...Your ballroom days are over, baby
Night is drawing near
Shadows of the evening
crawl across the years....
"Emancipate yourself from mental slavery, none but ourselves can free our mind.” - Bob Marley
Wednesday, December 24, 2008
Sunday, December 14, 2008
Alt-A and Option ARM Loans to be bigger mess than Subprime
For those of you that still like your blinders: just keep waiting for that 2nd-half 2009 recovery.
Saturday, December 13, 2008
Friday, December 12, 2008
As the prior post on foreclosures shows, the concentration is mostly middle class and upper middle class white suburban neighborhoods...
California leads the nation in foreclosures. The state’s foreclosure activity was up 51% from a year ago. These are not CRA communities, they are what were hoped to be surburban bedroom communities east of the major cities (San Diego and L.A.)...
the Community Reinvestment Act required banks to make good faith attempts to loan the money back to its own depositors.
He mentions “in 1995 the Clinton administration added tough new regulations,” but omits any mentions that the Bush administration substantially watering down the act in 2004.
since Bear Stearns collapsed in March, there has been a veritable parade of bankers, mortgage originators, lenders, fund managers, and investment banks CEOs all testifying in Washington D.C. about the causes of the crisis. By some strange coincidence, not a single one blamed the CRA (Dick Fuld, CEO of Lehman Brothers was even asked about it). Not a one.
Why did 30 other countries, none of which have are covered by the CRA, have a remarkably similar housing boom and bust to the USA?
Barry is demolishing an Op-Ed in the NYT - once again, the blogosphere fixes what the MSM breaks.
Thursday, December 11, 2008
One industry watcher, who wisshed to remain anonymous, stated: "Einstein thought that stupidity was infinite, but, really, we doubt that anything is truly infinite. However, we thought we had enough for the next 100 years until this Congress started trying to 'fix' things."
The first ripples of angst over stupidity supplies came last year when, acting on advice from Ben Bernanke, Congress increased the conformiing limit on GSE loans.
"That had some the more bearish Peak Stupidity people concerned, but we still thought the supplies would be good."
Then in October, Congress passed the $700 Billion dollar bailout of bankers and other scum.
"This wouldn't have been such hit to the reservoirs, except after defining the oversight, they gave Paulson the money before the oversight was in place. There really was a giant sucking sound on that one, and we know Monica and Bill are out of town."
However, there is panic on the Dumb futures tonight, after the Senate failed to reach agreement on even a bridge loan for the formerly-big 3, upon which as many as 3,000,000 jobs depend.
"We have no idea how to function in this environment. We looked all over flyover country, and cannot find anything like the dumbass deposits we had in D.C. - we are trying to arrange imports from Europe, but if that doesn't work, we'll have to fall back on Sean Penn amd Rosie O'Donnell. We think that'll probably do it for a while."
Friday, December 5, 2008
- Turning and turning in the widening gyre,
- The falcon cannot hear the falconer;
- Things fall apart; the centre cannot hold;
- Mere anarchy is loosed upon the world,
- The blood-dimmed tide is loosed, and everywhere
- The ceremony of innocence is drowned;
- The best lack all conviction, while the worst
- Are full of passionate intensity.
Good night. Sleep tight.
UPDATE2: Hat tip to CR commenter "Hawley Smoot" for the orginal link.)
This is the sound of veteran news reporter and interviewer Charlie Rose having the living shit shocked out of him.
A soon-to-be classic moment in video journalism, IMNSHO.
See this video clip of Charlie Rose interviewing Nassim Nicholas Taleb - author of The Black Swan: The Impact of the Highly Improbable. The entire interview is here.
Charlie Rose refers to Nouriel Roubini as some one who "scares the hell out of everybody when he comes here, and sits where you are". And then
((Timings below are from the entire interview.))
(15:48) Rose: How bad do you think it will get?
(15:51) Taleb: I think it will be worse than Roubini thinks
(15:54) Off camera: THUD! , which is Rose's hand slamming down on his papers and a copy of Taleb's book.
The camera returns to Rose and he is staring at Taleb with his mouth open in utter shock.
Strangely, Taleb says he thinks Henry "Paulson seems to be doing a good job (particularly that they were part of the problem developing)" in steering the world to what Taleb calls "Capitalism 2.0", a world where banks are public utilities, because nobody who is backed by the public will ever be allowed to take this much risk ever again; a lot less debt; most hedge funds are gone; risk is taken with both gains and losses strictly privatized; and stock prices are MUCH lower and much less involved in the making of money by most people.
Wednesday, December 3, 2008
Here we see:
Balfour was out on parole from the Illinois River Correctional Center on attempted-murder, carjacking and stolen-property charges, for which he had been sentenced to serve seven years.Here we see:
Family members told police that Balfour, 27, paroled for an attempted murder in 2006, had threatened his estranged wife before and was thrown out of the family home, according to law-enforcement sources.So a guy who tried to kill somebody (among other felonies) was sentenced by some moronic judge to all of 7 years - and then the morons on the parole board decided that this sterling citizen deserved to be released early.
From Gunfacts.info we see:
Why does crime rise when criminals are released from prison early? Because they are likely to commit more crimes. 67.5% were re-arrested for new felonies or serious misdemeanors within three years. Extrapolating, those released felons killed another 2,282 people. (“Reentry Trends in the U.S., Recidivism”, Department of Justice, 1999)
45% of state prisoners, at the time they committed their offenses, were under conditional supervision in the community--either on probation or on parole. (US Bureau of Justice Statistics, 1991) Keeping violent convicts in prison would reduce violent crimes.
Homicide convicts serve a little more than ½ of their original sentences. (“Firearm Use by Offenders”, Bureau of Justice Statiscs, November , 2001) Given that men tend to be less prone to violent behavior as they age (Homicide rates peak in the 18-24 year old group, Bureau of Justice Statistics, online database), holding them for their full sentences would probably reduce violence significantly.
In 1991, 13,200 homicides were committed by felons on parole or probation. For comparison sake, this is about ½ of the 1999 annual gun death totals (keep in mind that gun deaths fell from 1991 to 1999).
