Archive for May, 2010

Financail Crisis Redux 2.0

May 25, 2010 Leave a comment

All of this talk of liquidity in the markets and confidence between banks sounds vaguely familiar:

Dollar Libor rates gauging stress within the interbank lending market have jumped to a 10-month high of 0.5363pc, with credit contagion spreading to every area. The iTraxx Senior financials index – banks’ “fear gauge” – rose 20 basis points on Tuesday to 184. “It turns out we weren’t seeing the light at the end of the tunnel after all, but a train with a big light on it coming towards us of double-dip,” said Dr Suki Mann, at Societe Generale.

While the Libor rate is still far below peaks reached during the Lehman crisis, the pattern has ominous echoes of credit market strains before the two big “pulses” of the credit crisis in August 2007 and September 2008. In each case a breakdown of trust in the interbank market was a harbinger of violent moves in equities and the real economy weeks later.

RBS’s credit team said Libor strains were worse than they looked since most banks in Europe were paying much higher spreads, especially in Spain. The “implied” forward spreads were nearer 1.1pc.

To me, there seems to be a lot of complacency here in the United States.  The subprime mortgage crisis came around less than two years ago and destroyed much of Wall Street in its path, and took back hundreds of billions of dollars in equity from everyday Americans.  And nobody seems to worry about a second wave of failing banks and the tenuousness of our economy and financial markets.

When the dominoes start falling in Europe, only a fool will think that the American market will be immune to the mess.  We’re a global marketplace now, and the idiocy of our central bank, the Treausry and our political leaders will not change that fact.

Taking back the Senate

May 25, 2010 Leave a comment

Still highly unlikely for the GOP, but Jay Newton-Small seems to think it’s within reach.

The key for the Republican party is to put forth competitive candidates in states where less than twelve months ago, the idea of a competitive GOP was laughable.

Still, I will not underestimate the ability of the Republican party to snatch defeat from the jaws of victory.  They’ll shoot themselves in the foot somehow.

Oil Spill Flyover

May 24, 2010 Leave a comment

Holy crap:

I’ve read a lot regarding the oil spill, but the devastation never really hit me until I saw this video.

Keep in mind, the video is dated May 6th, so you can only imagine what’s happened since then.


Sestak admits WH offered him job; Democrats lament potential electoral risk

May 24, 2010 Leave a comment

Democrats want to nip this in the bud before the rubes begin to notice come election time:

Democratic Rep. Anthony Weiner (N.Y.) called on the White House on Monday to detail conversations it allegedly had with Rep. Joe Sestak (D-Pa.) to try to convince him to drop his Senate bid.

Weiner said that allegations that White House officials had offered Sestak an administration job in exchange for his dropping of his primary bid against Sen. Arlen Specter (D-Pa.) had become a growing political liability.


Weiner said that he saw it as likely that nothing inappropriate did happen, but reasoned that this was why the administration needed to be more forthcoming about the case.

“When we’re having conversations like this three days after the nomination, that’s a problem,” said Weiner, who also expressed support for Sestak’s Senate campaign.

But the New York Democrat said the best way to do that was with some sort of release of information, which he said would bury the story.

“Someone has to help us out here, and I think the White House and Congressman Sestak need to make sure we’re not talking about this next week,” Weiner explained.

Are we allowed to refer to Democrats as “corrupt” yet?  Or is corruption just a label for the Republican party?

It isn’t so much about the potential violation of Federal law, or the continuation of politics as usual in Washington.

No, it’s not just that.

I don’t hear any Democrats going on about how unethical this all is–the White House handing out official administration jobs  like candy on Halloween, just as long as it gets its way.  Not to mention interfering with a Senate primary.

We hear none of that.  What we do hear is Democrats lamenting the fact that this “issue” could be damaging to their electoral prospects come this November.  You know, priorities.

Congressman Weiner and the rest of these corrupt Democrats can take a hike.

Kudos to Congressman Issa who’s been pounding the table on this issue for months.

What’s the deal with the White House? Leftists want to know…(Gulf Oil spill edition)

May 23, 2010 Leave a comment

Browsing the blogosphere, I’m starting to get the feeling that the hard left is none too happy with the Obama administration’s lackadaisical response to the oil spill in the gulf.  Exhibit A here

Then there’s prominent leftist Peter Daou’s piece in the Huff Po, in which he clearly has a case of  the vapors:

The Gulf disaster is a singular moment – an opportunity to bring the human race together to save itself, to protect its only home.

This should be a rocket-boost for the environmental movement, a time to finally put to rest the notion that environmentalists are misguided alarmists, a chance to finally marginalize green-bashers and put an end to their fatal obstructionism.

Instead, this grand debacle will gradually fade into the background once some political gaffe or sports game or celebrity scandal occupies us.

But kudos to Daou for laying blame at the feet of the administration:

[…]President Obama can launch as many fact-finding commissions as he sees fit. But we shouldn’t be impressed that they are doing what we elected them to do – it’s their job to deal with emergencies promptly and effectively.


The administration seems miffed and mystified that it is being criticized. After all, it can reel off dozens of swift actions taken in the aftermath of the spill.


The White House’s defenders want the spotlight aimed exclusively at BP. But this is a situation where body language and words are just as important as actions.

