Thursday, May 7, 2009

Not Cutting The Mustard

After going over this yesterday, it seems the Right just hasn't learned from the heaps of scorn dumped on law prof and Professional Deranged Obama Hater William Jacobsen. Because apparently nobody in the Wingerverse likes to bring up an actual argument (they mostly lose on these, you see) they instead resort to making fun of the President's taste in condiments and now the peanut gallery is chiming in.

Following President Obama's May 5 visit to Ray's Hell Burger in Arlington, Virginia, Sean Hannity, Laura Ingraham, and Rush Limbaugh Show guest host Mark Steyn criticized Obama as an elitist because he ordered a burger with "spicy mustard" or "Dijon mustard." Hannity claimed that Obama ordered a "fancy burger" with a "very special condiment," while Steyn asserted Obama is trying "to enlighten us" through his order. Ingraham asked of Obama: "What kind of man orders a cheeseburger without ketchup but Dijon mustard? ... The guy orders a cheeseburger without ketchup? What is that?" In their discussions of Obama's burger order, Hannity, Ingraham, and Steyn all referenced a Grey Poupon commercial featuring actors portraying wealthy British men expressing desire for the mustard.

During the May 6 edition of his Fox News program, Hannity said: "[A]s you all know, President Obama is a real man of the people. And yesterday he dropped by a popular Virginia restaurant to grab a burger with his pal [Vice President] Joe [Biden]. Now, the Gateway Pundit blog pointed out that plain old ketchup, well, it didn't quite cut it for the president. Now take a look at him ordering his burger with a very special condiment. ... Dijon mustard? I think the president watched just a little bit too much television as a kid." Hannity then played a portion of a Grey Poupon commercial and commented, "I hope you enjoyed that fancy burger, Mr. President." In the May 5 post Hannity referenced, the Gateway Pundit wrote of Obama and Biden: "They're just two ordinary metrosexual guys going out for a burger ... Obama and Biden, two ordinary guys, go out for a sandwich and Obama asks for Dijon mustard at Joe's Hell Burger." The blog added: "I hear it's delish with arugula lettuce. Yum-Yum."

Yep. Keep pushing those issues, guys. You'll win eventually!

My Bad, I Just Meant She Was Mildly Incompetent

TNR's Jeffrey Rosen attempts to apologize for Tuesday's hatchet job on Sonia Sotomayor's qualifications for being the next Supreme Court Justice.
Some readers have also questioned my confession at the end of the piece that I hadn't read enough of her opinions to make a fully confident judgment. Perhaps I conceded too much: I had read enough of her opinions to find them good but not great--like much of the competent but not especially distinctive writing that characterizes most federal appellate opinions. In the past few days, I've read many more opinions, and nothing has called my initial judgment into question. For what it's worth, that judgment is consistent with that of the lawyers in the Federal Almanac:

Lawyers interviewed said Sotomayor writes good opinions. "Her opinions are O.K, by and large." "She writes very clear and careful prose in her opinions." "Her writing is good." "Her opinions are generally well-reasoned and well-argued." "She writes well." "She is a very good writer." "Her writing is not distinguished, but is perfectly competent."

Some readers have questioned my account of how "a conservative colleague, Ralph Winter, included an unusual footnote in a case suggesting that an earlier opinion by Sotomayor [United States v. Samaria] might have inadvertently misstated the law in a way that misled litigants." Indeed, the footnote is hardly a model of clarity-and I can see why readers might not come to the same conclusion I reached. But the careful observers of the Second Circuit I talked to, who were familiar with the case, said Winter was widely assumed to be making an effort to be polite, avoiding direct criticism of his colleague while trying to distinguish Sotomayor's holding in Samaria from some loosely written dicta. In their view, Sotomayor's dicta in Samaria could indeed be read to call the earlier cases into question, just as the litigants suggested, and they believe Winter was trying to contain the damage to avoid embarrassing his colleague.

Translation: "She's just meh. Her mehness is simply common knowledge in my circles. I don't understand why Obama is even considering her, and I completely don't understand why anyone is bothering to defend her."

So he stands by his opinion that she's unqualified. She just, after all, is according to his buddies. This is his explanation and apology by way of being even more condescending then he was on Tuesday.


[UPDATE] Score: Double G, 2. Jeffrey Rosen, zip.

Getting a few people to chatter with the promise of anonymity is certainly the least burdensome way to get people to say bad things about someone. It's easy to understand why an extremely slothful "journalist" with no standards would opt for that path. But to claim that this is the only way to obtain candid assessments of a judge is clearly untrue.

Even if that claim were true, Rosen's mentality illustrates the decay that lies at the core of modern journalism. In his view, it's better to write a story using completely unreliable and discredited methods than it is to simply refrain from writing the story at all (well, the alternative to writing an unreliable piece was to write nothing, he argues, as though that's exonerating). Publishing a hit piece on someone's character and intellect using unreliable methods is infinitely worse than refraining from writing a story at all until you can get people to speak on the record and thus ensure there's accountability. But if you're desperate for attention and care only about being the first person to write a story, then standards of truth and reliability don't matter.

