• The Chutzpah of the Chicago Tribune

• Are the Blue Dogs Moderate?

• What A Mess
• Video, Quote and Word of the Day
• Terror in Iran
• Morning Market Report
• The Legislative Lessons of Health Care Reform

The Chutzpah of the Chicago Tribune

Posted: 28 Dec 2009 03:17 PM PST
So, there I was reading the Sunday Chicago Tribune when I came upon this editorial. It's a call to arms
you see.

If you enjoy the political culture as is -- with the next corruption scandal never far off and
with your public officials borrowing future generations into penury in order to prop up
today's treacherously uncontrolled spending -- then you should support candidates who'll
protect the status quo.

If, however, the failure of too many politicians to make urgently needed reforms infuriates
you, then reach for a broom.We hope you're among the millions who are infuriated. And we
hope you'll reach for that broom. If you're just coming up to speed on Illinois politics, fine.
We'll help because, next year, you have to be a change agent:

The Tribune is having their Network moment. They're mad as hell and they aren't going to take it
anymore. It's time to elect good politicians. It's not a moment too soon. After all, the county and state
primaries are just about a month away and in this one party county and state those are as good as the
general elections.

We've got a vital primary in the Cook County President's race and doggone it, it's time to elect a good
leader already. That's the message from the Tribune.

Now, I'm all for the media helping the voters in their selection of candidates. That's a top priority of all
media. Of course, the Tribune's been around for a hundred plus years and there's been elections all
throughout. I'm not saying that the Tribune is cynically responding to a wave of cynicism among the
electorate and hoping no one will include them in the cynicism...er, maybe I am.

After all, the last poll the tribune itself ran, the top two candidate in the Democratic primary, Brown and
Stroger, had 90% plus name recognition, and the rest 60% and lower. Now, if the citizens of Cook County
don't know who's running for Cook County Board President call me cynical but isn't some of the blame on
the media for not telling them about it.

I'd be less cynical if the Tribune hadn't acted as cheerleader and chief propagandist for the Olympics
movement but as a watchdog, you know the job of the press. It's been five years since the Chicago Hired
Truck scandal broke. Donald Tomczak is in jail for taking bribes. He literally had bags of money delivered
to his office. You know who's not in jail. Whoever delivered him the bags of money. It appears the Tribune
investigation of the scandal stopped at Tomczak. The money, you see, just magically appeared at his
doorstep. Again, I wouldn't be so cynical if someone at the Tribune noticed that money doesn't just
magically appear.
Frankly, what really makes me cynical about this movement is how this particular editorial itself ends.

This editorial launches our pre-primary push to answer that question. Subsequent editorials
will explore how a reconstituted Illinois can confront three mighty challenges:--The
wreckage from current spending and borrowing -- and the taxing to pay for it all.--The need
for ethical reforms to better curb corruption and to reduce the concentration of power in the
hands of those Illinois oligarchs.--The disturbingly low level of job creation here as state
government policies nudge employers to locate and expand elsewhere.

That's right folks. Electing good politicians in Illinois is so important, that this particular editorial was an
introduction. Just you wait. Starting next week, the Tribune will really become the watchdog we all know
they can be. Until then, the clock ticks until the primary and another seven days will wind down before the
Tribune gets serious about helping the electorate to elect good politicians. Me cynical?

Are the Blue Dogs Moderate?

Posted: 28 Dec 2009 03:33 PM PST
No says Americans for Limited Government. They've done an analysis of what they call "some of the most
controversial votes of 2009". Of these, 856 were Yea and only 207 were Nay. Of course, it's important to
note that the "controversial votes" were entirely determined by ALG themselves.

Here's the votes they accounted for: 789 billion "stimulus", bankruptcy mortgage "cramdowns," ACORN
funding, a $108 billion International Monetary Fund expansion, the Waxman-Markey carbon emission
caps, the $2.1 trillion "public option" health system, the $154 billion assistance program for bankrupt
states, and the $290 billion debt limit expansion.

