01/05/2012 archive

Why we can’t have nice things

Bond Exotica Gains Favor in Era of Low Rates

By Sarah Mulholland, Bloomberg News

Jan 4, 2012 5:33 AM ET

So-called esoteric asset-backed securities issuance may soar 12.9 percent to $35 billion, compared with debt linked to more traditional collateral such as auto and credit-card loans, which will grow 8.75 percent to $87 billion, according to a forecast from Credit Suisse Group AG.

Esoteric bonds make up 16 percent of the $620 billion market for asset-backed securities outstanding, with debt tied to credit card, student and auto loans accounting for the rest, according to data from Wells Fargo.

Wells Fargo’s recommendations for 2012 include debt backed by timeshare payments and fleets of rental cars, according to a Dec. 6 report from analysts led by John McElravey in Charlotte, North Carolina.

A disadvantage of esoteric bonds for investors is that they can be hard to sell because they don’t trade frequently. As a result, investors require the additional yield, said Barclays Capital’s Wishengrad.

Double digit returns on investment are guaranteed neither by the Constitution nor the Bible and even Freshwater Shamen don’t contend they are risk free.

Punting the Pundits

“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”.

New York Times Editorial: Talking With the Taliban

The Taliban’s announcement that they plan to open an office in Qatar and possibly begin peace negotiations deserves a close look and a full draught of skepticism.

This is the same group of militants, led by Mullah Muhammad Omar, that ruled Afghanistan with such medieval brutality, denying women access to an education or health care. It is the same group that gave sanctuary to Al Qaeda before Sept. 11, 2001, and that is still killing NATO troops and terrorizing and murdering the Afghan people. But if there is even a remote chance of a political settlement – one that does not reimpose the Taliban’s horrors – it must be explored.

Robert Sheer: Arms Dealer Obama Will Win by Default

Barack Obama will be re-elected not as a vindication of his policies but because the Republicans are incapable of providing a reasonable challenge to his flawed performance. On the central issue of our time-reining in the greed of the multinational corporations, led by the financial sector and the defense industry-a Republican presidential victor, with the possible exception of the now-sidelined Ron Paul, would do far less to challenge the kleptocracy of corporate-dominated governance.

As compared to front-runner Mitt Romney, who wants to derail even Obama’s tepid efforts at regulating Wall Street, and who seeks ever more wasteful increases in military spending, the incumbent president appears relatively enlightened, but that is cold comfort.

David Cole: Guantánamo: Ten Years and Counting

On January 11 it will have been a decade since the first of the men we once called “the worst of the worst” were brought to Guantánamo Bay, a location handpicked by the Bush administration so that it could detain and interrogate terror suspects far from the prying eyes of the law. In the intervening years much has improved at this remote US-controlled enclave in Cuba. Allegations of ongoing torture have ceased; the detainees have access to lawyers and court review; and more than 600 of the 779 men once held there have been released.

But in another way, Guantánamo is a deeper problem today than it ever was. No longer a temporary exception, it has become a permanent fixture in our national firmament. And although at one time we could blame President George W. Bush’s unilateral assertions of unchecked executive power for the abuses there, the continuing problem that is Guantánamo today is shared by all three government branches, and ultimately by all Americans. With President Obama’s signing of the National Defense Authorization Act (NDAA) on New Year’s Eve, the prison is sure to be with us-and its prisoners sure to continue in their legal limbo-for the indefinite future.

Amy Goodman: Republicans Divided, Citizens United

The Republican caucuses in Iowa, with their cliffhanger ending, confirmed two key political points and left a third virtually ignored. First, the Republicans are not enthusiastic about any of their candidates. Second, we have entered a new era in political campaigning in the United States post-Citizens United, the U.S. Supreme Court decision that unleashed a torrent of unreported corporate money into our electoral process. And third, because President Barack Obama is running in this primary season unchallenged, scant attention has been paid to the growing discontent among the very people who put him in office in 2008. As a result, the 2012 presidential election promises to be long, contentious, extremely expensive and perhaps more negative than any in history.

