Loose Lips Sink CEOs

Bank of America CEO Ken Lewis is trying to keep the worst kept secret in Washington: Plan N. He's not doing too hot of a job.

Bank of America CEO Ken Lewis tried to assure his senior team that the bank would not be seized by the government, the WSJ says. As nationalization talk gains momentum in Washington, Lewis also reportedly asked the government to say publicly that it is not considering this option.

WSJ: Mr. Lewis addressed the nationalization speculation during a senior leadership meeting Thursday at the bank's headquarters, according to a person there. Policy officials in Washington have assured Mr. Lewis that such an option isn't on the table, the CEO said. He also said he has urged the government to say this publicly.

It's not clear which "policy officials" Lewis was referring to, exactly. Presumably some folks at the Treasury and Fed. Nationalization is now emphatically "on the table" in Washington, with Lindsey Graham, Kay Bailey Hutchinson, and others publicly calling for it.

The other news about Lewis that we can infer from this article is that he's likely losing the support of his senior team. Unless Lewis himself ordered the leak--perhaps in an attempt to get the "nationalization not on the table" idea into the press again--Bank of America's senior team is now going around him to the press (and quickly, too).

This, combined with the crushed stock price, Merrill Lynch deal, and Cuomo subpoena, suggest that Ken Lewis's tenure is not long for this world.

And that's putting it mildly. I'm gonna say that Bank of America is not long for this world, and that includes a number of other banks, including Citigroup.

Some sort of government receivership of these banks will be required very, very soon. The calls for Plan N are growing louder every day. Ken's fighting for his job, understandably. But he's on the losing side of history here, and the tsunami is coming for him and a lot of other bank CEOs here in the next few months...maybe even weeks.

[UPDATE] Add Senate banking committee chair Chris Dodd to the list of folks saying "Plan N is go". Citigroup and BoA stocks taking a complete nosedive at this hour.

Benny Up To Bat

As widely expected, Israel's Benjamin Netanyahu has been given a chance to form a coalition government with himself as Prime Minister.

The decision comes after Avigdor Lieberman, head of the right-wing Yisrael Beytenu party, said he would recommend Netanyahu for the post, but only if he promises to form a "broad-based" coalition government.

In last week's parliamentary elections, no single party won the minimum 61 seats needed to form a government. That means a government of two or more parties is virtually inevitable.

To become Israel's next prime minister, Netanyahu must form a coalition within six weeks, or the process will start all over.

The ruling moderate Kadima Party won the most seats in the Knesset, Israel's parliament. But Kadima, led by Foreign Minister Tzipi Livni, received one more seat than Netanyahu's conservative Likud Party.

The strong showing of other right-wing parties -- including Yisrael Beytenu and the Orthodox Shas movement -- could give Netanyahu a better chance of forming a coalition government.

With the other right-wing parties backing him up, Netanyahu does have the support to form a government. The question at this point is will it include the moderate Kadima party of Livni or not.

Netanyahu can't afford to freeze them out, or he seriously risks damaging relations with President Obama. I'm curious as to how he will balance what Lieberman and the ultra-nationalists want with what Livni and the moderates want. If you thought Obama had to walk a fine line, you don't want to be in Bibi's shoes.

Right now all sides are talking inclusion and power-sharing and uniting to help Israel. That'll change once Netanyahu gets settled. I predict serious friction between the US and Israel in 2009. From an objective point of view, Netanyahu's job is actually worse than Obama's predicament right now.

Oh Please Let This Happen

Over at National Review's blog The Corner, Kathryn Jean Lopez puts up possibly the funniest, most fever-bright insane-o-vision suggestion I've seen in quite some time, the notion of the GOP Populist Ticket Of Megastupid, where she slyly suggests that the cure to AFOP is a combination of Aurora Sarahalis and CNBC's Rick Santelli.

Who the hell is Rick Santelli? Much like Chase CEO Jamie Dimon yesterday, Rick has gone on a Jim Cramer style tirade against Obama's mortgage plan, saying that people need to revolt against it becuase "the government is promoting bad behavior."

Yep. Trillions in free money for banks, fine. But $75 billion to keep Americans in their homes? The government and Obama are "subsidizing the losers".

So yes. Let's see the GOP embrace this notion of Wall Street hotshots getting trillions in taxpayer loans and capital telling the American people to go screw themselves with a length of PVC pipe for wanting to keep a roof over their heads. Please. Let's go back to blaming Americans who bought a home over the last two years and made the same mistake that Wall Street did and didn't anticipate the housing bubble.

Let's throw these "losers" out on the street and give their homes to the banks, along with trillions of our tax dollars. Run with that notion, guys. Run with it.

[UPDATE] John Cole has more, and White House spokesperson Robert Gibbs tells Santelli to stick it.

