Obama at the Alfalfa dinner

Excerpt of the President's remarks tonight, they're cute:

I am seriously glad to be here tonight at the annual Alfalfa dinner. I know that many you are aware that this dinner began almost one hundred years ago as a way to celebrate the birthday of General Robert E. Lee. If he were here with us tonight, the General would be 202 years old. And very confused.

Now, this hasn't been reported yet, but it was actually Rahm's idea to do the swearing-in ceremony again. Of course, for Rahm, every day is a swearing-in ceremony.

But don't believe what you read. Rahm Emanuel is a real sweetheart.

No, it's true. Every week the guy takes a little time away to give back to the community. Just last week he was at a local school, teaching profanity to poor children.

But these are the kind of negotiations you have to deal with as President. In just the first few weeks, I've had to engage in some of the toughest diplomacy of my life. And that was just to keep my Blackberry. I finally agreed to limit the number of people who could email me. It's a very exclusive list. How exclusive?

Everyone look at the person sitting on your left. Now look at the person sitting on your right. None of you have my email address.

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Octuplet mom wants $2m from Oprah, hires agent

I rest my case.

THE single mother of octuplets born in California last week is seeking $2m (£1.37m) from media interviews and commercial sponsorship to help pay the cost of raising the children.

Nadya Suleman, 33, plans a career as a television childcare expert after it emerged last week that she already had six children before giving birth on Monday. She now has 14 below the age of eight...

Her earning power, though, could be diminished by a growing ethical and medical controversy....

US public reaction has been mixed: many have asked how an unemployed single mother can raise 14 children, as her first six have already strained the family budget....

Nadya Suleman, who describes herself as a “professional student” living off education grants and parental money, broke up with her boyfriend before the birth of her first child seven years ago.

Television child care expert? What's she an expert in? She's unmarried, unemployed, has given birth 14 times, and still lives with her parents at the age of 35. Good Lord. What company in their right mind would want this woman as their spokesman? Trojan condoms? Then again, she has all the qualifications to be a war correspondent for Pajamas Media. Read More......

Will Obama plan wipe out big banks?

I sure hope so. They're too big to fail yet they're complete failures. The government throws them a life line and they spend $18 billion on bonuses. Scrap the entire damned thing and start over. If the executives are this stupid (and they are) and the shareholders are this stupid, tough luck. Break these banks into smaller pieces and see if bankers can get back to being bankers instead of high roller gamblers and executive socialists.

The creation of a government bad bank to buy toxic assets is necessary, but then the government will need to take control of and restructure major banks to fix the system, one economist at the World Economic Forum in Davos told CNBC.com.

"They have to do a bad bank," Harvard Economics Professor Ken Rogoff said. But "if that's all they do then it's idiotic."

Institutions like Citi and Bank of America will have to go, boards will have to be fired and equity stakeholders will be wiped out, Rogoff said.

The plan could mirror the one Sweden implemented, where all troubled banks were nationalized, their balance sheets were cleaned up and the good parts of the businesses were sold to the private sector.

That solution was "much cleaner," he said.

Sweden’s banks were effectively bankrupt in the early 1990s, but the government pulled off a rapid recovery that actually helped taxpayers make money in the long run.

The government placed banks with troubled assets into a so-called bad bank, where they could be held and then sold when market and economic conditions improved.

In the meantime, it used taxpayer money to provide enough capital to allow banks to resume normal lending, but wiped shareholders out in the process.

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Falwell refused to help women in the rain

I was reading the latest newsletter from the son of dead religious right bigot Jerry Falwell, and it was talking about the ongoing Ted Haggard fiasco, and Falwell's son wrote the following:

My dad stated from the pulpit on more than one occasion that if he saw a lady from the church standing without an umbrella in a driving rain, he would not pick her up. Dad also never met alone with a woman in his office. He lived in this manner because he did not want to: (1) risk anyone seeing him with another woman, even if he was just doing a good deed by giving her a lift, or (2) risk placing himself in harm’s way in terms of personal temptation. Every pastor should live this way and work always to preserve his testimony at all costs.

I'm trying to imagine, in my mind's eye, how this would be virtuous in an old-world, grampa kind of way. But it doesn't sound virtuous. It sounds like virtue turned creepy. You wouldn't stop and help a woman because someone might think you're having an affair (yes, better to worry about your image than actually help another human being in need), and worse (and weirder), you'd be tempted to hit on the damsel in distress. Huh? How about if you drove by and found her beaten on the road, would you stop then? Or would you still be tempted to "do" her?

Again, I get the "good guy" notion underlying this story. Though it is indicative of why religious right bigots are so fearful of gays and other - it appears the thumpers have some rather extreme "temptation" issue of their own, and may be acting out against their own uncontrollable, and rather distasteful, urges when they strike out at gays. This is a perfect example of how the religious right's "good" intentions are filtered through such a hyper-religious filter that they're twisted into kooky, and scary, results. Some days the victim of their good intentions is a poor woman standing on the road in the pouring ray. On another, it's a gay man who simply wants a chance at the American dream. Read More......

Justice Department to open criminal probe in peanut case

What a difference a few days makes. The Bush FDA never had an interest in protecting Americans. Whatever business wanted, business received. Those days of ignoring problems and relying on business to self regulate appear to be over.

The FDA reported this week that federal inspectors who visited the plant since the salmonella outbreak found roaches, mold, signs of a leaking roof and numerous other sanitation problems.

Federal officials now say the plant had a salmonella problem dating back at least to June 2007. Peanut Corp. was under no obligation to tell the FDA it was making peanut butter at the Georgia plant, the FDA said Friday.

Stephen Sundlof, head of the FDA's food safety center, said the Justice Department will investigate possible criminal violations by the Peanut Corp. plant.

The company shipped products that initially tested positive for salmonella after retesting and getting a negative result. The FDA's investigations branch will assist in the probe.

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Creepy update on mother of 6 who then chose to have octuplets

I told you there was something not-quite-right about this story. Reader Raine sent me the following update from CBS:

CBS News has learned that the family of the octuplets born this week outside Los Angeles filed for bankruptcy and abandoned a home a little over a year-and-a-half ago.

Early Show national correspondent Hattie Kauffman says the mother is in her mid-thirties and lives with her parents.

There's been no mention of the octuplets' father, Kauffman observes.

The grandfather, she adds, is apparently going to head back to his native Iraq to earn money for the growing family. He told CBS News he's a former Iraqi military man....

On The Early Show Friday, the scientific director of an Atlanta-area fertility clinic blasted whichever clinic did the implantations, saying he's "stunned."

....in fact, it's really a bit of a medical disaster."

