Thursday, April 30, 2009

Credit Card Completed, Cramdown Crashes

While the House easily did pass credit card reform legislation, the cramdown bankruptcy foreclosure bill was killed. Not by Republicans, mind you...but by a dozen Democrats.
Max Baucus (D-MT)
Michael Bennet (D-CO)
Robert Byrd (D-WV)
Tom Carper (D-DE)
Byron Dorgan (D-ND)
Tim Johnson (D-SD)
Mary Landrieu (D-LA)
Blanche Lincoln (D-AR)
Ben Nelson (D-NE)
Mark Pryor (D-AR)
Arlen Specter (D-PA)
Jon Tester (D-MT)
And Evan Bayh didn't even have to vote against it. The banksters own enough of the Democratic Party to assure that no real reform will happen -- only trillions more in bailouts until America is broke. Remember, no cramdown means more Americans out of their homes, meaning more damage to all sectors of the economy and a longer recovery.

PS, Thanks Arlen!

Dammit Jim, I'm A Blogger, Not A Senator!

Realizing that he has basically zero chance of winning reelection at this point, Kentucky Republican Sen. Jim Bunning is throwing in the towel in 2010.
Kentucky Sen. Jim Bunning, the most endangered Republican up for reelection in 2010, appears headed for retirement after giving his leading GOP rival the blessing to prepare to run for his seat next year.

Bunning’s retirement would be a huge victory for national Republicans who have grown increasingly nervous that the 77-year-old two-term senator would lose a critical race as the party tries to cling to its diminished minority in the Senate.

On Thursday afternoon, Kentucky GOP Secretary of State Trey Grayson announced that he would form an exploratory committee to run for Bunning’s seat — a move that Kentucky GOP operatives say is a precursor to Bunning's retirement. Grayson's entry will come as a relief to Kentucky Republicans and Senate GOP leaders, who may now have reason to believe their party could hold on to this seat.
And actually I was really, really hoping Jim would stick around. He was terribly unpopular. But this makes it a wide open race, and the fact that as a wide open seat it's still competitive for the Dems in the state that gave McCain his largest victory is really saying something.

The funny part? The last guy to find out Jim Bunning was retiring was apparently Jim Bunning.
Bunning’s spokesman could not be immediately reached for comment, but GOP sources expect Bunning — whose lackluster fundraising and erratic behavior has put his reelection bid in imperil — to eventually make his announcement official.

“He’s either acting in a really odd manner or graciously setting the table for preparing for the strongest candidate to be viable and ready to run as soon as he officially retires,” said a senior GOP aide. "Why would someone anoint the strongest statewide Republican to form a committee to run against him?”

With Bunning in the race, Democrats viewed the Kentucky Senate seat as one of their leading pickup opportunities, given the two-term senator’s tenuous political standing. Two statewide Democratic officials — Attorney General Jack Conway and Daniel Mongiardo — entered the race in the last several months, and led Bunning in many public polls.

A Public Policy Polling survey conducted earlier this month showed Bunning with just a 28 percent approval rating — exceptionally weak for an incumbent who hasn’t been tainted by scandal. The poll showed every prospective Democratic challenger defeating Bunning.
Having to publicly hand the knife to the guy who is cutting your own throat and having to smile while doing it. It's great being a Republican.

Road Warriors

Bob Reich looks at the Chrysler bankruptcy deal.
GM just announced it was laying of 21,000 more of its workers, as a means of assurring the Treasury Department the company is worthy of more bailout money. A Treasury official was quoted as saying approvingly that the goal is a "slimmed-down" GM.

What? Having General Motors or Chrysler cut tens of thousands of jobs in order to be eligible for a government bailout reminds me of "saving" Vietnam by bombing it to smithereens. Aren't we giving these companies billions of taxpayer dollars to save jobs? If not, we're just transferring money from taxpayers to GM and Chrysler bondholders and shareholders.

I agree with those who say the United States needs an auto industry. But there's no point spending tens of billions of taxpayer dollars for an auto industry that's a tiny fragment of what it was before. We could achieve that objective by doing nothing.
Which, if you are paying attention, paying off the shareholders and killing UAW jobs is exactly the point of the exercise.

