Nothing New Or Irregular About Bloomberg Bias

In this article that chronicles Italy, Spain, and Japan's failure to meet their emissions reduction targets under the Kyoto agreement, Bloomberg makes the egregiously biased, but often made, assertion that George Bush killed off the US's participation in the Kyoto Protocol: "U.S. President George W. Bush rejected the treaty."

There is simply no excuse for this mistake. If you know anything at all about this issue, you should know the basic fact that the US Senate ratifies treaties, and that it rejected the Kyoto Treaty 95-0 in 1999 when George W. Bush was Governor of Texas. This elementary fact is misrepresented probably 8 times out of 10 in the MSM. Just another drop in bucket of evidence of endemic bias, but if I were Chimpy Hitler I'd be smiling. After all, the media is giving him credit for a great move that he didn't even pull off! On one of the few occasions that the Great Sausage Factory actaully shows some sense and some balls at the same time, the media actually hands the kudos to him! Bo. Nan. Za. It doesn't get much better than that. I predict that when the history books get written, the Bushitler will be denied proper credit for saving us from this alarmist, multi-lateral, bureaucratic disaster. When the true extent of Kyoto's worthlessness becomes fully known over time, there is no way that the elites who guard our knowledge of the past will allow Bush to receive credit for keeping the US out of the treaty, and credit will revert back to the Senate. Ultimately, bias will serve the cause of truth.

Sometimes You Get a Two-fer

The retirement of the dreadful and embarassing Trent Lott is welcome news in itself, but the ascension into the number two leadership slot of one of the truly good guys and actual talents in the Senate, Jon Kyl, makes this a two-fer.

Abu Dhabi...Suckers?

The government of Abu Dhabi has finally decided what it wants in return for all that oil it sent to us in recent times. Strangely, what it wants is something highly intangible - Bob Rubin's skills at running a bank. At the time they sent us all this wonderful oil - that heats/cools our homes and allows us to travel comfortably and cheaply, among many other enjoyable uses - they weren't fully decided on what they wanted in return. We offered them airplanes, food, computers, and cars, but they took an IOU instead. Well, yesterday they cashed in that IOU for Bob Rubin's management acumen. Others seem to be quibbling over the amount of oil we got for our Bob Rubin, saying we took too little oil given the amount of Bob we are handing over. On whole though I think it is a pretty good trade, that oil kept me toasty warm last night and is going to get the entire Baseball clan to the in-laws' for Christmas. It is as yet unclear what Bob Rubin will do for the government of Abu Dhabi and, in the long run, it could be not much at all.

Team Rudy Fumbles Ball to Fred

Given the composition of his economic policy team, I thought that Rudy was intent on running as the obvious taxpayers' champion. Alas, Fred Thompson has stolen a beat on Rudy. Thompson's vision is impressive, and this development represents a serious fumble on the part of Rudy's campaign. Unless, of course, Rudy goes over the top of Fred and ups the ante, although it is hard to see what proposal could top this and yet still appear politically realistic. Fred might have checkmated Rudy on this issue and all Rudy can do is me-too him and focus on other strengths. Like I said, a fumble for Team Rudy.

Does the Government Supersize Poor Kids?

Is this why poor kids are disproportionately fat?

Florida Screws Up Easiest Asset Management Task

Someone, or someones plural, at the state of Florida's treasury got greedy, just like any number of financial institutions and investors, and tried to scratch out a little extra money from the state's short term funds. Turns out they bought riskier paper than they thought. At least that is the tenor of the first 99% of the reporting. Notice how these funds merely "consist" of default-prone financial products, not that they were willingly purchased. Nope, they just magically consist or were sinisterly placed there - the article tells us clearly who did the selling, Lehman Bros., but subtley avoids saying that anyone did any buying. Not until you get to the last sentence do you hear the other side of the story: ``The state appears to have breached the trust of the investors by putting money in new kinds of debt its managers didn't fully understand, in their search for higher yields,'' Mason said.

It is inconceivable that Florida's financial administrators did not know what they were buying. More likely is that they were cutting corners or seeking personal advancement on the taxpayers tab. But when you cut corners on a $42 billion dollar base, paying the piper is still expensive. Sadly, this isn't rare. Managing short term funds is easy, but the government manages to screw even that up. But hey, sign me up for that National Health Care System and that Save the Earth from Global Warming stuff.

