Wednesday, January 30, 2008

Flux News

One of my repeated predictions here is that in the wake of the coming Democratic trouncing in November, a lot of winger talking heads will vanish in a cloud of worn I.O.U.s (well, I just added the cloud part this minute). I never bothered to explain why exactly, and (koff-koff) none of you readers asked me to explain.

Eric Boehlert puts everything I'd say into a neat package regarding the FOX brand, to which I would add a few more considerations.

First is the faddish nature of brands in general. By resolutely branding themselves with flags and eagles and that squalid little man, the GOP and FOX threw in with a fairly large, and limited, audience. Times change. People die. The brand keeps rolling out lame products. A lot of people who are not dead notice and get bored. You get the idea.

Consider too that when times are hard a lot of extra money dries up, and if the return on investment in brain dead mouthpieces suddenly plummets, then you either get new mouthpieces saying different things, or cut way back on the staff, or retire. I think a lot of wingnut welfare checks, at think tanks and networks, will stop flowing after the Dem tidal wave.

The coming election will be the acid test for these assholes, and boy will they fail. (I'd say the Giuliani campaign is that coal mine's canary.) This is why I have a hard time accepting the "GOP will throw everything at the Democratic candidate, so s/he better be ready" line. Call me naive, but I don't think the Repup shit will be focused or especially effective this time around. Sure hasn't hurt old John yet, has it?

Saturday, January 26, 2008

French Kiss Off

Ah. We learn from the French that the young man who somehow evaporated $7 billion of his bank's funds was sensitive, had family problems.

Zut!

Others have pointed out that this sort of illegal trading thing happens all the time, and that it is only the odd heavy loser who gets sussed, or maybe it is the one schmo who gets the blame. Be that as it may, the real story behind the story, something you will never hear from any part of the financial press, is that Wall Street "investors", that abstraction meant to stand for a legion of prudent householders, are in fact about 10,000 or so kids under 32 who have the stamina, and lack the empathy of any sort of inner or personal life, to move billions and billions of credit units around the globe every live long day.

The "small investor" is mainly the one who has sunk her 401k into mutual funds and prays for a 5% return, and woe to the manager who does not deliver. There is no prudence to the market, only a need to over react to good news. Foresight is selling into a bear market. Like the old fashioned idea of farmers, a breed mainly killed off by Big Agriculture, the investor mainly exists in the promotional literature of a giant corporate undertaking looking to vacuum bucks as freely as possible.

The other thing worth considering is that when times were good, such admirable rogues as Msr. Kerviel could not have done nearly as much damage (remember he was ahead of the game all of December). But when the tolerances are tight, when the system lacks give, it is pretty astounding what one bank, one bloke, can accomplish.

Friday, January 25, 2008

Shittybank 2

Regular readers may recall a post from November in which I told a true tale of American finance. As followup comes news this morning that Citigroup, that amalgam of malign institutions, for its own mulishness, is on the hook for billions more in the Enron settlement. In all candor, I thought they, like the other institutional defendants, accepted the settlment for promoting the Enron fraud and moved on. Apparently that is NOT the case:

Enron Creditors Recovery Corp., the entity winding up the defunct energy trader's affairs, distributed $13.3 billion, or 36 cents on the dollar, since a bankruptcy plan was approved in 2004. That includes most of $1.73 billion in out-of-court settlements with 10 of the 11 banks creditors accused of aiding the fraud that wiped out the company. They argue that Citigroup, the only lender that hasn't settled, should pay the rest of the claims, about $18 billion. The amount is more than six times the $2.8 billion reserve for Enron, WorldCom Inc. and initial public offering-related litigation that Citigroup disclosed in a Nov. 5 regulatory filing.

Evidence at a trial set for April in New York may include an examiner's report citing bank e-mails as evidence Citigroup assisted in the fraud. Testimony against the bank by Andrew Fastow, Enron's imprisoned former chief financial officer, may also be introduced.