Frame the argument to a narrow scope where people are fighting over whether or not you got heads and won, or you got tails and everyone else lost. Classic Rovian "catapult the propaganda" here...Rosen tries to play the "Am I right and Sotomayor's a total bitch, or am I overreacting and she's just stupid?"

And Glenn just utterly reams the guy. It's well worth reading the whole thing.

Test Stressing

The bank stress test results are out (pdf) and the bottom line is the 19 largest banks need about $75 billion in more capital. The real problem is the adverse scenarios used: even worst case, these tests assumed -3.3% GDP, which has already been shattered, 8.9% unemployment (which we should reach tomorrow) and only a 22% drop in housing prices, again well under the 30% drop we're looking at in prices year over year.

The worst case scenario has already been blown wide open. The banks need another $75 billion just to survive the rosy scenario Treasury threw at them.

How much money will they really, really need? I'm betting far more than just $75 billion. These results are a joke across the board.

Don't count on a quick recovery. Count on just enough of a ramp to get a good head of steam before we plummet into the ravine.

When The Time Is Right...

...for pointless legislation declaring erectile dysfunction ads too racy for daytime TV, you'll know.
You’ve all seen them. Those ubiquitous TV ads where a simple little pill transforms a man suffering from erectile dysfunction, or ED, into a virile tiger who puts a smile on the face of his now beaming wife.

Well, Representative Jim Moran (D-VA) has seen them too, and you’d be hard pressed to see a smile on his face when he talks about the ads.
“A number of people,” he says, “have come up, including colleagues, and said I’m fed up. I don’t want my three or four-year old grandkid asking me what erectile dysfunction is all about. And I don’t blame them.”

Enter H.R. 2175. That’s a bill that Rep. Moran introduced last month that would prohibit any ED ads from airing on broadcast radio and TV between 6AM and 10PM. The bill advises the Federal Communications Commission to treat these ads as “indecent” and instruct stations to restrict their broadcast to late night and overnight hours.

And yes, Jim Moran is in fact a Democrat pulling this silly crap when the country has real and overwhelming problems to solve. In the middle of a recession, a constitutional crisis involving torture, a health care emergency and a climate on the brink, he wants the country focused on what time of day is acceptable to show those goofy Cialis bathtub ads.

Pay attention, Dems. This is how you lose power the country has seen fit to grant you until you prove yourself unworthy of using it.

ED ads. Really. Pay some real attention to the issues, Jim.

Alarm Bells Are Ringing

...and the commercial real estate sector continues to crumble.
Commercial mortgage delinquencies in the U.S. climbed to the highest level in at least 11 years in April as scarce credit made it difficult for landlords to refinance loans, according to property research firm Trepp LLC.

The percentage of loans 30 days or more behind in payments rose to 2.45 percent, Trepp LLC said in a report. The delinquency rate was more than five times the year-ago number, Trepp said. The New York-based researcher’s records go back to 1998.

“It’s about as bad as it’s ever been,” said Thomas Fink, a Trepp senior vice president. “I don’t think we’re done yet. Where it’s going to top out, I don’t know, but we’re not done.”

The market for securitized commercial mortgages, which helped fuel an 88 percent rise in U.S. commercial property prices between 2001 and late last year, shut down in 2008 as financial institutions racked up losses and asset writedowns of more than $1.38 trillion related to residential mortgage defaults. Commercial property values fell 21.5 percent through February from their October 2007 peak, according to Moody’s Investors Service.

Properties bought in 2006 are now worth on average 11 percent less than their original price, and those bought in 2007 are worth almost 20 percent less, Moody’s said.

Trepp’s 30-day delinquency rate remained under 1 percent from October of 2005 to last November.

Commercial real state prices have a long, long way to fall, folks. These real estate assets are on the books of America's companies and disintegrating in value. When your company owes more on the building than the building is worth, you're in trouble. You can go underwater on your property in the buisiness world, too.

And all that will do is continue to hurt the economy.

Joe The New Frontiersman

Time's Michael Grunwald documents Joe The Plumber going so far off the reservation, he meets himself...and he doesn't like what he sees (h/t Balloon Juice):
Big Government is never popular in theory, but the disaster aid, school lunches and prescription drugs that make up Big Government have become wildly popular in practice, especially now that so many people are hurting. Samuel Wurzelbacher, better known as Joe the Plumber, tells TIME he's so outraged by GOP overspending, he's quitting the party — and he's the bull's-eye of its target audience. But he also said he wouldn't support any cuts in defense, Social Security, Medicare or Medicaid — which, along with debt payments, would put more than two-thirds of the budget off limits. It's no coincidence that many Republicans who voted against the stimulus have claimed credit for stimulus projects in their district — or that Louisiana Governor Bobby Jindal stopped ridiculing volcano-monitoring programs after a volcano erupted in Alaska. "We can't be the antigovernment party," Snowe says. "That's not what people want."
There may be something to this "end of the GOP" theory after all.

