New Details Emerge in Las Vegas HOA Corruption Probe | HOA Nut House: "So how was it done? For one thing, at Park Avenue, more than half the owners live elsewhere. The condos are investments, so they take little interest in board meetings. The most recent election had twice as many ballots cast as ever before, and most were mailed from one place. 'Funny part is, in California, all the different cities, they were all mailed form Long Beach at the same time on the same date,' said Dennis Noto.'They looked like real ballots that came in. Someone duplicated ballots, duplicated envelopes and then mailed them en masse. Even in Las Vegas, they were mailed all the same day from the same place,' said Lahargoue."
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I am interested to see whether this sort of thing is ultimately found to be criminal or just civil. If the former, homeowners' rights advocates have an opportunity big enough to drive a truck through. If the latter, we are back to the "6 years in court" drawing board.
Tuesday, October 07, 2008
Frank says GOP housing attacks racially motivated
Frank says GOP housing attacks racially motivated: "BOSTON (AP) - Rep. Barney Frank said Monday that Republican criticism of Democrats over the nation's housing crisis is a veiled attack on the poor that's racially motivated. The Massachusetts Democrat, chairman of the House Financial Services Committee, said the GOP is appealing to its base by blaming the country's mortgage foreclosure problem on efforts to expand affordable housing through the Community Reinvestment Act. He said that blame is misplaced, because those loans are issued by regulated institutions, while far more foreclosures were triggered by high-cost loans made by unregulated entities."
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Frank is probably right on the issue of regulated CRA loans (a point made by a knowledgeable commenter on this blog yesterday). But this claim that criticism of housing programs is racially motivated is exactly the same thing Democrats said to silence Republican criticism of Fannie Mae (to the enormous detriment of the nation); it is the same thing the Obama campaign says whenever The One is criticized; and I hope the rest of the nation is as sick of hearing it as I am.
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Frank is probably right on the issue of regulated CRA loans (a point made by a knowledgeable commenter on this blog yesterday). But this claim that criticism of housing programs is racially motivated is exactly the same thing Democrats said to silence Republican criticism of Fannie Mae (to the enormous detriment of the nation); it is the same thing the Obama campaign says whenever The One is criticized; and I hope the rest of the nation is as sick of hearing it as I am.
AFP: US author of anti-Obama book detained in Kenya
AFP: US author of anti-Obama book detained in Kenya: "In a press release distributed earlier this week, Corsi announced he would 'expose deep secret ties between between US Democratic presidential candidate Sen. Barack Obama and a section of the Kenyan government leaders.' He was also to detail Kenyan leaders' 'connections to certain sectoral groups in Kenya and a subsequent plot to be executed in Kenya should Sen. Obama win the American presidency,' the release said."
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If he's not careful, HE will be the one "executed in Kenya."
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If he's not careful, HE will be the one "executed in Kenya."
A move to secede on California-Oregon border
A move to secede on California-Oregon border: "Guess the time is ripe to create a whole new state. That's the thinking up here along the border between California and Oregon, where 12 sparsely populated, thickly forested counties in both states want to break away and generate the 51st star on the nation's flag - the state of Jefferson. You can see the signs of discontent from Klamath Falls to Dunsmuir, where green double-X 'Jefferson State' flags hang in scores of businesses."
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These folks think the governments of Oregon and California are too liberal for them, so they want their own little Conservastan called "Jefferson."
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These folks think the governments of Oregon and California are too liberal for them, so they want their own little Conservastan called "Jefferson."
Monday, October 06, 2008
Leading geneticist Steve Jones says human evolution is over - Times Online
That is obvious. Exhibit A: daytime television. I rest my case.
That is obvious. Exhibit A: daytime television. I rest my case.
FT.com / In depth - Markets routed in global sell-off
FT.com / In depth - Markets routed in global sell-off: "Stock prices collapsed around the world on Monday amid growing fears that the credit crisis would trigger a global recession. The wave of selling swept through markets despite a scramble by governments to tackle the crisis, leading to rampant speculation that co-ordinated emergency rate cuts by the Federal Reserve and other central banks might be in the offing."
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Slow news day.
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Slow news day.
Indian American to oversee $700bn bailout
Indian American to oversee $700bn bailout: "Kashkari, who was one of the originator of the bailout plan, was part of the Treasury team that negotiated the asset-repurchase programme with Congress. Now, he would oversee some key decisions on how the rescue programme would operate."
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He is an engineer whose first career was with the space program. He also has an MBA in Finance.Sure hope he knows what he's doing.
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He is an engineer whose first career was with the space program. He also has an MBA in Finance.Sure hope he knows what he's doing.
Cramer to the Market: Now Is the Time to Panic
Cramer to the Market: Now Is the Time to Panic: "Whatever you may need for the next five years, please take it out of the stock market. Right now. This week. I do not believe that you should risk those assets in the stock market."
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Well. That is helpful.
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Well. That is helpful.
6 Family Members Dead In Murder-Suicide In Porter Ranch - News Story - KNBC | Los Angeles
6 Family Members Dead In Murder-Suicide In Porter Ranch - News Story - KNBC | Los Angeles: "LOS ANGELES -- All six people found dead in a home in the Porter Ranch area of the San Fernando Valley were members of the same family and were shot to death in a murder-suicide. Deputy Chief Michel Moore said the unemployed father of the family, 45, left two suicide letters claiming responsibility for his suicide and the murders of his family members, identified as his wife, three children and his mother-in-law."
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The article says he had no evident history of mental illness.
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The article says he had no evident history of mental illness.
Pakistan facing bankruptcy - Telegraph
Pakistan facing bankruptcy - Telegraph: "Pakistan's foreign exchange reserves are so low that the country can only afford one month of imports and faces possible bankruptcy."
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At some point you have to give up worrying about all this. How can the whole world go bankrupt? There have to be some creditors somewhere. We can't all be debtors...can we?
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At some point you have to give up worrying about all this. How can the whole world go bankrupt? There have to be some creditors somewhere. We can't all be debtors...can we?
Dewey Cheatham apparently not availableTreasury Secretary Henry Paulson is expected to name Neel Kashkari to oversee the U.S. government's $700 billion financial stabilization program, the Wall Street Journal reported, citing people familiar with the matter.
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With a name like that, what else could he do except become an economist? He is 35 years old, by the way, and has $800 billion to spend. When I was 35 I had 800, but without the "billion."
Germany takes hot seat as Europe falls into the abyss - Telegraph: "We face extreme danger. Unless there is immediate intervention on every front by all the major powers acting in concert, we risk a disintegration of global finance within days. Nobody will be spared, unless they own gold bars."
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Reading between the lines, I think the writer is a bit anxious about the state of the European economy.
Bloomberg.com: Worldwide
At what point do we start calling this "socialism"?: "Oct. 6 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke may find the next fronts of the financial crisis to be just as chilling as last month's downfall of Wall Street titans: its spread to corporate America and state and local governments.
Companies from Goodyear Tire & Rubber Co. and Duke Energy Corp. to Gannett Co. and Caterpillar Inc. are being forced to tap emergency credit lines or pay more to borrow as investors flee even firms with few links to the subprime-mortgage debacle. California Governor Arnold Schwarzenegger says his and other states may need emergency federal loans as funding dries up."
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$700 billion is a lot of money, but that is just for the banks. How can a government that is $14 trillion in debt even begin to think of bailing out the states and the rest of the failing corporations?
Companies from Goodyear Tire & Rubber Co. and Duke Energy Corp. to Gannett Co. and Caterpillar Inc. are being forced to tap emergency credit lines or pay more to borrow as investors flee even firms with few links to the subprime-mortgage debacle. California Governor Arnold Schwarzenegger says his and other states may need emergency federal loans as funding dries up."
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$700 billion is a lot of money, but that is just for the banks. How can a government that is $14 trillion in debt even begin to think of bailing out the states and the rest of the failing corporations?
Dogs being abandoned at state park (phillyBurbs.com) | Courier Times
Scenes from the Philadelphia suburbs: Dogs being abandoned at state park: "In the last six months, seven domestic dogs have been discovered abandoned in Nockamixon State Park, the most recent last week. Park officials and animal rescue agencies believe people are abandoning their pets there because they can no longer afford to care for them. “People think 'Oh someone will find him, take care of him. The park has leftover food. There's garbage there.' But these dogs can't fend for themselves,” said Lori McCutcheon, founder and president of Last Chance Ranch, a Richland animal rescue group, which since July, has taken in four dogs found at the park. But the 5,283-acre park, says McCutcheon and park officials, is not the place to dump animals. It's wooded, home to wild animals such as coyotes, and the pets will find little food or water."
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Sunday, October 05, 2008
FOXNews.com - Mass. Asks About Federal Loan Amid Market Worries : "BOSTON — The treasurer of Massachusetts has asked the federal government about lending Massachusetts money under the same favorable terms it has given banks and firms during the financial crisis.
Treasurer Timothy Cahill's requests to the U.S. Treasury and Federal Reserve Bank of Boston this week were prompted by the state's inability to borrow from the short-term debt markets, The Boston Globe reported Saturday. The financial turmoil has caused credit markets to stop lending, or to charge prohibitive rates."
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First California, now Massachusetts. Two down, 48 to go. Then there are 88,000 local governments, followed by 300,000 or so community associations. Who comes after that?
Political Punch
Put on your muck boots: Into the mire we go: "With the news that the McCain campaign is launching a full assault on Obama's associates, preparedness, and judgment in a TV ad campaign to start Wednesday -- as detailed in this morning's Washington Post -- the Obama campaign is planning a pre-emptive assault on the TV airwaves to start Monday."
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Enough about the economy and foreign policy. Time to get into mud-slinging!
As a political scientist I have been expecting this.
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Enough about the economy and foreign policy. Time to get into mud-slinging!
As a political scientist I have been expecting this.
Saturday, October 04, 2008
ESCONDIDO:Barron aims to restore city's reputation, attract corporations : North County Times - Californian
ESCONDIDO:Barron aims to restore city's reputation, attract corporations : North County Times - Californian: "A political novice, Barron said he has learned quite a bit about leadership serving as president of the Las Palmas Homeowners Association the past few years."
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Escondido is in north San Diego County. Their mayor has some big ideas. I hope his HOA experience stands him in good stead.
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Escondido is in north San Diego County. Their mayor has some big ideas. I hope his HOA experience stands him in good stead.
Home crisis hampers HOAs | InsideNova.com
Home crisis hampers HOAs | InsideNova.com: "Homeowners' associations got lost somewhere in the shuffle of the home mortgage lending crisis.
No one knows that better than Deby Wine, the president of the Brandy Station Homeowners Association.
The Manassas Park HOA has become a revenue graveyard where many residents pay their quarterly association dues late or don't pay at all, said Win"
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And I wouldn't be expecting a federal HOA bailout anytime soon. The bread line is pretty long right now.
No one knows that better than Deby Wine, the president of the Brandy Station Homeowners Association.
The Manassas Park HOA has become a revenue graveyard where many residents pay their quarterly association dues late or don't pay at all, said Win"
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And I wouldn't be expecting a federal HOA bailout anytime soon. The bread line is pretty long right now.
Bill Clinton's drive to increase homeownership went way too far - BusinessWeek
Bill Clinton's drive to increase homeownership went way too far - BusinessWeek: "Add President Clinton to the long list of people who deserve a share of the blame for the housing bubble and bust. A recently re-exposed document shows that his administration went to ridiculous lengths to increase the national homeownership rate. It promoted paper-thin downpayments and pushed for ways to get lenders to give mortgage loans to first-time buyers with shaky financing and incomes. It’s clear now that the erosion of lending standards pushed prices up by increasing demand, and later led to waves of defaults by people who never should have bought a home in the first place."
