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Friday, October 29, 2010

U.S. GDP and Consumer Spending Headlines - B.S. ???

MarketWatch proclaims, "GDP rises 2% in third quarter on consumer spending : Spending growth of 2.6% is fastest since fourth quarter of 2006 ".  Which sounds like progress, until you drill down into the details of the Report on 3rd quarter GDP  issued by the Commerce Department's Bureau of Economic Analysis, or 'BEA'.

Which is what Michael Shedlock has done--with an assist from David Rosenberg-- in the SEEKING ALPHA article, ' Double Dip Delayed, Not Derailed; Understanding Consumer Spending '.

Problem #1 : Of the 2.0% GDP Growth, only 0.6 was 'Final Sales', while the rest was Inventory Re-build.

Problem #2 : BEA's definition of ' Consumer Spending '

Now you and I would define  ' Consumer Spending ' as people taking their own money out of their wallet or purse to pay for something. But that's not how the BEA defines it.  The BEA's  'personal consumption expenditures' category, as David Rosenberg points out, includes '"pretty much all of the all of the $2.5 trillion healthcare spending, including the roughly half which comes via government. When Medicare writes a check for your mom’s knee replacement, that gets counted as consumer spending in the GDP stats."

But let's look at this at ground level. If actual, real consumer spending--like my buying a bottle of the vodka on special, a bag of Cheezits, and a DVD of, say, THE TEN COMMANDMENTS-- were on the mend, wouldn't state sales tax revenues be up ? But they're not !  In fact, "state sales tax revenue (the only valid measure of consumer sales), is still far below 2007 levels and states are in serious trouble over it."

Freeze Cuts Sales, Supply in Hardest-Hit States, says Bloomberg.

Bloomberg reports that...

In Arizona, California and Nevada, foreclosure auctions on courthouse steps, known as trustee sales, are down 42 percent since Sept. 20, according to ForeclosureRadar, a real estate tracking service in Discovery Bay, California. In Florida’s Miami-Dade and Broward counties, fewer foreclosures have led to 18 percent declines this month in the number of repossessed homes listed for sale, said Ron Shuffield of Esslinger, Wooten, Maxwell Inc., a realty firm based in Coral Gables, Florida.

In a real estate market where as many as 7 million homes face foreclosure or have already been seized by lenders, according to Zillow Inc., a clog in the pipeline may delay a housing recovery, which won’t occur until home prices stop falling. That could in turn postpone a U.S. economic recovery. Distressed properties accounted for 31 percent of all U.S. home sales last month, RealtyTrac Inc. said Oct. 14.
This " clog in the pipeline " is bad all right.  Bad for real estate vultures, that is.  But let's look at it from a different point of view. If these foreclosure-halts reduce the supply of saleable housing and in doing do prevent people from being tossed out of their homes--a process which dislocates countless lives and turns whole neighborhoods into ghost-towns-- and perhaps induce banks to agree to more short sales, isn't that a good thing ? And it's not like there's no other real estate out there to sell !  And if housing supplies are constrained--yeah, right--won't that serve to increase housing prices ? And if housing prices go up, isn't it possible that fewer people might wind up with negative equity, and isn't that a good thing ? 

What this Bloomberg report reveals all too clearly is that the MSM --Mainstream Media--have built-in biases, and they're sure as hell not in favor of Main Street, or the little guy/gal.

For Halloween, Screamin' Jay Hawkins Puts a Spell on You

Screamin' Jay,  in a pensive moment.

And so do...

Joe Cocker
Nina Simone
Jeff Beck and Joss Stone (Live auf Mallorca)
Eric Burdon  (Live at Lugano, 2006)
Arthur Brown
Bryan Ferry
Buddy Guy
Creedence Clearwater Revival
Marilyn Manson
Tim Curry
Alan Price
Terry Reid

One-Stop Shopping for 2010 Election Projections : Try Larry Sabato's "Crystal Ball"...

at the U.VA. Center for Politics, which covers Senate and House races, as well as gubernatorial contests natoinwide, allowing you the option of viewing these races from a fairly high level, or drilling down to single, specific race.

Fore example, here's the Cyrtal Ball's projection for the Massachusetts Governor's Race :
The Crystal Ball is also changing the gubernatorial rating in Massachusetts from Leans D to Toss-Up. Both public and private surveys are showing that Republican Charlie Baker has evened the race with Governor Deval Patrick. We do not know which way this one will go on November 2, in part because of the continuing presence of Independent Tim Cahill, who is still polling in high single and low double-digits. While Cahill is a former Democrat, he may well be splitting the anti-Patrick vote with Baker. Cahill insists that he will stay in the race until the end, but the real question is whether he holds his current support level, or whether it declines as Election Day approaches. This is one to watch, not least because it is Massachusetts—a normally Democratic state, but also one that gave us the first indication, via Scott Brown, that a Republican wave was coming in 2010.

Check out the Crysal Ball's Projections for the Senate, House,  or Governorships.

Sabato's final 2010 Congressional projection :  "GOP Gains 55 Seats in House, 8 in Senate ".

The " Catholic Vote " No Longer Exists...

says Joseph Bottum of THE WEEKLY STANDARD. Even so...
Catholic articulation of certain public issues has come to dominate conservative thought—even while Catholics themselves have ceased to be any kind of distinct voting bloc [emphasis mine].
It’s peculiar, the political invisibility of Catholic voters. More than 68?million of them live in the United States, well over 20 percent of the population, and their vote is becoming indistinguishable from the nation’s. “The Catholic vote has gone to the popular winner in every presidential election since 1972,” noted the Wall Street Journal. So has the general vote. Catholics behave at the polls just like everyone else.
The major role, perhaps the only role, that Catholicism genuinely plays on the American stage anymore is as a source of the vocabulary for phrasing moral issues. If you had to describe a typical member of the new generation of Republican candidates, it would be a former military officer, now a local businessman, who attends a center-right Evangelical church and never ran for public office before. Which makes it all the more astonishing that, typically, he speaks the Catholic language of moral issues so seamlessly and well.
Sanctity of life, just-war theory, natural law, dignity of the person: It has become the single viable vocabulary these days for expressing moral concepts in a secular space. Call it the John Courtney Murray project, after the Jesuit priest whose essays in the 1950s exercised so much influence on the liberalizing reflections about democracy at the Second Vatican Council.
Indeed, it was the genius of a handful of modern Catholic writers—laymen, mostly, from Michael Novak to Robert P. George—to take what, circa 1959, was a liberal Catholic idea and turn it into a mainstay of contemporary conservatism—though its effect was primarily on Protestants. The horrified fascination of, say, the New York Times with all things Catholic isn’t caused by worry about the religious authority of bishops or some monolithic Catholic voting bloc. It concerns the political left’s desire to discredit Catholicism as an influence on secular thought.

With Friends Like These, Part II : Bubba's On the Stump Not to Aid Obama, but to Rally Clintonistas for 2012 Challenge

opines Toby Harnden of THE TELEGRAPH, in his article ' Bill Clinton's 'retribution tour' against Barack Obama '. Some excerpts :

Byron York [ in the WASHINGTON EXAMINER ] wonders here whether Bill Clinton wants Democrats to win next Tuesday. That may be going too far but he is certainly onto something when he suggests that (the) Clinton(s) has/have (politically speaking, they’re inseparable) a double agenda right now. As I reported a couple of weeks ago, Bill himself has stated that his principal motivation for going on the campaign trail was to thank those who had supported his wife against Obama.

After my column was published, the NYT did a big piece on Bill on the campaign trail and buried the stuff about Clinton not being close to Obama and in reality still campaigning for Hillary. But it was still in there:

   Still, Mr. Clinton is not particularly close to Mr. Obama. He coordinates with Vice President Joseph R. Biden Jr., but makes his own decisions about whom to help.He has focused on aiding Democrats who endorsed Mrs. Clinton against Mr. Obama, like Representative Mark Schauer here in Battle Creek. Some Democrats call it a “retribution tour”; aides said they think of it as a “thank you tour.”

Deep in The Washington Post’s Bill-on-the-stump piece (published three days before the NYT effort) was the notion that Clinton is essentially going rogue:
    Some assume Democratic leaders in Washington are orchestrating Clinton’s campaign activities, but he is deployed by no one but himself.

    Democratic candidates of all stripes are funneling requests and seeking advice through his top aide, Douglas Band. Clinton prioritizes politicians who helped his wife, Hillary Rodham Clinton, in her 2008 presidential campaign. (As secretary of state, she is banned from political activity.)
So it is noteworthy that Bill is apparently about to campaign for Frank Caprio, the Rhode Island gubernatorial candidate who this week told Obama he could “shove it” after the President declined to endorse him. Caprio was an early supporter of Hillary for President, according to the Providence-Journal. In November 2007 he attended an East Greenwich fundraiser that netted $300,000 for her. As early as April 2006, Caprio was hanging out in bar with Bill as Hillary made the first moves for her ill-fated White House run.

