wall themselves up in gated communities, push for more tax cuts (for them) and advocate the excesses of capitalism, expect crime to grow. And as quoted above, we all pay for it.


Thursday, February 28, 2008

The Data

There really is data and analysis about the reality of the threat of al Qaeda. Kevin Drum refers to an article in today's WaPo outlining some of the reality of the threat, which is "trumped up" to say the least:

The heart of Sageman's message is that we have been scaring ourselves into exaggerating the terrorism threat — and then by our unwise actions in Iraq making the problem worse. He attacks head-on the central thesis of the Bush administration, echoed increasingly by Republican presidential candidate John McCain, that, as McCain's Web site puts it, the United States is facing "a dangerous, relentless enemy in the War against Islamic Extremists" spawned by al-Qaeda.

The numbers say otherwise, Sageman insists. The first wave of al-Qaeda leaders, who joined Osama bin Laden in the 1980s, is down to a few dozen people on the run in the tribal areas of northwest Pakistan. The second wave of terrorists, who trained in al-Qaeda's camps in Afghanistan during the 1990s, has also been devastated, with about 100 hiding out on the Pakistani frontier. These people are genuinely dangerous, says Sageman, and they must be captured or killed. But they do not pose an existential threat to America, much less a "clash of civilizations."

It's the third wave of terrorism that is growing, but what is it? By Sageman's account, it's a leaderless hodgepodge of thousands of what he calls "terrorist wannabes." Unlike the first two waves, whose members were well educated and intensely religious, the new jihadists are a weird species of the Internet culture. Outraged by video images of Americans killing Muslims in Iraq, they gather in password-protected chat rooms and dare each other to take action. Like young people across time and religious boundaries, they are bored and looking for thrills.

....Sageman's harshest judgment is that the United States is making the terrorism problem worse by its actions in Iraq. "Since 2003, the war in Iraq has without question fueled the process of radicalization worldwide, including the U.S. The data are crystal clear," he writes. We have taken a fire that would otherwise burn itself out and poured gasoline on it.



I know that this story doesn't arise to the level of some kind of Pumpkinhead hypothetical, but Turkey has invaded northern Iraq. And now, they are refusing to give a timeline on withdrawal (sound familiar):

Ankara (dpa) - Turkey's military operation in northern Iraq against Kurdish separatists could finish in as short a time as one day or take up to year, Turkish Chief of General Staff Yasar Buyukyanit said on Thursday.
The Turks have obviously attended the George Bush school of diplomacy. And what's really rich is that the U.S. is trying to pressure the Turks to leave.



Charlie is one pissed off dude today. And rightly so. I was going to excerpt, but you're really better off just going to it.



Stagflation in motion:

This chart shows what has happened to mortgage rates. You'll note that they are actually higher today than the first of the year.

If you're like me, you might think this doesn't make sense. The Fed has been "cutting interest rates" like crazy right? But here's the problem (bear with me a minute). The rates the Fed cuts are very short term rates. Long bonds (primarily the ten year treasury) are the bonds upon which mortgage interest rates are based. Those rates are set by the market and what the bond traders (the market) are telling us is that inflation is the concern and that future interest rates will have to go up to stop inflation. When traders feel that way, they don't buy long bonds which causes the "yield" (interest rate) to go up in order to attract buyers.

So, ironically, while Bernanke and crew are studiously lowering interest rates to help the housing crisis, it ain't working.


Just Waiting For This

You knew we'd see a story like this sooner or later:

The Wall Street Journal leads its world-wide newsbox with Treasury Secretary Henry Paulson's harsh criticism of any new plan that uses government money to help struggling homeowners. In an interview with the paper, Paulson characterized the proposals as "bailouts" and said the administration's market-based approach would be enough to prevent a crisis in foreclosures. Democrats are working on several plans to help homeowners, and Paulson's comments emphasized the opposition they'll face from the White House on the issue.
The hypocrisy is rich. The government is working in overdrive to provide bailouts to the corporations financial institutions but when it comes to helping out ordinary citizens, fogetaboutit.


Wednesday, February 27, 2008

St. John Part Deux

Digby reminds us of how Rovian politics really work. Remember all the crap about the nutbar who introduced McCain trashing Hussein Obama?

In this case, McCain not only gets these insults against both Democratic candidates aired over and over again, he makes himself look good for "repudiating" it. It's "out there" which is the best of all possible worlds.
Yep. We all fall for it and the media laps it up like a thirsty dog.
The media have been playing those insults of Obama and Clinton over and over again on a loop --- along with that straight talking flyboy angrily dismissing the comments. The media gave him high marks for his integrity, as usual. Today, they are calling it a brilliant "triangulization" strategy. Talk about a win-win-win for McCain.
It's enough to make you a cynic.


And Here's ......

Timmeh! In all his stupid glory!


Let's see. If a dog shits in the woods, and no one hears it, does it smell?


Stellar Guy

After McCain's slap down of the right-wing nutbar introducer yesterday, Digby thought it good to take us down memory lane of some of McCain's greatest hits of good taste!