"Had she walked into a fertility clinic and said, 'Listen, I've got other children, the oldest seven, the youngest two,' co-anchor Julie Chen asked Tucker, "is there any ethical responsibility on the clinic's part to say, 'I'm not going to treat you,' or, 'You know what? This is not a good idea?" '

"Suffice to say," Tucker responded, "I've been in this business for 25 years now. And it's pretty much standard practice in all clinics to have some form of psychological evaluation of the patient. Also, their sociological circumstances. And I'm stunned, actually, that a clinic would proceed to treat a patient in this circumstance and then even to get to perhaps the transfer of embryos and ponder the transfer in, I believe, the lady's mid-30s, a 35-year-old -- she should be receiving two embryos, maximum, as a transfer into her uterus to have had eight transferred is somewhat -- is extremely irresponsible."

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Obama on the recovery package, a new plan for the financial system and the "arrogance and greed" of Wall Street firms

No surprise that Obama talked the economy and the recovery package today. But, he all addressed Wall Street. He didn't quite call them "a bunch of idiots" like Claire McCaskill did, but some of that sentiment is there:

Last year Congress passed a plan to rescue the financial system. While the package helped avoid a financial collapse, many are frustrated by the results -- and rightfully so. Too often taxpayer dollars have been spent without transparency or accountability. Banks have been extended a hand, but homeowners, students, and small businesses that need loans have been left to fend on their own.

And adding to this outrage, we learned this week that even as they petitioned for taxpayer assistance, Wall Street firms shamefully paid out nearly $20 billion in bonuses for 2008. While I'm committed to doing what it takes to maintain the flow of credit, the American people will not excuse or tolerate such arrogance and greed. The road to recovery demands that we all act responsibly, from Main Street to Washington to Wall Street.

Soon my Treasury Secretary, Tim Geithner, will announce a new strategy for reviving our financial system that gets credit flowing to businesses and families. We'll help lower mortgage costs and extend loans to small businesses so they can create jobs. We'll ensure that CEOs are not draining funds that should be advancing our recovery. And we will insist on unprecedented transparency, rigorous oversight, and clear accountability -- so taxpayers know how their money is being spent and whether it is achieving results.

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Saturday Morning Open Thread

Good morning, everyone.

Check out the poem of the week, The House Was Quiet and the World Was Calm, by Wallace Stevens. Very nice read about reading. Nice pace to start the weekend.

And, then, to get yourself riled up, watch Senator Claire McCaskill's speech about the "idiots" on Wall Street, which she delivered on the Senate floor yesterday. John posted about it last night -- and it's worth a watch:
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Banksters call Obama a socialist

Oh the irony. There's socialism, no doubt, but it's socialism for the high income earners on Wall Street. What other industry can be rescued from total failure and still pay out $18 BILLION in bonus money? Look in the mirror, Wall Street.

Nonetheless, it was rather remarkable on Friday how many white shirts denied getting a bonus altogether when they were asked. Indeed, if the data obtained by reporters in the district was any measure, there is no telling where that $18 billion really went.

What can be told, however, is that President Obama is substantially less popular on Wall Street this week than he was last week. Words like “outrageous,” “shameful” and “the height of irresponsibility” — especially when applied to a man’s paycheck — tend not to make you many friends.

“I think President Obama painted everyone with a broad stroke,” said Brian McCaffrey, 55, a Wall Street lawyer who was on his way to see a client. “The way we pay our taxes is bonuses. The only way that we’ll get any of our bailout money back is from taxes on bonuses. I think bonuses should be looked at on a case by case basis, or you turn into a socialist.”

That, indeed, was a recurring equation: Broad strokes + bonuses = socialist.

“It’s a very slippery slope to go down,” said another insurance broker as he waited to be seated for lunch at Cipriani Downtown. “A blanket statement like that borders on” — you guessed it — “socialism.”

A slippery slope, indeed. Why do average Americans need to fund their lifestyle on Wall Street? Read More......

The old voice of the GOP is really the new voice

Every time there's another gun rampage, the right wing loonies roll out "guns for everyone" as the solution. I've been re-watching some of the old All in the Family episodes on YouTube lately and can't believe how much the GOP still sounds like Archie Bunker even now. Some things never change. Read More......

China's Olympic stadium sits empty

As I said, these games are a waste of money. Paint chipping half a year after the games? A shopping mall in the works for some unknown future date? Many of the Athens buildings have fallen into disrepair as well as they sit unused. Can't the world do something better with money besides building a complex that is used for a couple of weeks?

The area around Beijing’s massive Bird’s Nest stadium will be turned into a shopping and entertainment complex in three to five years, a state news agency said Friday.

Officially known as Beijing National Stadium, the showpiece of the Beijing Olympics has fallen into disuse since the end of the games. Paint is already peeling in some areas, and the only visitors these days are tourists who pay about $7 to walk on the stadium floor and browse a pricey souvenir shop.

Plans call for the $450 million stadium to anchor a complex of shops and entertainment outlets in three to five years, Xinhua News Agency reported, citing operator Citic Group. The company will continue to develop tourism as a major draw for the Bird’s Nest, while seeking sports and entertainment events.

The only confirmed event at the 91,000-seat stadium this year is Puccini’s opera “Turandot,” set for Aug. 8—the one-year anniversary of the Olympics’ opening ceremony. The stadium has no permanent tenant after Beijing’s top soccer club, Guo’an, backed out of a deal to play there.

Details about the development plans were not available. A person who answered the phone at Citic Group on Friday said offices were closed for the Chinese New Year holiday.

A symbol of China’s rising power and confidence, the stadium, whose nickname described its lattice of exterior steel beams, may never recoup its hefty construction cost, particularly amid a global economic slump. Maintenance of the structure alone costs about $8.8 million annually, making it difficult to turn a profit, Xinhua said.

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City of Lucca, Italy to ban "ethnic" foods

Fantastic. Hopefully they make sure to get rid of Tuscan foods like potatoes, tomatoes and green beans because if there's one thing I hate, it's that doggone junk that's indigenous to America spoiling Italian classics. If they so much as touch a pumpkin, there's going to be trouble. Hopefully Lucca doesn't use olives or olive oil since they originated in Greece. And turkey or cod? Never should either show up since they comes from the Americas. Since lemons originated in east Asia I'm sure they won't see the kitchen in Lucca, thankfully. Anyone who uses those foreign products ought to be thrown in jail for life.

Maybe someone can work on India and Southeast Asia who wrongly use chilies from America for their curry and soups and everything else. Don't they know it's wrong, that we aren't supposed to include any fusion in food? More cultural exclusion is the direction of the world so let's get with it folks.

Lucca is the new Freedom Fry.

If you are craving a kebab, tandoori chicken or Peking duck you may go hungry in the small Tuscan city of Lucca, which has just barred new ethnic restaurants from opening in its historic medieval center.

Officials say new rules passed last week by Lucca's conservative administration aim to protect local specialties from the rising popularity of "different" cuisines. The measure also bans fast food restaurants and hopes to reduce littering within the city's ancient walls, a magnet for tourists.

"By ethnic cuisine we mean a different cuisine," city spokesman Massimo Di Grazia said Thursday. "That means no new kebabs, Thai or Lebanese restaurants."

