COUNTERCOLUMN: All Your Bias Are Belong to Us

A year after Washington rescued the banks considered too big to fail, the ones deemed too small to save are approaching a grim milestone: the 100th bank failure of 2009.


There are now a number of companies... private insurers... who have more in cash reserves backing their own promises than the FDIC has available to back the banking system...

While the parade of failures still represents a mere fraction of America’s small banks, it underscores a growing divide between them and large institutions like Goldman Sachs, JPMorgan Chase and U.S. Bancorp, which are slowly growing stronger as the economy improves.

Leave it to the New York Times to fall for the 'rich get richer' divide. I mean, they already went for "grim milestone." Why not go whole hog for the stupidity? News flash for the Times: It's called "consolidation." Solid banks get a chance to purchase distressed assets of failing banks at a discount and thank God they do! It's good for everyone, and is saving the system from collapse right now.

Burdened by worsening commercial real estate loans, many small banks’ troubles are just beginning. Many analysts say that the now-toxic loans could sink hundreds of small lenders over the next few years and place a significant drag on the economy.

Already, the bank failures are placing enormous strain on the F.D.I.C. and its fund, which keeps depositors whole. Flush with more than $50 billion only two years ago, the fund recently fell into the red.

The prospect of more failures has led the F.D.I.C. to seek new ways to replenish the fund with higher and earlier payments by healthy banks, even after setting aside reserves for future losses.

Those commercial loans aren't turning around yet, either. And there's a new wave of ARMs due to reset soon, which should trigger a new round of foreclosures.

Yippee.

The initial wave of failures has also unsettled some communities, even though most of the troubled institutions have been bought by other banks rather than shuttered. While deposits are safe thanks to federal insurance, the new buyers often do not have the same ties to local businesses as the former owners.

More stupidity. Deposits are safe? Only deposits up to $250,000. And that's not really sustainable, because we upped the limit from 100k to 250k without a supporting increase in premiums. Oh, and what's this "federal insurance?" Kemosabe?

In some cases, they tighten lending and make it harder for longtime customers to obtain loans or favorable terms. In other cases, managers of the new bank make other changes, like ending offers for high-interest certificates of deposit and calling in certain lines of credit. In the longer term, some new owners are likely to close branches of the bank they have acquired in order to cut costs.

Ok, time to hit the Times reporter over the head with a clue-bat: Larger banks don't pull back on CD rates because they're out of touch with local businesses, moron. They do it because they aren't desperate and stupid. There's a reason banks offer above-market CD rates. Think about it: They are trying to raise cash in a hurry, to stave off a short-term crisis. Often it doesn't work, and the bank fails. Sometimes, the smart money sees their bank offer a significantly above-market CD rate, and they yank their money, and the bank fails as a result of what amounts to a large-depositor run on the bank. (Small depositors tend to be lazier.)

Once the bank is acquired by a healthier bank, the crisis is past, and banks no longer have a reason to offer CD rates significantly above market.

(Here's another clue: If you are looking for a good deal on a loan, don't go to the bank offering crazy-good CD rates! They're not looking to lend, and will be very picky and jack up rates to exceed their new higher cost of capital.

This calls for a song!

Labels: banking, economy, finance, New York Times

When Al Gore is pressed on a point, he has his henchmen cut off the microphone.



And the rest of the press corps does nothing.

I would not have been so polite with the organizer in the hall. Scratch a liberal, you'll find a fascist.

The fact is that the British court ruled that it would be illegal to show the film in schools in the UK without additional guidance for students correcting the nine listed errors in the film. I would have to imagine that's unprecedented, and hardly "in favor" of the film's producers. Even if they agree with the overall thesis, you cannot pull out nine egregious factual errors from any documentary, call the presentation "one-sided," issue a ruling that it would be illegal to show the film without correcting these errors, and call that a 'ruling "in favor of" the movie.

Splash, out

Jason

Hey, Jay Rosen... I got your 'rollback' strategy right here!

Labels: Al Gore, environment, global warming, Media, movies

Ace of Spades, call your office.

Roger Lee Nance, of 1117 Shew Ridge Mission Road, was charged with possession of non-tax paid liquor, possession of non-tax-paid liquor for the purpose of selling, and possession of equipment and ingredients intended for the use in the manufacture of an alcoholic beverage.
“This is one of the biggest seizures of white liquor I’ve seen come out of the mountains in my career,” ALE Director John Ledford said in statement.
The arrest follows a two-month investigation by ALE agents, assisted by the state Highway Patrol. In addition to the liquor, large amounts of sugar and other items were seized during a search of Nance's property, authorities said.

