Fannie and Freddie Seized

WASHINGTON (AP) -- Fannie Mae and Freddie Mac are expected to be taken over by the government as soon as this weekend in a bold move designed to protect the mortgage market from the risk the companies could fail, a person briefed on the matter said Friday night.

Some of the details of the intervention, which could cost taxpayers billions, were not yet available, but are expected to include the departure of Fannie Mae CEO Daniel Mudd and Freddie Mac CEO Richard Syron, according to the source, who asked not to be named because the plan was yet to be announced.

Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson and James Lockhart, the companies' chief regulator, met Friday afternoon with the top executives from the mortgage companies and informed them of the government's plan to take over the troubled companies in a process known as conservatorship.

The news, first reported on The Wall Street Journal's Web site, came after stock markets closed. In after-hours trading Fannie Mae's shares plunged $1.70, or 24 percent, to $5.34. Freddie Mac's shares fell 95 cents, or almost 19 percent, to $4.15.

China’s Central Bank is in a Bind

It has been on a buying binge in the United States over the last seven years, snapping up roughly $1 trillion worth of Treasury bonds and mortgage-backed debt issued by Fannie Mae and Freddie Mac.

Those investments have been declining sharply in value when converted from dollars into the strong yuan, casting a spotlight on the central bank’s tiny capital base. The bank’s capital, just $3.2 billion, has not grown during the buying spree, despite private warnings from the International Monetary Fund.

Now the central bank needs an infusion of capital. Central banks can, of course, print more money, but that would stoke inflation. Instead, the People’s Bank of China has begun discussions with the finance ministry on ways to shore up its capital, said three people familiar with the discussions who insisted on anonymity because the subject is delicate in China. Full Monty in today's NYTimes.

Money

Too Volatile to be POTUS

McCain said "fight" 29 times and "change" 10 times last night....,

Politics is the Problem, Not the Solution

Paul Chefurka brings a carefully argued essay with an altogether too optimistic conclusion. I like Chefurka's writing and I definitely consider him a "reality aware" oasis of good faith and good intentions. I believe, however, that he would profit by spending a little time contemplating the Hypertiger Wisdoms....,

Guardian Institutions
Over the centuries an interlocking system of guardian institutions has grown up to protect and defend the two key ideas of growth and hierarchy.

• Our economic and financial institutions cooperate with business and industry to set the value of work and control the money supply (thereby controlling access to food). In this role it doesn't make any difference whether an economy is capitalist, socialist or communist. The core belief it guards is always the same one.
• Our educational institutions teach successive generations how the system works, giving them the tools to integrate into it and manipulate it, while at the same time training them to see this as the only possible way the world can work.
• Our communications media reinforce this message by enlisting people in the growth paradigm. They do this both through overt messages like advertising and covert messages embedded in the story lines of entertainment.
• Our religious institutions (as distinct from the religions they purport to enshrine) are primarily normative social structures. Many incorporate an overt message that we should be content with things as they are. There are often injunctions against questioning authority, as all authority is seen to devolve from the supernatural – just as it did for the shamans of the early agricultural era.
• Our legal institutions enforce the norms of hierarchy in ways too numerous to count. These range from the protection of privilege (one law for the rich, one for the poor) to the preferential defense of property rights over human rights.
• Our political institutions sit at the tip of the pyramid. Political institutions encode, enshrine and manage the application of social power. Politics is the institution that legitimizes all the others. Because of its unique ability to make laws and its access to legalized violence to defend those laws, politics is the fullest expression of the power hierarchy of modern civilization.