Di Grazia said ethnic restaurants opened before the measure was passed could stay in business.

The move has sparked accusations of gastronomic racism from opposition politicians and criticism from Italian chefs, who say modern cuisine relies on fusion, the combination of ingredients used in different food traditions.

"It's a discriminatory ban," center-left councilman Alessandro Tambellini told the Corriere della Sera daily. "It's a sign of closure toward different cultures."

"There is no dish on the face of the Earth that doesn't come from mixing techniques, products and tastes from cultures that have met and mingled over time," said Vittorio Castellani, a TV chef and cookbook author.

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US liquor sales not recession proof

The common thinking is that when recession hits, people drink more, but that has not turned out to be true in 2008. Not for hard liquor, at least. Maybe Americans are just getting high on life these days. No?

The Distilled Spirits Council of the United States (DISCUS) also abandoned its practice of giving industry forecasts for 2009, citing marketplace volatility.

The trade group joins a growing list of companies, including Fortune Brands, Microsoft, eBay and Coach, that say it is too hard to predict results in the recession.

DISCUS said U.S. revenue for spirits companies rose 2.8 percent to $18.7 billion in 2008, while sales by volume rose 1.6 percent to 184 million 9-liter cases.

That represents a slowing from 2007, when revenue rose 5.6 percent and volume rose 2.4 percent, and DISCUS's prior forecast, which called for revenue growth of 4 percent to 5 percent and volume growth of about 1.9 percent.

"Contrary to popular belief, the entire beverage alcohol sector is recession-resistant, not recession-proof," said DISCUS CEO Peter Cressy in a press release.

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Ted Haggard on Oprah... you know you wanna know

From Joe.My.God:

Ted Haggard and his wife Gayle appeared on Oprah yesterday and what a festival of nonsense and doubletalk it was. Haggard isn't straight, he isn't gay, he isn't bi, he's just "got issues". God made him this way, but God wants him to resist. Oh, and a monogamous heterosexual relationship is still the only way to go. For her part, Gayle trots out the old "desire vs. behavior" theme - if ol' Teddy is only thinking about mansex, not doing it, then he's straight. I'll have to say that Oprah called them on their bullshit at least twice.

And Joe has the video.More from CNN:

Haggard likened his struggles with his desires to the struggles faced by dieters who say, "'I'm not going to eat today' and then they eat."

Uh, yeah. Right. Read More......

Giuliani supports Wall Street bonuses despite being failures

It's hard to imagine how this guy was blown out so quickly during his Presidential bid. Why does Giuliani hate capitalism? What red blooded American doesn't believe in shoveling over billions to total failures who brought the world into the worst recession in decades? Let's just forgive and forget as we wonder if our jobs will exist tomorrow and the economy falls harder because of greed on Wall Street. How does Giuliani's plan to reward failure fit with the capitalism? Shouldn't success be rewarded? Do government handouts really work, as Giuliani is suggesting? I guess if you are worth hundreds of millions, perhaps, but not if you are poor. Then you are screwing the system and a loafer.

Bonuses for Wall Street fat cats are easy political fodder in uncertain economic times, but former New York Mayor Rudy Giuliani said Friday cutting corporate bonuses means slashing jobs in the Big Apple.

"If you somehow take that bonus out of the economy, it really will create unemployment," he said on CNN's "American Morning." "It means less spending in restaurants, less spending in department stores, so everything has an impact."

President Obama admonished corporate America on Thursday after the New York comptroller reported that Wall Street bankers received $18.4 billion in bonuses in 2008.

Then again, Giuliani does seem to be the expert on being a sponger. He's made millions telling third world cities what they already know. If billions of dollars of handouts are the answer to the problems of America, the country is completely screwed and might as well call it a day. Read More......

Dems: House GOP’s Stimulus Plan Would Actually Raise Taxes For Many Americans

Doh!

GOP leaders — led by John Boehner and Eric Cantor — have spent days bashing the economic stimulus package being touted by President Obama and Democrats because it doesn’t sufficiently cut taxes.

But is it possible that the alternative plan House Republicans unveiled as a more responsible approach earlier this week would have actually raised taxes for untold numbers of Americans?

That’s the surprising claim that House Democratic staffers who have taken a look at the GOP plan are now making. They insist to me that the Republicans did some almost comic number shuffling in drawing up their proposal, the upshot of which would be that the actual tax bill would go up for many.

And they’re now preparing to make an issue of this in the districts of Republican House members by painting Republicans as the would-be tax hikers.

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I'm with Claire McCaskill on this

She's 100% spot on.

One day after President Barack Obama ripped Wall Street executives for their "shameful" decision to hand out $18 billion in bonuses in 2008, Congress may finally have had enough.

An angry U.S. senator introduced legislation Friday to cap compensation for employees of any company that accepts federal bailout money. Under the terms of a bill introduced by Sen. Claire McCaskill, D-Missouri, no employee would be allowed to make more than the president of the United States.

Obama's current annual salary is $400,000.

"We have a bunch of idiots on Wall Street that are kicking sand in the face of the American taxpayer," an enraged McCaskill said on the floor of the Senate. "They don't get it. These people are idiots. You can't use taxpayer money to pay out 18 billion dollars in bonuses."

McCaskill's proposed compensation limit would cover salaries, bonuses and stock options.

On Thursday, Obama said the prospect that some of the $700 billion Wall Street bailout could end up paying for bonuses to managers of struggling financial institutions was "shameful."

The president said it was the "height of irresponsibility" for executives to pay bonuses when their companies were asking for help from Washington.

"The American people understand we've got a big hole that we've got to dig ourselves out of, but they don't like the idea that people are digging a bigger hole even as they're being asked to fill it up," Obama added.

And for those who don't like it, tough. Go find employment somewhere else. It's insulting to see the bonus money still be the sixth highest in history. Bring value to customers and the world and then talk about big money. Read More......

Steele Elected RNC Chair

Yes, he's African-American, and he almost lost to a guy who belonged to a whites-only country club, so let's not get carried away here...

The Republican National Committee elected Michael Steele as its first African American chairman today in Washington, a decision that came after an excruciating series of ballots that displayed a level of drama rarely seen in national politics.

On the sixth and final ballot Steele bested South Carolina Republican party Chairman Katon Dawson 91 to 77.

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They're organizing to protect DOMA already

Religious right bigots are already fundraising to protect the Defense of Marriage Act. What are we doing on our side to effectively get it repealed? This is indicative of the difference between conservatives and liberals: The right organizes years on an issue years in advance, the left organizes after we've lost.

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I think they mean the eternal flames of hell

Reader Phillip writes:

When I first read this piece I thought he was making up snark Maureen Dowd style.

WASHINGTON (CNN) -- The only bright spot in the nation's capital for Republicans these days seems to be a flame that burns 24 hours a day in the courtyard at the campaign headquarters for Republican senators.

