Monday, May 10, 2010

Last Call

It's not 5,000 barrels of oil a day, folks.  It's 25,000 or so.  1 oil barrel is 42 US gallons.  That's over a million gallons of crude a day, folks.
The amount of oil gushing from BP's Deepwater Horizon oil disaster is five times more than what the oil company and the U.S. Coast Guard are currently estimating, said a Florida State University oceanography professor on Saturday.

At an oil spill environmental forum at the Hilton Pensacola Beach Gulf Front, Ian MacDonald said the blowout is gushing 25,000 barrels a day.

The Coast Guard and BP estimate 5,000 barrels a day of crude is spewing into the Gulf.

MacDonald said his estimate is based on satellite images and government maps forecasting the slick's trajectory.

MacDonald also told a crowd of about 100 gathered for the discussion that he's been frustrated by the lack of data from federal responders and BP since the April 20 explosion and subsequent spill.

Dick Snyder, director of the Center for Environmental Diagnostics and Bioremediation at the University of West Florida, said satellite imagery and maps give a misleading picture of the spread of the spill.

Chemical dispersants and exposure to sunlight have made some of the oil nearly invisible and hard to detect, he said.

Testing seawater for a hydrocarbon signature is needed to adequately track the oil spill so cleanup operations can be activated before it arrives, Snyder said.

A proposal by UWF to conduct such testing off the Pensacola coast was rejected by the state Department of Environmental Protection, Snyder said.

Both Snyder and MacDonald are members of the newly created Oil Spill Academic Task Force.
Team Obama doesn't exactly seem to be too eager to correct the narrative, either.  That annoys the hell out of me.  They need to get out ahead of this now.  Multiple sources have determined that the 5,000 barrels of oil per day narrative is far, far too low.

Someone Please Hold An Intervention With Sully

I mean the Trig Palin crap is bad enough, but Sully has now jumped the shark with this on Elena Kagan. Big bold title is Sully's.
So Is She Gay?
It is no more of an empirical question than whether she is Jewish. We know she is Jewish, and it is a fact simply and rightly put in the public square. If she were to hide her Jewishness, it would seem rightly odd, bizarre, anachronistic, even arguably self-critical or self-loathing. And yet we have been told by many that she is gay ... and no one will ask directly if this is true and no one in the administration will tell us definitively. 
Dude,  Really.  Somebody go calm him down before he does something irredeemably silly.

Your Comparison Comparing Comparator Is Broken

I honestly don't know which is more annoyingly desperate:  Lake Palin/Tennessee flooding as "Obama's Katrina" or Elena Kagan as "Obama's Harriet Miers".  Steve Benen takes this out back and shoots it:
Whether one thinks Elena Kagan is a wise choice or not, it's hard to ignore the fact that she's a brilliant, accomplished attorney. Even conservatives tend to respect her as a gifted, skillful legal mind. Kagan's background, despite not having been a judge, is pretty impressive: Supreme Court clerk, White House domestic policy aide, dean of the Harvard Law School, Solicitor General of the United States. Not too shabby.

Harrier Miers, meanwhile, helped manage a law firm in Texas, and worked as the head of local bar associations that the state's top lawyers didn't join. She then worked for George W. Bush -- writing him charming notes, telling him he's "the best governor ever," who is "cool" and "the greatest" -- and he made her White House counsel before inexplicably concluding Miers was the single best lawyer in the United States for the U.S. Supreme Court.

Miers proceeded to offer responses to the Senate Judiciary Committee's questionnaire with glaring errors that first-year law school students would generally avoid.
Look, just because Bush was a moron as President doesn't mean every Democrat from here on out is going to make all the same moronic mistakes he did.

(Only some of them.)

Now What Are The Odds Of That?

Tyler Durden flags down this bit of Goldman Sachs trivia:  In 1st Quarter 2010, in 63 trading days on the trading floor, Goldman Sachs made at least $25 million dollars a day. Every day.  Not only did they never, ever lose moeny in the course of a full trading day, but every day was worth at least $25 million bucks.

Now what are the odds of that?
In the quarter ended March 31, Goldman made money on every single trading day. The firm did not record a loss of even $0.01 on even one day in the last quarter. That's 63 days profitable out of 63 trading days. The statistic probability of this event is itself statistically undefined. Goldman is now the market - or, in keeping with modern market reality, Goldman is the house, it controls the casino, and always wins. Congratulations America: you now have far, far better odds in Las Vegas that you have making money with your E-Trade account.

Adding to the alice in wonderland insanity of this announcement, the firm made over $100 million daily on 35 different days. Of Goldman's $9.7 billion in total Q1 revenue, 76% came from trading. Forget investment banking, forget underwriting, forget advisory: over three quarters of the firm's value is based on being the house to the biggest corrupt casino in existence. Ever.
They're not just playing the game.  They're not just winning the game.  They are the game.  Rest of us are just here to fill the stands. What say you, Goldman?
Goldman Sachs on Monday showed how its trading operations are stronger than ever, but warned that more litigation and investigations loom. 
Gosh, really?

