Last Call

The only thing more surreal than Chicago shock jock Erich "Mancow" Muller getting waterboarded as a publicity stunt, lasting a total of seven seconds, and then declaring it to be torture...


(NSFW, frankly. Also disturbing as hell to know we put a guy through this 183 times.)

...is the number of people over at Little Green Footballs calling Mancow a complete pussy for failing to last longer.

Apparently these real conservatives can stand up to waterboarding as proof of their manhood. To them, I go "Let's see you do it there, Superman." Mancow is a glory hound and publicity junkie, but he has the stones to at least make his mind up having experienced it. You get credit for that in my book.

It's called torture for a reason, you idiots. Sadly, Mancow may have done more for the country than weeks of impassioned, intelligent arguments about waterboarding's true effects.

Mark Sanford: Super Asshole

GOP Gov. Mark Sanford doesn't want to accept $350 million in stimulus funds for South Carolina. The stimulus legislation allows state legislatures to override the Governor's veto and the SC legislature promptly did so with a 34-11 vote.

Sanford is promptly suing the state's general assembly, stating overriding his veto is unconstitutional.

Gov. Mark Sanford is taking the General Assembly to court after lawmakers required him to accept $350 million in disputed federal money by overriding his budget vetoes.

Sanford quickly announced the federal suit after the Senate voted 34-11 on a state budget that forces him to accept the money.

“We know a suit will be filed against us on this issue, and as such we’ve filed a suit tonight in response,” Sanford said in a prepared statement. “We believe the Legislature’s end-around move won’t pass constitutional muster.”

This is a guy that would rather sue his own legislature than accept money to help his constituents with an 11.5% unemployment rate.

Asshole. Prime.

Republicans Still Run The Village

Iggy wants to know what the hell is up with the All Newt Gingrich All The Time Show on teevee.

It’s a really strange situation. If were an editor looking for an op-ed from a conservative point of view about the California budget crisis, I would turn to one of the members of the California State Senate, or to one of the members of the California State House of Representatives. If I wanted an op-ed from a conservative point of view about the implications of the California budget crisis for national politics, I think I would turn to one of the 19 different Republican members of the United States House of Representatives. But the Post went with a former House Speaker from Georgia, who last held elected office about ten years ago.

If I wanted a conservative politician to go up against Dick Durbin (D-IL), the number two Democrat in the United States Senate, my first choice would be Jon Kyl (R-AZ), who’s Durbin’s opposite number. But of course Mitch McConnell (R-KY), the top GOP dog, would be a great get too. Failing that, there are 37 other Republican Senators you can ask. And there are lots of conservatives in the House leadership who might have an enlightening point of view on whatever it is they’re up to. But Meet The Press went with a former House Speaker from Georgia, who last held elected office about ten years ago.

Hey Iggy, news flash. The Village wants it to be 1993 all over again. It was the height of their power. Their incestuous relationship with the GOP began then, and only in the last 4 months has that even come close to changing. The Rush/Cheney/Newt show allows the GOP to stay relevant thanks to the Village, and the Village gets to run Washington and the country thanks to the Democrats pissing themselves in fear.

The Village wants it. The GOP wants it. The Democrats are powerless to stop it. You thought the Clinton years were bad for Democrats?

You have no clue.

[UPDATE] Steve Benen notes that Dick Cheney's daughter Liz has been all over the damn teevee too as a Serious Pundit. They literally can't get anyone to back up Cheney's garbage other than his own daughter, not a single sitting GOP anybody, and this is supposed to be Serious Journalism.

At This Point, We're Not Even Trying To Hide The Magical Thinking Anymore

If your idea of financial prognostication is Jim Cramer, Laszlo Birinyi and the rest of the Happy Face Financial Media, then brother, have I found the economist for you!

When will this horrible recession be over? According to one surprising source, it's over right now.

The source is Robert J. Gordon, an acclaimed macroeconomist and professor at Northwestern University. It's surprising to learn he thinks the recession is over, because he is one of seven members of the elite Business Cycle Dating Committee of the National Bureau of Economic Analysis. These are the people who decide officially, for the record books, when recessions begin and end -- usually many months after the fact, when the decision is really obvious. I'm unaware of any previous case in which a member of this committee has stepped forward and declared the end of a recession in real time.

Gordon bases his gutsy call on an indicator that he says the committee never even looks at: claims for unemployment benefits. He's talking about the so-called jobless claims number that is released every Thursday morning before the market opens.

Based on detailed data from state agencies, it reports the number of workers who have asked for unemployment benefits in the previous week. As Gordon points out, there is no other major macroeconomic statistics that comes out so frequently and so close to real time.

