Monday, August 8, 2011

Last Call

A third night of riots in London has all but paralyzed the country, forcing embattled PM David Cameron to cut short his overseas trip and head back to try to settle the city down with the old stiff upper lip.

Riots spread to new areas of London on Monday while looting also erupted in the city of Birmingham as Britain's worst unrest in decades escalated in a third night of violence.

In Hackney, a multi-ethnic area in east London close to the site of next year's Olympic Games, hooded youths set fire to rubbish bins and pushed them down a street toward police, while hurling bottles and bricks.

Many laughed as they ran back when police charged them. Others shouted into their cellphones telling their friends to join in.

The disturbances started late on Saturday in London's northern Tottenham district when a peaceful protest over the police's shooting of a suspect turned violent.

On Monday, the violence had spread to the south of the city, including the areas of Peckham, Croydon and Lewisham.

No signs of this calming down either.  It's turning into a pretty lousy Monday.

Market For Chaos

Treasury bonds skyrocketed today, meaning that world investors ignored S&P's downgrade of America's credit rating this weekend and flocked to safety, especially given the turmoil in Europe.

"Treasuries are still a comparatively low-risk asset. I think there's no doubt about that," said Michael Schumacher, a strategist at UBS in Stamford, Connecticut.

Fears over slowing global growth, in tandem with the still-unresolved turmoil in the euro zone, have led investors to flood safe havens that in some cases have been unable to cope.

The Swiss National Bank last week announced a shock interest rate cut in a bid to stem flows into the country that have sent the Swiss franc soaring. BNY Mellon (BK.N) also said it would implement a new fee for some large deposits, citing "sudden, significant increases" in funds.

With over $9 trillion in marketable Treasuries outstanding, the U.S. debt market is one of few able to meet the demand.

But the markets also ignored President Obama speech trying to restore confidence in the stock markets as they plunged deep into the red.

"Markets will always rise and fall," Obama told the nation. "No matter what some agency may say, we've always been and always will be a AAA country."

For all the troubles the U.S. faces, Obama said, the country continues to have the best universities, most productive workers, and "the determination to shape our future."

"We're going to need to summon that spirit today," he continued.

Many cable TV news outlets ran the President's remarks along with a split screen of the financial market's plummeting numbers. While Obama spoke, MSNBC briefly flashed a split screen showing the Dow Industrial Average dropping beneath 11,000. 

The Dow ended up down 633 points, the S&P 500 was off 80 points, or 6 2/3% and the NASDAQ lost almost 7% shedding 175 points.   An absolute bloodbath in the markets today...and despite 63% of Americans favoring job bills over spending cuts, Republicans are insisting confidence has been lost because we haven't cut enough spending in a recession yet.  Basically just about everything that could go wrong today went wrong.

Notable stock hits:  Bank of America completely cratered, falling to under $6.50 a share as AIG (yes, the same AIG) sued the bank for $10 billion in damages from subprime mortgage losses over the weekend, and the floodgates on that led to a massive 21% drop in stock value.

If BoA manages to actually go under, today's losses are going to look like a pleasant dream compared to the next couple of weeks/months.

Strap in, people.  It's go time.

Wall Street Haterade

I know that comes as a shock to some of you as you're convinced President Obama is nothing more than a Wall Street stooge, but the simple fact of the matter is Wall Street despises the President and openly signals their contempt of the man on a regular basis.  Case in point, John Mariotti in Forbes magazine this weekend opens with this:

Few Americans needed Standard & Poor to confirm the mismanagement of the United States government and its finances. The downgrading of American credit will raise interest rates on America’s huge debt and ultimately on all Americans. Popular polls say that most Americans blame Congress—but that’s too simplistic. As much as Barack Obama would like to shift that blame onto Congress, the fault lies squarely on the shoulders of President. It is first and foremost a leadership problem that is crippling America—and the leader is President Barack Obama—not the many members of Congress.

No matter how many speeches he makes, the conclusion is clear: Obama’s greatest failure is spending America into enormous deficits, and being clueless about how to get the economy to recover. His speeches, riddled with “I” and “We” are mostly serving to indict him for his failings. Appearing on TV more than any other sitting president, Barack Obama is constantly “explaining” why things aren’t working, when he should be working on what to do different and better.