Nobody Could Have Predicted, Etc

Nobody could have predicted that the GOP plan was to oppose whomever Obama chose to replace Justice Stevens by characterizing them as an evil liberal activist judge.  Brian Beutler:
In an April 22 conference call with RNC members, which was recorded and passed my way by a source, activist Curt Levey, director of the conservative Committee for Justice, offered Republican operatives candid strategic advice, pressing them to put up a fight against even the most moderate of judges, and providing a glimpse of the GOP's playbook for obstructing Obama nominees.

The crux of the GOP's strategy is to use Obama's nominee to wedge vulnerable Democratic senators away from the party, and drag the confirmation fight out until the August congressional recess, to eat up precious time Democrats need to round out their agenda.

"[I]t wouldn't take much GOP resistance to push a final vote into early August," Levey advised. "And, look, the closer we could get it to the election, frankly, the better. It would be great if we could push it past the August recess because that forces the red and purple state Democrats to have to go home and face their constituents."
Levey acknowledged that a filibuster likely won't last--that Obama's nominee, now known to be Solicitor General Elana Kagan, will almost certainly be confirmed. But he hammered home the point to Republicans that there's value in mischaracterizing any nominee, and dragging the fight out as long as possible, whether or not Obama's choice is particularly liberal.

"We wouldn't have a lot to object to if it was [Interior Secretary Ken] Salazar. He's quite moderate as Democrats come," Levey admitted. "We're not necessarily going to say that if he's nominated, but I think that's the truth." Emphasis mine. This advice was met with laughter by one of the listeners on the call. (Salazar was cited in early reports as a long-shot candidate on Obama's short list.)

"Even if it's a nominee that we can't seriously stop, we can accomplish several things, and so a hard fight is worthwhile," Levey implored. "Certainly it can be to the political advantage of Republicans.... There's everything to be gained from making the Supreme Court vacancy a campaign issue in 2010." 
Not like any of us Dirty Hippie Bloggers were screaming that this was the case months ago.

Oh wait.

Another Milepost On The Road To Oblivion

The RNC's plan to attack Elena Kagan?  To go after the judge she clerked for:  Thurgood Marshall. Steve Benen:
It's simply not realistic to think the Republican National Committee would be gracious and classy upon learning of President Obama nominating Elena Kagan for the Supreme Court. But with all of the potential areas of attack, this RNC argument seems especially misguided, even for the RNC.
Republicans are questioning Elena Kagan's ties to a liberal icon and the nation's first African American Supreme Court justice, Thurgood Marshall.
In its first memo to reporters since Kagan's nomination to the high court became public, the Republican National Committee highlighted Kagan's tribute to Marshall in a 1993 law review article published shortly after his death.
Kagan quoted from a speech Marshall gave in 1987 in which he said the Constitution as originally conceived and drafted was "defective." She quoted him as saying the Supreme Court's mission was to "show a special solicitude for the despised and the disadvantaged."
This, as far as the RNC is concerned, is some kind of outrage.

But that's foolish. Thurgood Marshall's description of the Constitution as "defective" was hardly shocking -- it was defective. Let me give the RNC an example: the Constitution defined slaves as three-fifths of a person. It was a morally indefensible and disgusting "flaw" in the Constitution that needed fixing. It was, after all, what Marshall was referring to in the speech Kagan quoted.

(Fortunately, we now have the13th Amendment. Maybe the RNC has heard of it.)
Sure they've heard of it.  Doesn't mean they like the damn thing.

The Kroog Versus The Eurovision Bailout Contest

Dow up 400 at one point, now up 350ish.  Almost put back the carnage from Thursday.  Almost.  Krugman weighs in on the bounciness coefficient of the Dead Cat in question:
So there’s something substantive here; it’s not just a matter of buying time during which nothing good will happen.

That said, I wonder about magnitudes. I’m sure that the ECB has no intention, even now, of letting inflation rise 200 basis points (even though it should welcome that development.) And Greece, still the epicenter of the crisis, doesn’t gain much from the credit lines. So does a drop of more than 500 basis points in the yield on Greek 10-years make sense? I don’t think so.

The good news here is that for the first time in this crisis, European policy makers have gotten ahead of the curve, acting more strongly than almost anyone expected. That’s a shock, and it has awed the markets. But I still don’t think it’s nearly enough.
Neither do I.  When this particular can of Monster Energy Drink wears off, the market's going to have a hell of a headache.

Kaganology 102

With the official announcement from the White House that Elena Kagan will be Obama's choice for SCOTUS coming at 10 AM this morning, the attacks on her are coming fast and fierce.

We've jumped over 3 and gone straight to step 4.  Step 5, which for those of you keeping track is the part where the Village wonders out loud if Kagan should refuse the nomination, is coming soon.

Oil's Well That Doesn't End Well For This Oil Well, Part 9

If you're interested in the latest oil spill landfall forecasts, the experts at NOAA have set up this site with daily predictions for the next 24, 48 and 72 hours based on wind and tide conditions, as well as what you can do to help if you're in the area.  The maps are very helpful and cover from the Texas/Louisiana border to about Pensacola, Florida on the map.

