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Friday Night Free Association

Friday, March 12, 2010

Well, I started out looking for Ray Charles singing Georgia on My Mind, but decided to go with this, a duet with Willie Nelson:

That video led me to this one (it was on the sidebar at youtube), Ray Charles singing Ring of Fire on Johnny Cash’s television show:

Which put me in mind of this, the great Frank Zappa singing the very same song, though you might never know it. Video terrible, but the music is great:

You can’t get anywhere that will pass the censors if you start with Frank, so I’ll stop here.


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Hints of spring

Friday, March 12, 2010

I’m not really very good at remembering the names of the various plants, bushes and other assorted vegetation we have around the house, and at the moment my wife’s not around to lend her expertise. In any event, this is a picture of a pussy willow (is that a generic term for this sort of thing) on a tree that I’m sure begins with “M”. I am posting it for no other reason than that I like the picture, and it does give hope for better days ahead, assuming it ever stops raining, or threatening rain.


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What’s the poor farmer to do?

Friday, March 12, 2010

The New York Times reports that the price of seed is growing like corn in July:

During the depths of the economic crisis last year, the prices for many goods held steady or even dropped. But on American farms, the picture was far different, as farmers watched the price they paid for seeds skyrocket. Corn seed prices rose 32 percent; soybean seeds were up 24 percent.

Such price increases for seeds — the most important purchase a farmer makes each year — are part of an unprecedented climb that began more than a decade ago, stemming from the advent of genetically engineered crops and the rapid concentration in the seed industry that accompanied it.

The price increases have not only irritated many farmers, they have caught the attention of the Obama administration. The Justice Department began an antitrust investigation of the seed industry last year, with an apparent focus on Monsanto, which controls much of the market for the expensive bioengineered traits that make crops resistant to insect pests and herbicides.

The investigation is just one facet of a push by the Obama administration to take a closer look at competition — or the lack thereof — in agriculture, from the dairy industry to livestock to commodity crops, like corn and soybeans.

An entirely predictable event, of course. But pity the poor farmer, should he or she decide to revert to real seeds, which are apparently now worth tens of thousands of dollars a ton (sorry about the commercial):

Beck has been losing real sponsors at a tremendous clip, but this has made room for low rent scam artists. What could be better for them? Low cost ads with an audience pre-selected for mindless stupidity leavened with paranoia.


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Reconciled to Democratic spinelessness

Wednesday, March 10, 2010

I just watched Lawrence O’Donnell, on the Keith Olbermann show, ask the head of the House Progressive Caucus if she feared the possibility of the Senate Parliamentarian ruling certain items of the Health Care reconciliation bill out of order, as not fitting subjects for reconciliation. She, of course, with reason did say that the House Democrats did not trust the Senate to follow through on its commitments but my immediate subject is the question of whether the Senate Democrats can actually make a commitment upon whcih they can deliver. In other words, if they say they can and will do something by reconciliation, can any power in the Senate, other than their own cowardice and spinelessness, stop them?

Now, mind you, the Democrats are, as is there wont, trying scrupulously to make the bill comport with reconciliation requirements. Any adverse ruling will most likely be subject to question on the merits.

O’Donnell’s question presumed that if the Senate Parliamentarian ruled against them, the Democrats would have no choice but to get 60 votes to get the right to merely hold a vote, and the Congresswoman did not disagree with this analysis.

Now, this didn’t sound right to me, so I did 30 seconds of googling, which brought me to the Senate website, where I read this:

The Senate and the House each has an Office of the Parliamentarian to provide expert advice and assistance on questions relating to the meaning and application of that chamber’s legislative rules, precedents, and practices. In the Senate, staff from the parliamentarian’s office sit on the Senate dias and advise the presiding officer on the conduct of Senate business. (Emphasis added)

which in turn linked to this (so I assume this is authoritative):

The Parliamentarians in both chambers have as their key responsibility advising the Member of Congress presiding over the floor throughout a day’s session. The Parliamentarian guides the Chair in formulating his responses to parliamentary inquiries and his rulings on points of order. In the House, the Parliamentarian on duty stands to the right of the Chair or sits very close by on the rostrum. In the Senate, the Parliamentarian sits on the lower tier of the rostrum just below the presiding officer. He is frequently seen swiveling around in his chair, which faces the Senate floor, to address the Senator presiding behind him. While the Member of Congress presiding is free to take or ignore the advice of the Parliamentarian, most abide by his guidance. Few Members have the independent body of knowledge regarding the chamber’s procedures necessary to preside on their own. In the Senate, the Parliamentarian, and in the House, the Parliamentarian’s Clerk, also keep track of the time when Members are allotted a specific number of minutes to speak. (Emphasis added)

