Friday, May 29, 2009

The Danger of a North Korean Land War

I am of a mind that a massive land invasion by North Korea might actually succeed depending on how it is carried out.

North Korea's nuclear threats are grabbing the world's attention. But if the North were to strike South Korea today, it would probably first try to savage Seoul with the men and missiles of its huge conventional army.

The attack might well begin with artillery and missiles capable of hitting South Korea's capital with little or no warning. North Korea's vast cadre of commandos could try to infiltrate and cause chaos while the South tried to respond.

What the North would have to gamble with is the resolve of Obama to continue fighting even if there are massive casualties. It will be safe to say that 10,000+ people might die in the first few hours if Seoul is specifically targeted by the North. Also Tokyo might get its fair share of missiles lobbed their way as well.

I think Obama might dither with the UN instead of committing everything in a counterattack. If that happens the North might have a chance since the US would be the only power that could decimate their forces in a few days and carry out an invasion of the North.

What Kim Jong Il would be doing is testing the backbone of Obama and the Democratic Congress since the loss of life in any counterattack would make Iraq look like a fist fight. Would the Dems have the stomach to carry out a protracted land war in North Korea? Would the US Military be able to face off against a million man army with 7 million reserves while still fighting in 2 wars in other parts of the world?

Then all Kim would have to count on China and Russia doing nothing directly because they don't want millions of refugees pouring into their countries if the North is invaded. If China and Russia go to the UN option instead of invading the North then I figure they would be able to fight for about week before they have to go to the UN bargaining table. Once there they might be able to call the shots knowing that no one will have the will to stop them or reverse their gains.

Hardin, Montana Wants to Be America's GITMO

Hey if the people of Hardin want it then let them have the detainees.

Hardin, a dusty town of 3,400 people so desperate that it built a $27 million jail a couple of years ago in the vain hope it would be a moneymaker, is offering to house hundreds of Gitmo detainees at the empty, never-used institution.

The medium-security jail was conceived as a holding facility for drunks and other scofflaws, but town leaders said it could be fortified with a couple of guard towers and some more concertina wire. Apart from that, it is a turnkey operation, fully outfitted with everything from cafeteria trays and sweatsocks to 88 surveillance cameras.

Just have the government spend a few billion dollars to upgrade the place to a SuperMax and then just house the terrorists there until they can be tried. If they are convicted then turn them around and send them right back here to serve out their sentence. Plus, Montana has the death penalty so they can be executed if they need to be. Seems like something that should be studied.

Thursday, May 28, 2009

Interplanetary GPS System Developed: The "Coll Pulsar" Method

Now this may be one of those ideas that lasts for the next 10,000 years or so if it works out.

Today, Bertolomé Coll at the Observatoire de Paris in France and a friend propose an interstellar GPS system that has the ability to determine the position of any point in the galaxy to within a metre.

Their idea is to tune in to the signals from four pulsars: 0751+1807 (3.5ms), 2322+2057 (4.8ms), 0711-6830 (5.5ms) and 1518+0205B (7.9ms), which each generate regular millisecond radio signals.

So these pulsars would act as the GPS satellites do today and allow really easy navigation anywhere in our own galaxy. I can see this system used more and more as we start to leave this planet for other places in our stellar neighborhood. So these so-called "Coll Pulsars" might be programmed into every navigational computer in every interstellar ship going forward.

I just got the mental image from the year 3109 of a helmsman piloting a Boeing 7007 Spaceliner plotting the Coll Pulsars into the Garmin NaviComp and then setting a course for Alpha Centauri with a group of settlers on board. The settlers will spend the next 15 years in cryostasis while the NaviComp makes subtle course corrections pinging off of the Coll Pulsars.

GM Bondholders Accept Sweetened Deal

It looks like we are going to see a Good-GM vs. Bad-GM breakup according to this. Also the bondholders get a pretty okay deal for the most part:

In addition to the 10 percent of the stock in a newly formed GM that was originally rejected by bondholders, the new offer would give them warrants to acquire an additional 15 percent stake at a deep discount. That would come only if they agree to support selling the company's assets to a new company under bankruptcy court protection.

So that could potentially give them a 25% stake in the company and more of a chance of recovering their investment if the new company becomes profitable again. I think someone finally told Obama that these guys aren't all "greedy speculators." He finally realized that they were mostly pension funds and hedge funds that have a fiduciary responsibility to lose as little money as possible. Ripping these guys off actually hurts retired teachers and policemen who have GM bonds in their pension funds.

The final plan also seems somewhat fairer then that rip-off Chrysler deal. The US Government gets 72.5%, the UAW gets 17.5%, the unsecured bondholders get 10%, with an option to get another 15% probably out of the governments share. What would be left of GM sounds like a decent enough company as well

The plan envisions the slimmed-down new GM, shorn of more plants and brands, would have $17 billion in long-term debt and $9 billion in debt-like preferred shares. That would represent a 61 percent decline from its existing debt load of about $67 billion.

They might even move into 3rd place in the US behind Toyota and Ford if it keeps its profitable brands and jettisons the rest. That depends on how much market share will be lost during the restructuring. They are still fairly profitable in China and other foreign countries so they might be a decent enough company coming out of the bankruptcy.

They should also think about building Buick plants in China where that brand is actually quite popular IIRC. Actually it would make sense to have Buick as a China-only brand and concentrate on Chevy, GMC and Cadillac in the US market. I have a feeling that the government might nix any China deals in the interests of "keeping jobs in the US" even though it will hurt their investment in the long run.

Wednesday, May 27, 2009

The New $9 Airline in Town: JetAmerica

It seems that JetAmerica is the new low cost carrier in town.

Clearwater, Fla.-based JetAmerica said 34 nonstop passenger flights a week will start July 13 at Toledo, Ohio; South Bend, Ind.; Melbourne, Fla.; Newark, N.J.; Minneapolis and Lansing, Mich. Twenty-eight flights start or end at Newark Liberty International Airport. The carrier will add six more flights -- from Toledo to Minneapolis -- starting Aug. 14.

How they can drop their rates so low is due to airports and Uncle Sam subsidizing their prices. I guess this would be a way for John Murtha County Airport and Boondoggle to actually be profitable. Well, let's not hope for too much.

The Lansing, South Bend, Melbourne and Toledo airports are subsidizing JetAmerica with $1.4 million in grants in its first year, along with about $867,000 in waived airport fees and $1.1 million in marketing and advertising assistance.

South Bend, Toledo and Melbourne received their grants from the U.S. Department of Transportation's Small Community Air Service Development Program, which has awarded $104 million to 223 recipients since 2002 in an effort to restore lost service and bring air fares down.

Market Choking on Debt: Time to Buy TBT?

It seems that mountain of Obama spending might cause interest rates to soar judging by what happened today.

Stocks turned lower Wednesday afternoon, sending major indexes down about 1 percent, after trading mixed earlier. Prices for the benchmark 10-year Treasury note slumped, driving its yield up to 3.66 percent from 3.55 percent late Tuesday.

The drop in bond prices followed an auction of $35 billion in five-year notes, part of the $101 billion in debt the government is issuing this week. Even though the auction itself was strong, traders said investors are speculating that demand could weaken as the government issues massive amounts of debt to fund its financial and economic rescue programs.

So I was looking into a hedge against interest rates jumping higher and UltraShort 20+ Year Treasury ProShares (TBT) might really fit the bill. It is a 2x inverse of the daily performance of the Lehman Brothers 20+ Year U.S. Treasury index. So it should go up as interest rates rise and bond prices drop.

