Last Call

Just in case we were still unclear on the answer to the whole "So is Wall Street going to let this default happen?" question:

The United States may lose its top-notch credit rating in the next few weeks if lawmakers fail to increase the country's debt ceiling, forcing the government to miss debt payments, Moody's Investors Service warned Wednesday.

Moody's was the first among the big-three rating agencies to place the United States' Aaa rating on review for a possible downgrade, which means a negative rating action is impending.

In a statement, Moody's said it sees a "rising possibility that the statutory debt limit will not be raised on a timely basis, leading to a default on U.S. Treasury debt obligations." 

The move wasn't completely unexpected: The credit-rating agency had warned in early June that a ratings review was likely in mid-July if there wasn't "meaningful progress" in discussions to raise the debt limit. 

And now Wall Street is pissed.   Expect a deal sooner rather than later, as long as Obama continues to be smart enough to let the GOP save face.

So Very Not Miller Time

The Minnesota shutdown's latest casualty?  Miller Lite.

Miller Lite beer fans better stock up while they can.

The MillerCoors brewing company will soon be forced to pull 39 brands of beers from every restaurant, bar and liquor store in the state of Minnesota.

It's all because the company wasn't able to renew their brand label registration far enough in advance before the state's government shut down.

"What that means is they're not able to either distribute or sell their product in this state," said Doug Neville, spokesperson for the Minnesota Department of Public Safety.

Neville said the bare-bones staff of the state Alcohol and Gambling Enforcement department have reached out to MillerCoors for a removal plan, so he said it will likely be a day or two before the company begins pulling the product.

Granted, Minnesota may later thank the beer gods for getting rid of Miller Lite and Coors for a while, but something tells me this is exactly the six-pack straw that broke the shutdown's back.   We'll see.

Obama Cashes In

Meanwhile, despite all the right-wing noise that Jewish donors are "abandoning Obama in droves" and that "Wall Street hates the President" and are now backing the GOP, President Obama's fundraising efforts in the second quarter of this year took in $86 million: more than double the entire GOP haul for April, May, and June.

President Obama's vast campaign operation raked in $86 million for his re-election and for the Democratic party during the last three months, breaking previous records with a total far greater than that posted by his Republican opponents for  the 2012 election.

Initially, the Obama campaign had set a goal of raising $60 million. Republican candidates combined are expected to raise less than $35 million this quarter.

The Obama amount points to the advantages of incumbency in fundraising, and to the staggering cost of the coming election, which this year will feature a new, powerful role for independent groups that can raise unlimited sums. This year, those groups could out-raise and outspend the parties and the candidates.

The dollar total for Obama this quarter, announced by his campaign manager in a video message to supporters this morning, reflects $47 million raised for the Obama for America presidential campaign and an additional $38 million raised jointly with the Democratic National Committee.

That is an important caveat to watch.  Advocacy groups, lobbyists, industry groups and PACs can give unlimited funds this time around, and that's where the real money will be raised and spent in 2012.  But to still outraise the entire GOP field by more than 2 to 1 is just staggering. 

Obama still has the fundraising chops, that's for sure.

Election Special

Some election results for you yesterday:  in California's special election for Democrat Jane Harman's seat, Democrat Janice Hahn easily defeated Republican Craig Huey by 10 points.

Hahn, a Los Angeles City Councilwoman and member of a political dynasty, earned about 55% of the vote to Huey's 45% when all ballots were counted late Tuesday.

She succeeds Democrat Jane Harman, who resigned to run a Washington think tank, in California's 36th District.

For a special election whose outcome would have little impact on the partisan balance in the U.S. House, the run-off race between Hahn and Huey at times turned nasty.

A conservative super PAC ran an ad depicting Hahn as a stripper that also used racist imagery and language. Hahn called Huey, a businessman who publishes Christian voter guides, "extreme" for his views on issues such as abortion. Huey tried to portray Hahn as a career politician, and tapped Tea Party support in the campaign.

After the vote, Hahn vowed to press for more jobs and aid for veterans. "When they come home, we have to do a better job making sure they get their health benefits. They deserve that and we owe it to them," she's quoted as saying in The Daily Breeze.