Los Angeles county saw repeat offender and re-arrest rates soar after authorities closed jails and released prisoners early. In less than three years, early release of prisoners in LA resulted in: (" Releasing Inmates Early Has a Costly Human Toll", Los Angeles Times, May 14, 2006)
• 15,775 Rearrested convicts
• 1,443 Assault charges
• 518 Robbery charges
• 215 Sex offense charges
• 16 Murder charges
Saturday, November 29, 2008
From Orion Hood by way of Bill Whittle.
Sunday, November 9, 2008
One thing to realize -- 700 billion sounds like a hell of a lot -- but, at least up until a couple months ago -- it was about 20 days output for the nation.
Not to attack OBH, [ at least not now ;) ], but simply to note: if only it were just $700 Billion.
The $700 Billion is just the Emergency Economic Stability Act - aka "The Swindlers Bailout Act of 2008" - and as I understand it, this amount can rise to $1 Trillion ( and that ignores the $150 Billion of pure pork the Senate added to this obscenity).
There are other huge amounts of "money" which can come to sorrow. How these overlap with bailout funds is unclear, but this still represents the destruction of money, via default of debt, on an enormous scale.
It is also the $700 Billion or more that the FHLB has "loaned" out using dodgy mortgages or mortgage securities as collateral.
It is also the $1.5 Trillion expansion of the FRB's balance sheet based on unknown collateral, most likely with a smaller "hair-cut" than used by FHLB. The FRB refuses to disclose what this collateral is. This is predicted to reach $3 Trillion by the end of this year.
It is also the $40 Billion per month of toxic sludge that Fannie and Freddie are now committed to buying, going forward. This has some overlap with other categories, but transfers the problem directly to taxpayers, and explicitly targets bad debt.
It is worth noting that the horrible lending practices that were evident in the residential mortgage markets also prevailed in Commercial Real Estate, auto loans and credit card debt. Through various means, including the feedback loops with the real economy, these are already playing a part.
Finally, back to the original black hole for money, see this chart:
This shows that we have another 2 years of hell at least. All the "Option adjustable rate" loans will probably difault due to the extreme toxicity of these loans (when they "recast", monthly payments can explode by 60%). (The recasts will not happen at the exact time of the resets shown above, but will not be too out of line with them for many of these.) All the other categories will see significant default rates as well, as the represent vintages for which the underwriting standards were truly hideous.
Tuesday, November 4, 2008
Obama stole all the caucuses he "won" in the primary. These tactics bring to mind nothng so much as the Nazis and the Brown-Shirts in the 1920s and 1930s
And Hillary had to know it was happening as early as the Iowa Caucus in January, and certainly by Super Tuesday, yet failed to make a campaign issue of it. Party unity and winning was more important than the integrity of the electoral process.
Fuck them all.
HRC knew at least as early as Jan. 23 2008, see here here or here for the letter from HRC Counsel regarding the Nevada Caucus.
See here for the details on the critical, first in the nation, Iowa caucus
Saturday, November 1, 2008
|10/31/2008||Pakistan||Mardan||8||25||A suicide bomber walks into a home and detonates himself, killing at least eight other people.|
|10/31/2008||Somalia||Mogadishu||3||3||Islamists successfully kill three civilians in separate grenade attacks on two markets.|
|10/30/2008||Pakistan||Charbagh||1||0||The Taliban behead an abducted cop after holding him hostage for two days.|
|10/30/2008||Iraq||Mosul||2||6||A random bombing along a traffic circle leaves two civilians dead.|
|10/30/2008||India||Assam||77||300||Harkat-ul-Jehadi-e-Islami terrorists massacre over seventy people in six deadly blasts across several towns.|
|10/30/2008||Afghanistan||Kabul||5||23||A woman is among five people killed when a Muslim terrorist throws a bomb into an office building.|
|10/29/2008||Pakistan||Dera Ismail Khan||3||0||Three Shiite civilians standing at a bus stop are gunned down in cold blood by Sunni militants.|
|10/29/2008||Pakistan||Bannu||2||11||Two local soldiers are blown to bits by a Fedayeen suicide bomber.|
|10/29/2008||Somalia||Hargeisa||28||26||Five separate suicide bombings leave over two dozen innocent people dead in commercial areas across the city.|
|10/29/2008||Iraq||Baghdad||5||17||Mujahideen bomb a soda fountain, killing at least five patrons.|
|10/29/2008||Iraq||Balad Ruz||3||14||al-Qaeda gunmen muder three children in their home.|
|10/29/2008||Thailand||Pattani||1||0||Islamists shoot a 52-year-old man to death.|
|10/29/2008||Iraq||Baqubah||1||16||A 4-year-old child is murdered by Islamic bombers.|
Wednesday, October 22, 2008
Sunday, October 12, 2008
From Bloomberg (hat tip comments of Calculated Risk):
Oct. 11 (Bloomberg) -- Federal regulators directed Fannie Mae and Freddie Mac to start purchasing $40 billion a month of underperforming mortgage bonds as the Bush administration expands its options to buy troubled financial assets and resuscitate the U.S. economy, according to three people briefed about the plan.
Fannie and Freddie began notifying bond traders last week that each company needs to buy $20 billion a month in mostly subprime, Alt-A and non-performing prime mortgage securities, according to the people, who asked not to be identified because the plans are confidential. The purchases would be separate from the U.S. Treasury's $700 billion Troubled Asset Relief Program.
The Federal Housing Finance Agency, which placed the two companies in conservatorship on Sept. 7, directed them last month to start increasing their purchases of loans and mortgage-backed securities as the Treasury seeks to absorb underperforming and illiquid assets from financial companies.
So the vile Paulson still maintains his hopes to tranfer the toxic sludge securities from his Wall Street cronies to the taxpayers, now trying to do it without even the minimal controls and transparency in place in the EESA.
Friday, October 10, 2008
The world is at severe risk of a global systemic financial meltdown and a severe global depression
Although long called Doctor Doom, and long predicting the chaos in the financial markets, he has previously predicted only a long, severe, recession...until now. The fact that he was most pessimistic but only predicting a recession was comforting, but confusing.
I guess I'm less confused and more uncomfortable now.
Wednesday, October 8, 2008
Now if only our government would get a clue.
I've been reading Nouriel Roubini for a year or more and he's been talking about the "systemic meltdown" at least that long. Other economists used to call him Doctor Doom. Now they just call him to find out what's next.
