Wall Street Loves Banks Again

A few days ago I wrote that I was hopelessly confused about what was going on with the economy.  Here's Exhibit A: I thought it was a fantasy to expect banks to raise lots of private capital after the stress tests were completed, but apparently I was wildly, spectacularly wrong:

J.P. Morgan Chase & Co., Morgan Stanley, American Express Co. and regional bank KeyCorp said Tuesday they sold a combined $8.7 billion in common stock. That pushed the total value of shares sold by the 19 financial firms that were stress-tested by the government to at least $65 billion since the results were announced May 7.

Nonguaranteed debt sales and the conversion of preferred shares to common stock have generated roughly another $20 billion, for a total of $85 billion or more, giving most of the banks considerably more capital than U.S. regulators have required them to amass as they ride out the recession. Money is pouring in so fast that surprised bankers can hardly believe it, especially since most investors didn't want to go near financial stocks just three months ago, even though they were nearly 40% cheaper.

"It's easy to raise capital now," one executive at a bank that recently raised capital through a public stock offering said Tuesday. Investors are "happy to gobble it up."

I dunno.  I continue to think that there are a lot of trouble signs for the economy, with further shocks still to come.  If I had to pick the most likely one, I'd say Eastern Europe, but really, there are a dozen candidates.  Overall, I'm with the unnamed "executive at a New York bank" who thinks investors are chasing after any tidbit of good news even though the financial system remains fragile.  "A bucket of cold water will be thrown in people's faces," he says.

Still, there sure are a lot of people who disagree and are willing to put their money where their mouths are.  I hope they're right but I fear they're wrong.  There are just too many imbalances left in the global economy, too many writedowns yet to come, and no obvious place for sustained consumer demand to come from.  Caveat emptor.

I Am Officially Old

I just got back from the optometrist with my first pair of bifocals.  (Thanks, Ben!)  Progressives, actually, and I guess these things take some getting used to, don't they?  I stopped in at the market on my way home, and when I moved my head around while looking down an aisle I felt like I was watching a bad student film project from the 60s.  Weird.  But I suppose my neurons will eventually adjust and trick me into thinking that everything is OK.  Or will they?  I actually don't wear my glasses very much, so it might take a while for my brain to figure out the new order of things.  We'll see.  In the meantime, hopefully I'll be able to watch TV and do a crossword puzzle at the same time once again.

I've been following Mark Benjamin's excellent reporting in Salon on the photos being withheld by the Obama administration. After the Telegraph reported Gen. Antonio Taguba's allegations that photos exist that "show rape" of detainees, Benjamin spoke to Taguba, who did not withdraw his claim that the photos exist but clarified that he was not talking about the photos Obama is withholding, which he hasn't seen. In the course of investigating Taguba's claim, Benjamin asked a Pentagon spokesman whether there were any more photos of detainee abuse at Abu Ghraib beyond those that Salon already published in 2006. The official said no. But I've read Salon's summary of the 279 photos and 19 videos it published in 2006, so I did a double-take at this passage from Benjamin's article Tuesday:

While the press have been investigating Gen. Antonio Taguba's claim that photos existed that "show rape" of detainees by Americans, Congress and the Obama administration have been working behind the scene to pass a law allowing the executive branch to summarily withhold any photos of detainee treatment it wants for an effectively unlimited time. Salon's Glenn Greenwald reports that the White House is "actively supporting" a bill called The Detainee Photographic Records Protection Act of 2009 that would pre-empt the ACLU's court battle with the administration and allow Obama to pre-empt any future efforts to force the government to disclose evidence of torture. 

It's one thing for the president to fight in court for the ability to withhold these specific photos in this specific instance. It's another thing entirely to lobby for detainee treatment photos to get blanket immunity from the Freedom of Information Act. But that's what Obama's doing.

The bill, sponsored by Sen. Lindsey Graham (R-SC) and usual suspect Joe Lieberman (I-CT), would allow the administration to easily suppress "photograph taken between September 11, 2001 and January 22, 2009 relating to the treatment of individuals engaged, captured, or detained after September 11, 2001, by the Armed Forces of the United States in operations outside of the United States" as long as the Secretary of Defense claimed it was to protect the troops. The bill is reportedly sailing through Congress. "What kind of a country passes a law that has no purpose other than to empower its leader to suppress evidence of the torture it inflicted on people?" Greenwald asks. Indeed. What kind of a president says "Let me say it as simply as I can: Transparency and the rule of law will be the touchstones of this presidency," and then supports such a law?

No Twitter at the White House

The White House Twitter feed has--as of this writing--233,182 followers. But apparently not too many are within the White House itself.

At today's daily press briefing, a reporter asked White House press secretary Robert Gibbs if the White House would use Twitter to disseminate the speech on US-Muslim relations that President Obama is set to deliver later this week in Cairo. Laughing, Gibbs said, "that would be awkward"--perhaps thinking that the reporter meant Twittering it before it happened. He then added, "we can't get" Twitter on the computers in the White House.

