Archive for March 7, 2008

Update: Carlyle Capital

March 7, 2008

Yesterday I put up this post on Bush and Carlyle Capital Corp. Today there is more info via Prairie Weather and from the WaPo.

Carlyle Capital, a publicly traded financial fund managed by the District-based Carlyle Group, this week became a barometer for broader troubles in the mortgage and credit markets when it announced that lenders were writing down the value of its high-grade investments in U.S. mortgages and issuing “margin calls” — demands for more collateral — to protect themselves.

Carlyle Capital’s announcement helped drive U.S. stock exchanges lower by roughly 2 percent yesterday. Also raising fresh concerns about the U.S. economy, the Mortgage Bankers Association reported that foreclosures on U.S. home mortgages had reached an all-time high, and concern spread that even the value of loans backed by mortgage giants Fannie Mae and Freddie Mac had become suspect.

Foreign markets followed the U.S. markets lower overnight. Asian exchanges were off by roughly 3 percent, and major European markets were down by around 1 percent. Wall Street was waiting today for a closely-watched report on unemployment.

Carlyle Capital in the last week has received a succession of demands from its lenders. The latest round came yesterday, the company said in a news release this morning, and more may be on the way. In addition, the company said that some of its lenders had begun forcing the sale of investments they had helped underwrite, and “it is possible that additional securities may be liquidated.”

The news release did not discuss the dollar value of the assets that have been liquidated, or the amount of additional cash and collateral that the company’s 13 lenders expect it to post in coming days. As of Wednesday, before the latest round of demands, lenders had asked for roughly $97 million, some of which the company had been unable to raise — leading to one notice of default and the expectation of another, according to the company.

With trading in the company suspended on Amsterdam’s Euronext exchange, after a nearly 60 percent drop in the value of Carlyle Capital yesterday, the latest news release sounded a dark note.

“Although the Company believed last week that it had sufficient liquidity, it was informed by its lenders this week that additional margin calls and increased collateral requirements would be significant and well in excess” of those already received, the company said. “The Company believes these additional margin calls and increased collateral requirements could quickly deplete its liquidity and impair its capital.”

Whatever happens to Carlyle it will not affect the Bush fortunes nearly as much and the ramifications will affect the rest of us residents of the United States.

Clinton’s Rules of Disorder

March 7, 2008

Samantha Power has resigned from the Obama campaign after calling Hillary Clinton “a monster”:

Here’s her statement, just sent out by the campaign:

“With deep regret, I am resigning from my role as an advisor the Obama campaign effective today. Last Monday, I made inexcusable remarks that are at marked variance from my oft-stated admiration for Senator Clinton and from the spirit, tenor, and purpose of the Obama campaign. And I extend my deepest apologies to Senator Clinton, Senator Obama, and the remarkable team I have worked with over these long 14 months.”

In an interview with The Scotsman, Power called Hillary a “monster” and said other less-than-flattering things about her. Despite her prompt apology yesterday, the Hillary camp demanded her resignation this morning.

Less than two hours later, she’s out.

The Clinton campaign exerted enormous pressure on team Obama to get rid of Power:

There are advisers and then there are advisers. Power is Barack Obama’s Condi Rice.

A Harvard Law grad, former foreign correspondent, and Pulitzer Prize winning author, Power left her Harvard faculty gig to go work on Obama’s Senate staff for a year. It might be a little condescending to say she schooled him on foreign policy, but that’s close to accurate. In the constellation of Obama advisers, the 37-year-old Irish-born Power has as high a profile and as close a relationship to the candidate as anyone.

All of which is to say that her intemperate comments have put her and Obama in a bind — and the Clinton campaign knows it.

Clinton’s sanctimonious response to Power’s insult is, of course, quite hypocritical given some of the loose lips in her campaign. One reporter asked her about that, pointblank, during her Hattiesburg, Mississippi, news conference, and she was clearly rattled:

Q. How is being called a monster any different than Obama camp being called ken starr?

HRC: You know, I am, you know, very focused on this campaign and you’ve made the comparison between those two…

Q. You[r] spokesman made that comparison.

HRC: I think one is an ad hominem attack and one is a historical reference.

Q. But he said that he did not see how anybody imitating Ken Starr would win the Democratic nomination.

HRC: Well, I think that is a true statement.

Q. When Bob Johnson raised the issue of Sen. Obama’s drug use, you didn’t act quickly on that.

HRC: Well, we did repudiate it and he apologized.

Q. There was no repudiation immediately. Immediately, your campaign said he was talking about community organizing. Then he came out and said he was actually referring to his drug use and no one heard anything else from your campaign.