Bill is acknowledging Caprio’s faithful support for Hillary against Obama and has no doubt calculated that it also serves his and his wife’s purposes for the Clintons to be seen as the good Democrats by supporting the party candidate dissed by Obama . Perhaps there’s also a dash of “the enemy of my enemy is my friend” about it too.

My hunch is that the Clintons smell Obama’s blood in the water right now and, political predators that they are, they are positioning themselves to take advantage (and, frankly, who could blame them for doing so?). We know from 2008 what they really think of Obama. Despite Hillary’s loyal service as Secretary of State, her scathing critique of Obama during their bruising primary still stands – and now looks prescient.

Coincidentally (not), Hillary will be out of the country next Tuesday – as far away from the impending disaster as possible.

Some are speculating that Hillary might resign from State and mount a primary challenge to Obama in 2012. I think that’s highly unlikely – it would be an extremely difficult path for her to challenge the first black President. Seven years is a long, long time (and so is five, when the decision to run would be taken) but all things being equal she is currently a near cert to run in 2016.

Of course, it’s not impossible that Obama, badly damaged by the mid-terms and sick of the distinct lack of the adoration he’s always been used to, will do an LBJ and decide not to run in 2012. I’ve long wondered whether his heart is in getting re-elected. In mid-September, a “big-time Democrat” told Politico’s Roger Simon that 2010 was already lost:
 “It is gone. He must now concentrate on saving 2012. But the biggest fear of some of those close to him is that he might not really want to go on in 2012, that he might not really care.”

With Friends Like These, Part I : The Left Says Obama Wasn't Liberal Enough...

submits Michael Shear in THE CAUCUS BLOGS.  Some Excerpts :

If Democrats suffer widespread losses next week, as expected, is President Obama to blame because his agenda wasn’t sufficiently liberal?

With just five days before the election, the party’s most liberal activists are increasingly pointing the finger at Mr. Obama and his legislative allies for giving up too much of the progressive agenda, and too quickly.

Jon Stewart, the host of Comedy Central’s “Daily Show,” confronted Mr. Obama with the charge directly in an interview Wednesday night, suggesting that the administration’s achievements had been more “timid” than they should have been.

Writing in The New York Times on Sunday, Ari Berman argued, “Democrats would be in better shape, and would accomplish more, with a smaller and more ideologically cohesive caucus.”

Where did DCCC Decide to Make A Stand ? Follow the $$$... !

...says Simmi Aujla in THE POLITICO

  • In Virginia, the Democratic Congressional Campaign Committee spent $1.5 million on ads for Rep. Gerry Connolly.
  • In Jew Jersey, the DCCC disbursed $653,865 " to protect another vulnerable incumbent, Rep. John Adler against his challenge from former NFL offensive tackle Jon Runyan."
  • In Penssylvania, the DCCC put $557,613 into the race to support Rep. Patrick Murphy. " Murphy’s trailing campaign is getting particularly aggressive — it sent out mailers telling voters they would lose their voting privileges if they didn’t submit absentee ballot request forms, prompting dozens of people to call the local elections board in a panic" .
  • In Massacusetts, the DCCC " spent $862,577 on ads against Jeff Perry, a protégé of Sen. Scott Brown (R-Mass.), after only spending under $100,000 the week before that."


says a recent Senate Report.  

In the last 10 years, spanning two terms of George W. Bush’s administration and the first two years of Barack Obama’s presidency, the federal government has dished out more than $1 billion to the deceased, according to a new report by Oklahoma Sen. Tom Coburn, who serves as the ranking Republican on an investigative Senate subcommittee.

The payments span the gamut, including $18 million to nearly 72,000 dead people from the economic stimulus funds from the Social Security Administration; an additional $40 million to deceased Social Security beneficiaries; nearly $4 million from the Health and Human Services Administration to pay heating and cooling costs; more than $1 billion in farming subsidies from the Agriculture Department to nearly 173,000 dead farmers (since the 1990s); $15 million from the Department of Housing and Urban Development to nearly 5,000 households with one dead person; and $92 million out of Medicare for medical supplies prescribed by dead doctors and $8.2 million for supplies sought by dead patients.

“These people won’t be hurt by spending cuts,” quipped John Hart, Coburn’s spokesman.

Florida Senate Soap-Opera : Intrigues Surrounding a Crist or Meeks Drop-Out

While Republican-turned Independent Charlie Crist discussed dropping out-- in favor of Democratic Candidate Kendrick Meeks-- with officials at the White House, guess what ? Bill Clinton was talking to Meeks about dropping out and endorsing Crist !

What's going on here ? Stephen F. Hayes of the POLITICO provides lucid analysis of the Clinton gambit.

The stunning news, first reported by Politico’s Ben Smith, thrust the Florida Senate contest back into the national spotlight following several weeks of relatively little attention after a series of polls showed Republican Marco Rubio with a double-digit lead. The high-level efforts, involving a former president and several White House officials, suggest that the leaders of the Democratic Party were willing to go to extraordinary lengths to make sure that Rubio, a rising star in the conservative movement of Hispanic descent, is not elected to the Senate on November 2 [ emphasis mine ].

The details are important. Smith reported that Clinton talked to Meek about dropping out of the race and that several Democratic officials believed that Meek had agreed to do so. Smith reported that a tentative endorsement event had been set up for October 26. In a rapid succession of developments Thursday evening, Meek denied that he had ever agreed to quit and said suggestions to the contrary were “inaccurate.” Clinton acknowledged talking to Meek about dropping out but denied coordinating with the White House. And Charlie Crist gave two interviews – one to Keith Olbermann and the other to Greta Van Susteren – and eagerly provided many details of the discussions to national television audiences.

At the end of the night, the trajectory of the Florida Senate race remained unchanged, but the story underscored the hardening perceptions of the candidates. Marco Rubio remains the clear frontrunner. Kendrick Meek looks like he cannot possibly win. And Charlie Crist, whose candidacy at this point amounts to little more than platitudes about loving the Sunshine State, cemented his position as one of the most shameless political opportunists in recent memory – quite a distinction when the other competitors are elected officials. The New York Times reported that Crist had agreed to caucus with Democrats if party higher-ups could convince Meek to drop out.

Thursday, October 28, 2010

Aloha, Danno !

Excerpts from the AP Report :

Stage and screen actor James MacArthur, who played "Danno" in the original version of television's "Hawaii Five-O," died Thursday at age 72.

In a career that spanned more than four decades, MacArthur was most recognized for his role as detective Danny "Danno" Williams on "Hawaii Five-O," which aired from 1968 to 1980. Episodes often ended with detective Steve McGarrett, the lead character, uttering what became a pop culture catch phrase: "Book 'em, Danno."

Space Dragon--a Baby Step for NASA's COTS Program --Waits on FAA Re-entry License

SpaceX Dragon
..reports Irene Klotz in AVIATION WEEK.  Some excerpts :

Space Exploration Technologies (SpaceX) is awaiting an FAA license to fly its Dragon capsule through the atmosphere, following launch on a Falcon 9 rocket targeted for Nov. 18 from Cape Canaveral AFS, Fla.

The launch license was granted Oct. 15. The pending re-entry license will be the first ever issued by FAA, according to George Nield, FAA’s associate administrator for Commercial Space Transportation.

“As we go forward [with NASA Commercial Crew Development and other programs] we expect to see a lot more of those,” Nield tells AVIATION WEEK.

Building on the Falcon 9’s successful June 4 debut (Aerospace DAILY, June 7), SpaceX plans to put Dragon into a 34.5-deg.-inclination, 300-km. (190-mi.) orbit, where it will remain for less than 4 hr. before re-entering the atmosphere and splashing down in the Pacific Ocean near Southern California.

The mission is a demonstration flight for NASA under its Commercial Orbital Transportation Services (COTS) program. Both SpaceX and Orbital Sciences Corp. have contracts to develop and demonstrate launch vehicles and to fly cargo to the International Space Station.

A Quartet of Articles on the Economy and Investing, from SEEKING ALPHA

Ed Harrison summarizes Jeremy Grantham's Case Against the Federal Reserve in, ' Night of the Living Fed .

The Calafia Beach Pundit explains ' Why QE2 Is Both Unnecessary and Foolish: Part II  '.  Excerpts :
There is no need for any QE2, and certainly no need for trillions more of asset purchases. Therefore, I think there is a strong case to be made for a QE2 announcement next week that "disappoints." Why couldn't the Fed announce a token QE2 (e.g., a hundred billion in installments) to reinforce the fact that they are committed to avoiding deflation, but also unwilling to provoke too much inflation? While such an announcement would seem likely to result in an equity selloff, I would view it as very good news from a long-term perspective, and thus an excellent buying opportunity. If the Fed does the right thing, that can never be bad. Downplaying the risk of deflation and the need for a massive QE2 would also send a strong message of badly-needed optimism.