Really? When it was my turn to ask a question, I queried Gibbs on the George Tiller murder (he said Obama had nothing to add to his previous statement and indicated the president was not contemplating any additional steps to take), and I asked about the case of two American brothers who were imprisoned in Saudi Arabia after apparently participating in a religious protest (Gibbs said he was unfamiliar with this incident and did not know if Obama would raise it with the Saudi king when he sees him this week). Then I realized I had forgotten to ask about Twitter. And my turn was over.

After the briefing, I found a press aide who informed me that White House aides working on new media do have access to Twitter on their office computers, but that he and others in the White House press office did not. "Security?" I asked. He nodded.

So much of the White House is Twitter-free. That may be good for productivity. But Gibbs and his crew are missing a lot in the Twittershpere. Still, I wonder if Obama can get secret tweets on his BlackBerry.

Of course, I tweeted this story as it unfolded.

Adventures in Diplomacy

From Marc Lynch:

While it hasn't received much attention, Iraq's relations with two key Arab Gulf states have jumped the tracks over the last week.  Iraqi Prime Minister Nuri al-Maliki has publicly declared that he has given up on trying to reconcile with the Saudis. Meanwhile, Iraq and the Kuwaitis are in an increasingly nasty spat over the question of compensation claims dating back to the 1990 Iraqi invasion of Kuwait. It's gotten to the point that a majority of the members of the Iraqi Parliament are demanding that Kuwait pay compensation to Iraq for allowing U.S. troops to invade Iraq in 1991!

In other news, I'm planning to sue that dude whose nose injured my fist a few days ago.  He should have been more careful.

Cheney and Limbaugh: On the Same Stage?

It's no secret that Dick Cheney fancies Rush Limbaugh over Colin Powell. During a May 10 appearance on Face the Nation, the ex-veep called Limbaugh a better Republican than Powell. That was before Limbaugh went on his crusade to brand Supreme Court nominee Sonia Sotomayor a "racist" and bigot" who is comparable to former KKK leader David Duke. But the radio host's anti-Sotomayor rants have apparently not made him radioactive for Cheney. Cheney will join Limbaugh and other conservative movement poohbahs for Troopathon, a web telethon that will raise money for care packages for US troops and that will be broadcast from the Ronald Reagan Presidential Library on June 25. Other rightwingers signed up for the event include Laura Ingraham, Lars Larson, and Monica Crowley. The event will be hosted by conservative journalist Melanie Morgan and conservative blogger Andrew Breitbart. Certainly, Cheney can say that his involvement in this good cause has nothing to do with Limbaugh, who has become more of a hot potato for the GOP since Cheney chose him over Powell. But the event's organizers are trying to link the two men. A press release the group sent out announces, "Vice President Cheney in Fundraiser for Troops--Appearing with Rush Limbaugh, Jon Voight and Others." Appearing with? Really? Side by side? At the same time--during this eight-hour-long parade of guests? Maybe not, and maybe the group is just trying to draw press attention. Well....bingo! But imagine Cheney and Limbaugh coming on stage together and singing a duet. A lot of people would pay money to see that.

Will Saletan is Missing the Point on Abortion

Slate columnist Will Saletan wrote in the New York Times in February that he believes that we can end the culture wars by encouraging birth control and discouraging abortion. This week, in the wake of the murder of late-term abortion provider George Tiller in Kansas, Saletan returned to that argument, writing that while abortion is not "murder," it's "something less, a tragedy that would be better avoided," and we should look for ways to prevent it. On the way to that conclusion, Saletan stumbled on an interesting point:

Them Boiling Frogs

Hoo boy.  I sure hope James Fallows doesn't watch this video snippet.  He's already annoyed at Anne Applebaum's China fearmongering, and seeing all his good work on the boiling frog myth blown up on prime time TV in a matter of seconds — well, that might just drive him over the edge.  Don't watch, Jim!

Summer Passport Woes

Matt Welch writes:

Do you feel safer today? Let's hope so, since you're certainly less free to travel about the Northern Hemisphere. Beginning just after midnight, every American returning from Canada, Mexico, and various island paradises now have to flash a U.S. passport to get back in the country. For the 70 percent of citizens who don't have passports, that means a minimum four to six weeks waiting time (and probably more, given the new filing rush) to legally escape the national boundaries.

Great.  My passport is expiring in a couple of months and I downloaded the forms just yesterday to get it renewed.  I didn't realize I was going to get caught up in Phase 2 of the great Canada/Mexico passport debacle. Thanks for warning me just in time, Matt.

Of course, this is only a partial change.  I learned to my chagrin some years ago that at least some Canadian border officials have wanted to see a passport all along.  Flying into Toronto in the mid-90s, I got hassled by a security guy at the airport for having only a driver's license to prove my bona fides ("that doesn't prove citizenship," he said, "it just means you're licensed to drive in California," which, admittedly, is perfectly correct).  He still let me in, but I've made sure to take my passport on trips to Canada ever since.