According to Gordon's research, in every recession since 1974, the peak in jobless claims came within weeks of the bottom of the recession.

Wow. That's staggering. We're honestly saying that since we've hit a peak in weekly jobless claims six weeks ago, the recession is over.

That's the entire theory. The whole thing. Everything from here on out is recovery, just a slow, ugly one. All based on one statistic (and a traditionally lagging indicator at that.)

Does anyone still think this is just another recession, just like all the ones since 1974?

Second wave is coming, folks. It's a double dipper. Buckle up. Recoveries only happen when the fundamental problems are dealt with. Housing prices are still 30% too high. Millions of homeowners are going to get clobbered by falling home prices and ARM reajustments. The banks are still insolvent and are only still going because of billions of taxpayer dollars. $2 trillion in losses still remain for the sector. Commercial real estate is falling apart as I type this.

Just because you got lucky and landed on a ledge when you fell into the volcano doesn't mean it's not going to erupt and obliterate you.

The more I think about it, the more I'm coming up with the theory that the recovery addicts are saying to themselves "OK, I don't care what the data says. This recession has lasted sixteen freaking months now. It has to be over by now. What are the odds of this going any longer? Time to buy! Recession over!"

And that's their entire plan. It's like Cheney fiddling with intel to make the case for Iraq.

Autopsy Of A Mall-ing

Regular readers will note that I've been talking about the commercial real estate bust for some time now. Hotels, motels, office buildings, business parks, big-box stores and retailers have all been hurt by the recession and will continue to be hurt.

But if there's one segment of the CRE market that is flat out doomed, it's America's shopping malls. The WSJ has an interesting post-mortem on a mall I've been to more than a few times, Charlotte's dying Eastland Mall.

The severity of the recession is turning some malls that were once viewed as viable into potential casualties. "Any mall that's sitting on life support is probably going to get its plug pulled" as the economy stalls, says Michael Glimcher, chairman and CEO of Glimcher Realty Trust, which owns 23 U.S. properties, including Eastland Mall in Charlotte.

One industry rule of thumb holds that any large, enclosed mall generating sales per square foot of $250 or less -- the U.S. average is $381 -- is in danger of failure. By that measure, Eastland is one of 84 dead malls in a 1,032-mall database compiled by Green Street. (The database focuses heavily on malls owned by publicly traded landlords and doesn't account for several dozen failing malls in private hands.) If retail sales continue to decline at current rates, the dead-mall roster could exceed 100 properties by the end of this year, according to Green Street. That's up from an estimated 40 failing malls in 2006, before the recession began.

"This time around, because of the dramatic changes in consumer spending practices, we're very likely to see more malls in the death spiral than we've ever seen before," says Green Street analyst Jim Sullivan.

Failing malls didn't get into trouble overnight, and most began their descent long before the tough climate. Typically, a mall begins to suffer due to job losses and other pressures in the surrounding neighborhood or because a newer mall opens nearby. The loss of key tenants -- such as the wave of department-store closures over the past three years -- hastens the demise. Also sapping malls' vibrancy: the increased preference among consumers for big-box stores, such as Wal-Mart Stores Inc. and Target Corp., which rarely operate in malls.

Developers, in fact, have been moving away from the enclosed-mall format in favor of big-box centers anchored by free-standing giants such as Wal-Mart or open-air shopping centers with tiny parks and outdoor cafes sprinkled among fashion stores. Only one enclosed mall has opened in the U.S. since 2006: The Mall at Turtle Creek in Jonesboro, Ark.

These pressures, coupled with landlords' difficulties refinancing debts in the bone-dry capital markets, signal tough years ahead for retail-property owners -- even after consumer spending begins to rebound. "The shopping-center bankruptcies and the REIT bankruptcies are the ticking time bomb that people aren't talking about," says Burt P. Flickinger III, managing director of Strategic Resource Group, a research firm.

Malls were pretty much screwed before the recession, in other words. With the recession and deep cuts in consumer spending these days, it's a certainty that malls in the country are going to start going under at an alarming rate. That means more lost lobs, less consumer spending, and more problems for the economy.

The next wave of the recession is coming. Count on it.

A Fighting Or A Challenge: Dick's Speech

The Guardian's US correspondent, Toby Harnden, proclaims that Mighty Dick "landed ten punches on Obama's jaw" in his speech yesterday.

Sounds like A FIGHTING OR A CHALLENGE to me. Let's go, Skippy.