(snip)

There's an ``unprecedented'' amount of evidence against Citigroup, said John Ray III, chairman of Houston-based Enron Creditors Recovery. This includes the report by examiner Neal Batson, who quoted one internal bank e-mail as saying, ``Sounds like we made a lot of exceptions to our standard policies'' in setting up an Enron deal. ``Let's remember to collect this IOU when it really counts.''

The bank ``bent its own internal rules and participated in transactions about which it had substantial reservations, in order to accommodate Enron and maintain an important client relationship,'' Batson concluded about special-purpose entities, or SPEs, used to disguise loans as investments.


Seems nowadays like the destination of every free market is a courtroom.

Wednesday, January 23, 2008

There Will Be Oscars*

Noted here happily, my two fave flicks from the last six months or so, Michael Clayton and There Will Be Blood nominated for, among others, Best Picture and Best Actor.

Clayton was out and out terrific, from the first shot to the wonderful lingering final moments, a character drama and industrial espionage thriller rolled into a creepy portrait of our business era. I can't praise it enough.

Blood has all the marks of a flawed, or perhaps incomplete, Plutonian masterpiece. Magnificent craft work in all departments, set, cinematography, acting. It is also one of those very rare modern films which presumes to tell a story with pictures, and the first hour, at least, moves along without much need for dialogue.

I would watch Daniel Day-Lewis wash dishes, and here he creates a furious, grasping character the equal to any others in movies: Noah Cross in Chinatown or Charles Foster Kane. There is something missing to Blood, though, and I suspect it is another half-hour, at least, which might have filled in the missing years, between the building of the pipeline and the final setting in the 1920s.

Don't be put off by other comments. Blood's final scene is magnificent -- wonderfully constructed and played, claustrophobic, and deeply strange. The final shot, with Lewis' last line, is classic filmmaking.

What drags the scene down is an astoundingly poor job done aging the actors from the earlier scenes (about 20 years), and a certain willingness to gloss character details that might explain what we see. (I suspect the DVD will have a director's cut restoring several scenes.) It wasn't until about an hour after I left the theater that I figured out just what drove crazy old Plainfield at the end. Back in the day, such things were spelled out on the screen before the final credits. Now not so much.

No Country for Old Men also has a puzzling character decision, namely - why does the guy go back to the scene of the shootout with the jug of water? And it took me a day to figure that one out. (In one word: 'Nam).

Now movies like those discussed above cost tens of millions of dollars, and the best ones employ exceptionally talented directors, writers and actors to bring characters and stories to life. In order for this to happen, the actor needs to understand from the script and the director Why a character does what she does. It does not have to be spelled out all the time, or even onscreen, but a good actor needs to work with choices beyond " just 'cause".

Lately, filmmakers have left off illustrating motivation. Maybe this is because they don't think the audience cares anymore (and they might be right). But some of us do, and we are the ones rewarded when dense pictures like Blood appear. One pines for the day, though, when one left the theater wrung out (as I felt after Michael Clayton, and Chinatown) rather than wondering just what the fuck it was you saw, no matter how well made it was.

I'll be happy to hash all this out with you movie buffs, with spoilers, in comments.

----

*Hat tip to Walter Monheit, wherever he may be. . .

Tuesday, January 22, 2008

The Dismal Silence

Man, do I hate writing about the shitty ecomony. (Where do you start? What can you do?) Now that it has turned south in earnest maybe I can move on to other things. But, for now -- odd day, yesterday, wot? I am still trying to work out the symbolism of the spirit of Dr. King somehow holding off, for a day, a day of reckoning on Wall St.

Judging by this WSJ story, things are looking almost as bad as Jim Kunstler would have it. But the shit never stops coming from those Journal types, and here I'll quote the unsuspecting dupe who wrote the piece (over 30? I don't think so), to wit:

"Part of the problem is just not knowing," Ms. Reinhart says. "The longer the process of not knowing what the losses are takes, the longer the resolution takes." Japan was the extreme example, she says. Japan's inability to appropriately gauge the losses from the collapse of its 1990s real-estate and stock bubble led to a "lost decade" of economic growth.