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This item is from February. The blog author relies on and links to analysis by Prof. Joseph Mason of Drexel Univerisity who analyzes the Clinton Administration's National Homeownership Strategy. This policy got underway in 1994 or 1995 and was intended to increase the home ownership rate by making it possible for people to buy houses even though they could not come up with a down payment, did not have enough money to make normal interest-plus-principal payments, or otherwise couldn't afford to buy a house in the first place. Clinton gave numerous speeches throughout his administration boasting of the success of the program.
As I keep saying, I don't see how any one culprit can be identified here. But Clinton is skating on what amounted to the intentional creation of a world of bad debt, backed up by GSEs.
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This item is from February. The blog author relies on and links to analysis by Prof. Joseph Mason of Drexel Univerisity who analyzes the Clinton Administration's National Homeownership Strategy. This policy got underway in 1994 or 1995 and was intended to increase the home ownership rate by making it possible for people to buy houses even though they could not come up with a down payment, did not have enough money to make normal interest-plus-principal payments, or otherwise couldn't afford to buy a house in the first place. Clinton gave numerous speeches throughout his administration boasting of the success of the program.
As I keep saying, I don't see how any one culprit can be identified here. But Clinton is skating on what amounted to the intentional creation of a world of bad debt, backed up by GSEs.
French PM says world 'on edge of abyss' | Business News | Reuters
French PM says world 'on edge of abyss' | Business News | Reuters: "Prime Minister Fillon, whose country is hosting an emergency summit of Italian, British and German leaders on Saturday, said only collective action could solve the financial crisis. He said he would not rule out any solution to stop any bank failing.
'The world is on the edge of the abyss because of an irresponsible system,' Fillon said, alluding to widespread anger over past lax regulation of financial markets and excessive lending."
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Here in the US the media portray this as an American problem and the political class seems to go along with that, but the fact is that European banks have been doing the same things that drove American banks under. It wasn't just based on risky home loans. All kinds of debt were used to create a bizarre unregulated aftermarket consisting of various forms of derivatives that I don't remotely understand. George Soros has a book out on this. Back in March he was predicting that the crash of the $50 trillion credit default swap market would dwarf the previous bank failures. I'm not a Soros fan but his argument on the failure of the neoclassical economics model is very persuasive.
'The world is on the edge of the abyss because of an irresponsible system,' Fillon said, alluding to widespread anger over past lax regulation of financial markets and excessive lending."
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Here in the US the media portray this as an American problem and the political class seems to go along with that, but the fact is that European banks have been doing the same things that drove American banks under. It wasn't just based on risky home loans. All kinds of debt were used to create a bizarre unregulated aftermarket consisting of various forms of derivatives that I don't remotely understand. George Soros has a book out on this. Back in March he was predicting that the crash of the $50 trillion credit default swap market would dwarf the previous bank failures. I'm not a Soros fan but his argument on the failure of the neoclassical economics model is very persuasive.
FOXNews.com - Lawmaker Accused of Fannie Mae Conflict of Interest - Politics | Republican Party | Democratic Party | Political Spectrum
FOXNews.com - Lawmaker Accused of Fannie Mae Conflict of Interest - Politics | Republican Party | Democratic Party | Political Spectrum: "WASHINGTON — Unqualified home buyers were not the only ones who benefitted from Massachusetts Rep. Barney Frank’s efforts to deregulate Fannie Mae throughout the 1990s. So did Frank’s partner, a Fannie Mae executive at the forefront of the agency’s push to relax lending restrictions. Now that Fannie Mae is at the epicenter of a financial meltdown that threatens the U.S. economy, some are raising new questions about Frank's relationship with Herb Moses, who was Fannie’s assistant director for product initiatives. Moses worked at the government-sponsored enterprise from 1991 to 1998, while Frank was on the House Banking Committee, which had jurisdiction over Fannie."
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That is "partner" as in "life partner," not business partner.
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That is "partner" as in "life partner," not business partner.
Foreclosure Alley - SoCal Connected
Foreclosure Alley - SoCal Connected: "For the past few years, the Inland Empire in Riverside County has been one of the fastest growing counties in the state - home to a major housing boom. But now the Inland Empire is pretty much the poster child for the foreclosure crisis. In the newer developments, house after house sits vacant - either up for auction, for sale by a bank or going for what’s called a “short sale” which is when the owner owes more than the house is worth."
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Wow. All they need is some zombies staggering around. What a disaster.
Thanks to Fred Pilot for this grim link.
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Wow. All they need is some zombies staggering around. What a disaster.
Thanks to Fred Pilot for this grim link.
Friday, October 03, 2008
Woman, 90, shoots self inside foreclosed home - CNN.com
Woman, 90, shoots self inside foreclosed home - CNN.com: "(CNN) -- A 90-year-old Akron, Ohio, woman who shot herself as sheriff's deputies tried to evict her from her foreclosed home became a symbol of the nation's home mortgage crisis Friday. Fannie Mae foreclosed on the Akron, Ohio, home of Addie Polk, 90, after acquiring the mortgage in 2007. Addie Polk is being treated at Akron General Medical Center after shooting herself at least twice in the upper body Wednesday afternoon, her city councilman said."
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Fannie Mae Eases Credit To Aid Mortgage Lending - New York Times
New York Times, September 30, 1999: Fannie Mae Eases Credit To Aid Mortgage Lending: "In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders. The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring. Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits. In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans."
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And there you have the essence of the problem. The Clinton Administration and the banking industry were eager to have Fannie Mae underwrite the enormous risk involved in lending money to people so they could buy houses that were beyond their means.
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And there you have the essence of the problem. The Clinton Administration and the banking industry were eager to have Fannie Mae underwrite the enormous risk involved in lending money to people so they could buy houses that were beyond their means.
Feral cats to be trapped - Milford, MA - The Milford Daily News
Feral cats to be trapped - Milford, MA - The Milford Daily NewsFRANKLIN —The Highwood Condominium Association's board of trustees has decided to trap and euthanize a colony of feral cats at the complex that has been the center of a neighborhood dispute, according to Animal Control Officer Cindy Souza. The move may be illegal, however, depending on who actually owns the woods where the cats roam and eat, she said.
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It says at one time they had over 200 of these creatures and they were jumping out of trash bins and biting people. A feral cat bit my son when he was 6 and we were vacationing in St. Maarten. They look cute up until they attack. But why does the association have to do this? Shouldn't the Animal Control people be doing this on public land, and going on private land with the association's permission, instead of reading from the rule book?
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It says at one time they had over 200 of these creatures and they were jumping out of trash bins and biting people. A feral cat bit my son when he was 6 and we were vacationing in St. Maarten. They look cute up until they attack. But why does the association have to do this? Shouldn't the Animal Control people be doing this on public land, and going on private land with the association's permission, instead of reading from the rule book?
Quick Takes: Protest Over Political Ban at Illinois, Another Scandal for Pa. Loan Agency, Patent Loss for Johns Hopkins, Sick Students at Georgetown, Ig Nobel Prizes :: Inside Higher E
Protest Over Political (make that "Obama") Ban at Illinois: "Faculty members held a rally at the University of Illinois at Urbana-Champaign to back the Obama presidential campaign Thursday to show that they will not follow guidelines issued by the university that bar them from rallies or wearing political buttons on campus, the Chicago Tribune reported. The university says it isn’t enforcing the guidelines, which it says are required by state law."
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Nothing will happen to them for defying the ban. The U of I faculty will continue electioneering for Obama in every arena, including the classroom, and nothing will be done about it.
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Nothing will happen to them for defying the ban. The U of I faculty will continue electioneering for Obama in every arena, including the classroom, and nothing will be done about it.
Schwarzenegger to U.S.: State may need $7-billion loan - Los Angeles Times
Schwarzenegger to U.S.: State may need $7-billion loan - Los Angeles Times: "SACRAMENTO -- California Gov. Arnold Schwarzenegger, alarmed by the ongoing national financial crisis, warned Treasury Secretary Henry M. Paulson on Thursday that the state might need an emergency loan of as much as $7 billion from the federal government within weeks The warning comes as California is close to running out of cash to fund day-to-day government operations and is unable to access routine short-term loans that it typically relies on to remain solvent."
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California isn't the only government that can't get a loan. But that state has been spending and regulating itself into insolvency for a long time, and the voters have made it worse by passing initiative measures that crippled the government (property tax cap, term limits, etc.) Add to that a new pattern of population movement--immigration of low income people and out-migration of the middle class to Nevada, Utah, Arizona, Colorado, etc., topped off with socialist mayors running LA and SF, oblivious to economic realities. The last thing the state needed was having their credit card cut up.
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California isn't the only government that can't get a loan. But that state has been spending and regulating itself into insolvency for a long time, and the voters have made it worse by passing initiative measures that crippled the government (property tax cap, term limits, etc.) Add to that a new pattern of population movement--immigration of low income people and out-migration of the middle class to Nevada, Utah, Arizona, Colorado, etc., topped off with socialist mayors running LA and SF, oblivious to economic realities. The last thing the state needed was having their credit card cut up.
Thursday, October 02, 2008
TEACHERS TOLD NOT TO WEAR OBAMA BUTTONS - New York Post
TEACHERS TOLD NOT TO WEAR OBAMA BUTTONS - New York Post: "The teachers union has been handing out thousands of Barack Obama campaign buttons to its members, sparking a clampdown by education brass.
The Department of Education - which has a long-standing policy barring teachers from wearing campaign buttons in schools - is set to send out an e-mail this week from Schools Chancellor Joel Klein laying down the law."
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This is looking like a concerted effort by teachers' unions to use their access to students for pro-Obama activism. Clearly, the Obama campaign knows how to influence and organize young people. And the teachers' unions are not hindered by rules against activism in the classroom.
The Department of Education - which has a long-standing policy barring teachers from wearing campaign buttons in schools - is set to send out an e-mail this week from Schools Chancellor Joel Klein laying down the law."
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This is looking like a concerted effort by teachers' unions to use their access to students for pro-Obama activism. Clearly, the Obama campaign knows how to influence and organize young people. And the teachers' unions are not hindered by rules against activism in the classroom.
Virginia Teachers Union Sparks Outrage With 'Obama Blue Day' - FOXNews.com Elections
Virginia Teachers Union Sparks Outrage With 'Obama Blue Day' - FOXNews.com Elections: "Virginia Republicans are in an uproar after the state teacher's union sent an e-mail to its members encouraging them to wear blue-colored shirts to school to show their support for Barack Obama.
State Republicans are calling it an undisguised attempt to influence students' political views.
The Virginia Education Association sponsored 'Obama Blue Day' on Tuesday. In an e-mail sent last week, it urged teachers to participate by dressing in blue."
State Republicans are calling it an undisguised attempt to influence students' political views.
The Virginia Education Association sponsored 'Obama Blue Day' on Tuesday. In an e-mail sent last week, it urged teachers to participate by dressing in blue."
What They Said About Fan and Fred - WSJ.com: "House Financial Services Committee hearing, Sept. 10, 2003:
Rep. Barney Frank (D., Mass.): 'I worry, frankly, that there's a tension here. The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disaster scenarios. . .'
Sen. Charles Schumer (D., N.Y.): 'And my worry is that we're using the recent safety and soundness concerns, particularly with Freddie, and with a poor regulator, as a straw man to curtail Fannie and Freddie's mission. And I don't think there is any doubt that there are some in the administration who don't believe in Fannie and Freddie altogether, say let the private sector do it. That would be sort of an ideological position.'."
