Do They Think Cheney Makes a Better Supplicant Than Bush?

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So they’re shipping Dick off to Saudi Arabia to beg King Abdullah to let loose the oil so the economy doesn’t nosedive under Bush’s Cheney’s watch.

Q Will he repeat the request to the Saudis to ask OPEC to raise oil production, a request which was made by the President and turned down by our friends, the Saudis?

MS. PERINO: I’ll refer you to the Vice President’s office for exactly what he will bring up. But certainly the position of the United States and the President is that we believe that more supplies should be out there on the market. And the President does want OPEC to take into consideration that its biggest customer, the United States, that our economy is weakened, and part of the reason is because of higher oil prices; we think that more supply would help. And I don’t anticipate that the Vice President would have any other message than that one.

Q So he will, obviously, then, have that message.

MS. PERINO: I’m not — I can’t tell you exactly what the Vice President is going to say and I’m not going to — I’ll let him have his meetings and then they can read them for you while you guys are on the road.

It seems like it was just two months ago that Bush tried to beg for more oil, only to have Abdullah blow off the request.

I’m curious precisely what kind of leverage Dick Cheney might have over the Saudis that Bush doesn’t have? Does the fact that our economy has gotten worse and people are beginning to talk about a Citibank failure change things for the Saudis? Or is Dick just going to beg again because Bush suddenly realized that we’re getting close to $4/gallon gasoline? 

And So the US Economy Picks Up Where It Left Off in the 1970s

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Newsweek has a couple of articles on stagflation you might want to read. From the first:

Inflation is generally on the rise throughout the world, and the rate of inflation is higher in many parts of the world than it is in the U.S. But Americans may feel they’re getting hurt more by the current outbreak of inflation than many of our trading partners. Inflation is being driven by rising energy and food prices. Commodities-wheat, gold, oil, you name it-are getting more expensive. Another way of thinking about it, however, is that the dollar is losing ground against wheat, gold, oil, and other commodities. As the U.S. has pursued fiscal and monetary policies that debase the currency, the dollar has weakened significantly against many of the world’s currencies. Consequently, when a commodity that is priced on a global basis in dollars, like oil, goes ballistic, the chumps who have all their assets in dollars will get hurt disproportionately. Americans today pay about $100 for a barrel of oil. But if you’re French, and you’re buying oil with the Euro, which has increased by about 16 percent against the dollar in the past year, the blow has been substantially cushioned. What’s more, many of the countries that have pegged their own currencies to the dollar, including China and the Persian Gulf states, either subsidize gas or use price controls. American consumers and businesses are, in some ways, uniquely exposed to the twin ravages of a weak dollar and expensive oil.

It has been clear that Bush has mismanaged the economy in fairly spectacular fashion. But it’s nice to see the press beginning to bring out the dreaded word "stagflation" so we can brand Bush and his chosen successor with the term.

But I’m more struck by this stat, from WorldChanging:

It finally happened this week. The price of oil passed the all-time inflation-adjusted peak of $103.76 that was set in April 1980—and is now three times what it was just four years ago.

What’s going on? This is a record that virtually none of the world’s oil experts predicted, particularly at a time when the world economy is slumping and the demand for gasoline is now dropping in the United States.

And it’s going to get worse from here.

Some of the blame may go to speculation and the decline of the dollar. But the roots of the problem run deeper. Read more →

Meet Our New Sovereign Wealth Fund Overlord

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The NYT offers us a much-needed look at our new sovereign wealth fund overlord, the Abu Dhabi Investment Authority (ADIA), the guys who just bought a big chunk of Citibank.

Abu Dhabi has about 9 percent of the world’s oil and 0.02 percent of its population. The result is a surfeit of petrodollars, much of which is funneled into a secretive, government-controlled investment fund that is helping to shift the balance of power in the financial world.

After decades in the shadows, the fund, the Abu Dhabi Investment Authority, is turning heads on Wall Street and in Washington by making high-profile investments in the United States and elsewhere.

[snip]

[ADIA’s $650 to $700 billion in] riches, coupled with the more aggressive stance being taken by ADIA and other sovereign funds, has raised concern that these investors will wield their wealth for political as well as financial reasons.

ADIA’s secrecy is also drawing scrutiny. The fund has no internal communications department, although it says it is in the process of setting one up. When sovereign fund leaders from around the world descended on Davos, Switzerland, last month for the World Economic Forum, no one from ADIA saw fit to show up.