The Eternal Flame of Freedom is near the National Republican Victory Monument, which commemorates the 1994 "Republican Revolution," when the GOP wrested control of Congress out of Democratic hands.

But no! They actually have a flame, and a victory monument. Clearly these folk do not read Shelly who penned a line or two about people building memorials to themselves.

And the kicker is that anyone could get their name inscribed on the victory monument if they became a 'platinum' donor. You can almost hear the infomercial voice-over, "but wait, there's more, call now and we will double the benefit, inscribing your name and the name of a loved one on the National Republican Victory Monument. The fully functional working model of the Ronald Regan Eternal Flame is yours to keep whatever you decide. Mount it in your office, your den, or your back deck where it doubles as a BBQ...

Of course they will build a monument for Dufus sooner or later. My suggestion is to get in there first. A twenty foot high statue of the Abu Ghraib crucified man holding a 'mission accomplished banner in his hands, sunk up to his waist in a reflecting pool of crude oil.

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Mother of 6 gives birth to 8 more

Perhaps I'm wrong, but something in my gut is telling me this isn't right. A woman with 6 children goes on fertility medicine and implants 8 more fertilized eggs in her womb? Why? Because she always wanted 7 kids, and was disappointed she only had 6? I mean, it's one thing to get pregnant again after having six kids, it's another to take fertility drugs and go for in vitro. And, these are octuplets, which also raises health issues (in addition to the overall question of whether any one family can appropriately raise 14 kids). Just me, or does anyone else get a bad feeling when they read stories like this? Read More......

Former USS Cole commander on closing Gitmo: ''We shouldn't make policy decisions based on human rights and legal advocacy groups"

Ja wohl, mein Führer:

The former commander of the USS Cole, the American war ship that was struck by a suicide boat in Yemeni waters more than eight years ago, on Thursday slammed President Barack Obama's orders to close the Guantanamo detention center and reassess the prisoners being held there.

''We shouldn't make policy decisions based on human rights and legal advocacy groups,'' retired U.S. Navy Cmdr. Kurt Lippold said in a telephone interview.

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House Republicans "delighted" and "elated" and "celebrating" over their zero votes to save the economy

This says so much about the culture in Washington. You'd like to think that members of Congress are looking out for the nation's good and the well being of their constituents. The Republicans sure aren't. Based on several news reports, it's clear the House Republicans are reveling in the united opposition to the economic recovery package.

This must seem bizarre to most people, especially those who are struggling and have lost their jobs or homes (or both). Everyone seems concerned as the economy continues to tank. Yet, the Republicans are having a party because they all voted against saving the economy. Wow.

And, from the wide coverage, its clear the Republicans want the world to know they're happy.

New York Times:

Republicans profess to be unconcerned. House Republicans on Thursday headed off to a retreat at The Homestead, a Virginia resort, still celebrating their unanimous stand — despite Mr. Obama’s visit to the Capitol to seek their support — against a package that in their view has too much big-government spending and too few tax cuts. Their unsuccessful substitute was entirely of tax cuts.

The Hill:

House Republicans still elated from their unanimous vote againt the Democratic stimulus package think they will be able to work with President Obama on future bills despite the partisan vote

Washington Post:

The bill passed easily despite the opposition of all 177 Republican House members, but party leaders delighted in what they considered a victory after two straight electoral drubbings and much soul-searching about what the party stands for.

It's all fun and games for the GOP. Read More......

US economy shrank 3.8% last quarter -- worst since 1982

Not that it's great news, but this could have been much worse. MarketWatch reports the number was closer to 5.1% if inventory was included.

The U.S. economy shrank at its fastest pace in nearly 27 years in the fourth quarter, government data showed, sinking deeper into recession as consumers and business cut spending.

The Commerce Department on Friday said gross domestic product, which measures total goods and services output within U.S. borders, plummeted at a 3.8 percent annual rate, the lowest pace since the first quarter of 1982, when output contracted 6.4 percent. GDP fell 0.5 percent in the third quarter. These were the first consecutive declines in GDP since the fourth quarter of 1990 and the first three months of 1991.

Analysts polled by Reuters had forecast GDP contracting 5.4 percent in the fourth quarter. The U.S. economy slipped into recession in December 2007, driven by the collapse of the housing market and resulting global credit crisis.

For 2008, GDP rose 1.3 percent, the slowest pace of growth since 2001, when the economy expanded 0.8 percent.

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Roland Burris should resign and let the new governor of Illinois pick someone untainted

Illinois "Senator" Roland Burris will always be seen as a stooge of now ex-governor Blagojevich. No one deserving of an appointment to the US Senate would accept one from a man like Blagojevich. Roland Burris will always be judged by his original sin. He put ego, and loyalty to a now fallen governor, ahead of his state and his country. Burris should resign and let the new governor of Illinois pick a legitimate, untainted senator to represent Illinois.

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Friday Morning Open Thread

Good morning.

This has been quite a week.

We saw our new president sign the first bill into law. The Lily Ledbetter Fair Pay Act is the first of many.

We saw that the House Republicans are continuing their assault on the American economy. It's bad enough they enabled Bush's destruction of the economy. Now, they want to block Obama from fixing it. Duly noted.

So, while there's been change, some things, like Republicans, never change. Ever.

Thread the news... Read More......

Fourth quarter GDP numbers out later today

Most expect Q4 to be bad. Very bad. Despite flimsy - at best - evidence of business tax cuts helping to boost the economy, somehow, the new plan in Washington is full of them. How many more tax cuts is business going to receive before everyone else starts seeing some benefits? What a waste of time and money to win over the GOP who even then won't support the efforts to save the economy. We're in this situation because of the Republicans yet they still don't get it.

The official report is out this morning.

The country tumbled deeper into recession and probably logged its worst economic performance in a quarter-century during the final three months of last year as battered consumers and businesses throttled back spending.

The U.S. economy is deteriorating at an alarming clip as the housing, credit and financial crises — the worst since the 1930s — feed on each other in a vicious cycle that has proven difficult for Washington policymakers to break.

The Commerce Department is set to release a report Friday expected to show the economy shrank at a pace of 5.4 percent in the October-December period, a much faster descent than the 0.5 percent decline logged in the prior quarter. If economists' forecasts are correct, it would mark the weakest quarterly showing since an annualized drop of 6.4 percent in the first quarter of 1982, when the country was suffering through a severe recession.

"It was a bloodbath," said Richard Yamarone, economist at Argus Research, referring to the economy's fourth-quarter performance.

A massive pullback by consumers is expected to play a prominent role in the economy's worsening backslide. They are cutting back on spending as jobs disappear and major investments — homes, stocks, retirement accounts — tank in value. Businesses are retrenching, too, as profits shrivel and demand wanes from customers in the U.S. and overseas.

