Tuesday, August 30, 2011

Iraqis Warn Libyans Saying, "Don't Do What We Had Imposed On Us"

It's through a tangled web of non-linear thought that Republicans and their candidates are able to to question the productivity and ability of the Obama administration. The big question during the campaign many moons back was "Who do you want picking up the phone at 3 A.M.?" Since then we have seen Obama implicated in any number of things having nothing to do with the answer to that question. Foreign policy has been eclipsed by our little economic hurricane, and what is out of sight is best left that way as far as Republicans are concerned, and especially when the reality defies your prophecy of events.

 The faint praise for our victory in Libya is thus expected. The approach there was the complete opposite of what was undertaken under Bush with our invasion of Iraq. In Bush's Gulf War we mustered every ounce of our strength (except the diplomatic State Department cerebral portion), and thought to remake Iraq in our image. I don't fault Bush that goal or doubt that Iraq's disregard of U.N. resolutions resulting from our first war could be ignored. Nevertheless the undertaking was badly staged and managed, and we were not welcomed in the manner we expected. It was a long-term mess, with a lot of unnecessary chaos and dying.

 With Libya, Obama took the prudent approach. He let our allies be allies, loaning our expertise in the background, but not needing to take the credit for "the win". That's probably a good thing. In this complicated world, there is no such thing as a "win", or an easy win. Often what looks like an obvious win--tanks rolling into the capital--turns out to be more complicated as time goes on.

 The New York Times includes a piece today where Iraqi citizens are interviewed and asked to give advice to their Libyan neighbors. What is notable is that much of the advice runs opposite what was actually done in Iraq, including this major, major gem: "And do not ostracize members of the former regime, as happened in Iraq under the so-called de-Baathification policy."

 While conservatives here lean on Iraq as an example of what Bush did right (and we do believe he gets credit for the act but criticism for the method), it is interesting to contrast that full blown war with what Obama accomplished. The result of Obama's Libyan policy--the creation of a moment in time where people can choose to be free--was accomplished without putting the full faith and credit of the United States on the line.

 Obama is smart enough to realize that a revolution does not necessarily bring democracy. It brings a moment where democracy can be born. Where Bush tried to guarantee an outcome and impose a result, it seems Obama is much more inclined to let the Libyans find their own way and learn as they go. And without the ongoing loss of American lives as they muddle through. They will muddle. We are not obligated to unmuddle them, since we didn't light the fire.

 The handling of the Libyan Revolution defies the story-line that both Republicans and Hillary Clinton presented about Obama. They projected that he would be weak, unaccomplished, naive, and not quite ready to handle situations. And yet, internationally, he is handling it. We managed to kill Osama. We managed to flip a government away from a dictator. We've killed any number of Al Queda operatives, while remaining aware that foreign commitments must end soon. We've NOT created new points of damage or friction. Mostly, we've not been hit with the type of terrorism that happened to us under Bush. Indeed it's ironic that Bush almost gets absolved for responsibility for the September 11th situation, as though it didn't happen on his watch. But nevermind all of this.

The political class is focused on the domestic problems, which is why all the candidates are pontificating over the economy and jobs, without offering confidence that they have the answers to shock a collapsed economy back to responsiveness.

Sunday, August 14, 2011

Pawlenty Out, Perry In, Romney Likely OK With That

Romney Counts Remaining Candidates
Obama can breath a bit easier today, given the recent news of former Minnesota Governor Tim Pawlenty dropping out of the race.  Pawlenty failed to reach his own target level of support during the shenanigustic Iowa straw poll this weekend, and the announcement by Texas Governor Rick Perry to enter the race probably did not help the calculus.

This is not good news for Republicans, generally, while it works for Romney specifically. While Pawlenty had no real shot at the presidency given his decided lack of flair, he still represented a sensible wing of the Republican Party, and that sensible group has dropped from three to two, leaving Romney and Huntsman.

This weekend the sensible (and dull) was replaced by the more flamboyant Governor Perry. Perry is not your middle of the road Republican; he duplicates a lot of the qualities that can be found in Michelle Bachmann, but with a touch more experience in getting things done. We imagine that Romney is quite okay with candidates to his right, and the more extreme the better, so long as they don't drift to the middle. You don't want guys like Pawlenty around siphoning off that voter who is unhappy with Obama but still wants a reasonable, mainstream candidate.