StupidiNews!

• Bank of America CEO Ken Lewis faces Congress on what he knew about Merrill Lynch's billions in bonuses.
• Experts say recession-born crime statistics will be on the rise as America faces more unemployment.
• GM says it will soon have no choice but to phase out or shrink the Hummer, Saab, and Pontiac brands.
• Evidence that the corporate bond market is revving up might indicate the credit crunch is thawing.
• Wikileaks finds out the hard way that anything can be leaked, including its own donor list.

Last Call

Seems the AP's Larry Margasak has decided that Blago, Tom Daschle, and Roland Burris are equal to the entire eight-year run of BushCo. The Democrats are now the "culture of corruption" in Washington.

Senate Democrats now may be trapped in their own ethics system. Disciplinary action against a senator usually requires a long investigation by the Senate's ethics committee. While a preliminary inquiry on Burris is under way, that's only the first early step. And, with ongoing criminal investigations in Illinois, the committee probably would have to postpone any action — as it usually does — to avoid interference.

In 2006, Republicans lost control of the House after Democrats effectively used a "culture of corruption" theme against them.

The final scandal broke shortly before the election, when it was revealed that then-Rep. Mark Foley, a Florida Republican, sent sexually suggestive e-mails and explicit instant messages to teenage boys who had served as House pages.

Republicans were further harmed when it was disclosed that several of their members were aware of the problem and failed to take action.

Democrats, who've been in control of both Congress and the White House less than two months now, are lucky on one point. The next congressional election is nearly two years away.

But luckily, we have the Liberal Media to remind us every step of the way that AFOP is the worst Presidency ever, and that Barack Obama and the Democrats are Worse Than Bush!

How kind of them. Remember the Village is on the GOP's side and has been for decades. Remember, the plan is to make sure Democrats get every ounce of blame for the problems Bush handed over. Every second Obama fails to magically solve Iraq, Afghanistan, Iran, Pakistan, Russia, Israel, India, Zimbabwe, Sudan, the economy, the housing crisis, crime, inflation, deflation, race relations, immigration, drugs, and everything else is another sin marked against his tally to these fine folks.

Yes, someday Barack Obama will be responsible for what Bush left us. But not one month into his Presidency. Remember...the plan is Destroy. Obama.

Even More Epic Situation Appreciation Fail

GOP Rep. Darrell Issa, as in "Darrell Issa Moron" bitching about the Obama White House needing to preserve all e-mails. You know, the same White House that six months ago lost tens of thousands of Bush e-mails that will of course never be found.

The irony, of course, is that Issa couldn't care less about an actual scandal regarding White House emailing archiving. Bushies lost untold thousands of emails, with no archive or backups. Indeed, the former president's team deliberately created a "primitive" email system that created a high risk that data would be lost -- there was "no automatic system to ensure that e-mails were archived and preserved."

Perhaps most startling of all, the Bush Administration managed to dismantle, apparently on purpose, the Clinton Administration's email archive system -- which worked just fine -- without replacing it with anything at all.

When Henry Waxman raised concerns about all of this, Darrell Issa dismissed the questions as partisan sniping.

But now Issa is worried about the Obama White House failing to fully comply with the Presidential Records Act. Funny, up until recently, Issa preferred to pretend the Presidential Records Act didn't exist. I wonder what changed his mind?

One, the Village will ignore the BUSH White House e-mail scandal for the shadow of a rumor of an Obama one in a heartbeat. Two, remember the GOP plan is Destroy. Obama.

So yes, Issa FAILS EPICALLY.

The Village Explained

...by Josh Marshall.

Who are we talking about? The journalists. The lobbyists. The people who work in the think tanks and quasi-think tanks where purported policy experts work. The employees of the majority activist groups on both sides of the political spectrum. The list could go on and on. But this gives a basic flavor of who we're talking about.

We're coming off of, or at least we've had a period of (because who knows about the future) thirty plus years of conservative dominance of Washington. By some measures you could say forty years. But at least thirty, notwithstanding Bill Clinton's eight years in office. That conditions a generation of people with mindsets based around Republicans being the party of power, the party whose ideas get vindicated at the polls. Most of all Washington is a city that coddles up to and worships power. But a generation of one party holding the reins selects for certain kinds of journalists in key positions of power, the policy experts at the think tanks who get the journalists calls, the lobbyists who move the most money and so forth. You build up a set of assumptions about what kinds of people and ideas are respectable and which aren't. Which are old-fashioned, which are 'cutting edge' and so forth. Who defines conventional wisdom?

In all of these respects, DC remains overwhelmingly wired for the GOP.

