Why no one seems to really care about JPMorgan – its loss is just too complex to understand

Lisa Pollack on J.P. Morgan’s $2B London Whale Loss: Too Big To Hedge
[Via Grasping Reality with Both Hands: Economist Brad DeLong's Fair, Balanced, and Reality-Based Semi-Daily Journal]

Lisa Pollack:

FT Alphaville » Too Big To Hedge: Throughout FT Alphaville’s coverage of the credit trades of JP Morgan’s Chief Investment Office, there were two thoughts that kept nagging us. We’d think about them whenever we wrote about the technicals the trades might be creating. One was: could this really happen under CEO Jamie Dimon’s watch? The other was: where the hell are the regulators in all of this?…

Like most trades, it probably started harmless enough, or it least it seemed that way. After all, no one enters into a trade to lose money….FT Alphaville thought they had entered into a curve trade…. The whole curve moving down would mean that these corporates are regarded as more creditworthy, i.e. spreads have tightened…. The curve flattens when things look bad even in the near term. Curves can completely invert when the view is that if the corporate (or sovereign) can manage to survive some immediate obstacles and not implode, things will probably get better or at least less bad…. [O]ur theory was that the CIO had put on a trade that bet that the CDX.NA.IG.9 — a credit index that was launched in 2007 which has decent liquidity due to the legacy of the CDO boom — would flatten. With such a trade, JP Morgan could say things like this (from the WSJ):

On a conference call with analysts, [J.P. Morgan Chief Financial Officer Doug] Braunstein said the positions are meant to hedge investments the bank makes in “very high grade” securities with excess deposits. (J.P. Morgan has some $1.1 trillion in worldwide deposits.) Braunstein said the CIO positions are meant to offset the risk of a “stress-loss” in that credit portfolio. He added the CIO position is made in line with the bank’s overall risk strategy. Which is a good thing to answer with when Paul Volcker comes knocking on your door, inquiring about any proprietary trading going on under your roof.

A flattener trade is just fine in reasonable doses, i.e. if there’s enough liquidity in the market to support it. Unfortunately, with curve trades, you have to rebalance them reasonably actively… keeping the ratio of protection bought at the short end to protection sold at the long end just right. Get this wrong and your position will start to look even more risky and volatile…. [I]t looks like the CIO… may have really screwed the pooch in terms of managing this trade, possibly increasing its overall size too in a fit of doubling down….

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Reading this whole thing made my head hurt. All I get is that JPM lost $2 billion on something.

You know, banks that are too big to fail and expect to be bailed out by taxpayers should not do anything that cannot be explained to a college graduate. And they should have to reveal exactly what happened, not hedge around like JPM so that people speculate.

I like what Jonathan Weil wrote:

If a too-big-to-fail bank can’t disclose what its trading desk is doing for fear of blowing itself up, then the bank shouldn’t be allowed to do it.

And the only reason we are hearing about this now is that it could get worse. You knw, I’m not big on governments nationalizing private businesses but I am around to the idea we should just nationalize JMP and be done with it.

They take all the moral hazard out of their business – ‘we cannot ever fail so we can do just any stupid thing’ – because they know the taxpayers will back them up. Lose our shirts on stupid things, well, we will be made good.

This is easy to understand.

Financial crises are worse than anyone expected

Could this time have been different? – The Washington Post
[Via The Washington Post]

Christina Romer had traveled to Chicago to perform an unpleasant task: she needed to scare her new boss. David Axelrod, Barack Obama’s top political adviser, had been very clear about that. He thought the president-elect needed to know exactly what he would be walking into when he took the oath of office in January. But it fell to Romer to deliver the bad news.

So Romer, a preternaturally cheerful economist whose expertise on the Great Depression made her an obvious choice to head the Council of Economic Advisers, gathered her tables and her charts and, on a snowy day in mid-December, sat down to explain to the next President of the United States of America exactly what sort of mess he was inheriting.

Axelrod had warned her against pulling her punches, and so she didn’t. It was not a pleasant presentation to sit through. Afterward, Austan Goolsbee, Obama’s friend from Chicago and Romer’s successor, remarked that “that must be the worst briefing any president-elect has ever had.”