Unfortunately, the article kind of reads like the NYT’s Vicki Iseman article on McCain–it reflects unease, but doesn’t state clearly the reason for the unease. Big money, secrecy, what’s wrong with that, if they want to bail our biggest banks out of the shitpile, right?

Read more →

Still Trying to Read Poppy Bush’s Lips

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Am I the only one that finds it especially ironic that Poppy Bush endorsed McCain one day after McCain came out with a "no new taxes" pledge? If the timing was unintentional, I’d consider it a rather inauspicious coincidence if I were McCain.

Time to Throw the Payday Moneylenders out of the Christian Conservative Temples

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I can’t vouch for their underlying research, but two professors just completed a study showing a strong correlation between the number of payday lenders in localities in the US and the prominence of Christian Conservatives (h/t The Consumerist).

Payday lenders, creditors that charge interest rates averaging about 450 percent, are more prevalent in Conservative Christian states, according to a new study coauthored by University of Utah law professor Christopher Peterson. The study, which is based on the most comprehensive database of payday lender locations yet compiled, maps a surprising relationship between populations of Christian conservatives and the proliferation of payday lenders.

“We started this project hoping to find out more about the spatial location of payday lenders and were surprised when a pattern reflecting a correlation with the American Bible Belt and Mormon Mountain West emerged,” said Peterson, who conducted the research and coauthored the article with Steven M. Graves, an associate professor of geography at California State University, Northridge. “The natural hypothesis would be to assume that given Biblical condemnation of usury there would be aggressive regulation and less demand for payday loans in these states, but ironically, the numbers show the opposite is true. It’s sad that states with a pious and honorable religious heritage now disproportionately host predatory lenders.”

Peterson and Graves’ article, titled “Usury Law and the Christian Right,” is forthcoming this Spring in the Catholic University Law Review. It profiles states all around the nation examining the unprecedented spread of payday lenders during a time of growing Christian engagement in the political process. “A generation ago, populist Christian leaders were among the most aggressive opponents of usurious lending. But today many Christian leaders take large campaign contributions from the credit industry and no longer support the Biblical injunction against usury in public life,” Peterson said. [my emphasis]

In the context of primary discussions about how President Hillary or President Obama will fix Bush’s clusterfuck economy without turning the US into Argentina, I find this detail really fascinating. The people preying on the financial insecurity of working people are also some of the people bank-rolling the preachers who give Republicans moral cover for their immoral ways.

All the more reason to make this kind of predatory lending illegal.

Update: Here’s what PastorDan has to say about this (see his h/t to selise, too):

Now, correlation is not causation, of course. Even Read more →

Chuck Schumer: We Will Fix the Bankruptcy Bill

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We just had a panel on economic issues, with Byron Dorgan, Chuck Schumer, and Sherrod Brown. It took until the last question–mine–for anyone to bring up the Bankruptcy Bill.

From these three Senators, there was little dispute: the Bankruptcy Bill was a bad bill and it needed to be fixed. There was also the recognition that the part of the bill that pertained to protecting houses had exacerbated the foreclosure crisis.

That’s the good news.

The bad news is that we’re not going to do anything about it until 2009. Senator Schumer explained that he didn’t want to pick around the edges, he wanted to make a real fix, and we’re not going to be able to do that until we get a bigger majority.

It seems I have heard that before.

Update: Added video of Matt Stoller interviewing Debbie Stabenow on this topic. 

Market Fun

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The world markets have responded to Bush’s plan to put the country further into debt to put $800 of spending money into each American taxpayer’s pocket in much the same way they responded to 9/11.

Stocks across Asia took precipitous falls Tuesday for the second day in a row, reflecting fears that a weak U.S. economy could derail growth worldwide.

The drops were even more severe than those on Monday and several markets hit multiyear lows. Indian shares plunged so quickly — nearly 11 percent — that its stock markets halted trading soon after opening. In South Korea, volatile futures prices prompted the main Kospi market to briefly suspend program selling orders at midday. The Australian market suffered its worst one-day fall ever, while Japan’s Nikkei fell to its lowest since 2005.

Globally, the sell off has involved some of the worst market declines since Sept. 11, 2001 and has erased more than $5 trillion from stock markets this year.

