Thursday, April 30, 2009

Game Theory: Why the Swine Flu Panic is Good

First 100 Days...

We'll see if the market holds up after Obama's bashing of hedge funds, but say what you want about the man... the market is actually up since he took over January 20th...

Source: Yahoo

Chicago PMI: Less Pessimistic

Marketwatch details:

Chicago-area businesses were a lot less gloomy in April, according to the Chicago Business Barometer released Thursday. The Chicago index rose to 40.1% from 31.4 in March. It was the largest one-month increase in the index since 1983. The index shows business activity in the Chicago area declined in April for the seventh straight month but at a much slower pace. Readings under 50 indicate most firms said business was getting worse. Production, new orders and employment all improved.
Source: Econstats

Personal Consumption Sinks

WSJ reports:

The spending of U.S. consumers dropped in March along with their incomes and they elevated savings to cope with the recession. Meanwhile, new U.S. claims for unemployment benefits unexpectedly fell last week, providing some hope that the pace of layoffs may be slowing somewhat after months of crippling job losses.

Personal consumption in March fell at a seasonally adjusted rate of 0.2% compared to the month before, the Commerce Department said Thursday. It wasthe fourth decline in six months. Spending increased a revised 0.4% in February; originally, spending was seen up 0.2%.

Source: BEA

Detroit's Auto / Housing Market Isn't its Only Problem

Forbes details:

The violent crime category is composed of four offenses: murder and non-negligent manslaughter, forcible rape, robbery and aggravated assault. We evaluated U.S. metropolitan statistical areas--geographic entities defined by the U.S. Office of Management and Budget for use by federal agencies in collecting, tabulating and publishing federal statistics--with more than 500,000 residents.

Though nationwide crime was down 3.5% year over year in the first six months of 2008, the cities atop our list illustrate a disturbing trend: All 10 of the most dangerous cities were among those identified by the Department of Justice as transit points for Mexican drug cartels.

Source: Forbes

Swine Perspective

Fox News reports:

President Barack Obama pledged "great vigilance" in dealing with the situation as the total confirmed cases in the U.S. rose to nearly 100, with many more suspected.

The Geneva-based World Health Organization sounded its own ominous alarm, raising its alert level to one notch below a full-fledged global pandemic. Said WHO Director General Margaret Chan: "It really is all of humanity that is under threat during a pandemic."

Dr. Richard Besser, acting chief of the Centers for Disease Control and Prevention, said there were confirmed cases in 10 states, including 51 in New York, 16 in Texas and 14 in California. The CDC also counted scattered cases in Kansas, Massachusetts , Michigan, Arizona, Indiana, Nevada and Ohio.
Should Swine Flu be a concern for health organizations around the world? YES. Should we do our best to inform ourselves of necessary precautions. YES. But should we also ignore the fear mongering media coverage realizing the problem is so far VERY small? YES.

How small? Well, in the five days that the disease 'Swine Flu' became integrated into day to day conversation, about 100 people (in a nation of ~300,000,000) have been diagnosed with having the disease and only 1 has died (a child who contracted the disease in Mexico).

How does this compare to the estimated number of actual deaths caused by murder in the U.S., which hopefully doesn't cross anyone's mind on a daily basis?

Lets just say 12x more people were murdered by hand or foot than by "swine" over that time frame...

Source: FBI

Wednesday, April 29, 2009

Japanese Industrial Production Up

Marketwatch with the details:

The increase to a seasonally adjusted index level of 70.6 marked the first gain in industrial output for Japan in six months and may be a sign that Japan's decline in production and exports are slowly coming to an end.

The data came in better than consensus. Economists surveyed by Bloomberg News had expected a milder 0.8% increase in Japan's March industrial output.

"The fact that IP is rising is hardly surprising, though, as the extremely sharp fall in previous months was an over-adjustment," said Andreas Schuster, strategist at CLSA in Tokyo.

However, the bad news is "that a recovery to a level that brings capacity utilization back to a ratio that ensures good profitability will be taking a very long time," he said.

Source: METI

Historical GDP Breakdown (Through Q1 09)

Source: BEA

Deflation Alert: Wages Show Biggest Drop Since 1950's

Source: BEA

"Equal Pay Day" Still Hasn't Arrived

Yesterday, April 28th marked 'Equal Pay Day'. Imperial Valley News with the details:

“Forty-six years have passed since President John F. Kennedy signed the Equal Pay Act into law in 1963,” pointed out Congressman Filner. “And yet, in many cases, there is still not equal pay for equal work in this country.”

