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Amateur Zero Hour Oval Reset

By John Batchelor on August 31, 2010 1:38 PM | 17 Comments

Jerry Seib Works Hard to Reset POTUS.

The eve of POTUS's second Oval Office speech, this time on Deepwater Iraq, the estimable and trenchant Jerry Seib, WSJ, measures the Obama administration foreign policy in the ummah and finds it "reset." This is generous and ambitious at once. POTUS has no policy in the ummah. Iran describes another idea that POTUS cannot figure and does not seek counsel to figure. With regard Iraq, POTUS remains against the war. With regard Afghanistan, POTUS remains certain that this is the necessary war. With regard Israel and Palestine, POTUS remains certain that by bringing peace to the region, palaver, palaver. In sum, POTUS arrived at the Oval Office with a fresh posture and little information, and over the last 20 months, despite his unique access to information, POTUS has remained at "reset." POTUS disdains foreign policy. POTUS disdains domestic policy. POTUS asserts and asserts on camera. Off-camera, POTUS retreats to his certainty without information. POTUS is more an amateur today than he was when he chose to run for POTUS in December 2006, two months after Senator Obama's bagman, Tony Rezko, was indicted for graft. POTUS was then and remains now an amateur cipher. No psychology needed or useful. Reset is POTUS. Each day. What does this mean for the so-called "direct talks" between Netanyahu and Abbas? Very little. SecState Clinton is taking an unusually strong part here. No reset to HRC. HRC learns. POTUS surprisingly uninvolved. VPOTUS Biden a liability to the Democrats, not to POTUS. POTUS disdains Biden and the Democrats. POTUS disdains Washington. This is not psychology. It is POTUS taste, perhaps also to be found in reset Oval Office design colors. Taupe, beige, neutrals -- did I say beige? Does POTUS think he is beige? I am beige. Are you beige? What is taupe? Reset beige may be taupe. RESET POTUS is zero.

Where in the World Is Zhou?

By John Batchelor on August 30, 2010 9:43 PM | 8 Comments

Central Banker Mischief.

Unusual, already-denied (and yet still unexplained and puzzling) rumor out of China in the middle of the day that the big boss of the Central Bank of China, Zhou Xiaochuan, is in big trouble. Defection was mentioned. The trouble points to major losses in US Treasury holdings. The losses were said to be $430 billion. This would be nearly twenty percent of China's $2.5 trillion holdings. The number appears preposterous. The source of the rumor looks to be an unreliable and non-confirmed and even manufactured report out of a Hong Kong website, Ming Pao. The same website published a denial and said it had nothing to do with the report. Of note, Zhou's name was put behind government firewalls in order to prevent searches. Odd behavior. However, little about the story stands up to logic. Let us review: Midday (while China is supposed to be asleep) Barron's Tiernan Ray moved a summary:

Currently circulating the Interwebs is the note from Stratfor this morning that Zhou Xiaochuan, governor of China's central bank, the People's Bank of China, has fled the country, apparently because of a $430 billion loss on U.S. Treasurys suffered by the People's Republic, according to Stratfor.

The matter is clouded by the fact that a report was published on Saturday attributed to Hong Kong-based news agency Ming Pao and subsequently denied by Ming Pao. But the rumor has continued to circulate anyway. Stratfor says it can't corroborate the matter but judges the spread of the rumor as "significant" given possible Communist Party leadership changes in 2012....

Later in the Day, the Denial.

In the early evening, Jeff Stein, WaPo, put out a denial from Stratfor about the defection story. The denial knocked the losses rumor. It did not solve the firewall detail.

Stratfor, the global intelligence analysis group, reported Monday that Chinese-language blogs were reporting that Zhou Xiaochuan, governor of the People's Bank of China, "may have left the country."

But George Friedman, chief executive officer of Stratfor, said that the swirling rumors, which also accuse Zhou of overseeing a $430 billion loss on U.S. Treasury bonds, have little basis in fact and may instead signify a power struggle in advance of a leadership change in 2012.

"We don't believe it either," Friedman told SpyTalk, referring to the alleged $430 billion investment loss. But he added, "I'm less concerned about the number and the specific charges than the politics of a senior banker clearly under attack without the government stepping in and backing him. We really don't know what it all means, if anything, but the numbers aren't important."

According to Stratfor, the rumors were built on a foundation of intrigue.

"The rumors appear to have started following reports on Aug. 28 which cited Ming Pao, a Hong Kong-based news agency, saying that because of an approximately $430 billion loss on U.S. Treasury bonds, the Chinese government may punish some individuals within the PBC, including Zhou," Stratfor reported.

"Although Ming Pao on Aug. 30 published a report on its website indicating that the prior report was fabricated by a mainland news site that had attributed the false information to Ming Pao, rumors of Zhou's defection have spread around China intensively, and Zhou's name has been blocked from Internet search engines in China."

Two knowledgeable government officials, speaking on condition of anonymity, said they had no evidence of Zhou's defection and that he was not in U.S. custody.

That Lehman Brothers Rumor Once Upon a Time.

Another source asks me, "How hard is it to locate a Central Banker?" Where in the world is Zhou? Let us stipulate that Zhou is not missing with the money, that China has not lost $430 billion. Let us stipulate that the US government has no clue where Zhou is this morning. The fact of the rumor is of significance by itself. Do you recall how the shortseller rumor on Lehman Brothers worked? During the meltdown of Bear Stearns in mid-March 2008, there was wild talk of short-selling of Lehman. Lehman denied all around. Bear Stearns was offloaded to Jamie Dimon with Ben Bernanke money and all was well. Except six months later Lehman did fail (gallows understatement), and the short-sellers were gamely rewarded if they stuck it out. What to make of the March rumor? Wild guess? Just gaming the market?

Later Still.

Stratfor is reporting the Jeff Stein report that US government officials deny that Zhou has defected. Chinese authorities remain non-reporting on Zhou. Stratfor argues trenchantly that rumors about a senior Party member indicate that there is turmoil. Gordon Chang often relates the observation that the 2012 succession deadline approaches, and the Hu Jintao cohort of the cadres may be reluctant, unprepared, unwilling to hand over power to the younger generation. Rumors about Wen Jiabao earlier this year did not prove accurate. Now a rumor about Zhou. Why is the firewall up? Why not show him on Xinhua? Is he under investigation? Game is afoot. Who is playing the game?

Mission Summer Accomplished Recovery

By John Batchelor on August 29, 2010 4:45 PM | 8 Comments

Long-term, Grinding, Deflating Federal Hooey.

Steve Moore, WSJ, makes the easy and correct case that the Obama administration's ballyhooed stimulus and budget and various housing magic maneuvers have delivered up a Recovery Summer that is anemic, mortal, corpse-like -- may be an animated flesh-eating zombie that is ravenous and relentless. POTUS spoke at Xavier University this news cycle, to commemorate five years after Katrina, and Sean Miller, The Hill, surprised by reporting on air that the event was listless and poorly organized by the White House. Too many VIPs jammed into too small a space. POTUS making exactly the same remarks he made recently during his few hours in Florida. POTUS avoiding the number one issue, which is not Katrina or the Deepwater Horizon spill but rather the moratorium on deepwater drilling. Louisiana wants to talk about jobs, and POTUS wants to play to the Dress Circle in California and Florida for the midterms and talk green and environment and renewable energy. POTUS puts in a subpar performance after his missing holiday week. POTUS also has little to say about the bad GDP revision on Friday 27 -- and not much about the "Recovery Summer" palaver: POTUS tells Brian Williams of NBC, "...a constant evolving debate about what are our obligations to each other..." Try to stay focused, Mr. President. Jobs debate is over. Your team is losing. And the remark about the "...birth certificate plastered to my forehead..." was just plain weird. Does he hate the job he's got? Is he ready to go back on vacation?

