Last Call

I will say this:  I agree with Zev Chafets on two things, this:

So why the lack of attention? Mr. Limbaugh has studiously refrained from claiming credit for the movement. His only intervention thus far has been to quash talk about the Tea Party becoming a third party. He wants a unified, right-wing G.O.P. in 2010, and by all appearances he is going to get it.  

and this:

Rush Limbaugh came along after the age of Ronald Reagan. He has never really had a Republican presidential candidate to his ideological satisfaction. But if the party sweeps this November under the banner of Real Conservatism, Mr. Obama will find himself facing two years of “no” in Washington and, very likely, a Limbaugh-approved opponent in 2012.

You see Rush Limbaugh really is greatly responsible for the position the GOP is in right now.  Chafets however thinks this is a good thing.  Nothing could be further from the truth.

But Rush?  Yeah, I'd say all this is Rush's fault.  Absolutely.

Oil's Well That Doesn't End Well For This Oil Well, Part 14

The Deepwater Horizon disaster just keeps getting worse...

BP hired a top oilfield service company to test the strength of cement linings on the Deepwater Horizon's well, but sent the firm's workers home 11 hours before the rig exploded April 20 without performing a final check that a top cementing company executive called "the only test that can really determine the actual effectiveness" of the well's seal.

A spokesman for the testing firm, Schlumberger, said BP had a Schlumberger team and equipment for sending acoustic testing lines down the well "on standby" from April 18 to April 20. But BP never asked the Schlumberger crew to perform the acoustic test and sent its members back to Louisiana on a regularly scheduled helicopter flight at 11 a.m., Schlumberger spokesman Stephen T. Harris said.

At a few minutes before 10 p.m., a belch of natural gas shot out of the well, up a riser pipe to the rig above, igniting massive explosions, killing 11 crewmembers and sending millions of gallons of crude oil into the Gulf. The rig's owner, Transocean, blames failed cement seals, installed by Halliburton, for the disastrous blowout.

...and worse...

BP acknowledged Thursday that the gusher of oil pouring from its damaged Gulf of Mexico well is bigger than estimated to date, as new video showed a cloud of crude billowing around its undersea siphon.

Company spokesman Mark Proegler said Thursday that the siphon is now drawing about 5,000 barrels (210,000 gallons) a day up to a ship on the surface. That's as much as government and company officials had estimated the spill was pouring into the Gulf every day for a month. Proegler declined to estimate how much more oil was escaping.

BP America Chairman Lamar McKay said Wednesday the figure used by the oil spill response team had a degree of uncertainty built into it. But figures by independent researchers have run up to many times higher: Steve Wereley, a professor of mechanical engineering at Purdue University, told CNN's "American Morning" that the spill could be as big as 20,000 to 100,000 barrels a day.

...and worse.

The first heavy oil from a giant Gulf of Mexico spill sloshed ashore in fragile Louisiana marshlands on Wednesday and part of the mess entered a powerful current that could carry it to Florida and beyond.

The developments underscored the gravity of the situation as British energy giant BP Plc raced to capture more crude gushing from a ruptured well a mile beneath the surface. The spill is threatening an ecological and economic disaster along the U.S. Gulf Coast and beyond.

"This wasn't tar balls. This wasn't sheen," Louisiana Governor Bobby Jindal said after a boat tour to the southernmost point of the Mississippi River estuary. "This is heavy oil in our wetlands."

Even if the oil geyser was stopped right this second, the damage has already been done.  I really, really don't think people are still even dimly aware of just how much economic damage the Gulf Coast states are in for.  Best case, tens of billions, likely case, multiply that figure by ten, worst case, well...half a trillion or more ain't out of the ballpark...

Between this and the Dow today, it's a good thing I don't have a lot of booze around right now.

Blair Under The Bus

ABC's Jake Tapper is reporting that Director of National Intelligence Adm. Dennis Blair is resigning, possibly as early as tomorrow.

For several weeks President Obama has been holding serious conversations about whether to ask Blair to step down and has interviewed candidates to replace him. After a discussion  this afternoon between the president and Blair in the Oval Office about the best way forward, Blair offered to resign and the president said he would accept, sources told ABC News.

Multiple administration sources tell ABC News that Blair’s tenure internally has been a rocky one.

On the heels of a number of intelligence failures involving the Fort Hood shooter, failed Christmas Day bomber Umar Farouq Abdulmuttalab, and questions about failed Times Square bomber Faisal Shahzad, it was no longer clear that Blair -- tasked with coordinating the 16 intelligence agencies and ensuring that they cooperate and share information – still had the full and complete confidence of the president, sources say.

The news will not come as a surprise to those in the intelligence community. For months, Blair has turf battles while the White House made it clear that it had more confidence in others, such as counterterrorism and homeland security adviser John Brennan, taking the lead both publicly and privately.

