Chinese politician: China has $1.5 trillion of 'hidden' debt

If a politician in China is saying this, you have to wonder how much worse it really is. Overcoming a financial hurdle like this won't be easy, even for China. Reuters:

Billions of dollars of debt racked up by local Chinese governments during their investment sprees are likely to sour as the projects they finance near completion, Yin Zhongqing, a prominent Chinese lawmaker, said this week.

In an interview with Reuters Insider, Yin said local governments had incurred at least 10 trillion yuan ($1.5 trillion) of "hidden" debt, which they have concealed by creating thousands of investment vehicles that serve as borrowers.

Yin said it is not yet clear which loans will sour because they do not have to be repaid until the projects are completed.

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Jindal looks even worse in oil spill report

It didn't seem possible to look even worse than the $200 million waste of money, but in the final report, Jindal somehow manages to do it. Remember when he was talked about as a potential 2012 presidential candidate? Anything can happen in politics, but that looks much less likely today. NY Times:

Jockeying by Gulf Coast officials for limited oil spill-fighting resources and the construction of a massive chain of sand barriers to block oil offshore — a key priority of Gov. Bobby Jindal of Louisiana — did little to protect the coastline and often hampered the more effective actions of federal responders to the 2010 oil spill, according to the final report by the presidential panel investigating the spill.

The report, released on Tuesday, also details new allegations that Mr. Jindal deliberately withheld the location of an area of oiled marsh from the Coast Guard that he used as a backdrop for television interviews.

“Coast Guard responders watched Governor Jindal — and the TV cameras following him — return to what appeared to be the same spot of oiled marsh day after day to complain about the inadequacy of the federal response, even though only a small amount of marsh was then oiled,” the report stated, citing an interview with a Coast Guard official. “When the Coast Guard sought to clean up that piece of affected marsh, Governor Jindal refused to confirm its location.”

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Goldman Sachs reveals $5 billion more in losses

If they're trying to make a mockery of the US system of regulations and reporting, they're doing a great job. Believe the books at your own risk. Financial Times:

Goldman Sachs has revealed details of about $5 billion in investment losses suffered during the crisis for the first time this week, in a move that will deepen the debate over companies’ financial disclosures.

The figures, issued as part of internal reforms aimed at silencing Goldman’s critics, show that the bank suffered $13.5 billion in losses from “investing and lending” with its own funds in 2008.

But Goldman’s regulatory filings and its executives’ comments to investors at the time pointed to about $8.5 billion of losses arising from its investments in debt and equity, as markets were rocked by the turmoil.

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This cat seriously hates Justin Bieber

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Maine's Governor on NAACP: 'Tell 'em to kiss my butt'

First, a little background:

Gov. Paul LePage has declined invitations to attend Martin Luther King Jr. Day celebrations in Portland and Bangor next week, increasing concern among NAACP leaders that their interests won't be represented in the new governor's administration.

When LePage, a GOP Teabagger, was questioned about it, his response was "Tell 'em to kiss my butt."

Classy guy that Paul LePage. It's going to be a long four years up there in Maine:

This guy is really going to make Republicans proud.

Hat tip, Rita (my mother.) Read the rest of this post...

Top DOD official says MLK would have supported wars in Iraq/Afghanistan

Wow.

Although the Rev. Martin Luther King, Jr. is best remembered by the American public for fighting against racial discrimination, he was also an outspoken opponent of war and violence, most notably of the war in Vietnam. A top Obama administration official at the Department of Defense, however, argued Thursday that if King were alive, he would support the wars in Iraq and Afghanistan.

At a Pentagon commemoration of King's accomplishments, DOD General Counsel Jeh Johnson said that today's wars are in line with the reverend's teachings.

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Palin announces speaking engagement at gun-related gathering less than 1 week after assassination rampage in Tucson

The woman is sick. In her twisted mind, this is yet another chance to do an "I gotcha!" on people upset about the assassination attempt against Congresswoman Giffords, and the assassination of a federal judge, a nine year old girl, and several others last Saturday in Tucson.

The woman is sick. She knows that announcing a keynote at a gun-related event, in the middle of the firestorm over her incendiary "targeting" of the congresswoman who would end up with a bullet through her brain, will be perceived as totally inappropriate by everyone but the violence/eliminationist-fetishing wing of the GOP she represents. So in Palin's world, it's a win-win, with absolutely no consideration whatsoever for the dead, the overall problem of violence in our culture, or the consequences.

