Wasn't the government supposed to make money on these bailouts?

How many times did we hear that the government could make a profit? The potential losses are pretty large for just the top 19 banks.

The federal government projected that 19 of the nation's biggest banks could suffer losses of up to $599 billion through the end of next year if the economy performs worse than expected and ordered 10 of them to raise a combined $74.6 billion in capital to cushion themselves.

The much-anticipated stress-test results unleashed a scramble by the weakest banks to find money and a push by the strongest ones to escape the government shadow of taxpayer-funded rescues.

The Federal Reserve's worst-case estimates of banks' total losses and capital shortfalls were smaller than some had feared. Optimists interpreted the Fed's findings as evidence that the worst is over for the industry. But questions remain about the stress tests' rigor, in part since the Fed scaled back some projected losses in the face of pressure from banks. . . . .

The Wall Street Journal nails the whole idea of these stress tests here:

On the other hand, all we really have to go on is the word of the federal employees who looked at the banks and estimated their losses against certain economic assumptions. Did they go easier than they might have, and how much did they bend when the banks fought back? The Fed's overview yesterday claimed they ran a "deliberately stringent test" and pegged potential "adverse"-case losses at the 19 largest banks at $600 billion this year and next.

Yet markets are also full of reports that regulators showed more than a little forbearance, especially after it became clear that President Obama had no desire to go back to Congress to ask for more public money. With only $110 billion or so in Troubled Asset Relief Program (TARP) funds left uncommitted, it's probably no coincidence that Treasury now sees new net bank capital needs as a manageable $75 billion.

And maybe that optimism will prove correct. Most banks are earning healthy profits again, thanks to a low cost of funds and steep yield curve. They're also taking steps to burn bad debt and clean up their balance sheets. Some banks that got too big during the boom are looking to sell some of their operations in order to raise cash. This is how a financial system shapes itself up under the market pressure of recession, with or without stress tests.

Not that there still aren't plenty of financial risks out there. On the credit side, commercial real estate is ugly and both home mortgage and credit card losses are a long way from receding. While the economy seems to be bottoming out at last, unemployment will keep rising for several months, which will mean more bank losses.

But our biggest question concerns interest-rate risk. Thanks to the Federal Reserve's emergency easing, short-term rates are close to zero. That can't last forever, and the longer the Fed keeps rates this low the more likely it is that rates will have to climb higher down the road to prevent inflation. Remember how the Fed's 1% rate of 2003-2004 rose to 5.25% by 2006 and what that did to housing prices and the cost of bank funds? Yet the Fed didn't disclose the interest-rate projections for 2010 and beyond that it built into its stress test models. . . . .

ACORN workers charged with voter fraud

The AP has this story here:

PITTSBURGH (AP) - Authorities in western Pennsylvania have accused seven people who worked for the community group ACORN of falsifying voter-registration forms.
The seven have been charged with either forging, illegally soliciting or illegally filling out voter-registration cards in the lead-up to the 2008 election.

Allegheny County District Attorney Stephen Zappala Jr. announced the charges at a news conference Thursday.

ACORN, the Association of Community Organizations for Reform Now, has come under scrutiny for registration irregularities in other states.

Authorities in Nevada filed charges Monday against ACORN and two former employees on charges they illegally paid canvassers to sign up voters. ACORN denied those accusations.

"Eco-sailors rescued by oil tanker"

From the BBC.

An expedition team which set sail from Plymouth on a 5,000-mile carbon emission-free trip to Greenland have been rescued by an oil tanker.
Raoul Surcouf, Richard Spink and skipper Ben Stoddart sent a mayday because they feared for their safety amid winds of 68mph (109km/h).
All three are reportedly exhausted but safe on board the Overseas Yellowstone.
Mr Surcouf, 40, from Jersey, Mr Spink, 31, and Mr Stoddart, 43, from Bristol, are due to arrive in the USA on 8 May.
'Heartfelt thanks'
The team, which left Mount Batten Marina in Plymouth on 19 April in a boat named the Fleur, aimed to rely on sail, solar and man power on a 580-mile (933km/h) journey to and from the highest point of the Greenland ice cap.
The expedition was followed by up to 40 schools across the UK to promote climate change awareness.
But atrocious weather dogged their journey after 27 April, culminating with the rescue on 1 May after the boat was temporarily capsized three times by the wind.
In one incident Mr Stoddart hit his head and the wind generator and solar panels were ripped from the yacht.
Water was also getting into the boat from waves breaking over it and the crew took refuge in the forward cabin.
The crew were 400 miles (644km) off the west coast of Ireland when they sent a mayday to Falmouth coastguards who co-ordinated the rescue with Irish coastguards.
The transfer from the Fleur to Overseas Yellowstone was achieved in 42mph (67km/h) winds. . . .

Defensive gun use in Wisconsin (Open carry self-defense)

Wisconsin is one of only two states that completely ban concealed carry, but that hasn't stopped defensive gun uses from people carrying guns. Here is one interesting example.