UPDATE: The state has suspended further withdrawals. Wow, imagine if you had money in what was supposed to be a super-safe, short term money market fund and the manager made risky bets, lost a good chunk of your money and refused to let you fire them by withdrawing your money. It would be enough to get you enraged, enough for you to decry markets and free enterprise, enough for you to demand regulation by the government...oh wait. One thing I don't get is this Stipanovich guy, representing the state, says "If we don't do something quickly, we're not going to have an investment pool." My answer, "So what." It is clear that the state wasn't all that good at managing the pool and failed its customers. Why then should they be allowed to continue in that role? What right do they have to operate this pool after its failure? Counties and municipalities can readily go out and find asset management options, why do they need the state? Let the state pool liquidate, I say.

More of That Oil That Is Not To Be Found

Deepwater and ultra-deepwater areas of the central Gulf (of Mexico) were auctioned off recently to oil & gas exploration operators. The US Minerals Management Service received record amount of interest for lease sale 205. The MMS estimates developing these areas could result in production of 1.3 billion barrels of oil and 5.2tcf of natural gas. But remember folks, there is no more oil left to be found! (Read here to find out why we are finding all this new oil when there is no more oil left to be found.)

Another Vacation, Another Survey of Liberal Paradise

I love when I travel around this great country and partake of the service economy in such a way that those providing service to me wear name tags with their name and hometown. It is a way to start a good conversation, but it also gives you an opportunity to look at how citizens view what their politicians have wrought for them. Naturally, people move for alot of reasons - the weather, jobs, spouses, etc., but whenever I chat with a native of the tri-state paradise of NY, NJ, and CT that has moved away, these excuses are the minority. Usually I hear, "taxes to high", "schools suck", or "too much crime." Sure enough, on my Thanksgiving foray down to the lovely Piedmont Triad area of North Carolina, I met Jackie the hair salonist from Jersey City, NJ. "Too expensive, taxes are crazy" was her retort to my standard question "Why did you leave?" Then there was Bill, the landscape contractor orginally from Long Island. "Raise my kids on Long Island? Forget it" was his reply. No surprise here. South and West.

No Wonder Chuck Prince Got Fired

This is GREAT! Follow along. Big Bank A helps Investor B buy Company C by arranging very large loans that are favorable to B. So favorable in fact that Investors X, Y, and Z that have heretofore bought these loans from A have reconsidered and stopped buying. So A is stuck with the loan on its balance sheet and now has to figure out how to mitigate the risk. So what do you do if you are A? How about make additional loans to B so that B can buy those assets from A at a 5% discount!

Here's my question? If no one bought the first round of loans and holding the loans is unacceptable practice, will the second round of loans be offered to B at a discount and will that sale be financed by a third round of loans? And if no one bought the first and second round of loans...

And why precisely does financial capitalism have a bad reputation?

Petty Tyranny Dampens Loonie Windfall

Canadians are going loony shopping in the US with their newfound purchasing power stemming from the recent steep appreciation of the Canadian dollar (two yuk-yuk puns in that sentence!). Thank God, because ya know, the consumer is tapped out here in the US (consumers other than consumers who buy PCs and laptops that is). Our fine friends from the north have to be careful though. Whatever they do, no matter how many thousands of dollars they can save, they ought not to buy a car down here. The Canadian government, in its wisdom, has declared that all cars licensed to operate in Canada must have an anti-theft immobilizer, and not just any immobilizer, but a very specific one. No matter that actual Canadians don't seem to mind that their cars don't have such a device. Now I have no bloody idea why Canadians need such a device on their cars to such an extent that the government has mandated them, but I am pretty sure that Canadians are intelligent enough to assess their own risk of car theft and make appropriate provisions. Whatever the reason, I would bet a vast fortune if I had one, that it is a trifling matter, nowhere near justification for limiting Canadians freedoms to choose and confiscating their wealth, which is what this silly provision does. Just one more of the thousands of examples of petty tyrannies that C.S. Lewis recognized as the truest danger...

"Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience. "

A Rant In Contravention to All the Idiotic Market Rhetoric

The dumbest and most annoying (and most consistently wrong) bearish mantra emanating from quotable analysts that the financial press loves to parade before us is "the consumer is tapped out." How many months and years have we been hearing that the consumer is tapped out? In what will hopefully be a refreshing change, in that we won't have to hear this gibberish any more, the bears are formulating a new rationale for our impending economic doom. Scratch all that about the consumers, actually it's the banks that are tapped out! So because a few large banks got drunk on securitization and underwriting fees and have to write-down assets that won't trade because nobody knows how to value them, the economy is going to be starved of capital? Hmm. Ok, I get that maybe Citigroup might reign it in a little, but why would the First National Bank of East Jesus stop lending money? Or why would a bank stop lending to buy container ships or truck engines or cement mixers just because lending money to poor people to buy overpriced homes proved to be a bad idea? There is no reason to believe that all banks will cease to engage in banking and that all investment projects will be viewed the same as housing. There is just no sense to this.

