In legal documents in its federal case against Jeffrey Howell, a Scottsdale, Ariz., man who kept a collection of about 2,000 music recordings on his personal computer, the industry maintains that it is illegal for someone who has legally purchased a CD to transfer that music into his computer.
The industry's lawyer in the case, Ira Schwartz, argues in a brief filed earlier this month that the MP3 files Howell made on his computer from legally bought CDs are "unauthorized copies" of copyrighted recordings.
F___ them. I'm not buying any more CDs from RIAA members. Indie labels and band-produced CDs, sure. But I'll be damned if I spend one more dollar supporting the evil RIAA.
The essence of Minsky’s [Financial Instability Hypothesis] is that stability is destabilizing because capitalists have a herding tendency to extrapolate stability into infinity, putting in place ever-more risky debt structures that undermine stability.
Minsky had that exactly right, I think. McCulley, not so much. He's great at describing what's happened in the rear-view mirror, but he hasn't made any significant forward-looking calls. I went to a lunch where he spoke more than a year ago, and I pressed him on the unsustainable nature of Greenspan's serial bubbles. He seemed to agree with the premise of the question, but had no appreciation for the magnitude of the fallout that was to come.
It's not just houses. Joe Six-pack has found a way to get into house-sized debt on a car:
When Jennifer and Bobby Post traded in their 2001 Chevy Suburban last year for a shiny new Ford F-350 turbo diesel with an extended cab, it seemed like a great deal. Even though they still owed $9,500 on their SUV after the trade-in value, they didn't have to put a penny down.
The dealership, near the Posts' home in Victorville, made it easy; it just added the old debt to the price of the new truck and gave the couple a seven-year, $44,276 loan.
"New Jersey faces some of the nation's highest HIV rates among women."
That's why we call them put-option ARMs: the buyer has a free option to put the underwater house back to the bank! No money down, home values dropping, payments increasing -- hmmmm.... what to do????
Only the truly stupid would continue making mortgage payments on a negative-equity house. And only the truly stupid would have written these loans to buyers who had no skin in the game in the first place.
Mike Huckabee strode out to the strains of “Right Now” by Van Halen and immediately addressed the Bhutto situation, expressing “our sincere concern and apologies for what has happened in Pakistan.”
Apologies? I knew he was a no-good, tax-hiking, nanny-stater who raised his son to torture animals, but I had no idea he was capable of this.
It's about time. Greedy senior citizens think they can loaf just because they've paid off their mortgages. Well, I've got news for them. We're going to raise their property taxes. And if they can't or won't work, we'll throw their asses out in the street.
"How do you think a person feels who lives through the Holocaust and then the president of the Jewish Community Federation calls him Hitler?" Lipner, who was in Nazi-occupied Romania during World War II, said Monday. "I don't understand how, on a technicality, a person doesn't have a right to go to court and clear his name."Statute of frickin' limitations? How about the First Amendment, Hitler?
That's decidedly not the case in No Country for Old Men, which has lots of great scenery, acting, and action, but absolutely no point. It was very well made, and critics are calling it a masterpiece, but the problem is the story. There's just not much there. It's like Michelangelo spending years painting the Sistene Chapel to illustrate some guy walking into a bakery.
Old Zeke will probably like it. He liked Magnolia, a similarly artful and pointless movie.
For the past three years, China has been the financier that kept the American government well-funded. In 2004, it bought a fifth of the U.S. Treasury securities issued, a proportion that rose to 30 percent in 2005 and to 36 percent in 2006.
But according to U.S. government figures, in 2007 China has reversed course and become a net seller of Treasury securities. The U.S. Treasury said this week that China had $388 billion of Treasury bonds at the end of October, or $10 billion less than it had at the end of 2006.
Hang on to them hats and glasses.
The excellent business blogger Lee Distad posted this YouTube video, which many of you may be familiar with, as it's one of the most popular modern Christmas songs. Me, I'm a cultural idiot, so I'd never heard it before. But it's so good I have to pass it on:
George W. Bush on Thursday urged US financial institutions to take any write-downs resulting from the housing crisis “now” and to give investors more information about their financial health.