Granted, much of this panic was also caused by the news that the insurers that are supposed to be insuring nice stable municipal bonds but instead are insuring the Shitpile can’t really insure the Shitpile.

But I can’t help but think of what this panic is going to do for our efforts to get a bunch of foreign investors to bail out our over-exposed financial system. Read more →

Bank of America Buys a Big Chunk of the Shitpile

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There are several things that concern me about the news that Bank of America has agreed to buy a big chunk of the shitpile. First, there’s this bit, which sounds to my non-expert ears like it could become a real problem.

By purchasing Countrywide, Bank of America would combine its 5,800 branches with the mortgage lender’s coast-to-coast network, helping Mr. Lewis achieve his goal of becoming the biggest player in every major consumer finance category.

Bank of America would brush up against a federal cap that prevents a bank holding company from controlling more than 10 percent of the nation’s deposits. Because Countrywide Bank is a federally insured savings and loan, the rule does not apply.

Seeking to ease any regulatory concerns, representatives for the companies were in Washington on Thursday to brief regulators.

Given the financial situation of this country, I’m not sure it’s a good idea for anyone to hold 10% of the nation’s deposits. Now match that detail with this speculation from Herb Greenburg, via Calculated Risk.

We’ll know it soon enough, but with the leak that Bank of America is near acquiring Countrywide, several things would appear apparent (at least while we’re playing the guessing game):

1. The Fed is behind the deal.

2. The Fed is behind the deal because the rumors yesterday of a near bankruptcy were probably true.

3. As part of the deal, the government likely agrees to guarantee BofA against Countrywide-related losses. Read more →

2008, the Year of $100/Barrel Oil

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As freep pointed out, the price of oil has officially topped $100/barrel.

Surging economies in China and India fed by oil and gasoline have sent prices soaring over the past year, while tensions in oil producing nations like Nigeria and Iran have increasingly made investors nervous and invited speculators to drive prices even higher.

Violence in Nigeria helped give crude the final push over $100. Bands of armed men invaded Port Harcourt, the center of Nigeria’s oil industry Tuesday, attacking two police stations and raiding the lobby of a major hotel. Word that several Mexican oil export ports were closed due to rough weather added to the gains, as did a report that OPEC may not be able to meet its share of global oil demand by 2024.

Light, sweet crude for January delivery rose $4.02 to $100 a barrel on the New York Mercantile Exchange, according to Brenda Guzman, a Nymex spokeswoman, before slipping back to $99.15.

I’m not surprised in the least that this symbolic limit has been passed (however briefly–this was just a single transaction). It’s just kind of creepy that it happened on the first business day of the New Year (along with a 200 point decline in the Dow).

We started last year with the hope that somehow we could scale back Bush’s disastrous imperialism. A year later, Bush’s policies and the developed world’s addiction to oil continue to destabilize the world. Only now, the economic impacts of those policies are taking center stage.

Tommy K’s Everywhere

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This was a story I was expecting to see: a report that, in recent years of lax oversight, a large number of people have been defrauding mortgage companies.

The number of mortgage fraud cases has grown so fast that government agencies that investigate and prosecute them cannot keep up, lenders and law enforcement officials have said.

Reports of suspected mortgage fraud have doubled since 2005 and increased eightfold since 2002. Banks filed 47,717 reports this year, up from 21,994 two years ago, according to statistics from the Federal Bureau of Investigation and the Financial Crimes Enforcement Network of the Treasury Department. In 2002, banks filed 5,623 reports.

“I don’t think any law enforcement agency can keep up with mortgage fraud, because it’s such a growth industry,” said Chuck Cross, vice president of mortgage regulatory policy for the conference of state bank supervisors, an organization of regulators and bankers. “There’s too many cases, not enough agents.”

Mortgage fraud covers crimes like false statements on mortgage applications and elaborate “flipping” schemes that involve multiple properties and corrupt appraisers, title companies and straw buyers.

What I’m waiting for, now, is news of what these people used their fraudulent money for. Are these tens of thousands of cases of mortgage fraud just con men getting rich in the easiest way possible? Or were they funneling their ill-gotten money to something or another. In the case of Tommy K, he used his fraudulently gained money bribing Republican Congressmen. Was he the only one capitalizing on the corporatists’ refusal to regulate industry to funnel more money to corporatists?

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