2010 - %3, August

Friday Cat Blogging - 27 August 2010

| Fri Aug. 27, 2010 2:07 PM EDT

Today we have twin cats. In fact, until I put these side by side, I didn't quite realize just how identical they were. And yes, for the nerd watchers among you, these are lids to comic book boxes. They are, apparently, much preferred as cat snoozing spots than the actual boxes themselves. And with that, I'm off to lunch. Have a good weekend, all.

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The Tale of Fannie and Freddie

| Fri Aug. 27, 2010 2:02 PM EDT

Karl Smith has read the just-released Conservator’s Report on Fannie and Freddie and has a detailed post summarizing it. His conclusion:

The wave of housing price increases was kicked off by changes in private label securitization. These changes left Fannie and Freddie with a smaller market share and lower absolute level of securitizations. Fannie and Freddie attempted to adjust their basic business practices to stay competitive in bubble markets and among aggressive borrowers.

These adjustment left Fannie and Freddie exposed to a large decline in housing prices. This is exactly what happened and Fannie and Freddie reaped enormous losses because of their exposure.

Had Fannie and Freddie stuck to their traditional role of guaranteeing low value traditional loans rather than trying to stay competitive in bubble areas their losses would have been substantially less.

In short, attempting to subsidize the American dream for low and moderate income families may be a fundamentally bad policy. However, it does not appear to be either the origin of the housing bubble or the source of Fannie and Freddie’s trouble.

Read the whole thing for the full story. Overall, it really does seem like the right take to me. Fannie and Freddie obviously made huge mistakes that are going to cost the taxpayers a boatload of money, but the evidence just doesn't support the idea that they helped provoke the housing bubble. They were followers, not leaders. It was Wall Street that lit the fuse, not Fannie and Freddie.

Conspiracy Watch: The Devil Wears Gaga

| Fri Aug. 27, 2010 1:00 PM EDT

The latest installment in our ongoing collection of wonderfully weird (and totally wack) conspiracy theories. Find more Conspiracy Watch entries here.

What kind of sick mind dreamt up the idea for "Telephone," Lady Gaga's 9-minute video potpourri of prison homoeroticism, shameless product placement, and incisive commentary on cell phone reception? A mind that's been brainwashed by the CIA (Or Freemasons. Or Satanists. Or whatever nefarious organization has the capability to plot world domination and come up with a crazy idea like cigarette sunglasses.)—that's who. Yes, it's time for another installment of Conspiracy Watch, our ongoing collection of wonderfully weird (and totally whack) conspiracy theories. 

THE CONSPIRACY: Behind the catchy singles and outrageous getups, Lady Gaga is the pawn in an elaborate Illuminati plot. Looking beyond the surface of her lyrics, videos, and fashion reveals a trove of secret messages and symbols promoting Freemasonry, satanic rituals, and CIA brainwashing. For example, her "Paparazzi" video is a metaphor for how "reeducation by the occult elite" can turn you into a killer robot. Instead of being a savvy image maven, Gaga may be unaware of what she's doing, since her "robotic and slightly degenerate persona embodies all the 'symptoms' of a mind control victim."

THE CONSPIRACY THEORIST: The anonymous keeper of the website Vigilant Citizen, an enthusiastic Canadian symbologist and music producer who has been exposing and analyzing the "transhumanist and police state agenda in pop music," including the work of Beyoncé, Lil Wayne, and Rihanna. He confesses that he likes most of the music he deconstructs: "If people have to go through the trouble of incorporating hidden messages in songs, they will certainly pick sure hits, performed by charismatic artists. If those messages were in crappy songs, they would have no effect at all, rendering them useless."

MEANWHILE, BACK ON EARTH: A superstar clotheshorse who is unwittingly the tool of an evil yet very silly conspiracy...wait, isn't that the plot of Zoolander?

Kookiness Rating: Tin Foil Hat Small Tin Foil Hat Small Tin Foil Hat Small Tin Foil Hat Small Tin Foil Hat Small (1=maybe they're on to something, 5=break out the tinfoil hat!)

Read My Lips, Don't Look At My Record

| Fri Aug. 27, 2010 12:39 PM EDT

George Bush's former budget director, Rob Portman, who's doing well in his campaign for a U.S. Senate seat in Ohio, says voters really don't care that he was part of the administration that helped wreck the economy over the past decade:

"What the people in this plant want to know is what you are going to do for me going forward," Mr. Portman said. "That is all they care about, and frankly that's what voters care about."

"The world has moved on," he added. "Maybe the Democrats haven't."

Steve Benen is gobsmacked that Ohio's voters seem eager to support Portman "despite his background of failure" — though in fairness to Ohio's electorate, Portman has a long record as an Ohio congressman prior to his two years as an obscure official in the Bush administration, and that's probably what most voters are responding to.

More broadly, though, there's no reason to be surprised anyway. As near as I can tell, Portman is right: policywise, voters really don't care much about what you've done in the past. They only care about what you say you're going to do in the future. They care about scandals in the past, and they generally seem to give politicians credit for the past policies of their parties — so Republicans get automatic credit for being budget hawks even if they've spent freely in the past and Democrats get credit for protecting Social Security even if they've voted to cut it in the past. Beyond that, though, voters don't care much. They just vote for whoever talks the best talk.