I also think oil might be the other hedge since higher debt levels hurt the value of the dollar as well. You can see oil at multi-month highs of +$63 even though demand is down and supplies seem to be rising. We might see a further spike in oil as people rotate out of US debt to find a safer haven. I guess the bills for Obamanomics and Health Insurance for everyone might come due faster then the White House thinks.

North Korea Threatens to Attack South Over Nuclear Ship Interdiction

I think this saber-rattling by the North needs to be met with some kind of decent response.

Pyongyang, reacting angrily to Seoul's decision to join an international program to intercept ships suspected of aiding nuclear proliferation, called South Korea's decision tantamount to a declaration of war.

"Now that the South Korean puppets were so ridiculous as to join in the said racket and dare declare a war against compatriots," North Korea is "compelled to take a decisive measure," the Committee for the Peaceful Reunification of Korea said in a statement carried by state media.

The North Korean army called it a violation of the armistice the two Koreas signed in 1953 to end their three-year war, and said it would no longer honor the treaty.

This is quite a test of the Obama Administration and how far it can be pushed by belligerent hostile powers. So the response has been pretty mealy-mouthed and full of talk. I think the North knows they can push Obama around and the Iranians are looking on with interest.

More Bad News for US Car Makers: People Like Imports

I think this survey should put fear in the hearts of Obama Motors going forward. Foreign cars are just more reliable and you can count on your dealership being there when it is time to buy a new one. You can't say that for Obama Motors. You might be forced to go to the DMV to service your GM or Chrysler going forward. Just having to do that will sell another 100,000 Toyotas.

The Harris Interactive poll showed that just over half -- 54 percent -- of domestic car owners in the United States believed their primary dealership will still be around in three to five years' time.

Among owners of foreign-made cars, nearly three quarters thought their dealership would still be in business a few years down the road.

And of those who plan on buying or leasing another new car in future, import owners were more likely to stick with the same brand than US-made owners -- 61 percent versus 54 percent.

Just 53 percent of American car owners said they thought the company that made their vehicle is moving in the right direction, against 72 of imported car owners.

GM Circles the Drain as Bondholders Refuse to be Ripped Off

I would hate to take an equity for stock deal as well.

A committee representing GM's biggest bondholders — mostly big banks and other institutional investors — has opposed the debt-for-equity swap from the start.

Smaller bondholders — individual investors like retirees and families — have also railed against the terms of the exchange. Both groups say the offer gives them too small a stake for the amount they are owed, and some have pledged to fight in bankruptcy court.

With the government and the UAW running the company I would not want to own shares in the company after the bankruptcy. I mean who will buy GM bonds after the government's lowball offer of 10 percent equity? So any debt they raise will have to come from the Treasury from here on in.

I think the big winner out of this will be Ford because they will be poised to steal market share from GM and Chrysler due to them closing so many dealerships so quickly. Also I can see many Americans buying a Ford just to avoid dealing with US Government motors.

The idea of them having to compete with the government shouldn't be a big deal because when has the government ever been good at running anything? They will keep writing big checks that the UAW will cash and the cars will be still continue to be incredibly crappy. I think both GM and Chrysler are pretty much dead and will be an albatross around the neck of the government for decades.

Tuesday, May 26, 2009

North Korea Fires Yet Another Missile: Total up to 5

Where is China when we need them? North Korea is out of control and China needs to put their usual pressure on them. I don't see an unusually belligerent North Korea helping China's long term plans at all so it is about time for them to act. Some Chinese "war games" near the North Korean border would put them back in line in a hurry.

North Korea has fired off another missile, the latest in a series since its nuclear test two days ago, South Korea's Yonhap news agency said Wednesday.

The North fired a short-range missile into the Sea of Japan (East Sea) overnight, it quoted a Seoul government source as saying.

Consumer Confidence Goes Strait Up

It seems that consumers are starting to feel better about the economy even though we are still in a recession.

The research group's Consumer Confidence Index vaulted to 54.9 from 40.8, soaring past the 42.3 that economists surveyed by Thomson Reuters expected.

Investors watch the indicator for signs of whether consumers might start shopping more or making bigger purchases such as cars and homes. Spending by consumers makes up more than two-thirds of U.S. economic activity.

Friday, May 22, 2009

Congress Plays Monday Morning Quarterback on Chrysler and GM

In the "closing the barn door after the horse has left" tradition Congress tells the Obama administration to take a "time out" on the GM and Chrysler restructuring.

While many auto plants are confined to Rust Belt states, the loss of car dealership jobs affect communities throughout the country. With an upcoming Memorial Day recess looming, members of Congress are expected to field questions about the job losses.

While GM has not made its list public, Chrysler has identified 789 dealerships in 49 states that are scheduled to be closed. Only Alaska was spared.

"These dealers deserve a little more than a pink slip in the mail," wrote Missouri Sens. Claire McCaskill, a Democrat, and Kit Bond, a Republican

Yup, the closing of 789 Chrysler dealerships finally wakes up the slumbering Congress. The problem is that the dealerships seem to have been closed with not much thought involved. From what I have been reading many of them are still making decent money and are profitable. While others have been selling cars for decades in the same place and are probably fixtures in their communities.

I would be willing to bet that these car dealerships gave thousands of dollars to politicians in their communities as well. So of course they get on the horn and called in their favors with their local Senator or Representative. Let's see if Congress makes any headway especially because a GM bankruptcy will probably shutter thousands of dealerships and lay off tens of thousands of workers and might cost a few Congressmen their jobs as well.

The Opening in Obama's Armor: National Security

This is a very interesting new development that some who believe that Cheney was right to think that Obama is weakening national security. They are thinking that it isn't a good idea to close Gitmo without doing anything about the detainees and not saying anything when Pelosi smeared the CIA.

We'll be hearing much more about this new culture clash. During the hearings on Obama's first Supreme Court appointment, Republicans will spend more time hammering the Democratic nominee on Hamdan v. Rumsfeld and Boumediene v. Bush than about Roe v. Wade. At the moment, Obama looks untouchable. But the politics of national security could prove his undoing.

I would have to agree because the Bush people did keep us safe for 7.5 years and that is what Obama needs to do for the next 4. If that doesn't happen then Obama won't get 4 more and I think he knows that. So he beefs up the drone attacks in Pakistan and puts a troop surge into Afghanistan over the protestations of the far left. Obama knows full well that even a mini-9/11 will pin him with the title "the 1 term President that couldn't protect us."

Thursday, May 21, 2009

Chrysler Bankruptcy Ripped off the Retired Teachers and the Policemen of Indiana

It seems that one of the "speculators" that were burned in the move to give Chrysler to the UAW was the retirees of Indiana.

Indiana Treasurer Richard Mourdock revealed this week that his state's police and teacher pension funds have lost millions of dollars in the Chrysler "restructuring." Indiana's State Police Fund and Major Moves Construction Fund, which finances roads and bridges, together lost more than $1 million. And the Teacher's Retirement Fund "suffered, at a minimum, a loss of $4.6 million due to the action of the Federal government," reports Mr. Mourdock.

Yup instead of recovering a fair amount of those losses through a bankruptcy filing which would be his fiduciary duty the government stuck him with the loss. That is bad enough but this should really chill the blood of anyone that has even a dollar of TARP money on their books:

We've worried that the Chrysler sandbagging would discourage bond investment. And, sure enough, Mr. Mourdock says that from now on no funds under his control will invest in the secured debt of "General Motors, other manufacturing companies, or those insurance companies who have or will be receiving bailout funds." Given the recent actions by the feds, he adds, "the risk is too great for any prudent investor to accept."

