Consumers borrowing less

Last night we chatted with an old time British banker who gave us quite an earful about the banking industry. He was disgusted with the state of the banks who overpaid and over grew and then were technically insolvent before being rescued by taxpayers. We had talked about this report that came out yesterday where consumers chopped borrowing by $15.7 billion last month. The banker thought that no matter how much spin the banks and governments offered, the man on the street wasn't a complete fool and knew that they had to stop spending at the previous rate.

Eliminating borrowing, if possible, is a wise move in this economic environment (any time, really) but at the same time the US economy needs consumers to spend in order to recover. Bouncing back to pre-credit crisis spending is not likely nor is it very wise.

Borrowing by consumers fell by $15.7 billion in April as U.S. households continued to trim spending and put away their credit cards amid a severe recession.

The Federal Reserve said Friday the April decline was the second largest ever in dollar terms following March's drop of $16.6 billion. March's decline originally was reported as $11.1 billion, which had been the most on records dating to 1943.

The April decline was more than double the $6 billion drop that economists had expected. Analysts believe consumers will remain cautious as long as the unemployment rate keeps rising, which it did again in May.

Without the old record high borrowing rates, where will the banks turn to raise easy, though risky money? There have been a few signs from the industry that they are cutting back but too few to mean very much. As we discussed last night with the banker, the money from recent years has distorted the entire industry from all reality. They still think they are deserving, profits or no profits. There is little grasp of the seriousness but why would think that the world has changed when they are still treated so gently by governments around the world?

Another future issue in the world of credit is the government borrowing. In the near term there is little choice but eventually the appetite for buying government debt is going to dry up unless the return goes up. For investors receiving those returns that is good news but for our governments, this is very bad news. Somebody better start creating the new business cycle quickly and because the model of the last few years is not going to do it. Read the rest of this post...

Mattel agrees to fine for lead in toys

The fine sounds a bit small though to their credit, there have not been any new publicized problems related to lead in their toys for young children since the 2007 scandal. It appears as though someone over there listened and changed their production. For such a low penalty they do, however, get away with an easy out including the typical "we didn't really mean to do it" wording. It's possible but shouldn't there be a responsibility to know better in such circumstances? It's their name going on the product so they should know.

Toy maker Mattel Inc. and its Fisher-Price subsidiary have agreed to pay a $2.3 million civil penalty for importing and selling toys with excessive levels of lead.

The penalty is part of a settlement the companies reached with the Consumer Product Safety Commission, which announced Friday, that the toymaker had knowingly violated a 30-year-old federal ban on lead paint in toys.

The companies deny having willfully violated the ban.

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Gay penguin pair raising chick

The picture with the story shows the gay penguin couple guarding the entrance to the cave to protect their chick. I'm guessing right about now Tony Perkins and James Dobson are feeling a sudden urge to divorce their wives. Read the rest of this post...

Feeling the hate in Jerusalem on the eve of Obama's address

UPDATE: Max has posted a blog post follow-up as to why he did this video.

The notion that the racist diatribes in my video emerged spontaneously from a beery void is a delusion, but for some, it is a necessary one. It allows them to erect a psychological barrier against acknowledging the painful consequences of prolonged Zionist indoctrination. And it enables them to dismiss the disturbing spectacle of young Jews behaving like fascist soccer hooligans in the heart of the capitol of Israel and the spiritual home of the Jewish people.

The people in my video were not white trash, nor were they the “extreme right-wing fringe” as some bloggers have called them. They were the college-educated sons and daughters of middle and upper class American Jews from cosmopolitan metropolises and genteel suburbs. Some had come to Israel on vacation, some had made aliyah, and some told me they were planning to move to Israel in the near future. Many were dual citizens of America and Israel. They may have behaved in a moronic way, but they will not grow up to toil in the custodial arts. Many of these kids will move into white-collar jobs and use their influence to advance Israeli initiatives. Programs like Birthright Israel -- a few of those in my video were on Birthright tours -- exist for the exclusive purpose of indoctrinating American Jews into unyielding, unthinking supporters of Israel. Thus the kids in my video represent at least one aspect of the Zionist project’s future base of political sustenance.

From Max Blumenthal:

On the eve of President Barack Obama’s address to the Muslim world from Cairo, Egypt, I stepped out onto the streets of Jerusalem with my friend Joseph Dana to interview young Israelis and American Jews about their reaction to the speech. We encountered rowdy groups of beer sodden twenty-somethings, many from the United States, and all eager to vent their visceral, even violent hatred of Barack Obama and his policies towards Israel. Usually I offer a brief commentary on my video reports, but this one requires no comment at all. Quite simply, it contains some of the most shocking footage I have ever filmed. Watch it and see if you agree.

Joseph Dana, who lives in Israel, explains in the same post exactly what we're seeing, and why these kids are typical:

Max and I went on to the streets of Jerusalem at ten o’clock on a Wednesday to ascertain the feelings of the young population about Obama’s upcoming speech in Cairo. As is often the case, the streets of central Jerusalem were not filled with native Israelis but American Jews. Doubtlessly anyone who has visited Jerusalem has encountered the droves of American Jewish kids that are sent to Israel to study for a period of time from Teaneck or Westchester. We asked people a simple question, “What do you think of Obama and Israel?” Most of the people that we talked to were dual American Israeli citizens. The answers in this video reflect the education and worrisome perspectives that many American Jews harbor towards Israeli politics. The sense of entitlement that the American Jewish community has when it comes to Israeli policy is on full raw display in the words of these young adults.

