Tangled Webs

Wednesday, August 15, 2007

Hell In A Hand Basket

That the prediction for the U.S.

No, not by me, but by a government official:

The US government is on a ‘burning platform’ of unsustainable policies and practices with fiscal deficits, chronic healthcare underfunding, immigration and overseas military commitments threatening a crisis if action is not taken soon, the country’s top government inspector has warned.

David Walker, comptroller general of the US, issued the unusually downbeat assessment of his country’s future in a report that lays out what he called “chilling long-term simulations”.

These include “dramatic” tax rises, slashed government services and the large-scale dumping by foreign governments of holdings of US debt.

Drawing parallels with the end of the Roman empire, Mr Walker warned there were “striking similarities” between America’s current situation and the factors that brought down Rome, including “declining moral values and political civility at home, an over-confident and over-extended military in foreign lands and fiscal irresponsibility by the central government”.

“Sound familiar?” Mr Walker said. “In my view, it’s time to learn from history and take steps to ensure the American Republic is the first to stand the test of time.”

Mr Walker’s views carry weight because he is a non-partisan figure in charge of the Government Accountability Office, often described as the investigative arm of the US Congress.

While most of its studies are commissioned by legislators, about 10 per cent – such as the one containing his latest warnings – are initiated by the comptroller general himself.

In an interview with the Financial Times, Mr Walker said he had mentioned some of the issues before but now wanted to “turn up the volume”. Some of them were too sensitive for others in government to “have their name associated with”.

“I’m trying to sound an alarm and issue a wake-up call,” he said. “As comptroller general I’ve got an ability to look longer-range and take on issues that others may be hesitant, and in many cases may not be in a position, to take on.

Join the crowd in terms of sounding an alarm. But hey, it's that new conservatism in action!

I was watching the local news last night. They had some mom-on-the-street interviews about the Chinese toy mess. These moms were horrified to think their kids were exposed to the dangers of lead and swallowing magnets. One even discussed the ineffective lead testing kits available to consumers. You'd have thought a plague had hit suburbia.

It made me wonder.

Would these moms be worried if they lived in Iraq?

Racheting the Rhetoric

Apparently with Condie's blessing, we've now named a portion of Iran army as a "terrorist group". What's important here is not the stupidity of naming a portion of a sovereign country's army "terrorists". It's that the move is supported by Condie who, thus far, as been about the only bulwark against Cheney's great crusade against Iran.

Imagine if Iran named the Special Forces of the U.S. Army a "terrorists" group, which is likely accurate given their current activities within Iran. Conservatives would squeal like stuck pigs.

September, It's Only A Friedman Away

Speculation is growing about what his majesty Gen. Petraeus will say in September. Thanks to O'Hanlon and Pollack, the media is eating up the idea that "progress" is being made. Here's some of the buzz:

The Los Angeles Times leads with administration officials saying they expect that Gen. David Petraeus will suggest U.S. troops should be moved out of several areas in Iraq where security has improved when he gives his much-awaited progress report in September.

...

The LAT points out that even if Petraeus proposes removing troops from certain areas, this wouldn't necessarily mean that he will suggest any kind of withdrawal from Iraq since they could simply be moved to "another hot spot." Some say Petraeus will call for maintaining the current number of troops for an additional six months. But still, officials hope that by stating that progress has been made in certain areas, including the once volatile Anbar province, it could persuade lawmakers to delay calls for a major troop withdrawal. Despite the predictions, it's clear that officials really don't know what Petraeus will recommend, and some have warned that pulling back from areas too quickly could result in a resurgence of violence.

