Credit crisis claims first political casualty

No surprise that Iceland - a country teetering on the edge of bankruptcy - is where the first casualty is located. I only wish the people who promoted the model of easy credit in the US will meet the same political fate. Even now the Republicans are trying to spin the recession as the fault of minority lending, as if they haven't spewed enough racial politics already. Maybe those people can look at the global economy (gasp! the world!) and see how real estate saw comparable bubbles in other countries such as Spain, UK, Ireland and elsewhere. Suddenly the "minorities caused this" doesn't work, but who wants to block a good racist rant when that keeps the wingnuts happy?

Iceland's embattled Prime Minister Geir Haarde may have become the first political casualty of the global credit crisis, announcing his resignation yesterday, and clearing the way for elections in May. Illness was the official reason for Mr Haarde's decision to quit, but few in the capital Reykjavik were in any doubt that his departure was linked to a week of intense and violent public protests at once prosperous Iceland's economic implosion.

Since October's financial earthquake Icelanders have vented their frustration, anger and despair in peaceful weekly protests. But demonstrations turned violent on Thursday, leading to 22 arrests and the worst civilian unrest since Iceland joined Nato in 1949.

The tensions prompted the government's first admission since October that Iceland needs a change of leadership if it is to rebuild its fractured economy and overhaul its discredited political culture, viewed by many Icelanders as corrupt and nepotistic.

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There will not be a recession, flashback to 2006/2007

It was all so funny a few years ago and Fox News laughed and laughed at Peter Schiff. How on earth could the best economy ever experience problems? Agree or disagree with Schiff's other ideas, but he called this economy and they laughed.

By the way, the "super bargain" that Ben Stein touted - Merrill Lynch - has fallen off a little since the timing of his promotion. At the time it was selling at $76.04 per share and it closed on Friday 23 January at $5.25. Nice "super bargain" there. Read More......

Vatican mouths off, again

The Prada-wearers are lecturing Obama about arrogance.

A senior Vatican official on Saturday attacked US President Barack Obama for "arrogance" for overturning a ban on state funding for family-planning groups that carry out or facilitate abortions overseas.

It is "the arrogance of someone who believes they are right, in signing a decree which will open the door to abortion and thus to the destruction of human life," Archbishop Rino Fisichella was quoted as saying by the Corriere della Sera daily....

"What is important is to know how to listen... without locking oneself into ideological visions with the arrogance of a person who, having the power, thinks they can decide on life and death," he added.

Apparently it's finally sinking it at the Vatican that Him-bo has left the building. Then there's this:

"I do not believe that those who voted for him took into consideration ethical themes, which were astutely left aside during the election debate. The majority of the American population does not take the same position as the president and his team," he added.

First off, get a spokesman who speaks English, and not German spoken as English. Second, don't lecture us about our elections, when your election is based on a smokestack. And finally, being lectured to about ethics by a regime run by a former member of the Hitler Youth is, well, choice to say the least.

The Vatican had no problem embracing George Bush, and overlooked his innumerable sins, all because Bush was pro-life and anti-gay. The Vatican had no problem with Bush's warmongering, his torture, or his lack of interesting in the plight of the disadvantaged. Funny that none of that ever bothered the oh-so-ethical Vatican.

One final point the Vatican keeps overlooking. We're not a Catholic country, and nobody cares what they think. So go away. Read More......

Real estate market even worse off?

There continue to be too many surprises and too many new problems. Until the dust settles for at least a quarter, things will only get worse.

Housing might be in worse shape than we think.

There is probably even more excess housing inventory gumming up the market than current statistics indicate, thanks to a wave of foreclosures that has yet to hit the market.

The problem: Many foreclosed homes and other distressed properties that are now owned by banks have yet to be listed for sale. The volume of this so-called 'ghost inventory' could be substantial enough to depress already steeply falling prices when it does go on the market.

"That's not good news," said Pat Newport, an analyst with IHS Global Insight. "[Excess] inventory is the biggest problem in housing these days, and it leads to lower housing prices, which leads to more foreclosures."

RealtyTrac, the online marketer of foreclosed properties, recently discovered that it has far more foreclosed properties listed in its database, which the company compiles using courthouse records, than there are listed in the multiple listing services (MLS) maintained by real estate agents.

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Why is taxpayer money being spent on lobbyists for banks?

This is bullshit. Banks should either cease lobbying or pay a brutal penalty if that's the way they want to spend their money. In no way should taxpayers be funding Wall Street's efforts to collect more bailout money or get other special breaks. Not that any of them give a damn about individual customers - the days of easy credit and mega deals killed that - but there is no way I would leave my money with any of them.

Bank of America stopped their lobbying efforts in Washington but a few others continue. The pro-lobbying groups are claiming it's their constitutional right to free speech. Uh huh. It's the taxpayers constitutional right to take back the money and let these bastards live on the streets without jobs or golden parachutes. They're only in business because of massive federal support. Someone in Washington is going to have to step up and call these banks out. Unfortunately the team in place has been much too friendly and accomodating with Wall Street, but let's see if that changes.

Citigroup, recipient of another $45 billion, made the opposite call. While trying to keep a low profile, the company is still fielding an army of Washington lobbyists working on a host of issues, including the bailout. In the fourth quarter, it spent $1.77 million on lobbying fees, according to its lobbyists’ filings.

