December 2011 archive

Sigh.  I’m reluctant to jump on the bandwagon but there is a section of the Left/Democrat blogosphere that agrees with dday in his assessment that the inclusion of a Keystone XL deadline in the 2 month Social Security Tax Holiday extension (bad for reasons not relevant here) contrary to conventional Washington “Wisdom” actually effectively kills the project.

Republicans Demand to Kill the Keystone XL Pipeline

By: David Dayen, Firedog Lake

Friday December 16, 2011 10:54 am

The provision would force the Administration to decide on a permit for the pipeline within 60 days, and that the permit would automatically be granted otherwise. The President could decide that the pipeline production “would not serve the national interest,” and deny the permit. Politico goes on to claim that this decision would be “fraught with political risks in the thick of an election year.”

No it wouldn’t. The State Department has already come out and said that they would not have enough time within 60 days to assess the environmental risks from the pipeline project. So they would have to deny the permit if forced into a 60-day decision-making process. And that serves as the excuse. It becomes a political discussion, like any other, and calling it a “risk” is really overblown.

Senate Passes Two-Month Extension for Payroll Tax Cut, Unemployment Benefits, Doc Fix

By: David Dayen, Firedog Lake

Saturday December 17, 2011 8:41 am

The second measure concerns the Keystone XL pipeline. There’s been a ton of misinformation around this part. I know some people have termed this a GOP victory but I don’t see why. Even the venerable 350.org rushed out a call to action last night saying that Obama caved on the pipeline and that everyone must call to get him to veto the bill. They are either playing along or don’t understand that this provision will ensure a denial of the permit in rapid fashion.

The bill stipulates that the Administration must make an up-or-down decision on the permit for the pipeline within two months of the signing of this act. The State Department has already said that doesn’t leave them enough time to explore the re-routing both they and the state of Nebraska and pipeline owner TransCanada have said they want to consider, to avoid the Ogalalla Sand Hills region, and particularly the aquifer that supplies water to the area. So if faced with a 60-day timeline, the State Department said, they would have to deny the permit. Earlier in the week the White House agreed with them, saying that The House bill simply shortens the review process in a way that virtually guarantees that the pipeline will NOT be approved. So adding this provision kills the pipeline in the short term.

And Republicans, by the way, KNOW this. They want the President to deny the permit. The tell is that Newt Gingrich spoke up about the pipeline in the debate on Thursday night. Republicans want to position Obama as someone destroying US jobs to satisfy environmentalists. They also would like to say that he is stopping the supply of domestic energy production. None of this is true with regards to Keystone XL. The pipeline won’t create jobs, all the energy production in this case comes from Canada, and the President actually has presided over a boom in domestic energy production, although that hasn’t led to a drop in oil prices because we simply don’t have that much oil domestically.

But the likely outcome on Keystone XL fits a narrative for the GOP. So they want to see the President cancel the pipeline to make it a campaign issue. The counter-argument for the Democrats is that the demand by House Republicans to give an answer within 60 days on a pipeline whose route remained in flux killed the permit. So this becomes your run-of-the-mill he-said/she-said, and the pipeline doesn’t get built. My understanding is that it would not impact the possibility of the pipeline being approved after the elections, when more time is given to the environmental impact. So that’s a fight environmentalists will still have to wage. In the short term, within 60 days they will have a President reject the pipeline, and then they can go to their lists and tell everyone how their pressure got it done. But they’ll have to extend a note of gratitude to Republicans, who made it all possible.

If those are not adequately sourced enough for you there is also The Hill–

Democrats: Concession to GOP on Keystone will force Obama to kill pipeline

By Alexander Bolton, The Hill

12/16/11 09:08 PM ET

Republicans hailed inclusion of the pipeline provision as a victory, but Democrats said the practical effect of the language would be to kill the project.