At the base of the hierarchy, supporting it all, are an ever-diminishing number of farmers who apply ever-increasing amounts of knowledge, technology and petroleum to ensure an ever-expanding supply of food. Because at the core it is their food that makes the whole edifice possible. (sounds exactly like Hypertiger)

So where does this put us in relation to the array of wicked problems we listed at the beginning? Simply put, every one of those problems is the result of unbridled growth. They are the logical results of the continual exercise of the first precondition of modern civilization, the drummer of growth we have been marching to for ten thousand years since the invention of agriculture. (I believe that Hypertiger would point us toward the extortionate control of agriculture by the TOP - otoh - as the preconditioned mechanism undergirding *civilization* as we experience it)

Politics is the problem, not the solution
In light of this analysis it should be obvious why we are repeatedly failing to address any of these wicked problems. The only permanent "solution" to any of them is the secession of growth. That idea is anathema to our guardian institutions. And as the occupants of the pinnacle of power, our politicians have every reason to derail efforts in that direction, no matter how small.

Politics, regardless of party or ideology, is part of the problem and can never be part of the solution. While it may be easier for the average person to live under the rule of a more humane parcel of rogues, at its heart politics is the primary guardian institution of modern civilization. The role of all politics is to manage power, and power is always managed for the benefit of the holders of power. It doesn't matter whether the power managers are Democrats, Republicans, Tories, Grits, Social Democrats, Communists or a military junta. They all fulfill the same role in service of the same beneficiaries.

In order to fulfill that role they unite with the other guardian institutions – the economic, industrial, legal. religious, educational and communications organizations. Together they create, maintain and guard a noetic milieu (a globalized intuitive, non-rational consciousness) in which any values that challenge the two fundamental preconditions to modern civilization are seen as incomprehensible, self-evidently absurd, dangerous or even insane. Since the primary value system these guardians protect is the paradigm of continuous material growth, the most dangerous of all radical ideas are any proposals to limit, halt or reverse that growth.

Beyond the Palin

Ian Williams in the Guardian online today;The speech was almost certainly inspired by HL Mencken's thought: "On some great and glorious day the plain folks of the land will reach their heart's desire at last, and the White House will be adorned by a downright moron". But that is unfair. Both she and her speechwriters are very clever, and unscrupulous, and they want to make her fit that role. They are basing their campaign on the premise that the American electorate wants a president on the edge of Alzheimer's and a vice-president who is auditioning for a part in a schmaltzy soap opera.

Polls suggest that the American public oppose almost every one of Palin's concealed policies. This speech casts the forthcoming telection as an IQ test for the American electorate. If it fails, I foresee long lines outside Canadian and European consulates as the elite (anyone with an IQ over a 100) tries to get out.

Learn to Speak Redneck!!!

Bageant in tuesday's Guardian. The comments are more illuminating than the editorial piece, but by all means, read it all because it's genuine news that you may really be able to use. Up from the comments there;

The US redneck is downtrodden, exploited, screwed over and spat upon, and he knows it. He's no fool, he can see through the BS better than any fancypants liberal. But there isn't a single molecule of social solidarity, of trust in his fellow man, of faith in collective action, left in his ultraindividualistic body that can transform his lumpenproletarian rage into progressive politics.

The redneck is almost an anarchist except that anarchists believe the state is unnecessary for maintaining social order and cohesion because mankind is innately social and cohesive. But the redneck believes that mankind is innately animal and that the state just a way for the fat and pampered rich and the weak to protect themselves from the law of the jungle, in which otherwise he, the strong individualist-survivalist with all the guns and ammo, would rule.

It wasn't always so. The collective struggle of the granddads and grannies of today's rednecks against the gun-toting robber barons of America was epic. It's that struggle that May Day celebrates. Where today's rednecks revel when the US bombs and destroys other countries, the US working class of the late 19th and early 20th century was resolutely antiwar. The Anti-Imperialist League militated against America's genocidal invasion of the Philippines. The IWW - the so-called "wobblies" - mobilized against the US entry into WWI and its members were carted off to concentration camps or dumped in the desert for "sedition" by Woodrow "make-the-world-safe-for-democracy" Wilson.