Instead he is “campaigning,” which is the only thing he knows how to do reasonable well. But he can’t fix the economy; he has neither the experience nor the knowhow to do it. His failed, misguided policies have only exacerbated the size of his mistakes and shortcomings.

If this sounds exactly like Republican Tea Party talk radio screamer stuff, that's because it is (and Mariotti continues on for some length about the "Redistributionist-in-Chief".)  He hits all the old sour notes:  the President is not too bright, he has no business experience, he's a socialist, he's arrogant, he's always campaigning, stomping on every key in the Obama Derangement Syndrome keyboard.

He then goes on to rewrite Dubya's Presidential history (TARP and the Medicare Part D drug benefit were wildly successful, and who really cares about those wars anyway, not when Obama is crushing business with regulations!) and piles on President Obama's "minions" like Nancy Pelosi, who "spent us into a hole".  It was a good thing Hillary Clinton stopped him from giving the country away to America's enemies and all. (and yes, PUMA nonsense abounds in this article).

But Limbaugh talking points being spewed out all over the nation's financial magazines is nothing new.  Wall Street wants Dubya back, somebody easily controlled and who will be one of them despite being a complete failure at being an entrepreneur, someone who give them all they want without complaining.

Point this one out next time someone says President Obama is a Wall Street flunky, because the truth is they can barely hide their revulsion of even a moderate black Democrat in charge.  Obama Derangement Syndrome?  That's a market Wall Street is eager to buy, buy, buy.

The truth is America is in economic peril right now, and Wall Street is making sure their Republicans on the payroll are doing nothing to solve the problem in a way that makes the Masters of the Universe have to give up anything.  Wall Street's more than happy to make sure nothing improves between now and November 2012, after all they've got jobs to offshore, profits to reap, and voters to depress.  Democrats have put up jobs bills, and every single one has been blocked by the House GOP, knowing that if no jobs bill passes, they can blame Obama for no jobs.

How the President puts up with it, I have no idea.  He's a stronger man than myself.

Too Little Too Late

AT&T is stepping up the protection of its customers' voice messages amid mounting security concerns raised by the phone hacking incidents in the U.K.
The Dallas telecommunications giant changed its policy today so that a password was the default setting for its cell phone voice mail boxes, Chief Privacy Officer Robert Quinn posted on a company blog. New phones will automatically have the settings changed, and beginning early next year, existing customers who upgrade their phones will also see the change.

It's a step, but if not for anything besides liability reasons I expected to see large sweeping improvements in security measures.  A PIN protection for voice mail is the very first level of protection.  As much as I am in favor of protecting privacy, the people on the other end gotta put forth a certain amount of work on their own.  PINs and passwords fall under that category.

Anonymous Demonstration Worrisome

In retaliation for recent arrests and to demonstrate what they can do, the hacker group Anonymous has now released several pieces of information stolen from local law enforcement from a handful of states (Missouri was among them).  While most was supposedly harmless the most concerning fact is that most of those agencies were not aware of the security breach, and once they were the public was not made aware until the press brought it out.

This wasn't supposed to be a major heist.  It was a message.  We are only as safe as the weakest link, and there are plenty of weak links to be had.  Anonymous is doing us a favor in a way.  We have some serious lapses in our security, from top secret records to Facebook passwords.  Information that can be stolen can be altered or falsely imitated, even planted.  Anonymous has so far done some pretty ornery things in a very public and Robin Hood style. Their crimes are profound even as the public shows everything ranging from puzzlement to cheering for them while they systematically embarrass their enemies.  They do not hide from the media, they are allowing them to document their victories, but also reminds us to improve our personal security.

Their next move may not be as publicized, but for a group called Anonymous they are showing a surprising amount of transparency about their agenda and procedures.

The Badger Awakens, Part 12

Yet another crazy story out of Wisconsin involving the GOP, this time a county party chair has resigned after a DUI crash involving the official and her three kids in the car.

Columbia County Republican Party chair Amber Hahn resigned on Friday after drunkenly crashing a car carrying herself and her three children, according to The Wisconsin State Journal.

Hahn, 35, crashed her car Thursday night while driving drunk. No other vehicles were involved and fortunately no one was injured. Police were summoned by the car's On-Star call system.

Jane Kohlwey, the Columbia County District Attorney, also a Republican, has requested that a special prosecutor from neighboring Dane county handle the case. Ms. Hahn, a Poynette School Board Member and volunteer firefighter said in her resignation statement, "It is clear to me now that I have lost focus and I am trying to do too much. I have an addiction to alcohol and need to address it."

