Sens. John Kerry and Joe Lieberman are reportedly planning to meet this afternoon with Lindsey Graham in a last-ditch effort to salvage the climate and energy bill the three senators have been working on for months. The legislation, scheduled to be unveiled today, was thrown into chaos this weekend after Graham threatened to abandon negotiations unless Democrats committed to advancing energy and climate ahead of immigration reform.  

Meanwhile, advocates for climate action are trying to figure out whether there's still a chance that the trio's bill—which Kerry has called the "last, best shot" at tackling global warming this Congress—still has a chance or is already dead in the water. Greens were already plenty nervous about the rollout of the bill, as leaks about the draft indicated it would be very friendly to business interests. But if Graham follows through with his threat, there may not be a bill at all. "It's hard to know if this is jockeying for position, or if this is a watershed," said David Hamilton, director of the global warming and energy program at the Sierra Club. "I think we just have to wait a few days and see how it shakes out."

Hamilton pointed out that Graham "certainly appeared serious." However, Graham's been able to wring a lot out of this bill, including major investments in nuclear power and increased offshore drilling. It's not clear how many of those concessions would survive if he walked away. Hamilton added that the South Carolina senator has also invested a lot of political capital in the bill. "It's hard to believe that it would all just end up on the kitchen floor."

Jon Chait points to this paragraph in today's Politico story about a Republican filibuster of the financial reform bill:

McConnell secured a commitment from his conference to hold together in opposition on the first vote, but all bets are off after that, aides acknowledge. McConnell’s challenge after Monday is preventing moderates such as Snowe and Sen. Susan Collins (R-Maine) from breaking away and weakening Republican leverage.

It is a little peculiar that Republican aides would concede this, isn't it? If even they think that a few moderates are going to peel off after doing their duty on the first round, what real incentive do Democrats have to seriously compromise? In fact, this puts them in the best situation they could have hoped for: they get to slam Republicans for obstructing a popular reform bill; they get to pass something fairly soon anyway; and they get points with their base for not caving in to GOP demands to water down the bill. What's not to like?

China's Housing Bubble

David Pierson of the LA Times reports on China's housing bubble, which is now far more frenzied in third-tier cities like Hefei than it is in places like Beijing or Shanghai. Some excerpts:

Taxi drivers boast of owning multiple flats for investment. Billboards hawk developments with names such as Villa Glorious and Rich Country. Frenzied crowds pack sales events with bags of cash, buying units that exist only on blueprints. Average home values in Hefei soared 50% last year.

....Xi Zhou, a cameraman for a local news channel, paid $50,000 for his 900-square-foot unit in December. He figures it's now worth $80,000...."For people of my generation, property is all we talk about," said Xi, 27, who will share the new home with his wife and parents. "I felt a lot of pressure to buy because the longer I didn't, the more likely I wouldn't be able to afford anything."

....Many Hefei residents are as obsessed with real estate news as Angelenos are. One of the most popular radio programs here is an afternoon talk show called "Blossom Real Estate." Some prospective buyers get half a dozen text messages a day on their cellphones from developers advertising new properties. Apartments are opened with great fanfare, with outdoor concerts in malls.

....Guo Hongbing, a marketing consultant for several developers [...] gave visitors a tour of Mediterranean-style condominiums....All the properties had been sold, and Guo was interested in estimating how many were left empty by investors. His unscientific method? Looking for curtains. "See, less than half that building is occupied," he said, pointing to one block with several bare windows. "These speculators want to buy as many as possible."

"I felt a lot of pressure to buy because the longer I didn't, the more likely I wouldn't be able to afford anything." Hey, that sure sounds familiar to this Southern California native!

Every time I read about this, someone points out that China's housing bubble isn't driven by debt. China's middle class are huge savers, and they mostly buy with cash or, at the least, with a big down payment. But I wonder if that's really true? Reliable statistics are probably impossible to get, but even if real buyers are avoiding debt, I'd be surprised if speculators are. If half the units in a typical building are being snapped up by speculators hoping to make a quick yuan, that might mean there's more debt than we think fueling this bubble.

