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That’s “Yogi”, with a “Y”

Sunday, August 3, 2008

Yesterday took place the last Old Timers Day game to be held at the present Yankee Stadium. The front page of the Courant’s sports section (paper, not on-line edition) has a picture of an aged gnome identified as “Jogi Berra”. Jogi? Surely someone was asleep at the editor’s desk. I have decided to believe that this misspelling was occasioned by the fact that whoever made this mistake is too young to remember Yogi, or, or that matter, his namesake bear. How else explain this grievous error?

Were it any other Yankee I would let it go unnoticed, or even feel a bit of satisfaction. I am an inveterate Yankee hater, as are all us true Red Sox fans, but I think I speak for most of us when I say that even during the 50s, when the Yanks were at their peak and the Sox had reached their nadir, Yogi was always an exception. He transcended the despicable, abhorrent, abominable, contemptible, detestable, loathsome team of which he was a part. He further proved his worth by refusing to enter Yankee Stadium until the despicable etc. George Steinbrenner apologized to him for, essentially, being George Steinbrenner.

A great player, and a great guy, who deserved to play for Boston (well, he may not see it that way) and who surely deserves to have his name spelled correctly.

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Over the top; Jumping the shark

Saturday, August 2, 2008

John McCain’s latest ad compares Obama to the Messiah, or, I suppose, claims that Obama has been doing so. Am I missing something? The negative line at the end seems like an afterthought. In any event, since when does the Messiah have to prove he’s ready to lead? He’s the Messiah, after all. This whole “celebrity” meme, which McCain has now taken to the third power, is puzzling. I guess the theory is that it goes after Obama where he’s strongest, but I’m not sure this line of attack is ultimately a winner, and it’s so ludicrous that it might cost McCain his biggest fans: the media, for as John Aravosis points out at the link above, these attacks are coming directly from him, not from an organization over which he can pretend to have no control.

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Life is good, with music

Friday, August 1, 2008

A few weeks ago I went to my doctor for my biennial check-up. My EKG was abnormal, though he said it was likely a false positive. But since my father died quite young of a heart attack, it was only prudent to send me off for a stress test. I thought I aced it, since I got my heart up to target rate easily, and didn’t even breathe hard until it was over. But no, the stress test showed something suspicious, a possible “false positive” but just to be sure, I was scheduled for a cardiac catheterization, which I underwent today.

Let me pause here and state that I am something of an exercise freak. I swim from three to five miles a week, depending on my schedule. I ride an exercise bike at home, and a real bike on weekends. I have, in the process of all this testing discovered that my resting heart rate is in the 50s, my blood pressure is low, and my cholesterol readings are in a good range. That means I’m in just as good shape as George Bush, who has tons more time to exercise than do I.

Given all that, it seemed unfair that I was facing the possibility of being shuttled off to New Haven for a stent insertion, should the test today not go well. Naturally, though I had never experienced them before, I started to suspect that maybe I was, after all, having some sort of chest pains. By this morning, I was fairly sure I was New Haven bound. But no, it turns out that my false readings were caused by something I was born with, a Myocardial bridge, which is apparently fairly harmless. I merely had to spend the day coping with boredom (there’s a 4 hour recuperation period during which you have to lay down, not to mention the wait for the test itself, which started an hour later than scheduled) and the typical indignities incident to being in a hospital. The nurses, as always, were great. I don’t know how they do it. My wife was even greater. As a near professional worrier, she handled a great deal of that chore for me, in addition to being there today to keep an eye on me.

Anyway, though as it turns out I was never at any risk, I feel a bit like I’ve got a new lease on life. These kinds of incidents make you realize that despite the existence of people like George Bush, Dick Cheney, Karl Rove, etc., and the impending destruction of the planet by global warming, to mention just a few of the leading causes of indigestion (and high blood pressure for that matter), life is still pretty good, and as Louis Armstrong sings, It’s a Wonderful World.

