Last Call

Via the Rumpies:



To all those who say "I support the First Amendment but I don't think you should build your place of worship here," please do me a favor and read your Constitution.

I really don't care if 70% of America agrees with that statement or not. It just means 70% of Americans are depressingly ignorant of how the Constitution works.

Educate yourselves or risk losing it.

Another Milepost On The Road To Oblivion

Here's why I'm pissed off about Obama not doing more on unemployment.  Not to put too fine a point on it, but the unemployment numbers among white Americans is actually about 8.6%.

For African-Americans it's 16.6%.  That's unacceptable.  That's one in six, which means the real numbers are closer to 30%, maybe 33%.  One in three African-Americans in the job market is unemployed or underemployed is my honest guess.

For white teenagers, it's 23.2%.   That's bad enough.

African-American teenagers?  The official numbers are 44.2%.  The real numbers?  Well over half.  60% maybe.  Who knows.

Black America has been in a depression for several years now.  Odds are really good that it's going to get worse and soon.

There's a reason why there's no sense of urgency on Capitol Hill.  Whose fault is it?  Too many to blame and no sense in assigning it.  But no real sense that anything's really, really wrong in "America" yet.

They've only got 8.7% unemployment, dig?

Steele Running Away

Unlike Josh Marshall I personally think Michael Steele will make it all the way to Friday before he has to apologize to the GOP again for his latest bout of stupidity.

In an interview with Spanish-language network Univision, RNC Chairman Michael Steele distanced his party from Arizona's controversial new immigration law, saying, "The actions of one state's governor is not a reflection of an entire country, nor is it a reflection of an entire political party."

"We hope, now that this debate is in full bloom, level heads will prevail and that we'll reach a common sense solution with regards to immigration," Steele said.

He's toast.  Wouldn't this be funny if this really was the last straw that gets Steele fired?  Won't happen, I mean if they haven't fired him by now, they're not going to.

Now, come January 2011 this may be a different story, especially considering the RNC's major money problems, but considering that Michael Steele and the RNC are irrelevant now compared to Karl Rove's fundraising operations, at this point it doesn't matter what happens to Steele, does it?

Zandar's Thought Of The Day

Me, June 2009:

Despite all the overwhelming evidence to the contrary, CNBC's Jim Cramer has officially called a bottom to the housing market.

Man, I love these old comedy reels, don't you?
 

But here's the reality of the situation:

• Unemployment will most likely increase to above 10% very soon, with the U-6 pushing 18, possibly 20%.
• The second wave of forclosures caused by unemployment and resetting ARMs is already underway.
• Increased pressure on banks will come from the ongoing commercial real estate collapse.

All these will combine for a perfect storm in the second half of the year and into 2010. Housing prices will continue to fall, not stabilize. Buying into a recovery right now, especially a strong recovery, is a lethal mistake. More havoc will continue to spread across the country...and if housing starts are truly on the way back up, the supply of unsold homes on the market will only continue to increase.

That means housing prices have to fall. I said back in May that housing starts had to continue to fall under May's record lows, not rebound from them.

Cramer's not only wrong, but he should be fired. I'll keep revisiting this one to see how badly Cramer's call has failed.

Part of me is having a really good chuckle right now.  Then I remember what me being right actually means, and I'm not so happy anymore.

Also, Cramer's still an idiot.

Drop The D-Word On Them

D-D-D-D-Depression, as David Rosenberg makes his case.

Writing in his daily briefing to investors, Rosenberg said the Great Depression also had its high points, with a series of positive GDP reports and sharp stock market gains.

But then as now, those signs of recovery were unsustainable and only provided a false sense of stability, said Rosenberg.

Rosenberg calls current economic conditions "a depression, and not just some garden-variety recession," and notes that any good news both during the initial 1929-33 recession and the one that began in 2008 triggered "euphoric response."

"Such is human nature and nobody can be blamed for trying to be optimistic; however, in the money management business, we have a fiduciary responsibility to be as realistic as possible about the outlook for the economy and the market at all times," he said. 

