Last Call

Rand Paul pusses out again, and this time he's put the GOP in a terrible spot.

Betsy Fischer, the executive producer of Meet the Press, just Tweeted that Rand Paul is trying to cancel his appearance on the show this Sunday.

I just reached Fischer, and she tells me Paul's camp asked to cancel because "he's had a long week."

"He committed to coming on on Wednesday," Fischer tells me. "We got an email from his press secretary this afternoon saying that he wanted to cancel."

Fischer adds that the Meet crew asked to talk directly to Paul himself to ask him to reconsider, but he has yet to call back. "We're still waiting," she says.

Asked what reason the Paul camp gave for canceling, Fischer says the Meet crew was told "that he's had a long week, he's tired, and he's very sorry and he needs to cancel."

GOP better tread lightly here.  If they complain too loudly about the Sunday shows being the mean old liberal media out to get lily white pure Rand Paul, they really are going to piss off the Village.  You don't tug on Superman's cape, you don't spit into the wind, you don't pull the mask off the ol' Lone Ranger and you don't cancel on Meet The Press. Only Louis Farrakhan and Prince Bandar of Saudi Arabia have ever done that, and certainly no US politician running for Senate has ever told MTP to go screw themselves.

If the Republicans decide to back Paul here and go after MTP, the GOP leadership is going to be in real trouble.  But if they don't take Rand Paul's side against the LIBERAL MEDIA SMEAR MACHINE!!!11! then the GOP leadership is also going to be in a lot of trouble.

Who do they fear more?  My guess is the Teabaggers, so look for the usual wingers to throw NBC under the bus for picking on mean ol' Rand, just like they did with Katie Couric and Sarah Palin.

And we know how that turned out...

[UPDATE] John Cole wins the internetz with 'I Rand, I Rand So Far Away".

Zandar's Thought Of The Day

If the argument that the GOP has on immigration is "Obama and the federal government won't do their jobs and secure the border" then why are Republicans in Washington doing everything they can to block national immigration reform?

Rally Round The Family, Pocket Full Of Euros

The GOP has put all their chips in the pot defending Rand Paul.  I don't see how they have much of a choice, either because the Teapublicans will demand it.  If they throw him under the bus, they're done for in November.  the great part is if they back Rand Paul and his ideas, they lose in the general anyway.  For now, it's all smiles and rainbows in the Bluegrass State.

On the ground in the Bluegrass state, Republicans are excited by the prospects of the Rand Paul candidacy -- they say he can bring fresh blood and fresh enthusiasm to the party and that can help up and down the ballot. But they remain wary of his unique views -- and the possibility of more days like Thursday ahead.

On Saturday, Paul and one-time establishment favorite Trey Grayson will come together for a staged rally with all the key players -- from Senate Minority Leader Mitch McConnell on down -- telling their voters to come together for the sake of winning the general election in November. TPMDC spoke today with several Kentucky Republicans who insisted they will be able to forge the right kind of agreement to beat Democratic nominee Jack Conway. But privately, they admit it might not be so easy.

That's one reason the GOP seems to have settled on a talking point - Paul was set up by the liberal media, who pushed him into a trap that earned him 24 hours of negative press.

"This was just an old type of ploy to get him to slip up on something. It was more of a media gotcha and not any big event," said state Republican Party member and former county chairman Richard Granna. He told TPMDC in an interview that Kentucky voters are more concerned with the European financial crisis than "hashing up something from 1964 that's already been settled."

Yeah, sure.  Kentucky voters are more concerned about the Euro then they are Rand Paul saying that businesses should be allowed to discriminate, that coal companies should be allowed to continue to operate with little to no oversight or regulation, and that Obama's being too hard on poor BP.

The fact that nationally the GOP will have to come out across the board in favor of Paul's crackpot notions all but guarantees they're going to have real trouble come November.  Every GOP candidate needs to be asked if he or she agrees with Rand Paul's ideas.  And the idea that Paul was set up when the interview in question was last month...that's just laughable.

I'm noticing the same excuses to cover Rand Paul's ass that I did for Sarah Palin in late 2008...and we all know how that one turned out for the GOP.

Oil's Well That Doesn't End Well For This Oil Well, Part 15

And the first indefinite beach closings from oil washing ashore begin.

Government officials in Grand Isle are closing all beaches until further notice, citing the fact that oil from the Gulf of Mexico spill is washing up on the shore.