At the campaign event on Monday, the woman asked McCain, "How do we beat the bitch?"

McCain laughed along with the crowd as he said, "May I give the translation?"

"That's an excellent question," he added. "I respect Senator Clinton. I respect anyone who gets the nomination of the Democratic Party."

McCain said Wednesday he's sure the New York senator understands.

"Senator Clinton and I have a very good relationship," he said. "She understands I've always treated her with respect, and I'm sure that's been the reaction of her campaign."


"I can't dictate what other people say _ that's not my business," he said. "Nor is it an appropriate role for me to play in a gathering at a restaurant, and if anybody thinks that I should, then I think they have the wrong idea of what gatherings are all about.
Or this one that the nutbar said and McCain didn't repudiate:
How about Condoleeza Rice and Madeline Albright, who looks like death warmed over. I think there's a big difference between Condi and Madeline.
Then there's my personal favorite from eight years ago:
Earlier this month, at a Republican Senate fund-raiser, McCain told a downright nasty joke making fun of Janet Reno, Hillary Rodham Clinton and Chelsea Clinton.

The fact that McCain had made the tasteless joke was reported in major newspapers, as was the vain attempt by his press secretary to initially deny what McCain had done. But in several major newspapers, the joke itself was kept a secret. When McCain subsequently apologized to President Clinton, the Washington Post, in its personality section, noted the apology but said the joke "was too vicious to print."

The Los Angeles Times, in its Life & Style section, provided an oblique rendering of the joke that did not fully convey its ugliness. When Maureen Dowd penned a column in the New York Times about the joke, she wrote that McCain "is so revered by the press that his disgusting jape was largely nudged under the rug." But Dowd chose not to relay the joke, either.

The joke did appear in McCain's hometown paper, the Arizona Republic, and the Associated Press did report the joke in full, so everyone in the press had access to McCain's words. But by censoring themselves, the Post, the Times and others helped McCain deflect flak and preserved his status as a Republican presidential contender.

Salon feels its readers deserve the unadulterated truth. Though no tape of McCain's quip has yet emerged, this is what he reportedly said:

"Why is Chelsea Clinton so ugly? Because her father is Janet Reno."
Nice. But, how about more recently:
McCain made the reference to Democratic front-runner Hillary Clinton after touring USC Upstate’s nursing school and seeing a training mannequin.

“I was very glad to meet the dummy, named ‘Hillary,’” McCain said to laughter. “Is that the name?”

Actually, the dummy, or human simulator, doesn’t have a name.
Yeah. John McCain. The gentleman, straight-talking class act.



I didn't watch the Democratic debate last night. But from all that I've read, I guess Timmeh "pumpkinhead" Russert made a complete ass of himself. Which means, things were normal.


Trouble In Hate Land

Looks like John McCain has dissipated all that good feeling the NY Times story created in the base:

In Ohio yesterday, Sen. John McCain (R-AZ) appropriately apologized after right-wing talk radio host Bill Cunningham opened his campaign rally by pejoratively referring to Sen. Barack Obama’s middle name Hussein while calling him “a hack.” “I did not know about these remarks, but I take responsibility for them. I repudiate them,” McCain told reporters.

McCain’s repudiation stung Cunningham, who bellowed against the senator on his show later in the day. Cunningham claimed McCain “threw me under the bus for the national media” and then said that he would now “throw” his “support behind Hillary Clinton.”

Cunningham’s “hate radio” brethren, such as Rush Limbaugh and Sean Hannity, joined him in indignation over McCain’s apology.


Right-wing radio host Mark Levin, who also blogs for National Review, called McCain a “loser” for distancing himself from Cunningham’s caustic comments


Because he won’t stoop to their low rhetorical level, right-wing radio is now telling McCain that he can “say good-bye to any hope of winning over the conservative base.” Apparently McCain doesn’t have enough hate for “hate radio.”
Karl Rove suggested that these guys need to cool it or they'll appear "bigoted". Well ..... they are aren't they?

Popcorn anyone?



Does anyone really believe any of this? Remember, the LA Times is noted for crappy polls:

Whoever ends up winning the nomination will face a tough time against Sen. John McCain, notes the Los Angeles Times in its lead story. A new in-house nationwide poll shows 61 percent of voters view McCain favorably. McCain holds an advantages in several fronts as voters are more likely to rate him as the strongest leader who has "the right experience" and would be better at protecting the country and dealing with Iraq. On the economy, McCain gets higher marks than Obama but not Clinton. In a hypothetical matchup, McCain gets more support than either of the two Democratic contenders, leading Clinton by 6 percentage points and Obama by 2 points, which is within the poll's margin of error.
The key question asked was probably something like, "would you vote for that sweet boy John McCain or one of the evil twins, Clinton and Obama?

This is a non-story on so many levels, yet a very large national daily prints it.

If we are to have a chance of correcting the excesses of the past 7 years, it will only come through a resounding thumping of all Republicans in 2008. The message has to come through that the behavior of Republicans, not just Bush, has been self-destructive to the party. Without that, what's to prevent everyone from adopting the crappy governance tactics of the past two administrations?