A critical difference between the U.S. and Japan is that the Federal Reserve has been cutting the target for its benchmark federal-funds rate and appears ready to cut it more deeply, whereas the Bank of Japan was still raising rates a year after Japan's bubble began to collapse. Also, Congress and the White House are both promising a fiscal-stimulus package, with Fed Chairman Ben Bernanke pushing for a plan that would help boost spending this year.


Now the first graf is correct-o, the second is pure editorializing (or maybe just wishing.) Because Japan lost that decade of growth (as if such an abstraction were a bad thing) not for stingy policy but because its banks insisted on carrying failed commercial real estate loans for years without admitting loss, and thereby the attending loss of face. In other words, they ate the blame. I'm not sure if U.S. financial institutions are quite so constituted. Nor do I expect any of them to do the honorable thing. Indeed, the whole set-up is designed to slip the snake head to some other sucker's bowl.

My sensible readers are maybe as appalled as I as to what counts for the administration's measures against the gale blowing now. Fiscal-stimulus sounds like a kind of cloud, an airy, intangible thing. I'm not sure if any of the Democratic candidates are quite ready for the future as it appears to be shaping up this snowy morn, but, Christ, at least policy won't be set by brain dead knaves for a while.

UPDATE: A .75% rate cut before the bell?? Wow. I guess panic has now officially reached the highest levels.

Sunday, January 20, 2008

Sick Transit

In fairness to you, my several readers, I'm here to say that the Chicago Transit meltdown I mentioned a couple weeks back has been averted -- no, make that postponed.

For the state of the issue is that our stupid, big-haired, Democratic governor (I was going to say corrupt, but he is a piker by local standards) agreed to allow the bill for higher real estate taxes to go forward, provided it carried a provision allowing senior citizens utterly free transit.

Now as much as I mainly respect old people and consider it a civic duty to allow them subsidized public transit, and no matter how soon it will be before I join their number myself, the solution was an inane and cowardly bit of politicking which even the Dems in the legislature were furious about.

For it is not the needs of those over 65 which required addressing, rather those still in the workforce, during rushhours and for fast and efficient service to the two airports. The next step up on the ladder of need is regular and general evening bus service linking the city's many neighborhoods for those folks under and over 65 who may want to go to the theater and have dinner without having to wait a half hour, or longer, for a ride, or discover that the buses on the route they're on stop running at 8pm.

It is a truism I deduced years ago when living in Minneapolis, that public transit is not run for the good of the public but rather the health of the municipal transportation bonds. Hard to keep those babies paying four percent per annum without cutting service, postponing maintenance, and raising fares. Should you click the 'postponed' link above you will see that, contrary to my earlier estimate that the CTA requires a billion dollars a year to fix (which I insist must come from the Federal Govt.), the official number seems to be six billion over five years (and here I hope that figure includes construction of at least two new east/west running EL lines), or about what the Yew-Nighted-Stakes spends every two-and-a-half-weeks surging all over Iraq.

For local readers only: I'm no engineer, but walking across the Wells St. bridge (the one which also carries the Brown Line over the river) gives me the fucking creeps. All you see on it is rust, and it is the shabbiest of any of the downtown river crossings. My guess is that no one's figured out how to rehab it without rushhour chaos resulting, and so it maintains. It probably won't kill a lot of people when it fails, but what a fucking mess it will be.

Saturday, January 19, 2008

Bind Rating

The previously cited podcast chat with Ambrose Evans-Pritchard regarding the global money meltdown was the first place where I heard anyone explain what is likely to be the next shoe to drop, namely the collapse of bond insurers. (And really, who knew such enterprises existed, or rather, as K. Drum points out, that there was a need for them?)

Just one more hoop in the daisy chain apparently, and yesterday saw a second tier ratings service knocking down the second largest bond (I almost wrote 'bomb') insurer.