Last November, the White House sided with CIA director Leon Panetta when Blair attempted, against Panetta’s wishes, to pick the chief U.S. intelligence officer in each country, a job that traditionally has gone to the CIA station chief.

At other points, Blair seemed simply out of the loop. In hearings looking into failed Christmas Day bomber Abdulmuttalab, Blair seemed unaware that the High-Value interrogation Group was not yet operational.  He later walked back his statement.

Just this week – after a scathing report on intelligence failures and Abdulmuttalab by the Senate Intelligence Committee  -- Blair acknowledged in a statement that “institutional and technological barriers remain that prevent seamless sharing of information.” 

I'm not sure if I agree with Blair's sacking, in fact I figured with the rather solid police work on the Times Square plot that our intel community under Blair had redeemed itself somewhat.  I guess that's not the case.  Spencer Ackerman's analysis rings true, however:

Assuming the report pans out — and I doubt it wouldn’t — it’s telling that President Obama will have fired an intelligence chief after several low-grade attempted terrorist attacks failed but President Bush didn’t fire his after a major domestic terrorist attack succeeded.

That's something to keep in mind.  Not every administration believes in failing upwards.

Roubini Is Back, Baby

And we're all screwed.  Dow dropped 376 points today, down over 1000 since April 23.  It's starting to feel like October 2008 all over again, kids.  And that means it's Roubini time!

Stocks are likely to continue their aggressive decline and shed another 20 percent in value as the world economy weakens, economist Nouriel Roubini told CNBC.

As the market slides into correction territory, Roubini said weakness in euro zone countries and a slowdown in the US and other developed countries will make things even more difficult for investors in the months ahead.

"There are some parts of the global economy that are now at the risk of a double-dip recession," said Roubini, head of Roubini Global Economics. "From here on I see things getting worse."

Doot doot doot, been singing this particular song for quite a while now, folks.  In the short run, things are going to be really bad.  How bad?  Our old friend the LIBOR is back as is the VIX, and it just keeps building up.  Only this time, we can't cut rates anymore. What can we do?

I hear Helicopter Ben's Printing Press is nice this time of year.

The correction, soon to be crash, is here: the market had a bigger relative open to close move today than it did on May 6. We closed at the day's lows on massive volume, despite definitive central bank intervention, regardless whether it was the SNB, the ECB, or the Fed. The central planners have lost control of the market, and all thanks to the inevitable collapse of hyper capitalist Keynesianism coming out of the formerly most communist country in the world. A day of ironies. And it's not over. Futures are already down another 4 handles. The correction is coming, and it will be a bloodbath. The Fed can not push rates lower. It will print. It is inevitable. It is our destiny.

This is where things start to get real, real scary folks.  There's no more interest rate to cut.  The euro is disintegrating from Greek Fire.  The global shell game is running out of shell to look under, and somebody's going to figure out when there's only one shell left that the little red ball ain't there.  So what the hell do we do when there's no more rates to cut and a massive liquidity jolt is needed because the credit markets are tightening up like a vise?

Here there be dragons, guys.  This is the real crash helmet stuff here.  I've been warning about this this I started this mess, and now it's looking like the day of reckoning is nigh.

Assume the position.

And This Is Why I Hate To Say I Told You So

Because not 24 hours after the Senate financial regulation bill died, it got brought back from the dead and through that cloture vote 60-40.

Wall Street reform cleared a crucial test vote on Thursday, all but assuring final Senate passage of the most sweeping regulatory overhaul since the New Deal.

The Senate voted 60 to 40 to meet the threshold to overcome filibusters and send the measure to a final vote within days. Three Republicans voted for it, and two Democrats voted against it.

The legislation aims to stop bailouts, shines a light on complex financial products and strengthens consumer protection, to a final vote.

Final passage, which will require only 51 votes, is likely to come within days.


"We've made great progress ... it's been hard to get to this point," said Senate Majority Leader Harry Reid. "It's been a good debate. It's been the way the Senate should operate more often than it has."

The bill failed in a similar test vote on Wednesday. One key change Thursday was that Sen. Scott Brown, R-Mass., switched his vote to "yes."

Scott Brown is still a better Democrat than Ben Nelson.  Just sayin'.  Can we trade?

Seriously, I have to admit I was wrong, I figured yesterday was the killing blow on the legislation.  Now it looks like they have a deal and it's going to pass.  Chris Bowers:

Before the final vote on the bill, there will be 30 hours of debate and amendments.  There are only a couple of amendments that have been ruled germane: the Brownback amendment to exempt auto loans from new consumer protection laws, and the Merkley-Levin amendment to reinstate the Volcker rule that is attached to that amendment.  If there are others, I will report back and list them in this space.

