IMF report: toxic bank debts could be $4 trillion

The good news is that it's not $5 trillion. Yet. In all likelihood this number will increase and the previous forecasts on toxic debt will be proven to be fantasy. Can someone - anyone - explain why Obama still refuses to meet with fellow Democrats who have questioned the current economic programs pushed forward by Geithner and Summers? The problem is too serious to get stuck in with outdated economic theory.

Toxic debts racked up by banks and insurers could spiral to $4 trillion (£2.7 trillion), new forecasts from the International Monetary Fund (IMF) are set to suggest.

The IMF said in January that it expected the deterioration in US-originated assets to reach $2.2 trillion by the end of next year, but it is understood to be looking at raising that to $3.1 trillion in its next assessment of the global economy, due to be published on April 21. In addition, it is likely to boost that total by $900 billion for toxic assets originated in Europe and Asia.

Read the rest of this post...

Powerful statement on gay marriage by Iowa Senate majority leader

You have to watch this video. It's only 2 minutes long. It's possibly the most powerful video I've seen to date on the issue of marriage equality for gay couples.

How can we get politicians this courageous, this plain-spoken, at the national level?

Read the rest of this post...

What else would a baker in Turkey produce?

Baracklava to honor Obama's visit.

NOTE FROM JOHN: Ruh roh, now AP is going to sue the Turkish bakery too. Read the rest of this post...

Obama talks to the troops in Iraq

It's a nice speech. You can read it here, and watch it below.



The White House has also set up a neat slideshow of Obama's visit. This pic is probably my favorite:



The woman to Obama's right just kills me. Read the rest of this post...

Nice Greek boy raises over a million for Senate race in Illinois

I'm told I'd referred to Alexi Giannoulias, who will be running for Obama's Senate seat in Illinois in two years, as a "nice Greek boy." It's something my yiayia (that's "grandma" for you Americans) would have said, trilling her Rs all the while, so it's entirely possible.

I actually met Alexi at the Greek Independence Day event at the White House a few weeks ago (that's him, above, shaking Obama's hand), and he is a nice Greek boy. He's also a great politician, a good Democrat, and on his way to becoming the next Senator from Illinois (Cillizza at the Post is already calling Giannoulias the Democratic frontrunner in the race.) I hope you'll consider supporting Alexi's race by donating to his campaign via the box to the left.

From the Chicago Sun-Times:

He's still just at the "exploratory committee" stage, but Illinois Treasurer Alexi Giannoulias has already raised $1.1 million in the 28 days since he announced he was "exploring" a run for U.S. Senate.

He is eyeing the seat formerly held by his friend and basketball court partner, President Obama.

"It's actually unbelievable on two counts: The sum of $1.1 million, in and of itself, is unbelievable, but the fact that it's in the worst political fund-raising environment that, I think, any of us have ever seen, makes it all the more extraordinary and impressive," said political activist and fund-raiser Michael Bauer....

Giannoulias had hoped to raise half a million dollars after announcing his exploratory bid March 3 to make him appear the prohibitive favorite in next year's Democratic primary for the seat. The amount of contributions surpassed his expectations, he said.

Read the rest of this post...

MN-Sen: Al "Landslide" Franken pads lead, wins vote count

Markos explains the latest in the Republican's battle to stop the 59th Senator from being seated simply because he's a Democrat.

Today, Minnesota counted the absentee ballots the Minnesota Election Contest Court ordered counted, and not surprisingly, Al Franken's lead has swelled to 312 votes over Norm Coleman.

There are two remaining decisions for the ECC -- whether to count the 133 missing ballots and what to do about the 100 double-counted votes the Coleman campaign claimed (with zero evidence) were cast. More likely than not, those final two issues will be dispatched in Franken's favor, but worst case scenario, losing those two claims would net Coleman just 146 votes, clearly not enough to overcome Franken's lead. The "counting the votes" phase of this election is finally over, six months after the election. All that's left now is the appeals.

Read the rest of this post...