To the extent that any candidate is hard core Christian on social issues, and without a substantive record of achievement (Palin, Bachmann), we see a palpable advantage for people like Obama or Romney in running against them.


Saturday, August 6, 2011

Volatility

Don't let the volatility in the market spoil your game!







U.S. Gets Bad Report Card From Teacher: AAA to AA+, Spankings to Follow

S&P notices US debt yesterday for 1st time
It looks like fiscal and monetary policy are dead, almost worldwide, but especially here in the U.S. now that the rating agency S&P has stepped in to wipe away the Triple-A credit rating of the Federal government. This would be the same Standard and Poors that missed a pre-2008 opportunity  to accurately assess the risk of numerous asset classes, putting a positive imprimatur on some very shaky financial products and thus playing a massive part in the world's 2008 financial meltdown.

I guess better late than never when it comes to doing your homework. This downgrade comes on Obama's watch and his enemies will use it to baste him like a turkey in dubious sauces. We can see more clearly that this would in fact be primarily or mostly Obama's fault if, A) the entire world was not now struggling with the same issues (Hello Italy, Greece and Spain) and B) so much of the economic policy limitations of today were not the direct product of slutticatory policy during times predating Obama.

We fully expect people to draw the wrong conclusions from all of this. Or, we expect that the people with the power to make things worse to in fact draw the wrong conclusions and... make things worse. It's like those people who hate Obama's bailing out the banks, failing to realize that it was Bush's TARP policy and further, that financial firms like Bank of America are still struggling with residue from the mortgage crisis (lending credence to the idea that bailing out the banks was necessary despite the seeming populist position that killing your bankers is the first step toward greater capitalism and financial solidity).  There are a lot of folks who cannot properly locate the problem or define the solution.

Monday should be a blizzard of a day, with some people making a ton of money going forward, and the majority of average persons (with money managed in pension funds and retirement plans) taking a huge hammering that will probably continue for several months. It's not just us. Europe has to get its junk together before there is enough room for people to relax and breath and imagine that things can improve.

Until then, we can thank S&P for picking exactly the wrong moment to get all hyper about due diligence and accurate debt ratings.

Thursday, July 28, 2011

Dubious Hedge Fund Closing Theories with CNBC's John Carney

Oy vey. A piece by CNBC Senior Editor John Carney in The Christian Science Monitor manages to make the absurd argument that regulation is forcing hedge funds to operate in a manner that increases systemic risk. The suggestion is that there is a mad dash to dump outside investors to avoid regulatory oversight by the SEC.

Does bad journalism rife with political propaganda never cease?

Based on a sample of three large hedge funds closing to outside investors (non family), Carney manufactures a trend and  leaps to conclusions that are not justified by fact.
Years of concern about giant pools of investment capital that were said to be under-regulated and under-taxed concluded in Dodd-Frank’s hedge fund regulation requirements and gave rise to new plans to end capital gains treatment for the profits of hedge fund managers.
But instead of kneeling down before the regulators and the tax collectors, some of the largest hedge funds are avoiding the regulation by shutting themselves off to outside investors

First, we had Stanley Druckenmiller who shuttered his $12 billion Duquesne Capital Management hedge fund just a month after the passage of Dodd-Frank. Druckenmiller cited his inability to meet his own performance expectations and the personal toll of working as a fund manager, rather than Dodd-Frank. But between 30 percent and 40 percent of the funds assets belonged to Druckenmiller or his associates, and he continues to manage that money. The fund didn’t shut down so much as go private—and escape the grasp of regulators.
(Christian Science Monitor)

In the case of all three of the funds--run by an 80 plus year old Soros, an aging Carl Ichan and a retiring Drukenmiller--he clearly ignores the stated reasons given to their investor,s in order to go with a manufactured reason off the top of his ideological head.

The regulation in question requires that hedge funds with assets over $100 million register with the SEC, unless it's personal money being managed. In a time when the number of new hedge funds is still proliferating, and where nearly every major fund depends on money from outside investors save for a few highly profitable and long running funds, it's ridiculous to assert that legislation is having any discernible impact at all. (We won't even count the thousands of funds that voluntarily already register).

But what we are seeing frequently in the business press is journalists with an opinion or ideology constructing thought pieces to fit with their.