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The data we now have indicate that the numbers being given to Obama in 2009 were way way off, and too optimistic.  They thought that the decrease in the economy during the last quarter of 2008  dropped at an annual rate of 3.8%. They were wrong and working in the dark with estimates that have been shown to be horribly incorrect.

It was not until this year – over 3 years latter – that we know what the real decrease was. Over twice as high at 8,9%

They proposed a stimulus that was not even large enough to make up for a 3.8% drop in the economy. It was tragically much too small for an 8.9% drop.

But the GOP would never stand for that. We now know we needed something closer to a $2.5 trillion stimulus to get us out of this whole. The GOP allowed us t get a $700 billion, with about half in tax cuts rather than direct stimulus.

A better approach would have been to follow some of the ideas from an insightful book “This time it’s different” which looks at a large number of financial crises. Rogoff and Reinhart, the authors, provide some useful points which need to be considered.

Because their work shows that in contrast to economic crises which are usually fixed relatively rapidly, the aftermath of financial crises can take years or decades to fix. In some cases the economy never recovers.

Thy do believe that the stimulus, as small as it was, was instrumental in preventing a second Great Depression. It just failed to recognize how long the slog is after a financial crisis. There are other things that can be done.

One would have been to take longer to use the stimulus. As a Republican economist stated, “The Recovery Act worked. The problem is we didn’t keep our foot on the accelerator.”

Rogoff/Reinhart show that these crises are extended because of the timidity of poltical solutions

Yet the Obama administration did too little. Its team of interventionist Keynesians immersed in the lessons of the Depression and Japan did too little. Everyone does too little, even when they think they’re erring on the side of doing too much. That’s one reason “this time” is almost never different.

The reason ‘This time is different” is never really different is that the politicians never really do enough. Not all of these need to be just stimulus also. Some, like preparing the population for the long slog of a financial crisis recovery, should be easy.

But the biggest thing that needs to be done about a financial crisis is to deal directly with the cause of it – debt. But the right kind of debt. This crisis was not caused by government debt. So lowering government debt will not fix it.

It was caused by the housing debt. The overall cost of housing now is $6 trillion less than in 2006. And this will get worse:

Morgan Stanley estimates there are more than 2.2 million homes sitting vacant, and 7.5 million more facing foreclosure. It is housing debt that has weakened the banks, and mortgage debt that is keeping consumers from spending.

But we have not dealt with this debt at all.  It is still there. In fact McCain actually proposed dealing directly with this debt – the government buy up the troubled mortgages and let people refinance. This was shot down so hard by his own party that Obama did not even try.

Because there is no way our politicians will allow people to be helped if it hurts banks. The banks pay for their election campaigns.

We will not really solve this financial crisis until there is a workable housing policy. I have yet to hear either candidate propose such a thing.

What is obvious form this article is that Obama’s policies were not as effective as they could have been. But the GOP’s policies would have been much,much worse. And nothing they are proposing will do much to ovecome the sorts of crises seen by Rogoff-Reinhart.

Charts everyone should look at

Chart Book: The Legacy of the Great Recession —
[Via Center on Budget and Policy Priorities]

The United States went through its longest, and by most measures worst economic recession since the Great Depression between December 2007 and June 2009. This chartbook will document the course of the economy following that recession against the background of how deep a hole the recession created – and how much deeper that hole would have been without the financial stabilization and fiscal stimulus policies enacted in late 2008 and early 2009.

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The data tell a mighty tale. Such as change in GDP:

Obama took over in the first quarter 2009. There has been an increase in GDP every quarter since.

The Recovery Act was passed in February 2009. Since then we see increasing employment in the private sector – 4.2 million jobs added or 163,000 a month. While the previous 12 months were all job losses. Real jobs have been created.

This one shows just how bad the job situation was. The previous recessions mostly reached bottom within 18 months. This one went out to 2.5 years.

But it would have been much worse without the stimulus. That stimulus, as small as it was, may be the thing that prevents a seconds recession, one that much of Europe is now experiencing.

Returning to 1959 is all right with the GOP

 

by NASA Goddard Photo and Video

House pares NASA’s 2013 spending back to 1959 levels, suggests Europa mission
[Via Ars Technica]

The Appropriations Committee of the US House of Representatives has set May 8 as the date they will begin debating an election year budget that pares NASA back to its lowest level as a percentage of the Federal budget since 1959, surpassing last year’s record low of 0.48%. In absolute terms, it will roughly match the 2006 Bush levels, cutting money from the Space Technology and Commercial Crew program requests for a third year, while adding funds to the Space Launch System and the Orion Multi-Purpose Crew Vehicle, two House favorites.

