Last Call

Out on the West Coast, the government can keep tabs on you without you ever knowing...

Government agents can sneak onto your property in the middle of the night, put a GPS device on the bottom of your car and keep track of everywhere you go. This doesn't violate your Fourth Amendment rights, because you do not have any reasonable expectation of privacy in your own driveway — and no reasonable expectation that the government isn't tracking your movements.
 
That is the bizarre — and scary — rule that now applies in California and eight other Western states. The U.S. Court of Appeals for the Ninth Circuit, which covers this vast jurisdiction, recently decided the government can monitor you in this way virtually anytime it wants — with no need for a search warrant. 

Just call me the Running Man.

The court went on to make a second terrible decision about privacy: that once a GPS device has been planted, the government is free to use it to track people without getting a warrant. There is a major battle under way in the federal and state courts over this issue, and the stakes are high. After all, if government agents can track people with secretly planted GPS devices virtually anytime they want, without having to go to a court for a warrant, we are one step closer to a classic police state — with technology taking on the role of the KGB or the East German Stasi.

Fortunately, other courts are coming to a different conclusion from the Ninth Circuit's — including the influential U.S. Court of Appeals for the District of Columbia Circuit. That court ruled, also this month, that tracking for an extended period of time with GPS is an invasion of privacy that requires a warrant. The issue is likely to end up in the Supreme Court.

Considering the recent Citizens United decision that turned our election system into "Whoever has the gold makes the rules" as well as siding time and again on the side of the government in terror trials, do you feel confident the Roberts Court will side with civil liberties here?

Not me.

Zandar's Thought Of The Day

Steve Benen on Glenn Beck's egomania:

I'm trying to imagine what the response would be among conservatives if, say, Barack Obama's campaign in 2008 had tried to do something similar. Imagine if the campaign had organized an event at the Lincoln Memorial on the anniversary of the "I Have A Dream" speech, and then released a video comparing the Obama-led effort to the Founding Fathers, the Moon landing, the civil rights movement, and the invention of airplanes.

Imagine if that same Obama campaign video told viewers, "It's time to restore America. Restore the world. It's time to believe again."

The right would consider this egomania on an unhealthy level, and they'd be right.

And yet, here we are, with Beck, Palin, and 300,000 zealots showing up in D.C. on Saturday.

Umm, isn't that exactly what they did during the campaign and the transition with the whole "His President-Elect thing is egomania!!!!"

Another Milepost On The Road To Oblivion

Best thing about President Sarah Palin in 2012?  We can all say "Remember when her daughter Bristol was on Dancing with the Stars?"
 

Who needs a silly Alaskan reality show when you can compete on Dancing With The Stars. E! is reporting that Bristol Palin is the latest person to be signed to compete on the upcoming season of the popular dance-off reality show.

We can report to you exclusively that Sarah Palin’s 19-year-old daughter Bristol Palin has been cast on the 11th season of DWTS, set to premiere Sept. 20.

As for the reports that David Hasselhoff, Audrina Patridge, The Situation and Brandy will also be part of the cast, here’s the real deal: All true, according to sources.

ABC has balls, I'll give them this much.  Of course, if Bristol doesn't win, the Teabagger "It's a Liberal media plot to embarrass the Mama Grizzly's cub!  KILL THE INFIDELS!" jihad against them will be quite nasty...

Catfood Uber Alles

The folks at Standard and Poor's are making a nice little threat to Obama and the Dems.

The United States government needs to take steps to preserve its top AAA-rating, a Standard & Poor's Ratings (S&P) official told Dow Jones newswire in an interview published on Thursday.

The measures taken in response to recommendations President Barack Obama's commission on fiscal responsibility would be crucial in the view S&P takes on the U.S. credit rating, he said.

"It is very important for the credit standing of the United States that the Congress considers very carefully what the fiscal commission proposes," John Chambers, chairman of S&P's sovereign rating committee, was quoted as saying.

"It is very important for Congress to take the required steps."

S&P maintains the United States' top AAA rating with a stable outlook, meaning there is not a significant chance of a change in the near future.

However, it has repeatedly warned about the gigantic deficit and the debt burden in the world's biggest economy, calling it a challenge for the government. 

