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Monday, August 30, 2010

Castle in the Crosshairs

Fresh off their victory against Lisa Murkowski, the Tea Party Express is taking on the Republican establishment. This time it's in Delaware where the establishment pick is Mike Castle. The Tea Party Express is supporting Christine O'Donnell.

Delaware tea party candidate Christine O’Donnell got a major boost today in her long-shot campaign to take the Republican Senate nomination from under the nose of Rep. Mike Castle, who is considered the overwhelming favorite. The Tea Party Express announced it would spend around $600,000 ahead of Delaware’s Sept. 14 primary on her behalf.

But before the pundits could say “Joe Miller,” the Republican establishment had mobilized to shake Castle’s lapels and try to energize his campaign. Washington Republicans laid into O’Donnell, saying she could hardly be viewed as a paragon of fiscal virtue when she owes back taxes, had her home foreclosed on, and never received a diploma because she didn’t pay her tuition.

The next stop for the evolution of the Tea Parties runs through Delaware.

Crist Stumbles on Healthcare

Over the last couple months, the Florida Senate race has been a battle of messages between Charlie Crist and Marco Rubio. Both have been very effective and thus the race has been tight with each having their share of polls showing them leading.

Rubio has continued to ride his message of American exceptionalism, small government and free markets. Meanwhile, Charlie Crist has ridden a message of the independent politician not beholden to either party.

Both would have been perfectly happy staying on this message until November. Recently, however, Governor Crist has stumbled in trying to explain his position on Obamacare.

Florida Gov. Charlie Crist (I) is walking back comments he made in an interview earlier today about the recently enacted healthcare law.

Crist is mounting an independent bid for Senate against Republican Marco Rubio and Democratic Rep. Kendrick Meek.

Crist told a local TV station Friday that he would have voted in favor of President Obama's healthcare proposal were he in the Senate. That was a reversal of his previous position against the healthcare law.

"I would have voted for it," Crist said in the interview. "But I think it can be done better, I really do."

Crist has said just about everything on Obamacare recently. He's said he would have voted for it and against it. He's said he'd repeal it and he'd just improve it. He's been taken totally off message. Meanwhile, Rubio carries the Republican Party line of repeal and replace and so he stays on message and attacks Crist as a flip flopper.

This race will be very tight and it will come down to exactly these sorts of errors. Rubio has won this round. If he's flawless going forward, victory is in hand.

Friday, August 27, 2010

Gerard Beloin in the News

The long shot Senatorial campaign of Gerard Beloin, running for the Republican nomination in New Hampshire, got some much needed exposure with this piece in the Nashua Telegraph. The article mostly focuses on his consistent conservative record but the real story is Beloin's journey to becoming a nominee. That story can be found here.

Wednesday, August 25, 2010

The ACORN Rebranding

The intrepid ACORN reporter Matthew Vadum has the latest on ACORN's continuing rebranding effort.

On Mosque: White House Digs Hole and Keeps Digging

The big story yesterday involved the Ground Zero Mosque proprietor, mam Feisal Abdul Rauf, and some very explosive comments he made in Australia about five years ago. The comments were first discovered by Pamela Geller.

Whatever chances there were that this Mosque would get built officially ended with this news, even if no one will admit to it yet.

That said, the White House has dug in. The same Imam is on a State Department sponsored junket all throughout the Middle East. Here's what the State Department said about the comments.

"We are aware of those remarks," said State Department Spokesman P.J. Crowley. "I would just caution any of you that choose to write on this that once again you have a case where a blogger has pulled out one passage from a very lengthy speech, if you read the entire speech, you will discover exactly why we think he is rightfully participating in this international speaking tour."

Lot's of people have had quotes taken out of context. That said, when you make such an accusation you also have a duty to explain the context. The State Department has failed to do so. Instead, they have attacked Geller and claimed that we are repeating the Shirley Sherrod incident.

The problem for the White House is that the full transcripts are available and Rauf says what he says and the context is there. They continue to defend him at their own peril.

Miller Wins in Alaska

Joe Miller appears to be squeezing out a narrow victory in Alaska.

Republicans are fired up and ready to go, and that's producing some surprising election results, including the possible defeat of Sen. Lisa Murkowski in Alaska, who would be the third sitting U.S. Senator ousted by their own party this year.

The Alaska story, though, could shape up to be the most interesting. Miller leads Murkowski, a second-generation senator, by three percent. But the results are still trickling in - more than 15 percent of the ballots have not been counted, including the many absentee ballots from Alaskans who work, serve or attend school elsewhere. If Murkowski goes down it will be the biggest pelt yet for Sarah Palin's hunting party. She backed Miller (as did the Tea Party Express with a late $500,000 ad buy) and can claim lots of credit for his success. If Miller prevails, he should have a clear shot at the Senate against Democratic nominee, Sitka Mayor Scott McAdams. Miller is a conservative, West Point graduate, Yale-educated lawyer and former judge. While Alaskans overall may have some reservations about Palin after she abruptly left the governorship, this should be a very Republican year in a very Republican state.

98% of the precincts have come in and Miller continues to lead. The Tea Parties, of which Miller is a favorite, have flexed their muscles in the primaries.

That said their future goes through three states: Nevada, Florida and Colorado. The Tea Parties have shown incredible muscle in primaries. Furthermore, it's a movement that is here to stay. It has spawned the likes of Nikki Haley, Scott Brown and Rand Paul.

The key for this movement will be whether or not their candidates can win elections in a cross section of states that represent the country as a whole. That's where Florida, Colorado and and Nevada come in. No one is a bigger Tea Party favorite than Marco Rubio. There's no more purple state than Florida. So, a victory by Rubio in Florida legitimizes the Tea Parties.

It means that Tea Parties don't have to settle for any Republican candidate. Meanwhile, a loss means the tea parties took a solid Republican seat and gave it to another party.

There are similar dynamics in Nevada and Colorado. In both states, a tea party candidate came out of nowhere to defeat the establishment candidate. In both states, the seat was likely Republican. Will the tea party candidate hold on? If so, a real political force is born. If not, it could be the sort of force that does more harm than good electorally.

Tuesday, August 24, 2010

Reuters: Most Want Bush Tax Cuts

Here's the story.

Almost one-third of Americans support President Barack Obama's proposal to allow tax rates to rise for the wealthiest, a Reuters/Ipsos poll found on Tuesday.

Nearly half of those surveyed think the tax breaks, which were enacted under former President George W. Bush, should be extended for everyone, including those who make more than $200,000 a year and would be excluded under Obama's proposal.