The different approaches from the two banks that have received the most money underscores the growing dilemma facing private companies, which increasingly deal with the federal government not only as rule-maker but also as shareholder, lender and trading partner.

Pressing federal policy makers risks the appearance of recycling public money to advance a private agenda, while staying on the sidelines could put a company at a comparative disadvantage.

Citigroup and Bank of America are hardly the only two financial firms to confront the issue. During the last three months of 2008, at least seven other firms receiving bailout funds — American Express, Capital One, Goldman Sachs, KeyCorp, Morgan Stanley, PNC and Bank of New York Mellon — all lobbied the government about the bailout, according to a review of their most recent disclosure reports.

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Ted Haggard sinned, again

Not recently - rather, back when he was paying the gay massage therapist for happy endings. There was another guy. A very young guy. Even went to his church. No one could have predicted that. Haggard's church paid the young man and required him not to tell anyone, but they're now saying this was NOT hush money. If was just money. Then they made him agree to hush.

God, I love evangelicals Read More......

President Obama's First Weekly "Radio" Address

In the first weekly (not just) radio address, brought to us via the White House's YouTube channel, the President talks, of course, about the economic crisis. He's pretty clear about the need to act: "In short, if we do not act boldly and swiftly, a bad situation could become dramatically worse." And, he delves into the specifics of his proposal -- and you know this president knows what he's talking about, not just reading a script:



The transcript can be found here. Read More......

Saturday Morning Open Thread

Good morning.

No cartoons this weekend, but check out the poem of the week, The Buck in the Snow, by Edna St. Vincent Millay. It's a "crisp, powerful poem" by the Maine-born Millay.

And for everyone who missed the inaugural poem (including me), here's Elizabeth Alexander:



Let's get the weekend started... Read More......

Wakey, wakey

I hate waking up early on weekends. Actually, I hate waking up early any day of the week. Earlier in the week I had to catch a very early morning train so I had barely more than four hours of sleep, less if you count Sushi waking me up each time he walked on top of me. (He knew I was leaving and gets very clingy when he thinks he will be left alone.) This morning somebody left the alarm on so I had the pleasure of waking at 7:30AM. On a Saturday. After no sleep and too much travel this week. Maybe I can get some help from Captain Sensible and his mob. Read More......

British economy falls hard in Q4

It wasn't that long ago when the UK was the envy of everyone in Europe. Workers - especially those in banking/finance as well as laborers from Eastern Europe - all flocked to the UK to make British pounds and ride the wave. They're all leaving now, heading back home to the Continent where the Euro is on par with the once-strong Pound and life is less expensive. While visiting the UK this past week everyone was talking about the state of the economy and luxurious bonuses still being paid out. Northern Rock - the first casualty of the credit crisis - just handed out bonuses despite being in talks with the government for an inject of another $14 BILLION.

The big question today is who will emerge as the leader from this crisis within Europe. The UK appears to have some significant hurdles to overcome including an economy that was heavily based on banking and finance. It's unlikely that industry will be anything close to what it was during the Blair years any time soon. From The Independent:

The British economy has "fallen off a cliff" and entered a recession that shows every sign of developing into the worst since the Second World War, with unemployment soaring above three million by next year.

The slowdown has turned into recession: the question is now whether the recession will become a slump.

The Office for National Statistics said yesterday that the British economy shrank by 1.5 per cent in the last three months of 2008. Worse than most economists feared, it follows a contraction of 0.6 per cent in the third quarter of last year, and thus satisfies the conventional definition of recession, being two successive quarters of negative growth.

Output is 1.8 per cent lower than this time last year. It is the first time the UK economy has shrunk since 1991, and is the worst performance since the exceptionally deep downturn of 1980. The British economy grew by just 0.7 per cent last year, by far its worst performance since Labour came to power in 1997. The ONS also announced a fall in the value of retail sales last month, prompted by heavy discounting. The pound and the stock market slumped again on the news. Sterling hit a 24-year low against the dollar to close at $1.35. It stayed close to parity against the euro, while the FTSE 100 index fell almost 2 per cent before a late rally.

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Sarkozy to bail out French newspapers

Maybe the right wing American media can update me on the reasons why they love Sarkozy and think he's the great hope of Europe. Giving newspapers away to 18 year olds? Really? From the newspapers perspective, I get that they want to keep their jobs but this is going to hurt them in the long run as they are already considered too cozy with whoever is in power. Now, the government is going to own them. This is sad all around.

The French president Nicolas Sarkozy today announced €600m (£565m) in emergency aid for his country's troubled newspaper indus try and declared that every 18-year-old in France would get a year's free subscription to the paper of their choice to boost reading habits.

The crisis-hit French press is among the least profitable in Europe, stifled by rigid communist print unions, a lack of kiosks selling papers and a declining readership far below that of the UK or Germany.

The public's trust in the media is at an all-time low in a climate where politicians rewrite their own interviews for publication and the president's powerful business friends, from construction to arms manufacturing, own several major papers or TV stations.

Sarkozy has been likened by his political opponents to Silvio Berlusconi for his recent moves to tighten state control of public TV.

But today he made no apology about turning his hand to print and online newspapers with a major speech instructing them to improve the content of their articles, bring in younger readers and transform business models in exchange for emergency aid worth €600m over the next three years.

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