Scheduling an ‘angry’ presidential news conference weeks after oil started gushing into the Gulf waters is exactly the wrong thing to do.

Authentic anger isn’t something you turn on for the cameras and leak to the press the previous day. Indignation and defensiveness are precisely the wrong message…

Two things here. 

First, I agree with his take on American ambivalence towards crises facing the country.  The looming debt crisis, financial and mortgage crises of the last two years might as well be ancient history for example.  And I’m in the camp that these are merely in remission and they will rear their ugly heads yet again.  It’s speaks volumes of our political class’ whatever attitude and their unwillingness to make hard and uncomfortable decisions. 

Which brings me to the second point.  Despite campaigning as a different politician, one who was willing to make these hard decisions and change the way “Washington works”, Barack Obama is proving to be the complete opposite–your standard fare for DC. 

This is nothing new.  But it presents an interesting dynamic.  The memories of the Bush administration are just beginning to fade, but the Left’s gnashing of teeth over perceived errors and bureaucratic hubris over Hurricane Katrina, the wars, etc. is essentially what got Obama elected.  Obama was the anti-Bush.

So now you have the Left getting agitated over the White House sticking its thumb in their collective eye over a disaster that makes Katrina look like a spring shower.

Part of the problem is that the left assumes government can “solve” these problems.  Hence, their aneurysm over Bush and Katrina.  In reality, there’s not that much the federal government can do and government bureaucracy is horribly inefficient in these situations.  And one could make the argument that Republicans lost the White House for less.

All I ask is for consistency from the Left on their moral equivalencies.  Time will tell.

NYT: The reckoning is coming to Europe

May 23, 2010 Leave a comment

Hey, guess what?  LIBERALISM. DOES. NOT. WORK. 

Across Western Europe, the “lifestyle superpower,” the assumptions and gains of a lifetime are suddenly in doubt. The deficit crisis that threatens the euro has also undermined the sustainability of the European standard of social welfare, built by left-leaning governments since the end of World War II.

Europeans have boasted about their social model, with its generous vacations and early retirements, its national health care systems and extensive welfare benefits, contrasting it with the comparative harshness of American capitalism.

Europeans have benefited from low military spending, protected by NATO and the American nuclear umbrella. They have also translated higher taxes into a cradle-to-grave safety net. “The Europe that protects” is a slogan of the European Union.

But all over Europe governments with big budgets, falling tax revenues and aging populations are experiencing rising deficits, with more bad news ahead.

With low growth, low birthrates and longer life expectancies, Europe can no longer afford its comfortable lifestyle, at least not without a period of austerity and significant changes. The countries are trying to reassure investors by cutting salaries, raising legal retirement ages, increasing work hours and reducing health benefits and pensions.


In Rome, Aldo Cimaglia is 52 and teaches photography, and he is deeply pessimistic about his pension. “It’s going to go belly-up because no one will be around to fill the pension coffers,” he said. “It’s not just me; this country has no future.”

Changes have now become urgent. Europe’s population is aging quickly as birthrates decline. Unemployment has risen as traditional industries have shifted to Asia. And the region lacks competitiveness in world markets.

According to the European Commission, by 2050 the percentage of Europeans older than 65 will nearly double. In the 1950s there were seven workers for every retiree in advanced economies. By 2050, the ratio in the European Union will drop to 1.3 to 1.


In Athens, Mr. Iordanidis, the graduate who makes 800 euros a month in a bookstore, said he saw one possible upside. “It could be a chance to overhaul the whole rancid system,” he said, “and create a state that actually works.”

At the end of the day, two plus two always equals four, no matter which country you live in.

Europe is only beginning to realize the big steaming pile of crap it’s gotten itself into.  Meanwhile, here in the United States our elected overlords would rather not get into the lifeboats, but are content to climb back onto the Titanic.

During the healthcare debate, the favorite mantra of the pro-reformers was that the United States was “the only Western nation” that didn’t “provide” healthcare to its citizens.  This is emblematic of the entire progressive doctrine–that government not only can provide for the cradle-to-grave well-being of its citizens, but it’s imperative that it must do so.  All of it of course, paid for by taxing the productive class and/or public debt.

This is a recipe for a Euro-style disaster.

I like books. REAL books.

May 22, 2010 Leave a comment

Not e-books.  I don’t care for reading books on Kindles and Nooks, although I tip my hat to the technological advances that make it possible–I think it’s all fascinating (seriously). 

I like the iPad, and it’s e-book reader, but I can’t see myself getting into a book with that either.

The die is cast however, for actual books:

…[T]he digital revolution sweeping the media world is rewriting the rules of the book industry, upending the established players which have dominated for decades.

Electronic books are still in their infancy, comprising an estimated 3% to 5% of the market today. But they are fast accelerating the decline of physical books, forcing retailers, publishers, authors and agents to reinvent their business models or be painfully crippled.

“By the end of 2012, digital books will be 20% to 25% of unit sales, and that’s on the conservative side,” predicts Mike Shatzkin, chief executive of the Idea Logical Co., publishing consultants. “Add in another 25% of units sold online, and roughly half of all unit sales will be on the Internet.”

Maybe the 25% number that Mr. Shatzkin is forecasting is a bit steep, as that’s a huge swing towards e-book consumption in a relatively short time frame.  Progress is progress, however.  As much as I hate to admit it, the death march of the book has begun.

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