"They're starting to see dead wildlife," said Jefferson Parish Councilman Chris Roberts.

Roberts said there is more oil offshore, and he's concerned it will continue washing ashore when the high tide comes in this afternoon. He is heading to Houma to meet with BP officials, in an attempt to address the situation, he said.

The beach closure went into effect at noon, to allow workers to begin cleaning up the oil, according to Nora Combel, with the mayor's office. People are advised to stay off the beaches, and they will be asked to leave if they are caught trespassing, she said.

We're going to see a lot more beach closings, which won't really matter too much because hey, the tourists are canceling anyway, oil or not.

The Sacrifical Donkey's Being Prepared

The Happy-Face financial media has already found their scapegoat for this market "correction".

The Senate version of financial regulation is bad for business on Wall Street. "Some analysts estimate it could cut the profits of major financial institutions by roughly 20%," reports the Wall Street Journal.

It’s also bad for the economy, says Robert Prechter, president of Elliott Wave International. Prechter believes the measures are doing the exact opposite of their intention. “Even though they (the government) want credit to expand, because that’s the base of inflation, they’re doing everything they can to restrict it,” he tells Aaron in this clip.

"On one hand we have the Fed trying to jawbone banks into lending but the government is doing everything it can to curtail the lending," he continues, noting the Senate’s bill will mean smaller bank profits, which in turn means less money to lend.  It also plays into Prechter's thesis that the economy is headed for deflation and depression.  

Anyone who's been paying attention to this blog knows the real reason why the market is crapping out:  the Fed and the European Central Bank, as well and the unhinged casino greed of the banksters.  But the rush is now on to pin all the problems happening now on legislation that's not even law yet, with dire warnings that the economy is doomed because the poor, poor banksters won't make as many billions when it comes to bonus time.

Gosh, who will speak up for the lobbyist in Washington?  Their voices are never heard...

In all seriousness however, expect to see much, much more of this as the market goes south:  "Financial Regulation caused the crash!"  The truth is putting off financial regulation for 16 months after Obama took office caused this particular cockup.

The banks went right back to the casino tables and now they're about to lose another couple trillion.  guess who's paying for THAT one?

PS...it won't be the banks.

Specifically Not Feelin' Randy, Part 3

Rand Paul continues to top his easy primary rampage over Tray Grayson with arguably the worst general campaign in the history of the universe as this time he manages to alienate anyone who seems to think BP or Massey Energy might be at fault in the recent spate of deadly accidents this year.  Steve M.:

There's a lot of snickering on our side right now because Rand Paul seems to have put his foot in his mouth again while talking to ABC's George Stephanopoulos about the Gulf oil spill:

What I don't like from the president's administration is this sort of, you know, "I'll put my boot heel on the throat of BP." I think that sounds really un-American in his criticism of business.

What's more, as Betty Cracker notes, "Paul managed to imply that maybe the reaction to the recent mine explosion was a touch too anti-business as well." He said:

I mean, we had a mining accident that was very tragic and I've met a lot of these miners and their families. They're very brave people to do a dangerous job. But then we come in and it's always someone's fault. Maybe sometimes accidents happen.

This should really, really hurt him, because, after all, he's a tea party candidate, and that means his supporters are self-reliant people with callused hands who really know the pain of something like a mine disaster.

You'd think that in coal country, Rand the populist candidate would be a little more careful backing Massey Energy over the people.  But as Steve points out, Ol' Rand did the best in exurban areas: the high-property value suburbs of Cincy, Lexington and Louisville.

So Paul's base is people whose fingernails never get dirty. Because, after all, that's who the teabaggers are.

They don't care if the oceans get brutalized or a few miners die. They just want you to cut their damn taxes.

Got that right. Hey fellow Kentucky voters?  You're getting played by the biggest corporate lapdog in the history of the world.  Think Rand Paul gives a damn about coal miners, oil riggers, car plant workers or truck drivers?  Think again.  The only thing that matters to this guy is the rights of business owners to run you into the ground.  You're just capital to the capitalists, dig?

And you can be replaced real easy.  You're just one more unfortunate cost that Rand Paul and his Galtie friends have to pay that lowers their profits.

And should there be any doubt, his friends in the GOP are right behind him, trying to change history by yelling ROBERT BYRD at the top of their lungs and ignoring the last 40 years of actual Democratic Party history, not to mention a GOP Presidential candidate named Barry Goldwater who ran in 1964 on repealing the Civil Rights Act.