In 1963, when the Equal Pay Act was signed, women who worked full-time, year-round made 59 cents on average for every dollar earned by men. In 2007, women earned 78 cents for every dollar earned by men. That is progress - but it is slow progress. It means that the wage gap has narrowed by less than half a cent per year.
Men vs. Women Pay by Industry

Source: BLS

Investment Slump

Marketwatch reports:

The big story for the first quarter was in the business sector, where firms halted new investments, and shed workers and inventories at a dizzying pace to bring down production and stockpiles to match the lower demand from U.S. and foreign markets.

"Businesses have not only cut back aggressively on inventories, but also on business fixed investment," wrote Harm Bandholz, economist for UniCredit Markets. "And the size of the declines in suggests that the adjustments in these areas have largely been made during the last couple of months."

Source: BEA

Consumption Strength? Yes and No...

All I hear on CNBC is that the market shrugged off the horrendous GDP figure as personal consumption showed surprising strength. Is that true?


And no...

Looking at the above change in personal consumption expenditure year over year, one can see the quarter over quarter figure was up, but just a rebound off of massive lows.

Source: BEA

Q1 GDP Down 6.1%

Marketwatch reports:

The U.S. economy contracted violently again in the first quarter of the year as business investment declined at a record rate, the Commerce Department reported Wednesday. Real gross domestic product fell at a 6.1% annualized rate in the first quarter, nearly matching the 6.3% decline in the fourth quarter of 2008. The two-quarter contraction is the worst in more than 60 years. The big story for the first quarter was in the business sector, where firms halted new investments, and shed workers and inventories at a dizzying pace to bring down production and stockpiles to match the lower demand from U.S. and foreign markets.

Source: BLS

Depression Equity Returns... Not So Bad

NY Times details:

Historical stock charts seem to show that it took more than 25 years for the market to recover from the 1929 crash — a dismal statistic that has been brought to investors’ attention many times in the current downturn.

But a careful analysis of the record shows that the picture is more complex and, ultimately, far less daunting: An investor who invested a lump sum in the average stock at the market’s 1929 high would have been back to a break-even by late 1936 — less than four and a half years after the mid-1932 market low.

How can this be? Three factors have obscured this truth from investors: deflation, dividends and the distinction between the Dow Jones industrial average and the overall stock market.

Source: Irrational Exuberance

Tuesday, April 28, 2009

Good News Alert! Consumer Expectations Rockets

Yahoo details:

The Conference Board says that its Consumer Confidence Index rose 12 points to 39.2, up from a revised 26.9 in March. The reading marks the highest point since November and well surpasses economists' expectations for a level of 29.5. The Expectations Index, which measures how shoppers feel about the economy over the next six months, skyrocketed to 49.5 from 30.2 in March.

CSPI Bounces Off Bottom, but Negative for Six Straight Month

I previously detailed that CPI may overstate inflation for an individual who:

  • does not own a home
  • would like to own a home
  • will likely soon buy a home

as it does not include how "affordable" housing has become with the recent price collapse for non-homeowners (full details here, but in a nutshell CSPI replace the 'home owners equivalent rent' figure in the CPI with actual home prices).

Though CPI is fluctuating around zero, the Case Shiller Price Index (CSPI) has been negative for six months now.

In looking at the Composite 10's five year returns (annualized), it is now moving into negative territory and given past corrections, indicates there may still be room for further deterioration.

Source: BLS / S&P

Asset Class Returns "Normalizing"?

It amazes me that the same people that were talking about the end of the world in March, are now contemplating we are in "new, lasting bull". The WSJ reports (bold mine):

If stocks have already hit their bottom and are in a new, lasting bull market, then buying them would be the smart move, even though they have already risen some 23% (that is the DJIA, the S&P 500 is up closer to 27%) since March 9. Pessimists warn, however, that the market went on a very similar run from November to January before sinking again to new lows. This is another such bear-market rally, they believe, and new lows are still on the way.

