So what's wrong with cramdown?

The banks are against it, naturally. The way things work now, bankruptcy court has full power to tell creditors how much they are going to recover, if anything, and in general divvy up the bankrupt's assets among his creditors. Typically the holders of credit cards and car loans take a haircut, the bankrupt gets to keep enough of his salary to buy groceries and everyone goes away mad, except the bank. Home mortgages are exempt, the bankruptcy court cannot write them down ("cramdown"). The banks get a bigger slice of the bankrupt's assets than the other creditors.
The banks like it this way, and claim that mortgage rates are lower because the mortgage is more secure, so they can offer a better rate, and are more likely to do a mortgage than they would be if bankruptcy could lower the value of said mortgage.
Of course, as we struggle with Great Depression II, that was caused by absolutely reckless mortgage lending by the banks, we might have been better off if the banks had been less eager to do sub prime, alt A, and liars loans.
In the real world, banks shouldn't be granting mortgages to people likely to declare bankruptcy. Plus the mortgage rate is whatever Fannie, Freddie, or the Fed are willing to lend at.
Maybe cramdown would improve mortgage lending standards, something sorely needed.

Anger Management

The country has a lot of anger, building up higher and higher, and just waiting for a target to land on. Obama can sense this, and he is trying to discharge the lightening bolt by offering up sacrificial lambs (aka scapegoats). First he tried to incinerate Rush Limbaugh and now he is trying to draw the lightening down to strike AIG. Trouble is, after you call out a lynch mob, you gotta have a real lynching, leaving bodies swinging from lampposts. Otherwise you just look wimpy.
I think AIG is going to skate out of this more or less intact. Ed Liddy, the cleanup guy, came across well on TV. He claimed he was stuck with the bonuses by previous management. He had run the offending bonuses by the Feds and gotten something between a "do your own thing" and an OK. Treasury and the Fed have not contradicted Liddy, so he is creditable. Liddy made a fair business case for what he called "retention bonuses". I'm not fully on board with Liddy about that, but he did make a case. So far, Treasury says they are going to deduct the $160 million worth of bonuses from the next $30 billion bailout payment. That's 0.5% and won't make that much difference in the larger scheme of things. It is a far cry from bodies hanging from lampposts.
Obama made this media theater. He could have told Liddy "cancel those bonuses" and made it stick. He didn't. He wanted a circus and he got one. Doesn't look like he is going get real blood out of AIG. He might get a "tax all bonuses away" law thru Congress, but that won't satisfy the voters like throwing some Wall St stock brokers/gamblers into jail would.

Grilling AIG

Congress had the president of AIG before a committee to grill him about the AIG bonuses. Liddy, the AIG president, is a new broom brought in to clean house after AIG started taking federal bailouts. He had retired from running AllState, and was brought in to run AIG. Liddy is working for $1 a year.
Liddy explained that the bonus's were a done deal before he got there. The bonuses were to retain some key individuals who were unwinding AIG's stupendous portfolio of credit default swaps and other dodgy paper. Liddy stated that they had reduced AIG's exposure by $1 trillion, and had another $1.6 trillion to go.
Liddy came off pretty well. He sounded sincere and serious and wasn't evasive.

Colt New Agent .45 ACP pistol

Cute looking little automatic pocket pistol, the kind small enough to tuck into a sock. Nicely made, beautifully finished, beautifully photographed for the magazine article. Styled just like the real thing, the .45 Government Model automatic pistol. Except it is much shorter, lower, and lighter.
It's still chambered for .45. "At the range, several shooters noted that the New Agent was an effective pistol with some difficulty associated with the sharp recoil."
Translation, it kicks like a mule. I can believe that, the regular, heavy, .45 auto kicks hard, and the muzzle blast is startlingly loud. A handgun shorter and lighter, firing that cartridge, is going to kick so hard as to be next to useless.
But it's handsome.

Obama on the budget

Obama was on TV a few minutes ago urging passage of his next budget. He talked for 15 minutes without uttering a single number. He did use a couple of percentages, like "I will reduce the deficit 50%" when the deficit last year was $1/2 a trillion and the Obama deficit will be $1.5 trillion. But he didn't tell us how big the budget was, where the money was going, and any reasons for spending the money. He was eloquent without informing. Four square for motherhood and apple pie.

Mini Spooky with Windows

US Special Operations Command is agitating to replace the AC-130 gunships with something new. Granted the AC-130 has been around since Viet Nam. but it still works well. The proposed replacement would be the smaller twin engined C-27 light cargo plane, just coming into service.
Not too sure about that. The first gunships were C-47's about the same size as the C-27 and the program moved up to the C-130 to gain the size needed for bigger guns, lots of ammunition, and a larger crew. The C-130, large as it is, can operate out of short dirt runways, which is as difficult as it gets.
USAF Lt Col Brenda Cartier was quoted in Aviation Week saying she hopes to upgrade the old fire control computers on the AC-130 to a Windows-based System. Arrgh. What has happened to the Air Force? Everyone knows Windows is too crash prone and virus vulnerable to be used for anything serious.

Bonuses for Boneheads

AIG is still stuck on stupid. They are paying out $160 million in bonuses, after accepting $140 billion in taxpayer bailout. Geithner claims to have jawboned AIG management about it and AIG said they were contractually obligated to pay the bonuses. The proper response should have been "Pay bonuses after loosing $140 billion dollars and that's the last bailout you are ever going to get."