Fifteen percent back stronger action than Obama has proposed -- letting all the lower tax rates expire, a view typically held by those worried about the yawning budget deficit.

This is mostly important because once again President Obama has chosen to be on the minority side of an issue. I know presidents aren't supposed to govern by polls but you also can't consistently go against the will of the people and govern.

Obama long passed that point. As such, he'll get nothing new through. More than that, continuing to take stances that go against the population in general will be evident in November.

The next major political battle will come over these tax cuts, and once again President Obama starts from a position of weakness.

Blago and Fitzgerald

Lead largely by the likes of Laura Ingraham much of the national press has tried to frame the Rod Blagojevich trial as the defining moment for US Attorney Pat Fitzgerald. With the embarrassment of a mostly hung jury, many of the same folks now are attempting to paint Fitzgerald as a largely failed prosecutor.

Most of it is total nonsense. First, the Blagojevich trial is important largely in the media only. Blago was never an important figure politically or to ending the corruption in this state. He was always a buffoon and that's how most approached him. In fact, the profile of the trial was raised almost entirely by Blagojevich himself. By going on the Apprentice, his wife on Survivor, along with the whirlwind media tour, Blagojevich raised the profile of his trial.

That still doesn't make it the end all be all. Here in Illinois insiders called Jim DeLeo the shadow governor and most considered him significantly more powerful. So, bringing down Blago wouldn't have brought down anything close to the most powerful player in Illinois politics. In fact, a case could be made that by taking down both Tony Rezko and Bill Cellini that Fitzgerald did significantly more to damage the power base than a Blagojevich conviction.

Beyond that, Fitzgerald also has the convictions of Robert Sorich in the Hired Truck Scandal under his belt. Operation crooked code lead to significant convictions in Chicago's long corrupt Department of Buildings. Alderman Ike Carothers was rececntly convicted of taking bribes. Furthermore, Fitzgerald landed a significant blow to the Outfit with the conviction and subsequent indictment of Lt. Rudy Fratto. Conrad Black was also convicted of fraud.

Furthermore, Fitzgerald was the special prosecutor that got the conviction of Scooter Libby. Finally, Fitzgerald has achieved convictions against not one but two former Governors of Illinois.

In fact, Fitzgerald has received criticism from all quarters. Conservatives don't like him for the aggressive prosecution of Libby. Civil rights folks think he's too aggressive. One criticism you won't hear about Fitzgerald is that he's not trying hard enough and to me that's the sign that he's doing a great job.

Saturday, August 21, 2010

Friday, August 20, 2010

A Fannie/Freddie By Any Other Name

Politicians are now paying lip service to reforming Fannie/Freddie. I wouldn't expect anything to actually get done but be prepared for all sorts of hair brained ideas. The first is by Congressman Barney Frank.

The more things change, the more they stay the same. Take the case of Barney Frank, Chairman of House Financial Services Committee. In an interview with FOX Business’ Neil Cavuto, he called for Fannie Mae and Freddie Mac to be abolished. “The only question is what do you put in their place,” he said.


What would he propose? He said, “I’ve worked closely with the Financial Services Roundtable… They are talking about the following: first of all, you separate it out, so there’s no more hybrid public-private. So, Fannie and Freddie and anything like them go out. You have a purely public FHA [Federal Housing Administration]… [that is] fully self-financing.”

Frank added, “If we want to subsidize housing then we could do it upfront and let the budget be clear about that.”

Clearly, Barney Frank hasn't been paying attention to me. Beyond that, Frank clearly doesn't understand why Fannie/Freddie are such a problem. It's as though the problem is the names. They've become too toxic and so if we change them and have another mechanism that does the exact same thing everything will be fine.

Let's start at the beginning. Mortgage securitization is a very complicated process but, in my opinion, it's a necessary one. It provides liquidity in the market and it transfers risk from banks to speculators. All of that is good. That means more people get loans and rates will be lower.

The problem is that in loan securitization there's only two games in town, Fannie Mae and Freddie Mac. That's duopoly and those never work. The second problem is that both are extensions of the government. So, what we had was a government run monopoly on securitization. Fix both problems and you fix Fannie/Freddie.

Instead, Barney Frank wants to go the other way. He wants to stop simply having an implicit government guarantee and just have an explicit government guarantee. Of course, that perpetuates the problem.

Wednesday, August 18, 2010

Nancy Pelosi Wants an Investigation into the Ground Zero Mosque

No, it's not about the funding for the Mosque. Instead, Speaker Pelosi wants to investigate those that are funding the opposition to the Mosque.

The house speaker is calling for an investigation into groups protesting the building of the Ground Zero mosque.

"There is a concerted effort to make this a political issue by some," she told San Francisco's KCBS radio on Tuesday.

Pelosi added that she joins "those who have called for looking into how is this opposition to the mosque being funded."

Many Republicans have said they are against the building of the mosque, and have demanded Democratic candidates and incumbents to publicly choose a side.

Just think, some are concerned about who's behind the funding of the Mosque. That's not what Nancy Pelosi is concerned about. Instead, she's concerned about who's funding the opposition.

Here, I thought the opposition was spontaneous and organic. Pelosi must think that 64% of the population is being driven and funded by a secret group all behind the scenes. Talk about a conspiracy theory. Somehow, a secret group of wealthy bankers was able to fund an opposition that has turned into a grass roots opposition. I'd like to know their marketing guru.

Morning Market Report

It was a great day for all markets across the board yesterday with all three indices showing strong gains of about one percent. They all look to be slightly higher today from yesterday. Meanwhile, mortgage applications are the highest in fifteen months.

U.S. mortgage applications leaped last week as rock-bottom rates lifted demand for home refinancing loans to its highest level in 15 months, the Mortgage Bankers Association said on Wednesday.

Home loan refinancing puts extra cash into consumers' hands that can be used to pay off existing debt or funnel into the economy through purchases. By lowering a monthly mortgage payment it may also help some homeowners avoid default and foreclosure.

The MBA said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended Aug. 13, increased 13.0 percent. The four-week moving average of mortgage applications, which smoothes the volatile weekly figures, was up 2.6 percent.

It was just yesterday when I said that mortgage applications weren't showing any strength even as mortgage rates were at or near all time lows. There's some talk about reforming Fannie/Freddie.

In response to criticism by many in Congress that it should have added GSE reform to the financial reform bill, the Obama administration has repeatedly said the housing and mortgage markets are simply too fragile right now to weather the inevitable storm that debate would entail.

