Last Call

CNBC's Albert Bozzo writes an article that says that you probably shouldn't treat Goldman Sachs' massive profit as any true barometer of the economy.

The irony of that is the only people stupid enough to need dissuasion from believing the silly theory that Goldman Sachs is a barometer of the economy work for CNBC.

A Spectacular Conflict Of Interest

Via BooMan, Democratic lobbyist and general pain in the ass Lanny Davis has a new lobbying client: the leaders of the coup that booted Honduran President Zelaya from the country.

The Hill reports that Davis has been hired by the Honduran branch of CEAL, the Latin American equivalent of the U.S. Chamber of Commerce, to urge US lawmakers to support, rather than oppose, the military removal of President Manuel Zelaya, Honduras's democratically elected president.

Of course, thanks to his close ties to the current Secretary of State -- who met with Zelaya yesterday -- Davis could be particularly well placed for the job. But the Fox News contributor said he had no plans to set up a meeting between Clinton and the current and former Honduran government officials with whom he's working.

Because that would be A SPECTACULAR CONFLICT OF INTEREST and ILLEGAL AS ALL HELL of course.

You won't find a Republican to make a peep about it however. They're backing Micheletti just like Lanny Davis.

That's Classified, Ma'am

Atrios raises a good point:

Either Liz Cheney has inside knowledge of classified information (a problem!) or she doesn't. If the former is true that's an interesting story. If the latter is true, then why the hell is she on the teevee talking about things she has no idea about? I mean, yes, this is cable news so that's a common occurrence, but still.

Concern about Liz Cheney's security clearance aside (After all, how does she know there is "no evidence" of the vice-president's wrongdoing?) an even more obvious question is "Doesn't Liz Cheney (who to my knowledge does not have a security clearance) discussing her father's possible role in mishandling classified CIA programs in the capacity as a network analyst or national security expert of some kind represent at the minimum a conflict of interest for the networks she appears on?"

So why is she repeatedly given a platform to defend her father? What possible qualifications does she have in the national security arena that make her an expert on this subject? Finally, why does the Village continue to pretend that she is one?

Waxman On, Waxman Off (Again)

The House Democrats finally unveiled their version of Obamacare today, but House Energy and Commerce chair Henry Waxman gave a headscratcher of a presser, saying that he expects the legislation done by the end of the year, but also strongly hinting that the House and Senate should work through the August recess until the bill is done.



So, um, which one is it Henry? Because honestly yesterday I went through all the myrad reasons why "end of the year" means "never" for Obamacare. Not going to happen if it doesn't happen by Labor Day.

Of course, that may be the point. What's Waxman getting at? Surely he's not buying into my warning theory...right?

Still, the legislation itself (It's called the America's Affordable Health Choices Act for a reason) is significant. TNR's Jon Cohn has the details:

The three House committees writing health care legislation have just released the full text of their bill. And my immediate, admittedly tentative reaction is strongly positive. Once fully implemented, this reform plan will accomplish most of the goals on my mental checklist:

• Generous subisides, available to people making up to 400 percent of the poverty line
• Expansion of Medicaid to cover people making less than 133 percent of the poverty line
• Guarantees of solid benefits for everybody, with limits on out-of-pocket spending
  
• Strong regulation of insurers, including requirements that insurers provide insurance to people with pre-existing conditions without higher rates
• An individual mandate, so that everybody (or what passes for everybody in these discussions) gets into the system and assumes some financial responsibility
• A public plan, one that appears to be strong, although I'll reserve judgment on that until I hear from the experts
  
• Choice of public and private plan, at first just for individuals and small businesses, but later for larger businesses and--possibly--eventually for everybody
• Efforts at payment reform, if not necessarily as strong as they could be
  
• Investment in primary care and prevention, which is not sexy but potentially important for general health.

The Congressional Budget Office score? Their initial estimates have it covering 94 percent of people living here and 97 percent of legal immigrants, for net outlays of just over $1 trillion over ten years. That figure includes the offsetting effect of the employer mandate, which--at a healthy 8 percent of payroll for larger companies that don't insure workers--would generate $30 billion a year by the end of the decade-long planning window. (Smaller businesses would be exempt.)