“They’ve just killed the Keystone pipeline. They killed it because they forced the president to make a decision before he can make it so he’s not going to move forward with it,” said Sen. Barbara Boxer (D-Calif.), chairwoman of the Senate Environment and Public Works Committee and an ally of environmental groups.

…

A senior Obama administration official noted that the president said he would not accept an attempt by Congress to mandate construction before adequate review of health and safety regulations.

Regardless of the current decision there’s no reason at all the next Administration couldn’t revisit the proposed project provided it’s still economically viable, but that seems less and less likely with every delay.  Pushing the deadline to 2013 is a good thing, but not a stake in the heart.

I’m an optimist.

Not that it does any good.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Gail Collins: An Early Holiday Hangover

Right now you’re probably asking yourself: What’s up with reproductive rights this holiday season?

And the answer is: a lot! This is America, and we don’t restrict our battles over people’s sex lives to 11 months a year.

Just this week in Washington, House Republicans were thwarted in their attempt to tie the latest bill providing money to keep the government going with the defunding of Planned Parenthood. Those two things aren’t necessarily linked in most citizens’ minds, but everything reminds the House Republicans of their hatred of Planned Parenthood. Chestnuts roasting on an open fire. “Jingle Bells.” A partridge in a pear tree.

Their rancor has been a sort of a Christmas present to Planned Parenthood itself. “It’s been such a stunning year,” said Cecile Richards, the organization’s perpetually embattled president. “More than a million new activists joined Planned Parenthood, and our approval rating is at 68 percent. Congress is I think at 9.” (It may be time to stop pointing out that you have a higher approval rating than Congress. Really, everything has a higher approval rating than Congress. Termites. Zombies. Donald Trump.)

Charles M. Blow: Inconvenient Income Inequality Inconvenient Income Inequality

Is income inequality becoming the new global warming? In other words, is this another case where the facts of an existential threat lose traction among a weary American public as deniers attempt to reduce them to partisan opinions?

It’s beginning to seem so.

A Gallup poll released on Thursday found that, after rising rather steadily for the past two decades, the percentage of Americans who said that the country is divided into “haves” and “have-nots” took the largest drop since the question was asked.

This happened even as the percentage of Americans who grouped themselves under either label stayed relatively constant. Nearly 6 in 10 Americans still see themselves as the haves, while only about a third see themselves as the have-nots. The numbers have been in that range for a decade.

This is the new American delusion. The facts point to a very different reality.

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

December 17 is the 351st day of the year (352nd in leap years) in the Gregorian calendar. There are 14 days remaining until the end of the year

On this day on 1865, the first two movements of Franz Schubert’s “Unfinished Symphony”, Symphony No. 8 in B minor, is performed in Vienna, Austria.

(The symphony) was started in 1822 but left with only two movements known to be complete, even though Schubert would live for another six years. A scherzo, nearly completed in piano score but with only two pages orchestrated, also survives. It has long been theorized that Schubert may have sketched a finale which instead became the big B minor entr’acte from his incidental music to Rosamunde, but all the evidence for this is circumstantial.[1] One possible reason for Schubert’s leaving the symphony incomplete is the predominance of the same meter (three-in-a-bar). The first movement is in 3/4, the second in 3/8 and the third (an incomplete scherzo) also in 3/4. Three consecutive movements in exactly the same meter rarely occur in the symphonies, sonatas or chamber works of the great Viennese composers (one notable exception being Haydn’s Farewell Symphony).

Hello, boys and girls!  Last week, until my ill advised outburst, we were finishing up 1968.  Actually, I think that some of their finest work was done then, but their commercial success was not as much as they would have liked, and Townshend in particular was in sort of a crisis of his ability to write and delivers songs that would chart well.

There were other things going on as well.  Please remember the it was Daltrey who invited Townshend to join HIS band, and by the end of 1968 is was pretty clear that Daltrey was not the “owner” of the band any more, Townshend was.  Daltrey had always been pugnacious, but he recognized that under the leadership of Townshend The Who was much more successful than The Detours ever would have been.

