August 11, 2007

You thought Bush was bad on abusing civil liberties?

The British plan on using anti-terrorism laws against global warming protestors at Heathrow Airport.
Armed police will use anti-terrorism powers to "deal robustly" with climate change protesters at Heathrow next week, as confrontations threaten to bring major delays to the already overstretched airport.

Up to 1,800 extra officers will be drafted in to prevent an estimated 1,500 people disrupting the airport over the period of the camp for climate change, which is due to begin on Tuesday. The police have been told to use stop and search powers against the protesters, who have pledged to take direct action on August 18 and 19 but not to endanger life.

(A) police report makes it clear that the government has encouraged police forces to make greater use of terrorism powers “especially the use of stop and search powers under s44 Terrorism Act 2000.” …

The civil rights group Liberty said it was alarmed at the police use of the anti-terrorism powers to deter peaceful protest. "Stop and search powers created to address the threat of terrorism should not be used routinely against peaceful demonstrators," said James Welch, Liberty's legal director.

The police tactics have echoes of the 2003 anti-war demo at RAF Fairford where law lords eventually ruled police had acted unlawfully in detaining two coachloads of protesters, who were stopped and searched and then turned back even though they were on their way to an authorised demonstration. Police used section 44 of the act 995 times at the Fairford peace camp, even though there was no suggestion of terrorist overtones.

The Guardian has established that at least two climate change campaigners have been arrested recently at Heathrow by officers using terrorism powers. Cristina Fraser, a student, was stopped when cycling near the airport with a friend and then charged under section 58 of the Terrorism Act. This makes it an offence to make a record of something that could be used in an act of terrorism.

It’s clear that between things like this and a country full of surveillance cameras that the home of civil liberties is turning its back on them, more and more.

August 10, 2007

A snarky look at how the Fed caused the housing-credit bubble in the first place

It’s basically by “counterfeiting” $3 trillion of money over the past few years. This is pretty funny, but with good explanatory value:
• I use $1 trillion to buy stocks (jump starting the bull market)
• I use $1 trillion to buy U.S. Treasury bonds (thus driving bond prices higher and interest rates lower)
• I use $1 trillion to go around to every neighborhood in every major city of the U.S. and start buying houses for 10 percent higher than the listed price.

And you get all these benefits:
• This will create jobs, since lots of employees and consultants will be needed to spend $3 trillion.
• The stock market indices will soar. Everyone's 401(k) and day-trading portfolios will increase in value.
• Home prices will increase by 10% overnight.
• Interest rates will fall which will make it even cheaper for everyone to borrow money to buy new cars, upgrade into a bigger homes, and buy new gas plasma TVs every year hoping against hope of getting to watch the CUBs someday play in the World Series.
• The lifeblood of America, vastly underpaid Real Estate Agents, will get a much needed and well deserved infusion of cash.
• The economy will be humming so fine that no one will care about the loss of jobs to India and China.
• Cheap goods will continue to pour into the US and the CPI will show only a modest 2 percent rise in the price of goods.

Boy, you just can’t beat that, can you?

It does show, in addition, that, although Adam Smith was hugely wrong about his “invisible hand,” he was right on the money about human greed.

Mike Shedlock goes on to say that not just an ordinary recession, but a deflation similar to late 1980s Japan, is very possible. Bill Fleckenstein, another financial analyst who seems to have good insight, agrees.

Personally, I’ve upped my recession odds by Aug. 1, 2008 from 1-3 to 2-5. I’m leaving the Jan. 1, 2009 prediction at 1-2, but those odds will probably get adjusted upward soon.

Oh, and if your 401(k) has any such risk investments, look out.

How collateralized debt obligations arose

Jim Jubak provides an easy-to-understand explanation:
Wall Street walked in the door with an amazing deal. Investment bankers should spin speculative-grade credits — whether corporate debt and loans from a buyout deal or mortgages from financially challenged home buyers — into investment-grade credits. By bundling together groups of credits, or pools of loans, corporate debt or mortgages, the investment banks said, you'd lower the risk that an investor would take a hit if any one loan or mortgage went bad.

And then, by cutting up those pools and putting the riskiest deals together in one segment, called a tranche, and the less-risky deals in other tranches, you could insure the less-risky tranches against loss. The riskiest tranches might get wiped out, which is why investors who bought them got a higher yield, but they created a kind of buffer for investors in the less-risky tranches, the investment banks said. Investors in those less-risky tranches wouldn't take a hit until the more risky tranches were wiped out, the banks promised. And it follows, the banks argued, that the less-risky tranches met the standards for investment-grade credit ratings.

