Saturday, August 18, 2007


Financial analysts should have seen the subprime bomb ticking

In fact, some did:

“All of the old-timers knew that subprime mortgages were what we called neutron loans — they killed the people and left the houses,” said Louis S. Barnes, 58, a partner at Boulder West, a mortgage banking firm in Lafayette, Colo. “The deals made in 2005 and 2006 were going to run into trouble because the credit pendulum at the time was stuck at easy.”

“I’m one guy in a research department, but many people in our mortgage team have been suggesting that there was froth within the market,” said Jack Malvey, the chief global fixed income strategist for Lehman Brothers. “This has really been progressing for quite some time.” …

“We’ve contended for a while that there was an issue in subprime debt,” said Neal Shear, global head of trading at Morgan Stanley. “A year ago, we were aware that delinquencies were going to rise.”

Meanwhile, since everybody who has followed this issue knows that the incestuous action of ratings agencies like Moody’s, touting subprime derivatives on which they stood to profit, is a fair part of the problem, the European Union is planning to investigate possible conflicts of interest. Where’s the SEC, on our side of the pond?

And, the anti-Cassandras also bear blame for being in denial still, primarily through their claim that this is a just a problem with subprime mortgages.

No, it also has affected a number of Alt-A mortgages, the next class above subprimes. Therefore, it has affected more collateralized debt obligations. It’s also caused other classes of mortgage to hike their interest rates.

And, with the peak in number of adjustable rate mortgages due to reset nearly a year off, we’re still not at the bottom of this.




There's more: "Financial analysts should have seen the subprime bomb ticking" >>

The Gray Team --- Lunchbox 8-17-07

I like Adam Green and roomeight. I loved the music, but I really didn't like the A-Team. There was one t thing about the A-team that was accurate, those Ruger Mini-14s couldn't hit the broadside of a barn. I know, I owned one back then. Truthfully, nobody could shoot that many bullets and not hit a thing. Not even Mr. T. Tonight's funny.




There's more: "The Gray Team --- Lunchbox 8-17-07" >>

Introducing the Wurlitzer Prize of the Week for Wingnuttery™

I gotta admit, when the idea came to me, I gave myself a palm-to-the-forehead, Homer-style “D’oh!” slap. I still can’t believe one of my liberal-blogger counterparts didn’t get there first.

There is plenty of wingnuttery out there, to be sure. I am certain that some weeks it will be difficult to select a winner. This week was rife with possibilities. There was Newt claiming that the war on the streets of America with illegal immigrants gunning down American teenagers is worse than the wars in Afghanistan and Iraq. There was Time Magazine editor Michael Duffy on Hardball asserting that "for the last 25 years, Democrats have done everything they can to alienate religious voters, faith-minded voters" and Rudy making his absurd claim of the week, this time that he was at Ground Zero more than a lot of the rescue workers, when in reality he was there a grand total of 29 hours. There was Michael Gerson on the pages of the Washington Post feebly attempting to make the case that Karl Rove is the “opposite of a cynical political operative.” There is the entire body of work for last week of The Weekly Standard and The National Review, and pretty much anything posted at Town Toxichall. (Sorry, no links to those sad sites. If you read them, chances are pretty damned good that you don't read us, so...)

After inoculating myself against all forms of known pathogens, I waded into the fever-swamp of the Right and set about getting down to the business of finding a worthy recipient. So many choices! A veritable banquet of right-wingnuts just sitting there on the steam-tables, waiting to be selected! But alas, I could only pick one.

Our first Wurlitzer Prize is awarded to Ralph Peters of the New York Post for his ridiculous claim that al Qaeda targeted two Yazidi communities in the northwest Sinjar Province because they are losing and they are desperate, and the worst attack of the war to date is actually good news. If Ralph Peters was an amusement park attraction, you would have to be "this tall" to ride, he spins so furiously.

The foreign terrorists slaughtering the innocent recognize that their only remaining hope of pulling off a come-from-way-behind win is to convince your senator and your congressman or -woman that it's politically expedient to hand a default victory to a defeated al Qaeda.

First of all, there is no definitive proof that al Qaeda had anything to do with it, and no group has claimed credit for the devastation. Second, there was no al Qaeda in Iraq before Resident Evil™ opted to invade, and there will be no al Qaeda presence after we leave. The Iraqis have an aversion to all foreign fighters in their midst, not just coalition forces. The foreign militants will be slaughtered, or forced to flee on the heels of an American withdrawal. The ridiculous meme that Peters is pushing is merely cranking up the Mighty Wurlitzer to set the stage for the inevitable “liberals stabbed the military in the back” trope that they trotted out after Vietnam, and some are still embracing. It’s utter nonsense, of course, but it worked the last time, so they are set to dust it off once more, because it’s all they’ve got, after having been proven wrong, wronger, wrongest at every single turn. And besides all that, his man-crush on General Petraeus is just creepy.




There's more: "Introducing the Wurlitzer Prize of the Week for Wingnuttery™" >>

The Daily Show Reports from Iraq...No, Seriously


Come Monday, Comedy Central's The Daily Show begins Operation Put Your Money Where Your Mouth Is.

Comedy Central released this statement regarding the special reports: “Join The Daily Show with Jon Stewart for ‘Operation Silent Thunder: The Daily Show in Iraq,’ a week of special reports filed from Iraq. Yes, actual Iraq, not green-screen Iraq. Daily Show senior war correspondent Rob Riggle will provide in-depth coverage and insights from the front lines throughout the country where he was embedded with the troops and learned just how hot 120° really feels.”

Riggle himself is a major in the United States Marine Corps Reserve, where he served in Liberia, Kosovo and Afghanistan.

Rush Limbaugh, your Hummer is waiting....hump that rucksack, soldier!




There's more: "The Daily Show Reports from Iraq...No, Seriously" >>

Wal-Mart slumps; leading economic indicator of rocky times ahead?

Decades ago, General Motors’ Charlie Wilson said that what’s good for the country is good for General Motors, and vice versa.

No Sam Walton never made such a claim for Wal-Mart, nor has current CEO Lee Scott. Nonetheless, whether defending Wal-Mart’s pay scale or the “Wal-Martizing” of many small towns, there’s been plenty of economists who have, in essence, been ready to make that claim on behalf of the retailing behemoth.

Well, the flip side of that would be that what isn’t good for Wal-Mart isn’t good for the country. So, if Friday’s report on Wal-Mart sales means anything, it reinforces the likelihood of a recession, in my mind. Home Depot also reported problems, but its sales have been limping for several months. The Wal-Mart news is new and fresh:

Economists said the sluggish performance of the chains — Wal-Mart missed its profit forecast and Home Depot’s earnings dropped — could signal broader troubles in the economy.
“It’s a red flag,” said Jay Bryson, global economist at Wachovia. “If consumer spending starts to weaken, the overall outlook for economic growth will diminish.”
That, Wal-Mart executives said, is precisely what has begun to happen in its 4,000 United States stores over the last three months — even after the chain cut prices on 16,000 products this summer.
“Many customers are running out of money at the end of the month,” said H. Lee Scott Jr., the chief executive of Wal-Mart.

Home Depot started slumping some time back, once adjusted-rate mortgages began to rise, and its fortunes are more narrowly tied to housing. But, Wal-Mart’s problems would seem to reflect broader economic problems, in some cases, and broader economic worries about the future by people who have not been affected.

It is not horrible economic news if a company misses an earnings-per-share forecast by a penny. But, to be 3 cents off is a little more serious. I’m sure WallyWorld is already adjusting its third-quarter forecast. But, unless it outperforms that, rather than just hitting it on the mark, the Street might not be too impressed.

Plus, don’t forget those price cuts on 16,000 items. That forced dozens if not hundreds of Wal-Mart suppliers to do their own adjusting. And, if their products still aren’t selling well, some of them could be looking at layoffs in the future.

That makes it official in my mind; I’ll raise my 12-month recession odds from 2-5 to 1-2.




There's more: "Wal-Mart slumps; leading economic indicator of rocky times ahead?" >>

Just Think Good Thoughts, Clap Your Hands and Keep Wishing

I just tried commenting to a post at PA called THIS MEANS YOU, JOE.., but somehow was unable to put up my comment. Here is what I would have said there if I had been able.

Kevin Drum laments the success of politicians like Joe Lieberman, and journalists like O'Hanlon and Pollack who after dropping in to Iraq for dog and pony shows come back and wow the big time media with PR bull shit.

