Greenspan's Body Count

Today's episode of Greenspan's Body Count begins in the Oregon town of West Linn:
More details are emerging in a relationship that ended with the husband killing his wife and then himself in a police department parking lot, officers said. [...]

Although neighbor Dusty Calliham said there was no indication Bill McMurtrey would turn violent, she said he was behind on his mortgage, was having trouble getting construction work and had recently begun drinking again.

Trouble paying the mortgage? No construction work? Common symptoms of the aftermath of Greenspan's housing bubble.

Alan Greenspan, these kills are yours.

And then in the Bay Area city of San Ramon, a realtor / mortgage broker fell on hard times and ended up allegedly having his business partner killed:
Reginald James Robinson had fallen on some hard times in recent years.

The 31-year-old El Sobrante man defaulted on his home three weeks ago, records show. Creditors had filed a pair of civil suits against him looking to collect money, and his real estate license had been revoked after he tried to open a phony bank account, which was connected to a messy divorce, according to state records.

Despite those stresses, an associate expressed shock that Robinson would be in jail on suspicion of arranging to have his business partner, Kashmir Billon, shot dead in the middle of an empty business park.

Robinson was arrested Monday on suspicion of soliciting the murder of the 42-year-old Billon.

I'd like to think Billon would be alive today if Robinson had gotten an honest, steady job instead of trying to get rich as a realtor in Greenspan's bubble.

Greenspan's Body Count now stands at twenty-five:

Kashmir Billon
Bill McMurtry

Lisa McMurtry
James Hahn
Raymond Donaca
Deanna Donaca
Michel Veillette
Nadya Ferrari-Veillette
Marguerite Veillette
Vincent Veillette
Mia Veillette
Jacob Veillette
Maurice Pereira
Natasha Pereira
Mark Achilli
Raed Al-Farah
Andrew Kissel
Rufus Shaw Jr.
Lynn Flint Shaw
Mr. Pierce
Walter Buczynksi
Marci Buczynski
Jason Washington

All you need to know about the housing bailout

They also prefer dim sum to dog shit

Some Chinese exporters prefer Euros to dollars

I wouldn't want to be paid in Bernankes either.

Dead man walking

Countrywide is under investigation for fraudulent loan origination in its "Fast and Easy" program: deliberately making loans to people who were obviously lying about their income. Today's WSJ:
A federal probe of Countrywide, the nation's largest mortgage lender, is turning up evidence that sales executives at the company deliberately overlooked inflated income figures for many borrowers, people with knowledge of the investigation say.

Some of the problems are surfacing in a mortgage program called "Fast and Easy," in which borrowers were asked to provide little or no documentation of their finances, according to these people and to former Countrywide employees. Both Countrywide and Fannie Mae, the government-sponsored company that bought many of the loans, classify the loans as "prime," meaning low-risk.

Fast and Easy borrowers aren't required to produce pay stubs or tax forms to substantiate their claimed earnings. In many cases, Countrywide didn't even require loan officers to verify employment, according to an October 2006 presentation by Countrywide's consumer-lending division. That left the program vulnerable to abuse by Countrywide loan officers and outside mortgage brokers seeking loans for customers who might have been turned away if their finances had been more closely scrutinized, according to three current and former Countrywide senior executives and to several mortgage brokers who arranged loans through the program.

This raises a couple of questions:

1) Countrywide then sold many of these mortgages to unwitting investors. Why aren't more of these investors filing multi-billion-dollar class-action suits against Countrywide for fraudulent origination?

2) With all this legal risk, why is B of A still apparently going ahead with the purchase of Countrywide?

I'll propose a possible reason for 1), which should encourage B of A to seriously reconsider 2).

Without the pending B of A transaction, Countrywide would likely be bankrupt already. If B of A were to walk away now, Countrywide would be in deep trouble. If you sue Countrywide now, you might not get much. Blood from a stone. Countrywide's mortgage buyers may realize that it's better to keep quiet until the B of A transaction, then sue the deep-pocketed B of A. Makes sense to me.


We get visitors

Three of the top 10 searches that bring people to the W.C. Varones Blog today:

3. piss wc
4. pissing wc
10. blog pissing

You people are sick.

Schwarzenegger: "Holy &^%@! Varones was right!"

Remember when we told you that California was screwed because Schwarzenegger is the biggest-spending governor in history and his budgets depended on the housing bubble continuing forever?

Schwarzenegger admits it: "Kahleeforneeyah is like totally doomed, and it's all my fault." Well, not so much the part about admitting it's his fault. Don't expect a lying weasel like Schwarzenegger to take responsibility for his actions. But he now says the budget is twice as bad as he thought.

There are no good solutions. They can't raise taxes, because they'd drive businesses out of the state and/or hammer consumers in a bad recession. They've already done a lot of accounting gimmicks and borrowing from the future, so they're running out of tricks there. Democrats are proposing anything to scare the public into accepting more taxes: mass prisoner releases, mass teacher firings, mass closures of state parks, etc.

Schwarzenegger's fiscal policy is a lot like Greenspan's monetary policy: it overstimulated the economy in the boom times, and it's going to cause Hell in the downturn.


Greenspan's Body Count: Golden Oldies

We missed this when it happened back in October:

[redacted at request of victims' family]

And this, also from October:
Deputies proceeded on foot to the residence and discovered a strong gas odor outside the residence. After checking further it was discovered there was a 1981 Cadillac Eldorado running inside a locked garage. Deputies breached the door and checked for any victims of the heavy Carbon Monoxide fumes and discovered the door to the tri-level home had been propped open with a rock.