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Iceland to be fast-tracked to join European Union

Last week I heard a joke in London that asked "what's the difference between Ireland and Iceland? One letter and the EU." (Ireland has also experienced enormous credit related problems but has been propped up by the EU.) That's about to change as the EU is moving to absorb the crisis-hit country that is on the edge of financial ruin. It seems like only yesterday that the EU was berating countries for failing to trim budgets and meet the regulations set by the EU for the common currency but now, failing appears to be a prerequisite. In Euroland (and the US as well) the concern had previously been about Iceland falling into bankruptcy and being bailed out by Russia. Many feared the growing reach of the new Russia, chock full of petro-dollars, spreading its wealth and influence.

The failing Russian economy helped slow down that process and the West provided financial assistance. Now Iceland is on target to be the 29th country in the ever-expanding European Union. Looks like right wing economics is dead in yet another country.

The conservative government in Reykjavik, in power for 18 years, collapsed this week, the first government to fall as a result of the financial meltdown which has wrecked the Icelandic currency, the krona, wiped out savings and pensions, required a massive IMF bailout, sparked unprecedented riots in Reykjavik, and forced the formation of a caretaker centre-left government until new elections can be held, probably on 9 May.

EU membership will be a central theme of the election campaign, with the social democrats - the senior partner in the coalition interim government with the anti-EU Left Greens - pushing to join the EU and to swap the krona for the single European currency as soon as possible.

"The krona is dead. We need a new currency. The only serious option is the euro," said a senior Icelandic official.

The financial disaster in Iceland has triggered extreme volatility among voters. While there is support for joining the euro as a currency safe haven to protect Iceland from a battering by the markets, there is less enthusiasm for full EU membership, particularly among those in the vital fishing sector. This factor has fuelled talk of "unilateral euroisation", meaning that Iceland might join or use the single currency without being admitted to the EU. This is dismissed in Brussels as nonsense.

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Brits may end up spending even more for London Olympics

What a waste of money. When Paris "lost" the 2012 bid to London, may in Paris were upset but I could have cared less. Joelle lived in Montreal during the Olympics and it turned out to be an enormous drain on the system. They were paying additional taxes for the honor of hosting the international drug fest. London had previously been the European capital for big finance where no deal was too large. Whipping up a few dozen billion could practically be done over lunch but those days are long gone. In an economy that heavily relied on finance (roughly 1/3 of the GDP), finance is now the biggest drag on the system. Hmmm, loans for home buyers or a loan for the Olympic village that will be used for three weeks?

Each time the IOC has another competition for the next host city, too many cities that don't have the money spend millions to make the cut. Even after winning and after the games, buildings sit idle never to be used again. Let the sports marketing companies or athletes fund this junk if they want it so much. I've watch enough of this horror show to not care if they ever bother to hold another Olympic game.

The taxpayer may end up paying to build every major venue in London's 2012 Olympic Games because private finance has dried up, the chairman of the Olympic Delivery Authority admitted yesterday.

John Armitt said it was possible that no private sector money would be found for the £1bn Olympic village in the heart of the park, the most high-profile victim of the global downturn which has already cost the taxpayer £326m more than was planned for.

The authority has already given up hope of securing funding for the £355m international media centre, which will now be paid for entirely by the Exchequer. In total, £496m has already been used from the £2bn contingency fund set aside for the project.

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If this is the official thinking, China is doomed

Anyone in a position of power and influence in China is deeply connected to the communist party. Offering a point of view that is radically different from the party view is discouraged. The run up of the Chinese economy has been pretty darned impressive and in large part it has been a result of the consumer demand in the US and Europe. Anyone who thinks that can be replaced with a magic wave of a wand is delirious. Add to that the Chinese communist's historical failure to grasp reality with numbers, this has failure written all over it. The Olympics may turn out to be the high point of this regime before the recession ravages the authority of the current government.

Vladimir Putin tweaked sensibilities in the financial and political worlds by warning against government involvement. And Wen Jiabao went with optimism, especially on his own country's ability to avoid recession.

Looking at both East and West, the Chinese economy will stage a "quick rebound" of economic growth, but the US has a tougher job, facing the loss of $1 trillion in consumption, Zhu Min, executive vice president of Bank of China, told CNBC.com.

"In the States the housing industry has not stabilized" and there will be more deleveraging in the financial and household level leaving no doubt about a recession, he said.

And for the first time in 60 years, you'll see the developed countries contributing zero to the world economy, he added.

Quick government action in China will lead to a quick rebound, and although the economy will slow more in the first quarter, growth of 7 percent to 8 percent is manageable, he said.

Right. And everyone already recognizes that the 6.8% growth in Q4 was probably incorrect, with the real number being a point or two lower. To break even with incoming workers China needs 7% growth per quarter. I'd love to hear the theory on how that happens when their export markets have stopped buying. Do tell. Read More......

What Obama should say about the House Republicans not supporting the stimulus package...

While I have my own gripes with the House stimulus packages (wasting 1/3 of it on tax cuts that are patently unfair), we need to pass something because things are bad. Hopefully Obama will use the addition of the tax cuts to argue that he tried to give the Republicans what they wanted - he even devoted a full 33% to 40% (House bill vs. Obama's proposal) to tax cuts, and the House Republicans still refused to come together in a moment of national crisis. As I've said, I think the bill stinks in parts. But at this point, better to settle for second best (or third) than not have a bill at all. Read More......

Republican economics have consequences

Not everyone receives million dollar bonuses for losing billions and not everyone is sitting in the board rooms with friends setting their annual pay packages. For those people, life remains comfortable. For everyone else, add a few more years of hard work and hope for the best. More from the Washington Post:

Millions of Americans lost more than a quarter of their 401(k) retirement savings in 2008 because of the stock market's collapse, a setback that could force them to work longer or severely curtail their spending as they grow older.

In an analysis of their participants' accounts, Fidelity Investments, Vanguard and T. Rowe Price -- three of the nation's largest 401(k) plan providers -- also found that some employees were further eroding their savings by taking hardship withdrawals to pay for current financial needs.

Many Americans have seen their wealth evaporate with the drop in home values, the rise in the cost of living and the stagnation of wages. Now, as they tap into nest eggs to pay bills, they face leaner retirements as well. Particularly vulnerable are baby boomers who expected to retire in the next few years.

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Rush speaks for the GOP

The RNC may be meeting this week to find a new chair of the party, but it doesn't really matter. We know who is really calling the shots for the GOP. It's not McConnell, it's not Boehner, it won't be the new RNC Chair. It's all about Rush:
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Obama may name GOP Senator Judd Gregg (NH) as Secretary of Commerce

Hot news from Capitol Hill via Roll Call (sub. req.):

The Obama administration has been floating the idea of naming Republican Sen. Judd Gregg (N.H.) to be Commerce Secretary, several Senate sources said Thursday.

The sources, who spoke on the condition of anonymity, said Gregg’s nomination was far from a done deal, but remains a serious possibility. Reached by phone, Gregg, the top Republican on the Senate Budget Committee, said he had no comment on whether he has been in talks with the White House about the post.