It's a good bill so far. And now the fight really begins for America to make it law.

Fried Chicken, Indeed

If you've never seen Spike Lee's classic skewering of the TV industry in his most underrated (and arguably most uncomfortable film) Bamboozled, you need to Netflix it.

It stars Damon Wayans as TV writer Pierre Delacroix, whose ideas for a positive African-American family sitcom are shot down. In frustration, he pens "Mantan: The Modern Minstrlsy Hour", a revival of the old "Amos 'n' Andy" style blackface minstrelsy shows of the 30's and 40's, only with actual black actors in blackface (underrated Savion Glover plays Mantan beautifully) as a deadly satire of the plight of African-Americans in modern America.

The problem of course is that "Mantan" quickly becomes a smash hit. Delacroix wrote the show strictly for the shock value and to "wake black America up". Instead, they're the ones laughing the hardest at the show. In the end, Delacroix has to decide whether to feed the monster he created, or strangle his own show. Part The Producers, part Death To Smoochy, and part Hollywood Shuffle, it's worth watching with other people you know just to see their reactions.

The point is, I always think of Pierre Delacroix whenever RNC Michael Steele opens his mouth and decides to write another episode of Mantan for the Republicans.



The guy has to know better, right?

How We Got Here

Over at the Frog Pond, Steven D has a pretty damn fine rundown of the financial crisis so far, and it's worth reading. An excerpt:

They (and I mean by "they" I mean traditional economists, politicians, investors, risk assessment managers, ratings agencies, bankers and insurance company executives) assumed all along that the smart guys on Wall Street and at the big insurance mega-corporations, who understood risk so well in so many other areas of finance, would understand it in this newly created market for securitized debt obligations. But of course they had no incentive to understand that risk, and no real long term market history to rely upon since the market for collateralized debt obligations was a relatively new one. It had only rally been created in the last 30 years, a drop in the bucket in economic time. Without any trend lines from past markets to guide them, and with a market that had exploded in growth exponentially over the last ten years, they were operating in uncharted waters. The assumption they all made was that the real estate bubble would continue for the indefinite future. The Federal Reserve under Alan Greenspan was keeping its rates low, pumping money into the economy, and with real estate loans (from construction lending to end user mortgages) being the easiest place to put that money to work, real estate prices continued to rise. Until, of course, they burst like all previously artificially created financial bubbles from the Tulipmania of the late 1500's in Holland, to the South Seas Scandal of 18th Century England, to the stock market bubbles of the Roaring 20's, and to a lesser extent the late 90's. Indeed, as Professor Mehrling notes, they had a hard time believing the good times would ever stop rolling even when AIG stopped issuing credit default swaps for these CDO's:

Once AIG stopped writing insurance, the game was really over, but it continued to run for quite a while. One thing that happened, and we know this from the UBS shareholder report, is that UBS started to say if AIG isn't going to sell us insurance at this cheap rate, we are going to make a plan to buy just 2% insurance and then make a plan to do "dynamic hedging" ourselves, which is a problem. That means when the price goes down, we sell, assuming that there would be a buyer on the other side.

Of course, in the end there were more sellers than buyers, and like all bubbles, this one burst as well. And all these securitized debt instruments, which had been sold as the "safest of safe" investments were exposed as the highest risks out there. Unfortunately by that time it was too late. AIG, Lehmann Bros., Merrill Lynch, etc. were in too deep. Never having anticipated that the market for their products would crash because the artificial boom in real estate they had helped to create by keeping credit cheap and ignoring the risks involved regarding (1) who was recieveing all that easy credit under the relaxed standards they helped make possible, and (2) the realistic value of the assets (homes, malls, etc.) which ultimately supported those loans, they did not have the cash reserves available to make good on their obligations.

And from there, KA-BOOM. It really was that simple: when AIG stopped writing insurance on CDOs and the music stopped, there were only a couple chairs left in the room.

Do read the whole thing.

