Thursday, March 5, 2009

Al Versus Norm, Part 443

The Norm Coleman Mulligan Express gains steam.

I've been picking up word that Republicans on the Hill genuinely think Norm Coleman is going to get the results of the November elections tossed and have a revote. And if not genuinely, that they've all convinced themselves to say they believe it. As I told one friend who passed word on to me about this, the Coleman people must be smoking some powerful weed. Because nothing that has happened in the trial gives the remotest indication that anything like that will happen. Indeed, there's simply no basis in Minnesota law for throwing out the results of an election. To be clear, I think it's highly unlikely that the Court will come down with a judgment that will make it possible to Coleman to reclaim his seat. There's just no indication of that. But while that's very unlikely, actually throwing out the results entirely isn't even on the menu of options the judges have before them.

Now, here's one thing to consider. Are the Republicans trying to lay the groundwork for filibustering any effort to seat Franken, even after the state of Minnesota tells Norm it's over and he has to go home? Keep an eye out for it.

Josh is dead on the money. The GOP will do everything they can to assure Al Franken is never seated, but I'll go even further: the play here is filibustering the motion to seat him until the matter can go before Roberts/Scalia/Thomas/Alito and pick up that fifth opinion to force some sort of national standard on voting supression that favors the GOP. The goal is to make sure that the votes thrown out or counted in the future favor Republican voters.

That's the real issue here. The GOP is going for broke here, and they know they only way to get away with this kind of crap in the Obama era is to jam it through the Supremes. The GOP smells an opening here, and Obama and the Democrats need to shut this noise down immediately.

Then And Now

NRO's Peter Wehner says because Dubya had slightly better Gallup numbers after six weeks, it means Obama's not really popular now. Of course, Bush had the advantage of 4,000 points on the Dow too, but Obama's not doing too bad for himself, considering the mess Bush left.

Obama Is Dumber Than Bush

No, seriously. That's the argument and Politico's latest moronic excuse for a hit job on the Already Failed Obama Presidency: Obama uses teleprompters, ergo Bush (who famously made tons of gaffes speaking off the cuff) is confirmed as far more intelligent.
“It’s just something presidents haven’t done,” said Martha Joynt Kumar, a presidential historian who has held court in the White House since December 1975. “It’s jarring to the eye. In a way, it stands in the middle between the audience and the president because his eye is on the teleprompter.”

Just how much of a crutch the teleprompter has become for Obama was on sharp display during his latest commerce secretary announcement. The president spoke from a teleprompter in the ornate Indian Treaty Room for a few minutes. Then Gov. Gary Locke stepped to the podium and pulled out a piece of paper for reference.

The president’s teleprompter also elicited some uncomfortable laughter after he announced Kansas Gov. Kathleen Sebelius as his choice for Health and Human Services secretary. “Kathy,” Obama said, turning the podium over to Sebelius, who waited at the microphone for an awkward few seconds while the teleprompters were lowered to the floor and the television cameras rolled.

Obama has relied on a teleprompter through even the shortest announcements and when repeating the same lines on his economic stimulus plan that he's been saying for months — whereas past presidents have mostly worked off of notes on the podium except during major speeches, such as the State of the Union.
The Wingnuts unleash their Pavlovian response, immune to the irony of THAT, and conveniently forget Obama prevailing in the debates where you know, he didn't...have...a teleprompter.

But Obama's an empty suit, unlike Bush.

Oh My Lord This Stock Market Is Awful, You Have To Try It

So, I remember more than one occasion when Zandarmom would get something out of the fridge that had been in there a while, try it herself, declare it to be spoiled, and then make Zandardad try it.

CNBC is apparently trying to do the same thing with the stock market.
In a market more preoccupied with government policy than traditional indicators, employment is the one metric that still draws investor attention.

That's why Friday's jobs number, whether it surprises to the upside or downside, could either intensify the current market slump or perhaps indicate better things to come.

"That number's been one the market has been focusing on each time," says Richard Sparks, senior analyst at Schaeffer's Investment Research in Cincinnati. "The worries over the economy and how bad it's going to get are a real big concern. The jobs number is one that people are going to be looking at to see if things are as bad as we think they are."