The vehicle was turned off and the garage doors were opened before the deputies proceeded to another door outside the residence.

After deputies discovered the outside door from a deck on the 2nd level was locked they breached that door and discovered the body of Raymond Donaca, age 71. Along with Mr. Donaca were three Golden Retrievers that were also deceased.

The deputies continued to check the residence and found the body of Deanna Donaca, age 69 in the upstairs bedroom and another Golden Retriever at the top of the stairs who was deceased.

Deputies worked through the hazardous fumes and attempted to open the windows and doors of the home so they could investigate the scene. The Crook County Fire Rescue were called to assist after the deputies on scene began feeling sick from the carbon monoxide fumes.

Fire personnel brought a large fan and breathing apparatus for the deputies to use during their investigation.

At this time it is believed that the Donaca's committed suicide after attempts to save their home following a foreclosure notice left them believing they had few options.

And this, also from October:
A 12-hour standoff ended this morning with a north Houston man lobbing Molotov cocktails at Houston Police before taking his own life rather than vacate a home he'd lost to foreclosure.

James Hahn, a chemist, had told police he would not be taken from the home alive, said Capt. Bruce Williams, an HPD spokesman.

Greenspan's Body Count now stands at twenty-two:

James Hahn
Raymond Donaca
Deanna Donaca
Michel Veillette
Nadya Ferrari-Veillette
Marguerite Veillette
Vincent Veillette
Mia Veillette
Jacob Veillette
Maurice Pereira
Natasha Pereira
Mark Achilli
Raed Al-Farah
Andrew Kissel
Rufus Shaw Jr.
Lynn Flint Shaw
Mr. Pierce
Walter Buczynksi
Marci Buczynski
Jason Washington


Ali G does Shakespeare

A British satirist has translated 15 of Shakespeare's classic plays into chav speak.

Martin Bauam's updated version of Hamlet reveals: "Dere was somefing minging in de State of Denmark."

The Danish prince, who is re-named 'Amlet, asks: "To be or not to be, innit?", while Romeo pines for his "fit bitch Jools".

Mr Baum's other titles include Macbeff, Much Ado About Sod All, De 'Appy Bitches of Windsor, De Taming of de Bitch, Two Geezas Of Verona and All's Sweet That Ends Sweet, Innit.

I've never heard of "chav." Methinks it must be English for "Ali G."


36 months

Willie Mays Hayes
Hits like Mays
Runs like Hayes
Which is useful in prison
To protect his ayss

The $600 that saved the world

President Bush announces a little surprise: your $600 stimulus check is coming early:
"Starting Monday, the effects of the stimulus will begin to reach millions of households across our country," Bush said Friday in remarks on the South Lawn of the White House. [...]

"The money is going to help Americans offset the high prices we're seeing at the gas pump, the grocery store, and also give our economy a boost to help us pull out of this economic slowdown," Bush said.

Bush's emphasis on fuel and food prices differed from other comments he's made since signing the economic stimulus legislation, intended to aid the economy by boosting overall consumer spending - which accounts for roughly two-thirds of the nation's economic activity.

Bush has suggested the rebates could trigger a spending spree. "When the money reaches the American people, we expect they will use it to boost consumer spending," he said last month.

The change in language suggests that Bush realizes how asinine the $600 to save the economy was. Mortgage equity withdrawal was running at hundreds of billions of dollars annually. That's thousands of dollars every year for every man, woman, and child in America. That money is gone. You think a one-time $600 check is going to make up for that?

It's nice to see Bush's acknowledgment of reality: it's not a stimulus check; it's a partial refund for victims of Bernanke's inflation.

Congo travel advisory

Beware of penis theft:
KINSHASA, Congo -- Police in Congo have arrested 13 suspected sorcerers accused of using black magic to steal or shrink men's penises after a wave of attempted lynchings triggered by the alleged witchcraft.

Reports of so-called penis snatching are not uncommon in West Africa, where belief in traditional religions and witchcraft remains widespread, and where ritual killings to obtain blood or body parts still occur.

Rumors of penis theft began circulating last week in Kinshasa. They quickly dominated radio call-in shows, with listeners advised to beware of fellow passengers in communal taxis wearing gold rings.

Purported victims, 14 of whom were also detained by police, claimed that sorcerers simply touched them to make their genitals shrink or disappear.

Belated happy Anzac Day

We forgot to wish the Aussies a happy Anzac Day last week.

Sorry we missed all the fun!

Greenspan's Body Count: Premeditated Murder

Today's episode of Greenspan's Body Count does not contain the story of another victim. Instead, it relates to the motive and mindset of the man behind the killing spree.

In this weekend's Barron's, reporters find a rare copy of Alan Greenspan's Ph.D. thesis. The thesis discusses housing bubbles and their effect on consumer spending.

Greenspan's Body Count now appears not the result of negligence or incompetence on the part of the Maestro, but of malice. Years before he created the bubble with unprecedented easy credit, and years before he urged borrowers to buy overpriced homes with adjustable-rate mortgages, Greenspan knew what the outcome would be:
...the work's introduction includes a discussion of soaring housing prices and their effect on consumer spending; it even anticipates a bursting housing bubble. Writes Greenspan: "There is no perpetual motion machine which generates an ever-rising path for the prices of homes."