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I wrote about this the other day. NIce to see it hitting the mainstream.

And the Republicans in the House want to kill private expansion into space – they want NASA to pick only one company to support, rather than 4. As NASA is a prime contractor for many companies, this would seriously set-back efforts.

They gave NASA half what they asked for here – $406 million. Meanwhile, they gave NASA $1.3 billion to develop its own system.

The biggest curiosity in the space business is currently the Space Launch System, labeled by many as the “Senate Launch System” because NASA seems to have been forced to take a rocket they didn’t specify and don’t want. Both the House and the Senate require the Space Launch System by law to have the capability to lift 130 metric tons to orbit, even though no mission exists yet for the giant rocket and no one is sure that one will exist for the forseeable future.

The SLS is so expensive that NASA will only be able to afford to launch it every two years at best, giving rise to a strong suspicion that the rocket will be cancelled before completion. In attempt to spare all parties from further embarassment, the new House bill orders NASA to come up with a list of possible missions and destinations for SLS.

$1.3 billion. To put this in perspective – from a recent report –  using just the current technology we have, $2.6 billion would fund a ten year project to find, reach and move a 7 meter asteroid to lunar orbit, ready to mine. Two years of funding for a boondoggle NASA does not want would have use mining asteroids in 10 years or less!

Why fund a purely government program that is already late and years over budget that is not wanted when fairly supporting a public-private partnership would put Americans in space rapidly,would have us mining asteroids and doing what else? Why force NASA to spend money on a system it does not want and that will not really provide any benefits? Why hurt the progress of a real path to space that we can do right now for continued funding of a white elephat ‘maybe’?

Why? I’d guess because, like most government welfare, it serves to fund projects in their states. They do not care if it actually produces anything but the money will fund jobs.

This is their stimulus – hurt American progress into space, put America at a disadvantage compared with other countries – so that they can create make-work in their states. I’d have more respect for them if they came out and said that was exactly what they were doing.

Private corporations are going to be hiring lots of those people now working on the NASA boondoggle. Too many companies and those jobs disappear at NASA and then where  will those politicians be. Much better to reduce the competition so those jobs the GOP are fighting for stay put.

The companies realize this which is why Space-X just announced it is seeking permission to have a launch site in Texas. The Texas delegation has been very protective of jobs at the Johnson Spaceflight Center. But perhaps if those jobs migrate to the private sector in Texas, the politicians will be mollified.

What a weird reversal where the Democratic members want to get private companies to take over much of the low Earth orbit work while the GOP wants big government to fund worthless projects.

Republicans in Congress already has pushed back private efforts 1-2 years because of the approach in previous years of underfunding the private/public partnerships. Now they want to kill it almost totally. So they can hand it to just one contractor – apparently Boeing. Which is at least one if not more years behind the others.

All so they can keep a large white elephant going and supply jobs for a useless rocket system.

Pay more for slower development. That is what the GOP in the House is supporting.

Idiots. The inability to launch Americans into space sits solely at the feet of the GOP members in the House if they follow through with this.

They really do want to return to a pre-Sputnick funding approach to space.

Reading positive things about the US from foreign media

by owenwbrown

America, Syria and the UN: This is what foreign-policy success looks like
[Via The Economist]

NOWHERE near enough attention is being paid to the way the diplomacy around the Syrian civil war is playing out. Nowhere near enough. The other day I noted that nothing had made me as pessimistic about development aid as the endgame of our failed intervention in Afghanistan. Today let me paint a stroke in the other direction: nothing has made me as optimistic recently about the prospects for a broadly international, pro-human-rights, anti-authoritarian foreign policy that brings together America, the democratic world, and many of the emerging-market/non-aligned countries as what’s happening right now around the Syria question. The complete isolation of Russia and China in the Security Council vote on sanctions last week is a watershed moment. It not only, as my colleague writes, cemented the image of Russia and China backed into a corner together in defence of authoritarianism. It also strengthened the tentative cohesion formed during the Libyan revolution last year between the democratic West, Arab democracy movements, and the Arab League.