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There is more, and from a number of Democrats who are now blaming the whole thing on the Republicans. It wasn't all the Democrats fault, either, but it does take a certain chutzpah for Barney Frank to say the things he has said in the last week, after saying what he did five years ago. He was warned, and so were others, and they not only ignored the warnings, they criticized the people who delivered the news.
Rep. Barney Frank (D., Mass.): 'I worry, frankly, that there's a tension here. The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disaster scenarios. . .'
Sen. Charles Schumer (D., N.Y.): 'And my worry is that we're using the recent safety and soundness concerns, particularly with Freddie, and with a poor regulator, as a straw man to curtail Fannie and Freddie's mission. And I don't think there is any doubt that there are some in the administration who don't believe in Fannie and Freddie altogether, say let the private sector do it. That would be sort of an ideological position.'."
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There is more, and from a number of Democrats who are now blaming the whole thing on the Republicans. It wasn't all the Democrats fault, either, but it does take a certain chutzpah for Barney Frank to say the things he has said in the last week, after saying what he did five years ago. He was warned, and so were others, and they not only ignored the warnings, they criticized the people who delivered the news.
Financial Crisis: So much for tirades against American greed - Telegraph
Financial Crisis: So much for tirades against American greed - Telegraph: "It took a weekend to shatter the complacency of German finance minister Peer Steinbrück. Last Thursday he told us that the financial crisis was an 'American problem', the fruit of Anglo-Saxon greed and inept regulation that would cost the United States its 'superpower status'. Pleas from US Treasury Secretary Hank Paulson for a joint US-European rescue plan to halt the downward spiral were rebuffed as unnecessary. By Monday, Mr Steinbrück was having to orchestrate Germany's biggest bank bail-out, putting together a €35 billion loan package to save Hypo Real Estate. By then Europe was 'staring into the abyss,' he admitted. Belgium faced worse. It had to nationalise Fortis (with Dutch help), a 300-year-old bastion of Flemish finance, followed a day later by a bail-out for Dexia (with French help).
Within hours they were all trumped by Dublin. The Irish government issued a blanket guarantee of the deposits and debts of its six largest lenders in the most radical bank bail-out since the Scandinavian rescues in the early 1990s. Then France upped the ante with a €300 billion pan-European lifeboat for the banks. The drama has exposed Europe's dark secret for all to see. EU banks took on even more debt leverage than their US counterparts, despite the tirades against ''le capitalisme sauvage'' of the Anglo-Saxons."
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I made note below of Steinbruck's condescension. Now it turns out that our sophisticated European betters, from whom we in the colonies need to learn so much, are in even worse shape due to their own risky credit practices.
Within hours they were all trumped by Dublin. The Irish government issued a blanket guarantee of the deposits and debts of its six largest lenders in the most radical bank bail-out since the Scandinavian rescues in the early 1990s. Then France upped the ante with a €300 billion pan-European lifeboat for the banks. The drama has exposed Europe's dark secret for all to see. EU banks took on even more debt leverage than their US counterparts, despite the tirades against ''le capitalisme sauvage'' of the Anglo-Saxons."
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I made note below of Steinbruck's condescension. Now it turns out that our sophisticated European betters, from whom we in the colonies need to learn so much, are in even worse shape due to their own risky credit practices.
Wednesday, October 01, 2008
IBDeditorials.com: Editorials, Political Cartoons, and Polls from Investor's Business Daily -- Fannie, Freddie Critic Ridiculed In 2000
IBDeditorials.com: Editorials, Political Cartoons, and Polls from Investor's Business Daily -- Fannie, Freddie Critic Ridiculed In 2000: "It is now consensus that Fannie Mae and Freddie Mac are at the heart of the systemic meltdown we are seeing in the mortgage market. They are costing taxpayers billions through their own bailouts and through the role they played in fueling an artificial mortgage boom. But eight years ago, when I testified before Congress that Fannie Mae and Freddie Mac's 'special privileges create a serious hazard to the market, to taxpayers (and) to the economy,' my criticism of these sacred financial entities was met with ridicule."
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He wasn't alone. Other people said similar things, and there was even legislation introduced that would have increased oversight of the GSEs. Nothing passed because numerous members of Congress rushed to Fannie Mae's defense. Maybe somebody should see who got what campaign contributions from whom. Maybe somebody with subpoena power might want to look into what other benefits certain people might have received.
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He wasn't alone. Other people said similar things, and there was even legislation introduced that would have increased oversight of the GSEs. Nothing passed because numerous members of Congress rushed to Fannie Mae's defense. Maybe somebody should see who got what campaign contributions from whom. Maybe somebody with subpoena power might want to look into what other benefits certain people might have received.
Teachers asked to remove Obama buttons in class - Santa Cruz Sentinel
Teachers asked to remove Obama buttons in class - Santa Cruz Sentinel: "SOQUEL -- Teachers at Soquel High School have agreed not to wear 'Educators for Obama' buttons in the classroom after a parent complained that educators were attempting to politically influence his daughter and other students."
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Hey, what about all the teachers who were wearing McCain buttons? Oh...there weren't any. What a surprise.
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Hey, what about all the teachers who were wearing McCain buttons? Oh...there weren't any. What a surprise.
Tuesday, September 30, 2008
Saudi woman driver hurt after defying ban
Saudi woman driver hurt after defying ban: "A young woman in Saudi Arabia who defied ultra-conservative kingdom's ban on women driving was injured when the car span out of control and plunged into a stream, a newspaper reported on Tuesday. The unnamed woman in her 20s 'stole' her brother's car on Sunday, picked up a female friend and drove at high speed through a town in the Eastern Province before losing control of the vehicle, Al-Riyadh said. The car hit an electricity pole and plunged into an irrigation channel. Both the driver and her friend were taken to hospital in serious condition, the paper said."
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The Saudi version of Thelma and Louise. And these policies continue because the nation sits on an ocean of crude oil.
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The Saudi version of Thelma and Louise. And these policies continue because the nation sits on an ocean of crude oil.
Feds, D.A. rebuffed HOA members - Face To Face: Final Take - Las Vegas Sun
Feds, D.A. rebuffed HOA members - Face To Face: Final Take - Las Vegas Sun: "he woman who brought her suspicions about collusion on her homeowners association board to the attention of the FBI says she didn't get far. Wanda Murray tells Jon on tonight's program that the feds deemed the issue a civil matter and had no interest. Ditto for the District Attorney, where Murray says she and her neighbors failed to get past the secretary.
So what got law enforcement to take notice? Tune in tonight to hear State Sen. Mike Schneider's (D-Clark) contention that the alleged activity extends beyond Nevada."
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So now we have two different stories of how this investigation got started, but Senator Mike's story is not out yet...stay tuned. Expiring minds want to know.
So what got law enforcement to take notice? Tune in tonight to hear State Sen. Mike Schneider's (D-Clark) contention that the alleged activity extends beyond Nevada."
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So now we have two different stories of how this investigation got started, but Senator Mike's story is not out yet...stay tuned. Expiring minds want to know.
From the Center for California Homeowner Association Law: the inside scoop on the Las Vegas HOA investigation
"So how exactly did five senior homeowners get the FBI to investigate possible fraud and collusion in their homeowner association? By doggedly collecting association records, by studying the facts, by keeping their ears open, by being patient, and by not giving up –- for three long years. On Aug. 22, 2005, Bill Farnsworth, Wanda Murray and three other owners of condominiums at the Rhodes Homes development of Vistaña walked into the local headquarters of the Federal Bureau of Investigation. In their possession was a 3-inch thick, three-ring binder full of records and other papers documenting -- at the least -- what they thought were serious conflicts of interest involving their homeowner association board of directors. At the most, they believed the records showed a possibility of collusion between members of the board, which included a former Las Vegas police lieutenant, to steer work toward a Las Vegas construction firm, Silver Lining Construction. The group of angry and diligent senior homeowners appears to have been on to something. The names contained in their three-ring binder largely correspond to those in a federal warrant served last week on two management companies, two association law firms, and seven associations. Read the story of these patient, dogged seniors on the CCHAL website [www.calhomelaw.org/] The link is http://calhomelaw.org/doc.asp?id=849."
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Fascinating story and well worth reading. Thanks to Marjorie Murray of CCHAL for sending this note. But there is another account out there saying that the owners were initially rebuffed by the DA and the FBI, who viewed it as a civil matter. That would be par for the course. Something else, other than a citizen complaint, must have happened to trigger the criminal probe.
"So how exactly did five senior homeowners get the FBI to investigate possible fraud and collusion in their homeowner association? By doggedly collecting association records, by studying the facts, by keeping their ears open, by being patient, and by not giving up –- for three long years. On Aug. 22, 2005, Bill Farnsworth, Wanda Murray and three other owners of condominiums at the Rhodes Homes development of Vistaña walked into the local headquarters of the Federal Bureau of Investigation. In their possession was a 3-inch thick, three-ring binder full of records and other papers documenting -- at the least -- what they thought were serious conflicts of interest involving their homeowner association board of directors. At the most, they believed the records showed a possibility of collusion between members of the board, which included a former Las Vegas police lieutenant, to steer work toward a Las Vegas construction firm, Silver Lining Construction. The group of angry and diligent senior homeowners appears to have been on to something. The names contained in their three-ring binder largely correspond to those in a federal warrant served last week on two management companies, two association law firms, and seven associations. Read the story of these patient, dogged seniors on the CCHAL website [www.calhomelaw.org/] The link is http://calhomelaw.org/doc.asp?id=849."
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Fascinating story and well worth reading. Thanks to Marjorie Murray of CCHAL for sending this note. But there is another account out there saying that the owners were initially rebuffed by the DA and the FBI, who viewed it as a civil matter. That would be par for the course. Something else, other than a citizen complaint, must have happened to trigger the criminal probe.
Monday, September 29, 2008
Biden Focuses on Debate Prep, Mishears Question on Rejection of Bailout Bill - From The Road
Biden Focuses on Debate Prep, Mishears Question on Rejection of Bailout Bill - From The Road: "As he exited the hotel for his dinner break, Biden was asked “Senator, can we get your reaction to the House bill not passing?”
Biden interrupted the question with a “Hey folks,” to reporters and then said “Oh, things are going well.”
Biden’s press secretary, David Wade, sent an e-mail minutes later, saying “the senator thought you asked how prep was going” for this week’s debate with Gov. Sarah Palin.
Prior to Biden's departure, the press was moved further away from the hotel's exit, perhaps far enough away that it prevented Biden from clearly hearing the question."
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When Biden shows he is out of touch, the press painstakingly explains it away. But when Palin asks Charlie Gibson for a clarification of an ambiguous question, the press portrays her as a dunce.
Biden interrupted the question with a “Hey folks,” to reporters and then said “Oh, things are going well.”
Biden’s press secretary, David Wade, sent an e-mail minutes later, saying “the senator thought you asked how prep was going” for this week’s debate with Gov. Sarah Palin.
Prior to Biden's departure, the press was moved further away from the hotel's exit, perhaps far enough away that it prevented Biden from clearly hearing the question."
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When Biden shows he is out of touch, the press painstakingly explains it away. But when Palin asks Charlie Gibson for a clarification of an ambiguous question, the press portrays her as a dunce.
Power Line: Was the Bailout Vote a Partisan Set-Up?: "Everyone has heard about the weirdly partisan and inaccurate rant which Pelosi contributed to the debate on the bailout bill. But that speech did not take place in a vacuum. Public opinion is running strongly against the bill, and it required political courage to vote for it. If you look at the list of those who voted 'No' in both parties, it is mostly members who are engaged in tough re-election campaigns. This is true on both sides of the aisle.