That's about a subtle as a 20-pound sledgehammer to the crotch, but there you are.  Let the Catfood Commission makes those massive cuts to Social Security and Medicare or else, well it would be a shame if anything happened to your country's sovereign debt rating, eh?

A real shame.  Still think Obama and the Dems are going to resist the Catfood Commission?  Not me.

It's possible however.  At least one Dem is publicly calling for Alan Simpson's head.

In the end however, Catfood Uber Alles.

Harry Reid Goes On Offense

With this campaign ad against Sharron Angle, and it's a doozy.



Ouch. On the other hand, Greg Sargent has a point:

What's interesting is that even though Angle did say all these things, and even though Reid has widely disseminated her comments throughout the state, the race is still very close. It's a measure of how stiff a headwind Reid faces.

It's routinely pointed out that Reid's reelection chances turn on whether he can render Angle an unacceptable alternative. But the rubs is that given how disliked Reid and the Obama agenda are in Nevada, he needs to render her really, truly, horrifyingly unacceptable. If the stuff Angle has already said isn't enough to do that, it's hard to imagine what it would take.

In other words, if Angle's own lunacy doesn't damn her and Nevadans hate Harry Reid that much, there's really no hope at all for the Dems this year.

No Jumbo Love

Via Zero Hedge, David Rosenberg explains what I mean when I keep saying "there is no housing market."

If the truth be told, if we are talking about reversing all the bubble appreciation that began a decade ago, then we are talking about another 15% downside from here. The excess inventory data alone tell us that this has a realistic chance of occurring...The high-end market, in particular, is under tremendous pressure. In fact, it is becoming non-existent. Guess how many homes prices above $750k managed to sell in July. Answer — zero, nada, rien; and for the second month in a row.

Think about that for a second.

For the second consecutive month, there was not one house in America that sold above the price of $750k.  Not.  A single.  One.  And guess what?  It gets worse.

Only 1,000 units priced above 500,000 moved last month. That’s it! Over 80% of the homes that the builders managed to sell were priced for under $300,000. Just another sign of how this remains a full-fledged buyers’ market — at least for the ones that can either afford to put down a downpayment or are creditworthy enough to secure a mortgage loan (keeping in mind that 25% of the household sector does have a sub-600 FICO score).

Remember that this is a July data point and we know that the NAHB housing market index, which has an historic 83% correlation with new home sales, dipped for the third month in a row in August, to 13 from 14 in July. So it’s not even safe to say that we have hit rock bottom. Moreover, when you look at the trendline in total home sales, it is plain to see what has happened from the impact of the now-expired housing tax credits — the subsidy did little more than distort the pattern of housing demand and actually pulled forward well in excess of a million units of consumption, at the expense of future growth. What does this mean? That demand will remain anemic and likely hit even new lower lows in coming months and quarters as we enter into the “payback time” phase.

This is going to sound like a broken record but it took a decade of parabolic credit growth to get the U.S. economy into this deleveraging mess and there is clearly no painless “quick fix” towards bringing household debt into historical realignment with the level of assets and income to support the prevailing level of liabilities. We are talking about $6 trillion of excess debt that has to be extinguished, either by paying it down or by walking away from it (or having it socialized).

What happens to our economy if we take another $6 trillion out of circulation to pay off the housing bubble?  Another 6 trillion hit on top of the disaster we're already in?

Do you see what I mean, now?   We're down to Helicopter Ben's Magic Printing Press.  It's coming.  The only question is how.  Inflation, deflation, hyper-inflation.  We're working through the deflation now and we're almost done with that phase.

It's that last one that will kill us.

The Next Hoffman Effect: FL-Gov

Rick Scott's Republican primary win for Charlie Crist's job as Governor of Florida may be rather Pyrrhic as Scott has made a lot of enemies spending $50 million of his own money buying the candidacy.

Scott spent $50 million on the race to take down the party establishment's choice, state Attorney General Bill McCollum -- much of it on attack ads against McCollum. And so far, McCollum is not endorsing Scott. His campaign said that McCollum's endorsing Senate nominee Marco Rubio and other GOP candidates, but isn't mentioning Scott.

In fact, McCollum's written concession statement didn't even name Scott -- McCollum only acknowledged his own defeat, and thanked everyone who supported his campaign. "This race was one for the ages. No one could have anticipated the entrance of a multi-millionaire with a questionable past who shattered campaign spending records and spent more in four months than has ever been spent in a primary race here in Florida," McCollum wrote. "While I was disappointed with the negative tone of the race, I couldn't be more proud of our campaign and our supporters for fighting back against false and misleading advertising when we were down by double-digits."