But the very successful strategy of the ruling class against America's immigrant poor was to pit them against each other, nation against nation and race against race. As Martin Scorsese epically depicted, the immigrant poor gouged each others' eyes out under the shadow of Lady "give me your downtrodden" Liberty. Factory bosses sent immigrant strikebreakers from another country, speaking another language, on strikers, provoking bloody gunbattles that left lasting divisions in the working class.

The modern redneck is a mutant created by a thousand violent traumas, from the machine-gunning of workers by troops and Pinkertons, Sacco & Vanzetti-style executions, and Bisbee-style mass deportations to starvation during the Depression, red scares, McCarthyism, and mob control of trade unions. He is the ultimate antisocial lumpenproletarian, imprinted with a thousand hatreds and mistrusts, whose ultimate faith is in the survival of the fittest, and whose political ideal has far more in common with fascism than any progressive agenda.

Old girl read the hell out of that teleprompter last night. I'd be lying to you if I claimed that I didn't PIP the "speechifying" into the outstanding tennis. While I had next to no interest in anything written by the GOP counter-narrators - I was very curious about her capacity to function as the embodiment of their identity politics gambit.

Life in the Post Political Age

On Saturday, I tried to serve up my take on what's going on in these here presidential selections. In that post, I linked to an article by one of the thinkers for whom I have the greatest continuing amount of respect, Joe Bageant. Today, in light of what has transpired in our political theatre over the last five days, and the extent to which underlying critical issues are now completely off the American political table, it's time to share more of Joe's sage socio-political insight.

In the post political world the candidates who can best thrive in it have tremendous appeal to the economic elites; these candidates thrive in a system that does not dwell on issues and will never ask the question, "who has power and why", but simultaneously creates a social and media environment of stupefying distractions while destroying traditional social mores (under-credited as a source of much social solidarity). This can only benefit their continued rule of that society.

In such a setting our political choices like our consumer choices, regardless of the product, are primarily about what makes us more fulfilled and feel better about ourselves.

Have you witnessed anything in the unfolding psychodrama that fits these observations?

A Match for the Ages....,

meanwhile.......,

Helicopter-borne American Special Operations forces attacked Qaeda militants in a Pakistani village near the border with Afghanistan early Wednesday in the first publicly acknowledged case of United States forces conducting a ground raid on Pakistani soil, American officials said.

Until now, allied forces in Afghanistan have occasionally carried out airstrikes and artillery attacks in the border region of Pakistan against militants hiding there, and American forces in “hot pursuit” of militants have had some latitude to chase them across the border.

But the commando raid by the American forces signaled what top American officials said could be the opening salvo in a much broader campaign by Special Operations forces against the Taliban and Al Qaeda inside Pakistan, a secret plan that Defense Secretary Robert M. Gates has been advocating for months within President Bush’s war council.

It also seemed likely to complicate relations with Pakistan, where the already unstable political situation worsened after the resignation last month of President Pervez Musharraf, a longtime American ally.[...]

By killing civilians, General Abbas said, there was now a great risk of an uprising by the tribesmen who supported the Pakistani soldiers in the border area. The tribesmen, who oppose the Taliban and support the Pakistani forces, will now be extremely angry, he said.

“Such actions are completely counterproductive and can result in huge losses, because it gives the civilians a cause to rise against the Pakistani military,” he said.

The governor of North-West Frontier Province, Owais Ahmed Ghani, said the helicopter attack occurred about 3 a.m. and killed 20 people. Local residents said most of the dead were women and children, but this could not be confirmed.

One American official said that at least one child had been killed, and that several women who died in the attack were helping the Qaeda fighters. NYTimes - American Forces Attack Militants on Pakistani Soil

Regression to the Mean

Family Values

It Speaks for Itself....,

Making a Big Election About Small Things

Jonathan Freedland writing in today's Guardian gets it;

Everything that liberal, blue-state America can't stand about her makes conservative, red-state America swoon. It's not just about "Jesus babies and guns," as Rush Limbaugh pithily put it. Palin also wants "intelligent design" - creationism - taught in school. When she was mayor of the small town of Wasilla, "she asked the library how she could go about banning books," according to a local official quoted by Time. Palin was worried about "inappropriate" language. "The librarian was aghast" - and was later threatened with the sack.