That being the case, and given the fact that the legislation was in fact a negotiated, bipartisan compromise, the first duty of the majority party is to line up its members to support the majority's bill. But evidence is growing that the Democrats did no such thing.
As of yesterday, the Democrats' House whip, Jim Clyburn said that he hadn't even begun 'whipping' Democratic representatives, and wouldn't do so unless and until he got orders from Nancy Pelosi. Today, Democratic Congressman Peter DeFazio told NPR that he never was 'whipped' on the bill. So Pelosi evidently left Democrats to vote their consciences--which is to say, vote against the bill if they thought it was politically necessary--while counting on Republicans to put the bill over the top.
This is a classic Charlie Brown and the football maneuver. Pelosi gives a speech that frames the issue, falsely, as the issue, falsely, as the result of bad Republican policies, then allows her own threatened representatives to do the popular thing while expecting Republicans to take one for the team by casting an unpopular vote. Which, of course, their Democratic opponents would use against them, thereby increasing the Democratic majority in the House.
If this was Pelosi's plan it failed, in part, perhaps, because her over-the-top partisan diatribe tipped off Republicans as to what was afoot. If, as it now appears, it's true that the Democrats made no serious effort to pass the bailout bill, it is just one more example of the failure of leadership we have seen since they took control of Congress."
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This is Powerline's explanation of why the bailout bill collapsed in the House. It is the only explanation for Pelosi's behavior that makes sense to me. I read Pelosi's speech and it was an attack on the Republicans she was expecting to vote for it. Here are some documents that are posted on the House Financial Services Committee web page along with the bill and summaries of it:
On Housing Finance, the Difference between Democrats and Republicans Has Been Night and Day
The Truth about the Community Reinvestment Act
The Truth versus the Republicans on the Regulation of Subprime Mortgages and Fannie Mae and Freddie Mac
The Democrats were being highly partisan in presenting this bill to the public as a fix for Republican failures, which is not true. That would be fair enough given that they have the majority, as long as they pass it as a Democrat bill. But Pelosi wanted to have her cake and eat it. She let the Democrats off the hook. Pelosi did not use her power to get all the Democrats in line, which she certainly could have done. She was counting on a whole lot of Republican support. She got lots of them, but not enough. About 94 Democrats voted against it, and they are a laundry list of the left wing of her party. The Democrats, not the White House, wrote this bill, and Pelosi seriously screwed up. Now it is back to the drawing board and we will see what happens later this week.
Homeowner links cameras to city cops :: CHICAGO SUN-TIMES :: Chicago Crime
Homeowner links cameras to city cops :: CHICAGO SUN-TIMES :: Chicago Crime: "Hill has become the first private homeowner to take the city up on its unprecedented offer to connect privately owned exterior surveillance cameras to Chicago's 911 emergency center...Nearly two dozen colleges, businesses and high-rises also have agreed to share their video with the 911 center to create a panoramic view of disaster scenes.
They include Boeing, Macy's, the Chicago Mercantile Exchange, the Chicago Board Options Exchange, Blue Cross-Blue Shield, Golub & Company, JPMorgan Chase Bank, Sears Tower, Prudential Plaza, the Cook County Administration Building, Rush Hospital, Columbia College, Harold Washington College, St. Xavier University, DePaul University, Roosevelt University, Ike Sims Village and an association of State Street merchants.
After the deadly school shootings at Northern Illinois University and Virginia Tech, DePaul is hooking up at least 15 cameras at its Lincoln Park and South Loop campuses at a cost of roughly $10,000 for computer servers and switches."
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I wonder if any condo buildings are on the list. It says "high-rises," but that would include business towers.
They include Boeing, Macy's, the Chicago Mercantile Exchange, the Chicago Board Options Exchange, Blue Cross-Blue Shield, Golub & Company, JPMorgan Chase Bank, Sears Tower, Prudential Plaza, the Cook County Administration Building, Rush Hospital, Columbia College, Harold Washington College, St. Xavier University, DePaul University, Roosevelt University, Ike Sims Village and an association of State Street merchants.
After the deadly school shootings at Northern Illinois University and Virginia Tech, DePaul is hooking up at least 15 cameras at its Lincoln Park and South Loop campuses at a cost of roughly $10,000 for computer servers and switches."
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I wonder if any condo buildings are on the list. It says "high-rises," but that would include business towers.
FBI investigates Las Vegas HOA corruption/ September 26, 2008 at Center for California Homeowner Association Law: "According to a law enforcement source, the FBI is investigating whether individuals were placed on homeowners association boards who, in turn, would direct business stemming from construction defect lawsuits to select companies.
At issue, according to the source, is whether HOA members were steering contracts to certain construction companies.
Other sources said there has long been speculation that some HOA representatives were hiring certain law firms to handle construction defect lawsuits in exchange for kickbacks.
State Sen. Mike Schneider, D-Las Vegas, a lawmaker who has been involved in homeowners association issues before the Legislature, said the speculation involved management companies steering construction defect business to law firms in exchange for kickbacks."
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I don't know anything about the merits of the cases that are being investigated, but the political ramifications intrigue me. I'm wondering if this case will turn out to be Exhibit A for why Nevada needs to pass legislation cutting back on the ability of community associations to file construction defect suits. Developers in many states have been arguing for decades that CID construction defect litigation is a racket.
Now here we are with the housing market in tatters. New homes are not selling, developers are in bad shape financially, and of course attorneys representing all the existing developments are filing litigation regardless. Now, on top of everything, the credit markets just imploded.
This case, if it proves to be a real example of criminal conduct, could be the wedge that developers need to open a policy window and enact such measures as:
1. Mandatory binding arbitration
2. Caps on attorney fees
3. Caps on damages--such as going to the traditional rule of cost of repair or diminution in value, whichever is less. Often the diminution in value is zero or very speculative. Cost of repair is the only thing that makes sense for an HOA.
4. Mandatory meet and confer requirements with the developer having a chance to repair
5. Having court appointed experts do the repair estimate
6. Changing the burden of proof or the test for recovery, or otherwise raising the bar for proving the case
Here is some historical background. In 1995, California passed a law that made it harder to file these suits. My informal understanding of things is that a number of California construction defect attorneys migrated to Las Vegas and Arizona in hopes of finding greener pastures in the desert, so to speak. These attorneys have done well for themselves, but now I think they may find themselves in an uncomfortable spotlight. This is a hard issue, because if there are serious defects in original construction, there has to be a real remedy for these associations. There has been a lot of shoddy construction, especially during housing booms. But the fees are so high for the attorneys involved, and the risks and cost of litigation so high for the developer and insurance companies, that there is always a temptation for some practitioners to trump up a damage claim in the hope of a settlement. If you want examples of ethical attorneys pursuing valid claims, you can find them, but if you want bad apples, you can find those too.
At issue, according to the source, is whether HOA members were steering contracts to certain construction companies.
Other sources said there has long been speculation that some HOA representatives were hiring certain law firms to handle construction defect lawsuits in exchange for kickbacks.
State Sen. Mike Schneider, D-Las Vegas, a lawmaker who has been involved in homeowners association issues before the Legislature, said the speculation involved management companies steering construction defect business to law firms in exchange for kickbacks."
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I don't know anything about the merits of the cases that are being investigated, but the political ramifications intrigue me. I'm wondering if this case will turn out to be Exhibit A for why Nevada needs to pass legislation cutting back on the ability of community associations to file construction defect suits. Developers in many states have been arguing for decades that CID construction defect litigation is a racket.
Now here we are with the housing market in tatters. New homes are not selling, developers are in bad shape financially, and of course attorneys representing all the existing developments are filing litigation regardless. Now, on top of everything, the credit markets just imploded.
This case, if it proves to be a real example of criminal conduct, could be the wedge that developers need to open a policy window and enact such measures as:
1. Mandatory binding arbitration
2. Caps on attorney fees
3. Caps on damages--such as going to the traditional rule of cost of repair or diminution in value, whichever is less. Often the diminution in value is zero or very speculative. Cost of repair is the only thing that makes sense for an HOA.
4. Mandatory meet and confer requirements with the developer having a chance to repair
5. Having court appointed experts do the repair estimate
6. Changing the burden of proof or the test for recovery, or otherwise raising the bar for proving the case
Here is some historical background. In 1995, California passed a law that made it harder to file these suits. My informal understanding of things is that a number of California construction defect attorneys migrated to Las Vegas and Arizona in hopes of finding greener pastures in the desert, so to speak. These attorneys have done well for themselves, but now I think they may find themselves in an uncomfortable spotlight. This is a hard issue, because if there are serious defects in original construction, there has to be a real remedy for these associations. There has been a lot of shoddy construction, especially during housing booms. But the fees are so high for the attorneys involved, and the risks and cost of litigation so high for the developer and insurance companies, that there is always a temptation for some practitioners to trump up a damage claim in the hope of a settlement. If you want examples of ethical attorneys pursuing valid claims, you can find them, but if you want bad apples, you can find those too.
O'S DANGEROUS PALS - New York Post: "WHAT exactly does a 'community organizer' do? Barack Obama's rise has left many Americans asking themselves that question. Here's a big part of the answer: Community organizers intimidate banks into making high-risk loans to customers with poor credit.
In the name of fairness to minorities, community organizers occupy private offices, chant inside bank lobbies, and confront executives at their homes - and thereby force financial institutions to direct hundreds of millions of dollars in mortgages to low-credit customers.
In other words, community organizers help to undermine the US economy by pushing the banking system into a sinkhole of bad loans. And Obama has spent years training and funding the organizers who do it."
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I wonder if this will go anywhere as an issue. Probably not. With a colossal economic bomb exploding five weeks before the election, on top of the five-year Iraq war and presidential job approval ratings that are like winter temperature in Fairbanks, it is hard to see how Obama can lose.
But on the merits of the issues (remember those?), there is more to the problem than the Community Reinvestment Act. However, that entire policy--forcing banks to lend to low-income borrowers--needs to be examined. McCain should be raising this issue loud and clear, and Obama should explain why we need this policy.
In the name of fairness to minorities, community organizers occupy private offices, chant inside bank lobbies, and confront executives at their homes - and thereby force financial institutions to direct hundreds of millions of dollars in mortgages to low-credit customers.
In other words, community organizers help to undermine the US economy by pushing the banking system into a sinkhole of bad loans. And Obama has spent years training and funding the organizers who do it."
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I wonder if this will go anywhere as an issue. Probably not. With a colossal economic bomb exploding five weeks before the election, on top of the five-year Iraq war and presidential job approval ratings that are like winter temperature in Fairbanks, it is hard to see how Obama can lose.
But on the merits of the issues (remember those?), there is more to the problem than the Community Reinvestment Act. However, that entire policy--forcing banks to lend to low-income borrowers--needs to be examined. McCain should be raising this issue loud and clear, and Obama should explain why we need this policy.
Sunday, September 28, 2008
Meettheboss.com: Advisers greet a financial 'Facebook' - InvestmentNews: "A free multimedia site for senior financial executives, MeettheBoss .com, which was launched this month, is a virtual community intended to foster communication among an elite group with shared interests."
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MEETTHEBOSS.COM is being called a virtual gated community. How nice for them to have a place where they can discuss plummeting stock prices, bankruptcy, golden parachutes, and government bailouts.