Still, next Tuesday, financial industry leaders, academics, economists and dozens of TV cameras will meet in a room at the Treasury Department for the first public forum on reforming the two mortgage giants which have been bleeding cash while still controlling 70 percent of today's mortgage market.

Administration officials have told me over and over that there will be no policy announcement on Tuesday; this is an open forum to look at and discuss the many proposals for reform of and transition from the current GSE conservatorship.

As I've said over and over, reforming Fannie/Freddie is really simple. You break them up and fully privatize them. As my old boss used to say,

it's simple but not easy

So, we'll see. I don't expect our fair politicians to get this right.

Treasury bonds are showing strength again. The ten year U.S. Treasury bond is now just below 2.60% at 2.5928%. The yield spread between the two and ten year continues to hold at 2.1%. Bonds in Britain were relatively unchanged while in Germany we saw some strength.

Both Gold and Oil are taking a breather. Oil is off about 50 cents a barrel to $75.18 and Gold is off $1.40 an ounce to $1226.90. Meanwhile, the Dollar is showing some weakness this morning. It's off .19% against the Euro, .51% against the British Pound and off .29% against the Japanese Yen.

It was a mixed day for equities around the world. The Hang Seng in China was off .54%, the NIKKEI in Japan was up .86% and the Straits Time Index in Hong Kong was off .14%. In Europe, the DAX in Germany was off .08%, the FTSE in London was off .45% but the Spanish index was up .03%.


All investments involve different degrees of risk. You should be aware of your risk tolerance level and financial situations at all times. Furthermore, you should read all transaction onfirmations, monthly, and year-end statements. Read any and all prospectuses carefully before making any investment decisions.

Nothing on this page should be taken as investment advice but strictly for information purposes. All investors should consult with an investment advisor before making any investment decisions.

Tuesday, August 17, 2010

Blago Guilty

Of course, it's only on a count of lying to the Feds.

A federal jury today convicted former Gov. Rod Blagojevich of only one count against him: lying to the FBI. Jurors said they were deadlocked on the other 23 counts against the former governor, and all four counts against his brother Robert.

Blagojevich, who faces up to 5 years in prison, pursed his lips and shook his head slightly.

Patti rested her head on the chair in front of her and shook her head no several times.
Blagojevich looked at her with an annoyed look on his face.

This is similar to the charges that Martha Stewart was found guilty of and Blago will likely receive roughly the same amount of time. The Feds have said they intend to try him on the other charges so we may have this circus.

Gay Marriages Still on Hold in California

My head usually spins trying to follow the appeals process of any case in which constitutionality is at issue. The case of Prop 8 in California is one such case. Here's the latest.

Same-sex "weddings" in California are on hold indefinitely after a federal appeals court blocked them while it considers the constitutionality of the state's ban on homosexual unions.

The decision, issued Monday by a three-judge panel of the 9th U.S. Circuit Court of Appeals, trumps Judge Vaughn Walker's order that would have allowed same-gender marriages to begin on Wednesday.

Walker had previously ruled that the ban, known as Proposition 8, violated the constitutional rights of homosexuals, who he said should not face discrimination based on "moral and religious views." The ban's sponsors appealed that ruling and also asked the 9th Circuit to block same-sex weddings in the meantime. They claimed in papers filed with the 9th Circuit that homosexual marriages would harm the state's interest in promoting responsible procreation through heterosexual marriage.

You may recall that weeks ago a district judge ruled that the ban on gay marriage in California, Prop 8, was unconstitutional. That was immediately appealed. In the meantime, the appeals court, the ninth circuit which is the most liberal in the country, has put all gay marriage ceremonies on hold indefinitely while they look at the district judge's ruling.

Secular Progressivism in Chicago

The Second Unitarian Church does affirm same sex

Harry Reid Backs Off

Harry Reid became the first prominent Democrat to distance himself from President Obama.

Spokesman Jim Manley said in a written statement that Republicans should show their sincerity about sensitivity to Sept. 11 survivors by backing a high-profile bill to grant health benefits to rescue workers, something that stalled in Congress earlier this month.

But at the same time, Manley put Reid on the record for the first time in the hyper-sensitive and volatile mosque debate.

"The First Amendment protects freedom of religion," Manley said. "Sen. Reid respects that but thinks that the mosque should be built some place else."

Reid's comments added another high-profile voice to the mosque controversy. The president first stepped into the fray Friday when he appeared to endorse the Park 51 project during a Ramadan dinner at the White House. The next day, he clarified that he was merely commenting on fundamental religious freedoms -- not specifically on the "wisdom" of the mosque project. Then White House spokesman Bill Burton said Obama was not "backing off" his original remarks.

President Obama wanted to straddle the line. He wanted to state the obvious to the world: in America the first amendment guarantees everyone a freedom of religion. He didn't want to take a stand on the real issue: whether it's proper for this mosque to be built so close to Ground Zero.

Harry Reid had no such problem. Obama created a firestorm with his comments and then tried to walk them back. It was truly amateur hour, a growing trend, at 1600 Pennsylvania Avenue. Furthermore, Democrats have enough problems. Now, everyone has to deal with this.

Morning Market Report

Everyone with an opinion seems to be weighing in on the possibility that we're headed toward a double dip recession.

Nearly two-thirds of Americans believe the economy has yet to hit bottom, a sharply higher percentage than the 53% who felt that way in January,” according to a recent Wall Street Journal poll.

A growing and vocal minority of economists believes that there will be a double dip recession primarily because of the intransigence of high unemployment and the rapidly faltering housing market. The notion of a “jobless recovery” has been around since the recessions of the 1950s and 1960s. It is a concept built on a relatively simple idea: employment lags during a recession but it is always part of a recovery cycle. Production rises as businesses see the end of a downturn and anticipate improving sales. They are reluctant to hire new workers until the recovery is confirmed, but once it has been, hiring picks up.

The 2008 – 2009 recession was – if it is indeed over – different from any other because of its depth and causes. The first trigger was the drop in housing prices, which robbed many people of their primary access to capital. As that access disappeared, so did the availability of credit. Consumer buying power evaporated and business cut inventory and production. Joblessness rose. Finally, consumer confidence plunged.

For his part, Phil Nuciola, of Scottsdale Capital, considers a double dip recession a real possibilities. The confluence of three events, according to Nuciola, makes this a real possibility. First, housing is off 20% and more in many places. Second, people's credit has been shot and so they can't get loans to buy anything new. Third, there's no jobs.