“Wall Street needs to...put it all out there for everybody to see. They need to have... the off-balance sheet [items]...put out there for investors to take a look at,” the US President said at his year-end press conference. “And if there’s some write-downs to be done, they need to do it now.”
I was directed by my HMO to an urgent care center. As I pulled up to the address, I knew the building well. It was a classic old San Diego strip joint that had closed recently. The signs had been replaced, but the cheesy/flashy design of the building belied its prior use. I wondered what kind of treatment I was in for. I expected something along the lines of Dr. Nick.
To my great relief and surprise, the staff was excellent, from the receptionist to the nurse and the doctor. Everyone was extremely courteous and efficient. Within an hour, they had me diagnosed, pumped full of 'roids and antibiotics, and on my way.
Thank God for competition and private practice in medicine. If I ever feel like that again, I don't want to stand in line waiting to face surly employees at the Deparment of Health and Motor Vehicles under HillaryCare or ArnoldCare.
One of Mike Huckabee's chief advisers has just attempted to clarify the Arkansas Governor's apparent equating of homosexuality and necrophilia.
In an interview with TPM Election Central, Joe Carter, Huckabee's director of research, argued that while Huckabee does think both fall in the category of "aberrant behavior," he's not arguing that they're the same and sees them as being at "opposite ends of the spectrum" of such behavior.
Opposite ends of the spectrum? Which one is at the bad end? And does it help if the body is still warm?
Today he has published letters that folks could use to email or mail to Senator Boxer one of the California Senators. They state what I have already emailed her about and I recommend the letter to anyone supporting this absurd "homeowner" bailout.
I want to offer one point about the issue - the entire theme of the housing and economic debacle is about creating an unsustainable economic reality. The housing market inflated causing the economy to inflate at levels that were not reasonable. And I wonder if Senator Boxer herself is fighting an unsustainable battle.
Sure she will receive massive donations from the corporate interests that are really being bailed out here but is she losing the population that votes for her at the same time? I have registered Republican for the first time and will vote against all of the folks representing me in congress; they all happen to be Democrats.
But ultimately is Senator Boxer also losing donations? I have already donated to Congressman Paul. I can afford to donate because I didn't enter into an absurd mortgage agreement. Is Senator Boxer going to get a dime from anyone whose house she is saving? Seems a bit unsustainable to me.
``Cash is available and we should use that in larger amounts, as is necessary, to solve the problems of the stress of this,'' Greenspan said. ``It's far less damaging to the economy to create a short-term fiscal problem, which we would, than to try to fix the prices of homes or interest rates. If you do that, it'll drag this process out indefinitely.''
Um, Mr. Greenspan, if we bail out those homeowners who borrowed beyond their means then does that send the message that everyone should spend beyond their means? If everyone spends beyond their means does that make for a healthy, sustainable economy? Does it really stop this process from dragging out? How's that work?
Of course this is all rhetorical, Alan Greenspan is obviously incompetent and I wish the media would treat him as such. He is not a celebrity; he is a senile old man who is responsible for fucking the US Economy and apparently he hasn't cum yet.
Schwarzenegger, who was elected to replace the spendthrift Gray Davis and "tear up the credit card," has instead decided to become the most reckless spender in California history, increasing spending 40 percent in just four years.
What's the truth of the situation? My money is on Kessler. He's got a long and high-profile career in public service. And the University of California has a long history of illegally fleecing taxpayers and students to line the pockets of administrators.
The Illinois attorney general launched a probe into the lender's business practices and may expand the investigation to examine how homeowners were approved for mortgages with payments they were unable to afford.Better late than never, I guess.
"We're looking at why people who appear to us to not be able to afford the loans they're in are in these loans and how Countrywide contributed to that," said Deborah Hagan, chief of the attorney general's consumer protection division, on Thursday.
A California probe is also under way, a state official familiar with the attorney general's investigation into mortgage lending practices said late Thursday on condition of anonymity, citing the confidential nature of the investigation.
Two-thirds of 1,500 Oregon attorneys surveyed by the Oregon Attorney Assistance Program said they'd had no exposure before law school to the day-to-day life of a lawyer; if allowed to start over, 30% said they'd choose a different field.
Citigroup's new CEO brings SIVs onto balance sheet.