Jubak has a more in-depth explanation here.
In other words, a lot of bad investments are starting to come home to roost in a lot of places.

August 09, 2007

Will Democrats stipulate that their Iraq withdrawal plans include defunding private contractors?

If we just replace American soldiers being shot at with more funding of private contractors, then the war potentially becomes more burdensome on the budget, and not a whole lot easier. Read Mother Jones for some good reporting on what contractors are doing in Iraq right now, and on their belief that, if we pull out, the Iraq government will have to come calling on them. (Unanswered: Where will Iraq get the money to pay for these guys when [I hope] the U.S. gravy train pipeline gets shut down?)

Another good reason to oppose toll roads

Mix in PayPass glitches, mistakes and misreads, the temptation to hike fees at a higher rate on automated roads, surcharges for things like paper statements, and toll road private companies, or governments, cutting back on human toll booth operators, thereby increasing traffic jams unless you break down and use a PayPassand you have a pain in the butt. Throw in the fact that the biggest private toll road operators, like Cintra and Macquarie, are global in reach, have deep pockets and are all too ready to lobby state representatives, and you have private-sector greed on top of that pain in the butt.

August 08, 2007

Thought police, literally

Read Ted Rall’s latest as the BushCo Justice Department starts prosecuting people just for what they say, shudder, and agree with the Daytona Beach News-Journal that this is speculative justice.

ACLU fires first salvo over FICA expansion

It may not (yet) be a lawsuit, but a request to make public a January court order about terms of oversight of electronic surveillance is a start:
After the September 11 attacks, Bush authorized warrantless interception of communications between people in the United States and others overseas if one of the participants had suspected terrorist ties.

In January, Bush put the program under the supervision of the secretive court, called the Foreign Intelligence Surveillance Court.

The court's orders from January about the terms of its oversight of the surveillance have never been made public. The ACLU said it seeks disclosure of those orders, though that would be highly unusual. The civil rights group could cite only two other public opinions by the surveillance court.

The administration and some supporters in Congress argued the new legislation was needed in part because of restrictions recently imposed by the court on the government's ability to intercept certain communications, congressional aides said.

The ACLU said it also seeks release of that ruling.

“Publication of these secret court orders is vitally important to the ongoing debate about government surveillance,” said Jameel Jaffer, director of the ACLU’s National Security Project. “The public has a right to first-hand information about what the court permitted and what it disallowed.”

The ACLU said the orders and opinions should be released as quickly as possible, with only those deletions essential to protect information the court determines to be properly classified.

Given this administration, even if the FISA expansion is just (for now, pending further Democrat caving?) a six-month deal, a lawsuit should be coming down the pike soon enough.

Chet Edwards opposes real action on renewable energy

Texas Democrat Edwards was one of just 9 Democrats to vote no on the House renewable energy bill, H.R. 3221. Before the vote, Edwards said he specifically opposed the requirement that electric utilities get at least 15 percent of their power from renewables by 2020 because it was too tough.

My letter to Pelosi and Reid over the FISA standards expansion bill

Via an American Civil LIberties Union action alert, here's what I wrote Speaker Pelosi and Majority Leader Reid:
Dear Speaker Pelosi and Majority Leader Reid:

It is at times like this, and votes like this, that I'm most aware of the importance of being “a card-carrying member of the ACLU.”

With last weekend’s deplorable, no horrific, FISA votes, that’s apparently a sentiment — and probably a membership — lacking in all too many Democrats. Unfortunately, on the House side of the Capitol, my own representative was one of the 41 turncoat Democrats.

Beyond the failure of responsibility lies the failure of strategy. For the past six and a half years, the Bush Administrations has engaged in such politics, but, yet again, too many Democrats knuckled under, and the leadership — that’s you, Ms. Pelosi and Mr. Reid — apparently was both unable and unprepared to steel them for the fight.

Speaker Pelosi, AFTER the vote was over, you charged Rep. Conyers et al to come up with a better bill. Among examples of closing the barn door after the horses are out, this was an egregious one.

You can lessen, but never totally erase, my distrust and disappointment by getting what had better be the right bill passed. More and more of us progressive bloggers are raising the “no money for Democrats” cry over issues like this.