Now, I invite you to pull out your constitution and go to Article 1, Section 3.4, which provides, lo and behold, that the Vice President shall be President of the Senate. That’s right, boys and girls, it’s the VP that ultimately makes the Parliamentary decisions, not the Parliamentarian. Sure, the Republicans can scream and shout if the VP ignores him, but so what? These, by the way, are the Republicans who fired a Parliamentarian with whose reconciliation rulings they disagreed.

So the Senate and Obama/Biden can give the House Democrats almost iron-clad guarantees, if they merely have the guts to do what we all, each and every living one of us, know in our hearts, souls and minds that the Republicans would do without blinking an eye or shedding a tear were they in similar circumstances.

Ah, but you may say, should the Democrats do such a dastardly thing? Should they trample1 on the sacred, if nonsensical and undemocratic, institutional traditions of the Senate merely to extend health care to millions of Americans? Shouldn’t this sort of thing be restricted to more appropriate circumstances, like giving tax cuts to the rich, or screwing the poor? Stay tuned. The answer to the latter question is probably “yes”.

  1. In this context “trampling” means accepting a legitimate , if disputed, interpretation of Senate rules.?


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Retraction, sort of

Wednesday, March 10, 2010

Yesterday I wrote a post about a min-controversy involving Merrick Alpert, who was administratively suspended from the practice of law for failing to pay his client security fund fee. Jon Kantrowitz, who posted about the issue on My Left Nutmeg, left a comment to the effect that, in fact, as it turns out, Merrick did make the payments.

So, the factual basis for the piece was wrong. I plead not guilty to jumping to conclusions, as Merrick had admitted, it now turns out erroneously, that he had not paid the fees. However, fair is fair, and it would be unseemly not to set the record somewhat straight. You can read the original post and Jon Kantrowitz’s comment here.

Let me hasten to add that this doesn’t change my overall opinion of Mr. Alpert, though I am inclined to agree with Kantrowitz that it’s not a totally bad thing that he’s in the race. However sincere or insincere Alpert may be in espousing progressive positions, he will force Blumenthal to keep his left flank secure. Like so many of his ilk, Blumenthal has already shown an unfortunate tendency to throw principles under the bus. Case in point is his shameful embrace of military tribunals in place of civilian trials for terrorists of the Muslim religion. (Good white American terrorist who manage to survive ramming their planes into buildings or shooting up IRS offices, will, of course, still be entitled to civilian trials).


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Merrick, suspended

Tuesday, March 9, 2010

I’m not quite sure what to think about this. Over at My Left Nutmeg, Jon Kantrowitz takes severe exception to the fact that Merrick Alpert has not paid his client security fund fee, and was therefore administratively suspended from the practice of law. It appears the non-payment is intentional on Merrick’s part, though it is not crystal clear (though the preponderance of the evidence weights against him) that he was aware that he was supposed to pay, whether he was practicing or not. The rule is fairly clear that every member of the bar must pay, unless he or she files a formal notice of retirement with the appropriate body, and the quotes from Merrick certainly seem to indicate that he knew he was supposed to pay.

At first blush it appears to be a fairly minor matter. I can certainly see how someone might make the mistake of believing he was exempt from payment if he was no longer practicing. On the other hand, it’s quite likely that anyone in that situation would receive notices from the state telling them of the requirements. In fact, I’m fairly certain it is all spelled out on the bill, when you get it. I don’t normally read it thoroughly, since I just pass it on to our bookkeeping department for payment, but I’m pretty sure the law is cited in it. After all, it’s being sent to lawyers who will presumably be looking for any excuse not to pay. I can certainly understand Kantrowitz’s pique, since he, a non-practicing lawyer for about 30 years, faithfully pays his fee.

In the final analysis, perhaps we must conclude that this merely proves that Merrick is qualified to be a politician in these modern times. Kantrowitz is obviously one of those folks Leona Helmsley called the “little people” who pay their taxes and otherwise play by the rules. Modern day politicians mentally exempt themselves from most of those rules, and Merrick is no exception. He made a decision that he shouldn’t pay what is a relatively nominal amount, because whether or not the rule applied to him, he did not believe it should. Playing by the rules is for the little people, not folks who have been marked out by-well, by themselves in this case, for greater things. It bespeaks a certain arrogance, does it not? But then, arrogance is what Merrick is mostly about.