Of course, what makes it even more interesting, is this:

New Hampshire's governor is a Democrat, who would be able to name Gregg's replacement. That pick could give the party a filibuster-proof 60-vote majority in the chamber if Democrat Al Franken is also ultimately named the winner in the contested Minnesota Senate race.

This kind of bi-partisanship works for me.

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It's over for Blago - impeached, removed from office

Impeached:

The Illinois Senate voted to remove Gov. Rod Blagojevich from office Thursday, marking the first time in the state's long history of political corruption that a chief executive has been impeached and convicted.

The 59-0 vote followed several hours of public deliberation in which senator after senator stood up to blast Blagojevich, whose tenure lasted six years. And it came after a four-day impeachment trial on allegations that Blagojevich abused his power and sold his office for personal and political benefit.

The conviction on a sweeping article of impeachment means the governor was immediately removed from office. The Senate also unanimously voted to impose the "political death penalty" on Blagojevich, banning him from ever again holding office in Illinois.

Lt. Gov. Patrick Quinn, Blagojevich's two-time running mate, has become the state's 41st governor.

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Republican party chair candidates stumbling over themselves to prove who's more pro-gay

Yet you don't see them racing to prove who's more pro- religious right.

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Congress gives itself a $4700 pay raise!

Congratulations! It must be very hard to live on $169,300 a year, so I'm glad that our representatives will now get a nearly $5,000 raise, upping their annual income to $174,000 (the way it works, they automatically get a pay raise every year unless they themselves vote it down, and they have voted it down before - but no plans to do so this year!).

Now, sure, those same members of Congress (Democrats, actually) think that if you make $95,000 a year, you're rich, and don't deserve to partake in the stimulus bill's $7500 first-time homebuyer tax credit. And sure, those same members of Congress think that you don't deserve to benefit from the stimulus plan's $500 a person tax cut if you make over $100,000 a year - again, because they think you're just too rich.

But those same members of Congress make almost $170,000 a year, and they are suffering so much that they permit themselves a nearly $5,000 raise while millions of Americans are being thrown out of work. This, even though those Democrats live in the same town, facing the same cost of living, as people they're cutting off at only $100,000 a year.

If the Democrats thinks that a private citizen making $100,000 a year is rich, that people making $100,000 a year don't deserve federal help, and that those people need to suck it up and take one for the team, then Democratic members of Congress shouldn't be pigging out at the federal trough with a $5000 pay raise when they make a hell of a lot more. Fair is fair. If you're going to play the "screw the rich" game, then screw yourselves too. Or are some pigs more equal than others? Read More......

AIG to pay $450M in bonuses to retain 400 people who lost $34 billion

Everyone would be a heck of a lot better off if these people were shown the door rather than hugged and handed $1 million plus. Even now they continue to suggest that if they don't pay millions to retain these valuable people, they will leave. Excuse me, but who the hell lost the $34 billion? Let. Them. Go. Now. (h/t Carlton)

American International Group Inc., the insurer saved from collapse by government money after losses on credit-default swaps, offered about $450 million in retention pay to employees of the unit that sold the derivatives, according to two people familiar with the situation.

About 400 workers at the financial products unit may get the money in two installments, said the people, who declined to be named because details of the payments were confidential. The business was responsible for about $34 billion in writedowns since 2007 as the market value of swaps AIG sold to banks plunged amid the subprime mortgage market collapse.

The payments bring to more than $1 billion the amount AIG has committed to keep its employees from leaving. The New York- based insurer in September took a federal bailout to avoid bankruptcy and is selling subsidiaries to repay the government. AIG said the program was disclosed before the government rescue, which is now valued at $150 billion.

This is another tired excuse, much like the Citi jet for $50 million. I don't think anyone really cares whether or not this decision was made before, during or after the government bailout. The fact is the bailout changed everything so all bets are off. Had the government not stepped in, every one of these people would have nothing, so I don't even want to hear about this excuse. Read More......

House stimulus package makes $7500 first-time home buyer tax credit a real tax credit... for some people

The good news: The House stimulus bill changed the federal first-time homebuyer $7500 tax credit from something you had to pay back (which means it was never really a credit) to something you get to keep forever. It's $7500 in free money when you buy your first home.

The bad news: The House bill starts phasing out the tax credit if you make $75,000 a year, and phases it out completely if you make $95,000 a year.

As I've said before. If you live in NYC - or even Washington, DC - and you make $75,000 a year, you're not rich. A one bedroom condo in DC could easily cost you $350,000 (and to rent, a 500 sq ft studio apartment in my building costs around $1600 a month - and I don't live in the Taj Mahal). Then there are student loan payments (which yuppies often have to make, as they tend to be well educated) - they often total a second rent payment. Add in the cost of the groceries, and the cost of living is significantly higher in cities like NY and DC (and probably SF and many more). But the Democrats think you're rich, so no stimulus for you. Yet again, another provision of the stimulus bill that won't apply to lots of people living in big cities because on paper they're "rich," when in reality they're not. Read More......

NY Times promotes Bush Oval Office rules which are false

I'm calling BS on this. Besides the fact that the "no jacket, no Oval Office" story has been proven to be false, so is the old story of Bush running a tight schedule. Who could forget all of the media hype during the early Bush years about Bush being the first CEO President? All we heard about was that he ran a tight ship, with strict adherence to the schedule.

Too bad I know someone who had a 15 minute visit to the Oval Office that turned into 45 minutes. Bush invited a group to the White House to (in theory) congratulate them for an amazing historical event though of course, he never once recognized the event and instead monologued about his furniture and art work brought from Texas. After 30 minutes someone asked about photos so it then dragged out for another 15 minutes. As they left the Oval Office they passed by generals with stars across their shoulders who had been left waiting for an additional 30 minutes. Maybe the Times can quit spreading lies about what a tight ship Bush ran, because he didn't. Even if he did, none of his supposed regulations for staff did much positive for the country. They trashed it for eight years.

Anyway, as I've said before, who really cares if Obama wears a jacket or not? Even a tie for regular meetings seems like a waste to me. If Obama wants to wear a wet suit to work I don't give a damn. Just get the job done and let the GOP worry about the silly issues. Read More......

AT&T; is celebrating Data Privacy Day, after allegedly handing every single one of us over to the NSA

Gee, thanks AT&T.; Though isn't this a bit like Jeffrey Dahmer celebrating the Year of the Child?

You'll recall that the good Germans over at AT&T; allegedly let the National Security Agency set up shop in their own basement, without a court order, simply because a Bush administation official told them it was okay. Nice. What law school did you guys go to? I don't recall reading the "court order required unless some guy says it's okay" rule.