This is a pretty handy thing for politicians.

Angle: Congress' Enemies of the State Still There

| Fri Aug. 27, 2010 12:30 PM EDT

At least Nevada conservative Sharron Angle isn't a complete flip-flopper.

As Greg Sargent over at The Washington Post's Plum Line reported this week, when an interviewer suggested in 2009 suggested that there were "domestic enemies" in the US Congress, Nevada conservative Sharron Angle responded, "Yes. I think you're right." Now, that alone is quite an inflammatory statement, claiming elected lawmakers here in DC are actively threatening the safety of this country.

Well, as ThinkProgress points out today, Angle was given a second chance to weigh in on this domestic-enemies-in-Congress claim in an interview with conservative radio host Heidi Harris. Here's the exchange:

HEIDI HARRIS: He said that we have domestic enemies and he thinks some of them are in the walls of the Senate and Congress, and you agreed with him. Did you agree with him?

ANGLE: Well, we were talking about what’s going on in Congress, of course, and the policies that have come out of Congress, and those policies as we’ve all seen over the last 18 months have definitely hurt our country.

HARRIS: Yeah, well I agree with you by the way, but I wanted to make sure you got you a chance to clarify that, because I’ll tell you the truth, Sharron. I do think we actually do have folks in Congress who truly want to do us harm and see us change from the nation we are now.

ANGLE: There is no doubt that the policies that have been coming out in the last 18 months have injured us, and injured us most specifically here in Nevada.

So not only does Angle stand by her domestic enemies position, but she belives the problem is actually spreading! Harris, the transcript shows, agrees with Angle's position.

In response to Angle's original comment, Senate Majority Leader Harry Reid, Angle's opponent in Nevada's US Senate race, issued a direct challenge to Angle: Name which senators she considered domestic enemies. "If she is going to use such rhetoric, she has an obligation to name names and explain to the American people exactly who she thinks is a domestic enemy," Reid said. Then again, you can't take seriously most anything Angle has to say. After all, this is the candidate who called the unemployed "spoiled," who suggested "Second Amendment" remedies to fix our problem in Congress, and stated that a teenage girl who'd been raped by her father should turn "a lemon situation into lemonade."

(h/t ThinkProgress)

Quote of the Day: PowerPoints in Afghanistan

| Fri Aug. 27, 2010 12:13 PM EDT

From reserve colonel Lawrence Sellin, formerly assigned as a staff officer at ISAF Joint Command in Afghanistan:

For headquarters staff, war consists largely of the endless tinkering with PowerPoint slides to conform with the idiosyncrasies of cognitively challenged generals in order to spoon-feed them information. Even one tiny flaw in a slide can halt a general's thought processes as abruptly as a computer system's blue screen of death.

It gets better. Unsurprisingly, Sellin was sacked yesterday.

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Eating Your Own Toxic Waste

| Fri Aug. 27, 2010 11:27 AM EDT

What's that? The housing bubble is starting to show its age and you're having trouble finding buyers for all the crappy CDOs you've put together? That won't do at all: if the market gets wind that no one actually wants the toxic waste lying around on your books, the show could be over. What to do?

Faced with increasing difficulty in selling the mortgage-backed securities that had been among their most lucrative products, the banks hit on a solution that preserved their quarterly earnings and huge bonuses:

They created fake demand.

....An analysis by research firm Thetica Systems, commissioned by ProPublica, shows that in the last years of the boom, CDOs had become the dominant purchaser of key, risky parts of other CDOs, largely replacing real investors like pension funds. By 2007, 67 percent of those slices were bought by other CDOs, up from 36 percent just three years earlier. The banks often orchestrated these purchases. In the last two years of the boom, nearly half of all CDOs sponsored by market leader Merrill Lynch bought significant portions of other Merrill CDOs.

ProPublica also found 85 instances during 2006 and 2007 in which two CDOs bought pieces of each other's unsold inventory. These trades, which involved $107 billion worth of CDOs, underscore the extent to which the market lacked real buyers. Often the CDOs that swapped purchases closed within days of each other, the analysis shows.

Not only does this hide the fact that there's low demand for your toxic waste, but it generates fees for all on both sides of the deal. It's a twofer!

The chart below shows how much of its own inventory Merrill Lynch bought at the height of the bubble. For all the gory details, just click the link and read the whole story.

(Via Felix Salmon.)

Stimulus vs. Austerity

| Fri Aug. 27, 2010 11:07 AM EDT

According to David Brooks, the returns are in: during the first half of this year the U.S. spent more on stimulus than Germany, and the German economy is doing great. Score: Austerity 1, Stimulus 0.

Needless to say, this didn't sound quite right to me. Why look only at the first half of this year? It takes a while for stimulus spending to have an effect, after all. So what about 2009? Here's the Wall Street Journal on March 12, 2009:

According to IMF figures, Germany's 2009 emergency spending is 1.5% of gross domestic product, compared with 2% for the U.S. But Germany's automatic stabilizers will narrow the gap, contributing an additional 1.7%, for a total of 3.2% of GDP. The U.S. stabilizers add 1.5% for a total of 3.5%.