Greenspan's Body Count remains at seventeen:

Michel Veillette
Nadya Ferrari-Veillette
Marguerite Veillette
Vincent Veillette
Mia Veillette
Jacob Veillette
Maurice Pereira
Natasha Pereira
Mark Achilli
Raed Al-Farah
Andrew Kissel
Rufus Shaw Jr.
Lynn Flint Shaw
Mr. Pierce
Walter Buczynksi
Marci Buczynski
Jason Washington


Whole Paycheck - BEER

Now call me a softy for foods and drink that are different and exotic; I like Whole Foods. It's really close to my house and I love the bread, cheese and meat selection (this is Negocios here not WC). And I love their exotic beer collection. I love trying different beers.

So I just returned from there with a hearty IPA from Petaluma and my god, what has happened to the price of beer? Anchor Steam for $9.99 a six pack!?!? (Which ends up being be $11.00 because of the bottle tax, sales tax, and we're an incompetent government tax). The brewery is 24 miles away and they are charging that!?! I saw one six pack for $14.00 and I would say the majority of them were at $9.99.

I realize how trite this sounds in light of the world food shortages that are happening. My point in mentioning this is Whole Foods might a juicy short opportunity. My family has already stopped shopping there unless there is a dire need for the malted beverage or cheese from Eindhoven. But what happens when 10% of the population is without a job and inflation is pricing a six pack at $15.00; who's going to be going to Whole Foods? Something tells me Cambridge, Mass won't have all 3 of their stores by this time next year.

You should see what he does at a Lynn & Liz Cheney event

A man heckling First Lady Laura Bush and daughter Jenna outside the 92nd Street Y was arrested after he punched a wheelchair-bound girl whose parents had told him to shut up, authorities said Wednesday.


Shark kills swimmer at Felcher Cove in Solana Beach.
Fletcher Cove
I'm trying to figure out how this is Greenspan's fault, but it's not coming to me yet.


Investing on Planet Bernanke

Keep all the food lines movin'
Don't come crying for more
The signs were there
You should have
Bought connections before

Wall Street Journal: Ditch the money markets and stock the pantry, 'cause Bernanke is destroying the dollar!
Reality: Food prices are already rising here much faster than the returns you are likely to get from keeping your money in a bank or money-market fund. And there are very good reasons to believe prices on the shelves are about to start rising a lot faster.

The only thing I'd add is that you might want some guns and gold to go along with that. You never know who you're going to have to bribe or shoot when the shit goes down.


Taxpayers to bail out bad lenders

Congress wants to use your money to buy foreclosures that bad lenders won't sell at the market price:
Democrats pushed a $15 billion housing bill through a House committee Wednesday over the objections of Republicans who called it a government bailout.

The measure would send federal loans and grants to cities and counties hit hardest by the housing crisis so they could buy and fix up foreclosed properties. It passed the Financial Services Committee 38-26, mostly along party lines.

You're a responsible, hard-working citizen. You didn't want to lie on a mortgage application or sign up for some sleazy option ARM to buy an overpriced house in the bubble. What's your reward for such prudence? The Democrats want to make you bail out the Mozilos!

If this bothers you, join the discussion and sign the petition at AngryRenter.com.


Everything is Connected

Greenspan's easy credit orgy... corn fueling Hummers... global food shortages.

Some call it the Law of Unintended Consequences. Some call it the Butterfly Effect. I call it Everything is Connected.

We thought we could have an economy driven by ever-increasing consumption paid for by ever-increasing debt on ever-increasing assets. We thought negative consequences were a relic of the past in the era of The Maestro. We thought wrong.

Terrible to see those Third World food shortages and riots. But we're insulated over here, right? Wrong. Everything is Connected.

As T-Dub pointed out, Greenspan's Body Count may be turning into a genocide.

Skeptical CPA has some good posts today about the food crisis and its causes.

Greenspan with the dish!

To the extent that Easy Al inspired fast-money practices among friendlies across the pond, we can credit him with an unofficial assist in this story, dug up by reader Russ DoGG.

A loving mother who could see "no way out" of her family's mortgage arrears drugged herself and her two children before setting fire to their home, an inquest was told.

Linda Mulvihill Nicholas Mulvihill Carly Mulvihill

Not my fault

No, I didn't inspire this fire with yesterday's arson post.
A multimillion dollar hilltop home under construction in the gated community of Cielo went up in flames Monday.

The 7,400-square-foot two-story home on Camino de Arriba near Punto Del Norte was reported ablaze just before 6 a.m., said Rancho Santa Fe Fire Protection District spokeswoman Julie Taber.

When firefighters arrived at the house in the private gated community it was fully engulfed, Taber said.

The home was close to being finished and was not yet occupied.

The post went up at 5:16 PM, long after the house burned.


I don't like voting for aliens anyway

Headline from Monday's Wall Street Journal:
Boycott Mars Election

I guess you'd need an absentee ballot, in any case. (Btw, this headline appears only in the print edition -- Monday, April 21, page A8 -- which includes an abbreviated version of this article.)

Underwater on your mortgage?

Mortgage payment got you down? Negative equity giving you the blues?

The LA Times discovers the ultimate antidote to negative equity:
In what appears to be the latest symptom of the nation's mortgage meltdown and credit crisis, insurers, law enforcement officials and state agencies nationwide report a jump in home and automobile fires in the last year believed to have been set by owners unable to pay their debts. The numbers are small, but they're leading the insurance industry to scrutinize more closely what seem to be accidental blazes.

