The squeaky wheel

which groans the loudest ain’t necessarily the one that should be attended to.

It seems the elected representatives of our once fair nation believe they are doing right by buying votes, showing the broad populace they are indeed on top of the crisis.

At-risk folks are screaming loudest,  yet the fault lies at their feet.

They are not the majority.

They are an ailing minority.

And once the cause of their troubles go away, so will their squealing.

Meantime, we have “leaders” who are pandering to the wrong segment.

The prudent, the frugal, the solvent, the smart, the upstanding, the realistic, the cautious, the ones who actually get out and vote- are all watching, and taking down names and numbers.

By not interfering in the debacle interference started in the first place, the market will cycle naturally, which will allow those people with sufficient funds to (finally) afford a home.

Interrupting the flow only serves the undeserving.

Let’s see who gets re-elected come November.
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“The market here is very different…” -The most persistent delusion of all.

Hmmmfest

Dollar sinks to a new low against euro (.66).

A new ice age upon us?

Oil is at a new high.

And despite the (bad) news, somehow Wall St. DJIA is up again. Is the PPT in action?

The next bubble: alternative energy? Nah, not sexy enough. Not feasible either.

Analogy o’ da day (On the monoline/duoline bailouts by banks):

This is like you getting into a car accident, calling your insurance company, and having them tell you that you need to loan them some money in order for them to help you out.

Beggar nation? At what point do beggars realize that big daddy ain’t got no more no more?

Hell, I coulda told them that

if only they had asked:

Prozac, used by 40m people, does not work say scientists

Analysis of unseen trials and other data concludes it is no better than placebo 

Assclowns on parade

Ladies and gentlem, I introduce to you the Federal Homeowner Preservation Corporation.

BofA wants banks bailed out. Hell, everyone wants to be bailed out.

I thought bail was for those accused of wrong-doing?

What happened to the free market anyway? I thought everyone was so jazzed about that, since, at least, Ronny Raygun. I guess in their wallets hearts they do want a free-market, up until they FUCK IT UP.

The NYT sets them up, and Mish takes them down.

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Nationalize Housing? WTF?
Essentially, the bail out as proposed by BofA transfers the bad loans banks made- which they made lots of money on in fees BTW- into the above named (new) government entity who will take the loss [BOHICA] – because the banks wants to be paid more than the homes are worth, and the market still has a (LONG) way to fall. (If the banks didn’t think the housing market was heading down, do you think they would be proposing a bailout?)

There’s a primo opportunuity here for a whole lotta more fees to be charged too, no doubt .

We learned the hard way that war-mongering neocons had influence (hey, who elected them anyway?), but who knew the Bush regime and congreff was chock full of national socialists as well?

It is just a proposal, but really, does anyone think for a minute that the banks will be denied?

I didn’t think so.

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Of course everyone and their loan-defaulting brother-in-law has a plan, man.

Might I suggest the best plan is the first line of the Hippocratic Oath: “First, do no harm”"

It just fits.

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Wall Street: privatising gains and socialising losses since 1907.

Linkfest

• Stuff White People Like [blog]

• The Secret History of the Credit Card [viddy]

• Part of Salton Sea’s desolate shore made into a lush oasis [latimes]

• Why a mortgage is a raw deal  [a nice rant]

• The breakdown of Wall Street alchemy [Asia Times]

• Porn blogging? [NSFW]

• CarMD

• Government’s only fiscal truthteller to quit

• McFeng Shui

• Usenet’s second wind

• Investing in Defense

• Nietzsche Family Circus

• Antelope Valley Confidential

• West Texas Land

• Ten things you chould know abut databases

My browser tabs are now hereby cleared.

Dirty little secrets

As Housing Panic correctly points out, whenever the homedebtor pays only the monthly “minimum payment” on their NegAm loan:

GAAP allowed the holding bank to recognize the shortfall in what was owed every month as NONCASH INTEREST INCOME.

And thus a nominal loss shows up as profit. Alchemy lives!

I wonder if it would be a worthwhile undertaking: identify and add up all the slanted or bogus metrics that are used in the calculation of executive bonuses [See: Enron, Worldcom, Tyco, Global Crossing, KPMG, Arthur Anderson, United States of America]?

From Wikipedia:

It outrages a lot of folks that the neg am balances, which represent interest that has been earned but not paid, is considered noncash interest income.

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Fungible is as fungible does
And if you are in the CDO market, it doesn’t.

Nothing like a frozen system of debt investing in the middle of winter to bring on a case of the blues. Pass the sauce! I need me a Bergie(tm)!

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Wagers now being accepted
Odds are 10:1 that lame-duck Bush will be “convinced” to bailout the banks exposed to risk.

So much for autonomy; they want their mommy’s teat <sniff>.

Jess Unruh’s said it first: money is the mother’s milk of politics.  Truer words, and a new slant on them too.

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Separation anxiety
Who knew so many Americans were addicted to the mother’s milk of home equity lines of credit?

All winners, to a man/woman.

“I didn’t know they could do that. I thought I was too smart to have something like this happen to me.”

–

Statistics
Lies and damn liars

Ever get the feeling you’re being cheated?

By lying about the CPI by conveniently changing the metrics to suit (Richard Feynman warned about this dd he not?) the gummint gets to show how good a job they aren’t doing, and the payout to social security recipients means less not more dog food.

Job’s a good ’un -or- I smell trouble’s afoot lads?

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Stealthy is unhealthy
With all this stealth activity- greedy corporate goons conducting deals in the shadows with government dupes to save their own FUCKED asses- who do you suppose is being hung out to dry, d’ya think? Hmmm? The little guy? Joe Middle Class? You? Me? Our feeble parents and grandparents who played by the rules and now get their pooches screwed and asked to love it?