This is being selective and it's without context but still the results are remarkable. The Blue Dogs are
supposed to be moderate and certainly fiscally conservative. Nancy Pelosi is a San Francisco liberal. Many
of these votes are some of her biggest pet projects and about 80% of the time they voted with Pelosi.

Incidentally, speaking of cap and trade...that's on life support.

Bruised by the health care debate and worried about what 2010 will bring, moderate Senate
Democrats are urging the White House to give up now on any effort to pass a cap-and-trade
bill next year.

“I am communicating that in every way I know how,” said Sen. Mary Landrieu (D-La.), one
of at least a half-dozen Democrats who've told the White House or their own leaders that it's
time to jettison the centerpiece of their party's plan to curb global warming.

...
What A Mess
Posted: 28 Dec 2009 10:12 AM PST
One day after proclaiming on national television that allowing the would be terrorist on the Northwest
flight wasn't a security breakdown, Secretary Napolitano backtracked.

Secretary of Homeland Security Janet Napolitano has backed off comments she made on
Sunday on CNN saying that "the system worked" in response to questions about how a
would-be-bomber got explosive material aboard a Detroit-bound flight on Christmas Day.
"Obviously this individual should not have gotten on the plane carrying that material. And
we can explain all of the reasons, but they're not satisfactory," Napolitano said on CBS' "The
Early Show" Monday.

Meanwhile, it took all of twenty four hours for conservatives to put the blame square on the shoulders of
the Obama administration.

There is a reason why Obama hasn’t given a public statement. It’s strategy.Here’s the
theory: a two-bit mook is sent by Al Qaeda to do a dastardly deed. He winds up neutering
himself. Literally.

Authorities respond appropriately; the President (as this president is want to to) presides
over the federal response. His senior aides speak for him, letting reporters know that he’s
videoconferencing regularly, that he’s ordering a review of terrorist watch lists, that he’s
discoursing with his Secretary of Homeland Security.

But an in-person Obama statement isn’t needed; Indeed, a message expressing command,
control, outrage and anger might elevate the importance of the deed, would generate panic
(because Obama usually DOESN’T talk about the specifics of cases like this, and so him
deciding to do so would cue the American people to respond in a way that exacerbates the
situation

That, coincidentally, is how long it took for the Obama administration to declare that this was NOT part of
a larger terrorist plot. That's 22 hours more than it took the Obama administration to initially declare that
the Fort Hood shooting was NOT an act of terror. Meanwhile, Michelle Malkin claims this is proof that
Jihadis aren't motivated by poverty.

The Nigerian elite enginnering student studied at one of Britain’s leading universities, “lived
a gilded life” and “stayed in a £2m flat.”

The Independent says Abdulmatallab’s privileged status is “surprising” — “a very different

 background to many of the other al-Qa’ida recruits who opt for martyrdom.”

Actually, there’s nothing surprising about it. The only surprise is that so many supposedly
informed people — from British journalists to our own commander-in-chief — continue to
perpetuate the myth of the poor, oppressed jihadist.

Note to Michelle Malkin, UBL is worth somewhere in the neighborhood of $50 million. If the folks that
believe this nonsense aren't swayed by UBL's personal fortune, they aren't going to be swayed by this
particular story.

There's calls for investigations everywhere. Yet, we still don't know how this guy got on the plane. This
guy's own father turned him in. If that's not a red flag, nothing is. Of course, this is a system wide
breakdown.

What we have now though is complete and total political posturing and opportunism. Pundits, pols, and
editors alike are all jumping over themselves to draw a higher analysis from this. Surprise, surprise,
eveyone's analyses are pretty much in line with their own preconceived notions. Republicans are dying to
call this a failure of homeland security by an incompetent White House. Liberals are dying to call this an
isolated incident by one lone nut.

It's not even 72 hours. How can anyone draw any conclusions yet? Yet, they all are. Let's not let the facts
get in the way of a good story.

