WC Varones

Don't lend your hand to raise no flag atop no ship of fools

Survey results confirmed

Gallup: Republicans have better mental health than Democrats.

ABC News: Clinton office hostage taker was "a well-known local man with a history of emotional issues."

WE HAVE HIT BOTTOM!

Cramer called it! BOTTOM! We have hit the sub-prime bottom. Sure we are going to have a massive amounts of mortgage resets next March OR somehow, the teaser rates are going to be locked in thereby obliterating the MBSs that hold them but somehow this is all going to work and we can start breathing easy and again invest in Countrywide, Wells Fargo, HSBC, MCI, Enron and Arthur Andersen. Phhhheeewwwwwww, thanks Jim!

Freedom to Fail

This link gives a good sob story narrative about the deceptive practices of the mortgage lending industry. PBS It illustrates how poor, poor home "owners" were deceived and how Congress is reacting to the situation. The comical part is the lobbyist representing the mortgage industry. He is straight out of "Thank You For Smoking". And while I do believe the problem is primarily the borrowers, the mortgage industry is surely one of the more evil, FU industries we have on the planet. I do think that that little, orange butcher's son deserves to be snatched up by flying monkeys and dropped from 200 feet no doubt. But the real problem here are the stupid people who signed up for stupid loans. Also a little deserved blame goes to the economically challenged Uncle Greenspan for pushing the dream of homeownership. It was never homeownership; it was home rentership and liquidity production for Wall Street. And he fricking got knighted.

On a side note, how funny would it be to see little Tanzilo in a full plate mail knight's get up with the helmet, a sword he couldn't lift and a shield? Sort of like those little hobbits from Lord of the Rings in that final battle. Except Tanzilo instead of fighting would probably be sucking the blood out of all the dying combatants lying in the field. Fucking midget vampires.

Letter bag

E-mails, we get e-mails:

We’re inviting North Carolina and South Carolina media to attend a national Town Hall meeting hosted by John Ratzenberger (Cliff on ‘Cheers’) at 6:30 pm on Wednesday, Dec. 12, at The Freedom Center, 215 E. Main Street, Rock Hill, SC, 29731.

I’ve pasted some info on the event below. Please feel free to contact me if you might be interested in attending and/or covering the event. I’d also be very grateful if you could please post this notice or pass it along to anyone who might be interested in attending or blogging live at the event.

Many thanks,

Steven Capozzola
Communications Director
Alliance for American Manufacturing


My response:

Dear Steve,

While I have been deeply involved in many of the most crucial North and/or South Carolina news stories this year, I am unfortunately located in San Francisco, California. I will not be able to attend the Town Hall with Cliff Claven from Cheers. Please feel free to send Woody's girlfriend Kelly to San Francisco, as I would love to probe her views on American competitiveness in manufacturing.

Best regards,

W.C. Varones

Freddie Mac - Buy Opportunity!

Freddie Mac is probably the reason that most exemplifies why someone like me should go nowhere near the stock market. Yesterday the quasi-government mortgage liquidity factory announced that they are cutting their dividend in half while at the same time issuing preferred stock because they are burning through their reserves because of all the defaults occurring on the loans they own. ARTICLE

This makes sense because our lending, appraisal and real estate industry, with the backing of crazy-talk-Greenspan, set out to rip the face off of anyone with a pulse by pushing grossly inflated homes on people who couldn't possibly afford them. Really the definition of afford changed from "able to meet the expense of" to "able to provide fees to all vampires involved."

So what drives me to drink, beat my kid and seek out prostitutes is what happened today in response to this news. The stock jumped 14.34%. QUOTE

I think I get it really. All those who own the stock really want the dividend they were promised so maybe they decided to double down, right? Seriously, what in the world is considered bad news anymore? I think had the Enron implosion happened today, they wouldn't have gone under. They probably would have out priced Google.

And don't even get me started on the "fantastic" news about Citi and their cash infusion at 11%!?! What a great DEAL!!!

Preferential treatment for illegal alien felons

Illegal alien who stole his dead cousin's identity to become a cop gets probation.

Can you imagine what would happen to an American citizen who committed multiple felonies to infiltrate a police department under a false identity? Not probation, I would think.