Biker scares away robbers with gun, legal question remains

By Marci Laehr Tenuta
mtenuta@journaltimes.com

Tuesday, May 5, 2009 9:08 PM CDT
RACINE — Four teens knocked a 42-year-old Racine man from his bike Friday night. He thought they were going to rob him.

The man pulled a Smith and Wesson revolver from his side holster, pointed it at the sky and yelled, “Gun!”

The four suspects ran, and the man flagged down a Racine police officer.

The incident will perhaps mark the first time a new opinion allowing open carry of firearms is put to the test here, as it conflicts with another state statute that makes it illegal to possess a gun within 1,000 feet of a school, if not on private property.

The Racine man involved, who asked not to be named and declined to comment on the alleged robbery attempt when contacted by The Journal Times, was assaulted in the 1100 block of Grand Avenue, which is within 1,000 feet of Walden School, 1012 Center St.

Police did not arrest the man. After he was treated for head and wrist injuries at the scene by Racine rescue, officers escorted the man home and returned his gun to him.

But that doesn’t mean charges won’t be filed against the man, and police are questioning how such situations should be handled in the future.

“It’s difficult with the way the laws are written to carry (a gun) and not get into trouble,” said police spokesman Lt. Jim Dobbs.

He said the new open carry ruling will probably prompt more and more people to wear firearms, but in many places in the city, even stepping off their front porch would mean they are breaking the law.

“People will break the law inadvertently,” Dobbs said. “We want clarification from the state on what we should be doing.”

Last month, Attorney General J.B. Van Hollen sent out a memo saying openly wearing a holstered gun is not illegal. While Wisconsin law states a person cannot legally carry a concealed weapon, it does not address carrying a firearm in plain sight. . . . . .

So who is it that benefits from getting rid of vouchers?

Well, the students and their parents surely seem to be happy with the vouchers.

Supporters of a celebrated school voucher program in Washington rallied near the mayor's office Wednesday to save the scholarships from being slashed by Congress -- nearly 40 percent of whose members send their own children to private schools.

An estimated 1,000 parents, children and community leaders attended the afternoon protest in Washington's Freedom Plaza, where they called on D.C. politicians to help preserve a federal school choice program that currently assists more than 1,700 students with scholarships worth up to $7,500. . . . .

The same congress that thinks that vouchers for education are bad, vouchers for cars good?

Congress has approved legislation to offer consumers $4,500 for trading in their gas-guzzling clunkers in exchange for newer, fuel-efficient vehicles.

Dubbed the “Cash for Clunkers” bill, the legislation was approved on May 5 by Congress and is headed for the House. The bill would be active for one year after it is signed, and would fund up to one million new vehicles. This could cost anywhere between $3 billion and $4 billion. . . . .

Qualifying passenger cars must get less than 18 miles per gallon to be eligible. If the desired new car gets at least 4 miles per gallon more than the trade in, the owner will get a voucher worth $3,500. However, if the new car gets 10 or more miles per gallon, the voucher value is upped to $4,500.

Some education numbers for DC available here.

Nonprofit newspapers will surely be very aggressive going after news, right

I think that this tells us more about the political nature of the newspapers having trouble than anything else.

The U.S. government could provide tax breaks for newspapers or allow them to operate as nonprofits to help the struggling business survive, Sen. John Kerry said Wednesday.
Kerry, a Massachusetts Democrat, said Congress can help the industry hit by a collapse in advertising revenue, debt that is getting harder to repay and the drift of print subscribers to free online news websites.
Without newspapers, Kerry and other lawmakers said at a Senate subcommittee hearing Wednesday, there will be too few journalists investigating governments, companies and individuals.
"I think there are definitely some things we can do to encourage, to help the situation without stepping over any line," Kerry told Reuters after holding a hearing on the future of journalism. . . . . .

Captain Richard Phillips' statement on arming the crew against pirates

His testimony is available here:

"I do believe that arming the crew as part of an overall strategy could provide an effective deterrent under certain circumstance and I believe that as part of a measured capability in this respect should be part of the overall debate about how to defend ourselves against criminals on the seas."

More on Thuggish Government behavior on bailouts

Hedge funds strike back on Obama's attacks.

Cliff Asness, whose firm manages some $20 billion of assets, has written an open letter blasting President Obama for his attack on the hedge fund industry in the wake of the Chrysler bankruptcy.

As you'll recall, hedge funds, which hold approximately $1 billion in Chrysler bonds, refused the government's offer to take approximately thirty cents on the dollar. Obama accused hedge funds of holding out "for the prospect of an unjustified taxpayer-funded bailout."

These comments have enraged many in the industry but few have spoken out publicly. Asness, whose firm doesn't hold Chrysler bonds, says the industry is genuinely afraid in the face of Obama's power. Stating that he himself is "fearful writing this," Asness still pulls no punches:

"Let’s be clear, it is the job and obligation of all investment managers, including hedge fund managers, to get their clients the most return they can. They are allowed to be charitable with their own money, and many are spectacularly so, but if they give away their clients’ money to share in the “sacrifice”, they are stealing."
"The President screaming that the hedge funds are looking for an unjustified taxpayer-funded bailout is the big lie writ large. Find me a hedge fund that has been bailed out. Find me a hedge fund, even a failed one, that has asked for one. In fact, it was only because hedge funds have not taken government funds that they could stand up to this bullying. The TARP recipients had no choice but to go along."
"The President's attempted diktat takes money from bondholders and gives it to a labor union that delivers money and votes for him. Why is he not calling on his party to "sacrifice" some campaign contributions, and votes, for the greater good? Shaking down lenders for the benefit of political donors is recycled corruption and abuse of power."

