February, 2009 archive
Things That Go Bump in the Night 1
Supply and Demand 0
’nuff said:
This is in addition to the center’s recently expanded Saturday hours, also open 8 a.m. to 1 p.m.
What Nationalizing the Banks Means 0
DougJ’s post at Balloon Juice considers the implications.
It includes part of a lengthy email from a senior manager at a hedge fund. That itself is worth your while.
Solomon the Bipartisan 1
When King Solomon offered to split the baby, he was not being bipartisan.
He was getting results.
There are too many out there who define “bipartisanship” as some form of splitting the baby. As long as the result is somewhere sort of half-way between the desires of the two major parties, it must be ipso facto “bipartisan” because it’s in between (in Left Blogistan, that philosophy is often referred to as “Broderism”).
The flaw in that reasoning is that what virtue there is in bi-partisanship lies in improved results, not in a split baby.
Today’s National Journal contains President Obama’s thought on bi-partisanship (emphasis added):
Cooperation on the economic agenda, he suggested, may have been unusually difficult because it “touched on… one of the core differences between Democrats and Republicans” — whether tax cuts or public spending can best stimulate growth. He predicted there may be greater opportunity for cooperation on issues such as the budget, entitlements and foreign policy. And if he keeps reaching out, he speculated, Republicans may face “some countervailing pressures” from the public “to work in a more constructive way.” White House aides suggest that regardless of how congressional Republicans react on upcoming issues, Obama will pursue alliances with Republican governors and Republican-leaning business groups and leaders.
Yet while promising to continue to seek peace with congressional Republicans, Obama also made clear he’s prepared for the alternative. “I am an eternal optimist [but] that doesn’t mean I’m a sap,” he said pointedly. “So my goal is to assume the best but prepare for a whole range of different possibilities in terms of how Congress reacts.”
Via The Huffington Post.
Also posted, with slight edits, at the Great Orange Satan.
Your Tax Dollars at Work. Your Good Faith Betrayed. 0
Mortgage Relief 2
Not for this guy. He dug his own hole.
Stand Up Guys 0
The Army Corps of Engineers:
Alamosa City Manager Nathan Cherpeski brought the situation to the city council’s attention during his weekly Friday update and commented further about it on Monday. He said although the Corps designed the current levee, and it was built according to the Corps’ design, the Corps is now telling the city the levee was constructed incorrectly.
The big problem with the levee is the tree growth on the land side of the levee, Cherpeski said. He pointed out that the Corps left many large trees in place when it constructed the new levee in 1997 but is now apparently blaming the city for the potential structural problems the trees could cause to the levee.
You remember the Corps. That’s the outfit that built the levees in New Orleans.
Yeah, those levees. The ones that fell over.
Via Harry Shearer.
Empty McMansions 0
More coming:
“It wouldn’t surprise me to see one or two of the top 10 homebuilders filing this year,” said Bittner (of Grant Thornton LLP–ed.). “But in most cases, the current lending environment is unique in that as long as a builder has positive cash flow, the lender doesn’t want to foreclose or force a bankruptcy filing. Recovery is more likely if a bank can be patient with a borrower. Positive cash flow and ability to service interest on a credit facility provides for a better negotiation position with the lender.”
Stray Question 0
Does anyone actually read Maureen Dowd? I can never get past the headlines.
Surrounded by the Aquarium II 0
Frank Rich in the Toimes:
(snip)
Because Republicans are isolated in that parallel universe and believe all the noise in its echo chamber, they are now as out of touch with reality as the “inevitable” Clinton campaign was before it got clobbered in Iowa. The G.O.P. doesn’t recognize that it emerged from the stimulus battle even worse off than when it started. That obliviousness gives the president the opening to win more ambitious policy victories than last week’s. Having checked the box on attempted bipartisanship, Obama can now move in for the kill.
Surrounded by the Aquarium 0
The fish don’t seem to see the wider world around them. Or, if they do, it is distorted by the water.
Atrios poses the question.
