Year: 2012

This is Why These F%$#s Need to Go to Jail

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Because the financial class is really a bunch of monsters:

Fannie Mae (FNMA) pulled the plug on a 2010 plan to forgive borrowers’ mortgage debt because company executives were “philosophically opposed” to the idea, a former company employee told House investigators.

…………

According to the letter, a former Fannie Mae employee told the committee that the mortgage finance company had developed a pilot program for reducing mortgage debt for borrowers who owe more on their house than the property is worth.

The purpose of the plan was to develop “a responsible way to reduce principal balances for underwater mortgage borrowers without creating undue incremental moral hazard,” the employee told the committee.

The pilot had preliminary approvals from officials at Fannie Mae, FHFA, and the Office of the Comptroller of the Currency, a bank regulator, according to the former employee.

In mid-2010, two weeks before its launch, senior Fannie Mae executives cancelled the program because they were “philosophically opposed to writing down principal balances,” according to the former worker, who was quoted in the letter without being identified.

“I believe that we could be saving tens of billions of dollars while also helping stabilize housing prices and stimulating economic growth,” the former employee said, according to the letter.

They f%$#ed the economy, but they are so convinced of their ultimate virtue that they are acting against the interests of the companies that they manage, and the taxpayers, because they have bought into a, “heads I win, tails you lose,” vision of crony capitalism in which they are the arbiters of virtue.

These people are dangerous sociopaths.

What Ken Livingstone Said

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In the time I was mayor, I used to do meetings with City bankers and I’d often open by saying, ‘This isn’t the world I would have created . . .’ [Bankers’ bonuses are] like penis extensions, among a small league of men – mine is bigger than yours.

. . . The world is run by monsters and you have to deal with them. Some of them run countries, some of them run banks, some of them run news corporations.

— The former (and hopefully future) Mayor of London Ken Livingston on the banksters and other captains of industry

(emphasis mine)

I think that this is an important thing to say.  One of the primary defenses of the banksters and the rest of the parasites on our economy is that their success is somehow the product of their virtue and ability.

This is a lie.  It has always been a law, and so long as we allow the myth that these folks are anything other than amoral winners of the genetic lottery, we grant them a legitimacy that they they do not deserve, and we do so at our own peril.

The Drug War Sucks

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We’ve kind of been rolling the trifecta with colds.

Sharon* has been on antibiotics for a cough and sinus for a few days, and after being blown off by our kid’s pediatrician’s replacement doc, so we went to an urgi-care clinic, and we got diagnoses for them, and me as well, since I had a nagging cough, and it had gotten bad enough that I wasn’t waiting until I saw my doctor at my regularly scheduled appointment with my doctor.

Charlie has a sinus infection, Natalie’s sinus infection migrated down to pharyngitis, and mine had migrated down to a full blown bronchitis.

In addition, Marilyn, my mother-in-law is at Sinai Hospital for what appears to be pneumonia.

So, what does this have to do with the drug war?

Well, in addition to antibiotics, both Charlie and I were prescribed decongestants, and both of these medications contained Pseudoephedrine, and so I could not buy both, because federal regulations say that it’s too much, and we might ………… cook meth.

The war on drugs is, to misappropriate the words of Nietzsche, like the bite of a dog into a stone, it is a stupidity.

*Love of my life, light of the cosmos, she who must be obeyed, my wife.

This Isn’t Water, It’s Shoggoth Blood!

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Russian researchers in Antarctica have drilled through more than 2 miles of ice and extracted a ten million year old water sample from “Lake Vostok” underneath.

Between the novella by John W. Campbell, Jr. (writing as Don A. Stuart), the oeuvre of Howard Phillip Lovecraft, and John Carpenter’s take on cinematic take on Antarctic science, this is not something that I find particularly reassuring.

Two Banks Get Eated

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And here they are, ordered, and numbered for the year so far.