As Pentagon chief, Cheney proposed big Pentagon cuts

Just watch the Republicans complain about Secretary Gates' proposed changes to the Defense Dept budget. As Noah Shachtman at Wired explains, Cheney proposed huge cuts in weapon systems when he was secretary. And in fact, Cheney didn't just propose huge cuts. He oversaw huge cuts. As I've written before, Cheney's own bio, still on the DOD Web site, brags about the amount that Cheney cut the Defense budget. Cheney wanted to cut the number of US servicemembers by 27%, but ended up settling for 20%. He cut the Army by 25%. The Air Force by 22%. Had Obama cut defense that much, he'd be skinned alive by the Republicans. Maybe it's time the GOP started explaining why Dick Cheney hates the military. Read the rest of this post...

Arianna Huffington: Obama needs human-centric not bank centric view

She is so right in so many ways. It's not that the current team is bad or stupid, but they are the wrong people for this moment in history. They are wrapped up in an old argument where banks are at the center of the universe yet that is a pre-credit crisis mentality that does not fit the world today. Obama's economic team can craft an intelligent sounding argument and maybe they've even convinced themselves - as many Democrats had done in the Clinton years - that we are to worship at the alter of Wall Street banks who will deliver us to prosperity. This is not the case and the longer we continue down this path, the longer and more difficult it will be to move forward.

It's a good investment of your time to read Arianna's post in full. Maybe one day soon, Obama will get around to engaging in a discussion with the other Democrats instead of the old school team who are yesterday. One can hope, at least. Read the rest of this post...

D.C. Council Votes to Recognize Other States' Gay Marriages

Of course I'm glad. I just worry that someone, somewhere in the great gay agenda, better be prepared to defend this sudden string of victories.

The D.C. Council voted today to recognize same-sex marriages performed in other states, on the same day that Vermont became the fourth state to legalize same-sex unions.

Domestic partnerships are already legal in the nation's capital. But yesterday's vote, billed as an important milestone in gay rights, explicitly recognizes relocated gay married couples as married.

Read the rest of this post...

GOP civil war continues in Virginia

Couldn't happen to a nicer state.

Ousted Virginia Republican leader Jeffrey M. Frederick said Monday he will probably run for party chairman again in May, setting up another clash with the GOP's gubernatorial nominee, Robert F. McDonnell, as Republicans struggle to unite for the November election.

Frederick said in an interview that he does not think the party's leaders, McDonnell among them, will be able to turn around years of Republican losses in Virginia.

Joe has written about this nutjob before (he's the guy who tried to link Obama to bin Laden). He epitomizes the worst in the Republican party. He also epitomizes pretty much every single one of the GOP's current leadership, political (on the Hill) and intellectual (FOX News and Limbaugh). Angry, extreme, out of touch, and only interested in winning - not in helping the country move forward. Read the rest of this post...

Actor Kal Penn hired by WH

Aha, and my friends thought I was nuts when I said I saw him walking into my new condo building a few weeks ago.

Penn told EW: "I'm going to be the associate director in the White House office of public liaison. They do outreach with the American public and with different organizations. They're basically the front door of the White House. They take out all of the red tape that falls between the general public and the White House. It's similar to what I was doing on the campaign."

Penn, who starred in "Harold and Kumar," and is a regular on "House," is unique among celebrities interested in politics - he is actually giving up his career (or at least is putting it on hold) in order to support the political cause he believes in. He quit House in order to work for Obama. That's pretty wild, and damn laudable. I have no problem with celebrities getting involved in politics - on the contrary, Hollywood has been a great help on so many progressive issues, and with so many progressive candidates. But I can't recall anyone going this far in their commitment to a political cause, or a politician - as to actually quit a hit TV show. Remember, he's also taking a huge pay cut. I'm seriously impressed. Read the rest of this post...

BREAKING: Gay marriage now legal in Vermont

Holy crap.

This is huge. On many levels. First, Iowa and Vermont both making marriage legal within days of each other, that creates the sense of a trend. Second, in Vermont, the legislature made marriage legal. Not the courts, the legislature. Why does this matter? Because Republicans have been arguing for years that the problem with gay marriage is that THE COURTS are making these decisions, rather than the people via their elected representatives. Well, today the people made the decision to legalize same-gender marriages through their elected representatives. What will Republicans say now? We've met their test, and passed. Either the GOP simply hates gays, or they need to admit that we won, fair and square, even by the rules they set down.

From the Human Rights Campaign:

The state Senate voted 23-5 and the House of Representatives voted 100-49 to override Gov. Jim Douglas’s veto, making Vermont the first state to recognize marriage for committed lesbian and gay couples through the legislative process. The Vermont legislation goes into effect September 1.

