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Getting it Right

| Fri Jan. 2, 2009 2:32 PM EST

GETTING IT RIGHT....How many people figured out that the U.S. financial system was headed for disaster before the disaster actually struck? Just for starters, I think that if you want credit for "getting it right":

  • You need to have really gotten it right. For example, predicting a dollar crash due to our expanding trade deficit with China doesn't count, since that's not what actually happened.

  • You need to have figured this out in 2004, not 2007. By 2007 the storm clouds were overhead, the Fed was in full panic mode, and it was too late to do anything useful.

  • You need to have a decent track record, not merely one of being a chronic doomsayer. After all, if you're always predicting disaster, you'll always be right eventually.

That said, the Wall Street Journal profiles "The Doomsayers Who Got It Right" today, and given my bullet points above, I have to say that fund manager Bob Rodriguez seems pretty spectacularly prescient:

He saw storm clouds gathering in 2005 when newly minted pools of supposedly high-quality "Alt-A" mortgages began acting oddly....He quickly dumped the holdings, reckoning that by the time he figured out what was actually going on, whatever disaster the odd behavior foreshadowed would have already occurred.

....He stopped buying Fannie Mae and Freddie Mac debt and took giant insurer American International Group Inc. off the list of approved commercial-paper investments. He refused to invest in financial-services companies because of what he saw as "a pandemic collapse" in the rules by which lenders approved mortgages.

As of 2004, he began moving his fund to more than 45% cash, even as one big shareholder yanked out $300 million because of his bearish stance.

Not bad! You can read more about Rodriguez from Money magazine, who called him "the best fund manager of our time." So what's he concerned about now?

Looking forward, he, too, sees "a massive bubble in Treasurys" forming. "Quite frankly, we do not trust government," he says, as the U.S. government adds more debt to pay for economic-revival measures. He's not buying Treasurys because "We will not lend long-term money to a borrower that capriciously erodes its balance sheet."

His real concern, he recently told shareholders, isn't the next two years, "but period three through 10." In an interview, he says it will be punctuated by inflation, and he expects real GDP growth of no more than 2% a year, possibly less.

I too am concerned about years three through ten. As Barack Obama prepares his stimulus plan for years one and two, I hope his economic boffins also explain what they're doing now to prepare for what they think the economy will be like in 2010. That dollar collapse might still come someday, after all.

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Drudge, NY Post Have Field Day with Kathy Griffin's CNN "Trash Talk"

| Fri Jan. 2, 2009 2:23 PM EST

Kathy Griffin CNNComedian Kathy Griffin is making news for uttering an expletive during CNN's New Year's Eve broadcast, which the D-lister hosted with Anderson Cooper. The network's enemies are having a field day. Here's how the New York Post described the moment:

Comedienne Kathy Griffin may be doomed to life on CNN's S-list after answering a heckler with a shrieking, vulgar tirade during the network's live New Year's Eve broadcast.
"Screw you," she told the heckler. "Why don't you get a job, buddy? You know what? I don't go to your job and knock the d- - - out of your mouth."
The raunchy exchange, which occurred well after the ball dropped at midnight, was received with guffaws by the camera crew.

That's because everyone at CNN is a godless, liberal heathen, right, everybody? Actually, if you watch the clip (which you can do after the jump) it's clear she was responding sarcastically to good-natured ribbing, not a "heckler," and I'd say the "shrieking" part is debatable, too. Either way, we watched CNN's coverage New Year's Eve before heading out for DJ gigs, and honestly, the almost-always-hilarious Griffin was the best thing about that sloppy, nonsensical broadcast—can someone teach them how to avoid the talk-over-each other problem during live remotes? Also amusing: watching both Griffin and drag queen Sushi (live from Key West!) hold themselves back from making gay jokes about Cooper. Do you think they sign a contract?

Alberto Gonzales: Pathetic? Deluded? Crazy?

| Fri Jan. 2, 2009 2:03 PM EST

Short fiction writer Alberto Gonzales is confused, asking in a recent interview, "What is it that I did that is so fundamentally wrong, that deserves this kind of response to my service?"