  1. Charter National Bank and Trust, Hoffman Estates, IL
  2. SCB Bank, Shelbyville, IN

An average week, and this Shelbyville is nowhere near Springfield (about 200 miles), so it’s not the real (Simpsons)  Springfield.

    Full FDIC list

    So, here is the graph pr0n with last years numbers for comparison (FDIC only):

    And here is the detail, since it is early in the year:

    Obama and Contraception

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    When your opposition looks this pampered and out of touch, you have a winning issue

    So, in the ginned up controversy over the requirement that religious non-profits cover contraception for their employees, Obama has split the baby:

    Mr. Obama announced that rather than requiring religiously affiliated charities and universities to pay for contraceptives for their employees, the cost would be shifted to health insurance companies. The initial rule caused a political uproar among some Catholics and others who portrayed it as an attack on religious freedom.

    Meeting with his top advisers in the Oval Office last week amid rising anger from Catholic Democrats, liberal columnists and left-leaning religious leaders — a fed-up Mr. Obama issued an order meant for Kathleen Sebelius, the secretary of health and human services. Ms. Sebelius and agency lawyers had initially told the president they needed a year to work out a compromise that had seemed obvious to some in the administration from the start: make the new rule more like that offered by the State of Hawaii, where employees of religiously affiliated institutions obtained contraceptives through a side benefit offered by insurance companies.

    But in difficult internal negotiations, a group of advisers had bested Vice President Joseph R. Biden Jr. and others and sold the president on a stricter rule. Now the political furor surrounding it was threatening to consume signs of economic improvement giving a boost to the White House and put the Obama re-election campaign on the defensive.

    So the mandate for coverage is now on insurance companies, rather than the employers.

    If this is the end of this matter, then this is a good thing.

    My concern, based on past history, is that this is only the first step in a larger retreat.

    Then again, there are a number of people I respect who see it as eleventy dimensional chess, with people like Amanda Marcotte suggesting that Obama punked both the Conference of Bishops and the woman hating wing of the Republican Party, by forcing them to publicly oppose contraception, which is used by something like 99% of all sexually active women in the US at one time or another.

    Certainly the optics, for now at least, are good, and the effect on coverage of this change is zero, so it’s a win win.

    But the most powerful knock against Obama is his unwillingness to fight, and in the 2-3 days before this decision, news outlets were starting to note that there are 28 states that have had an identical mandate, and have had such a mandate for years, with nary a peep from the pedophile protection bureau US Conference of Catholic Bishops, so it was clear that the worm was turning in the media as well, so keeping this up until they blinked would, to my mind, have been the optimal approach.

    [on edit]
    I think that the real policy and political implications are best synthesized by the following from Lindsay Beyerstein:

    But if the bishops won’t accept this deal, Obama should stop trying to accomodate them. Respect for religious freedom does not include paying solemn lip service to the contraception cooties.

    Sorry Felix, You are Wrong

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    Yesterday, I talked about Dave Dayen and Yves Smith’s take on the settlement, and their take was “bankster bailout”, and I noted that Felix Salmon’s take was that it was a good thing.

    Well, now the journalist who is I think the best person (this side of Jon Stewart, anyway) at distilling the complexities of Wall Street to you average reader, Matt Taibbi has weighed in, and not only is he calling bailout for Wall Street crooks, but he apologizes for his earlier optimism. What’s more, he distills what it all means in one paragraph:

    But this deal not only doesn’t end robosigning, it officially makes getting caught for it inexpensive. Shame on me for ever thinking that might be a good thing.

    That is the final word.  Fraud and forgery have been given a price tag, and it’s less than 2 grand.

    OK, These Are Some Tax Collectors That I Could Love

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    So, the Italian police have taken to staking out posh neighborhoods and pulling over drivers of expensive cars. They then take their personal information, and send that to the tax bureau to make sure that their lifestyle matches up to their declared income:

    Police fanned out across Milan in late January halting more than 350 vehicles, mostly luxury SUVs and Porsches.

