Earth to Santelli: Shut the hell up

God, but this guy is a tin-eared demagogue.

CJR's Ryan Chittum takes Santelli to task for this latest attempt at self-inflation: appearing with G. Gordon Liddy to claim the White House has threatened him.

Santelli's a bonehead - and while I'll refer you to Chittum's takedown of his recent stupidity, I'd just like to revisit the original bag of stupid that started this mess:

Why don’t you put up a website to have people vote on the Internet as a referendum to see if we really want to subsidize the loser’s mortgages...?

How many of you want to pay for your neighbors mortgage that hasan extra bathroom and can't pay their bills? raise their hands!
...President Obama, are you listening?”

Now with a little typographic judo - we can redirect this back at Santelli:

Why don’t you put up a website to have people vote on the Internet as a referendum to see if we really want to subsidize the loser’s mortgages Wall Street's stupidity...?

How many of you want to pay for your neighbors mortgage that has an extra bathroom idiot bankers that have million-dollar bathrooms and can't pay their bills? raise their hands!

...President Obama Mr. Santelli, are you listening?”

I'd love to see Santelli's answer.

Common Stock vs Preferred Stock

CitiGroup wants the gov't to convert its preferred stock to common stock

ProPublica's saying that the Treasury Department has announced they will allow banks to convert the existing government shares into common stock.

What the hell is up with common stock? and why the sudden movement away from preferred stock?

Thankfully, The Baseline Scenario is here to answer that question.

Spoiler: the government is being stupid.

Corn IS trying to kill us...

Although it seems that Snapple is trying to fight back:

Snapple replaces corn syrup with real sugar


The old ingredient list for Lemon Snapple Iced Tea: “water, high fructose corn syrup, citric acid, tea, natural flavors.” Calories: 200. The new ingredient list: “filtered water, sugar, citric acid, tea, natural flavors.” Calories: 160.

(H/t Cool blog)

A bad year for the anti-vaccine movement

...and thank God.

David Gorski is a surgical oncologist, and also a well-known though bepseudonymed blogger for Science Blogs. His anti-antivaccination stance is legendary, for good reason: he is incredibly well-spoken and his posts railing against the pro-measles (haha) crowd routinely eviscerates them.

But none of his posts has ever done so in such a remarkably thorough fashion as in this lengthy post in which he destroys the movement from top to bottom.

 (H/t Bad Astronomy)

The strength of the post, in my opinion - is to hold the heroes of the anti-vaccine movement up to the light and watch them wither.

I have no problem with scientific questions about the safety of vaccines - but this "I know in my heart" nonsense has got to stop. Make with the science, or shut the hell up.

AIG OMFG II

Here we go again,

AIG, already propped up to the tune of 150 billion dollars, is passing the hat again.

That'd be three bailouts for AIG, three for CitiGroup (assuming the latest common stock nonsense goes through). Poor old BoA only has two.

Who will step forward to claim the title of biggest corporate welfare queen??

(H/t to TPM)

By the way, if you have any curiosity about the "Swedish model" of bank nationalization everyone keeps talking about, you could do worse than to listen to Planet Money's summary.

They didn't nationalize all the banks, they nationalized two. The first bank because it was 80% government-owned when it became insolvent - the second because the bankers who owned it gave the keys to the government and essentially walked off.

Interesting stuff.

At least we're not Mexico

Yes, the gov'ts talking about owning more CitiGroup, and the banks are zombified, but look on the bright side - we're not in Monterrey

That week in Monterrey, newspapers reported, Mexico clocked 167 drug-related murders. When I lived there, they didn’t have to measure murder by the week. There were only about a thousand drug-related killings annually. The Mexico I returned to in 2008 would end that year with a body count of more than 5,300 dead. That’s almost double the death toll from the year before—and more than all the U.S. troops killed in Iraq since that war began.