He was wrong on one call though: he thought it would take another 6 - 12 months for the big 5 investment banks to disappear.
So the fact that he was wrong on the optimistic side about something is not altogether reassuring.
And now, once more because I just can't resist:
GOOD THING WE'RE NOT IN A RECESSION!
Monday, October 6, 2008
The 35-year-old Kashkari is a former Goldman Sachs Inc. banker, the investment giant once headed by Treasury Secretary Henry Paulson. The new office was created by the emergency legislation enacted Friday to fund the largest government bailout in history.
How much does it take to see the pure grab for taxpayer gold that this "bailout" is? Is Congress really this stupid? Or are they all bought and paid for?
Sunday, October 5, 2008
- Emphasize, that even with all the trouble in the econcomy, the number one issue is the war on terror, which means the war on Islamic Fundamentalism. This should be in every speech by McCain, Palin and every surrogate. It should be in many, many TV ads.
- Continue to emphasize Obama's associations with Ayers. Empasize how he has lied on this issue.
- Hammer hard on Obama's association with other unsavory elements - his warm relations with radical Muslim professors, his consultation with the anti-Israel Zbigniew Brezinski.
- Note how Obama has never voted against any gun control measure, no matter how restrictive. Include his vote against a law that protected the very right that the Supreme Court upheld in June 2008. Emphasize that Obama stated that he thought the DC law, which was overturned, was constitutional - and that he continues to support the same ban in Chicago - all while claiming to "support" the 2nd amendment. Empasize how he has lied on this issue.
- Emphasize Obama's support of pro-abortion extremism, including Michelle Obama's mailing supporting partial birth abortion and Obama's voting 4 times against the Illinois BAIPA, even thoutgh the 4th time it was cloned from the Federal version he now claims to "support". Empasize how he is supporting infanticide and how he has lied on this issue.
It has been well documented by Mish and Market Ticker (who has a great video up tonight; it is a must see) that the darkside to this money grab may have more to do with foreign creditors than is being spoken about. China, Japan, Saudi Arabia and many others were duped into buying tons of the mortgage backed AAA rated toxic paper, and they are not amused....looking at diminished stock returns, and now saddled with worthless paper the foreign powers seem to have had enough.So, just as MaxedOutMama pointed out here on my question about the GSE bailout, this is all about keeping th foreign credit, upon whihc our once-proud nation is so dependent, flowing to enable our continuing sub-prime government spending.
The strong language that allows foreign trash to come back to the treasury was such a sticking point to any plan that a veto was threatened if this provision was taken out.
It makes sense. The total rush-iob; the inclusion of foreign assets; the fact that as stated, the plan won't actuallly address the real problem, or does so only in the most corrupt and inefficient fashion. It all makes sense.
We are so screwed. We are owned by our creditors because we must still borrow just to keep running.
Someday soon, this will be put to the ultimate test: economic blackmail used to affect our stand on foreign policy. What will we have to give up to keep pawning ouselves? Israel? Taiwan?
Or will it be a more subtle, but equally devastating, insistence that we allow the "political correctness" that allows Fundamental Islam its foothold in this country, undermining all that makes this country the beacon it has been?
As many have said, we are fadst in the process of becoming a 3rd world nation - a banana republic - with nukes.
Saturday, October 4, 2008
The plan - from Economic Disconnect :
Folks, we were screwed royally on this past bill. Every single poll, every single person I talked to was firmly against this action. FIRMLY. The Congress decided they knew so much more than their constituents.
if [Congress is] going to ignore 70% of the voters and do whatever you want, we might as well move to Iran....
What's more is that a message must be sent here. No more bailouts. No more mismanagement of the economy and national finances. No more giving the voters the middle finger with no accountability. NO MORE.
What I want you to do is to identify all incumbents that are on your ballot for November. Then I want you to vote against every single one.(You may elect to keep any official that voted NO to the bailout.)
Now I understand that for many the thought of voting for a republican makes you ill ...Get over it. You can always vote the next time for a democrat. This issue is the most important thing and all that other stuff can wait.
I get it that the thought of voting for a Democrat may make you want to take a shower....You can always vote for a republican the next time.
I can guarantee that if a boatload of incumbent get sent down the river, the new congress is going to be especially keen on listening to their voters.
This issue is the most important thing and all that other stuff can wait.
The new rallying cry: THROW THE BUMS OUT!
Vote against all incumbents who voted for the Paulson-Bush-Pelosi-Reid-Boehner-McConnell "Swindlers Bailout Act of 2008".
Senate Vote here.
House Vote here.
Even if it means voting for someone you can't stand - this is the only way we can take back Congress. Otherwise we're the same miserable sacks-of-shit they are. Only by standfing up and throwing the bums out can we have a chance of making sure this doesn't happen again.
Friday, October 3, 2008
Following the passage of the economic bailout bill Friday, House Speaker Nancy Pelosi said congressional hearings are planned to find the causes of the crisis and to determine "where we go from here."
"We were dealt a bad hand; we made the most of it," Speaker of the House Nancy Pelosi said Friday.
How nice. After letting yourselves be scared like little sissies into handing the most corrupt people in the world $700 Billion to hand out to their buddies who are also the most corrupt people in the world - which you did without consulting a single non-Admimnistration economists - even though many hundreds reviled this plan - NOW that you've bailed out ther Pigmen and Swindlers at the expense of the taxpayers, NOW you're going to have hearings!
NANCY PELOSI, YOU ARE THE STUPIDEST FUCKING ASSHOLE ON THE PLANET!
Thursday, October 2, 2008
I'm good enough that sometimes people will tell me they like what I do. I'm lousy enough that I've thrown the guitar in the corner in frustration.
But over the years I've been through enough cycles of rehearsals and gigs with a few bands that I finally figured out what used to be a mystery to me: why are some of the rehearsals - especially, always, the last rehearsal before a gig - so goddamn horrible, while the gigs go well?
After nearly 20 years - my hobbies go into hibernation at times - I finally figured it out: It's adrenaline - induced by the presence of a crowd.
It makes all the difference. Fewer mistakes are made, they are recovered from faster, and sometimes when the band loosens up in a jam, some bit of musical magic can happen.
The last rehearsal before the gig has all the downside - nerves, desire to work out all the bugs, "it's about time to do this right, dammit!" - but not the crowd. The gig has the crowd, and for me and at least some of the other folks I played with, that makes all the difference.