So, do I believe we have seen equity lows? No... my concerns that the U.S. economy is still shedding millions of jobs, has a broke / indebted consumer AND government, and relies on the earnings of "healthy" corporations that can't get decent financing and struggling corporations that are just beginning to default still linger (though when the market does end up hitting its bottom, I will probably be saying those same things).

However, there have been signs of normalization. Asset class returns since the "equity market bottom" are actually "logical" in the sense that higher risk assets are returning more than lower risk assets down the line from equities to Treasuries (unlike what was detailed here).

Though I will say that high yield returns of 15% and equity market returns of 25% in a month and a half sure doesn't feel logical.

Monday, April 27, 2009

Guess Who?

I'll be honest. I hoped some people would agree with my post Torture: Should We Just Ignore It And Move On?, but here is someone I never expected:

'War crimes will be prosecuted, war criminals will be punished and it will be no defense to say, "I was just following orders."'
Source: CNN

Box Office Boom Continues...

As mentioned a few times already at EconomPic, the box office continues to show strength during this economic downturn as movie goers look for a cheap source of entertainment to forget about their surroundings. Even with the amazing weather on the east coats, this week was no exception. Time reports:

Enough customers were transfixed by the fatal-distraction drama Obsessed to place it at the top of the weekend's box office chart with a surprisingly robust $28.5 million, according to early studio estimates. The PG-13 thriller more than doubled the take of its nearest competitor, 17 Again, and earned nearly as much over the weekend as the total of the three other movies that opened in wide release. It is the all-time highest grosser (surpassing the 2004 Lindsay Lohan-Tiny Fey comedy Mean Girls) for the last weekend in April, when traditionally hardly anyone goes to the movies.
Obsessed marks the fourth release from 2009 that makes up the top 11 April openings ever.

Source: Box Office Mojo

Baseball Franchise Values... Mixed, but Holding Up

Yahoo! Sports with the details:

One-third of Major League Baseball teams declined in value over the past year while the New York Yankees’ worth increased 15 percent to $1.5 billion, according to the annual estimates by Forbes magazine.

The Washington Nationals took the biggest hit during the recession, down 12 percent to $406 million. The Atlanta Braves dropped 10 percent and the Detroit Tigers and Seattle Mariners each were off 9 percent, the magazine said Wednesday.

The decline by 10 teams was the most since 2004, Forbes said.

On the other hand, the rich have gotten richer. Both the Yankees and Mets have seen their franchise values continue to rise.
Bolstered by their new $1.5 billion stadium, the Yankees showed the top increase and remained the most valuable franchise in the majors. The New York Mets, also boosted by a new ballpark, were second in value ($912 million) and increase (11 percent).

Part of the value is due to the revenues these two teams generate (Yankees are king, the Mets are third behind the Red Sox), but they both have 'franchise value to revenue multiples' that are among the highest in the league due to their ability to grow those revenues.

It will be interesting to see how teams hold up through the economic downturn as their businesses, as well as owners are impacted.

Source: Biz of Baseball

European Exports

Interesting analysis at Zero Hedge making the case that the Euro may have more room to go on the downside. Along with some data on the level of leverage many of these countries have built up, Tyler details the reliance Europe has exporting to the UK and US (and lack of a large exposure to China and OPEC nations), both of which are facing their own own struggles.

And the associated cliff dive...

Source: Zero Hedge

Friday, April 24, 2009

Just One of the Guys

Matt Stafford, a "pretty solid" college quarterback based solely on stats (yes, not all college stats are fluffed, so it is possible he is better than those stats) just signed a new contract IN DETROIT FOR 6 YEARS.... 72 MILLION F&CKIN' DOLLARS.

According to the AP:

Detroit desperately needs a quarterback to help turn around the NFL's first 0-16 team, which has had the worst eight-year stretch in the league since World War II, and is turning to Stafford after he was a starter in each of his three seasons at Georgia.

Looking at Matt's new salary compared to the median wage for a variety of industries in the Detroit Metropolitan area, it looks like he'll fit right into the Detroit community.

Ah... the Detroit Lions... one of the only teams (I'll throw Cincinatti and Cleveland in there) that make my J-E-T-S look good. From 0-16 to.... 2-14? At only 175x the salary of the Detroit team doctor, he is WELL worth the money!

But lets looks at the positives... maybe he can throw some of that cash GM or Chrysler's way.