The only thing the last 100 days has proven is that the UAW has approximately .0001% of the lobbying power among Democrats as the banks do. But hey, it's not like tens of thousands of auto workers and dealers are going to lose their jobs or anything.

After all, tens of thousands of unemployed auto workers will only help the Magical V-Shaped Recovery!

Department Of Sniffles

From HuffPo:
A security aide helping with arrangements during President Barack Obama's recent trip to Mexico became sick with flu-like symptoms and three members of his family later contracted probable swine flu, the White House said Thursday.

The disclosure from press secretary Robert Gibbs comes days after the White House played down risks to the U.S. delegation on the two-day trip that started April 16. Gibbs remained steadfast that the president was never at risk of contracting the flu, which has quickly spread across the globe.

The employee, who was not named by the White House, is an aide to Energy Secretary Steven Chu and helped plan the Mexico trip.

You better not give this flu crap to those little Obama girls, dammit. I mean that.

That Poll Axed Look

Tuesday I remarked that when only 21% of Americans call themselves Republicans in your poll, your party is in deep trouble.

Now a number of polls show that the percentage of Americans identify themselves as Republicans has fallen into the low 20's.
The number of people who self-identify themselves as Republicans continues to shrink, as evidenced by four separate national polls released over the last five days. If this doesn't scare party leaders, they're not paying attention.

The Post/ABC poll found 21% of Americans identify themselves as Republicans. The NYT/CBS poll put the number at 20%. NBC/WSJ also put the GOP number at 20%.

The latest Pew Research Center study has a better take on the GOP's standing, but only slightly.

Pennsylvania Sen. Arlen Specter's switch to the Democratic Party on Tuesday highlights what is happening across the nation among Republicans -- they are walking away from the GOP.

The latest survey from the Pew Research Center offers new data on the party's diminishing ranks: just 23% of respondents identified themselves as Republicans, down from 25% in 2008 and from 30% in 2004.

Republicans have lost about a quarter of its base over the past five years.

Four polls, four results showing that only about a fifth of the population consider themselves Republicans. To put that in perspective, in 1992, Ross Perot and whatever it was his party was called got about 19% of the vote nationwide. Republicans are only slightly stronger now.
That's staggering. And yet, they continue to double down with their mistakes over the last several years.

We really are living in a one party system in 2009, and it's because the second party is rapidly becoming non-viable.

[UPDATE] The best political numbers guy in the business, Nate Silver at, crunches the digits and comes up with this:
The shifts in the number of Republicans and independents appears to be a somewhat recent phenomenon, dating not from Inauguration Day itself but rather from the past 50 days or so. My guess is that it is related to increasing -- if possibly unwarranted -- optimism about the economy, perhaps coupled with the GOP's lack of focus in articulating an agenda.
Roughly 50 days ago was when Obama signed both the order overturning Bush's stem cell research ban on March 9 and signed the omnibus spending bill into law on March 11, clearly both big accomplishments for the President.

But I'm thinking the events that caused this mass defection to Independent was caused by the following: Republicans called Obama's overturning of Bush's stem cell ban, something approved by a large majority of Americans (including Independents) a "distraction", which may have hurt, but I honestly think the "Which 2012 hopeful can reject the most stimulus money for their state?" story which started ramping up around the same time. Who could forget the rogues' gallery of GOP governors racing to the bottom by rejecting unemployment benefits from the recently signed stimulus bill?

If you're looking for a correpsonding series of events that would cause GOP voters to switch to Independents since Inaguration Day, there you are. The dim realization that the 2012 nominee would be somebody like Rick Perry, Bobby Jindal, Sarah Palin or Mark Sanford would certainly turn off more moderate GOP voters in droves.

Epic Brand Name Fail

As Steve Benen points out, Republicans are once again Doing It Wrong:
It seems several leading Republicans have effectively given up hope that the GOP is the "party of ideas," and want to start over.

Looking to rebrand a struggling Republican Party, a group of party heavyweights including former Florida Gov. Jeb Bush and Sen. John McCain (R-Arizona) are launching a new group that will hold town halls around the country and look to produce GOP ideas on issues like education and health care.