And it appears that this is the case with Sarah Palin. In a room with Katie Couric and a camera, it's dress rehearsal time - all nerves and no buzz.
Put her in front of a crowd - even opposing a guy with 35+ years of experience having the night of his life - and she is a force to be reckoned with.
Get this woman onto "The View" post-haste - she will make mince-meat of Whoopie and the other lefties.
Yes there was a really jarring change of subject. (But they all do that.) Yes there was a brief echo of the "what other Supreme Court decisions" horror - but she pulled out of it and kept on trucking.
And let her do one-on-one interviews again - but only in front of a live audience.
My name is Bob N. and I am an adrenaline addict!
Still unaddressed is the impact on the credit markets - or the impact on the dollar- of $700 Billion of *additional* US borrowing.
Today in a post at Naked Capitalism, one of Yves Smith's readers makes this issue more explicit:
More grist for the mill that Congress refuses to run: they are listening only to Bernanke and Paulson - the clueless and the corrupt.
Much of the working capital market, for decades has come via money market funds (MM). Joe public or Joe CFO deposits money into a MM. That MM loans it to a bank (usually by buying paper, and usually at a medium duration) and then that bank loans it out to business for inventory, payroll or whatever. The MM has converted Joe's demand deposit into a fixed-duration loan.
The problem we're having is that people are fleeing commercial MM for treasury MM. Those are buying treasuries and thus converting the money to the desirable medium duration BUT that money is loaned to the Fed, and the Fed doesn't make working capital loans. So the deposited money that had been made into working capital has been diverted into the Fed and lost to working capital.
Right now we have both commercial and treasury MMs. Deposits have shifted from commercial MMs to treasury MMs, and consequently we have less working capital (a commercial MM product) and better credit for the Fed (a treasury MM product). But, treasury MM rates are now very low and the gap between treasury and commercial fairly high, which creates an incentive for depositors to put money into commercial funds, producing some working capital.
When Paulson dumps out his 700 billion in treasuries it's going to be at the short end. That will drive up rates for short-term treasuries. This will obviously draw even *more* deposits into the treasury MMs. That means even less in the commercial MMs and thus less working credit, the eventual commercial MM product. Hence Paulson's billions remove working capital by competing for the deposits that could get used to make working capital loans. That 700 billion is going to go to fairly long-term mortgage securities. So Paulson's billions divert credit from working capital to long-term mortgages - from where it's most needed to where it's most wasted.
I think it's very telling that in two days of hearings and two weeks of discussion we have yet to see *any* detailed mechanism for how Paulson's plan will increase the supply of, say, inventory loans. It's not that every economist in the world is an idiot, it's just not going to help. I think people have fallen into the fallacy that if it costs a lot it must be valuable. Paulson's plan falls into the category of very expensive way to hurt ourselves.
These memes have become a rallying cry -- cognitive dissonance writ large -- of those folks who have been pushing for greater and greater deregulation, and are now attempting to disown the results of their handiwork.
• Did the 1977 legislation, or any other legislation since, require banks to not verify income or payment history of mortgage applicants?
• 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision; another 30% were made by banks or thrifts which are not subject to routine supervision or examinations. How was this caused by either CRA or GSEs ?
• What about "No Money Down" Mortgages (0% down payments) ? Were they required by the CRA? Fannie? Freddie?
• Explain the shift in Loan to value from 80% to 120%: What was it in the Act that changed this traditional lending requirement?
• Did any Federal legislation require real estate agents and mortgage writers to use the same corrupt appraisers again and again? How did they manage to always come in at exactly the purchase price, no matter what?
• Did the CRA require banks to develop automated underwriting (AU) systems that emphasized speed rather than accuracy in order to process the greatest number of mortgage apps as quickly as possible?
• How exactly did legislation force Moody's, S&Ps and Fitch to rate junk paper as Triple AAA?
• What about piggy back loans? Were banks required by Congress to lend the first mortgage and do a HELOC for the down payment -- at the same time?
• Internal bank memos showed employees how to cheat the system to get poor mortgages prospects approved that shouldn't have been: Titled How to Get an "Iffy" loan approved at JPM Chase. (Was circulating that memo also a FNM/FRE/CRA requirement?)
• The four biggest problem areas for housing (by price decreases) are: Phoenix, Arizona; Las Vegas, Nevada; Miami, Florida, and San Diego, California. Explain exactly how these affluent, non-minority regions were impacted by the Community Reinvesment Act ?
• Did the GSEs require banks to not check credit scores? Assets? Income?
• What was it about the CRA or GSEs that mandated fund managers load up on an investment product that was hard to value, thinly traded, and poorly understood
• What was it in the Act that forced banks to make "interest only" loans? Were "Neg Am loans" also part of the legislative requirements also?
• Consider this February 2003 speech by Countrywide CEO Angelo Mozlilo at the American Bankers National Real Estate Conference. He advocated zero down payment mortgages -- was that a CRA requirement too, or just a grab for more market share, and bad banking?
Wednesday, October 1, 2008
Time to shit-can this plan and start over - this time with help from respected outside economists - not just discredited hacks like Paulson and Bernanke.
See here for information from a real expert, Nouriel Roubini on how various bailouts work - and why the Paulson plan is one of the worst possible ways to do it. Roubini has been called Dr. Doom for years as he has explicitly predicted these problem before most others.
Everything in this plan that Paulson put there must go. And Paulson must go, too. He is so clearly the wrong person to manage any part of this. His background is Wall Street - he managed Goldman Sachs at the exact time that they and others were creating this "crisis".
The bailout still has too little protect taxpayers from the inevitability that Paulson will overpay. All "oversight" is provided after the fact by people with neither the time nor qualifications to be effective.
The so-called insurance is *optional*.
Overpaying for toxic sludge securities - many if not most already rendered worthless by defaults that have already occurred is the only mechanism by which this plan helps the banks and other institutions. See here for an explanation of why the lower tranches - those often retained by Banks selling the Asset Backed Securities - are much more heavily impacted by relatively low default rates. See here for why the default rates are so much higher than those used for the original creation of these securities and the results on the securities.