1. "I've heard occasional speculation that I'm a different man after 9/11. I wouldn't say that, but I'll freely admit that watching a coordinated, devastating attack on our country from an underground bunker at the White House can affect how you view your responsibilities."

Harnden here says that Obama was just a wussy State Senator, and Cheney was making the big decisions.

Decisions like "ignoring intel showing Bin Laden was about to attack" and "failing to prevent 3,000 deaths". I sure want him in charge!

2. "The first attack on the World Trade Center was treated as a law- enforcement problem, with everything handled after the fact: arrests, indictments, convictions, prison sentences, case closed."

PRE 9/11 MINDSET! THIS IS AN UNENDING WAR! But the funny thing about treating it as a law-enforcement problem: We tried, convicted, and incarcerated the people behind that attack legally, and they are still in various maximum security and Supermax facilities in the United States, along with hundreds of other terrorists. It was done legally and safely. Instead, we scooped up hundreds of people, declared them enemy combantants illegally, and tortured the hell out of them in order to get casus belli for war with Iraq.

Imagine that. Following the Constitution is a "pre-9/11 mindset."

3. "By presidential decision last month, we saw the selective release of documents relating to enhanced interrogations. This is held up as a bold exercise in open government, honoring the public's right to know. We're informed as well that there was much agonizing over this decision. Yet somehow, when the soul searching was done and the veil was lifted on the policies of the Bush administration, the public was given less than half the truth."

That's funny, because you could have said the same "nakedly political" charge that Harnden makes about Obama's photo release about the Abu Ghraib photos. We certainly learned far less than half the truth about detainees from Abu Ghraib...which is why Obama was put in the situation to begin with. Maybe if Cheney had released the full extent of the information of his programs...it's not like Cheney was the most nakedly political veep of our time or anything.

4. "It's hard to imagine a worse precedent filled with more possibilities for trouble and abuse than to have an incoming administration criminalize the policy decisions of its predecessor. Apart from doing a serious injustice to intelligence operators and lawyers, who deserve far better for their devoted service, the danger here is a loss of focus on national security and what it requires."

Been over this argument many times before.

When the policies are criminal policies, then they should be criminalized. You broke the law, Dick. You broke the Geneva conventions. You said the justification for doing so was because the law didn't apply to you during wartime, and then you argued it didn't apply because the president said it was legal. You are not above the law.

5. "We had a lot of blind spots after the attacks on our country, things we didn't know about al Qaeda. We didn't know about al Qaeda's plans, but Khalid Sheikh Mohammed and a few others did know. And with many thousands of innocent lives potentially in the balance, we did not think it made sense to let the terrorists answer questions in their own good time, if they answered them at all."

Harnden's idiotic argument is that Americans are willing to do whatever it takes to get answers, including torture. How far are you willing to go for that, America? The logical endpoint of that is allowing torture in criminal and civil cases too where informants and suspects don't want to talk. If a man is suspected of kidnapping a loved one and their life is possibly at stake, would you demand that the informant that the police have detained be waterboarded until they told you everything? How many lives are worth torturing a human being for? Once you go down that path, there is no climbing back up.

6. "On his second day in office, President Obama announced he was closing the detention facility at Guantanamo. This step came with little deliberation, and no plan. Now the president says some of these terrorists should be brought to American soil for trial in our court system. Others, he says, will be shipped to third countries; but so far, the United States has had little luck getting other countries to take hardened terrorists."

Now, here I have to award both Harnden and Cheney the point. Obama will indeed take poltical damage if he doesn't manage to keep that promise, and frankly I have my doubts that he will close Gitmo: his own party is pissing on itself in fear to prevent Obama from doing it.

However, if Obama can do it, he wins this point back.

7. "The administration has found that it's easy to receive applause in Europe for closing Guantanamo, but it's tricky to come up with an alternative that will serve the interest of justice and America's national security."

The way the Bush/Cheney administration treated European allies over the course of the last 7 years was at best indifferent, and at worst insulting. Even the UK hung up its spurs in Basra and said "no more troops for your war." We have a lot of bridges to rebuild, and yet Cheney once again treats simple diplomacy with military allies as "appeasing the enemy". It's a blockheaded approach, and change is needed.

8. "If fine speechmaking, appeals to reason, or pleas for compassion had the power to move them, the terrorists would long ago have abandoned the field."

Sigh, the same old "Democrats as effete nerdy wimps" argument. Terrorism will only be solved in the end by making peace or killing billions, and see the response to #7. This fool sees diplomacy itself as the enemy. Honestly.