If Gonzales is trying this unctuous nonsense in an attempt at image-rehabilitation, he needs to hire a professional PR company. If he's asking this question in earnest, he is demonstrably insane.

As Think Progress points out, the answer to Gonzales' question includes: corrupting the DOJ by insiting on ideological purity tests in hiring; firing US Attorneys that refused to toe the Bush Administration line; signing off on torture as White House Counsel; trying to strong-arm a hospitalized Attorney General into authorizing domestic spying despite widespread opposition within the federal government; lying about said episode and the domestic spying program in general; and lying about pre-war intelligence. Gonzales also stonewalled Congress when they sought answers on a number of these subjects and had his aides do the same.

So the question is, was Gonzales this pathetic/insane when he joined the Bush Administration, or was there something about the experience that affected his brain? Did he do so much mental work to convince himself that what he was doing was acceptable, even needed, that today he simply has no ability to engage with reality? Did he go so far down the rabbit hole that he has no ability to get out?

Watch Your Tongue

| Fri Jan. 2, 2009 1:54 PM EST

WATCH YOUR TONGUE....The Washington Post reports that a Muslim family was tossed off a flight to Orlando yesterday. AirTran spokesman Tad Hutcheson explains:

"At the end of the day, people got on and made comments they shouldn't have made on the airplane, and other people heard them," Hutcheson said. "Other people heard them, misconstrued them. It just so happened these people were of Muslim faith and appearance. It escalated, it got out of hand and everyone took precautions."

"It just so happened" indeed. But it gets even worse. Apparently after making these comments that "shouldn't" be made on an airplane and freaking out some high-strung passengers, the flight was delayed:

As a result of that report, federal officials made the decision to order all 104 passengers from the plane and re-screen them and their luggage before allowing the flight to take off for Orlando — two hours late and without the nine passengers.

So everybody was thoroughly rescreened, luggage was rechecked, and presumably it turned out that the Muslim family didn't have so much as a nail file on them. But they were kicked off the flight anyway. And TSA's reaction? Apparently they think the system worked exactly the way it was supposed to.

Welcome to 2009.

*Quote of the Day - 01.02.09

| Fri Jan. 2, 2009 1:30 PM EST

QUOTE OF THE DAY....From Jon Chait, commenting on — well, just click the link to see what he's commenting on:

That's the problem with Marxists. They're everywhere you don't want them to be and nowhere you really need them.

Noted. Of course, I'd be churlish too if I were stuck being a Michigan fan this year, so this should all be taken with a grain of salt.

Conservatives Angry Because Obama's Team Is Too Far Left? Not Really

| Fri Jan. 2, 2009 1:19 PM EST

Hmm. New story out today in the Washington Post about how conservatives are supposedly worried that Obama's appointees and transition team are too far to the left. That's a wild departure from all previous grumbling, which came from progressives worried Obama's people are too far to the right.

You could easily take this as an example of two grand truths: (1) Presidents, especially new presidents, just can't win. Washington simply has too many people with too many different agendas. Every time a new man or woman takes the White House, his or her moves are bound to disappoint somebody. (2) If you look hard enough when you are writing a newspaper article, you can always find someone willing to complain. This is true on almost any topic.

But before we use this as a teachable moment, let's take a closer look at the Post article. Only one conservative is on the record as complaining about Obama's confidantes being too liberal, a man named Roger Clegg. The executive director of the Northwest Mining Association does pop up briefly at the end to whine about a former Clinton staffer who is on the transition team advising Obama on Interior, but that same mining official is said to be "comforted" by the fact that Sen. Ken Salazar, a Democrat from Colorado with friends in the oil and mining industries, was picked by Obama to head Interior. Let's not look a gift horse in the mouth here, folks. You've got the big fish on your side and you're complaining about the little fish? (Two animal metaphors in two sentences = bonus points.)

The article mentions just four people close to Obama who raise the ire of conservatives (or would possibly draw the ire of conservatives, if anyone had bothered to go on the record). All four are advising the transition team; not one has been appointed to anything. No complaints are made by anyone, named or unnamed, about Obama's actual appointees. A Harvard professor is cited in the article as believing "an ultra-left takeover by Obama advisers and nominees are manufactured hyperbole." That seems about right. And this Post article fits that bill.