[youtube]http://www.youtube.com/watch?v=vnRqYMTpXHc[/youtube]

I love this song, and have wanted to post it for a long time. This seems like as good an excuse as any.

Back to politics, tomorrow.

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Hiatus probable

Thursday, July 31, 2008

For reasons not worth getting into, I may be unable to post for a few days. That means no Friday Night Music, in case anyone cares. I did post Crosby, Stills and Nash today, so that makes up for it a little bit.

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Public hearing on Charter Tuesday

Thursday, July 31, 2008

We here in America sometimes let our “democratic” principles get the better of us. For instance, there is a school of thought that proposes that since requiring a majority to pass something is good, requiring a super-majority must be even better. In California, as in a number of other states, this has led to constitutional amendments requiring super majorities to pass state budgets. The result is predictable. A small minority can hold the majority hostage. The “super majority” requirement effectively empower the minority, which, having failed to win the support of the majority of voters, can nonetheless hold a state hostage until it gets its way. And of course, when Republicans are in the minority, they have no problem doing just that. California is currently without a budget. In typical Republican fashion, Arnold has reacted by cutting the salaries of low paid state workers to the minimum wage. A typical Republican reaction, of course. This is just one of many features of the California political system that comes courtesy of referenda, which taken together have made the nation’s largest state virtually ungovernable. This outcome, by the way, was not by chance, but by design of the proponents of these referenda, which have been sold as measures to provide tax relief, enhance democracy, control excess, etc. The intent was to prevent government from succeeding.

Which brings me around to Groton, where the Town Council will be considering the charter we proposed last week. We (the Charter Revision Commission) have rejected the idea of a budget referendum. On Tuesday, the Council holds a public hearing to get citizen input. My sources tell me that the Groton Long Point Selfish Citizens PAC is putting together a petition to demand a referendum. I’m sorry to say that Democrat Paulann Sheets still appears to be carrying water for these folks, as is our State Representative, Elissa Wright, who seems to be fine on state wide issues, but remains myopic on these local issues.

The Commission was required to issue a report to the Town Council, which we did. We did not discuss the budget referendum, except to say we decided against it, because the purpose of the report was to talk about what we did, not what we didn’t do. The two members of the commission who still favor a referendum penned a minority report (copy below if you’re interested), to which I responded on behalf of the other members, also attached below. While a budget referendum does not legally hand control of the budget process to the minority (as in California), it has the practical effect of doing just that. It is the method of choice on the local level for people who don’t want government to work to make sure government can’t work. In the main, by the way, these are folks who can’t or won’t get their hands dirty actually running for office and putting their views out their in the open for people to assess. They’d rather just destroy the work that dedicated people perform, in elections dominated by slogans about taxes in which low turnouts give them a dominant voice.

I certainly encourage everyone, whatever your views on this issue, to make them known to the Town Council. My sense is that an email to any single councilor will end up in the Public record, so if you can’t make it to the hearing, you can make your views known that way.

Minority Report

Majority Response

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Crosby, Stills, Nash & Colbert

Thursday, July 31, 2008

Harmony not quite so sweet as in the past, but that’s okay.

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High finance

Tuesday, July 29, 2008

Merrill Lynch just dumped some of its more toxic assets for what looks like a purchase price of 6.7 billion, already a steep discount from their nominal value:

Merrill sold the investments at a steep loss. The United States super senior asset backed-security C.D.O.’s that Merrill sold were once valued at $30.6 billion. As of the end of second-quarter, Merrill valued them at $11.1 billion — or 36 cents on the dollar. And Merrill sold them for $6.7 billion to an affiliate of Lone Star Funds, the Dallas private equity firm.

Merrill provided 75 percent financing to Lone Star Funds, which means Merrill lent the private equity fund about $5 billion to complete the sale.