Art Laffer, in a letter to clients yesterday, points out that the Bernanke Fed has suffered an unprecedented level of dissension. "Of the 32 FOMC policy decisions under Greenspan's watch, there were three that received a dissenting vote ... under Bernanke's stewardship, 19 of 42 FOMC policy decisions have faced a dissenting vote, with 21 total votes against." Moreover, quite a few of the FOMC Governors and regional Fed Presidents have questioned the benefit of, actively criticized, or pointed out potential negative consequences of further quantitative easing: Fisher, Hoenig, Kocherlakota, Lacker, Plosser, Warsh, and even the perennially dovish Yellen. In short, there is good reason to suspect that the FOMC decision next week may fall short of market expectations. The market may view that as bearish for the economy, but I would view it as ultimately bullish. Too much monetary ease is not something we need or should be hoping for at this juncture.
Is the Bond Bull Market Over ?  Bill Gross of PIMCO says, ' You betcha ! '  To paraphrase, the Bull Market is on its last legs as the Federal Reserve continues to perpetrate a hideous Ponzi Scheme on a helpless public.

Bespoke Investment Group provides charts illustrating Historical Midterm Election Results and Market Performance.
Looking at the entire week surrounding election day, the average change has been very positive as well at 0.90% with positive returns 17 out of 26 times. (Note: The market was closed during election week of 1914 due to World War I.)
In ' Drowning in Crude ',  Bespoke Investment Group shows that while we're virtually drowning in crude oil, inventories of gasoline and distillates are down.  What are the actual figures ? Glad you asked.
This week’s inventory report from the department of Energy showed a huge increase of 5.007 million barrels of crude oil versus expectations for a build of 1 million barrels. Gasoline inventories, on the other hand were down 4.387 million barrels versus expectations for a build of 625 thousand barrels. Finally, distillate inventories were down 1.613 million barrels, which was slightly more than the forecast for a draw of 1.5 million barrels.

Mid-term Models for Obama : Truman in 1946 and Clinton in 1994

Jay Cost reviews the elections of 1946 and 1994 and analyzes the similarities to and differences from 2010, in THE WEEKLY STANDARD.  Some excerpts : 

...1946 and 1994 were very different midterm elections. In 1946, a still essentially liberal country voiced its frustration and exasperation with the painful readjustment to peacetime. Once balance was restored to the economy, the country was prepared to move back to the left. In 1994, the country was no longer liberal at its core, and the 1994 midterms were an ideological correction of the leftward bent of the early Clinton administration. Thus, the strategies of Truman and Clinton made sense in their respective political contexts. Each president made an accurate judgment of what his midterm rebuke meant in the broader scheme, and thus was able to respond in an effective way.

It follows that the success or failure of President Obama’s response to a new Republican Congress will depend very much on whether he accurately reads the public’s mind. If he thinks the country is center-right, he will accommodate, as Clinton did. If he thinks it is center-left, he will “give ’em hell,” as Truman did.

So far, the president has telegraphed that he intends to fight. He has warned that a Republican victory would mean “hand-to-hand combat.” A comment the president made in a recent interview with the New York Times Magazine suggests he expects Republicans to move his way, not vice versa:

 It may be that regardless of what happens after this election, they feel more responsible .??.??. either because they didn’t do as well as they anticipated, and so the strategy of just saying no to everything and sitting on the sidelines and throwing bombs didn’t work for them, or they did reasonably well, in which case the American people are going to be looking to them to offer serious proposals and work with me in a serious way.

What is animating this sentiment? Part of the answer appears to be Obama’s belief that, deep down, the country is with him. He seems to think that Republicans—much like their forebears in 1946—have made political hay out of economic uncertainty, but that when it comes time to govern they will have to come to the table, his table, or suffer a rebuke in 2012.

The Newest Wave is GOP Women

And they're ready to make history says Jan Larimer, co-chairwoman of the Republican National Committee.: 
On Tuesday, the Republican Party is going to have more female candidates on the ballot than at any other point in our nation’s history — with 51 women running for Congress.

For the past two years, the Republican National Committee Women’s Program has worked to find female candidates who want to make a difference by running for office. We brought together thousands of female Republican volunteers, activists and donors at a series of regional summits. We built a social networking platform for Republican women at and forged stronger ties with Republican women in Congress to help us comb the nation to find the next generation of female GOP leaders.
• Susana Martinez seems poised to become New Mexico’s first female governor. As a former prosecutor, she has the skills and the toughness to clean up New Mexico’s statehouse and defeat Bill Richardson’s hand-picked successor.

• Nikki Haley looks positioned to become South Carolina’s first woman governor and only the second Indian-American governor in our history. She offers a clear vision for the state in difficult economic times.
• Kristi Noem is running strong in South Dakota to replace incumbent Democrat Stephanie Herseth Sandlin in the House. Noem embodies the conservative values of hard-working South Dakotans — not a career politician.

• Sharron Angle has energized Republicans in Nevada and rallied them against Reid’s policies. Angle is now ahead in a race too close to call, But if she unseats Reid, a 28-year incumbent and the architect of this harmful economic agenda, the result could send shockwaves throughout the Democrat establishment.

The New Republic's John Judis Takes on the Tea Party...

explains why liberals are so dismissive about the Tea Party and dispels Four Myths about the Movement, namely, that :

1) “The Tea Party is not a movement."
2) “The Tea Party is a fascist movement.”
3) “The Tea Party is racist.”
4) “The Tea Party is a conventional Republican group funded by big business.”

Obama's Urbanista Emphasis Doesn't play in the 'Burbs, says Joel Klotkin in THE POLITICO

Terrific Article by Klotkin, ' author of “The Next Hundred Million: America in 2050.” He is a distinguished senior fellow in urban futures at Chapman University and an adjunct fellow at the Legatum Institute in London. ' Excerpts follow :
In America, the dominant geography continues to be suburbia – home to at least 60 percent of the population and probably more than that portion of the electorate. Roughly 220 congressional districts, or more than half the nation’s 435, are predominately suburban, according to a 2005 Congressional Quarterly study. This is likely to only increase in the next decade, as Millennials begin en masse to enter their 30s and move to the periphery.

Nationally, suburban approval for the Democrats has dropped to 39 percent this year, from 48 percent two years ago. Disapproval for President Barack Obama is also high --- nearly 48 percent of suburbanites disapprove, compared to only 35 percent of urbanites. Even Obama’s strong support among minority suburbanites, a fast-growing group, has declined substantially.

Much of the suburban distress, of course, stems from the still perilous state of the economy. Obama’s mix of fiscal and monetary policies has provided much succor to Wall Street, where stock prices have soared 30 percent, and to big corporations, whose profits have risen by 42 percent. This has been great for Manhattan plutocrats -- but not particularly helpful for the suburban middle class.
Much of the Obama policy agenda – from mass transit and high-speed rail to support for “smart growth” policies – appeals to city planners and urbanistas. Transportation Secretary Ray LaHood has spoken openly of “coercing” Americans out their cars and the Department of Housing and Urban Development is handing out grants to regions which support densification strategies that amount to forced urbanization of suburbs.

This is a problem since the vast majority of Americans – consistently more than 80 percent – do not prefer to live in dense big cities. Most want a house rather than being forced to live in an apartment. And for all but a handful, a car, not a bus or train, remains not only the preferred way to get to work, but often the only feasible means to get work -- mostly in the suburbs.

If the Democrats want to mount an electoral comeback in suburbia, they need to take these realities into account . There are just not enough votes in core cities, upscale close-in suburbs or college towns to knit together a majority.

Wednesday, October 27, 2010

Another 2010 Excuse : "The D*mned Portuguese Water-Dog Ate Our Narrative "

Narrative ? What Narrative ?
Blaming the President's dog, Bo, is just about the only excuse that hasn't been adduced to account for expected Democratic losses in the mid-term elections.

' Lost, misplaced, or stolen narrative ' is increasingly popular, cited yesterday by Pennsylvania's Governor Ed Rendell on FOX.
The term-limited governor and former chairman of the Democratic National Committee said that health care is just one of a number of issues on which Democrats have struggled to effectively make their case.
“What happened is the Democrats joined the Obama administration, lost a spin war on stimulus, on health care, even financial responsibility … 95 percent of the people should have been for that bill,” he said. “It hasn't been a clear and concise enough message."

OVER-THE-TOP TV : What is 'OTT' and Why Does It Scare the Cable Companies ?

