It’s just been announced that JP Morgan will buy Bear Stearns for $2 a share, implying a value of about $250 million. Given that the company headquarters is said to be worth about $1.2 billion, that gives the BS banking business a value of negative $1 billion. And that’s only after the Fed agreed to take on $30 billion worth of toxic waste from the BS portfolio, politely described as “less-liquid assets.”
That’s quite the bargain, though of course one needs to wonder if the headquarters building at 383 Madison Avenue could really sell for $1.2 billion in the current real estate market. According to The Wall Street Journal about a third of BS is owned by its employees, at least some of whom have presumably seen a very healthy chunk of their savings wiped out as BS shares declined from $170 in January ’07 to $2 today. Looks like they probably won’t be the last big firm to go under in this mess.
A new study by the National Security Archive finds that despite “ordering improvements more than two years ago, President Bush has barely made a dent in the huge backlog of unanswered requests under the Freedom of Information Act.” Of government agencies with backlogs, “31 percent even saw pending requests rise during the two years.”
The presence of a strong La Ni±a contributed to a global average temperature that was the coolest since the La Ni±a episode of 2000-2001.
So it was relatively quite warm, even with a strong La Ni±a. No doubt the next El Ni±o year we see will be the warmest year on record. Anybody want to take a $1000 bet against that? Delayer-1000s, where are you?
Let’s get this straight. We have some short-term cooling from a strong La Ni±a. And a little more cooling from being at a solar irradiance minimum. And we still have the 16th warmest winter on record. The planet is warming — deal with it (please). Not only that, but the most abnormally warm place is the worst possible location from the perspective of carbon cycle feedbacks [click to enlarge]:
That’s right. We’re running upwards of 9°F warmer than normal in the land of the permafrost permamelt. This is worrisome because:
Siberia contains probably the world’s largest amount of carbon locked away in the permafrost.
The Houston Rockets just got their 22nd straight victory and uncontested posession of first place in the Western Conference. Both teams saw disappointing shooting from their stars (33 percent for Kobe, 25 percent for T-Mac) but the difference is that Kobe took over a third of the Lakers’ shot attempts while McGrady for more like a fifth of the Rockets’. There’s that, and Houston’s continued ability to pull quality role players out of thin air. First there was Carl Landry, then he went down with injury, and now Mike Harris, who was playing in China as of 10 days ago, delivered six points and six rebounds in ten minutes.
Every now and again, and then increasingly as things start looking worse, I get a comment like “how can you write about [thing that's not earth-shatteringly important] when the economy is [something terrible happening in the economy].” The twofold answer is, of course, that nobody can write exclusively about the most objectively important things all the time and secondarily that I try to focus write blog posts that I think are going to be good posts rather than just posts on objectively important topics. I don’t, in general, have any opinions about the problems in the financial markets that go beyond the utterly obvious — bad things seem to be afoot and I’m worried.
If you want non-stop coverage of the financial crisis from a center-left perspective, I’d recommend Delong and Krugman; from a more libertarian perspective there’s Marginal Revolution and The Atlantic‘s own team of Megan McArdle and Clive Crook.
But speaking strictly as an ideologue, I don’t necessarily have a problem with the government intervening to bail a bunch of rich guys out when their own bad decisions blow up in their faces if that’s what’s needed for the health of the overall economy, but this sort of thing is one of several reasons why I think the very rich should pay high tax rates and we shouldn’t be happy about the prospect of ever-growing inequality. At a certain level, the game is rigged and you’re not really bearing any risk.
UPDATE: Also the widely recommended Calculated Risk. Don’t take the remarks here as intended to disparage the quality of analysis offered elsewhere. There are a lot of good economics blogs out there — along with legal issues it’s one of the best-covered issue niches of the blogosphere.
Jonathan Weisman has an excellent rundown of the horserace as it pertains to congressional elections. Beyond the broad point that big picture trends look bad for Republicans, he shows that these bad trends have already manifested themselves in a series of candidate-recruitment failures — only Mary Landrieux in the Senate is facing is a serious GOP challenge and “Republicans have largely failed to recruit credible candidates for the swing-district seat of retiring Rep. Jerry Weller (R-Ill.) or to challenge several Democratic freshmen who took GOP seats in 2006. They include Zack Space of Ohio, Joe Courtney of Connecticut, Chris Carney and Joe Sestak of Pennsylvania, John Hall of New York, Joe Donnelly of Indiana and Heath Shuler of North Carolina.”
Consequently, whatever happens between now and November, the Republicans are basically condemned to be playing defense. The question becomes how many seats will they lose, not whether they will lose one. That’s a pretty bad situation for a minority party to be in since, by definition, a majority party can only make further gains by pushing into not-incredibly-favorable geography. At any rate, if I’ve said it once I’ve said it a thousand times, but in the event a Democrat is in the White House in 2009, the trajectory of domestic policy in the next administration is going to have more to do with the outcome of the congressional elections (especially in the Senate) than with the outcome of the Democratic primary.