So, people have been forced from their homes and their back to renting. With no jobs, people will have trouble paying the rent. Where do you go when you're renting? Meanwhile, the weak dollar has pushed many commodities, a la Gold, to near record highs. So, gasoline is up above $3 a gallon in most places. So, the same people that have no jobs, no place to live, will now have to pay more and more for basic household items like gas.

Nuciola says that he's watching the S & P 500 for guidance. The magic number is 920. If the S & 5, now at 1080, falls to 920, that's the signal for him that we're in a double dip recession because

you've set a new low during a recovery.

It's phenomenon that we also saw in 1932. After seeing a recovery from Black Monday, October 1929, market indices fell back setting similar new lows during that recovery, and a full blown depression was on.

If, in fact, we do fall back into a double dip, Nuciola sees disaster. That, he thinks, will lead us into a depression. The analogy is to a prize fighter, or for 24 fans, a prisoner under interrogation. Falling back into a recession will "break" so to speak the economy, and we'll go into freefall.

Despite the doom and gloom, Nuciola sees individual opportunities in this market. For instance, he loves Intel. (INTC) Intel finished at $19.47 a share yesterday. It has a 4.25% dividend at this level. Like many tech stocks, their sales and earnings have survived this storm. Nuciola says,

where's this company going

In other words, it's staple, the Intel chip, will be featured in most PC's for years to come.

Another security Phil Nuciola likes is Blackrock International Growth Fund. It traded just slightly above Net Asset Value. It finished at 10.30, whereas Net Asset Value is at 9.90. It's a mix of staples of world companies including Honda and Royal Dutch Shell.

Meanwhile, it was a relatively quiet day in the market. All three indices neither gained nor lost even a quarter of a percent yesterday. Markets look a half to three quarters of a percent better at the open ahead of a slew of earnings this week.

Bonds are taking a breather after another big day yesterday. The ten year is up four basis points to 2.60%, but that's after it lost almost eight basis points yesterday. It set all time records pushing 2% in January of 2009. That was following a similar announcement that the Fed would be buying hundreds of billions of treasury bonds. Are we headed toward similar record? The yield spread between the two and ten year is steady at 2.1%. Bonds in Britain and Germany were both relatively unchanged today.

Crude oil is up nearly a buck a barrel to $76.02 this morning. Gold is up again to $1228 an ounce. Meanwhile, the Dollar is mixed this morning. It's down .48% against the Euro, up .13% against the British Pound and down .02% against the Japanese Yen.

Good day all around in the markets in the world. The Hang Seng was up .12% while both the NIKKEI and Straits Time Index were down, but they were the only two indices down in both Europe and the Far East.

Finally, the financial world is still buzzing from the news yesterday that China surpassed Japan in total GDP, but we also need some context. The per capita income in China is $3600 yearly. It's more than ten times that in both Japan and the U.S. There's many ways to look at that. When the average citizen's income is $3600, your economy is NOT near a power YET. This despite almost two decades of outstanding growth. So, either China's only begun to grow, or even after all that growth it's still an impoverished nation.

Domestically, the housing trend continues to show weakness.

Housing starts rose less than forecast in July and building permits fell to the lowest level in more than a year, indicating little evidence of a rebound in U.S. construction following an expired tax credit.

Work began on 546,000 houses at an annual rate last month, fewer than the 560,000 median estimate of economists surveyed by Bloomberg News and up 1.7 percent from June, Commerce Department figures showed today in Washington. Building permits dropped 3.1 percent to a 565,000 pace.

The number I'm most interested in is the weekly mortgage application number. Even as the rate on the thirty year fixed hovers near records everyday we've seen applications off. That hasn't happened until now even in this market. All throughout 2008-2009 and 2010, when rates fell, mortgage applications rose. Now, that is not even happening. That's not a good sign at all, to say the least.


All investments involve different degrees of risk. You should be aware of your risk tolerance level and financial situations at all times. Furthermore, you should read all transaction onfirmations, monthly, and year-end statements. Read any and all prospectuses carefully before making any investment decisions.

Nothing on this page should be taken as investment advice but strictly for information purposes. All investors should consult with an investment advisor before making any investment decisions.

Monday, August 16, 2010

Obama Backtracks Leaves Supporters in Lurch

How must Glenn Greenwald be feeling today? After all, here's what he wrote immediately following Obama's pronouncement on Friday.

This is one of the most impressive and commendable things Obama has done since being inaugurated:

President Obama delivered a strong defense on Friday night of a proposed Muslim community center and mosque near ground zero in Manhattan, using a White House dinner celebrating Ramadan to proclaim that "as a citizen, and as president, I believe that Muslims have the same right to practice their religion as anyone else in this country" . . .


What makes this particularly commendable is there is virtually no political gain to be had from doing it, and substantial political risk. Polls shows overwhelming opposition to the mosque nationwide (close to 70% opposed), and that's true even in New York, where an extraordinary "50% of Democrats, 74% of Republicans, and 52% of 'non-enrolled' voters, don't want to see the mosque built."

Greenwald wasn't the only one. Here's a sample of the comments on the Huffington Post following a story about this on Friday.

Once again Obama does the right thing. Conservatives only care about the constitution when it aligns with their ideology/goals. As usual.


America cannot let the demagogues win this one. Sarah's "win" will be the terrorists' win. It is sickening and disheartening that part of this great country will let this woman lead them. However, we must persevere. America is infinitely greater and better than her.


The headlines should state, President defends the Constitution. Come on HP!! stop trying to compete with Faux News headlines, it is below you. Well, I used to think it was below you, but I am beginning to wonder.

Of course, not a day after taking what some liberals called a principled stance, Obama backtracked.

I was not commenting and I will not comment on the wisdom of making the decision to put a mosque there," he said. "I was commenting very specifically on the right people have that dates back to our founding.

So, now, most of those same liberals have egg on their face. It turns out that Obama's "principled stance" lasted all of one day. Now, liberals are taking Obama on for blinking.

A mere 24 hours after he threw his presidential weight behind the proposed mosque near New York’s ground zero—in a display of statesmanship that was delicious as much for its rarity as for its apparent cojones—Obama recalibrated his position in a frightened, mealy mouthed attempt to placate the anti-mosque opposition (which, depressingly, appears to comprise almost the entire Republican Party).

On Friday, Obama said, in words that were plainly at war with the conventional wisdom that holds that the mosque is offensive to popular American sentiment: “As a citizen, and as president, I believe that Muslims have the same right to practice their religion as everyone else in this country. And that includes the right to build a place of worship and a community center on private property in Lower Manhattan, in accordance with local laws and ordinances. This is America.”