But at least there's this: "China's central government is taking steps to cool the market. This month, lawmakers raised down-payment requirements for the purchase of second homes and gave banks new powers to restrict lending to speculators. Capital gains and monthly property taxes are being considered." Maybe it's enough, maybe it isn't. But it's a hell of a lot more than U.S. regulators did.

According to a new Washington Post poll:

  • 63% want stronger regulation of the financial industry
  • 43% want stronger regulation of derivatives
  • 53% support requiring banks pay into a fund to help wind down failed financial institutions
  • 59% support stronger regulation of consumer finance products

I'm a little unsure if this is good news or bad news. It's good that there's generally majority (or better) support for all this stuff, but the majorities aren't all that big. I wouldn't be surprised, for example, if lots of people had no opinion on regulation of derivatives, but I am surprised that among those who do have an opinion, support for stronger regulation is so weak (43%-41%).

On the other hand, numbers like these are often high and then fall once the political debate starts. These numbers are (mostly) still fairly high even though the public debate has been in full swing for a month or two. So that's promising.

Overall, though, the public doesn't exactly seem ready to hit the streets with pitchforks and torches. Maybe public opinion would be stronger if we could somehow convince them that Goldman Sachs planned to convene death panels?

The state of climate and energy legislation was thrown into disarray over the weekend, as the lead Republican on the bill, Lindsey Graham, threatened to walk away from negotiations over tensions on timing. With bipartisan agreement in peril, John Kerry, the lead Democrat on the bill, pushed off the roll out of the bill initially scheduled for today.

"For more than six months, Lindsey Graham, Joe Lieberman, and I have been meeting for hours each day to find a bi-partisan path forward and build an unprecedented coalition of stakeholders to pass a comprehensive climate and energy bill this year," Kerry said in a statement Saturday. "We all believe that this year is our best and perhaps last chance for Congress to pass a comprehensive approach. We believe that we had reached such an agreement and were excited to announce it on Monday, but regrettably external issues have arisen that force us to postpone only temporarily."

Read more on the state of negotiations over on Blue Marble.

Goldman Sachs, the besieged Wall Street baron, fired back at a Senate subcommittee this weekend by releasing a report of its own on the bank's role in the subprime mortgage markets leading up to the crash of 2008. The report (pdf) is a clear attempt by Goldman to counter claims that it intentionally "shorted," or bet against, the housing market, even as it peddled the kinds of mortgage-related products its traders were wagering would fail. Its loss of $1.7 billion in residential mortgage-related products in the 2008 fiscal year, and its small market share in the mortgage industry, are evidence that the firm was hardly the subprime bogeyman it's been made out to be, Goldman claims. "Goldman Sachs did not take a large directional 'bet' against the US housing market, and the firm was not consistently or significantly net 'short the market' in residential mortgage-related products in 2007 and 2008," the company says.

Of course, the story is far murkier than that. As McClatchy reported last year (and as Goldman neglects to mention), in 2006 and 2007 Goldman marketed some $39 billion in securities backed by toxic home loans to clients but neglected to mention that Goldman was betting against that same market. McClatchy also reported that Goldman, which had decided to start buying insurance against (i.e., betting against) the housing market in late 2006, used "offshore tax havens to shuffle its mortgage-backed securities to institutions worldwide, including European and Asian banks, often in secret deals run through the Cayman Islands, a British territory in the Caribbean that companies use to bypass U.S. disclosure requirements."

But there's one looming question that neither Goldman nor the press has answered: How much exactly did Goldman make from its big-time bets against the housing market? Goldman spokesman Lucas van Praag said in a statement on Saturday that the report released by the firm "demonstrates conclusively that we did not make a significant amount of money in the mortgage market"; however, in the set of emails released by the Senate investigations subcommittee, Goldman CEO Lloyd Blankfein writes in an email that "Of course we didn't dodge the mortgage mess. We lost money, then made more than we lost because of shorts." In a different email released by the subcommittee, Goldman CFO David Viniar reacts to news of losses in the mortgage markets, and of Goldman's subsequent gains, by writing, "Tells you what might be happening to people who don't have the big short."

