December 22, 2007
Rush Limbaugh and Hillary’s wrinkles
It would behoove everybody to remember that Monsieur Limbaugh is a comedian. He and his arch supporters only have to sit back and wait to hear the howls from Democrats and feminists before then doubling over in great gales of laughter.
If you can step back from the stage, so to speak, and gain some perspective you can enjoy a master vaudevillian doing his shtick (at your expense.)
Personally, I fell in love with Golda Meir when I was in my 20’s.
December 19, 2007
Greenspan's adorable euphemism for the housing debacle and Free Market mythology.
There are some interesting side issues to the sub prime housing crisis that are not so generally discussed. Are free markets efficient, as the GOP/corporate mantra goes, or prone to excess and economic dislocation? Who pays for the economic dislocation, those receiving the bonuses prior to the crash or John and Jane Doe? If the total housing market is in effect a commodity subject to ups and downs why were the financial big boys all invested in an ever upward scenario? Who lends trillions collateralized by a commodity with little or no equity margin? Greenspan et al, to some degree knowingly, destroyed the S&Ls so Wall Street could get their hands on mortgage paper. This sub prime crisis is actually Part Two of the earlier S&L takedown.
Also, while considering the effects of Congress, the Fed and Corporate (Bank) America's destruction of one institution, i.e. the Savings and Loan Industry, ask again why Bush, the GOP and Wall Street say trust us that privatizing social security is a guaranteed boon to our aging citizens.
First, the myth that free markets operate efficiently: In the 60's, financial institutions' equity got hammered by overlending to REITs. Then, as a result of a Latin America lending binge in the 70's and 80's, several household name banks disappeared via mergers. Followed on by the the S%L crisis which happened when the biggest commercial banks and investment houses talked Greenspan et al into deregulating these economically safe and efficient entities in order that they could get their hands on what would become known as securitized debt or mortgage obligations. Without legislation to destroy the Savings Industry's niche, what we now call the sub prime fiasco could not have occurred. It is interesting to note that this is actually the S&L debacle, Part two.
My labored point is that the financial big boys go on binges. They regularly wipe out enormous chunks of their equity capital and in so doing they wipe out their lending capacity. If free markets were efficient this would not occur. In this fiasco the financial industry bought crap assets. Forget both the borrower and the broker who made the loans. Billions of these mortgages were known to entail a high degree of risk and yet they were bought at par so to speak. There is no evidence of market efficiency here. The supposed best, biggest and brightest bought junk.
Let's hear Alan Greenspan's (hilarious) euphemism on this subject: "Over the past five years, risk had become increasingly underpriced as market euphoria, fostered by an unprecedented global growth rate, gained cumulative traction." (As I said the big boys, hedge funds, etc bought crap loans.)(Hence gov't intervention.)
Another different light that could be shed on the Collateralized Mortgage crash is that, in overview, housing is or became a commodity. I was a lender in the oil patch in the early eighties when the collective equity of the Texas and other Southwest banks seemingly disappeared overnight. A barrel of oil had risen to $26-28 and when it fell to $12, a domino of bad loans left the US Government as the Southwest's banker.
Leading up to our present liqiuidity crisis, all housing became commodified. It had to increase in price for the sub prime CMO purchase and sale system to stay afloat. What I find interesting here is that there are written and unwritten rules that the financial world follows when retail or wholesale customers or the institutions take a position in a commodity. Common sense as well as in-place regulations mandate that a sensible liquid margin be in hand before, in this case, a person or an industry bets trillions on the price direction of a commodity or particular asset.
A regulator presenting a case for earlier intervention by using this commodity analogy might have presented a simpler, more cogent and forceful argument. Saving John and Jane Doe from resetting mortgages was not an argument likely to get a patient ear from our entwined Corporate America and Congressional decision makers.
And harken well to the underlying economic rationale and philosophy espoused when George Bush, the GOP and Wall Street attempt to entice the public that placing their retirement benefits in security related private accounts is a guaranteed boon to their retirement well being. The banks and the Fed and their Congressional enablers had their way with the Savings and Loan Industry and the results have not been pretty. When they come asking for commissions on the nation's social security assets ask them to explain that bit about how markets only rise in value.
December 17, 2007
Sunnis to kick Shia butt -repost from 11/26/06
The Sunni insurgents are now literally and actually in their "last throes."
But now this statement means they have won.
A knowledgeable source basically says that it is an open secret that the Sunni insurgents will kick the Shia's butt when we leave.
And, our staying will serve no useful purpose.
Let events take their course.
Tis a shame we didn't go in with 300,000 troops or not disband the Army, but "Oh well."
(Current addition. It is interesting to note that the Sunni's are more comfortable with secular life, Christian minorities, women's rights and not aligned with Iran...the "Farside" meets Bush's Iraq victory. Also there's a quote somewhere of Cheney expressing disgust or disappointment that Shia fighters as compared to the Sunnis are wusses.)
December 15, 2007
Obama Drug use: Lessons from Turd Blossom
George replied, "I'm not going there." "It's rule one of gotcha politics that each answer to a query such as "What about your drug use?" only results in 'gotcha scenarios' and more questions. Therefore, I am not going there."
He did not go there and the media quit, no digging, no witnesses, no nada because George had learned from Karl that if you give the (lazy, frightened, sheep like) press zip, zippo, nada by way of easy lines and gossip you quash the topic.
Everybody knows part one of Rove's public relations manipulation schemes...rank propaganda.
If a meeting ends with Bush and company in agreement on legislation to turn back a decade of EPA constraints thus directly leading to increased chemical fouling of the atmosphere, I see them giggling and turning to Rove and asking,"Karl, what should we call this bill?"
He replies. "The Clean Skies Initiative" amidst high fives and laughter.
