As I continue to pick apart the Dressaday post and its comments, I come to another oft-revisited (is that a word?) subject. What do your clothes say about you?
In her post, Erin says:
This way, if I end up sitting next to someone interesting, I don’t have to shout over what my clothes are saying. Last Click Here to continue reading.
We have been neglecting the unfolding hedge fund/CDO/subprime crisis lately. Not because it has not been interesting, but because nobody knows anything at the moment. Heck, Bear Sterns won’t even let its investors know how much money they have lost until mid July. So nobody will really know if the sky is falling until then.
So we ignored this rather alarmist Bloomberg article when it first came out. But over the weekend Macro Man did a post on it that was so funny we just had to point it out. Just to give you a taste of Macro Man’s commentary, the following is a passage from the Bloomberg article with a comment from Macro Man in bold at the end.
S&P abandoned seven-year-old criteria for determining a bond’s protection against default in February.
Under the old guidelines, S&P said a bond’s “credit support” must be twice the rolling 90-day average of the sum of value of mortgages delinquent by three months or in foreclosure plus real estate that has been seized by the lender.
Of the 300 bonds in ABX indexes, the benchmarks for the subprime mortgage debt market, 190 fail to meet the credit support standard, according to data released in May by trustees responsible for funneling interest payments to debt investors.
Most of those, representing about $200 billion, are rated below AAA. Some contain so many defaulted loans that the credit support is outweighed by potential losses. Fifty of the 60 A rated bonds fail the criteria, as do 22 of the 60 AA rated bonds and three of the 60 AAA bonds.
All but five of 120 securities in BBB or BBB- rated portions of the mortgage-backed securities would have failed S&P’s criteria, according to data compiled by Bloomberg.
None have been downgraded, though S&P and Moody’s have parts of three pools of securities linked to the index under review for a downgrade. Fitch has downgraded parts of three mortgage pools tied to the ABX and put four on watch for downgrade.
“Don’t misunderstand me: I’m not saying these others are performing great,” Robert Pollsen, a director in S&P’s residential mortgage surveillance in New York, said in an interview last month. “And they certainly might warrant our attention several months from now, which obviously we’re going to do.”
What can I say? To abandon a credit-standard test just as it starts to bite is the height of irresponsibility. And the comments from Mr. Pollsen are so lame, they need a cane.
Oil prices are falling today. But reason that they are falling is going to hurt your pocket book big time. This from a Bloomberg story….
Crude oil fell from a 10-month high in New York as a refinery shutdown in Kansas cut demand.
Coffeyville Resources LLC shut its refinery in Coffeyville, Kansas, yesterday because of flooding on the Verdigris River, according to as statement on its Web site. The 108,000-barrel-a- day refinery can produce about 2.1 million daily gallons of gasoline.
Crude demand should decline because of the shutdown, said Andy Lebow, a trader at Man Financial Inc. in New York. “That’s the motivating force in the market today,” Lebow said.
What do you think the price of gas is going to do now that 2.1 million gallons of production has been taken off of the market?
I am keeping my eye on R-Squared to see what Robert Rapier will have to say about the issue.
Edit: Mr. Rapier did respond in the comments section over at his blog. Apparently the refinery that was shut down is relatively small (who would have thunk that 2.1 million gallons of production per day was small?) and BP may be bringing some other refineries back on-line after having problems with them. So he does not seem to think that it is going to change the already tight gas situation much either way. He grants thought, that losses of any refinery capacity is small tragedy given that we want to get out of the supply hole we are in.
I read this post over at the EU Referendum and it made me think of this week’s essay of the week. In particular, this passage…
Another troubling thought comes from a long conversation I had with a serving RAF officer yesterday who affirmed what I had heard so many times before, on the structure and equipment of the armed forces. I got from him what I have heard so often elsewhere, that the Services cannot afford to focus on the current wars in Afghanistan and Iraq as that would leave them unprepared to fight future wars. The effort in our current theatres must, therefore, be tempered by the need to maintain balanced forces, capable of dealing with future (unknown) commitments.
I have likened this to a military planning committee deciding in 1943 to withhold forces from the invasion of Normandy and the defeat of Hitler for fear of being unprepared to fight a war in the 1950s.
The point that emerges here is that the military – no less than the nation in general (each for their own different reasons) – is not committed to the current wars. As we listened to the RAF commentator coo and gasp at the performance of the Eurofighter, delivering a torrent of propaganda in favour of the new “toy” as it went though its paces (admittedly impressive), one’s impression was somewhat reinforced that fighting wars in distant fields were regarded as an irrelevance at best, a distraction from the real business of constructing that mythical beast, the “balanced force”.
Frankly, if neither the military nor the population – to say nothing of the media and the political establishment – are committed to winning our current wars then (no matter how vital it is that we do win them) we have no business sending our troops there, some of them to die and many more to suffer horrific injuries. We might just as well bring them home to play with their “balanced” force and forget all about the untidiness and inconveniences of real fighting.