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Wimps to the infinite power

Monday, March 8, 2010

Wow.

Via Think Progress, from whom I’ve stolen almost the whole article:

During his reign as Senate Minority Leader, Senator Mitch McConnell (R-KY) has led his party to engage in an unprecedented level of obstruction — wielding the filibuster to block even routine bills and nominations while simultaneously lying about his own previous support of majority rule in the Senate. No one has fared worse under McConnell’s blanket obstructionism than President Obama’s nominees to key government positions, ambassadorships and judgeships. Amassive 237 Obama nominees presently await Senate confirmation, yet Mitch McConnell has done nearly everything in his power to ensure that Obama’s nominees will never even receive a Senate vote.

Because the government includes several agencies and boards whose members are required by law to be bipartisan, however, the party-out-of-power’s Senate leader traditionally gets to make a few nominations of his own. One such McConnell nominee is Sharon Browne, a nominee to the Legal Services Corporation’s board who fundamentally disagrees with the Corporation’s mission of providing legal services to the poor. Browne has spent most of her career with a right-wing litigation shop that repeatedly fought to cut off funding for indigent legal services; and she was a plaintiff in a court case which claimed that a method of funding legal services for poor Californians violated that state’s law. In other words, McConnell has selected someone to help lead the Legal Services Corporation who is committed to destroying the Legal Services Corporation.

Yet despite Browne’s obvious unfitness for this job, and despite the fact that her patron has fought tooth and nail to prevent President Obama’s nominees from even receiving a Senate vote, Senate HELP Committee Chair Tom Harkin (D-IA) scheduled a committee vote on Browne’s nomination this Wednesday. Not one Democratic senator has taken a serious step to slow down Browne — such as placing a hold on the nomination — and she appears to be on track for confirmation.

I guess McConnell must have pointed out to the Democrats that every nominee deserves an up or down vote, and they were persuaded by his argument. Or maybe he pointed out that if he didn’t get a vote on Browne, Republicans might not be willing to work with Democrats as closely as they have in the past. I’m just sure there’s a good reason for what they’re doing.

Full Disclosures: I’m a former legal services lawyer and my wife presently works for a legal services organization, though her employer is not funded by the Legal Services Corporation.


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Talkin’ more CDS blues

Sunday, March 7, 2010

Gretchen Morgenstern, the Times’ excellent business reporter,exposes another as yet unexploded credit default swap bomb, this time close to home. Seems that many municipalities have issued credit default swaps in connection with municipal bonds. In theory, the swaps allowed the municipalities to pay a slightly lower rate of interest, but that happy outcome, as elsewhere, depended on “nothing” being the answer to that perennial question: “What could go wrong?”. In fact, a lot can go wrong, and apparently a lot is about to go wrong for our municipalities:

Here’s how municipal swaps worked (in theory): Say an issuer needed to raise money and prevailing rates for fixed-rate debt were 5 percent. A swap allowed issuers to reduce the interest rate they paid on their debt to, say, 4.5 percent, while still paying what was effectively a fixed rate.

Nothing wrong with that, right?

Sales presentations for these instruments, no surprise, accentuated the positives in them. “Derivative products are unique in the history of financial innovation,” gushed a pitch from Citigroup in November 2007 about a deal entered into by the Florida Keys Aqueduct Authority. Another selling point: “Swaps have become widely accepted by the rating agencies as an appropriate financial tool.” And, the presentation said, they can be easily unwound (for a fee, of course).

But these arrangements were riddled with risks, as issuers are finding out. The swaps were structured to generate a stream of income to the issuer — like your hometown — that was tethered to a variable interest rate. Variable rates can rise or fall wildly if economic circumstances change. Banks that executed the swaps received fixed payments from the issuers.

The contracts, however, assumed that economic and financial circumstances would be relatively stable and that interest rates used in the deals would stay in a narrow range. The exact opposite occurred: the financial system went into a tailspin two years ago, and rates plummeted. The auction-rate securities market, used by issuers to set their interest payments to bondholders, froze up. As a result, these rates rose.