The problem is Scott's history with his company paying a nearly two billion dollar fine for medicare fraud in a state like Florida.

There had been hints of this before primary day. In an interview last week with the NBC affiliate in southwest Florida, McCollum was asked whether he would endorse Scott in the event that the businessman won the primary. "I would sit down with him. I won't say I won't endorse him," said McCollum. "But I've got more questions about him and his character, and whether he's suitable to be governor than anyone I've ever had participate in any election in the years I've been running for public office."

And oh yes, there's already an independent in the race and in the general, Scott is losing to Democrat Alex Sink.

The TPM Poll Average has Sink leading Scott by 38.8%-30.5%, plus 11.0% for independent Bud Chiles, going into the general election. Should be a fun race.

Indeed.   Rick Scott may have just Hoffmaned his way to putting Sink in the Governor's mansion.  More power to her.

Republicans, what were you thinking?

The Kroog Versus Alan Simpson

Paul Krugman doesn't pull any punches voicing his opinion that Obama Catfood Commission chair Alan Simpson needs to be shown the door.

At this point, though, Obama is on the spot: he has to fire Simpson, or turn the whole thing into a combination of farce and tragedy — the farce being the nature of the co-chair, the tragedy being that Democrats are so afraid of Republicans that nothing, absolutely nothing, will get them sanctioned.

When you have a commission dedicated to the common good, and the co-chair dismisses Social Security as a “milk cow with 310 million tits,” you either have to get rid of him or admit that you’re completely, um, cowed by the right wing, that IOKIYAR rules completely.

And no, an apology won’t suffice. Simpson was completely in character here; it was perfectly consistent with everything else he’s said, and with his previous behavior. He has to go.

I'll go one step further and say the entire Catfood Commission needs to go, but that's just me.  The only possible outcome from this is that Obama is forced to make cuts to Social Security and Medicare and the Republicans will rightfully destroy him on that in 2012.  I'm not sure why Obama doesn't see this coming, but with his now famous proclamation that he doesn't mind being a one-term President if it means he gets what needs to be passed into law, he's well on his way to exactly that.

The best part is the GOP will happily undo everything that Obama's done anyway.

If It's Thursday...

Good news, everyone! 

Jobless claims down to 473k from a revised 504k last week, continuing claims down 60k or so to 4.46 million.

Course, we're still pretty much screwed from the rest of the bad econ news this week (especially housing) but hey, at least we're not back above 500k claims a week.

Yet.

Revenge Is A Dish Best Served Arctic Cold

As I predicted yesterday morning, GOP Sen. Lisa Murkowski isn't taking Moose Lady's knife in her back real well.  After initially supporting Murkowski, Sarah Palin dumped her for teabagger Joe Miller and it may be next week before we know who the winner of the suddenly hotly contested primary is.

As I called yesterday, rumors are now flying that Murkowski is considering a third party independent bid.  Officially, Murkowski is waiting on the primary results, of course...

Trailing attorney Joe Miller by less than 1,500 votes—and with at least 8,000 more still to be counted—Republican Sen. Lisa Murkowski said Wednesday at a press conference she would wait until all Republican primary absentee votes were counted before making any decisions about how to proceed.

Her next step is one that could have dramatic consequences for the national Republican Party in the wake of Miller’s stunning performance at the polls Tuesday.

Amid speculation that she might run as a write-in or third-party candidate if she loses—a scenario that would jeopardize control of an otherwise safely Republican seat—Murkowski told reporters in Anchorage that it was "too premature" to discuss that option.

She insisted that "it ain't over yet, folks" and that she would wait for all the absentee ballots to be counted before she made any decisions.

The tea-party-backed Miller, who also carried strong support from former Alaska Gov. Sarah Palin, finished first Tuesday with a 51 percent to 49 percent advantage—a result that would rank as one of the year’s biggest upsets if it holds true.

Even with the outcome still in doubt Wednesday, Republicans began to assign blame for Murkowski's unexpectedly poor performance after polls as late as last week showed she would win her party's nod.