I see his point 100% because you have the chance to go from secured creditor one day to having to accept $0.29 on the dollar the next. That is no way to invest the pensions of the retired teachers and policemen of Indiana or any other state for that matter. I think the debt of any TARP firm should be sold ASAP before the government gets a chance to rip you off.

Cheney Hits Back In Dueling National Security Speeches

It is kind of historic to see a former VP debate against a sitting President. Basically Obama took the tact of "blame Bush" in his speech.

“In dealing with this situation, we do not have the luxury of starting from scratch. We are cleaning up something that is – quite simply – a mess; a misguided experiment that has left in its wake a flood of legal challenges that my Administration is forced to deal with on a constant basis,” Obama said. “The problem exists because of the decision to open Guantanamo in the first place.”

Then he went with this nonstarter:

“I believe with every fiber of my being that in the long run we…cannot keep this country safe unless we enlist the power of our must fundamental values,” Obama said. “We uphold our most cherished values not only because doing so is right, but because it strengthens our country and keeps us safe. Time and again, our values have been our best national security asset.”

The problem with values is that they won't stop a dirty bomb from going off in an American city. It is just that simple. We can say we don't torture, give every terrorist we catch the full Geneva Convention treatment, and we can give them the full rights of our Constitution (even though they aren't US citizens) and they will still try to attack us.

Values by themselves will not keep us safe. If Obama has another suggestion on how we can get actionable information quickly from the next Al-Quida leader we catch then please tell us because that will keep us safe. Do we only get to hear "name, rank, and serial number" from the next guy or can we break him down a bit? What can the CIA do to get that information that we need to save lives? Can they use tougher measures if that doesn't work?

These questions are what Obama needs to answer instead of talking about what Bush did. I mean Bush did keep us from getting attacked again after 9/11. I think Obama needs to release the information that waterboarding was able to give us. If it was nothing or not actionable then he proved his point that waterboarding was worthless and only hurt our reputation with the world. If it did give us intelligence but Obama doesn't want it used then tell us what the CIA should replace it with.

I think basically Obama needs to tell us what he will do in the next 4 years that will keep us as safe as Bush did in the last 7.5.

Wednesday, May 20, 2009

Wall Street Journal Off-Base on CAFE Standards

I normally think the Wall Street Journal is spot-on with its Opinion pieces but I have to take issue with this part.

The new U.S. fleet will almost certainly be made up of hybrids and electric cars. This comports with the explicit intention of the President and his environmental partners to back out fossil fuels. One may ask: Once Detroit is forced to build these cars, will free Americans want to buy them, at any price?

Unless we outlaw the bigger cars that recent sales figures have shown Americans prefer any time gas prices fall below $4 per gallon, Detroit will need help marketing these small vehicles. As GM's Bob Lutz put it not long ago, "Very few people will want to change what has been their 'nationality given' right to drive big and bigger if the price of gas is $1.50 or $2 or even $2.50. Those prices will put the CAFE-mandated manufacturers at war with their customers."

The problem is that these new CAFE standards will effectively outlaw bigger cars. It doesn't matter what the customer wants because this one of those "you can have it in any color as long as it is black" type deals. The customer either buys a new hybrid at an increased markup (call it an R&D recapture fee) or they drive an old gas guzzler.

You will see most car companies rush to meet these standards so that they can recoup the R&D costs as fast as they can. So you might see Toyota coming out with an all Hybrid fleet well before 2016. That means you might never see a Hummer or a Ford Crown Victoria that is not held together with electrical tape and Bondo past 2012.

It doesn't matter what gas prices are in 2016 because the consumer has the choice between a 5-10 year old gas guzzler or a brand new Hybrid. I think the highways of 2012-2016 are going to be all Hybrids with tiny little Eurocars and 10 year old SUVs and Trucks thrown in.

I think many Americans will stick with their older, bigger, cars at first. But I would be willing to bet that Obama will change the spare parts law from 10 years after a car is discontinued to only 3-5 years to force people to "embrace change."

So that means that a customer still driving their 2009 Ford F150 Supercab will have the choice between buying a new Ford F150 Hybrid or having to custom make (or find on the Ebay) their replacement parts. I think a lucrative business in the future will be hoarding or custom making car parts for gas guzzlers. That means it might be a very good time to go long Autozone (AZO) as a buy-and-hold type stock for the next decade.

CBS Shuffles Shows and Adds Medium

It seems that NBC is going to get rid of Medium for whatever reason and CBS is picking it right up. I am really liking this change as well:

The CBS Television Network introduced a fall lineup to advertisers on Wednesday that introduces four new programs and moves one of its most popular new shows, "The Mentalist," to Thursday nights from Tuesdays.

I was liking the Mentalist but it was up against Fringe so I only watched it when Fringe was a rerun. Now with a move to Thursday I can now put Mentalist on my to-watch list.

Time to Cancel the Credit Card: Bad Credit Card Users Bailed Out by the Good

Well it seems that the people that pay their bills every month now get hosed by people who are underwater in the new "Credit Card Bill of Rights"

Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.

Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.

If they charge interest as soon as you buy the thing then there is no reason at all why you would use a credit card instead of a debit card. I love how the law of unintended consequences keeps biting Congress in the ass. As this article points out this could serve to *limit* spending by people that have the greatest ability to pay back their credit card and *increase* spending from people who are underwater. In other words more defaults. I can't wait for 2010 to vote these incompetents out.

Our Friends the Indians

It seems that the Congress party India has now won quite a few seats and seems pretty pro-American.

The election held over four weeks in April and May has produced a result very much to our advantage. The Congress party has been returned to power with a larger share of the vote than indicated by pre-election and exit polls, and will no longer need Communists and left-wingers for majorities in the Lok Sabha. The BJP attacked Congress for being too close to the United States; voters evidently decided that this was not a minus but a plus.

You have to hand it to a country that has a four week election and still has a democracy in place. We say it is too much trouble to take an hour off of work once very few years to vote. But it seems that there is now a major chance for us to cement good relations with India going forward. It is startling how similar both of our countries are:

It became obvious that we had much in common. Both countries have a large and capable military, both have nuclear weapons, both have electoral democracies and English common law traditions, and both are prime targets of Islamist extremists. After Sept. 11, when Pakistan’s Gen. Pervez Musharraf made a U-turn and promised to help the United States in Afghanistan, he did so in the awareness that the U.S. had a friend on the other side of his border.

Hell, both of our countries even freed themselves from the same colonial master i.e. Great Britain. Americans are more and more accepting of Indian culture from the success of movies like Slumdog Millionaire. You could even see some Bollywood creeping into the US by way of something like High School Musical. Also women like Padma Lakshmi are the kind of export that no American man will complain about. Now if we can just accept Indian hot curry we will really be closer to an Indian/American transcendence.

The Real Costs of Cap and Trade

Whenever someone talks about this Carbon Tax they need to look at these numbers.

In testimony before the Senate Energy and Natural Resources Committee last year, Peter Orszag, Obama's Director of the Office of Management and Budget, admitted that a 15 percent cut in carbon dioxide emissions would reduce American incomes of households would pay an average of $680 more each year for goods and services (3.3 percent of their incomes) and the highest . According to Orszag, the lowest quintilequintile would pay $2,180 more (1.7 percent of their incomes) than they would have in the absence of carbon rationing.

Yup the poor would get taxed almost double the amount that the rich will be taxed. In other words Cap and Trade will be just the thing to produce Tax Hikes for the Poor. There is nothing like the government sticking you with a $680 bill for just turning on your lights at night. So the GOP rallying cry needs to be: Cap and Trade is equivalent to Tax Hikes for the Poor.

