I'd run your company into the ground for half that price

So, I guess the "doomsday scenario" for Fannie and Freddie has failed to materialize... yet. Instead of being on the hook for upwards of one trillion dollars, taxpayers will bail out the two GSEs -- for now -- at the low low price of $25 Billion. This "temporary lifeline" will enable Fannie and Freddie to continue to afford to pay their CEOs' yearly salaries of $12.2 Million and $19.8 Million, respectively.

I mentioned the term "GSEs". This stands for "Government Sponsored Entities". Which means our government is spending $25 Billion (at least) to sponsor:

1. profligate, out of control executive salaries;

2. being paid to managers who are utterly incompetent;

3. so that the companies they run can enable and encourage other companies (banks, mortgage brokers, and Wall Street firms) to loan money to people who they (banks, etc) are reasonably sure cannot repay it;

4. so that while they (banks, etc) are reaping huge profits from making these loans;

5. they (the GSEs) and their shareholders may reap huge profits in return for enabling them;

6. and then when it becomes obvious to everyone else (besides the lenders, who knew it all along) that the borrowers can't pay;

7. then they (the banks and the GSEs and their shareholders) can get huge infusions of taxpayer money in order to avoid any downside to their risky (and probably fraudulent) behavior.

So that's pretty much it. Lenders, GSEs, and their shareholders engage in highly risky financial behavior (i.e., speculation; i.e., gambling). To the extent that their bets pay off, they enjoy all the upside, and to the extent that their bets are raked off the table into that neat round hole, they don't suffer any of the downside. Said downside, magically, becoming the responsibility of you, the taxpayer.

And congress wonders why its approval rating hovers in the single digits.

not sure how I missed this...

(6 seconds)

truly bizarre.

I think my favorite part is the last split-second where he jerks his head around to the side, like "wtf did I just say?"

can you arrange such story toward the [international community]?

Imagine that you're part of a greedy, bellicose, hostile, unhinged, borderline insane group of people who have a great deal of shady, hidden business and political interests and goals, and that your group has somehow gotten near-complete control over the most powerful military in the history of the world. Imagine further that -- for reasons known only to you and your cohorts -- you've decided you want to use this power to attack a certain country.

The target country is (ostensibly) led by a dude who is somewhat of a jackass who says things in public that are at various times ignorant, stupid, offensive, or wacky, and through the use of credulous reporters, inaccurate translations, mischaracterizations, and just sheer force of public relations wizardry, you've been able to convince a lot of people that the dude is not just some backwards jerk, but is actually an extremely dangerous genocidal maniac -- a Hitler-like character -- whose goal is to wreak destruction upon neighboring countries and -- quite possibly -- upon your own country.

Which is a hard sell, given that the target country is on the other side of the globe from your own, and the target country is relatively small, and poor, and has a relatively small military, no ICBM capabilities, and is generally just very very weak compared to your own country. BUT, thankfully for you and your little group, the target country has been defiantly pursuing a program of uranium enrichment which they maintain is being done for purposes of generating nuclear power but which you say is to build nuclear weapons to be used to advance their irrational genocidal goals.

So far, so good. You've been able to build a plausible case that the target is dangerous, and is pursuing a course which will make them even more dangerous if nothing is done to stop them. But you can't attack yet, because there are other problems. First and foremost, you -- being a part of an extremely bellicose group, as noted above -- have already made such a case before, which resulted in an attack and a disastrous, prolonged military engagement against a country which you alleged to be similarly dangerous, only later to have it revealed to the world that this previous target was, if anything, only dangerous to its own citizens. So you have some credibility issues.

