People are having a hard time saying the truth. MBIA is rated AAA. MBIA is a company that insures bonds against default. This allows institutions who do not have a AAA rating to have their bonds rated AAA so that retirement funds and insurance companies can buy them.

Everyone knows that MBIA is no longer close to being a AAA level company. If MBIA loses its AAA rating, all the bonds that it insures lose their AAA rating. So saying that everyone knows that MBIA is not even close to being a AAA company is to say that their are a lot of bonds out there that don’t deserve an AAA rating.

With that in mind, watch the clip below (h/t Calculated Risk)

This from the International Herald Tribune…..

Next year in California, state regulators are likely to have the emergency power to control individual thermostats, sending temperatures up or down through a radio-controlled device that will be required in new or substantially modified houses and buildings to manage electricity shortages.

The proposed rules are contained in a document circulated by the California Energy Commission, which for more than three decades has set state energy efficiency standards for home appliances, like water heaters, air conditioners and refrigerators.

The changes would allow utilities to adjust customers’ preset temperatures when the price of electricity is soaring. Customers could override the utilities’ suggested temperatures. But in emergencies, the utilities could override customers’ wishes.

Final approval is expected next month.

I wish I lived in a country where Wall Street did not set the interest rates. But sadly that does not seem to be the case. The best predictor for what the Fed will do seems to be what the markets want. This from Calculated Risk….

It’s now a tossup, based on market expectations, between a 50 bps rate cut and a 75 bps rate cut, on January 30th.

Just a couple of days ago, I heard a couple of analysts say that the Fed wouldn’t cut 75 bps because that would give the appearance that the Fed is panicking.

Wall Street is apparently saying “Bring on the panic”.

From Naked Capitalist……

Third, and most important, I am concerned that “mistakes as policy” is becoming established as acceptable practice in American companies, so I applaud the bankruptcy judges’ moves against it. I have been this become entrenched at my health insurer, Cigna. I have been with them for over two decades. It used to be that my claims would be processed, and the fights would be on charges they deemed to be excessive or procedures they didn’t like, such as chiropractic and acupuncture (before you get on your high horse about alternative medicine, Cigna promotes its coverage of acupuncture on its website, but then seeks not to pay for it, even for conditions where there is a considerable body of research saying it produces superior outcomes). I am persistent and have always prevailed (I believe people should live up to their contracts, what a novel concept, and am considerably aided by the fact that I live in the communist state of New York, which allows for external appeal to a state board which then turns to independent experts).

But I have seen a pattern with Cigna very similar to Countrywide’s, that of making persistent mistakes that are clearly errors in their favor, and hoping that the consumer doesn’t catch them. Before 2006, Cigna never mislaid a single claim I sent them. Suddenly, they failed to receive (meaning threw out) about 20%, which puts the onus on me to notice what hasn’t been reimbursed, confirm that it isn’t in their system, and resubmit the claim. Even with customers like me, they get the benefit of hanging on to their dough longer. Their new 2007 trick was trying to reinterpret how the applied claims to the deductible, which since I kept my records and there had been no change in my policy, was not successful. But I imagine that sort of move would have succeeded with at least half the plan members they tried it on.

Value-Steam mapping a electronic transactional process is dumb; Value-Stream maps are meant to show not so much what is happening as what isn’t, where work “in progress” is actually sitting around waiting to be worked on. Given large enough quantities of electronic data, it may also sit in queues and take time to process, but Click Here to continue reading.

The worst famines of the last 100 years were all caused by government policy. Think of Mao’s great leap forward or the horrible Ukrainian famines. So while it is tempting to dismiss Stuart Staniford’s “Fermenting the Food Supply” as being to alarmist, we should not forget that government’s have a track record of causing massive starvation in the name of the greater good.

The weakest part of Mr. Staniford’s argument is where he argues that Ethanol plants would still be profitable even without government subsidies. Especially given the fact that he does not seem to be taking into account the fact that government has been mandating that the refineries put an increasing amount of Ethanol into their gasoline blends.

But this weakness is overshadowed by the graphs he made showing how fast the Ethanol industry has grown and how much of our food supply is already being burned. Anyone who thinks that Ethanol is the wave of the future should look at those graphs and image what will happen if the growth in Ethanol production continues.