Toyota Poo-poos the Chevy Volt

It seems Toyota laughs heartily at the new Chevy Volt.

Toyota’s US national manager for advanced technology says plug-in hybrid vehicles are a non-starter. “Toyota estimates sales of hybrids that can be recharged at household outlets may be 50,000 units a year at most and could be as few as 3,500.”

If they sell only 3500 units then you can count that as a Gremlin-style dismal failure. If Toyota shows that kind of contempt toward the UAWs savior-mobile then I would hate to be long GM. Wait, I am already long GM to the tune of several billion in tax money. The Hybrid battle will be between Ford Fusion Hybrid, the Honda Insight, and the Toyota 3G Prius. The Volt may sell to a few early adopters but I think it will be just too expensive to compete with the other Hybrids.

Senate Breaks with Obama on Gitmo

I guess the Senate wants to know what the White House is going to do with those detainees before they sign off on the money.

In a major rebuke to President Barack Obama, the Senate voted overwhelmingly on Wednesday to block the transfer of Guantanamo detainees to the United States and denied the administration the millions it sought to close the prison.

In other words the Senators would rather not have to explain to their constituents why they suddenly got a whole new batch of Al-Quida neighbors staying at the maximum security facility down the road. Closing Gitmo is harder then just writing up an executive order and hoping for the best.

Friday, May 15, 2009

Ugly X-Box Nike's Cost $2500

If they had a miniature X-box in them instead of some fiber optic lights then they would be worth maybe $600. Instead they look like something that came out of the day-glow 1980s (and should stay there.) I'm sorry, anyone paying $2500 for these shoes is a sucker.

From the" Pay Back the TARP Right Now" File: The Government "Suggests" Bank of America Change their Board Members

It must suck to be Bank of America since the White House gets a chance to bully them simply because they hold TARP money on their books.

The Journal said regulators including the Federal Reserve and the Office of the Comptroller of the Currency had previously signaled to the bank's leadership that changes in the board would be well received by the federal government, the Journal report said.

In other words do not change that preferred shares into common shares for any reason or the shareholders lose control of the board. I think the White House should remember that the common shareholders vote for the board and not the them. All the company can do is put up a slate of candidates and the shareholder can vote on them. Anything else would be illegal.

Health Care Leaders Contradict Obama's 1.5% per year cost cut plan

I think these Health Care people, like Chrysler before them, are soon going to be given the Chicago head-smash if they keep this up.

The Washington office of the American Hospital Association sent a bulletin to its state and local affiliates to “clarify several points” about the White House meeting.

In the bulletin, Richard J. Pollack, the executive vice president of the hospital association, said: “The A.H.A. did not commit to support the ‘Obama health plan’ or budget. No such reform plan exists at this time.”

Moreover, Mr. Pollack wrote, “The groups did not support reducing the rate of health spending by 1.5 percentage points annually.”

Probably because they can't cut costs by that amount and still keep everyone employed and health care at a desirable level. Of course Obama will probably just mandate a 1.5% cut per year from on high and Pollack will have to scurry or be replaced.

CIA Director Panetta Hits Back at Pelosi

It is good to see the CIA close ranks against Pelosi trying vainly to get her self out of her torture mess by accusing everyone but herself. She seems like a person falling down a gravel covered hill who is trying to grab on to anything she can to keep her upright.

Panetta, President Obama's pick to run the clandestine agency and President Clinton's former chief of staff, wrote in a memo to CIA employees Friday that "CIA officers briefed truthfully on the interrogation of Abu Zubaydah, describing 'the enhanced techniques that had been employed,'" according to CIA records.

"We are an agency of high integrity, professionalism and dedication," Panetta said in the memo. "Our task is to tell it like it is — even if that’s not what people always want to hear. Keep it up. Our national security depends on it."

Yup, the CIA are actually fighting the good fight against Al-Quida scumbags and keeping America safe. I think Pelosi saying she was "misled" by them is the height of irresponsibility. Maybe she should think about stepping down from her Speaker post like Rep. Steve King (R-Iowa) has suggested.

Thursday, May 14, 2009

Pelosi Seemed to Know Everything She Needed to About the Torture

She should just come out and admit that she was briefed on this stuff in 2002 and get it over with. These denials and talk of the Bush Administration and the CIA "misled" her sound like so much ass-covering. That means that the ranking Democrat on the Intelligence Committee was not on the ball enough to check into torture allegations. She is either hiding something or is just too naive to have been handling Top Secret information.

She had to have known something was up from the title of the briefing alone:

In a report to Congress on May 5, Mr. Panetta described the CIA's 2002 meeting with Mrs. Pelosi as "Briefing on EITs including use of EITs on Abu Zubaydah, background on [legal] authorities, and a description of the particular EITs that had been employed." Note the past tense -- "had been employed."

I'm really liking Panetta because he is standing up for his people at the CIA instead of trying to protect a fellow Dem like Pelosi from the tough questions on what she knew and when. The CIA seemed to be telling Congress everything they needed to know if they truly wanted to stop the torture. Pelosi could have pulled a Deep Throat and leaked the info to the press if she really wanted to stay anonymous. The New York Times would have eaten this up with a spoon in 2004.

I guess she wanted to get the benefits of these enhanced techniques without having to know how the CIA got them. Maybe she truly felt that the guy that cut Daniel Pearl's head off was just giving us this information on Al-Quida out of the goodness of his heart.

Hubble Gets a New Camera

It is good news that the Hubble fix-it mission is going well.

Grunsfeld and Feustel replaced Hubble's old imager with the Wide Field Camera 3, a new $132 million instrument expected to probe deeper into the evolution of galaxies and the shed new light on the mysteries of dark matter and dark energy. It is designed to see back to about 500 million years after the birth of the universe. The universe is 13.7 billion years old.

That is pretty cool that they have a camera that can see back to 500 million years after the Big Bang like that. I have to agree with some commentators that Hubble may be one of the greatest inventions of all time.

Wednesday, May 13, 2009

AT&T Fridge Cleanup Sickens 28 People

Now this is one stinky fridge. All I have to say is AT&T employees are slobs:

An office worker cleaning a fridge full of rotten food created a smell so noxious that it sent seven co-workers to the hospital and made many others ill. Firefighters had to evacuate the AT&T building in downtown San Jose on Tuesday, after the flagrant fumes prompted someone to call 911. A hazmat team was called in.

Now that is serious 7 people had to be hospitalized and a hazmat team had to be called in? We had rotten food in our company fridge in the past but holy crap.

Obama Sees the Light on Detainee Photos

I think someone finally sat him down and told him that releasing these photos to "Get Bush" will "Get Obama" instead.

“Last week, the President met with his legal team and told them that he did not feel comfortable with the release of the DOD photos because he believes their release would endanger our troops, and because he believes that the national security implications of such a release have not been fully presented to the court,” said a White House official who asked not to be named.

Now this is a flip-flop I can believe in. He is finally understanding that his job as Commander and Chief is to protect the lives of US Servicemen in a warzone. That means he can't just let the ACLU publicize photos that will get even more Islamic crazies to sign up to fight our troops for the sake of "transparancy."

The ACLU doesn't have to worry about some Sudanese kid firing an RPG at them because he saw some internet photos made him so enraged that he wanted to kill some US soldiers. Transparency is all fine and good until the bullets start to fly.

Democrats to Be Rebranded the Democrat Socialist Party?

The RNC came up with that awkward sounding name as a "rebranding effort."