House passes credit-card curbs, debate moves to Senate

From the WSJ.

Many Senate Democrats want stricter limits on card companies' ability to raise rates on consumers who are paying their credit-card bills on time. But most Senate Republicans want credit-card companies to have the right to establish a price for credit based on risk. That means adjusting terms if a consumer's credit quality has deteriorated -- even if that consumer hasn't been delinquent.

Industry officials say that is necessary to offer credit fairly to consumers. "If you cannot adjust for the behavior of a consumer or the risks that they pose, you're going to have to raise rates for everybody at the outset," said Kenneth Clayton, senior vice president of card policy at the American Bankers Association, an industry trade group. "That's unfair to consumers that have been playing by the rules because they're going to pay the price."

The House overwhelmingly passed legislation last week that would ban numerous practices, such as the retroactive interest-rate increases on existing balances, and require clearer disclosure and advance notice for changes to terms. Most of the House provisions mirror federal regulations, approved by the Federal Reserve in December, that take effect in July 2010. . . . .

Sen. Chuck Schumer (D., N.Y.) said companies are instituting "arbitrary credit-rate increases" -- with interest rates doubling or tripling "without any misconduct" by cardholders. "The companies are doing more of this now. And the feeling is they're doing more of it because they know your rules will go into effect" in more than a year, he told Mr. Bernanke.

Why Democrat Politicians send their kids to private schools

From the WSJ:

Two weeks ago, the Heritage Foundation highlighted this double standard with the release of a new study showing that 38% of the members of Congress are sending or have sent their children to private schools. That's more than three times the rate for rest of America. For Democrats especially, their choice of a private school for their own families tends to make them opponents of choice for others. . . . .

- President Barack Obama. Though the president talks a good game about putting kids first, and could save the Opportunity Scholarships Program with a few words, he remains silent -- even as his daughters attend the exclusive Sidwell Friends School.

- Education Secretary Arne Duncan. When Mr. Duncan chose a safe suburban school in Virginia for his kids, he explained it this way: "I didn't want to try to save the country's children and our educational system and jeopardize my own children's education."

Fair enough. Mr. Duncan also stated that the children who now have scholarships should be grandfathered. This reporter called his office to ask what, specifically, his department is doing to make that happen. A spokesman said they are working on a budget request -- though the administration has not yet decided whether the funding would be just for their existing schools or stay with them through high school.

- Mayor Adrian Fenty. The mayor nominally favors the Opportunity Scholarships, but he's been an uncertain trumpet -- and his lack of leadership was a green light to a Democratic Congress itching to end the program. Though the mayor has promised that his two sons will go to D.C. public schools come fall, right now they too are in a private school.

- Sen. Durbin. In his floor statement defending his killer amendment, Mr. Durbin admitted he chose Catholic schools for his own children. "If I entrusted my own children to [private education], I certainly believe in it." But he went on to say this choice should be there only for Americans who pay for it.

Hmm. Wonder if Mr. Durbin's voting record reveals a consistent respect for not funding things when Americans can't afford them -- or if this fiscal rectitude is reserved only for programs that rile his friends in the teachers unions? . . . .

What did Specter get by switching parties?

Moving the Democrats to 60 votes seems to be an extremely valuable gain for them. A loss of his seniority and the prospect of a tough Democrat primary makes wonder why he switched. However, the Hill reports:

Despite promises from Senate Majority Leader Harry Reid (D-Nev.) that Sen. Arlen Specter (Pa.) would retain his seniority after switching parties, Specter will be put at the end of the seniority line on all his committees but one under a resolution on the floor late Tuesday.

Under the modified organizing resolution, Specter will not keep his committee seniority on any of the five committees that he serves on and will be the junior Democrat on all but one — the chamber’s Special Committee on Aging. On that committee, he will be next to last in seniority. . . . . .

The Pittsburgh Post-Gazette has two prominent Democrats predicting that Specter will face a tough Democrat primary next year.

"I'm pleased that he saw the light and decided he would be a better fit for the Democratic Party and I think you have to allow for his political views to evolve," said former DNC chairman Howard Dean in an interview with the Huffington Post. "But he won't win the Democratic primary by taking the position that you should not have [the Employee Free Choice Act] or a public option for health insurance... If he takes these kinds of views, of course there is going to be a Democratic primary."

In a separate interview with the Huffington Post, Democratic strategist James Carville was equally sour on Specter's recent party switch, calling the defection a potential "major event in terms of how the Senate conducts its business," but "a relatively minor event in political history."

"[Specter] was the least reliable Republican. So he will just switch to become the least reliable Democrat," said the longtime Clinton confidant and author of the upcoming book, "40 More Years: How the Democrats Will Rule the Next Generation." "I wouldn't try to make much more out of it than the political survivor comes up with one more act in a long running play of political survival... The one thing I will give him is I will give him some points for candor for being so upfront about [his switch]."