The Village still hasn't gotten the memo that the Democrats matter. Obama to them is still a combination of Will Smith and Jimmy Carter. President's got game, but he may be in over his head. He's a curiosity, a gimmick, a ratings boost for sweeps, but not a leader. They're running with it, because it allows them to control the narrative, and surprise, surprise, the GOP just happens to have the same empty suit and a smile opinion of Obama.

The Village loves running Washington, but they also love access to the halls of power, it's how they make their living. The Obama team is fighting back by setting ground rules, and the Village is countering by ignoring Obama and instead interviewing every Republican they still have in the contacts list to give the inevitable "Well he's a nice guy, but..." speech.

And that's why we're seeing the moronic articles about Obama's "rocky start" and other such nonsense after the guy has passed more legislation in a month than Bush bothered to do in years. Both the GOP and the Village operate on pure fantasy, and they're both great at manufacturing it. Talking about the facts? We can't have that. Facts are boring.

The new babysitter wants to actually enforce the bedtime rules, and the Village is having precisely none of that shit.

Deck The Malls With Lots Of Pink Slips

I've been talking about retail closings for some time now and the fact that a whole hell of a lot of retail jobs are going to permanently vanish, but the Yahoo Tech-Ticker crew puts it all in some scary perspective.

About 220,000 stores may close this year in America, says our guest, retail consultant Howard Davidowitz of Davidowitz & Associates. As more Americans save and spend less, it's clear there's too much retail space. Just visit Web site deadmalls.com and track retail's growing body count. And luxury retailers? They're on "life support," Davidowitz says.

It's bad, folks. Real bad. Doing back of the napkin numbers, 220k stores x 10 employees average = 2.2 million lost jobs in 2009 just from retail. If you count big box and mall anchor stores going under with 40-50+ employees per store, that's closer to 3 million or more jobs lost, not to mention the fact that this will leave thousands of malls across the country gutted.

Those gutted dead malls will close, taking even more stores with them, more jobs, more consumption, etc. It's a nasty, nasty death spiral we're looking at here. We're talking losing about a third of the retail space in this country by the time the retail crash settles out, not to mention several million jobs gone for good. There won't be anyone left to afford spa pedicures, soy lattes, reciprocating saws and fresh pretzels.

It's going to be pretty damn horrible, pretty damn fast.

West Coast Deal

California has finally approved a state budget, making up a $42 billion shortfall through a state sales tax increase and spending cuts.

Senate leaders secured the final vote needed from moderate Republican Abel Maldonado in late-night negotiations by agreeing to his demands for election changes, government reform and removal of a gas tax increase, giving them the two-thirds vote needed to pass the package.

To win Maldonado's support, legislators also agreed to ask voters to revise the state's constitution to allow open primaries for legislative, congressional and gubernatorial elections.

You do what you have to do to get by, but the fact of the matter is I fully expect California to face another massive shortfall next year (people spend less, less sales taxes collected, plus housing prices dropping) and plenty of other states having this issue, most noteably New York state.

The stimulus will help offset some of this, but there's still going to be a lot of massive budget cuts in nearly all the states in 2009 and especially in 2010.

If It's Thursday...

...it must be time for another record four week average of jobless claims, up to 619,000. Continuing claims will probably break 5 million next week, which is downright frightening. Even worse however is the Philly Fed manufacturing index, down to a staggering -41.7, meaning massive contraction in the manufacturing sector.

Not good.

[UPDATE] A new Reuters survey of economists shows most think the unemployment rate will peak at 9.1%, which if you ask me is way the hell too low.

On Short Time

Bank stocks are taking it in the pants again, and as the number crunchers at CNBC will tell you, those stocks are being deliberately sold short. At the top of the list of banks being sold short over the last year? Fifth Third, Citigroup, and BoA, along with Goldman and JP Morgan rounding out the top 5. This is bad, bad news for these banks, it's becoming a self-fufilling prophecy that these guys will go under soon.

Of course, self-fufilling prophecies still can be the complete and utter truth: these banks are insolvent. It may be a matter of only weeks before we have another late night Sunday session of Deal or No Deal, and I'm thinking 5/3 may be the next contestant.

Epic Situation Appreciation Fail

After saying this about Obama's housing foreclosure fix plan...

"I don't think just because someone's underwater they say I don't have to stay there. But they're supposed to pay the mortgage, and we should teach the American people, you're supposed to meet your obligations, not run from them. Because you have a mortgage doesn't mean you should run away as it goes down."

...why the frak does Chase CEO Jamie Dimon still have his job? Anyone want to explain to me why a guy whose company took billions from the government to stay afloat after not being able to pay their bills is bitching about Americans not being able to pay their bills?

EPIC FAIL.

Taking A Hard Line

In Israel, Benjamin Netanyahu has obtained the support of ultra-right wing nationalist Avigdor Lieberman, giving him the opportunity to form a very right-wing, hard-line government coalition that will make the current group that attacked Gaza look like Che Guevara leftists by comparison.