Video, Quote and Word of the Day

Posted: 28 Dec 2009 09:40 AM PST
This is making the rounds. Is Baucus drunk?

imprecation

a curse

We can often endure an extra pound of pain far more easily than we can suffer the withdrawal of an ounce
of accustomed pleasure.

Sydney J. Harris

Terror in Iran
Posted: 28 Dec 2009 07:46 AM PST
Clashes between protestors and police in Iran are again turning deadly.
 A number of opposition figures were arrested Monday in the wake of violent nationwide
protests a day earlier, Web sites reported, including three top aides to the opposition leader
Mir Hussein Moussavi and the leader of a banned political group, Ibrahim Yazdi.

Mr. Moussavi’s 43-year-old nephew Ali Moussavi was among 10 people reported killed
during the protests, becoming another flashpoint in the conflict.

Another opposition leader, Mehdi Karroubi, was among those who lashed out at the
authorities for using deadly force during the protests.

Here's the latest from Twitter.

Heavy Clashes at Hafte Tir Sq, Police Shooting Tear Gas

...

Iran forces take the killed bodies, in order to prevent the families to show them to the public

...

They lost all fear, risk their lives, up to us to provide as much support as we can!

...

Security forces UNABLE to arrest Mohsen Armin today.

Mohsen Armin is the subject of several tweets. He's an Iranian politician that's been one of the leaders of
the opposition.

Here's another video that's raw footage of the violence.

The analysis is mixed. Here's one analyst that believes all of this is still fragmented and disjointed and so
ultimately doomed to fail. Here's another that says this is a "tipping point". The situation remains fluid.

Morning Market Report

Posted: 28 Dec 2009 07:26 AM PST
Let's start out today by talking about bonds. Those have quietly become a story lately and almost no one
has noticed. The ten year is again weaker this morning, though just slightly. That's good news considering
what's happened over the last week and a half. The ten year is up to 3.82%. It reached a low of 3.19% in
November. It's more recently been in the 3.3% range. To put this into perspective, after the refinance
boom ended, bonds averaged about 4.2% from 2003-2007. That was a guage to see where they were at.
So, 3.8% is still very low. It's also getting dangerously high. That's because we're carrying nearly $13
trillion worth of debt and much of it will be financed by these ten year bonds. The yield spread between
the two and ten year also continues to set all time records. It's currently at 2.83%. The three month t bill
has raised itself from the critically negative levels to .041%. Bonds in England and Germany were relative
unchanged today so we'll wait and see how domestic bonds respond.

Meanwhile, there was relatively good news on the retail front.

The spending bounce means retailers managed to avoid a repeat of last year's disaster even
amid tight credit and double-digit unemployment. Profits should be healthier, too, because
stores had a year to plan their inventories to match consumer demand and never needed to
resort to fire-sale clearances.

Retail sales rose 3.6 percent from Nov. 1 through Dec. 24, compared with a 2.3 percent drop
in the year-ago period, according to figures from MasterCard Advisors' SpendingPulse,
which track all forms of payment, including cash.

Now, it's important to keep in mind that 2008 was an awful year for retailer and so I'm not sure how good
this news really is. This is sort of like a .200 hitter getting excited because their batting average increased
by ten percent.

The most interesting news if you will of the weekend came from Paul Krugman who said it was a
"reasonably high chance" that we'd see a double dip recession. That means the economy will recover for a
while and then fall back into recession. That happened to Reagan in 1982-83 and to FDR in 1937-38.

Paul Krugman was on ABC's The Week on Sunday declaring a "reasonably high chance" of a
double dip coming next year.

Actually, he doesn't sound quite as gloomy as you might guess. Yes, he describes the entire
recovery so far as being driven by government spending and inventory rebalancing, but the
odds of a double dip he does place at lower than 50/50, so that's good. Obviously he wants
much more spending.

I almost never agree with Krugman so I won't be one of those people that suddenly calls him an oracle
since we do. It's very important to note that Krugman, from the beginning, has insisted that the stimulus
wasn't nearly big enough and this is more of that skepticisim.

