2008 - %3, October

Subway Madness

| Fri Oct. 24, 2008 1:40 PM EDT

SUBWAY MADNESS....Apparently AIG, over the years, has guaranteed several elaborate tax avoidance schemes that allowed local transit authorities to make some extra money via sale-leaseback agreements with banks. Now that AIG is kaput, the schemes are falling apart and the transit agencies may suddenly get billed for tens of millions of dollars. Transit fan Matt Yglesias is pissed:

WTF is happening here? Can't we, in exchange for all the money we're giving AIG, force the company to keep guaranteeing deals that are vital to keeping our public services running? Something about the implementation of this bailout is very troubling and it doesn't inspire a ton of confidence in the future of TARP.

Unfortunately, that doesn't seem to be the issue. AIG is still guaranteeing the deals. The problem is that the contracts with the banks terminate automatically if AIG doesn't maintain a high credit rating. Which, needless to say, they haven't. So now the banks are demanding payment.

Which just goes to show how all this stuff trickles down not just to Main Street, but to the subways underneath Main Street too. However, a Treasury Department spokesman says, "Treasury is aware of this situation." That should make us all feel better, right?

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Campaign Trail Update

| Fri Oct. 24, 2008 1:14 PM EDT

CAMPAIGN TRAIL UPDATE....Barack Obama and John McCain have finally found something they agree on: George Bush sucks. That's called "reaching across the aisle," boys and girls.

Housing Update

| Fri Oct. 24, 2008 12:49 PM EDT

HOUSING UPDATE....The latest news on the housing market:

Although prices continued to fall, existing-home sales climbed more than expected during September, marking the highest level of home sales activity in more than a year.

Home resales rose to a 5.18 million annual rate, a 5.5% increase from August's unrevised 4.91 million annual pace, the National Association of Realtors said Friday.

....The home sales increase represents "a nice jump," said NAR economist Lawrence Yun. "Hopefully, this trend can continue."

OK, I admit it. I'm just trying to cheer you up. That "nice jump" appears to be about the only good news around today amidst an ocean of gloom. Here in California, the latest news is that home foreclosures, after jumping about a million percent over the last year, are now down. But only because of a new law that makes banks delay proceedings until 30 days after contacting the borrower. Woo hoo!

Obama: It's Colorado, Stupid

| Fri Oct. 24, 2008 11:20 AM EDT

Colorado is the key to a Barack Obama victory.

At least, that's what the Obama campaign strategists seem to believe. This morning, the campaign sent out a schedule of Obama's remaining campaign stops. After Obama finishes visiting with his ill grandmother in Hawaii on Friday, he will return to the trail. First up, there are stops in Nevada. Next he will head to New Mexico. Then his final campaign stops will occur in Colorado.

Notice, there's nothing on schedule (as of yet) for Ohio, Pennsylvania or Florida, the traditional deciders. Instead, Obama is working hard the new swing states, especially Colorado.

Meanwhile, the McCain campaign's attitude toward Colorado is, eh, erratic. The campaign pulled its money out of the state. But after doing that, it decided to send McCain to campaign rallies there. And Sarah Palin has recently campaigned in the state. So what does that mean? Do the McCain strategists believe he can win that state by turning out the base with personal appearances rather than by courting swing voters with expensive teleivsion ads? It's a theory.

Schadenfreude Watch: 10.24.08

| Fri Oct. 24, 2008 11:11 AM EDT

We've written about the McCain campaign and, by extension, the Republican Party coming apart at the seams before, so let's just make it a regular feature. Today, here's Politico:

One well-connected Republican in the private sector was shocked to get calls and resumes in the past few days from what he said were senior McCain aides – a breach of custom for even the worst-off campaigns.
"It's not an extraordinarily happy place to be right now," said one senior McCain aide. "I'm not gonna lie. It's just unfortunate."

Oakland Ground Zero for Prop 8 Hate Speech

| Fri Oct. 24, 2008 12:43 AM EDT

Prop8.jpg Another night of Prop 8 campaigning in east Oakland, this time with supporters and opponents of the ban on gay marriage verbally battling face to face. At least 150 people packed each streetcorner, spilling out into traffic causing tie-ups in traffic and mayhem (I counted 14 police cruisers at one point) with cars honking and both sides yelling back and forth for hours. There was so much energy and anger in the air, people of all races, ages, and backgrounds, so passionate and fervent in their beliefs, taking to the streets. But I kept thinking, what a tragedy, that such energy is wasted on this fight.