What resilience the NYSE showed in the last quarter was mainly due, sez I, to soft dollar bargain hunters from overseas buying in while hopes for a soft landing abounded. Now I get the feeling there's an exodus of the same players now interested in buying at the bottom. And where's that? Excellent question. 11,000 seems a cinch (we might get there next week), 10,000 is about where this whole mess began, and who knows how sound a base that is? Could the market wipe out six years of ill-gotten, post 9/11 gains? Will our stupid CEO president leave office with a lower Dow than when he took (in the sense of stole) it? Stay tuned, and don't bet against it.

UPDATE: Two waterheads get it. (via Crooks and Liars) Indeed the loud, bald one explains the situation brutally well. . .

Wednesday, January 16, 2008

Nodes In Passing

I've been meaning to direct what little attention I can to two recent podcasts over at Electric Politics, last week's talk with Charlie Peters of the Washington Monthly, a 20-minute rundown of What Needs to Be Done, and a fascinating look at the influence of the Israel Lobby provided by the University of Chicago's John Meersheimer.

The latter's especially bracing in light of our squalid president's current mid-east charade. As Meersheimer points out, every president since Nixon has been against West Bank settlement, which has altered nether the level of aid sent Israel or, consequently, the building of settlements.

Oh, and while there, you may also want to listen to the Telegraph's Amrose Evans-Pritchard for an across-the-pond perspective on the Global Money Meltdown, in progress as I write.

Monday, January 14, 2008

Tearbaby

My brother in arms, the Field Negro, has a look at the race war of words, here and here, ongoing between the Clinton and Obama camps.

Now frankly I don't have time to parse the meanings of most things people say to me and so tend to adhere to the overt. While I'm not sure a lack of guile is one of the pathways to success, and it certainly disqualifies one from running for public office, it does simplify life beautifully. If the deeply annoying Andrew Cuomo (I ask again, how could two such fine people produce such a manikin?) wants to say "shuck and jive" in scolding Obama's style, really, who does it wound or reflect on more than he? If the chief of BET, as vile an entertainment enterprise as exists on TV, wants to warn that Obabma is no Sidney Poitier, who can hear that without taking the billionaire to be a jackass?

The whole dustup, and the one surrounding Hil's show of emotion, is only moderately upsetting, which is to say not upsetting at all, which is to say, What the fuck did you expect? Really? Did you, Ms. High-Minded Progressive, Mr. Issues-Oriented guy, REALLY think that a man of color and a woman could make legitimate runs for the highest office in this land WITHOUT this shit bubbling up?? Oh, I know. That it should be happening in Liberal Precincts!! Among Good People! Oh, the Shame, the Shame!!

Personally, I'm impressed in how it has come up in such an attenuated way, a matter for chatter. Call me naive, but I don't think people disinclined to vote for Hil will be moved to cast a ballot for her knowing now that she's a weeper, nor do I think Barak's considerable appeal, and his knack for engaging audiences of undecided and opposition voters, will be crippled by unflattering comparisons to, whom?, Sidney Poitier or Jimmie Walker.

I was going to write above "highest office in this sexist and racist land" but held off to consider that the nation, in its ideals and institutions, is neither. It is our culture which is sexist and racist. This may be a distinction too subtle for general elections, but I submit that the gap between our institutions and culture, for whatever reason has widened to the point that most people now notice.

I think what people are noticing is how little TV (that font of violence, sexism, racial cant and bad advice) can tell them about their lives, especially now that the metaphorical skies have turned bleak. Getting angry about racial code words is one more fine way of avoiding the related issues of poverty and class, issues which the nearly forgotten Edwards seems most keen to address, and it is interesting, in an aggravating way, how neatly he has been shut from the proceedings. Maybe this will give him the space to swing a few wins, maybe he otherwise decides the contest.

Thursday, January 10, 2008

Machine Maid

Though in my previous post I implied Obama would leave New Hampshire with some kind of crown, Huzzah, sez I, for Mrs. Clinton. That said, I will also point out that she of all the candidates has the closest and longest-standing relationship to the Daileys' Chicago machine (she is, after all, a local girl) and the same question regarding a fix for this city's collapsing mass transit system may be fairly asked of her.