AB 2846 Assembly Bill - ENROLLED
AB 2846 Assembly Bill - ENROLLED: signed by The Governator of Kaleeforneea: "This bill would provide that, if a dispute exists between the owner of a separate interest and the homeowners' association regarding any disputed charge or sum levied by the association, and the amount in dispute does not exceed the jurisdictional limits of the small claims court, the owner of the separate interest may pay under protest the disputed amount and all other amounts levied, including certain fees, costs, and other specified amounts, and commence an action in small claims court."
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My understanding is that Marjorie Murray and her organization, the Center for California Homeowner Association Law, have been pushing this concept for a long time. Congratulations, and I hope it works. And thanks to Fred Pilot for the notice.
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My understanding is that Marjorie Murray and her organization, the Center for California Homeowner Association Law, have been pushing this concept for a long time. Congratulations, and I hope it works. And thanks to Fred Pilot for the notice.
German leader warns U.S. superpower era is over - UPI.com: "Indeed, it looks increasingly likely that the dollar will not even remain the leading reserve currency. For several years, Arab nations, led by Saudi Arabia, that were alarmed by the financial measures included in the Patriot Act have quietly been transferring hundreds of billions of dollars into euros. And strongly anti-American but major oil-producing nations such as Iran and Venezuela certainly have been talking themselves in that direction. Now Russia, the largest combined oil and gas energy exporter in the world, is talking about using its record financial reserves to create a gold ruble. The dollar has not been backed by gold since President Franklin D. Roosevelt was forced to effectively devalue it by taking it off the gold standard in 1933."
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But let's keep talking about Sarah Palin's interview with Katie Couric and Barack Obama's bracelet. Important stuff like that. We wouldn't want the presidential campaign to get bogged down in press coverage of tedious public policy issues.
Behind AIG's Crisis, Blind Eye to a Web of Risk - NYTimes.com: "Although America’s housing collapse is often cited as having caused the crisis, the system was vulnerable because of intricate financial contracts known as credit derivatives, which insure debt holders against default. They are fashioned privately and beyond the ken of regulators — sometimes even beyond the understanding of executives peddling them.
Originally intended to diminish risk and spread prosperity, these inventions instead magnified the impact of bad mortgages like the ones that felled Bear Stearns and Lehman and now threaten the entire economy."
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This is why the blame is all over the place, from Main Street to Wall Street to Washington, DC. People bought houses they knew they couldn't pay for. Banks lent them money, using a host of "here comes the foreclosure" deals: interest only, ARMS, no down payment, no verification of income and assets, and so on. Anything to make the loan. The federal reserve kept overall interest rates low to induce even more borrowing, and mortgage rates stayed low as well. Politicians ordered lenders to make risky loans to "first time home buyers" and got Fannie Mae into the business of buying them, and also left the derivatives market unregulated. Investors bought mortgage backed securities that everybody knew were backed by high-risk loans because of the guarantees from Fannie Mae and insurers. Insurers came up with "creative" credit derivatives such as the various kinds of credit default swaps to deal with the risk. But the whole house of cards was premised on housing prices going up forever, even though it had to be obvious to everybody that such a thing is completely impossible. And every single person in the housing market knew that sooner or later, when prices stopped going up, a huge number of people were going to lose their homes to foreclosure. They didn't know how far the consequences would go, but they sure knew the foreclosures were coming.
By the way, AIG's stock price went from $22.76 per share on Sept.8 to $2.05 on Sept. 17. Biggest insurance company in the world.
Originally intended to diminish risk and spread prosperity, these inventions instead magnified the impact of bad mortgages like the ones that felled Bear Stearns and Lehman and now threaten the entire economy."
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This is why the blame is all over the place, from Main Street to Wall Street to Washington, DC. People bought houses they knew they couldn't pay for. Banks lent them money, using a host of "here comes the foreclosure" deals: interest only, ARMS, no down payment, no verification of income and assets, and so on. Anything to make the loan. The federal reserve kept overall interest rates low to induce even more borrowing, and mortgage rates stayed low as well. Politicians ordered lenders to make risky loans to "first time home buyers" and got Fannie Mae into the business of buying them, and also left the derivatives market unregulated. Investors bought mortgage backed securities that everybody knew were backed by high-risk loans because of the guarantees from Fannie Mae and insurers. Insurers came up with "creative" credit derivatives such as the various kinds of credit default swaps to deal with the risk. But the whole house of cards was premised on housing prices going up forever, even though it had to be obvious to everybody that such a thing is completely impossible. And every single person in the housing market knew that sooner or later, when prices stopped going up, a huge number of people were going to lose their homes to foreclosure. They didn't know how far the consequences would go, but they sure knew the foreclosures were coming.
By the way, AIG's stock price went from $22.76 per share on Sept.8 to $2.05 on Sept. 17. Biggest insurance company in the world.
Saturday, September 27, 2008
Gated communities as artwork « Susan’s Writings
Gated communities as artwork « Susan’s Writings: "Gated communities, seen as a trend in many countries by conceptual artist Juan Kasari, is the topic of this exhibition. It is presented very well through a series of mixed media paintings and video works, and deals with a half-documentary micro cosmos. It is an art study of a closed community where people live their own private and sheltered lives outside of society, dreaming for security and prestige."
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At least Mr. Kasari doesn't insist that they are cowering in fear, expecting a horde of zombies to storm the gate moaning, "Brrraaaaiiiinnnnnssssss!"
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At least Mr. Kasari doesn't insist that they are cowering in fear, expecting a horde of zombies to storm the gate moaning, "Brrraaaaiiiinnnnnssssss!"
Credit crunch banker leaps to his death in front of express train | Mail Online
Credit crunch banker leaps to his death in front of express train | Mail Online: "The City was in shock last night after the apparent suicide of a millionaire financier haunted by the pressures of dealing with the credit crunch.
Kirk Stephenson, who was married with an eight-year-old son, died in the path of a 100mph express train at Taplow railway station, Berkshire.
Mr Stephenson is believed to have taken his own life after succumbing to mounting personal pressures as the world’s financial markets went into meltdown."
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This is sad. I was wondering when we would read of a suicide. That happened with Enron, too, and of course the stockbrokers leaping out windows was cartoon fodder from the Great Depression.
Kirk Stephenson, who was married with an eight-year-old son, died in the path of a 100mph express train at Taplow railway station, Berkshire.
Mr Stephenson is believed to have taken his own life after succumbing to mounting personal pressures as the world’s financial markets went into meltdown."
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This is sad. I was wondering when we would read of a suicide. That happened with Enron, too, and of course the stockbrokers leaping out windows was cartoon fodder from the Great Depression.
Who is attorney Nancy Quon?
This is the web page from her law firm. Says she is in CAI's Distinguished Speakers Club. Haven't seen anything from CAI yet on this exploding situation.
This is the web page from her law firm. Says she is in CAI's Distinguished Speakers Club. Haven't seen anything from CAI yet on this exploding situation.
FBI searches attorney's office as political corruption probe continues - Las Vegas Sun: "The latest search warrant served in the Las Vegas Valley in the ongoing investigation of possible political corruption was at a local attorney's office.
FBI agents went to attorney Nancy Quon, whose Web site says she represents homeowners associations, and seized more records, said KLAS-TV Channel 8 today.
A law enforcement task force first served search warrants at homes, offices and clubs all across the Las Vegas Valley Wednesday as part of what might become a political corruption investigation."
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This is an intriguing situation. The articles I have seen so far tell me that the press doesn't have the whole story yet. They say, "Lawmen believe [contractor Leon] Benzer and other persons conspired to take over the boards, hire Benzer to do repair work and funnel lucrative lawsuit cases to certain law firms." (I haven't seen police referred to as "lawmen" since the last John Wayne rerun I watched--lots of "lawmen" seem to be women these days.) The press seems to think that there is some sort of collusion among professionals, run by a contractor and enabled by rigged elections. Perhaps the argument is going to be that this contractor stage-manages elections and puts in BOD members who follow his orders and hire a certain law firm which in turn hires a particular set of experts who in turn present a case that generates a pot of money, the repairs are overseen by a certain property manager, and everybody profits.
But there are plenty of questions unanswered.
1. Such as, what exactly is the suspected crime that led to such a drastic step as searching an attorney's offices? Believe me, that is a big deal, because of attorney-client privilege. Obviously, I get why owners would be angry at having their associations taken over, but usually such things are civil matters. What made this one into a criminal investigation?
2. How can you have "outsiders" on an HOA or condo association BOD? Don't you have to be a member to serve as an officer?
3. If the vote total goes way up from one election to another, is that because of ballot box stuffing and/or ineligible voters, which obviously would be bad, or is it because somebody solicited votes from absentee owners? If the latter, why is that illegal? I get that the resident owners don't like it, but if absentee owners are members, don't they get to vote if they want to? If somebody helps them vote, so what? In political science we call that GOTV...Get Out the Vote. (It's the Chicago Way. We even have dead people voting here.) Don't these associations have some way of determining that each ballot they count is from an actual owner?
4. And why is it criminal if one law firm represents lots of HOAs, and in every case that has the same kinds of damages, they hire the same contractor, estimator, soils engineer, and so forth? And if one contractor or property manager habitually refers cases to the same attorneys, is that illegal? Referrals are how law firms get construction defect cases.
5. And what is the relationship, if any, of all this to actual political corruption? Not clear from the articles.
6. Fred Pilot asks if this would be happening but for the unfolding real estate and mortgage meltdown. Good question, and I don't know. It would depend on how serious this really is. Is there some larger dimension to this investigation that the press doesn't know about?
I assume law enforcement has at least tentative answers to these questions or they wouldn't be executing search warrants. But so far, this is a puzzling situation that leaves me curious.
FBI agents went to attorney Nancy Quon, whose Web site says she represents homeowners associations, and seized more records, said KLAS-TV Channel 8 today.
A law enforcement task force first served search warrants at homes, offices and clubs all across the Las Vegas Valley Wednesday as part of what might become a political corruption investigation."
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This is an intriguing situation. The articles I have seen so far tell me that the press doesn't have the whole story yet. They say, "Lawmen believe [contractor Leon] Benzer and other persons conspired to take over the boards, hire Benzer to do repair work and funnel lucrative lawsuit cases to certain law firms." (I haven't seen police referred to as "lawmen" since the last John Wayne rerun I watched--lots of "lawmen" seem to be women these days.) The press seems to think that there is some sort of collusion among professionals, run by a contractor and enabled by rigged elections. Perhaps the argument is going to be that this contractor stage-manages elections and puts in BOD members who follow his orders and hire a certain law firm which in turn hires a particular set of experts who in turn present a case that generates a pot of money, the repairs are overseen by a certain property manager, and everybody profits.
But there are plenty of questions unanswered.
1. Such as, what exactly is the suspected crime that led to such a drastic step as searching an attorney's offices? Believe me, that is a big deal, because of attorney-client privilege. Obviously, I get why owners would be angry at having their associations taken over, but usually such things are civil matters. What made this one into a criminal investigation?
2. How can you have "outsiders" on an HOA or condo association BOD? Don't you have to be a member to serve as an officer?
3. If the vote total goes way up from one election to another, is that because of ballot box stuffing and/or ineligible voters, which obviously would be bad, or is it because somebody solicited votes from absentee owners? If the latter, why is that illegal? I get that the resident owners don't like it, but if absentee owners are members, don't they get to vote if they want to? If somebody helps them vote, so what? In political science we call that GOTV...Get Out the Vote. (It's the Chicago Way. We even have dead people voting here.) Don't these associations have some way of determining that each ballot they count is from an actual owner?
4. And why is it criminal if one law firm represents lots of HOAs, and in every case that has the same kinds of damages, they hire the same contractor, estimator, soils engineer, and so forth? And if one contractor or property manager habitually refers cases to the same attorneys, is that illegal? Referrals are how law firms get construction defect cases.