A member of the Republican National Committee told me Tuesday that when the RNC meets in an extraordinary special session next week, it will approve a resolution rebranding Democrats as the “Democrat Socialist Party.”

I think the Socialist Democrat Party would work better because it just flows a little better. Or the Socialist Democrat Workers Party might be more appropriate for the far left wing of the party. That would be the group that gave a labor union control of a car company over senior debt holders.

Tuesday, May 12, 2009

The EPA admits that Cap-And-Trade Will hurt the Economy

Now even the EPA is thinking that Cap-And-Slap AKA the "tax on every American" or the "Lightswitch Usage Tax" will actually do more harm then good.

"Making the decision to regulate CO2 under the CAA for the first time is likely to have serious economic consequences for regulated entities throughout the U.S. economy, including small businesses and small communities," states one comment in the memo, which were collected and officially sent by the White House's Office of Management and Budget. "Should EPA later extend this finding to stationary sources, small businesses and institutions would be subject to costly regulatory programs such as New Source Review."

The White House then tried to say it was a Bush holdover that wrote this thing. Too bad it is not as black and white as Bush vs. Obama:

A spokesman for the Office of Advocacy said he did not know who contributed the comments, but noted that Shawne C. McGibbon, the Acting Chief Counsel for Advocacy in the Small Business Administration, wrote about greenhouse gases last November, writing that the expansion of the the scope of the Clean Air Act to regulate greenhouse gases "could make hundreds of thousands of small entities that have not previously had to deal with the Clean Air Act potentially subject to extensive new clean air requirements. ...The compliance burdens associated with these requirements would devastate small entities throughout the economy..."

McGibbon, however, is not a "Bush holdover," having been with SBA since 1994.

Yes the writer may have been appointed by Bill Clinton and was actually speaking pragmatically. I guess he just didn't support the White House's plan to rip off the poor and the middle class through taxing their electricity use.

Obama Rolls Out a New Raft of Taxes to Pay for the Uninsured

I guess this is supposed to be a way to pay for the ramp up in spending to cover that $1.2 trillion over 10 years that it will cost to cover uninsured people. I would be willing to bet you $59 billion dollars that they will not get anywhere near $59 billion from these tax rip-offs.

The White House on Monday proposed an additional $59 billion in changes to the tax code that would help pay for the cost of efforts to cover the more than 40 million Americans without health insurance, including a substantial tightening of estate and gift tax rules.

They included to "rip-off-the-charities" tax in the mix. I'm sure America's Second Harvest and the United Way get to let people starve so that people can get their free health insurance. My money is on the Dems fighting this to the death because it will do far more harm then good to left leaning non-profits and charities.

The centerpiece of the tax proposals -- a limit on charitable deductions for taxpayers in the top two income brackets -- was rolled out earlier this year and remains in the proposal.

The also stuck in a "Kill-off-Humana" tax as well:

The most significant Medicare provision would put in place vast reductions in payments to private insurers through the Medicare Advantage program, creating a competitive bidding system to make Medicare Advantage payments more comparable to payments through the government's traditional Medicare fee-for-service program. That provision is slated to save $175 billion over 10 years.

Humana (which I have shorted in the past) gets a majority of their income from Medicare Advantage. I'm pretty sure that any reduction in payments will hit them pretty hard. I guess the Medicare Advantage companies could fight back by colluding on the bidding process in order for them to keep their margins level. That is if the government isn't trying to low ball the bidding process to "keep things fair."

Miss California Admits she Agrees With Obama

But she is a hateful bigot that should lose her job for agreeing with the position of the President and the Secretary of State. Where is Perez Hilton and Mike Musto attacking hateful bigots like Obama and Hillary Clinton? Double Standard anyone?

At a press conference addressing Carrie Prejean’s disputed title in the Miss USA competition, pageant owner Donald Trump compared Prejean’s stated views on gay marriage to Obama’s.

“It's the same answer that the president of the United States gave,” Trump said. “She gave an honorable answer. She gave an answer from her heart.”

In her own remarks moments later, Prejean echoed Trump’s statement, telling reporters: “The president of the United States, the secretary of state, and many Americans agree with me in this belief.”

Yet Another Reason Why the Kindle is Should Kill the Printed Newspaper

Do you know that is costs more to print the New York Times each year then it would be to send a free Kindle to every one of their subscribers?

The Kindle retails for $359. In a recent open letter, Times spokesperson Catherine Mathis wrote: We have 830,000 loyal readers who have subscribed to The New York Times for more than two years." Multiply those numbers together and you get $297 million -- a little less than half as much as $644 million.

So the New York Times could conceivably send every one of their subscribers a free Kindle and save $347 million dollars a year. Also you have to keep in mind all of the energy that the trucks and printing presses use up. You also have to factor in all of the waste that that newsprint generates as well.

Instead people can just pick up one device and have the paper delivered to them by a single download and when they are done they just delete the paper. So I guess you could say the Kindle is the first device that will make a "green" newspaper industry possible.

Obama Calls for Government Weight Cuts

Too bad they aren't tax cuts but you have to start somewhere.

The White House said Obama "will direct the Office of Personnel Management to work with the Office of Health Reform, the National Economic Council, the Department of Labor, and the Office of Management and Budget to examine successful employer wellness and prevention practices that lower health care costs and improve employees’ health and to explore the feasibility of developing such a plan for federal employees and their workplaces.

"The president hopes that by encouraging more employers to adopt similar programs, we can improve the productivity of our workforce, delay or avoid many of the complications of chronic diseases, and slow medical cost growth," the statement said.

I think this may be the biggest cost cut in any healthcare plan. If Americans didn't eat so much crap, didn't smoke, and actually exercised something other then their remote control hand then healthcare costs will drop considerably.

This would be especially true if your workplace pro-rated your health insurance based on your fitness level. So the company will pay 100% of your healthcare costs if you can run a mile in a certain period of time depending on your age. Kind of like how the Armed Services does it. I would train like I was running the marathon if my company did that.

I think this would be an interesting use of government money as well. Have the government give companies tax breaks to be used to install a health and wellness plan approved by the Department of Health. They would then get a "healthy company" seal of approval that would qualify them for a lower tax rate.

Monday, May 11, 2009

Ford To Be the Tea Party Car Company ?

That is what the Wall Street Journal thinks.

Ford also might emerge from the current crisis as the largest American auto maker for the first time in more than 80 years. GM had 18.6% of the market in the first quarter of this year to Ford's 14.7%. But GM's lead could be wiped out when the company sheds four or five brands to satisfy President Barack Obama's automotive task force.

The article also goes into the different Ford cars that are coming out in 2010 and if they will be profitable or not. Some of the cars seem pretty interesting and might actually do well once people start buying cars again. I'm liking the look of the Ford Fusion Hybrid which has even better gas mileage (44 mpg) then the Toyota Camry Hybrid (33 mpg.) It kind of reminds me of an old-school Civic and I will seriously consider it if I buy a new car in the future.

One thing that the article didn't go into is that people might start boycotting Chrysler and GM because of the bailout. I was reading several articles about the strong-arm nature of the Chrysler bankruptcy and seeing if it repeats itself with the GM.

Basically a vote against the tactics and the violation of the rule of law by the Obama people is to never buy a Chrysler ever again for any reason. And that goes double for any Fiat sold in the US as well. Ford is the American car company that is not tainted by the UAW or the ownership of the US and Canadian governments pure and simple.

This is a populist backlash type of thing so it will be interesting to see how it will play out for GM and Chrysler emerging from bankruptcy. I'm still of the mind that Chrysler as a brand is dead as fried chicken and Fiat might even be dragged into bankruptcy itself if it isn't careful.