These guys are playing you for fools with this populist act.  They could give a damn about the little people.  They just want you to hand over your vote to them so they can continue to rape the economy.

Another Milepost On The Road To Oblivion

Texas Schoolbook Edition:

The State Board of Education voted to include President Obama in a revised social studies curriculum on Thursday after a Republican board member temporarily offered —but then withdrew — an amendment that would have listed the president's full name — Barack Hussein Obama.


"The intent behind what you're doing, I think, is pretty obvious," board member Bob Craig of Lubbock said after his fellow Republican, David Bradley of Beaumont, offered the amendment. "I just don't that's correct."

"We don’t have to insult the president of the United States," Lawrence A. Allen Jr., a Houston Democrat and an African-American, told Bradley. "I'm asking you to please withdraw your amendment."

Another member, Mary Helen Berlanga, D-Corpus Christi, said the motion would be "humiliating" to the nation's first African-American president.

"I'll put an end to the whining," Bradley said. "I'll withdraw the motion."

"I don't consider it whining," snapped Mavis B. Knight, D-Dallas, an African-American.

The board accepted Allen's amendment to specifically note that Obama is the nation's first black president.

And these are the people in charge of educating millions of students in Texas.  Jesus wept.

Mexican Standoffish

You know, considering it's weapons sold in the US that Mexican drug cartels are using to turn places like Ciudad Juarez into the Murder Capital Of The Multiverse, I think Mexican President Felipe Calderon has a point here.

Mexican President Felipe Calderon's appearance Thursday before a joint session of Congress dramatically illustrated — and possibly reinforced — the partisan divide that's stymied progress on immigration legislation.


In his 40-minute address, Calderon sharply criticized Arizona's tough new immigration law and the United States' refusal to ban assault weapons, which are being used in the violent drug-gang shootouts in Mexico.

The GOP response boiled down to "Cry more, n00b."

Afterward, Sen. John Cornyn, R-Texas, said Calderon "crossed a line" by urging changes in gun policy, and Sen. John McCain, R-Ariz., who's become a hard-liner on curbing illegal immigration, declared, "I've never heard of another country's president coming here and criticizing the United States like that." 

The guy has seen a lot worse crap than you have, gentlemen.  I don't particularly think he's impressed by Gringo Mystique here.  Also, the reason why Johnny Volcano here hasn't heard that before is because it's the unvarnished truth, and his Washington Serious Insider brain is no longer capable of processing raw info like that without it being processed and horked back out like a owl pellet first.

I recall when our soldiers were being killed in Iraq (and still are) by weapons from Syria or Afghanistan or Pakistan or wherever, we have no problem telling other countries exactly what the hell they need to be doing with their weapons control laws, or we'll Predator drone bomb the piss out of them.

Mexico mentions the same to us, the GOP goes all "Tell that pendejo to go screw a chubacabra."  Funny how that works.  GOP Latino outreach for the win!

Kudlow Has A Plan, You See

Larry "The Recession's Been Over For Nine Months" Kudlow has a plan to fix the latest chapter in the ongoing financial crisis, European Edition.  This ought to be good.

So I have a thought.

In the autumn of 2008, when financing markets completely froze up during the very worst of the credit meltdown, the FDIC guaranteed all bank debt, from 30 days out to 30 years. In addition, the Fed and Treasury essentially guaranteed overnight lending in the repo market and the commercial-paper market for bank debt. It worked. 

At the time, the repo market for interbank loans was about $20 trillion, vastly greater than the $1.2 trillion volume of subprime mortgages. And when the repo market was rescued through the loan guarantees, the financial system gradually started to heal — although it took several months. (An end to mark-to-market accounting in March 2009 would aid that healing process.) 

So it’s my contention that the Europeans must now embark on a similar program. The EU/IMF rescue plan, which consists of $1 trillion in loans and loan guarantees for government sovereign debt, must be expanded to include a blanket loan guarantee for all European bank debt, short term and long term. A Europe-wide, centralized, deposit-guarantee system should also be developed. Right now bank deposits are insured by individual countries, like Greece. This is not credible. (Hat tip to investor David Kotok for this deposit-guarantee thought.) 

A loan-guarantee program to backstop the banks in Europe and sovereign debt will put an end to this crazy Greek drama that is pulling down markets everywhere and threatening the economic recovery. As a free-market advocate, I don’t like this sort of government intervention. But we’re talking emergency here. Systemic global emergency. 