Source: BLS

EconomPics of the Week (4/24/09)

Opinion / Other
Torture: Should We Just Ignore It And Move On? Please briefly read this post and if you feel an additional investigation needs to take place, sign the petition telling Attorney General Eric Holder to appoint a special prosecutor to investigate the torture further
Inequality and Entitlement
The One Recession Proof Area Within Finance

Economic Data
Leading Economic Indicators (March)
Where's the Defense? New Orders Down (March)
UK GDP Down Most in 30 Years
European Manufacturing Crash - February
IMF: Negative Global Growth for First Time Since WWII
Deflationary Cycle: UK Edition

IMF: $2.8 Trillion in Estimated Writedowns by Banks
T - 30 Minutes to Stress Test: Above or Below 3% T.C.E.?

Assets / Markets
Crude Oil Inventory Rise Continues
A Positive Outcome from Foreclosures
Ten Year Yields: Higher or Lower?
10% on Top of 2 and 20% No Longer Sensible?
S&P Earnings and 6% Growth...
2008 Corporate Profits vs. Market Cap (Top 10)

T - 30 Minutes to Stress Test: Above or Below 3% Tangible Common Equity?

Ahead of the announcement in 30 or so minutes, Option Armageddon (via Naked Capitalism) with details of the stress test. Reuters reports:

"U.S. regulators want the top 19 banks being stress-tested to have at least 3% [TCE]."
Below is a chart put together with data from Option Armageddon.

We see a number of banks that would need to convert preferreds to common or hit up the markets (private or government aided) if these figures are correct.

the actual release? Not much. As Paul from Infectious Greed details:
Lots of Testing, Not Much Stress

Where's the Defense? New Orders Down (March)

Marketwatch reports:

New orders declined in almost every industrial sector, although a key gauge of capital spending by businesses rose 1.5%, the second straight increase following a severe decline in January. New orders in the first quarter were down 27.1% compared with the first three months of 2008. Shipments of durable goods fell 1.7% in March and were down 18.4% in the first three months compared with the same period a year ago.

Source: Census

UK GDP Down Most in 30 Years

Daily FX with the details:

U.K. Q1 GDP contracted much more than expected, falling 1.9% quarter over quarter and 4.1% year over year, versus our survey median estimates for -1.6% and -3.8% respectively, highlighting the severity of the U.K. recession at the beginning of the year.

Total industrial production declined by 5.5% quarter over quarter, the largest quarterly drop since records began in 1948, emphasizing the very dire state for the sector. Meanwhile, manufacturing output fell by an even sharper 6.2% quarter over quarter , which was also the worst ever on record.
Historical Time Series

Recent Breakout

Source: Statistics.Gov.UK

Thursday, April 23, 2009

A Positive Outcome from Foreclosures

Calculated Risk details in the post Housing Bust and Geographical Mobility that:

It is very difficult for homeowners with negative equity to move.
That is until negative equity homes become foreclosures. Comparing areas in which sales via foreclosures are picking up steam (i.e. forced to move out in California / West) against areas in which problems are still picking up steam (i.e. still stuck in their home in the Northeast), we see mobility has returned to those hit worse, while those muddling through remain stuck.

Source: Census

European Manufacturing Crash - February

Marketwatch reports:

Euro-zone industrial new orders posted a smaller-than-expected monthly fall in February, but were still down by a record amount compared to the same month last year. The statistics agency Eurostat on Thursday said new orders fell 0.6% from January. Compared to February 2008, new orders were down 34.5%. Economists had forecast a 2.5% monthly drop and a 34.9% year-on-year decline.

Source: Eurostat

IMF: Negative Global Growth for First Time Since WWII

Voice of America reports:

The IMF says the world economy will shrink by 1.3 percent this year, its worst performance in more than 60 years. It says recovery is expected to begin only at the end of the year and that growth will recover to only 1.9 percent in 2010. Blanchard says there has been unprecedented contraction in recent months.

"The collapse of demand has led to sharp cutbacks in production and a dramatic decline in exports. Global GDP went down by an unprecedented six percent, at an annual rate, in the last quarter of 2008. And, as far as we can tell, most likely declined almost as fast in the first quarter of 2009," he said.

Source: IMF

Ten Year Yields: Higher or Lower?