Jackson Hole.

The debate about the slowdown, a/k/a "The Great Stall," did not find any illumination at the Federal Reserve's annual confab at Jackson Hole. The deflationistas remain cocksure. The inflation hawks are silent and brooding. Ben Bernanke asserts he will do what he "can." No comfort. If Bernanke cannot, then it cannot be done. The limits of the Fed. The ski slopes will be especially uncrowded this winter. Bernanke may be in denial. Bernanke may believe that, if he holds his breath, he can fly like an eagle. Calculated Risk looks to the jobs number coming on Friday 3 September. Grim tidings. The Jackson Hole gang is out of big bullets. They are going to try small caliber stuff next. After that, we will try rocks.

Unemployment Benefits: At the end of July, the qualification dates for the various tiers of Federal unemployment benefits were extended through November 30th. This extension was also made retroactive to June 2nd. Some people who have given up might rejoin the labor force to collect additional benefits. If this happens, the participation rate might increase in August - and that would push up the unemployment rate. Although the number is uncertain, if 250,000 workers rejoin the labor force to collect benefits that would push the unemployment rate to 9.7%. If 500,000 workers rejoin the labor force, plus the 125,000 from the teen adjustment, the unemployment rate would increase to around 9.9%.

Attack of the Zombie Republicans: Part 1

By John Batchelor on August 28, 2010 11:41 AM | 56 Comments

Glenn Beck's Festival of Fools

by John Batchelor

The celebrity Glenn Beck has organized a festive and apparently harmless public event for the Washington Mall that he calls "Restoring Honor." This theme is so deeply bland that it invites us partisans to look for inner meaning, such as the fact that August 28 is the anniversary of Martin Luther King's revolutionary March on Washington for Jobs and Freedom, or such as Beck's Fox News Channel seeking a low-budget reality show to sell for the dog days of summer programming. The trick here may be that Beck's event, which will feature the celebrity Sarah Palin, is not about anything at all. It is a farce of an event in the way the bookish Karl Marx meant it, "History repeats itself, first as tragedy, second as farce."

(continued)...

http://www.thedailybeast.com/blogs-and-stories/2010-08-27/glenn-beck-restoring-honor-rally-is-harmless/

Continue reading Attack of the Zombie Republicans: Part 1.

Moby GDP

By John Batchelor on August 27, 2010 1:54 PM | 11 Comments

Dead Whale Economy.

At 1.6% revised GDP growth for the 2nd quarter, the US economy and the Obama administration are floating adrift while losing jobs and suffering more uncertainty and gloom. POTUS is out of policy ideas except patience, or stalling, or waiting for the GOP to arrive and start acting extreme so POTUS can act responsible. Not much of a policy, to depend on the other guy. The partisans are not fundamental to what has happened. The disinflation, or the deflation, means that we are cautious and reluctant and in the Great Stall. What will move the economy to growth remains unknown. Plenty of room to the downside. We must get past the Hindenburg Omen before we look again at a rally based upon expectation that 2011 will show relative year-over-year growth. Steve Moore, WSJ, mentions growing at 8% to restore the jobs lost. Mary O'Grady makes the astute point that POTUS and the Democrats cannot change direction on taxes and healthcare and cap and trade without admitting to dummy mistakes in the last two years of major legislation passed by all-Democratic votes. In sum, POTUS cannot reach for a cure because it will kill off his team. Moby Dick of the American GDP is dead in the water. Ahab Obama and Ahab Bush stand on the dock, waving to us. Neither the Bush TARP nor the Obama stimulus did more than kill the whale. Metaphor is dead, too. Look to a savior. Ishmael Clinton, surviving as he clings adrift to a coffin?

Creative Unruliness

By John Batchelor on August 26, 2010 3:29 PM | 8 Comments

Alan Grayson Deserves Credit for the Sunshine.

The despair and panic in the Democratic elite is an inspiration to the troubled and self-financed Alan Grayson, FL-8, who responds with a video that takes your breath away with its Simple Simon triteness. Wearing his trademark American Flag tie, the amateur stand-up salesman-turned-millionaire member of Congress presents himself as the Pied Piper of Orlando. Joe Biden and Alan Grayson are simpatico. Joe Biden takes credit for the 500,000 new jobs every month starting July 2010 (as soon as we can find them); and Alan Grayson takes credit for the schools, the sunshine, the Florida weather and the way bacon crisps on the skillet. This is creative and unruly. Yes, it is also over the top, but the present cycle requires fresh thinking. Cheers for Alan Grayson, a man who made himself into a tall sunflower as a freshman member, and now faces the ons and offs of the tall sunflower syndrome facing playful fate in a purple district.

Grumpy Electorate.

Spoke Shane D'Aprile, The Hill, and John Fund, WSJ, about the creative, unruly voters revolting from the GOP itself in Alaska and rushing to push unknown and resourceful West Pointer and former judge Joe Miller into the lead over the establishment Lisa Murkowski. The restlessness is coast to coast and unpredicatable. This is a rough year to be an incumbent facing an unknown or iconoclast. Anything is possible. Spoke Devin Nunes, CA-21, who was in the CD of Tom Latham, IA-4, and he reports surprising surges of anti-Democrats in heretofore deeply blue CDs in California. One blue district with an incumbent who was re-elected with 74% of the vote in 2008 is now holding on to 50% and sinking against a poorly funded GOP rival. Meg Whitman goes ahead of Jerry Brown 48-40% in the Rasmussen. Carly Fiorina extends her lead over the well-funded Barbara Boxer, who now fights a come from behind race for the first time in decades.

Castle Foreclosure

By John Batchelor on August 25, 2010 2:00 PM | 2 Comments

Speaking Kris Hudson, WSJ, re the spreading gloom of major developers' walking away from commercial real estate properties in exactly the same fashion as homeowners' giving up paying mortgages and abandoning the family castle. The story behind the tale is that the banks are weakening as the big projects come back to the banks that made the loans, and that the default rate climbs again on CRE. This was the phenomenon I heard when I spoke to Bloomberg News about the transparent condos in NY (Trump Place, etc) that are eager to win renters just to keep the lights on, and needed permission to rent from the banks. Now the developers are throwing the keys at the same banks that have used "extend and pretend" as a hiding place. The transparent buildings (no customers for tenants) are across America on major thoroughfares and in unusual places in big cities. See-through black holes. The banks too big to fail knew this day was coming, which is why they have been building up all that free money from the Fed and not pushing out new loans. The nation is vastly overbuilt in commercial space. Mort Zuckerman of Boston Properties just bought cheap Harry Macklowe properties in Midtown Manhattan, chiefly because Macklowe couldn't carry the loan any longer. That is one grand castle gone to the rehab pile. More coming. The glass and concrete stuff from out West and in the South will likely go begging for buyers. Who needs a retail mall when the customers are online and out of work? I cannot point at POTUS on this cliff-diving. This is banking USA meets the property geniuses of the biggest markets. These guys were betting on trees growing to heaven. Location, location, location has limits. I could rent out Atlantis faster than sell a Manhattan condo or Vegas office complex. Then again, POTUS and the geniuses at Treasury knew that CRE was a time bomb, and they bet all their chips on the stimulus to get the market stabilized. Wrong bet. What we need are time and severe mark-downs. Nothing is broke that the right price won't fix. And take the "Trump" off of the Trump Place, and you will get buyers again when it reads "Mean Place." From Kris Hudson and A.D. Pruitt, WSJ:

"More landlords are expected to follow suit. Of the $1.4 trillion of commercial-real-estate debt coming due by the end of 2014, roughly 52% is attached to properties that are underwater, according to debt-analysis company Trepp LLC. And as the economic recovery sputters, owners of struggling properties are realizing a big property-value rebound isn't imminent."