9. "It's worth recalling that ultimate power of declassification belongs to the president himself. President Obama has used his declassification authority to reveal what happens in the interrogation of terrorists. Now let him use that same power to show Americans what did not happen thanks to the good work of our intelligence officials."

If there is concrete evidence that waterboarding saved a single American life, wouldn't Bush have declassified it in defense of his policies? Would not it have been the biggest news story of the year? Would it have not lead to the breakup, capture, or death of an entire terror cell and would it not be still hailed today as definitive proof that these "enhanced interrogation techniques" saved lives?

10. "To the very end of our administration, we kept al-Qaeda terrorists busy with other problems. We focused on getting their secrets instead of sharing ours with them. And on our watch, they never hit this country again. After the most lethal and devastating terrorist attack ever, 7- 1/2 years without a repeat is not a record to be rebuked and scorned, much less criminalized."

See #1. You lost 3,000 lives, Dick. You don't get to play that card. Ever.

Final score, these guys are batting 1 for 10, and even then that one they don't get credit for until next January.

Thanks for playing however.

Busted Banks On A Thursday Night

For once, the FDIC didn't wait until the weekend to pull the trigger on a failed bank, conducting the operation last night. But two other things make the failure of Coral Gables, Florida-based BankUnited very, very different. One, it's the largest bank failure in 2009, BankUnited had a hefty $12.8 billion in assets, over $8 billion of which were in deposits. Two, the FDIC was able to immediately find a buyer for BankUnited.

WL Ross & Co., Blackstone Group LP and Carlyle Group’s purchase of BankUnited Financial Corp., the largest U.S. bank to collapse this year, came with a signal from regulators that they may be willing to let more buyout firms snap up banks as failures soar to a 15-year high.

The Federal Deposit Insurance Corp., citing the interest of private-equity firms in buying banks in receivership, said yesterday that it will soon provide “policy guidance” for potential investors. Spokesman David Barr declined to elaborate on the statement.

“The FDIC’s guidance will address the issue of safety and soundness in private equity deals,” said Patricia McCoy, who teaches banking and securities regulation at the University of Connecticut School of Law in Hartford. Regulators “will probably ask for greater assurance that the private equity fund will stand ready as a capital backup if the depository institution becomes undercapitalized.”

Carlyle and Blackstone, the world’s two biggest leveraged buyout firms, are among those considering buying banks on the cheap after global losses from the credit crisis topped $1.4 trillion. The FDIC in January agreed to sell IndyMac Bank to private-equity investors after failing for five months to find a buyer among the lender’s stronger rivals. BankUnited’s winning bidders are injecting $900 million into the Florida lender.

These leveraged buyout firms are taking clear advantage of the FDIC's largesse, selling these busted banks for pennies on the dollar. Look for a lot more of this to come in 2009 and 2010 as the number of failed banks continues to rise sharply...and the number of buyout firms getting into the banking business increases.

After all, if these companies get into banking, they become eligible for billions in TARP money and trillions in interest free government loans should these bad banks become too much of a drain on their leverage. I believe they will, there's still trillions of bad commercial and residential mortgage bets out there, and getting a seat at the taxpayer trough now means not having to fight for one later when things get worse in 2010.

It's a damn smart plan for these firms to follow. They know now they belong to the "too big to fail" category with banks under their belt, and that means they can take all the crazy risks they want to. They know you and I are now on the hook should things go bad, and the government knows they have to help these firms out or risk losing all the private investment in the failed financial system. It's an implied guarantee of huge rewards if the risks pay off (like buying a failed bank with billions of exploding real estate time bombs on the books), and free taxpayer money should the plan backfire.

God, that's a f'ckin beautiful scam, it is. You really have to admire it. Either way, these leverage firms really can't lose, and they can use that implied guarantee to leverage some truly crazy deals. These guys will be falling all over themselves to get the next failed bank once the FDIC releases its guidance on the practice. It's a pyramid leverage scheme with the full faith and credit of the US taxpayer backing it. You don't get much better than that.

"Moral hazard"? Gee, what moral hazard?

StupidiNews!

• Another major ground beef recall for e-coli has been issued, mainly in the Ohio and Pennsylvania area.
• The White House is reviewing the military's "Don't Ask, Don't Tell" policy on serving gay and lesbian members.
• Gov. Sarah Palin has vetoed $28.6 million in stimulus funds for Alaska, drawing ire from Democrats.
• Despite news to the contrary that bankruptcy is all but certain, GM's fate may not become clear until June 1.
• Microsoft is blocking Windows Live Messenger service in US-embargoed countries like Cuba.