In the best-case scenario, a surprise to the downside could still work out well for the market.

Oh that makes sense! Because of course losing more than 700,000 jobs in a month means there's no way the stock market could possibly fall any further! BUY BUY BUY BUY BUY BUY!

If you honestly believe that, you deserve to lose your money in the market. Seriously.

Why Don't We Steele Away

The first public calls for RNC chair Michael Steele's resignation are coming in from the GOP rank and file.
Michael Steele should resign as Republican National Committee (RNC) chairman, according to a committee member from North Carolina.

In an e-mail to fellow RNC members obtained by The Hill, Dr. Ada Fisher, North Carolina's national committeewoman, said Steele is "eroding confidence" in the GOP and that members of his transition team should encourage him to step aside. Fisher added Steele's personal e-mail address to the e-mail.

"I don't want to hear anymore [sic] language trying to be cool about the bling in the stimulus package or appealing to D.L. Hughley and blacks in a way that isn't going to win us any votes and makes us frankly appear to many blacks as quite foolish," Fisher wrote.

Fisher, who is one of three black members of the national committee, backed South Carolina GOP Chairman Katon Dawson, whom Steele edged out in the final round of voting to win the chairmanship in late January. She has voiced repeated opposition to Steele, sending dozens of e-mails to committee members even after Steele won election slamming him for any number of chips that have fallen awry.

Fisher’s call for Steele’s resignation comes amid growing frustration in the GOP that the new chairman’s repeated gaffes are hurting the party.

Pop Goes The Weasels

The question is not "Will there be yet another bubble to pop and strangle the economy" but what that bubble is. The smart money is on consumer credit card debt detonating, but the even smarter money is on commercial real estate going straight to hell in 2009.
Investment in multimerchandise shopping structures (malls) decreased in Q4 2008 to .21% of GDP, after peaking in Q4 2007 at .25% of GDP. This is a pretty steep decline, but now it appears that new mall construction is about to almost stop.

As David Simon, Chief Executive Officer or Simon Property Group, the largest U.S. shopping mall owner said a few weeks ago:
"The new development business is dead for a decade. Maybe it’s eight years. Maybe it’s not completely dead. Maybe I’m over-dramatizing it for effect."
Kaboom. This is what's going to finish off banks in weakened parts of the country like the Rust Belt, California, Nevada, and Florida. Malls, hotels, and office construction is going to evaporate, taking the rest of the construction business with it, and with the entire retail sector falling apart, empty storefronts, vacant offices and unused hotel rooms will only get worse.

Banks who are landlords on this type of property will find a whole other pile of assets just decreased massively in value. As the tenants fold, the banks will have to foreclose on even more property, driving values down more, yadda yadda. The same death spiral that is killing residential real estate is now just really starting in commercial real estate, meaning we have whole new level of disaster coming.

Pop goes the weasels.


Remember Glenn Beck's Insane-O-Vision from a couple weeks back? (In the Grim Darkness of the Near Future there is only Stupid?)

Stephen Colbert just cold murdered his ass. WOLVEREEEEEEEENS!

Another Milepost On The Road To Oblivion

One in 8 US households are behind on their mortgages.
About one in every eight U.S. households, a record share, ended 2008 behind on their mortgage payments or in the foreclosure process as job losses intensified a housing crisis spawned by lax lending practices, the Mortgage Bankers Association said on Thursday.

With unemployment at a 16-1/2-year high and rising, more borrowers will be late paying or fall into foreclosure this year, said the group's chief economist Jay Brinkmann.

"While California, Florida, Nevada, Arizona and Michigan continue to dominate the delinquency numbers, some of the sharpest increases we saw last quarter in loans 90 days or more delinquent were in Louisiana, New York, Georgia, Texas and Mississippi, signs of the spreading impact of the recession," he said.

Home prices still have a ways to fall. This number will only get worse as they do. Dow off 200 plus at noon, Citigroup officially fell under a buck.

If It's Thursday...

...for once it's not a record new unemployed number! Only 639,000 people lost their jobs in America last week.