But it wasn’t just the amount of killing that shocked me. When I lived in Mexico, the occasional gang member would turn up executed, maybe with duct-taped hands, rolled in a carpet, and dropped in an alley. But Mexico’s newspapers itemized a different kind of slaughter last August: Twenty-four of the week’s 167 dead were cops, 21 were decapitated, and 30 showed signs of torture. Campesinos found a pile of 12 more headless bodies in the Yucatán. Four more decapitated corpses were found in Tijuana, the same city where barrels of acid containing human remains were later placed in front of a seafood restaurant. A couple of weeks later, someone threw two hand grenades into an Independence Day celebration in Morelia, killing eight and injuring dozens more.

Yikes.

(H/t Emptywheel)

Paying for the military, twice

Thomas Barnett giving a speech in 2005 about the culture of war and the future of the military.

It is alternately funny and terrifying.

Here's a sample bit:

We use the doctrine of imminent threat-

We haven't faced an imminent threat since the Cuban missile crisis, 1962, but we whip ourselves into a frenzy because we're a democracy and that's what it takes.

If that doesn't work, we shout out "he's got a gun!" just as we rush in. Then we look over the body and find an old cigarette lighter and say "Well Jesus, it was dark"

His opinion on the Transportation Safety Administration:

TSA? Thousands Standing Around

He wails on the most sacred cows with a curiously Machiavellian outlook. Look, you want this? This is what needs to happen...

The net result of this would be a dramatic shift to a new force that is in charge of winning the peace - after a smaller version of our current military is through kicking butt.

Nary a whisper of nationalization

Planet Money's Adam Davidson meets with a non-source and asks what he can leak about the nationalization issue.

The non-source's answer: bupkis.

The government official told me that if word leaked out in any way that the government was even considering nationalization, it could spook the stock markets so badly that all those troubled banks would, instantly, become dead banks.

Which makes sense.

So, if there were reports that a certain bank's future was being discussed by the Treasury Department, there would instantly be nothing to discuss.

The bank would fail, and the Treasury would have to move - simply because they discussed it.

Well, here's hoping those discussions are happening anyway.

(H/t Cool blog)

We have not found Bin Laden

I don't know who to be more annoyed with - The professors who published the paper Finding Bin Laden - or the media synchophants who ran to them like rabid hyenas to a dead cow.

One of the most important political questions of our time is: Where is Osama bin Laden? We use biogeographic theories associated with the distribution of life and extinction (distance-decay theory, island biogeography theory, and life history characteristics) and remote sensing data (Landsat ETM+, Shuttle Radar Topography Mission, Defense Meteorological Satellite, QuickBird) over three spatial scales (global, regional, local) to identify where bin Laden is most probably currently located. We believe that our work involves the first scientific approach to establishing his current location. The methods are repeatable and can be updated with new information obtained from the US intelligence community.

Oh fer crying out sideways - is there any limit to the gullibility of the American press? I mean these Professors are on a lark - making a point that their methods are scientific as opposed to humint based studies.

Danger Room lays down a hard dose of reality.

...the geographers' paper suffers from a classic data-crunching problem: garbage in, garbage out. In this paper's case, the trash includes some hoary urban myths about Osama.

Will the editors of America rise up and punish the idiots who brought this story to our attention?

Arrgh!

The nationaliztion question that demands an answer

...is We already own the banks -- shouldn't we run them?

(Via CJR)

…it’s obvious that nationalization of the banks is a done deal. We bought them. We own them.

The only problem is that we’ve failed to exercise our right to control them…

The cash injections alone are almost enough to buy up all of BofA’s outstanding common stock twice over and Citi’s stock three times over. Yet the government has failed to demand any specific performance in return. There have been no sackings of management and no mandate that the money be applied to support loans in credit-strapped sectors, like small and medium-size businesses.

The author, Michael Hilzik, takes everybody to task and just spells out where we're at and what needs to be done.

Here's my favorite bit:

Step One should be dumping current management, he says. The banks' CEOs argue that their executive caste needs to stay put because they know best how to run the place. This is the sort of argument my mother used to characterize as, "I like me, who do you like?"