The following notice was reportedly posted on AT&T;'s intranet. Apparently, their employees needed a good laugh:

We're recognizing Data Privacy Day with new privacy initiatives
January 27, 2009

We announced today our continued commitment to protect consumer online privacy by recognizing Data Privacy Day. In an effort to increase consumer awareness of privacy issues on the Internet, AT&T; Services announced the launch of The Privacy and Online Reputation Project, a new pilot program with iKeepSafe in Florida where school counselors will receive handbooks on how to educate students on privacy issues.

AT&T; Services will work with iKeepSafe and the Florida School Guidance Counselor Association to provide a handbook to school counselors that gives an overview of what students are posting on the Internet and bring school counselors up to date on existing cyber ethics tools for social networking. The handbook will inform students how to protect themselves and includes a Parent's Primer with information about how to connect with industry for assistance when needed.

In line with Data Privacy Day, AT&T; Services will also host the American School Counselors Association's 10 finalists for Counselor of the Year in Washington, D.C. for a discussion on the challenges these school leaders are facing when it comes to protecting students' online safety and privacy.

"Data Privacy Day is an especially important time to take a look at the issues we are facing with online privacy, particularly when it comes to the students in our schools who are on social networks," said Dorothy Attwood, chief privacy officer, AT&T; Services. "We look forward to working with school counselors and iKeepSafe to give these important educators the materials they need to protect students' identities online."

"Students, parents, and educators need to understand the importance of privacy and reputation in today's rapidly changing digital world. Guidance counselors especially need to understand that the rules applied to the offline world also apply to the online world when it comes to future academic and employment opportunities," said Marsali Hancock, president of iKeepSafe. "AT&T; has played an integral role in helping to provide school counselors and parents with insightful information and necessary tools to keep them up to speed on what kids are doing online. We are thrilled to work with AT&T; on this initiative."

Data Privacy Day was created in 2008 to promote privacy awareness and education among teens in the United States and now provides the opportunity to further international collaboration and cooperation on privacy issues. In addition to working with school counselors, and educating its employees and customers, AT&T; Services is also supporting the Data Privacy Day Symposium held on Capitol Hill organized by the Information Technology Association of America featuring remarks by Congressman David Price and Member of European Parliament, Alexander Alvaro.

To help consumers have a safer online experience, AT&T; operating companies offer a full library of supportive Internet safety and security tips and interactive safety games for kids, all available at http://www.att.com/safety. Information on privacy can be found on http://www.att.com/privacy. In addition, consumers can go to http://OnGuardOnline.gov to review practical tips from the federal government and the technology industry to help them be on guard against Internet fraud, secure their computer and protect their personal information.

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Obama signed first bill into law: Lily Ledbetter Fair Pay Restoration Act

In the first of what will be many, many progressive pieces of legislation passed by the Democratic Congress on the Hill, the President, with Lily Ledbetter at his side, just signed the Lily Ledbetter Fair Pay Restoration Act into law:

Here's an excerpt from the President's remarks:

Because while this bill bears her name, Lilly knows this story isn’t just about her. It’s the story of women across this country still earning just 78 cents for every dollar men earn – women of color even less – which means that today, in the year 2009, countless women are still losing thousands of dollars in salary, income and retirement savings over the course of a lifetime.

But equal pay is by no means just a women’s issue – it’s a family issue. It’s about parents who find themselves with less money for tuition or child care; couples who wind up with less to retire on; households where, when one breadwinner is paid less than she deserves, that’s the difference between affording the mortgage – or not; between keeping the heat on, or paying the doctor’s bills – or not. And in this economy, when so many folks are already working harder for less and struggling to get by, the last thing they can afford is losing part of each month’s paycheck to simple discrimination.

So in signing this bill today, I intend to send a clear message: That making our economy work means making sure it works for everyone. That there are no second class citizens in our workplaces, and that it’s not just unfair and illegal – but bad for business – to pay someone less because of their gender, age, race, ethnicity, religion or disability. And that justice isn’t about some abstract legal theory, or footnote in a casebook – it’s about how our laws affect the daily realities of people’s lives: their ability to make a living and care for their families and achieve their goals.

Ultimately, though, equal pay isn’t just an economic issue for millions of Americans and their families, it’s a question of who we are – and whether we’re truly living up to our fundamental ideals. Whether we’ll do our part, as generations before us, to ensure those words put to paper more than 200 years ago really mean something – to breathe new life into them with the more enlightened understandings of our time.

That is what Lilly Ledbetter challenged us to do. And today, I sign this bill not just in her honor, but in honor of those who came before her. Women like my grandmother who worked in a bank all her life, and even after she hit that glass ceiling, kept getting up and giving her best every day, without complaint, because she wanted something better for me and my sister.

And I sign this bill for my daughters, and all those who will come after us, because I want them to grow up in a nation that values their contributions, where there are no limits to their dreams and they have opportunities their mothers and grandmothers never could have imagined.

In the end, that’s why Lilly stayed the course. She knew it was too late for her – that this bill wouldn’t undo the years of injustice she faced or restore the earnings she was denied. But this grandmother from Alabama kept on fighting, because she was thinking about the next generation. It’s what we’ve always done in America – set our sights high for ourselves, but even higher for our children and grandchildren.

Now it’s up to us to continue this work. This bill is an important step – a simple fix to ensure fundamental fairness to American workers – and I want to thank this remarkable and bi-partisan group of legislators who worked so hard to get it passed. And this is only the beginning. I know that if we stay focused, as Lilly did – and keep standing for what’s right, as Lilly did – we will close that pay gap and ensure that our daughters have the same rights, the same chances, and the same freedom to pursue their dreams as our sons.

Obama is right, "This is only the beginning." And, it's a very good start.

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GOP won't support economic recovery even as Americans gettting unemployment hit highest level recorded

Yesterday, zero Republican in the House voted for the economic stimulus package. Zero. While the Republicans were being petulant and partisan, the number of Americans without jobs continued to climb. The economic downturn is having real consequences for people. That's what the President is trying to address. But while this is all a game for the Republicans, it's a harsh reality across the country:

The number of jobless American workers receiving unemployment checks rose to the highest level since the government began keeping records in 1967.

A Labor Department spokesman said the number of Americans drawing jobless benefits for a week or longer rose to 4,776,000 in the week ended Jan. 17, the latest data available.

The number eclipses the prior mark set in November 1982, when 4,713,000 million Americans drew benefits.

Americans who moved to collect their first unemployment checks rose for the third consecutive week, to 588,000, according to a government report released Thursday.

The number of Americans filing for unemployment claims has surged by 61% from this time a year ago.

More GOP members of Congress and their staff need to be jobless. That's the best solution for the economy. Read More......

The man who created the disastrous Bush White House thinks Obama's White House is too political and disorganized

This is almost funny.

Karl Rove is pontificating about the Obama White House. He seems particularly concerned that four people now share his old office. The guy who directed George Bush's strategies -- the very strategies that have us on the brink of economic depression and entangled in two wars -- that guy is worried about who gets what office in the Obama White House.