How much Goldman made—whether it's negligible as company purports it to be, or more significant than that—remains to be seen. Did the firm merely try to counterbalance its long bets on the housing market with the shorts? Or did it reap a massive payday? This week's hearings in the investigation subcommittee, which bring to Washington top Goldman executives like Blankfein, could finally shed some light on this mystery.

With the fate of climate and energy legislation in peril, will the White House intervene to save one (and possibly two) of their top legislative priorities? It doesn't appear so, at least not yet.

The Obama administration so far is staying out of the Senate squabble that kicked up this weekend when Lindsey Graham, the lone Republican working with Democrats on a climate and energy package, threatened to walk away from negotiations if the Democratic leadership followed through on talk of pushing an immigration reform bill first. Climate and energy bill co-authors Graham (R-SC), John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) were supposed to unveil their legislation today, promising unprecedented industry support. The rollout was delayed in hopes of salvaging bipartisan backing for the bill. The White House has declined to state a preference on which issue moves first—climate or immigration.

"There's no either-or between energy and immigration reform," Larry Summer, Obama's chief economic adviser, said on CBS’s Face the Nation yesterday. "Senator Reid, for whatever reasons he has, will in the Senate choose the legislative calendar."

White House climate and energy adviser Carol Browner issued a statement of continued support for a bipartisan bill on Saturday, but she didn't make any comment on timing, short of saying the White House still wants comprehensive legislation this year. "We believe the only way to make progress on these priorities is to continue working as we have thus far in a bipartisan manner to build more support for both comprehensive energy independence and immigration reform legislation," she noted.

"We have an historic opportunity to finally enact measures that will break our dependence on foreign oil, help create clean energy jobs and reduce carbon pollution," Browner continued. "We're determined to see it happen this year, and we encourage the Senators to continue their important work on behalf of the country and not walk away from the progress that's already been made."

The fight to pass legislation on the already contentious issue of climate and energy got uglier this weekend. Some intervention from the top might be necessary if the work Graham has been doing with Kerry and Lieberman is to be salvaged.

The ever-more business friendly Supreme Court will hear oral arguments today in a case that has the potential to shut a whole lot of regular Americans out of the justice system. The nation’s largest rent-to-own furniture company, Rent-a-Center, has asked the court to decide essentially whether huge corporate players should be able to use one-sided contracts to opt out of the civil justice system and judge themselves when customers and employees want to sue for discrimination or other abuses.

The case has enormous implications for big business, which has for years now been able to avoid legal accountability and big jury awards for employment discrimination, fraud, and even sexual assault by forcing people to sign what’s known as a mandatory arbitration clause as a condition of getting a cell phone, using a credit card, buying a car, or getting a job. The clauses force people to bring any complaint against the company before a private arbitrator, hired by the company, whose decisions can’t be reviewed by a judge in most cases. Not surprisingly, those arbitrators rarely find in favor of the little guy. But over the past couple of years, the little guy has been fighting back and occasionally winning important victories.

People like Jaime Leigh Jones have, against great odds, prevailed over much more powerful entities once they’ve gotten inside a regular courtroom. Leigh is the KBR/Halliburton employee who alleged that she was gang raped by her co-workers in Iraq and then confined to a storage container by her employer. She recently prevailed in a challenge to the arbitration clause in her contract that would have forced her to have her rape case heard by a Halliburton-hired arbitrator rather than a jury. Deborah Williams and Richard Welshans, after years of litigation, last year also won a ruling in federal court allowing them to finally bring a fraud lawsuit against the Coffee Beanery, a company they allege duped them into sinking hundreds of thousands of dollars into a doomed franchise. (The victory, unfortunately, came too late to save their house.) But if the Supreme Court rules for Rent-a-Center in the case argued today, even those rare victories will become nonexistent. That's because, as Public Citizen’s Robert Weissman has written, "The question presented to the Supreme Court in Rent-A-Center is, essentially: Can a corporation's hand-picked arbitrator decide whether it is fair for the company to hand-pick its arbitrator?"