“This historic vote in the Vermont legislature reminds us of the incredible progress being made toward equality. Less than five years ago, lesbian and gay couples began marrying in Massachusetts. Now, with the Iowa court decision last Friday and today’s vote in Vermont, there will be four states recognizing the right to marry for loving, committed lesbian and gay couples,” said Human Rights Campaign President Joe Solmonese. “We congratulate Senate President Pro Tem Peter Shumlin, Speaker of the House Shap Smith, the other legislators who voted for marriage, the Vermont Freedom to Marry Task Force, and MassEquality for ensuring that all couples will now enjoy the freedom to marry in Vermont. This is a law that will strengthen families and give meaning to the promise of equal rights for all.”...

Vermont becomes the first state to recognize marriage equality for lesbian and gay couples through legislation. California’s legislature has twice passed similar legislation that was vetoed and not enacted into law. Vermont is the fourth state, after Massachusetts, Connecticut, and Iowa, to extend marriage equality to committed lesbian and gay couples. Iowa’s state supreme court unanimously ruled on April 3, 2009 that the state constitution guarantees lesbian and gay couples the equal right to marry.

New York recognizes marriages by lesbian and gay couples legally entered into in another jurisdiction. California recognized marriage by lesbian and gay couples between June and November of 2008, before voters approved Proposition 8, which purports to amend the state constitution to prohibit marriage equality. The Proposition 8 vote has been challenged in court; a decision by the state supreme court is expected by June.

Lesbian and gay couples do not receive federal rights and responsibilities in any state. To learn more about state by state legislation, visit here.

Read the rest of this post...

BREAKING: Obama lands in Iraq

Interesting. Read the rest of this post...

House investigating whether Obama admin. is circumventing bailout compensation restrictions

Wash Post:

A congressional oversight committee opened an investigation yesterday into whether the Obama administration is circumventing a law that limits lavish pay for executives at firms benefiting from the $700 billion federal bailout....

The investigation comes two days after The Washington Post reported that the administration has engineered new bailout programs in a way that it believes will allow firms benefiting from the initiatives to avoid congressional restrictions that curb executive pay and require companies to turn over ownership stakes to the government.

Some experts and congressional staff have questioned the legality of that approach.

A few points. First, a Democratic Congress is providing oversight three months into a new Democratic administration. When did the Republican Congress ever investigate anything that the Bush administration did. Ever? So, regardless of whether we like Democrats investigating Democrats, this is a good thing for our democracy and for our country's general well-being.

Second, this issue, which we reported on a few days ago, about the administration supposedly looking for ways to circumvent the recently passed pay restrictions, is all the more evidence that someone inside the executive branch simply does not get it. Was the recent blow-up over AIG not evidence enough of how strongly the public feels on this issue?

And finally, Geithner (and Summers). Part of the reason - probably the main reason - people are willing to believe stories like this, and that Congress is willing to investigate stories like this even when they concern our own administration, is because of the presence of Geithner and Summers. People would likely give Obama the benefit of the doubt. Not likely with the other two. They will continue to be a lightning-rod for trouble. Read the rest of this post...

Judging Obama's foreign trip

Chris Cillizza at the Washington Post wrote the following about new polls showing the American people approving of Obama's trip abroad:

Before the White House begins celebrating the political success of this trip, however, it's important to remember two caveats.

First, former president George W. Bush was so despised by much of the world that an improvement in the way that America is seen by the rest of the world was almost inevitable once he left office. (The Post/ABC survey showed a whopping 61 percent of voters believed that America's image in the world had worsened under Bush.)

Second, first appearances are not necessarily lasting. Remember back to the campaign when Obama received rave reviews for his tour of Europe including over the moon analysis of his address to several hundred thousand people in Berlin.

But, the trip quickly turned sour -- from a political perspective -- as Sen. John McCain (R-Ariz.) used the footage of thousands of cheering Germans to paint Obama as an empty celebrity, a tag that stuck for the better part of a month and slowed the Democratic candidate's momentum.