Over-the-top TV is TV delivered via IP. It promises to provide almost limitless choice of video entertainment. Products such as PlayOn and Boxee already allow customers to watch OTT and toss their expensive cable subscription.

As an article at In-Stat puts it, Web TV will change everything.
Consumers are increasingly viewing TV content online. The on-demand, Web-user experience fits our busy lifestyles more than broadcast TV. What consumers really want is the online video viewing experience on their HDTVs. A wide variety of devices and technologies are making the Web-to-TV market a reality.
For more information on OTT and its implications for Cable, see Jon Orlin's "  Internet TV and the Death of Cable, Really " in TECH CRUNCH  and his " Comcast Reports Drop in Cable Subscribers, Blames Economy " in SEEKING ALPHA.  See also ECN MAG " Over-the-Top Video and Content Delivery Networks Will Transform Video-On-Demand Provisioning ".

Tuesday Night R&B/Soul Blast !!!

Ruby & The Romantics - Our Day Will Come
The Shirelles - Mamma Said
The Shirelles Will You Still Love Me Tomorrow ?
Ronettes - Be My baby
Mary Wells - My Guy
Fontella Bass - Rescue Me
Martha and  the Vandellas - Heatwave
Martha and The Vandellas - Dancing in the Streets
Martha and The Vandellas - Jimmy Mack
The Drifters - On Broadway
The Drifters - Up On The Roof
Ben E. King - Stand by me
Percy Sledge - When a Man Loves A Woman
Otis Redding - Sitting on the Dock of the Bay
The Temptations - My Girl
The Temptations - The Way You Do the Things You Do
The Four Tops - Baby I Need Your Lovin'
The Four Tops - Reach Out I´ll be there
The Four Tops - It´s the same old song
Smokey Robinson - The Tracks Of My Tears Live (1965)
Aretha Franklin - Respect
Aretha Franklin - Natural Woman
Marvin Gaye - I Heard It Through The Grapevine
Marvin Gaye - Mercy, Mercy Me
Marvin Gaye - What's Going On
The Supremes-You Keep Me Hangin' On
The Supremes - Come See About Me   
The Supremes-Stop! In The Name Of Love
The Supremes - You Can't Hurry Love (lyrics)

Tony Blankley Compares 2010 to 1994 Election and Looks Ahead

What lessons can we learn about mid-term " revolutions " and their results ? What’s new about 2010 ? Columnist Tony Blankley—who served as Newt Gingrich’s press secretary and as a close adviser from 1990 to 1997--has these thoughts, among others :

Let's assume the Republicans hold a majority in the House -- say they net a pickup of 60 House seats and eight Senate seats, resulting in 49 Republicans, 51 Democrats.

Let's assume between 55 percent and 64 percent of the public want to repeal Obamacare and the GOP brings it to the floor. Is it possible that there are 11 surviving Democratic senators (or those up for re-election in 2012 such as Dianne Feinstein) who might decide to cover their political backsides and vote for the repeal? Yup.

Also, in the deficit and tax fights that are likely to dominate the congressional year, neither tea party freshmen nor the GOP House nor the GOP Senate nor Mr. Obama nor his congressional parties alone can dominate the political process. How the case is presented to the public will determine which positions will feel the pressure from the public. Will tea partiers support congressmen across the board who actually cut entitlements, or will they flinch and penalize congressmen who have the guts to do so?
Either this is just the end of a big election that rolls back a few important mistakes, but basically changes little besides who gets the good parking spaces and whose staffers get to cash in for a few years. Or this is the beginning a great reformation that will take America back for liberty. It's up to the people. We are so close. In 50 years in politics, I have never seen as large a percentage of the public self-motivated for reformation. For those of us who believe we are a providential country, now is the chance for the public to demonstrate it. 

" We Lost 'Cause We Were Outspent " - Hogwash... !

says  THE POLITICO's Jeanne Cummings.

Democrats are increasingly stepping up their charges that conservatives effectively spent their way to big gains in Congress and in the statehouses through the spending by outside groups.

The argument seems designed to achieve two ends: insulating Democrats from blame that they gave up big losses in the House and Senate a mere two years after President Barack Obama’s historic win, and suggesting that the Republican wins have an unseemly edge, fueled by the secretive groups. “Everything was going great and all of a sudden secret money from God knows where – because they won’t disclose it – is pouring in,” Pelosi recounted at a recent fundraiser.

What's the truth of the matter, moneywise ?

It’s true that conservative third-party groups are outspending their Democratic rivals. But the Democrats still have a sizable cash advantage in their party committees – making this year’s elections a lot more of a fair fight than Vice President Joe Biden and House Speaker Nancy Pelosi let on.

“When you look at the national party committees coupled with the state party committees, the Democrats are whopping the Republicans,” said Dave Levinthal, a spokesman for the Center for Responsive Politics.

“It’s when you get into the realm of outside spending that you see the opposite is very much true, with conservative-leaning groups effectively obliterating the left-leaning groups,” he said.

Canary in the 2010 Election Coal Mine : Clinton Can't Get a Crowd in Michigan...

Obviously somebody didn't do their advance work. But the Dems have big problems in Michigan, says Manny Lopez in THE DETROIT NEWS, and--contrary to Governor Granholm--they're not just about voter impatience.

Some excerpts :
Oh to be a fly on the wall in the backroom after Bill Clinton's sparsely attended speech in Detroit on Sunday.
One can only imagine the outrage of the former president after walking into a high school auditorium that was supposed to be full of adoring fans and seeing fewer than 1,000 people in the seats. Surely someone suffered the wrath for not lining up an adequate number of seat warmers.
Perhaps people are simply tired of the state's failed politics and Clinton — thanks to his endorsement of Bernero [Virg Bernero, the Democratic candidate for Governor ] — simply became the most recent whipping post.
Regardless, Michigan can't afford the same nonsense that it's been fed for the past eight years and it appears Democrats are catching on, too.
Gov. Jennifer Granholm said we'd all be "blown away" and we have, just not in a good way. Apparently, also, it's our fault.
At least that's the message she delivered in a puff piece this past weekend in the Washington Post.
When asked why her approval rating is in the 30s (a generous nod to the governor), she said "it's low because people are impatient."
That's right, if only we had a little patience. Because apparently eight years just isn't enough. If only she knew that this state had term limits for governor and to make an impact meant having to do it in an allotted time. If only.
So why is Michigan poised to elect a Republican, she's asked? "Because they're impatient," she says again of the people. Say nothing of the prospect of the same, tired union-led, special-interest politics that have dominated this state for far too long.
Clearly Granholm was dealt a tough hand, but she's been tilting at windmills — literally and figuratively — for so long that she's forgotten that she was the CEO. The true measure of someone in charge is how they deal with adversity. It's the difference between being an elected official and a leader. Granholm is the former.

East Asia Looks to U.S. as China's Charm Wears Thin, says John Lee in FOREIGN POLICY

Some excerpts :
Later this week, U.S. Secretary of State Hillary Clinton will visit Hanoi to attend the East Asian Summit, a five-year-old forum that brings together top officials from 16 East and Southeast Asian countries to discuss the future of the region. Clinton is a "special guest" in Hanoi, and her presence at the gathering reflects anticipation that the United States will be invited to join the summit as a permanent member in 2011. As with most diplomatic moves in Asia these days, that prospective invitation is as much about China as it is about the United States, and it speaks to a stark underlying reality for Asia's rising superpower: Beijing's vaunted statesmanship in the region is reaching the point of diminishing returns.
Beijing's neighbors are beginning to look for ways to hedge against China's rise and even help restrain Beijing's strategic options -- and that means that they're looking at the United States' presence in the region with new eyes.
The vast majority of Asian states welcome the presence of the U.S. Seventh Fleet -- critical support, as America's forward deployments depend heavily on their acquiescence and cooperation.
China, by contrast, may be the loneliest rising power in recent history. Other countries in the region may look forward to the economic opportunities presented by China's rise, but Beijing has few genuine or reliable allies. It remains distrusted by almost every maritime power in the region.
...there is also resentment about the fact that millions of manufacturing jobs in the region have been lost to China; Indonesia has voiced concerns that the China-ASEAN Free Trade Agreement, activated in January, will devastate its garment and textiles industries. Until the appetites of Chinese consumers expand enough to create millions of jobs for regional workers, Beijing will find it difficult to extract political and strategic concessions from its neighbors.
Central to the rhetoric and self-image of the modern Communist Party is its claim that China will regain its status as Asia's "Middle Kingdom," the sort of bluntly hierarchical vision of regional geopolitics that neighbors tend not to be thrilled about. During a discussion of the South China Sea issue at a recent ASEAN meeting, Chinese Foreign Minister Yang Liechi lost his temper, declaring that "China is a big country and other countries are small countries, and that is just a fact." It was a chilling reminder to the region that a dominant China might well behave differently than a territorially distant and democratic power such as the United States.
The result is that key regional states are not just hedging against China's rise but subtly bandwagoning with Washington in order to hem in Beijing's strategic options. Inviting the United States to join the East Asian Summit as a permanent member is just one illustration of this strategic dynamic; others include Seoul, Jakarta, and Hanoi eagerly agreeing to strengthen military ties with Washington over the past six months.