"I'm not sure this is going to have a great ending," added Carville, who has worked extensively in Pennsylvania politics. "He could get primaried, you know... If [Rep. Joe] Sestak runs, [Specter] will have to fight."

The strange thing is that the Democrats were courting Specter.

In the Democratic Party’s courtship of Arlen Specter, no one may have played a bigger role than Vice President Joe Biden.

Biden has been trying to convince Specter to switch parties for at least the past five years, but those efforts were stepped up once he was sworn in as vice president, a senior White House official said.

Biden has met or spoken on the phone with Specter an average of once a week since the Inauguration. And after Specter became one of three Senate Republicans to support the administration’s stimulus package, those conversations were increased.

In the past 10 weeks, Biden has spoken with Specter 14 times — six in person and eight on the phone, according to the senior official.

Biden said at a fundraiser in Houston Tuesday that he's been trying to convince Specter "that he is really Democrat" for over two decades.

But, he added, "I have been working on that in earnest for the past four years and double-time for the past 100 days."

The US apparently has an extra $63 Billion for world health

An amount equal to $210 per American will be spent on health care for the rest of the world.

The Obama administration wants the United States to spend $63 billion over the next six years to fight global diseases and provide more aid for prenatal and postnatal care, children's health and fighting tropical diseases.

"We cannot fix every problem," Obama said in a written statement Tuesday. "But we have a responsibility to protect the health of our people, while saving lives, reducing suffering, and supporting the health and dignity of people everywhere. America can make a significant difference in meeting these challenges and that is why my administration is committed to act." . . . . .

Chrysler will not repay bailout money

CNN has the story here:

Chrysler LLC will not repay U.S. taxpayers more than $7 billion in bailout money it received earlier this year and as part of its bankruptcy filing.

This revelation was buried within Chrysler's bankruptcy filings last week and confirmed by the Obama administration Tuesday. The filings included a list of business assumptions from one of the company's key financial advisors in the bankruptcy case.

Some of the main assumptions listed by Robert Manzo of Capstone Advisory Group were that the Treasury would forgive a $4 billion bridge loan given to Chrysler in the closing days of the Bush administration, a $300 million fee on that loan, and the $3.2 billion in financing approved last week by the Obama administration to fund Chrysler's operations during bankruptcy. . . . .

Heroic College Student uses Gun to Save lives of Other Students

WSB TV has this:

COLLEGE PARK, Ga. -- A group of college students said they are lucky to be alive and they’re thanking the quick-thinking of one of their own. Police said a fellow student shot and killed one of two masked me who burst into an apartment.
Channel 2 Action News reporter Tom Jones met with one of the students to talk about the incident.
“Apparently, his intent was to rape and murder us all,” said student Charles Bailey.
Bailey said he thought it was the end of his life and the lives of the 10 people inside his apartment for a birthday party after two masked men with guns burst in through a patio door.
“They just came in and separated the men from the women and said, ‘Give me your wallets and cell phones,’” said George Williams of the College Park Police Department.
Bailey said the gunmen started counting bullets. “The other guy asked how many (bullets) he had. He said he had enough,” said Bailey.
That’s when one student grabbed a gun out of a backpack and shot at the invader who was watching the men. The gunman ran out of the apartment.
The student then ran to the room where the second gunman, identified by police as 23-year-old Calvin Lavant, was holding the women.
“Apparently the guy was getting ready to rape his girlfriend. So he told the girls to get down and he started shooting. The guy jumped out of the window,” said Bailey. . . . . .
Lavant, who was found dead near his apartment, only one building away. . . . .

Thanks to David Burnett for the link.

More taxes from Obama

This will increase the tax rate on foreign investments relative to those in the US.

Americans and American businesses earning profits overseas will pay an estimated $210 billion dollars more in taxes over the next decade if Congress approves stricter international tax laws outlined by the Obama Administration Monday. . . . .

Currently, most American-owned businesses investing overseas can delay paying federal taxes on their profits until they bring that money back to the United States. These businesses can also take tax deductions on their overseas investments. The President is proposing Congress eliminate those deductions unless the company pays its U.S. taxes on international profits. There would be an exception for research and experimentation expenses that have a spillover benefit to the U.S. . . . . .

The WSJ has this:

The President's argument is that U.S. tax-deferral rules make it more expensive for American companies to reinvest overseas profits at home than abroad. This, he claims, creates a perverse incentive for companies to "ship jobs overseas" and reduces investment and job creation in the U.S.

He's right, except that his proposals would only compound the problem. His plan would limit the tax deferral on income earned abroad by tightening the rules, limiting allowable deductions and restricting eligibility for foreign-tax credits. This "solution" is antigrowth, job-destroying, protectionist and unlikely to raise the tax revenue Mr. Obama predicts. Other than that . . .