Flash Crash

By John Batchelor on August 24, 2010 8:41 PM | 7 Comments

Dennis Berman, WSJ, and colleague Simon Constable, WSJ, discuss the Flash Crash of May 6, 2010, which remains under investigation by the SEC. The NYSE plunged 600 points in a moment at about 2:30 PM Eastern Time, and the theories are most diverse as to why. Spoke Graham Bowley, NYT, about the preliminary result from the SEC. A benign theory is that there are several exchanges and networks that feed into the central tape, and there was a confusion among them when buyers backed out of an already-weak market. Another theory is that the supercomputers that are used to trade the market in waves of milliseconds between buy and sell bids fell into a contest with other and started printing wild numbers way out of the money zone in order to misdirect each other (see chart, red for sell, green for buy). Another is that the wildness was the result of clogging by the waves of computer orders -- and that this caused certain exchanges to slow down, so there was a difference between the tape and the tributary exchange. This accelerated and widened the spreads. Another theory is that this clogging was willful, and that there was a villain behind the event who took advantage of the price spreads. My favorite theory is that the computers went to war with each other for no rational basis, and fought it out until they were shut off. This is the Hal 9000 version. From Dennis Berman's remarks, it appears that whatever caused the Flash Crash, this moment was a product of decentralization, bargain-hunting and a disorderly market. One result is that investors have stopped trusting the market as transparent. New regulation? Likely. But whatevr the cause, there is always a better mousetrap. Awaiting FC II. My new secret favorite explanation is that it was May 6, 2010 -- the 73rd anniversary of the Hindenburg crash at Lakehurst, New Jersey.

Red Green Julia

By John Batchelor on August 23, 2010 12:45 AM | 6 Comments

Spoke Peter Cameron, Liberal/Conservative frmr member Parliament, and Andrew Shearer, frmr National Security Adviser, John Howard government, re the long wait after the General Election in Australia. The projections are for 73 for Labour, and 73 for Liberal/Conservative Coalition, with four seats to decide the required 76 majority. The expectation is that the Green seat will join with Labour team. The three independents are all men from the rural areas of the North, former Conservatives, who are negotiating now with Tony Abbott to form a Minority Government. The best that Oz can suppose at this time is that the results wil read 76 for Liberals and 74 for Labour -- an unstable minority government at best. Andrew Shearer comments that such a government would last only as long as someone didn't resign or perish. The uncertainty is not happy. However, the overall theme is that Labour was elected three years ago in a rush of good feeling about Keynesianism, cap and trade and higher taxes all around. Kevin Rudd was removed by a union faction of nightcrawlers, and Julia "Red Julia" Gillard, the Atheist Champ, was installed as PM. Now, the tie. Suprising the similarities between Rudd's fall and POTUS Obama's slippage, decline, hesitation, reloading, stumble? Mention that Andrew Shearer is concerned that if Labour forms a minority with the Green seat, that the Greens will pull Labour to the "Loony Left" that wants to break off with the US, close uranium mines, dismantle the nuke reactor and return to 1911. The Greens are considered the big winner in that they took a deal of Labour votes away from Gillard's chances and gave the opening to the sudden rise of Abbott's Libs/Conservatives.

"...certain sections of New York..."

By John Batchelor on August 22, 2010 2:28 PM | 18 Comments

Bret Stephens, James Freeman and Kim Strassel, WSJ, surround the mosque at Ground Zero tale with wit, confidence and the genius of confidence. Paul Gigot is their boss, so this is a matter of reporting to the man with regard a story that is entirely about the skills of Manhattanites' facing off against all manner of creative invaders. So far, Manhattans are winning by 2 to 1 in the national polls as well as the local polls. Peace-mongering may want to call a time-out, or even to concede the game; however, for now the Manhattanites will continue the airland battle against the White House, POTUS, the Democrats, the usual suspects in the Middle East and the useful cable co-dependents of CNN and MSNBC. For Manhattanites, the narrative is taste and location, or chiefly location, location, location. Only New Yorkers understand that moving the mosque a few blocks from the Burlington Coat Factory site (damaged in the 9/11 attack) makes all the difference. The outsiders, also known as the Bridge and Tunnel Crowd, or Tourists, want to use a bland, fifth-grade civics lesson about religious freedom to explain their endlessly righteous and aimless Error of the Third Kind -- answering the wrong question precisely. POTUS seems weakened by his discovery of the First Amendment in All Things. Victor Hanson, Hoover, remarks that this is not about tolerance, it is about taste. Smile. Remind the outsiders (Tourists), of the wonderful line in Casablanca, when the Nazi villain taunts Rick (Bogart) about a Nazi conquest of New York:

Major Strasser: "How about New York?"

Rick: "Well there are certain sections of New York, Major, that I wouldn't advise you to try to invade."

Money at Ground Zero

By John Batchelor on August 21, 2010 10:48 PM | 3 Comments

White House Knots.

Imam Feisal Rauf is a double-talking sharpie who has been practicing his malarkey for a decade on various political actors in both parties (Democrats are no more sucker for it than the credulous GOP) - all in preparation for the big stage of the mosque at Ground Zero and checks with many zeros. It's about the money; it was always about the money. Rauf and his spouse, the obtuse Kashmiri Daisy Khan, are playing to the TV cameras now (on a State Department junket to the Gulf), knowing that the hot ticket is to be on FNC and MSNBC and NBC for the sheiks back in the Gulf and the sultan crowd in Malaysia and Indonesia. The mosque tale is now toxic for POTUS, and the White House wishes it will disappear behind the peace process palaver with regard the ragtag Palestinians. Notice how the mosque at Ground Zero makes the Israeli maneuver with the PA crowd look like weak tea. The Obama administration is in despair for the fact that no one is fooled by the Palestinian "direct talks" announcement. The assertion from administration sources that Iran is a year from the nuke fuel for weapons is another flabby try by the White House to divert attention from Feisal Rauf and Daisy Khan and their carney skills. I recall a cartoon early in the war. Two guys wrapped in dynamite talking about a third guy in the distance, who wears only one dynamite stick on his belt. The joke is, "He's a moderate." The fact is that jihad is absolute intransigence and First Cause bloodymindedness. Rauf knows this. That he remains alive and nimble is a measure that the jihad knows he is useful. Rauf chats in American about peace and moderation. In his natural Arabic (he is Kuwaiti), he chats anything at all with the sheiks and the princes. The White House is in knots. And the mosque? Talk, talk, talk all night in Arabic while the zeros grow and grow. It's about the money; it was always about the money. Speaking Sunday 22 with Claudia Rosett, FDD, and Andrew Bostom, author, re the latest on the the money at Ground Zero.

Behavior of Passionate Partisan Bunnies

By John Batchelor on August 20, 2010 2:29 PM | 8 Comments

Worth Watching.