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The article is a wonderful read. It provides a good explanation for why America’s overseas reputation is so high right now, why there is so much confidence in our policies overseas.

It reminds us of the cohesion that began last year with Libya, which reached a successful conclusion without becoming a money pit. It remains to be seen if a similar coalition will work in Syria but things are hopeful.

And the isolation of Russia and China has strong effects world wide. Has anyone heard about this:

Burhan Ghalioun, head of the opposition umbrella Syrian National Council, called Moscow and Beijing’s veto “a new license to kill from these two capitals for Bashar al-Assad and his criminal regime, which just yesterday killed 300 people.” The SNC said it held Moscow and Beijing “responsible for the escalating acts of killing and genocide.

“Protesters stormed the Russian embassy in Libya’s capital Tripoli Sunday, climbing on the roof and tearing down the flag. Men held up a banner saying: “Libyan revolutionaries are ready to fight with their brothers in Syria.”

This is simply extraordinary. At Foreign Policy, Colum Lynch notes that Vitaly Churkin, Russia’s ambassador to the UN, blamed the backers of the resolution for promoting a strategy of “regime change”. Mr Churkin seems to have phoned in his quote from a secret city in Siberia where the year is still 2003. There is a world of difference between an American request in the UN Security Council for authority to launch an invasion of a stable country, and a proposal for sanctions under a Security Council umbrella on a regime that is actively slaughtering its own citizens in order to cling to power in the face of a popular uprising. And when the Arab League, the relevant local multilateral group, is strongly behind the proposal, that should settle the question.

Wow. It is not American outposts being protested. Russia and China are hurting their worldwide influence by voting for authoritarian rule. The rest of the world sees it.

As for China, the vote is yet another in a series of recent strikes against the notion that Chinese “soft power” was poised to vanquish American hard power in the developing world. Over the past three years, China has proven inept and pointlessly confrontational in its push to seize control of the South China Sea. A relatively subtle American policy of offering help to regional countries looking for a counterweight to China, orchestrated with unobtrusive but pointed intent by Hillary Clinton, has proven extremely effective. Against all expectations, Western influence suddenly seems to be winning out even in Myanmar.

As he states, the US is now the soft power and CHina is now the hard. WHich one seems to be working better?

I have to say “Well done, US.” There are lots of areas in foreign policy where we still have a ways to go. We can not fix everything in a short period of time. But it is nice to read such a positive article. Ultimate applause may have to go to Secretary Clinton who has run a stupendous State Department.

More toys for the President to play with

President Obama controls a Sphero r/c ball
[Via Boing Boing]

[Video Link] “Excuse me, give me some space to drive my ball.”

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He loved the marshmallow gun. Now he gets to play with the robot ball he can control with an iPhone. Very smart entrepreneur to get the President on camera.

You can buy the ball from Amazon.

Perhaps why authorities feel comfortable using illegal and extralegal means

by Michiel2005

George W. Bush and torture: America’s highest officials are responsible for the “enhanced interrogation” of prisoners. –
[Via Slate Magazine]

It began with one document. On Sept. 17, 2001, six days after the terrorist attacks in Washington, D.C., President George W. Bush sent a 12-page Memorandum of Notification to his National Security Council. That memorandum, we know now, authorized the Central Intelligence Agency to set up and run secret prisons. We still don’t know exactly what it says: CIA attorneys have told a judge the document is so off-limits to the courts and the American people that even the font is classified. But we do know what it did: It literally opened a space for torture.

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To answer my title: They do it because the Executive branch not only did it 10 years ago but it continues to do it. It no longer matters who is in charge.

I think the degradation of our legal system began with our torture program, which many people knew was not legal and broke international law. The Executive Branch simply ignored this. And silenced anyone whose views were different.

And it did not end with the previous Administration. Obama has done little to support those who dissent to its clandestine activities or who wish malfeasance to be known. It has tried more people using the espionage act than all the previous Presidents together.

Whistleblowers who leak information about waterboarding to journalists have been charged with espionage. The Obama administration encourages aggressive reporting of other country’s secrets but wil charge and imprison people who do it here.

Some in its administration believe that reporters who print this information should be tried and imprisoned also. Instances of whistleblowing, where the information deals with administrative secrecy, not national security, result in being charged as a spy.