I hadn’t noticed the part about Merrill loaning the money when I read the article this morning, most likely because it’s toward the end of the article, and I thought I’d already gotten the gist. It was brought to my attention in a post at Firedoglake, whose helpful link I followed to Merrill’s official disclosure about the transaction:

Merrill Lynch will provide financing to the purchaser for approximately 75% of the purchase price. The recourse on this loan will be limited to the assets of the purchaser. The purchaser will not own any assets other than those sold pursuant to this transaction. The transaction is expected to close within 60 days.

I only took one economics course in college, and I concur that it is indeed the dismal science, but I think I understand the above, and there’s something here the Times didn’t notice, or didn’t remark on.

The linked article makes it clear that the sale will not be to Lone Star Funds, but to an affiliate formed just for the purpose of this transaction. The above quoted language basically means that the extent of Lone Star’s risk is the 25% down payment. Merrill has gotten these assets off its books for $6.7 billion it can post to its bottom line, but it has only shifted the risk of further loss to the extent of that 25% up-front payment. The “recourse” language means that, should this specially created entity default on the loan, Merrill can sue it for the unpaid balance of the loans, but it is restricted to recovering the assets it sold to Lone Star in the first place. Basically that means that Lone Star can walk away from these assets, should they decrease in value, without any further loss, and the only recourse for Merrill is to take them back. It seems a bit reminiscent of the Enron scams of a few years ago. Merrill is claiming that it has gotten out from under these “assets”, but in fact it hasn’t. It’s comparable to a car dealer selling SUVs with the understanding that should the buyer default, the only thing the dealer can do is take back the car. The buyer will keep the car only as long as it suits his purpose, and then dump it back on the dealer, who is stuck with an asset worth far less than the outstanding amount of the loan.

So unless I’m missing something, 75% of this deal is just yet another bookkeeping trick of the sort that got us into this mess in the first place. For Lone Star it’s practically a win-win situation. If the assets appreciate in value, it makes money. If they tank, Lone Star walks away from the deal without further loss.

Presumably, these assets are generating some return. I would be interested to know whether those returns count as an “asset” subject to recovery by Merrill. In other words, if Lone Star were to pull $500 million out of these instruments before dumping them back on Merrill, would that $500 million be recoverable by Merrill? Would it be considered part of the asset, or more in the nature of a dividend, which could be transferred to the pocket’s of Lone Star’s executives? At that point, those earnings would no longer be an asset of the “purchaser”, they would be assets of the executives.

in any event, while Merrill is indeed realizing some benefit as a result of this sale, it is not really transferring much of the risk of loss to Lone Star’s new affiliate. The risk remains with Merrill, so it is a bit misleading for Merrill’s chief executive to say that the sale was “a significant milestone in [Merrill’s] risk reduction efforts.”

UPDATE: Hey, it looks like I got it right:

Merrill Lynch’s agreement to sell $30.6 billion of toxic securities gives away the bank’s potential profits on the securities and leaves it on the hook for most of the risk, strategists at Bank of America wrote on Wednesday.

Merrill Lynch & Co Inc has financed 75 percent of the sale of the securities, meaning it is on the hook if the assets decline by more than 5 cents on the dollar, Bank of America strategist Jeffrey Rosenberg wrote.

…

Analysts, including Rosenberg, initially reacted positively to the deal, and Merrill’s shares rose nearly 8 percent on Tuesday, even though the investment bank sold $8.55 billion of new shares to raise capital after selling the assets at a loss.

…

In a report entitled “On Second Thought … ” Rosenberg wrote, “Merrill now finds itself effectively in the position of having sold off its upside but retaining its downside.”

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99 days. It will seem like years.

Monday, July 28, 2008

It’s going to be a long hard slog until November. The Republicans may not know how to govern, but they know how to play the press corps. They bring their A game every time, and the Democrats never seem to know what’s hit them.

Just a few odds and ends that illustrate what Obama is up against.

