June 2009

The Spin is In (not)

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An Op-Ed in Sundays New York TimesThe Economy Is Still at the Brink really calls out what is so wrong with politics generally.

Isn't not the public relations man, it's the policy

Mr. Obama thinks that the way to revive the economy is to restore confidence in it. If the mood is right, the capital will flow. But this belief is dangerously misguided. We are sympathetic to the extraordinary challenge the president faces, but if we’ve learned anything at all two years into the worst financial crisis of our lifetimes, it is that a capital-markets system this dependent on public confidence is a shockingly inadequate foundation upon which to rest our economy.

From a Whorehouse to a White House

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On December 6, 1928, in the town of Cienaga, Colombia, thousands of families gathered in the town square for Sunday Mass. Most of the men in the area had been on strike against the banana plantations for nearly a month. They were demanding written contracts, six-day weeks, and to get paid in cash rather than company script.
The Columbian government responded by sending out the army, which set up machine guns on the roofs and at the corners of the square. After giving a five minute warning, the troops opened fire despite a lack of any provocation from the strikers.


Banana strike leaders

PIPP - Psssss!

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Know that sound of a ball deflating right in the middle of your game? Oops, it's time out on PPIP, Geithner's toxic asset plan.

The Financial Times reports the U.S. Treasury's plan to sell toxic assets, PPIP, is in trouble:

The controversial US toxic asset clean-up plan, aimed at clearing bad loans from US banks’ books to enable them to raise capital and lend freely, has fallen behind schedule, and may never be fully implemented.

The plan has fallen prey to concerns from potential investors and regulators and waning interest from the banks themselves. Investors fear that Congress may set caps on pay while regulators are beginning to doubt whether the plan is really necessary.

"That Fund is not a Slush Fund"

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Looks like some Indiana pension funds are headed to the Supreme court after Appeals Court Refuses to Block Chrysler’s Sale of Chrysler to Fiat.

These pension funds are losing their rear ends. They bought $42.5 million of Chrysler debt in July 2008, at 43¢ on the dollar and the Government is giving out 29¢ on the dollar, a or 33% loss and roughly $28.7 million.

What is most interesting in this New York Times article is this in referring to the billions in government money Chrysler has already received, coming from TARP and other bail out funds:

That program “is not a gigantic slush fund,” Glenn Kurtz, a lawyer for the funds, said Friday.

A lawyer for the government responded that the Treasury Department was given wide latitude by Congress to decide how to spend the bailout money.

I guess the Appeals court decided the TARP money is a slush fund since they ruled against the Pension Plaintiffs.

Joe Hill

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"I die like a true blue rebel. Don't waste any time in mourning. Organize."
- Joe Hill's last written words

Every successful popular movement has its legendary, or near legendary, characters. People, or groups, who seemed bigger than life, and in the end must be sacrificed to the cause. The civil rights movement had Martin Luther King, Jr. and Malcolm X. The American Revolution had Nathan Hale.

For the labor movement the group that fit that role was the Industrial Workers of the World (IWW). While the roll-call of the IWW is filled with legendary characters, far more than can be written in anything less than a book, one character stands out above them all - Joe Hill.

A Deeper Look into Friday's Unemployment Numbers

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The headlines hit the feeds, WOW! May nonfarm payrolls -345,000, while minimizing a 9.4% national unemployment rate.

Others, not really interested in lagging indicators of a possible recession bottom, questioned Huh?

I mean, really, talk about cheerleading!   A reduction in the collosal monthly rate of job losses over the last year or so is interpreted here as a slow-down in the recession?  How so?  A slow-down in job losses, perhaps, and probably a monthly blip, but an improving recession?    How is that connection established?   I'd say there's about as much substance to that statement as Bush's remark that "We don't torture".

In Jobless rate slows, unemployment up and traders are happy:

There are so many people that have run out their unemployment benefits and have either:

  • Just stopped looking and aren't working
  • They had to take part time work

In these economic times of a prolonged recession, oops better get my words in order her, call it an economic down turn.   Did the powers to be ever really say the R word.   Did we hit enough quarters for them?

Econbrowser (one of the best blogs out there for economics!) says it all with a couple of graphs:

Saturn's diesel savior and the foundation of a new "Big 3 or 4 or 5??"

 In case anyone missed the news, Saturn was sold to the Penske Auto Group.  For the uninitiated, Penske's an automotive conglomerate to put it mildly. Basically if it's got wheels or has something to do with transportation, chances are this group has a piece of the action.  The company is the second largest automotive car dealer in the country.  They also have their own u-haul truck business. And yes, they do racecars.

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