The current tax-deferral system is a clumsy attempt to deal with the fact that most other countries don't tax their companies' overseas profits. A German firm doing business in Ireland, say, pays no German income tax on its Irish profits, but it does pay Ireland's corporate income tax at its 12.5% rate. The U.S. company competing with that German business in Ireland, by contrast, pays Ireland the same 12.5% on its profits -- and it then pays Uncle Sam up to 35%, minus a credit for what it paid the Irish. And because almost everyone else's corporate tax rates are lower than America's (see nearby table), U.S. companies end up paying higher taxes than their international competitors. . . . .

The explicit goal of this plan is to reduce the incentive for U.S. companies to invest abroad, which Mr. Obama derisively calls "shipping jobs overseas." Foreign companies may relish the loss of U.S. corporate competitiveness that his proposal will bring in the short term. But in the long term, reducing U.S. investment globally will hurt everyone. . . . . .

Movement to end gun-free zones in restaurants in Tennessee

The discussion is here:

A joint committee on a bill to allow handgun carry permit holders to take their weapons into restaurants that serve alcohol decided to remove restrictions passed in the House that would not have allowed the guns in age-restricted restaurants and would have barred the weapons from any restaurant from 11 p.m. to 5 a.m.

The House panel in the committee voted 3-2 to recommend a Senate amendment that contained neither of the stipulations that passed the House. Rep. Curry Todd, R-Collierville and the sponsor of the bill, indicated to the AP that the restrictions he fought for in the House didn’t matter once the bill went to a conference committee.

Todd indicated in the committee that he might want to move its decision to the House floor as early as tonight. The Senate will have to wait at least 24 hours before considering the measure, according to Sen. Doug Jackson, meaning it will likely come to the Senate floor Thursday.

The amendment indicated the bill, if passed into law, would go into effect June 1.

Thanks to Caleb C. for the link.

Coast to Coast AM show started an hour early

Show started at 1 AM EDT. You can get the link here.

Captain who had been held by pirates urges that crew members be armed

The LA Times has this story:

Reporting from Washington -- The freed captain of a merchant ship attacked by pirates near Somalia last month called Thursday for military protection and armed crew members to thwart attacks in dangerous waters.

Capt. Richard Phillips, skipper of the Maersk Alabama, told the Senate Foreign Relations Committee that it was the "responsibility of the U.S. government" to protect any ship flying an American flag, through military escorts or onboard squads of highly trained security forces.

He added that an armed brigade of specially trained senior crew members also could deter pirate attacks in certain situations.

"And I don't mean a security guard. I don't mean a mall cop. I mean someone who's sufficiently trained," Phillips said

Phillips and the private shipping line's chairman, John Clancey, differed in their prescriptions for addressing piracy in testimony Thursday. Clancey said arming and training crew officers would be prohibitively expensive and would result in a potentially deadly arms race with pirates.

But the recommendations from Phillips, widely regarded as a hero for selflessly trading his freedom in exchange for that of his 20-person crew, are likely to pressure the U.S. military to consider steps he outlined in the hearing. At the same time, military officials have said that world navies could not protect every ship, and they have recommended that vessel operators adopt more aggressive defenses.

Since the Maersk Alabama attack, the military has held several meetings with shipping companies, looking for better ways to deter pirates. Clancey said those talks were continuing.

He said Maersk Inc. had more than 500 merchant ships at sea, making the cost of training and arming crews a "very tall order," and not one with guaranteed results.

"Our belief is that arming merchant sailors may result in the acquisition of ever more lethal weapons and tactics by the pirates, a race that merchant sailors cannot win," Clancey said.

He also pointed out that most nations did not permit armed ships to enter ports or dock. Besides talks with military officials, Clancey said ships were being "hardened," including the addition of electrified rails and pressure hoses. . . . . .

This point about "most nations did not permit armed ships to enter ports or dock" may explain why we don't see more armed ships. Another gun free zone has its problems. We ran into this problem with arming pilots and that seems to have been worked out with some countries.

Thanks very much to Gus Cotey for sending me this link.

"GUN OWNERS FEAR OBAMA’S PUSH FOR INTERNATIONAL TREATY TO TRACK FIREARMS"

See this piece from Lou Dobbs' show on CNN here. Would be used to justify registration of guns.

More abusive actions by the government

The list of abuses from government coercion is getting too long to keep track of. Here is another example from Jake Tapper at ABC News.

White House Denies Charge By Attorney that Administration Threatened to Destroy Investment Firm's Reputation
May 02, 2009 3:17 PM

A leading bankruptcy attorney representing hedge funds and money managers told ABC News Saturday that Steve Rattner, the leader of the Obama administration's Auto Industry Task Force, threatened one of the firms, an investment bank, that if it continued to oppose the administration's Chrysler bankruptcy plan, the White House would use the White House press corps to destroy its reputation. . . . .

Perella Weinberg Partners, Lauria said, "was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under the threat that the full force of the White House press corps would destroy its reputation if it continued to fight. That’s how hard it is to stand on this side of the fence."

Perella Weinberg Partners, which owned Chrysler debt through its Xerion Fund, was one of Lauria's clients in this bankruptcy, but no longer is. Before the Thursday deadline, Joseph Perella and Peter Weinberg tried to join the larger creditors -- JP Morgan Chase, Citigroup, Morgan Stanley, and Goldman Sachs -- who are owed roughly 70% of Chrysler's debt and had already agreed to participate with the administration's plan.