Oh, and how much of a frankfurter is Wells Fargo CEO John Stumpf for using such sensationalist rhetoric with his reference to the Great Depression? Last I checked, there wasn't 25% unemployment, the money supply wasn't shrinking at a rapid pace, and we weren't sticking it to our global trading partners (not yet at least). This economy looks nothing like the economy of the 1930s and while he might defend himself that he limited his comparison only to housing, he should be smart enough to know how the phrase "Great Depression" carries broadly ominous symbolism, especially when wielded by the irresponsible half-wit media, and should not be blithely bandied about. I guess bankers sometimes need to break out of that measured, sober stereotype once in a while and do something kah-ray-zee!

Where's George? You Really Ought to Find Out.

This blog occassionally comments on the gridiron exploits of, as Boomer would say, the New York Football Giants, Big Blue, the G-Men. As a young whipper-snapper I attended most home games in the late 1970s and early 1980s with my dad. Beyond that affinity, as I have grown I have come to have deeper respect for the Giants as an organization for the way it is run and its principled management - essentially the management philosophy embodied by the late Wellington Mara. Our civic health would be alot better off if most institutions were managed like and had the integrity of the Mara-molded NY Giants organization. This philosophy attracted a certain type of individual and trickled down onto the players as well. Many of the Giants of yore exemplify the ideal of fierce competitor on the field and civic minded, gracious gentlman off the field - precisely the kind of athlete that we lament the lack of today. One such Giant great is George Martin, former defensive end and co-captain of the 1986 championship team. Today, at age 55, George Martin is walking across the country to raise money for the healthcare expenses of surviving of 9-11 rescue workers and responders. Learn about this incredible journey here and give this remarkable man some support here. Also, if you are on his route, c'mon out and give George some moral support and meet a great football player and a great American.

Crisis Management for the Next Duke: Do the Anti-Brodhead

I just finished reading Stuart Taylor and KC Johnson's book on the Duke lacrosse travesty. I've had a few people comment to me that 400 pages is alot of book to rehash a story that most people already know the basics of. Maybe. One of the themes of the book is the disastrous performance of print and television media in reporting the story. The book goes into excruciating detail and what becomes obvious early on is that even if you followed the story closely in the media, you were largely misinformed - you only thought you knew the story, but you didn't. While there is value in getting the story right, unlike the media, this book ought to secure its place in posterity as a case study for future college presidents and administrations on how not to manage in a crisis. It chronicles the antithesis of leadership. Imagine a Jack Welchy business leadership tome in full reverse.

Who knows how lasting the damage will be for Duke. (Taylor and Johnson make brief reference to recent admissions statistics, confirming what I predicted here and here.) Whatever the extent of damage to the institution, it is hard to imagine academia being introspective enough to even read such a book, let alone internalize it. Yet, such a crisis will certainly befall another university in the future, and that university's president could do alot worse than reading Taylor and Johnson's book and doing everything 180 degrees from how Brodhead and Steel managed the crisis at Duke.

Yeeeee F&^kin' Haawwww!!!!!

Steve Conover reports on the crucial farm subsidies that keep my salt-of-the-earth neighbors working the land to feed this great country. Yee Haw! I only wish I owned the local John Deere dealership here in Soho!

Luskin on Rangelnomics

Don Luskin explores the "voluntary" nature of Rangelnomics in today's WSJ. Much like I posited here - "One way to achieve this would be to simply stop working. Imagine someone age 42 who has accumulated $4,999,000 million in assets and currently makes $499,000 and whose career/business trajectory will place them over the thresholds in short order. That person could decide that they have enough money to live a cushy life playing alot of golf, skiing and/or taking frequent, splendid vacations abroad " - Don rightly points out that the Laffer Curve cuts both ways - "All the rich need to do in order to make true Mr. Rangel's characterization of our tax system is to retire to their yachts, rather than continue to contribute to the economy by running hedge funds or doing private equity deals." Best line, "Mr. Rangel will get a lesson in supply-side economics he'll never forget." Not just him, but Max Baucus too.

Brazil Finds Double Special Shitload of Oil

Your typical Peak Oiler spouts something like this to sum up his position, "there just aren't any more big finds out there."

Except of course for Jack, Beaufort, and now Tupi.

Like I always say, "if you don't look for oil, you won't find oil."

My Extremely Insensitive Post of the Week

This was a senseless tragedy. I know how it could have been averted. Parents take note: do not allow your 13 year-old child to be out riding his/her bicycle at 12:40 am in a rough neighborhood. Give them an age appropriate bedtime and enforce it.