    At checkpoints, including one adjacent to the fashionable Corso Como, the police got the driver’s license and registration, which they passed on to the national tax agency. The tax authorities will use the data to check if the cars’ owners had declared enough income — and of course paid the right amount of income taxes — to justify their lifestyles.

    It was at least the fifth raid targeting wealthy Italians since a Dec. 30 sweep at the posh Cortina d’Ampezzo ski resort, where 251 high-end cars were stopped, including Ferrari and Lamborghini supercars, Bloomberg Businessweek reports in its Feb. 13 issue. Rome, Portofino on the Italian Riviera and Florence have also been targeted.

    I’m Matthew Saroff, and I approve of this tactic.

    So, the Pedophile Protection Bureau Wants Contraception Coverage Banned

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    So, the Conference of Catholic Bishops, or more accurately the guy they hired to represent their position, has admitted that they want to ban coverage for all forms of contraception for everyone:

    “There has been a lot of talk in the last couple days about compromise, but it sounds to us like a way to turn down the heat, to placate people without doing anything in particular,” [Conference general council Anthony] Picarello said. “We’re not going to do anything until this is fixed.”

    That means removing the provision from the health care law altogether, he said, not simply changing it for Catholic employers and their insurers. He cited the problem that would create for “good Catholic business people who can’t in good conscience cooperate with this.”
    “If I quit this job and opened a Taco Bell, I’d be covered by the mandate,” Picarello said.

    They want to pull all coverage for contraception for everyone, and so we should take it seriously when they they say want to ban all contraception.

    At least the Taliban does not find f%$#ing little boys to be a moral imperative.

    The Obama Administration Just F%$#ed Us All to Benefit the Banks Again

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    Well, it looks like everyone (except Oklahoma) has signed onto Obama’s bank sellout settlement :

    After months of painstaking talks, government authorities and five of the nation’s biggest banks have agreed to a $26 billion settlement that could provide relief to nearly two million current and former American homeowners harmed by the bursting of the housing bubble, state and federal officials said. It is part of a broad national settlement aimed at halting the housing market’s downward slide and holding the banks accountable for foreclosure abuses.

    Despite the billions earmarked in the accord, the aid will help a relatively small portion of the millions of borrowers who are delinquent and facing foreclosure. The success could depend in part on how effectively the program is carried out because earlier efforts by Washington aimed at troubled borrowers helped far fewer than had been expected.

    Still, the agreement is the broadest effort yet to help borrowers owing more than their houses are worth, with roughly one million expected to have their mortgage debt reduced by lenders or able to refinance their homes at lower rates. Another 750,000 people who lost their homes to foreclosure from September 2008 to the end of 2011 will receive checks for about $2,000. The aid is to be distributed over three years.

    An announcement was scheduled in Washington for Thursday morning. The final details of the pact, including how many states would participate, were expected to be announced then. The two biggest holdouts, California and New York, now plan to sign on, according to the officials with knowledge of the matter who did not want to be identified because the negotiations were not completed.

    So, if a bankster steals your house, you get $2000, which might cover the cost of having all your furniture hauled to the dump.

    And as for the write-downs, that’s about $17 billion for about one million home owners ($5 B goes to the states), or about $17k  for homeowners, but there are 11 million homeowners under water, and on average it’s more than $50K each.

    And, BTW, the banks get to do this for mortgages that they manage, but don’t hold, meaning that the money is coming from investors, pension funds, and the taxpayer, and this serves to strengthen the second mortgages, which the banks do hold.

    I’m with Yves Smith’s take on this, “The Top Twelve Reasons Why You Should Hate the Mortgage-Settlement.html,” not Felix Salmon’s rather more optimistic take on this.

    This is not a settlement, it’s another sellout and back door subsidy to the banksters.

    The Foreclosure Sellout Settlement Is Getting Weird

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    I missed it, but the New York AG canceled a press conference about his position on the mortgage/foreclosure fraud settlement at the last minute:

    New York Attorney General Eric Schneiderman late Tuesday postponed a much anticipated conference call with reporters that was set up to announce whether the state would participate in broad a settlement with five big banks over foreclosure practices. Schneiderman, who is co-chair of a new mortgage fraud task force, told reporters in late January that he was not ready to participate in state settlement negotiations. Observers had speculated that he might announce his participation.