First off, the only real accurate part of the "reporting" is that no one really knows what Petraeus will say. If he does propose another Friedman Unit, it wouldn't be surprising. But the tactics of redeploying units within Iraq to "hot spots" looks a lot like whack-a-mole, Petraeus style (in slow motion rather than quickly). And the most important part is what Petraeus has to say about the strategic situation, which our media seems to not understand. Remember. The entire purpose of tactical security is to make it possible to improve the situation politically. I disagree that the security situation has materially changed:

Everyone fronts the four truck bombs that exploded in northern Iraq and killed at least 175 people (the NYT says 190). "It looks like a nuclear bomb hit the villages," an Iraqi officer said. Everyone mentions the bombs targeted members of a small religious sect, the Yazidis, who have become targets of Sunni attacks after a Yazidi woman was stoned to death for eloping with a Sunni man and converting to Islam. It amounted to the deadliest attack in almost a year and, once again, raised concerns that the recent buildup of U.S. troops has simply moved insurgents to more remote areas. [as is customary, the Pentagon is blaming al Qaeda with no proof]
The U.S. military announced the deaths of nine American service members, including five who were killed in a helicopter crash. Also yesterday, gunmen wearing Iraqi army uniforms and using official government vehicles kidnapped five senior Oil Ministry officials.

The violence is dispersing (as predicted), but not fundamentally changed. And on the political front, there's been reverse progress to date and no number of Friedman Units is going to change that.

Added: Here's a shock for you. The Petraeus report is being written by the White House.

Figures.

Tuesday, August 14, 2007

Atrios Asks A Question

Paraphrasing here. Atrios asks, supposed we attacked Iraq, democracy reined, and we had found secret nuculur weapons. What do you think would have happened to the reputations of anti-war advocates and pundits, especially their invites to the teevee shows?

Compare and contrast with reality ......

Hey Bear, Need A Condo?

Did you know that Katrina aid money is going to build condo's in Alabama?

Yep. Nevermind that the damage there was not large, they are after all a "red" state and Bear Bryant was a great football coach.

This is really having your priorities right.

Inflation Ex-Inflation Watch

In the middle of everything else going on in the economy, we had yet another report of no inflation .... when you take out the costs of food and energy. Guess we all need to stop using energy and eating to stay ahead economically.

But frankly, given the state of the credit markets, the Fed has no choice but to try and pump that balloon up .... big time.

This Is Not Good

Update: Rumors are floating that the Fed will come out today and cut interest rates.

Some money markets are halting redemptions. Just what does that mean?

Money markets are used by a whole lot of people like a savings account. In other words, they are very safe, very liquid and not at all a part of the credit problems. Yet panicy investors are requesting withdrawals at high rates .... runs on the bank ... if you will. For these guys to stop allowing people to withdraw their money is a sign of a significantly spreading panic.

This is a completely a no win situation for the institutions. If they halt redemptions, people panic more. If they liquidate assets to meet withdrawals, they risk bankruptcy. Why? Because right now the panic in the bond market has made even high quality bonds difficult if not impossible to trade. And if you can get a buyer, it's at a significant loss.

Just What We Need

This is just perfect. The man who didn't meet a death penalty case he didn't like to have more power?

The Los Angeles Times leads with word that the Justice Department is close to implementing a new set of regulations that would ultimately give Attorney General Alberto Gonzales the power to decide whether certain states can speed up death-penalty prosecutions. A state would have to specifically request to be included in the "fast track" program that would decrease the time a prisoner has to appeal.

This would be just crazy .....

Monday, August 13, 2007

Tweety Has A Problem

Updated: Clip is now included in the post.

I saw this clip earlier today and was creeped out by it. Chris Matthews has been noted to act like he has chronic man-crushes, gushing as he does about Thompson, Guiliani, or Bush at various times. But in this instance, it was a woman .....

Digby writes about it here and says it better than I.

In an interview with CNBC's Erin Burnett, Matthews really makes an ass of himself. You can watch the video here. Burnett is clearly caught way off guard and is embarrassed by Matthews comments. His past bullshit has been only noteworthy for being a lousy journalist. This is noteworthy for his demonstration of sexual harrassment.

In Your Honor Karl

This story is shamelessly taken from Kevin Drum. It's a fitting symbolic story to the entire Bush administration, led in part by Unkie Karl:

Interestingly, the story is told by a Republican:

"For all the years he was president," [Dick] Armey told me, "Bill Clinton and I had a little thing we'd do where every time I went to the White House, I would take the little name tag they give you and pass it to the president, who, without saying a word, would sign and date it. Bill Clinton and I didn't like each other. He said I was his least-favorite member of Congress. But he knew that when I left his office, the first schoolkid I came across would be given that card, and some kid who had come to Washington with his mama would go home with the president's autograph. I think Clinton thought it was a nice thing to do for some kid, and he was happy to do it."