Higher --> Supply: Across the Curve

Treasury bonds are taking a severe drubbing and the yield on the benchmark 10 year note is approximately at the level which prevailed on the day when the Federal Reserve announced quantitative ease (2.96 percent currently).

One participant noted that the 200 day moving average on the Long Bond was 3.798 percent and the market penetrated that level this morning as a sharp knife would melting butter.

Lower --> Quantitative Easing / Continued Economic Deterioration: Zero Hedge

There has been a lot of criticism of Big Ben (us included) but one thing that has come out is he is not afraid to take relatively risky moves to combat whatever he perceives as the biggest threat. As we have noted before, he has clearly revealed his playbook in the past and we see little indication that he will stray from it going forward. On the balance between inflation and deflation, much has been made of the Chinese response if we try to print our way out of this situation but the much larger problem has always been deflation. Combining what we know about the available policy options and the effectiveness of the last round of QE, we have to believe that more purchases of long rates are on the table as a serious consideration.

Source: Yahoo

Wednesday, April 22, 2009

Crude Oil Inventory Rise Continues

The AP details:

Crude inventories rose more than forecast last week while gasoline inventories jumped despite expectations for a dip, according to government data released Wednesday.

For the week ended April 17 crude inventories rose by 3.9 million barrels, or 1.1 percent, to 370.6 million barrels, which is 17.2 percent above year-ago levels, the Energy Department's Energy Information Administration said in its weekly report.

That's the highest inventory level since September 1990.

Source: EIA

The One Recession Proof Area Within Finance

Lobbying paid for by the financial sector continued to grow in 2008 despite the turmoil.

As reports, the trend continues:

Major recipients of federal bailout money spent more than $10 million to lobby lawmakers in the first three months of 2009, including arguing against pay limits for corporate executives, according to newly filed disclosure records.

The biggest spenders among major financial firms and automakers included General Motors Corp., which spent nearly $1 million a month on lobbying so far this year, and Citigroup and J.P. Morgan Chase & Co., which together spent more than $2.5 million in their efforts to sway lawmakers and Obama administration officials on a wide range of financial issues.

"Taxpayers are subsidizing a legislative agenda that is inimical to their interests and offensive to what the whole TARP program is about," said William Patterson, executive director of CtW Investment Group, an activist group affiliated with a coalition of labor unions. "It's business as usual with taxpayers picking up the bill."
Source: Open Secrets (idea via Charting the Economy)

IMF: $2.8 Trillion in Estimated Writedowns by Banks

The IMF released the Global Financial Stability Report. One section details the estimated $4.1 trillion in writedown losses, of which $2.8 trillion are expected to be held by banks.

Of estimated potential writedowns of $4.1 trillion on mature market credit for global market participants, banks are expected to suffer $2.5 trillion. In addition, global banks are expected to take an additional $340 billion of writedowns on exposure to emerging market assets, bringing the total to $2.8 trillion (Table 1.15).

Although Europe excluding U.K. banks are expected to suffer a sizable portion of its writedowns on assets within the region, a substantial proportion of the total, 44 percent altogether, is borne on assets outside the region, mostly in the United States, and in emerging European markets. By comparison, U.S. banks are expected to suffer only 8 percent of writedowns on non-U.S. exposure. Similar to continental Europe, U.K. banks suffer 45 percent of writedowns on nondomestic assets. For banks in Asia, potential writedowns on U.S. assets (35 percent) are higher in dollar terms than on any other regional exposure.
Table 1.15 (loss of $2.8 trillion by asset origination region)

Table 1.15 (loss of $2.8 trillion by region held)

10% on Top of 2 and 20% No Longer Sensible?

FT Alphaville reports:

In its latest findings, Hedge Fund Research, an industry data provider, estimates investors redeemed up to $104bn from hedge funds in the first quarter, versus the record $152bn withdrawn from the industry in the fourth quarter of 2008. The first-quarter figure makes up some 7.4 per cent of industry assets.

However, here’s the clincher: withdrawals from ‘fund of hedge funds’ specifically totalled $85bn in the first quarter — that far exceeds the fourth quarter 2008 redemption of $50bn and accounts for the majority of capital withdrawn from the hedge fund industry overall.