The 1929-33 recession saw six quarterly bounces in GDP with an average gain of 8 percent, sending the stock market to a 50 percent rally in early 1930 as investors thought the worst had passed.

"False premise," Rosenberg said. "And guess what? We may well be reliving history here. If you're keeping score, we have recorded four quarterly advances in real GDP, and the average is only 3%."

Rosenberg's warning comes as a slew of major analysts—Goldman Sachs and JPMorgan among them—have slashed GDP projections for 2010 to the 1.5 to 2 percent range.

Rosie's just being honest here.  We've been in a hole going on 32, 33 months now.  Today's housing news just confirms the worst is still ahead and that the "Obama boom" was nothing more than the mother of all dead cat bounces.  We never got out of the "recession" of 2008, really.

If anything, today's news all but proves it.  We're in a depression and it's well past time to admit it.

The Mask Slips Again

...and a Republican tells the truth about what will happen if they take back the House, in this case GOP Ohio Rep. Jim Jordan.

AUDIENCE MEMBER: Assuming it’s accurate that Republicans will get the House, how effective will that be in throwing a monkey wrench in the gears of everything Obama does?

JORDAN: If we win, what will we get done? Mostly, I’ll be honest, most of what we can get done is have the big fight, have the big debate, and have the framework for the 2012 election.

What, you thought the Republicans had a plan to try to do anything to fix America's problems other than to blame Obama for the next two years?

Really?  Obama Derangement Syndrome is all they have to offer.

Orange Julius Versus Timmy

Looks like GOP House minority leader John Boehner has decided to move on from the SCARY GROUND ZERO MOSQUE to switching attack vectors to something that actually does matter and something that does deserve to hurt the Democrats: going after Obama's failed economic team in a speech in beleaguered Cleveland.

Boehner, delivering what his aides billed as a major economic address, will say President Obama's team lacks "real-world, hands-on experience" in creating jobs, according to a draft version of his speech that was released in advance. The Republican lawmaker plans to cite reports that some senior aides complained of "exhaustion," including the recently departed budget chief Peter Orszag.

"President Obama should ask for - and accept - the resignations of the remaining members of his economic team, starting with Secretary Geithner and Larry Summers, the head of the National Economic Council," Boehner says in the prepared remarks, which are scheduled for delivery at the City Club of Cleveland shortly after 8 a.m. The mass dismissal, he adds, "is no substitute for a referendum on the president's job-killing agenda. That question will be put before the American people in due time. But we do not have the luxury of waiting months for the president to pick scapegoats for his failing 'stimulus' policies."

Boehner's demand for the ousters of Geithner and Summers is likely to be met with derision in the West Wing, and denounced as mere electioneering less than 75 days before the midterm election. Calls for cabinet officials to be fired is nothing new for the party out of power -- during the Bush administration many Democrats called for the ouster of Defense Secretary Donald Rumsfeld, a demand that was not met until Democrats swept the 2006 midterms.

Boehner is seeking to personalize mounting concerns among voters about Obama's handling of the economic recovery. In his speech, he argues that Obama's advisers unfairly highlight brief signs of marginal improvement to suggest a coming surge in job creation.

"The American people are asking, 'where are the jobs?' and all the president's economic team has to offer are promises of 'green shoots' that never seem to grow," Boehner says, according to the text. "The worse things get, the more they circle the wagons and defend the indefensible." After the speech, he is scheduled to participate in a question-and-answer session with business leaders in this economically distressed Rust Belt city.

And you know what? I can't argue against Boehner here. I've called for Geithner's firing long ago. Hell, I objected to Geithner from day one. Larry Summers on the other hand needed to have been shown the door last year for his complete mishandling of the stimulus package. Both these men have been awful and with unemployment hovering around 9.5% and real unemployment approaching 25% in some counties, these guys have failed across the board in getting a real economic strategy in place.

This is unfortunately for the Dems a completely legitimate avenue of attack against Obama, and you're going to see a lot more of this as we head towards the fall.  I don't see how Obama can continue to defend Geithner or Summers for much longer given the jobs and housing picture.

As much as it causes physical pain for me to admit it, John Boenher is right.  These two need to be fired because they have failed.