In his stirring speech last week, Obama urged America not to "make a big election about small things". Yet here we are, discussing not Sarah Palin's record or programme but Jesus, guns, and as one feminist blogger put it yesterday, "the uterine activity of her family". This is a setback for women, especially in a year that seemed to promise a breakthrough, but it is also a setback for America itself.

Obama made his name four years ago with a speech that called for an end to the civil war of red against blue. In 2008, he urged a different kind of election, one that would match the gravity of the hour. But the naming of Sarah Palin, and the reaction it has provoked, has dashed that hope. Americans are, once again, fighting over the questions that politics can never really settle - faith, sexuality - and pushing aside the ones that it can. And which it must.

Rally for the Republic

I dropped in at this part of his speech because he winds up talking about the folly of the war on drugs and the necessity of cultivating hemp for energy. He warms to this theme after a rousing round of "Go RP, Go RP" at about the 6 minute mark.

baby-daddy....,

He's a superhunky bad-boy ice hockey player from cold country; she's a chestnut-haired beauty and popular high school senior.

The all-American teen twosome will make GOP vice presidential pick and Alaska Gov. Sarah Palin a grandma at age 44 - just in time for Christmas.

Doe-eyed Bristol Palin, 17, and ruggedly handsome Levi Johnston, an 18-year-old self-described "f---in' redneck," have been dating a year, locals in Wasilla, Alaska, told the Daily News.

And the pregnancy? An open secret in the close-knit town of 9,780.[...]On his MySpace page, Johnston proudly declares: "I'm a f---in' redneck."

"I live to play hockey. I like to go camping and hang out with the boys, do some fishing," he says on the site.

He also warns that if anyone messes with him, "I'll kick ass."

The Web site, before it was removed, appeared not to have been accessed for a year.

On it, he admits to having a girlfriend.

On the part where it asks about children, he wrote, "I don't want kids."

Mark Okeson, the assistant principal at Wasilla High School, told the Chicago Tribune that Bristol started her junior year last fall, in the town where Sarah Palin grew up.

He said Bristol inexplicably transferred to an Anchorage high school midyear, leaving Levi behind.

"I never heard the story why," he said. Full-monty here in the New York Daily News...,

Prospective Civilization Superpowers

Summary

Oil as the cheap energy source has stoked industrial society for a century. However, ominous signs of oil depletion are beginning to appear, in fulfilment of M. King Hubbert’s “Peak Oil” theory. The implications of increasingly scarce oil supplies are catastrophic for the maintenance of industrial societies’ economic development. Even more, the anticipated economic development of the less developed countries is critically threatened. These less developed countries have set their will towards becoming industrialized, similar to that of the Western more developed countries. However, the stark facts of oil depletion herald considerable barriers to thwart the universalization of economic development to the less developed nations as oil prices skyrocket. This may all come together to facilitate civilization clash, as each political bloc frantically strives to secure the world’s oil resources, or at least the reliable supply of oil at the best price. Cohering nations may forge continent-wide civilization superpowers, for self advantage in the imminent new worldwide post-oil era, when abundant and cheap supplies of oil cannot be taken for granted. This may prove to be a contest of how the newly formed superpowers will cooperatively work together or aggressively compete with each other.

Future world scene and conclusion

Many are predicting the USA, in tragic economic decline, is about to plunge from its zenith position as the world’s voracious and massive consumer that has helped keep the world afloat economically. This free-fall (and possibly terminal) descent of the USA will have dramatic repercussions economically, by producing international financial chaos, as the world’s rapacious consumer, and receptacle for world investment, disappears, along with much of the international capital invested there. Such a massive economic catastrophe will rapidly lead to a rocky transition period. The world will be left without a great politically and militarily pre-eminent superpower. Just as nature hates a vacuum so does the political realm, and so newly forming superpowers will vie for advantage and even supremacy in the newly forming world order.