Charlie Cook is a pro's pro who makes calls based on moving numbers and historical models and is entirely absent of palaver or rancor. He could be talking about the behavior science of passionate, partisan bunnies and it would sound the same witty and modest wise observation -- the sort of talk when men hold their hands out, palms upturned, and shrug while looking in the near distance. (Jerry Seib, WSJ, is a first-rate political pundit as well as a careful, quiet, discreet Democrat -- most trenchant and reliable.) The numbers show a wave election that will sweep the GOP into the House and leave it a few seats short in the Senate -- with a much better opportunity for the Senate in 2012 even if the GOP puts up a sentimental zombie for a top of the ticket. The trends in place for the House show a gain of 35-45 at the very minimum -- not because POTUS is a Muslim bunny, nor because Nancy Pelosi is a flippant Frenchwoman, but rather because the jobs numbers are ghastly, and the housing numbers are fake. The Obama administration went for the stimulus to prod the economy just enough by election day in order to make the claim that we are on the right path. The markets do not believe Washington and have started talking randomly about the next Black Swan (known only after the fact) and those Hindenburg open-tickets to Lakehurst. Shrug. The housing program is the monster in the basement. The foreclosure gambit by the Treasury means that we have fake housing numbers because folk have been allowed to game the system and stay in their houses after stopping their mortgage payments. This keeps the house off the market, keeps their houses without overhead, and completely wrecks the comp prices on their streets and in their towns. Who can have confidence to buy when the Feds and the banks are warehousing inventory that is 30-50% overpriced and won't be marked down until after you buy at the phony price? See the video below from my favorite Jim the Realtor re how Fannie is scheming in North San Diego County to hide the real decline in house prices in order to prop up the banks (who would have to mark down their asset sheets) and to hope and hop and hope and hop that prices rebound so they can move their shadow inventory stuff. Shrug. They pretend to fool us and we pretend to be entertained. The midterm is nearly now locked in as a wave swamp tsunami that will make the GOP feel important. What we do to the GOP after it has the House is not for the family hour programming. There will be blood.

Hindenburg Reverse "R" Hope

By John Batchelor on August 19, 2010 1:32 PM | 20 Comments

Jobs in Reverse.

The last fig leaf fell off the Obama administration's hope and change with the first-time unemployment filing going to the Hindenburg Omen-worthy 500,000 the week ending August 14, reported today (as presciently pointed to by Joe Brusuelas, Bloomberg, when we spoke last Friday 13). The markets now prepare themselves for a slide and drift, as there is no going higher with this much uncertainty and gloom. The Phildelphia Fed manufacturing number declined for the first time since the depths of July 2009. No one plans to hire, because there is a weakness in orders that leads to weakness in inventory build-up. They are going to let their shelves empty again and wait for the election. POTUS campaigns on the statement that the GOP wrecked the economy (not untrue) and that the Democrats have saved the economy and are moving in the right direction. This is no longer accurate. The economy is now going in reverse, with an "R," -- which is not useful for POTUS's drab wit when he says the GOP will put the car of state in reverse. Ooops. "R" for Reverse Hope. Shrug. Larry Kudlow tells me that Larry Summers is soon gone from the POTUS econocoven, and James Pethokoukis, Reuters, does not disagree. With Christina (Cheerful) Romer already out the door, with the markets already prepped for the Hindenberg Omen, nothing like a morning bath in arsenic and ashes to plump up the corpse of the Democratic Congress. Speaking David Drucker, Roll Call, re the GOP strategists now saying it is okay to attack Obama directly, as he is toxic. The Democrats are telling their guys just to avoid POTUS as much as possible, but it is okay to use him for a fundraiser. Just don't talk policy. Prepare Hindenburg. Hydrogen gas ready. Lakehurst, New Jersey, here we come. (Steve Russolillo, DowJones, tells me that there is a 25% chance of a crash, back-tested to 1988.) Oh, the humility!

CHART OF THE DAY: Goldman Sachs Thinks the End of the Stimulus Is Going to Crush GDP Growth

Airstrike Jackass

By John Batchelor on August 18, 2010 10:27 PM | 13 Comments

NRSC Launches on Democrats.

Using the theme of "extreme," the National Republican Senate Committee goes at the polls, especially POTUS polls over the mosque at Ground Zero, but also at the bailout, healthcare, stimulus and jobless polling, and then slides in a gingerly fashion into the polling that shows the GOP candidates leading in critical Blue State races, enough so that the Senate could easily shift into GOP hands. It is mid-August. Nothing is written in stone. However, the polling on Independents from Rasmussen shows that the Democrats are leaking Indie support in the important states. Is it entirely the mosque? Nah. It is the sum total of jackass (original mascot of the Democrats, a pun on Andrew Jackson) mistakes and deafness these last months. The complaint is that POTUS is preaching and not conversing. Spoke Salena Zito, re POTUS visit to Columbus, Ohio, for Mary Jo Kilroy, where POTUS remarked "No regret" to a staged question about his Friday evening opinion on the mosque. Salena points to the polls throughout the Rust Belt as evidence of the sagging Democratic message of healthcare costs, government intervention, higher taxes and apparent directionless jobs programs. Spoke Devin Nunes, CA-21, who says POTUS may be coming to the very alienated and unemployed San Joaquin Valley -- just because the regional Blue CDs are at risk from the White House palaver and Democratic majority mismanagement. When I joked with Devin that the traffic jam created by POTUS in LA strectched all the way to Seattle, he rejoined that there are no jams in the Valley because folk are too reduced to drive around and waste gasoline. Some of the local CDs that were solidly 60% Democratic in the last election may be tipping to the GOP; that is how desperate, mad and wild the election is breaking.

Ground Rust Offensive

By John Batchelor on August 17, 2010 3:47 PM | 9 Comments

Shock and Awe Ground Zero Offensive.

From out of the littlest details comes the greatest shock of the campaign season, as the Gallup poll now shows a stark collapse of POTUS approval at the same time of his mosque reversal remarks on Friday 13-14 August. The CD polls were already running heavily toward the GOP, and now the steady momentum for the GOP is turning into a rout for the Democrats. Also, Toomey leaps ahead of Sestak in Pennsylvania, a critical component of the Republican revival. Sarah Palin goes on the air about the mosque, saying not much more than the commonsense stuff of everyone else -- not here, not now, not not -- and this video is just icing on icing for the GOP. The amazing detail in the Gallup is that POTUS still retains a 12% approval rating from Republican-identified respondents. Who are these guys? Speaking to Salena Zito, PTR, with Larry Kudlow, CNBC, re the surge in GOP polls in the Rust Belt (see the strike ad on John Boccieri OH-16 [D] below). Toomey's surge is critical, because the governor's race was long decided by Corbett's strength, and so now the top of the GOP statewide ticket will have two leaders in the polls -- a fact that will reach out and help all the GOP congressional challengers.

White House Needs Bailout.

As PA goes, so go the Democrats in the East. Ground Zero mosque talk is the rage of mid-August. POTUS is darting around the country now for fundraising at Democratic hot spots, such as California, Washington State, Wisconsin and Ohio. The senate polls show the GOP candidates' leading in California and Ohio -- not in Washington yet because it has yet to hold its GOP primary, where Rossi is heavily favored. Still, the Gallup collapse for POTUS does not look like a stable point. POTUS is down to 42% in the weekend tracking polls, and this week the GOP message machine is starting the shock and awe on the mosque on all videos. The Democratic candidates are isolated and frozen in a heatwave. Will POTUS speak again? Of course. The White House messaging team is dysfunctional and needs a bailout. The GOP pick-up whisper number remains 65. But I am told there are 104 Dem seats considered vulnerable now. The NRCC does not have enough money or people to invest below about 50 on the list. Everyone else is running on local talent and the national message that POTUS is deaf and the Democrats have spent the treasury for a century without results or jobs. Larry Kudlow joins as co-host, re the Fan/Fred confab in DC, and re the manufacturing numbers, which are not negative. We are speaking to James Pethokoukis of Reuters on the regime's tax hike threat. Still, the election story is the next piece of the puzzle to the solution of the economy. Must have the regime uncertainty silenced, and a GOP House and Senate will be a start.