And in Wisconsin's recall primary,  Democrats beat back six Republican primary challengers in order to secure Democratic opponents for the six GOP state senators facing a recall challenge.

Party-backed candidates won in each of six state Senate districts in Tuesday's vote, essentially a Democratic primary but with an odd twist that took place ahead of a formal August recall vote.

The candidates had to beat back unusual primary challenges from six Republicans who ran as Democrats in order to give the targeted Republican incumbents more time to campaign, raise money and maintain their party's hold on the state Senate.

Unofficial results posted on websites run by election officials in the counties where the six races were run showed the Democratic Party-backed candidates won all six races, and Democrats declared victory.

Running tallies late on Tuesday showed double-digit Democratic leads in all but one race, where the Democratic candidate led by a smaller but still substantial margin.

Things all went the Dems' way last night, so of course it "doesn't mean anything" as far as 2012 is concerned, according the right.

Google Plus = Huge Potential

I've just recently joined Google+ and I'm really enjoying it so far.  There is a load of potential, but I don't know how they plan to seriously compete with Facebook in the long run.  It's still bare bones right now, but I like what I see.  Like many, I was afraid this was a recycled effort to bring back Buzz, but for once Google applied feedback and put out a fully developed launch.  The most impressive thing is how they allow you to sort friends into circles.  You can control who sees what, but most importantly you can finally filter your feed quickly by clicking on the circle.  Now best friends, coworkers, family and clubs can be sorted easily.  I only have a few friends who have been able to get in (the waiting list is long) but I love the idea of going right to the category I'm interested in.  The way it is set up is both intuitive and truly useful.

My main concerns is with privacy.  Like Facebook, Google has been plagued with privacy complaints and issues.  However, the basic setup is straightforward and easy to organize, which capitalizes on one of Google's greatest strengths while highlighting a famed Facebook weakness.  Another massive strength is the integration.  Google may not control social networking but the Gmail and YouTube users will find a handy way to share without any real effort on their part.  I have moved my website, music, writing and social activities to Google.  This is the perfect way to bring it together, and that is something Facebook doesn't offer.  The fact that my Android phone can now be an extension of my Google activity is yet another perk that Facebook can offer but not quite match as effectively.

The +1 seems to be the equivalent of the Facebook "like" but without enough activity it is difficult to tell how this will work.  You can broadcast by webcam for different circles, and show up in their feed.  I prefer this to the Skype potential, but without more friends to try it with, I can't be sure.  With the YouTube integration I can see how the ten person limit for a hangout will give way to channels and webcasts and camblogs.

I will definitely update as more becomes available.  In the meantime, are any of you on there?  If so, what do you think? I'm not saying Facebook is licked by any means, but I think they may have some real competition here.  In the long run I won't maintain two accounts, but I can't say which will win... my investment in Facebook or the complete integration Google offers.  The real test for success will be when the public floods in and gives it a test drive.

My friend Sir Mud has written a handy how-to on getting started.  It's perfect for an intro to the basic features and how you may get the most benefit out of them.

Why Bon Feels Mighty Sorry For A Cop

Lately the police have annoyed me more than impressed, but even I have to feel sorry for this guy.  Can you imagine performing a routine traffic stop only to realize you have "The" Rodney King on your hands?

Los Angeles (CNN) -- Rodney King, whose videotaped beating by police ultimately led to the 1992 Los Angeles riots, was arrested on suspicion of driving under the influence on Tuesday, police said.

King was behind the wheel of a 1994 Mitsubishi when he was pulled over in Moreno Valley, in Southern California's Riverside County, the city's police department reported. Officers saw King -- who has acknowledged a longstanding drinking problem -- commit "several traffic violations," a police statement said.

No Dealing On The Debt Ceiling, Part 33

A big clue to the endgame on the debt limit hostage scenario comes from today's Wall Street Journal editorial board article selling Mitch McConnell's "escape hatch" to conservatives.