Nice move, Vik. Nice to know that you're a Varones reader and take the advice to heart (unlike Verizon and apparently unlike Bank of America).
Sleazy Sandy Weill never would have done that. And timid Chuck Prince refused to.
A little honest accounting is a good first step in resolving the current credit crisis.
In any case, it isn't at all clear that more liquidity is the solution to what is fundamentally a solvency problem. The world isn't suffering from a dearth of dollars, but rather from the fact that mortgage and real-estate assets are worth much less than banks and homeowners once thought.
Even if you expect a recession, relying on the Fed as savior is a mistake. Monetary policy is only one economic policy lever, and it has to be used with care. The other, better tool is fiscal policy -- specifically a tax cut. On present Washington course, we are falling back into the 1970s' policy mix of easy money amid tax increases. Whenever the economy slowed in the 1970s, everyone clamored for the Fed to ease. The result was ever shorter recoveries amid steadily rising prices.
The better policy mix is the one implemented by Ronald Reagan and Paul Volcker that broke stagflation in the 1980s. The Fed restored dollar credibility and avoided asset bubbles, while tax cuts spurred incentives to work and invest. Even on Keynesian grounds, a tax cut now makes sense if you're worried that the housing recession will slow consumer spending. An across the board tax cut on marginal personal and corporate income tax rates would also attract capital from around the world, increase the demand for dollars, and thus make the Fed's job easier.
It's a great program. You contribute after-tax dollars, and then your money grows tax-free forever, and withdrawals are tax-free. The limit is $15,500 per year, like traditional 401(k)s, but $15,500 after-tax is equivalent to about $23,000 pre-tax in a high-tax state like California, meaning the Roth effectively allows you to contribute much more.
Further, many dual-income families exceed the income limits to use Roth IRAs. The new Roth 401(k) has no such limits, so it's the only way for high-income families to get money into Roth accounts.
Some advisers recommend traditional deductible accounts over Roth if you expect your tax rate in retirement to be lower than it is currently. This is, of course, unknowable. But if you think taxes will be lower in general in the future, you're not paying attention to what's going on with the deficit, Social Security, Medicare, and HillaryCare.
If your company doesn't offer the Roth 401(k), talk to the head of HR. Tell him he should be fired for gross incompetence.
It's also an indictment of the cowardly and ineffectual U.N. If there was ever a reason for an organization like the U.N. to exist, it would be Darfur. If the U.N. can't or won't do anything about Darfur, it's time to abolish the U.N. and replace it with something that's more than a bunch of European bureaucrats dining out in New York on the U.S. taxpayers' dime.
Obviously she was hired for other talents then financial market analysis. My message to her "Hey woman-used-to-being-on-her-knees, the banks you mentioned, LIKE Countrywide, LIKE Washington Mutual F#CKED THEMSELVES. It's not the government's job to bail them out at the cost of, literally, inflation." The FED didn't do enough, LIKE WHAT....EVER!
Now SLNM.OB recaps the story.
And there are more recent developments: the bank took his mansion onto its books after there were no bids at $1.8 million (the loan was for $2 million).
And the state has put a lien on Crisp and his wife for back taxes. Good luck with that -- blood from a stone.
"The freeze may apply to mortgages issued between January 2005 and July 2007 that are currently scheduled to reset between January 2008 and July 2010, said a person who has seen a draft proposal. Borrowers whose credit scores are below 660 out of a possible 850 and haven't risen by 10 percent since the loan was issued will be given priority.
Those with scores above 660 will be more closely scrutinized to determine whether they are eligible or must continue making payments under existing terms, said the person.
The message here is reward the irresponsible and the unethical. I cannot believe how contrary to what I thought America stands for this is.
So who exactly does our President and our Congress represent - the idiots and the crooks in the real estate industry, OR those who are educated and fiscally responsible? Those who save and don't over extend themselves because they understand the value of money and hard work? Of course that is a rhetorical question because our President is an an idiot and a crook.
But how exactly does the math work for freezing the rate? Will the conversion rate in 5 years make up for the lost revenue during those 5 years? Mr. President, if it was originally a loan for 2 years at 2% and 28 years at 10% to pay off a total of say $500K, then what happens to the total amount due if you change 5 of those years from 10% to 2%? 7 years of 2% and 23 years of 10% will not get you to $500K at least using the traditional math. OR do you alter the adjustment rate from 10% to 15% in which case the "homeowners" are still going to lose there house in 5 years?