All those that reflexively defended him are stuck licking their wounds. No word yet from Glenn Greenwald.

Morning Market Report

The morning market report is back. This edition we'll be getting some guest commentary on the markets from Phil Nuciola of Scottsdale Capital.

Last week, the Wall Street Journal had this report about how high yield corporate bonds (junk) are getting back in favor.

Junk-bond issuance is on a record-setting pace this week, with a flurry of new offerings in the market Wednesday adding to the uncommonly high total seen this August.

This week has already produced $7.9 billion in high-yield bond issuance, the highest single-week total since late April, according to data provider Dealogic, and on pace to surpass the $12.5 billion one-week record set in December 2006. U.S. high-yield volume has reached a record high year-to-date volume of $148 billion, up 77% from the $83.6 billion at this point in 2009 and just $15.6 billion short of the $163.6 billion full-year 2009 total.

Companies, including Peabody Energy Corp. (BTU) and First Data Corp. (FDC) on Wednesday, have lined up to sell cheap debt and investors are increasingly willing to chase riskier investments to gain any yield advantage. Issuance of speculative-grade bonds began to pick up in late July and has accelerated as yields on high-grade corporate bonds have hit historic lows and equities continue to languish.

That's happening in large part because of record low yield on Treasury bonds, the ten year is hovering around 2.8%, as well as the AAA corporate debt. Johnson and Johnson just did an issuance for 3.13%. So, investors looking to make money in yields are rushing to junk which is paying 6% and higher. This trend is making Phil Nuciola weary. Nuciola says he staying away from individual bonds and he's only looking at high yield bond funds that are

not trading at a premium to their Net Asset Value.
He thinks that anyone paying a premium is overpaying for risky investments.

For short term traders, Nuciola says they should be keeping an eye on the S & P 500's. The S & P closed at just below 1080 on Friday. Nuciola says that's right at a support point. If we see another down day, watch for the S & P's to go to 1050. If it steadies itself, it could shoot back up to 1120. Either way, there's plenty of money to be made on the volatility if you get it right.

Generally though, Nuciola says he's "buy and hold" and looking for dividends.

In this market I'm going to buy securities that are going to pay me to own them.
Nuciola singled out Pfizer (PFE) as a stock he especially likes here. It traded at about 16 (it's at $16.08 in pre market) on Friday. It's got a low of 14 and a high of 20 over the last 52 weeks. The Price to Earnings here is a conservative 14.5 and it has "solid dollar earnings" here. Nuciola says the pipe line of new drugs is a bit bare but still loves the value here.

The Dow, S& P's, and NASDAQ futures are set to open a bit less than a half percent lower at the open. Meanwhile, Treasury bonds continue to show strength following the Fed's pronouncement that it will continue quantitative easing. The ten year is now trading at 2.64%. Thirty year fixed mortgages have been testing both sides of 4.5% and are on the verge of setting new records everyday. The yield spread between the two and ten year treasuries is at 2.1%.

Crude oil is sitting just a bit higher this morning at $75.58 a barrel while gold is showing a healthy gain to $1223. Things were mixed in the Far East today. The Hang Seng in China was up .19%, the NIKKEI in Japan was off .61%, while the Straits Time Index in Hong Kong was off .22%. In Europe, things were bloody. All indices but the Swedish index is currently down. The FTSE in London is off .51%, the DAX in Germany is off .35%, and the Spanish index is off .83%.

The Dollar is mixed this morning. It's up .45% against the Euro, up .18% against the British Pound, but off .83% against the Yen.

CNBC says that China has officially passed Japan as the world's second largest economy.

After three decades of spectacular growth, China passed Japan in the second quarter to become the world’s second-largest economy behind the United States, according to government figures released early Monday.

The milestone, though anticipated for some time, is the most striking evidence yet that China’s ascendance is for real and that the rest of the world will have to reckon with a new economic superpower.

The recognition came early Monday, when Tokyo said that Japan’s economy was valued at about $1.28 trillion in the second quarter, slightly below China’s $1.33 trillion. Japan’s economy grew 0.4 percent in the quarter, Tokyo said, substantially less than forecast. That weakness suggests that China’s economy will race past Japan’s for the full year.

The U.S. continues to have a larger economy based on GDP than the next three, China included, COMBINED. Also, despite it's fabulous growth, China still lags far behind in per capita income.

Meanwhile, according to Bloomberg, there's infighting among the investment banks in the upcoming IPO (initial public offering) of General Motors.

Wall Street banks led by JPMorgan Chase & Co. and Morgan Stanley stand to make a combined $120 million on General Motors Co.’s initial public offering. If it weren’t for Goldman Sachs Group Inc., they could have made four times as much.

In a pitch to the U.S. Treasury in May, Goldman Sachs offered to accept a fee of 0.75 percent, according to people with direct knowledge of the matter. That’s a fraction of the 3 percent banks typically charge on the largest IPOs and well below the 2 percent offered by Bank of America Corp. and other banks that presented to Treasury, said the people, speaking anonymously because the matter is private.

Finally, after the double whammy of bad jobs in July and a bad first time jobs claims number (484000) the next week all eyes will be on the weekly jobs number this Thursday.


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Sunday, August 15, 2010

Obama Clarifies?

President Obama seeked to clarify his comments from Friday vis a vis to controversy over the Ground Zero Mosque.

Speaking Friday night at a White House dinner to honor the holy month of Ramadan, the president said, "Muslims have the right to practice their religion as everyone else in this country," an apparent show of support for the mosque.

On Saturday, while spending the day in the Gulf, the president clarified, "I was not commenting and I will not comment on the wisdom of making the decision to put a mosque there. I was commenting very specifically on the right people have that dates back to our founding. That's what our country is about."

Later in the day, spokesman Bill Burton issued a statement saying "the president is not backing off in any way from the comments he made last night.

"It is not his role as president to pass judgment on every local project. But it is his responsibility to stand up for the constitutional principle of religious freedom and equal treatment for all Americans," Burton said.

This morning former White House Press Secretary Dana Perino said it best

if you're explaining you're losing.

The president will be doing an awful lot of explaining over this issue because it's very confusing exactly what his position is.

Saturday, August 14, 2010

More Bleeding Heart Liberalism

The Las Vegas Journal Review has an excellent piece breaking down the Senatorial campaign between Harry Reid and Sharron Angle. It will likely come down to the public's perception of Harry Reid's clout.