Tomorrow's the February job loss numbers, however. Atrios is taking the over on 650K, I'm feeling ballsy and gonna say 720K.

Delusionary Fiduciary Larry

Larry Kudlow's out to lunch, screaming that Obama's "welfare-izing" the housing market and that the world is "ignoring signs of the imminent recovery".
As Team Obama readies its nearly $300 billion mortgage bailout — a plan that at best will have only minor positive impact, and at worst will welfare-ize the housing sector even more — there are recovery indicators out there that are being ignored by the pessimistic administration and its media allies.

Consumer incomes, after tax and adjusted for inflation, have increased for five straight months, which is largely from the tax-cut effect of plunging energy prices.

Housing affordability is at a record high. Purchasing-manager surveys are now bottoming out. Fear-based credit spreads continue to decline. The money supply is expanding rapidly. And commodity prices are bottoming.

Well, let's take a look at Larry's indicators.

First, consumer incomes did go up in January, but actually went down in the preceding 4 months when adjusted for inflation. Disposable personal income did stabilize in January and increased somewhat. But the problem is wages are still stagnant and have been for several years. Adjusted for taxation and inflation, wages have gone down. However, the drop in gasoline prices for the consumer from July to January has helped. But now that energy prices have stabilized, that effect is largely over. Consumers have adjusted to the new energy prices, and because many energy consumers like airlines are locked into those high prices, consumers are still paying higher prices and not passing savings on to consumers.

Second, Kudlow is right when he says housing affordability is in fact at a record high. The index hit 158.8% in December 2008, meaning the median income family has 158.8% of the income needed to purchase a median home on a mortgage. But (and here's the big but) that assumes that median family has 20% down up front and does not pay more than 25% of their income on the mortgage. Right now, both of those are huge, huge assumptions. 20% down on even a median home in the US right now is still roughly $36,000. Many Americans can't afford that, we've become a nation hocked up to our eyebrows in debt. That average American family is carrying $8,700 in credit card debt, in fact. That 20% down is not an option. The barrier to affording a home is not the price of the home, but the up front costs of the tight credit to get a mortgage loan.

Third, the ISM's purchasing manager survey has stabilized, but it's still at 35.8 from 35.6 the month before...anything below 50 still represents contraction in the manufacturing sector. The sector's only dying at a slightly lower rate. Recovery would be above 50.

Fourth, credit-spreads are greatly improved over last year, but they are creeping back up, and lower LIBOR rates still have yet to improve lending to consumers.

Fifth, the massive increase in the money supply (it has nearly doubled over the last several years) still has yet to unclog the credit crunch. In fact, those dollars are disappearing into the void of Asian economies as they scramble to get out of the Euro. The upshot is while the dollar is getting stronger, it's killing US exports, and eventually that massive oversupply of dollars is going to lead to a massive inflation spike. It also means the collapse of the Euro, which brings about a host of new problems.

Sixth, commodity prices have bottomed out? Are you serious? Gold hit $1000 briefly last week. It's down to $915 or so again, but at any point gold is going to explode. But Kudlow has one final point:

And then there’s one indicator that never gets enough credit — the shape of the Treasury yield curve.

When short-term rates moved above long-term rates back in 2006, Ben Bernanke rushed to tell us that it would not signal a recession since interest rates were too low and historical precedence would not apply. By the middle of 2006, this curve had turned decisively negative, and roughly a year and a half later the economy headed into recession.

Which is also true. The opposite however isn't true, and with interest rates now in the toilet, the veracity of a normal curve meaning an expanding market just isn't the case in an economy like this. Kudlow's smoking something...and where was he on the inverted treasury curve in 2006? Oh yeah, he was full of shit then...
As I've discussed on CNBC's "Kudlow & Co.," the strong, across-the-board, five-month rally in stocks cannot possibly be predicting a recession. While the stock market can sometimes emit false positives on recessions, rarely does it give off false negatives. In fact, I think it is predicting a "Goldilocks" soft-landing for the economy.
...and he's full of shit now. Go away, Larry. Bonus Larry Stupidity:
A question for Krugman: When in the history of humankind have we had a recession when business profits are rising by 30 percent?
When they're lying about their assets, Larry.


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