There might be a big conspiracy among the media elites and the Washington politicians but I don't believe a conspiracy is necessary. The big time media and the politicians are just like they rest of us. They desperately want to believe the war is getting better. They really want things to improve. If they just wish hard enough maybe they will. They are looking and longing for good stories.

They simply ignore important stories if those stories don't provide the evidence they want to find. For example, here are a handful of stories from the past week that deserved much greater attention. They were confined to the foreign press, the back pages of main stream papers, an occasional passing reference on cable news and blogs like this one. Army’s High Suicide Rate Suggests Administration Is Understating Cases Of PTSD; Iraq insurgents continue to think a step ahead of the American military;An Army Under Stress; and War Czar Whispers "D" Word.

In Iraq Suicide Rate At Three Percent Gadfly laments the lack of coverage of the very important suicide story.

Happy talk doesn't make it so. Wishes don't always come true. Sometimes we have to face reality and level with both ourselves and the American people.

Update--I know, I used the word "lament" twice in this post, but I was up late watching 300 on video last night, which got me to thinking about the old Conan the Barbarian line: "Crush your enemies, see them driven before you, and hear the lamentations of the women!" The human brain is a funny thing. Sandahl Bergman, Arnold's co-star, is a Kansas City native. I don't think she lamented much. Ah, Saturday morning and nobody will read my word association.




There's more: "Just Think Good Thoughts, Clap Your Hands and Keep Wishing" >>

Campaign Video of the Day -- August 18, 2007

Who is the candidate black enough to win the black vote? That is the question in Yo Mama Obama.

I know this is pretty lame, but it has the kind of amateur spark I love. It was added to Youtube just yesterday August 17, 2007 by RobbieDigital2000.



If you want to see an official campaign commercial, you can't go wrong by looking at our nominee from the John Edwards campaign called Fighting for One America - Paying for Health Care.

Seen a video you think is going viral? Nominate it as Campaign Video of the Day. Email me at proctoring.congress@gmail.com or leave a comment in the previous day's video.




There's more: "Campaign Video of the Day -- August 18, 2007" >>

White House Continues to Stall on Subpoenas

Just three days before the latest deadline, the Bush administration asked the Senate Judiciary Committee for more time to produce subpoenaed information about Bush's warrant-less domestic spying program.

Committee Chair Patrick Leahy had set Monday as the deadline to provide the documents and testimony the committee had subpoenaed June 27th. Leahy had agreed to postpone the original July 18th deadline until August 20th at the request of the White House.

Subpoenas had been sent to the Justice Department, National Security Council and the offices of the president and vice president for documents relating to the legal justification for the warrantless wiretapping program.

In an August 8th note to the White House counsel, Leahy said he was setting a new deadline of Aug. 20 because he could not wait any longer.

"You have rejected every proposal, produced none of the responsive documents, provided no basis for any claim of privilege and no accompanying log of withheld documents," wrote Leahy, D-Vt.

But White House Counsel Fred Fielding Friday asked for another extension until after Labor Day:
In a letter to Leahy, White House counsel Fred Fielding argued that the subpoenas called for the production of "extraordinarily sensitive national security information," and he said much of the information — if not all — could be subject to a claim of executive privilege.
Fielding's response to Leahy said that while the White House had identified a core group of documents in response to the subpoenas, the work is "by no means complete" and could not be completed by Monday.
He suggested further conversations with the panel, saying the White House did not want the issue to interfere with the administration's desire to make more permanent the new powers Congress just gave NSA to monitor communications entering the United States involving foreigners who are the subjects of a national security investigation.
In response, Leahy spokeswoman Erica Chabot said:
"In requesting that last extension, the White House counsel suggested that the administration would be ready to respond by Aug. 1. The new deadline is three weeks past the time the White House counsel had estimated was needed. The committee looks forward to the administration complying with the subpoenas."
Of course, the "new powers Congress just gave NSA" are not limited to monitoring "communications entering the United States involving foreigners who are the subjects of a national security investigation."

The "Protect America Act" (sic) excludes from FISA's requirements any and all "surveillance directed at a person reasonably believed to be located outside of the United States."

There is no requirement that the surveillance be conducted outside the U.S.; that the surveillance be "directed at" a person in any way connected to terrorism or other wrongdoing; or that the surveillance excludes communications of U.S. citizens. In fact, the new law excludes from FISA any surveillance that is "directed at" persons overseas or "directed at" persons in the U.S.

The key term is "directed at." The law includes no definition of it.

The president now has the authority to spy on you at any time, in any place, for any reason. And now he doesn't want to explain the legal justification for this power.

Add to this the announcement Wednesday that the Department of Homeland Security is set to begin using spy satellites for domestic surveillance, turning its "eyes in sky" inward. The plotline of the Will Smith/Gene Hackman movie Enemy of the State no longer seems fictional, or even outlandish.




There's more: "White House Continues to Stall on Subpoenas" >>

Friday, August 17, 2007


Army’s High Suicide Rate Suggests Administration Is Understating Cases Of PTSD

It’s no secret that some of the toughest battles our troops fight begin when they return from overseas. That’s why it didn’t surprise me a bit this week, when the Army announced that suicides were at their highest rate in 26 years.

There are immense pressures on our troops in Iraq and Afghanistan. They’re being asked repeatedly to go back into the fight — first for 12-month deployments, and now for 15-month tours. During these tours, the troops are only allowed a single two-week break to return to their families. When we do this to them, with very little respite, the military starts to break down.

To get to the core of the issue, we have to look at the real reason for which combat troops and veterans would take their own lives. And that real issue — the larger issue — is Post Traumatic Stress Disorder.

The numbers of troops diagnosed by the military and the VA with PTSD are disturbingly low — especially when viewed by one who’s been in combat. Early in the war, the number given was around 30 percent. So the question becomes then, how do we reconcile these two figures — the high suicide rate with the low PTSD rate?

Troops that enter the military go through an extensive physical and intense training prior to joining their assigned unit. The rigorous screening makes these new numbers even more shocking, because those who showed any tendency to commit suicide are people who would never have qualified for military service from the start. Clearly, these are tendencies that largely come about as a direct result of being deployed to war. If this administration can so wantonly send troops to war, why is it having such problems taking care of them when they get back?

Suicide is no different than homelessness; it’s a symptom of Post Traumatic Stress Disorder. Though it’s been estimated that one in three troops in Iraq is facing the symptoms of the disease, the larger question is why are so few being officially diagnosed with PTSD?

The first question we have to ask (and something the government has not done a good job of doing) is defining what is PTSD? What quantifies it in a person? How do you diagnose it? How does a veteran, as they’re often told to do, “prove” they have it?

If you walk into a hospital and your arm is broken you have an X-Ray for proof. If you have cancer or HIV there is medical proof for the diagnosis. There is nothing in the medical community that can completely prove or disprove PTSD — that is until its too late. These increased suicide rates are a sign that were still not doing our jobs catching those with PTSD, before they reach a critical point.

It can’t be ignored that there’s a monetary “benefit” for the government if it keeps the count of PTSD down. The bar for qualifying for is kept unreasonably high. If a veteran is diagnosed with PTSD, it will cost our government money in care and disability, perhaps for the life of the person. So, while we’re not seeing a real increase in the cases of declared PTSD, we have seen an increase in the diagnosis of “adjustment disorder” and “pre-existing personality disorder,” because those aren’t diagnoses the government will compensate our troops for. Not only does it deny troops financial disability, but also the mental services the system provides, leaving them all alone in society.

If you don’t think it’s accurate, I would remind you this is an administration that won’t even tell our country the names of soldiers wounded in war. They have a track record of dishonesty in supporting our veterans.

Not only are we misdiagnosing PTSD, but we are actively sending troops back to Iraq with the illness who are even being medicated with drugs. As reported by the Hartford Courant, Col. Elspeth Ritchie, a psychiatry consultant to the Army surgeon general, confirmed that there was a decision to send back soldiers to Iraq with symptoms or a diagnosis of PTSD stating that it was “something that we wrestle with,” and partly driven by the military’s need to retain troops because of recruiting shortfalls.

“Historically, we have not wanted to send soldiers or anybody with post-traumatic stress disorder back into what traumatized them,” she said. “The challenge for us … is that the Army has a mission to fight.”

