Safe Havens

| Fri Feb. 13, 2009 10:49 AM EST
SAFE HAVENS....Via Felix Salmon, here's some interesting news: Moody's has decided that not all AAA sovereign debt is created equal.    Here's how things shake out:
  • AAA-Worst: Ireland, Spain
  • AAA-Middle: United States, UK
  • AAA-Best: Germany, France, Canada, Scandinavia

I wonder what it would take for the United States to be downgraded into the Ireland/Spain category?

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Vatican Brings Back Indulgences

| Thu Feb. 12, 2009 8:24 PM EST

From the New York Times comes news that the Roman Catholic Church is allowing indulgences again. The revelation compelled the Times to write this improbable paragraph:

There are partial indulgences, which reduce purgatorial time by a certain number of days or years, and plenary indulgences, which eliminate all of it, until another sin is committed. You can get one for yourself, or for someone who is dead. You cannot buy one — the church outlawed the sale of indulgences in 1567 — but charitable contributions, combined with other acts, can help you earn one. There is a limit of one plenary indulgence per sinner per day.

The Tipping Point

| Thu Feb. 12, 2009 7:19 PM EST
THE TIPPING POINT....Should the stimulus bill have been even bigger?  Tyler Cowen lists several reasons to be cautious on this score, including this:
5. Many on the left are boasting that the U.S. government could borrow lots more (look at the current T-Bill rate), forgetting they used to warn us that international capital flows, as amplified through noise traders and speculators, mean that crises can arrive in a single, whiplash moment, bringing countries from riches to rags virtually overnight.  Somehow those old narratives are being forgotten, I wonder why.

We have essentially replaced a risk bubble with a safety bubble.  And there are lots of good reasons to think that this bubble, which manifests itself as an almost bottomless demand for U.S. treasuries, will continue for a long time.  But a long time isn't forever, and we're planning to sell upwards of $3 trillion in treasuries over the next 30 months.  So when will the tipping point come?  After $1 trillion?  $2 trillion?  Never?  I hope the answer is never, but if the past couple of years has taught us anything, it's that we don't know — and that never is probably the least likely answer.  And when the market does turn on us, it's going to turn ferociously and without notice.  I sure hope Geithner and Summers and the rest of the crew are prepared for this, because the odds are that we're going to be paying for the profligacy of the Bush administration for a long time to come.

Madonna, Bon Jovi, Springsteen Made Big Bucks in '08

| Thu Feb. 12, 2009 5:38 PM EST
Billboard magazine has ranked the top 20 biggest money-makers in music this year, and I assume they don't mean, um, the body part one is supposed to shake. No, no, they mean musicians who've made the most dollars, or, more likely, euros, and maybe even rubles, in 2008. Madonna topped the list by a wide margin, earning a total of over $242 million, with rockers Bon Jovi and Bruce Springsteen just about tied at $157 and $156 million, respectively. Not surprisingly, says Billboard, touring is your best bet for the big cash these days, and every performer on their top 20 list had major tours this year. But perhaps more surprising is the apparent gap between album sales and tour income: Madonna's 2008 album, Hard Candy, was only the 50th-best-selling of the year in the US. But that didn't stop concert-goers, as her continuing "Sticky & Sweet" tour grossed nearly $230 million, not including the $18 million worth of tour merchandise sold. Jeez, and I'm stoked when I get 50 bucks for DJing. Anyway, the full list of the most immune-to-economic-woes musicians after the jump.

Gregg Withdraws

| Thu Feb. 12, 2009 5:13 PM EST
GREGG WITHDRAWS....I sure didn't see this one coming:

President Obama’s choice for Commerce Secretary, Senator Judd Gregg, withdrew his nomination on Thursday. He said there were “irresolvable conflicts” between him and the administration.
“It has become apparent during this process that this will not work for me as I have found that on issues such as the stimulus package and the Census, there are irresolvable conflicts for me,” Mr. Gregg said in a statement. “Prior to accepting this post, we had discussed these and other potential differences, but unfortunately we did not adequately focus on these concerns. We are functioning from a different set of views on many critical items of policy.”
Irresolvable conflicts on the stimulus package?  That's crazy.  There's simply no way Gregg didn't understand Obama's stimulus priorities when he accepted the job offer.