I didn’t ask for any goddamn $300 check to buy my vote. And I didn’t hear the public clamoring for this buyout – but what else would you expect a politician to come up with when they run out of ideas but turn to the corrupt practices they are most familiar with?

If you endorse that check, BTW, you are signing away you’re rights (and hope) to seeing effective governance in your lifetime.

Don’t sell out so cheaply! Hold out for more!

It all goes downhill from here!

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“It is easier to rob by setting up a bank than by holding up a bank clerk.” – B.Brecht

No bidders

No fun. [WP]

Tumbleweeds roll by. “I wonder what the Maytag repairman is up to these days?” thinks the auctioneer. “Maybe we should do lunch.”

–

The beat goes on
Of course, not everyone feels intimidated by the mortgage lender and the documents full of legalese.

Some people- correctly- point out to that in order for the lender to foreclose, they need to show proof they are the actual owner of the home.

[Bloomberg]

The mortgage loan for many homes sold in the last few years were bundled together with other loans, and sold as securities- and resold, perhaps many times over.

Apparently, during boom time, the paperwork wasn’t always completed.

Free rent for many years for the more savvy deadbeat out there.  ReeeeSULT!

–

You know, I believe I have pinpointed the cause of this entire RE/Debt debacle now cutting the throat of this once great nation of ours.

The culprit?

Incomprehension.

How so?

Weeeeeelp, did anybody borrowing that much money fucking bother to read their loan docs? Did investors bother to read whatever document explains the securities they were about to invest in (c’mon there has to be something, otherwise DON’T FUCKING PUT YOUR MONEY THERE)? Did lenders, who accepted docs from mortgage brokers, bother to read what was potentially damning evidence of a future default, right there, in black and white?

Of course they could not be bothered. But if they did, all this brouhaha mighta woulda never have happened.

An individual who dives in the deep end without looking to see the depth of the water is potentially going to break his neck.

But if they did read it, but failed to understand it because it was too complex, but then went ahead with the transaction anyway… well, whose fault is that?

Another word that comes to mind- negligence.

Remember, folks, the job isn’t complete until the paperwork is done (the image on the right should be a sufficient reminder).

I think there is a meme developing here.

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“The market here is very different…” -The most persistent delusion of all.

Top Ten reasons John McCain…

… should not become president.

Did you know, or do you recall, that he was one of the Keating 5?

Considering the so-called subprime crisis has eerie similarities to the 80’s S&L crisis, well, it’s like deja vu all over again. [Keating]

…and there’s a Bush around here somewhere, I can smell him…

Of course, nothing will come of it, and nobody will go to jail, and he still might (fat chance) become president.

His total lack of financial and economic knowledge notwithstanding (hey, it makes him the perfect dupe).

(See quote at bottom.)

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The subprime mess, the credit crunch, junk bonds and thou
It all started with Milken.

Looking back, few would doubt that high-yield bonds helped to democratize corporate finance and began to shift power from banks to capital markets as the primary intermediary between savers and borrowers. Through the magic of the leveraged buyout, these junk bonds helped to make companies more responsive to shareholders and laid the foundation for the growth of private equity.

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“In the United States, the only respectable form of socialism is socialism for the rich.” -John Kenneth Galbraith

The entire organism is infected

I don’t know what color the pill the folks in the financial sector swallowed en masse, but I hope for their sake at least it provided a decent, if temporary, high.

I know they made bonus, so huzzah and hurrah- you’ll always have that.

Coming down isn’t going to be pleasant. And as it turns out, a number of those little colored pills released a bacterial agent that will leave the body shell intact and the host functioning… while it rots from the inside.

Oh yes, the patient knows, but how well can he keep it secret from his colleagues, who can only suspect? In fact, he can keep coming to work as if nothing happened, until, well, until he can’t anymore.

Pleasant, huh?

Jonestown is not a model for a how a modern financial system ought to be- oh, wait, yes it was. -Ghost of J.P. Morgan

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Blight in Blighty
It appears the default problem in Britain- prices increasing each of the last ten years- might not get as bad as it will get here. Lenders there held mortgage instead of selling them on to the bond market (so while they bought a lot of American CDO/CLO’s they didn’t generate any of their own), even though the British people, on an individual level, still have subprime resets and other scams to deal with.

On the other hand, Britain has farther, in terms of declining property valuation, to fall.

Cheney’s been quiet

… too quiet.

I wonder what’s he’s up to…
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Yahoodies
Microsoft made an offer to Yahoo and it appears their very own market value has been reduced by nearly the same amount.

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A most curious thing
Since most American financial institutions (banking, lending, investing, hedging – am I leaving any out?) have moved (AHEM <cough> hidden) much of their CDO/MBS/CDS/ABS debt exposure “off the books” (where’s a SarbOx cop when you need him, eh?) into “Special Investment Vehicles” in order to hide their true exposure- a la Enron- AND they’ve been forced by cirumstance (of their own making) to accept handouts from Soverign Investment funds (how close is this to an offer they couldn’t refuse?) which only serves to delay the inevitable day of reckoning … do you suppose we’ll see more than a few of our august institutions flame out even more spectacularly?

My experience here on this planet tells me the longer you delay the inevitable, the worse the pain is going to be.

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I’m indifferent about whether one gets a tatoo or not in this life- hey, if you’re bored and want to spice up your life, there’s no better way than self-mutilation.

But after having watched a few minutes here and there (I was bad, and needed to be punished) I am no fan of the tatoo aficionados that appear on the TLC (sic) shows portraying their passion.

I was nearly ready to pierce my own brain with a bullet.

I’ve come to the conclusion that these folks as portrayed here are the boringest folks on the planet.

“Ah-ha”, I hear you exclaim,  ”so that’s why they do it.”

Exactly.

And they’re ugly too. Yes, a double whammy.

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