Tax Dollar Trump

By John Batchelor on August 16, 2010 12:25 PM | 3 Comments

We Are Safer with Congress in Recess.

The woefully underpaid, overworked, exploited, disposable, imprisoned Congressional staffers make the bulk of the decisions and comments on Capitol Hill that pass for First Article of the Constitution policy and history; and it is good to observe where staffers hang out with our tax dollars available on credit cards charged to Congressional business. Your tax dollar is a good tipper. It's a Republic, if we can keep the always-dangerous Mini-Me Bonapartists on Capitol Hill both numb and diverted by the local beauties and brew.

Then Again, the Great Stall...

New report this evening re the stalling economy. Oshrat Carmiel, Bloomberg, reports that the luxury condominium market in Manhattan is under severe stress. There are 8,700 new apartments empty in Manhattan. There are huge, fancy, glass-wrapped residential buildings with woeful occupancy rates. No bank wants to write a mortgage for $1 million condos in subpar buildings. Meanwhile, the commercial loans are coming due. The clever lads at the banks, development companies and real estate brokers have come up with a cunning solution. They have talked the FHA into backing the mortgages of sales up to the FHA limit to $729,750. Shazam! This will likely only move the studio in these glass palaces (such as the near-transparent and mostly dark Trump stuff along the West Side; also lots of the towers along Broadway), but it will be a start, and just perhaps the clever lads can use the FHA pieces to glue together a bridge loan/mortgage. What I learn is that the most valuable real estate residencies in the world are going begging. No buyers, and no lenders if there are buyers; and no end in sight to the commercial loan shortfalls. The Great Stall is turning into a sinking commercial property market at the top of the food chain: so how is it down where the real people dwell? Unknown. Aaron Task, Yahoo Finance, reports that the Street is watching WalMart earnings to see if the real people are shopping for value in real America. No WalMarts in Manhattan to watch. More of our tax dollar tipping to see if the FHA can restart the real estate values. My measure from other voices this eve, such as Floyd Norris, NYT (who says we have deflation and inflation all at once, calls it "flation"); and Laurence Kotlikoff, Bloomberg and Boston University (who says the US is bankrupt and has been running a Ponzi scheme on the young for the last six decades); and John Tamny, RealClearMarkets.com, who says that we are in an inflationary cycle, watch the price of gold as evidence), is that we are not at the bottom of the mortgage market yet and that prices must adjust -- when and if Uncle Sam stops interfering with the bribes and tricks and schemes.

Manhattan Luxury Condos Embrace FHA in 'Game Changer' (Update2)

Pope the Mosque Teacher

By John Batchelor on August 15, 2010 12:40 PM | 26 Comments

Peter King Mosque Zero Succinctly.

Pete King, NY-5 (R), makes the gentle and succinct case that the mosque at Ground Zero can follow the historical example of grace from the 1980s, when Pope John Paul asked the Carmelite nuns living in outbuildings of the original Auschwitz to move a little farther away to continue their prayers for the dead. The Pope seized the teachable moment and advised. Controversy solved. This case is from the lovely column written by Bill McGurn, WSJ, some two weeks back, and it stands above all other compromises offered these last weeks. Jerry Nadler, NY-8 (D), struggles long-windedly to avoid the question of the 9-11 families and their objections to the proximity of the Imam Feisal construction; and Mr. Nadler never does answer the question, instead offers misdirection (Newt Gingrich) and civics lessons (tolerance) and equivocation ("some" of the families object) and then trails off the track with his analysis that Al Qaeda is not the whole thousand-year history of Islam. Pete King makes the last fair observation that, if POTUS is going to get involved, along with other senior government officials, then have a meeting of the families, the community and the Imam Feisal colleagues and find a compromise site -- the governor has offered state land -- that is a little farther away -- as the Pope recommended to the nuns at Auschwitz once upon a time. How very tidy that the volubly Irish-American Mr. King moves the story the most with a lesson from the Polish Pope and the Holocaust during the Cold War, and that the Irish-American Ronald Reagan can be useful to African-American POTUS and the Egyptian Imam in summery New York during the long war with villainous and devious Al Q.

Harry Reid Bribes

By John Batchelor on August 14, 2010 3:25 PM | 4 Comments

Thaddeus McCotter and the Next GOP House.

Colleague Jeff Bliss, KSFO, and I enjoy a conversation (Wednesday 11 August) with Congressman Thaddeus McCotter 11-MI (R) re the latest bribe packages from the Obama administration for the beleaguered Democratic base in the municipal unions, in California, Illinois, Flordia and Ohio. First we speak of the day's news of $3 billion (taken from the lingering unspent TARP bailout money) dispatched to assist the unemployed who face foreclosure with their stressed and/or underwater mortgages in the Blue states of CA, IL, FL and OH. Then we speak of the $26 billion bailout package that the House was required to pass after being called back to Washington from August recess. Both packages describe the Obama administration's notion that the way to secure the election is to throw bad money after worse. We also discuss the peculiar remark by Majority Leader Harry Reid that he cannot imagine anyone of Hispanic heritage being a Republican. Thaddeus McCotter's response is to identify his wife as a Mexican-American Republican, the daughter of Mexican-American autoworker. We also mention that Brian Sandoval, the Republican nominee for governor of Harry Reid's Nevada, who is Hispanic-American, has a ten-point lead over Harry Reid's son, Rory Reid. Thaddeus concludes by arguing that the Republicans, if they return to the majority in the House, must demonstrate faith and confidence in the American people. Thaddeus also notes that Harry Reid, Nancy Pelosi and POTUS Obama all three assert that they are spending vast amounts of deficit money in order, they claim, to lay the foundations for the economy, and that this is not a trustworthy trio with our money and our economy, adding "...the American people laid the foundation for the the most prosperous and successful economy in history, and I think we should leave it in their hands..."

Boise Blues

By John Batchelor on August 13, 2010 9:51 PM | 1 Comment

Rocky Mountain Fiasco.

Spoke Joe Brusuelas, Bloomberg, re the economic numbers the last days that point to a surprising slow-down for the remainder of the year that likely started in the second quarter and may dip toward 0 (zero) in the third quarter. The number that alarmed most day-to-day economists, including Joe Brusuelas, was the surprise leap to 489,000 first-time unemployment claims. Joe Brusuelas advises that the closer this number gets to 500K, the more likely we are to slip into negative growth in the third (present) and fourth quarter. Thursday 19 August is Soylent Green day for the next decision moment. The reports from the big investors such as Ken Heebner and/or the Pimco boys point to defensiveness, bonds, emerging markets, anything that is far away from the equities in New York. I reported to Joe about the residential real estate Rocky Mountain States of Colorado, Utah and Idaho now turning bleak like the sand states and laying waste to neighborhoods of working people. Joe's observation is that the persistent joblessness is now pulling in areas of the country where there has been growth the last year, such as in the IT manufacturing neighborhoods of Denver and Boise. The Micron jobs at Boise of the last years have been cut in half, down from 10K to 5K and no hiring back yet, as the company remains cautious even with orders extant. The watch words across the country are caution, reluctance, hesitation, cash, cash, cash. Next week, Treasury Secretary Tim Geithner leads a confab in Washington re the Fannie and Freddie fiasco. The aim is to move to privatize the $12 trillion of mortgages, but Joe advises that the money is not available to accomplish this goal in the near term. The grinding down continues, another five years at best. And Boise? Long way down. Nan Holmes, 55, divorced, a senior escrow office at a title company in Boise, purchased a house in 2007 at 100% financing for $370K. She stopped paying the mortgage in April, put the house out for a short sale at $235K (no offers yet); and Bank of America sent the foreclosure notice in July -- one of 325K such mortgages served with foreclosure or repossession or default notice in July. Boise Blues, nowhere to hide, the new working homeless debtors in Rocky Mountain High Tech America. Mention that IT is one of the best growth stories in the economic states, and when IT slows, there is no replacement in the system just for GDP growth. Mention also, re the midterms and the economic numbers from last week and next week: the whisper number for the House GOP pick-up is now 65.