They're already preparing to throw Murkowski under the bus as a loser before she's even lost.  That's because a Murkowski independent bid would almost certainly give the Democrat Scott McAdams the second Senate seat in the state and be a rare pickup for the Dems in a year where the GOP is licking its chops over the prospect of taking back both the House and Senate.

The rest of the piece goes on to slam Murkowski for not winning this race outright (Politico, natch) when she should have won easily, and the real message is Murkowski's done in Republican circles if Miller wins the primary and Murkowski doesn't 110% support him.

Of course, that would mean Murkowski would be done in politics anyway if she loses her primary, yes?

Things just got very, very interesting up north.

Not Enough Parking, Not Enough Intestinal Fortitude

Out on the far western end of Kentucky near Paducah is the town of Mayfield.  It's not a huge town by any stretch of the imagination, but this week it's the latest battleground on the 1st Amendment, religious bigotry, and Islam.

For Mayfield's zoning board, it was about parking spaces. For the 250 residents of this western Kentucky town who reportedly cheered when the zoning board rejected a building permit for a new mosque, it was clearly about something else.

On Tuesday night, the Mayfield Board of Zoning Adjustment rejected a request from a local Somali group to build a mosque along the city's East Broadway, a strip of commercial and industrial properties. According to the Louisville Courier-Journal, the board rejected the mosque application because of concerns there wouldn't be enough parking in the area. (The area in question is pictured on the right.)

The Paducah Sun reports that some 250 area residents, packed into the hearing, "cheered" when the board announced its decision.

Now some observers suspect more than parking space concerns fueled the board's decision, and the Courier-Journal reports that the American Civil Liberties Union is "trying to get more information" about the decision.

Gosh, what could possibly be going on in the American zeitgeist that would give anyone any reason to suspect that cheering on the denial of a mosque's permit might have something to do with other than parking issues?

What's more, the Courier-Journal reports the Somali group that had petitioned for a zoning variance to allow the mosque to be built weren't present at the time of the decision -- because security had refused them entry, not realizing they were the people behind the project. The C-J reported:

The Paducah Sun and WPSD-TV reported they did come, but were initially denied entrance because the room was full and officers did not realize they were there to represent the project. When the mistake was recognized, officials searched for them outside the building but could not find them, according to the reports.

The C-J reports that Mayfield has a Somali community numbering in the hundreds, who arrived last year to take up work at a local chicken processing plant.

So this is an immigration story as well as a mosque story.  I think you get bonus points in the winger scorebook for that double barrel blast of hate.

Jeff Keith, a pastor at the First Baptist Church in Mayfield, told the C-J he hoped the Somali group could find another location for the mosque, so that the community wouldn't feel "unwelcome."

“Mayfield ... is a very neighborly area,” he told the newspaper.

Yeah, good luck with that.  Now why would African Muslim immigrants ever feel unwelcome in a state like Kentucky?  It's not their fault that 1000 miles is too close to Ground Zero to build a mosque...

StupidiNews!

• Five years after hurricane Katrina devastated New Orleans, residents say there's still too many blighted neighborhoods that remain.
• Military officials say an unmanned Fire Scout helicopter drone accidentally entered the airspace over the nation's capital earlier this month on a training flight.
• As California prepares to ban all plastic grocery bags, a major chemical industry trade group is making a final lobbying push for votes.
• More flooding in Pakistan means another 600,000 residents have been told to evacuate along the Indus river.
• Astrophysicists say they have the computer power now to model the formation of super black holes formed by the collisions of primordial galaxies.

Last Call

Not that's there's anything wrong with that, of course.

Ken Mehlman, the erstwhile chairman of the Republican National Committee and campaign manager for George W. Bush's 2004 reelection effort, has come out of the closet as gay in a column published in The Atlantic.

Mehlman came out in a column by Mark Ambinder on the website of The Atlantic, after the blogger who outed former Idaho Sen. Larry Craig (R-ID) and onetime Virginia congressman Ed Schrock revealed that Ambinder was to publish the story. Blogger Michael Rogers was the subject of the documentary "Outrage," a film about outing gays in government who have used their positions of power to advocate against gay issues, which aired earlier this year on HBO.

Mehlman, 44, spearheaded the Bush re-election campaign. The campaign used aggressively anti-gay tactics, including the mailing of a flyer in some states which suggested liberals would allow gay marriage and ban the Bible. Some believe Bush’s support for anti-gay marriage measures carried him to victory, particularly in Ohio, which had a gay marriage measure on the ballot.