In commodities, oil is pushing $80 a barrel again. It's currently at $78.57 a barrel. It reached below $70 a
barrel only two weeks ago. Gold is back above $1100 an ounce. It's currently at $1105 an ounce. It reached
over $1200 an ounce and shot back down. It's been slowing pulling itself up since it reached a low in the
$1080 range.

All three indices are opening just slightly higher this morning. They're all up about .25% forty five minutes
in. Retailers are strong following the retail numbers. Markets in both Europe and the Far East were both
up nearly across the board. The Hang Seng in China was down .17% but that's the only major indice that
was down. The NIKKEI in Japan was up 1.33% and the Straits Time Index in Singapore was up .63%. The
broader Chinese index was up 1.51%. In Europe, the FTSE in London is even, the DAX is up .7%, and the
Spanish index is up .44%. All indices are up or even in Europe.

The Dollar is mixed. It's down .01% against the Euro, down .13 against the British Pound but up .41%
against the Japanese Yen.

Here's a couple things of final note. China says its economy is growing faster than expected. Let's keep in
mind that a week and a half ago, it was annouced that the U.S. again revised its most recent GDP data to a
growth of 2.2%. It was originally measured at 3.2%, then revised to 2.8% and now 2.2%. So, everyone
should keep that in mind when you hear initial data for any number.

Then, there's this news, a prediction from Morgan Stanley Dean Witter.

If Morgan Stanley is right, the best sale of U.S. Treasuries for 2010 may be the short sale.
Yields on benchmark 10-year notes will climb about 40 percent to 5.5 percent, the biggest
annual increase since 1999, according to David Greenlaw, chief fixed-income economist at
Morgan Stanley in New York. The surge will push interest rates on 30-year fixed mortgages
to 7.5 percent to 8 percent, almost the highest in a decade, Greenlaw said.

In fact, if MSDW is right, we're all in big trouble. That would severely stunt any recovery. It could even
lead to inflation. This goes back to what I spoke about in the beginning. That is that U.S. Treasury bonds
are weakening and no one is noticing. If the rate on the ten year bond is 5.5%, then mortgage rates will be
in the neighborhood of 7%. You can forget any sort of housing recovery with those rates. Such high
borrowing costs would almost certainly mean a double dip recession. Every market observer had better
start to pay attention to bonds.

The Legislative Lessons of Health Care Reform

Posted: 27 Dec 2009 09:02 PM PST
Joe Lieberman got his way and not only was the public option removed but so to was the lowered
eligibility for Medicare. What's not reported quite as much was the multi hundred million dollars that
Lieberman negotiated for the University of Connecticut along with his fellow Senator from Connecticut
Chris Dodd.

Mary Landrieu was able to negotiate $300 million in federal aid from the health care bill. Here's how
Landrieu described her vote.

It’s not $100 million, it’s $300 million, and I’m proud of it and will keep fighting for it,” she
told reporters after a floor speech announcing her support of a vote to begin debate on
health care reform.
Meanwhile, Bill Nelson of Florida was able to win this concession.

a provision he said will let about 800,000 Florida seniors enrolled in private Medicare
Advantage plans keep their extra benefits

Why, just a week earlier, Bill Nelson was on Greta telling the public that this bill was essentially a non
starter.

We all know about the concessions that Ben Nelson won.

What do all of these people have in common? They all held out their yes votes until the end. Mind you,
they aren't the only ones to get concessions for their home states, but nearly each and every Senator that
got one made it known at one time that their vote wasn't decided.

What did my Senator, Dick Durbin, get? Nothing, that's what. Then again, Durbin's vote was never in
doubt. We call this horse trading but that word doesn't nearly describe the ugliness of the process.

So, the lesson is hold out. Then, you can get stuff. In the House, the only hold out left is Bart Stupak. He's
holding out for stronger anti abortion language. Then again, so was Ben Nelson. Suddenly, he got an
exemption for his home state and the anti abortion language wasn't as important.

The deal makers are those who's votes are in doubt. They make the rules, and in this Congress, that also
means they get free stuff for their states. That appears to be the lesson.