Foreclosures Spread in US as Idaho Defaults Mount (Update1)

Heebner Fund Exits Investment Banks, Mining Companies (Update1)

Aug. 13 (Bloomberg) -- Kenneth Heebner's Capital Growth Management LP sold
stakes in Goldman Sachs Group Inc. and Morgan Stanley ...
- 2010-08-13

Heebner's Hold on Top Fund Spot Slips in Third Year of Slump

June 17 (Bloomberg) -- Ken Heebner is mired in his third straight year near the
bottom of the mutual-fund return rankings, threatening his status as the top ...
- 2010-06-17

Heebner Buys Cliffs Stake, Sells Google, Amazon.com (Update1)

May 14 (Bloomberg) -- Kenneth Heebner's biggest changes to his stock holdings were
buying mining companies, such as Cliffs Natural Resources Inc. ...

"A Crime Against Economy ..."

By John Batchelor on August 12, 2010 12:24 PM | 3 Comments

Arrest Warrant on America.

What is delightful about Congressman Ed Markey's over-the-top assertion -- at a well-staged, so-called Congressional hearing of one guy and the witnesses -- that a Greenland glacier calving an iceberg the size of Manhattan is "a crime against Nature" is that it makes all the rest of the whining of the moment seem trivial. A crime against Nature. Arrest us before we assault Nature again! Swear out the warrant on America! What does it matter that we are struggling along with a five-year plan to drive 25- to 54-year-old unskilled laboring men out of the workforce? What concern is it of ours that billions upon billions were plundered by conniving bankers and their clients during a drunken spree, 2004-2008? Set aside our tiny infractions. We are criminals on a global scale. We are melting Greenland? Making it green? Ed Markey is the perfect companion for a hot day in America. No good news anywhere else. The market is in a ghoulish mood. Revisions coming for the second quarter that will challenge the notion that there was a recovery at all. The Permabears in Europe are having a good twenty-four hours. Bloomberg is reporting oil and stocks and commodities in retreat from expectation that demand will weaken.

•Unemployment Claims in U.S. Unexpectedly Climb to Highest in Five Months

•Stocks, Oil Drop as Job Data Show Slowing Recovery; Swiss Franc, Gold Gain

Stop the Bailouts!

It is not possible to find a positive spin anywhere. Cars are reporting good monthly sales figures as Americans restore their transportation after a two-year downturn. Speaking Lou Ann Hammond, carlist.com, who reports that there are Ford dealerships complaining they cannot get enough vehicles. Still, unlikely that hiring will answer the demand. Just banking the cash. Cash and ice, ice and cash, two items that are in demand in the long hot summer of the Great Stall. Paul Vigna, DowJones, reports on the call from economists to the policymakers to stop making changes, stop the legislation and bail-outs, stop the deficit spending, just stop. It is dreary and going to remain dreary, but don't make it worse with more crimes against the nature of the economy, such as pretending we are in a recovery.

Marshall Hell-Knocking

By John Batchelor on August 11, 2010 12:37 PM | 10 Comments

Sensational new video from Dan and Martha Quayle's son, Ben Quayle, who is campaigning for the purely Red Arizona 3rd District (John Shadeqq retiring) the way you might run for Territorial Marshall in 1910. In other news of the youthful Mr. Quayle, it appears that he once had ambitions to chase girls and enjoy sybaritic rebellion. Tiny scandal emerges that can only benefit his name recognition. The Arizona primary is August 24, and while there are ten names on the Republican ballot, Mr. Quayle is surely going to Washington on a slightly smutty horse and a white hat and a lawman's stare. Son of Quayle will prosper as long as he remembers that someday he too will be Washington and another tyro will be itching to prove he's No.1 with a gun. The way of the West, where glory lives.

Quayle Denies Link to Website

Ben Quayle (R), an Arizona House candidate and the son of former vice president Dan Quayle, denied allegations that he used to write for the Dirty Scottsdale website.

However, the site's founder tells Politico that Quayle was "one of the original contributors" to the site, which featured sexy photos of women and "chronicled the city's clubs and nightlife and the predecessor to the popular gossip website TheDirty.com."

"I am not going away."

By John Batchelor on August 10, 2010 3:26 PM | 10 Comments

Soliloquy for Hollywood.

Now we know the up-to-date answer to the question, "What's the worst that can happen?" to the Democrats. Not only is Charlie Rangel convincing and clever, but he is also defiant and immovable on the floor of the House as he delivers a soliloquy for Hollywood script writers that will be celebrated in the history of the Congress. This is the, "You want me, copper, come and get me!" defense that works for Jimmy Cagney and other famous cops and robbers leading men. The facts are not critical. Charlie Rangel has been doing favors for his pals and constituents for more than fifty years. Good for Charlie. His misbehavior under review is tax and crony problems. Shrug. The puzzlement here is why this melodrama is now in front of the cameras? Did Nancy Pelosi order this in train after the March flap over the chair of Ways and Means, when she elbowed Rangel out of a powerful position he had waited forty years to assume? Did the White House bless this mess? The self-destruction of the Democratic majority is a mystery. You cannot make this stuff up times ten. Adam Clayton Powell was driven from the same seat by an indifferent Congressional leadership in 1968. Now Charlie Rangel is shown the door by an indifferent Congressional leadership in 2010. Time for the third act curtain.

"If I can't get my dignity back here," Rangel said, "then fire your best shot at getting rid of me through expulsion."

Dinner with Jodie

By John Batchelor on August 9, 2010 11:39 PM | 4 Comments

Spoke Ashlee Vance, NYT, re the continuing mystery of what did ex-HP CEO Mark Hurd, 53, do in the company of actress and greeter Jodie Fisher, 50 (below, back row, center, in a group photo from a TV reality show, 2007), to be accused of sexual harassment by Jodie Fisher's celebrity attorney Gloria Allred? And what did Hurd do that convinced the board of HP to encourage Hurd to resign the day after Hurd settled with Allred and Fisher in some fashion -- a cash settlement of some kind. Fisher says there was no sex. Allred now speaks in sympathy of Hurd. HP says that, after an investigation, it was decided there was no sexual harassment. There is no explanation in all this denialism. Ashlee Vance remarks that Silicon Valley chat says there is another shoe to fall. Ashlee Vance also mentioned that Hurd liked to go out to dinner with Jodie after HP events in distant cities -- that he didn't like to hang out with HP types and he didn't like to dine alone. Puzzling. Even the omniscient Larry Ellison of Oracle is puzzled.

Jonah Rewrite

By John Batchelor on August 8, 2010 12:16 PM | 2 Comments

Mission Critical Unsolved.