According to the Atlantic's Ambinder, "Mehlman arrived at this conclusion about his identity fairly recently, he said in an interview. He agreed to answer a reporter's questions, he said, because, now in private life, he wants to become an advocate for gay marriage and anticipated that questions would be asked about his participation in a late-September fundraiser for the American Foundation for Equal Rights (AFER), the group that supported the legal challenge to California's ballot initiative against gay marriage, Proposition 8."

You know, except the part where as a closeted gay Republican Ken Mehlman led the GOP in several anti-gay initiatives including DOMA.

The 2004 Republican Party platform denounced prejudice and trumpeted equality, despite the party's political positioning on gay issues. It said, "Ronald Reagan believed that people were basically good, and had the right to be free. He believed that bigotry and prejudice were the worst thing a person could be guilty of," and included a bolded section titled, "Ensuring Equal Opportunities," leading with the sentence, "Our nation is a land of opportunity for all, and our communities must represent the idea of equality for every citizen."

Such equality and freedom from prejudice didn't apply to gay Americans. The 2004 platform continued, "We believe that neither federal nor state judges nor bureaucrats should force states to recognize other living arrangements as equivalent to marriage."

The party's position continued, "After more than two centuries of American jurisprudence, and millenia of human experience, a few judges and local authorities are presuming to change the most fundamental institution of civilization, the union of a man and a woman in marriage."

Asshole.  Not like the GOP has changed much.  I wonder what Howie at DWT has to say about all this, he's the one keeping tabs on anti-gay Republicans in serious sexuality denial.

Zandar's Thought Of The Day

Greg Sargent is a pretty smart guy, but why is he wasting time pretending that there's any other faction in the GOP on foreign policy other than the "Cheney-ites" in the GOP at all?

Oh wait, my bad, there's Ron Paul.

One guy does not a faction make, either.

On the other hand, Greg's 100% right when he says there is a faction of Blue Dog Dems running against Obama/Pelosi now and it's getting bigger.  You know, the Republicans would have cut these Blue Dogs off at the knees.

Forecast For Trouble

Nate Silver celebrates his new digs over at the NY Times with his Senate Forecast, and the numbers aren't good for the Dems.

The Democratic majority is in increasing jeopardy in the Senate, according to the latest FiveThirtyEight forecasting model. The Democrats now have an approximately 20 percent chance of losing 10 or more seats in the Senate, according to the model, which would cost them control of the chamber unless Gov. Charlie Crist of Florida, who is running for the Senate as an independent, both wins his race and decides to caucus with them.

In addition, there is an 11 percent chance that Democrats will lose a total of nine seats, which would leave them with 50 votes, making  them vulnerable to a defection to the Republican Party by a centrist like  Joseph I. Lieberman of Connecticut or Ben Nelson of Nebraska. On average, over the model’s 100,000 simulation runs, the Democrats are projected to lose a net of six and a half Senate seats, which would leave them with  52 or  53 senators. (Even though the G.O.P. primary in Alaska remains too close to call, that outcome is unlikely to alter the model.)

Even worse for the Dems, there's about a 12% chance of a 51-49 split which with Lieberman, Ben Nelson, and Charlie Crist in the mix could give the GOP control as well.  By my math, there's a 43% chance of real trouble for the Democrats in the Senate under Nate's model.

Not good at all...or is it?

That still leaves a much better 53% chance the Dems will solidly control the Senate and if you take Ben Nelson out of the equation as a 100% Dem, 65%.

I'd take two out of three odds on the Dems keeping the Senate, frankly.  So would the Dems.

Still Not Playing With A Full Deck

Jim Cramer just...my lord.  The man puts the "blithering" in blithering idiot.  Here's how he plans to fix the housing collapse:

“With the right push from the president of the United States, virtually all the negatives we're fretting about today could partially be fixed,” said Cramer. “The president has enough firepower to blast aside the obstacles standing in the way of higher stock prices ... and a stronger economy. We just don't know if he has the will or the inclination.”

Cramer said it’s hard to imagine Obama acknowledging the stock market, let alone embracing it. But the “Mad Money” host thinks the president, who campaigned on “change,” has the power to turn the markets around.