A voice is heard saying, "God damn, Karl can make almost anything seem sweet."
To which Dubya guffaws, "Why do you think we call him Turd Blossom."
But, part two of Rovian deceit par exellence is what Bush employed vis a vis his drug use.
The rule is, if, under ordinary circumstances, discussing a certain subject can not result in positive results then simply state that you will not discuss that subject. You might note that the pre Rove method was to talk around the subject or change the subject or get partially gothcha-d.
Absent a gutsy press, the subject will die.
Not going after Bush's drug history by the press or Kerry was victory numero uno for Rove's in-your-face deceit politics.
It emboldened the methodology which became Saddam caused 911, Saddam has nukes and "we torture but we don't call it torture."
Barack need only say, "I was a teenager. I dabbled. It's been discussed. Subject closed."
And we should pray that he doesn't thusly become infected with the viral dishonesty of Dubya and Turd Blossom.
December 14, 2007
Make Corporate Tax Breaks a Competition (Woot)
Corporations thirty years ago or so contributed over twenty percent of the tax revenues collected by our IRS. That number is now only seven percent.
Presumably this has come about in part because of the modern ability with computers to instantly reallocate costs, profit centers and scheme like deductions on a global scale.
It has also come about as the hordes from K Street each win a tax break here and a tax break there from their future brethren now sitting in the legislatures.
My proposal is a variable corporate tax rate.
First, set the percentage of total USA taxes required from the corporate sector (for example let’s say 12%). Then on a past year or past quarter rolling basis inform the corporate tax payers what their tax rate is; the rate necessary to meet the 12% goal.
Doesn’t this seem a fair way (as a citizen) to establish a countervailing power to the hold Corporate America has over the taxing powers, i.e. all legislatures?
If you’re economically geeky you may also appreciate a beautifully humorous scenario unfolding from this plan.
If the total amount of taxes to be paid is a set sum per period, then, when one company or one industry negotiates a large tax reduction this will cause the other corporations and industries to pay additional taxes to meet the set goal. Tax boondoggles become a competitive endeavor with each lobbyist’s gain a loss to a competing K Streeter.
Not only is there a smiley thought in envisioning members of the Armani suit cross my palm with lucre K Streeters being at each others throats as they compete to buy favors but tax cuts would have to pass a rigorous economic cost benefit analysis to meet approval.
Well, gee, that’s kinda funny too and somewhat novel.
(Next week: "Capping Pork Proposal defeated by chorus of squeals")
December 13, 2007
March '05 Dollar Oraclation -repost
"Pete Rose & Social Security"
Borrow a trillion or three to fund private accounts. Place half or all of these accounts in foreign stocks, currencies or bonds. The dollar careens yet lower and these account are massively rewarded. Zee problem is solved.
From March 11, 2005
(Explanation! If you're so incompetent as this capitalist mad going-in-debt administration is, just place a bet against your team...Goldman Sachs did...cha ching)
December 11, 2007
Saving bad mortgages and the Free Market
I see writings everywhere that people are upset with legislation to not allow a few tens of thousands of 'resetting' mortgages to default. Damn those stupid borrowers they say. Let the free market work. To me this is horrendously uninformed and naive thinking. I say.
What you espouse seems so right; so logically straight forward. It, however, for the most part is simply dead wrong and off target.
Forget entirely who made the loans, both the borrower and the initial lender. Trillions of dollars of mortgage loans were made and having been made these promises to pay became assets; account receivables to the hedge funds and institutions that subsequently purchased them.
Any middling good economist knew that excesses were going on and that with a rise in interest rates a ton of these CMO assets would default or otherwise decline in value.
So,and nevertheless, the pros, the hedge funds and their mega wealthy clients and other financial institutions still gobbled up these assets.
There was indication aplenty that the ratings were hyped on CMOs and that the financiers were buying some portion of junk assets. Caveat emptor.
In summary, the big boys bought crap assets and being leveraged their entire equity is exposed. As and if the free market was nakedly allowed to operate the big boys equity and concomitant lending resources would evaporate.
Hence the government steps in and says, "You know, the two hundred billion in mortgages that are shaky? Well, we're going to going to say that they are okay for the next cycle at least."
And you say, "Oh, they're now okay and no one needs to write off their equity and go out of business. How swell is that?"
Bottom line. The government cares not a whit that Jane, Joe, Dick or Harry will default and lose homes. They care that the big boys will tank due to their stupidity and that the credit resources of America will then hemorrhage.
Unfortunately, allowing the free market to work in this instance could be a mega disaster for all so the big money guys will of necessity be bailed out.
Jane and Joe, not so much.!
Huckabee's Likability Factor
Setting aside socio political planks as sole arbiters, he seems a personable and nice man. Mitt and Rudi do not.
Over all candidates he appeals as the guy you'd most want to have as a Principal at your children's school. As a neighbor, he appears most likely to show up at the door with a pie or a meal when a wife is ill or facing a surgery.
I find his "God speaks to me" platform and his smattering of intolerance, then or now, abhorrent but I like this man.
His rise is about more than the Theo Fundies.
December 08, 2007
Voltaire on hearing Romney's new mantra invoked in his "Freedom requires religion" line sat bolt upright. Actually he bumped his head which vexed him all the more.
"Theese Romney fellow is such a slut" he said. "He makes the liar, Karl Rove, seem pristine and chaste in hees willingness to throw the Constitution under the tumbrils."
Sex Education and Papal Protection
The Pope's ProphylacticsI have this vision of acolytes preparing the Pope's food in the Vatican kitchens.
In this day and age they are appropriately wearing latex sheaths on their hands. Each finger is covered; ten little condoms for the Pope's oral hygiene.
But when it comes to genitalia..icky, icky...Pius and Paul...forswear protection in Christ's name...you'all.