Armey said that when he went to his first meeting in the White House with President Bush, he explained the tradition with Clinton and asked the president if he would care to continue it. "Bush refused to sign the card. Rove, who was sitting across the table, said, 'It would probably wind up on eBay,'" Armey continued. "Do I give a damn? No. But can you imagine refusing a simple request like that with an insult? It's stupid. From the point of view of your own self-interest, it's stupid. I was from Texas, and I was the majority leader. If my expectations of civility and collegiality were disappointed, what do you think it was like for the rest of the congressmen they dealt with? The Bush White House was tone-deaf to the normal courtesies of the office."

A swell bunch or dumbass, immature, nerdy, wannabe fratboys.

Sicko

I saw Sicko yesterday.

All I can really say is, go see it. You'll not regret it.

Turd Blossom Out

Yeah, so Rove is leaving. But like everyone else, I'm suspicious. Is it a late-in-the-second-term departure or something else? His departure doesn't lessen his chances of having to testify ... quite the contrary.

So, like with everything Bush, the most sinister explanation will likely be correct.

The U.S. Islamic State

I was reading Glenn Greenwald today who is talking about the fear by some conservatives that the U.S. will be overrun by Islamist. What's up with that?

My first thought was, do these people really exist who think this? Followed by, of course there are. And there are a lot of them. And their thinking doesn't stop at Islam. They'll include a fear of anyone who isn't white, doesn't adhere to a strict set of norms and that doesn't looks like them.

Why does this exist?

There is absolutely no empirical evidence that there is any significant threat by any Islamic group to the United States. Despite that evidence, there is a very large group of people who chronically seem to fear being "taken over".

As a former psychological type, I tend to wonder about these people as individuals and their personal psychological makeup. I think the answer to this fear emanates from their own internalized fear about their own existence. Put another way, they're really not sure they're good enough, strong enough, smart enough or (fill in the blank) enough to compete with diversity, or the different. That insecurity manifests as fear leading to actions which can only be called, at best protectionist, and at worst racist.

There is absolutely no way, even in the current state of affairs, that America will become an Islamic theological state. The fundamental beliefs associated with Islamists are so fundamentally different from commonly held American values that is just ain't gonna ever happen. Interestingly, the real likely dangers of a theocracy come from those who are afraid of diversity, those very people leading the charge of fear against Islam. It's is their rigid and narrow view of America that is much closer to traditional values held in this country, and therefore would be much more likely to slowly be ingrained into the body politic.

Ironic. Isn't it?

Retail Sales

You're going to hear headlines stories of how retail sales are "good" or "improving". Maybe. I'll let you be the judge:

Here's the chart:

While sales were up, they certainly aren't great. Why is this important? Because consumers and their spending are two-thirds of gross domestic product.

Draw your own conclusions .....

Added: California sales seem to be particularly faltering.

Added: The retail sales figures are not adjusted for inflation.

Sunday, August 12, 2007

Used And Abused

Glenn Greenwald interviews Michael O'Hanlon where Michael reveals how he was bent over by the Bush administration. What's amazing is that with O'Hanlon's admissions, he still doesn't get it.

Bonus Quote

“We look upon authority too often and focus over and over again, for 30 or 40 or 50 years, as if there is something wrong with authority. We see only the oppressive side of authority. Maybe it comes out of our history and our background. What we don't see is that freedom is not a concept in which people can do anything they want, be anything they can be. Freedom is about authority. Freedom is about the willingness of every single human being to cede to lawful authority a great deal of discretion about what you do.”

Can you guess who said this? Answer after the jump .....

As Digby calls him, Benito Guiliani.

The Future?

A Must Read

Here's today's Sunday must-read. It's a NY Times story on how and why the war in Afghanistan was a failure and how Afghanistan is going down the drain.