Mitt Romney technically prevailed in the Iowa caucuses, squeaking out an eight-vote margin over late-surging Rick Santorum. Libertarian Ron Paul garnered an impressive 21 percent of the vote in the crowded field. Note that the Republican Party does not allow a recount of the handwritten, hand-counted ballots, and that the final Romney edge was first reported on right-wing Fox News Channel by none other than its paid commentator Karl Rove, the architect of George W. Bush’s two controversial presidential election wins.

Joe Conason: Did Reagan Raise Taxes? Let GOP Candidates Answer

Politicians and their flacks lie every day, but it is unusual for someone prominent to utter a totally indefensible falsehood like the whopper that just sprang from the mouth of Eric Cantor’s press secretary on national television.

While interviewing the House majority leader, “60 Minutes” correspondent Leslie Stahl suggested that he might consider compromise because even Ronald Reagan had raised taxes several times. Cantor’s flack then burst out in protest, saying he couldn’t allow her remark to stand.

The premise of Stahl’s perceptive question was perfectly accurate, of course. But the rude Hill staffer is scarcely alone in promoting this super-sized lie about Reagan’s tax purity. And it would be worth discovering which of the Republican candidates likewise reject a fundamental truth about their party and its idol.

E. J. Dionne, Jr.: Santorum, Huntsman and the Future of Conservatism

MERRIMACK, N.H.-I love watching Republicans engage in class warfare. They condemn it as a sin when Democrats come within 100 miles of even mentioning the sharp and growing class inequalities in the United States. But when conservatives play the class card, they see doing so as a high ethical calling involving the defense of good and moral folk against the depredations of a liberal elite.

Blatant hypocrisy is instructive.

Rick Santorum gave by far the best speech Tuesday night after his boffo performance in the Iowa caucuses. Among the Republicans, he along with Jon Huntsman-and, yes, Ron Paul who is really a libertarian-knows who he is and why he’s running. Santorum has a philosophy (and a theology) that holds his views together. It’s a retro philosophy but no less interesting for that. So comparatively speaking, he comes by his class warfare honestly, even if he panders shamelessly on guns and gays and talks about the straight-laced President Obama as if he embodied the moral sensibilities of Woodstock and Gomorrah.

Eugene Robinson; Search and Destroy Mission

DES MOINES-Mitt Romney and his backers decided that to win in Iowa they had to destroy Newt Gingrich’s campaign. Now Gingrich looks eager-and able-to return the favor.

Romney got his victory, but it doesn’t feel much like one. It’s embarrassing that the supposed Republican front-runner could only manage to beat Rick Santorum by eight votes out of about 120,000 cast in Tuesday’s caucuses. It’s troubling that Romney has spent the past five years campaigning in Iowa and still could draw just one-quarter of the vote.

And it’s downright ominous that Gingrich is threatening to do whatever he can to block Romney’s path to the nomination. If the sneering description of Romney in Gingrich’s post-caucus speech Tuesday is a preview-he called him a “Massachusetts moderate” who is “pretty good at managing the decay”-this could get ugly.

Gail Collins: The March of the Non-Mitts

“This is the New Hampshire primary! This is a big deal! I can’t even believe I’m standing here!” cried Jon Huntsman, who yearns to be the Rick Santorum of New Hampshire.

That’s what it’s come to. Do you think this is what Huntsman told himself when he quit his distinguished post as ambassador to China? (“Diplomacy is all well and good, but I believe I was meant for greater things. Like being the Rick Santorum of New Hampshire.”)

Santorum, of course, was the man of the hour when he sort-of-almost-nearly came in first in the Iowa caucuses on Tuesday. Actually, Mitt Romney won. (Eight Republicans can’t be wrong!) But Santorum has the momentum. His strategy of spending his entire life going from one Iowa Pizza Ranch to another paid off.


How Many Stephen Colberts Are There?