I didn’t even question them, given what all is leaking out about this bill, and the pre-recess deadline they were imposing upon themselves (surely also part of the Bush-Rove strategy) whether or not they even knew everything that was in the approved version of the bill. Probably not; it wouldn’t surprise me.

Are Democrats being hypocritical on Gonzo?

Both Slate and the L.A. Times weigh in on the split-personality behavior of House and Senate Democrats pummeling Alberto Gonzales for his politicizing the Department of Justice and, in doing so, apparently perjuring himself, then turning around and giving him massive new powers to control National Security Agency spying.

Both articles suggest political considerations are at stake. To the degree that’s true, then Democrats stand guilty of letting our civil liberties, in the FISA expansion bill, be made hostage to politics.

First, Slate’s always-incisive Dahlia Lithwick:
Imagine that the Democrats had been hollering for the past six months that Gonzales was an out-of-control drunk. With their eavesdropping vote, they've handed him the keys to a school bus. Nobody was forcing these Democrats to impeach or censure the AG. But this warm pat on the back they have offered him is beyond incredible.

With this FISA vote, the Democrats have compromised the investigation into the U.S. attorney scandal. They've shown themselves either to be participating in an empty political witch hunt or curiously willing to surrender our civil liberties to someone who has shown — time and again — that he cannot be trusted to safeguard them. The image of Democrats hypocritically berating the attorney general with fingers crossed behind their backs is ultimately no less appalling than an attorney general swearing to uphold the Constitution with fingers crossed behind his own.

Then the Times:
Democrats are not winning the battle to force Atty. Gen. Alberto R. Gonzales from office, stymied by a legal system that gives the Bush administration wide discretion to block investigations of itself. And they are not getting the White House witnesses or records they have demanded in recent weeks.

But many Democrats are fine with that.

Although they may prove fruitless, the Democrats’ investigative efforts may help keep President Bush and his administration the center of attention in next year’s elections, even as the Republican Party chooses a new standard-bearer and tries to move on.

Now, a bone to pick with the Times. The legal system hasn’t “given” Bush any such power; instead, he has arbitrarily seized it, which makes Congress’ failure to do more even more inexcusable.

In any case, one Democratic strategist owns up to the idea.
“This becomes a piece of the race,” said David E. Bonior, a former Michigan congressman who is managing Democrat John Edwards’ presidential campaign. By highlighting Bush’s allegiance to Gonzales, Democrats hope to make a point about how a Democratic administration would be different, drawing “the contrast of what we have and what we could have,” Bonior said.

The Times article goes on to point out that Democrats have already cut “linkage” campaign ads against New Mexico GOP Congresswoman Heather Wilson.

So, expect no escalation of attempts to get Gonzo out of office; the FISA expansion clearly indicates that, as Lithwick notes. And, expect no Democratic campaign contributions from people like Skippy and me.

Six months can be a lifetime, or at least actually 18 months

Any programs started under the FISA expansion bill last for one full year after the bill itself ends

Wired magazine weighs in on why Congress’ “temporary” six-month expansion of Foreign Intelligence Surveillance Act powers was so dangerous:
A new law expanding the government's spying powers gives the Bush Administration a six-month window to install possibly permanent back doors in the nation's communication networks. …

Prior to the law's passage, the nation's spy agencies, such as the National Security Agency and the Defense Intelligence Agency, didn't need any court approval to spy on foreigners so long as the wiretaps were outside the United States.

Now, those agencies are free to order services like Skype, cell phone companies and arguably even search engines to comply with secret spy orders to create back doors in domestic communication networks for the nation's spooks. While it’s unclear whether the wiretapping can be used for domestic purposes, the law only requires that the programs that give rise to such orders have a “significant purpose” of foreign intelligence gathering.

Plus, Wired notes this is actually an 18-month bill:
The law … makes any program or orders launched in the next six months perpetually renewable after the six month "sunset" of the new powers last for a year after being authorized.

Bush executive order threatens Fifth Amendment

An executive order recently promulgated by President Bush announces sweeping new powers to confiscate property of anybody coming close to helping insurgents in Iraq:
Under Bush's executive order, the U.S. government has endowed itself with the authority to freeze the American assets of anyone who directly or indirectly assists someone who poses "a significant risk" of committing a violent act that has the purpose or effect of threatening the Iraqi government, the "peace and stability" of the country or the reconstruction effort.

The White House has claimed the order is targeted at people or groups that are helping the insurgents, particularly in Syria or Iran, but the language of the order is far broader than its stated intent.