Okay, first off, just because George Bush was an idiot doesn't mean that the American people might not sincerely like the way Obama is handling himself as president. It's not at all clear that the world would have been happy had we elected John McCain president - and I'll bet they were laughing along with us at Sarah Palin. So let's not chalk George Bush up as some kind of anomaly. And even if he were, which he isn't, that doesn't preclude Obama from actually being good, and people recognizing that fact.

Second point, yes, McCain pulled the celebrity card on Obama and made his previous successful trip abroad into a bad thing. But what are we really saying here? That we should be careful with polls showing the public approving of Obama's handling of his foreign trips because the Republicans might smear Obama and trick the public into thinking the trips were really bad? Well, sure, they might. But that might happen any day, on any issue. Republicans lie. It's in their nature. (See our Rick Warren post below). That doesn't mean that when Democrats shine, we shouldn't give them credit. Read the rest of this post...

Apparently you have Rick Warren scared. He's lying again.

The last time we heard form our friend Rick Warren, the evangelical pastor Obama invited to give the swearing in at the inaugural, Warren was claiming that he never compared gay marriage to pedophilia and incest. Uh huh. Well, Warren went on Larry King, and the lies were flying. Even more so than last time. I think Mr. Warren is hurting from having his homophobia exposed. Though I'm not sure a religious "leader" should be resorting to lying in order to clear his record.

First, Warren told King that he never compared gay marriage to incest and pedophilia:

I was asked a question that made it sound like I equated gay marriage with pedophilia or incest, which I absolutely do not believe.

Yeah, THE QUESTION sounded like Warren was equating them. Let me share with you THE QUESTION, and then Warren's answer

Steven Waldman: One controversial moment for you in the last election was your support for Proposition 8 in California.

Rick Warren: Eight, yeah, yeah.

Steven Waldman: A couple questions about that. First, just to clarify, do you support civil unions or domestic partnerships?

Rick Warren: [long answer about civil unions]

Steven Waldman: What about like partnership benefits in terms of insurance or hospital visitation?

Rick Warren: Not a problem to me. But the issue to me is, I’m not opposed to that as much as I’m opposed to the redefinition of a 5,000-year definition of marriage. I’m opposed to having a brother and sister be together and call that marriage. I’m opposed to an older guy marrying a child and calling that a marriage. I’m opposed to one guy having multiple wives and calling that marriage.

Steven Waldman: Do you think, though, that they are equivalent to having gays getting married?

Rick Warren: Oh I do.

Yeah, did you catch how the QUESTION tried to TRICK Rick Warren into equating gay marriage with pedophilia and incest? The question was so tricky, in fact, that the questioner never even vaguely mentioned incest or pedophilia until Warren himself brought it up, and shocked, the questioner asked, do you really believe that they (incest and pedophilia) are equivalent to gays getting married - and Warren responded "Oh I do."

So Rick Warren is now lying, again about the details of an interview that any of you can watch yourselves online.

But it gets better. Warren also is now claiming that he was never an anti-gay-marriage activist, and in fact, the only statement he ever made about Prop 8 was to send a "note" to his congregation:

I never once went to a meeting, I never once issued a statement, I never once even gave an endorsement in the two years Prop 8 was going.

The week before the vote, somebody in my church said, 'Pastor Rick, what do you think about this?' And I sent a note to my own members that I actually believe that marriage is really should be defined, that definition should be say between a man and a woman, and then all of a sudden out of it they made me something that I really wasn't.

In fact, Warren didn't just sent some words on a "note" to his parishioners. He created a public video message urging people in California to vote for Prop 8. And again, surprise, heres the video:



And in the video - which is clearly not just a "note" - it's clear that Warren isn't responding to some question, or giving a generic answer to his views on gay marriage. The video is about Prop 8, Warren brought Prop 8 up all on his own (there was no "question" he was responding to), and he decided to use the very public video to urge Californians to vote for Prop 8. That makes you an anti-gay-marriage activist, Rick. It also makes you a huge liar.

So why did Rick Warren outright lie - again - twice - on Larry King about what he has said and done on gay issues? That's between Rick Warren and his God. Whoever that God is. Because if Rick Warren were worshipping my God, my Lord wouldn't be very happy about one of his "leaders" outright lying, twice, to millions of Americans during Holy Week. Read the rest of this post...

Tuesday Morning Open Thread

Joe is off exploring the Grand Canyon today, so you're stuck with me.