Rock 'N' Fire Obama

President Obama is throwing out the ceremonial first pitch at tonight's All-Star Game in St. Louis tonight, the first First Pitcher at the Midseason Classic since Ford.

Obama will become the fifth president to throw out the first pitch at an All-Star Game, but the first in 33 years. He is following in the footsteps of Franklin D. Roosevelt, John F. Kennedy, Richard Nixon, and Gerald Ford.

Asked about plans to practice before the game, Obama said Tuesday, "I want to loosen up my arm a little bit."

"The last time I threw a pitch was at the American League championship series, and I just wanted to keep it high," the president said of his opening pitch at the 2005 Chicago White Sox-Anaheim Angels game.

"Now, there was no clock on it. I don't know how fast it went. But if it exceeded 30 miles per hour, I'd be surprised. But it did clear the plate," he said.

Naturally, if you think he can clear the plate, the sports world is already buzzing over it...and taking action at the betting window.

“Given Obama’s well-known athletic ability, I felt that he has as good of a shot as anyone to get the ball across the plate,” said Richard Gardner, sportsbook manager for Bodog, which is listing the bet.

“Past celebrities have crumbled under the pressure of 45,000 people watching them throw the first pitch, but Obama has experience in front of crowds, so I don’t think this will be a problem.”

The maximum bet Bodog is taking is $100 and 80 percent of the action is currently on “caught in air.” For what it’s worth, Bodog says that everything is off if the ball is dropped by the catcher.

Hey, just as long as Obama doesn't come off looking like Cincy Mayor Mark Mallory...

We're still looking for that damn ball 3 months later.

The Reasons Are Becoming Clear

Jeff Sessions flunked out of a federal judgeship back in 1986. The reasons he did so are becoming painfully clear in 2009.

This week is Sen. Jeff Sessions' (R-Ala.) first chance to appear in the national spotlight in quite a long while. It doesn't seem to be going well.

Sen. Jeff Sessions (R., Ala.), seeking to discredit Judge Sonia Sotomayor's judicial philosophy, cited her 2001 "wise Latina" speech, and contrasted the view that ethnicity and sex influence judging with that of Judge Miriam Cedarbaum, who "believes that judges must transcend their personal sympathies and prejudices."

"So I would just say to you, I believe in Judge Cedarbaum's formulation," Sessions told Sotomayor.

"My friend Judge Cedarbaum is here," Sotomayor riposted, to Sessions's apparent surprise. "We are good friends, and I believe that we both approach judging in the same way, which is looking at the facts of each individual case and applying the law to those facts."

In fact, while Sessions held up Cedarbaum, a Reagan nominee, as having the superior approach to jurisprudence, Cedarbaum immediately backed Sotomayor. "I don't believe for a minute that there are any differences in our approach to judging, and her personal predilections have no affect on her approach to judging," she told the Wall Street Journal this morning.

Ian Millhiser extended some helpful advice to the conservative Alabama senator: "Note to Sessions: before you put words in a federal judge's mouth, make sure that she isn't in the hearing room to hear your false claim."

"I know Judge Cedarbaum, and you sir are no Judge Cedarbaum."

Really, the amount of damage this assclown is doing to his own credibility is beginning to take on the dimensions of a Guy Ritchie dark comedy.

[UPDATE 1:30 PM] Apparently the Guy Ritchie dark comedy comparison is quite apt.

You pick up all kinds of skills on the bench.

More Wrong Than Jim Cramer, It's Dennis Kneale

Via AttAckerman, It's our old friend, CNBC's Dennis Kneale, this time getting getting his ass kicked by Chris Hayes.



Y'all of course remember Dennis from such classics as "Tyler Durden Is A Poophead" and "The Recession Is Over, Bitches!".

I didn't think it was possible to be a bigger douchebag than Jim Cramer, but there you are. Anything's possible.

Goldman Makes The Gold

Yesterday I talked about Double G's timeline on the events that led to Goldman Sachs being able to post an expected $2 billion profit for 2Q 2009.

Today, Goldman Sachs announced they didn't make $2 billion in profits last quarter.

They made $3.44 billion.