The second problem is that there has been a substantial ongoing international diplomatic effort aimed at ensuring that the target uses its nuclear research only for generating electricity. The target has been generally cooperative with this effort and has been fully engaged in meetings, negotiations, and the like, and has even allowed ongoing international inspections of its facilities. This type of cooperation makes it difficult to use this issue as a plausible pretext for a military attack, especially given: (1) your group's credibility problem as noted above, and (2) the fact that your own country, at your direction, has refused to directly engage in any of the above-noted diplomatic efforts and has stated that it will not enter into negotiations on the matter until the target country first meets your demands (and, indeed, has gone so far as to suggest that to engage in such discussions would constitute "appeasement"). And, in fact, being a bellicose and warlike junta, your group's primary tactic has been to loudly (and credibly) threaten that the target will be attacked if it does not comply with your demands.

Therefore, in order to guard against your group being prematurely removed from power by your country's own citizens -- and also to avoid possibly severe recriminations against your own country by other, less bellicose nations -- an additional step must be taken so that, when the inevitable attack occurs, you can plausibly proclaim to the world that you took every reasonable step necessary to avoid it, but that in the end the target -- now officially the enemy -- gave you no choice but to confront it head-on, with military force, this option being, of course, your last resort in the face of such a serious and dangerous threat.

Which brings us to this:

UPDATE: Apparently some Harvard egghead has been reading this here blog. From AFP:

Meanwhile, Graham Allison, a security expert who teaches at Harvard University, suggested that the administration's recent readiness to talk could be a prelude to a return to a reliance on military solution to some of Washington's intractable foreign policy problems.

"The hard-liners in the Bush administration, for example, will do their best to insist on unachievable objectives that will ensure failure of negotiation," he said.

"If talks collapse, they will be able to argue that the US went the extra mile and exhausted all reasonable alternatives" leaving the military option squarely on the table, he said.

Having never set foot in Garland...

I can't personally attest to this, but I'm told it is somewhat of an armpit (to be generous with the use of my body-part-epithets). On the other hand, having spent rather a lot of time in Denton, and actually lived there for a time, I can say that that city, while not without its charms, isn't a particularly great place to live. Euless, I've been to. Blech. Hurst is much nicer, though definitely not what I'd call top quality.

Which is by way of saying: imagine my surprise in seeing this article, which tells me that Garland, Denton, and Euless are among the top 100 "Best places to live -- 2008", according to Money magazine. The DFW suburbaplex did astoundingly well, garnering no less than 10% of the spots on the list. Which means exactly nothing, because any such list which includes Carrollton and Lewisville but not Southlake or Colleyville is entirely, completely, 100% bogus and was self-evidently compiled in no part by anyone who has ever visited this little corner of the world.

But they do have a neat little interactive googlemap which I have excerpted in non-interactive form below:

Are you ready for $12 gasoline?

That may be among the least of our worries if this scenario plays out.

The lede from the article in The Times of London: "President George W Bush has told the Israeli government that he may be prepared to approve a future military strike on Iranian nuclear facilities if negotiations with Tehran break down, according to a senior Pentagon official."

The "senior Pentagon official" goes on to say that Bush's "own generals" oppose such an action, but that the administration's green light is mainly dependent upon the Israelis coming up with an acceptable plan of attack. Oh, and naturally, it would also be conditioned on the breakdown of the aforementioned "negotiations with Tehran." (You can be sure that the administration is diligently, constantly, negotiating their little hearts out trying to solve this diplomatically.)

The article then turns to the likely consequences of such a development: "The one thing that all sides agree on is that any strike by either Iran or Israel would trigger a catastrophic round of retaliation that would rock global oil markets, send the price of petrol soaring and wreck the progress of the US military effort in Iraq."

I think "catastrophic" is about right, given that Iran's primary strategy for self defense is geared toward shutting down oil shipments moving through the Straits of Hormuz. (OPEC leaders are on record as stating that any conflict involving Iran would result in "unlimited" increases in the price of crude on world markets, and any price increase of that magnitude would, in addition to its serious microeconomic effects, trigger an immediate global recession.) And given that the Israelis -- not a calm, measured bunch, to be sure -- have 200-300 nuclear warheads and a proven capability to deliver them.