The woman is sick. And she's the most popular woman in the Republican party. Read the rest of this post...

Krugman: 'Can Europe be saved?'

Paul Krugman has an excellent, major magazine piece at the Times on the prospects for Europe and the euro, as both climb out of crisis, painfully and slowly. Its title is "Can Europe Be Saved?" and the title is apt. The answer is not necessarily Yes.

Almost everyone knows something about the European crisis, but most of us don't know all of the major pieces. As a result we're subject to taking off half-cocked (or at least, half-informed) in one direction or another. Or, we subject to being made half-cocked by others with domestic agendas.

The prime candidate for the latter is the shouters from the Right, Middle, and Pretend Left, who scream in unison, "Don't be like Greece! Deficits will kill you!" You can hear the same group shouting, "Be like Ireland — cut your spending! (And leave those bankers al-o-o-ne!)"

The agenda, of course, is obvious: "We're the Elite, so you take the hit." The facts about Europe are against them, but if the facts aren't obvious, these arguments are hard to counter.

Enter Mr. Krugman, the facts, and his excellent article. It's all there:

• The history of the formation of the European Union
• Its political goals (make the next Franco-German war impossible) and its monetary ones
• The benefits of having a euro, and the traps
• How those traps were sprung
• Why the problem in Greece is different from Ireland, which is different from Latvia, and so on

And finally, what the likely outcomes are. Please do read it. Krugman is always easy, a clear writer, and whether you end up agreeing or disagreeing, you'll at least come away understanding what he says.

Here's just a bit from the end, the likely outcomes section. He sees four: "toughing it out; debt restructuring; full Argentina; and revived Europeanism."

Toughing it out: Troubled European economies could, conceivably, reassure creditors by showing sufficient willingness to endure pain and thereby avoid either default or devaluation. The role models here are the Baltic nations: Estonia, Lithuania and Latvia. These countries are small and poor by European standards; they want very badly to gain the long-term advantages they believe will accrue from joining the euro and becoming part of a greater Europe. ... [As a consequence] the Baltics have experienced Depression-level declines in output and employment. ... It says something about the current state of Europe that many officials regard the Baltics as a success story. I find myself quoting Tacitus: “They make a desert and call it peace” — or, in this case, adjustment. Still, this is one way the euro zone could survive intact.

Debt restructuring: At the time of writing, Irish 10-year bonds were yielding about 9 percent, while Greek 10-years were yielding 12½ percent. At the same time, German 10-years — which, like Irish and Greek bonds, are denominated in euros — were yielding less than 3 percent. The message from the markets was clear: investors don’t expect Greece and Ireland to pay their debts in full. They are, in other words, expecting some kind of debt restructuring, like the restructuring that reduced Argentina’s debt by two-thirds. ... Frankly, I find it hard to see how Greece can avoid a debt restructuring, and Ireland isn’t much better. The real question is whether such restructurings will spread to Spain and — the truly frightening prospect — to Belgium and Italy[.]

Full Argentina: Argentina didn’t simply default on its foreign debt; it also abandoned its link to the dollar, allowing the peso’s value to fall by more than two-thirds. And this devaluation worked: from 2003 onward, Argentina experienced a rapid export-led economic rebound. ... As Barry Eichengreen of Berkeley pointed out in an influential 2007 analysis, any euro-zone country that even hinted at leaving the currency would trigger a devastating run on its banks, as depositors rushed to move their funds to safer locales. ... But Argentina’s peg to the dollar was also supposed to be irreversible, and for much the same reason. ... Nothing like that has happened in Europe — yet. But it’s certainly within the realm of possibility, especially as the pain of austerity and internal devaluation drags on.

Revived Europeanism: In early December, Jean-Claude Juncker, the prime minister of Luxembourg, and Giulio Tremonti, Italy’s finance minister, created a storm with a proposal to create “E-bonds,” which would be issued by a European debt agency at the behest of individual European countries. Since these bonds would be guaranteed by the European Union as a whole, they would offer a way for troubled economies to avoid vicious circles of falling confidence and rising borrowing costs. On the other hand, they would potentially put governments on the hook for one another’s debts — a point that furious German officials were quick to make. The Germans are adamant that Europe must not become a “transfer union,” in which stronger governments and nations routinely provide aid to weaker. ... Europe doesn’t seem ready to take even that modest step.