All four financial institutions are recipients of up to $100 billion in federal government bailout funds, though the Obama administration insists the matters were kept completely separate. . . . .

President Obama singled out Lauria's clients for criticism when he announced the Chrysler plan on Thursday.

"While many stakeholders made sacrifices and worked constructively, I have to tell you some did not," the president said. "In particular, a group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-funded bailout. They were hoping that everybody else would make sacrifices, and they would have to make none."

Lauria said the president's assertion that his clients weren't willing to make any sacrifice is false. The clients were willing to take 50 cents on the dollar from Chrysler for their debt, he said. . . .

1) Well, the President appears to have carried out his threat at the press conference.
2) The large creditors that the government owns did what the government wanted, but the ones it doesn't own didn't. And there is no connection between these actions and government ownership? Dubious.
3) $27 billion loaned by both the government and creditors to GM, yet gov is supposed to get 50 percent and the creditors are to get 10 percent of the stock. It is then surprising that the non-government owned creditors are upset by the deal?

UPDATE: The Detroit News mentions the consequences for the companies that Obama criticized.

Creditors objecting to Chrysler LLC's efforts to speed the company's move through bankruptcy won a delay in a key hearing today, and a lawyer said some had received death threats.
The major proposal on tap for today was winning approval of the company's plan to establish bidding procedures -- in an effort to quickly allow the "good" assets of Chrysler to be auctioned off so the company can quickly emerge from bankruptcy. . . . .

A lawyer for the objecting creditors, Thomas Lauria, told Gonzales that some creditors had received death threats -- and those had been referred to the FBI and local police. Lauria wants court permission to keep the identities of some of those creditors secret. . . . .

"NYT Corrects Article Gore Cited in Congressional Testimony"

On April 23rd the NY Times had this:

“The role of greenhouse gases in climate change is not well understood,” the coalition said in a scientific “backgrounder” provided to lawmakers and journalists through the early 1990s, adding that “scientists differ” on the issue.

But a document filed in a federal lawsuit demonstrates that even as the coalition worked to sway opinion, its own scientific and technical experts were advising that the science backing the role of greenhouse gases in global warming could not be refuted.

“The scientific basis for the Greenhouse Effect and the potential impact of human emissions of greenhouse gases such as CO2 on climate is well established and cannot be denied,” the experts wrote in an internal report compiled for the coalition in 1995. . . . .

On May 2, 2009, had this correction.

The article cited a “backgrounder” that laid out the coalition’s public stance, published in the early 1990s and distributed widely to lawmakers and journalists. However, the article failed to note a later version of the backgrounder that included language that conformed to the scientific advisory committee’s conclusion. The later version was distributed publicly in 1998, but existed in some form as early as 1995, according to an online archive kept by Greenpeace. The amended version, which was brought to the attention of The Times by a reader, acknowledged the consensus that greenhouse gases could contribute to warming. What scientists disagreed about, it said, was “the rate and magnitude of the ‘enhanced greenhouse effect’ (warming) that will result.”

As this You Tube clip shows, Gore used the original article from the NY Times in his testimony.



The text of the relevant part of Gores statement includes this:

Sen. Warner made reference in his opening statement to the story on the front page of the New York Times this morning. Absolutely incredible. The largest corporate carbon polluters in America, 14 years ago, asked their own people to conduct a review of all of this science. And their own people told them, “What the international scientific community is saying is correct, there is no legitimate basis for denying it.” Then, these large polluters committed a massive fraud far larger than Bernie Madoff’s fraud. They are the Bernie Madoffs of global warming. They ordered the censoring and removal of the scientific review that they themselves conducted, and like Bernie Madoff, they lied to the people who trusted them in order to make money. . . .

One reason why public schools are so bad

This is just the very beginning of a very long article in the LA Times. It is very interesting. The unionization of public schooling helps explain how bad public schools are, but that is only part of the reason.

Firing tenured teachers can be a costly and tortuous task
Los Angeles Times
By Jason Song
May 3, 2009

Joseph Walker, former principal of Grant High School in Van Nuys, says that because of the uphill battles that administrators face in terminating teachers: “You’re not going to fire someone who’s not doing their job. And if you have someone who’s done something really egregious, there’s only a 50-50 chance that you can fire them.”

The eighth-grade boy held out his wrists for teacher Carlos Polanco to see.

He had just explained to Polanco and his history classmates at Virgil Middle School in Koreatown why he had been absent: He had been in the hospital after a failed attempt at suicide.

Polanco looked at the cuts and said they "were weak," according to witness accounts in documents filed with the state. "Carve deeper next time," he was said to have told the boy.

"Look," Polanco allegedly said, "you can't even kill yourself."

The boy's classmates joined in, with one advising how to cut a main artery, according to the witnesses.

"See," Polanco was quoted as saying, "even he knows how to commit suicide better than you."

The Los Angeles school board, citing Polanco's poor judgment, voted to fire him.