Tax "Reforms" To Hurt Competitiveness

I love how these officials seem so clueless when it comes to raising taxes on companies making money from foreign sources.

A Treasury Department official briefing reporters on the proposals Monday said the Obama administration is trying to "strike a balance" on overseas income between keeping U.S. firms competitive and removing tax code distortions that might cause a firm to "invest in Malaysia instead of Michigan."

The reason why a US firm will "invest in Malaysia" is because there is more growth there then in Michigan. There are just more people in Malaysia joining the middle class that will need the things that the US sells. So HP would much rather build a plant in Malaysia and sell printers and PCs in close proximity to the growing wallets of the buyers. If HP wasn't in that market for whatever reason then Lenovo would be in there faster then you can think. Plus you can bet Lenovo isn't paying a 32% tax rate.

These tax distortions are just arbitrary and force companies to keep their profits perpetually invested in that foreign place. If they really want to grow the economy then they should allow these companies a tax break to repatriate these assets in exchange for hiring US workers or preventing layoffs. If Obama was serious about jumpstarting growth in the US then they would cut corporate taxes and watch the revenue pour in.

Friday, May 08, 2009

Obama Gets a Pat on the Back: His Unemployment Plan is Great

Well every now and then Obama comes out with a big winner and I think this one may be one of them.

People who have been laid off and want to go back to school often have to give up their monthly unemployment checks. And if they decide to return to school, they often don't qualify for federal aid because eligibility is based upon the previous year's income.

Under rule changes Obama outlined Friday, the Labor Department will ask states to make exceptions during economic downturns so that the unemployed can keep their benefits if they go to community college or pursue other education or training.

The current plan is absolutely asinine. The idea that a person needs to starve to death in order to retrain for another job is stupid. In fact here is a place where I wouldn't mind seeing some of that stimulus go to work. If a person is laid-off then if they enroll in school they should be able to still draw some kind of living expense instead of just looking for a new job.

Also the idea that they can't qualify for federal aid only after waiting for a full year is stupid as well. We need the person retrained and working at their new job ASAP. The only thing they need to do is put some kind of checks and balances on it so people don't abuse it.

The Three Public Health Plans to Be Discussed

It seems that private health insurers have a right to be scared because the Big Bad Government will soon be in direct competition with them.

The three approaches being discussed are:

_Create a plan that resembles Medicare, administered by the Health and Human Services department.

_Adopt a Medicare-like plan, but pick an outside party to run it. That way government officials would not directly control the day-to-day operations.

_Leave it up to individual states to set up a public insurance plan for their residents.

So we either have a huge ad- on to Medicare and give massive new powers to the Dept. of Health and Human Services. We could have a Fannie Mae for health care where an outside company runs the plan. That worked out so well for housing. Or they can punt it to states who are barely able to cope with regular Medicare costs let alone insuring everyone in the state. I think all three plans are non-starters.

Also it really matters whether everyone gets to sign up for the plan or if it is only open to uninsured people who make under a certain amount or the self-employed. If it is open to everyone then the fees must pay for the plan or it will just be a huge money suck for decades to come.

In any case short Health Insurance companies because they will be going the way of Sallie Mae now that the government is going to run them all out of business.

Obama now the Trekkie-in-Chief?

He sees himself as Spock according to this.

We may never know if the commander in chief himself agrees with these assessments and views the pointy-eared science officer as a sort of intergalactic role model, but adding to the intrigue is The New York Times, which today asked the real Spock — Leonard Nimoy — for comment:

Q: "President Obama has drawn not-infrequent comparisons to the Spock character. Do you see any similarities there?"

A: "I've met him twice. The first time was a couple years ago, very early on when he had just announced his candidacy. He was in Los Angeles, speaking at a luncheon we were invited to. ... We were standing on the back patio, waiting for him. And he came through the house, saw me and immediately put his hand up in the Vulcan gesture."

Too bad the Trekkie-and-Chief meme falls just short of the mark:

"That's an interesting belt buckle," he said to Michelle, mischievously. She feigned offense and said, "I am interesting, next to you. Surprise, surprise, a blue suit, a white shirt and a tie." Obama grinned and bent down until he was almost at eye level with her waist. He jabbed a playful finger toward her belt buckle, and let loose his inner nerd. "The lithium crystals! Beam me up, Scotty!" Obama squeaked, laughing at his own lame joke as Michelle rolled her eyes.

*In my best Comic Book Shop guy voice* They are called Dilithium crystals not lithium crystals. I'll just chalk it up to"Bush-speak" like when he talked about Profit and Earnings ratios a few months ago.

White House Cuts Loose the New York Flyover culprit

It seems that the incompetent Obama people and the incompetent Bush people (your doing a great job Brownie) are pretty much the same.

Caldera said he didn't know Air Force One would fly at 1,000 feet during the April 27 photo promotion, according to the investigation findings. He also failed to read an e-mail message describing the operation and seemed unaware of the potential for public fear, the findings said.

Yup the guy was out of touch and not reading his email. I wonder if he was involved with giving the Queen of England an IPod or Gordon Brown region specific DVDs?

Thursday, May 07, 2009

The Chrysler Bailout Dinner: Funny Stuff.

This is exactly what I was talking about when Obama takes the Al Capone role when it comes to the Chrysler's bankruptcy deal. All TARP fund holders need to look at these two pictures to know what they have in store from the US government:



Followed by:

Why the Chrysler Bailout is only a Union Bailout

I have to agree with the Atlantic when they say that the only reason Chrysler is still allowed to exist is so the UAW can keep their members from losing their jobs.

This question was asked recently by a seasoned political reporter of my acquaintance. Frankly, I hadn't realized that anyone else seriously believed there was any other reason to bail out Chrysler. But let's go through a couple of the other stated rationales, to see why I find them so implausible:

Her rationals are spot on especially if you look over the bankruptcy deal and find that the UAW suddenly owns a controlling share of the company. I have never seen a company delivered to its union in such a way.

You can also see that the secured debt holders, Cerberus, and the American tax payer might eat a 100% loss on the deal as well. In return we get an Italian company trying to sell retooled Fiats to Americans who frankly won't buy them unless gas prices are at $5 a gallon. Even when that happens Toyota will still eat them for lunch and Nissan will lick the plate.

Is GOP Marketing the Problem? I Agree 100%

I have to agree with this post by Leigh Scott saying that the GOP needs a new marketing machine like the Dems had in the last 2 elections.

Did the Democrats put nationalizing the banks, firing corporate CEOs, and practically making out with Hugo Chavez in their trailer? Did their poster include Obama’s embarrassing world apology tour? I think not.

Yeah, most people didn't think Hope and Change meant "I Hope Hugo loves me" and all our kids will be left with is $1.27 in Change after the US defaults on its debt. They need to fix the marketing machine and fast.

I think the main problem with the GOP is letting their critics define them instead of defining their critics. Whenever the left calls any tax cut "a tax cut for the rich" the GOP needs to come back with "The Dems are calling anyone in the lowest tax bracket the rich. Our plan cuts your taxes but the Dems don't want you to have your own money. You earned it and you are hurting. Your kids need that money more then the UAW."

The AIG hysteria should have been framed as people getting death threats for accepting bonuses that the Obama administration and Dodd knew about for months. Why didn't these people block these bonuses or renegotiate these contracts way back when? Who in the administration knew what and when? Make the Obama people the villain and not the AIG employee trying to unwind the mess that other people created.