Wall Street reform will pass the Senate, likely tomorrow evening.  What form the bill takes before it ends up on President Obama's desk is still to be determined.

So watch carefully to see if the Republicans exempt auto dealers from consumer protection laws, and to see if the Volcker Rule goes back in.

Of course, there's still the chance this will all blow up.  But that's looking very unlikely now with Scott Brown being the vote over the top.

By The Time I Get To Arizona, Part 6

Attention Democrats Who Are In Charge Of The Country:


You officially now have an immigration optics problem.

"My mom said … Barack Obama is going to take away everybody that doesn't have papers," one girl told the first lady.

"Yeah, well, that's something that we have to work on, right?" Mrs. Obama replied. "To make sure that people can be here with the right kind of papers, right? That's exactly right."

The girl countered, "But my mom doesn't have any."

"Well, we have to work on that, we have to fix that and everybody's got to work together in Congress to make sure that happens. That's right," Mrs. Obama said before moving on to the next question.

Passing the buck on this until after 2013 will not work, guys.  Get with it.

The Day In Dead Cats

Dow's tanking hard, down 250-300 range as we head into lunchtime.  Oil and gold are also falling big time.  Not a good day in the free markets, folks.  Euro point man Jean-Claude Juncker is throwing in the towel at this point.

Jean-Claude Juncker, chairman of the Eurogroup forum of euro zone finance ministers, said the weakness in the euro, down more than 7 percent against the dollar in the past month alone, was likely due to fears that economic growth in the 16 countries that share the currency will slow.

Greece has been forced to impose drastic austerity cuts as the price for the EU bailout, while Spain and Portugal, seen as the markets' next potential targets, have also embarked on painful public spending cuts to rein in their deficits.

Analysts now fear the drive to restore fiscal balances will slow down economies in the European Union just as they recover from the sharp global downturn.

Juncker said markets were acting irrationally.

"There is a certain reluctance to believe the Greeks can overcome the current crisis. I don't think the markets are behaving in a rational way," he told Reuters in Tokyo.

Speaking to reporters after meeting Japanese Finance Minister Naoto Kan, he said he did not see the need to take immediate action on the euro's rapid plunge, but that central banks were in close contact.

We're fine here, everything's fine here, just give us a second to lock down this currency leak...

If It's Thursday...

New jobless claims up 25K to 471K, continuing claims down 40k to 4.63 million.

Still not good news at all.

Don't Ask, Don't Tell, Don't Think, Part 2

The thing that bothers me most about Defense Secretary Robert Gates's warning that there's basically no way Congress can legislate an end to DADT and force the military to integrate is that he's ignoring the fact the military's already been forced to integrate racially, and the fact our military allies have had no problems allowing gays and lesbians to serve openly.

Representatives from Great Britain, Canada, Australia, Israel and the Netherlands gathered Wednesday at the Brookings Institution, a think tank in Washington, to describe how the militaries in those countries handled allowing homosexuals to serve openly. The consensus was that, in spite of concerns before the change, it became a nonissue once gays and lesbians were allowed to serve.

"I did not see one case at any level when homosexuals did not get along with other soldiers. The problems are among men and women," said Maj. Gen. Walter Semianiw, an infantry officer in the Canadian military. "This is not an issue for our country."

"We know the U.S. as a country that favors the individual rights, freedom, giving the people the opportunity to flourish in their life," said Col. Kees Matthijssen of the Royal Dutch Army. "From that perspective it's still very strange the U.S. is still having a kind of ban on openly having gays and lesbians in the military."

"There were concerns in the late '90s of gay men walking across the gangplank in feather boas and high heels," said retired Lt. Cmdr. Craig Jones of the British Royal Navy. "That just did not happen."

Jones said British military officials saw an unexpected benefit of allowing gays to serve openly -- better retention of qualified soldiers and sailors in key positions. In the late 1990s and early 2000s, the British military had a 6 percent to 8 percent gap in unfilled positions. Now it's down to the 2 percent to 3 percent range.

Jones said one reason for that is the new policy allowing gays to serve.

Now that gays are able to serve, military recruiters in the United Kingdom have more volunteers to choose from, Jones said. Also, having children is often cited by British troops as one reason why they leave the military in their late 20s or 30s. Jones said because gays and lesbians are less likely to become parents, they tend to stay in the military longer.

Can we just put an end to this idiocy?  It's not like Canada or the Netherlands has exploded into total anarchy because of allowing gays and lesbians to openly serve.  You would think our professional soldiers would be more professional.  After all, tens of millions of Americans have openly gay co-workers.

Put an end to this, man.

Greek Fire, Part 20

Looks like another bad day on Wall Street ahead.

Stocks slid for a sixth day and U.S. index futures declined as the euro weakened against the dollar. Oil fell and palladium extended its losing streak to the worst since July.

