SAR #8167

Some see no solution; worse, some see no problem.

Evidence? Defense Secretary Gates fired the top two USAF leaders last week as 'responsible' for the unauthorized shipment of live nuclear weapons across the country. Okay, they were "responsible"; who actually had the authority to commandeer US nuclear weapons?

Catastrophe: Way back in 2007, President Bush declared in National Security Presidential Directive 51 that the president had the authority to do whatever he damn well wants to in a "catastrophic emergency". Go ahead; Google 'NSPD 51' for yourself.

Big Whoop! S&P cut 19 different Residential Mortgage-Backed Securities backed by 2006 vintage Alt-A loans from the theoretical AAA given on issuance (because of monoline insurance) to BB or BBB-. This is an early step in the unwinding of all those fake triple-A's, yet CNBC and Wall Street didn't even glance at them. Yesterday's news.

Wrong Question: A fairly long rant followed the straw-man question "Why is capitalism failing us?" After trying to read it, I must conclude that the answer is: Because it's capitalism. Nothing has gone wrong; it is supposed to function this way.

Conservatives: Turns out the IPCC was a really conservative bunch. Way underestimated the effects of global warming on the arctic and on sea levels. Turns out that current data depicts a doubling in the amount of freshwater melt from Greenland into the North Atlantic originally predicted by the IPCC. I seem to remember something about freshwater in the North Atlantic slowing or shutting down the Gulf Stream....

Exit Strategy: Poorly controlled puppet Iraqi Prime Minister Maliki says that if the US insists on permanent bases and exemption from the law and complete control of Iraqi airspace, he will invite the US to get the hell out of Iraq.

Example: Opposition leader (and presumed president-elect) Tsvangirai was arrested on his return to Zimbabwe. He faces trial for treason and will be found guilty if he beats Mugabe in the June 27 run-off election. Think Carl Rove is taking notes?

Friendly Skies: A study done for the Business Travel Coalition suggests that the airline industry is "heading toward a catastrophe". How much will they be asking Congress for this time?

Next: As we've been forecasting for some time, mortgage delinquencies are starting to increase rapidly in middle and upper middle class neighborhoods where buyers used "affordability products" such as ARMs and Option ARMs to buy houses they couldn't afford. With interest rates headed up just as the resets start coming due, these unaffordable houses will become more unaffordable. Too bad, because these people can't afford to pay the mortgage but are stuck with negative equity and can't sell.

A Pound Of Cure: Oil's high prices will cause sufficient demand destruction to slow the economy substantially. This will lead to national hoarding by the haves and military adventures by the wants.

Bribery or Extortion? Zimmer Holdings (and others) conspired to manipulate the market for hip and knee replacement devices - which are mostly paid for by Medicare. Zimmer avoided trial by paying the Justice Department $169.5 million in fines, and by paying John once-upon-a-time-AG Ashcroft over $28 million to "monitor" the company for 18 months.

Porn O'Graph: It's a gas, Naturally.