Apparently I don't understand the new math that our president uses. I am looking forward to seeing the plan on how this is going to work. I fear that the mortgage owners will be compensated using tax dollars in which case we need to vote everyone out of office. Democrat, Republican, whatever, if this measure goes through, our entire government needs to be replaced.
Oh and because the government is going artificially keep houses off the market, my ability to purchase a home at a reasonable price is reduced because houses that should be on the market are not. I didn't take out the crazy loan because I understood and my reward is that I will have to wait longer for the real estate collapse.
One note to those $50K a year families that took out loans for $700K - "HEY STUPID, IDIOT BAD MORTGAGE HOLDERS, YOU STILL AREN'T GOING TO OWN YOUR HOME AFTER 5 YEARS UNLESS YOU WIN THE LOTTERY SO YOU BETTER START BUYING THOSE MEGA MILLIONS TICKETS NOW!"
The phrase "suicide bomber" is accurate and descriptive because it explains that the terrorist intentionally killed himself in the act of terrorism. A "homicide bomber" literally means anyone that kills with a bomb, including those that detonate bombs remotely and live to plant more bombs. The only bomber who's not a "homicide bomber" is one whose bombs don't kill anybody. The F-16 is, quite literally, a homicide bomber (to quote Michael Franti).
Would someone with a room temperature IQ at Fox News please stop this stupidity? It's like hearing a stubbornly ignorant President mispronounce "nuclear" over and over and over.
Australian Prime Minister won't let Environment Minister Peter Garrett speak about the environment.
Today I ran the hills of Torrey Pines at sunset. It was a homecoming. I've been away for years and seen six continents since, but today I returned to the trails where I first learned to run.
Farewell, beautiful Presidio. Farewell, Critical Mass. Farewell, rude blonde manager woman at the Civic Center Countrywide office. Farewell, Magnolia Pub on Haight. I'll be back to visit.
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.
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.
Alliance for American Manufacturing
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.
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!!!
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.
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.
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.
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.
I contributed to Ron Paul on November 5th. And I'll do it again. You can contribute here.
“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.”
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.Can we get her to cry on Larry King again? Take a kayak!
"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.
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.
I hope this will cool Chucky Schumer's schemes to use Fannie and Freddie in a massive government bailout of the mortgage industry.
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.
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.
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.
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?
That said, the writers have struck a pretty good propaganda blow here.
Instapundit, November 11: It's the end of the world as Frank Rich knows it, and Jules Crittenden feels fine.
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.
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.
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.
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.
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.
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"......
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.
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?
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.
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.
From the San Francisco Chronic:
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.
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.
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?
And to think we were buying it under $500 less than two years ago.
"Gold is not a real investment," they told us. "Gold doesn't yield anything," they whined. "Gold is not a legitimate asset class," they said arrogantly.
I hope they're enjoying their 5% nominal returns on a plummeting dollar.
Proctor & Gamble gave investors the earnings they expected but not the guidance they hoped for. The consumer-products company cautioned Tuesday that
mounting costs will crimp its margins next quarter.
In response to the rising costs, Procter & Gamble will raise price increases across its offerings. The move could throttle the company's sales. "With consumers now facing rising prices for many everyday items, this is cause for some concern, but given the strength of Procter & Gamble's brands, we think the company will succeed in passing through these price increases without sacrificing too much in the way of sales volume," said Morningstar analyst Lauren DeSanto.
Nope, no inflation here! Another 50 bps, please, Mr. Bernanke!
Some would say it already has.
Gold prices continue to skyrocket.
The Orange Midget predicts happy days for Countrywide, because if dollars aren't worth anything, people won't have any trouble paying their mortgages.
Some 4.41 percent of Countrywide's conventional first mortgage loans were delinquent as of Sept. 30, up from 2.57 percent in the year-ago quarter. For prime home-equity loans, delinquencies inched up to 13.5 percent compared to 13.4 percent.
