Shaq to the Cleveland Cavs

I love the move. Shaq is 37, but he just needs one more year to win one more championship. I think the fact that Kobe won this year will drive him to get into shape and be ready to make one last push.

I love LeBron's game and think a physical presence like Shaq could help him overcome Dwight Howard in the East.

Further Evidence the Economy is Turning

Q1 GDP fell at an annualized rate of 5.5 percent. This is a slight revision from the reported 5.7 percent decline that was announced last month by the U.S. Department of Commerce.

The economy was falling by 6.3 percent in Q4. It is a long hard slog to get the economy going again, but as I have been saying for weeks, we should see real imporvement in the next two quarters as stimulus dollars hit the economy.

Governor Sanford is an Idiot

The guy disappears for a few days and it turns out he is off in Argentina having an affair.

Argentina? WTF?

His already fleeting presidential hopes are now totally gone.

I thought Republican Senator Ensign's admission last week that he was sleeping with one of his oldest friend's wife was bad, but leaving you wife and four sons over Father's Day weekend to fly off to Argentina for a secret international rendezvous seems even more bizarre.

Off Color "Joke"

Something that has never happened to me in my adult life happened yesterday. Over the last several years, I have been a regular visitor to a certain right-wing blog. The blog administrator has been fair and although I don't agree with 95% of what he believes, I have respected him. I have taken my fair share of abuse and name calling from folks for my comments, but I have largely enjoyed the interaction.

Two days ago, the adminstrator posted a joke blog entry about some link between President Obama and Bigfoot. I didn't find it particularly funny, but I was not going to post on it.

Out of the blue, this regular to the blog, "Mike," posted up the following:

"Actually, I have learned from other sources that it is Rob's mother. And she is actually NOT wearing a custome, but naked in the photo."

The rush of shock and anger at this comment filled me immediately. For those who know me and who knew my mom, and the love I had for her in life (and still have for her in death), you can imagine what I felt and what I would have done if Mike had said it to my face.

Even as I burn with rage about the comment itself, what I found even more remarkable was the number of other folks who laughed and joined in support of Mike's comment. It was like a pack of middle school kids - not normal adult behavior. I'm not sure what it is with these people, but they lack basic moral values and decency. However, all that said, what I find disappointing is that there are other regulars to the blog, including the administrator, who have sat silent. I take that silence to mean that they accept Mike's comment and support it.

Mike has been an idiot for years, and even though his comment crossed a new line of childishness and bad taste it is not altogether surprising. But, the fact that no one took Mike to task for it - even after I commented on it - has been surprising. I would never allow something like that to be said about anyone's mother in my presence - online or otherwise - without comment and condemnation. I suppose my Mom raised me better than that.

Here is a link to the blog post - you can read the comments. Don't bother commenting on that blog post - the people who laughed have no shame or moral character. All they will do is laugh and make fun of you. Instead, just feel sorry for them and pray for them to learn the error of their ways.

U.S. Intervention Around the World

President Obama is taking a patient approach to the happenings in Iran. Given the volatility and the lack of an actual pro-American alternative in Iran, this is the right approach.

I feel for the Iranian people and hope that they are able to resolve their problems, but this is an Iranian problem. The U.S. has failed miserably when it has tried to dictate or gotten involved in the political goings on in sovereign nations.

We need to get out of the 24-hour news cycle mentality and allow countries to go through their processes themselves. What I find remarkable is the complete ignorance Republicans in Congress have toward what is happening in Iran, and/or their willingness to use Iran as a political football.

The opposition candidate still believes in the Supreme Leader and the religious theocracy, hates the U.S., wants nuclear weapons, and hates Israel. There is not U.S. interest in seeing him over Ahmedinejad.

What Should Obama Do About Iran?

The case against American interventionism in Iran. The U.S. should let the Iranians figure out what they are going to do.

President Obama: We Shouldn't Be Seen as Meddling in Iranian Elections

Obama is taking the right path with Iran.

CPI Tame

As expected the consumer price index (CPI) was very tame with just slight growth. In fact, consumer prices are down significantly from a year ago. This is a deflationary sign. The problem with falling prices is that it slows economic growth as people wait for big ticket item prices to fall even further.