In the most recent case, John Kiriakou, a former C.I.A. officer who became a Democratic staff member on the Senate Foreign Relations Committee, was charged under the Espionage Act with leaking information to journalists about other C.I.A. officers, some of whom were involved in the agency’s interrogation program, which included waterboarding.

Yep, the guys who were involved in breaking international law and torturing people are off scott-free. But anyone who releases that information get charged with espionage. And their life damaged often beyond repair.

How about this case, which started out with frightening jail time and ended up a misdemeanor:

In one of the more remarkable examples of the administration’s aggressive approach, Thomas A. Drake, a former employee of the National Security Agency, was prosecuted under the Espionage Act last year and faced a possible 35 years in prison.

His crime? When his agency was about to spend hundreds of millions of dollars on a software program bought from the private sector intended to monitor digital data, he spoke with a reporter at The Baltimore Sun. He suggested an internally developed program that cost significantly less would be more effective and not violate privacy in the way the product from the vendor would. (He turned out to be right, by the way.)

He was charged with 10 felony counts that accused him of lying to investigators and obstructing justice. Last summer, the case against him collapsed, and he pleaded guilty to a single misdemeanor, of misuse of a government computer.

What he was eventually charged with does not matter to them. What is important is the example.

That is how things have become degraded and why, I think, other legal authorities believe they can simply ignore the law and rewrite their own.

The example is the most important think. Make sure anyone who stands up gets shot down.

It worked before so why not continue. The only people ever punished are those who are those who have some morals, not those whose lack of morals allows them to simply ignore the law.

So now we not only have Federal officials retaliating in sometimes extralegal ways against those they do not like but also see local authorities doing the same thing – hurting people who are acting legally in order to demonstrate who really holds power.

I see absolutely nothing to indicate that either party will change this. Both have too many authoritarian leaders who feel the ends justify the means.

Perhaps in another 20-30 years we will be able to recognize just how twisted this has made us – just as we eventually realized that interning American citizens was not proper.

But I see little to indicate that anything will be done by any political party in the near future. Our Imperial Presidency is still too powerful.

Adding Apple always gets more attention

Apple denies DoJ allegations of collusion, says it broke up Amazon monopoly
[Via AppleInsider]

Apple has spoken out against the U.S. Department of Justice’s lawsuit filed against the company earlier this week, noting that the launch of its iBookstore actually broke “Amazon’s monopolistic grip on the publishing industry.”

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Several legal experts have said that proving collusion against Apple will be much more difficult than against the publishers.

But adding Apple to the suit sure made it a much bigger story. Now we see a lot of grandstanding states Attorneys General jumping on this, as well as other countries.

It could well be that the DOJ drops Apple along the way. They have done similar things before.

Jurisprudence by Executive Summary – the neo-Lochner era

by DonkeyHotey

Close Read: Twenty-Seven Hundred Pages for Antonin Scalia
[Via The New Yorker]

Here’s where a person could lose just a little bit of patience with the Supreme Court: in the midst of an exchange with Deputy Solicitor Edwin Kneedler, Justice Antonin Scalia saw an obstacle he didn’t like:

JUSTICE SCALIA: You really want us to go through these 2,700 pages? (Laughter.)

JUSTICE SCALIA: And do you really expect the Court to do that? Or do you expect us to give this function to our law clerks?

(Laughter.)

JUSTICE SCALIA: Is this not totally unrealistic? That we’re going to go through this enormous bill item by item and decide each one?

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Not everyone is going to agree with every instance where the Supreme Court decides constitutional issues. It is not often easy and they usually do not get the easiest of cases.

But I would certainly hope that the judges and/or their staff would actually read the laws they were deciding on.

How do they determine what is constitutional if they do not know what the law states?

The judges have talked about things not even in the law, or about things from various digests of the law.

But Scalia’s own words demonstrate he has not actually read the law.

It appears that the Supreme Court is now no longer judging whether a law meets constitutional muster but are judging whether the Executive Summary they like most meets constitutional muster.

Is this really how we want our laws decided?

The last major period in the Supreme Court where decisions were made by political viewpoints rather than actual jurisprudence was the Lochner Era. Virtually all of their major decisions have been repudiated by the American people.