Even if one agrees that a core of professional management should be left intact, what's the rationale for not firing the boards? Bank directors presided over a disaster in a collective stupor, yet unaccountably continue to hold on to their seats with what George Orwell called "prehensile bottoms."

Pure gold, start to finish.

Prove it

Okay, this made me laugh.

Kathy Lovelace lost her job and was about to lose her house, too. But then she made a seemingly simple request of the bank: Show me the original mortgage paperwork.

And just like that, the foreclosure proceedings came to a standstill.

Lovelace and other homeowners around the country are managing to stave off foreclosure by employing a strategy that goes to the heart of the whole nationwide mess.

During the real estate frenzy of the past decade, mortgages were sold and resold, bundled into securities and peddled to investors. In many cases, the original note signed by the homeowner was lost, stored away in a distant warehouse or destroyed.

Persuading a judge to compel production of hard-to-find or nonexistent documents can, at the very least, delay foreclosure, buying the homeowner some time and turning up the pressure on the lender to renegotiate the mortgage.

"I'm going to hang on for dear life until they can prove to me it belongs to them," said Lovelace, a 50-year-old divorced mother who owns a $200,000 home in Zephyrhills, near Tampa. "I'll try everything I can because it's all I have left."

It shouldn't have - but it did.

Why I love Rachel Maddow

Dr. Maddow had Zbigniew Brzezinski on her show talking about our future in Afghanistan.

Smart question, smarter answer:

Maddow: It seems like the emerging, um I guess the emerging debate about what to do in the whole Afghanistan/Pakistan region - it comes down to this idea of about whether or not the problem can be out-governed instead of out-gunned. Whether this is something the US can be part of a constructive political solution, whether it really is a military issue. When I look at the evidently corrupt government - and, and a goverment of a limited reach of Hamid Karzai - and I look at the government in Pakistan which is only one year old and is bankrupt. It's hard for me to believe that we're, we've got enough- there's enough governance there to really solve this big problem.

Brzezinski: I can't help smiling because you used two words which we like to use when we become uncomfortable with those who are dependent on us - or who are, who are to some extent our allies. If we are uncomfortable with them we begin to say they are corrupt. Or now we're say that the Pakistanis are bankrupt.  What about us? We're close to being bankrupt, and you know Washington and I know Washington. What we have in this city is well-organized, legalized corruption.

Brzezinski was not done - he went on to point out that 160,000 Soviet troops lost in Afghanistan, and that (at first) the US won rapidly using 300 troops because the Afghanis were with us. He was less sanguine about our future prospects:

Brzezinski: We have wasted seven years, pursuing policies which were ill-defined - not seeing any realistic objective - and now we have to re-think this whole engagement very seriously and taking into account Pakistani and European views.

Good stuff.

The best food-safety enforcement tool

...is what we have now.

At least according to the WSJ editorial page (emphasis added)

Since the peanut butter-salmonella scandal was traced to PCA last month, the company and CEO Stewart Parnell have taken a very public path to corporate oblivion. Within weeks of linking the salmonella outbreak to contamination at its facilities, PCA's plants have shut down, its customers have fled, and the company has filed for bankruptcy protection. Civil lawsuits have been filed across the country.

[snip]


Regulators share some of the blame here, since the Washington Post reports they didn't even know the company's Plainview, Texas, plant existed until this outbreak. To hear consumer groups tell it, however, the answer to regulatory failure is -- more regulation! The Center for Science in the Public Interest is among those supporting a bill pushed by Representative Rosa DeLauro that would take food safety away from the Food and Drug Administration to create another, presumably more activist agency.

Other proposals would aim to trace food on every step of its journey of growing, sorting, processing, distributing and mixing on the way to grocery stores and pantries. But it's nuts to think any kind of reasonable inspection regime can make the food supply safer than it already is. Taxpayers can't afford to hire enough inspectors to guarantee the safety of the entire food chain. Meanwhile, such a regime will raise costs for law-abiding companies and consumers.