The hotter precincts of the blogosphere were calling this a sellout yesterday, though they might want to think before they shout. The debt ceiling is going to be increased one way or another, and the only question has been what if anything Republicans could get in return. If Mr. Obama insists on a tax increase, and Republicans won't vote for one, then what's the alternative to Mr. McConnell's maneuver?

Republicans who say they can use the debt limit to force Democrats to agree to a balanced budget amendment are dreaming. Such an amendment won't get the two-thirds vote to pass the Senate, but it would give every Democrat running for re-election next year a chance to vote for it and claim to be a fiscal conservative. 

Now this is clearly the Wall Street wing of the GOP telling the Tea Party wing to sit the hell down and shut the hell up.  Remember, the Tea Party position is that there's no valid reason to raise the debt ceiling at all.   The insistence here that it will be raised anyway, and the cynical admission that the Republicans were holding the country hostage in order to try to extort concessions out of President Obama and the Democrats, is not something that the Republicans would admit to unless they had lost the game.

We agree with those who say that Treasury Secretary Tim Geithner can cut other federal spending before he allows a technical default on U.S. debt. No doubt that is what he will do. We'd even support a showdown over technical default if we thought it might yield some major government reforms. But Mr. Obama clearly has no such intention.

Instead he and Mr. Geithner will gradually shut down government services, the more painful the better. The polls that now find that voters oppose a debt-limit increase will turn on a dime when Americans start learning that they won't get Social Security checks. Republicans will then run like they're fleeing the Pamplona bulls, and chaotic retreats are the ugliest kind. By then they might end up having to vote for a debt-limit increase and a tax increase.

The tea party/talk-radio expectations for what Republicans can accomplish over the debt-limit showdown have always been unrealistic. As former Senator Phil Gramm once told us, never take a hostage you're not prepared to shoot. Republicans aren't prepared to stop a debt-limit increase because the political costs are unbearable. Republicans might have played this game better, but the truth is that Mr. Obama has more cards to play. 

And this right here folks is a full-on white flag surrender.  I've long said that Wall Street would never let the Tea Party wreck their bond market ZIRP gravy train, and this is the clearest indication yet that the powers that be in Manhattan's towering edifices aren't about to let the teahadists crap the bed.

The Tea Party reaction to this is not pleasant.  Erick Erickson at Red State lost his marbles over McConnell's proposal.  Think tanks like the Heritage Foundation are screaming bloody murder.  But with conservatives like Jennifer Rubin at the Washington Post, Fred Barnes at the Weekly Standard, Andrew Stiles at the National Review, and John Podhoretz at Commentary Magazine all selling the McConnell Plan as the only way out of this mess, the Republican retreat is on.

Wall Street has had enough.  The Tea Party just got cut off at the knees.  And Obama?  Still looks like the smartest guy in the room.

Irish Eyes Are Crying, Part 12

Moody's has downgraded Ireland's credit status to junk and is warning the country will need another bailout due to the abject failure of austerity measures there (as I predicted long ago).

Moody's now rates Ireland Ba1, one notch below former financial market pariah Colombia and two notches below Brazil, and has kept a negative outlook, meaning further downgrades are likely in the next 12 to 18 months.

Ireland's rating is still one notch above Portugal and six above Greece. Both Standard & Poor's and Fitch Ratings have Ireland at BBB-plus, three notches above junk status, with S&P's outlook stable and Fitch on outlook negative meaning it does not expect a downgrade in the short-term.

Moody's move, however, will likely put pressure on the other ratings as the downgrade forces some investors to dump Irish bonds because they no longer enjoy a clean investment-grade sweep of the three major ratings agencies.

"It's amazing to me that Ireland was still investment grade," said Suvrat Prakash, interest rate strategist at BNP Paribas in New York.

"A lot of people assume that these rating agencies tend to move with a lag so there could be more downgrades to come.

Ireland's borrowing costs are already at levels once thought unimaginable, with five-year paper yielding over 15 percent on the secondary market and 10-year paper close to euro-era highs of 13.86 percent.