Go Big Blue, Er, Red...Anyway, Beat Dallas!

At little break from markets to discuss what us more intelligent males like to discuss...

The Giants could take the NFC East lead from the loathesome, repugnant, detestable, vile, odious and abhorrent Dallas Cowboys this Sunday. By all accounts the Giants are heathy and playing their best football right now, so the odds are good that we will not see a repeat of the miserable performance against said vile football team from Dallas earlier in the season. In fact, Eli & Co. put up 35 points in that game, it was only due to the swiss cheesiness of the defense that Dallas notched the victory. Since then though, the Spagnuolo scheme has sunk in and Hall of Fame DE Michael Strahan has shaken off his holdout-induced cobwebs. Much room for optimism. Less substantively, the G-men will be sporting their alternate (not throwback) red jerseys for a little sartorial flair.

Finally, WR Plaxico Burress returned to practice this week, sadly weakening the relevance of the rhythmic, punning nickname Plaxico "No Practice Go" Burress.

Grassy Knollish Financial Analysis from Egan-Jones

Alot of money is to be made if you can figure out the answer to a question that rages in financial circles today, namely, 'will the subprime mortgage fallout sink the bond insurance (financial guarantee) industry'? Check out the recent stock charts of Ambac (ABK) and MBIA (MBI), down 65% and 52% respectively since the beginning of October. If all this blows over, these could be home-run rebounds. If not, there could be more room to run lower.

In one camp is the view that the losses will be benign. In the other camp is the view that losses will be astounding and destructive. What is very interesting is that Egan-Jones is leading the charge in proclaiming impending doom. Egan-Jones's is a small, plucky rival of S&P and Moody's who rails against S&P and Moody's with messianic zeal. For instance they make unbelievable hay out of the fact that they beat their rivals to the punch in downgrading Enron and WorldCom ratings. So any chance to go against the grain of S&P and Moody's is hard to pass up. That alone doesn't necessarily mean Egan-Jones's analysis is wrong, but reading through their report it looks like the folks at Egan-Jones are hedging their analysis with a little political conspiracy theorizing: "Over-shadowing all the activity in the market is the Republican administration’s focus on maintaining the White House and minimizing losses in Congress. The incentives are high to defer the recognition of losses for the next 12 months. Unlike Enron, many players in the financial system are key to maintaining faith in the financial system, particularly after the departure of Merrill’s and Citigroup’s CEO’s. The result is likely to be the failure of a couple of firms and the crafting of a plan by the Administration to prevent or delay more failures."

At least the conspiracy theory is bipartisan, the Bush administration will ensure that the lid on the looming disaster is kept tightly sealed until after the election, but he'll have to work over time because Bob Rubin will happily wax Chuck Prince out of a job in order to make the financial system look shaky for the benefit of HRC & Co. Yes, that's it! This isn't just a buy or sell call, this is the nation's future at stake! I wonder if Egan-Jones thinks that David Petraeus can be brought in to keep mark-to-model accounting standards in place. Will Code Pink protest the Ambac annual shareholder meeting?

Does the Fed Know Who the Patsy Is?

This is perplexing. At the same time that analysts are still predicting hundreds of billions of dollars more in losses tied to credit-based securities, it looks like investors' appetite for risk is returning. I don't think there is an obvious conclusion in all this, but certainly a reasonable conclusion is that the Fed has set itself up as a likely bailer outer in the eyes of investors and allowed moral hazard to infect the markets. Is the Fed a soft touch? A call from Bob Rubin here, a Cramer rant there, and scads of post-loosening adulation and I think Wall Street might feel it has a patsy at the poker table. Disturbing indeed, unless of course you are a private equity honcho. More good times are ahead for you.

UPDATE: Yeah, I'd say we have our patsy.

Not a Trick Question

Here's a question: Would you rather be the owner PetroChina or of ExxonMobil, Chevron, and ConocoPhillips combined? Or how about owning PetroChina or every company on the Taiwanese stock market?

Final question, does this remind anyone of when Priceline.com was as valuable as American, TWA, Delta and Northwest combined?

Reassessing Chimpy Hitler

Don't look now, but Worst President Ever Chimpy Hitler is using the veto pen like it is going out of style. All he has to do now is cut my taxes, send the economy on a tear, wax Al Qaeda types all over the globe, and appoint a few judges who don't look to Norwegian law in order to interpret the US Constitution and I could actually be a HUGE fan of this guy!

Jerseyans: We Like Our Corrupt Officials Just Fine

Gimme more of that old time status quo.