He has a post on his Rolling Stone blog titled, “An Extremely Long Metaphor to Explain Mortgage Chaos.”
It’s really not long at all, but it concisely nails all the basic points.
Go read it now.
Month: January 2011
And Still No Prosecutions…
The robosigners at teh banks are currently stamping signatures of a woman who died in 1995 to legal documents.
This is not sloppy paperwork. This is criminal fraud.
We need to see prosecutions, but we won’t, because we are committed to looking forward, and not backward, so we will see more fraud, reckless risk taking, and general corruption in our financial system for decades to come.
Thanks, Barry.
And the Insanity Continues
So after a ruinous recession, the economy shrunk by over a fifth, made worse by austerity programs that were intended to maintain a hard peg to the Euro, Estonia’s government has finally achieved the desired result, and at the start of the year, Estonia joins the Euro Zone.
Truth be told, the Estonian government set it up such that there was no choice, since it maintained a hard peg to the Euro, and the Deutsch Mark before that, and almost all the loans outstanding are foreign denominated, so there really never was any sort of fiscal or economic sovereignty in the small Baltic Republic.
If anyone expects an improvement in the standards of living as a result of this though, they are very likely to be disappointed.
China Expected to Field First Carrier in 2011
Click for full size
The Varyag is out of dry dock
It looks like the Chinese will be launching their first carrier this year.
It’s made from the hull (no equipment or propulsion when bought as scrap) of the old unfinished Soviet STOBAR aircraft carrier Varyag, and while I doubt that it will ever serve in anything remotely resembling a combat capability, neither did the USS Langley, though it did see service as a seaplane tender.
What is important here is that it means that China will be developing equipment, doctrine, and training for a carrier borne air wing.
Missing the Point Completely
This article notes that Israel appears to have made significant discoveries in offshore natural gas, but that access to foreign markets will be difficult:
Israel can look forward to long-term energy security after the discovery of a huge off-shore natural gas field but obstacles lie ahead in exporting its output, experts said Thursday.
Israel will find it hard to secure foreign buyers as European gas consumption is weakening while competition is stiff in the expanding Asian market, they said.
Texas-based Noble Energy and its Israeli exploration partners described Wednesday the Leviathan prospect — 130 km (80 miles) off the Mediterranean port of Haifa — as the world’s biggest gas find in the past decade
This misses the reality of the situation.
When one looks at oil exporting nations, with the exception of Norway, the truth is that it does not bring prosperity to the masses, nor does it make for a better society.
Simply put, Israel should not plan to export the gas in any significant quantity.
First, from a defense perspective, the natural gas serves as a way to achieve energy independence in the relatively short term, and exporting the gas diminishes this.
Secondly, natural gas is the raw material for much of the petrochemical industry, and this could be used to establish such an industry in Israel. A focus on exports would serve to subvert the development of this industry and the additional profits, and jobs, that they would create.
Too True
Much like in reality, the when the cops realize that he has stolen hundreds of millions of dollars, rather than a few thousand dollars, they realize that they cannot prosecute, just like in real life.
Click picture for full cartoon.
Not Enough Bullets … No Consequences for the Rich Edition
The New York Times has an article on real estate developers who repeatedly fail and default, but continue to attract other people’s money to their schemes:
Larry Gluck, the apartment building king whose company defaulted on loans in New York, San Francisco, Los Angeles and Washington, recently bought the Windermere Hotel in Manhattan and Tivoli Towers, a subsidized housing complex in Brooklyn.
Ian Bruce Eichner, who lost two major New York skyscrapers to foreclosure in the early 1990s and defaulted on a $760 million loan for a Las Vegas casino resort in 2008, is working on a plan to rescue One Madison Park, a troubled 50-story condominium project.
Even Harry Macklowe, whose $7 billion gamble on seven Midtown skyscrapers at the top of the market almost cost him his entire empire, is out looking for new deals.
Industry lore has it that New York is one of the toughest, most unforgiving real estate markets in the world. The costs are so high, the unions so ornery, the politicians so demanding and the rivalries so fierce, that one false move invites financial disaster.
But the truth is that there have been surprisingly few career fatalities among New York developers, even though they have lost billions of investor dollars on overpriced real estate and have littered the city with unfinished apartment buildings. While a homeowner who lost a house to foreclosure would find it difficult to borrow for years, developers who defaulted on enormous loans have still been able to attract money.
The reasons, experts say, are that there is still plenty of money floating around and that the market has a very short memory.
“You can always find an investor who’ll put up equity with a guy, unless he’s Attila the Hun,” said Daniel Alpert, managing partner at Westwood Capital, a real estate investment bank.
………
This is the very definition of moral hazard, and when someone does this repeatedly, it is not incompetence, it is fraud.
Time to end the bailouts and start prosecuting.
U.S. Navy Splits the Baby on the LCS Contract
Both Lockheed-Martin’s conventional design and Austal’s Trimaran got contracts for 10 ships, at $538 million, without mission modules, which means not much in the way of meaningful sensors or weapons.
For a ship that weighs as much as a frigate, but is as lightly armed as a corvette, but has the advantage of being able to change tasks, by swapping out mission modules, going from anti-sub warfare, to anti-surface warfare, counter-min, ISR, etc. if it can find its way to suitably equipped port.
Yes, “It’s a dessert topping AND a floor wax!”
Yeah, the idea sounds really stupid to me too.
This is a Classic Case of Deterrence
It appears that the Chinese DF-21 anti-ship ballistic missile is operational, a 900 mile range anti-ship missile, at least according to Admiral Robert Willard, Commander, U.S. Pacific Command.
It’s intended to be a carrier killer, and while the capabilities, particularly the targeting, are unclear, but considering that the Pershing II’s MARV (MAneuverable Reentry Vehicle) got a roughly 30 m CEP, it will certainly give a CVBG cause to pause.
Even the warhead is nothing more than 150kg of high strength steel descending at 1000 m/s, it will still completely ruing a carrier skipper’s day.
There are 2 possibility two possibilities here, either this is an attempt by the Pentagon to hype the Chinese threat, or the Chinese are trying to create an effective no-go zone for the flat-tops by creating uncertainty steps to cut in the missile in an operational posture.
Then again, it might be both.