Look: these numbers don't really prove anything either. The German economy is different from the American economy in several important ways, and in any case the global economy is so intertwined that stimulus in an importing country like the U.S. has knock-on effects on an exporting economy like Germany. Still, Brooks's column is the dumbest kind of cherry picking. Last year stimulus spending was nearly identical in both countries. Both countries adopted robust Keynesian policies, and if you can draw any conclusions from that at all, it's only that it apparently had a bigger effect on Germany than it did on us. That means only that they no longer need stimulus and we do. What's so hard about that?

Enviro Links: Spill Probe Continues, Tastykake Goes Green, and More

| Fri Aug. 27, 2010 10:06 AM EDT

Today in oil-spill news:

BP Senior Vice President Kent Wells was on the hot seat yesterday, as federal investigators dug in on the oil giant's abysmal safety record. Investigators noted a letter Minerals Management Service sent to Wells in 2003 criticizing the company for "incomplete planning, poor communication, insufficient knowledge or training, and a lack of effective supervision."

Meanwhile, another BP executive testified that the Deepwater Horizon was "considered one of the most efficient and safest mobile floating rigs in the Transocean Ltd. fleet."

The New York Times has a piece today detailing some of the behind-the-scenes stories from the now four-month long process to kill BP's Gulf well. It was "far more stressful, hair-raising and acrimonious than the public was aware of," the paper reports.

And for a little bit of good news, BP has given up plans to drill in the Arctic off Greenland's coast.

Republicans are planning a number of probes into executive branch dealings should they take over the House this November, including an investigation of the Minerals Management Service (now renamed the Bureau of Ocean Energy Management, Regulation and Enforcement, or "BOEM").

Speaking of "BOEM," the selected acronym for the agency, apparently it's pronounced like "home." This is an improvement over using the longer acronym, BOEMRE, which many of us thought was pronounced "bummer."

And in other environmental news:

Tastykake has a new "green" bakery in Philadelphia, a 345,000-square-foot facility with more efficient water and energy systems, recycled building materials, and other "environmentally friendly" features.

It's possible that we won't know the outcome of the Alaska Republican primary until the end of September.

The Lexington Herald-Leader reports that at least four acts slated to appear at the Alltech FEI World Equestrian Game have pulled out in protest of the event's sponsorship by a coal company. Alliance Coal is one of the main sponsors, and the groups would be performing under a banner touting "clean coal."

Marco Rubio's Debate-apalooza!

| Fri Aug. 27, 2010 9:56 AM EDT

Marco Rubio, the GOP's candidate in Florida's US Senate election, must be feeling pretty good about his chances right now. So good, in fact, that he's throwing down one hell of a gauntlet. Rubio recently announced that he wants not just one or two or three major candidate debates this fall—no, he wants seven different occasions to duke it out with his opponents, Democrat Kendrick Meek and independent Charlie Crist

Rubio announced his debate barrage, the St. Petersburg Times reports, soon after agreeing to an October 24 debate with Crist hosted by CNN and the St. Pete Times. It's a pretty canny move by Rubio, giving him ample time to bash the lifelong-Republican-until-I'm-not Crist. Here's the Times on the political calculus behind Rubio's gambit:

Charlie Crist is almost always good on TV, but this poses a real problem for him. In a three-person debate, it would be Rubio and Meek each taking turns hitting Crist and pressing him on flip-flops and inconsistencies. It's hard to stay above the fray when you're the main target.

But skipping most of the debates is equally problematic. If Meek agrees to these debates and the networks agree to televise them with or without all three candidates, Crist would be letting Meek raise his profile as the Democratic alternative to Rubio.

"I am the only candidate for Senate who has outlined specific ideas and proposals as a clear alternative to the wrong direction that Washington politicians are taking our country," said Rubio in a statement. "I enthusiastically accept these opportunities to debate my opponents and present Floridians with the clear choice they have between a faithful loyalist of Washington’s agenda, a say-and-do anything opportunist who only cares about winning, and the clear, idea-based alternative I am offering."

Rubio proposed the following dates to debate Crist and Meek. As you can tell, some of these are primetime settings.

  • Sunday, September 5, NBC’s Meet The Press, Moderated by David Gregory, Washington, DC
  • Friday, September 17, WLTV-Univision 23 Debate, Miami, FL
  • Tuesday, September 28, WTVT-FOX 13 Tampa Bay Debate, Tampa, FL
  • Wednesday October 6, ABC News, WFTV-ABC 9 Orlando & WFTS-ABC 28, Tampa, Moderated by George Stephanopoulos and two local media panelists Orlando, FL
  • Wednesday, October 20, Leadership Florida Debate, Ft. Lauderdale, FL
  • Sunday, October 24 CNN/St. Petersburg Times Debate, Moderated by Candy Crowley, Tampa, FL
  • Tuesday, October 26, NBC News & WESH-NBC 2 Orlando Debate, Moderated by David Gregory, Orlando, FL