Out of international mayhem, with severe decline of some nations, and the collapse of the international financial system, a newly world-dominant economic and political superpower may arise, with its currency as the international convertible currency of choice.

This superpower, and any other remaining viable superpowers or civilizations, will need the reliable supply of oil, at cheapest possible prices, and it appears OPEC will be the most likely supplier of significant quantities. It remains to be seen whether the two oil-hungry, but oil-deficient civilization superpowers – Europe and the Asian conglomerate – can secure their supply of oil by the soft power of diplomacy, or whether the hard power of military force will be required – as oil is increasingly scarce against escalating demand.

Without a doubt, these oil-hungry superpowers will go to great lengths to maintain oil supplies and so sustain economic development and the viability of their civilizations.

This is an imminent state of affairs and may prove to be a testing ground for how the superpowers will compete for advantage, and how vociferous they can be for each to maintain, and even improve, its level of economic development, civilization greatness and world influence.

Go read the whole article - A geopolitical tsunami: Beyond oil in world civilization clash - at Energy Bulletin.

Palin the Alaskan Separatist

Alaskan Independence Party

1994, Convention Best Western Wasilla

Chairman	Edgar Paul Boyko	Anchorage
Vice-Chairman	Doyle Holmes resigned 5-95	Willow
	Bob Logan	Two Rivers
Secretary	Lynette Clark	Fox
Treasurer	Rita Leake	Fairbanks
Parlimentarian	Dee Roberts	Fairbanks

Jailbait...,

no need to fight Russia - just harness an alternative to oil

In this morning's UK Telegraph - yet another impotent appeal is given to a non-existent deus ex machina.

Yet again, the Bush administration has misjudged events. Moscow has drawn a line in the sand over Georgia and Ukraine. To push this issue is to poke the world's biggest energy producer in the eye.

Washington is lucky that China is not taking advantage of this crisis to help Russia inflict a crippling lesson. Russia holds $580bn of foreign reserves. China holds $1,800bn. Together they own a third of the $1.5 trillion stock of Fannie Mae, Freddie Mac and other US agency bonds. They are holding a gun to the head of the US Treasury, and the US financial system.

So how should we handle the bad-tempered bear? Data from the International Energy Agency suggests that oil prices will fall back for a couple of years as the global downturn squeezes demand, and new deliveries come on-stream from Brazil, Africa, Central Asia and the US itself.

Russia's leverage as supplier of 6.5m barrels per day of crude exports will slip, but not for long. But oil may well climb to a new equilibrium price above $150 a barrel once the next global cycle starts in earnest.

If so, Russia will become an even bigger headache. It is willing to use the oil weapon. It cut off 50pc of crude deliveries to the Czech Republic in July after Prague signed a deal with the US on the missile shield.

Obviously, we must cut our reliance on oil and gas even faster than we are already doing. Nuclear and clean power stations must be built with more urgency than we have seen so far. Tide and wave power technology should be given the same strategic priority as aircraft carriers.

If I were an American citizen, I would expect Washington to sponsor a Manhattan Project to harness the solar power on a mass scale. My apologies to the CIA/Pentagon if such a blitz is under way. Jim Woolsey, the former CIA director, told me last week that the US will end its strategic dependence on oil much more quickly than people realise. "We can defeat oil as a transport fuel. Russia won't be able to push us around any more within a decade," he said.

A deus ex machina (lat. IPA: [ˈdeːus eks ˈmaːkʰina], literally "god from a/the machine")[1] is an improbable contrivance in a story characterized by a sudden unexpected solution to a seemingly intractable problem.