Locked in a dead heat, both U.S. Sen. Harry Reid and Sharron Angle picked up support in the past two weeks, according to a poll for the Las Vegas Review-Journal and 8NewsNow that shows Nevada voters sharply divided on whether Reid's Senate seniority is too valuable to lose.

More than half of those surveyed, 51 percent, said the Senate majority leader's influence is not too valuable to give up, while 45 percent said Nevada can't afford to lose his clout, said the survey by Mason-Dixon Polling & Research. Another 4 percent weren't sure.

It's one of the comments that was most interesting to me.

What really bothers me about Sharron Angle is she has no compassion. Nobody can get an abortion, even if their father rapes them. People looking for a job shouldn't be given unemployment checks because it's pandering to them. Kids shouldn't have the number of teachers they need because it's paying a teacher who might belong to a union. Old people should fend for themselves and not have Social Security. Also: those of us expressing our opinions don't have to be employed by Harry Reid to want to do it. She is SOOOO irritating all by herself. Glad to see she's behind in the last 5 or 6 polls.

Clearly, this individual thinks it's government's job to pay for all these compassionate endeavors. That's why we call such people bleeding heart liberals.

Maxine Waters Blames Bush

Maxine Waters made her first significant statement after being formally charged by the Ethics committee in the House and she blamed Bush.

Embattled Rep. Maxine Waters on Friday blamed the Bush administration for her ethics problems -- saying she had to intervene with the Treasury Department on behalf of minority-owned banks seeking federal bailout funds -- including one tied to her husband -- because the Treasury Department wouldn't schedule its own appointments.

The California Democrat said in a Capitol Hill news conference -- an event rarely held during a congressional recess -- that she reached out to then-Treasury Secretary Hank Paulson in late 2008 when his department failed to respond to the National Bank Association's request for a meeting

The worst thing for the Obama administration is for both the Waters and Rangel trials to turn racial. If that were to happen, he'd be stuck between the proverbial rock and hard place.

If he were to sign on to the idea that the charges against both are racist in nature, that would turn off most of the electorate. If he didn't however, that would turn off African Americans. Either way, he'd lose support somewhere. Already, we're getting more and more support in mainstream liberal thought that these charges are racist in nature. Kirsten Powers made the suggestion on Special Report on Thursday. It's clear that Maxine Waters will make race an issue in her trial and if Rangel does the same, that would amp up racial tensions exponentially.

Obama Supports the Ground Zero Mosque

Speaking at an outreach event to the Islamic community President Obama said this.

As a citizen, and as president, I believe that Muslims have the same right to practice their religion as everyone else in this country," Obama told an intently listening crowd gathered at the White House Friday evening to observe the Islamic holy month of Ramadan.

"That includes the right to build a place of worship and a community center on private property in lower Manhattan, in accordance with local laws and ordinances," he said. "This is America, and our commitment to religious freedom must be unshakable."

The mosque is overwhelmingly, by 60% plus, not favored to be built at Ground Zero. It's especially opposed by most of the families of the victims of 9/11. High profile Republicans like Newt Gingrich and Sarah Palin oppose the mosque. The Anti Defamation League also opposes it issuing this statement.

We regard freedom of religion as a cornerstone of the American democracy, and that freedom must include the right of all Americans – Christian, Jewish, Muslim, and other faiths – to build community centers and houses of worship.

We categorically reject appeals to bigotry on the basis of religion, and condemn those whose opposition to this proposed Islamic Center is a manifestation of such bigotry.

However, there are understandably strong passions and keen sensitivities surrounding the World Trade Center site. We are ever mindful of the tragedy which befell our nation there, the pain we all still feel – and especially the anguish of the families and friends of those who were killed on September 11, 2001.

The controversy which has emerged regarding the building of an Islamic Center at this location is counterproductive to the healing process. Therefore, under these unique circumstances, we believe the City of New York would be better served if an alternative location could be found.

This continues a pattern by Obama of taking the overwhelming minority's side on the issue of the day.

More coverage of the issue here, here and here.

Thursday, August 12, 2010

Obamacare Chickens Coming Home To Roost

The themes from this recent O'Reilly Factor Talking Points Memo are not likely to go away. Health insurance rates are on the rise. The health insurance companies are blaming Obamacare for the rise in costs. This part in particular will prove politically deadly for President Obama.

As we stated Wednesday night, American health insurance companies are building in the anticipated costs of Obamacare. For the next four years until the Obamacare program completely kicks in in 2014, all Americans are going to be hammered as the insurance companies try to make as much money as they can before the federal rules are imposed.

I don't know about you, but I never heard this part of Obamacare. I was never told that my insurance rates were going to run wild.

Were you told that? Did President Obama mention that? I don't believe he did.

If you believe Dick Morris, the President wants rates to go up so that he can institute single payer in 2014. Of course, he won't be around in 2014 because his policies are all a colossal failure and we are seeing the beginning of that abject failure in real terms with Obamacare right now.

The fact is that Obama claimed that Obamacare would bend the cost curve downward and instead rates are skyrocketing up and the insurance companies are blaming Obama. So, the economy is horrible. Unemployment is near ten percent. The border is a mess. Afghanistan is a mess. Now, health insurance premiums are skyrocketing as a result of the very policies that Obama claimed would make them come down. To add to that, both Charlie Rangel and Maxine Waters may have their congressional trials in September. That's an unmitigated Democratic disaster. ob

Wednesday, August 11, 2010

My Interview with Fred White Candidate for Mayor of Chicago

Because Mayor Daley hasn't offficially announced, this is the only officially announced candidate for Mayor of Chicago in the election next March.

Harry Reid: "I Don't Know Why Any Hispanic Would Be a Republican"

That's one of the dumbest and most obscene comments you'll ever hear come out of a politicians mouth. Let's remember, many liberals and Democrats claim that the Tea Party movement is itself racist. The Republicans wasted no time in responding. Here's Marco Rubio, himself of Cuban descent.

Sharron Angle has proven to be a very weak candidate, but at this point, she just needs to keep her mouth shut as Reid is a total disaster.

The Shadow Watcher's Council

The Council submissions are up and of course, I'm no longer in the Council. Take a look at the submissions and here's the submission I would have made. Feel free to make comments about which is the best piece. No, I won't do this regularly.

Kent Alexander to All Scripts

Kent Alexander, who spent the last ten years as the Chief Counsel to Emory University, is moving on to chief legal counsel at Allscripts in Chicago.

It's been a while since last I referenced Alexander but here's a feature on him from nearly three years ago.