Comfortably beating analysts’ forecasts, Goldman Sachs earned second-quarter net profits of $3.44 billion, or $4.93 a share, the bank announced on Tuesday.

The results continue a robust turnaround for the firm since it rode out the final tumultuous months of last year with the aid of a federal rescue. They come just one month after it paid back its $10 billion in federal aid.

Goldman’s profit was lifted by record quarterly revenue of $6.8 billion in its fixed income, currency and commodities unit, where mortgage and other credit instruments are traded, the bank said in a statement. This business has performed well since the bank has taken on greater levels of risk since the end of last year.

Its equity underwriting business also generated record net revenue, worth $736 million in the second quarter, it said, as Goldman benefited among other things from a rush by other troubled banks to issue shares and raise their capital levels.

“We are performing well across the board,” said David A. Viniar, chief financial officer, who said the strong performance reflected “blocking and tackling every day” by Goldman’s employees.

It paid back $10 billion, made $3.5 billion, and did it with a smile, less than a couple months after having to borrow, well, $10 billion.

No company does that. None. Go back and read that timeline from Greenwald again. We've been had, and Timmy is beginning to look like a rat.

Congress is getting tired of asking nicely. Twenty House and Senate Democrats sent a letter to Treasury Secretary Timothy Geithner in May asking if he intended to implement the recommendations of bailout auditors. They never heard back.

If there's one thing that gets under the congressional skin, it's being ignored. So they're responding with an attempt to make it a legal requirement for Geithner to either accept the reform and oversight recommendations or explain to Congress why he won't.

The move represents an escalation in the tussle over the bailout between the White House and Democrats in Congress, and it's likely to pass.

Later this week, the full House will vote on whether to give Geithner a deadline written into the law to respond to its request. The mandate passed the Appropriations Committee last week. The first legally required report would be due Sept. 1, 2009, with quarterly reports to follow.

Geithner is required to respond to auditors' recommendations under current law, but there is no deadline to do so. Geithner neither replied to the May letter, nor has he responded to the recommendations of the Government Accountability Office (GAO) or the Special Inspector General for the Temporary Asset Relief Program (SIGTARP).

And while asking where the money went is nice, it's going to come far too late for millions of American jobs, or increasingly, too late to save Obama's domestic agenda.

Still Twice As High As Bush

Obama's approval numbers has slipped from the lower 60's into the upper 50's in the latest CBS poll. Naturally, the usual suspects are gleefully proclaiming the President's doom.

Apparently 57% approval rating is the new 27%. Go figure. What, we're spotting him 30% because he's black?

Robots And Racists

Once again, Jeff Sessions is playing Robots and Racists.

That is, he's saying that judges at the federal level must be entirely dispassionate and unbiased, or they are biased and should be rejected for the Supreme Court. There is no middle ground here in Sessions's world. You are either one or the other. The implication is not that Sotomayor is incapable of handling her emotions (that particular misogyny seems to be Jon Kyl's line of attack) but that no judge should ever have emotions at all. If you do, that is an example of bias, and you are unfit for the Supreme Court. The strong implication here is that Sotomayor has a bias against white men because she approaches things from the perspective of a Latina.

One, haven't we had enough examples of that dangerous binary worldview over the last eight years? Iraq, Bush's "dead or alive" proclamation on bin Laden, Cheney's "one percent doctrine" assumptions, etc...none of those exactly turned out well, did they?

Second, as Andrew Pincus explains:

The issue at the heart of this exchange is perhaps too complex to explain in a hearing, with the attendant political constraints, but it is critical to an understanding of how courts operate. No one wants judges whose decisions are based on prejudices or sympathies. And there is no evidence that Judge Sotomayor has allowed bias to infect her rulings. Numerous studies show that she has often ruled against discrimination plaintiffs, individuals raising immigration claims, and criminal defendants.