Also, according to the Hartford Courant, one 26 year old Marine who was having trouble sleeping was put on a strong dose of Zoloft that carries warnings urging doctors to closely monitor new patients for suicidal urges. Within several months of starting that drug the Marine killed himself in Iraq.

When we see these increased suicide rates we must ask, are we diagnosing this problem properly and if not, why not? We must also examine why are we sending troops into combat on antidepressant drugs that have a demonstrable link to suicidal tendencies in some? Why would those who say they ’support the troops’ so clearly lead some on a road directly leading to suicide? Not only does it place that troop’s life in danger, but it hinders the command, and the safety of other troops.

The mainstream media didn’t miss the large point with this story. It is tragic and it is clearly linked to the Army extensions to 15 month deployments. But there is so much more to examine here, and I genuinely hope that here on this blog and in the mainstream media, we don’t soon forget this report.

Jon Soltz


Our guest blogger is Jon Soltz, chairman of VoteVets.org and veteran of the Iraq war.




There's more: "Army’s High Suicide Rate Suggests Administration Is Understating Cases Of PTSD" >>

Oh for the good old days of $500 hammers and $600 toilet seats!

Those 1980’s abuses of the American taxpayer seem downright quaint in comparrison. What were they thinking, marking up the price of the goods themselves? The real profit margin is in fraudulent shipping and handling! (Pikers!)

A South Carolina defense contractor pleaded guilty yesterday to bilking the Pentagon out of $20.5 million over nearly 10 years by adding hundreds of thousands of dollars to the cost of shipping spare parts such as metal washers and lamps. The parts were bound for key military installations, including those in Iraq and Afghanistan. In one instance, in 2006, the government paid C&D Distributors $998,798 in transportation costs for shipping two 19-cent washers. Charlene Corley, 47, co-owner of C&D Distributors, used the money to pay for luxury homes, cars, plastic surgery and jewelry, according to court documents.

"It is a troubling case because the fraud took place during a time of war," said Kevin McDonald, the first assistant U.S. attorney for the District of South Carolina. The $20 million "that could have gone to assist our military was diverted and used in a fraudulent manner for excessive personal enjoyment."

C&D billed the Pentagon for materials and shipping separately, and they received payment on 112 of the fraudulent invoices submitted before the scam was uncovered. Among the abuses of your checkbook and mine was a $445,640 shipping invoice for an elbow pipe that cost less than ten dollars, and six machine screws worth a total of $59.94 were shipped at a cost of $403,436.

But there is even more salacious detail…C&D was owned and operated by twin sisters, and one of them committed suicide last fall after being questioned by investigators. The surviving sister is trying to make sure that most of the blame is shifted to her former womb-mate in an effort to reduce her prison time.

"We do not dispute that we participated and benefited in and from the conspiracy," Harris said. "We have, however, always maintained that her sister was the primary actor in this fraud, the primary beneficiary of this fraud, and unfortunately she is not here to today to assist us in distinguishing their roles in the fraud."

And this, boys and girls, is why we need oversight!




There's more: "Oh for the good old days of $500 hammers and $600 toilet seats!" >>

Gerson’s Tour de Farce

Not even a week has passed since KKKarl announced his resignation that will put him back in Texas and out of reach of the Sergeants of Arms of the congressional chambers should charges of Inherent Contempt be filed (we have already been told to piss off, the Justice Department he gutted won’t be doing it’s job for the American people and the Constitution) and already the rewriting of history is underway.

In today’s Washington Post, quintessential Useful Idiot™ Michael Gerson gets down on his knees and commences to….well, you get the idea….

Rove's main influence on the Republican Party has not been a series of tactical innovations but a series of strategic arguments. In this way, Rove is the opposite of a cynical political operator. He is not only a partisan for George W. Bush but the most serious, tireless advocate of Bushism. (emphasis mine)

Rove? The opposite of a cynical political operative? (Yeah - and slavery is freedom, ignorance is strength, and we have always been at war with EastAsia.)

Which Rove would that be, exactly? The Rove who assumed a fake identity to steal letterhead from the opponent in his very first campaign, and used it to make fake fliers promising “beer, food, girls and a good time for nothing” and passes them out at concerts and homeless shelters in an effort to disrupt the opponents campaign? Or the Rove who had a habit of anonymously tipping off the U.S. Attorneys in Texas that his Democratic opponents were committing illegal acts? To that end, investigations would be started that came to naught once the election was over?

Or would it be the Rove that thinks committing treason is just fine and dandy if it is for political reasons he wants to see advanced? It isn't cynical to sacrifice national security to cover up that a war was sold on false intel and blatant lies?

Or the Karl Rove that is way overrated as a “genius” campaign manager? They guy who wanted so badly to flip a blue state that they pissed around the last week of the 2000 election trying to win New Jersey and California, and the popular vote went to Gore, and the selection was made by the Supreme Court?

Or the Rove that lusts after the support of the African-American community, but will turn to race bating in a heartbeat to win an election?

Or the Rove that gutted the DoJ and turned it into the law enforcement arm of the Republican Party?

There are several KKKarl’s to chose from – and every last one of them is a “cynical political operative” so there are only two choices…Either Gerson is a bootlicking fucking shill, or he is under the influence of the Imperius Curse.




There's more: "Gerson’s Tour de Farce" >>

Iraq insurgents continue to think a step ahead of the American military

The latest twist? House bombs.

The 2nd Brigade, 3rd Infantry Division calls itself the "Send Me" brigade, and on Saturday, its soldiers were quick to send themselves to find the man who shot Pfc. William L. Edwards, a wide-eyed 23-year-old from Houston. They quickly identified the house where they believed the assailant was hiding and moved in, just as the sniper knew they would.

Inside the house, one soldier stepped on a pressure plate, detonating an estimated 30 pounds of explosives hidden under a stairwell. In an instant, four troops were killed; four others were injured. Edwards died later in the hospital. The sniper escaped.

The attack in Arab Jabour, southeast of Baghdad, was particularly savage, predicated on knowledge of the soldiers' sense of duty to a fallen comrade. Military commanders say the number of similar incidents — those in which soldiers are lured into a house rigged to explode — has risen dramatically across Iraq in recent months.

Especially for Marines, who are fanatic to the point of myth-making about refusing to leave a fallen comrade behind, these house bombs have to be like baited traps. The story notes this is all part of a pattern of emerging complexity in attacks, such as combining roadway IEDs with post-explosion ambushes, usually involving more insurgents at one site than previously was the case.

As for our top military PR? It’s a “spin” issue more than something to seriously address right now:
Officials attribute the increasingly sophisticated attacks to desperation on the insurgents' part after troops became too successful at finding roadside bombs and other explosives.

“It’s a clear sign that they could not get to us by other means, and that's a good sign,” said Lt. Col. Michael Donnelly, a spokesman for the American operation in northern Iraq, describing the pattern of house bombs in that area. “Obviously we're countering the improvised explosive devices, and force on force, they know that they can't fight us.”

This lying toady refuses to, or has orders to refuse to, credit insurgents for ever-rising tactical and technological ingenuity, even though he describes another example of such ingenuity in his very next breath:
But ambushes and rigged houses can cause many more casualties than smaller improvised explosive devices, which rarely kill more than one or two people at a time. Increasingly, Donnelly said, insurgents are creating a “daisy chain” of house bombs, in which an initial explosion can trigger blasts up and down a block.

Donnelly claims that the bombs leave tell-tale signs. Right.

If that really were the case all the time, why would the bombs be being used more and more? And, if it is starting to become true, the insurgency is probably already moving on to its next set of tactics.

In fact, Donnelly admits that, while keeping his BushCo happy face painted on.
Donnelly said that as U.S. troops become more skilled in identifying house bombs, al-Qaeda in Iraq will probably develop even more advanced techniques for attacking soldiers. But the American military’s counterinsurgency abilities, assisted by increased cooperation from Iraqi citizens, would prevail, he said.

Sure. Black is white, and the Red Queen loves Alice to death.

Cross-posted at Socratic Gadfly and Out of Iraq Bloggers Caucus.




There's more: "Iraq insurgents continue to think a step ahead of the American military" >>

Smile at the airport, or the TSA will arrest you?

No, I’m not kidding:

“Specially trained security personnel” will be watching passengers for “micro-expressions” that will reveal treacherous agendas and insidious intentions at airports around the country. These agents, who may literally hold your fate in their hands have been given a lofty, Orwellian name: “Behavior Detection Officers.”