For municipalities, that meant they were stuck with contracts that forced them to pay out a much higher interest rate than they were receiving in return. Sure, the rate plunge was unforeseen, but it was not an impossibility. And the impact of such a possible decline was rarely highlighted in sales presentations, municipal experts say.

Another aspect to these swaps’ designs made them especially ill-suited for municipal issuers. Almost all tax-exempt debt is structured so that after 10 years, it can be called or retired by the city, school district or highway authority that floated it. But by locking in the swap for 30 years, the municipality or school district is essentially giving up the option to call its debt and issue lower-cost bonds, without penalty, if interest rates have declined.

Imagine a homeowner who has a mortgage allowing her to refinance without a penalty if interest rates drop, as many do. Then she inexplicably agrees to give up that opportunity and not be compensated for doing so. Well, some towns did exactly that when they signed derivatives contracts that locked them in for 30 years.

Then there are the counterparty risks associated with municipal swaps. If the banks in the midst of these deals falter, the municipality is at peril, because getting out of a contract with a failed bank is also costly. For example, closing out swaps in which Lehman Brothers was the counterparty cost various New York State debt issuers $12 million, according to state filings.
Termination fees also kick in when a municipal issuer wants out of its swap agreement. They can be significant.

So, as it turns out, (no real surprise here) a lot can go wrong (not for the banks, of course) and most of it has, or is about to.

Credit Default Swaps appear to be the ultimate weapon of mass economic destruction. In the case of Greece and other European countries, they were used to mask government debt. In the case of the banks and AIG, they were used to mask the extent of the financial risks the banks were taking, and in the case of municipalities, they were simply a way for banks to scam municipalities that lacked the sophistication to understand the risks they were taking.

Recently Paul Volcker challenged a group of bankers to come up with a single example of a positive effect of derivatives:

“I would like one of you to give me the example of one single so-called innovative financial product that has produced benefits for economic development. I am sorry, but the answers you offered seem to me inadequate.”

Presumably those answers did not include the only one that really matters to those bankers: the positive effect derivatives have on their own paychecks.

Of course, Volcker is being viewed as sort of a cranky old man. It is really rather amazing that, given the destruction these things have wreaked, there is nary a voice in Congress demanding their abolition. Instead, there is talk about transparency, with the actual proposals riddled with built in loopholes. Not having learned from history, we are indeed doomed to repeat it.


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Friday Night Music

Friday, March 5, 2010

It’s that time again. I do feel like I’m cheating, since I haven’t done much actual blogging this week, so I really should be dispensing incisive commentary, but as I said in my last post, the world of politics is getting too depressing for mere words, even if those words are strung together by a thinker as accomplished as me. In fact, I started out tonight figuring I would stick with the “depressing” theme, so I went straight to Neil Young, and sampled some versions of Helpless, which, just off the top of my head, was the first truly depressing song I could think of. But then I thought: “No, I will not give in. I shall seek out a happy song, a song which only the truly, truly clinical depressed can listen to and not feel happy.”

So, I may be cheating. At some point in the long ago, I may have played this song before, but it’s been a long winter, tomorrow is going to be the first warm day of the year, so I’ll break the no repeat rule, as well (I think, this is supposed to be live, but I don’t believe it) the no lip-sync rule, for an encore performance by Manfred Mann of Do Wah Diddy.

As an added bonus, I found the song below. I was totally unaware that Mann’s song was a cover of the first version, done by an early girl group called the Exciters. Their version was only a minor hit, but it’s pretty good, and well worth a listen. No video, unfortunately, but I pass it on anyway to help rectify the fact that this version of the song has slipped into Rock ‘N Roll Limbo


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A few chuckles

Friday, March 5, 2010

I have not written much lately, for one reason or another. Drinking Liberally last night, just being lazy Wednesday, etc. My sloth is largely due to the fact that the news has been extremely depressing lately. Sure, Democratic stupidity makes an easy target, but after a while it wears thin, and what more can you say. Likewise, another Obama broken promise (with a sellout of the Constitution to boot) is old news. The return of McCarthyism? What, you couldn’t see that coming? It’s hard to summon up the outrage and far easier to slip into a clinical depression. The last year has proven only one thing-that our system of government is broken, and no one with the power to change it has the slightest interest in doing so. Our financial system is being re-set to explode again, the earth grows warmer, jobs grow scarcer and all around we are in a total mess. We are so fucked.

But, who needs Prozac? Take some Onion.


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