In my dudgeon last time I never got around to saying what I think needs to be done. Easy, bust up the machine. While that is a legal project which would rival the one in place against the Sicilian Mafia, I think one P. Fitzgerald (a local boy) is ready for the task. Once the law is on the crooks' heels, fully fund the CTA with, yep, federal money.

Now the prospect of that certainly runs the risk of swirling a billion dollars a year, maybe more, down an American city well where who-knows-what is going on. The Fraud! the Waste! the Featherbedding! Not to mention the union jobs, steel orders, better service and reduced fares. Right. It'll never happen. Besides, we need that money to pay for the next three days in Iraq anyway, a project Mrs. Clinton had no trouble signing on to.

Monday, January 07, 2008

That Teetering Town

In its admirably pithy deadpan, The Economist tackles a subject I've been meaning to get to here, namely Chicago's pathetic mass transit system now teetering on the brink of collapse.

If the Illinois state legislature does not act by January 20th, more than half of bus routes in the city will be eliminated, some 2,400 transport workers will be sacked and fares will be raised. Suburban rail and bus lines face cuts as well.

There's a bill that would increase the sales tax in Cook and its five neighboring counties, as well as up the levy on real estate transfers.

But this sensible bill has been stalled by the usual in-fighting. The governor opposes a sales-tax increase and favours diverting the sales tax on gasoline from the general fund. (Congestion pricing, raising the petrol tax itself or getting the private sector involved are not even part of the debate.)

Keep in mind we are talking about the second-largest transit system in the country, one which on its best days is an embarrassment of ill-designed cars, slow, bumpy rides and sporadic bus service. What the article does not mention is miles of elevated track trestles, rusting in the damp lake air, that will need replacement pronto, before it all begins shuddering to flakes, whole sections at once.

Long and entrenched inaction has brought us to this pass, just as gas prices in the city (taxed highest in the nation) stand this morning at $3.50 for regular unleaded. (Yr. Obt. Svt. does not own a car, but when I rent one, state and city taxes take an extra 20% of the total just 'cause.) On my gloomy days I combine the dysfunction in this arena with considerations of a recycling system widely considered an interactive joke and a "boom" (which is the sound things make when they collapse) of condo construction that has turned whole sections of town into half-filled dorms for yuppies, nearly all of them crowning empty storefronts with For Lease signs in their soapy windows.

And, since I'm ranting now, ALL of this has been lovingly laid into place by Democratic city and county machines which stretch back into the dreamtime, now nominally led by the son of the man who brought this civics lesson into its brightest power, but run by constituencies who would never have had a chance of holding broad power 40 years ago.

Now I like the idea of precinct bosses and aldermen and all the dirty dealing inherent there, provided things as important as mass rapid transit, and recycling, get taken care of (New York's systems for both, in contrast, work astoundingly well) and that the police not function as an official goon squad. But what has screwed the pooch in Chicago, I submit, is not the Democratic machine per se, but how it has over the years entered into a very cosy, mutually masturbatory arrangement with the out-state GOP in Springfield as to what, where and how much gets done. Rahm Emanuel meets Denny Hastert, if you will, not a pretty sight.

I bring this all up now because the nation now has a big new star on the political scene, born in the peculiar politics of Illinois, ready to rise even higher today. If there's a reason why I have yet to become a believer in Barack is that he was a player, however young, in the same game that has allowed Chicago its morbid public drift. Sometimes bringing both sides together is an excuse to do nothing useful at all. Though Chicago's woeful state mostly defines local issue politics, it is a broad exemplar as to what the country faces in the next twenty years (And let me repeat, though I believe everything is connected, infrastructure issues will loom large very soon). Someone should ask Barack, after his triumph today, just what he would do to get the mass transit system of Chicago, a city as big and important as any in the country, working in a respectable and modern way.