Carney goes on to suggest that this is a method of closing to outside money is in response to a theoretical possibility that Obama might end the carried interest exemption, where a manager's portion of capital gains from the funds of others is taxed at capital gains rate instead of as income. Under this logic, a manager would give up all the income from management fees and capital gains on vast portions of money in the billions, in order to avoid paying slightly more taxes.

It's the argument here from people who say,"Well if my income doubled I would have all those extra taxes to pay and that would be awful." Uhm, yea, but bottom dollar, more money in your pocket right? Right?

Nobody is going to shut down a hedge fund or turn away investors to avoid regulation or paying more in taxes.

Friday, July 22, 2011

Correlation, Causation, Confusion: Obama's Bane

Correlations. Miscorrelations. The central problem that the Obama administration has had to deal with is the average person's inability to line up events in proper order and correctly deal with correlation and causation.

The glaring example of this is the general assumption by the President's least informed (or most stubborn) critics that our current economic crisis has been caused by Obama's policies. He is frequently taunted as the destroyer of the American economic system; his motives are alternately accidental because he is an empty suited, affirmative action moron, or deliberate because he is diabolically evil, and because, well, he is a socialist. (His oppositional stance to conservative economic theory of tax reduction alone correlating, naturally, with a support for socialism). We won't comment on who really is suffering from a type of oppositional defiant disorder (you publicans in the House know who you are).


Even something so simple as an unemployment number is subject to confusion. George Bush began with unemployment at 4.2%, and in his last year in office (2008), we saw that rate jump from 5% to 7.3%.  2008 was a calamitous year and conservatives go through all sorts of contortions to absolve themselves of any responsibility for those problems. Where convenient, they will give credit to their own president, and where inconvenient, they will point out that, "well, during this period to that period," like 2006-2008, their man was hampered by Democrat majorities in the Congress. This allows all dogs to go to heaven, except Democratic ones, who carry all the blame, all the time, no matter who controls the presidency.

In any case, and on Bush's watch, unemployment went from 4.2% to 7.3%, a 3.1 point rise. Contrast this with rates under Obama. In January of 2009, unemployment stood at 7.8%, rose on momentum (that began in the previous year) to a peak of 10.1% in October 2009, only to drift downward to settle at 9.2% as of now. The Obama increase is 1.4 points and even that number is arguable, since his first six months or so would not likely reflect the results of any of his economic actions.

Do people realize this? Of course not. They correlate the rise in unemployment solely with the rise of Obama, and mostly because it's what they want to believe. If they chose to really reflect on the numbers, or when events occurred and how, they might also have to reflect on why they have such a hostility to Obama. But because high unemployment correlates (in concurrency fashion) with Obama as president, they are happy to run with this notion, despite the fact that the cause of the high unemployment was obviously triggered by events much earlier; the huge spike in unemployment rates in 2008 indicate that obvious point.

Nor do people give causal credit for actions that Obama actively took, as in stimulus. That $787 billion package was passed by Congress in 2009, and signed by Obama on February 17th of that year. Fully $288 billion of that package went to tax relief (see Wikipedia). Another $330 billion or so went toward education, aid to the states and unemployed, to Medicaid and veterans.

Despite the claims that the stimulus did not work, we eventually saw a reverse in the unemployment rate. In most cases the average anti-Obama enthusiast is not connecting the dots between stimulus and decreases in unemployment, because they are too busy trying to set up false correlations between Obama and other dubious factoids. (Those would include, "Obama is weak on terror" though we don't hear that one so often now, Osama being dead and Obama clearly no dove).

The way it works now, anything bad correlates with Obama, and regardless of the true cause which might have happened years earlier. Causation is crushed and yanked out of a historical time frame. Which is also how people who didn't care when the national debt hit $10 trillion can suddenly and violently care when it hits $14 trillion (and with cause).

We get another good look at this correlation and causation confusion in this Talking Points Memo piece that tracks the Romney campaign. He is out on the stump, visiting places that reflect our stumbling economy. He is trying to make a connection, a correlation, between failing businesses and Obama policy. Never you mind the details of why a given business might have failed. Don't pay any attention to the fact that a given business might have been struggling pre-Obama, thus severing any comparative causal relationships.

Romney does not have to be careful on this because the people he is speaking to don't really care about the details or any truth that conflicts with their own innate feelings about truth.
The latest example is in California, where the presidential candidate held a press conference in North Hollywood at Valley Plaza, an empty shopping center where multiple attempts to reverse its fortunes have failed to get off the ground. Romney admitted its problems predated Obama, but nonetheless blamed him for making the recession "worse" and thus helping squash development plans at the site.
(TPM)

Just link it all together across the space time continuum, call it bad, blame Obama, repeat.