But there is an important, albeit difficult-to-explain, difference between basing decisions on bias and basing them on experience. Take an easy example. In interpreting provisions of the Constitution the Supreme Court often applies a balancing test that takes account of the burden that various legal rules would impose on the government -- in criminal cases, on the prosecution. Parties argue about the extent of that burden in their briefs. If a Justice has experience as a prosecutor, she will be able to assess those arguments differently -- and almost certainly more incisively -- than a Justice who has no experience with the criminal justice system. Should that Justice be permitted to bring that experience to bear? Of course (and there would be no way to stop her from doing so). That Justice is not biased in favor of the prosecution; she is using her life experience to evaluate the arguments being made. That is why there is a huge benefit to having a Court with Justices of different experiences -- there is more likely to be at least one, hopefully more, Justices with experience relevant to the legal issues presented in the case.

This is not a novel concept. When Justice Marshall retired from the Supreme Court, Justice O'Connor explained that the life experiences he shared with the other Justices helped her better understand the legal issues that came before the Court.

I would expect a Supreme Court justice to have, well, a lifetime of experience in judicial matters. But Sessions is applying a ridiculous standard that equates experience with bias with the sole reason to try to pin charges of racism on Sotomayor.

It's ludicrous. Luckily, Sotomayor is more than able to easily deflect this lunacy, and she's making Sessions look rather foolish.

Here she explains the now infamous "wise Latina" remark as something meant to clearly inspire other Latina women.

Seems like a no-brainer to me. We don't need robots or racists on the bench, but intelligent judges with experience like Sonia Sotomayor.

Double Down On Dumb

You can tell GOP Senator John Ensign represents Nevada, because not only is he not resigning after news broke last month about a mistress and his parents paying off that mistress to the tune of $96,000, but he's planning to run again in 2012 too.

Ensign told the Las Vegas Sun he's been getting emails and phone calls from supporters urging him to stay put. Those supporters, he said, include senators on both sides of Senate leadership.

"I fully plan on running for reelection," Ensign said. "I'm going to work to earn their respect back."

He quoted his supporters as saying, "Keep your head up. This thing will pass."

Guy's holding a 2-7 offsuit in this game of texas Hold Em, and he's going all in before seeing the flop.

Gotta love it.

Policy Wonking 101

Just a general hint to Sister Sarah, when one is writing an op-ed piece, stick to the subject at hand instead of rambling on like an idiot. (Madam, rambling on like an idiot is for bloggers, the dirty bastards they are.)

There is no denying that as the world becomes more industrialized, we need to reform our energy policy and become less dependent on foreign energy sources. But the answer doesn't lie in making energy scarcer and more expensive! Those who understand the issue know we can meet our energy needs and environmental challenges without destroying America's economy.

Job losses are so certain under this new cap-and-tax plan that it includes a provision accommodating newly unemployed workers from the resulting dried-up energy sector, to the tune of $4.2 billion over eight years. So much for creating jobs.

In addition to immediately increasing unemployment in the energy sector, even more American jobs will be threatened by the rising cost of doing business under the cap-and-tax plan. For example, the cost of farming will certainly increase, driving down farm incomes while driving up grocery prices. The costs of manufacturing, warehousing and transportation will also increase.

The ironic beauty in this plan? Soon, even the most ardent liberal will understand supply-side economics.

No, the ironic beauty is that the author of this piece understands precisely nothing about economics, supply-side or otherwise. First of all, $4.2 billion over 8 years is pocket change, half a billion a year is what, a fraction of a percent of the stimulus package? That's for the jobs lost nationally in the entire industry? Doesn't seem like a major problem to me, considering the green jobs this will create to replace them.

Second, how does this make energy "scarcer"? Isn't the whole point to use less energy as well as to gain the addition of cleaner, less polluting sources of energy? How does lowering demand and increasing supply make energy more scarce or less available at all?

Third, what the hell does any of this have to do with supply side economics? How does this put more income at the corporate end to trickle down to the consumer?

Fourth, doesn't Alaska get the most tax money per capita in federal assistance, where $4.2 billion over 8 years is actually only a small part of what you guys take in up there? Wouldn't that money be better spent elsewhere helping other states develop green sources of energy?

Honestly, if you're going to pretend like you know what you're talking about, do a better job of lying.