Sunday, January 06, 2008

Vox Day

Kevin Drum notes the youthquake element behind Obama's, yes, startling victory, and wonders why. Offhand I'd say it's the technology, stupid. Not the equipment per se but the messages made useful by it. Forgotten, at least temporarily, are all the small web donations he collected over the summer. There is clearly a sense of mission surrounding Obama's campaign, quite at odds with the technocratic elan of Ms. Clinton's and the well-groomed blaze of Mr. Edwards.

I did not mark it down here, but my prediction for the Dem nomination, as witnessed (and agreed with) by Billy Applebaum (just ask him) on New Year's Eve, was that the race is Obama's to lose, and that Edwards would take the prize in the wake of that. Even with Obama's GOTV win in Iowa, and apparent lashing underway in New Hampshire, lengthening the odds against a stumble on his part, I yet maintain it'll be Edwards.

As much as I admire Mrs. Clinton, her beltway elan, and all of the status quo for which it stands, is a liability now. And the liable Bill, though the greatest president of my fairly long lifetime, remains a guide to the past and no help right now. The mere thought of a Bush Clinton Bush Clinton, succession, as Josh Marshall pointed out well over a year ago, is just too demoralizing to consider, a disgrace to the ideals of a republic.

I hear several of you snickering, as if amused by the idea that any ideals remain at this late hour, and to this I say, In Dreams Begin Responsibilities. And what the fuck do I mean by that? Only that a considerable amount of Obama's appeal, and a subject nearly unmentioned by the corporate press, is the lavish promise inherent in his beautiful speaking voice. After seven years of that sneering, inarticulate numbskull, where a hammering of the American language has gone hand-in-hand with bureaucratic assaults on what remains of our liberties, people quite rightly, I believe, have latched onto Obama's beautiful cadences, drawn so nobly from the churches, as a sign that a change is going to come.

And, really, where else are they getting that message? Not from TV and newspapers, those old media barges so resistant to change, that's for sure.

The GOP, that vessel of inaction so beloved by the corporate, is providing grander comedy, of the sort provided by an upset termite nest, from a safe distance. I still believe that Edwards was correct when he remarked months ago that money will not be as big a factor this year. While he has done pretty damn well with his own limited resources, the real showcase for the loss of Big Money ju-ju is in the precincts of the Big Money Party, where Mitt has just spent millions on a second place finish, shortly to be joined with one more.

Wednesday, January 02, 2008

The New Fear

I was never a big fan of Dick Clark's, but I am old enough to remember when American Bandstand was on TV everyday, right after school. This was, before President Kennedy was shot, before the Beatles arrived, the real start of the 60s counter-culture, I think. There were but three channels then, outside the big big cities, and as corporate and safe as much of AB's fare was, just to get kids dancing, nationwide, at the same time everyday was a tremendous model for what was to come, in all its weird particulars, so soon after.

Maybe this is the vestigial reason, lost in the annals of dead ad men, why Clark hosted the New Year's Time Square ball drop for so many years, the one face we were more of less wired to feel comfortable with regarding at the same moment. Be that as it may, the brief sight of that poor man I glimpsed two nights ago, propped in his booth, saying god-knows-what to who-the-fuck-cares, ruined, I have to say, nearly the whole evening for me.

I was at a party by and for the middle-aged, and we only switched the TV on near midnight, and lingered only briefly in an appalled regard of what may be unkindly considered an animate corpse, doomed to carry on the media duties of his former life. I mean, seriously now, which executive green-lighted the appearance of a severe stroke victim, who not only seemed to be operating at 60 percent capacity, but who has also undergone recent cosmetic surgery?? In what courts of human dignity, in what aspects of the endurance and nobility of the human spirit is that OK?

None that I am aware of, only in the dumb commercial simulacrum of life is the grin more enduring than the human. But I submit that here is yet another symbolic example of how the car has jumped the tracks. That the corporate culture is so terrified of the new, and believe you me 2008 looks to be all about the unexpected and drastic, that someone felt obligated to offer up the false and ruined body of old Dick Clark, a man who until his severe stroke was considered the quintessential eternal American teenager, as perhaps the last symbolic means of hanging on to the Old even at a ceremony supposed to usher in the New.