[UPDATE] And as Atrios tweets:  

liberals have been pointing out shortcomings of geithner and summers for some time, only a righty can make it an issue

Sad but true.

Crash Helmets, Please

July existing home sales numbers are in and they are devastating: sales down a record 27.2% montly drop to a 15-year low when most people were expecting a 12%, maybe a 15% fall. 27.2% is deep into "Oh crap" territory and the Dow fell off a cliff this morning as a result.

What does this number mean? Real simple, folks: welcome to the second leg down in the housing depression.

Assume the position. It's going to accelerate from here.

[UPDATE] As CalcRisk points out there's now a 12.5 month supply of houses on the market, which is a massive supply glut.   Housing prices are going to fall and fall sharply in the second half of the year.

[UPDATE 2]  Felix Salmon spells it out:  America Stops Buying Homes.

The number is so low that it looks like a statistical aberration: let’s hope it is. Because if it isn’t, the news is gruesome. It means that despite record-low mortgage rates, people aren’t able to buy houses: essentially all the benefit from those low rates is going to people who already own their homes and are taking the opportunity to refinance.

The news also means that there’s a big gap between buyers and sellers: the market isn’t clearing. Sellers are convinced that their homes are worth lots of money, or will rise in price if they just hold out a bit longer; buyers are happily renting, waiting for prices to come down. And entrepreneurial types, whom one would expect to arbitrage the two by buying houses with super-cheap mortgages and renting them out at a profit, don’t seem to have found those opportunities yet.

Houses are rarely a liquid asset; they were, briefly, during the housing boom, but now they’re more illiquid than ever. America is a country where two generations of homeowners have learned to consider their houses an asset; they’re rapidly learning that at times like these, a house can look much more like a liability. (And refinancing your mortgage is just liability management.) The enormous repercussions of that change in mindset are only just beginning to be felt.

Repeat after me:  there is no housing market right now.  This is a full-blown collapse.  Unless some sort of massive government intervention kicks in (which is politically impossible) then the housing market just locked up like an engine with no oil, and our economy along with it.

Getting Under Their Skin

Dave Weigel's piece on Dem Rep. Alan Grayson is worth a read as Grayson presses on against the Tea Party with a "kick them in the teeth" mentality and doing it without fear despite arguably being the Tea Party's number one House target in 2010.

Few other Democrats in Grayson's position talk like this. Some conversations with voters in the district demonstrate why. In 2008, they voted for Grayson and the Obama-Biden ticket, narrowly, because of disgust with the Bush administration's failures. It was tough to find a job then. It's tougher now. That lends more credibility to the critiques of Republicans like Webster, who promise to kick-start the economy by cutting taxes on businesses and slashing entitlement spending.

It's a critique that appeals even to voters like Jeff Evans, 49, who was laid off from his trucking job in December 2009. He was receiving unemployment benefits until a Republican filibuster stopped them this summer, leaving him without a revenue stream for weeks. But even though Grayson and his fellow Democrats eventually restored his benefits, Evans isn't sure he will support Grayson. It would do him more good, he said, and allow him to keep his dignity, if they "let the small businesses create more jobs."

Grayson knows how popular that argument is. The solution: Argue that Republicans have no credibility to make it. He pivots off of one of Webster's ideas, a proposal to cut the budget to what it was in 2007. Webster suggests that Floridians were perfectly well off when the government spent at that lower level. Grayson prefers to ask whether voters realize that a cut like that would mean lower Social Security payments.

"It's a stupid idea," says Grayson. "Nobody has a time machine, OK? The world has changed a little bit since 2007. For one thing, there're a lot of more people out of work." Soon he's on a roll, explaining how $12 trillion of capital disappeared in the "Bush implosion" of 2008. That's who voters need to blame, he says. Why aren't they as angry as he is?

"In 18 months, two centuries of work, the collective effort of millions of people, all gone," says Grayson of the financial crisis. "So now the Republicans want to go back to 2007? It's a little bit late for that."