So, you’re supposed to smile while being told your flight has been cancelled? You’re supposed to smile while standing in an hour-long line trying to book a replacement flight? You’re supposed to smile while your plane sits on the tarmac, running late, and leaving you wondering if you’ll arrive at the next airport in time to make your second flight connection?

Here’s how a scenario could play out:
Apparently, these Behavior Detection Officers work in pairs. One scenario is that an officer might move in to “help” a passenger retrieve their belongings after they’ve been screened. And then the officer will ask where the passenger is headed. If the passenger’s reaction sets off alarm bells in the officer’s well-trained mind, another officer will move in and detain them. Let’s be really clear here. If a stranger moved in on me like that, I’d tell that person to go to hell, throw in a few other expletives for good measure and probably give them the finger as I stomped off. Of course, I wouldn’t be stomping very far.

Orwellian, indeed.

What next? Do we move beyond Orwell to Huxley and “Brave New World,” with the airport thought police passing out mind-control happy pills? Free Prozac with your in-flight pretzels and peanuts?




There's more: "Smile at the airport, or the TSA will arrest you?" >>

Rudy's Records Reveal He Spent 29 Hours At Ground Zero During The Fall Of 2001

The story Russ Buettner of the New York Times has filed this morning can best be described as good old fashioned, get down into the weeds, read public records journalism. Buettner has determined that between September 17, and December 16, 2001 Rudy Giuliani spent a total of 29 hours at Ground Zero. His time at Ground Zero

involved 41 appearances, mostly to give tours to other officials and foreign dignitaries. Many entries include meetings away from the site before the tour. For instance, the schedule included 30 minutes on Nov. 15, 2001, for President Vladimir V. Putin of Russia, but Mr. Putin’s tour of ground zero was widely reported to have lasted 13 minutes.
The Times story is in stark contrast with Giuliani's public pronouncements patting himself on the back for all the time he spent at Ground Zero. You think I am kidding when I say Rudy is in danger of breaking his arm patting himself on the back for his efforts after 9/11 take a look at this TPM video.



By the old standards of journalism the Times story is real news. As TPM points out, pundits have been running away from this story. I wonder why? I wonder which one of them is going to say Rudy is being swift boated? Newsweek? The Hill?

Oh, notice that the Times decided to run this article on a Friday, and not on a Sunday. Hummmmm.

If I could I would nominate Russ Buettner for a Pulitzer. Way to go.




There's more: "Rudy's Records Reveal He Spent 29 Hours At Ground Zero During The Fall Of 2001" >>

Campaign Video of the Day -- August 17, 2007

The Service Employees International Union (SEIU) has a rule. If you want their endorsement, you have to Walk a Day in the Shoes of one of their members. With 1.9 million votes on the line, candidates make time for the SEIU.
To date Senators Hillary Clinton, John Edwards, Barack Obama and Chris Dodd, and Governor Bill Richardson have all spent time following a service worker around.

Having watched all the videos, it's pretty clear that the candidates all benefit from the experience. Today's campaign video is of John Edwards' day in April. His worker, Elaine Ellis, says something that is profound. Watch for it. I have linked the videos of the others as nominees. The latest uploaded was of Hillary's work with a nurse on August 14. It was Hillary's video that started me looking at this project.

The workers are stars of all 5 videos, but you also get the feeling that the five politicians are real people. Picking the winner was really tough. Watch all five. Hillary's warmth comes across in hers. Bill Richardson, being a governor, makes some interesting observations. Barack fits right in with his family. Chris could easily have been a teacher. John Edwards surprised by showing up ready for real work. In the end Elaine Ellis grabbed my attention.

It might be PR, but I like this program. If we could just talk Republican candidates into participating. Imagine Rudy following a first responder around, or Mitt Romney sweeping a floor. How about Fred Thompson acting?

The videos are all provided by either Newmediafirm or SEIU.



If you see a campaign video that you believe needs to be aired, please send me an email. The address is proctoring.congress@gmail.com Subject Campaign Video of the Day.




There's more: "Campaign Video of the Day -- August 17, 2007" >>

The war rains down on the Yazidis

Aerial view of one of the Yazidi villages devastated by Tuesdays bombing.

Four suicide bombers driving fuel tankers struck the normally restive
Yazidi towns of Qataniyah and Jazeera in Sinjar Province of northwest Iraq on Tuesday, in what has proven to be the most devastating attacks of the entire war. The bombings targeted the Yazidi minority religious sect. The poorly understood Yazidi faith embraces elements of Zoroastrianism, and incorporates Islamic teachings as well as rituals that are rooted in ancient Aryan Vedic ceremonies.

The Yazidi Kurds are caught between the Sunni extremists who want to drive them from their homes because they want their land; and the regional Kurdish officials who want their votes.

All the while, the Yazidi just want to be left alone, unmolested. To that end, they have for the most part removed themselves from the mainstream of Iraqi society, occupying a backwater in the northern mountains, and until Tuesday, they were probably the group least affected by the civil war raging in Iraq. Until last spring, when a young Yazidi girl was stoned to death after falling in love with a Muslim boy and converting to Islam, few people outside the Middle East had even heard of the obscure religion with only a half-million followers world wide.

That all changed Tuesday. The death toll has passed 250, and is expected to climb as high as 500, as bodies are still being pulled from the rubble and debris of the demolished villages.

"Someone in every family is dead." said a survivor of the attacks, "They destroyed us." He had lost several relatives in the bomb attacks, while a neighbors entire 12-member family was wiped out.

As rescuers arrived at the scenes of the bombings with bulldozers to clear the rubble, surviving relatives gestured to piles of rubble where their relatives were trapped, many with extremities protruding. The August heat and unrecovered dead and decomposing bodies represent a secondary danger in the form of disease.

Hospitals in the area were overwhelmed. The hospital in Dahuk had critically injured patients lying on floors, because all of the beds were full. Morgues were overflowing, to the point that victims, many missing arms and legs, were stacked like cordwood outside on the ground.

No group had claimed responsibility as of Thursday, although the American press and administration and military spokesmen invoked the specter of the reliable, default-position bogey-man, al Qa'eda.

Tuesdays attacks appear to be part of a larger pattern of stepped-up violence in areas that have a minimal military presence. Such attacks cast a pall over the claims of major successes in reducing violence in areas of Baghdad and in Anbar province.

When the escalation of American forces was proposed, it was supposed to reduce the violence in the capitol so the political process could have a chance to take hold. Instead, the government of Nuri Kemal al-Maliki teeters on the brink of collapse; and since the escalation got underway, four massive bomb attacks (attacks that kill more than 100 people) have taken place, Sunni Sheiks who had allied with the Coalition forces in al Anbar province have been assassinated, and the number of civilians killed in mass-casualty bombings was triple in July what it had been in June. The largest increases in civilian casualties were in the north, in areas where there is little or no military presence.




There's more: "The war rains down on the Yazidis" >>

Thursday, August 16, 2007


It’s like the 750’s all over again*

Shia militants signify their willingness to be martyred by wearing funeral shrouds.


It is not exactly “news” that the Iraqi army and police forces are heavily infiltrated by Shia militias, especially Jaish al Mahdi, nor is it surprising to anyone who has more than passing knowledge of the history of the region.

The Iraqi police and military forces are not simply infiltrated by Shia militiamen, they are infested – to the point that they have managed to apply sufficient political pressure to commanders that, on at least one occasion, they were able to create their own army units, staffed with its own Jaish al Mahdi fighters.

The units were disbanded in May, but like the oil in the pasta pot, it quickly came back together once the heat was off. The commander became the head of a new battalion, but the troops in his command didn’t really change all that much…

One Mahdi Army loyalist, a policeman by day and a militant after the sun goes down, was forthright about discussing the reality "There is a Mahdi Army member in every family and in every home across Iraq and the military is not exempt. The army wouldn't go after the Mahdi Army because many elements in the army are Mahdi Army. Here in Sadr City for example, there is one company and 35 of them are Mahdi Army."

Men like him, who seem to seamlessly lead dual lives, represent perhaps the greatest challenges faced by the American forces as they struggle to assemble and train non-sectarian security forces in the occupied country. They quietly, surreptitiously, go about their business of undoing the seeming advances toward a non-sectarian security apparatus.