You'd better stay away from Copperhead Road

Labels: Crime, law, Music, Steve Earle

'This word, counterinsurgency ... I do not think it means what you think it means.'

Labels: counterinsurgency, doctrine, Obama, Politics, Warfighting

HOPE!!!!

American soldiers serving in Afghanistan are depressed and deeply disillusioned, according to the chaplains of two US battalions that have spent nine months on the front line in the war against the Taleban.

Many feel that they are risking their lives — and that colleagues have died — for a futile mission and an Afghan population that does nothing to help them, the chaplains told The Times in their makeshift chapel on this fortress-like base in a dusty, brown valley southwest of Kabul.

“The many soldiers who come to see us have a sense of futility and anger about being here. They are really in a state of depression and despair and just want to get back to their families,” said Captain Jeff Masengale, of the 10th Mountain Division’s 2-87 Infantry Battalion.

“They feel they are risking their lives for progress that’s hard to discern,” said Captain Sam Rico, of the Division’s 4-25 Field Artillery Battalion. “They are tired, strained, confused and just want to get through.” The chaplains said that they were speaking out because the men could not.

That's a direct result, in my view, of the lack of resolve, decisiveness, and leadership coming from the White House. If the trumpet sounds uncertain, who will answer the call?

That said, the selection of soldiers who go see the chaplain isn't always representative of the military as a whole. Soldiers who speak to the chaplain about morale problems are naturally the ones with morale problems.

But you can bet dollars to doughnuts that these chaplains are in a position to assess the delta - the change, in morale - and if the chaplains in two separate battalions are concerned enough to take the extraordinary step of speaking to the media about it, then Houston, we've got a problem.

This can be turned around, though. The morale problems on the ground simply reflect the morale problems at home. And if Congress is questioning the mission, and the folks back home are questioning the mission, and the White House is questioning the mission, but none of them our paying the price... it's only the US soldier, sailor and Marine on the ground shedding blood every day for a mission the President can't be bothered to sell (too busy trying to enrich Mayor Daley and the rest of the Chicago mob with the Olympics), well, to quote Rudyard Kipling,

Tommy ain't a bloomin' fool, you be that Tommy sees!

Splash, out

Jason

Labels: Afghanistan, chaplains, Politics, soldiers issues, Warfighting

The New York Times reports:

President Obama told Congressional leaders on Tuesday that he would not substantially reduce American forces in Afghanistan or shift the mission to just hunting terrorists there, but he indicated that he remained undecided about the major troop buildup proposed by his commanding general.

The truth, however, is that Obama is undecided about the major troop buildup he himself proposed during the campaign.

Democrat Barack Obama said Monday that as president he would send at least two more combat brigades to Afghanistan, where U.S. soldiers face rising violence and endured their deadliest attack in three years on Sunday.

The proposed force increase - about 7,000 troops - is part of Obama's plan to pull combat troops out of Iraq and focus on the growing threat from a resurgent al Qaeda in Afghanistan.

"As president, I would pursue a new strategy, and begin by providing at least two additional combat brigades to support our effort in Afghanistan," Obama said in an op-ed published Monday in The New York Times, a day before he plans a speech here on his vision for Iraq and Afghanistan.

"We need more troops, more helicopters, better intelligence-gathering and more nonmilitary assistance to accomplish the mission there," Obama said.

Obama hasn't articulated a contrary position since that time. McChrystal came out in support of the only guidance Obama has publicly given so far. Truth be told, it was Biden, not McChrystal, who 'put his cock on the anvil' arguing a position contrary to the President. It was Biden, not McChrystal, who was "off the reservation," with his proposal.

Biden should keep his council private and use the chain of command. If Biden really has a problem with the Commander-in-chief, he should resign now, and then he can go as public as he likes.

Democrats, of course, philosophically hold the same position -- and blame McChrystal.

Splash, out

Jason

Labels: Afghanistan, Army, Biden, foreign policy, McChrystal, Obama, Politics, soldiers' issues, War on Terror, Warfighting

So General McChrystal is getting excoriated by the leftards in the media, by Gen. James Jones, Obama's National Security Advisor, and now by Generalissima Pelosi herself for providing a forthright answer to a question directly in his purview by a member of the media.

The treatment he is getting is outrageous.

Why?

1.) The question was whether the General would support Biden's suggestion to dramatically lower troop strength in Afghanistan, and try to fight it with special operations forces and Predator strikes. The general said he would not.