Some of the things she was trying to do involved apparently toeing the party line on astroturfing Scott Walker's union busting plan on FOX News.

Ms. Hahn is also the GOP official who appeared on Fox News last February masquerading as an "upset Wisconsin parent" weighing in on the issue of public school teachers teaching union history in the classroom. Neither Ms. Hahn nor the hosts and producers of "Fox and Friends" felt the need to disclose that Hahn was a Republican activist and local GOP chair.

Ding ding ding!  Now, hideous parenting skills aside, why would anyone expect the official mouthpiece of the GOP reveal a conflict of interest like that when there's evil unions to be busted?  Remember that going into Tuesday's recall election in Wisconsin.

The Italian (And Spanish) Job

While we were all neck deep in debt ceiling mess last week (and the Tea Party still managed to shoot the hostage in the leg) over in Europe, the Greek Fire spread to Italy and Spain, throwing those country's bond markets into complete turmoil.  The European Central Bank decided it wasn't going to bail out either country and leaned hard on Zee Germans to do it.  In turn, Zee Germans called the ECB's bluff and said "start buying up those bonds or we all explode."  Then the US got downgraded, and lo and behold the ECB is now very very happy to buy Italian and Spanish bonds.

The European Central Bank will intervene decisively on markets to protect Italy and Spain from an accelerating debt crisis, a monetary source said on Sunday, indicating it would buy government bonds of the euro zone's third and fourth biggest economies.

The agreement of the bank's policy-making Governing Council marked a watershed in the ECB's fire-fighting after modest bond buying efforts last week failed to stem contagion to the currency bloc's larger economies.

Officials on an ECB conference call carefully considered the situation in Italy and Spain, and took note of a statement by France and Germany on Sunday stressing their commitment to European financial reforms, the source said.

Translation, many hands make light work, or in this case leaves a lot more people to share the blame when this too blows up in Europe's face.

German Chancellor Angela Merkel and French President Nicolas Sarkozy said they were committed to getting approval from their parliaments for new powers for the European Financial Stability Facility rescue fund by the end of September.

That will allow the EFSF to buy government bonds in the secondary market if the ECB thinks it is warranted and if euro zone member states agree, potentially absolving the ECB of the need to do so, a policy that a powerful minority of its council members strongly oppose.

"France and Germany are confident that the ECB analysis will provide the appropriate basis for secondary market interventions as it will help determine the case when financial stability of the euro zone as a whole is at risk," the leaders said.

By "new powers" it means "Hey, that QE2 thing America is doing?  You guys should totally do that, but since we're European we have to all pretty much agree on that."

At this point all the PIIGS countries (Portugal, Italy, Ireland, Greece, and Spain) have seen or soon will see serious bailouts.  If the contagion isn't stopped here and the PIIGS firewall is burned through, it's pretty much game over for Europe.  But at this point it's more of a matter of "when" and not "if" that happens.

If it blows up before the November 2012 elections here, things could get ugly.  We'll see.

Can You Hear Me Now?

And speaking of union-busting, 45,000 Verizon employees belonging to the Communications Workers of American union are on strike as their contract expired over the weekend.  Verizon apparently could care less. 

The strike, which began when the old contract expired yesterday at midnight, may delay service calls and disrupt installations for telephone and Internet service. The company has trained more than 40,000 managers and contractors to step into the roles of union workers, said Richard Young, a Verizon spokesman.

“We are confident that we have the talent and resources in place to meet the needs and demands of our customers,” Mark Reed, Verizon’s executive vice president of human resources, said in a statement.

Pretty much a sign of the times that Verizon is simply able to find and train 40,000 contractors in this economy and tell its union workforce to go to hell, but that's how far unions have fallen.  The bone of contention is of course health care:

Verizon wants workers to contribute more for health insurance, including paying monthly premiums for the first time, while the unions say their members can’t accept the financial burden, given the current economy. 

If the first thing that went through your mind was "Why shouldn't they pay health care premiums, I do" instead of "Why shouldn't Verizon invest in keeping their trained workforce healthy?" then congratulations, you understand exactly why Verizon will almost certainly win this fight, and why Republicans are doing everything they can to dismantle collective bargaining for everyone in America to our collective yawn.


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