They gave us separate but equal (Plessy v. Ferguson), threw out child labor laws (Hammer v. Dagenhart), threw out 40 hour workweeks (Lochner v. New York), threw out minimum wage laws (Adkins v. Children’s Hospital), and pretty much did everything they could to disallow anything that dealt with interstate commerce, such as coal mine safety, the selling of sick chickens and farm subsidies.

Yes, the Lochner era court felt that a segregated population where labor, including children, took whatever conditions management offered – even if it was 60 hours a week and poverty wages – while working in unsafe conditions and eating unsafe food, was what America should be.

Few of us today would like to live in that America. Most of us would be repelled by the decisions made by the Lochner Era court.

But I bet they all read all of the laws they were deciding on.

What a shadow of greatness the current Supreme Court has become.

Tennessee and Oklahoma decide what ‘science’ belongs in science classes

“Teach the controversy” science education bills advance in Tennessee, Oklahoma
[Via Ars Technica]

Earlier this week, legislators in Tennessee approved a bill that singles out public school science education for special attention. Now, the Oklahoma House has passed a very similar bill that attacks an identical range of subjects that the legislation deems controversial: biological evolution, the chemical origins of life, global warming, and human cloning.

Both bills contain identical language, saying they “shall not be construed to promote any religious or nonreligious doctrine.” There’s also identical language about how they’re intended to “help students develop critical thinking skills they need in order to become intelligent, productive, and scientifically informed citizens.” However, the subjects they target are not areas where there are significant scientific controversies; either the bills’ sponsors are poorly informed (and thus shouldn’t be injecting themselves into science education), or they have non-educational goals in mind.

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There is no controversy here except for religious partisans who require statutory relief to get their minority views forced onto students.

If a particular scientific theory requires a conservative government regulation to sustain itself, I would submit it is not so much about the science but about the politics.

Reading the bill is really laughable. Like this:

Students may be evaluated based upon their understanding of course materials, but no student in any public school or institution shall be penalized in any way because the student may subscribe to a particular position on scientific theories.

How does this work in reality? Can a student who states they believe in the recent creation of all life on Earth simply state that for every biology question?  Getting an “F” would certainly be a penalty.

This is the meat of the bill:

The State Board of Education, a district board of education, district superintendent or administrator, or public school principal or administrator shall not prohibit any teacher in a school district in this state from helping students understand, analyze, critique, and review in an objective manner the scientific strengths and scientific weaknesses of existing scientific theories pertinent to the course being taught.

Since special creation is not scientific, I guess my previous point is moot. A teacher could objectively state “There is no scientific evidence for special creation.” and be perfectly okay.

And there are no controversial scientific theories to really be taught dealing with evolution. And there are no real scientific controversies about whether the globe is warming.

I think that these legislators simply do not know what a scientific theory is. Coming up with any sort of idea does not make it science.

I think that in the long run, these bills will not accomplish the political purpose of the sponsors and will simply serve as examples of the partisanship of certain politicians.

But in the short run there will be some real bullying of teachers by the ultra-religious.

Obama gives a real stemwinder in Houston

I can’t figure out how to embed the video so just go to the C-SPAN page. It is from Friday, March 13.

A stemwinder refers to a rousing speech. You can certainly tell that from the audience response. Here we see what I expect the President to sharpen for his stump speeches.

“Al Qaeda is weaker than its ever been and Osama Bin laden will never again walk the face of this earth! ”

Remember these are the speeches that candidates mainly provide to their supporters, not for their opponents. The goal is to charge up their followers.

Sure looks he accomplihsed that mission.

And raised about $2 million at the same time.

Loved this t-shirt from the event.

Massive fail with respect to latest Obama video

by IMLS DCC

The Story Behind the Obama Law School Speech Video
[Via FRONTLINE | PBS]

The web is abuzz today about video of a speech Barack Obama gave in 1990 (some reports have incorrectly identified the speech as occurring in 1991) at Harvard Law School defending the actions of Professor Derrick Bell. Bell, the law school’s first tenured black professor, had protested Harvard’s failure to offer tenure to women of color as law school professors. Online publisher Andrew Breitbart, who died last week, had said he possessed the speech and hinted that he would release it, arguing that it provided evidence that Obama has long held radical political beliefs.

Today, the website BuzzFeed published a clip of the speech along with an article explaining some past and current context for Obama’s remarks. The website claimed the clip was “not previously available online.” The editors at Breitbart.com responded that the video on Buzzfeed had been “selectively edited” and said that they would release the full footage tonight on Fox News.