The number of subprime loans that were behind in payments soared to 29.08 percent, compared to 18.32 percent in the year-ago period.
In the subprime loan category, 12.63 percent of the loans were behind in payments by 90 days or more, more than twice the year-ago rate.
Countrywide expects to "earn" 25 cents to 75 cents next quarter, because when people don't pay their mortgages, Countrywide counts the non-payment as "income" under the assumption that either the borrowers will win the lottery and be able to pay, or Countrywide will be able to foreclose and sell at 2006 inflated-appraisal, cash-back prices.
Corrupt former HUD Secretary Henry Cisneros leaves Countrywide's Board of Directors.
Facebook is everything that LinkedIn tried to be but couldn't. I've been on LinkedIn for a couple years, and found it sort of interesting, but never very useful. Join Facebook now, and avoid the LinkedIn IPO.
House prices are significantly over-valued in CaliforniaHow do you like them apples, homedebtors?
Our house price model indicates that Californian homes are 35-40% above the price range implied by current and forecast economic conditions (compared to 13-14% over-valuation nationally). As of August the median house price in California was $589K, but economic conditions support prices between $350-380K; material price declines are likely, in our view.
France, Italy, and German tried to remind the U.S. of this responsibility, but Treasury Secretary Paulson vetoed their statement.
SIV also stands for Simian Immunodeficiency Virus, the predecessor to HIV.
SIV was possibly transmitted to humans by people who screwed monkeys.
SIVs are commonly held by people who were screwed by monkeys like Mozilo.
when helicopter Ben decided to drop the FED Funds Rate while the rest of the worlds' major national banks were raising their lending rates, I decided to contact my voice in congress by getting a hold of Ellen Tauscher of the fighting 10th. I wanted to write my voice in Congress and say "HE LADY, Ben-o is goin' all medieval on the dollar and if he's not careful, he's going to drain every last ounce of it's value so that we are going to need wheel barrels of cash just to buy a loaf a bread, a la Germany 1933." I may have phrased it differently but the jist was please stop killing the dollar. Wall Street needs to sleep in the bed they made and it isn't the tax payer and the middle class who should finance their follies. In addition could you please give the currency printing presses a little break and tell the FED to actually raise the FED rate because the CPI value they are using to justify this action is the very definition of fraud.
So Congresswoman Tauscher replied, or should I say some uneducated democrat lackey replied. I certainly hope it wasn't Ms. T because if it was it means that someone without the simplest understanding of economics is voting for me in congress. So to keep faith in the system we will say this page replied with this statement about the 'relative worth' of the dollar:
Dear most valued constituent,
...To be sure, the hapless tax cuts and profligate spending policies of the Bush Administration have not strengthened our economy. However, other factors - including a decreased flow of international funds into America, extensive reliance on credit, and a lack of personal savings by many Americans - have also driven down the value of the dollar. The dollar's relative worth is most often a symptom of movements of capital between countries. As such, it is these flows, and the forces behind them, that are likely to determine the strength of our economy. Be assured that I will continue to work to implement policies that promote fiscal responsibility and inspire strong economic growth.
Now to be clear, at no point did I even suggest the problem was the Bush Administration, even though of course all administrations that choose to spend gagillions more then they bring in greatly contribute to the problem. I purely commented on 2 things: 1. the FED lowering the borrowing rate when their job is to protect us from inflation which that specifically does not and 2. STOP PRINTING SO MUCH GOD DAMNED MONEY.
Let's look at each factor that lackeyboytoy included:
1. Decreased flow of international funds into America - why would that happen? Because the dollar is weaker and they can earn more in foreign markets then in the US. SORRY that's the result, not the problem.
2. Extensive reliance on Credit - absofuckinlutly, except the way her boytoysexslave states it, it makes one think that she is actually referring to consumer credit and again it can't help, but the problem here is the liberal debt driven policies of our government's monetary leaders.
3. Lack of personal savings - hhhwwwwhhhaaatttt???? How does our populations' lack of savings impact the value of the dollar? So if we save more does that mean those dollars are out of circulation? OF COURSE NOT, the banks loan those dollars out to other folks so they can cash in on their home equity and get that dream pair of jet skiis with plasma tv's attached. So the dollars are in circulation meaning the new dollars printed, going into circulation dilute the value of the existing dollars and voila, we are seeing double digit percent increases in everything we need to live, which inherently means everything not counted in the CPI.