On April 1, 2007, Sen. John McCain (R-AZ) strolled through the open-air Shorja market in Baghdad in an effort to prove that Americans are “not getting the full picture” of what’s going on in Iraq. In a press conference after his Baghdad tour, McCain told a reporter that his visit to the market was proof that people could “walk freely” in parts of Baghdad.
What McCain failed to mention was that he was accompanied by “100 American soldiers, with three Blackhawk helicopters, and two Apache gunships overhead.” He also appeared to be wearing a bulletproof vest during his visit.
Since that trip, McCain has claimed that the situation in Iraq has improved even more. A few months ago, McCain claimed that “we’ve succeeded militarily” in Iraq. Things, of course, are going so well, that he wants to keep U.S. troops there for at least 100 years.
McCain is now back in Iraq for a “surprise visit with Iraqi and American diplomatic and military leaders.” He is joined by fellow Iraq war defenders Sens. Joe Lieberman (I-CT) and Lindsey Graham (R-SC). But it’s unlikely they will be visiting the Shorja market again. Today, CNN reported that they tried to visit the Shorja market, but it was too unsafe and they were unable to go:
We got close to that marketplace today, Jim, but our own security advisers here in Iraq did not want us to go there. They didn’t believe it was safe for an American to be in that area. We were in a thriving marketplace nearby.
But when you show up, the local Iraqis, while it is clear security is better on the street — it is clear there are more markets open, just the traffic jams alone tell you that things are better on the streets of Baghdad — it’s also a very sensitive potential neighborhoods.
That one marketplace, as a matter of fact, you do see Iraqi police, you do see the Iraqi army, but in truth, that area is controlled by the radical cleric Moqtada al Sadr’s Mahdi army.
Watch it:
Civilian deaths per day in Iraq are up to 39 from a low of 20 last January, while at the same time, there has been “a sharp increase in attacks resulting in the deaths of U.S. soldiers.” Twelve Americans were killed last week over a period of four days, “bringing the overall U.S. military death toll since the start of the war near 4,000.”
The Associated Press recently interviewed Iraqis who “said they were not necessarily changing their daily routines,” but “the growing bloodshed was present in their minds, clouding what had until recently been a more hopeful time.”
Ilan Goldenberg’s right to be troubled by this New York Timesretrospective on Iraq. There are some good pieces in here, but it’s striking that they’re all focuses on the execution of the war and none treat the strategic issue of Iraq.
But Iraq has been, first and foremost, a strategic miscalculation based on a disastrously wrongheaded conception of the strategic challenge revealed on 9/11/01. The United States had a chance to implement a focused, disciplined effort to go after al-Qaeda and remove the threat but instead George W. Bush, aided and abetted by a wide swathe of elites, chose to go in for a broad-brush vision of a “war on terror” whose centerpiece would be the invasion and occupation of a country that had nothing to do with 9/11 and no meaningful relationship with al-Qaeda. The costs of that decision have been enormous, not just in terms of the tragedy that’s played out for American soldiers and Iraqis of all stripes, but in terms of the opportunity cost of totally reorienting America’s foreign policy and defense priorities away from useful things and toward Iraq instead.
Today, America faces not just political choices about the future of our Iraq policy, but also choices about whether future policy in other areas will continue to be guided by the strategic vision that led us into Iraq, or whether we’ll return to something sounder. To just take the invasion for granted and argue about the handling of the occupation obscures much more than it reveals. Warren Strobel for McClatchy does a much better job of highlighting the big picture.
One line of inquiry concerned a bank branch in Amiriya, a Sunni Arab neighborhood on the west side of the capital that the American military said was one of Al Qaeda in Iraq’s most important strongholds last year. [...] “The bank is probably one of the most important things in the neighborhood. Opening it told people the government still cares about you,” Lt. Col. Dale Kuehl said when I called him shortly after he returned to the U.S. [...] Within weeks, I heard back from the military regarding Amiriya. The bank was no longer something the military was willing to highlight.
Also:
Meanwhile, I learned of another possible story: about a Chinese restaurant that had been opened in Baghdad’s Karada districtby three laid-off steelworkers from China’s Hubei province — the first eatery here to be owned and operated by someone from outside the Middle East in years. [...] A few days later, the restaurant employees said they had changed their minds about the interview. They were too scared to raise their profile through a news story. And a Chinese Embassy spokesman said his office had persuaded them to return home, although they were still operating in recent days. “The situation is far too dangerous for them to work here,” the spokesman said.
No doubt the Chinese embassy is just trying to undermine John McCain’s Presidential campaign as part of the PRC’s long-range plot to secure world domination for the reanimated corpse of Vince Foster.
Yep . . . John McCain really ought to be pressured to release his tax returns, just like Hillary Clinton is getting pressure. And for that matter, Clinton ought to actually release her tax returns rather than just get criticized for not doing so, and McCain, too, ought to release his returns.