(Aside: Many Washington insiders, like some of my friends, seem to think that today’s Republican Party bears some resemblance to the Republican Party that they grew up with 40 or 50 years ago, a party that included good, decent, sensible persons, such as President Jerry Ford, persons with whom one could disagree, yet still respect.
It does not.)
Abe Lincoln and the Blogs 0
Dick Polman decodes an old back-up tape from when the internet was Western Union.
“You Can Pay Someone Like a Mercenary, or You Can Pay Someone Like a Marine” 0
Harvard Business School professor Rakesh Khurana analyzes executive pay, pointing out that “there’s no distinction any more between value creation . . . and value extraction . . . .”
If you want to understand what’s wrong with Wall Street and American business, you will learn more from the seven minutes of this interview that from a year of reading the Wall Street Journal. His conclusion: Wall Street has been paying executives like mercenaries, who sell themselves to the highest bidder, not like Marines, who have a sense of duty, loyalty and a greater good.
And, no, he’s not talking about the size of the paychecks, but rather about the philosophies behind them.
Follow the link to listen (web quotation updated):
It’s the kind of news that raises the hackles of Rakesh Khurana, who teaches at Harvard Business School. He tells host Scott Simon that the highest paid person isn’t always the best.
Read Professor Khurana’s article in the Washington Post here and his subsequent online chat here.
Implications 0
If a woman has to choose between catching a fly ball and catching an infant, she will unhesitatingly choose to catch the infant, without even considering whether there’s a man on first base.
From Click and Clack.
Dustbiters To Come 0
Ronald D. Orol and Alistair Barr of MarketWatch analyzes Geithner’s “stress test.”
Note the list of “banks” which may be taken to the lab for the test–it’s almost all the biggies (I use quotation marks because some of them haven’t been “banks” for long):
Treasury is expected to allocate at least $100 billion of the remaining $350 billion from the Troubled Asset Relief Program to a bank bailout fund to buy preferred shares in banks that can be converted into voting common equity “if needed.” According to Treasury, banks can convert securities into common shares in a “worse than expected economic environment.”
(snip)
“Depending on how much capital an institution needs under this program, you could see a high percentage of its common equity, more than half, be issued to Treasury,” said David Brown, partner at Alston & Bird LLP in Washington. (Owning more than half the stock equals government ownership with equals nationalization–ed.)
If needed, the convertible securities will be converted into common shares at a “modest discount” to banks’ stock prices on Feb. 9.
Robert Klingler, attorney at Bryan Cave LLP in Atlanta, points out that most financial institutions were trading at historic low valuations on that date, which means the government stakes could be converted into massive controlling interests.There are 17 institutions, representing roughly three-quarters of the assets in the banking system, which may be required to take the stress test.
These are: J.P. Morgan Chase, Citigroup, Bank of America, Wells Fargo, Goldman Sachs, American Express, Morgan Stanley, State Street , Bank of New York Mellon, U.S. Bancorp, SunTrust Banks, Capital One, PNC Financial , Regions Financial, Fifth Third, and KeyCorp.
Stiglitz on TARP 0
“They’re in fundamental denial about their insolvency . . . . The financial sector wants to get as much for itself as it can.”
Translation: The banks are lying to themselves and to us. And we’re screwed.
They are not “too big to fail.” They have already failed.
Proposal: Nationalize them, liquidate them, and dress their executives in orange jumpsuits and have them pick up litter along the highways.
If they miss Greenwich and the Hamptons, let them pick up litter in Greenwich and the Hamptons.
Video via TPM.
Swampwater Redux 0
Jesus.
Typical American marketing. If the contents smell, change the packaging; keep the contents.
Mercenaries by any other name are still mercenaries beholdin’ to no one other than the person who signs their paycheck.
Blackwater is not a security company, for heaven’s sake.
Brinks, ADT, and Simplex are security companies.
Blackwater is a private army for hire, a plaything for someone who never outgrew his GI Joes, and it has no place on American soil.
Just Deserts 2
For the owners. Not for the workers.
Watch the owners walk away protected by the bankruptcy statutes.
Watch the workers learn how to live in their cars.
H/T Bill for the link.