You probably saw the news yesterday that Defense Secretary Gates was going to be not just cutting some defense programs and increasing others, but proposing a total restructuring of our entire military - something the Republicans will likely flip out over, since they really do enjoy their big toys (come on Aaron and Lindsey, you know you do). What's interesting, of course, is that Gates isn't just Obama's defense secretary. He was George Bush's defense secretary. So we basically have George Bush's war guy proposing this restructuring. Nixon just went to China, folks. And Barack Obama orchestrated the entire thing by keeping Gates on in the cabinet.

Not too shabby, this new president. Read the rest of this post...

Is the Geithner-Summers plan even worse than expected?

And yes, even lower than the already low expectations. One might ask how the Obama team could deliver such a potentially lucrative deal for Wall Street and a bad deal for taxpayers, but Summers history of making millions on Wall Street may provide some guidance. I voted for change and I wouldn't mind seeing some on Wall Street in stead of this same old, same old. More from Columbia economics professor Jeffrey Sachs:

Here's how. Consider a toxic asset held by Citibank with a face value of $1 million, but with zero probability of any payout and therefore with a zero market value. An outside bidder would not pay anything for such an asset. All of the previous articles consider the case of true outside bidders.

Suppose, however, that Citibank itself sets up a Citibank Public-Private Investment Fund (CPPIF) under the Geithner-Summers plan. The CPPIF will bid the full face value of $1 million for the worthless asset, because it can borrow $850K from the FDIC, and get $75K from the Treasury, to make the purchase! Citibank will only have to put in $75K of the total.

Citibank thereby receives $1 million for the worthless asset, while the CPPIF ends up with an utterly worthless asset against $850K in debt to the FDIC. The CPPIF therefore quietly declares bankruptcy, while Citibank walks away with a cool $1 million. Citibank's net profit on the transaction is $925K (remember that the bank invested $75K in the CPPIF) and the taxpayers lose $925K. Since the total of toxic assets in the banking system exceeds $1 trillion, and perhaps reaches $2-3 trillion, the amount of potential rip-off in the Geithner-Summers plan is unconscionably large.

Read the rest of this post...

UK to promote trade in program for auto industry

France has successfully (for a while) used such a program in the past and Germany is now offering one. Now it's the UK who will offer substantial money to trade in an old car in order to spur growth with new car sales. Used car sales have been much more active than new car sales with many people buying something they can afford. Car dealers can make a better profit from the used cars as well so the trends for new car sales are not going in the right direction.

In France the plan to promote new cars worked for a period of time and as soon as the money stopped, so did sales. Assuming the economy bounces back, dealing with a weakened car industry for some time is not catastrophic, but the question is whether the UK (or US or EU) will bounce back quickly. There's very little to suggest the recovery will be fast or substantial and much more realistic to assume the recovery will be slow and small. But that's another discussion for another day in this recession. Today it's all about selling the new.

The motor industry and lobby groups are hoping this month's budget will include a scrappage scheme, under which car owners are given a financial incentive of about £2,000 to swap their old vehicle for a new greener model.

Treasury officials have told the industry they are seriously considering including such a stimulus in the budget a fortnight tomorrow although ministers publicly insist that no decision has been taken.

A scrappage scheme in Germany - which offers car owners €2,500 (£2,263) for getting rid of any vehicle over nine years old - has attracted more than half a million buyers, with sales soaring 40% there in March.

Read the rest of this post...

Study: mutual funds too often vote with executives

They have a vote but too bad they are part of the problem. They're supposed to be working for their clients but that does not necessarily appear to be the case. This is a tight knit group that sticks together too often. Maybe naming and shaming will help but then again, this is a group that loves each other more than they appreciate their customers. MarketWatch:

A study published Monday analyzed the votes made by mutual fund companies in the past two years, and named the firms that most often sided with management in pay votes.

AllianceBernstein Holding, Barclays Global Investors, a unit of Barclays PLC, Ameriprise Financial Inc., and Bank of America Corp. fund arm Columbia Management were the four firms with the most pro-management voting records, according to the study.

"The worst ranked funds are accomplices in the overpayment of CEOs," said Gerald McEntee, president of the American Federation of State, County and Municipal Employees. "They should be protecting the assets of their clients by demanding that CEOs get paid for performance, rather than supporting runaway pay."

Read the rest of this post...

Utah, what's next?

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