"We've seen a dramatic increase in this kind of fraud," said Dan Bales, director of fraud investigations at Mercury Insurance. "People upside-down on their house with variable-interest-rate loans, or upside-down on their cars, are pretty quick to burn their property right now."

Get arson when you get the blues
Hey, get arson when you get the blues
Get a gas can full of premium
Throw a match and just get gone
Get arson when you get the blues

Of course, for those with legal, moral, or safety concerns, there are milder remedies:
Joan Shaffer is turning in the keys of the north Phoenix Tatum Ranch home she bought with her daughter in late 2005. They put nothing down on the home, took out a loan that let them pay less than they owed each month and now their loan is $200,000 more than the house is worth.

"We paid $585,000. It was the peak of the market, but no one told us," said Shaffer, a real-estate agent from Colorado. "We would probably have to spend the next 20 years trying to get right on the mortgage. That's crazy."

I hope she sent a thank-you note with the keys. That's hospitality!

Jingle mail
Jingle mail
Jingle all the way!

Key rule for California (and many other states') homedebtors: while you are free to walk away from a purchase loan, most refinance loans are "recourse" loans, meaning the bank could come after your wages and assets if you try to walk. So don't refinance if you think you might want to play Jingle Mail some day.


He may have defecated on the First Amendment and made it illegal for citizens and private organizations to criticize politicians, but John McCain apparently didn't get the big money out of politics:
Sen. John McCain's campaign has announced that it is asking individuals to donate as much as about $70,000 to accounts that could help his campaign. The cap on donations to presidential candidates is $4,600 per election campaign.

The McCain campaign has established several fund-raising accounts that will collect large donations from wealthy individuals and parcel them out to national and state Republican parties that can spend the money to help Sen. McCain and other Republican candidates.

The message here: if you're a wealthy individual or corporation that wants to buy a politician, McCain and the Republicans will be glad to find ways to help you do it. But if you're an independent group that wants to criticize them, well, you're out of line.

Morning rush hour


You can say that again

Great moments in journalism

Greenspan's Body Count

Sometimes we're a little flippant about Greenspan's victims. Many of them don't inspire much sympathy. But we should remember that Greenspan has set in place a chain of events that causes truly horrible things to befall truly innocent victims, too.

In today's episode of Greenspan's Body Count, we learn about the Veillette family, where father Michel Veillette killed himself in jail while facing the death penalty in the murder of his wife and four children:
The investigation records do not identify a possible motive for the killings but shed light on financial troubles that investigators said the family faced. [...]

Veillette also told police that his wife had recently spent $10,000 to take their daughter Marguerite to California for modeling and that she had purchased a new car he said they couldn't afford.
Blowing $10,000 you don't have on modeling lessons for your kid... not exactly something people did under Volcker's Fed, is it?
They had not made their mortgage payments for two months, according to the records.
Doesn't sound like a 30-year fixed at 3x debt-to-income, huh?
Veillette said that if he ever were released from jail, he would have to declare bankruptcy.

"I got nothing. I had everything a year ago, went down so, so quick," Veillette said, according to one report.

May God have mercy on Greenspan's soul.

Greenspan's Body Count now stands at seventeen:

Michel Veillette
Nadya Ferrari-Veillette
Marguerite Veillette
Vincent Veillette
Mia Veillette
Jacob Veillette
Maurice Pereira
Natasha Pereira
Mark Achilli
Raed Al-Farah
Andrew Kissel
Rufus Shaw Jr.
Lynn Flint Shaw
Mr. Pierce
Walter Buczynksi
Marci Buczynski
Jason Washington


The Joy of SPACs

Some people are so smart, you just want to give them a bunch of money and say, "I have no idea what you're going to do with this, but I'm sure you'll make me a fortune."

Such was the genius of Nathan Leight and Jason Weiss of Terrapin Partners. Their brilliance shone like the sun.

Fortunately, a new investment vehicle allows mere mortals to give their money to gods like Leight and Weiss. That vehicle is the Special Purpose Acquisition Company, or SPAC. In June of 2007, Leight and Weiss formed a company called Aldabra 2 Acquisition Corp, and did an IPO with no business. People bought $400 million worth of this nonexistent business, with the knowledge that one day Leight and Weiss would figure out something genius to do with the money.

They did not have to wait long. In February of 2008, Leight and Weiss decided to buy a dying paper company and infuse it with their magical awesomeness. Brilliant! Ladies and gentlemen, I give you the new Boise Corp:

I can't wait for the IPO of Aldabra 3!

boise inc. bz

Is McCain Stupid?

...or just the perfect example of what is wrong with our "representative" government?

He spoke the other day at Carnegie Mellon University. He promised pretty much the same things all candidates promise. He did leave out any mention of the bible and the mighty JC which was very refreshing.

So I was reading his text and thinking, huh, how's that work, what, when I came across 2 paragraphs that exemplified him perfectly. He first said this:

"...And we must start with the subprime mortgage crisis, with the hundreds of thousands of citizens who played by the rules, yet now fear losing their houses. Under the HOME plan I have proposed, our government will offer these Americans direct and immediate help that can make all the difference: If you can't make your payments, and you're in danger of foreclosure, you will be able to go to any Post Office and pick up a form for a new HOME loan. In place of your flawed mortgage loan, you'll be eligible for a new, 30-year fixed-rate loan backed by the United States government. Citizens will keep their homes, lenders will cut their losses, and everyone will move on -- following the sounder practices that should have been observed in the first place."