Sure, this guy has a sympathetic story. But so do millions of other illegal aliens. That's precisely why we need to secure the border and enforce employment law. Immigration should be for those who follow the law, not those who sneak in and then develop sympathetic stories because of their illegal status.

Separated at birth

Melissa Frances and Brittany Murphy:




Even a blind squirrel

Senator Chucky Schumer, firmly in the pocket and on the payroll of Wall Street and the big banks, inexplicably takes the right side of an issue, challenging the Federal Home Loan Bank of Atlanta's massive taxpayer-funded bailout of Countrywide:

According to the most recent SEC filings, FHLB Atlanta had made $51.1 billion in advances to Countrywide Bank, representing 37 percent of the Bank's total outstanding advances as of September 30, 2007 and far exceeding advances made to the next largest borrower. Countrywide had pledged $62.4 billion of mortgages as collateral for the FHLB advances, representing 78 percent of its total mortgage loans held for investment at the bank.

I find these numbers alarming as reports continue to emerge about how Countrywide's reckless and predatory lending practices were a leading contributor to today's foreclosure crisis. Moreover, it is my understanding that Countrywide's loans held for investment at the bank have been far from immune from the credit deterioration that has resulted from unsound lending.

The FHLB extended credit at 82 cents on the dollar for Countrywide's worst loans, the loans it couldn't sell for anywhere close to 82 cents on the dollar. When Countrywide collapses, as I expect it will, the taxpayers will be on the hook for billions in losses. Extraordinarily rare kudos to the sleazy Senator from New York for doing the right thing. Then again, Countrywide is notably absent from Chucky's contributor list.

Miscategorized?

I think I'm going to have to take Ang out of the "Left links" category.

Please explain

I'm not being a smartass here. I'm honestly looking for an explanation of how this is supposed to work.

Schwarzenegger and the big mortgage servicers decided to freeze rates on ARMs for borrowers in trouble. So you bought a $600,000 house on your $55,000 salary using a 2% teaser rate, and you're gonna be in trouble when that rate resets to 7% next spring. No problem! You can have the 2% rate extended for 5 to 7 years. By that time, you'll be bailed out by a real estate market that will surely be skyrocketing again.

Wait a minute. The servicers (Countrywide and others) don't own the mortgages any more. They have packaged them and sold them to Wall Street, pension funds, hedge funds, etc. How does Countrywide unilaterally declare that that 7% loan is now a long-term 2% loan? Surely the buyer has a right to put the loan back to Countrywide when the agreed terms are no longer in force?

UPDATE 11/26: Today's WSJ explains that servicing agreements do give a lot of leeway for servicers to modify loans:
The nation's mortgage servicers will help determine how many more billions this giant real-estate workout is likely to cost. Under their agreements with mortgage investors, servicers have latitude to decide whether to modify the loans of struggling borrowers or to sell their properties out from under them.

That's going to shut down the packaged loan market even more, now that investors see their juicy yields on ARMs negotiated away.

Jesus is a Blue Jays fan

Joe Kennedy, a 28-year-old pitcher and free agent, died overnight in Florida. Blue Jays president Paul Godfrey's reaction, according to the Associated Press:
"Godfrey said Toronto was interested in bringing Kennedy back."

Thoughts on the merits of contributing to Ron Paul

From the Daily Reckoning:

“We’re going to send Ron some money,” we announced to daughter Sophia last night.

“Why would you want to do that, Dad? You’re just wasting your money. Ron Paul is fine. I like him. Or, at least most of what I’ve heard about him. But he can’t win. What’s the point?”

“Winning is over-rated,” we replied. “You know what Gen. Washington said during the Revolution. ‘We can’t guarantee victory, but we can deserve it.’ Well, you can never guarantee anything. As it says in the Bible, ‘the race goeth not always to the swift, nor the battle to the strong.’ I guess people meant by that that there is a fair amount of luck involved in everything. But there’s something else. If you can’t know how things will turn out, what can you do? All you can do is to do the right thing. And I’ll give you another saying, since I’m getting warmed up: ‘Fiat justicia pereat mundus.’ I don’t know if the Latin is correct. But the sentiment certainly is: you follow the law even if the world should perish. I think the idea is the same for all of these things. All you can do in any situation is the right thing...not necessarily the smart thing. You can’t know what the smart thing is, because you can’t know what tomorrow will bring. But you can pretty much figure out the right thing. So, you do the right thing. You don’t necessarily get what you want. Things don’t necessarily go your way. But at least you will deserve success. And deserving success is more important than actually getting it. Doing the right thing is more important than doing the thing that turns out to be ‘smart,’ in other words.