Tuesday, July 19, 2011

Rupert Murdoch: Humbled or Humiliated or Carefully Cunning

Other news:


Where is the sacrificial lamb?

mr. gittesat 10:46 PM July 19, 2011
the Big Banksters nearly bring down the entire global economy; get Congress to shakedown the American people for TRILLIONS in bailouts, and yet we have the FBI rounding up anti-corporate cyber geeks that cost...what was it?....$5000 of damage to A-frickin' T&T??? "Law enforcement agencies tend to target -hackers- based on the amount of FINANCIAL HAVOC WREAKED or their POTENTIAL RISK TO NATIONAL SECURITY" Sweet mother of god this HAS to be an Onion story.....

Finn Talks Super 8 and Tree of Life

I finally got around to seeing Super 8, which was well worth the $5 I spent to see it, and in part because I also saw Horrible Bosses on the same budget; the erratic quality of both films combined to create a sum greater than my expenditure, if we leave out the cost of popcorn and beverage. (I like to pretend that snacks are off budget, and fungible, and that the snacks eaten at the movies would have been eaten elsewhere in another form anyway, and thus, no net increase in costs).

My main thoughts center around Super 8, a predictably retro alien movie, but let me just drop a pet peeve before continuing.

Horrible Bosses had a good premise, but was ultimately ruined by the outlandishness of the script, which called for multiple attempted murders, thus leaving a great cast to wallow in absurdities.  And when not also wallowing in a certain amount of deviance. Like Cedar Rapids, which I caught via Amazon stream, Horrible Bosses attempted to amuse us with certain bizarre sexual acts, and I've grown really tired of Hollywood writers who think that shock value can substitute for true humor. How many times do we have to see the otherwise straight laced main characters accidentally get snozzed with coke, provoking frenzy and mayhem? Lacking the courage to make a character an actual drug enthusiast, with all the life cratering sludge that would follow, we are left with the accidental dope usage and asked to laugh at the hi-jinks. It's tired and boring. But I digress in the wrong direction.

Super 8 was entertaining but left me feeling like I had seen it all before. Which, I probably have. It seemed to borrow from every alien movie of the past, giving us an alien who wants to eat us, but only some of us, and only as a snack while rebuilding his aircraft and figuring a way back home.  Set back in the 1980's, we get a bunch of kids who are into filmmaking, though lacking the conveniences of our current era where you can turn out a masterpiece that nobody wants to see on YouTube via your Android or Apple.

The story itself is pretty toss-able. Alien arrives, government somehow captures and captivates (literally) super strong and highly advanced alien, alien frees itself via scripted unlikelihood, alien gets chased and kills a few unworthies, kids run around without parents, parents run around somewhat oblivious as to where kids are until scripted moment of reflection, kids encounter alien, two species communicate via meaningful eye contact, alien creates spaceship out of crap and scriptural magic, spaceship flies off, humans look up in awe, credits.

But it was a captivating film, meaning, I didn't start feeling sleepy, or sit thinking, "Uhm, okay" like I did through certain parts of another film I saw recently. The Tree of Life was playing at my local arsty theater in Scottsdale and darned if I was not going to see it on opening day. While it carried big name stars, like Brad Pitt and a muted Sean Penn, I was more interested in whatever pretensions the director was trying to pull off. For that first half hour I sat watching an almost silent film that was infused with flecks of prehistoric imagery: volcanoes, flashes, stuff rushing around, dinosaurs, the stars of the film not actually saying anything we could hear.

I stared at the screen and stayed awake through that opening onslaught because I knew it was supposed to be some deep foundation upon which the rest of the film would build, and if you are asleep, how deep and intellectual can you appear to your fellow moviegoers? It's just not proper to fall asleep during moments like this, so you put on your introspective face and just stare at the screen like you are taking it all in and getting every nuance. (Sometimes you bring your hand up to your chin and finger your beard so that people down the row will think you are totally understanding some hidden modality they are missing). Thankfully my patience was rewarded with a heartwarming and carefully scripted and acted film that tracked the life of a family, and the relationship of a son with his father.