By CHARLES McGRATH, The New York Times Magazine

Published: January 4, 2012

The new Colbert has crossed the line that separates a TV stunt from reality and a parody from what is being parodied. In June, after petitioning the Federal Election Commission, he started his own super PAC – a real one, with real money. He has run TV ads, endorsed (sort of) the presidential candidacy of Buddy Roemer, the former governor of Louisiana, and almost succeeded in hijacking and renaming the Republican primary in South Carolina. “Basically, the F.E.C. gave me the license to create a killer robot,” Colbert said to me in October, and there are times now when the robot seems to be running the television show instead of the other way around.

A voice-over at the end announced that the commercial had been paid for by an organization called Americans for a Better Tomorrow, Tomorrow, which is the name of Colbert’s super PAC, an entity that, like any other super PAC, is entitled to raise and spend unlimited amounts of soft money in support of candidates as long as it doesn’t “coordinate” with them, whatever that means. Of such super-PAC efforts, Colbert said, “This is 100 percent legal and at least 10 percent ethical.”

Just as baffling as the Iowa corn ads – at least to the uninitiated – were some commercials Colbert produced taking the side of the owners during the recent N.B.A. lockout. These were also sponsored by Americans for a Better Tomorrow, Tomorrow, but they were “made possible,” according to the voice-over, by Colbert Super PAC SHH Institute. Super PAC SHH (as in “hush”) is Colbert’s 501(c)(4). He has one of those too – an organization that can accept unlimited amounts of money from corporations without disclosing their names and can then give that money to a regular PAC, which would otherwise be required to report corporate donations. “What’s the difference between that and money laundering?” Colbert said to me delightedly.

In the case of Colbert’s N.B.A. ads, the secret sugar daddy might, or might not, have been Mark Cuban, the owner of the Dallas Mavericks, who has appeared on the show and whom the ads call a “hero.” We’ll never know, and that of course is the point. Referring to the Supreme Court ruling that money is speech, and therefore corporations can contribute large sums to political campaigns, Colbert said, “Citizens United said that transparency would be the disinfectant, but (c)(4)’s are warm, wet, moist incubators. There is no disinfectant.”

“Aren’t lawyers allowed to have fun?” Potter asked me a few weeks ago, adding that he knew what he was signing up for by appearing on the show. He also said he thought that Colbert was serving a useful function. “I’m very careful not to ascribe motive to him – he can speak for himself,” he said. “I don’t know what he’s thinking. He can find the laws ironic or funny or absurd. But he’s illustrating how the system works by using it. By starting a super PAC, creating a (c)4, filing with the F.E.C., he can bring the audience inside the system. He can show them how it works and then leave them to conclude whether this is how it ought to work.”

Sponsored by Americans for a Better New York Times Magazine Next Week, Today.

On this Day In History January 5

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.

January 5 is the fifth day of the year in the Gregorian calendar. There are 360 days remaining until the end of the year (361 in leap years).

On this day in 1933, construction starts on what will become one of America’s most famous landmarks: the Golden Gate Bridge. When completed in 1937, the Golden Gate has a 4,200-foot-long suspension span, making it the world’s longest suspension bridge. Since opening to the public in May 1937, almost 2 billion vehicles have crossed the bridge, in both the north- and southbound directions.

The bridge was named not for its distinctive orange color (which provides extra visibility to passing ships in San Francisco’s famous fog), but for the Golden Gate Strait, where the San Francisco Bay opens into the Pacific Ocean. The bridge spans the strait and connects the northern part of the city of San Francisco to Marin County, California.

Before the bridge was built, the only practical short route between San Francisco and what is now Marin County was by boat across a section of San Francisco Bay. Ferry service began as early as 1820, with regularly scheduled service beginning in the 1840s for purposes of transporting water to San Francisco. The Sausalito Land and Ferry Company service, launched in 1867, eventually became the Golden Gate Ferry Company, a Southern Pacific Railroad subsidiary, the largest ferry operation in the world by the late 1920s. Once for railroad passengers and customers only, Southern Pacific’s automobile ferries became very profitable and important to the regional economy. The ferry crossing between the Hyde Street Pier in San Francisco and Sausalito in Marin County took approximately 20 minutes and cost US$1.00 per vehicle, a price later reduced to compete with the new bridge. The trip from the San Francisco Ferry Building took 27 minutes.