Benjamin Netanyahu's chances of becoming Israel's prime minister appeared to improve on Thursday after he won the conditional backing of a kingpin politician who heads a far-right party.

Avigdor Lieberman, leader of the Yisrael Beiteinu party, recommended to President Shimon Peres that he tap Netanyahu to form a government, on condition the right-wing Likud chief pursued a broad coalition. Netanyahu has said he would do so.

Peres could announce as early on Friday, after wrapping up consultations with party leaders, whether he will ask Netanyahu or centrist Kadima chief Tzipi Livni to put together a governing coalition.

Both laid claim to the premiership after Kadima won 28 seats in the 120-member parliament to Likud's 27 in Israel's inconclusive February 10 election.

With Lieberman's support, Netanyahu has the backing of some 65 legislators, enough for a narrow, governing majority of right-wing and religious parties.

Now, there's actually something of a problem here. Netanyahu and Lieberman can't totally tell Tzipi Livni to kiss off, and they certainly can't tell Barack Obama to go to hell either. Lieberman is talking about coalition building and playing nice for now.

Don't believe him. I see nothing but trouble coming out of this mess for the US and the world. The fact of the matter is they need Israel's leftists and moderates to give them any sort of political legitimacy whatsoever, because if Israel goes the hard-line route, they're done. Obama will have no choice but to do something about them.

We'll see how it turns out.

Don't Take The Money And Stay

I have to give Paul Begala credit for once, he called out GOP governors on Monday and dared them to put their ideology ahead of their people by rejecting stimulus money for their states. I thought it was a beautiful idea, hoping the GOP would be stupid enough to fall for the trap.

Well, stupid is as stupid does.

A handful of Republican governors are considering turning down some money from the federal stimulus package, a move opponents say puts conservative ideology ahead of the needs of constituents struggling with record foreclosures and soaring unemployment.

Though none has outright rejected the money available for education, health care and infrastructure, the governors of Texas, Mississippi, Louisiana, Alaska, South Carolina and Idaho have all questioned whether the $787 billion bill signed into law this week will even help the economy.

"My concern is there's going to be commitments attached to it that are a mile long," said Texas Gov. Rick Perry, who considered rejecting some of the money but decided Wednesday to accept it. "We need the freedom to pick and choose. And we need the freedom to say 'No thanks.'"

U.S. Rep. James Clyburn, D-S.C., the No. 3 House Democrat, said the governors — some of whom are said to be eyeing White House bids in 2012 — are putting their own interests first.

"No community or constituent should be denied recovery assistance due to their governor's political ideology or political aspirations," Clyburn said Wednesday.

In fact, governors who reject some of the stimulus aid may find themselves overridden by their own legislatures because of language Clyburn included in the bill that allows lawmakers to accept the federal money even if their governors object.

Yeah, please let these idiots turn down stimulus money. Let 2012 hopefuls like Bobby Jindal, Rick Perry and especially Sarah Palin turn down billions to help the people of their state get jobs and slash programs they need to help them get jobs. Let these states with rural counties in double digit unemployment hear "The people of my state don't need any help." Let them explain to the people why money that could help them got turned down because the governor is a partisan idiot attacking Obama. Let them scream that Washington is out of touch while they are denying taxpayers the benefits of the taxes they're paying. Let the resident of the state's nice, cushy governor's mansion explain why people will still be out of work because the jobs the stimulus could have provided are waste.

And then let those folks vote in 2010 and again in 2012. See what happens. Once again, Democrats need to go full bore on this plan. They need to call these governors out, as well as states where both senators and a majority of the state's congressional delegation voted against the plan. Target these guys hard.

If GOP governors wants to play politics with this stimulus cash, let them. Give them enough rope to hang themselves. Call them out for taking the money so that they go on record for turning it down.

Then see what the people of their states think at the polls.

[UPDATE] SC Gov. Mark Sanford suddenly has realized the big fat trap and has fallen right in, reversing course and saying he'll take the money. Hypocrisy complete.

[UPDATE 2] Doug at Balloon Juice has more including this lovely tidbit:

In South Carolina, a government panel is predicting that the state’s unemployment rate could reach 14 percent by the middle of next year.

Remember folks, that would be a "real" unemployment rate of 25-28 percent.

StupidiNews!

• Attorney General Eric Holder says Americans need to do more to face race relations.
• Secretary of State Clinton visits Indonesia and gets an earful on climate change by the island nation.
• The Iraqi shoe thrower could be facing fifteen years in prison.
• Swiss bank UBS is paying $780 million in fines over an alleged scheme to help the wealthy dodge US taxes.
• The latest Black Hat computer security conference features evidence biometric scanners can be cracked.