Which brings me back to J. J. Abram's Super 8. (Thought I got off point, didn't you?)  Super 8 is less a film about aliens than it is a study of kids and it is their interaction with each other that carries us forward and keeps it interesting.  That works out well enough, but the kids we are given strike that deja vu spot in the brain where you imagine that you have seen them before, maybe in Goonies or E.T. or some other Hollywood kid concoction from years gone by. That is, each kid is a type. We have a fat kid, we have a timid kid, we have the primary kid (as usual missing a parent) who gets the girl, we have the blond girl, we have the crazy kid who likes explosives. Each is a stereotype made to fit together in a motley crew upon which the director can hang plot points.

Heck, without the blond female, with lovingly long hair, are you really gonna run off after a creature from another planet who you have just seen kill and eat people? Of course not. In the Hollywood way of lensing the world, only a blond girl in trouble is gonna motivate you to do stupid stuff like confront aliens, or encourage your mousy explosives loving friend to create a decoy to "distract" the alien. (Apparently this was pre-bros before ho's).

While the acting was sufficient, and the faces relatively new and authentic, you still got the feeling that this was a Hollywood construct. There were moments of overacting, or moments of predictability that were glaring. They didn't seem so much to be real kids, as real kids acting in a movie, and with all that implies.  You imagined some stage mother saying, "You need to be better than the fat kid in Stand By Me".

Which is also why I loved The Tree of Life, and offer it as contrast. You will sleep or curse through whole elements of the film because director Terrence Malick sometimes assumes that visuals in themselves convey deep meaning. Often they don't, and sticking such visuals into a family drama is a risky endeavor. Not that it can't be done, it's just that he does not do it exceedingly well. If God created the world in six days, certainly Malick could have created his more philosophical imagery in mere minutes of time, instead of long moments that caused extra popcorn indulgence.

That said, Malick nails it with his choice of child actors and their direction. There are entire scenes between brothers, between father and son(s), between friends, that thoroughly pull you in and make you feel like you are watching real lives and real relatives. The child actors don't seem to be acting, or overacting, or even aware of what they are doing. They don't pop out of the context of the script in words, actions, visuals or deed. Even the way they walk strikes authentic.

The Tree of Life has probably some of the best acting by young people I've seen on screen. There is one scene where the brothers and their friends are walking through the neighborhood, drifting aimlessly, pausing here and there to poke at this, look at that, and culminating in the breaking of a window. It's entirely authentic and reminds me of my own wanderings with friends, no destination in sight, nothing to do, nothing that had to be done, just drifting, walking, seeing what might turn up around the next corner.

That's what you want in a movie, the unexpected around the corner.



Tuesday, July 12, 2011

Hmmm


Murdoch, the Old Fox, Gets Hounded

Gotta wonder if Rupert Murdoch's journalistic practices in the United Kingdom extend to the United States. I've not been hearing a lot of Fox employees reflecting on the ethics of their supreme leader, consciences whistling past the graveyard of mayhem he Old Rup has created in Britain.

The United States has far too many pressing issues, and is far too important a country, and too special a place, for the likes of people who would seek to manipulate the public and foster malice and ill will. No media outlet has gone quite as far to create a misguided patriotism that masks darker, un-American sentiments. In light of the controversies in the U.K., where employees of the Fox have shown a complete disrespect for honest dealing and privacy, we can only wonder how low people are willing to go, and whether those faulty choices extend far and wide.
The fallout threatened to spread to the United States, homebase of Murdoch's News Corp media empire which owns a clutch of prominent U.S. media properties including The Wall Street Journal, the New York Post and Fox Broadcasting. 
U.S. Senator John Rockefeller, chairman of the committee on commerce, science and transportation, called for an investigation to determine if News Corp had broken any U.S. laws.
Rockefeller said he was concerned that the phone hacking acknowledged in London by News Corp "may have extended to 9/11 victims or other Americans," in which case he said "the consequences will be
severe."
(Reuters)

None of this is entirely a surprise. British papers have long had a freewheeling nature, and Rupert's properties here in the States have shown an ability to be quite crass and unreliable themselves. One thinks of Fox News, which started out with a noble idea--that of being fair and balanced and offering a conservative perspective on issues that the other press outlets often pretended didn't exist. But Fox took the ball and ran, eventually deciding to be a dishonest political player rather than an honest broker of news and multiple perspectives.

Let us hope that this is the day the old fox has met his hound, and receives his comeuppance.