When Ireland agreed an 85 billion euros ($119 billion) bailout package with the European Union and the International Monetary Fund last November -- a move designed to soothe market fears -- its 10-year paper was yielding around 9.5 percent, a level viewed as shocking at the time.

Yeah, let's recap here.  Irish austerity has failed so badly that Irish debt is now 4 whole percentage points higher than the "crisis" level that austerity was supposed to solve.  The latest Greek bailout nonsense has wrecked Italy on Monday, and hit Ireland on Tuesday.

When you make massive government spending cuts in a recession, the recession gets worse.  Britain, Ireland, Greece, Spain...all are in serious trouble now.  And here in the States, Republicans want to cut trillions in spending.  The results will be an order of magnitude worse here should that happen.  Republicans are trying to destroy the economy for political gain.  We know what happens when you make massive government spending cuts in a weak economy.  Austerity hasn't helped any country since the crisis began in 2008.

But we're told if we don't cut spending, we'll go bankrupt or some idiocy.  We'll go right into a recession, if not a full blown depression, if we do.  As it is, ending the stimulus is about to do just that.

But that's okay with our masters.

The Netflix Conundrum, Part 3

Netflix is splitting its streaming and DVD services into two separate charges, meaning a substantial monthly price hike for a majority of customers...and they're not happy about it.

So the new plan is going to be $7.99 for unlimited streaming or unlimited DVDs every month, (or $11.99 for two DVDs rented at a time) every month. If subscribers want both, they're going to just have to pay double.

Some subscribers reacted angrily to the change in the blogs' comments section, while Ryan Lawler over at GigaOm noted that the change would help the company break out its financials more easily for investors to see how it really makes money.

Given that there's only a limited selection of movies available for streaming, it's not surprising that there's a continued demand for DVDs.

As many of the commenters noted on Netflix's blog, the change alters the value of the service -- which is convenience.

It was convenient to have an unlimited streaming account with the option of occasionally ordering a DVD for a title couldn't otherwise be accessed. 

Netflix I think is in real trouble here.  I know personally I like their streaming service a lot, but I'll definitely scale back on the DVDs now.  Maybe that's what they want, I don't know.  I do know that Google's on-demand movie rental service through YouTube and Apple's iMovies service are both looking like a better idea to me as a consumer now, especially for what Netflix will be charging for streaming and DVDs.

Or better, I just cancel the DVDs part, and Netflix loses revenue on me.  We'll see.

StupidiNews!

• After a 10% hike in November, California will raise tuition at state schools by another 12% this fall as steep budget cuts force students to pay.
• Pakistan has raised the stakes after the US suspended military aid to the country by threatening to pull troops out of the lawless tribal regions of the country.
• House Republicans are demanding that $1.5 billion given to states for high-speed rail projects instead be sent to flood-ravaged Midwestern states.
• Japanese Prime Minister Naoto Kan will announce plans to reduce Japanese nuclear power and shift to more green energy.
• A study finds that one in eight US companies are violating their own do not track policies for customers.

Last Call

Fittingly, a Last Call from last night's Last Word as Lawrence O'Donnell explains what Obama is up to on the debt ceiling, why Boehner is screwed, and why Obama is winning.



The Republicans have been exposed. The "most masterful rope-a-dope in history" has the Republicans, and especially Orange Julius, staggering around the ring wondering how they lost this. Now we're seeing Republicans say publicly that they will no longer negotiate, that they will walk out of the room, that they would rather destroy the economy than agree with Obama.

The country is turning on them now. They have nothing. And when they realize that 100% of the blame for a debt ceiling meltdown will be on them, it's over, just like last December. They will be disarmed and dismissed.

Yeah, Obama knows what he's doing.  Today he upped the pressure exponentially by telling CBS News that he can't guarantee Social Security checks will go out after August 2.

President Obama on Tuesday said he cannot guarantee that retirees will receive their Social Security checks August 3 if Democrats and Republicans in Washington do not reach an agreement on reducing the deficit in the coming weeks.

"I cannot guarantee that those checks go out on August 3rd if we haven't resolved this issue. Because there may simply not be the money in the coffers to do it," Mr. Obama said in an interview with CBS Evening News anchor Scott Pelley, according to excerpts released by CBS News.