5. And what is the relationship, if any, of all this to actual political corruption? Not clear from the articles.
6. Fred Pilot asks if this would be happening but for the unfolding real estate and mortgage meltdown. Good question, and I don't know. It would depend on how serious this really is. Is there some larger dimension to this investigation that the press doesn't know about?
I assume law enforcement has at least tentative answers to these questions or they wouldn't be executing search warrants. But so far, this is a puzzling situation that leaves me curious.
S.E.C. Concedes Oversight Flaws Fueled Collapse - NYTimes.com: "WASHINGTON — The chairman of the Securities and Exchange Commission, a longtime proponent of deregulation, acknowledged on Friday that failures in a voluntary supervision program for Wall Street’s largest investment banks had contributed to the global financial crisis, and he abruptly shut the program down."
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Talk about closing the barn door after the horse got out.
South Florida gated communities link teens to security troubles -- South Florida Sun-Sentinel.com: "Gated communities became popular in South Florida in the 1970s, promising an extra level of security and prestige, according to Joanna Lombard, a professor of architecture at the University of Miami. But with that security comes challenges, including teen behavior problems and unexpected costs."
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Ironic. The gates end up being expensive because teenagers break them. According to this article about the culture of gated teenagers, they express their existential teenage angst-ridden gatedness by acting out. I guess if it isn't one thing, it's another.
Weekend America: Gated Into Foreclosure
Weekend America: Gated Into Foreclosure: "San Niccolo has been feeling the effects of the real estate crisis for more than a year now. A lot of houses are vacant, post-foreclosure. Others are being rented out to college kids, or multiple families, by investors who'd hoped to flip the properties for a quick profit but couldn't find buyers.
Houses that went for $600,000 a few years ago are now on the market for half that. And the neighbors say the wrought iron front gate, supposed to symbolize prestige and security, is regularly rammed by tow trucks trying to get in to repossess residents' cars. Vandalism has become a problem in the neighborhood: break-ins, slashed tires, broken windshields."
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This is a high-priced gated community in Las Vegas. The houses sold for $500,000 and higher not too long ago.
Houses that went for $600,000 a few years ago are now on the market for half that. And the neighbors say the wrought iron front gate, supposed to symbolize prestige and security, is regularly rammed by tow trucks trying to get in to repossess residents' cars. Vandalism has become a problem in the neighborhood: break-ins, slashed tires, broken windshields."
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This is a high-priced gated community in Las Vegas. The houses sold for $500,000 and higher not too long ago.
Friday, September 26, 2008
Statement by John McCain, 2 1/2 years ago
Senator John McCain
May 26, 2006
Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.
The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.
The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.
For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac–known as Government-sponsored entities or GSEs–and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.
Quick Info
S-90 Federal Housing Enterprise Regulatory Reform Act of 2005
Last Action: Committee on Banking, Housing, and Urban Affairs. Ordered to be reported with an amendment in the nature of a substitute favorably.
Status: Dead
I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190,to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.
I urge my colleagues to support swift action on this GSE reform legislation.
Senator John McCain
May 26, 2006
Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.
The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.
The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.
For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac–known as Government-sponsored entities or GSEs–and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.
Quick Info
S-90 Federal Housing Enterprise Regulatory Reform Act of 2005
Last Action: Committee on Banking, Housing, and Urban Affairs. Ordered to be reported with an amendment in the nature of a substitute favorably.
Status: Dead
I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190,to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.
I urge my colleagues to support swift action on this GSE reform legislation.
Support, criticism for plan to rewrite mortgage-loan terms
Support, criticism for plan to rewrite mortgage-loan terms: "A plan by Democrats to allow bankruptcy judges to rewrite mortgage-loan terms for struggling homeowners as part of the proposed $700 billion Wall Street bailout has the support of some South Florida jurists. The judges say the proposal would let them lower the interest rate on home loans for borrowers who enter Chapter 13 bankruptcy because of a pending foreclosure. A Chapter 13 allows individuals to reorganize their debts. Right now, bankruptcy judges can modify the terms of all kinds of loans except those on a first home.''Since we can't help [homeowners], they end up losing their home and that may mean breaking up their family and putting them out on the street,'' said U.S. Bankruptcy Judge A. Jay Cristol in Miami. Added U.S. Bankruptcy Judge Laurel M. Isicoff, also in Miami: ''Every bankruptcy judge I've spoken with feels strongly that this is a tool that they should be given.'' She has talked with about 30 judges, she said. Cristol said the proposal is a ''win-win'' for homeowners and lenders. Homeowners keep their house and lenders have a performing loan rather then getting the keys to a property they'll then have to sell."
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It seems like a good idea to me, too. But the Mortgage Bankers Association is against it.
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It seems like a good idea to me, too. But the Mortgage Bankers Association is against it.
Las Vegas Now | I-Team: New Details Emerge in Homeowners Association Probe
Las Vegas Now | I-Team: New Details Emerge in Homeowners Association Probe: "Mountains of financial and legal documents seized by a law enforcement task force are being scrutinized. FBI Agents and Metro Detectives worked into the night, serving search warrants at nine locations to find evidence of what they believe is political corruption involving local homeowner associations.
The FBI and Metro are still not talking, nor do we expect them to say anything. The investigation is just getting started and it's now obvious it stretches in many directions.
Investigators already see a pattern, whereby the same law firms file construction defect lawsuits, the same contractors are hired to do the work, the same management company oversees the whole thing, and the homeowner boards are subjected to something like a political coup.
The elections, homeowners say, are rigged."
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They are talking about "dozens" of HOAs being "hijacked."
The FBI and Metro are still not talking, nor do we expect them to say anything. The investigation is just getting started and it's now obvious it stretches in many directions.
Investigators already see a pattern, whereby the same law firms file construction defect lawsuits, the same contractors are hired to do the work, the same management company oversees the whole thing, and the homeowner boards are subjected to something like a political coup.
The elections, homeowners say, are rigged."
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They are talking about "dozens" of HOAs being "hijacked."
Video: Burning Down the House--What caused our financial crisis?
This is a devastating video that will soon be everywhere because Drudge just posted a link to it. Viral video is turning into an unpredictable force in these campaigns. With almost six weeks to go, what else will go viral, and what will be the impact on the campaigns and the issues?
[update: The same basic story appears in an editorial in Investor's Business Daily.]
This is a devastating video that will soon be everywhere because Drudge just posted a link to it. Viral video is turning into an unpredictable force in these campaigns. With almost six weeks to go, what else will go viral, and what will be the impact on the campaigns and the issues?
[update: The same basic story appears in an editorial in Investor's Business Daily.]
TheHill.com: "Senate Democratic leaders unveiled their $56 billion economic stimulus package on Thursday, less than an hour before leaving to meet President Bush at the White House to continue the fragile negotiations on the financial rescue bill."
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So that is the Democrat price tag for supporting the bailout?
[update: Here is a summary of what the House Republicans want, which isn't what Bush and Paulson want. So I guess the situation is the House and Senate Democrats will support something like the Paulson plan if they get their $56 million; the House Republicans don't like the plan, which is being panned like crazy by many conservatives; and neither McCain nor Obama has so far tried to play the role of Bigfoot. Harry Reid is bashing McCain for not being helpful enough, and seems to have forgotten that Obama was sitting there not doing a whole lot either. As the presidential candidate of the party that controls both houses, I would think more leadership would be expected of him than of McCain, but Obama has made a fantastic career out of acting supremely important while doing absolutely nothing, so why change now?]
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So that is the Democrat price tag for supporting the bailout?
[update: Here is a summary of what the House Republicans want, which isn't what Bush and Paulson want. So I guess the situation is the House and Senate Democrats will support something like the Paulson plan if they get their $56 million; the House Republicans don't like the plan, which is being panned like crazy by many conservatives; and neither McCain nor Obama has so far tried to play the role of Bigfoot. Harry Reid is bashing McCain for not being helpful enough, and seems to have forgotten that Obama was sitting there not doing a whole lot either. As the presidential candidate of the party that controls both houses, I would think more leadership would be expected of him than of McCain, but Obama has made a fantastic career out of acting supremely important while doing absolutely nothing, so why change now?]
Steven Pearlstein - Gut Check
Steven Pearlstein - Gut Check: "[T]his isn't primarily a bailout for Wall Street -- it's an attempt to jump-start certain credit markets that have broken to the point that nobody is buying, driving down prices to the point where they are well below any reasonable estimate of their long-term economic value.
The basic idea is to use special auctions to recreate a market for these securities with many competing sellers and one buyer (the Treasury), so that a credible 'market' price can be established. If that price turns out to be below what those securities are now valued at on the banks' balance sheets, then banks will have to take the loss. If the price turns out to be higher, then banks may be able to record gains. The point isn't to bail out institutions that have made bad bets and suffered credit losses, but to provide a buyer of last resort so the market can begin pricing again."
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This is a short and persuasive take on the Paulson proposal. Worth reading for sure.
Pearlstein doesn't talk about the politics, just the policy. Politically, we now have the spectacle of the Democrats blaming the congressional Republicans for the breakdown in negotiations over the bailout. Last time I checked the Democrats had majorities in both houses of Congress and they can surely count on some Republican votes, and the President won't veto it because it's his administration's proposal. So why don't the Democrats just negotiate with the administration, come up with a Bush/Democrats bill, pass it, and take credit for saving the economy? Pelosi told Paulson that the Republicans are the problem, so in fact there is no problem, right?
Except that the Democrats don't want the responsibility of making the decision. They want some sort of bipartisan bailout so they don't take the heat for the current unpopularity of "bailing out Wall Street," and for the possibility that it will be a failure anyway. And they want Republican support on Democrat terms, apparently with all sorts of additional spending for other things and new powers for bankruptcy judges to remake the terms of mortgages. Some of these things may be good ideas. But it comes down to power. They don't want to do this without some sort of Republican leadership on board. Yet, it seems to me that there is so much vehement conservative opposition to this entire bailout concept (listen to talk radio on this) that the Republican leadership will continue to balk. Maybe McCain can twist their arms, maybe not. If he succeeds in getting the Republicans in line (and that's why he went to Washington), we have a bailout and the usual bipartisan blame-and-credit-game afterword. If he fails, the Democrats will have to choose between a) taking responsibility for a huge, complex, and untested policy that may not work, or b) letting the financial sector melt down entirely and trying to blame the resulting depression on Bush, McCain, and the Republican minority in Congress.
The basic idea is to use special auctions to recreate a market for these securities with many competing sellers and one buyer (the Treasury), so that a credible 'market' price can be established. If that price turns out to be below what those securities are now valued at on the banks' balance sheets, then banks will have to take the loss. If the price turns out to be higher, then banks may be able to record gains. The point isn't to bail out institutions that have made bad bets and suffered credit losses, but to provide a buyer of last resort so the market can begin pricing again."
---------------
This is a short and persuasive take on the Paulson proposal. Worth reading for sure.
Pearlstein doesn't talk about the politics, just the policy. Politically, we now have the spectacle of the Democrats blaming the congressional Republicans for the breakdown in negotiations over the bailout. Last time I checked the Democrats had majorities in both houses of Congress and they can surely count on some Republican votes, and the President won't veto it because it's his administration's proposal. So why don't the Democrats just negotiate with the administration, come up with a Bush/Democrats bill, pass it, and take credit for saving the economy? Pelosi told Paulson that the Republicans are the problem, so in fact there is no problem, right?