Things are about where we should expect in a recovery period. As a related note, don't expect the Dow to run up over the next few months. The summer is always a slow time for Wall Street. We've also had a huge runup. If we can stay flat for about 3 months, it will be great news. Then, as the Fall rolls in and the stimulus dollars are having their impact, we should hear news of a better consumer shopping period this Christmas. That will lead to another nice runup in the market and growing confidence that the economy is getting back on track.

Just Plain Wrong

The President's team is reviewing whether to release a list of visitors to the White House. This is just flat out wrong. The American people have a right to know who is meeting with the President. Secret Service logs should be public information. I am not talking about personal matters and family, I am talking about visitors on official business to the Executive Branch.

Bush started this secretive policy and it is sad that Obama is not just overturning the precedent. It was wrong when Bush did it and it is still wrong today.

Inflation Concerns Overblown

With all of the liquidity the Fed has pumped into the financial sector, the federal borrowing and spending, there are some who are crying about the risk of inflation.

But, one has to understand the full causes and effects of inflation. It is not as simple as - you print some more money and spend and you get inflation. This certainly can drive inflation, but the reality is that it is far more complicated than that. For example, we are seeing some strengthening of the U.S. dollar against major currencies because we are in a global recession and the world - for the most part - wants a strong dollar. It is the currency of choice.

This morning, the May PPI and the core PPI numbers were reported and they were fairly tame. Core PPI dropped by 0.1 percent.

Tomorrow the CPI numbers are released, but consumer prices have been falling over the last year.

Here is the rub - we are in one heck of a financial mess. The PPI and CPI numbers are indicating that in the short run there is a greater risk of deflation than there is of inflation. Over the longer term inflation is a concern, but right now the Fed is walking a tightrope with interest rates and liquidity. The Fed does not want to raise rates to encourage savings and sop up liquidity (thus lowering the risk of inflation) because that would harm the fragile recovery process. At the same time, as the economy starts to recover, the Fed does not want to continue with is low interest rates which could lead to a bout of inflation.

They seem to be on top of things. Bernanke has said the Fed won't monetize the debt (i.e., just print money to pay off debt) - I take him at his word for that. The goal is to get the economy going (GDP is still shrinking but it is improving), then raise rates to soak up excess liquidity, and then address the unsustainable structural deficits.

Rex is a Texan

Much maligned Rex Grossman found a good home in Houston. It is a solid team that should challenge for a playoff spot. He will be behind UVA alum Matt Schaub, but Schaub has a knack for getting injured. The backup QB in Houston is likely to get a few starts.

He was a good QB in Chicago, but the fans really turned on him. That is just what Chicago fans do to their QBs. I certainly wish him well.

Baseline Economy Obama Took Office With

Here is a link to the nonpartisan CBO's January 2009 report on the economy that Obama took office with.

It shows a $1.2 trillion deficit for this year (see Table 4).

It also shows that government spending for this fiscal year would come in at over $3.5 trillion. This made a few assumptions that the TARP would not be fully used and that unemployment would be a bit lower, so it is a conservative estimate.

Obama's first budget is for FY 2010 and his spending comes in just under $3.6 trillion. Basically it is holding the line on spending from this year.

Trillion Dollar Deficit Explanation

There is a great graphic in the New York Times showing how we ended up with the trillion dollar deficits we are now saddled with.

Don't believe the nonsense that Republicans are spouting about it all being Obama's fault. That is just flat out wrong and anyone who argues that is not being intellectually honest.

Going forward over the next several years, Obama is going to have to deal with the large deficits, but given his pragmatism he will change policies if needed. Obama is a student of history and has emulated some of the ways Reagan and Clinton communicated with the American people. Both Reagan and Clinton raised taxes and changed economic philosophies/plans in response to the economic challenges they faced.

OBAMA IS A "CITZEN OF THE WORLD"

Newt is a complete idiot.

Brett Favre

This guy is an idiot. Look, I have no problem if he wants to play. If you want to then just play. But all of the secrecy and coded language is just plain stupid. I'm sure there are still plenty of fans in Green Bay who love him, but I'm also sure there are a lot more fans who dislike him now that he looks to be trying to join the Vikings. He has tarnished his legacy with what looks to be desperation of an old man.

I'm sure this version of Brett Favre can still make some plays, but I'm also sure that this version of Brett Favre will continue to make the dumb mistakes that he has become known for making in recent years.

Personally, I'd love to see him play for the Vikings. I think his skills have greatly diminished and he really wasn't that great against the Bears in recent years anyway. Come on Brett, just say you are joining the Vikings and get it over with already.