HRC: Well no, yes you did. You said he apologized and we accepted his apology.

I want to close by pointing to a truly superb piece by Andrew Sullivan about the way Clinton’s personal and political style is shaping this race, and what it’s doing to this country’s long-term political well-being. It’s too difficult to pick a quote from this post — so here’s the entire thing:

The new meme is that politics has returned to normal and that this election will now be run by Clinton rules. Many are relieved by this. You could sense the palpable discomfort among many in Washington that their world might actually shift a little next year. But if elections are primarily about fear and mud, and who best operates in a street fight, Beltway comfort returns. This we know. This we understand. This we already have the language to describe. And, the feeling goes, the Clintons can win back the White House in this atmosphere. What she is doing to Obama she can try to do to McCain. Maybe Limbaugh will help her out again.

What I think this misses are the cultural and social consequences of beating Obama (or McCain) this way. I don’t mean beating Obama because the Clintons’ message is more persuasive, or because the Clintons’ healthcare plan is better, or because she has a better approach to Iraq. I mean: beating him by a barrage of petty attacks, by impugning his clear ability to be commander-in-chief, by toying with questions about his “Muslim past”, by subtle invocation of the race card, by intermittent reliance on gender identity politics, by taking faux offense to keep the news cycle busy (“shame on you, Barack Obama!”) and so on. If the Clintons beat Obama this way, I have a simple prediction. It will mean a mass flight from the process. It will alter the political consciousness of an entire generation of young voters – against any positive interaction with the political process for the foreseeable future. I’m not sure that Washington yet understands the risk the Clintons are taking with their own party and the future of American politics.

The reason so many people have re-engaged with politics this year is because many sense their country is in a desperate state and because only one candidate has articulated a vision and a politics big enough to address it without dividing the country down the middle again. For the first time in decades, a candidate has emerged who seems able to address the country’s and the world’s needs with a message that does not rely on Clintonian parsing or Rovian sleaze. For the first time since the 1960s, we have a potential president able to transcend the victim-mongering identity politics so skillfully used by the Clintons. If this promise is eclipsed because the old political system conspires to strangle it at birth, the reaction from the new influx of voters will be severe. The Clintons will all but guarantee they will lose a hefty amount of it in the fall, as they richly deserve to. Some will gravitate to McCain; others will be so disillusioned they will withdraw from politics for another generation. If the Clintons grind up and kill the most promising young leader since Kennedy, and if they do it not on the strength of their arguments, but by the kind of politics we have seen them deploy, the backlash will be deep and severe and long. As it should be.

He has a million little donors. He has brought many, many Republicans and Independents to the brink of re-thinking their relationship with the Democratic party. And he has won the majority of primaries and caucuses and has a majority of the delegates and popular vote. This has been a staggering achievement – one that has already made campaign history. If the Clintons, after having already enjoyed presidential power for eight long years, destroy this movement in order to preserve their own grip on privilege and influence in Democratic circles, it will be more than old-fashioned politics. It will be a generational moment – as formative as 1968. Killing it will be remembered for a very, very long time. And everyone will remember who did it – and why.

Commander-in-Chief Threshold

March 7, 2008

Hillary says that both she & John McCain have crossed this threshold. Ridiculous. I question her judgment now, more than ever. This plus her vote to “authorize the use of military force.”

In my opinion the President of the United States needs intelligence and good judgment. Politicians and bad actors are a dime a dozen. Leadership is a rare commodity and I feel that leadership is lacking in both Hillary Clinton and John McCain.

Barack Obama is the closest I’ve seen as a leader on the national stage since JFK.

The System is BROKE !

March 7, 2008

From CBS News comes this tale of terror. Stark, un-mitigated terror brought on by a broken system. The story begins thusly

Alton Logan doesn’t understand why two lawyers with proof he didn’t commit murder were legally prevented from helping him. They had their reasons: To save Logan, they would have had to break the cardinal rule of attorney-client privilege to reveal their own client had committed the crime. But Logan had 26 years in prison to try to understand why he was convicted for a crime he didn’t commit.

A way must be made to allow a communication with the court in cases when “beyond-a-doubt-evidence-exists” to stop a wrong of this magnitude from occurring.

We have far too many innocent people that are convicted because of prosecutorial misconduct, incompetent defense attorney, witnesses who lie (including police officers who lie), juries who are manipulated and biased judges.

Though admittedly infrequent, this is one wrong that can be gotten out of the system.

Thought of the Day

March 7, 2008

If you’re going through hell, keep going

Winston Churchill