Except that the Democrats don't want the responsibility of making the decision. They want some sort of bipartisan bailout so they don't take the heat for the current unpopularity of "bailing out Wall Street," and for the possibility that it will be a failure anyway. And they want Republican support on Democrat terms, apparently with all sorts of additional spending for other things and new powers for bankruptcy judges to remake the terms of mortgages. Some of these things may be good ideas. But it comes down to power. They don't want to do this without some sort of Republican leadership on board. Yet, it seems to me that there is so much vehement conservative opposition to this entire bailout concept (listen to talk radio on this) that the Republican leadership will continue to balk. Maybe McCain can twist their arms, maybe not. If he succeeds in getting the Republicans in line (and that's why he went to Washington), we have a bailout and the usual bipartisan blame-and-credit-game afterword. If he fails, the Democrats will have to choose between a) taking responsibility for a huge, complex, and untested policy that may not work, or b) letting the financial sector melt down entirely and trying to blame the resulting depression on Bush, McCain, and the Republican minority in Congress.
BBC NEWS | UK | Pilot completes jetpack challenge
BBC NEWS | UK | Pilot completes jetpack challenge: "A Swiss man has become the first person to fly solo across the English Channel using a single jet-propelled wing. Yves Rossy landed safely after the 22-mile (35.4 km) flight from Calais to Dover, which had been twice postponed this week because of bad weather. The former military pilot took less than 10 minutes to complete the crossing and parachute to the ground. The 49-year-old flew on a plane to more than 8,200ft (2,500m), ignited jets on a wing on his back, and jumped out."
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I want one of these for my birthday.
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I want one of these for my birthday.
Money: HOA delinquencies on the rise | association, hoa, foreclosures, hoas, aliso - OCRegister.com
Money: HOA delinquencies on the rise | association, hoa, foreclosures, hoas, aliso - OCRegister.com: "The Laguna Hills condo complex had at least 23 foreclosures in the past six months, resulting in months of unpaid homeowner association dues.
Now, Aliso Meadows is so short on cash that it has deferred roof and termite repairs, can't fix rotten wood siding and must wait to fix potholes 'big enough for your families to make Jacuzzi's of,' association officials said."
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Many associations are getting hit hard by the foreclosure meltdown. Banks aren't paying assessments on their REO CID units. Do you think they are going to start paying now, in the middle of a financial crisis? Harder times are coming, it seems.
Now, Aliso Meadows is so short on cash that it has deferred roof and termite repairs, can't fix rotten wood siding and must wait to fix potholes 'big enough for your families to make Jacuzzi's of,' association officials said."
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Many associations are getting hit hard by the foreclosure meltdown. Banks aren't paying assessments on their REO CID units. Do you think they are going to start paying now, in the middle of a financial crisis? Harder times are coming, it seems.
MyFox Tampa Bay | Homeowners face foreclosure for bushes, fees
MyFox Tampa Bay | Homeowners face foreclosure for bushes, fees: "A group of homeowners say they face liens on their homes and possible foreclosure for something as trivial as tall bushes. Others say they're accused of not paying fees when they have. Now, the issue is headed to court."
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This is the wrong time for HOA boards to get all hard-nosed about minor issues, if you ask me. Thanks to Fred Pilot for this link.
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This is the wrong time for HOA boards to get all hard-nosed about minor issues, if you ask me. Thanks to Fred Pilot for this link.
WaMu is largest U.S. bank failure - Yahoo! News
WaMu is largest U.S. bank failure - Yahoo! News: "NEW YORK/WASHINGTON (Reuters) - Washington Mutual Inc was closed by the U.S. government in by far the largest failure of a U.S. bank, and its banking assets were sold to JPMorgan Chase & Co for $1.9 billion...It vaults JPMorgan past Bank of America Corp to become the nation's second-largest bank, with $2.04 trillion of assets, just behind Citigroup Inc. Bank of America will go to No. 1 once it completes its planned purchase of Merrill Lynch & Co."
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At the rate this is going, we will soon have just a few giant banks.
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At the rate this is going, we will soon have just a few giant banks.
Thursday, September 25, 2008
Rescue plan could hinge on value of bad assets
Rescue plan could hinge on value of bad assets: "Treasury Secretary Henry Paulson's $700 billion financial rescue plan has grown from a program focused on relieving lenders and investors of their bad mortgages to one in which the government would have the authority to take over any kind of problem loan or other asset, from bad credit card debt to commercial real estate securities."
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Fred Pilot wonders if this would include delinquent HOA assessments. Maybe HOAs should start packaging their bad debt as securities and selling it, because if the credit markets dry up they won't be able to borrow to repair common area elements that 1) they have insufficient reserves to repair, and 2) they can't get enough from the owners in regular or special assessments to fix, and 3) there ain't no place else to go but the bank.
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Fred Pilot wonders if this would include delinquent HOA assessments. Maybe HOAs should start packaging their bad debt as securities and selling it, because if the credit markets dry up they won't be able to borrow to repair common area elements that 1) they have insufficient reserves to repair, and 2) they can't get enough from the owners in regular or special assessments to fix, and 3) there ain't no place else to go but the bank.
China banks told to halt lending to US banks-SCMP | Markets | Markets News | Reuters
China banks told to halt lending to US banks-SCMP | Markets | Markets News | Reuters: "BEIJING, Sept 25 (Reuters) - Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday."
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I think this is what Bush was talking about when he said that "credit markets are frozen." I wonder if Obama thinks this is important enough for him to stop the preening and posturing and go back to Washington. Last time I checked, he was supposedly a US Senator. I realize he thinks he is already President, but it seems that he might actually need to vote "present" again.
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I think this is what Bush was talking about when he said that "credit markets are frozen." I wonder if Obama thinks this is important enough for him to stop the preening and posturing and go back to Washington. Last time I checked, he was supposedly a US Senator. I realize he thinks he is already President, but it seems that he might actually need to vote "present" again.
Bailout: Full text of Bush's address about economy - On Deadline - USATODAY.com
Bailout: Full text of Bush's address about economy : "The decline in the housing market set off a domino effect across our economy. When home values declined, borrowers defaulted on their mortgages, and investors holding mortgage-backed securities began to incur serious losses. Before long, these securities became so unreliable that they were not being bought or sold. Investment banks, such as Bear Stearns and Lehman Brothers, found themselves saddled with large amounts of assets they could not sell. They ran out of money needed to meet their immediate obligations, and they faced imminent collapse. Other banks found themselves in severe financial trouble. These banks began holding on to their money, and lending dried up, and the gears of the American financial system began grinding to a halt."
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I don't pretend to be an expert on the financial sector, but I wish Bush had gone further and explained a couple of things.
The speech laid out the basics. There was a tsunami of cheap and easy money being lent out, creating enormous risk to the financial institutions, and the GSEs were in terrible jeopardy. When housing prices began to fall, the wave began to crash.
But while he correctly pointed to the speculation in housing that occurred, he never mentioned two things, because to do so would set off the blame game and paralyze his efforts to get the bill passed:
1. The Clinton Administration's major initiative to force banks to give home loans to "first time home buyers," meaning people who couldn't afford home ownership. You could call this over-regulation. This got Fannie Mae and Freddie Mac involved in buying all kinds of bad loans, and they passed that on in what turned out to be bad (but guaranteed) securities.
2. The total lack of regulation over the huge array of bizarre derivatives that were spawned to deal with all the excess risk. Credit default swaps proliferated all over the place and led to demands for payment that could not possibly be met--even by a giant like AIG.
So it seems to me that there was both over and under regulation: over-regulation in housing finance to induce reckless lending to people with no money, and under-regulation in the financial sector where they bought and sold all that risk. He avoided mentioning either. That makes the whole thing sound like a big natural disaster instead of something that was created by human action. Maybe that helps get the bailout passed, but doesn't the public need a fuller explanation of how we got here? I can see a typically vapid finger-pointing election "debate" over this between Obama and McCain with nobody explaining why both explanations are part of the real story.
----------------
I don't pretend to be an expert on the financial sector, but I wish Bush had gone further and explained a couple of things.
The speech laid out the basics. There was a tsunami of cheap and easy money being lent out, creating enormous risk to the financial institutions, and the GSEs were in terrible jeopardy. When housing prices began to fall, the wave began to crash.
But while he correctly pointed to the speculation in housing that occurred, he never mentioned two things, because to do so would set off the blame game and paralyze his efforts to get the bill passed:
1. The Clinton Administration's major initiative to force banks to give home loans to "first time home buyers," meaning people who couldn't afford home ownership. You could call this over-regulation. This got Fannie Mae and Freddie Mac involved in buying all kinds of bad loans, and they passed that on in what turned out to be bad (but guaranteed) securities.
2. The total lack of regulation over the huge array of bizarre derivatives that were spawned to deal with all the excess risk. Credit default swaps proliferated all over the place and led to demands for payment that could not possibly be met--even by a giant like AIG.
So it seems to me that there was both over and under regulation: over-regulation in housing finance to induce reckless lending to people with no money, and under-regulation in the financial sector where they bought and sold all that risk. He avoided mentioning either. That makes the whole thing sound like a big natural disaster instead of something that was created by human action. Maybe that helps get the bailout passed, but doesn't the public need a fuller explanation of how we got here? I can see a typically vapid finger-pointing election "debate" over this between Obama and McCain with nobody explaining why both explanations are part of the real story.
Wednesday, September 24, 2008
Bush: U.S. Citizens to Welcome Our 51 State
Bush: U.S. Citizens to Welcome Our 51 State: "(2008-09-20) — Although it cost more than the Louisiana Purchase and the Alaska purchase combined and offers far less acreage, President George Bush today said he thinks “U.S. citizens will welcome our 51 state with open arms.”
The announcement that the financial realm collectively known as “Wall Street” had applied for statehood follows a week in which the federal government took control of mortgage giants Fannie Mae and Freddie Mac, and insurance megalith AIG. It also comes as news breaks that the U.S. plans to spend up to a $1 trillion to “rescue” other foundering financial firms.
President Bush noted that the newest state is not so much a geographical swath of land as it is “a state of mind.”"
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You did hear about this, didn't you?
The announcement that the financial realm collectively known as “Wall Street” had applied for statehood follows a week in which the federal government took control of mortgage giants Fannie Mae and Freddie Mac, and insurance megalith AIG. It also comes as news breaks that the U.S. plans to spend up to a $1 trillion to “rescue” other foundering financial firms.
President Bush noted that the newest state is not so much a geographical swath of land as it is “a state of mind.”"
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You did hear about this, didn't you?
3 News > Business > Story > Cows that milk themselves
3 News > Business > Story > Cows that milk themselves: "The country's first robotic dairy farm is now up and running, complete with milking robots that allow the cows to choose their own milking time.
It is run by robots, milking robots that allow cows the freedom to be milked whenever they choose. Each animal has its own computerised collar giving it access to the milking shed, and monitoring its milk outflow and health."
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Somebody tell PETA about this so they can stop asking Ben & Jerry to make ice cream with human breast milk (see below).
It is run by robots, milking robots that allow cows the freedom to be milked whenever they choose. Each animal has its own computerised collar giving it access to the milking shed, and monitoring its milk outflow and health."
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Somebody tell PETA about this so they can stop asking Ben & Jerry to make ice cream with human breast milk (see below).