I am not endorsing our lack of savings of course. But I am calling out that she, sorry her sexboytoyfrombucknell, is suggesting that the population is the reason for inflation instead of the monetary policy makers who believe that the best way to support the rich is to destroy the middle class.
If this is my representative and this is what the Democrats think, and the Republicans are spending at lights out speed then we need a new party. How about the REAL CONSERVATIVES. Mr. Paul would you be available?
The dollar index, a measure of the dollar's value against six major currencies, was down 0.7 percent at 77.576. Earlier in the session it fell to 77.478, the lowest since its post-Bretton Woods inception more than 30 years ago.
Fortunately, the literary reference ended there. No guy in Members Only jacket, no cut to black.
Just a small town girl
Living in a lonely world
She took the midnight train going anywhere
Just a city boy
Born and raised in South Detroit
He took the midnight train going anywhere
A singer in a smoky room
A smell of wine and cheap perfume
For a smile they can share the night
It goes on and on and on and on
Don't stop believing...
But thinking about the greatest TV series ending of all time got me thinking about other great art. I know I've told you about Dogville before, but I also know that you're lazy and haven't gotten around to seeing it. Dimwitted movie critics will dismiss it as an anti-American rant from a European kook. But it's really a religious allegory about a vengeful God. And it's about the dark side of all humans, not specific to America. It's one of the greatest movies of all time, right up there with The Big Lebowski. Put it on your Netflix now, dammit.
"Our goal is to essentially broaden the pie that watches business news," said Kevin Magee, the Fox News executive in charge of the new business channel, which will be beamed into 34 million homes in the U.S. at first.If CNBC is too complicated for you, maybe business isn't your thing. Take up gardening. And don't we already have garbage like "Flip this House" on the other cable channels?
Magee wouldn't divulge programming details except to say it will focus on de-mystifying the financial world and attracting the average investor who may be put off by the way business news is presented.
Viewers are likely to see shows on saving for retirement or buying a house.
The ultimate fear: If banks need to write down more assets or are forced to take assets onto their books, that could set off a broader credit crunch and hurt the economy. It could make it tough for homeowners and businesses to get loans. Efforts so far by central banks to alleviate the credit crunch that has been roiling markets since the summer haven't fully calmed investors, leading to the extraordinary move to bring together the banks.
In recent weeks, investors have grown concerned about the size of bank-affiliated funds that have invested huge sums in securities tied to shaky U.S. subprime mortgages and other assets. Citigroup, the world's biggest bank by market value, has drawn special scrutiny because it is the largest player in this market.
Citigroup has nearly $100 billion in seven affiliated structured investment vehicles, or SIVs. Globally, SIVs had $400 billion in assets as of Aug. 28, according to
If banks are forced to take assets onto their books? Either it's a bank asset or it's not. If it's a bank asset, it ought to be on the books in the first place.
Did the idiot regulators learn nothing from Enron? Chuck Prince ought to be sharing a cell with Andy Fastow.
Bono runs around acting like he has a social conscience. Wouldn't it be nice if he called Mozilo up onstage and suggested The Orange One give his ill-gotten hundreds of millions to the employees and borrowers whose lives he's ruined?
But you're still in bed
And the California rain is turning red
Retail sales rose nationally in September, up 0.6% compared to expectations of 0.3%.
But not in California:
Based on sales tax revenue, it now appears that the California economy is in recession... September sales tax revenue was off 7% compared with last year.
What's the difference? Mortgage Equity Withdrawal. California is at the center of the housing bubble and the housing ATM bubble. No more cash-out refis, no more consumer.
And if you think that sales tax drop is funny, wait until you see how far below projections property taxes will come in over the next few years. Property tax revenues go up from construction of new houses and sales of existing homes at higher valuations. Both of which just stopped happening. And just as Arnie was ramping up spending!
And, to quote a late Californian singer, "We've only just begun..."
But I'm sticking with this one through the primaries. Why? Ron Paul is the only candidate who has a clue about the debt and inflation problem facing our country.