Ok, so Mr. Reduce government is proposing that people who "played by the rules" are not held to those rules and the Government will pay for them to keep their homes. The people who lied about their income and got into loans they couldn't afford are now being given the chance to keep those homes? The Government is going to give them cheaper loans, WHILE I continue to rent and still priced out of a home because I am financially responsible? And the taxes I pay are going to back those loan?!?!

Ok that is just stupid and matches what the other 2 stupid candidates are saying. But it becomes insulting when he immediately follow up with:

"It's important as well to remember that the foolish risk-taking of lenders, investment banks, and others that led to these troubles don't reflect our free market as it should be working. In a free market, there must be transparency, accountability, and personal and corporate responsibility. The housing crisis came about because these standards collapsed -- and, as president, I intend to restore them."

In a Free Market?!?!.. "he will restore the transparency, accountability, and personal and corporate responsibility." He is going to have the US Government provide loans that could not be found in the Free Market to people who don't deserve the homes in the first place but support a Free Market. Um, ok...

Well I guess if you can call North Korea the Democratic People’s Republic of Korea then the US will be a Free Market under McCain.


Who says there's no such thing as progress?

Legal journey to begin for children removed from Texas polygamist compound

Better than Janet Reno's Barbecue, eh?

Big Brother watch

So I spend a lot of time at my favorite Starbucks. It's not my fault that it's next door to a whorehouse.

Your cell phone is transmitting your every move:
...just consider the nature of mobile phones, which are continually connecting to towers. Records are kept of every tower your phone communicates with. While it may not be as precise as true GPS, this information is being recorded any time your phone is on.

Leave Obama alone!

Help wanted

Realtors and mortgage brokers need not apply:

Like a lot of mortgage industry workers, Stush, 55, tried to get work in other kinds of financial services such as insurance, but he found a huge stigma attached to the mortgage industry that disqualified him from even being considered for many jobs.

"It's unjust. If you were in the mortgage industry for a long time ... employers think you're used to making so much money that you're not going to take $50,000 or $70,000 a year. ... They also think (mortgage lenders) are all money-hungry pigs, but it's not true. Employers are missing out on some really outstanding employees."

It's not uncommon to see disclaimers on Internet job postings that say: "NO REAL ESTATE OR MORTGAGE CANDIDATES PLEASE."

Hint: replace the "mortgage broker" time on your resume with something more respectable, like hooker or drug dealer.

HT: HousingPanic


The Black Hole of California gets a little blacker

Falling corporate profits gouge a wider hole in California budget:
California's budget problems deepened today as the state reported that tax receipts plummeted nearly $1 billion last month due to plunging corporate profits.

The news comes as the state moves closer to the July 1 deadline for lawmakers to close California's budget gap, which had earlier been estimated at $16.5 billion. There is little agreement in the Capitol about how to go about doing that.

We've only just begun. Sales taxes, property taxes, income taxes. All were enormously inflated in Greenspan's bubble, and now they are beginning to fall. Try to raise taxes to cover the gap, and you'll only drive more businesses out of this already high-tax state.

This is Governor Schwarzenegger's fault. He ran on a platform of budget reform, and then he turned his back on reform and became the biggest spender in the history of the state. He has painted California into a corner.

Let's recall Schwarzenegger and bring back Gray Davis. He wasn't half this bad.

Herbie Goes Bananas

Herb Greenberg, muckraking business journalist and frequent guest on CNBC, is hanging up his press pass and starting a research shop.

He's tried a similar trade before, selling an expensive premium tier service to hedge funds for TheStreet.com at the same time he wrote a free or cheap column for the general public there. Nice to be working for himself though.


Do as I say, not as I do

Treasury Secretary Henry Paulson says no government bailout for the housing market:
Governments "need to resist the temptation of price controls and consumption subsidies that are generally not effective and efficient methods of protecting vulnerable groups," Paulson said [...]

Paulson said price controls and subsidies "tend to create fiscal burdens and economic distortions while often providing aid to higher-income consumers or commercial interests other than the intended beneficiaries."

Oh, wait. He means that developing nations should resist the temptation to help starving people, not that the U.S. should resist the temptation to bail out lenders, realtors, and housing speculators.


At the REDC foreclosure auction

Yesterday I went down to the REDC foreclosure auction at the Del Mar Fairgrounds, just to see how these things worked.

There were more people there than I expected -- maybe 2,000 judging by a rough count of rows of chairs. The bidders at the back were so far back that runners in tuxedos had to jump up and down for them to attract the attention of the auctioneer.

They had a couple hundred San Diego area foreclosures for sale, mostly from far-flung areas like Oceanside, Chula Vista, and Alpine. A typical example was a 4-bedroom house in Oceanside with a "prior valuation" of $499,000, with a starting bid of $189,000. Like all of the properties I saw in the half hour I was there, this house attracted multiple bidders well above the starting bid. It ended up going for $335,000, plus the 5% "buyer's premium."

Jim Klinge has a professional's view of the auction.

Quote of the day

"Derivatives don't kill banks. People kill banks."
- T-Dub


Greenspan's Body Count: the Eleven

I know, I know. It's been rough going a week and a half without a Body Count update. I was jonesing as bad as you were. Fortunately, this morning's news brings us our fix. Today's victims: Maurice and Natasha Pereira of Lake County, Florida:
Deputies found a retired couple shot dead in their rented home Friday, victims of an apparent murder-suicide, a Lake County Sheriff's Office spokesman said. [...]