El Rushbo Gets His Pound Of Flesh

This week he rips it from Gen. Colin Powell.
"What Colin Powell needs to do is close the loop and become a Democrat instead of claiming to be a Republican interested in reforming the Republican Party," Limbaugh said on his radio show Wednesday.

Limbaugh also took aim at Powell's decision to endorse President Obama over John McCain during the presidential election, repeating his earlier sentiment that Powell's move was "solely based on race."

"He's just mad at me because I'm the one person in the country who had the guts to explain his endorsement of Obama," Limbaugh said. "It was purely and solely based on race."

Got that? Colin Powell is a racist Democrat. So sayeth Rush. The rest of them should be chiming in on how much they've always hated Powell anytime now.

Keep it up, Rush. Whatever rises from the ashes of the GOP's self-immolation will be on your head.

Timmy Phones It In

Everything you need to know about the stress tests is in one paragraph in Timmy's NY Times op-ed this morning.
Banks will also have the opportunity to request additional capital from the government through Treasury’s Capital Assistance Program. Treasury is providing this backstop so that markets can have confidence that we will maintain sufficient capital in the financial system. For institutions in which the federal government becomes a common shareholder, we will seek to maximize value for taxpayers and enable these companies to attract private capital, thereby reducing government ownership as quickly as possible.
Bailouts then, bailouts now, bailouts forever. The stress test changed nothing, the government learned nothing, the plan remains the same.

Until America goes broke.

If It's Thursday...

Weekly jobby job numbers are out at 8:30, with April job loss numbers out tomorrow. Much has been made of the ADP prediction that after a string of 600,000+ job loss months, that America lost less than 500,000 jobs in April, which would in fact be good news if correct. If that's true, then the rally in the markets will pick up steam.

Which is actually unfortunate. What we're looking at here is a swimmer finally breaking the surface after being swamped by one wave, poking his head up to get badly needed air only to not see the second wave behind him.

[UPDATE] 601,000 new claims last week, still high but not as bad...but continuing unemployment claims up to 6.35 million. Labor productivity rose in 1Q 09, up 0.8% despite the loss of nearly 2 million jobs in the first 3 months of the year.

Tomorrow's numbers will be very important. I don't buy the 491,000 prediction, I'm still calling well over 500k.

Cramer Vs Roubini Round 2

Jim Cramer says today's bank stress test results proves the era of systemic risk in the financial sector is over thanks to the brilliant Tim Geithner.

Thank Treasury Secretary Geithner. He seems to be following Cramer’s forbearance plan, a la the savings-and-loan crisis of 1989-’91. What worked then? Letting the private sector work out its own problems. Foregoing all talk of nationalization. That after all was the grizzly threat the bears used to scare the market. Well, now it’s more koala than Kodiak.

Look at what Geithner did: He gave poor grades to Bank of America and Wells Fargo to legitimize his stress test, saying the companies needed to raise $34 billion and $15 billion, respectively. But these figures can be met with virtually no difficulty, as BofA just needs to sell some assets and convert its TARP money in common stock while key investor Warren Buffett just has to cut a check to help Wells. This Washingtonian chest pounding provided wiggle room for Geithner to say that more troubled institutions like American Express, MetLife and Morgan Stanley were in the clear. The remaining banks can be scooped up by their stronger peers.

This solved the banking problem, Cramer said. It removed the systemic risk and put us back in a position where we can again trust company earnings. Forget the “Armageddon factor.” That’s not a concern anymore. Add in oil’s close at a six-month high and a tech-led rally at the end of the day, and it’s obvious why the market soared – 100 points in the Dow and an even bigger percentage jump in the S&P 500.

And in the blue corner, Nouriel Roubini, who says we still have a long way to go with the stress tests being a farce: the banks still need tens of billions to meet even the non-stressful test levels, and reality is already much worse.
Nouriel Roubini, co-founder and chairman at RGE Monitor, also known as Dr. Doom, feels these tests lack credibility and simply aren't stressful enough as the actual economic data are far worse than the worst case scenario of these tests.

"(But) if you assume the results have been leaked are true, you're going to find out that a large number of financial institutions have significant capital needs," Roubini told CNBC.

He also warns the government's plan to make banks covert more preferred shares to common stocks could lead to a creeping nationalization of the banks.

"Weaker institutions are going to find it very hard to raise money in the private sector because they're going to be further diluted by the government converting preferred into common shares. So eventually we may go into a creeping process of partial nationalization of some financial institutions," Roubini added.

Roubini suggests that if the end goal is to keep banks in the private sector, it might make more sense to convert the claims of bank creditors into equity.

So who is right? If Cramer is somehow correct, we're at the bottom now and recovery is now the buzzword for 2009. Everything from this point on is just the rest of the problems working themselves out, and Geithner and Bernanke were right all along.

But if Roubini is right, then the banks are extremely vulnerable to shocks from this point on as the stress test worst-case conditions have already been surpassed, and the second wave of mortage problems from ARMs combined with the commercial real estate crash could push us into a double dip Great that could crack the already broken and stressed system and plunge us into another Depression.

My money's on the guy who has been right for the last three years. Your mileage may vary.


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