There were some other dynamics as well, as Kit Lambert began to spiral out of control with drink and narcotics, hard narcotics.  This was not full blown at the end of 1968, but the die had been cast and Townshend was well on his way to being the undisputed leader.

   

A gray December afternoon.  4:30 pm. Your Bloguero sits near the fire, and his eyes slowly close. The galaxy of bright dreams just under his eyelids begins to shimmer. He can hear his breathing deepen, his chest is rising and falling. Soon there will be bright lights, magical thinking. There will be dreams. Maybe it will be the Polar Express. But something’s wrong. He wonders what it could be. Something is not right. “Oh,” he thinks, “It’s Friday. You forgot the weekly digest, the one you’ve been writing for all these many months. This must be the one you don’t write.” This wakes your Bloguero up with a start. The dream journey is aborted. The Polar Express isn’t coming for him. Your Bloguero begins to ponder.

There ensues a debate. “Nobody reads it anyway, nobody cares, you see, virtually no one comments or recommends. It won’t even be missed. Let the dreams begin. Forget that post.”  This negative, critical, disparaging thought is of course opposed. Your Bloguero is adept at having contentious debates with himself. Especially if the choices are dreams or writing, his own sloth or productivity. “It’s not so hard, and it’s good to have a weeky practice, and who knows what you’ll write, it’ll be fun. And if you do it before Friday is over, you will have completed this task and will be able to pick it up again next week, when, hopefully you’ll feel more like writing.”  This chatter seesaws back and forth for a while. Yadda yadda yadda. Habla bla bla bla bla. It disrupts the incipient nap. Your Bloguero finds himself at the keyboard instead of the dreamy pullman. He just wants to check in, insert a place mark on Friday, December 16, 2011.

Chanukah is next week; Christmas, the week after. Solstice is next week; Kwanzaa, the week after. And Festivus is next week. ‘Tis the season. Your Bloguero dispenses with his usual remarks about the pernicious Festival of Capitalism and wishes each of you and your families and friends a very happy Holiday. May it be a day of comfort and joy. May you be happy and find delight.

Your Bloguero would be remiss if he didn’t repeat, given the season and its expected shopping behavior, that his new novella, Tulum, is now available, and you can should buy it at Barnes and Noble, Amazon and iUniverse.  This would make a perfect stocking or Kindle stuffer.  It would make a lovely gift. Your Bloguero thinks you would like to read it.  No stocking should be without one.  And lest he not admit it, it will profit your Bloguero.

This Week In The Dream Antilles is usually a weekly digest. Usually, it appears on Friday. Sometimes, like now and for several of the past weeks, it isn’t actually a digest of essays posted at The Dream Antilles. For the essays you have to visit The Dream Antilles

———

cross-posted from The Dream Antilles

Recently some people of my acquaintance have had traffic accidents that damaged their cars (fortunately there were no injuries).

They had insurance which, over the lifetime of the vehicle, amounted to much more than its replacement cost.  So an adjuster came out and examined the damage, determined whether or not repair exceeded replacement cost and issued a check for the lower of the two values.

In the mean time the insurance company had the use of the payment money which they invested and collected the profits of that investment.

At least that’s the way insurance is supposed to work.

Accountancy is boring.  I want to be a Lion Tamer!

What If Lehman Happened Today?

By Michael Hirsh and Stacy Kaper, National Journal

Updated: December 1, 2011 5:19 p.m.