The Pereiras were new to the southLake County subdivision. They filed for bankruptcy in September, records show, and Circuit Judge Mark Hill was scheduled next week to hear a mortgage company's request to sell property in Tavares that the couple had defaulted on.

Court records show two other lending companies sued the couple last year, one accusing them of failing to keep up with monthly payments on a 2006 Cadillac De Ville and the other accusing them of defaulting on a property they had bought in Leesburg.

Congratulations, Alan Greenspan. These two kills are unquestionably credited to you.

Greenspan's Body Count now stands at eleven:

Maurice Pereira
Natasha Pereira
Mark Achilli
Raed Al-Farah
Andrew Kissel
Rufus Shaw Jr.
Lynn Flint Shaw
Mr. Pierce
Walter Buczynksi
Marci Buczynski
Jason Washington

We've mentioned before that we believe that we are vastly understating the true Body Count, as many suicides are kept quiet out of respect for the family. Even those press reports that do cover suicides often do not mention whether mortgage and foreclosure problems were troubling the deceased.

A recent local case is a perfect example of this. W.C. Varones Blog reporters are currently investigating the suicide of a prominent, high-income stockbroker and community leader who jumped off the Coronado Bridge. Was he overextended on a McMansion he bought at the peak? Did he lose millions of his clients', or his own, money on Greenspan's bubble stocks like Countrywide or New Century? Seems pretty likely, but we'd never know from press reports. In fact, the suicide was not even covered in the press. The only press coverage is an obituary that omits the cause of death. We only know about this case through personal connections. There are likely hundreds, or thousands, of these Greenspan victims across the country that go unreported.


Craigslist finds

Unfortunately I have be deported back to Mexico. I have only 2 weeks to sell all my things. Please call and make any offer on my things.
1992 Ford Mustang 5.0 White great condition, lowered, with rims - $2800
Low rider bike, beach cruiser ? - $80 \
Neon Corona beer sign - $50
Card ID laminate machine - $120
set 4 100 spoke dayton rims gold - $300

A Chinese perspective

So yesterday the SF torch run protest was thwarted by the SF officials by changing the route of the run. I know I was all set with my fire extinguisher. I wanted that FLAME GONE!

So protesters on both sides had to miss the stupid burning torch go by and had to find some other way to express their outrage/support of China.

This hit a little closer to home then I expected. I work at a firm that has a partnership with a Chinese firm. Folks from Beijing have been here for a few weeks; we are working on some projects together. I specifically work with a woman who headed down to the ceremony and asked me later what the big deal with Tibet was. She stated China hasn’t done anything to Tibet.

I forwarded her the Wiki page on Tibet and asked her if this information was incorrect. We were using our interoffice IM and I asked if she had seen the footage of Tienanmen Square in 1989. I asked if she knew what happened and she replied that it was against the law to TALK about Tienanmen Square. So I invited her over to my desk and showed her a Youtube clip.

Her response was sort of unexpected. First off she watched it over and over again. It is a Chinese speaking individual narrating the footage. Then she watched the BBC video. I then opened the Wiki page on the topic. She read it and started to cry. She said that they are told something totally different; that the students involved had left the country to study abroad.

The eye opening thing is that the Chinese government apparently REALLY DOES control the media. So the internet as we know it, thanks to Cisco, Yahoo and Google, is not possible in China. Kind of ironic that software and hardware icons of the so liberal Bay Area are contributing to the total ignorance and oppression of 1.3 billion people.

For the Chinese woman I feel sorry that I showed her the footage; ignorance is bliss. For Cisco, Yahoo, Google, and all other information providers that kowtow to the Chinese censors - GFY!


His bite was worse than his bark

New claims dog a murder suspect

Volcker to Bernanke: You Suck!

Paul Volcker, the greatest Fed chairman ever and the man who got us out of Jimmy Carter's stagflation 70's, tells it like it is:
"You don't have to predict it. We're in it." Thus did Paul Volcker respond to a question Tuesday about whether he still predicted a "dollar crisis" in the coming years. [...]

On the dollar, Mr. Volcker's blunt talk of crisis is a welcome tonic to the devaluationist consensus that now dominates Washington. The world has been staging a run on the greenback, with damaging results if it continues. Mr. Volcker noted that when "concerns about recession are rife," the central bank will be tempted to "subordinate the fundamental need to maintain a reliable currency" to the impulse to shore up a flagging economy. The danger is that you lose both battles, as the U.S. did in the 1970s, and wind up with stagflation.

The present climate, Mr. Volcker told his audience, reminded him of nothing so much as the early 1970s. Then as now, certain commodity prices were rising fast – he cited oil and soybeans as two examples. Then as now too, these were explained away as speculative price run-ups and not as a harbinger of a broader inflationary trend. [...]

Mr. Volcker also argued Tuesday that the Fed's strenuous efforts on behalf of the housing market risked looking "biased to favor particular institutions or politically sensitive constituencies," in this case the housing industry. He did not argue that no government intervention was warranted – the crisis was, he said, "too threatening" for the government to stand aside.

But the Fed has a particular duty to defend the integrity of the "fiat currency" in its charge. And exchanging dollars for "mortgage-backed securities of questionable pedigree" both raises the specter of moral hazard and potentially undermines the world's faith in the integrity of the Fed's balance sheet. Unless the Fed can shut the door it opened with its guarantee of $29 billion worth of Bear Stearns paper – which "seems highly unlikely," in Mr. Volcker's words – it will have to take on oversight of the institutions it is now implicitly back-stopping.