Read the transcript of the last debate here (or just skip through to the Ron Paul statements).
Sure, I'll vote for anybody in the general election who opposes Hillary's communist health care. But in the primary, I have the luxury of voting for someone who is honest and comprehends the big issues. How often do you have the privilege to vote for someone with those credentials?
"We're going to keep on praising together. I am confident that we can create a Kingdom right here on Earth."
CNN, of course, buries the quote below the fold in a story fawningly headlined "Obama: GOP doesn't own faith issue."
Subprime mortgage bonds created in the first half of 2007 contain loans that are going delinquent at the fastest rate ever, according to Moody's Investors Service.
The average rate of "serious loan delinquencies" in the securities has been higher than 2006 bonds, New York-based Moody's analysts Ariel Weil and Amita Shrivastava wrote in a report today. Serious loan delinquencies are those 60 days or more past due, including properties in foreclosure or already foreclosed upon.
"It is shocking what you see," said Kyle Bass of Hayman Advisors LP, a Dallas-based hedge fund that reported a 400 percent return on its bet the U.S. housing market would fall. "Anything securitized in 2007 has got to have the worst collateral performance of any trust I've seen in my life."
Apparently the bobbleheads in Washington are talking about creating a new Mortgage “CZAR” which is just what we need. I’m always in favor for more government especially when it means spending my tax dollars to help those who can’t read but get $500,000 loans when their income is $50,000 gross a year. Anyway......
My question is why the term CZAR? The last czar of
SO we name all of our important enforcer positions czar. Does that seem a little strange? Why not kaiser, or how about fuhrer or maybe kahn. Why can’t we have a Drug Kahn and Mortgage Kaiser?
And while we are at it, wasn't it Nicholas II who nearly bankrupted
Having suffered a barrage of negative headlines while battling to shore up its finances and shrink its work force of 60,000 by as much as 20%, the nation's largest home-mortgage lender is launching a PR blitz aimed at repairing its reputation. And it starts inside the company.
For the demoralized employees who remain, the new campaign means wristbands with the phrase "Protect Our House" and pep talks promising to keep "amply" rewarding the most successful among them amid a struggle with the sharp drop in mortgage lending as defaults soar and house prices decline.
Oh, yeah. Employees are going to love wearing wristbands as they fear the next round of layoffs and their evil orange CEO laughs on his piles of hundreds of millions of dollars from dumping stock and as news reports expose their sleazy lending practices.
Anyone not wearing a wristband is the next to go!
The Senate Banking Committee, in the celebrated Pecora Hearings of 1933 and 1934, laid the groundwork for the modern edifice of financial regulation. I suspect that they would be appalled at the parallels between the systemic risks of the 1920s and many of the modern practices that have been permitted to seep back in to our financial markets.
Although the particulars are different, my reading of financial history suggests that the abuses and risks are all too similar and enduring. When you strip them down to their essence, they are variations on a few hardy perennials – excessive leveraging, misrepresentation, insider conflicts of interest, non-transparency, and the triumph of engineered euphoria over evidence.
The most basic and alarming parallel is the creation of asset bubbles, in which the purveyors of securities use very high leverage; the securities are sold to the public or to specialized funds with underlying collateral of uncertain value; and financial middlemen extract exorbitant returns at the expense of the real economy. This was the essence of the abuse of public utilities stock pyramids in the 1920s, where multi-layered holding companies allowed securities to be watered down, to the point where the real collateral was worth just a few cents on the dollar, and returns were diverted from operating companies and ratepayers. This only became exposed when the bubble burst. As Warren Buffett famously put it, you never know who is swimming naked until the tide goes out.
Not that those idiots in Congress will understand it, much less act on it against the interests of their Wall Street campaign contributors.
I'm all for unregulated, free-market capitalism, but that's not what we have. What we have is no regulation, and an implicit government promise that the Fed/ GSEs /Bush /Congress will bail out the speculators any time they get in trouble. If the taxpayer is always going to be on the hook to bail out speculators, we need to regulate the risks we are signing up for.
The experts agree We're going Full MMT So start buying gold Mauldin Economics on the prestigious Camp Kotok economic gathering: ...
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There are very few financial problems that can't be solved by a suitable application of asset bubbles.