Taliban and Al Qaeda Joined at the hip ? No, claims Arnaud de Borchgrave...

...who met with Tailban supreme Mullah Mohammed Omar in Kandahar and listened to the Mullah piss and moan about Osama bin Laden.

According to Borchgrave...
The ideological and personality differences between the two leaders have long been misunderstood. Taliban is an indigenous movement made up of mostly ethnic Pashtuns, midwifed by Pakistan's Inter-Services Intelligence agency to put an end to the civil war and fill a vacuum left by the Soviet retreat from Afghanistan in February 1989.
Mullah Omar and his immediate entourage made clear to Mr. Turabi, a multilinguist, and me that any fatwa issued by bin Laden declaring jihad, or holy war, was "null and void." He explained that bin Laden hadn't completed his 12 years of mandatory Koranic studies to qualify for the position of mufti.
Is it possible the U.S. could strike a deal with Mullah Omar that would end the war in Afghanistan and at the same time contain Al Qaeda/bin Laden  ?

Read on !

Karzai's Iranian Baksheesh and American Irresolution

Our bud Hamid, with some other guy.
In the WSJ, Fouad Ajami paints a picture of President Hamid Karzai as a man who's known all along that the U.S. would drop its Afghanistan project like a bad habit, asap, and that, before the party was over, he should grab all the goods he could, including any from Iran.

Some excerpts :
The idealism has drained out of this project. Say what you will about the Iraq war—and there was disappointment and heartbreak aplenty—there always ran through that war the promise of a decent outcome: deliverance for the Kurds, an Iraqi democratic example in the heart of a despotic Arab world, the promise of a decent Shiite alternative in the holy city of Najaf that would compete with the influence of Qom. No such nobility, no such illusions now attend our war in Afghanistan. By latest cruel count, more than 1,300 American service members have fallen in Afghanistan. For these sacrifices, Mr. Karzai shows little, if any, regard.
Mr. Karzai didn't need to be a grand strategist. He had, as is necessary in his world of treachery and betrayal, his ear to the ground, his scent for the irresolution of the Obama administration. He saw the scorn of Iran's cruel leaders for America's diplomatic approaches. He could see Iranian power extend all the way to the Mediterranean, right up to Israel's borders with Lebanon and to Gaza. The Iranians were next door and the Americans were giving away their fatigue. Why not accept the entreaties from Tehran?
A year ago, the U.S. ambassador to Kabul, Karl Eikenberry, laid out the truth about Mr. Karzai and his regime in a secret cable that of course made its way into the public domain. "President Karzai is not an adequate strategic partner," Mr. Eikenberry wrote. The Karzai regime could not bear the weight of a counterinsurgency doctrine that would win the loyalty of the populace. There were monumental problems of governance but "Karzai continues to shun responsibility for any sovereign burden, whether defense, governance, or development. He and much of his circle do not want the U.S. to leave and are only too happy to see us invest further. They assume we covet their territory for a never-ending war on terror and for military bases to use against surrounding powers." In Mr. Eikenberry's cable, Mr. Karzai is a man beyond redemption, who was unlikely to "change fundamentally this late in his life and in our relationship."

A big American project, our longest war, is now waged with doubt and hesitation, and our ally on the scene has gone rogue, taking the coin of our enemies and scoffing at our purposes. Unlike the Third World clients of old, this one does not even bother to pay us the tribute of double-speak and hypocrisy. He is a different kind of client, but then, too, our authority today is but a shadow of what it once was.

Turkish Membership Just the Thing for Ailing EU ?

That's exactly what Turkey’s minister for Europe and chief EU negotiator, Egemen Bağış, asserted during last weekend's annual Bosphorus Conference on Turkey-EU relations in İstanbul, reports Amanda Paul in TODAY'S ZAMAN

Some interesting excerpts from Paul's article :

Ankara believes “Turkey” is the medicine that needs to be taken if Europe is to recover and bounce back stronger and more resilient than before.
However, many in the EU don’t like the taste of Turkish medicine, so while Turkey may be “bouncing like Tigger,” it has unfortunately not made those Europeans opposed to Turkey’s membership in the EU any keener to let Turkey in.
While the government may place less focus on the EU than it once did and reforms are inconsistent, there can be no doubt that Turkey’s candidate country status has been a tool for the ongoing democratization and modernization process that is transforming the country.
Whether you like the governing Justice and Development Party (AKP) or not, it is undeniable that Turkey is a more open, freer and tolerant country than it was 10 years ago. The EU offers the best way to consolidate values in Turkey’s national life and Turkey is not planning to withdraw its application any time soon.
Of course one obstacle standing between Ankara and a seat at the EU table is Cyprus. No resolution to the decades-old Cyprus problem means no membership. In fact, the Greek Cypriots are increasingly the scapegoat for everything related to Turkey’s membership process.

Tuesday, October 26, 2010

Change of Pace : Great articles by ESPN's Sports Guy, Bill Simmons, and an Homage to the Ward-Gatti Fights

Irish Micky Ward and Arturo Gatti - Brothers in Arms
An excerpt from Simmons on Ward-Gatti:
When boxing is working -- when it's really working, which isn't often anymore -- it's still the most exciting sport in the world. Warts and all.
* * *
We were reminded of this again last Saturday night, when Irish Micky Ward and Arturo Gatti re-enacted the Drago-Balboa fight [ from ROCKY IV ] at the Mohegan Sun, with Ward prevailing in a dramatic majority decision that left everyone breathless, including me. Boxing needed one of these old-school battles, just two guys pounding the crap out of one another, utterly fearless, pushing themselves toward that sacred place where skills don't matter anymore, when it's all about determination and heart and nothing else.

I had the privilege of watching one of the three epic matches between these two warriors on HBO. To say that it was phenomenal, that it was electrifying,  is merely to give it its due.    

For additional testimonials, click on these links to Boxing Scene, and The New York Times, plus Sports Illustrated's Obit on Arturo Gatti.

For info on the Paramount Pictures biopic on Ward, THE FIGHTER,  to be released in December, and to see a trailer, click on this IMDb link.

Bad Bad Idea, from Baseball Union Head : More Playoff Teams, More Playoff Games

Joys of baseball in the snow
According to the AP, "The new head of the players' union says his members are open to adding more wild-card teams for 2012 and possibly extending the division series to a best-of-seven. Union head Michael Weiner says it's also possible players would agree to cutting the regular season from 162 games, but that's more problematic because it would cost teams revenue. "

Good grief. Does this guy want the rank-and-file to be playing baseball until Thanksgiving ? Didn't this bozo learn anything when the Phillies-Rockies playoff game in Colorado had to be postponed on account of snow earlier this month (October 10) ?

If anything, the season and playoffs need to be compressed. I'm not for reducing the regular season. But maybe it's time to bring back double-headers and twi-nighters. And while we're at it, ditch the DH, if it's not asking too much.

"Silver Investors Beware ! " Warns Chris Mack...

Jeff Nielson and others have already warned us about "paper inventories" of silver, and carefully choosing a vehicle for investing in the metal.

Now Chris Mack does much the same, reporting that yesterday, after over two years of investigation with no acknowledgment of problems,  CFTC Commissioner Bart Chilton was quoted as saying that "there have been fraudulent efforts to persuade and deviously control that price... the public deserves some answers to their concerns that silver markets are being, and have been, manipulated" and that the CFTC would be introducing new regulations to curb manipulation in the precious metals markets.

According to Mack...
Silver analyst Ted Butler has been writing letters and warning the CFTC of the consequences of manipulation in the silver market for more than 20 years. Not many people would bother to warn of these issues when ignored and ridiculed, however Butler persisted with his call for action to remove manipulators from the market. Up until recently, these warnings have been completely ignored.
As of October 19th, the commercial traders were still net short 58,150 contracts - roughly 290 million ounces of silver. There are currently only 52 million registered ounces and 59 million eligible ounces held in COMEX warehouses. It would not be possible to remove the short commercials from the silver market in an orderly fashion. The majority of contracts would have to be settled in paper at much higher prices. As pointed out by Butler, the worst case scenario - and increasingly likely - would be a closure of the paper precious metals markets. If that occurs physical silver would likely trade in multiples of its previous paper price and would be unavailable to most buyers. The apparent choice by the CFTC to act is most likely no choice at all. It is a desperate move to maintain the status quo and a reaction to an eminent emergence of either physical shortages or dollar devaluation instigated by a wave of quantitative easing.   