What's worse, of course, is that the pundits will eat this up. Rove's words will ricochet across cable news today. None of those who quote Rove will wonder why he's got any authority to talk about an effective White House. Rove still plays the press corps -- and they still let him.

One thing Rove doesn't understand is that it's going to take a Herculean effort with all the best minds working extremely long hours to bring this nation back to where it was before Bush and Rove ruined it. Read More......

Thursday Morning Open Thread

Good morning.

So, as predicted, zero votes from the zeroes in the House for the stimulus. Zero.

The traditional media and pundits need to remember that the primary goal here is saving the economy, not bipartisanship. It shouldn't surprise anyone that the same Republicans who played politics with the Iraq war are willing to play the same games with our teetering economy. That's what they do. Hopefully, the Obama team has learned something, too. If the other side isn't really negotiating in good faith, you're just negotiating with yourselves. Paul Krugman captured it best:

Aren’t you glad that Obama watered it down and added ineffective tax cuts, so as to win bipartisan support?

The goal, once again, shouldn't be getting GOP votes. The goal is putting together a package that will save the economy, which was destroyed by GOP policies.

Thread the news...

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Roubini: stocks down another 20%, emerging markets to have hard landing

Uh oh, the Wall Street cheerleaders won't like hearing this. They hate when reality gets introduced and the "prosperity is just around the corner" meme is challenged because that doesn't help the love affair they have with Wall Street. Whoever brought Roubini on the show from Davos is probably in hot water today. Either that or they're scrambling to locate Jack Welch to talk about the good old days of the Republican economy and how the GOP really knew how to help business. As long as they don't mention Jack's own luxurious decorating habits and his platinum parachute, everything will be fine. Onto the crazy guy who obviously doesn't know anything about economics. (Video interview inside as well.)

US and global stocks are still likely to fall because the corporate and economic news will be worse than expected, Nouriel Roubini, RGE Monitor Chairman, told CNBC.

Investors will be hit by the realization that many banks are bankrupt, that companies will have to rein in debt and sell assets and that emerging markets may get into trouble, Roubini said.

"I think that there's a 20 percent downside risk to US and global equities," Roubini told "Squawk Box Europe."

The transmission mechanism oiling the wheels of the banking system is broken, he said, adding that "banks are getting the money and they are hoarding it, they're not lending it," because they expect higher losses.

There is no safe haven from the crisis as all countries are affected, and the collapse in aggregate demand may bring about prolonged deflation, Roubini added.

"We have to worry today about not ending up like Japan. That's the risk for the global economy," he said.

The rise in the price of gold is a signal of fear that countries and corporations may default on debt rather than of worries about future inflation, and the precious metal is used as a "safety valve."

Falling stock prices and very low bond yields are signaling depression, while credit spreads are still very wide, indicating fear of defaults, according to Roubini. And even the fast-growing Asian economies aren't spared.

"If you look at the data in emerging markets and around Asia, East Asia, there is a hard landing," he said. "All the numbers out of China suggest… the manufacturing sector is already in a recession."

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But they said they were experts

Not so much. If you look closely, I think that might be Phil Gramm and the GOP. Read More......

Starbucks to close 300 stores

Tough times for Seattle these days between Microsoft, Boeing and Starbucks. The first two can always bounce back (easily) but nothing can change the lousy taste of Starbucks coffee. At least the CEO has the common decency to have his own comp plan slashed during these tough times. I hope this doesn't mean he's going to pull the old trick of lowering one part and substantially raising another part of the plan but for now, it looks reasonable since he's firing more workers.

Thousands of baristas are to lose their jobs as Starbucks shuts stores to cope with dwindling sales of lattes, cappuccinos and frappuccinos as cash-strapped consumers lose their thirst for coffee.

The Seattle-based chain tonight revealed a 70% slump in quarterly profits to $64.3m and announced that it intends to shed 6,700 employees this year. It is closing 300 stores, two thirds of which will be in the US, on top of 660 shutdowns last year.

As the global economy turns sour, appetite for Starbucks' premium-priced drinks appears to be waning. Like-for-like sales fell by 10% at American stores and dropped by 3% elsewhere in the world - including a decline in the UK during the three months to December.

Starbucks' chief executive, Howard Schultz, is joining in the belt-tightening by asking the company's board to cut his basic salary from $1.2m to $10,000. Schultz, 55, dropped off Forbes' list of the world's billionaires last year as the value of his stake in Starbucks plunged.

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Roubini: "US banking system is insolvent"

Yeah, but what does he know anyway? Just because he saw the credit crisis years ago and predicted this recession, he probably doesn't understand economics. It was a lucky guess and we shouldn't listen to anything he has to say unless he cheers loudly in favor of Wall Street. Give me a "W"! Give me an "A"! Oh never mind.

That was the opinion of economist Nouriel Roubini, of RGE Monitor, who was one of the first people to predict the housing crisis, speaking to "Squawk Box Europe" this morning.

Expected losses of about $2 trillion exceed bank capital of about $1.5 trillion, Roubini said.

Roubini had earlier said that total financial system losses could hit $3.6 trillion.

And "schemes" to just buy so-called toxic assets may not work, because the "risk is it's going to take too much time to resolve the problem," he added.

Instead Sweden's plan of nationalizing all insolvent banks, cleaning them up and then selling off the good assets to the private sector could be a better option, he said.

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It must be redecorating season on Wall Street

You can't even make this crap up. Spongers.

Step aside and take solace, John Thain: The public flogging you just endured for spending $1.2 million to jazz up your now-vacant office at Merrill Lynch could subside once the sanctimonious mob moves on to other Wall Street titans who would dare redecorate their digs.

Next likely target: Citigroup. Though it is ailing mightily, Citi only recently began sprucing up an entire floor of offices for its senior-most executives at its headquarters in Manhattan, at 399 Park Avenue. That includes a new office for chief executive Vikram Pandit. If a disgruntled staffer leaks details of any new accoutrement and their price tags, the bank could come under new fire for its supposedly profligate ways.

Just down the street, J.P. Morgan Chase is close to completing a gut renovation of all 50 floors at its headquarters at 270 Park. Cost of the project, which began 18 months ago: A quarter of a billion dollars. Let any cushy details from that facelift surface, and JPM Chief Executive Jamie Dimon could have some ’splaining to do.

No doubt some other Wall Street giants have redone their offices, too. Let the witch hunt begin for the next CEO we can pillory for his fatcat ways.

The big problem with all this is it criminalizes capitalism. It plays right into the ill-conceived agenda of Wall Street’s harshest critics.

Um, since when was capitalism about losing billions? Typicaly CNBC excuse making. Let these people make real profits and not profits that can't survive on the books for a couple of years. These people wouldn't know capitalism if it bit them in the ass. Despite what CNBC thinks, this is an indictment on capitalism. If this is the best it can offer it's no wonder people are against it. The sooner this type is run out of business the better. And that includes CNBC. Read More......