Tuesday, April 21, 2009

Inequality and Entitlement

In Felix Salmon's post The Plight of the Overpaid, he details Gabriel Sherman's New York Magazine article The Wail of the 1%, which takes on those bankers that feel they still deserve to be paid in excess:

As Sherman says, bankers are the last Americans to Get It: they don’t think that the excesses of Wall Street were responsible for wealth destruction rather than wealth creation, and they still think that a degree from Wharton is, in and of itself, a Good Thing. One financier essentially tells Sherman that the going rate for any job which involves being woken up in the middle of the night should be roughly $2 million a year — which is not the kind of attitude guaranteed to make you friends among, say, the farming community.

Most people outside Wall Street have come to the conclusion that excess pay was a direct cause of the current meltdown, but the highly-paid symbolic analysts at our biggest investment banks somehow have a massive blind spot when it comes to that fact.
The entitlement is striking, but is somewhat explained by the reality that the third quartile American earns 2x more than the first quartile (i.e. what has been reality becomes ingrained that it should be reality).

Yet 'Wall Street' vs. 'Main Street' is far from the only source of inequality that remains. In fact, according to the BLS the median Asian man earns more than 50% more than the median Hispanic man (both of which earn more than the woman of either race).

While I absolutely believe in capitalism, getting a brand name education, a finance job, and being the "right race" should not in itself equate to substantially more income than someone who just didn't have the same opportunity (this coming from someone who went to an Ivy League business school, works in finance, and is white so take that with a grain of salt). While I do not believe in the redistribution of wealth for redistribution of wealth's sake, if taxes are used to create the same opportunities for all and shifts income to jobs that truly add value to our economy, I'm all for it...

Source: BLS

Deflationary Cycle: UK Edition

ITV reports:

The headline rate of inflation, which includes mortgage payments, has fallen below zero for the first time in 50 years.

RPI stood at 0.4 per cent last month - down from zero in February - showing the cost of living is actually getting cheaper.

But negative RPI should not necessarily be welcomed. The figure is often used as a benchmark to set wage, state pension and other benefit increases.

That last sentence is striking. According to Save Borrow Spend:
Millions of public sector workers could find their incomes on hold if the UK enters a period of deflation. Council workers, nurses and teachers could all see their pay cheques stand still because public sector pay is tied to the RPI.
Let the deflationary cycle begin.

Source: Statistics.Gov.UK

Monday, April 20, 2009

2008 Corporate Profits vs. Market Cap (Top 10)

Source: CNN Money

Leading Economic Indicators (March)

Marketwatch reports:

The recession may continue though the summer, though its intensity could ease, the Conference Board said Monday. The index of leading economic indicators fell 0.3% in March, following an upwardly revised dip of 0.2% in February. Building permits were the largest negative contributor in March, while the real money supply was the largest positive contributor. "There have been some intermittent signs of improvement in the economy in April, but the leading economic index and most of its components are still pointing down," said Ken Goldstein, economist at the Conference Board.

S&P Earnings and 6% Growth...

Interesting analysis of historical earnings in the Barron's article What's the Real P/E Multiple?

There's more we can do to make sense of earnings: The best way to measure present earnings and future earnings is to smooth them out over long periods. Earnings can grow at only approximately 6% a year over the long term. The trend is limited by the growth in real GDP plus inflation. And long term, real GDP cannot grow faster than the increase in the labor force plus the increase in productivity.

If you don't accept this, look at a long-term chart and draw a 6% growth line through the earnings. It is clear that earnings sometimes rise above the line and sometimes fall below it, but earnings always revert to the 6% mean.

Going back to 1950, every instance where actual earnings rose above trend-line earnings was followed by a period where actual earnings went well below trend-line earnings.

Comstock Partners believes that we have entered such a period now, and that the market is trading at such a high multiple of trend-line earnings that it will be difficult to make money.

You could even lose a lot of money.

Source: Irrational Exuberance

Torture: Should We Just Ignore It And Move On?

What is waterboarding? According to Wikipedia:

Waterboarding is a form of torture that consists of immobilizing the victim on his or her back with the head inclined downwards, and then pouring water over the face and into the breathing passages. By forced suffocation and inhalation of water the subject experiences drowning and is caused to believe they are about to die. It is considered a form of torture by legal experts, politicians, war veterans, intelligence officials, military judges, and human rights organizations. As early as the Spanish Inquisition it was used for interrogation purposes, to punish and intimidate, and to force confessions.