So that leaves the census.  Obama has decided to remove it from the Commerce Department and put it directly under the White House, something that's recently become a right wing  cause célèbre"This isn't a small or innocent change," says Rep. Marsha Blackburn (R–Tenn.), and I suspect we're going to be hearing a lot more about this soon from Limbaugh and Drudge and the rest of the usual suspects.  I hope Obama has a pretty good explanation for doing this.

UPDATE: Marc Ambinder says here that the census director still reports to Commerce and that the whole thing is a "BS issue."  So I'm not quite sure what's going on.  Fox News frames it this way:
White House officials have announced that the census will technically remain part of the Commerce Department, but that Chief of Staff Rahm Emanuel will oversee it at the White House, raising eyebrows among critics who say he can't be expected to be neutral in the task.

More later as I figure out what's really going on here.

"Diaper Dave" Vitter Says Obama Adopts Judicial Standards of a "Dictatorship"

| Thu Feb. 12, 2009 5:11 PM EST
Republican Louisiana Sen. David Vitter made a trip to DC's Chinatown on Thursday to nibble on kung pao chicken and rally the conservative troops. Addressing the DC lawyers chapter of the conservative legal group, the Federalist Society, Vitter got right down to red meat. After quoting comments from President Obama suggesting that he'd like his judicial nominees to be able to empathize with the downtrodden, Vitter declared that demanding empathy in a judge was something you'd expect in a "dictatorship." How empathy equates with repressive rule, Vitter didn't really explain, except to say that it had little to do with ensuring checks and balances on an imperial government. (Vitter also claimed--and it was hard to tell if he was joking or not--that he routinely walks from the Senate to the House of Representatives to use the apparently more populist House water fountains, instead of imbibing the stuff the Senate is drinking these days.)

But Vitter didn't really come to Tony Cheng's to discuss judges or the Constitution. His talk, entitled "Defending Conservative Principles in the Senate," was mostly a complaint about the economic stimulus bill that his Senate colleagues were poised to pass without his vote or the votes of most Republicans. According to Vitter, his party was having a come-to-Jesus moment over the stimulus package, which had provided the minority party an opportunity to rediscover its mantra of smaller government and lower taxes.

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Song of the Day: RH+ - "Curb"

| Thu Feb. 12, 2009 4:54 PM EST
Hmm, are the folks at Nacional Records sure they didn't mix up their publicity photos? From what I see here, the members of RH+ look like three slabs of rough-and-tumble, smokin'-hot Chilean beef, complete with elaborate facial hair and tough-guy shades. But the single "Curb" from the Santiago combo's debut album Quintana Roo has the delicate, dream-pop style of Scandinavians Royksopp, lead by the high, clear vocals of what sounds like an innocent young lady. Did she not show up for the photo shoot, or is one of these hunks actually a castrato? Okay, okay, joking aside, there's actually a propulsive solidity to this track, and while I'm not sure if there are any strains of traditional Chilean sounds here, "Curb" does remind me of classic Brazilian psychedelia, with its hypnotic combination of silky vocals and buzzy melodies. Listen to it by pressing the "play" button on the thingy below or grab an mp3 over at the RCRD LBL site.
[Update: Okay, their label Nacional assures me that in fact, RH+ is a five piece with a female singer and one other guy, and that RCRD LBL just cut them out of the publicity shot for some reason. Well, it made for a funny post, at least...]

LOST: Please Tell Me They're Not in Purgatory

| Thu Feb. 12, 2009 2:54 PM EST
The title of last night's LOST episode should have been a giveaway: "This Place is Death." But I'm hoping to Hurley the island-bound Losties are not in limbo, or in purgatory, or just plain old dead because the show's creators promised they wouldn't be.