Still unaddressed is the impact on the credit markets - or the impact on the dollar- of $700 Billion of *additional* US borrowing. Uncle Benny thought he'd get a freebie lowering interest rates to take the sting out of ARMs, but the dollar swooned *and* LIBOR has now disconnected from Fed Funds. These are the kinds of unintended consequences that come from winging it.
It is worth noting that on Tuesday the market indices reclaimed 2/3s of what was lost Monday. Congress does more harm dithering on this piece of crap bailout than if they would take the time to get real experts in there and do it right.
Tuesday, September 30, 2008
Newsflash: The GSEs have been under Executive Branch Regulation since at least 1992.
Until Paulson put them in conservatorship, the GSEs were regulated by HUD and OFHEO - both part of the Executive Branch.
From OFHEOs FAQ:
How is oversight of Fannie Mae and Freddie Mac divided between OFHEO and HUD?
The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 created a regulatory oversight structure for the housing government-sponsored enterprises of Fannie Mae and Freddie Mac. The regulatory oversight was divided to address two functions – their financial safety and soundness and their affordable housing mission. The financial safety and soundness regulation is vested in the Office of Federal Housing Enterprise Oversight (OFHEO). OFHEO implements, monitors and enforces capital standards for Freddie Mac and Fannie Mae.
Effective January 1, 2005, HUD established new and increasing affordable housing goal levels for the GSEs for the years 2005 through 2008. These goals require that a certain percentage of the mortgages purchased by Fannie Mae and Freddie Mac support financing for housing low – and moderate – income families.
January 1, 2005:
Republican President and Executive Branch: Check!
Republican House and Senate: Check!
One more right-wing myth explodes upon impact with the facts.
|Timeframe||Mostly before 2003||Exploded after 2005|
|Issuers||all by Regulated Banks||at least 3/4 by enitites no fully regulated by CRA|
|Location||by law, Neighborhoods where bank deposits were taken||Much in vast new construction such as the Inland Empire and exurban Phoenix, where by definition no bank deposits were being taken because nobody lived there|
The idea that Community Reinvestment Act (CRA) == Subprime has becaome a new conservative wet dream - but with less substance. (Thank goodness.)
The latest Right wing meme is that the Community Reinvestment Act "paved the way" or "provided the template for" or "is" Subprime Lending. I will not link to the idiots who propound this, other than to mention that I am seriously disappointed in Mike Huckabee, who seemed like the smartest of all the candidates, albeit too ready to mix religion with Constitution.
Here is the information I used in the table above. Money quotes:
CRA applies only to banks and thrifts that are federally insured...
The law imposes on the covered depositories an affirmative duty to lend throughout the areas from which they take deposits...
Studies by the Federal Reserve and Harvard's Joint Center for Housing Studies, among others, have shown that CRA increased lending and homeownership in poor communities without undermining banks' profitability.
In the mid-1990s, new CRA regulations and a wave of mergers led to a flurry of CRA activity, but, as noted by the New America Foundation's Ellen Seidman (and by Harvard's Joint Center), that activity "largely came to an end by 2001." In late 2004, the Bush administration announced plans to sharply weaken CRA regulations, pulling small and mid-sized banks out from under the law's toughest standards. Yet sub-prime lending continued, and even intensified -- at the very time when activity under CRA had slowed and the law had weakened....
Second, it is hard to blame CRA for the mortgage meltdown when CRA doesn't even apply to most of the loans that are behind it...Perhaps one in four sub-prime loans were made by the institutions fully governed by CRA.....
[Which is not to say that 1/4 of subprime loans were CRA, btw.]
Most important, the lenders subject to CRA have engaged in less, not more, of the most dangerous lending. Janet Yellen, president of the San Francisco Federal Reserve, offers the killer statistic: Independent mortgage companies, which are not covered by CRA, made high-priced loans at more than twice the rate of the banks and thrifts.
One of the only regulators who long ago saw the current crisis coming was the late Ned Gramlich, a former Fed governor. While Alan Greenspan was cheering the sub-prime boom, Gramlich warned of its risks and unsuccessfully pushed for greater supervision of bank affiliates. But Gramlich praised CRA, saying last year, "banks have made many low- and moderate-income mortgages to fulfill their CRA obligations, they have found default rates pleasantly low, and they generally charge low mortgages rates. Thirty years later, CRA has become very good business."
So the next time you hear some right winger jabbering about how CRA started, or caused, or even contributed to the subprime crisis, you know you are listening to a profoundly uninformed person.
In fact, the mere nomenclature "Subprime Crisis" shows ignorance. The categories of mortgages known as "Alt-A" and "Option ARMs", generally not included in Subprime statisitics, are exploding and they will be as nearly as big, or bigger, than Subprime. And that still doesn't cover the loans on commercial real estate, where much of the same abandonment of sane underwriting occurred as in the residential mortgage market.
I wasn't going to link to anything, but this cartoon at Day by Day http://www.daybydaycartoon.com/, by Chris Muir, seems to imply agreement with the CRA-caused-this meme, though I could be mistaken. If it does, then I have to disagree with the 1st half of of Sam's first frame comment.
And, for completely different reasons, I have to disagree with the characterization of the Paulson-Democrat bailout plan as a "crap sandwich". After all, there is bread in a crap sandwich.
Monday, September 29, 2008
Sunday, September 28, 2008
Could it be possibly be any worse than this? HOW?
Thinking George W. Bush can conduct foreign policy - now THAT is naive!
UPDATE: Oh, but there were pre-conditions for this - no tongues!
Leading up to its collapse, Bear Stearns was participating along with other major investment banks in a “voluntary” oversight program begun in 2004 designed to consolidate supervision. The idea was that voluntary regulation of these banks was the only way to effectively govern their behavior because of the peculiar complexity and their international structures.
Same topic here:
The chairman of the Securities and Exchange Commission, a longtime proponent of deregulation, acknowledged on Friday that failures in a voluntary supervision program for Wall Street’s largest investment banks had contributed to the global financial crisis, and he abruptly shut the program down.
The commission created the program after heavy lobbying for the plan from all five big investment banks. At the time, Mr. Paulson was the head of Goldman Sachs.
Those would be the 5 investment banks that don't exist anymore, the last 2 having become commercial banks earlier this week.
Doesn't the idea of Hanky Panky Paulson handling the crisis he helped create make you feel all warm and fuzzy inside?