Precious Metals Update : More on GLTR, the New Multi-metal ETF

In a SEEKING ALPHA article, Julian Murdoch analyzes whether ETF Securities' Physical Precious Metal Basket of Shares (GLTR)--which gives investors exposure to Gold, Silver, Platinum and Palladium--is "worth the metal it's based on?"   Some excerpts...

First off, you need to look at why you want to invest in these metals. After all, the four metals are fairly well correlated, so holding all four won't give you much in diversification.

Now, if you're looking to buy all four metals just to have them, then this may be an ideal product. But if you're driven by other motivations — for example, you think palladium still has a way to go before topping — then you may be better served by purchasing each metal individually, whether in physical bullion or via a physically backed ETF, like SIVR, PPLT or PALL.

But one thing all metals investors should keep their eyes on is how large GLTR grows. Each 50,000-share creation unit of GLTR is backed by 1,500 ounces of gold, 55,000 ounces of silver, 200 ounces of platinum and 300 ounces of palladium. While as of now, those amounts comprise just a small part of demand for each of the underlying metals, should the fund take off, it could theoretically become a much larger demand driver — and even influence prices down the road.

Red Tape Also Strangling Small Business Recovery, says USATODAY

Chip Mellor and Dana Berliner document how " cities and states stifle new small businesses at every turn, burying them in mounds of paperwork; lengthy, expensive and arbitrary permitting processes; pointless educational requirements for occupations; or even just outright bans ", and how various government entities have "imposed barriers to entrepreneurship in eight cities. In every city studied, overwhelming regulations destroyed or crippled would-be businesses at a time when they are most needed."

DCCC Playing Fast and Loose with ObamaCare/Medicare Facts ?

Yes, according to John McCormack in THE WEEKLY STANDARD. That's what the DCCC's Chris Van Hollen's doing when he says, " seniors should be more afraid of Republican congressman Paul Ryan's plan to turn Medicare into a means-tested voucher program for Americans under 55 years old."

But having voted for Medicare cuts in the health care law, it's a difficult argument for Democrats to make. "Obiously there’s been a lot of misinformation," Van Hollen said, "on what exactly happened with respect to Medicare financing" in the national health care law. Van Hollen said that Obamacare's Medicare cuts are "primarily changes in the Medicare Advantage plan."

"It’s important to understand that the Medicare Advantage plan was subsidized with about 114 percent of the regular Medicare fee-for-service plan," said Van Hollen. "And as a result, not only were taxpayers giving an additional subsidy to these health insurance companies … but other folks in the fee for service Medicare were actually subsidizing these other plans."

There are a lot of problems with Van Hollen's argument. First, Medicare Advantage is popular with the 10 million seniors who choose it, and some insurance companies are already dropping their Medicare Advantage plans because of Obamacare.

Second, the Medicare cuts in Obamacare are not "primarily" cuts to Medicare Advantage. Only $136 billion of the more than $500 billion in Medicare "savings" by 2019 come from cutting Medicare Advantage. Most of the cuts are to hospital and doctor reimbursement rates.
McCormack cites Peter Ferrara and Larry Hunter's WSJ article,  How ObamaCare Guts Medicare : The president's pledge that 'If you like your health plan, you will be able to keep it' clearly does not apply to America's seniors.

Ferrara and Hunter conclude

The drastic reductions in Medicare reimbursements under ObamaCare will create havoc and chaos in health care for seniors. Many doctors, surgeons and specialists providing critical care to the elderly—such as surgery for hip and knee replacements, sophisticated diagnostics through MRIs and CT scans, and even treatment for cancer and heart disease—will cease serving Medicare patients. If the government is not going to pay, then seniors are not going to get the health services, treatment and care they expect.
... Two-thirds of hospitals already lose money on Medicare patients. Under ObamaCare it will get much worse. Hospitals also will shut down or stop serving Medicare patients.
Everyone should know by now that Medicare suffers dramatic long-term deficits and unfunded liabilities, and is in need of fundamental, structural reforms. But effectively refusing to pay the doctors and hospitals that provide the medical care the program promises to seniors is no way to solve that problem.

Ton o' Outside Money Burying Them, say Dems.

But they're buried in campaign cash, too, according to Jonathan Martin in THE POLITICO...
The denunciations of outside money by President Barack Obama and others began as a tool to rally the Democratic base before the Nov. 2 election. But in recent days it has morphed gradually into something else: A main talking point to explain—and fend off the recriminations over—what many Washington Democrats assume will be a brutal election night.
While the appearance of new conservative groups – in effect a shadow RNC – has unambiguously bolstered GOP fortunes this year, much of the Democrats’ message is about blurring the reality: It was issues that produced a political headwind for Democrats this year.
Democrats benefited from the same phenomenon in 2006, when they won power in Congress despite being outspent by the GOP in many key races.
What’s more, the financial advantage in 2010 is not clear-cut.
The DNC and the party’s two congressional committees have outraised their GOP counterparts and airing millions of dollar worth of TV ads. Further, it’s AFSCME, not one of the new conservative groups, that is spending the most money of any outside group this election, dropping $87.5 million to help Democrats. Other unions are also spending tens of millions on the campaign.
For all that, spending by outside groups—not affiliated with the candidates or parties—is only expected by experts to be about 10 percent of the total money spent.
...and Mark McKinnon, in THE DAILY BEAST.
Team Obama may keep trying to scare voters with a bankrupt and hypocritical message about big money, but that dog won’t hunt.  Because now we know: It is the union-funded Democrats who are “the big dog” when it comes to special-interest money.
Big as in $87.5 million. Big as in the biggest spender of any outside group—all meant to protect the interests of unions, the new “privileged class.” But wait a minute: Team O led us to believe that honor went to the vilified U.S. Chamber of Commerce and all of its alleged contributions from “foreign money” sponsors.
A record $87.5 million has been spent by one union, the American Federation of State, County and Municipal Employees, to elect Democrats.
Six of the top 10 overall political action committee spenders are union groups, with the vast amount of contributions supporting Democratic candidates.
Contrary to what Obama and the Democrats would have us believe, the Tea Party is largely fueled by small-dollar donations from American citizens in amounts of $200 or less.
The Hill newspaper reports that the Democratic Party has raised more than $1 million from political action committees affiliated with foreign companies. According to the Center for Responsive Politics, Democrats this year have received more money from PACs ($6.5 million) than Republicans ($5.6 million). And in the past two election cycles, liberal interest groups outspent Republicans by a considerable sum.
Beyond being untrue and unproven, the Obama money charges against Republicans are completely hypocritical. The guy who promised to “change Washington” completely reversed his promise during the campaign to abide by the limits of public financing. The Obama campaign spent almost $1 billion—and $400 million was spent by outside groups on his behalf, most of which did not disclose their donors. Now we discover unions are the largest outside spenders in this election, not the Chamber or groups tied to Karl Rove and Ed Gillespie.
When you look at the money spent by labor unions for Democrats, it comes as no surprise the Democrats crafted a campaign-finance “disclosure” bill with the thresholds adjusted to exempt unions.

GRIM DIAGNOSIS on ObamaCare, from Two Senate Republlican MD's

As reported by Jeffrey Anderson in THE WEEKLY STANDARD. In the excerpts below, the emphasis is mine.
As doctors Tom Coburn (R., Okla.) and John Barrasso (R., Wyo.) show in their report, entitled “Grim Diagnosis,” Obamacare wouldn’t reform our health care system but would deform it — by injecting the federal government into the middle of the private relationship between doctor and patient.  Moreover, as Drs. Coburn and Barrasso write, Obamacare would increase “costs to patients, consumers, and taxpayers, while exacerbating many existing problems in health care.”
In June, the U.S. Department of Health and Human Services issued rules limiting changes employers can make to health insurance plans, and still be considered to be ‘grandfathered’ – or exempt from many of the new mandates in the law.  Under the Department’s own estimates, more than half of companies may have to give up their current health coverage because of the new law by 2013.  And, in their estimate, the Administration predicts that eight in 10 small businesses could lose their current health plans.
On fiscal solvency, Coburn and Barrasso observe that, in August, the Obama administration issued a shamelessly politicized Medicare trustees’ report, which claimed that each of the hundreds of billions of dollars that Obamacare would siphon out of Medicare could simultaneously be spent (on Obamacare) and saved (so as to be spent later to extend the life of Medicare).
Coburn and Barrasso write that, in response to this brazen claim, “The official Chief Actuary of Medicare warned that ‘the financial projections shown in [the trustees’] report for Medicare do not represent a reasonable expectation for actual program operations in either the short range...or the long range.’”  Thus, they note, the chief actuary issued a competing analysis “based on ‘more sustainable assumptions.’”  That analysis showed that a dollar, indeed, cannot be spent twice.