The Sadr movement has used Iraqi soldiers and national police officers to push deeper into predominantly Sunni Arab districts in west Baghdad, U.S. Army officers said. It also swayed the leadership of an Iraqi army battalion in the spring to mount strikes in Fadil, a Sunni district in east Baghdad, the U.S. officers said.

The nexus has included soldiers carrying out killings or turning a blind eye as Sadr fighters slip through checkpoints. In late March, in the early phase of the U.S. military buildup, a Mahdi fighter who gave his name as Abu Haidar bragged to The Times that Iraqi army officers had provided vehicles to his group to carry out executions. "We have a deal with the Iraqi army and police," he said.

Last fall, Iraqi soldiers looked on as Shia militants forced thousands of Sunni families out of their homes in the western neighborhood of Hurriya in the wake of a bomb attack in Sadr City. A few weeks after the Hurriya neighborhood was cleansed of Sunnis, an Iraqi commander and four other officers were arrested, only to be released a week later. The very day they were released, the Lt. Colonel in the Iraqi army who had filed the statement that led to the arrests was shot dead at a checkpoint.

Speaking on condition of anonymity, a U.S. intelligence officer was as plainspoken as the Iraqi policman/militant "We've slowed them down, but they are still slowly expanding their reach. Jaish al Mahdi expansion is taking place. Like water, they are going to find a crack and move through the weakest area."

*The 750’s signify the point when the Sunni-Shia split became an unbridgeable chasm. The Battle of Zab in Egypt occurred then, and so did the murder of Jaffar. The murder of Jaffar was the final treachery and precipitated the final split between the Shia and the faction that would later come to be known as Sunnis.




There's more: "It’s like the 750’s all over again*" >>

More bad housing market and general financial news

Countrywide, the nation’s largest mortgage lender, has to borrow an $11.5 billion line of credit; new home starts are at their lowest in more than a decade; and more and more investors are expecting a Fed rate cut, and one of half a percentage point, not a quarter point.

But, what if, as I posted earlier Bernanke and the Fed are still worried enough about inflation to only cut a quarter-point, or possibly even still sit on their hands a few more weeks? In addition to inflating home prices, mortgage rates have gone back up again, even though T-bills have gone back down.

The Dow is showing more and more signs of weakness; Dell having to restate earnings, which will only intensify SEC investigation, adds to the mix. I’m about to up my 12-month recession odds from 2-5 to 1-2.

Cross-posted at Socratic Gadfly




There's more: "More bad housing market and general financial news" >>

Tripartite Iraq? Bipartite? Or still unified, with new boundaries?

Abu Aardvark’s excellent article on what appears to be the final collapse of Sunni participation in the government of Iraq got me to thinking about what the longer-term results might be.

I know that a number of pundits, some historians and even a few American politicians have bandied about the idea of a tripartite Iraq, on Shi’a/Sunni Kurd lines. It’s usually presented as if this were the only realistic option (by politicians and pundits), or the most likely actual option (by historians).

In any case, a tripartite Iraq vs. current Iraq are presented as the only two outcomes, usually. But, the Sufi philosopher Idries Shah once said, “There are never just two sides to any situation,” and that is the case here.

For example, what if Sunnis, Shi’as, Iranians and Turks combine to do a partition of Poland move on the Kurdish state? Then, we’re down to a bipartite Iraq.

Or, what if Kurds and Shia’s stay together, with a Sunni area making a formal declaration of independence? Then we have a bipartite Iraq.

Or, what if the Saudis get so frustrated they issue an invitation to the Sunni area to let itself be taken under the Saudi wing? To appease Bush, they could make this as innocuous as possible, but then complete the annexation during the heat of the presidential election season or just after, confident they can then get away with it. Then, we have a still unified, but shrunken, Iraq, with an enlarged Saudia Arabia now having even more of both oil reserves and Falafist fundamentalists in its midst.

Cross-posted at Socratic Gadfly and Out of Iraq Bloggers Caucus.




There's more: "Tripartite Iraq? Bipartite? Or still unified, with new boundaries?" >>

California Supreme Court gives Fourth Amendment a whack

California drivers suspected of DUI will no longer be “secure in their homes” after the court ruled their homes could be searched without a warrant.

Ridiculous. Where’s the probable cause even to do this with a warrant? There is none.

And, to do so without a warrant requires “exigent” needs, such as “hot pursuit.” There’s none of that, either.




There's more: "California Supreme Court gives Fourth Amendment a whack" >>

Why Bernanke isn’t guaranteed to cut Fed funds rate to bail out housing market

The Federal Reserve chief still has inflation fears to worry about.

As the chart below shows, oranges, eggs, frozen juice, milk and apples — five of the most common family food purchases — are the five most inflated foodstuffs over the past year, with prices on all inflating at least 10 percent.

While the government leaves food, and energy, out of its core inflation forecasts due to “volatility” concerns, a 12-month time span is enough time for any “volatility” to drop out. This is real inflation.

And, W., like his daddy, just doesn’t seem to “get it” about inflation:

Meeting with economic writers last week, President Bush dismissed several polls that show Americans are down on the economy. He expressed surprise that inflation is one of the stated concerns.

“They cite inflation?” Bush asked, adding that, “I happen to believe the war has clouded a lot of people’s sense of optimism.”

Food prices and the folly of corn-based ethanol production are the main drivers of food inflation.




There's more: "Why Bernanke isn’t guaranteed to cut Fed funds rate to bail out housing market" >>

Pelosi’s biggest brain-dead moment on FISA

Here’s the simplest thing Pelosi forgot in trying to shut the FISA barn door after she helped the unlimited snooping horses escape:

Bush can veto any new FISA bill he doesn’t like. We’ve already seen this kabuki play over Iraq timetables and deadlines, earlier this year, and we saw who finally caved.




There's more: "Pelosi’s biggest brain-dead moment on FISA" >>

"Gays For Giuliani"

I found this on TPM this morning. Allegedly it is going to being aired in South Carolina by it's producers "gaysforgiuliani." It has all the ear marks of a college prank, but Huffington is also touting it. It is just too funny not to share. What do you think the red necks in South Carolina are going to think?




There's more: ""Gays For Giuliani"" >>

Campaign Video of the Day -- August 16, 2007

Today's campaign video is from the John Edwards Campaign. Here he is on the trail proving that he is a Democrat who believes in Democratic values.

Fighting for One America - Rewarding Work



The nominated video is called Vote Democratic. It is an MSNBC Political Ad entry. It was produced by zobohobodog and posted to YouTube on August 11.

If you know of a really good campaign video you think should be seen, please email me at proctoring.congress@gmail.com subject Campaign Video of the Day.




There's more: "Campaign Video of the Day -- August 16, 2007" >>

They have nerve, I gotta give 'em that...

Yesterday we learned that General Petraeus and Ambassador Crocker will not be writing the September report that will bear their names, instead it will be written by White House staffers. Today, the Washington Post reports that they may not even present it.

On Wednesday, congressional aides revealed that the administration has floated the notion that Petraeus and Crocker might limit their appearances to private briefings, and instead, the progress report on the occupation of Iraq be delivered by the secretaries of state and defense.

The White hose did not deny that they proposed the idea, but seemed to back away from it once it was made known, claiming they would not “shield” Petraeus and Crocker from congressional testimony (which is required by the war funding legislation that Congress caved on in May and Bush signed). "The administration plans to follow the requirements of the legislation," responded National Security Council spokesman Gordon Johndroe when questioned about the matter.

With the report due by Sept. 15, officials at the White House, in Congress and in Baghdad said that no decisions have been made on where, when or how Petraeus and Crocker will appear before Congress. Lawmakers from both parties are growing worried that the report -- far from clarifying the United States' future in Iraq -- will only harden the political battle lines around the war.

White House officials suggested to the Senate Foreign Relations Committee and the House Foreign Affairs Committee last week that Petraeus and Crocker would brief lawmakers in a closed session before the release of the report, congressional aides said. Secretary of State Condoleezza Rice and Defense Secretary Robert M. Gates would provide the only public testimony.

Senate Foreign Relations Committee Chairman Joseph R. Biden Jr. (D-Del.) told the White House that Bush's presentation plan was unacceptable. An aide to Senate Armed Services Committee Chairman Carl M. Levin (D-Mich.) said that "we are in talks with the administration and . . . Senator Levin wants an open hearing" with Petraeus.