Republicans will announce today the creation of the "National Council for a New America," a group led by congressional party leaders that includes Bush, McCain, former Massachusetts Governor Mitt Romney and Louisiana Gov. Bobby Jindal as its "national panel of experts."

I see. The "rebranding" effort will be led in part by conservative Republicans with the last names Bush and McCain. What could possibly go wrong?

Or, as Josh Marshall put it, "You know things are really humming along when your 'rebranding' effort is led by your recently crushed presidential nominee and your discredited party leader's brother."

And the sad part is that it's not funny in the long run. We need a viable second political party and I swear that the GOP is trying to extinguish themselves in the fires of self-immolation just so the Democrats will start screwing up on purpose to save the Republicans.

He-Man can't be He-Man without Skeletor, you know.


Stupor Heroes

There are times when I'm actually proud of Cincinnati.

This is not one of them.


I've been warning you guys about the commercial real estate collapse for quite some time now, and we're starting to see that collapse accelerate to the point where the news media is picking it up.
A commercial mortgage meltdown is likely to prolong the nation's economic recovery. The falling prices in commercial real estate will lead to additional bank losses at a time when banks are sapped by home mortgage defaults and soaring credit card defaults. This could lead to future additional taxpayer assistance for the banks.

The reality is already on display. On April 16, the nation's second largest mall developer, General Growth Properties, filed for bankruptcy protection. The Chicago-based company owns more than 200 malls across the U.S., and was unable to renegotiate its debts as they came due.

Six days later, a 40-story office tower on New York's Avenue of the Americas was seized by its creditor, a Canadian-owned pension fund. The tower's owner, Macklowe Properties, couldn't meet loan terms.

"On the street, the rumor is it is coming and it's going to come fast and furious. Some people are predicting September," said Paul Waters, a New York-based executive vice president of brokerage operations in North America for NAI Global, a top-five commercial real estate brokerage with operations across the globe.

Just like the housing meltdown, the commercial real estate crunch is likely to begin as a slow bleed that gains momentum. The coming commercial real-estate crunch is likely to be spread evenly across the nation, in large part because of an outgoing economic tide that's spared few companies anywhere.

"There's going to be a lot of trouble on Main Street with some of these commercial and industrial buildings. The biggest impact will be on some of the smaller owners," Waters said. "The smaller local regional players that are stretched thin may have some great difficulties with their mortgages."

Wheels within wheels, death spirals within death spirals. This will only assure there will be no recovery in 2009 and there may very well be no recovery in 2010 either.

Don't be fooled by the quick recovery happy talk. It's not going to happen. It will continue to get worse. Just because the rate of your fall out of the airplane has hit terminal velocity doesn't mean you stop falling.

Unleash Joe Biden!

It's Joe versus Swine Flu!

Helpful Joe Biden is Helpful. You know, like a 6 year old with paint. That kind of helpful. Honest, in a Freudian slip kinda off-message way, but helpful!

Preventing irrational panic: you're doing it wrong, Joe.

Chrysler And The Great Bankster Wars

Jim Kwak at Baseline Scenario tries his hand at being a war corespondent from Wall Street, where the news that Chrysler's deal has collapsed and bankruptcy is imminent is just one small part of a much larger battle.
I’ve been writing a lot about the game of chicken recently, most often in connection with the GM and Chrysler bailouts. On the Chrysler front, the game is in its last hours. Even after a consortium of large banks agreed to the proposed debt-for-equity swap, some smaller hedge funds are holding out for more money, and even the extra $250 million that Treasury agreed to kick in seems unlikely to keep Chrysler out of bankruptcy.

The problem is that bankruptcy is the only weapon Chrysler and Treasury have in this fight, and it’s a strategic nuclear weapon. Bankruptcy is the only threat that can get the bondholders to agree to a swap; but because a bankruptcy carries some risk of destroying Chrysler (because control will lie in the hands of a bankruptcy judge - not Chrysler, Treasury, the UAW, or Fiat), and taking hundreds of thousands of jobs with it, everyone knows that Treasury would prefer not to use it. The bondholders are betting that they can use Treasury’s fear of a bankruptcy to extract better terms at the last minute. (And it’s even possible that the large banks agreed to the swap knowing they could count on the smaller, less politically exposed hedge funds to veto it.) But Treasury may still press the button, because it needs to make a statement in advance of the bigger GM confrontation scheduled for a month from now.