Passion Pit front man Michael Angelakos started his first band in kindergarten, a time when he focused his lyrical creativity on subjects like ninjas and dirt-bikes. Since those days, Angelakos has moved on to weightier subjects like love and self-deprecation, but the beats he and his Passion Pit bandmates create certainly don't lack for youthful exuberance. In 2009, following the success of Chunk of Change—an EP Angelkos recorded solo in 2007 as a gift for his girlfriend—synth-tastic electropop band Passion Pit released its debut album Manners to critical acclaim and some criticism, too. Rolling Stone, however, praised the record, and Angelakos for "his loose beats, shamelessly fruity melodies and breathless little-boy vocals." I spoke with Angelakos about the genesis of his relationship with music and what it means to go from being a one-man band to front man of a band that headlines tours and sells out shows.

Mother Jones: What first made you interested in music?

Michael Angelakos: Music is one of the few things I'm relatively good at, one of the things I understand a little better than everything else. I became really creative around the time I started understanding that people could be creative with music and that that was allowed. I stated taking piano lessons at age five, but I never did what my piano teacher told me to do. I would just do whatever I wanted. Pretty soon after that, my parents realized I wasn’t supposed to be in that bracket of children who follow the rules. 

MJ: Were you in bands with friends in middle school and high school? 

MA: Oh yeah, I had bands even in kindergarten. In fact, the beginning of "Better Things" is from a recording I made when I was five or six. It's on a tape. And let me tell you, I was slave driving—my little brother had pencils in his hand slamming on a single-head snare drum and I was screaming at him to play in time for the recording. Really, I had tons of bands over the years. At one point in high school, I had 15 different projects. I just kept flying from one idea to another. This is why it's hilarious to me that I'm still in this band after three years. The fact that I'm still doing it is like a weird therapy. If I didn't have a label and a manager behind me, it would be tough for me to pay attention to just one project. I would have gone on and recorded five or six more CDs in the span of time I've been promoting this one record.

At Cypress Hill's annual 4/20 show the hip-hop aficionados basically hot-boxed the entire Warfield Theater in San Francisco. In the middle of the four-piece crew's three-hour set, their mascot—a human joint!—wandered center stage coughing and looking like a blazed mess. At that point, the rap group's head honcho B-Real proceeded to fire up a 14-inch dick-like blunt, an image which pretty much sums up most stoners attraction to this lionized venue on this most holy night. Yes! It's the weed! And an uninhibited celebration of it through open indulgence in it. Every super-relaxed bro in that maxed-out crowd (especially the dude in front of me wearing the "Got Weed?" shirt) was lighting up either a middle-finger-sized joint, a pipe, a one-hitter, or just feeling loopy from the unavoidable mega-contact high.

It was so dope. I almost forgot who was on stage.

The appeal of Cypress Hill—the SoCal-based gangsters-turned-rappers act stars B-Real (who’s an ordained Santeria priest), Sen Dog, Eric Bobo, and DJ Muggs stand-in DJ Julio G—lies more in their brazen ganja-toking displays than in their music, which is a rock-and-rap-and-sometimes Latin-flavored bro-down. B-Real's nasally rhymes—layered with turntable scratches, laptop samples, and Latin drums—get trumped by the "let's get high all the time" mantra that underlies most of their jams, which is appropriate for a 4/20-themed show.

The fans I talked to at intermission confessed to either loving the group since its '90s heyday or just remembering their awkward junior-high affection for Insane In The Brain. The group played this mainstream hit plus some tracks from their new album Rise Up! which also dropped on 4/20. They ended with Rock Superstar and roused an impromptu mosh pit on the ground floor. Sen Dog stage-dived a few times to the dismay of his security detail, which pummeled through the crowd continuously to rescue the rambunctious onetime member of the Bloods. All in all, it was a fun show, as you can see from the video below.