And now Gensler-a former Goldman Sachs executive whose stand against his erstwhile Wall Street comrades has won praise from progressives-is facing down the biggest Goliath of all. Europe’s raging financial crisis may not leave Gensler the time he needs to get a handle on the vast global market in derivatives, the arcane instruments used to bet on everything from interest rates to currencies to credit default swaps on the Continent. At $708 trillion (yes, trillion), the derivatives trade is already much larger than it was during the 2008 crisis. Just as last time, this opaque market may hold the key to whether the evolving eurozone disaster causes another market meltdown worldwide. With a staff of only 712 (roughly unchanged from the 1990s, when financial products where much less complex), the CFTC must regulate markets seven times the size of the futures market it used to oversee. Mostly, it supervises America’s $300 trillion portion of the global derivatives trade. “Until we complete this task, the American people remain at risk,” Gensler warned in an interview with National Journal at his office in downtown Washington. “We are midstream” in rule-writing and in requiring firms to report their trading positions, he admits. “The only thing that we would have right now is the data that banks and others are voluntarily reporting.” Even after the rules are written, Gensler says, “we won’t necessarily have the cops on the beat to oversee the market.”

…

The most frightening (but still very plausible) scenario is that some of the CDS dealers won’t have capital to pay off the swaps as they are “triggered” by the plummeting value of European bonds. That shortfall could lead to defaults on trillions of dollars in other types of derivatives. Something similar occurred when Lehman Brothers collapsed in September 2008; it failed to make good on nearly 10,000 contracts for swaps and derivatives. Lehman was severely over-leveraged, relied too heavily on short-term funding, and ultimately succumbed to a liquidity run. “That’s exactly what’s going to bring the system down,” says Michael Greenberger, a derivatives expert at the University of Maryland who once served as a senior CFTC official. “Here you’ve got people holding on to potentially valueless government debt.”

…

A panic may be just around the corner. The International Swaps and Derivatives Association appears to be trying to tighten its standards for paying out credit default swaps on euro debt, making it more difficult to collect on them, the Financial Times reported this week. That decision has angered the firms holding the CDS insurance. The situation also has similarities to 2008 and the failure of American International Group, the world’s biggest dealer of credit default swaps, which required a $150 billion bailout by the U.S. government. AIG imploded because it couldn’t keep up with the triggers that required it to post more collateral. “The real problem is that CDS moves the financial consequences of a default much further up the line,” says Dennis Kelleher, the head of Better Markets, a D.C.-based activist group. “So, long before someone defaults, be it an institution or a country, anyone who has written insurance-ie, credit default swaps-has to start posting massive amounts of collateral.”

…

“We still don’t have transparency in the swaps market,” Gensler says. “There is $20 of swaps for every dollar in our economy.”

Or so it would have been, if certain modern theories about the shape of the world had not proved to be disastrously wrong.  

Some encouraging news in the on going call for an investigation into foreclosure fraud, Sen Maria Cantwell (D-WA) called for Attorney General Eric Holder to investigate the fraud before letting the bank off with a pitiful settlement $20 billion and a “get out of jail” card for criminal charges, She also demanded a full investigation into robo-signing scandal and ‘pump and dump’ mortgage bubble scheme:

I am concerned that recently reported settlement proposals will effectively absolve these financial institutions of substantial civil and criminal liability in one of the largest alleged fraud schemes during the financial crisis. Specifically, I am concerned that the proposed settlement includes a release from liability that may be far too sweeping, does not adequately compensate victims, does not require enough of banks to reform the system that led to the crisis in the first place, and is being made before all the facts are known and without the backing of a full inquiry into the size and scope of the alleged fraud.

…

Without a thorough investigation, it is impossible to truly estimate just how pervasive the defects in the foreclosure and securitization process are. Continued reports of wrongful foreclosures, forged documents, and an inability of servicers and banks to prove chain of title and the legal right to foreclosure, raises the very alarming possibility that these defects were endemic to the mortgage servicing industry across the country. The sheer magnitude of the potential fallout from these defects demands that we undertake a full investigation to uncover the true scope of wrongdoing before providing blanket immunity to the perpetrators.