Monday, August 9, 2010

My New Chacko Feature

It only begins today, part one is here. Check out the conclusion tomorrow.

Friday, August 6, 2010

Breaking Non Farm Payroll Negative 131,000

There was a slight gain in private jobs but 141000 census workers lost their jobs.

Companies in the U.S. added workers in July for a seventh straight month at a pace that suggests the labor-market recovery will be slow to take hold.

Private payrolls that exclude government agencies rose by 71,000, less than forecast, after a gain of 31,000 in June that was smaller than previously reported, Labor Department figures in Washington showed today. Economists projected a 90,000 rise in private jobs, according to the median estimate in a Bloomberg News survey. Overall employment fell 131,000 and the jobless rate held at 9.5 percent.

Watch the administration spin this positively but this is awful. Best case scenario we have a U shaped recovery in jobs. Worst case scenario we'll pull back into a double dip. That means we'll have high unemployment for most, if not all, of Obama's first term.

Thursday, August 5, 2010

Chacko Memo II

UPDATE: Please also check out my new book, The Definitive Dossier on PTSD in Whistleblowers, for only $3.95, in which I dedicate chapter four entirely to the exploits of Dr. Anna Chacko. 

I just received this from a source at the Pittsburgh VA. This, according to the source, is the other side of the story of the allegations that Dr. Chacko is making against the Pittsburgh VA. Here are the charges that Chacko laid out.
Also, here's the Pittsburgh Tribune story that started all this.

You be the judge about Dr Chacko’s claims of radiation overexposure.
The detailed story of the technetium/Thallium utilization for Cardiac Stress testing at the Pittsburgh VA.
VAPHS has switched to using Technetium for the cardiac stress tests, many years ago, from the regular utilization of Thallium, the stadard of care in many institution, even today. Technetium offers a slightly lower dose of radioactivity and faster clearance.
There have been occasional national and international shortages of technetium when specific nuclear reactors are down. VAPHS has a contingency plan to use Thallium, a widely utilized nuclear isotope for cardiac stress test, in case of Technetium shortages.
VAPHS has a specific contract with a licensed vendor to provide unit dose radioactive material on a regular basis to serve the veterans and hospital patient care needs. The vendor has to maintain a copy of the VAPHS current United States Nuclear regulatory (NRC) license to use specific radioactive material. All the details are spelled out in the contract, and have been in effect for several years. The vendor is NOT General Electric (GE).
On the day Dr Chacko describes, there was a shortage of technetium. Dr Chacko independently calls a “friend” in General Electric(GE) and requested the delivery of technitium directly to the nuclear medicine department at the VAPHS. A nuclear pharmacist from GE was tasked to fly to Cleveland to prepare the isotopes and drive them to Pittsburgh, as ordered.
The Unit doses were delivered to the VAPHS, at her request, followed by a bill to the VAPHS to pay General Electric for the radioisotope, and the urgent shipping cost. These isotopes were never used to inject veterans.
Here is what was wrong with this arrangement:
  1. The VAPHS has an exclusive contract with a vendor, and cannot deviate from the contract.
  2. The nuclear medicine staff had no idea what was in those isotope vials, and were not about to inject patients with isotopes that just showed up at the door, with no prior arrangements, or the safety of a contract for liability.
  3. None of these arrangements were cleared by the VA administration or the contracting office.
  4. This was under the watch of her friend Dr Rashmikant Shah (Bob Shah, as he might be known), who she had put in charge of Nuclear Medicine Department at that time, and who had agreed to using the Thallium instead of cancelling patients.
  5. GE did not have a copy of the VAPHS license to use radioisotope, and may have committed an illegal act by just sending the radioactive material to Pittsburgh at that time. (The NRC should look into this and similar practices that may be going on by this vendor who was striving to gain “special vendor status” with VAPHS under Dr. Chacko’s watch.
  6. When the contracting officer told Dr Chacko that this would be an unacceptable breach of contract, Dr Chacko threatened to sue the contracting officer for not going along with her plan.
  7. When the Adminitrative officer objected, she was subjected to retatalliation and spreading rumors of incompetency and harming patients.
  8. When the lead tech objected to breaking the contract, and injecting patients with unknown material delivered by an unknown vendor to us, for no “life threatening reason”, he too got harshly reprimanded and threatened to loose his job, by Dr Chacko. She also spread false accusations about his incompetence and inadequacy for the job (heis a licensed Nuclear medicine technologist with decades of experience in Nuclear medicine)
  9. To put all this into perspective, one should compare the radiation exposure of the one dose Thallium, one dose technetium and one CT scan. I will leave this to the radiologists and physicists to figure out, and see how can Dr Chacko, a nuclear medicine physician, have any credibility in her field.
  10. Dr Chacko preys on the ignorants and unsuspecting naïve, and there are too many of them out there.
  11. Dr Chacko’s complained loudly, and triggered a Medical Inspector General team’s visit who found no fault by the VAPHS in dealing with the shortages. They commended the VAPHS technical and administrative staff for the efforts to get to the bottom of Dr Chacko’s complaints, locally, and for doing the right thing.

A Split with the Watchers of Weasels

I've been asked to leave the Watcher's Council, of which I've been a part since about this time in 2008.

This week I've nominated this piece on the Chicago poet Kevin Coval. Coval holds some strong opinions on Palestine and Israel and the Council doesn't agree with those opinions. I was told that by nominating this piece was "hitting a raw nerve" and "rubbing their faces in it."

Ironically enough, Coval himself has been uninvited from several scheduled performances for these views. More ironic however is this. In November of 2009, the Watcher's Council had this set of nominees. Included in the nominations was this piece by Michael Gaynor (we each nominate one of our own weekly and one from another source) That is a hit piece on ME. Council member Terry Trippany thought that was the best piece he'd read all week by outside sources.

In other words, writing a hit piece on a member of the council is appropriate but writing about a poet with anti Israel views hits a nerve and is worthy of being expelled. The audience can decide if that sounds right.

Here again is Coval's pinnacle performance.

Wednesday, August 4, 2010

Dr. Mary Johnson on Dr. Chacko

Dr. Mary Johnson is herself a whistle blower in North Carolina and she's none too happy with Dr. Chacko wrapping the "whistle blower" flag around herself.

Missouri Invalidates Health Care Mandate

Yet another state sent Obamacare a message.

Missouri voters on Tuesday easily approved a measure aimed at nullifying the new federal health care law, becoming the first state in the nation where ordinary people made known their dismay over the issue at the ballot box.