Wasn't the Bush deregulation just the best thing ever?
Friday, September 26, 2008
I hadn't done enough drugs, so I couldn't take it. Literally. I could feel I.Q. points being sucked out of my skull as I listened.
I don't know what mixture of meth, coke, smack, ibogaine, weed, alcohol and glue huffing it takes to take either of these guys seriously. Maybe enough Valium to render me unconscious would have allowed me to leave the TV turned on, but the hangover from that stuff is wicked.
I kept turning it on, listening for like 45 seconds, saying "Fuck you" to whichever one was speaking, then turned it off again.
Then I found this at Angry Bear:
Awkward Loan Interview
So I watched it. Then I went to Comedy Central and watched some more.
That's the Liberative Debate Report. Hope you liked it.
Tuesday, September 23, 2008
Sunday, September 21, 2008
Pull the props out, get the Fed's and the FHLB's money back.
Whatever bank dies, it deserved to.
Whatever bank lives, it derserved to.
Then, take the 700 Billion dollars and open new Banks under really strict regulation. With fractional lending, 700 Billion yields 7 Trillion of new credit. That should be plenty.
Oh yeah: catch Paulson, Bernanke, Bush, Cox, Dodd, Frank and hang them. Slowly. Especially that fuck Paulson.
(hat tip to "Nude" in comments ar Calculated Risk.)
(UPDATE: For all I know, this could cause a global Depression. (That would be a bad thing, so something should be done. Just not the Paulson plan.) But I sure had fun writing it! )
- It cannot work unless the government - using tax dollars - pays more than the mortgage bonds are worth.
- It gives unprecedented power to one man - the Secretary of the Treasury - with no review whatsoever.
Here is the most offensive passage:
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.700 hundred Billion dollars are to be put at the sole discretion of one man. And that man is Hank Paulson, who has minimized and lied every step of the way in this crisis.
Here are blogs I've seen so far condemning this thing:
Calculated Risk: NY Times Makes a Funny and Some Thoughts on the Bailout
Paul Krugman, Liberal: No deal
Mike Shedlock, Free Marketeer: Bush Administration Seeks "Dictatorial Power"
Yves Smith: Why You Should Hate the Treasury Bailout Proposal
Update: This just keeps getting more vile: Bailout Eligibility Expanded to Foreign Institutions!
The NBER, National Bureau of Economic Research, is responsible for timing the start and end of recessions. They say here:
The NBER does not define a recession in terms of two consecutive quarters of decline in real GDP. Rather, a recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.[Emphasis added].
The also say here:
The committee's approach to determining the dates of turning points is retrospective. We wait until sufficient data are available to avoid the need for major revisions. In particular, in determining the date of a peak in activity, and thus the onset of recession, we wait until we are confident that, even in the event that activity begins to rise again immediately, it has declined enough to meet the criterion of depth. As a result, we tend to wait to identify a peak until many months after it actually occurs.[Emphasis added, paragraphs may be re-ordered]
It's more accurate to say that a recession-the way we use the word-is a period of diminishing activity rather than diminished activity. We identify a month when the economy reached a peak of activity and a later month when the economy reached a trough. The time in between is a recession, a period when the economy is contracting.
Most of the recessions identified by our procedures do consist of two or more quarters of declining real GDP, but not all of them. The most recent recession in our chronology was in 2001. According to data as of July 2008, the 2001 recession involved declines in the first and third quarters of 2001 but not in two consecutive quarters. Our procedure differs from the two-quarter rule in a number of ways. First, we consider the depth as well as the duration of the decline in economic activity. Recall that our definition includes the phrase, "a significant decline in economic activity." Second, we use a broader array of indicators than just real GDP. One reason for this is that the GDP data are subject to considerable revision. Third, we use monthly indicators to arrive at a monthly chronology.
Note the part about the revisions: we see here that after revision, 4Q2007 GDP growth was actually NEGATIVE. This happened on or about July 31, 2008. So we still don't know the real 1Q2008 numbers yet, leave alone later quarters.
Mike Shedlock (aka Mish) looks at this issue here. One of his points - "How can we have an understated inflation rate of 4%, and a GDP Price Deflator of just 2.6%?" - is particularly well taken, given the known rigging of the CPI ("hedonic adjustsments" and other such nonsense) described here and shown graphically here. The flaws in GDP statisitics are discussed here.
Summing up: Once youe realize that the "2 quarters of negatice GDP growth" is the mindless repetition by the MSM of an outdated measurement model, you can see that things have been going the wrong way for quite a while.
Friday, September 19, 2008
This is not some distortion or hijacking of Islam. This is what Orthodox Islam is.
|9/19/2008||Pakistan||Quetta||8||9||Eight students at a religious school are blown to bits by a suicide bomber.|
|9/19/2008||Thailand||Narathiwat||1||0||A teenager is taken down in a drive-by shooting by Islamic radicals.|
|9/19/2008||Somalia||Mogadishu||12||35||al-Shabaab Islamists rain down mortars on a city airport, killing a dozen civilians.|
|9/18/2008||Iraq||Mosul||2||0||Two family members are killed when sectarian gunmen storm their home.|
|9/17/2008||Thailand||Yala||2||0||A father and son are brutally gunned down by Religion of Peace militants.|
|9/17/2008||Pakistan||Khyber||1||0||The Taliban abduct and murder an Afghan refugee.|
|9/17/2008||Pakistan||Dera Ismail Khan||1||7||A woman is murdered by Islamic bombers in a residential area.|
|9/17/2008||Iraq||Baghdad||18||79||Eighteen Iraqis are killed in a series of Mujahideen bombing and shooting attacks.|
|9/17/2008||Yemen||Sanaa||10||13||Women and children are among the casualties when al-Qaeda militants stage a coordinated attack on the US embassy.|
|9/17/2008||India||Srinagar||0||15||Fifteen pedestrians are injured when Islamic terrorists toss a grenade into the street outside a shopping center.|
|9/17/2008||Philippines||Mindanao||1||7||Moro Islamists attack a group of local soldiers, killing one.|
|9/17/2008||Ingushetia||Magas||4||0||Four local security personnel are ambushed and killed by Muslim radicals.|
Thursday, September 18, 2008
Great explanation of how multiple Congresses and multiple Administrations aided and abetted the pigmen - aka Wallstreet - in ruining the economy through the mortgage/housing bubble.