Speaking Bob Zimmerman, behindtheblack.com, re the disappointment of the spacewalk on Saturday 7 to solve the failed cooling pump. The ISS has been on minimal power for a week after the ammonia cooling pump failure. NASA asserts that all six on board remain safe, that the ISS is stable and safe, that the problem can and will be solved. The cooling pump is mission critical. NASA originally scheduled the spacewalk repair mission for Thursday 5, then Friday 6, then finally Saturday 7 -- meanwhile scripting the scenario in the big pool at Houston where astronauts work underwater in spacesuits to simulate the spacewalk. The delay was to get the script right for the two spacewalkers. Still, the disappointment when the spacewalkers could not get even one of the four hoses disconnected, and when there was a sudden leak of ammonia -- an event NASA has declared "unacceptable."

More Bad Luck.

There is another spacewalk now scheduled for Wednesday 11, after more scripting rewrite. There is every reason to believe that NASA will solve the problem. However there is fresh material to make the case that the Obama administration manned space planning is inadequate for just this sort of emergency. The cooling pump is 780 pounds -- much too heavy for anything but a space shuttle cargo bay or perhaps a Russian robot freighter. NASA has warehoused four of the pumps in the event of failure. The broken pump has been in operation since 2006 and is supposed to have a 12-year lifespan. No explanation at this time why it failed. If and when a new pump is installed, they will have three left. There are two more shuttle missions before the program is closed by order of POTUS. There is no room on board the two remaining missions for another pump unless there are tradeoffs. The calculations can be solved. The Obama administration's anti-manned space policy cannot be solved. The new Congress will resist the closing of the shuttle and the abandonment of the Constellation program for a new manned spacecraft and heavy lift vehicles. The drama at the ISS is part of the larger battle over US manned space goals. The "unacceptable" leaking ammonia from the aborted repair mission is now part of the Obama administration's run of bad luck in the face of its suddenly Jonah policy.

Five Years from Iraq

By John Batchelor on August 7, 2010 9:23 PM | 5 Comments

Spoke to Sebastian Gorka, FDD, re the Obama administration policy for Iraq and learned that there is no policy after the withdrawal of combat troops. POTUS Obama asserts that he is keeping a campaign pledge to move the US out of Iraq. This is not the same as establishing a policy with goals and alternatives. POTUS and VPOTUS are satisfied with quitting a fragile state that is easily pulled apart by the usual thugs. Gorka asserts that Al Q will be first to take advantage of our exit and will rally the usual Sunni Baathists. The Kurds easily reject the Baghdad crowd. The Shia of the south are well under the wing of Tehran. The current PM Maliki is a viceroy of the IRGC. Five years from now? A client state of Tehran, contributing troops, ships and rhetoric to the witches' brew cooked up by the Twelvers of Tehran. POTUS knows some of this, and yet continues to assume that his diplomacy will win over the Twelvers and their sadistic military cult, the IRGC. This is delusional planning at best. Five years from now, Iraq will mount missiles that can reach Israel and the Arabian oilfields. Five years from now, Russia will be doing big business in Iraq with energy and arms. Five years from now, POTUS and VPOTUS will be avoiding the question, "Who lost Iraq?" I remind myself with Colin Powell's famous proverb, You break it, you own it. We broke Iraq. We interrupted Iraq's self-loathing; we introduced another kind of fate; we banished the wretchedness of the Saddamites. We broke the savage Iraq. We own it.

Not Getting Worse Fast

By John Batchelor on August 6, 2010 2:12 PM | 2 Comments

The Great Stall.

Paul Vigna and his colleagues Madeleine Lim and Michael Casey, Dow Jones, all observe the much-predicted and disappointing jobs number for July (mid-June to mid-July) and seek relief sometime in future. This new normal now has a name, "The Great Stall." Jobs growth does not much exist because companies are not growing their workforce. Companies are not growing their workforce because they are unsure of the future and the demand is not booming. Consumers are saving, de-leveraging, just plain hiding from the usual purchases because they are not confident of their jobs, their house price, their expenses under the new regimes of healthcare, FinReg and education expenses. The deflationistas are having another good day as the market retraces the holding pattern of the last months. We ain't going anywhere fast; we ain't "getting worse fast." We ain't going, getting, moving.

Midterm.

The numbers show that the stimulus package did not work because the jobs saved were government jobs, and those workers saved their money (smart) and paid down debt (smart). The TARP did not much work because the banks took the money to stabilize, then paid it back (smart) while keeping most of what they earn (smart). The healthcare and FinRed cannot make jobs, can only cut costs, maybe, and even that is dubious. In sum, the policies of the Obama administration have achieved at best "this ain't getting worse fast," if that is a credible achievement. At worst, the polices are part of the hesitation to hire and grow. If the deflationistas win the argument, the next policy from Washington will be more stimulus. What will we do with it? Save (smart), de-leverage (smart), increase productivity (smart); wait. You like this year's prices? Wait till next year. Or at least wait till the election. (The snarky 70-year-old Henry Waxman of Hollywood and Malibu told the Hill that he looks forward to the Democratic defeats, because those conservative Dems were hard to work with: Waxman just wants 218 Progressive pushovers on his side, smile.) The GOP has no quick answers, but it will stop the command and control from Washington. When the Hill is frozen, we busy beaver types can all get back to the work of digging out from the Great Stall.

The "Great Recession" has officially morphed into the "Great Stall." There are no signs in this morning's report on July employment of building momentum for the second half of this year. If anything, there are more signs of a deteriorating labor situation. -Steven Blitz, Majestic Research

Plutonomy Rising

By John Batchelor on August 5, 2010 12:37 PM | 12 Comments

Not Good Bad News: Bad Bad Predictable News.

The jobless claims spike. The disinformation rumor spreads that the Obama team will buy out failed mortages, that is, bail out the banks again (and solve Freddie and Fannie by assuming the debt onto the Fed's balance sheet). POTUS jets to Chicago to lead a rally at Ford, where he boasts that Ford benefited from his bail-out of GM and Chrysler. Puzzle. (Does POTUS know that it is harder to pay off your debts by yourself than to have the Fed pay them off?) None of this is good news. It is even bad news. Report from Robert Frank at the WSJ of the birth of the plutonomy. The top 5% wage earners in the US now account for 37% of the savings. Without the rich, we do not have a consumer-class economy. The rich panicked in 2008-2009 and stopped spending, and that accounts for the cliff-diving in the economy. They got their nerve back in mid-2009 and started back at the yacht club. Still, the rich are shaky. And an economy that depends upon the rich is not stable. It is even not an economy. It is a feudal kingdom, with ersatz royals called politicians. Shrug.

From Calculated Risk re the Unemployment Claim Spike:

"Rob Dawg wrote: Yet more people fell off the back of the bus than got on. I thought the idea was to push people off the bus, then help them get back on so they can be pushed out again later, and to take a cut from both sides of the action."

Robert Frank on the Plutonomy: The Rich Are Always with Us.

"Who cares how the rich spend their money? Well, perhaps everyone should these days. Consumer spending accounts for roughly two-thirds of U.S. gross domestic product, or the value of all goods and services produced in the nation. And spending by the rich now accounts for the largest share of consumer outlays in at least 20 years . . .

"What is surprising is just how much of our consumer economy is now dependent on the rich, and how that share has increased as the U.S. emerges from recession. In the third quarter of 1990, the top 5% accounted for 25% of consumer outlays. That held relatively steady until the mid-1990s, when it started inching up past 30%. It dipped in 2003 and again in 2008, but started surging in 2009 amid the greatest bull market rally in history, with the Dow Jones Industry Average rising nearly 50% in the last nine months of the year . . .