I am also concerned that reports of a settlement in the range of $20 billion, as recently reported, may not adequately compensate the victims of the foreclosure crisis. As a result of the pump-and-dump scheme perpetrated by the nation’s largest banks that inflated – and burst – the housing bubble, an estimated 14 million Americans are underwater, owing $700 billion more on their homes than those homes are worth. A $20 billion settlement is woefully inadequate to compensate the wrongfully evicted or homeowners struggling to stay in their homes. Much more should be required of banks to provide meaningful help underwater homeowners and compensate foreclosure fraud victims.

And some good news for homeowners facing foreclosure in Florida:

WEST PALM BEACH – Home­owners in foreclosure may have a better chance of getting a true trial, instead of a quickie judgment, following a 4th District Court of Appeal decision that requires banks to prove ownership of the note at the time they file for repossession.

The ruling Wednesday in Palm Beach County was heralded by foreclosure defense attorneys who said it may even force banks to dismiss some cases and start over with new paperwork.[..]

Wednesday’s ruling was on the case of Robert McLean vs. JPMorgan Chase, and involved a 2009 Broward County foreclosure.

According to the decision, which reversed a lower court’s verdict in favor of the bank, Chase originally filed the foreclosure claiming the note – basically the IOU from the borrower – was “lost, stolen or destroyed.”

The claim has been made thousands of times as lenders rushed without the proper documentation to take back homes tangled up in the real estate boom’s securitization frenzy.

Although most notes are found before a final foreclosure judgment is entered, the 4th DCA said the note also must be correctly dated and endorsed to show ownership before the foreclosure was initially filed – something that Chase didn’t have, according to the ruling. The court also questioned a mortgage assignment made to Chase that was dated three days after the foreclosure was initially filed.

If there is substantial doubt about the note, the bank should dismiss and refile the case or the home­owner should be entitled to an evidentiary hearing instead of a more hasty “summary judgment,” the ruling said.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Paul Krugman: G.O.P. Monetary Madness

When it comes to views on economics, Republicans have been consistent, clear and wrong.When it comes to views on economics, Republicans have been consistent, clear and wrong.

Apparently the desperate search of Republicans for someone they can nominate not named Willard M. Romney continues. New polls suggest that in Iowa, at least, we have already passed peak Gingrich. Next up: Representative Ron Paul.

In a way, that makes sense. Mr. Romney isn’t trusted because he’s seen as someone who cynically takes whatever positions he thinks will advance his career – a charge that sticks because it’s true. Mr. Paul, by contrast, has been highly consistent. I bet you won’t find video clips from a few years back in which he says the opposite of what he’s saying now.

Unfortunately, Mr. Paul has maintained his consistency by ignoring reality, clinging to his ideology even as the facts have demonstrated that ideology’s wrongness. And, even more unfortunately, Paulist ideology now dominates a Republican Party that used to know better.

New York Times Editorial: Politics Over Principle

President Obama has caved in to political pressure and will sign a dangerous bill that will make indefinite detention and military trials part of American law.

The trauma of Sept. 11, 2001, gave rise to a dangerous myth that, to be safe, America had to give up basic rights and restructure its legal system. The United States was now in a perpetual state of war, the argument went, and the criminal approach to fighting terrorism – and the due process that goes along with it – wasn’t tough enough.

President George W. Bush used this insidious formula to claim that his office had the inherent power to detain anyone he chose, for as long as he chose, without a trial; to authorize the torture of prisoners; and to spy on Americans without a warrant. President Obama came into office pledging his dedication to the rule of law and to reversing the Bush-era policies. He has fallen far short.

Fallen short? He has embraced and strengthened the worst of the Bush agenda.

The corporate-owned media are all over the too-long-in-coming demise of right-wing extremist and liar Christopher Hitchens, whose cheerleading for the invasion and occupation of Iraq contributed nothing of value whatsoever to society.  And since we’re being forced to read and watch utter drivel instead of noting another reduction in the number of U.S. soldiers occupying Iraq (though we’re still maintaining the super-sized fortress embassy as well as thousands of mercenaries), I thought I’d kick you all while you’re down and embed the Star Wars Holiday Special.