The anxiety level is ratcheting up all around as the war grows ever more unpopular at home, and the countdown to the make-or-break report by Petraeus on the Bush AEI war strategy is on. (The report is due on 15 September.) As the deadline looms, the calls for a drawdown grow louder and more sustained.

"Americans deserve an even-handed assessment of conditions in Iraq. Sadly, we will only receive a snapshot from the same people who told us the mission was accomplished and the insurgency was in its last throes," warned House Democratic Caucus Chairman Rahm Emanuel (Ill.).

"That's all the more reason why they would need to testify," a senior Foreign Relations Committee aide said of Petraeus and Crocker. "We would want them to say whether they stand by all the information in the report." He spoke on the condition of anonymity because he was not cleared to speak to reporters.

Although the legislation as written says that Crocker and Petraeus "will be made available to testify in open and closed sessions before the relevant committees of the Congress" before the report is delivered, it also plainly sets forth that the president "will prepare the report and submit the report to Congress" in consult with the secretaries of state and defense, and with the ambassador and commanding General.

That, however, is not how it has been peddled to the public. For weeks, Bush has pleaded that we have to “wait for the report by General Petraeus”You couldn’t watch the news in the last few weeks without witnessing an impassioned appeal that we please, wait for Godot Petraeus. Over and over again, the president has referred directly to the General as the one who will be making the report, and implored Congress (and the American people) to please, pretty please, withhold judgment until then.

Congressional Republicans, who strongly desire that their political careers continue beyond the Bush administration have implied that their support is contingent upon a credible assessment and presentation by Petraeus. They are basing continued support not only on military progress, but political and social progress as well, hinting that they need to see that the Maliki government is taking steps to end sectarian conflict and achieve some religious and ethnic reconciliation. Sen. John W. Warner (R-Va.), former chair and current ranking Republican member of the Senate Armed Services Committee, and Senator Carl Levin, Current Chairman, left yesterday to go to Iraq to make their own assessment in advance of the September report.

Petraues told reporters yesterday that he is preparing for the impending trip to Washington and assessing troop levels. "We know that the surge has to come to an end," Petraeus said, according to the Associated Press. "I think everyone understands that, by about a year or so from now, we've got to be a good bit smaller than we are right now. The question is how do you do that . . . so that you can retain the gains we have fought so hard to achieve and so you can keep going."

The Army is simply running out of soldiers, recruiting and retention are both lagging, and short of a draft, it simply can not be sustained.




There's more: "They have nerve, I gotta give 'em that..." >>

Latest Iraq Carnage Once More Demonstrates Obvious Hopelessness

Tuesday night's attack, blamed on al Qaeda in Iraq, on a Kurdish-speaking religious sect in the northwest part of the country was the vilest of acts. I can certainly identify with the righteous anger so many feel about this kind of homicidal insanity. But it is just one more event that underscores the futility of the U.S. position there.

It was one of the worst attacks on civilians in the war, with the death toll up to at least 250, and estimates ranging as high as 500. Whole neighborhoods were reportedly leveled. Make no mistake about my views here -- extremists who commit such atrocities are nothing short of diabolical. There can be no rationalization, religious or political, for the likes of this.

But the sad fact that most Americans now seem to realize, even if our current leaders do not, is that the world's "only superpower" nonetheless has its limitations. We're trying to police a country that our "leaders" so hideously misunderstood from the beginning that there is no realistic way to clean up the mess.

This is not merely a civil war -- this is multifaceted cultural chaos that, sadly, will have to expend itself over a lot of time. The U.S. military presence doesn't frighten people who are that crazy. And, rather than extinguishing any fire, it seems to fling gasoline upon it, over and over.

There's a difference between being an isolationist and being a realist. And there's a difference between being tenacious in a positive way, and being stubbornly stupid. It's the classic case of people not knowing how to pick their battles. Iraq was clearly the wrong one to begin with, and consequently the U.S. has plenty of blood on its own hands -- several hundred thousand people, from credible accounts. Even if one assents to the amoral, crackpot "pragmatism" of the neocon view, by now even these people ought to have sense enough to know that they did something irreparably foolish.

After such a disastrous detour, it's time to find the road back to a fight against the kind of people who were actually responsible for 9-11. It will mean a senseless loss of many more lives if we have to wait 17 months for a new administration to get that process going. Congressfolk, are you listening?




There's more: "Latest Iraq Carnage Once More Demonstrates Obvious Hopelessness" >>

Wednesday, August 15, 2007


Soon We Can All Smell Like Anderson Cooper, Goody

Tonight's funny is from Stevetatham. Enjoy.




There's more: "Soon We Can All Smell Like Anderson Cooper, Goody" >>

Today's Must Read: Bury the idea that swaying the center will win elections

Scientist George Lakoff has a fascinating essay over at Common Dreams. His central point: There is no such thing as a moderate.

Here are just a few of the tasty bits from the piece.

* “Centrism” is the creation of an inaccurate self-serving metaphor, and it is time to bury it. There is no left to right linear spectrum in the American political life. There are two systems of values and modes of thought - call them progressive and conservative (or nurturant and strict, as I have).

*American ideas are fundamentally progressive ideas - the ideas this country was founded on and that carry forth that spirit. Progressives care about people and the earth, and act with responsibility and strength on that care.
Lakoff goes on to demolish the DLC and talk about the strategy that will guarantee a Democratic loss in the next election. His discussion of what he calls “biconceptuals” holds clues to a progressive victory.

Not everyone likes what Lakoff says, but I think he makes enormous sense. We have to think differently in order to even have the ability to see what's really going on in this country. If we don't learn how to think differently, we'll never learn how to move this nation forward.




There's more: "Today's Must Read: Bury the idea that swaying the center will win elections" >>

Ted Stevens Over Acts

During an interview with the Anchorage Daily News editorial board, Sen. Ted Stevens (R-AK) was asked how, in light of ongoing federal investigations into him, he could “be effective in Congress.” Instead of addressing the question, Stevens attacked the paper:

This paper has caused me more difficulty, and I’ve told you that before, than anything else. You’ve created me as the senator-for-life. You’ve been hanging me weekly. […]

I’ve spent hours here with you here in the past, and I’ve never seen any result of it at all. … This paper has done nothing but try to assassinate me.
Stevens is evidently upset about coverage of events like the FBI raid of his home, which marked the first time in history federal investigators searched a sitting U.S. senator's residence.

To paraphrase Sarah Vowell, "Assassins and self-important senators invite the same basic question: Just who do you think you are?"




There's more: "Ted Stevens Over Acts" >>

Wall Street: Giant Ponzi scheme? Giant poker game?

The combination of subprime mortgages, other mortgages and other items of debt into the complex collateralized debt obligations and credit default swaps invite both these comparisons, as Michael Panzner makes clear.

In essence, these forms of smashed, blended debt, sliced into tranches, are a Ponzi scheme because they have been relying on more and more people buying houses, buying bigger houses, refinancing for remodels and so forth.

These debt forms are like a giant poker game because the main bettors have been betting against the odds, especially the odds of subprime borrowers defaulting. (At the same time, as part of the incestuousness of these arrangements, creators of this debt have been depending on ratings agencies like Moody’s both to give the best possible rating on CDOs and to talk up the financial market in general, and housing market in particular, at the same time.

From Mish (whose blog on economic analysis is a highly recommended read), here’s what I mean by incestuousness:

Moody’s: “Moody’s has no obligation to perform, and does not perform, due diligence.”

S&P: “Any user of the information contained herein should not rely on any credit rating or other opinion contained herein in making any investment decision.”

Because of that bottom-line fact, Mish has a boatload of questions:
* How many billions of dollars will be lost because of absurd pricing models?
• How can it be that an entire system of investment decisions are based on ratings that the ratings companies tell everyone not to use for investment purposes?
• Were the ratings companies grossly incompetent or just foolish?
• Will the disclaimers of the ratings companies hold up in court?
• How long will it be before there be a court test of those disclaimers?
• Why has only a minuscule portion of subprime debt (2.1% or $12 billion of a massive $565.3 billion of subprime bonds) downgraded?
• Are the ratings companies under pressure by the banks and/or the Fed to not rerate this debt?
• Why is it that ratings companies are allowed to have outside business relationships with the companies whose debt they rate?
• Did banks realize how absurd those ratings were but look away because of greed and the ease in offloading he debt to pension plans, insurance companies, and hedge funds out of pure greed?
• Heck, did the upper echelons at the ratings companies themselves know their ratings model was flawed and look the other way out of greed?
• How long before there is a government sponsored bailout of this mess? Hint small ones are starting already. See Please - No More Help! for a discussion.
• How long before Bernanke starts cutting rates?
• How high will gold prices rise when Bernanke starts cutting?
Here's the big question: How big will the taxpayer bailout be?

