I was chatting with some people from work about the fact that the banks are in serious need of capital, which is why the Fed has been acting the way it has been. They suggested I was wrong, that the banks had already written off all their losses and were coming around. Well, not by a long shot:

After racking up more than $100 billion in mortgage-related losses in recent months, banks and their investors had hoped they were out of the woods.

They aren’t.

UBS AG’s warning yesterday that its 2007 write-downs would be $4 billion higher than it predicted last month signaled that further pain may lie ahead for Wall Street banks still vulnerable to the U.S. housing sector’s strife.

Meanwhile, tough times for bond insurers such as MBIA Inc. and Ambac Financial Group Inc. may spell trouble for banks that rely on those firms to insulate their mortgage holdings from losing value.

Brace yourselves. Seriously.

Read more here.

I go to sort through the change in my pocket and I find someone gave me a CANADIAN QUARTER. I suppose I should be happy, given that it’s worth more than our own, but in practical terms, it’s worthless to me because the Coke machine at work won’t accept it. And the dollar reader in the machine is broken, which means I need the quarter more than I ordinarily would have.

Grrr…..

Been reading this biography of the Elevators, and it strikes me that from their origins as a psychedelic band to Roky Erickson becoming something of a metal singer singing about demons and aliens and vampires kind of mirrors the path taken by Spinal Tap in the mockumentary. But a quick Google search didn’t turn up any connection. Anybody out there know anything?

Caught this over at Drudge:

I’m measuring my words carefully. Harry Smith has raised the possibility that Barack Obama’s life could be in danger. [...]

SMITH: “I just, I think what I was trying to say is, sometimes agents of change end up being targets, as you well know, and that was why I was asking if you were at all fearful of that.”

When you tell a man with Ted Kennedy’s family history that “you well know” about politicians becoming “targets,” the implication is unmistakable.

This time, Kennedy [to his credit I would say] chose to ignore Smith’s suggestion, giving another bland answer about Obama being a candidate for change.

What could possibly have possessed Smith to raise this specter?

I’ll tell you what. The goddamned baby-boomer generation is utterly incapable of letting go of its narratives and storylines. Nobody is going to try and assassinate Barack Obama. And if I’m wrong about that, it’s still extraordinarily unlikely that any such attempt would be successful.

Barack Obama is not JFK, he’s not RFK, he’s not MLK. He’s not even an acronym. Give it up already.

UPDATE: More from Penn Jillette.

If you think Rudy should be President, tomorrow’s vote is your last chance to say so, if you ask me. If I were in Florida, I’d be voting for him. He may still pull it out given that people have been voting in Florida for weeks (if not months), but I’m not holding my breath. Of course if he does win, it changes everything.

The ever-brilliant Ted Olson sends out an unfortunately yet accurately titled email this morning on behalf of the campaign;

The Final Push In Florida

Boy oh boy, you can say that again.

David Frum at the National Review endorses Giuliani today. His endorsement hits all the right points. Just go read David Frum.

And Rudy makes fun of John McCain below (via captain’s quarters). Hopefully, it’s not all for naught. I really think he is the right man for his time for his party and for the country. It saddens me deeply to see him in the position he’s currently in.

Nick Schulz makes the case:

The same tech-driven tumult that was trans­forming communications turned other industries upside down, too. Former Clinton administra­tion official Robert Reich notes in his new book, Supercapitalism, that technology prompted a new questioning of regulation.

Consider air travel. Reich points out that “advances in telecommunications and aircraft design (high-strength materials, better aero­dynamics, improved fuel economy) created new possibilities� for air transport, “so in 1978, Congress deregulated the airlines, and began closing down the Civil Aeronautics Board,� the federal authority that regulated aviation.

Technology revolutionized the shipping indus­try as well. Thanks to new container technologies that improved efficiencies and shipping possi­bilities, “in 1980, Congress deregulated trucking and railroads, and began shutting down the Interstate Commerce Commission,� Reich says.

Not so with the FCC. And yet it continues to be tripped up by technological changes.

I think it’s only a matter of time. Read Nick Schulz.