Moving On

Just wanted to say so long. Take care, all.



We've had a number of recent interest rate cuts. Therefore, mortgage interest rates should be declining. Right?


This is a problem in stagflation conditions. Because inflation is a concern, bond traders are selling longer term bonds because of future higher interest rates that will be needed to stop inflation. This means that the 10 year bond, which is a key benchmark for mortgage rates, has a higher interest rate than before the cuts!

It's going to take some good inflation news before interest rates begin to cool. And I just don't see that happening in the near term.


Tuesday, February 26, 2008

2008 Results

Would be really funny ..... if it wasn't possible.

Diebold Accidentally Leaks Results Of 2008 Election Early


Background Info

Here is a pretty good column that outlines the situation going forward with Clinton and Obama vis a vis' a convention floor fight. Tomansky tackles the possibilities of a fight over Florida and Michigan as well as the Democratic Party's players who will be making key decisions.



If you're a regular reader, this won't be news. Today's Producer Price Index (measure of inflation at the producer level) was up a whopping 1% in January. That would be an annual 12% rate of inflation. And all of it happening during an economic slowdown.

What's that word used to describe the situation?


Monday, February 25, 2008

A Little Here, A Little There

If you're like me, you don't spend much time looking at the nuances of the spread between the yield on two year bonds vs. ten year. But some people do, and for very good reason. Lately, the "curve" on yield has been steepening.

So, why do I care? Because it's yet another example of how the government commits corporate welfare:

Folks should understand that a steepened yield curve typically does not happen by accident.

Given our current financial climate, this might be seen as a clearly orchestrated move on the part of monetary authorities to allow banks to fatten their profits [by raising - borrowing - short term funds to lend longer term ‘risk free’ to the government] at public expense to help the banks repair their battered balance sheets.

There are some market observers who would describe this change of slope in the interest rate curve as the ‘socialization’ of bank losses.
Let me put this is laymen terms. The Fed makes money available to the big money boys (not you and me) at an increasing lower interest rate (short term rates). Those corporations financial institutions then use that cash to buy longer maturity government bonds that will give them a higher return on their investment than the cost of borrowing, and all done with a risk free bond! Pretty good deal. If you're a private corporation financial institution that is.

I wonder what would happen if I went to the Fed and asked for $100K at prime (with collateral of course) and then purchased a ten year bond, making a totally risk free 1%? It would probably close down the Fed from everyone laughing so hard.


Good Job Shrub

Congrats Shrub, we're back where we started.

Must be time to elect an adult to clean up the mess:


Simple Proof

Republicans are routinely going around the cable B.S. Fests and complaining that Democrats won't give Bush credit for "improvement" in Iraq. Michael Kinsley answers this criticism with a very simple response that is a test for success:

Michael Kinsley writes in his Washington Post opinion column: "The test is simple, and built into the concept of a surge: Has it allowed us to reduce troop levels to below where they were when it started? And the answer is no.
End of discussion.

Not only are we not bringing people home, we are net 20,000 soldiers up from the pre-escalation levels. Meanwhile, Lord Petraeus's current strategy is the "pause" the withdrawal lest things spiral out o' control again. Frankly, I don't even think the extra troops are doing much of anything. We can thank Muqtada al Sadr for the decrease in American deaths. And we all know how dependable Sadr will be in the long run.

Meanwhile, here's Juan Cole's headline for his blog today (much like everyday):

60 Dead in Attack on Shiite Pilgrims;
Turkish invaders Kill 33 PKK Guerrillas;
2 US Soldiers Killed;
Stewart Skewers McCain



I've always thought that solar electricity generation is where the future should be. Given the size of our country, and the amount of surface area on buildings it should be a no-brainer. This energy expert agrees with me having done the math on such an undertaking:

My calculator indicates that 6.1 million acres is an area of 9,531 square miles, which is equivalent to a square of just under 100 miles by 100 miles (which would be 10,000 square miles). That's a large area, to be sure. But the possibility is there. A lot of "land" is available right now of rooftops.
His above conclusion is based on replacing all current electric generation with solar, which does not include any current cleaner technologies like hydroelectric, thermal, or wind. He concludes with this:
What is the limiting factor? Are there particular components that are critical, but not available in large enough quantities to make this work? Possibly, but I don't know what those might be. I actually believe that this could be our Manhattan Project, and it could be done. But it doesn't even have to offset all of our current electrical capacity. We just need to start chipping away, and substituting solar in place of fossil fuels and new capacity that is needed.

Can we afford it? The key question to me is, "Can we afford not to?"
Couldn't agree more.


Sunday, February 24, 2008

Just Consider This

And Iowa is not alone ......

Obama Would Carry Iowa, Clinton Would Lose

A new Des Moines Register poll in Iowa shows Sen. Barack Obama would beat Sen. John McCain in the general election, 53% to 36%.

However, McCain would beat Sen. Hillary Clinton, 49% to 40%.

Iowa is expected to be a competitive swing state this fall.


Dancing At The Top

No upside break yet ..... Peak oil or a brief plateau?