Mormon churchgoers have been rallying for Prop 8 at this intersection for several days now and in response neighbors organized via email to counter the message in person with messages of their own. Their message: "Equality for All," "Don't Discriminate, No on 8" and "Say No to Hate, No on 8." The chants were dirtier tonight on the Yes side, along with "Save Our Children" and the "Protect Marriage" there were plenty of "Don't Hate, Be Straight" and "Stop the Virus AIDS" chorus rounds.

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Quote of the Day - 10.23.08

| Thu Oct. 23, 2008 10:51 PM EDT

QUOTE OF THE DAY....From Alan Greenspan, testifying before Congress on the derivatives market:

"Credit default swaps, I think, have serious problems associated with them."

Ya think? The subprime lending market may have been the trigger for our late financial collapse, but the truth is that the trigger could just as easily been mispriced risk (i.e., irrational exuberance) in a variety of other markets. If subprimes had been regulated better, maybe there would have been a bubble in commercial real estate instead. Or arctic oil drilling. Or online pet food companies. Who knows? Regardless of the trigger, however, it was only when the resulting bubble got multiplied tenfold by opaque global chains of credit default swaps that the bursting of an asset bubble went from routine disaster to worldwide financial meltdown. So yeah: there are serious problems there. Here's more from Greenspan:

"I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms," Mr. Greenspan said.

....Mr. Waxman pressed the former Fed chair to clarify his words. "In other words, you found that your view of the world, your ideology, was not right, it was not working," Mr. Waxman said.

"Absolutely, precisely," Mr. Greenspan replied. "You know, that's precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well."

Hmmm. Maybe not quite so well as he thought.

Yummy, Yummy Kool-Aid

| Thu Oct. 23, 2008 9:08 PM EDT

YUMMY, YUMMY KOOL-AID....From Mark Krikorian, commenting on Sarah Palin's views on immigration reform:

"What Palin's response shows is that [] she's completely open to whatever kool-aid they want her to drink."

He's quite right, of course. Note, however, that this is coming from neither a liberal nor from a moderate conservative complaining that Palin is too right-wing. It's coming from an immigration hardliner complaining that Palin is too accomodating.

Normally the hardliners don't talk about this because Palin's lack of interest in policy of any kind, along with her resulting willingness to drink Kool-Aid of whatever flavor is put in front of her, is a feature, not a bug. Every once in a while, though, it comes back to bite them.

But don't worry, Mark. I'm sure she'll learn the proper responses before long.

If Wes Anderson Directed a McCain Attack Ad

| Thu Oct. 23, 2008 7:02 PM EDT

From The Landline comes this quick trio of potential attack ads in the style of famous directors that the McCain campaign might be interested in trying out. There's your standard John Woo action thriller parody, which is cute, and a quick Kevin Smith bit, which is like ten years out of date, but they saved the best for last: a brief take on Wes Anderson's directorial style. Futura titles, quirky old soundtrack, and, well, a penguin: gotta love it. (The Anderson part starts at about 2:20.)

McCain on a Veep Candidate: Looks Count

| Thu Oct. 23, 2008 6:19 PM EDT

Historians and political writers will for years wonder and write about what moved John McCain to select Sarah Palin as his running mate. But perhaps a newspaper clipping from 1988 offers a bit of insight into how McCain thinks about a veep pick.

Two decades ago, another GOP vice presidential nominee was also something of a puzzling choice: Senator Dan Quayle. Many questioned George H.W. Bush's decision to tap a little-known senator as his running-mate. But some observers thought that Quayle's looks (he was compared to Robert Redford) would help the ticket with the ladies--female voters, that is. Was that a sexist? Whether or not it was, McCain accepted this perspective. According to a Newsday article from that time, McCain said, "A guy that good-looking just has to be attractive to women," said Sen. John McCain (R-Ariz.).

Twenty years later, did McCain take a similar view when searching for his ticket partner?