“Well, what does this have to do with Ron Paul?”

“He’s the only candidate to come along – practically in my entire lifetime – who is worth voting for. He doesn’t believe in robbing people with taxes so some people can pursue their own crackpot world improvement project. And he doesn’t believe in going to war unless the country is attacked...and there is a declaration of war by Congress...which is what the constitution requires.

“All I’m saying is that you can vote for Ron Paul...and send him money...with a clear conscience. You haven’t been able to do that for a long time. Better take advantage of it.”

I contributed to Ron Paul on November 5th. And I'll do it again. You can contribute here.

Buy Nothing Day tomorrow

Tomorrow is a day to reflect on the excesses of our consumer society, and to buy nothing. Take a walk, bake a cake, read a book.

Celine Dion cancels concert over hurt feelings

Halifax locals: Celine Dion sucks, eh!
Celine Dion cancelled a concert in Halifax because local radio and newspaper reports continually insulted her, the singer's husband and manager Rene Angelil said Tuesday.

"When an artist comes to a place to entertain, the artist hopes people are happy," Angelil said by phone. "I couldn't understand that negative reaction."

He quoted a letter sent to the Halifax-based Daily News by a fan, upset at the press coverage.

"'This past week, I listened as call after call came into the local radio station that we didn't want Celine Dion to come to Halifax. What the hell is wrong with Haligonians?,'" he quoted.

Can we get her to cry on Larry King again? Take a kayak!

Win a great deal at Amazon

This is a cool promotion. It works for Amazon because they get a lot of people coming back to their site every day. And if you're a lucky winner, you get an awesome deal.

UPDATE 11/22: I didn't win the Nintendo Wii, which I would have resold on Craigslist. What I really want is the Panasonic camcorder tomorrow.

Things to be thankful for

Countrywide breaking $10.

That will put a bountiful feast on the Varones table this Thanksgiving.

Karma

Fannie Mae, the corrupt personal piggy bank for Clinton cronies, is taking a whacking this morning along with its twin, Freddie Mac.

I hope this will cool Chucky Schumer's schemes to use Fannie and Freddie in a massive government bailout of the mortgage industry.

abx

Online candidate matching

The morons at ABC News put together this online candidate match to help you find a candidate who supports your views. It gives no weight to what issues are more important to you, and it includes stupid questions that have no bearing on policy, such as "Do you prefer governors, senators, or congressmen?"

Glassbooth.org has a good one that doesn't ask such stupid questions, and weights the results based on how important each issue is to you. My match? Ron Paul, 85%. Next are Tancredo and Huckabee. But the Huckabee match is based on what he says, not what he's done. Huckabee claims to be a fiscal conservative, but governed Arkansas taxing and spending like a drunken Democrat.

Don't Shoot the Medic


Note Barry Bonds' deft use of international war conventions during his 2007 record chase.

Notes from the briar patch

Please, Elvira Arellano, don't go on a hunger strike! Anything but that!

Indecent indeed!

Imagine being exposed to this.

Couldn't happen to a nicer guy

Soros takes stake in Countrywide in 3Q.

How's that working out for you, Georgie? Not so well, huh? Kind of like how it worked out for Bank of America, huh?

Disturbing children's books


Three months too late

Bonds indicted.

Schwarzenegger screws California

San Jose Mercury news: California's deficit balloons to $10 billion amid slowing economy. And the $10 billion is an understatement. That's on top of a $4 billion reserve fund that California is blowing through. And that is still based on unrealistically rosy assumptions about tax revenues.

Just a few years after kicking Gray Davis out of office by railing against fiscal irresponsibility, Schwarzenegger has signed the most reckless budget in the history of the state. He has increased spending faster than Gray Davis ever did, and he has created the biggest budget deficit in the history of the state. And it's going to get worse. Just wait until lower property taxes from the real estate bust kick in.