Dionne and Berkowitz Spar over Tea-Party and Its Significance

To the WASHINGTON POST's E. J. Dionne, the Tea Party is an extremist tempest in a teapot. Peter Berkowitz of the Hoover Institution demurs, and his point-of-view receives support from Scott Rasmussen of the respected Rasmussen Reports and political strategist Douglas Schoen, who cite several polls in their POLITICO article, excerpted below.
The tea party movement may well be the most powerful and potent force in America.
More than half, or 54 percent, of Americans believe the tea party movement has been a good thing for the U.S. political system, our new survey revealed. Only 22 percent say that it is a bad thing, while 19 percent say it has made no difference.
While many label the tea party movement as divisive, 69 percent of Americans now say that they are either positive about or neutral to the tea party, and only 24 percent of Americans say that they are against it.
Even with these numbers, the political class’s assault on the tea parties has been continuing and systematic. Indeed, Rasmussen Reports has shown that 87 percent of the political class views “tea party member” as a negative description, while almost half – or 48 percent — of ordinary mainstream voters see it as a positive.

NETFLIX's Free Lunch is Over !, says Karl Denninger.

It's all about Netflix's customers' eating cable bandwidth, and who's going to pay for the buffet, going forward.

Malaise, Part ??? : Jimmy Carter says U.S. has lost the last THREE decades !

The former President is reported to have said that U.S. is " no better off now than it was in the late 1970s and early 1980s", and that, " from  national politics to relationships with other nations, there is a lot of room for improvement." 
"We had almost complete harmony with every nation on Earth," the Nobel Peace Prize winner said of his administration. "We not only preserved peace for our country, we never went to war. We never dropped a bomb. We never fired a missile."
Right.  And in that time, all across the globe, the U.S. and its allies were in retreat, while the autocratic Soviets and their like-minded proxies were on the march, and the gulags filled with happy campers. U.S. inflation soared to double-digits. And we couldn't rescue our hostages from Iranian mullahs and Revolutionary Guards, with whom, presumably, we were in complete harmony.

Clearly Carter will say almost anything to redeem his presidency. Or to sell his new book, WHITE HOUSE DIARY, which should be entitled, MORE MUSH FROM THE WIMP.

U.S. Trapped by Liquidity ? What's THAT Mean, Anyway ?

In an interesting SEEKING ALPHA piece, Edward Harrison provides a survey of thinking on the liquidity trap, and his view whether QE2 will do anything to get us out of it.    

What is a liquidity trap ? As Keynes describes it, as quoted in John Hussman, below...
There is the possibility… that after the rate of interest has fallen to a certain level, liquidity preference is virtually absolute in the sense that almost everyone prefers cash to holding a debt at so low a rate of interest. In this event, the monetary authority would have lost effective control.

As John Hussman observes,
"... the hallmark of a liquidity trap is that holdings of money become "infinitely elastic." As the monetary base is increased, banks, corporations and individuals simply choose to hold onto those additional money balances, with no effect on the real economy. "

Okay. But are we in one, now ?  Paul Krugman has no doubt.
"The point is that we’re now in a liquidity trap. What does that mean? It means that the Fed has pushed short rates down to zero, so that at the margin T-bills are no better than cash — and correspondingly, that means that at at the margin people and banks are holding some of their cash purely as a store of value. Liquidity is now free, and as a result the market’s demand for liquidity is satiated; adding more potentially liquid assets makes no difference."

Sound familiar ? So, how do we get out of it ? Apparently the Fed thinks inflation is the way to go.  But Harrison opines that...
Bottom line: QE will be a bust; The US is in a liquidity trap. The only way out is through fiscal policy or a liquidation of excess capacity. I prefer the latter as the primary goal because it is geared to the longer term. Given the hugely misallocated US economy and the excess capacity, fiscal policy is likely to only be effective in the short-run. 
By the way, we're not alone. As of March, 2010, Krugman estimated that 70%of the world's GDP is similarly hosed.

Monday, October 25, 2010

View from Brasilia : THE ECONOMIST surveys the state of Brazil as Lula departs

Some excerpts :

Lula’s choice, Dilma Rousseff, [ is ] a colourless technocrat who was Lula’s chief of staff but has never held elected office...

Where Ms Rousseff herself stands nobody bar her closest associates knows. Her early appointments and announcements will be scrutinised with unusual eagerness. Will she surround herself with austere economists, or party hacks, or believers in the state’s power to boost growth? Or a mix of all three? Does she plan to trim the budget deficit—or does she, like many on the left of her party, believe that growth makes such tedious rectitude unnecessary? Will she take some steps that Lula shirked, because of a desire to smooth her path to the throne, such as inviting private companies to run Brazil’s overstretched state-owned airports?

Ms Rousseff may have cause to wish that her predecessor had been bolder. But she is inheriting a better Brazil than he did, and that is in good part because of him. If one of Lula’s finest moments came right at the start of his presidency, another will come at the end, when he stands down after two terms, rather than changing the constitution to allow himself a third. “A popular left-winger but not a populist,” concludes Carlos Melo of Insper, a São Paulo business school. “This is something completely new and an example to the rest of Latin America.”

Monday Night Music : Fire up !

Jimi Hendrix - Let Me Stand Next To Your Fire
The Doors - Light My Fire
Arthur Brown - Fire
Elvis - Burning Love
The Pointer Sisters: Fire - Live on Midnight Special 1979
Bruce Springsteen - I'm on Fire
Martha and the Vandellas - Heatwave
Robert Palmer - Some Like it Hot
Jimi Hendrix - Burning Of The Midnight Lamp
Glenn Frey - The Heat is On
Deep Purple - Smoke on the Water

Did the Prez " Lose the Narrative " ?

That's what David Corn proposes, in MOTHER JONES.

In politics, second-guessing is practically obligatory, and many of Obama's calculations have already been subjected to the hindsight machine. The conventional take is that the president overreached, focusing on health care and climate while spending large amounts of money on the stimulus and unpopular bailouts—alienating those hard-to-please independent voters. There might be some truth in that diagnosis, but there's more to it. It wasn't just what Obama did, but how he did it. The president forfeited control of the narrative—as they like to say in Washington—because he blew several specific opportunities.

Hmm. "There might be some truth in that diagnosis..." You think ?

So, the Prez lost his narrative. Or did the Blue Dogs eat it ? Yeah, that's it ! It was the Blue Dogs. That's the ticket !

" Purge the Blue Dogs ! ", urges Ari Berman...

...on the NYT Op-Ed Page.

Berman, a contributing writer for THE NATION, suggests the Democrats cleanse the Democratic Party of Conservatives.

Why ? In Berman's own words...

IN 2008, Barack Obama’s presidential campaign seemed to rewrite all the rules in electoral politics and herald a new progressive era in America. Democrats assembled a huge Congressional majority and, in the euphoria that followed the historic election, were poised to enact sweeping change. However, despite some notable successes — the stimulus package, health care reform, tighter rules for the financial industry — things have not gone according to plan. Just two years later, Democrats face a bad economy, a skeptical public, a re-energized Republican Party and a coming avalanche of losses in the midterm elections.
What happened? One important explanation is that divisions inside the Democratic coalition, which held together during the 2008 campaign, have come spilling out into the open. Conservative Democrats have opposed key elements of the president’s agenda, while liberal Democrats have howled that their majority is being hijacked by a rogue group of predominantly white men from small rural states. President Obama himself appears caught in the middle, unable to satisfy the many factions inside his party’s big tent.
Interesting that Berman offers us just that one explanation.

" Barack, whatever happens, don't move to the Center !", urges Robert Reich... SALON. If the GOP wins control of Congress, Reich advises the President not to worry about moving to the center. Why ? Well, first off all, the Center " doesn't exist " !  And by the way, don't worry about the electorate. They're just " grouchy ". It happens every 2 years.

Bad Political Karma, Part I : R.I. Dem Gov Nominee Rips Obama after Prez backs Independent Chafee

...reports THE POLITICO.
Obama, showing deference to Republican-turned-independent Lincoln Chafee, is refusing to endorse Democrat Frank Caprio, even as he travels to the smallest state to do a fundraiser for the Democratic Congressional Campaign Committee.
Rhode Island's Democratic gubernatorial nominee said President Obama can "shove" his endorsement amid an ugly intraparty squabble that has Democrats buzzing that the commander in chief is showing too little loyalty to his own party.
Meantime, in an interview with THE POLITICO, Nathan Daschle, executive director of the Democratic Governors Association the head of the Democratic Governors Association, voiced his displeasure, saying the Prez's decision not to endorse Frank Caprio in Rhode Island "sends a bad message."
"This is disappointing,” Daschle said. “Frank Caprio has spent his career fighting for the values of the Democratic Party, and I think he deserves the full support of our party and its leaders. While this might not be what the White House intended, the president’s refusal to endorse a fellow Democrat in the worst environment since 1994 sends a bad message to everyone who’s working to get Democrats elected this year."