Take disappointing July existing-home sales, for example. What an impact Obama could have made if he had said he’d do everything in his power to increase the demand for housing and tried to convince the American people that, with lower home prices and interest rates, it’s a good idea to buy a house right now, Cramer said. Obama also could have told the country that Federal Reserve Chairman Ben Bernanke saw this coming and is keeping mortgage rates low to sop up the excess housing stock.

Excuse for thinking that Cramer's plan consists of "Obama needs to clap harder and everything will be fine!"

Jim, let me explain something to you.

Obama saying "it's a great time to buy a house!" isn't going to fix the 9.5% unemployment rate.  It's not going to make the bank magically lend to people. It's not going to solve the fact that Joe and Jane have been trying to sell their house for 2 years now and can't find a buyer at the price they need to charge to end up not losing tens of thousands of dollars in equity (or maybe hundreds of thousands.)

It's not going to fix the fundamental problem we have with the housing market, which is IT HAS COLLAPSED COMPLETELY.

Jesus.  Not to mention if Obama did do that, the Republicans would yell SOCIALIST GOVERNMENT INTERVENTION and attack him anyway.

Really?  Obama needs to tell people to go buy houses?  With what money, genius?

Sew The Wind, Reap The Whirlwind

Islamophobia is all in your head, America.

The New York Police Department has confirmed to TPM that a cab driver in Manhttan was allegedly stabbed by a passenger who asked if the cabbie was Muslim, and says the incident is being treated as a hate crime. The suspect has been charged with attempted murder and other crimes.

According to Detective Marc Nell, at 6:12 pm last night, the driver picked up Michael Enright, 21, of Brewster, NY, at the intersection of 24th Street and 2nd Avenue in Manhattan. The cab proceeded to drive north, and Enright asked the driver, who Nell identified as a 43-year-old Asian male, if he was Muslim. After the driver responded that he was, Enright allegedly stabbed him repeatedly with a Leatherman tool, according to police.

"[Enright] stabbed the driver in the throat, right arm, left forearm, right thumb and upper lip," Nell said.

According to police, the driver called 911, and stopped the cab on 3rd Avenue between 40th and 41st streets, managing to lock Enright inside until police arrived. 

All in your head.

Waiting now for the screeching wingers to say that Enright here was a liberal working for George Soros, because as we all know, Islamophobia is a myth created by the Left.

Meanwhile, is the President really a Christian?

Digby has more on why these crazy Leftist Saul Alinsky minions had to provoke people by admitting to being Muslim.

[UPDATE] And it's Politico's Ben Smith with the story that Enright "works for a pro-Park51 group" while kind of failing to mention that the guy was part of a group that was filming US military exercises in Afghanistan...and that he was a volunteer, not an employee.

But it doesn't matter, it was all a publicity stunt by ACORN to smear Real Americans, right?

Home, Home I'm Deranged Part 9

Yet more bad housing news, this time in new home sales hitting their lowest rate...

Ever.

New U.S. single-family home sales unexpectedly fell in July to set their slowest pace on record while prices were the lowest in more than 6-1/2 years, government data showed on Wednesday.

The Commerce Department said sales dropped 12.4 percent to a 276,000 unit annual rate, the lowest since the series started in 1963, from a downwardly revised 315,000 units in June.

Analysts polled by Reuters had forecast new home sales unchanged at a 330,000 unit pace last month. 

"What we are seeing is the downside of government intervention. It had fanned expectations of a market bottom when in fact, it created a false bottom," said Tom Porcelli, a senior economist at RBC Capital Markets in New York. "We expect home sales to stay at this remarkably low range with remarkably high unemployment. There is also little demand for lending." 

Little demand for lending with mortgage rates also at record lows?  Over 12 months supply of housing on the market?  And now new homes hitting the lowest rate ever recorded?

This isn't a housing depression.  It's a complete meltdown.

Islamophobia Is All In Your Head, Apparently

Salon's Alex Pareene has finally had enough of Jonah Goldberg's idiocy on the Park51 project.

Jonah Goldberg, whose columns are apparently published in grown-up newspapers for consumption by literate adults, uses today's to expand on a theme that he first toyed with at The Corner last week: Liberals are the real intolerant ones because they make up "Islamophobia" and accuse Real Americans of it.