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We had been hearing for weeks that Breitbart had an explosive video of the President and was going to release to ‘vet’ him.

Then the video was released by Buzzfeed this week.

It was claimed that the video was an exclusive, saying it had never been seen on the internet. Breitbart.com weakly claimed the video was editted but it was far from incendiary.

In fact, it showed that Obama could speak well without TelePrompTers. He mostly spoke in support of a Harvard Professor.

But what is even more amazing was the video was available online, as part of a FRONTLINE report on Obama as they vetted him in 2008. It was nothing new at all.

All this has already been seen 4 years ago the first time Obama ran.

FRONTLINE producers obtained the footage from the same source as BuzzFeed did this week: the archives of WGBH, Boston’s PBS station. The footage was shot in 1990 by a team of local news producers for the WGBH Ten O’Clock News. FRONTLINE is produced at WGBH and our producers were alerted to the footage in the station archives in 2008.

Pretty poor when 20 year old archival footage that was already shown 4 years ago is hyped up to present something ‘novel.’ Perhaps someone has an ulterior motive than just informing the public?

Social media changes the dynamic

How Social Media Has Rush Limbaugh – And His Advertisers – On The Run
[Via American Times]

Rush Limbaugh is in trouble.

Following the conservative talk-radio host’s remarks about a college student, Sandra Fluke, who testified before congress during the contraception debate, numerous advertisers are pulling their ads from the show.

After Fluke’s testimony, Limbaugh took to the airwaves.

“What does that make her?” he asked. “It makes her a slut, right? It makes her a prostitute. She wants to be paid to have sex. She’s having so much sex she can’t afford contraception. She wants you and me and the taxpayers to pay her to have sex.”

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This seems so similar to the Komen Foundation debacle. And the SOPA/PIPA one. Someone inside a bubble says/does things that everyone they know is doing and may have done for years. When the crap hit the fans, they respond just as they have in the past, relying on the slowness of old media to temper the anger.

A two-way discussion usually takes weeks when done that way, plenty of time to defuse the situation.

But some of the guys are finding that social media increases the flow of information and response exponentially. What worked to soothe people before takes too long. Now people can make their own videos, their own ‘press-release” – for what are most blogs but PR of a sort.

Every one listens and everyone sees. It is much harder to obfuscate or slip away or vamp.

Komen found this out. Congress found this out. Rush found this out. Wonder who will be next?

The President forces me to retract some things

by John-Morgan

How Obama Ignored The NDAA’s Military Custody Provision |
[Via TPMMuckraker]

The Obama administration issued procedures late Tuesday on their interpretation of the provisions of the National Defense Authorization Act (NDAA) which required some terrorism suspects to be held in military custody. In short, the guidelines make it nearly impossible for a terrorism suspect to end up in the hands of the military.

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Back in December I wrote about some of the worrying aspects of this bill. I was worried that Congress was going to give the President way too much power. And it still might to some future President.

But the current President took a different approach. He took the military detainment aspects of the law and added to many regulations to it as to prevent it ever being misused.

This is an instance when regulations can be used for good. They prevent the law from being mis-used or gamed in ways to hurt us all.

So at least this law will not be used currently to further an Imperial President. Congress’s inability to do the people’s work will not be used to harm them.

Not quite a useful as a line-item veto, I bet, but creating regulations that prevent action is as old as anything we have in our government. Here it actually does some good.

The propaganda business

Merchants of Doubt: Nicotine is Not Addictive = Climate Change Is Not Real
[Via Age of Engagement | Big Think]

The Climate Reality Project has produced online video short linking effectively for viewers the parallels between the tobacco industry’s attempts to lie and downplay the threat of smoking with conservative advocates’ efforts to downplay the reality and threat of climate change.  The video translates the narrative from Naomi Oreskes’ and Erik Conway’s book Merchants of Doubt.

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Here is the video:

Just remember that some of the same people and institutes that took money form the tobacco companies to produce non-scientific work are now involved in the climate debate.

Sure, this time they may be doing things right but I would be very skeptical of anything considering who is funding them. They produced misleading material before for their masters and they continue to do it.

Their industry is propaganda and they use doubt to carry it out. They exist to mislead, lie and convey the information that their sponsors wish.