Month: July 2008

Bank Deathwatch: Indymac

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The nation’s 7th largest mortgage lender is no longer classified as “well capitalized”, and it appears to be unable to raise additional capital. As a result regulators are pressuring them to shrink their loan business, and they have laid off half their staff

Indymac currently has a Texas ratio* of 140%, where a number at or above 100% means likely failure

Note that Indymac was cofounded by the “Tanned One” Angelo Mozilo, who also founded countrywide financial. He’s just the gift that keeps on giving.

*Quoting wiki, “The Texas ratio is a measure of a bank’s credit troubles, developed by Gerard Cassidy and others at RBC Capital Markets. It is calculated by dividing the value of the lender’s non-performing loans by the sum of its tangible equity capital and loan loss reserves.”

There’s Not Guilty, There’s Innocent, There Is Pure as the Driven Snow, and Then There is:

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So f&^%ing innocent that half your jury goes tailgating with the former defendant to a Pittsburgh Pirates game.

Dr. Cyril H. Wecht, former Allegheny County coroner, who was harassed by a political hack US attorney over a few phone calls and faxes from his office.

Note that they did this after said US attorney sent goons to intimidate them after the hung jury (last link).

See here, here, here, here, here, here, and here.

Banking Losses to Hit $1.6-Trillion

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Paul Kedrosky finds an article in a Swiss paper on a study by the 2nd largest hedge fund in the world, Bridgewater, that estimates the final hit on the credit crunch at $1.6 trillion.

Yes, that’s trillion with a T, and my guess is that the number is too low.

Why, because even the most bearish of bears, Noriel Roubini, has admitted that he underestimated the size of the bubble and the resulting size of the collapse.

A Spinster on Marriage

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Yes, it’s the New York Times’ finest, Maureen Dowd, writing on desirable qualities for a husband.

There are many women out there who can lead fulfilled lives without being married.* These are simply unmarried or single women, or whatever they wish to be called.

There are also those who can never find fulfillment without the ring. These are spinsters or old maids.

Dowd is the latter.

*And thanks to California, same sex couples can argue over community property now!!!

Canadian Court Orders Review of US Deserter Refugee Status

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The judge ruled that officially sanctioned brutality, even when it does not rise to the level of a crime against humanity, is sufficient to merit refugee status:

…..

While the immigration board concluded that some of the alleged conduct by the U.S military included a “disturbing level of brutality,” it said the conduct did not meet the definition of a war crime or a crime against humanity.

Barnes said the board erred “by concluding that refugee protection for military deserters and evaders is only available where the conduct objected to amounts to a war crime, a crime against peace or a crime against humanity.”

Citing a case from the U.S. Federal Court of Appeal, Barnes said officially condoned military misconduct could still support a refugee claim, even if it falls short of a war crime.

“The authorities indicate that military action which systematically degrades, abuses or humiliates either combatants or non-combatants is capable of supporting a refugee claim where that is the proven reason for refusing to serve,” Barnes wrote.

Barnes said the board imposed a legal standard that was “too restrictive” on Key, who lives in Saskatchewan.

Key’s lawyer, Jeffry House, said the ruling expands a soldier’s right to refuse military service.

…..

(emphasis mine)

They broke this man, the story mentions debilitating nightmares, and I’m sure that an examination would find more evidence of damage, and they wanted to send him back.

For us as a society, what should bother us is the broken men who go back to Iraq, and then, one day, they come home, because this will come home with them.

Economics Update

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Well, the Employment Trends Index is down again. That 11 down over the past 12 months.

In energy, oil prices briefly brok $140/bbl on the downside before settling at $141.37, but the price of retail gasoline continues upward unabated.

Unsurprisingly, the dollar strengthened today, though I am unclear why. The fundamentals underlying the dollar, trade and budget deficits, would seem to point further down.

I wonder what happens when we run out of Dutch boys’ fingers to put in the levee.*

Meanwhile, I think that all those folks who said that it was only residential real estate that was crashing are now desperately trying to find their happy place, because we just saw the the worst Q2 in commercial rentals in 30 years.

*No, I’m not going there.

The GSE’s Just Tanked

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Freddie Mac fell 18 percent and Fannie Mae 16 percent after a Lehman Brothers analysts said that they would have to raise more than $75 billion.

They are both down more than 60% so far this year.

Normally, I don’t follow stock, but if they do indeed need to raise capital to stay solvent, then they will have…you got it…sell stock for said capital.

The rule, FAS 140, is intended to make sure that companies don’t keep “under performing assets “(translation: worthless crap) in “off-balance sheet entities” (translation: embezzlement and fraud).

Republicans Will Cave on Medicare Funding

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The Republicans are holding up a Medicare funding plan which reduces subsidies to private insurers offering “Medicare Advantage” in order to raise doctors fees in the stand, and the AMA is taking out ads targeting the Republicans opposing this.

You see the Republicans believe that they only way to bring efficiency to the medical market is to bring in private enterprise, but private enterprise is much less efficient than basic Medicare, so they need subsidies to compete.

The reality is that the Medicare advantage program is about two things:

  • Ideology trumping reality.
  • Republithugs getting donations from insurance companies.

Bush is promising a veto, and doctors are already shutting down practices or no longer accepting new Medicare patients, so this will get ugly quickly.

If the Dems have any brains, they will fold their arms, and say, “this is the deal”, and let the Republicans founder.

Well, It Looks Like Texas Has Pulled Ahead in the Backwards State Derby

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Yep, Texas is heading for a new monkey trial.

Chris Comer, former science director of the Texas Education Agency (TEA) was fired because he forwarded an announcement about an evolution event, and she has now sued for illegal termination on the basis that:

  • That creationism is illegal religious dogma in public schools.
  • The TeA’s “neutrality” on evolution/creationism is in fact an endorsement of the latter.
  • That her firing is an illegal establishment of religion.

The think is that this is fairly settled law, see Kitzmiller v. Dover Area School District, so I imagine that Comer will win this.

It’s why I left Texas in 2001. I did not want my children to grow up in the backward political and social environment there.

Zimbabwe

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Well, it’s not getting any better.the government is “embracing and extending” the idea of using food aid as a weapon, even after the election.

Mugabe is demanding that negotiations will not start until the opposition formally recognizes him as duly elected president of Zimbabwe.

The Guardian now has hidden camera video of voter intimidation, if you want to check it out.

Of course, Mbeki is still trying to be the mediator, even when it is unbelievably clear that he is no where near impartial in this matter.

Meanwhile, the US is pushing for sanctions against the government of Zimbabwe and its leaders, including an arms embargo and Freezing foreign assets of Zimbzbwean leaders.

We do have a potential promising development, a proposal in which Mugabe would remain president, but retain essentially no power, but this appears to be confused, with Mugabe apparently insisting that negotiations occur at the presidential offices, which would appear to cede that to Mugabe before the first words were said.

Crap. John McCain is Telling the Truth

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OK, now we have Obama “Puzzled” by blip flop charges, because he has completely reversed himself on FISA, and now he’s saying that in order for “mental distress” to be used to justify a late term abortion, it must be a formal psychiatric disorder out of the DSM IV.*

So, he’s selling the constitution out privacy, he’s reversed himself on free trade agreements, and now he is suggesting a heightened standard for late term abortion (while using the right wing’s language of “Partial Birth Abortion”).

John McCain can call him a flip flopper on the issues because Barack Obama is a flip flopper on the issues.

His only saving grace is the John Sidney McCain is a bigger flip flopper.

I guess that we’ll get the president we deserve.

*The 4th and most recent release of the Diagnostic and Statistical Manual of Mental Disorders.