I've suspected for some time that conservatives would eventually have serious reservations about where Norm and his mouthpieces are trying to take them. Maybe it's finally dawning on some of them that making a federal case out this election contest risks a long-term disaster for the GOP — one that would completely outweigh the short-term benefits of depriving the Democrats of their 59th vote.
Billmon: Scalia's Nightmare

So pieces of paper rated AAA by the credit rating agencies (implying virtually no risk of default loss) and sold for a 100 cents on the dollar (or more) are now worth a nickel — a 95% haircut. Something like $150 billion in the stuff was issued in the last two years of the bubble alone. Another $300 billion in slightly higher quality AAA-rated debt is probably worth 35-40 cents — at best.

As the FT notes, this kind of thing doesn't exactly inspire investor confidence:

I would hazard a guess that this is easily the worst outcome for any assets that have ever carried a "triple A" stamp. No wonder so many investors are now so utterly cynical about anything that bankers or rating agencies might say these days.

Which in turn suggests that sooner or later Milo Minderbinder and company are going to have to go back to the drawing board and figure out a better way to dispose of Big Shitpile than coating it in chocolate.

Billmon: Chocolate Covered Cotton: An Update

So swapping $45 billion in preferred stock yielding 8% for $4 billion in common stock yielding a penny a share is "protecting the taxpayers"?

Billmon: Citi to Uncle Sam: For You We Make Special Deal

Citibank, with the help of the democratic senators it bought, wants lots of money for nothing. It is bankrupt and will go down. But Reid and others want to spend taxpayer money to push the inevitable a few month out.

It is not only the U.S. taxpayer Citi wants to screw. Singapur holds a bunch of preferred Citi stock too

Citi is driving the move. It approached regulators yesterday with a plan for the government to convert some of its US$45 billion (S$69 billion) in preferred shares into up to 40 per cent of common equity, according to news reports.

…
It is now scrambling to stitch together a life-saving deal by asking holders of preferred shares – including the Government of Singapore Investment Corporation (GIC) – to take more direct stakes.

GIC holds convertible preferred shares in Citi that it bought for US$6.88 billion in January last year. It can convert these into ordinary stock, but at a price likely to be more than 10 times Citi's current price. Until then, the preferred shares pay dividends every quarter at a rate of 7 per cent a year for as long as GIC wants to hold them.

Citi hopes to persuade GIC and other preferred stock holders, such as the Abu Dhabi Investment Authority and the Kuwait Investment Authority, to convert some of their stakes into common equity, according to news reports yesterday.

This would give the bank more capital and help it avoid drawing on another government lifeline, a move that would revive fears of nationalisation. If the government nationalises a bank, its common shares become virtually worthless.

There will be a lot of angry background talks between the involved governments.

What would happen if the U.S. takes Citibank into receivership and effectively wipes out the wealth of foreign taxpayers? Could that lead to real international crises which then might develop into something worse?

I fear that.

American tea party? Looks more like the British variety to me.

Billmon: A Mad Tea Party

Maybe there is no way out of this mess, either practically or politically. Limitless growth, Edward Abbey once wrote, is the ideology of a cancer cell, and the doctrine of endless debt-fueled expansion may have created an economy so riddled with it that any therapy powerful enough to kill the cancer will also kill the patient. In other words, globalized capitalism (or rather, this strange brew of corporate oligopoly and lemon socialism) may have finally dug itself a hole too deep for the traditional neo-Keynesian policy tools (fiscal and monetary policy) to lift it out of.
But, if that's true, then our children and our grandchildren may indeed spit on our graves, but it's going to be because we have bequeathed them much bigger nightmares than an increase in the federal debt.

Billmon: Generational Theft? Sorry, That Money's Already Been Stolen

So here we are: The banks are sitting on paper originally valued at 100 cents on the dollar (or even more) which is now worth 20 or 10 or 0 cents. If they sell the stuff at those prices, most of the capital they’ve put behind those assets will be erased, leaving them insolvent, technically and perhaps literally – as in, unable to cover their current liabilities. On the other hand, if they don’t sell their pieces of Big Shitpile, all their capital (including what Uncle Sam has already thrown into the till) will remain frozen in place, blocking them from doing any new lending. Without new lending, they can’t earn the profits they need to make good the losses they are sitting on. Zombies. Night of the Living Dead Banks.
…
One of the things that creeps me out about the political system’s response to the crisis so far – the insolvency of the banking system in particular – are the increasingly desperate attempts to maintain a phony façade of free markets and private enterprise, in an economy now utterly dependent on the federal safety net. I totally expected that from Hank Paulson and the Cheney Administration, but is Obama’s financial team really pressed from exactly the same Wall Street mold?