The inimitable Hunter S. Thompson

The greatness of Hunter S. Thompson is illustrated by contrasting the miserable failure of this alleged "artist" trying to live the Gonzo lifestyle. First he was a total dick at Burning Man. Then:
September, it turns out, was a busy month for Addis. In its waning days he took his one-man Hunter S. Thompson show, Gonzo: A Brutal Chrysalis, to Seattle — and, on Sept. 27, that city's police department received a frantic call about a "man with a gun." After Addis' American Express card was refused at a Seattle hotel, witnesses told police he began "taking deep breaths" and clenching his teeth "like an animal" before muttering, "Heads are going to roll, and it's going to start here."

At this point, witnesses said Addis unzipped his duffel bag, slung a rifle over his shoulder, and stared at the terrified desk clerk for half a minute before packing away the gun and leaving the premises while bellowing into a cell phone. While onlookers and police believed the gun to be real, it turned out to be an air rifle. Addis spent the night in King County Jail and left the next day after posting $1,520 bail for misdemeanor charges of harassment and unlawful use of weapons. The air rifle remains in a Seattle evidence room.

Not exactly as Hunter would have done it. Flash a rifle, glare menacingly, and get arrested? What's Gonzo about that? Oh, and he also threatened to kill schoolchildren and got caught carrying explosives into Grace Cathedral.

Coke: The Pause That Refreshes

The Los Angeles Times reports on a study of addictions in rats (probably the next focus in our War On Drugs):
In the experiment, 43 rats were placed in cages with two levers, one of which delivered an intravenous dose of cocaine and the other a sip of highly sweetened water. At the end of the 15-day trial, 40 of the rats consistently chose saccharin instead of cocaine.When sugar water was substituted for the saccharin solution, the results were the same, researchers said.

Did it ever occur to them that maybe the rats were just thirsty?

Hollywood writers' strike

When two groups responsible for the modern television wasteland go to war, we can only hope for a multi-year standoff that devastates the industry and starves all the writers.

That said, the writers have struck a pretty good propaganda blow here.

Does the Blogfather read W.C. Varones?

W.C. Varones, November 5: It's the end of the world as Mozilo knows it ...and I feel fine!

Instapundit, November 11: It's the end of the world as Frank Rich knows it, and Jules Crittenden feels fine.

Countrywide post-mortem

From the New York Times: a tale of hubris, mismanagement, and appalling corporate governance.

Question

What happens when you get sustained price declines in the largest, most widely held, and most highly leveraged asset class in the history of the world?

Varones Presidential poll

Please take a moment to pick your favorite Democratic and Republican candidates in the polls at the right. Even if you violently oppose all candidates in one party, pick the lesser of all the evils. I've got a favorite in one party and a pretty good lesser of all evils in the other. Share your reasoning or support an unlisted candidate in the comments if you like.

What would China do??

While Helicopter Ben is busy flying the US Economy into a mountain, I think it's fortunate he's not the head of the Chinese National Bank. I would imagine that if he were responsible there for what he is responsible for here his family would probably be writing a check for the bullet they would rattle around his brain for destroying the economy.

I'm sure Ben will be lauded for "protecting" our economy while his predecessor has even received an honorary knighthood by the Queen. Strange how in America you can sleep with children, kill ex wives, and destroy the economy and nothing happens to you. I suppose all of those folks are glad they don't live in China.

Euphemisms

From Bank of America: Dumb investments = "market dislocations."

Fleckenstein on the Fed

Fleck on the disaster that is the Federal Reserve:
Why in the hell was the central bank easing the federal funds rate with (1) the dollar at a new low, (2) oil at $90, (3) gold at $800, (4) virtually every commodity on the planet going wild and (5), despite government statistics to the contrary, inflation raging?

...

The Fed's policy is to print money, print money and print more money. That's because of what then-Fed chief Alan Greenspan did for nearly 20 years. He bailed out every problem that came along, so we never had a small forest fire. Now we're getting set to have a giant forest fire.

...

At least somebody at the Fed had indicated to [WSJ reporter Greg] Ip that he was concerned about how the stock market would respond to the Federal Open Market Committee decision, which indicates how much the Fed is in the back pocket of speculators.

Running the Fed by trying to pick the right interest rate was never a good idea, but that's what Greenspan did and what Bernanke does now. An even worse way to run the Fed is to be 100% on the applause-meter standard, which seems to be the path we're going down.