Special focus on the failure of the SEC to provide independent securities ratings, which would have stopped this in its tracks.
Also focuses on how Gramm-Leach-Bliley - passed by a Republican congress and signed by Clinton after massive Citigroup lobbying - removed previously existing controls that stopped this from happening in the past. The "Gramm" is Phil Gramm, of fame for his comments that "Americans are whiners" for complaining about the "mental recession". Gramm is also famous for having been John McCain's chief economic advisor and campaign co-chairmen at the time of those remarks.
Saturday, September 13, 2008
From Council on Foreign Relations 2002:
For years, individuals and charities based in Saudi Arabia have been the most important source of funds for al-Qaeda. And for years, Saudi officials have turned a blind eye to this problem.
From PBS-Frontline interview with Ali Al-Ahmed, executive director of the Saudi Institute :
Yes, I am saying that. Because the hijackers, 15 hijackers who are Saudis, they studied this thinking -- destructive thinking -- in Saudi Arabia. They spent a few months in Afghanistan. But they lived their life, they studied this in government mosques. They studied this kind of curriculum that I talked to you about. ... Government curriculum inspired what happened in New York.
From The Institute for the Analysis of Global Security:
Saudi government money funneled into madrassas where radical anti-Americanism is propagated has been instrumental in creating an ideological climate which generates terrorism.
Saudi Arabia continues to fund and export its Wahhabi brand of Islam, making it a "strategic threat" to the United States in the worldwide war on terror, the chairman of the U.S. government commission on religious freedom said yesterday.
"It is an ideology that is incompatible with the war on terrorism," said Michael Young, chairman of the State Department's Commission on International Religious Freedom.
From Saudi Arabia, Wahhabism and the Spread of Sunni Theofascism June 2007:
American efforts to combat this contagion are hamstrung by the fact that its ideological and financial epicenter is Saudi Arabia, where an ostensibly pro-Western royal family governs through a centuries-old alliance with the fanatical Wahhabi Islamic sect. In addition to indoctrinating its own citizens with this extremist creed, the Saudi government has lavishly financed the propagation of Wahhabism throughout the world, sweeping away moderate interpretations of Islam even within the borders of the United States itself.
The Bush administration has done little to halt this ideological onslaught beyond quietly (and unsuccessfully) urging the Saudi royal family to desist. This lack of resolve is rooted in American dependence on Saudi oil production, fears of instability in the kingdom, wishful thinking about democracy promotion as an antidote to religious extremism, and preoccupation with confronting Iran.
And, regarding the Islamic Saudi Academy, in Virginia, in 2008:
Examples of Problematic Passages in Current ISA Textbooks
In a twelfth-grade Tafsir (Koranic interpretation) textbook, the authors state that it is permissible for a Muslim to kill an apostate (a convert from Islam), an adulterer..
A twelfth-grade Tawhid (monotheism) textbook states that “[m]ajor polytheism makes blood and wealth permissible,” which in Islamic legal terms means that a Muslim can take the life and property of someone believed to be guilty of this alleged transgression with impunity. (Tawhid, Arabic/Sharia, 15) Under the Saudi interpretation of Islam, “major polytheists” include Shi’a and Sufi Muslims, who visit the shrines of their saints to ask for intercession with God on their behalf, as well as Christians, Jews, Hindus, and Buddhists.
Although this Koranic passage does not in itself invoke the term jihad, the Saudi textbook authors write:
- “In these verses is a call for jihad, which is the pinnacle of Islam. In (jihad) is life for the body; thus it is one of the most important causes of outward life. Only through force and victory over the enemies is there security and repose. Within martyrdom in the path of God (exalted and glorified is He) is a type of noble life-force that is not diminished by fear or poverty.” (Tafsir, Arabic/Sharia, 68)
And HERE is what Bush does about it:
Bush: Have you no shame or pride or backbone or balls at all?
God Damn It! You are the Fucking President of the Fucking United States of America! We may need their oil and their money, but can't you have the decency to preserve the diginity of the POTUS, if not for your miserable useless self, at least for those who follow?
See here for what you can do about it.
In a strong bipartisan effort, House Democrats and Republicans recently joined forces to introduce H.R. 6691, the “Second Amendment Enforcement Act.” This critical NRA-backed legislation would overturn Washington, D.C.’s newly enacted “emergency gun control laws,” which continue to defy the U.S. Supreme Court’s unambiguous decision in District of Columbia v. Heller by continuing to restrict D.C. residents’ right to self-defense....
H.R. 6691 currently has 116 cosponsors, but we need more! The bill is expected to be considered on the House floor next week, so please be sure to contact your U.S. Representative -- AS SOON AS POSSIBLE -- at (202) 225-3121, and urge him or her to cosponsor and support H.R. 6691 (“Second Amendment Enforcement Act”).
Let Carl have his Sig!
Friday, September 12, 2008
I am still working out how the AUMF and the MCA and the DTA and the SCOTUS in Quirin and Habeas Corpus in the Constitution interact. I can say it's more confusing the more I look.
But it has occurred to me that aspiring dictators of every stripe support and impose gun control - and John McCain opposes it and, in choosing Sarah Palin, has reaffirmed that position.
Dictators don't let the people have guns - because that makes them citizens, not subjects.
Obama's views on this are well known - he'd make gun ownership damn near impossible if not outright illegal - all in the name of "common sense" while claiming to "support" the second amendment.
I got some thinking to do.
Thursday, September 11, 2008
Never forget the thousands lost, - in the planes, in the towers, in the Pentagon and in the field in Pennsylvania.
But also never forget the thousand that continue to die at the same hands - the hands driven by Islamic intolerance.
And never, ever forget who did this: The "Religion of Peace".
Reader obloodyhell reminds me:
"To the men and women serving in Iraq and Afghanistan, as well as to the direct victims of 9/11."
I could not agree more - here's to our troops - doing a magnificent job under the most difficult circumstances.
Sunday, September 7, 2008
The link E3 Gazette used has stopped working, but the story, from Winnemucca, NV, is also here:
So lesson 1: Law-abiding citizens with CCW (Concealed Carry Weapon permit) and a gun can stop massacres - as was seen last year, with Jeanne Assam in Colorado.