While the Professor doesn't dig into the politics of all this, those aspects are obvious, and many are ugly.

These include — the orderly fall of governments; the disorderly revolt of the masses at having to paper over the debt of bankers and speculators with their pain; and the continent-wide awareness that it's the Germans of all people, the perceived Captain Evil of the first half of the 20th century, who appear to be heartlessly profiting.

A bad and bitter soup, but a terrific education and read.

GP Read the rest of this post...

Biden names CEO of DLC as his new chief of staff

Today, Vice President Biden announced his new Chief of Staff: Bruce Reed, who ran the "centrist," (but really conservative) Democratic Leadership Council for ten years before heading up the National Commission on Fiscal Responsibility and Reform (a.k.a. the Catfood Commission.)

Yep. Read the rest of this post...

Wall Street traders still make more money than brain surgeons or 4 star generals

This is not quite the progress people expected with Wall Street reform. Wall Street traders provide little, if any, value to society so until these dynamics change, we should not expect a different result. Just as Washington tweaked the system to encourage this current situation, Washington needs to encourage smart students to take up professions that actually provide a value to society. The country certainly doesn't need more traders who have figured out how to game the system though we probably need more brain surgeons. Bloomberg:

Wall Street traders discouraged by declining bonuses this month can take solace: They still earn much more than brain surgeons and top U.S. generals.

An oil trader with 10 years in the business is likely to earn at least $1 million this year, while a neurosurgeon with similar time on the job makes less than $600,000, recruiters estimated. After a decade of deal-making, merger bankers take home about $2 million, more than 10 times what a similarly seasoned cancer researcher gets (see table below).

The pay gap between finance and other professions widened between the 1980s and 2006, exceeding the record set before the Great Depression, according to a 2009 study by Thomas Philippon, a professor at New York University’s Stern School of Business. After the 2008 financial crisis, Wall Street started paying a larger portion of bonuses in stock and restricted cash. Yet there’s little sign the gap with Main Street is narrowing.

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Huff Post: Mixed support for increased gun control

Mark Blumenthal at the Huffington Post has a good article (with lots of charts and graphs) showing the history of the support for various aspects of gun control, in the period leading up to Tucson. None of the data reflects the post-Tucson reaction. Blumenthal:

Will the shooting of Rep. Gabrielle Giffords (D-Ariz.) and 20 others in Arizona turn public opinion in favor of tougher gun control measures? The evidence is mixed at best. While public opinion has generally turned against stricter gun-control measures over the last twenty years, majorities continue to support greater restrictions on the sort of semi-automatic weapon used in the Tucson shootings.

For the last 20 years, the Gallup organization has tracked whether Americans "feel that the laws covering the sale of firearms should be made more strict, less strict or kept as they are now." As Gallup explained in a report last November, that support has declined gradually over the last two decades to the point that a "record low 44%" now support stricter gun laws, while a majority prefer laws that are kept as they are currently (42%) or made less strict (12%).

The chart that goes with that statement is this one. Note the steady decline in the dark green "More strict" line:

On the other hand:

[M]ajorities still favor bans on the sort of semi-automatic gun allegedly used by Jared Lee Loughner in Arizona. The precise number depends on the wording of the question (and possibly on timing). But, as the following table shows, three organizations have found majority or plurality support for bans on semi-automatic weapons in recent years.

And this is worth your time:


The top (NBC News) line shows declining, but still (mostly) majority support for the ban.

I found the last two lines, the two ABC News samples, revealing (though of what I'm not sure). Note that they were taken with the same sample size at the same time. The only apparent difference is in the addition of an explanation. That explanation reduced support for a ban on assault weapons by 12 points.

Did the explanation lessen the force of the phrase "assault weapons"? If so, it's a lesson for you nascent "perception is reality" PR & MBA freaks out there. Stay in school. [Update: One commenter noted that the phrase per se doesn't appear in both questions, just the concept. Fair point.]

As Blumenthal says, it will be interesting to see how Tucson changes these numbers.

One contributing factor in any change of public opinion may be whether Democrats choose to advocate for specific new gun control measures. Without prominent leaders pushing for a change, it is hard to imagine a reversal of this decades long trend.