The Obama administration is in fact now saying this morning that Chrysler will be nuked from orbit. The plan is to join it with Fiat without liquidating it, but still the expectation is that thousands and thousands of Chrysler jobs will have to be shed.

The question is why are we blasting Chrysler's jobs to hell, but refusing to hold insolvent banks to the same kind of deal? In fact, the banks are refusing to accept anything less than the trillions in free money they are getting now and have no intention of doing anything else.

Why are the banks turning their banks on this government largesse? I think there are two reasons.

First, taking capital under the CAP or selling assets into the PPIP involves some hardship, despite the taxpayer subsidies involved. Raising capital dilutes existing shareholders, and selling assets (at prices where someone will buy them) will require writedowns from their current, unrealistic book values. Treasury really wants the banks to participate, because it will increase confidence in the banks, and that’s why Treasury is offering to share the pain, via underpriced capital and low-risk loans.

But even though Treasury is so generously offering to share the pain, what’s the incentive for the banks to suffer any pain at all? We know the government won’t use the strategic nuclear weapon and let them go bankrupt or pull their banking licenses (which amount to the same thing). And Tim Geithner’s request for a battlefield nuclear weapon - resolution authority for systemically important financial institutions, including bank holding companies - seems to be going nowhere in Congress. This is not surprising, since the banks have already demonstrated that they can count on most or all Republicans and at least a few Democrats in the Senate. With the administration’s hands tied and the banks’ political power intact, the banks are in the same position they always were: if things go well, they will make money; if things go badly, the government will always bail them out later, on terms they are willing to accept.

On the one hand, the banks are complaining about unprecedented government interference and pressure, and to some extent that is happening. But on the other hand, the banks are ultimately calling the shots, because they know Tim Geithner can’t use his only real weapon.

Second, the incentives of managers and shareholders are not aligned. A major factor in the banks’ reluctance to participate in their own rescue seems to be fear of government interference, which is code for executive compensation restrictions.

Executives worry that whatever assurances the White House gives them, an angry Congress might impose new rules on banks that participate, particularly on pay. . . . “We’re certainly not going to borrow from the federal government, because we’ve learned our lesson about that,” [Jamie Dimon] said earlier this month in a conference about earnings.

Now, while I think some of the compensation caps discussed in Congress (but not passed by the Senate, as far as I know) were silly, I haven’t heard a lot of shareholders complaining about them; it’s the managers who don’t want them. So the situation is very simple. Participating in PPIP, for example, might be a net positive for shareholders, because even though it forces short-term writedowns, it also reduces the risk of larger writedowns in the future. But if managers think that it will lead to compensation limits, then it is a net negative for managers. I think our readers can fill in the rest of this thought.

In other words, the banksters continue to run the bank bailouts to the tune of trillions of dollars. And Obama and Geithner are going along, because failure to do so means the collpase of the global economy. It's extortion, and the one thing that could end the cycle -- Plan N -- has been killed in Congress by the bank lobbyists.

So we'll continue to be shaken down for big bucks until the free money we print to pay off the extortion breaks the back of the creditor nations that fund our economy. That will eventually happen, but not before the banksters walk off with our economy to another "less restrictive" country.

The banksters have won the war...and the American people have all but lost.

[UPDATE] Glenn Greenwald has more on the bankster lobbyists controlling Congress.

[UPDATE 2] D-day has Obama on Chrysler:

While many stakeholders made sacrifices and worked constructively, I have to tell you, some did not. In particular, a group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-funded bailout. They were hoping that everybody else would make sacrifices, and they would have to make none. Some demanded twice the return that other lenders were getting. I don't stand with them. I stand with Chrysler's employees, its families and communities. I stand with Chrysler's management, its dealers and suppliers. I stand with the millions of Americans who own and want to buy Chrysler cars. I don't stand with those who held out when everybody else is making sacrifices.
Really. Well then. You should have a little talk with guys like Dick Durbin and Evan Bayh there, because they do most certainly stand with the banksters.