"The data may be a further sign that the U.S. is becoming a plutonomy - an economy dependent on the spending and investing of the wealthy. And plutonomies are far less stable than economies built on more evenly distributed income and mass consumption.

". . . In fact, the recent spending of the wealthy may be unsustainable. Their savings rate has gone from more than 26% in 2008 to a negative 7% in the first quarter of 2010, according to the Moody's Analytics data. They still have lots of savings. But the massive draw on that in the past two years is unlikely to continue at the same pace . . ."

Senator Maximum

By John Batchelor on August 4, 2010 1:46 PM | 8 Comments

Russ Feingold Moving Forward.

The despair of Democrats this cycle is illustrated best by the video that Russ Feingold of Wisoconsin constructs for his re-elect. The boarded buildings, empty shops, jobless and forlorn faces, all point to a catastrophe somewhere in the past. It reminds of a scene from The Road, and any moment a cannibal may wander by and start stabbing at the candidate. Russ Feingold, as a robust Progressive of the Democratic Left, is part of the problem, and he now must reposition himself to be part of the protest. How? Emphasize that he thinks bank bailouts are incorrect? Emphasize that he doesn't like jobless ruin? Wisconsin is a most liberal state, but it is not a suicide pact to be liberal. The Wisconsin primary vote put Candidate Obama permanently ahead of Mrs. Clinton in February 2008. Two-and-a-half years later, POTUS Obama has crushed numbers at 41%. This will not improve over the next 90 days. Feingold has no choice but to pitch himself as a change candidate and an iconoclast. If the people of Wisconsin vote for Feingold again, it will be brain death. The GOP can run a sock puppet and look better than Senator Forward. Is this wit? Satire? The GOP seems to favor an Oshkosh small businessman, Ron Johnson, with no political experience, who is planning to run against Feingold the career pol. Sure. It is a wave election. Russ Feingold is fearful. Knee-slapper. This is an outsider? This is a small businessman's pal? Russ Feingold the Maximum Government Guy??

Feingold Statement In Support of Fully Paid-For Funding for Wisconsin Schools and Health Care

Taxpayer Watchdog Report Ranks Feingold's Agenda as 5th Most Cost-Saving in the Senate

FEINGOLD ANNOUNCES STIMULUS FUNDING FOR NEW MILWAUKEE POLICE OFFICERS

Deaf

By John Batchelor on August 3, 2010 4:45 PM | 6 Comments

Sharron Angle Looks Like Loser.

The interview with Carl Cameron is not acceptable, and Sharron Angle demonstrates that she is either deeply unaware of the political process or she just cannot think while on camera. Harry Reid maintains his lead over Angle in a new poll.

According to a Reuters-Ipsos poll, Reid is leading Angle 48%-44% among likely voters. However, Reid's lead jumps dramatically among registered voters, 52%-36%.

Sharron Angle is a bridge too far. The Tea Party of Nevada, in its enthusiasm against the healthcare fiasco, nominated a candidate who cannot handle a public interview or a conversation with the media. Is Angle a conservative ideologue? No evidence. Angle is inarticulate, vain, deaf, unread, alienated, and suggestively an opportunitist. Carl Cameron is honestly flabbergasted. Does Angle qualify as a senator from Nevada? Wrong question. Does Angle comprehend that she is on TV as a speaker with the Republican nomination to represent Nevada (and Vegas and Reno) in the Senate? The answer is likley, Nope. Can Angle win? Sure. The GOP wave, with 90 days to go, is building on the negative economic news. POTUS is reduced to 41% job approval -- crushed lower by the negative Afghanistan news. The jobs report on Friday 6 will not be attractive. Alan Greenspan uses the odd term "quasi-recession." Angle can ride all this to victory. Nowhere is worse than Nevada. No one in Nevada trusts Harry Reid to improve anything much. Still.

Angle Expands Communications Team

Tue, 08/03/2010 - 2:24pm

Laughing Bell

By John Batchelor on August 2, 2010 1:47 PM | 4 Comments

You May Laugh Too Hard.

The fairy tale of Bell, California, now overwhelms the local state news in the Golden State and moves the taxpayers into a Whiskey Rebellion scenario. It is impossible for a grown person to listen to the details of the Bell, CA, manager and police chief and other rascals and not not break down laughing. Be cautious, you may laugh too hard. Check your local muncipal pensions scam, especially for NJ, NY, MI, MA, CN, PA. Speaking to Jeff Bliss, Monday 2, that the scandal grows because the cities all know that they have been playing this game for years without fear. The pension is based upon your final salary level, and yet the payments come from all the cities and towns and so forth where you have worked. Bell pays only 3% of the police chief's pension -- retiring at a rate figured upon his last salary of $400k plus, while Ventura pays 67%. Jeff Bliss tells me that the system is so rotten even Jerry Brown is against it. The California governor's race just got a lot funnier. The news includes the fact that this kind of patronage and back-slapping salary manipulation is commonplace in other wrecked states, many other wrecked states, and that the SEIU and AFSCME crowd have got a lot of explaining to do. Taxpayers rising, and not all of them are Tea Party.

1927 Was a Very Good Year.

The Spanish aristocrat and former soldier Don Antonio Maria Lugo settled on 30,000 acres of land that encompasses what is now the City of Bell. In 1838, the King of Spain formally granted the land to Lugo and the acreage became known as Rancho San Antonio. By 1865, the Lugo family fortune dwindled and most of the Rancho was sold for less than a dollar per acre. Between 1870 and 1890 settlers arrived to the area and among those was the city's founder, James George Bell. He acquired approximately 360 acres of land and helped in its development as a small farming and cattle community.

In 1876 James George Bell, his wife Susan Abia Hollenbeck Bell, and their two children, Maude Elizabeth and Alphonzo Sr., moved from Los Angeles where they had lived for a short period with Susan's brother, John Hollenbeck, into their Victorian-style home -- the Bell House, now a historic landmark located at 4401 East Gage Avenue.

The City of Bell was incorporated on November 7, 1927. The City is now home to many businesses, small industries, schools, churches and community organizations. Local government provides valuable services to all residents.

Pashtunistan Hercules

By John Batchelor on August 1, 2010 8:23 PM | 2 Comments

Hydra Taliban.

Quick note to mention that POTUS is in an unusually defensive posture these days with regard Afghanistan. Petraeus, Mullen and even David Cameron all mention 2014 as a date for departure, handover, what is a euphemism for Afghan control of security. However, the Pakistan Army is ready to move quickly to adjust the Pashtunistan part of Afghanistan as a vassal state run by the Karzai cartel. The WikiLeaks documents are a trifle compared to the ambitions of the infamous ISI. The Taliban is a hydra-headed creature of the ISI, and it is generally an obedient creature. Recall however that when Hercules cut off one head of the Hydra, two sprang back in place. Also that the blood of the slain Hydra, painted by an enemy onto a cloak that Hercules pulled on, eventually killed the hero. POTUS Obama (speaking for Hercules USA) never believed he could slay the Hydra. But now that the battle is joined, POTUS Obama no longer believes he can get away. The Obama team wants out of Afghanistan pronto. VPOTUS Biden says a few thousand leaving by 2011. Mrs. Pelosi says withdraw "Now." After the midterms, it will be impossible to withdraw, and the Democrats will make it hellish for POTUS to stay. Result, POTUS in the old defensive posture.

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