Significant amounts of money are going towards high tech weapons like the F-22 which is practically useless in the two wars that are currently being fought. In fact, it is hard to think of an opponent where the US would need the F-22.
China comes to mind of course, but could there really be a serious war between the US and China that did not go nuclear? In that case, the F-22 would be rather irrelevant wouldn’t it?
As the Chieftain of Seir argued in this essay, the focus on what worked well for US in the past is setting US up for military defeat.
From the Associated Press….
Iran is using the Lebanese Shiite militia Hezbollah as a “proxy” to arm Shiite militants in Iraq and Tehran’s Quds force had prior knowledge of a January attack in Karbala in which five Americans died, a U.S. general said Monday.
U.S. military spokesman Brig. Gen. Kevin J. Bergner said a senior Lebanese Hezbollah operative, Ali Mussa Dakdouk, was captured March 20 in southern Iraq. Bergner said Dakdouk served for 24 years in Hezbollah and was “working in Iraq as a surrogate for the Iranian Quds force.”
And what were they trying to accomplish in Iraq? This from CNN…
U.S. sources and Iraqi militia sources have said the carefully planned operation was meant to take captives who could be traded for five Iranians held by U.S. troops since a January 10 raid in Irbil, in northern Iraq. But the Karbala attack went awry, resulting in the deaths of the five Americans.
Qais Khazali, a onetime spokesman for anti-American cleric Muqtada al-Sadr’s Mehdi Army, was one of the men sought by American troops in connection with the attack. By the time of his March arrest, he had left the Mehdi Army and was leading one of the “special groups,” according to U.S. intelligence.In searching for Khazali, U.S. and allied troops found computer documents detailing the planning, training and conduct of the failed kidnapping. And they found Daqduq, whom intelligence officials said has admitted working on behalf of Iran.
Contacted by CNN, a Hezbollah spokesman in Lebanon said he would not dignify the U.S. allegations with a response. And it remains unclear why Hezbollah’s leadership would risk sending advisers to Iraq: American intelligence officers suspect Hezbollah — which is indebted to Iran for decades of military and financial support — had no choice.
Iran seems to think that taking captives furthers its goals. In recent history they have taken both Israeli and British personal captive. If they want American captives, I would expect them to eventually be successful. One wonders if that would lead America to attack Iran with all the attendant problems that would bring.
(hat tip Defense Tech)
Since Andrew and Teague seem to have gone AWOL, I had to look around for a new source of contemporary poetry. So far, not much luck. This poem from the Brooding Dane will have to do for now.
We are going to be hearing a lot about Michael Moore’s latest movie Sicko. This rant/review from MTV really says all that needs to be said about it.
Those who read the Wall Street Journal will have already have general idea of what this week’s essay is about. But for those that don’t, a little explanation is in order.
The most severe shortage that the army currently faces is lower level officers. They more or less have enough grunts to meet their authorized strength and they have high level officers in spades. But lieutenants and captains are leaving the force at record levels. In part, this is because of the hardships of war. But an even bigger factor is frustration with upper level leadership.
In this essay, Lt. Col. Paul Yingling gives vent to those frustrations and the reception that this essay has been getting has rocked the military world. One general even went so far as to call all his subordinate officers together so that he could publicly rebut this essay.
Since this essay reflects the sentiments of a lot of junior officers currently serving in the military, I think that it is worth reading. But I would remind people that just because old guard is corrupt doesn’t mean that new crew has better ideas. Just think of the French and Russian revolutions.
I found this video of Sergi Ignatov to be very interesting. I’ve heard it said that the russians push themselves closer to their limits when they perform, and that seems to hold true for Sergi. He does one of the hardest routines you’ll ever see in a public performance, but he also drops more than Click Here to continue reading.
Mankind is capable of more then you can imagine. There was a time when nobody would have believed that man could make it too the moon. There are people today who can’t believe that men are capable of things likes this….
Later in the day, some of the soldiers from the unit I share a tent with, the C-52, told me that one of their Kit Carson scouts (comprised of some of our previous enemies who have turned on al Qaeda) had pointed out an al Qaeda who had cut off the heads of children. Soldiers from C-52 say that the Kit Carson scout freaked out and tried to hide when he spotted the man he identified as an al Qaeda operative. Just how (or if) the scout really knew the man had beheaded children was unknown to the soldiers of C-52, but they took the suspected al Qaeda to the police, who knew the man. C-52 soldiers told me the Iraqi police were inflamed, and that one policeman in particular was crazed with intent to kill the man who they said had the blood of Iraqi children on his hands. According to the story told to me on 30 June, it took almost 45 minutes for the C-52 soldiers to calm down the policeman who had drawn his pistol to execute the al Qaeda man. That same policeman nearly lost his mind when an American soldier then gave the al Qaeda man a drink of cold water.
The above is from Michael Yon’s latest post and he has pictures of some of the exhumed bodies from the graves if you can stand that sort of thing. Be warned, the pictures included one picture of a pile of rotting heads.