If It's Thursday...

Y'all get the memo anyway. 631,000 new unemployment claims, and we've officially jumped the 6.3 million mark on continuing claims. Consumer spending and personal income down in March, labor costs decreased as well (that happens when you fire 2 million people in 3 months.)

All in all, bad news. April job numbers will be out soon, expecting another 600,00+ jobs lost.

War Of The Elephants

The Republican civil war continues, spilling over onto the pages of the NY Times.
A fundamental debate broke out among Republicans on Wednesday over how to rebuild the party in the wake of Senator Arlen Specter’s departure: Should it purge moderate voices like Mr. Specter and embrace its conservative roots or seek to broaden its appeal to regain a competitive position against Democrats?

With consensus growing among Republicans that the party is in its worst political position in recent memory, some conservatives applauded Mr. Specter’s departure. They said it cleared the way for the party to distance itself from its record of expanding government during the Bush years and to re-emphasize the calls for tax cuts and reduced federal spending that have dominated Republican thought for more than 30 years.

“We strayed from our principles of limited government, individual responsibility and economic freedom,” said Chris Chocola, a former Indiana congressman who is head of Club for Growth, a group that has financed primary challenges against Republicans it considers insufficiently conservative. “We have to adhere to those principles to rebuild the party. Those are the brand of the Republican Party, and people feel that we betrayed the brand.”

But Republican leaders in Washington argued that Republicans would be permanently marginalized unless they showed flexibility on social issues as well as economic ones.

Senator John Cornyn of Texas, the head of the National Republican Senatorial Committee, said he would seek to recruit candidates who he thought could win in Democratic or swing states, even if it meant supporting candidates who might disagree with his own conservative views.

Mr. Cornyn said he was taking a page from Senator Charles E. Schumer of New York, the last head of the Democratic Senatorial Campaign Committee, who led his party to big gains by embracing candidates who, for example, opposed abortion rights or gun control.

“If you think about it, Schumer has been very good at this; I complimented him this morning in the gym,” Mr. Cornyn said, adding, “Some conservatives would rather lose than be seen as compromising on what they regard as inviolable principles.”
As I've said before, the outcome of this is vitally important to the country. If the Republicans go for the Club For Growth "Purity" path, they are doomed as an effective counter to the Democrats and that actually hurts the country as a whole. On the other hand, nobody's going to believe them when they say they are the Big Tent party when they continue to demonize Hispanics, blacks, gays and lesbians, union blue collar workers, the scientific and environmentally minded, and the pro-choice memberships of their party and continue to drive them into the arms of the Democrats. They lost in 2006 and 2008 because they drove far more people away from their party than included people in it. It's that simple.

The GOP still thinks it can be the party of 2010 by pretending to be the party of 1980, when they are really still the party of 1950 and economically the party of 1920. It can't work. America has changed fundamentally from the 20th century and will continue to do so. But the Republicans refuse to recognize it. The Democrats have adapted. They are thriving as a result. The GOP won't evolve and demand the country change back to the way they want things, and are incapable of understanding why this isn't working any longer. They see a landslide in 2010 and 2012 not because the Democrats did something right (that's impossible) but because the GOP controls the political universe and they did something wrong. Even the concept that the Democrats won is incomprehensible to them. Democrats can never win...Republicans just fail to do so by sheer coincidence that will not be repeated. The next election will prove America is conservative. Bush failed conservatism, conservatism itself can never actually fail. The GOP followed the moderates and failed to win. Ergo, the moderates must be jettisoned.

As such, they will continue to fail to win. Lindsey Graham has the best quote in the article:
“Do you really believe that we lost 18-to-34-year-olds by 19 percent, or we lost Hispanic voters, because we are not conservative enough?” he said. “No. This is a ridiculous line of thought. The truth is we lost young people because our Republican brand is tainted.”
Amen to that, brother. And your own party continues to spread the taint of hate, intolerance and bigotry on a daily basis.


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