But, Mish’s quote of Moody and S&P hand-washing, bad as it is, still isn’t the full story.

For one thing, these CDOs were backed not with money, but with insurance. And, just like people can “short” a stock, banks and other CDO creators could short their insurance.

Well, what’s happening right now is that a lot of bluffs are being called. Or, on the analogy above, a lot of banks and other lenders are facing the equivalent of margin calls. And, a lot of the people whose bluffs are being called are having to reveal they’ve been betting with IOUs or overrun bank drafts. And, unlike monetary deposits, these investments aren’t protected, even if made by banks. Plus, as Panzner points out, many of these types of loans were made by nonbanking entities.

Already three years ago, Warren Buffet was calling derivatives “financial weapons of mass destruction.” But Greenspan kept encouraging banks and other lending agencies to keep churning them out. Combine that with the Fed loosening the fractional money reserve requirement of banks, and you have the perfect storm.

This is why the Fed and the European Central Bank are injecting money into the system through buybacks. Banks already are thin enough on reserves that their power to fluff more credit into the system is running low. But, the Fed is actually using credit, not money, for these buybacks; banks, then, with their small reserve margins, can inflate this credit.

Stoneleigh at The Oil Drum goes into even more depth (warning, it’s about 5,000 words); if you still don’t understand too much about how much more than a “housing bubble” the subprime crisis is, and have a bit of reading time, I strongly recommend it.

One final note; our, and the world’s, Great Depression wasn’t caused by hyperinflation anywhere. Instead, the Roaring ’20s were a period of high credit inflation.

I think I’ve writeen enough on this to give you the general idea.

Cross-posted at Socratic Gadfly.




There's more: "Wall Street: Giant Ponzi scheme? Giant poker game?" >>

Those 110,000 U.S. weapons missing from Iraq?

A notorious Russian arms dealer is behind those missing AK-47s:

Consider the case of one particular bad guy, Viktor Bout — a stout, canny Russian air transporter who also happens to be the world's most notorious arms dealer.

When the U.S. government needed to fly four planeloads of seized weapons from an American base in Bosnia to Iraqi security forces in Baghdad in August 2004, they used a Moldovan air cargo firm tied to Bout's aviation empire. The problem is that the planes apparently never arrived.

The missing Bosnian weapons could simply be a paperwork problem (and it's not certain that they are among the missing weapons the GAO discovered; they may be an additional loss). But Bout's involvement raises bleak possibilities … that the arms were diverted to another country or to Iraqi insurgents killing American troops.

For more than a decade before he landed on U.S. payrolls, Bout's air cargo operations delivered tons of contraband weapons … to some of the world's most dangerous misfits.

He stoked wars across Africa, supplying Charles Taylor, the deposed Liberian president now on trial for war crimes. He ferried $50 million in guns and other cargo, and he even sold air freighters to the Taliban. …

Bout also has a well-known record for working both sides of the fence. His planes armed both the Angolan government in Africa and rebel forces arrayed against it. He cut weapons deals with Afghanistan's Northern Alliance government before betraying it by arming the Taliban.

One thing about the Bout affair is certain. As of mid-2006, his firms were no longer flying for the U.S. in Iraq. But now he poses a new problem: "blowback," the blunt term espionage writers like to use for the deadly consequences of poor spycraft.

When the U.S. turned to the Bout network to mount its Iraq supply flights, it was already clear that Bout's network had aided the Taliban's extremist mullahs. How could the U.S. be absolutely certain he wouldn't fly for our enemies once he had left the payroll?

We couldn't and, apparently, he is.

Last summer, a jumbo Il-76 flying the Khazakh flag swooped down to a landing in Mogadishu to unload arms for radical Islamic leaders who briefly seized control of Somalia. It was one of Bout's planes, concluded U.S. military intelligence officials.

With arms-dealer friends like this, who needs enemies, eh?

Cross-posted at Socratic Gadfly and Out of Iraq Bloggers Caucus.




There's more: "Those 110,000 U.S. weapons missing from Iraq?" >>

Iraq vets suicide rate at 3 percent

Greg Peterson of Editor and Publisher laments the lack of news coverage; the rate is twice that of soldiers not in Iraq.




There's more: "Iraq vets suicide rate at 3 percent" >>

So…Why are we waiting for Petraeus?

You know how the Resident keeps saying that we should sit back on our heels and wait for what Petraeus and Crocker have to say come September?

Yeah…about that…Petraeus and Crocker aren’t even writing the report that will bear their names.

Despite Bush's repeated statements that the report will reflect evaluations by Petraeus and Ryan Crocker, the U.S. ambassador to Iraq, administration officials said it would actually be written by the White House, with inputs from officials throughout the government.

And though Petraeus and Crocker will present their recommendations on Capitol Hill, legislation passed by Congress leaves it to the president to decide how to interpret the report's data.

So someone tell me again why we are waiting for Petraeus and Crocker to deliver Georgies foredrawn conclusions?

One “senior administration official” – speaking on condition of anonymity, of course – said that the process had put the administration in “uncomfortable positions” because they can’t decide what constitutes “satisfactory progress.”

In July, when the interim report was being written, some officials were encouraging the telling of blatant lies, by claiming progress where none existed. They urged the administration to claim success on the Exxon-Mobile Enrichment Act er, Oil Sharing Law, in spite of the fact there had been no agreement reached.

At least some insiders argued against telling the big lie, claiming it would be disingenuous. "There were some in the drafting of the report that said, 'Well, we can claim progress,' " the administration official said. "There were others who said: 'Wait a second. Sure we can claim progress, but it's not credible to . . . just neglect the fact that it's had no effect on the ground.' "


A DoD official who has been skeptical of the escalation from the outset said he expects Petraeus to emphasize military progress, such as “improving security in Baghdad” and a reduction in the number of suicide attacks. But how does that translate to political progress? How does that improve the day-to-day lives of the Iraqi people? "Who cares how many neighborhoods of Baghdad are secured?" the official said. "Let's talk about the rest of the country: How come they have electricity twice a day, how come there is no running water?"




There's more: "So…Why are we waiting for Petraeus?" >>

Housing woes continue

Year-to-year sales off 11 percent for second quarter, despite price drop of 1.5 percent. In Southern California, sales are their worst since 1995.

My latest recession odds are 2-5 within a year and 5-4 in favor by the start of 2009.




There's more: "Housing woes continue" >>

Money markets latest to catch the subprime bug

Even though money market accounts are supposed to be “safe” investments, it looks like at least one got tempted to dip its hand into the subprime cookie jar:

Sentinel Management Group asked the Commodity Futures Trading Commission to help it stop Sentinel's investors from withdrawing their money, according to CNBC. Sentinel doesn't manage money funds for retail investors. Rather, it helps commodity trading firms and hedge funds invest the cash they accumulate in short-term, interest-bearing vehicles, according to The Wall Street Journal.

Money funds, similarly, invest in short-term, high-quality obligations called commercial paper. But in an effort to gain a competitive edge, some companies that run the funds stretch a little further out on the risk spectrum. Though it's not clear yet what securities Sentinel holds, there has been speculation in the market in recent days that some money funds owned short-term paper — including mortgage-backed securities — issued by banks with exposure to problems in the subprime-mortgage market.

The problem is twofold. One, Sentinel doesn’t have the type of liquid capital to pay off many investors. Two, the commodities commission said it has no power to do what Sentinel wants.

And, the problem has its own shockwaves
Sentinel is not a mutual fund company, and should not be confused with Sentinel Funds of Vermont, which today posted at its website that it is “in no way affiliated with the Sentinel Management Group (of Illinois).” …

Spokesmen for Fidelity Investments, Vanguard Group and T. Rowe Price said their firms have no significant exposure to commercial paper backed by subprime mortgages.

If other money-market funds are exposed, watch out. Calls on money could become stampedes, which will only further tighten business liquidity and cut the availability of business credit.

Cross-posted at Socratic Gadfly.