A man [Villagomez] entered the crowded Players Bar and Grill. He fatally shot two brothers...
According to witnesses, Villagomez at some point stopped to reload his high-capacity handgun and began shooting again when he was shot and killed by another patron - a 48-year-old Reno man who had a valid concealed weapons permit.
(Examples of citizens using gunns to defend themselves and others every day are available at the Civilian Gun Self Defense Blog.)
Lesson 2: The Mainstream Media have completely ignored this story. Google searches on "shooting winnemucca" (without the quotes) find nothing about the story and ABC News, NBC News, CBS News, CNN.com or even Foxnews.com - not one mention at any of the websites for these organizations. Interestingly enough, 3 links show up to MSNBC, but attempts to retrieve the pages give "Page Not Found" errors, amnd the google cache has also apparently expired.
Why the virtually complete media blackout? Possibly because there was absolutely no way to claim that the hero was anything other than a legally armed citizen, rather than the widely mis-used label of "security guard" which was applied to Jeanne Assam.
The "security guard" meme was wrong: Jeanne Assam had no official or profession status as such - she was just a church-goer with a CCW, who volunteered to be on watch after earlier killings at another church in the area. But the "security guard" label stuck very stubbornly - because it allowed the MSM to continue to pretend, contrary to all evidence, that armed citizens cannot improve security and prevent crime.
In the Nevada case, it was just some middle aged patron with a CCW - no way to hide or obscure the facts.
Saturday, September 6, 2008
Friday, September 5, 2008
|9/3/2008||Pakistan||Sahiwal||1||0||A 17-year-old girl is shot to death by her father and brother for seeking a divorce after being forcibly married at 9.|
|9/3/2008||Somalia||Mogadishu||2||4||Two civilians are killed during an ambush by Islamic militia.|
|9/2/2008||Iraq||Mosul||1||0||Islamic fundamentalists abduct and murder a 65-year-old Christian doctor.|
|9/2/2008||India||Pulwama||1||2||An off-duty soldier is brutally cut down by Islamists while shopping at a vegetable market.|
|9/2/2008||Pakistan||Swat||2||0||A retired schoolteacher is among two people murdered by the Mujahideen.|
|9/2/2008||Iraq||Kirkuk||1||2||A 9-year-old boy is murdered by Islamic bombers.|
|9/2/2008||Iraq||Mosul||7||7||Children are among the victims of a Fedayeen suicide car bombing.|
|9/2/2008||Iraq||Baghdad||4||23||Four Iraqis are killed in a couple of Jihad roadside attacks.|
|9/1/2008||Thailand||Pattani||2||0||A Buddhist woman is among two people murdered in separate shooting attacks by Muslim radicals.|
|9/1/2008||Pakistan||Kohat||7||0||Religious extremists take out seven security personnel in a surprise ambush.|
|9/1/2008||Afghanistan||Kunduz||1||0||A civilian is blown to bits by a suicide bomber.|
|9/1/2008||Philippines||Digos||6||32||Islamic bombers are suspected in a blast that rips nails through a passenger bus, leaving six dead.|
|9/1/2008||Thailand||Yala||1||0||A 61-year-old man is shot to death by militant Muslims while driving home.|
|9/1/2008||Iraq||Othmaniyah||3||0||Sunni bombers kill three farmers with a device hidden in a water pump.|
|9/1/2008||Iraq||Kirkuk||1||2||An Iraqi child is taken down by Islamic bombers.|
|9/1/2008||Afghanistan||Wardak||3||0||Three security guards are killed by religious radicals in an ambush.|
|9/1/2008||Thailand||Yala||1||0||A teacher is brutally gunned down in front of his wife by Religion of Peace warriors.|
|9/1/2008||Afghanistan||Khost||2||2||The Taliban take down two local cops with a roadside bomb.|
|9/1/2008||Afghanistan||Kandahar||1||0||A taxi driver is murdered by Sunni extremists.|
|9/1/2008||Somalia||Mogadishu||1||0||A civilian is killed during a Mujahideen ambush along a city street.|
Violent Black Mobs
Terrorism and Radical Islam links
- ► 2009 (37)
- ▼ December (8)
- ► November (5)
- I'm Bored....
- When you're in a hole, STOP DIGGING
- "One cannot rule out a systemic collapse and a glo...
- All Roubini All the Time
- Treasury Bailout: A Den of Thieves
- My Opinion on What McCain Should Do to Win
- An Explanation of the Senseless Bailout?
- Throw the Bums OUT!
- Pelosi: NOW we're going to have hearings!
- FUCK CONGRESS! FUCK BUSH! FUCK PAULSON!
- It's the Audience, Stupid!
- How the Paulson Plan HURTS CREDIT MARKETS
- More on the Idiotic "CRA-and-GSEs-Caused-This" Mem...
- House was Right to Reject the Fatally Flawed Pauls...
- Right Wingnut Myths 2: The Democrats Prevented GSE...
- Right Wingnut Myths: "The CRA Caused the Subprime ...
- It's Not A Coincidence!
- Is it Naive for Obama To Meet Ahmedinijad?
- More Evidence Against the SEC "Regulation"
- The De-Liberative Definitive Presidential Debate R...
- Hank Paulson as "419" Scammer
- The Liberative Bailout Plan: Fuck 'Em All
- Say NO to the Mortgage Bonds Bailout
- For All You Recession Denialists, Part 2
- Another 3 Days of Murder, from The "Religion of Pe...
- For All You Recession Denialists
- MaxedOutMama: How Did We Get Here?
- How Bush Fights Terrorism
- Support The 2nd Amendment Rights of D.C. Residents...
- 2nd Thoughts On McCain
- September 11, 2001
- Media Bias? No way!!!!
- Bill Whittle Rules!
- Most Recent 3 days of Islamic Terror
- I'm a 57 year old geek. I voted Democratic for 20 years, because I disliked the Republicans more. But now, nobody really speaks for me. I'm for Guns, for more correct government regulation of the financial world, against illegal immigration and amnesty. (in 2008 I ended up voting Republican - too many questions about Obama, and voting against anybody who voted for TARP 1.) In 2010 I voted a stright republican ticket because the Democrats have completely lost their minds.