Imagine the sadness of a titan like Volcker seeing his office debauched by imbeciles like Greenspan and Bernanke. Ronald Reagan was lucky in comparison: he was deep in an Alzheimer's haze before having to see Dubya in the Oval Office.

Olympic torch comes to San Francisco

Make me proud, Friscans.

The Frenchies did.


W.C. Varones receives WSJ mention

Our "Greenspan's Body Count" feature was mentioned in the front-page article His Legacy Tarnished, Greenspan Goes on Defensive of the Wall Street Journal today:
Anti-Greenspan sentiment has cropped up on blogs such as The Mess That Greenspan Made and Greenspan's Body Count, the latter a tally of deaths purportedly linked to the real-estate bust. Hedge-fund manager William Fleckenstein's book "Greenspan's Bubbles: The Age of Ignorance at the Federal Reserve," released in January, is now in its fourth printing.

... and linked in this online interview:

While Alan Greenspan's memoir, "The Age of Turbulence," has sold one million copies, anti-Greenspan sentiment is also cropping up in bookstores and on blogs. See some recent examples:
"The mess that Greenspan made" by blogger Tim Iacono. With posts dated since 2005, if follows daily news about the credit crisis underlying where Mr. Greenspan's policies are mentioned.
"Greenspan's body count" is a recurring feature of W.C. Varones' blog that tracks "mortgage-related" suicides. (http://wcvarones.blogspot.com/)

Welcome, Wall Street Journal readers. Please come back often for news of finance, housing, politics, the odd, and of course, further updates to Greenspan's Body Count.


Soon to be in foreclosure: Mortgage Bankers Association headquarters

Apparently, they even tried to fool themselves:
Critics also see irony -- and some justice -- in this predicament. "They are certainly getting what they deserve," said Dean Baker, co-director of the Center for Economic and Policy Research, a liberal research group. "Mortgage bankers encouraged people to take out mortgages that were very risky, and the result of that was a large number of the mortgages went bad and caused mortgage interest rates to soar. Now they are the victims of high mortgage rates and chaos in the market more generally."


Tales of shame and degradation

Last week I related the story of a friend who's looking to buy a foreclosure with no money down for far less than the current loan. I wondered whether the bank would replace a loan gone bad with another high-risk, no-down loan.

Now Slate tells us that, if the bank is Countryfried, my friend is probably in luck:
When it comes to its own foreclosed properties, that's most assuredly the case. Take this two-bedroom starter house in San Diego's Linda Vista subdivision: a Countrywide foreclosure that sold for $330,000 in August and was financed again with a 100 percent mortgage from the folks at Countrywide. Or the house in Palm Springs, Calif., that sold not long afterward, in September, for $275,000. Who knew you could get a house in Palm Springs for less than $300,000? Even better, according to mortgage records, the new mortgage from Countrywide was for the full $275,000.

The rub, of course, is that in the heady days of mortgage free love, all those zero-down mortgages tended to come with unpleasant side effects, such as high interest rates and prepayment penalties. And they often went to people who, not being able to afford to put any money down, were very optimistic about how much they could pay each month.

We won't know for a while whether the loans in this go-round are any less toxic than the ones that came before. But if the experience of other booms and crashes is any indication, there's every reason to think that however low standards went on the way up, they can go even lower in the last ill-fated efforts to keep the game going on the way down.

This is a mixed bag for transparency and resolution of the of the financial crisis. Yes, Countryfried is taking big writedowns as it sells at a big loss, but it's originating the new loans on terms that no sane lender would ever make in normal circumstances. If property values continue to fall, these zero-down buyers will have every incentive to walk away, starting yet another round of foreclosures and writedowns.

FASB to smack down banks on securitization?

This is a little too wonky for me, but it sounds like FASB is going to remove Qualifying Special Purpose Entities (QSPEs) from FAS 140. This could have a significant effect on securitization.

First, here's a little background from Calculated Risk.

Here are the original sources for this week's news:

Meeting Agenda.

And audio of the discussion at the meeting.

Keep all the food lines moving

Don't come crying for more
The signs were there
You should have
Bought connections before

Rice jumps as Africa joins race for supplies:
Rice prices rose more than 10 per cent on Friday to a fresh all-time high as African countries joined south-east Asian importers in the race to head off social unrest by securing supplies from the handful of exporters still selling the grain in the international market.

The rise in prices – 50 per cent in two weeks – threatens upheaval and has resulted in riots and soldiers overseeing supplies in some emerging countries, where the grain is a staple food for about 3bn people.

Kamal Nath, India’s trade minister, said the government would crack down on hoarding of essential commodities to keep a lid on food prices. "We will not hesitate to take the strongest possible measures, including using some of the legal provisions that we have against hoarding," he said on Friday.

Last year it was a corn shortage in the Americas as some pinheads in the U.S. decided it would be a great idea to use food crops as fuel for SUVs. This year it's a global rice shortage for a lot of reasons: conversion of agricultural land to other uses, rain shortfalls, population growth, rising consumption in poor countries, etc.

Interesting times, indeed.


And you thought crime didn't pay

Clintons: $109.2 Million in 7 Years

True, it's not illegal. But it should be. Book deals and seven-figure speaking deals are an easy way to pay politicians after they leave office for favors performed while in office. Yeah, Reagan got a couple million from Japan. But grifters like the Clintons take it to a new level.