Leadership we can believe in. For what it's worth, here's your polling baseline.

GP Read the rest of this post...

Socarides: 'the bottom line is the government continues to oppose full equality for its gay citizens'

Last night, John reported on AMERICAblog Gay that the Obama administration is still defending DOMA in the courts. The President and his Department of Justice don't have to do it, but they are. And, that's just wrong. I don't think this counts as "evolving."

From Ben Smith:

Gay groups are furious with a Justice Department brief defending -- though in quite narrow terms -- the Defense of Marriage Act, which Candidate Obama, unlike even his Democratic rivals, had pledged to repeal in full.

"DOMA is supported by rationales that constitute a sufficient rational basis for the law. For example, as explained below, it is supported by an interest in maintaining the status quo and uniformity on the federal level, and preserving room for the development of policy in the states," says the government's brief (.pdf) in two cases in the U.S. Court of Appeals for the First Circuit. The brief focuses solely on the virtues of keeping the federal law while state's experiment, and not the underlying question of marriage.

The half-heartedness of that defense didn't offer much solace to activists who -- despite the Justice Department's traditional role defending federal laws -- are demanding that Obama return to the full support for same-sex marriage that he advocated in the 1990s.

"There are some improvements in tone in the brief, but the bottom line is the government continues to oppose full equality for its gay citizens," said Equality Matters chief Richard Socarides in an email. "And that is unacceptable."

Completely unacceptable. And, this is going to be a problem for the reelection campaign. Soon-to-be Campaign Manager Jim Messina is going to have to figure this one out. The President is going to have to be clear about his full support for marriage equality. Read the rest of this post...

EPA revokes license for mountain top coal mining project

Now *that* is change we can believe in. It's not going to be a popular decision, but doing the right thing isn't always popular. The Republicans are going to kick and scream but they always do. It's good to see someone is finally taking a stand against the pollution left behind during these mining projects. West Virginia is a beautiful part of the country so protecting it's nature is long overdue.

The Obama administration has vetoed one of the biggest coal projects in the US in a historic decision against the destructive practice of mountaintop removal mining.

The Environmental Protection Agency said it was revoking the permit granted to the Spruce Number One mine in West Virginia, which would have involved blasting the tops off mountains over more than 2,200 acres, because it would inflict "unacceptable" damage to surrounding valleys and streams.

The agency said it was the first time it had revoked a previously issued permit in 40 years, but it said the action was warranted because the environmental damage was truly unacceptable.

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Here's how the Tea Party showed respect for our democracy

Visit msnbc.com for breaking news, world news, and news about the economy

Remember, they don't support violence and they love our democracy. Read the rest of this post...

Berlusconi may have legal problems

Enacting new laws to protect one person probably sounded like a good idea to the Berlusconi supporters, but the Italian courts are less supportive. It's easy to look back at the impeachment proceedings against Bill Clinton and see how they were politically motivated and a waste of time. At the same time, when you look at other politicians, you wonder how they can get away with certain actions. Either way, it's doubtful that any legal challenges will end the political career of Berlusconi. CNN:

Italy's Constitutional Court Thursday struck down key parts of a law that would protect Prime Minister Silvio Berlusconi from prosecution.

The law was designed to halt criminal proceedings against top government officials for 18 months on the grounds that they are too busy to appear in court.

But Italy's top court ruled that 18 months is too long, and that judges, not politicians, should be the ones to determine if a defendant is free to appear in court.

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Nearly 500 confirmed dead in Brazilian mudslides

Unfortunately the death toll is expected to rise. The Guardian:

Nearly all of those killed were buried alive when avalanches of mud and debris smashed down on to their homes in the early hours of Wednesday. At least 13,000 people have been left homeless by the disaster, which focused on three towns in the mountains north of Rio de Janeiro.

"It is a very dramatic moment. The scenes are very powerful, the suffering is very visible and the risk is very serious," Brazil's president, Dilma Rousseff, said after a brief visit to the affected region.

Teresópolis, a bucolic tourist town about 60 miles north of Rio, was one of the hardest-hit areas: by tonight, at least 200 deaths had been confirmed. Local authorities were preparing to erect floodlights in the cemetery in order to hold round-the-clock burials. The town's streets filled with pick-up trucks packed with fleeing residents, carrying mattresses, duvets and pets.

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