GOP Trying to Blame Obama for Economy

The GOP is trying to pin the horrible economy on Obama. It is truly breathtaking to watch.

Let's start with a couple of basic facts.

1. Q4 2008 GDP was falling at -6.3% - GDP is the broadest measure of how the $14 trillion U.S. economy is doing.

2. The falling Q4 2008 GDP (-6.3%) is the worst quarterly economic performance since Q1 1982 (-6.4%).

3. As a result of the rapidly worsening economy, unemployment rose rapidly throughout 2008. It went from 4.8% in Feb 2008 to 7.6% in Jan 2009.

4. The 2009 budget year that we are currently in is mostly made up of George W. Bush's spending priorities. The first budget that Obama is proposing is for 2010.

5. George W. Bush's proposed budget for fiscal year 2009 was $3.1 trillion. When it passed through Congress and he had signed it it was about $3.3 trillion. Keep in mind that there was about another $100 billion that he kept out of the budget for Iraq/Afghanistan (that was emergency supplementals).

6. As Bush was leaving office the economic crisis (that he caused) really started to hit. So we ended up with $700 billion TARP (October 2, 2008), the nationalization of AIG (September 17, 2008), Freddie Mac (September 7, 2008) and Fannie Mae (September 7, 2008). In addition to the TARP money, the Fed pumped in hundreds of billions of dollars into the economy in Q4.

7. As Obama was proposing his budget, the CBO published the baseline budget numbers. They showed that as a result of all of the Bush spending, the baseline budget deficit for FY 2009 had exploded to $1.67 trillion. To be fair, as much as $150 billion of it comes from stimulus spending this fiscal year that Obama passed, but the reality is that Obama inherited about $1.5 trillion of the deficit when he took office.

8. The Dow Jones Industrial Average stood at 8000 when Obama took office.

This is the mess that Obama inherited and that he is dealing with. His economic plan is fairly simple at its heart. The first thing to do is to make sure the financial sector is not going to collapse. It looks like things are stabilizing there, and some of the $700 billion TARP is going to be repaid in coming months.

Second, get the economy going again through stimulus spending on construction projects and middle class and business tax cuts. Contrary to what Republicans want to believe, more than $200 of the $787 billion stimulus plan is made up of tax cuts.

Once the economy is growing, tax revenues will increase naturally and the deficit will fall. However, this won't be enough to close the huge structural deficits that Bush left behind. We are winding down in Iraq over the next two years, the Bush tax cuts on those in the upper income bracket will be allowed to expire, and there is an effort to fix health care so that it does not eat up as much of the federal budget or private spending.

Let's be clear that the financial sector is stabilizing. The Dow is rising and is on a major bull run. The Dow is a LEADING indicator of the economy, so it seems to be predicting rising GDP. Unemployment is still worsening and hit 9.4% last month, but this is not surprising. Unemployment is a LAGGING indictor of the economy. Firms hire after recovery is in full swing - that is just the way it is.

Here is the bottom line - if the economy continues to improve from where it was, Obama will be largely responsible. If the economy sours and gets worse than where he took over, he will be to blame. Unlike Republicans who blame Clinton and refuse to accept the disaster that Bush created, next year and then again in 2012, I won't make excuses for Obama. Either his plan will work or it won't. However, Republican bitching and moaning and trying to pin everything on Obama this early in his presidency is just plain stupid.

Steven Colbert Haircut

Watch Colbert this week - he is awesome. President Obama makes a special appearance in this clip.

Another Good Sign of Growing Economic Strength

It looks like $68 billion of the $700 billion TARP program that was used to save the banks is going to be paid back to the U.S. Treasury.

The banking sector is again raising private equity capital and it looks like it is stabilizing. This is an absolute must for our economy to grow. We'll never get back every dollar from the TARP, but if we can get a lot of it back it would go a long way to reduce the budget deficits.

This is great news.

Unemployment Numbers

Unemployment hit 9.4 percent, the highest rate in over 25 years. This is not surprising at all. I have said many times in recent months that unemployment is a lagging indicator of the economy and that we will hit 10 percent - even as the economy shows signs of improving.

There was good news in the jobs report as the rate of job losses fell significantly. The 345,000 Americans who lost their jobs last month is part of a big number, but this is half of the job losses from March and 150,000 better than April. So things look like they are improving on the job front.