There are strong doctrinal resources for this: COIN doctrine, however imperfect the fit with the Afghanistan battlefield, holds that the "key terrain" in the counterinsurgent fight is the population itself. The fight is not for control of real estate, but for the loyalty of the people.

That takes boots on the ground.

The second doctrinal reason to reject the Biden plan is that COIN, by its nature, is intelligence driven. The best source of battlefield intelligence is a strong relationship between our soldiers and marines on the ground and the local population. If we enact the Biden plan, the result will be a rapid retreat from the battlefield, leaving the population, including many who risked everything to support us, to the tender mercies of Taliban reprisals. If we retreat even a little from our commitment to village and tribal elders who have stuck their necks out to support us, word will spread like wildfire and the village and tribal elders will cut their own deals in order to survive.

In my view, we may already be seeing this happening: In a vicious firefight last week, in which an American outpost was in danger of being overrun, the Taliban was able to stockpile hundreds of weapons in a nearby village mosque. Large numbers of villagers must have known. And yet no one alerted coalition forces.

The logistics for massing materiel already underway, the Taliban managed to quietly gather in battalion strength to launch two deliberate attacks against American and Afghan outposts... and again, no one alerted Coalition forces.

This is symptomatic of a huge tactical intelligence failure on the ground. American forces were not, apparently, present in enough strength to defend the position and patrol aggressively simultaneously - with disastrous but not unsurprising results: A poor relationship with the people of the neighboring village and the ceding of the tactical initiative.

General McChrystal is seeing the same compromise being made all over the country: Troop strength being spread too thin. And Biden, without acknowledging the strategic and operational tradeoffs that MUST come with a reduction in troop strength, and without adjusting the General's mission in Afghanistan, wants to spread those troops even further.

So General McChrystal sticks up for his mission - and what's more, advocates precisely what President Obama himself is already on record as advocating: a substantial increase in troop strength in Afghanistan.

"I said a year and a half ago that we needed more troops in Afghanistan -- at least two brigades," Obama said. "John McCain, at the time, didn't think that was necessary, and now there's a convergence around the notion that we need at least two and maybe three brigades in Afghanistan."

McChrystal, then, was simply articulating a view already publicly endorsed by the Commander in Chief. As far as we know, the President has said nothing since that piece was published that would contradict that view. He has long held that Afghanistan is the central front on the War on Terror Group Hug Against Scary Things, and has repeatedly called for more troops in Afghanistan to prosecute that war. McChrystal was well within his guidelines, and when the President has been as vague and noncommital in policy statements as he has - despite a direct request from McChrystal for more troops, what else does McChrystal have to go on besides Obama's own public pronouncements?

Further, given the President's repeated calls for an increase of two to three brigades in Afghanistan, it wasn't McChrystal speaking out of school, it was Biden. I would argue that the Biden plan is the outlier, not McChrystal's statement that he would not support it.

What's more, there is no way that McChrystal can possibly be seen to be bucking the chain of command... because A.) Obama, the commander in chief, is already on record as calling for MORE boots on the ground, not fewer, and B.) Biden is NOT NOT NOT in the chain of command in any sense whatsoever.

I'm very cognizant that subordinates at all levels should take care not to pain their leadership into a corner. But that obligation goes both ways - leaders owe subordinates clear guidelines and directions. And that goes ESPECIALLY when the battlefield situation is vague.

I've noticed for several months now that Afghanistan policy was coming apart at the seams. Not from any one thing, but from having read a variety of news reports and hearing things through the military grapevine, the infantry mafia, the blogger boys club, and the intel syndicate. I haven't had time to blog them lately, and I regret that now. But this was a long time in the making.

McChrystal used the chain of command. He submitted his request to his boss,, General Petraeus at CENTCOM. And that, apparently, is where it languishes, because the President and his National Security decision-making apparatus has not yet produced a product useable for the commanders in the field.

McChrystal used the Chain of Command... the Chain of command, unfortunately, is not functioning.

McChrystal is entitled to know what he is expected to accomplish. He needs to know in order to issue orders down the chain. Every soldier and marine and corpsman and airman on the ground is entitled to know what he or she and their units are expected to accomplish.

Everyone involved in the effort is entitled to a decision from the President.

It's not like he didn't know the Afghan war was waiting for him when he got to the Oval Office.

Splash, out

Jason

And Pelosi's an ignorant twit.

Labels: Afghanistan, Army, COIN, McChrystal, soldiers' issues, USMC, War on Terror, Warfighting