Yeeeeeeehaaaaaa!  It's the Hank Paulson Bailout Special!  Guarantee all Eurozone country loans with the power of the ECB, introduce massive moral hazard across the board as no major financial player will be allowed to lose, and re-open the casinos so the big banks can gamble with all of Europe's cash!

Boy that sounds like a wonderful plan.  It's like what Hank Paulson and Bush did here, only an even bigger giveaway of trillions to the big banks.  Meanwhile, the poor chumps on the streets in Athens, Barcelona, Lisbon, Dublin and Rome get to see their salaries slashed, their retirements wrecked and their livelihoods looted as they are forced into "austerity measures" while the fat cats feast.

Hey, it worked for us!  We just call those "furloughs" here.  Anyone surprised by this?  because this is exactly what I expect is going to happen over the next month or so.  It's a terrible plan (after all Kudlow thinks it's  great idea) so count on something very much like it happening very, very soon.

The Kroog Versus That Whole "We're Greece!" Thing

Good news!  According to Paul Krugman we're not Greece, circa 2008.  Bad news, according to Paul Krugman, we're Japan circa 1991...and there's nothing we will do about it.

But the truth is that policy makers aren’t doing too much; they’re doing too little. Recent data don’t suggest that America is heading for a Greece-style collapse of investor confidence. Instead, they suggest that we may be heading for a Japan-style lost decade, trapped in a prolonged era of high unemployment and slow growth.

Let’s talk first about those interest rates. On several occasions over the past year, we’ve been told, after some modest rise in rates, that the bond vigilantes had arrived, that America had better slash its deficit right away or else. Each time, rates soon slid back down. Most recently, in March, there was much ado about the interest rate on U.S. 10-year bonds, which had risen from 3.6 percent to almost 4 percent. “Debt fears send rates up” was the headline at The Wall Street Journal, although there wasn’t actually any evidence that debt fears were responsible.

Since then, however, rates have retraced that rise and then some. As of Thursday, the 10-year rate was below 3.3 percent. I wish I could say that falling interest rates reflect a surge of optimism about U.S. federal finances. What they actually reflect, however, is a surge of pessimism about the prospects for economic recovery, pessimism that has sent investors fleeing out of anything that looks risky — hence, the plunge in the stock market — into the perceived safety of U.S. government debt.

What’s behind this new pessimism? It partly reflects the troubles in Europe, which have less to do with government debt than you’ve heard; the real problem is that by creating the euro, Europe’s leaders imposed a single currency on economies that weren’t ready for such a move. But there are also warning signs at home, most recently Wednesday’s report on consumer prices, which showed a key measure of inflation falling below 1 percent, bringing it to a 44-year low.

This isn’t really surprising: you expect inflation to fall in the face of mass unemployment and excess capacity. But it is nonetheless really bad news. Low inflation, or worse yet deflation, tends to perpetuate an economic slump, because it encourages people to hoard cash rather than spend, which keeps the economy depressed, which leads to more deflation. That vicious circle isn’t hypothetical: just ask the Japanese, who entered a deflationary trap in the 1990s and, despite occasional episodes of growth, still can’t get out. And it could happen here.

So what we should really be asking right now isn’t whether we’re about to turn into Greece. We should, instead, be asking what we’re doing to avoid turning Japanese. And the answer is, nothing. 

Krugman's on to something here.  I've been talking about the deflation of the housing market (more correctly it's disinflation) as billions of dollars in wealth are vanishing from real estate and being replaced by...nothing.  The commercial market is falling apart and has been.  We can no longer cut interest rates.  The Neo-Hooverites on both sides of the aisle say we need to cut spending when the government is the spender of last resort, guaranteeing we end up in the Japanese deflation trap.  Should the GOP regain control of Congress later this year, we're pretty much doomed economically.  They will defund the government as much as possible.

And that will be the final nail in our coffin, knocking us into a double-dipper that it'll take us years to get out of, if not longer.

StupidiNews!

• Jupiter appears to be missing a stripe, and scientists are trying to figure out why.
• A US research team has created the first viable cell ruled by a completely constructed set of DNA.
• The Senate financial regulatory bill passes the upper chamber 59-39, a conference bill with the House is expected by July 4th.
• Another bad day ahead for world stock markets as investors try to make sense of yesterday's big losses.
• Turns out even in the antelope world, males are complete dogs.

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.