They're going to need to zoom out.  Lake Palin is getting awfully large these days.  Because I figure by the end of the week, this thing is going to cover pretty much that entire swath of coastline.

Today for instance, Lake Palin is currently eating a piece of land called "Most of Southeastern Louisiana" and is happily blobbing its way north towards Mobile Bay and west towards Atchafalaya Bay according to the 72 hour prediction map.  Also, you'll need to add the word "tarballs" to the lexicon.

Mmm.  Tarballs.  It's whats for dinner.

Zandar's Thought Of The Day

Galtie Wingers, that is the subset of Wingnuts that see unrestrained free market libertarian capitalism as the key to a Communist Utopia "worker's paradise", are always looking for reinforcement from fictional charters and popular culture, with the analogies between Ayn Rand's hero John Galt and whatever's hot this month on the intertoobs (free market libertarians love surfing the Socialist collective of the intertoobs, you know).

This month as the Rumpies discover, it's "John Galt is just like Iron Man!"  You know, like he's been just like Batman's Bruce Wayne, Rorschach from the Watchmen, The Green Lantern (some of them, but not that black guy John Stewart, that green Jade chick, or any of those weird alien Green Lanterns dammit!), the Green Arrow (despite being named Oliver Queen), yadda yadda forever and ever amen.

And actually, the best Galtie in pop culture is a villain, industrialist Andrew Ryan from the Bioshock series of games, who built his own underwater city to get away from everyone else and staffed it full of people who were the best and brightest in their field, scientists, artists, industrialists, doctors, and anyone who could afford a ticket to his city of Rapture, then said "free markets rule!  You're on your own!"  Major genetic breakthroughs were discovered that turned man into superman, and the place turned into a bunch of crazy people with shotguns and super-powers trying to kill each other.

And that's basically what Galtism boils down to.  Look at Greece, the Gulf Coast, Iraq, Afghanistan, Pakistan...that's what your "free market" has gotten us.

Greek Fire, Part 19

The details of that massive, near $1 trillion package in loans, direct aid, and bond repurchases for Greece are becoming clear.  It's got Zero Hedge's Tyler Durden scared out of his socks.
In other words, total and unprecedented monetary lunacy, as every cental bank, under the orchestration of the Federal Reserve, will throw money at the problem until it goes away, which it won't. As we have long expected, Bernanke is now willing to sacrifice the dollar at any cost to prevent the euro unwind. This is nothing than a very short-term fix, whose half life will be shorter still than all previous ones. 
The race to the currency devaluation bottom is now in its final lap. And gold is the only alternative to the now imminent collapse of the fiat system: the world had a chance to take writedowns on losses, punish those who took risk and failed, and refused to do so. There is now no risk left, but it only means that eventually all the risk will come back and lead all capital markets to zero. The result will be the end of Keynesian economics as we know it. Do not trade in this broken market, do not hold your money in a bank as they are all now one hour away from a terminal bank run - buy and hold real, FASB mark-to-myth independent assets
Canned food and shotguns time?  It could be.  The point is Europe doesn't have an extra trillion bucks just lying around.  Meanwhile, the Fed has quietly opened the currency swap window with the world's other leading central banks, and that means trading the dollar just became Disneyland.  Barry Ritholz is a bit more subdued.
When the US began its massive bailout plan in October 2008, markets had been falling for 10 months, and were down 20% from peaks. Ultimately, the liquidity added was rocket fuel to the markets, and after they fell a total of 55%, a 75% rally ensued over the next year.

Europe has now gone down the same path — but from a very different location in the market cycle. I would not expect the reaction to be identical, but one must be very cognizant of the impact a trillion dollars will have on markets.

We have seen this movie before.
Felix Salmon makes the rounds too and finds a lot of information for the hungry:
Is the massive EU bailout a case of “too much, too late”? At $1 trillion, give or take (depending on the highly-uncertain value of the euro), it’s certainly enormous: Mohamed El-Erian calls it “a completely new level and dimension” in terms of European policy response. But the late-night negotiations of European finance ministers might yet fail to pass muster with national governments. After all, as Kevin Drum notes, the $700 billion TARP bill was initially voted down by the House of Representatives, and this deal has to be ratified by not one but many different legislatures.

Meanwhile, Peter Boone and Simon Johnson have some very scary numbers about Greece in particular: it will have to cut spending by a whopping 11% of GDP; its debt-to-GDP ratio will rise to at least 149% of GDP in a best-case scenario; and realistically Greek GDP could fall by 12% between now and 2011. Now that’s a recession.
The bottom line is that the difference between the Greek Fire and the U.S. TARP plan is that one depends on the economy of the United States, and the other depends on the economy of Greece.  (And actually, there are those who will argue that both depend on the economy of the United States...)  Greece just got Too Big To Fail status.

The obvious question is "Who's next and when?"


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