The measure was intended to invalidate a crucial element of President Obama’s health care law — namely, that most people be required to get health insurance or pay a tax penalty. Supporters of the measure said it would send a firm signal to Washington about how this state, often a bellwether in presidential elections, felt about such a law.

“My constituents told me they felt like their voices had been ignored and they wanted Washington to hear them,” Jane Cunningham, a state senator and Republican who had pressed for a vote, said Tuesday night. “It looks to me like they just picked up a megaphone.”

The legalities of all this are murky. The politics couldn't be clearer. The administration is on a collision course with dozens of states on this mandate and it will end up in the Supreme Court. It will pit individual states against the federal government. While this is happening, the Obama administration is on a separate collision course with Arizona and other states vis a vis illegal immigration.

Council Nominations

The Watcher's Council nominations are up.

Council Submissions

Non-Council Submissions

Tuesday, August 3, 2010

Miller and Chacko

UPDATE: Please also check out my new book, The Definitive Dossier on PTSD in Whistleblowers, in which I dedicate chapter four entirely to the exploits of Dr. Anna Chacko. 

The Pittsburgh Tribune has the story.

A letter to Shinseki from Sen. Richard Burr, R-N.C., and Rep. Brad Miller, D-N.C., centers on allegations from a former VA physician who says he was forced out of the agency in retaliation for raising questions about money for brain injuries, the "signature injury" of the wars in Iraq and Afghanistan. The Defense and Veterans Brain Injury Center reports 10 percent to 20 percent of troops with combat exposure there suffered concussions from roadside bombs.

Then, there are parallels drawn between this and Dr. Anna Chacko.

Van Boven's case appears to parallel that of radiologist Anna Chacko, who says VA officials ousted her from her post at the Pittsburgh VA facility in Oakland after she questioned spending and treatment practices.

I'm left confused. After all in May of 2009, the same Congressman Miller said this of Dr. Anna Chacko.

Senate Letter 2009-05-19[1][1][1] -

Then as Chacko was about to get terminated in January of this year, he said this.

He said that assuming the VA followed proper procedures in Chako's termination, he did not plan further involvement.

Chacko had been suspended from her job in the spring but was reinstated in late summer, only to be placed on administrative leave in October. The termination letter was issued last week.

While they have declined to comment on the issues leading to Chacko's suspension and termination, VA officials said an internal investigation refuted claims by Chacko that patient care might have been compromised by excessive radiation during treatments.

So, does Congressman Miller think that proper procedures were followed in the case of Dr. Chacko? It was apparently neither asked or answered. Miller does hint at it in the latest article.

Miller said told the Tribune-Review he is troubled by "an emerging pattern" of VA administrators using boards of inquiry to punish and silence whistleblowers.
"I would encourage the VA to look into whether the process is being abused," he said.
If that's the case why didn't he step in before Chacko was fired? That was also neither asked nor answered. Here is the statement from Senator Burr's office about the "emerging pattern" that Congressman Miller spoke about.

The “emerging pattern” that Rep. Miller referenced in his comments to the Pittsburgh Tribune-Review were made independently of the specific issues raised jointly by Sen. Burr and Rep. Miller in the letter to Gen. Shinseki. I strongly suggest you take up your concerns with Rep. Miller’s staff as they may have more insight into the reasoning for Rep. Miller’s comments.

Here's the full letter that Burr and Miller drafted to Shinseki and Chacko is not mentioned in it. Both Shinseki and Miller's office have yet to respond for comment.

Shinseki Ltr

Here's the full dossier of Anna Chacko.

Monday, August 2, 2010

Kerry: "Not Fair to Blame Obama"

John Kerry was on CNN defending President Obama.

I think what's happened is Fareed, in the last six months I think there was an article even in the paper this week about people no longer blaming Bush. They're beginning to target this White House. That's a natural course of events as you go through any administration, but I don't think it is fair to the President

Senator Kerry went on to say that Democrats have to go out with "passion" and defend all their accomplishments during the Obama administration because in his perspective the people haven't figured out just how much they've accomplished.

I think Senator Kerry is confused. The people know exactly what the Democrats have accomplished and that's the problem.

Virginia Passes One Hurdle Re: Health Care

A Federal judge gave the state of Virginia a small victory in its battle with the U.S. government.

The state of Virginia can continue its lawsuit to stop the nation's new health care law from taking effect, a federal judge ruled Monday.

U.S. District Court Judge Henry Hudson said he is allowing the suit against the U.S. government to proceed, saying no court has ever ruled on whether it's constitutional to require Americans to purchase a product.

"While this case raises a host of complex constitutional issues, all seem to distill to the single question of whether or not Congress has the power to regulate -- and tax -- a citizen's decision not to participate in interstate commerce," Hudson wrote in a 32-page decision.

This is a long way from over. I won't predict the outcome but can someone explain why the Federal government is taking on so many of its states. It's absolutely amazing how many lawsuits that pit the Federal government of Barack Obama are currently ongoing in which the adversary is an individual state. Here's the statement from the White House.

Since the enactment of health reform legislation in March, several state Attorneys General have filed lawsuits challenging the constitutionality of the Affordable Care Act. Having failed in the legislative arena, opponents of reform are now turning to the courts in an attempt to overturn the work of the democratically elected branches of government. This is nothing new. We saw this with the Social Security Act, the Civil Rights Act, and the Voting Rights Act – constitutional challenges were brought to all three of these monumental pieces of legislation, and all of those challenges failed. So too will the challenge to health reform.

Couldn't you turn that statement around on the White House re: the Arizona immigration law?

Another Giannoulias Headache

The Senate race in Illinois is devolving and it continues to be a contest of which candidate will have fewer scandal. Alexi Giannoulias took a step back in that race today.

By February 2006, businessman and political fixer Tony Rezko was already politically radioactive, caught up in a federal investigation that would see him criminally charged by the end of that year.

News reports had linked Rezko, a key adviser and campaign fund-raiser for then-Gov. Rod Blagojevich, to shady deals involving state pension funds -- among the crimes that ultimately would send him to prison.

This particular story is dubious. The loan was made to a company that Tony Rezko had a stake in. It was made after news had come out that Rezko was involved in scandal, but it was also made after Giannoulias stopped running day to day operations at the bank.

It is, however, more evidence of just how much of an insider Giannoulias is and how connected he is to other insiders in Illinois and that doesn't help at all.

This Chart Says it All

Welcome to the world of Obamacare.

My colleague Soccer Dad has more.