You would too

Report: Stabenow's husband paid prostitute in sting


Boycott Pizza Hut

They suspended an employee for exercising his Second Amendment rights:
A Des Moines pizza driver who was suspended from his job after he shot an armed robber said today he has been overwhelmed by support from people who cheered what happened.

“But no one had contacted me directly about a job offer,” said James William Spiers III, 38, who was sent home by Pizza Hut managers after he fired multiple shots at a man who put a gun to his head Thursday and demanded money outside the Sutton Hill Apartments, 2100 S.E. King Ave.

No more Pizza Hut at the Varones household. I like Taco Bell, but they're owned by the same company. Might boycott them too. Give 'em an earful at 1-800-948-8488.

HT: Misha.

Competitive devaluation begins

You knew it couldn't last -- Euro Currency Board resolve to defend their currency as the Fed destroyed the dollar. Airbuses just aren't competitive against Boeings when the dollar is 50% off.

So the competitive devaluation begins.

Euro falls on speculation European consumer demand faltering, ECB may cut rates.

And continues.

Singapore May Slow Currency Gains to Aid Exporters at Expense of Inflation

What to do when countries around the world get into competitive devaluation to make their exports attractive? Hmmm.... what's the one store of value that dirty central bankers can't print? That's right, GOLD! And it's 10% off its recent high -- a perfect buying opportunity for you.

As the Realtors used to say, "Buy now or be priced out forever."


Greenspan's Body Count

Two Body Count updates in one day. The pace is picking up.

Let me introduce Esequiel "Paul" Garcia, a mortgage broker and real estate agent who's just been arrested for the execution-style murder of a business associate:
Garcia, a 1996 Bellarmine graduate and a longtime coach of the school's freshman football team, earned his bachelor's in business administration from San Jose State University in 1999. While working, he went on to earn a master's degree in human resources administration from the University of San Francisco in 2003.

Soon after, Garcia, embarked on his real estate venture and friends say he talked regularly about his success "flipping" houses - buying them, improving them and then selling them for profit.

It was about this time, public records show, that Garcia began taking out big-dollar real estate loans. In the year and a half before his transactions with Achilli, and as the subprime mortgage market began its meltdown, records show Garcia borrowed more than $2.5 million, either pulling out equity from homes he owned or borrowing against equity in property he was buying.

Several of the loans appeared to have adjustable rates, and one transaction, for a $1.45 million home in Discovery Bay, appeared to have been purchased with no cash down at all. It was not known where any of the loans stood Tuesday. Garcia's attorney, Harry A. Robertson, did not return a call and a message seeking comment.

Never mind that Greenspan's bubble was obviously the cause of his mortgage problems. He never would have been in a financial position to have done any business with, or even met, the victim without Greenspan's funny money. Alan Greenspan, this kill's for you.

Greenspan's Body Count now stands at nine:

Mark Achilli
Raed Al-Farah
Andrew Kissel
Rufus Shaw Jr.
Lynn Flint Shaw
Mr. Pierce
Walter Buczynksi
Marci Buczynski
Jason Washington

Tales of shame and degradation

I talked to a friend today who's putting a stink bid in on a foreclosed home in Fallbrook, a remote part of San Diego County.

Current bank loan: $505,000. Days on market: 100. Bid: $340,000. Down payment: $0.

Yes, zero-down was what got the banks into this mess. But I wouldn't be surprised if they hit the bid just to turn an REO into a performing (at least for now) loan.

Greenspan's Body Count

Of course, Greenspan's victims are not only those whose misfortunes in the real estate bubble drove them to suicide. There are also those who were driven to murder or attempted murder.

Today's episode of Greenspan's Body Count brings two cases from Michigan: one that got away and one that didn't. First, the one that got away:
William L. Harshman, who allegedly stabbed Lisa Heintz in her home in December, filed a suit last month alleging the Heintzes stole $90,000 from him as part of a mortgage scam, said Haley, his attorney.

Harshman, a former Mott Community College professor, is charged with first-degree home invasion and two counts of assault with intent to murder in the alleged attack on Lisa Heintz while the family was readying for a move to Florida. Heintz received non-life-threatening injuries.

Haley said Harshman's suit contends the Heintzes were assisting him in securing two mortgages for a home in Grand Blanc. When Harshman tried to refinance the mortgage, he discovered that the Heintzes had actually opened a line of credit that Harshman had to pay back, Haley said.

Heintz and her husband are now missing, and apparently on the run, with millions of dollars in foreclosures and lawsuits in an apparent straw buyer ring in their wake.

Now, one that didn't get away:
Bashar Farraj, 28, of Detroit, and Samer Fawaz, 30, of Dearborn, were found guilty by a jury that deliberated about 10 hours Thursday and Friday following a nearly 5-week trial.

Prosecutors argued the pair killed Raed Al-Farah, 27, of Madison Heights on Oct. 16 or 17 in the offices of Michigan Mortgage in Sterling Heights, likely by striking a blow to his head.


Motive may have revolved around a federal investigation of mortgage fraud involving the victim and defendants, the prosecution said.

Alan Greenspan, this kill's for you. Your housing bubble created a massive wave of mortgage fraud across the nation, and some mortgage frauds don't end as amicably as others.

Greenspan's Body Count now stands at eight:

Raed Al-Farah
Andrew Kissel
Rufus Shaw Jr.
Lynn Flint Shaw
Mr. Pierce
Walter Buczynksi
Marci Buczynski
Jason Washington

Thanks to Russ DoGG for the tips!

Happy Super Tuesday!