Advantage:  Obama.  That noise you heard is Sen. Mitch McConnell stabbing Orange Julius in the back and testing out his white flag waving arm.

Senate Minority Leader Mitch McConnell (R-KY) has proposed creating an escape hatch for Congressional Republicans, who have put themselves in a box by threatening not to raise the national debt limit if Democrats don't agree to trillions of dollars in cuts to popular social programs.

The plan is designed to give President Obama the power to raise the debt limit on his own through the end of his first term, but to force Democrats to take a series of votes on the debt limit in the months leading up to the election. This would stave off the threat of defaulting on national obligations, but keep the charged issues of debt and spending at the center of political debate for months.

And once again Obama is the baddest mofo in the room.  Brian Beutler argues that the real target is Grover Norquist's hold on the GOP:

Right now, whether he knows it or not, President Obama has a chisel resting at the most vulnerable point of contact between Grover and the GOP, and, if he's willing to commit, a hammer hovering threateningly above it.

He knows Congress has to raise the debt limit, and he seems to truly believe Obama won't let them do it without offering up new tax revenue -- and that would mean forcing Grover into early obsolescence. Taking that as a given, would he rather see the GOP cave in a way that renders him meaningless, or cave in a way that preserves the power of the "pledge." I totally understand his thinking here.

The second the GOP breaks Grover Norquist's no taxes pledge, he is through.  And nobody knows that more than Grover Norquist.

Well, except for one Barack Obama, it seems.  Once again, Obama has the GOP right where he wants and needs them.

Greek Fire, Part 39

The second I in PIIGS is Italy (Portugal, Ireland, Greece and Spain are the rest) and the Greek Fire that swept Europe over the weekend in the wake of Greek bailout talks falling apart with the reality of a partial default looming has now spread to engulf the Italian economy.  Wary European investors have turned on Italy and are giving the boot-shaped country the boot.

Political soap operas in Italy — especially those featuring Mr. Berlusconi — are nothing new. Nor do they usually matter much to financial markets, even after the debt crisis hit Europe. The widespread problems in Italy’s economy, which has been sluggish for the better part of a decade, also rang few alarm bells.

What’s more, Italy’s banks are sound; they never speculated in a housing bubble. The current annual budget deficit is low, at about 4.6 percent of gross domestic product. And while Italy issues the largest amount of bonds of any euro zone country, Italians own about half the debt, making it less vulnerable to the follies of financial markets.

But with interest rates rising, Italy’s economy is not growing fast enough to cover an accumulated debt load of 120 percent of gross domestic product, the second-highest in Europe, after Greece. The International Monetary Fund expects growth to pick up only slightly, to 1.3 percent in 2012.

In a sign of how quickly things have turned against the country, the stock market regulator imposed emergency rules on Monday against speculation after shares in Italian banks slumped for a fifth consecutive session. The cost of insuring Italy’s sovereign debt against default surged to a record high, and the interest on its 10-year bond leaped to a record 5.67 percent.

While that is still well below what Greece pays, analysts say Italy will have serious problems if its borrowing costs exceed 6 percent.

“Italy is a banana republic that didn’t depend so much on foreign capital in the past, but now it does, and markets are less forgiving,” said Daniel Gros, the director of the Center for European Policy Studies in Brussels. “Italy is in the danger zone; that is quite clear now.” 

Italy has so far avoided the problems that have ravaged Greece, Ireland and Portugal.  But if Italy goes down, the rest of the Eurozone goes with it...and most likely the weakened global economy will be susceptible as well.

Still, if the crisis were to take hold in Italy, the problems for the euro union would dwarf all others to date. European banks have total claims and potential exposures of 998.7 billion euros to Italy, more than six times the 162.4 billion euro exposure they have to Greece, according to Barclays Capital. European banks have 774 billion euros of exposure to Spain and 534 billion euros of exposure to Ireland.

In the United States, banks are also more exposed to Italy than to any other euro zone country, to the tune of 269 billion euros, according to Barclays. American banks’ next biggest exposure is to Spain, with total claims estimated at 179 billion euros.