First, we have the ginned up controversy about his alleged refusal to visit sick troops in Germany. The story is completely false, but that hasn’t stopped the media from almost unanimously repeating it uncritically, as is being documented over at Media Matters. But what’s interesting about this bit of Republican fiction is the fact that the McCain smear ads appear to be directed almost entirely at the media, not directly at the voters. Why spend a lot of money pushing your slime when the media will deliver it for free:

Okay, this is interesting: It looks as if the new McCain ad falsely attacking Obama over his canceled troop visit may not really have a lot of money behind it, suggesting that its real purpose isn’t getting it before voters directly.

Rather, the real target audience may be the media — meaning that the McCain camp’s goal is largely to get the ad debated in the press and to drive the conversation that way.

Evan Tracey, who tracks media buys at the Campaign Media Intelligence Group, took a look at the McCain buys and discovered that an earlier McCain foreign policy attack ad, as well as the troop visit attack spot launched this weekend, are running in almost no battleground-state markets, with the new spot only running in Denver and Washington, D.C

When Obama went on his foreign trip the media was looking for a “gaffe”. There were none, so now they’ve allowed the Republicans to make one up. Meanwhile, John McCain is a gaffe factory, and they go virtually unreported.

It’s really cheaper and more effective to get the media to drive your narrative for you, as has worked so well with McCain’s argument that Obama should be a man and admit he was wrong about the “surge”. Obama has been pestered for a week to recant his opposition to that failed strategy, and to his credit he has resisted. Today he pushed back:

[youtube]http://www.youtube.com/watch?v=0SE-ONd4ACw[/youtube]

The money quote:

You know, I have to say, it is fascinating to me the to hear you guys reemphasize this over and over again. I have not heard yet somebody ask John McCain whether his vote to go into Iraq was a mistake. i haven’t, during the entire week that we were having this conversation.

Besides echoing and amplifying McCain’s talking points, the media will be madly spinning almost everything to bolster McCain. Consider the new Gallup poll out today, that contradicts Gallup’s own tracking poll, since instead of a 9 point Obama lead, it shows a four point McCain lead. How? Here’s how:

In the latter instance, the metric being evaluated was one near and dear to the hearts of pollsters, the “likely voter.” In the earlier poll that showed Obama ahead, Gallup merely surveyed registered voters.

…

Emory Univeristy political scientist Alan Abramowitz broke it down for the Huffington Post. Noting that out of the 900 voter sample surveyed by Gallup/USA Today, the pollsters deemed 791 of those individuals to be “likely” ones, and it is their responses which make up the 49-45 figure that immediately got coverage on MSNBC’s Hardball.

By contrast, the full 900 person sample of registered voters polled by USA Today showed Obama with a 47-44 lead. So what about those 109 likely voters? According to Abramowitz, “among your 109 unlikely voters, according to Gallup, Obama leads McCain by a whopping 61 percent to 7 percent. Putting it another way, according to Gallup 16 percent of registered Obama supporters are unlikely to vote compared with only 2 percent of registered McCain supporters.”

Apparently, we’ve all been missing something, and it’s McCain’s voters who can’t wait to get to the polls.

The media constantly tells us that Obama has a problem with Jewish voters, (e.g. this article) yet, the numbers say that it is McCain that has the problem. Reality will not intrude on this meme; we will hear about it until election eve.

The Republicans accomplish all this by engaging in co-ordinated message delivery and by intimidating that dwindling portion of the press that is not already in their ideological corner. Former Democrats like George Stephanopoulos must prove their bona fides by bending over backwards to prove that they are not in the tank for Democrats. They do so by echoing the right’s talking points. The idiotic surge questions are a case in point. Conservatives, on the other hand, don’t have to prove they are not liberal and make no attempt to hide their biases. Result: except for Keith Olbermann, John Stewart (most of the time) and Stephen Colbert, the media marches to the Republican drumbeat.

The Democrats as an institution deserve their fate, though we citizens are the ones who suffer. Democrats don’t co-ordinate; they don’t push back. The fake story on the troops is a good example. Obama should not need to defend himself on that. The rest of the Democrats should be doing it for him in a coordinated fashion, and they should be accusing the media (and this is mainly the broadcast media) of doing exactly what they are, in fact, doing: echoing Republican talking points.