The best food-safety enforcement tool is the one now being wielded against PCA and Mr. Parnell in the form of corporate self-destruction. Their fate should be chastening to any company inclined to play fast and loose -- and will do more to enforce food safety standards than any army of inspectors.

Tell that to the nine people who died. Or the hundreds of people who got sick while the CDC scrambled to find out how widespread this problem was - or where it orignated.

We may not need an army of inspectors, but an improved audit trail for food products that affect vast swaths of the country would speed any future investigation AND increase the certainty that future offenders will meet the corporate oblivion that the WSJ embraces.

Comrade Greenspan

I can only share in the complete shock of others:

Here's the FT article

Late edit:

It just keeps getting stranger (emphasis mine):

“We should be focusing on what works,” Lindsey Graham, a Republican senator from South Carolina, told the FT. “We cannot keep pouring good money after bad.” He added, “If nationalisation is what works, then we should do it.”

(H/t to CJR, natch)

Gone in 20 seconds

Here's CJR's Ryan Chittum, on a WSJ piece:

The Journal has a superb A1 story today about a foreclosure “rocket docket” in Florida that gives homeowners fifteen or twenty seconds to “present” their cases.

Reporter Michael Corkery (disclosure: a friend and former colleague of mine) traveled down to Fort Myers to find judges there are hearing some thousand foreclosure cases a day in a frantic bid to cut down a backlog.

    Hoping to save her house, Saundra Hill Scott arrived at the county courthouse clutching dog-eared mortgage bills and letters from her lender.

    She need not have bothered. The foreclosure hearing lasted less than 20 seconds, with Judge John Carlin asking her two questions: Are you current on your mortgage and are you living in the home? She answered no and yes and then offered to show him her paperwork.

    “I don’t need to see that. That’s between you and the bank,” he said as he gave Ms. Hill Scott, her husband and three grandchildren 60 days to work out a deal with their lender or vacate their three-bedroom house.

Read the whole thing. 24,000 foreclosures at 20 seconds a pop - that's only three business weeks going flat out.

Nice.

Science as a diversion to the current economy

TED Blog has another fun talk that pokes fun at the current mess, and also discusses some coming science as well.

Juan Enriquez on The Ultimate Reboot:



It's a good time, although I don't know how uplifting his economic stuff is (or accurate) the science bit (about 7 min in) is pretty interesting.

Ack Ack

As in:
 
Ack!

Reuters - U.S. charges Stanford Financial with "massive" fraud
In a complaint filed in federal court in Dallas, the U.S. Securities and Exchange Commission accused the cricket-loving Stanford and two other top executives at Stanford Financial Group of fraudulently selling $8 billion in high-yield certificates of deposit.

and

Ack!

NYT - Adding Up the Government’s Total Bailout Tab

Beyond the $700 billion bailout known as TARP, which has been used to prop up banks and car companies, the government has created an array of other programs to provide support to the struggling financial system. Through Feb. 10, the government has made commitments of nearly $8.8 trillion and spent $2 trillion.
(H/t The Big Picture)

To which I would add...

Ulmp!

Down goes Kansas?

Okay, this is not the end of Kansas, but it's pretty frickin' bad:

(Via Calculated Risk)

Kansas suspends income tax refunds, may miss payroll

Income tax refunds and state employee paychecks could be late after Republican leaders and the Democratic governor clashed Monday over how to solve a cash-flow problem.

Payments to Medicaid providers and schools also could be delayed.

"We are out of cash, in essence," state budget director Duane Goossen said.

Missing payroll is one of those unthinkables - suspending tax refunds doubly so.

And Medicare and schools...?

Let's hope this is just posturing by the political types (who can then get destroyed) - because if this is the real situation - gonna be a lot of pissed people in Kansas.

A bonus by any other name

...is just as undeserved.