It may be best not to think too much about that question. It reminds me
too much of the USSR’s fetish for preserving the trappings of socialist
"democracy" – a Supreme Soviet, a ministerial government, courts, etc.
– even though the actual decisions were all made, behind the scenes, by
the party and the Politburo. It’s not a good sign when societies routinely lie to themselves about such big, fundamental truths, which in turn suggests that toxic assets may not be the poison we most need to worry about: The rottenness and decadence of the entire system may do us in first (not exactly a new theme for me.)

Billmon: Chocolate Covered Cotton

Billmon: Same Day; Different Nations

Lawmakers' Goal to Cap Executive Pay Meets Resistance

Washington Post

February 12, 2009

Employers Fighting Unemployment Benefits

Washington Post

February 12, 2009

Billmon:

What the supposed cynics like to call "all that Kumbaya shit" (but which the real cynics, like yours truly, suspect is a cooly executed strategem to grab the upper partisan hand by monopolizing the bipartisan label) was almost wholly lacking. Gone missing was the by-now customary reference to states that are neither red nor blue, but united. Previous promises to be the president even of those who did not vote for him were not repeated.
…
At this point, though, the message is not clear. I thought I heard what I thought I heard; the talking heads think they heard something rather different — a moralist scolding Washington for its wicked ways, rather than pragmatist signaling his intention to lower the boom on any adversary who block his path too long or too unreasonably.
…
If our new president really aspires to fix a broken economy, provide national health care, find alternative energy sources, restore the rule of law, withdraw from Iraq, win in Afghanistan (we could argue about that last one, but these are his priorities, not mine) and otherwise remake America — or at least get a start on the process during his first term — at some point soon he'll need to become a lot more explicit about what he is willing to do to his fellow politicians, as well as with them, to make it happen.
Obama at the Plate

Billmon:

I guess the son of bitch was telling the truth for once. It WAS worth it — to him and his cronies.
Worth It

Billmon: Flushing the Cheney Administration Down the Memory Hole

I have a strong hunch the political-media complex (i.e. the Village) is going to want to move fairly quickly to the post-Soviet solution I described earlier — skipping right over the perestroika and glasnost to get directly to the willful amnesia and live-in-the-moment materialism of mid-1990s Russia.

Which means, in turn, that Bush, Cheney, Rummy, Feith and the whole noxious crew are about to get flushed straight down the memory hole: banished fairly quickly from public discussion and corporate media coverage — in much the way the Iran-Contra scandal (go ahead, Wiki it) was almost immediately forgotten or ignored once it became clear that the fix was in. America apparently had its big experiment with truthtelling and reform in the post-Watergate era, and the experience was so unpleasant that nobody (or nobody who counts) is willing to go there again.

Billmon:

While we can't total up the damage from the current recession or even the current financial crisis, since both are still ongoing, with the release of December's unemployment numbers we can at least start to draw a line under the Bush presidency — to the American economy what Hurricane Katrina was to New Orleans, or Doug Feith's Pentagon was to Iraq.
…
Closing the Books on an Economic Disaster

Billmon:

Your modern conservative movement: Clueless, humorless, self-absorbed assholes, right to the bitter end.

But I guess we always knew they would go out that way.
A Final Communique From the Neocon Bunker

It might not be a 1964 or 1972 or 1984 style absolute landslide, especially in the electoral college, where the Republicans have built in structural advantages (like the overweights given to small rural states), but — again, assuming Gallup is even close to right — there shouldn’t be any doubt on Wednesday morning that the country has decisively rejected both the Republican Party and the conservative ideology that has dominated American politics since Ronald Reagan first took office.

Some fun, huh?

Billmon: Landslide Watch

Personally, I’m just waiting for the first right-wing wacko blogger to make the argument that even if Todd did lie, her story was "mythically" true because it represents the real life experience of so many delicate blossoms of young Caucasian womanhood.