Beware the Button Police :: Inside Higher Ed :: Higher Education's Source for News, Views and Jobs
Beware the Button Police :: Inside Higher Ed :: Higher Education's Source for News, Views and Jobs: "Sporting an Obama or McCain button? Driving a car with one of the campaigns’ bumper stickers? You might need to be careful on University of Illinois campuses.The university system’s ethics office sent a notice to all employees, including faculty members, telling them that they could not wear political buttons on campus or feature bumper stickers on cars parked in campus lots unless the messages on those buttons and stickers were strictly nonpartisan. In addition, professors were told that they could not attend political rallies on campuses if those rallies express support for a candidate or political party. Faculty leaders were stunned by the directives. Some wrote to the ethics office to ask if the message was intended to apply to professors; they were told that it was. At Illinois campuses, as elsewhere, many professors do demonstrate their political convictions on buttons, bumper stickers and the like."
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Yes, they do "demonstrate their political convictions." But the University of Illinois faculty's political convictions are about 99% on one side: the left. So what we are really talking about is suppression of Obama buttons, Obama bumper stickers, and attendance at Obama rallies. And many professors also demonstrate their convictions in the classroom, which I noticed didn't pop up on the list, presumably because of legitimate concerns about the professors' academic freedom. So, the hard question is, who, if anybody, makes sure professors respect the students' freedoms? How do you address that concern without trampling on the professors?
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Yes, they do "demonstrate their political convictions." But the University of Illinois faculty's political convictions are about 99% on one side: the left. So what we are really talking about is suppression of Obama buttons, Obama bumper stickers, and attendance at Obama rallies. And many professors also demonstrate their convictions in the classroom, which I noticed didn't pop up on the list, presumably because of legitimate concerns about the professors' academic freedom. So, the hard question is, who, if anybody, makes sure professors respect the students' freedoms? How do you address that concern without trampling on the professors?
Tuesday, September 23, 2008
Brad Setser: Follow the Money » Blog Archive » Some ballpark math on the US financial sector (i.e. just how big is $700b?): "The Federal Reserve’s flow of funds data indicates that US households have $11.2 trillion in outstanding mortgage debt on non-farm homes, another $2.4 trillion in outstanding “other mortgage debt” (a category that includes corporate farms, who knew … ) and $2.5 trillion outstanding consumer credit."
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Not so big after all?
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Not so big after all?
PETA Urges Ben & Jerry's To Use Human Milk - News Story - WPTZ Plattsburgh: "PETA officials say a move to human breast milk would lessen the suffering of dairy cows and their babies on factory farms and benefit human health."
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When did the press start doing PETA's bidding here? When a cow reproduces, the offspring is called a "calf," not a BABY. And pardon me for being squeamish, but I'm not buying human breast milk ice cream. Besides, I'd say this whole milk gig is good for cows when you consider the alternative. If we don't use cows to produce milk, why not shoot them and turn them into meat? While on the subject of unpleasant alternatives, I think if you surveyed the nation's cows, they would vote about 9 to 1 that they would rather be milked daily than have their hind legs eaten by a pack of wolves while their front legs are still trying to run away.
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When did the press start doing PETA's bidding here? When a cow reproduces, the offspring is called a "calf," not a BABY. And pardon me for being squeamish, but I'm not buying human breast milk ice cream. Besides, I'd say this whole milk gig is good for cows when you consider the alternative. If we don't use cows to produce milk, why not shoot them and turn them into meat? While on the subject of unpleasant alternatives, I think if you surveyed the nation's cows, they would vote about 9 to 1 that they would rather be milked daily than have their hind legs eaten by a pack of wolves while their front legs are still trying to run away.
Americans reluctant to fund bailout, poll finds - Los Angeles Times
Americans reluctant to fund bailout, poll finds - Los Angeles Times: "Asked whether the government should use taxpayer dollars to rescue financial firms whose collapse could have adverse effects on the economy, 55% of the poll's respondents said they did not believe the government should be responsible for funding a bailout plan."
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The precise working of the questions would determine the results in this situation, because most of the respondents probably think Fannie Mae is a candy store.
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The precise working of the questions would determine the results in this situation, because most of the respondents probably think Fannie Mae is a candy store.
FinancialRx: Credit Default Swaps Now Total $283 Trillion: "Last week the International Swaps and Derivatives Association said that at the end of June, the outstanding nominal value of swaps and derivatives was $283.2 trillion. As the New York Times pointed out over the weekend, that's a lot of money, vastly superior to the combined gross domestic products of the U.S., European Union, Canada and China -- a paltry $34 trillion -- or the value of all U.S. homes, which is about the same amount. 'To be sure, notional value is an exaggerated term as it greatly overstates the amount at risk in many contracts,' the Times noted. 'But the growth rate is real, and in the fastest-growing area of swaps -- credit default swaps -- notional value is closer to the amount at risk, because such swaps promise to make up the losses if a borrower defaults on the notional amount.'"
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This is a link to a blog post. The chart that accompanies it will blow the mind of anybody who looks at it long enough to understand it. Then look at the date of the post: September 28, 2006.
And now we are reading about how the financial sector of the US economy is melting into a puddle of goo because of...credit default swaps.
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This is a link to a blog post. The chart that accompanies it will blow the mind of anybody who looks at it long enough to understand it. Then look at the date of the post: September 28, 2006.
And now we are reading about how the financial sector of the US economy is melting into a puddle of goo because of...credit default swaps.
Freddie Mac's new chief to get $900,000 salary - Sep. 23, 2008: "WASHINGTON (AP) -- Mortgage finance company Freddie Mac says its new chief executive is earning a base salary of $900,000 a year, a 25% pay cut from his predecessor who also received sizable bonuses and stock options."
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Nice to see all this belt-tightening at Freddie Mac, now that we the taxpayers have taken it over and all. A mere 900K for the base salary, while his full salary package is being determined, mind you. This is just to tide him over. Isn't that special?
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Nice to see all this belt-tightening at Freddie Mac, now that we the taxpayers have taken it over and all. A mere 900K for the base salary, while his full salary package is being determined, mind you. This is just to tide him over. Isn't that special?
FOXNews.com - FBI Investigating Potential Fraud by Fannie Mae, Freddie Mac, Lehman, AIG - Local News | News Articles | National News | US News: "Over the past year as the housing market cratered, the FBI has opened a wide-ranging probe of companies across the financial services industry, from mortgage lenders to investment banks that bundle home loans into securities sold to investors. Mueller has previously said the FBI's hunt for culprits in the nation's subprime mortgage crisis focused on accounting fraud, insider trading, and failure to disclose the value of mortgage-related securities and other investments. The investigations revealed Tuesday come as lawmakers began considering whether to approve emergency legislation that would give the government broad power to buy up devalued assets from troubled financial firms."
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Pardon my skepticism, but I can't help wondering if this is a conveniently timed leak intended to convey the impression that the Bush administration isn't just showering the financial industry with taxpayer largesse, but investigating...seeking to find and punish the bad guys who created this mess, whoever they may be (and I should emphasize that I am not blaming any particular individuals for the economic debacle--I'm just talking about the way this leak makes things look).
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Pardon my skepticism, but I can't help wondering if this is a conveniently timed leak intended to convey the impression that the Bush administration isn't just showering the financial industry with taxpayer largesse, but investigating...seeking to find and punish the bad guys who created this mess, whoever they may be (and I should emphasize that I am not blaming any particular individuals for the economic debacle--I'm just talking about the way this leak makes things look).
Fort Lauderdale condo association has dog fight -- South Florida Sun-Sentinel.com
Fort Lauderdale condo association has dog fight -- South Florida Sun-Sentinel.com: "Michael Colyer lost his cool with his condominium board's president, so now the condo association wants a judge to order him to get lost when it comes to future meetings."
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No sooner do I blog about dogs than up jump a couple of schnauzers and nip a Shih Tzu, leading to a big row at the condo association meeting, with F-bombs thrown around, and next thing you know the association wants a TRO barring the hurler of the F-bombs from meetings and "other condo functions," which I assume amounts to shunning.
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No sooner do I blog about dogs than up jump a couple of schnauzers and nip a Shih Tzu, leading to a big row at the condo association meeting, with F-bombs thrown around, and next thing you know the association wants a TRO barring the hurler of the F-bombs from meetings and "other condo functions," which I assume amounts to shunning.
Monday, September 22, 2008
CARPE DIEM: Size of U.S. State Economies vs. Foreign Countries: "We often lose sight of: a) how big the U.S. economy is, b) how productive American workers, and how much we produce vs. other countries. After all, who can get their mind around $13 trillion, the size of the U.S. economy measured by GDP ($13,000,000,000,000)?
World GDP is about $47 trillion according to the CIA World Factbook, so the U.S. economy produces more than 30% of world output every year, with just 5% of the world's population."
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A little perspective helps to get a sense for the kind of money this bailout represents. The map that accompanies the post is astounding. Russia=New Jersey???
Home, small home: 250 square feet in SoMa / New condo development targets young first-time buyers without too much stuff
Home, small home: 250 square feet in SoMa / New condo development targets young first-time buyers without too much stuff: "It's about the size of seven ping-pong tables - and all yours starting at $279,000. A San Francisco design and development firm has begun marketing 98 tiny condominiums - ranging from 250 to 350 square feet - at the Cubix Yerba Buena building in SoMa."
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And the condo dues are $270 per month. Thanks to Kimberly Cane for this link. What a deal. Maybe they just wall you up in it like The Cask of Amontillado.
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And the condo dues are $270 per month. Thanks to Kimberly Cane for this link. What a deal. Maybe they just wall you up in it like The Cask of Amontillado.
Bailout Prevents Great Depression 2.0 - Capital Commerce (usnews.com): "What would be the dollar cost of not bailing out Wall Street? Try a number north of $30 trillion. (The awful math is detailed below.) That's why Hank Paulson and Ben Bernanke were so scared last week."
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That number will get your attention in a hurry. How much money is there in the world?
FEATURE-For many U.S. Christians, it's God before mortgage | Markets | Bonds News | Reuters
FEATURE-For many U.S. Christians, it's God before mortgage
For some Christians, tithing to their church takes precedence over paying their mortgage. Shorting the bank is one thing, but if you ask me they had better pay those HOA fees.
For some Christians, tithing to their church takes precedence over paying their mortgage. Shorting the bank is one thing, but if you ask me they had better pay those HOA fees.
Woman whose dogs mauled neighbor gets 15 to life: "SAN FRANCISCO (AP) - A judge has sentenced a dog owner to 15 years to life in prison, seven years after her canines fatally mauled her neighbor in an upscale San Francisco neighborhood."
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This is a highly unusual sentence. Normally the owner of a dog that attacks somebody gets a small fine and maybe a civil suit. In this case, these dogs were huge, vicious beasts raised by white supremacists, and the owners were attorneys who represented the creeps and acquired the dogs from them. The woman who died was opening the door to her apartment and the dogs were in the hall with their owners. They attacked her and the owners couldn't get them off her. It was a horrific incident.
Apparently this was in an apartment building, but the issue that comes to mind is the presence of potentially dangerous dogs, such as those Presa Canarios, pit bulls, etc., in condo and hoa developments. Most condos have rules on the number and/or size of pets. Many HOAs are much less restrictive. I have been consulted by people who had problems with their neighbors' dogs, which were legal under existing rules but scaring the daylights out of everybody. Of course, the owners say the dogs are harmless and just look scary. Seems to me that this is a difficult situation where there are generally two sides to the story. There is no easy solution. Do you ban certain breeds, and if so, besides pit bulls, which ones? Do you give the dogs disposition tests? Do you go by weight? Give them one free bite? How much power should people have over the neighbor's choice of pet? Not an easy issue to be fair about.
(PS: would the pit bull lovers please spare me the lectures about what wonderful misunderstood animals they are? I've heard it all before and it is nonsense. I could fill this blog with stories of people mangled by pit bulls. I know some of them are great dogs, but they are unpredictable time bombs and should all be sterilized.)
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