Here's the lede:

Here's a thought: The 70% of Americans who oppose what amounts to an Islamic Niketown two blocks from ground zero are the real victims of a climate of hate, and anti-Muslim backlash is mostly a myth.

First: "an Islamic Niketown"? What ... what does that mean? Will there be shoes for sale? Are Americans objecting to the commercialization of the sacred ground near but not adjacent or particularly related to the former site of the World Trade Center, where a complex of commercial office building are currently being constructed? Couldn't Goldberg, who is Jewish and from New York, have come up with an analogy that actually helped explain to his readers what he is talking about?

The data backing up Goldberg's thesis? FBI hate crime statistics. That's it. There were only 481 hate crimes against Muslims in 2001, "the year a bunch of Muslim terrorists murdered 3,000 Americans in the name of Islam on Sept. 11," Jonah helpfully reminds us. ("Now, that was a hate crime," he adds, because he is a truly execrable columnist.)

Ahh, the old "If you point out bigotry, you're the bigot!" excuse.  Gosh, it's been a whole couple of hours since I've seen that one dragged out.

If more than half of Americans want to deny American Muslims their constitutional rights, and somehow that isn't Islamophobia, then what is it, exactly?  A misunderstanding of the Constitution?  A hidden clause in the text in really, really tiny print?  A mulligan?  What?

I just don't get it.  I really don't.  I understand the human capacity for self-delusion and justification is nearly infinite, but really?  Goldberg is this stupid?

Pension Tension In Illinois

While a lot has been made of the country's largest state employee pension fund (CALPERS) in California possibly going under and causing massive damage to the economy (especially when the Governator is raiding it to try to balance the state's budget), let's not forget there are plenty of other states out there with multi-billion dollar employee pension funds that are in no small amount of trouble.  One of them is Illinois.

Two few months ago we disclosed how the Illinois Teachers' Retirement System (TRS) was doing all it can to become the next AIG. In addition to, or maybe precisely due to, its deplorable fundamental condition, which can be summarized as being 61% underfunded on its  $33.7 billion in assets, with a performance record of down $4.4 billion in 2009 and 5% in 2008, the fund, courtesy of a detailed analysis by Alexandra Harris of the Medill Journalism school at Northwestern, was found to be on its way to trying to become a veritable self-made TBTF: as was described then, "TRS is largely on the risky side of the contracts, selling and writing OTC derivatives, including credit default swaps, insurance-like contracts that guarantee payment in the event of a default." In other words, TRS was selling substantial amounts of derivatives, which held the fund's other assets as hostage in case the collateral calls started coming in, as should the market broadly decline, the value of the downside derivatives would "increase" and the seller (in this case TRS) would need to pledge ever more collateral against these wrong way bets.

That's right, folks:  Too Big To Fail isn't just for banks anymore!  If you've got tens of billions now riding on the Big Casino (especially in the President's home state!) and you lose, the expectation is that the Government will cover your losses.  After all, Obama can't afford politically to leave some 300,000 plus teachers in the state high and dry with no retirement funds in his own backyard, yes?

The problem is that all those Big Casino bets are about to go bad along with the rest of the economy.

Alas, at this point it is too late: for TRS, and likely for many, many other comparable pension funds, which had hoped that the Fed would by now inflate the economy, and fix their massively incorrect investment exposure, the jig may be up. As liquidations have already commenced, the fund is beyond the point where it can "extend and pretend", and absent the market staging a dramatic rally, government bonds plunging, and risk spreads on CDS collapsing, the fund is likely doomed to a slow at first, then ever faster death. Then one day, Goldman's risk officers will call the TRS back office, and advise them that due to its "suddenly riskier profile" established in no small part courtesy of Goldman's investment allocation advice, the collateral requirements have gone up by 50%. The next step is either Maiden Lane 4... or not. For the sake of the 355,000 full-time, part-time and substitute public school teachers and administrators working outside the city of Chicago, we hope that the TRS has now been inducted into the hall of the Too Big To Fail, as otherwise roughly $34 billion in (underfunded) pensions are about to disappear.

And the thing to remember is that Illinois isn't alone. A lot of there states out there along with other pension funds are in the same boat, hoping to have hit the TBTF jackpot by now.  When, not if, the market tanks, these funds are going to be left high and dry and millions of employees counting on those pensions along with them.

And it's going to get really ugly.  Fast.