Bad Political Karma, Part II : W.VA. Dem Senate Candidate Backs Away from Reid, Obama, Big-time

...reports THE POLITICO.
[ Joe ] Manchin has blasted Democratic leaders in his close Senate race against Republican John Raese – voicing frequent criticism of the health care law and even cutting an ad where he shoots a hole through the cap-and-trade bill.
But the West Virginia governor took his criticism a step further in an interview with Politics Daily, by not committing to endorsing Reid as the Democratic leader should both win their races Nov. 2.

And Justice for Some : DOJ's Dumping of the Black Panther Voter Intimidation Case makes the Washington Post front page...

Jennifer Rubin of COMMENTARY reviews the Washington Post's coverage --which headlines tensions within the Department of Justice produced by this case -- and concludes

Yes, that’s right. On Saturday’s front page, in a well-documented piece, the Washington Post did a very credible job in reporting the details of the New Black Party Panther case and, in large part, vindicating the witnesses and conservative outlets which have reported that: 1) the administration concealed that political appointees influenced the decision to dismiss a blatant case of voter intimidation; 2) the Obama administration does not believe in equal enforcement of civil rights laws; and 3) this single incident is indicative of a much larger problem than one case of voter intimidation.
And Patrik Jonsson of The CHRISTIAN SCIENCE MONITOR asks, is the DOJ's conduct in this matter a 'Bombshell for Obama' ?

Excerpts :
The Civil Rights Commission is investigating claims that the Justice Department inappropriately dropped an investigation into alleged voter intimidation by the New Black Panther Party.
When Department of Justice attorneys traveled to investigate a voter intimidation allegation against a black politician in Mississippi's Noxubee County in 2006, one civil rights staff attorney commented, "Can you believe we're going to Mississippi to protect white voters?"
To Christopher Coates, the former head of the Department of Justice's voting rights section, the comment was more than just an attempt at irony – it was evidence that something was going wrong in the department.
On Friday, Mr. Coates testified before the US Civil Rights Commission, a bipartisan oversight group, alleging that under President Obama, the dismissive attitude of that civil rights staff attorney toward white claims of disenfranchisement at the hands of blacks has essentially become Justice Department policy. He said he had seen evidence that Obama appointees in the Department of Justice had created a "hostile atmosphere" toward attorneys pushing to prosecute blacks for voting-rights violations – a charge the Justice Department denies.

Video of the Black Panthers at Philly Polling Place.

Foreclosure Fiasco Continues : More perspectives on the subject, from the NEW YORK TIMES

GRETCHEN MORGENSON and ANDREW MARTIN, Battle Lines Forming in Clash Over Foreclosure, October 20, 2010. 
Excerpts :
...missing and possibly fraudulent documents are at the center of a potentially seismic legal clash that pits big lenders against homeowners and their advocates concerned that the lenders’ rush to foreclose flouts private property rights.

That clash — expected to be played out in courtrooms across the country and scrutinized by law enforcement officials investigating possible wrongdoing by big lenders — leaped to the forefront of the mortgage crisis this week as big lenders began lifting their freezes on foreclosures and insisted the worst was behind them.

Federal officials meeting in Washington on Wednesday indicated that a government review of the problems would not be complete until the end of the year.

In short, the legal disagreement amounts to whether banks can rely on flawed documentation to repossess homes.

While even critics of the big lenders acknowledge that the vast majority of foreclosures involve homeowners who have not paid their mortgages, they argue that the borrowers are entitled to due legal process.

Banks “have essentially sidestepped 400 years of property law in the United States,” said Rebel A. Cole, a professor of finance and real estate at DePaul University. “There are so many questionable aspects to this thing it’s scary.”

Others are more sanguine about the dispute.

Joseph R. Mason, a finance professor who holds the Louisiana Bankers Association chair at Louisiana State University, said that concerns about proper foreclosure documentation were overblown. At the end of the day, he said, even if the banks botched the paperwork, homeowners who didn’t make their mortgage payments still needed to be held accountable.

“You borrowed money,” he said. “You are obligated to repay it.”

GRETCHEN MORGENSON, One Mess That Can’t Be Papered Over, October 23, 2010
Excerpts :
Mortgage securities, like other instruments that have generated large losses for investors during the crisis, have extremely complex structures. Technically known as Real Estate Mortgage Investment Conduits, or Remics, these instruments provide investors with favorable tax treatment on the income generated by the loans.

When investors — like the New York Fed — contend that strict rules governing these structures aren’t met, they can try to force a company like Bank of America to buy them back.

Which brings us back to the sloppy paperwork that lawyers for delinquent borrowers have uncovered: some of the dubious documentation may undermine the security into which the loans were bundled.

MICHAEL POWELL, Short Sales Resisted as Foreclosures Are Revived, October 24, 2010

For numerous reasons, Powell explains, banks are balking at "short sales" of homes in foreclosure.

Concerns about fraud are one of the reasons lenders are so careful about short sales. Sometimes well-off homeowners want to portray their finances as dire and cut their losses on a property. In other instances, distressed homeowners try to make a short sale to a relative, who would then sell it back to them (a practice that is illegal). A recent industry report estimates that short sale fraud occurs in at least 2 percent of sales and costs banks about $300 million annually.

Short sales are also hindered when homeowners fail to forward the proper papers, have tax liens or cannot find a buyer.
Perversely, there are incentives favoring foreclosure over short sales, even where short sales may garner a higher selling price.

Fannie Mae, the mortgage finance company with federal backing, gives cash incentives to encourage servicers, who are affiliated with banks and who oversee great bundles of delinquent mortgages, to approve short sales.

But less obvious financial incentives can push toward a foreclosure rather than a short sale. Servicers can reap high fees from foreclosures. And lenders can try to collect on private mortgage insurance.

Some advocates and real estate agents also point to an April 2009 regulatory change in an obscure federal accounting law. The change, in effect, allowed banks to foreclose on a home without having to write down a loss until that home was sold. By contrast, if a bank agrees to a short sale, it must mark the loss immediately. 

Gold and Silver Commodity Investing : New Articles

Cliff Wachtel offers a useful primer on gold investing, entitled Gold for Dummies: What's Driving It Now and How to Play It Safely. Wachtel, a CPA, is " Chief Analyst for AVAFX, a leading online trading site for global currency,commodity, and stock index trading".

Jeff Nielson, writer/editor for the website BULLION BULLS CANADA and a contributor to SEEKING ALPHA has posted a serues of articles on Silver Investing, full of info on the current silver inventory, supply, and depletion issues : The Silver Price-spiral, Part I: today ; The Silver Price Spiral, Part II: paper "inventories" ; The Silver Price Spiral, Part III: tomorrow. See also his article Bullion As A Superior Investment, on gold. 

Tax-Free Lunch over for Amazon and other Internet Retailers ?

On Friday, the State of Texas hit Amazon with a huge tax assessment. According to MarketWatch...
Texas alleges the online retailer owes $269 million in uncollected sales taxes, according to a Securities and Exchange Commission filing Friday. The assessment covers sales that occured between Dec. 2005 and Dec. 2009. "We believe that the State of Texas did not provide a sufficient basis for its assessment and that the assessment is without merit," Amazon said in the filing. "We intend to vigorously defend ourselves in this matter."

How will that affect Amazon as well as other Online Retailers ? It's not hard to imagine how Wall Street will react.

Here's an early indication, from a SEEKING ALPHA contributor, who thinks it's time to short the Internet Bookseller

Amazon (AMZN) is a richly valued stock, trading at nearly 70X trailing earnings and 47X forward earnings, according to Reuters. Could the recent decision by the State of Texas to levy a $269MM backed taxes assessment against AMZN kill the stock price over the next two months? My guess is only if and when the overall market sells off.
However, the real risk is if states wise up and realize that AMZN is in fact not paying taxes when the mom and pop in-state competitors must pay the taxes -- an unfair competitive advantage to the big guys.
In essence, the argument for the levy of online state taxes is that bad enforcement of state sales tax and Anti-Trust laws are crushing small business at home -- the small in-state businesses cannot compete with Amazon. I am sure that if Texas wins this legal case, the legal loophole that allows AMZN to "consolidate" the retailing business will close, and Wall Street would then have to cover their shorts in the Retail Holders Trust (RTH), creating havoc.
I recently spoke with an unnamed, high ranking State of California employee who told me off the record that California could soon declare bankruptcy... If they are willing to legalize pot to generate sales taxes, I would not put it past them to enforce state sales tax on and similar out of state internet "Duty Free" retailers.