In contrast to submerging the head face-forward in water, waterboarding precipitates a gag reflex almost immediately. The technique does not inevitably cause lasting physical damage. It can cause extreme pain, dry drowning, damage to lungs, brain damage from oxygen deprivation, other physical injuries including broken bones due to struggling against restraints, lasting psychological damage or, ultimately, death. Adverse physical consequences can start manifesting months after the event; psychological effects can last for years.
Thus, while there is absolutely no question that Khalid Sheikh Mohammed and Abu Zubaydah are both evil individuals, the following news made my stomach turn. The Empty Wheel (via Paul Krugman) with the details:
According to the May 30, 2005 Bradbury memo, Khalid Sheikh Mohammed was waterboarded 183 times in March 2003 and Abu Zubaydah was waterboarded 83 times in August 2002.

On page 37 of the OLC memo, in a passage discussing the differences between SERE techniques and the torture used with detainees, the memo explains:
The CIA used the waterboard "at least 83 times during August 2002" in the interrogation of Zubaydah. IG Report at 90, and 183 times during March 2003 in the interrogation of KSM, see id. at 91.

183 times in one month; that means, on average, they subjected Khalid Sheikh Mohammed to the sensation of drowning to death six times per day. Obama's statement on the memos:
We have been through a dark and painful chapter in our history. But at a time of great challenges and disturbing disunity, nothing will be gained by spending our time and energy laying blame for the past. Our national greatness is embedded in America's ability to right its course in concert with our core values, and to move forward with confidence. That is why we must resist the forces that divide us, and instead come together on behalf of our common future.

The United States is a nation of laws. My administration will always act in accordance with those laws, and with an unshakeable commitment to our ideals. That is why we have released these memos, and that is why we have taken steps to ensure that the actions described within them never take place again.

Whether or not this method of torture was legal (a form of waterboarding was ruled legal by then Assistant Attorney General Jay Bybee on August 1st, 2002, who "JUST HAPPENED" to have been nominated by President Bush to be a federal judge months prior), is the release of their names enough?

I certainly don't think so. If you have similar thoughts and feel an additional investigation needs to take place, you can sign the petition telling Attorney General Eric Holder to appoint a special prosecutor to investigate the torture here.

Friday, April 17, 2009

EconomPics of the Week (4/17/09)

New Baseball Fields and (Empty) Corporate Boxes
If Goldman's Selling... Beware of Buying
Taxpayers Subsidizing Paper?
Only Now Moody's Downgrades Ambac to Below Investment Grade?

Economic Data
State Unemployment Spike
State Tax Collections Decline.... Sales Taxes with a Record Drop
Michigan Consumer Sentiment Rebounds; Flat Year over Year
Philly Fed Index... "Business Sucks Now, BUT WILL ...
Eurozone Industrial Production Collapse
Deflation Camp: Under-utilized Capacity
Industrial Production Slump Continues
CPI Down; Solely Due to Transportation
Inventories Continue to Fall...
Retail Sales Fall (March)
Deflation, Here We Come (PPI March)

Markets / Assets
Reader Opinion Friday.... Is this Sustainable?
No Foreign Demand for US "Risk" Assets
Investment Grade Corporate Bond Yield
Global Equity Rebound

Citi Losing Non-US Deposits

State Unemployment Spike (and Oregon Struggling)

All States (click for ginormous chart)

States w/ Statistically Significant Unemployment Rate Changes


Reader Thomas asks the question:

Any particular obvious reason why Oregon is hit so badly? Somehow, it wasn't on my list of usual suspects. Did they have lots of construction jobs?
I was wondering the same thing. The Statesman Journal ponders the question.
The question on everyone's mind is why Oregon's unemployment rate has risen so high, Cooke said.

"We don't have definitive answers," he said. "We have some ideas as what is the likely cause."

California, which has suffered a strong economic hit with the bursting of the housing bubble, is likely dragging down Oregon's economy, he said. California's unemployment rate is the nation's fourth highest at 11.2 percent.

The housing bust also has affected demand in Oregon's lumber and wood products industry, Cooke said.

Demand for mobile homes and other durable goods made in Oregon also is down.

And there's no good news on the horizon.

Source: BLS