The order's liberal use of the word "or" and inclusion of the highly subjective term "significant risk" are particularly troubling in the hands of a White House that has suggested that domestic war critics are emboldening U.S. enemies in Iraq.

Bruce Fein and others are troubled by the dragnet language:
“On its face, this is the greatest encroachment on civil liberties since the internment of Japanese Americans in World War II,” said Bruce Fein, a constitutional lawyer who was a deputy attorney general in the Reagan administration and author of an article of impeachment against President Bill Clinton. …

Fein, who was in San Francisco last week, said latest executive order on Iraq continues a Bush administration pattern of “sneering contempt for the Constitution“ that is unmatched in U.S. history. “These precedents, if unchallenged, lie around like loaded weapons,“ Fein said. He reminds his fellow conservatives that Republicans will not occupy the White House forever. …

The targets of the property seizures, even American citizens, would not be given any advance notice or opportunity to challenge the government's action in court. The American Civil Liberties Union has noted that an order this sweeping could encompass “entirely innocent” activities such as an donations to humanitarian relief groups that indirectly provide what the U.S. government decides is “material support” to supporters of the insurgency.

“This order could have a serious chilling effect on charitable contributions intended to ease the suffering in Iraq,“ said Michael German, ACLU national security counsel.

I see it as going even broader. Could it be used to target antiwar protestors? That “significant risk” phrase could be awfully elastic.

China threatens “nuclear dollar” option

A massive Chinese sell-off of U.S. dollars would almost certainly push us into a recession:
Two officials at leading Communist Party bodies have given interviews in recent days warning — for the first time — that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress.

Of course, even the threat of such action is likely to hammer the dollar to some degree.

August 07, 2007

Oops on Google Maps!

Google Maps, used on my Ning page to identify where I shot uploaded folders, still calls Death Valley a national monument, not a national park. That's only about 13 years out of date.

Ron Paul surely will lose much of his more sensible anti-Iraq War support over this

His call to privatize offensive wars like Iraq will show that he’s not really anti-war or even anti-Iraq war, just a libertarian taking a libertarian stance on one more issue that almost every non-libertarian in our country will reject.

It’s clear that, libertarian ideas of civil liberties aside, Paul cares not a whit about what mercenaries would or would not do as far as war crimes. He also doesn’t look at the idea that mercenaries (as we have already seen) would be more likely to commit some sort of war crimes than national soldiery, and, still being traceable to the United States, give us even more of an international black eye than we now have. Nor, given that libertarians seem to think that lawsuits are an answer for regulatory agencies, does he deal with the possibility of the United States getting sued over mercenaries’ behavior or other issues.

Paul has come off as a libertarian nutbar on many other issues; it is now clear he is a libertarian nutbar on Iraq, too.

Say good night, Ron, and don’t let the Iowa caucuses door hit you in the butt on the way out.

August 06, 2007

“War on Drugs” gets bitch-slapped

Califoria Supreme Court “just says no” to vehicular asset forfeiture seizures in drug cases.

If the WOD is now going to be much less of a money-maker for local cops and DAs, watch the number of cases dry up

Wall Street continues to credit party like it’s 1999

The credit crunch is also hurting commercial mortgages, among other things. But the Street plays ostrich with this, too, pretending that if it ignores the problems long enough, they’ll go away.

Here’s the bottom line on why that won’t work, though:
The downgrading of CDOs has just begun and Wall Street is already in a frenzy over what the effects will be. Once the ratings fall, the banks will be required to increase their reserves to cover the additional risk. For example, “As a recent issue of Grant’s explains, global commercial banks are only required to set aside 56 cents ($0.56) for every $100 worth of triple-A rated securities they hold. That’s roughly 178 to 1 ratio. Drop that down to double-B minus, and the requirement skyrockets to $52 per $100 worth of securities held — a margin increase of more than 9,000 percent.”

In other words, this whole situation is going to make banks a LOT less liquid. Fed chairman Ben Bernanke knows that, so the Fed will NOT be lowering interest rates.

Next in the housing bubble: lawsuits

These lawsuits against home builders are going to come in two varieties.

The first is fraud, in cases where home builders have also acted as mortgage brokers and, in doing so, have inflated would-be buyers salaries.

The second is going to be over shoddy construction (as I could give personal evidence of in Lancaster, Dallas County, Texas).

Of course, all of these lawsuits are going to further cripple the home-building industry, which might not be such a bad idea.

For details of a Pulte-built “house from hell,” read here.