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Bodies from Air France flight believe to be found

CNN:

The bodies of two men -- believed to be from Monday's crash of an Air France plane -- were found Saturday morning, a Brazilian air force spokesman said Saturday.

A seat and a suitcase were recovered at sea by a vessel participating in the search, Jorge Amaral said. Also found were a backpack containing a laptop, an airline ticket and a oxygen mask, the Brazilian navy and air force said.

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Obama's weekly address: Real health care reform.

Your president delivered his weekly address on health care reform. He wants real reform with real change. That is, after all, one reason why the American people elected him. It's in the hands of Congress, which is where the health insurance lobbyists manipulate the members.

Obama may say everyone is at the table, but he must heed Krugman's words: Don't trust the insurance industry. Read the rest of this post...

Senate Labor Committee health care reform bill released

Let's hope these guys don't blow it. We need health care reform that helps all of us. At the OFA meeting last night, one person, who was quite bright, and clearly a good activist, mentioned a few times how people like us weren't who we were fighting for because we have enough money to get good insurance and pay for our bills. Wrong. As I've written before, I have the best self-employed insurance I can get from Blue Cross, and I get a whopping total of $1500 in prescriptions covered a year, period. And the limit never goes up - it's been stuck there for 12 years, and counting. If I ever come down with a serious, chronic illness, I'm toast. MS drugs cost $2k a month. So do HIV drugs. I don't have either. But that's how much serious illnesses cost, in drugs alone. Of course, I can switch to a cheaper plan, with a $3m lifetime limit, but at least it covers more prescriptions. Or I can switch to an HMO and lose my allergy/asthma specialist and my general practitioner I've been visiting for the past 12 years or so. And God knows what the HMO will charge me, or whether they'll even accept my pre-existing conditions. The thing is a mess. We all need relief. Not just the poor. Not just the lower middle class. All of us. Read the rest of this post...

Saturday Morning Open Thread

Joe is in Philly, so on the chance that he's not being a total geek and waking up early to blog, you got me this morning.



Last night I was asked to speak about health care advocacy to one of Obama's OFA house meetings he's calling for around the country this weekend. It was quite interesting. I had no idea what to expect. We got a good briefing on health care in America from the wife of a friend of ours who used to do health care issues at the OECD in Paris. Then a Georgetown Prof talked about the main provisions one might want in a health care reform package. And then I led a discussion about how we could all advocate better on health care. I of course warned the group that they might just find themselves having to beat up Democrats who have lost their spine. But we also had a good discussion about local advocacy. This was one of those Internet sign-up events, where anybody could come. It was quite the vocal, feisty crowd. Read the rest of this post...

Next up, inflation

This week we saw the dollar take a beating and the talk started to move back to the problem of printing money which means inflation unless something changes. Will the US reinvent itself and start building a new economic cycle before inflation kicks in or will inflation take over and bury the economy?

On a less serious note, a favorite Fast Show clip featuring Channel 9 TV. For those who have never had the pleasure of watching TV around the world, Channel 9 bundles the best of the worst into one make believe television channel in a make believe country. The target word of the show is inflaytion. Read the rest of this post...

Berlusconi's guest gets pretty excited about taking a shower

Our dear friend Silvio Berlusconi is still arguing his case about the 18 year old model but now a new scandal is keeping him busy. Spanish newspaper El Pais published a few photos of a party that Berlusconi was hosting at one of his houses. The photos include a few naked women as well as a former Czech prime minister who is, ahem, excited at the idea of taking a shower or whatever excuse Berlusconi tried to offer. The naked women may be the chaff but the wheat is the much more important issue.

The Italian photographer who took the photos is now being sued by Berlusconi for an invasion of privacy though his point behind the photos is valid. His issue is not about the sex or whatever they are doing as consenting adults but the abuse of power. Should a political leader be allowed to use government resources for transporting "friends"? Berlusconi is one of the wealthiest in the world and certainly at the top in Italy but this does not give him the authority to use the Italian military as a personal airline for his parties. Let him spend his own money or let his "friends" use their money to fly to wherever his party is being held.

Silvio Berlusconi and his associates mounted a vigorous damage-limitation exercise yesterday after the publication of photographs by a Spanish newspaper showing naked and semi-naked guests, including a former Czech prime minister, at his villa on Sardinia.

His lawyer announced legal action against El País, which released five of the pictures, and threatened a lawsuit against "whoever republishes the photographs in Italy". One shows two young women topless, one wearing a tanga. Another is of a naked man standing by a swimming pool in what appeared to be a state of sexual arousal.

Mirek Topolanek, the former Czech prime minister who was Berlusconi's guest last year, confirmed in Prague he was the man depicted. But added "It is clearly also the result of a photo-montage."

Links to the El Pais article (in Spanish) here though by American standards they are probably NSFW. Here's an English version for those interested. Read the rest of this post...

Burger King franchise responds to "global warming is baloney" controversy

Basically, they're freedom lovin', God fearin', Fox News watchin', Bush-lovin', Obama hatin' folks. Basically. Every country has their crowd of idiots and this is certainly an American classic. While the franchise, Mirabile Investment Corporation, is enjoying the controversy, the good news is that they're obviously fuming over Obama being in the White House. They even regurgitate the right wing "Obama's apology tour" line that is making its way around in those circles. The question now is how much or how little support they receive from their community who now have a clearer understanding of what they're all about.

The environmental journalist from The Guardian (UK) phoned the business and managed to speak with the franchise. It's a strange interview but you have to love a restaurant owner throwing in a story about cockroaches. That always inspires confidence in an operation selling food. I'm smellin' a pro-Sarah Palin post on that board sometime soon, if it hasn't been posted already. Read the rest of this post...