Sotomayor And The Five D's

As we head into the second day of the Sotomayor hearings (and one where the real questioning will begin) keep in the back of your head another valuable observation from Digby:

Steve Benen capably deconstructs Ron Fournier's offensive little exercise in mind reading the Sotomayor hearings and he mentions one line that I found particularly revealing of Fournier's (and probably Jeff Sessions')mindset:

[F]or example, the audience heard Sotomayor thank her family this morning, and tell the Judiciary Committee, "If I introduced every one that's family, we'd be here all morning." Sounds like a person who appreciates her large family? Not to Fournier, who re-interprets the comment for the rest of us: "I may not look like all of you but, trust me, I'm no different than every other family-loving American. I'm surrounded by people who love me."

Does Sotomayor really look different from all of "us?" She's a middle aged woman with brown eyes and dark hair, which describes a rather large portion of the population. She looks as American as anybody in that room. Of course, any member of the human species could be equally described that way. "American" isn't an ethnic or racial identity --- unless you are a privileged white person who thinks that anyone who doesn't look like you is an interloper (not to mention an untrustworthy, anti-family freak.)

Us Versus Them is a game the Republicans have been playing for a long, long time, since the dawn of civil rights and class warfare, but one thing hasn't changed: "Them" are always the bad guys, trying to destroy "our" way of life, "our" country, "our" values. It's the Five D's: Declare, Divide, Demonize, Dehumanize, Destroy.

• Declare the criteria you don't like about Group X that makes them different.
• Divide the people into Us Versus Them.
• Demonize the other group as the Enemy.
• Dehumanize them by classifying their actions as something horrific.
• Destroy them with the people cheering you on.

It's been the heart of the GOP for a very long time. The tactic is wildly effective, especially when you can accuse the other side of engaging in the exact same behavior as part of Demonize and Dehumanize (and it makes it difficult when fighting back not to fall into the trap of engaging in that behavior yourself, especially in a format like a blog where you have the podium all the time.)

And yet, given the constant assaults on groups that disagree with them, you have to start assigning these behaviors to some people in the GOP anyway, if only to recognize what is going on so that you can deal with it. Part of the problem is that fighting back inevitably leads to the "staring at the abyss" moment where the abyss stares back, and you risk becoming what you have fought against. It's by no means limited to the GOP. I've seen people go over that edge, and it's not pretty. I've gotten close myself.

Still, it's something to think about, if only to recognize when the GOP is doing it. Watch for it in today's hearings, how Republicans will eagerly use the 5 D's against her.

[UPDATE 9:41 PM] The hearings have resumed. Walter Pincus is covering it live at TPM.

Smelling A Story

David Kurtz thinks there's more there to the CIA/Cheney/Al Qaeda leader/assassination program story.

So regardless of how you might feel about targeted assassinations, it's not at all clear why this particular program would be so radioactive -- compared to what the U.S. was, and still is, doing more or less openly -- that (1) Cheney would demand the CIA not brief Congress about it for eight years; (2) Panetta would cancel it immediately upon learning of it; and (3) Democrats would howl quite so loudly when finally informed.

Which makes sense. Republicans keep saying "You know, all we were doing is going after Al Qaeda members." If that's true, then why lie to Congress about it, especially when there were overt programs and military missions to go after Al Qaeda members?

There's a major piece of information missing here, another shoe to drop still. As Tim F. at Balloon Juice says:

BTW, here is a fun idea. Put together secret assassination squads, the One Percent Doctrine and Dick Cheney. Let your imagination run wild about the minute care they must have taken in selecting targets.

I'm willing to bet the objections to the program have something to do with going well beyond "going after Al Qaeda".

Who else did they go after?

StupidiNews!

• Bad weather has forced NASA to postpone the launch of shuttle Endeavor for a third day.
• A wanted U.S. federal fugitive and KKK member was arrested in Israel yesterday.
• Ousted Honduran President Manuel Zelaya has given current President Roberto Micheletti one week to resign or face "bloodshed".
• Convicted fraudster Bernie Madoff is on his way to a medium-security Atlanta facility that once housed Charles Ponzi.
• The Swiss government is experimenting with a service to scan postal mail digitally to allow access to it online.