If the GOP is going to take back the House, they'll have to take down Dems like Alan Grayson, period.  They can't afford to ignore him.  He's the one Democrat in a red district who should, by any stretch of the imagination, be a Blue Dog.  He's an unapologetic liberal and if there really is a Republican wave this year, Grayson should be among the first to drown and take a double-digit loss.

Grayson, to his credit, isn't backing down.  Would that more Democrats would get that message...which is exactly why the GOP wants to bury him.  Should Grayson survive, why, other Democrats might develop a spine too.

And the Republicans can't afford that.

Paycheck To Paycheck

The Governator keeps juggling the numbers in order to keep California solvent, and the state is now down to playing shell games with monthly payments to school districts to try to avoid defaulting.

Gov. Arnold Schwarzenegger, California's state controller and treasurer, decided Monday to delay $2.9 billion a month in payments to school districts and counties sooner than expected so the state can meet debt and pension obligations.

The leaders issued a joint letter notifying state lawmakers of their decision to begin withholding the payments in September instead of October.

The move reflected the limited resources the state has to work with as the impasse over California's $19 billion budget shortfall has dragged on for nearly two months. 

Controller John Chiang has warned that the state could again issue IOUs, perhaps as soon as the end of August. 

The Legislature gave authority in February to the three officers to delay $2.5 billion a month in payments to schools and $400 million in monthly payments to counties during October, November and December to help manage cash flow. 

The step came on top of a July deferral of $2.5 billion for schools and $700 million for counties. 

Can't even afford to pay for schools from month to month, and IOUs will almost certainly be back soon.  At what point do we admit California's a third-world failed state?  What happens when the state eventually defaults?

How bad will the damage be?  We're going to find out rather quickly.

Moose Lady Puts It All On The Line

Sarah Palin is betting her rep as a Mama Grizzly today in her home state of Alaska.  After a couple of early successes backing Tea Party insurgents, Palin's endorsed candidates have gone down in flames, the latest being Clint Didier in Washington State.

Now Palin's star power is in trouble in today's Alaskan Senate primary.  GOP Sen. Lisa Murkoswki is expected to get the win over Palin-backed Joe Miller and if Palin can't pull off a Tea Party win in her own home state, it's time to admit that she's still a major liability to the GOP.

The Tea Party’s message of fiscal conservation and the clout of Sarah Palin may prove to have limited influence in Alaska – a state that welcomes federal dollars.

Both the conservative group and the former governor’s coat tails will be tested Tuesday, as they are backing attorney Joe Miller's (R) primary challenge against Sen. Lisa Murkowski (R-Alaska).

Casting a shadow over Palin's involvement is her political feud with the Murkowski's and her upside down approval ratings in the state where she was once one of the nation's most popular governors. Palin defeated Murkowski's father, Frank Murkowski (R), in a 2006 primary for governor and has had a rocky relationship with Sen. Murkowski since.


Murkowski down played any possible “blood war” with Palin.

“I think people who don’t know us or are from outside the state think that there’s some kind of blood war or something that goes on between the Palins and the Murkowskis. I would like to think that we will continue to have the respectful professional relationship,” she told The Hill earlier this month.

She also expressed surprise at Palin’s endorsement of Miller.

“It was a bit of a surprise, and only because she has been supportive of my work on behalf of the state of Alaska and has publicly said so,” Murkowski said.

Yeah right.  Palin's willing to throw anyone under the bus if it keeps her in reality show money, speaking gigs, and FOX News appearances.   But to do that she's got to be able to get people to win.  If she can't do that, what good is she (other than to the Democrats?)

No, a Palin loss here and we're going to start hearing about how she may just not be the chosen one anymore...and people may actually start asking her to go elsewhere.

StupidiNews!

• A federal judge has issued an injuction against any federal funding for any embryonic stem cell research, saying it violates federal law.
• Sen. John McCain faces primary opponent JD Hayworth in Arizona's primary today, primaries are also in four other states including Alaska.
• California's uninsured has hit 8 million and rising, including 2 million who have lost their insurance since 2008.
• Existing home sales data for July out today is expected to have taken a major hit without the homebuyer tax credit that expired in June.
• Birds, like other social animals, sometimes cheat with other mates but still cooperate...most of the time.