Just to show you what a pathetic joke the Federal Reserve is, last week the Mexican central bank raised interest rates from 7.25% to 7.5% -- and the peso has been far stronger than the dollar lately.

How a humanitarian deals with cats

Blogmeister John Enright picks up the story of how Jimmy Carter shot his sister-in-law's cat with a shotgun, and left a note explaining that he was only trying to scare it.

Bush outsmarts terrorists yet again

ABC News:
The FBI is warning that al Qaeda may be preparing a series of holiday attacks on U.S. shopping malls in Los Angeles and Chicago, according to an intelligence report distributed to law enforcement authorities across the country this morning.

Won't the terrorists be disappointed when they get to the malls this holiday season and find nobody there! Silly terrorists. Try the bankruptcy courts if you want a respectable body count.

Hot potato, hot potato

Tanta at Calculated Risk has a great post on Cramer vs. Cuomo vs. eAppraiseIT vs. WaMu vs. Fannie Mae. The latter three are playing a game of hot potato with pools of fraudulent mortgages. Cuomo is shining a light on the sordid mess. Cramer is crying that if you drive the fraud out of the mortgage business, there won't be a mortgage business.

It's an enlightening post on the possibility of pushbacks from the investors onto the originators. That possibility is likely to be the end of Countrywide.

This W.C. Varones is your W.C. Varones

Some contributors have opined that recent W.C. Varones posts have crossed the boundaries of tastefulness. Specifically, we have compared Countrywide CEO Angelo Mozilo's pillaging of shareholders to raping a horse, and we have likened the Bernanke/Bush slow-motion default to murder by HIV.

It is the opinion of W.C. Varones that such metaphors are illustrative, but we do not wish to offend our loyal readers. Please vote in the poll on the right to state your preference as to whether these controversial references should be stopped.

Subprime Loses Aren't Quite Over Yet

I would like to thank the writers at the Wall Street Journal for updating the population on today's mortgage lending and associated debt status. The "sub prime loses aren't quite over yet." Sort of like saying hurricane Katrina is not quite finished 7 days before it hits New Orleans: sort of like saying 5 seconds into the Loma Prieta earthquake that it's not quite over yet: sort of like saying the terrorist acts of 9/11, before anything happened, is not quite over yet. In the realm of understatement and prevention of population panic, this is high on the list.

Aren't Quite

As a number of sites have pointed out, the majority of sub prime resets have occurred in October and will occur next March. By the time that all shakes out, "aren't quite" will mean "we's just getting fired up here brothers"......

Central Banking 101

Bernanke could take a lesson from Australia's central bank Governor Glenn Stevens.

It's official: the dollar is toast

China throws in the towel, no longer willing to put more money into a Bernanke'd currency.

The Slow Puncture

Back in my prison days, there was a term "slow puncture" that referred to a cruel way to murder another inmate. A "slow puncture" meant giving an inmate HIV, via means you can surely imagine, and letting him die a slow, painful death from AIDS.

When facing insurmountable debt, third-world countries give their creditors the equivalent of a shank in the shower: they default. Not the U.S. Facing insurmountable debt, the U.S. is giving its creditors the Slow Puncture. Sure, we'll still pay you the nominal dollars we owe you, but by the time you get them, those dollars will be so devalued you won't recognize them. We'll give you your 4.5% annual interest as you watch your principal decline in value far faster than that. The Slow Puncture.

The Chinese Treasury investing its trade surplus in the U.S.? They get the Slow Puncture.

Oil companies and countries putting their petrodollars into Treasuries? They get the Slow Puncture.

Little old ladies in Pasadena living on 2% Social Security increases as the cost of living rises in the double digits? They get the Slow Puncture.

Memo to Bernanke

Hot chicks don't like deadbeats.
Ben Bernanke is a married man. But if he weren't, there's at least one woman who wouldn't want anything to do with the Federal Reserve Chairman's policy charms: Gisele Bundchen. The Brazilian supermodel is reportedly now insisting that she be paid in a currency other than the U.S. dollar.

"Contracts starting now are more attractive in euros because we don't know what will happen to the dollar," the model's twin sister and manager in Brazil, Patricia Bundchen, told Bloomberg recently. The ubiquitous runway diva even demanded payment in euros when she signed a contract in August to promote Pantene hair products for Procter & Gamble Co., according to a Brazil magazine. Think about that one: She's willing to sell a U.S. product, but she won't accept payment in U.S. currency.