Don’t hold your breath. The Republicans don’t like McCain, but they’ve circled the wagons. We Democrats leave our candidates exposed, as we did to John Kerry. It may be that the electorate has become inured to Republican sleaze, or that the thought of $5.00 gas, foreclosed homes, and unemployment has induced a little critical thinking in all those folks who figured they should vote for the guy with whom they would want to drink beer. We can only hope. Obama is the far superior candidate, but the fact remains that he is a black (one drop will do) Democrat with a Muslim sounding name. He may be ahead in the polls, but it’s still an uphill battle. The press destroyed Al Gore in 2000, and it enabled the Swift Boaters in 2004. Obama will be battling one Republican fostered media narrative after another until November. It’s going to be a long campaign.

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Sunday Evening Political Music

Sunday, July 27, 2008

Harry Shearer (via Jesus, General):

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Ben Stein: Everything’s still fine, just like he told us last year

Sunday, July 27, 2008

I must admit that Ben Stein is one of those Republicans who really gets under my skin. Perhaps it’s because he’s put himself forward as a poylmath, and operates on an idiot level on so many fronts. He writes on economics for the New York Times, though his credentials for doing so are something of a mystery. In his spare time, he unsuccessfully debunks evolution and blames Darwin for the holocaust.

Last year, as the mortgage crisis started to gather steam, he sought to calm all us Nervous Nellies by telling us:

If I were the editor of the business section for just one day, I would run one immense headline: “Everything Is Going to Be Fine. Go Back to Work.”

Being incapable of evolving, he is back again today telling us that he was right back then, and that a few bank failures, along with the collapse of Bear Stearns, along with the de facto bankruptcy of Fannie Mae and Freddie Mac along with the advent of a probable recession along with a decline in employment are no big deal and everything is still fine.

Like Stein, I’m no economist (unlike Stein, I don’t claim to be), so I’ll leave the details to Dean Baker (who is an economist) at his invaluable blog, Beat the Press:

[Stein’s column] includes a number of wondrous “no big deal” comments. For example, the Fed had to step in and rescue Fannie and Freddie from bankruptcy — no big deal. We’ve had only one major bank (IndyMac) fail — no big deal. One of the major investment banks, Bear Stearns, collapsed — no big deal. Of course those minimizing the economy’s problems last summer expected such commonplace events.

We also have the great line “employment in June was considerably less than 1 percent below its all-time peak in November 2007.” You’ve got to really really love that one. Does Stein not know that economies add jobs through time. In other words, we generally expect that in any given month we have more jobs that we ever did before. To be 1 percent below our all-time peak, 7 months after that peak is really quite bad.

In addition, Stein misrepresents the meaning of the employment data. Contrary to what he claims, the numbers do not show “that 94.5 percent of the people who wished to be employed and were capable of work were employed.”

The employment rate (EPOP), the percentage of the non-institutional population that is actually employed, is more than 2 full percentage points below its peak in 2000. This corresponds to more than 5 million fewer people employed compared with a situation in which the EPOP had stayed the same. We can either believe that these people just developed a distaste for working in the last eight years, or alternatively that they are not working because the labor market does not present as many good job opportunities today as it did in 2000. The latter seems more plausible to me, but readers can make up their own minds.

In singing the praises of the economy, Stein also neglects to mention the loss of $5 trillion in real housing wealth over the last two years (almost $70,000 per homeowner), but that’s probably a small point.

Okay, I admit it. I’m jealous of Stein. Here I am laboring away in anonymity and Stein gets to write for the New York Times. I’m at least as unqualified as he to write a column on economics. Of course, I’m also just as unqualified as David Brooks to be a social critic. I didn’t know that Applebee’s doesn’t have a salad bar either. My point is that given the proper motivation I could be just as wrong as Stein, indeed just as wrong as Brooks (I’m overlooking Maureen Dowd here. Since she never says anything, technically, she’s never wrong), just as often as either of them, if only the Times would give me a chance.

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