This Chrysler mess needs to be portrayed as a Union bailout and not "saving a car company." The Obama people instead bullied hedge funds who have legal obligations to pension plans and investors to recover as much money as they can from a bankrupt company. An American company was basically sold off to a workers union, an Italian car company, and the Canadian Government while the tax payer is on the hook for billions in losses. The GOP should be calling for the Car Czar's head to roll instead of soul searching and navel gazing.

Wednesday, May 06, 2009

Amazon's New Kindle the Newspaper Savior?

Hmm, it sure makes some serious sense that the new "Big Kindle" aka the Kindle DX might be able to save millions of dollars for the newspaper industry.

"Newspapers have been an absolute bestseller on Kindle," Bezos said. "People love waking up in the morning to find that their New York Times, their Washington Post, their Wall Street Journal have been 'automagically' delivered overnight. They like the fact that when they travel their subscription follows them around."

The idea of the Wall Street Journal delivered to a mobile device instead of having to be printed on a piece of paper does sound like a game changer. Suddenly the newspaper company can close all of their massive printing presses, get rid of their trucks, and a lay off all their newsboys. You can just pay for a Kindle subscription and cut out all of the middle man.

The newspaper industry might even be able to buff up their staff because content will be the great differentiator and not manufacturing costs. They might even be similar to software companies with their fat margins since most of the newspaper companys' expensive overhead can be stripped away.

Of course Amazon might be able to get a cut of each paper downloaded as well as selling the device. The only thing they need to do is drop the price to something a bit more reasonable. I think $500 for an e-reader is just too much but $200 sounds just about right. In any case I think Amazon might be on the cusp of a truly Apple-like spurt of growth as the Kindle gets more and more ubiquitous.

Is Obama Now the Tax Raider-in-Chief?

Another day another bungled plan that will do more harm then good.

In promoting its new global tax raid, the White House fingered the Netherlands, which it lumped with Ireland and Bermuda as "small, low-tax countries" that supposedly account for an outsize share of reported foreign profits of U.S. firms. The Dutch corporate tax rate is 25.5% -- which isn't even all that low by current European standards. And the U.S. is the largest foreign investor in that "small, low-tax country," according to the Dutch Embassy. Perhaps reducing American investment there and slamming the Netherlands as a tax haven is Mr. Obama's way of reaching out to friends and allies.

But the Netherlands won't be the only country hurt. The explicit goal of this plan is to reduce the incentive for U.S. companies to invest abroad, which Mr. Obama derisively calls "shipping jobs overseas." Foreign companies may relish the loss of U.S. corporate competitiveness that his proposal will bring in the short term. But in the long term, reducing U.S. investment globally will hurt everyone. And that investment is a two-way street -- the Netherlands is also the fourth-largest foreign investor in the U.S.

Ending the foreign tax deferral plan in place is a dagger aimed at the heart of US tech companies. Some of these companies make more then half of their revenues outside of the US. So if they were taxed on that outrageous US tax rate of 39% then suddenly Ireland and their 12% tax rate looks like a great place to move to.

So you might just see quite a few Silicon Valley jobs move right out of the US. So this plan is basically antigrowth, will destroy jobs and, might not even get as money in taxes as they expect.

But even as a revenue raiser, this is likely to fail. Fewer companies will keep their headquarters in the U.S., especially small or mid-sized firms that can slip away without becoming a political target. Those companies that can't flee will sooner or later demand relief from Congress, which will be happy to create even more loopholes.

My guess is that California liberals will fight this measure tooth-and-nail on behalf of their tech constituencies like Google, HP, Amazon, and Dell. There is absolutely 0% chance that this will even get out of committee let alone be put up to vote.

Obama Proposes Budget Cut of One Half of One Percent

It seems that Obama wants to be knows as some kind of budget cutter by proposing to slash a whopping $17 billion from the $3.6 trillion budget.

Compared with the total $3.6 trillion spending plan for 2010, the proposed trims amount to one-half of 1%. Half the cuts would come from defense, especially Pentagon weapons programs already spelled out by Defense Secretary Robert Gates, such as trimming back the fleet of advanced F-22 fighter planes. The other half would come from programs that have strong support among progressive activists who cheered Mr. Obama's election. Programs targeted for elimination or consolidation include education and housing programs that Democratic aides said will have fierce advocates among traditionally Democratic constituencies.

It should have been $170 billion worth of cuts instead of only $17 billion. As it is now this amounts to just a pittance that allows him to pay lip service to cutting his own budget. Maybe he can cut out some of those placeholders and down payments from that budget so he can make some real headway.

Cisco Beats on Revenue and Earnings

I think the drop off in computer spending is not as bad as some analysts feared. At least routers and switches still seem kind of popular. Also Cisco was able to cut costs to $3.6 billion from $4.1 billion which means they are cutting some of the fat of previous years.

The computer networking giant said it earned 30 cents a share in its fiscal third quarter, compared with a per-share profit of 38 cents a share in the same period last year.

Analsyts polled by Thomson Reuters predicted that Cisco would earn 25 cents a share in the last quarter on sales of $8.072 billion, on average.

Revenue in the most recent quarter reached $8.16 billion for Cisco, against $9.791 billion last year.

Tuesday, May 05, 2009

Obama went "Al Capone" on Chrysler's Senior Debtholders?"

The reports are coming in fast and furious of Obama attempting to strong-arm the senior creditors in the Chrysler deal.

Although the focus has so been on allegations that the White House threatened Perella Weinberg, sources familiar with the matter say that other firms felt they were threatened as well. None of the sources would agree to speak except on the condition of anonymity, citing fear of political repercussions.

Now this part should scare anyone dealing with the White House in the future.

One participant in negotiations said that the administration's tactic was to present what one described as a "madman theory of the presidency" in which the President is someone to be feared because he was willing to do anything to get his way. The person said this threat was taken very seriously by his firm.

I guess that is the Chicago way to either act like an organized crime figure or a 5 year old kid. Forget upholding the constitution or the rule of law that secured creditors get their money back before any unsecured creditors. Barack "the Godfather" Obama gets what he wants or he will destroy you!

I can just picture Obama dressed in a white suit with dark glasses and a big stogie like Al Capone in the Untouchables. I guess Perella Weinberg gets to be that guy that gets hit in the head with a baseball bat. This also sets a terrible precedent for any future dealing with the White House:

Imagine telling your bank that you’ve decided to pay off your mortgage in full, but you’re only going to give them 35 cents on the dollar, take it or leave it. Then when they protest, you lose patience, walk out of the room, and go on national television to say that your bank is a bad actor, they’ve exhausted your patience, and now they’ll have to settle for a big fat zero. And by the way, maybe the White House press corps will start spreading nasty rumors about them.

The bad part is the hedge funds would have taken 50 cents on the dollar if Obama didn't go all Capone on them and storm out of the room. This should tell you in no uncertain terms that any company that has TARP funds is now subject to a Bully Pulpit that will actually bully you.

If You Are a Lawyer Do Not Consult with the Government

It seems that the lawyers that okayed the harsh interrogation orders are going to be made the scapegoats according to the Justice Department.

Officials conducting the internal Justice Department inquiry into the lawyers who wrote those memos have recommended referring two of the three lawyers — John Yoo and Jay Bybee — to state bar associations for possible disciplinary action, according to a person familiar with the inquiry. The person, who spoke on condition of anonymity, was not authorized to discuss the inquiry.

I'm not sure why the third lawyer is exempt from the witch hunt but I guess he didn't play such an important role. In any case if this should tell all lawyers that if the Justice Department wants you to draft up some legal memos then you better say "well I'm pretty swamped, I just can't do it." After all it could get your disbarred by a future administration looking to take a few heads.