But at the end of the day, “If Italy goes, it’s no longer a domino,” said Mr. Gros, the analyst in Brussels. “It’s a brick.” 

The Greek bailout falling apart last weekend has now left Italy vulnerable, and should they crack, the dam will be truly burst.  The Greek Fire...it just keeps burning.

The Twenty-Seven Percent Solution: Climate Change Edition

A new Harris poll shows that in just four years, the number of Americans who believe that humans are causing global climate change has dropped from 71% in 2007 to just 44% now.

Only 44 percent say they "believe the theory" that carbon dioxide emissions are warming the Earth, down from 51 percent in 2009 and 71 percent in 2007, but most movement has been into the "not sure" column.

The online poll of 2,163 adults was conducted June 13 through 20. Harris does not give margin-of-error figures. 

According to the poll itself, 44% believe it exists, 28% do not, and 28% are now not sure.  That "doesn't believe humans cause climate change" number has been around that magic 27% for a while now.  But nearly all of change in the polls over the years since 1999 has come at the expense of people who used to believe that humanity is responsible for climate change increasingly falling into the "not sure" category.

Enough anti-science propaganda has been deployed against the issue of global climate change that the clear majority of Americans who believed in it has now fallen to a mere plurality, and one that is fading fast.  America's energy companies couldn't be happier, either.

Best part of that Harris poll?  Americans overwhelming believe there are more natural disasters now than just a few years ago, including weather related disasters like tornadoes, hurricanes, and blizzards.  They just don't believe that humans have anything to do with causing it, or are increasingly unsure.

In other words, the climate change denialists are winning big time by muddying the waters.  And the longer we do nothing out of inertia, the worse it will get.

Exciting New Horizons In Obama Derangement Syndrome

Michelle Obama had a burger, fries, and a Diet Coke at Shake Shack in DC yesterday.  Not only is this Washington Post worthy news, that came as a surprise to some, but it makes her an elitist socialist pig who ate a meal that required two hand trucks to deliver, making her a big hypocrite, so let's get back to pretending what a hottie she is.

Boy remember eight years of people telling Laura Bush that she was fat and hated Christians and bought shoes and was way above her station and also basically the worst person on Earth?

Oh wait, sorry, all Wingers hating on Michelle Obama again.  My bad.  Hey, she should just toughen up and take the abuse like Laura Bush...never had to put up with.

Dropping The Ball... Twice

It's a huge deal when phones are hacked by NOTW,  but not too long ago we found out Michigan cops
are going through phones without permission with barely a blip.  On multiple occasions, cops have helped themselves to private data without permission or a warrant.  Obama has failed to give back our right to a warrant before being digitally snooped in the name of the war on terror.  Our government managed to take away a very important right and never answered for it.  We're all subject to search and seizure without protection, in an age where our digital actions can be forever recorded.  Nobody is stupid enough to believe that that protection will ever be reinstated.  We looked to Obama to uphold the people's rights and he failed us.  Shame on him.

NORML (National Organization for the Reform of Marijuana Laws) sends an intelligent and compelling editorial to CNN right as the federal government issues a memo stating that large grow operations sanctioned by state government are not above prosecution.  There seems to be some debate as to what may be in the works right now, but it is clear this is coming to a head, and states are requesting the right to decide for themselves how to handle one of the largest cash crops in the nation.  Still, Obama has dropped the ball here as well in my opinion.  There is a chance for him to strike the final blow in the war on drugs and undo a lot of bad karma.  A laundry list of wrongs can be resolved upon legalization (overcrowded jails and medicinal benefits come to mind) and I fail to see where the opposition provides anything stronger than maybes and personal judgment when it comes to reasons. I'm sorry, the legalization argument just makes more sense to me.  Obama has dodged the bulk of the subject.  Instead, he has opted to put the money in the hands of criminals and let the states and feds squabble about rights and jurisdiction.

The man isn't perfect and I realize it.  Here are two huge opportunities to set things right and leave a good mark in history.  There is still time, but I have no faith these mistakes will be corrected.