The MSCI World Index of 23 developed nations’ stocks fell 0.5 percent at 11:45 a.m. in London for its longest losing streak in four months. The Stoxx Europe 600 Index dropped 0.5 percent and futures on the Standard & Poor’s 500 Index retreated 0.6 percent. The euro weakened against the dollar, trading near the lowest level in four years. Palladium lost 7.5 percent, extending its six-day slump to 22 percent.

European finance officials meet in Brussels a day before the German parliament votes on the country’s share of a $1 trillion bailout to backstop the euro in the wake of a worsening sovereign debt crisis. Stocks plunged yesterday as Chancellor Angela Merkel’s unilateral effort to control what she called “destructive” markets rattled investors. The German ban on some bearish bets against financial companies and government bonds wasn’t replicated in other European states.

“My major concern in Europe is that in order for the zone to start kicking in you need to see some serious austerity,” said Jonathan Plant, a strategist at Liberum Capital Ltd. in London. “It goes back to whether stocks are cheap, and they are just not cheap enough for me.” 

After stocks went up for no apparent reason over the last 12 months, reality is starting to kick in.  Tyler Durden has the real story however:

The last time Greeks were shown to be storming their parliament on live TV, we got a 1,000 point drop on the Dow Jones. Today, another 100,000 protesters of austerity are expected to hit the streets as the entire country is essentially shut down. From the BBC: "Much of Greece's transport network has been immobilised, as trade unions stage another 24-hour general strike against austerity measures. Ferries are tied up in port, railway stations shut, and the Labour Ministry occupied by communist protesters. Organisers are hoping that up to 100,000 people will join protests on the streets later. There are fears of renewed violence after protests in Athens two weeks ago led to the deaths of three people. The country's main civil service and public sector unions say they represent some 2.5 million workers. "People are bleeding financially but they will participate in the strike," Ilias Vrettakos, a senior member of the ADEDY union, was quoted as saying by Reuters."  

It's going to be a really, really bad day in the markets, folks.  And there's going to be a lot more of these bad days ahead.  The Greek Fire is now burning through all the Eurozone.  Germany has already been scorched badly, and the euro itself is providing ample tinder to keep the Greek Fire burning for a long time.

It's going to be a long, hot summer.

Specifically Not Feelin' Randy, Part 2

Well, that didn't take long for the Village to find out what Kentuckians have known for quite some time.  Why this Rand Paul interview from last month with the Louisville Courier-Journal didn't get national airplay before now...well hey, research is hard.

INTERVIEWER: Would you have voted for the Civil Rights Act of 1964?

PAUL: I like the Civil Rights Act in the sense that it ended discrimination in all public domains, and I’m all in favor of that.

INTERVIEWER: But?

PAUL: You had to ask me the “but.” I don’t like the idea of telling private business owners—I abhor racism. I think it’s a bad business decision to exclude anybody from your restaurant—but, at the same time, I do believe in private ownership. But I absolutely think there should be no discrimination in anything that gets any public funding, and that’s most of what I think the Civil Rights Act was about in my mind.

To recap, Kentucky's "Next Senator" thinks racism is bad, and thinks racism in publicly funded institutions is bad...but defends the rights of private citizens and private businesses to be able to discriminate if they so choose.  You know, private businesses like ophthalmologists.

Now I know I say the following a lot, but this time I really do mean it:  it gets worse, kids.

INTERVIEWER: But under your philosophy, it would be okay for Dr. King not to be served at the counter at Woolworths?

PAUL: I would not go to that Woolworths, and I would stand up in my community and say that it is abhorrent, um, but, the hard part—and this is the hard part about believing in freedom—is, if you believe in the First Amendment, for example—you have too, for example, most good defenders of the First Amendment will believe in abhorrent groups standing up and saying awful things. . . . It’s the same way with other behaviors. In a free society, we will tolerate boorish people, who have abhorrent behavior.

Indeed.  Sometimes those boorish people with abhorrent behavior run for the United States Senate, too.  Voters like myself sometimes get the opportunity to make sure they do everything they can to make sure such behavior is not rewarded with a Senate seat, too.

And that's exercising my constitutional rights to free speech.

Bye, Rand.  Taylor Marsh has more on this at HuffPo.

StupidiNews!

• Louisiana Gov. Bobby Jindal tells reporters that heavy oil has now reached Louisiana's wetlands.
• A House panel has found that in 2004 the CDC misled Washington DC residents about lead levels in drinking water.
• The latest video of the larger oil leak in the Gulf shows the flow rate may be as high as 95,000 barrels of oil per day.
• Thai army troops are enforcing a fragile peace and curfew after yesterday's forced surrender of protesters.
• Facebook's privacy wars may be coming to an end as the company struggles to win back its reputation among users.