So... whom, you may ask, is responsible for bringing us to this precipice of disaster? Well, I'm glad you asked me that. Because at the linked site you will find helpful commenters, one of which opines:

This dangerous dilema is a direct result of the Democrat Party in the US and anti-war zealotry in Europe. Not the fact they are antiwar, but the fact that they have been so reckless with their condemnation of the War in Iraq .This has emboldened the enemies of freedom and rendered talk useless.

I think I'll just go ahead and let the wisdom of that comment speak for itself (though I do feel compelled to add that the "Democrat Party in the US" certainly has a funny way of showing its "anti-war zealotry" in light of the fact that it has continued to appropriate hundreds of billions of dollars every few months in order to keep Bush's Iraqi Adventure rollicking along and has otherwise done exactly nothing (not one single thing) to deter or thwart it in any way whatsoever.)

Creditworthy

Phil Gramm -- erstwhile Enron crook, who was last seen taking huge checks from UBS as its Vice Chairman, the giant bank writing off billions lost in the subprime mortgage shitpile and being pursued by federal investigators for criminal violations in that connection -- is John McCain's top economic adviser, as well as the campaign's national co-chair.

Good ol' Phil was caught expressing his true feelings the other day in an interview, when he opined that the country's economic problems are in our imaginations and that we are a nation of whiners. I don't think he actually said "let them eat cake", but this was certainly his intended message.

McCain's response: Phil Gramm "doesn't speak for me. I speak for me." Inconveniently however, at the exact moment that McCain said this, Phil Gramm was in New York explaining John McCain's economic plan to the Wall Street Journal's editorial board. On behalf of John McCain.

Most of the coverage I've seen of this story focuses on how this incident damages McCain in the "horserace" sense. No major newspapers appear to be pointing out that Gramm -- as the top economics adviser for a candidate that, by his own admission, knows next to nothing about economics -- has had, and will have, a key role in forming McCain's actual economic policies. And since Gramm believes there are no problems with the economy, it seems very likely that he also believes that nothing need be done to address these (nonexistent) problems.

Oh, and also, Phil Gramm is a complete moron. In addition to the rather salient facts that fuel costs have doubled within the last several months, the devaluation of the dollar continues, the Dow is below 11,000 for the first time in 2 years, homeowners have lost about $1 trillion dollars in equity over the last two years, unemployment numbers are the highest in years (and rising), and the federal deficit is huge and getting more monstrously huge with no end in sight -- I say, in addition to all of these facts which the expert economist Phil Gramm appears to not be aware -- just yesterday, I see this story in Fortune.

The article is entitled "The Fannie and Freddie doomsday scenario". It begins with this: "Here's a scary, and relevant, question to ponder as the housing market continues to slide: What would it take for the government to step in and help Fannie Mae and Freddie Mac, and how would a rescue affect you, the taxpayer?" (and today I see that these stocks have lost have their value in like 2 days.) Apparently they are already "insolvent" (i.e., cannot make payments as they fall due).

Fortune goes on to detail how these two companies are so crucial to the mortgage industry (and the credit market in general) that they cannot be allowed to fail.

The last paragraph of the article is as follows (Phil Gramm, are you paying attention?):

The doomsday scenario could cost taxpayers more than $1 trillion, says the S&P report. The report [by Standard & Poor's] went so far as to say that a government bailout of Fannie or Freddie could force the agency to lower its rating on the creditworthiness of the United States. [!!!]

Yet more evidence that life isn't fair

On my way home from the office I was driving beside a guy in a brand-spanking-new M3 that still had dealer plates on it. The dude couldn't have been more than 22 yrs old. I wonder whether he will in any way be damaged by never having had to drive a beater with squealing brakes, a semi-operable water pump, non-functioning A/C, windows that don't roll up, door handles that don't open the doors, etc.

Damn kids, get off my lawn!

Where do I get a shirt like that?

Darcy Burner, former Microsoft exec and current congressional candidate, pictured shortly after her house was destroyed by fire. Via Atrios and others.