Bonuses are bad, therefore according to Morgan Stanley, they've become awards

[Morgan Stanley's] JAMES GORMAN: I’m going to turn to a topic that I suspect is near and dear to everybody’s hearts, which is retention. There will be a retention award. Please do not call it a bonus, it is not a bonus it is an award. The award will be based on ‘08 full year production. Clearly it would have been cheaper to do it off ‘09 but we think it’s the right thing to do and we’ve made that decision.

Not bonuses, awards. Got that?

Let's see - an award based on 2008 production for Morgan Stanley, that would be, what? Well, you lost billions - so I'd say the production was zero. Unless you want to pitch in - I'd say you should be happy to still be working.

As in, You have a job - Bonus!

But what if the payments weren't based on performance?

Is there an angle there?

Call them Retention payments.

(via GOOD blog and Reuters)

Morgan Stanley and Citigroup Inc are preparing to pay $3 billion of retention awards to brokers to keep them from fleeing a brokerage joint venture, the Wall Street Journal said on Friday, citing people familiar with the matter.

I'm picturing banks throwing taxpayer money at employees who are about to jump out of a sinking ship. Doesn't really sound laissez faire to me.

They put the kaibosh on this - we can look forward to yet another new term for giving money to the well-heeled and undeserving.

Late edit: CJR points out a Bloomberg article that hits this topic, hard.

AP vs Simon Johnson on executive pay

Here's the AP:

Congress strengthens executive pay limits

Sen. Christopher Dodd, chairman of the Senate Banking, Housing and Urban Affairs Committee, inserted strict rules into the $787 billion economic stimulus package over the White House's objections. Dodd's limits on bankers' bonuses are significantly more aggressive than those sought by Obama or Geithner in recent days, with much fanfare.

Dodd, D-Conn., said the restrictions — an executive making $1 million a year in salary could receive only $500,000 in bonus money, for example — are necessary if Obama plans to ask Congress for more money to save the financial sector.

[snip]

The stimulus bill, however, sets executive bonus limits on all banks that receive infusions from the government's $700 billion financial rescue fund. The number of executives affected depends on the amount of government assistance they receive. But as a rule, top executives will be prohibited from getting bonuses or incentives except as restricted stock that vests only after bailout funds are repaid and that is no greater than one-third of the executive's annual compensation.

The prohibition would not apply to bonuses that are spelled out in an executive's contract signed before Feb. 11, 2009.

Sounds pretty impressive eh?

Now here's Simon Johnson's take (from his interview with Bill Moyers, via The Big Picture):

SIMON JOHNSON: ...And [Treasury Sec. Tim Geithner] said, “The compensation caps we’ve put in place, for the executives of these banks, are strong.” And at that point I just fell out of my chair. That is not true. That is factually inaccurate, in my opinion.

BILL MOYERS: That?

SIMON JOHNSON: That this $500,000 limit, and deferred stock, is some kind of restriction on what they do? It’s deferred stock, Bill. It’s not restricted. You can get as much stock as you want, as soon as you pay back the government, you can cash out of that. That’s one.

Second, you can, sorry to get technical, but reset the strike price. This is something you and your and your viewers, you need to hear this one out. Just look for these words, okay, follow them through the press. When you get into trouble, when your company goes down, and you have massive amounts of stock options that aren’t worth much anymore, because the stock price has gone down, you say, “Oh, well, we’re going to reset our option prices.”

And, basically, it means that, at the end of the day, these people are going to walk away with tens if not hundreds of millions of dollars paid for by basically, insurance policy that you and I are providing.

Think of it like this, our taxpayer money is ensuring their bonuses. We’re making sure that companies, that banks survive. And eventually, of course, the economy will turn around. Things will get better. The banks will be worth a lot of money. And they will cash out. And we will be paying higher taxes, we and our children, will be paying higher taxes so those people could have those bonuses. That’s not fair. It’s not acceptable. It’s not even good economics.

Late edit: Forgot to link to TBP for the Moyers transcript. Whoops.