Many wanted to build a bridge to connect San Francisco to Marin County. San Francisco was the largest American city still served primarily by ferry boats. Because it did not have a permanent link with communities around the bay, the city’s growth rate was below the national average. Many experts said that a bridge couldn’t be built across the 6,700 ft (2,042 m) strait. It had strong, swirling tides and currents, with water 500 ft (150 m) in depth at the center of the channel, and frequent strong winds. Experts said that ferocious winds and blinding fogs would prevent construction and operation.

Executing Citizens United

I’ll believe corporations are people when Texas executes one ~ unknown author #OWSNYC

Back in 1912, the voters of Montana passed a law that barred corporations from direct contributions to political candidates when mining czar W.A. Clark bought himself a seat in the U.S. Senate. That law was overturned in 2010 when the US Supreme Court declared that granted corporations the same 1st Amendment rights as citizens and allowed businesses to freely spend their way into the nation’s political debates. Being single minded Westerners, the Montana Supreme Court has challenged Citizens United by upholding the state’s century old law that limits corporate contributions:

In a 5-2 opinion, the Montana court’s majority concluded that the state’s long history of well-funded natural resource extractors, small population and historically inexpensive political campaigns allow it to demonstrate compelling government interest in regulating corporate financial muscle. Even one of the justices who dissented – saying that the U.S. Supreme Court left no room for states to exempt themselves – argued forcefully against the broad corporate latitude encompassed in the Citizens United decision.

Corporations are not persons. Human beings are persons, and it is an affront to the inviolable dignity of our species that courts have created a legal fiction which forces people – human beings – to share fundamental, natural rights with soulless creatures of government,” Justice James C. Nelson wrote in his reluctant dissent.

“Worse still, while corporations and human beings share many of the same rights under the law, they clearly are not bound equally to the same codes of good conduct, decency and morality, and they are not held equally accountable for their sins. Indeed, it is truly ironic that the death penalty and hell are reserved only to natural persons,” he wrote.

(emphasis mine)

Clearly, Citizens United is uniting people who oppose the solidification of the corporate take over of the government. In December, Sen. Bernie Sanders (I-VT) introduced a constitutional amendment, S.J.Res.33 (pdf), that would strip corporations of the same constitutional rights as persons, subject them to regulation, bar them from making campaign contributions and grant Congress the power to regulate campaign finance. There are now four different constitutional amendments to the U.S. House and Senate seeking to overturn the Citizens United ruling.

In Los Angeles, CA, the city council unanimously passed a non-binding resolution in support of such an amendment.

Then, in one of their first acts of the New Year, the New York City Council passed a resolution calling on congress pass an amendment overturning Citizens United v. Federal Election Commission. Oakland, CA; Albany, NY; Missoula, MO; Boulder, CO and South Miami, FL have all passed similar resolutions.

The Montana decision, which applies only to state elections, is important because it sets the path for the return of the issue to the US Supreme Court, while we wait to see if a constitutional amendment can be passed.

My Little Town 20120104: Cold Weather Activities

Those of you that read this regular series know that I am from Hackett, Arkansas, just a mile or so from the Oklahoma border, and just about 10 miles south of the Arkansas River.  It was a rural sort of place that did not particularly appreciate education, and just zoom onto my previous posts to understand a bit about it.

Since we have had a really cold snap here in the Bluegrass, I began reflecting on what it like in the winter when I was growing up in Hackett.  When I was a kid it was colder in the winter in Arkansas for the most part than it was when I was older.  A least, that is how I remember it being.  Kids tend, or at least tended at the time before video games and computers, to get outside even during cold weather, but I think that it was colder back then, and I have some memories of why I think that.

For one thing, it snowed and sleeted more then than it did later.  Now where I grew up one or two snows deep enough to build snow men is about typical, but as I recall there would be three or four snows when I was little.  They seemed to last longer, but days seem longer to a child than to and adult.