Given the mental and emotional similarities between the "post-modern" left and the "pre-rational" right, I suspect it’s only a matter of time.
Billmon: The Conservative Tawana Brawley

Billmon:

We’ve crossed some more lines, in other words — in a long series of lines that have made it increasingly difficult to distinguish between the ultraconservative wing of the Republican Party and an explicitly fascist political movement. And John McCain and his political handlers appear to have no moral compunctions whatsoever about whipping this movement into a frenzy and providing it with scapegoats for all that hatred, simply to try to shave a few points off Barack Obama’s lead in the polls.

To call this "country first" only works if you assume your opponents (and scapegoats) are not really part of that same country. And we all know where that leads.
The New Stabbed In the Back Myth

Billmon:

We may not be there yet. Both the dollar and the commodity prices could stabilize, at least temporarily — particularly if the Cheney Administration (or should I say the Goldman Sachs Administration?) and the Dems in Congress can quickly reconcile their differences and ram the MOAB through the legislative colon (and up ours). Further disasters are not inevitable — or at least, they don’t have to happen all at once.

But if and when it comes, disaster (the kind that turns financial panics into searing generational memories) will unfold in a string of events that will look very much like what we saw in the markets today — only on steroids.
Things Become More Serious

On the other hand, people have told me that my entire argument is off base: Just because the country is becoming less white doesn’t mean it will become more Democratic, and just because it becomes more Democratic doesn’t meant it will become more progressive. We have plenty of proof of the latter proposition.  But some say the former one has also been documented.
…
It may not be saying much, but after 30 years of conservative hegemony I guess I’ve finally learned to manage my expectations. If it’s going to be a choice between a country that looks and acts like California, or one that looks and acts like Idaho (or Alaska) I know which America I would like to live in — and it doesn’t have to include mooseburgers.
Billmon: The Future Belongs to We

To cut right to the nasty, they were using "community organizer" as a euphemism for "poverty pimp."

And, as a special bonus, to a GOP audience (country club division, at least) organizer = union. What could be worse than a black, radical activist union organizer from the South Side of the Chicago?

…
I gotta admit, I’m impressed in spite of myself. When it comes to playing the dog whistle, these guys are Mozarts.
Billmon: Why the repeated attacks on "community organizers"?

9/11! 9/11! 9/11! 9/11! 9/11! 9/11! 9/11! 9/11! 9/11! 9/11! 9/11! …
Billmon: Rush Transcript of Rudy’s Speech

In the middle of the biggest media shitstorm of the campaign so far, with reporters baying at her heels on a host of personal and political issues, and her career on the line, Palin makes time to meet with the entire board of AIPAC?
…
.. I wouldn’t be at all surprised if an old video or audiotape surfaces that would not wear well at the next B’nai B’rith meeting. Maybe Sarah’s meeting with "the lobby" was a preemptive strike against the next wave of media hysteria.

I’ve absolutely no evidence of this, mind you – it’s just a hunch. (Or, if you prefer, another vicious smear from the "angry left". ANGRY, ANGRY ANGRY!) 
Billmon: Does Palin Have an Israel Problem?

Given that the Republican Party is, first and foremost, the party of white people (even in 2006, the year of the great Democratic congressional landslide, the GOP still managed to hold on to a majority of white votes) the question becomes: How many voters will tune into this year’s RNC and be reminded that, as disgruntled as they might be with the party and its corrupt ways, those are still "their" people?

In other words: Just how tribal is American politics these days? Enough to give McCain and the Republicans a significant bump up in the polls?

Obviously I don’t know, although I suppose we’ll find out soon enough. But McCain better hope there are plenty of them out there. Because from what I’ve seen so far, they don’t have much else going for them in St. Paul.

Billmon: In Your Heart, You Know They’re White

It’s already clear that Palin offers an embarrassment of riches for the Obama campaign, and a wealth of embarrassments for McCain’s. There’s no need to get greedy — or cruel and vindicative, which is the one thing that could cause this whole freeding frenzy to circle back and start munching on the Democrats. McCain’s people wanted to toss the pregnancy story into Hurricane Gustav? Good. Let it be buried in the muck.

Except for one obvious point: When Sarah Palin praises her 17-year-old daughter for "choosing" to give birth to a baby conceived out of wedlock (and assures us that she is doing it of her own free will) it should never be forgotten that she (and her party) would, if they could, deny that same right of choice to every other American woman, without exception.

Billmon: Ready, shoot, aim