Bernanke has turned the U.S. into a laughingstock. Pretty soon Canadians will be hiring American illegal aliens to wash their dishes and mow their lawns.

UPDATE: Fellow blogger Negocios Loucos points out that Gisele is dating Patriots quarterback Tom Brady, a loser earning American dollars. How long before she dumps him for a Canadian?

It's the end of the world as Mozilo knows it...

... and I feel fine!

This news on WaMu is something I've been expecting for a while:
After lenders like WaMu originate home loans, they are often packaged up into mortgage-backed securities and sold to institutional investors around the world. The process gets the loans off the lenders' books, freeing them from the risk that those loans may default and also providing fresh cash to make more new mortgages.

But if parts of the origination process are found to be fraudulent, investors can potentially force lenders to buy the mortgages back at the original price. If the assets have suffered delinquencies and have dropped in value, the lender takes a financial hit.

If parts of the origination process are found to be fraudulent? Ha! Imagine WaMu or Countrywide trying to explain to a jury that making no-doc, no-money-down, cash-back, inflated-appraisal loans to unemployed 23-year-olds and then selling the loans to unsuspecting investors was not fraudulent!

WaMu and Countrywide have enough problems with the loans they still hold in their portfolios. If investors start forcing them to take back the garbage CDOs, it's Game Over.

Revolution calling

In honor of Guy Fawkes' Day tomorrow, please deliver a "money bomb" to Ron Paul:





Ron Paul is the only candidate in either party who has a clue about the U.S. debt crisis. Send him a contribution to help him get the message out.


Remember, remember the 5th of November.

Knight of the British Empire killed in Bayview

From the San Francisco Chronic:

Two men were shot dead and another was wounded in the Bayview-Hunters Point neighborhood, and three juveniles were shot in Oakland in a 19-hour whirlwind of violence ending early today.

One of the victims was wearing a bullet proof vest when he was shot in the head, according to Mayor Gavin Newsom.

...

The mayhem started just before 8 a.m. Friday when two men were shot at Garlington Court and La Salle Avenue, in the Bayview-Hunters Point district of San Francisco. Both were taken to San Francisco General Hospital, where one of the victims, listed as Sir Marcus Bibbs, 21, of San Francisco, was pronounced dead, according to a spokesman in the medical examiner's office.

There are three lessons here: first, congratulations to Mayor Gavin Newsom on the success of his San Francisco gun ban. Second, don't wear a bulletproof vest to a head-shooting contest. Third, don't call yourself Sir Marcus if you can't back it up with some vicious swordplay.

You know it's gonna get stranger...

New York Attorney General says Washington Mutual forced First American to provide inflated appraisals:

New York state's attorney general said Thursday that his office is suing First American Corp. for allegedly "colluding" with mortgage lender Washington Mutual to inflate the appraisal value of homes.

First American's eAppraiseIT subsidiary succumbed to pressure from Washington Mutual, also known as WaMu, to use a list of preferred "Proven Appraisers" who provided inflated appraisals, according to Andrew Cuomo, New York's top law-enforcement official.

Emails show that executives at eAppraiseIT knew their behavior was illegal but went ahead in order to secure future business with WaMu, Cuomo said in a statement. Representatives at Santa Ana, Calif.-based First American didn't immediately respond to phone and email requests for comment.

"The independence of the appraiser is essential to maintaining the integrity of the mortgage industry," Cuomo said.

However, First American and eAppraiseIT "violated that independence when Washington Mutual strong-armed them into a system designed to rip off homeowners and investors alike," Cuomo alleged.

Does this strike you as insane? Appraisals are there to insure that there is adequate collateral for the lender in case the loan goes bad. Washington Mutual is saying that they want to be defrauded!

That's like a bank asking its rent-a-cop firm to send old, feeble security guards who will fall asleep on the job. Not enough bank robberies here! Let's do something to encourage more!

Of course, it makes sense when you realize who got rich and who's left holding the bag. WaMu management got filthy rich in 2000-2006 from bonuses and stock options on inflated earnings. They don't care when all those loans go bad. The shareholders are left holding the bag. Sound familiar, Mozilo?
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