Wow, every year I mean to celebrate Robert Burns Day and I always forget. Anyone know where to get some haggis in Boston?

It’s not often when I look at WSJ and think that basically everything needs to be read, but today is such a day. Let’s begin with the news section. Are we seeing a return of 1970′s type stagflation?

In the past, when the U.S. economy faltered, slack demand for everything from oil to wheat pushed global commodity prices lower. That made the jobs of central bankers easier: They could cut interest rates without worrying too much about inflation.

But several factors, including the surge in demand from emerging-market heavyweights like China, are set to keep commodity prices high during this downturn, putting policy makers and businesses in a pickle reminiscent of the stagflation-plagued 1970s.

In the short term, the quandary means central bankers across the globe may be reluctant to bring down rates as far or fast as they otherwise would to support growth. In the long term, it signals that the global golden age of low inflation may be ending.

Peggy Noonan delivers a scathing indictment of the Bush administration:

On the pundit civil wars, Rush Limbaugh declared on the radio this week, “I’m here to tell you, if either of these two guys [Mr. McCain or Mike Huckabee] get the nomination, it’s going to destroy the Republican Party. It’s going to change it forever, be the end of it!”

This is absurd. George W. Bush destroyed the Republican Party, by which I mean he sundered it, broke its constituent pieces apart and set them against each other. He did this on spending, the size of government, war, the ability to prosecute war, immigration and other issues.

Were there other causes? Yes, of course. But there was an immediate and essential cause.

And this needs saying, because if you don’t know what broke the elephant you can’t put it together again. The party cannot re-find itself if it can’t trace back the moment at which it became lost. It cannot heal an illness whose origin is kept obscure.

She also points our that a lot of Democrats are beginning to understand what used to infuriate the Republicans about the Clintons in the 90′s, and that that may cause a rift among the democrats. Read Peggy Noonan.

Meanwhile, Kimberley Strassel points out how the Bush administration had pulled the rug out from under the Republican Presidential candidates:

Here’s one group that isn’t much stimulated by the White House’s economic pact: Republican presidential hopefuls. The general sentiment among most of the campaigns? Thanks for nothing.

The Bush administration unveiled its $150 billion feel-good stimulus package yesterday, with President Bush praising the “good will on all sides.” The package, with its “middle-class” tax rebates and minor assortment of business benefits, isn’t likely to help the economy. But it did allow the political class to provide itself some cover if things continue to go south. After all, Washington “did something.”

Left holding the bag have been Republican presidential candidates as they struggle to explain why their party should again be trusted with the Oval Office. The White House provided no real outreach to let the campaigns know what was coming down the stimulus pipe, forcing them to instead cobble together plans they hoped wouldn’t conflict with the president’s. With the administration jumping on the Keynesian bandwagon, it was left to the candidates to make the case for conservative ideals and supply-side economics. And since nobody wants to pick a fight with Mr. Bush during a primary, the aspirants were also stuck saying nice things about this no-growth plan. Many inside the campaigns are privately miffed, and with good cause.

Read Kimberley Strassel.

Finally Arthur Laffer takes the Democrats to task for their tax proposals:

When you cut the highest tax rates on the highest-income earners, government gets more money from them, and when you cut tax rates on the middle and lower income earners, the government gets less money from them.

Even these data grossly understate the total supply-side response. A cut in the highest tax rates will increase lots of other tax receipts. It will lower government spending as a consequence of a stronger economy with less unemployment and less welfare. It will have a material, positive impact on state and local governments. And these effects will only grow with time.

Mark my words: If the Democrats succeed in implementing their plan to tax the rich and cut taxes on the middle and lower income earners, this country will experience a fiscal crisis of serious proportions that will last for years and years until a new Harding, Kennedy or Reagan comes along.

Trained economists know all of this is true, but they try to rebut the facts nonetheless because they believe it will curry favor with their political benefactors.

The idea is that lower income earners have fewer economic choices to make, and therefore monkeying with their taxes has little economic effect. The opposite is true with higher income earners. It’s a pretty devastating analysis. Read Arthur Laffer.

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(via j-walk)