That sinking feeling aside, some really interesting information is helping progressing the series toward a (hopefully) satisfying conclusion. We now know the smoke monster used to guard a temple inscribed with Egyptian hieroglyphs, the same glyphs seen when Desmond's hatch computer was allowed to time out. The Egyptian symbols, together with Charlotte's Tunisian Dharma Initiative research, and the slave ship the Black Rock, gives this season a bit of an African flavor, but it's hard to tell what the link is between Africa and the island.

New Torture Memos Outline Black Sites, Ghost Prisoners

| Thu Feb. 12, 2009 2:03 PM EST

Three human rights groups released more than a thousand pages of Department of Defense and CIA documents Thursday that outline how closely the two agencies worked in rendering terrorism suspects to black sites, keeping detainees' identities secret, and tempering bad publicity for inmate treatment at Guántanamo Bay.

Most of the documents—obtained after Amnesty International, the Center for Constitutional Rights, and the Center for Human Rights and Global Justice sued under the Freedom of Information Act—simply contain news articles, but the Center for Constitutional Rights scoured the files and found three significant disclosures from the DoD.

New York Attorney General Cuomo Slams Merrill Lynch

| Thu Feb. 12, 2009 1:39 PM EST

Andrew Cuomo, New York's Attorney General, is most displeased. Cuomo is investigating why Merrill Lynch handed out $3.6 billion in bonuses before releasing its horrendous results for the fourth quarter of 2008, in which it lost $15.31 billion. After doling out the bonuses, Merrill Lynch was subsequently bought by Bank of America (with $20 billion of taxpayer help), and Bank of America was later the beneficiary of a $25 billion government bailout. The bonuses were also very unequally distributed—while 39,000 employees received some bonus money, 700 employees were made millionaires by the bonus pool, and the top 149 bonus recipients alone received $858 million. The New York AG's office wants to know why Merrill Lynch saw fit to reward so few of its employees so extravagantly for such massive failure. But Cuomo's not stopping at a state-level investigation—he's also calling in the feds. In a letter to Rep. Barney Frank (D-Mass.), the chair of the House Financial Services Committee, Cuomo dishes the dirt on his ongoing investigation of Merrill:

On October 29, 2008, we asked Merrill Lynch to detail, among other things, their plans for executive bonuses for 2008, including the size of the bonus pool and the criteria they planned to use in determining what, if any, bonuses were appropriate for their top executives... Merrill did not provide my Office with any details as to the bonus pool, claiming that such details had not been determined.
Rather, in a surprising fit of corporate irresponsibility, it appears that, instead of disclosing their bonus plans in a transparent way as requested by my Office, Merrill Lynch secretly moved up the planned date to allocate bonuses and then richly rewarded their failed executives. Merrill Lynch had never before awarded bonuses at such an early date and this timetable allowed Merrill to dole out huge bonuses ahead of their awful fourth quarter earnings announcement and before the planned takeover of Merrill by Bank of America. [emphasis added]

The sheer Rod-Blagojevich-esque audacity of Merrill's move is impressive. Merrill knew it was being watched by Cuomo, who had asked them to behave reasonably and transparently with their bonuses. One would think that knowledge would inspire some sort of caution. But no—instead, Merrill just went ahead and did what it wanted to anyway, likely figuring that politicians wouldn't have the stomach to take back bonuses that had already been handed out. (Better to beg forgiveness than to ask permission.) That may be the case, but one of Cuomo's accusations seems to make government punishment a bit more likely. "One disturbing question that must be answered," Cuomo writes, "is whether Merrill Lynch and Bank of America timed the bonuses in such a way as to force taxpayers to pay for them through the deal funding." Sure, politicians are reluctant make people give up already-awarded bonuses. But if the bonuses essentially came from taxpayer money, public outrage might force Congress (or Cuomo) to make Merrill's employees give the money back.