Subprime Overview

As you likely now know, there was a shock in the stock market last week. Shocks have occurred before. The Fed has thrown money at it and things settled down. But a lot of people are concerned that this problem is different. Here's why:

This from John Mauldin's newsletter (free: subscribe here)

And one last difference between 1998 and today. Back then, the problems in the markets became known and were priced into the markets in relatively short order. It is going to be several years before we know the extent of the subprime losses. Remember the table that I used last week which showed the bulk of subprime mortgage interest rate resets was not until the first half of 2008. [This table shown in billions, the amount of adjustable loans to reset and when they begin to reset]:

It is going to take years for the markets to know what the losses on the subprime will actually be.

And it is not as if it should be a total surprise. Any investor can go to their Bloomberg and pull up a listing of subprime Residential Mortgage Backed Securities. There are 2,512 of them. If you sort by the ones with the most loans over 60 days past due, you find that the average RMBS has 12.39% of their mortgages over 60 days, and 2.39% have already been repossessed (REO in the next table), with almost 5% in foreclosure.

...

"Let me reinforce my point with a basic but very appropriate analogy. In Japan, there is a distinctive puffer fish called the Fugu. It is served in special sushi restaurants by master chefs. Fugu tingles in your mouth when you eat it. It is supposed to be an exotic aphrodisiac in Japan, where diners spend hundreds of dollars a serving to eat it. The problem is that eating Fugu can kill you. There is an old saying in Japan, 'I want to eat Fugu, but I don't want to die.' People have been known to literally drop dead in sushi bars from cardiac arrest and pulmonary failure if the Fugu they ate wasn't prepared correctly. You have to be a specially trained and licensed Fugu chef to prepare and serve it. Personally, I would want to see the stats of the chef before eating Fugu...just a simple 'number of customers killed' would work for me.

"Now imagine a family in your town called the Griswolds. (You may remember them from the National Lampoon 'Vacation' films.) Suppose for their next trip, the Griswolds decide to travel to Japan and pursue some gastronomical thrills and eat the infamous Fugu. So they do some cursory research, march into a Tokyo Fugu restaurant, plunk down $1,000 and order a huge plate of Fugu. And die on the spot.

"The next morning as you sit at your breakfast table sipping coffee, you read the following headline:

"LOCAL FAMILY DIES EATING EXOTIC POISONOUS FISH IN TOKYO"

"You think to yourself, no problem... you continue sipping coffee... and maybe mutter... 'They should have known better.'

"Now imagine instead that you read the following headline:

"LOCAL FAMILY DIES IN FISH RESTAURANT"

"Your reaction may be very different. You are likely going to cancel your reservation at the local sushi bar until you hear more. What if all fish are tainted? Or is it just that restaurant? Or is it a specific type of fish? You'll have lots of questions, and you might assume, until you know more, that no fish are worth eating.

Mauldin is exactly correct. It's going to take months to have any kind of sense of just how big the mortgage default situation is. It's going to likely take years to know the impact of defaults on consumers, housing prices, and the value of underlying bonds that support mortgages. Until then, the headlines coming out are going to be imprecise and the information sketchy. Markets do not like sketchy.

As I've said before, only a fool would predict a collapse. But, also, only a fool would predict that a collapse can't happen. The fact is, no one knows, which is exactly the problem. So get ready for a wild ride if you have any investments.

Tangled Webs

Wednesday, August 15, 2007

Hell In A Hand Basket

Toying With Us

Racheting the Rhetoric

September, It's Only A Friedman Away

Tuesday, August 14, 2007

Atrios Asks A Question

Hey Bear, Need A Condo?

Inflation Ex-Inflation Watch

This Is Not Good

Just What We Need

Monday, August 13, 2007

Tweety Has A Problem

In Your Honor Karl

Sicko

Turd Blossom Out

The U.S. Islamic State

Retail Sales

Sunday, August 12, 2007

Used And Abused

Bonus Quote

The Future?

A Must Read

Subprime Overview

About Me

Froomkin

Blog Archive