Pakistan Enters a Critical Phase: Will Now Battle the Taliban

Well, the Taliban is now on the move because fhe truce has broken down between themselves and the government.

The collapse of a 3-month-old truce with the Taliban means Pakistan will now have to fight to regain control of the Swat Valley, testing the ability of its stretched military and the resolve of civilian leaders who until recently were insisting the insurgents could be partners in peace. The government feared the refugee exodus could reach 500,000.

Now we will see if the Pakistan's government will hold up or not. My money is on a military coup d'état in the next few weeks unless they are able to smash the Taliban quickly. If they run into any heavy resistance there will be a vote of no confidence followed by marital law. The part I fear though is that the Taliban will seize missile silos in the confusion. That will end any land battle in one fell swoop.

Monday, May 04, 2009

Did Obama Violate the Constitution in His Chrysler bankruptcy Bid?

It seems he might have run afoul of the 5th Amendment and Thomas Lauria is going to take him to task on behalf of the hedge funds.

Thomas Lauria, who accused the White House of threatening the creditors withn humiliation at the hands of the White House press corps, has filed a motion to halt the administration’s machinations on behalf of the UAW in the Chrysler bankruptcy. Lauria and his allies claim that the Obama administration has violated the Constitution in their bid to devalue the senior creditors’ holdings on behalf of junior creditors, and have some precedent to support the allegation.

The go on to site the case of Louisville Joint Stock Land Bank v. Radford, 295 U.S. 555, 594 (1935) in their bid against the Treasury. Also, we get another charge of death threats over not agreeing with Obama. It's AIG all over again where the White House bullies people out of contractual obligations through the use of "naming names."

Chinese Stimulus Plan Actually Creating More Jobs then Ours?

It sure seems so according to this article.

I'd rather see money going to programs like the Chinese government's stimulus plan which, in part, gave $2.9 billion for a 13 percent purchase price subsidy on Liquid Crystal Display (LCD) TVs for its rural citizens -- which as I discussed on MarketPlace this week -- boosted demand enough to force Corning (GLW) to hire back 100 of the North Carolina LCD plant workers it had laid off.

We should have just gave the Chinese that $787 billion and had them think up ways of creating more jobs for Americans. The more I look at things the more I think that China is the new America. While the Red Dragon rises in the East the Socialist Eagle set in the west.

Obama Attempts to Close Tax Loopholes

I think there may be quite a bit of pushback on this issue from business groups.

The president said he wants to prevent U.S. companies from deferring tax payments by keeping profits in foreign countries rather than recording them at home and called for more transparency in bank accounts that Americans hold in notorious tax havens like the Cayman Islands.

I think this will be yet another thing that makes more US companies re-domicile in Switzerland or wherever. The more you tax these companies the better the cost-benefit analysis of moving your company headquarters looks. Too bad for the states that used to house these corporations because they will eventually need a bailout from all those lost state taxes.

Friday, May 01, 2009

Why China Does Not Want to See Pakistan Fail

The thing I love about the Internet is that there is potential for learning something new everyday. Like many Americans I am not a foreign policy newbie so this came as kind of a surprise to know that the Red Chinese have real stake in preventing a failed Pakistan.

China has invested heavily in the strategically important deep sea port of Gwadar in the Pakistani province of Baluchistan, which borders Afghanistan's unstable southeast. The port lies some 400 kilometres east of the Strait of Hormuz, through which 60 per cent of China's oil imports travel. It also provides China with a forward operating base from which to better project its naval power and ensure the safe passage of its seaborne energy shipments. A new rail line linking the Aynak copper mine with Gwadar is being considered, as is another linking Gwadar with China's western line in Xinjiang province.

The Aynak copper mine in Afghanistan is the largest untapped copper mine in the world and the Chinese have a claim on it. As most people know the Chinese are the biggest user of copper in the world so a stable Afghanistan is now very important to their interests.

Also a stable Pakistan would allow the Chinese to build that railroad that links Gwadar and China unmolested by militants nutjobs or failing governments. This railroad would save the Chinese billions in shipping costs because it would be so easy to move that Middle Eastern oil out to Gwadar and then stick it on a train destined for south west China instead of going all the way around.

Also the idea that the Chinese would have a blue water port right near the Persian Gulf should be an important strategic consideration as well. The Chinese could probably get a naval port out of any long term Pakistan/China military pact.

The Chinese could then use this port to watch their shipping and project their power into this volatile region to check American dominance there. They could even put military pressure on Iran if they threatened to close the Strait of Hormuz for whatever reason. I really marvel at how well the Red Chinese play the Great Game.

The 50 Tools You Should Own

This is an interesting list of different tools you should own if you want to be a DIYer.

Man is “weak in himself, and of small stature,” wrote 19th-century essayist Thomas Carlyle. Yet, with tools, “the granite mountain melts into light dust before him, seas are his smooth highway, winds and fire his un­wearying steeds.” And this from a guy who never felt a 5800-rpm circular saw scream to life in his hand.

While much has changed since Carlyle’s day, one thing hasn’t: We need tools to build, repair and maintain the mechanical world in which we live. With these 50 tools, you’ll be ready for just about any project—whether it’s melting mountains or swapping out the kitchen sink.

Obama Is Not FDR but Ulysses S. Grant?

At least US News and World Report thinks so.

If anything, the financiers are more solidly in charge now than they were during George W. Bush's presidency, when the New York Times declared that "Government Sachs" was a reality. Today, such figures as Timothy Geithner, Lawrence Summers, and Steven Rattner are accelerating the Bush era's finance-favorable policies, piling bailout on top of bailout. Even nonfinancial policies are being drafted to serve Wall Street; the "cap-and-trade" greenhouse gas proposal, for example, would do more to boost the bottom line of neo-Enronesque pollution mongers than to reduce carbon dioxide.

Auto Sales at 30 Year Low

I guess people just like to drive their old cars rather then have to buy a new one.

Japan's Toyota Motor Corp posted the largest sales drop at 42 percent among major automakers in the U.S. market, followed by Nissan Motor Co Ltd at 38 percent.

Sales at U.S. automaker Ford Motor Co slid almost 32 percent last month, while sales General Motors Corp, which like Chrysler has been operating under federal supervision, fell 34 percent.

Honda Motor Co's sales were off 25 percent.

I think this may be a case of Japanese cars running too well. It is much easier to keep a Honda or a Toyota running for years then it is an American car. They break down less so it is easier to stretch them out for years instead of buying a new one. Plus I have to say there isn't very much difference between a 2003 Toyota Corolla and a 2009 Toyota Corolla.

Obama's Tax Credit Might Have to be Returned by Retirees and Families

Obama giveth but the IRS taketh away. It seems the "making work pay" tax cut for 95% of Americans might have to be returned by quite of those Americans.

It will come as a shock to two income families, some federal workers, retirees, and young people with more than one low paying job that they will be expected to give back some portion of that “extra” money that Obama claimed he was giving them come April 15, 2010.

So the people hit will be two income families where both spouses work. Which makes up just about 55% of all married couples. Also if you have two low paying jobs or are a teenager that is claimed on your parents taxes then you have to pay. So that hits most of the people that would actually benefit the most from an extra $400. It also hits about 20 million retirees as well:

Retirees who have federal income taxes withheld from pension benefits also are getting an income boost as a result of the new withholding tables. However, pension benefits are not earned income, so they don’t qualify for the tax credit. That money will have to paid back next year when tax returns are filed.