But Polanco, who contended that he had been misunderstood, kept his job. A little-known review commission overruled the board, saying that although the teacher had made the statements, he had meant no harm.

It's remarkably difficult to fire a tenured public school teacher in California, a Times investigation has found. The path can be laborious and labyrinthine, in some cases involving years of investigation, union grievances, administrative appeals, court challenges and re-hearings.

Not only is the process arduous, but some districts are particularly unsuccessful in navigating its complexities. The Los Angeles Unified School District sees the majority of its appealed dismissals overturned, and its administrators are far less likely even to try firing a tenured teacher than those in other districts.

The Times reviewed every case on record in the last 15 years in which a tenured employee was fired by a California school district and formally contested the decision before a review commission: 159 in all (not including about two dozen in which the records were destroyed). The newspaper also examined court and school district records and interviewed scores of people, including principals, teachers, union officials, district administrators, parents and students.

Among the findings:

* Building a case for dismissal is so time-consuming, costly and draining for principals and administrators that many say they don't make the effort except in the most egregious cases. The vast majority of firings stem from blatant misconduct, including sexual abuse, other immoral or illegal behavior, insubordination or repeated violation of rules such as showing up on time.

* Although districts generally press ahead with only the strongest cases, even these get knocked down more than a third of the time by the specially convened review panels, which have the discretion to restore teachers' jobs even when grounds for dismissal are proved.

* Jettisoning a teacher solely because he or she can't teach is rare. In 80% of the dismissals that were upheld, classroom performance was not even a factor. . . . .

Fox News not called on again to ask a question to Obama

A transcript of the press conference from April 29th is here. The lamest, softball question was clearly from the New York Times. CBS TV and Radio got one question each. CNN got one question. Black Entertainment Television got one question. Chuck Todd (NBC), who is a strong liberal and frequently openly shows his bias, got one question. Fox News had zero questions.

Obama: Jeff Zelleny (New York Times).

Question: Thank you, Mr. President.

During these first 100 days, what has surprised you the most about this office? Enchanted you the most from serving in this office? Humbled you the most? And troubled you the most?

Texas Academics push for ending gun free zones on public college campuses

Pieces were published in the Houston Chronicle and in the Austin American-Statesman.

Interesting challenge to federal gun laws in Montana, Texas, and Utah

Something that is destined to go to the Supreme Court. The only huge problem is that this is in the 9th circuit and the delays there are legendary so who knows how long it will take before the Supreme Court gets it and how Obama will have reshaped the court by then. Montana has just enacted this law.

HELENA, Mont. (AP) — Montana is trying to trigger a battle over gun control — and perhaps make a larger point about what many folks in this ruggedly independent state regard as a meddlesome federal government.
In a bill passed by the Legislature earlier this month, the state is asserting that guns manufactured in Montana and sold in Montana to people who intend to keep their weapons in Montana are exempt from federal gun registration, background check and dealer-licensing rules because no state lines are crossed.
That notion is all but certain to be tested in court.
The immediate effect of the law could be limited, since Montana is home to just a few specialty gun makers, known for high-end hunting rifles and replicas of Old West weapons, and because their out-of-state sales would automatically trigger federal control.
Still, much bigger prey lies in Montana's sights: a legal showdown over how far the federal government's regulatory authority extends.
"It's a gun bill, but it's another way of demonstrating the sovereignty of the state of Montana," said Democratic Gov. Brian Schweitzer, who signed the bill.
Carrie DiPirro, a spokeswoman for the federal Bureau of Alcohol, Tobacco, Firearms and Explosives, had no comment on the legislation. But the federal government has generally argued that it has authority under the interstate commerce clause of the U.S. Constitution to regulate guns because they can so easily be transported across state lines. . . . .

Texas is working towards passing such a law.

A bill by state Rep. Leo Berman exempting Texas-made firearms, gun accessories and ammunition sold within the state from federal regulation and law -- including registration -- was heard in a House committee on Monday.

The bill also provides for the Texas Attorney General's office to defend Texans who run afoul of the federal government because of this law.

Berman, a Tyler Republican who has pushed several "states' rights" measures this legislative session, said his bill would affect more than 300 manufacturers in the state.

"Under the 9th and 10th Amendments of the U.S. Constitution, states have responsibility for regulating intrastate commerce," Berman said. "The federal government has no role." . . . . .

Utah is also considering a similar law:

Some Utah legislators are eyeing a bill aimed at preventing the federal government from regulating guns in the state.
Montana's Legislature recently passed a bill that Gov. Brian Schweitzer signed into law that would exempt guns made in the state and kept within its borders from federal regulations, including registration, background checks and dealer-licensing.
It's an idea that's appealing to some of Utah's conservative legislators, who say President Barack Obama and the Democrat-controlled Congress are strongly anti-gun and are trying to overstep their bounds and infringing on states' rights.
"I think [Montana's law] preempts somewhat what the federal government is trying to do right now in gun registration," said Rep. Carl Wimmer, R-Herriman. "This is something Utah should look into. We should look into several different avenues to reassert state rights."
Wimmer says he or one of his colleagues may run a similar bill in next year's legislative session, and it's an idea that has traction among many legislators who are fiercely pro-gun rights and pro-states' rights.