Wail, and gnash your teeth.  Moohoohaha!

You can’t a fool a me.  There ain’t no Sanity Clause.

Barry Ritholtz made a not so bold prediction at the beginning of December that I highlighted on the 5th (Pepper Spray Saves Santa).  Even way back in the dim dark mists of History that those born yesterday don’t remember and I was working retail shipping and receiving we knew holiday sales reports were thin tissues of lies put together by buyers to save their asses from the piles of remainders we’d get stuck inventorying in February after marking it down to nothing.

Rithholtz followed up with this-

Retail Sales Disappoint on False Black Friday Reports

Author: Barry Ritholtz, EconoMonitor

December 13th, 2011

Today, we learn that many breathless forecasts from NRF to ShopperTrak were so much hot air and empty hype: Sales were flat to up only modestly. Total U.S. retail sales in November gained only 0.2%, following a 0.6% October. Even that month was revised downwards.

Retailers themselves may pay the price for their massive discounting: Not only might their quarterly earnings be affected by the margin pressure, but they continually train investors shoppers to hunt for discounts. Retail therapy and sport shopping are being replaced by extreme couponing and sites like Living Social and Groupon.

We are left to ponder what those folks who were lining up late at night at Wal-Mart and Best Buy for bargains were doing. No, it was not a sign of “shopping enthusiasm,” it was a sign of extreme economic distress. No one who can afford otherwise goes out Thanksgiving night to stand in the cold with a crowd, to fight the stampeding, pepper-spraying mob for a discounted X Box.

Here is your simple formula:

Thanksgiving Thursday night shopping + record food stamps = Bad Economy

I almost pointed that out because I’m greedy for any affirmation of sanity, but today, like a Red Nosed Rudolph, we have The New York Times reporting-

As Sales Lag, Stores Shuffle the Calendar

By STEPHANIE CLIFFORD, The New York Times

Published: December 15, 2011

A sharp drop in shopping since Thanksgiving weekend has prompted worried retailers to slash prices, extend specials, stay open later – and rewrite the calendar.

Usually one of the most heavily discounted shopping days of the year, the Saturday before Christmas – it falls on Dec. 24 this year – is too crucial to retailers’ holiday sales to be left in the hands of procrastinating Christmas Eve shoppers. Instead, many of the promotions pegged to “Super Saturday,” as the day is known in the retail industry, are now scheduled for this Saturday – a full eight days before Christmas.

…

The dueling Saturdays might seem like a lot of consternation about nothing to consumers weary of faux shopping events: Black Friday, Sofa Sunday, Cyber Monday, Red Tuesday, Mobile Sunday, Green Monday and Free Shipping Day (Friday this year, for those keeping track).

But the worries are real for retailers who are seeing the season slip away from them, and the potential effects on the economy are considerable.

After a Thanksgiving weekend that set records in terms of sales, in-store shopping has dropped significantly in the two weeks that followed. The cumulative drop from Thanksgiving-week sales in those weeks, of 2.4 percent, was the biggest since 2000, according to the International Council of Shopping Centers. The Commerce Department said this week that retail sales in November, including online sales, came in lower than analysts had expected, rising just 0.2 percent to $399.3 billion, the smallest increase in five months.

“That suggests we may not get quite as much momentum in the holiday-sales season as people were expecting,” said Peter Buchanan, an economist at CIBC World Markets. Given that consumer spending makes up the majority of the gross domestic product, he said, “the chances of having a really decent recovery are rather limited if consumers continue to hold back.”Almost 40 percent of Americans said they were done with their holiday shopping as of last week, according to a survey from America’s Research Group and UBS, suggesting there may not be too much spending left to do.

Merry eksmas suckers.

He may look like an idiot and talk like an idiot, but don’t let that fool you. He really is an idiot.