EK: No End in Sight

Eastman Kodak Company's (NYSE: EK) long-term outlook could not be more grim. S&P LCD reported this morning that EK has drawn on a large portion of its revolving credit facility (specifically, $160m draw out of $235m availability; $400m total ABL facility) for "general corporate purposes," namely to "bridge timing differences between cash inflows and outflows." CDS spreads blew up on the news--see frightening chart below.

Historical EK 5 yr CDS via CMA Datavision, in bps:

Warren Enters the Fray

Today Elizabeth Warren, Harvard Professor and architect of the newly formed Consumer Financial Protection Bureau, announced her plans to run for US Senate in Massachusetts. In an email to her supporters, Warren highlights her recent listening tour of the state citing her experience "listening to folks all across our state who know that we can do better, people who are frustrated like I am that Washington just doesn't get it".

Ms. Warren is not only painting herself as at odds with Senator Scott Brown, but is also subtly contrasting herself with the Massachusetts Attorney General, Martha Coakley, who lost the 2010 special election against Brown for Senator Kennedy's vacant seat. Coaklley infamously derided the idea that she had to "stand outside Fenway Park? In the cold? Shaking hands?" because she already had the support of the Mayor and school board of Salem. With comments like these, Coakly easily fit the stereotype of a northeastern liberal, disconnected from the people. Warren, on the other hand, is depicting herself as an advocate of working Americans who have been left behind. On her website, she highlights her middle class upbringing and her car experience as the "New Sheriff on Wall Street."

On a day when Republicans gained another seat in the House - that of former Congressman, and perpetual punchline, Anthony Weiner - Warren's entrance into the Senate race is a ray of hope for Liberals in Massachussets, and beyond. There is little doubt that Democrats hope to make the tenure of Scott Brown an abbreviated one - a mere blip in the history books between the Lion of the Senate and the New Sherriff of Wall Street.

Perry's Death Penalty Bona Fides

Today's Wall Street Journal editorial page opens with a critique of the "liberal elite." Big surprise.

In "Why they cheered" James Taranto explains that the those who were put off by the cheerful response during the Republican debate to Rick Perry's death penalty stat - that he has overseen more executions than any other governor - fail to understand the fact that an argument in favor of capitol punishment should give us a "tinge of patriotic pride." The logic, according to Taranto, is that since Europeans and Americans both favor executions, the United States government shows its respect for democracy by keeping capitol punishment legal. European governments, on the other hand, which are dominated by elites, autocratically impose soft justice onto their people. Taranto describes the left's reaction to the the applause as harsh, self-righteous, and simple minded, as if those so brazen enough to raucously cheer in favor of the death penalty possessed no such qualities.

I have always taken exception to the "how can the same people who are against abortions be in favor of the death penalty?" argument. The holes in that logic are so gaping they do not deserve the time to address them, and Taranto is right to assert that there is no comparison. But there is a parallel to draw between the two deeply moral issues.

Two nights ago, we saw a Governor boast, and the crowd cheer, about having the highest number of executions on record. Would we have ever seen anything like that on the other end of the political spectrum? Even those on the left who are most fervently pro-choice do not rejoice when abortion statistics spike. No one would celebrate the fact that more abortion procedures have been done in his or her state than in any other. Such a statistic would be a sign of a wider societal problem, rooted in poverty, lack of education, and a myriad of other factors. The same can be said about a high rate of executions. In fact, Texas ranks in the bottom half of the country in high school graduation rate and has wages below the national average in all but 18 of its 254 counties. And that is nothing to cheer about.