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To the Moon!

| Fri Jan. 2, 2009 1:17 PM EST

TO THE MOON!....Bloomberg reports that the space race may be heating back up. Only the players have changed:

President-elect Barack Obama will probably tear down long-standing barriers between the U.S.'s civilian and military space programs to speed up a mission to the moon amid the prospect of a new space race with China.

....The potential change comes as Pentagon concerns are rising over China's space ambitions because of what is perceived as an eventual threat to U.S. defense satellites, the lofty battlefield eyes of the military.

I'm not sure which is worse: that this suggests Obama is buying into an arms race with China, or that Obama is buying into the zillion-dollar manned moon landing boondoggle. If this report is true, I guess the only question left is which strained excuse he'll use for continuing the moon program. Helium-3 mining? Staging site for mission to Mars? The Chinese will throw rocks at us if we let them colonize the place? Or will he use the excuse du jour: it's great stimulus for our broken economy? Feh.

Study: Great Barrier Reef Sees Worst Growth Rate in 400 Years

| Fri Jan. 2, 2009 1:11 PM EST

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Scientists from the Australian Institute of Marine Science report that the Great Barrier Reef, the world's largest reef system (visible from space), is facing historic peril. Not that this is news. Mother Jones has reported extensively on the subject. But new research published in the journal Science includes the largest study to date about environmental damage to Australia's reefs.

The reef is experiencing is slowest growth rate in nearly 400 years, and gone unchecked, could lead to zero growth by 2050, says Glenn De'ath, the study's co-author. "When you disturb an ecosystem in this way, you get a cascading effect. You then get a chain reaction -- the fish habitat is lost."

What's to blame? The usual suspect: global warming. Rising sea temperatures are causing coral bleaching, in which corals release the algae which nourish them. The effect is grimly obvious underwater, where previously vibrantly colored reefs come appear like piles of bones. Without algae, corals eventually die. Says De'ath, "We may have seriously underestimated the rate of climate change and this should compel us to drastic steps to decarbonise Australian and global economic systems."


Photo used under a Creative Commons license from Leonard Low.

Make 'Em Sweat

| Fri Jan. 2, 2009 12:13 PM EST

MAKE 'EM SWEAT....The Washington Post reports that Barack Obama's upcoming inauguration has struck terror into the hearts of corporate wrongdoers:

The Justice Department has reached more than a dozen business-related settlements since the presidential election, with more in the pipeline for January, prompting lawyers and interest groups to assert that companies are seeking more favorable terms before the new administration arrives.

....A review of 15 agreements involving corporations since early November suggests that much of the alleged misconduct dates back five years or more, provoking questions about why the cases took so long to mature and why resolutions are coming with only weeks left in President Bush's term.

"What they obviously are trying to do is take advantage of an administration that's deemed to be more friendly to business," said Cono R. Namorato, a Washington defense lawyer who ran the Internal Revenue Service's office of professional responsibility earlier in the Bush administration. "I know of no tax reason for doing it now."

This is good news. It means that real corporations, with real money at stake, think that Obama's unity talk isn't worth banking on. When push comes to shove, they really do think he's going to drive a harder bargain than the Bush administration when it comes to dealing with charges of corruption, pollution, and overcharging.

Good.

Fight On

| Thu Jan. 1, 2009 3:34 PM EST

FIGHT ON....Today is for football, not blogging, so how about some football blogging to combine the two? Consider this an open thread.

I'll be cheering for USC in the Rose Bowl, of course, and for those of you who wonder why I'm a Trojan fan even though I never attended school there, the answer is on the right. A couple of months ago my mother dropped off a few baby pages from one of her scrapbooks, and my USC junior alumni card was right there. So as you can see, I've been a fan literally my entire life. As for the game today, Penn State has a decent team but I'll take Pete Carroll's crew by three touchdowns, wrapping up a 5-0 bowl record for the Pac-10. Not a bad finish for a conference that otherwise had such a dismal season.

UPDATE: Well, it would have been three touchdowns if USC hadn't played like a bunch of guys afraid to beat the point spread in the second half. But I'll take it anyway. Congratulations, Trojans!