UPDATE: Time magazine has caught up on this story.

"It is part of the populist state-sovereignty movement, the sense there is so much power in Washington," says Stephen P. Halbrook, a Virginia attorney who has argued several important Second Amendment cases before the Supreme Court, including, most recently, a successful case overturning the Washington, D.C., gun ban. Halbrook says the Montana initiative had been simmering long before President Obama's election, which led to reports of a run on gun and ammunition across the country because of fear of new federal curtailment or taxation of gun ownership. "It is a grass-roots thing," Halbrook says, "not an NRA [National Rifle Association] initiative." The NRA, however, has expressed its support for the measure.

It is likely the Montana law will end up before the Supreme Court, Halbrook says, following the same track as the landmark Printz v. United States case, which he argued successfully before the court. That case was filed in Helena, Mont., challenging the constitutionality of requiring local enforcement officers to perform background checks required by the federal Brady Act, regulating handgun sales. The district court found the requirement unconstitutional but was overturned by the more liberal Ninth Circuit Court of Appeals in San Francisco. The lower court decision was affirmed by the Supreme Court in 1997, four years after the Brady Act passed. The ruling was, in effect, moot because a federal background database supplanted local background checks by the time the court ruled, but it left in place an important precedent on the limits of federal law — an issue that the new Montana law raises again.

Gun-regulation supporters say the Montana law is unconstitutional, citing long-standing court decisions going back to the Depression era based on the application of the so-called commerce clause regulating interstate commerce, the Wickard v. Filburn case, according to Paul Helmke, president of the Brady Campaign to Prevent Gun Violence. The courts have ruled that even if a farmer grows his wheat locally, sells it locally and someone buys it locally, the entire transaction process is still governed by interstate commerce because of the concept that his actions affect the entire marketplace — including, most importantly, the ability of a farmer in a neighboring state to sell his wheat across state lines. . . . .

Excellent piece on the lenders who stood up against the government stealing their money

Great piece by Rick Newman. Please read the entire piece here.

Hooray for Chrysler’s Rogue Creditors
May 01, 2009 10:46 AM ET | Rick Newman | Permanent Link | Print
One rap against President Obama is that he never gets mad. The Chrysler bankruptcy may have proven otherwise.

When Obama singled out “investment firms and hedge funds” that wouldn’t agree to restructure Chrysler’s debt on the government’s terms, his scorn was palpable. “I don’t stand with them,” he said pointedly. “I don't stand with those who held out when everybody else is making sacrifices.”

[See why Chrysler still might not survive.]

The president was referring to a group of financial firms that hold a big chunk of Chrysler’s $6.9 billion in debt. Some of Chrysler’s creditors agreed to take 33 cents on the dollar and let Chrsyler off the hook. But other creditors said no to that deal, gambling that they’d get more from a bankruptcy judge. They may be right: Fitch Ratings estimates that bondholders could get 50 to 70 percent of their money back if Chrysler liquidates, and a bit less if Chrysler emerges as a going concern. In either case, that’s a better outcome for creditors than the 33 percent return they would have gotten under the government’s offer.

On $1 billion in debt, the difference between a 33 percent and a 50 percent redemption is $170 million. On the whole $6.9 billion in debt, the difference would be almost $2 billion. Sure, some of that accrues to rich investors who can probably afford the haircut, but much of the money is invested on behalf of pension funds, mutual funds, and the retirement accounts of ordinary Americans. Should they really accept a deeper loss because the government asked them to? . . . .

Vote on whether concealed handguns should be allowed on college campuses?

A pro-con debate over concealed carry on college campuses in Missouri is here.

"FOX's Brilliant Business Move: Ignore Obama"

The Business Insider has this:

It seems Fox made the smart move by deciding not to air president Obama's 100th-day press conference. The network beat every other broadcaster, all of which were carrying the president's speech, in the ratings. Fox's new episode of Lie To Me drew 7.9 million viewers. Fox also got millions in advertising revenue by running a normal TV program instead of Obama's commercial-free address. In second place for the 8 p.m. hour was NBC's airing of Obama's speech, which pulled in 6.7 million viewers. Are people finally getting bored with Obama's frequent speeches? . . .

The question is why Fox was the only network not to cover this (of course, Fox News covered it).

If the media corrected the original impression that they created about the number of deaths from this Swine flu, it wouldn't be an issue

This is getting too little attention.

WHO also reported the number of confirmed swine flu cases rose to 257 worldwide Thursday, with cases in Mexico rising to 97 from 26, with seven deaths. The WHO confirmed tally from the United States now stands at 109, with one death.

Upcoming appearance on Coast-to-Coast AM on Sunday night/Monday morning

Coast-to-Coast's upcoming shows are noted here.

Hosted by George Noory

Guest:
John R. Lott

Sunday May 3, 2009

Senior research scientist, John Lott will discuss 'Freedomnomics,' his simple formula that can unlock and explain puzzling and curious policy issues, politically incorrect topics, and subjects you have wondered about. Hosted by George Noory.