There's more: "Money markets latest to catch the subprime bug" >>

Campaign Video of the Day -- August 15, 2007

This Campaign Video of the Day has lousy production values, it is grumpy and very unfair, but John Edwards campaign team needs to watch it. I suspect the video reflects a perception of Edwards that is holding him back.

On John and Elizabeth Edwards on the Campaign Trail was posted by wyattmcintyer on August 14, 2007.



If you have a video you want to nominate as Campaign Video of the Day, please send me an email. Our address is proctoring.congress@gmail.com. The subject line should read Campaign Video of the Day.




There's more: "Campaign Video of the Day -- August 15, 2007" >>

Woodstock 2007: The Times, They Definitely Have A'Changed

Thirty-eight years after the second-largest city in New York state assembled for three days of rock 'n' roll, drugs, nonviolence and general nakedness, The New York Times has reported that Max Yasgur's Bethel, N.Y., farm -- what's left of it -- is for sale for $8 million.

Roy Howard, 73, and Jeryl Abramson, 53, do not own the actual site where the Woodstock music festival took place. What they have is Yasgur's old house and acreage around it. Pieces of the original land have been sold over the years. Howard and Abramson are reported to have been reverent conservators of the property they had, for a while. They held "reunions" that included Melanie and Country Joe McDonald, and so forth. Now they're selling out and retiring in Arizona.

What became of the actual land that the August 1969 lovefest took place on? The Times reports:

The place where the event happened was sold to a nonprofit foundation set up by Alan Gerry, a billionaire entrepreneur and former Marine. He built an open-air performing arts center there with seating for 5,000 and lawn space for 12,000, an air-conditioned museum pavilion, a staff of guides and a kiosk where the hard of hearing can rent amplification devices. Smoking is not allowed on the grounds.

... There is lots of security. Any food that's brought in must be carried in one-gallon plastic bags. Camping is not allowed.


And -- stay away from the brown cappuccino. Man, it's way too strong.




There's more: "Woodstock 2007: The Times, They Definitely Have A'Changed" >>

What I wouldn't give for a competent and functioning State Department

This is about as sane as that time Caligula made his horse a Senator.

The Bush administration has decided to declare the Iranian Revolutionary Guard Corps a "specially designated global terrorist organization.” This move will take place under Executive Order 13224, signed September 23, 2001. The EO authorizes the US to seize the assets of businesses, individuals and charities that the United States government identifies as having ties to terrorist organizations on the list. It also allows for the disruption of operations by foreign businesses that "provide support, services or assistance to, or otherwise associate with, terrorists."

The classification of the Revolutionary Guard as a terrorist organization is the first time a military branch of a sovereign government has been so designated.

The driving purpose of this move is to impinge upon the Revolutionary Guard’s far-reaching business interests, and as a cudgel to wield against foreign companies that do business with the Revolutionary Guard, and individual IRGC members.

"Anyone doing business with these people will have to reevaluate their actions immediately," said a U.S. official familiar with the plan who spoke on the condition of anonymity because the decision has not been announced. "It increases the risks of people who have until now ignored the growing list of sanctions against the Iranians. It makes clear to everyone who the IRGC and their related businesses really are. It removes the excuses for doing business with these people."

Expect this to set off a great hue and cry among U.S. allies and trading partners that do business with the Iranian military branches. China is Iran’s number one trading partner, and Russia has strong business ties with the IRGC.


Joseph Cirincione, a nuclear proliferation expert at the Center for American Progress fears that this move could have a deleterious effect on diplomatic efforts, "It would greatly complicate our efforts to solve the nuclear issue. It would tie an end to Iran's nuclear program to an end to its support of allies in Hezbollah and Hamas. The only way you could get a nuclear deal is as part of a grand bargain, which at this point is completely out of reach."




There's more: "What I wouldn't give for a competent and functioning State Department" >>

Tuesday, August 14, 2007


“Katrina” alert?

Tropical Storm Dean is projected to be a Category 1 hurricane by Friday, Category 3 by Sunday. Plus, current storm track computer models show it is likely to go across the western tip of Cuba, then into the Gulf of Mexico.

Let’s hope that FEMA actually is looking at tropical weather information from our weather satellites.




There's more: "“Katrina” alert?" >>

Seattle Times News Room Politics

I thought this was an interesting piece posted by David Postman on his Seattle Times "Postman on Politics" blog. Apparently, a number of people were pretty enthused about a certain resignation as of late (Postman quoting Seattle Times Executive Editor Dave Boardman):

When word came in of Karl Rove's resignation, several people in the meeting
started cheering. That sort of expression is simply not appropriate for a
newsroom.

At first, I kind of agreed with Boardman on this one. But the more I think about it, the less I consider it faux pas. I think this poses a couple of questions about journalistic integrity and bias in general.

I know journalists aren't supposed to be biased. Or at least they aren't supposed to make their biases apparent. This is considered to be a mainstay of an open democracy - the fourth estate which keeps the rest of the powers-that-be in check by informing citizens as to what's going on. Of course, everyone is biased. It's ridiculous to think that journalists are somehow above personal preference. Now, I don't think anyone seriously contends that journalists should be above political preferences (well, at least, normally functioning people don't), but what people do think is of critical importance is that the news media not actively engage in public opinion manipulation.

I'm not really sure what I think when it comes to this. Bias exists, and its impossible to get rid of, nor do I think we should try. The personal preferences of journalists, news readers, editors, producers, and corporate big-wigs are naturally going to skew the kind of coverage and content that their papers and news programs produce. Since Neil Cavuto is a heartless pervert, his show is full of pieces on why taking care of poor people hurts America, and gratuitous shots of Hooters girls' and female correspondents' cleavage (here, here, and here). I don't necessarily think that this is a bad thing (although, when it comes to Cavuto...). On one level, it's important for the news media to collect information, and to contextualize it. If the President claims something that is patently false, a reporter has the responsibility to say that, hey, this is incorrect. If the Federal Reserve raises interest rates it is the job of the reporter to explain how that affects home owners, consumers, and workers, otherwise it means nothing to the reading/watching public at large. "Just the facts ma'am" doesn't cut it when it comes to informing people; sure, the President said something, but so what? What does it mean? Is it true? What are the possible consequences? Journalism, as I understand it, is not about repeating what is said, or what has happened, but is more about digesting information and showing its importance. Of course, when one relies only on a single news source, this becomes problematic, since those preferences held by the journalists, news readers, producers, and corporate big-wigs threaten to be adopted wholly by the information consumer. This is the inherent risk in media ownership consolidation.

But bias? I just don't think it's that big a deal.

Now, here's something with which I take issue; news organizations claiming that, somehow, they're above it all. Now, let me differentiate between bias and opinion. Bias usually affects news content; what is covered, how it's covered, and the priorities of story placement. Opinions are normative; this is good, that is bad, this thing does or does not matter. Opinions have no place in news reading, but are fine in editorial sections (i.e. Bill O'Reilly's opinions, however stupid, are fine. Brit Hume's, when reading the news, are not). What bugs me the most about Fox News is that they claim, daily, to be unbiased - fair and balanced. That is ridiculous. The idea that Fox doesn't succumb to the biases of the news media is insulting. But, you know, so what, right? I mean, they're only deluding themselves... right? RIGHT!?

Unfortunately, the way Fox goes about address bias misinforms their consumers as to what constitutes bias and opinion. Their rhetoric only works toward consolidating their viewership and increasing their market share. Of course, as a business, this is Fox's job. However, instead of competing in the realm of journalism by providing better analysis or more comprehensive coverage, they just deride their competition and try to undercut everyone else's credibility (have you ever heard O'Reilly talk about the print media? He basically lists everything that printed on paper as part of the "Secular-Progressive Crowd" whatever that is). Unsurprisingly, this is akin to the Republicans questioning the patriotism of Democrats every time they try to address legitimate concerns about runaway military spending or curtailed civil liberties; it's not about issues, it's about market share.

So, when the Seattle Times news room expresses its joy that Karl Rove has departed 1600 Pennsylvania Avenue, so long as they aren't lying in their news pieces, so what?

Does anyone think I'm off base here? There are lots of fine publications that are obviously biased. The Economist, Mother Jones, Harper's, the Atlantic, Foreign Policy... I dunno, maybe even the Weekly Standard (although, I think the line must drawn somewhere, and I call that line "LYING", so the Standard is probably excluded). We still read them, and they offer lots of really good information and analysis, but they still have their biases.




There's more: "Seattle Times News Room Politics" >>