    This is happening despite the full court press from the Obama administration for this deal to go through.

    The sticking point appears to be the MERS lawsuit, and the banks want this dropped before they sign off on any deal.

    I think that this delay is a good thing because:

    • The deal is basically another bailout for the banks.
    • As it gets nearer to the election without a deal, the more it becomes likely that the Obama administration will be forced to go after them for electoral benefit, as opposed to just going after some small fry.

    This should get interesting.

    More on the Catholic Church and Sh%$

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    Amanda Marcotte has a great example of just what “public accommodation” means, and it is both illustrative of just how hypocritical the Catholic Church is being over the requirement that they follow the law in insuring their employess.

    It has the additional advantage of goring my own ethnic ox, albeit that I am not at a black hat Jew:

    There was an interesting story a few months ago here in Brooklyn about a privately owned company that serves the public that was engaging in discrimination against women.

    Women who ride the B110 bus in Brooklyn can’t sit where they want unless they’re okay with being berated by Orthodox Jewish men, even though technically the B110 is a public bus.

    The B110, which travels between Williamsburg and Borough Park is open to anyone, has a route number, and goes to city bus stops. However, the line is run by a private company under a decades-old agreement with the city, and since the bus is designed to serve the Hasidic community in the area, a board of rabbis sets the rules. They’ve decreed that women should sit in the back and men should sit in the front to avoid contact betwen members of the opposite sex.

    When it was exposed that a bunch of religious fanatics were doing this, the city came down on them and said, “God or no god, you can’t discriminate against women if you’re serving the public.”

    She’s right.  Hospitals and universities  serve the public provide public accomodation.

    The Catholic Church has no more right to make its employees sit at the back of the bus for their insurance than do those Jews running that bus line.

    If You Choose to Invest in a Criminal Enterprise, You are Supposed to Lose Money

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    So, the SEC is giving the banksters a free pass when they defraud investors, but the SEC gives them a pass. Why? To protect the investors.

    You know, for most people, letting the banksters steal with impunity is not protecting investor:

    Even as the Securities and Exchange Commission has stepped up its investigations of Wall Street in the last decade, the agency has repeatedly allowed the biggest firms to avoid punishments specifically meant to apply to fraud cases.
    By granting exemptions to laws and regulations that act as a deterrent to securities fraud, the S.E.C. has let financial giants like JPMorganChase, Goldman Sachs and Bank of America continue to have advantages reserved for the most dependable companies, making it easier for them to raise money from investors, for example, and to avoid liability from lawsuits if their financial forecasts turn out to be wrong.
    An analysis by The New York Times of S.E.C. investigations over the last decade found nearly 350 instances where the agency has given big Wall Street institutions and other financial companies a pass on those or other sanctions. Those instances also include waivers permitting firms to underwrite certain stock and bond sales and manage mutual fund portfolios.
    JPMorganChase, for example, has settled six fraud cases in the last 13 years, including one with a $228 million settlement last summer, but it has obtained at least 22 waivers, in part by arguing that it has “a strong record of compliance with securities laws.” Bank of America and Merrill Lynch, which merged in 2009, have settled 15 fraud cases and received at least 39 waivers.
    Only about a dozen companies — Dell, General Electric and United Rentals among them — have felt the full force of the law after issuing misleading information about their businesses. Citigroup was the only major Wall Street bank among them. In 11 years, it settled six fraud cases and received 25 waivers before it lost most of its privileges in 2010.

    By granting those waivers, the S.E.C. allowed Wall Street firms to have powerful advantages, securities experts and former regulators say. The institutions remained protected under the Private Securities Litigation Reform Act of 1995, which makes it easier to avoid class-action shareholder lawsuits.

    And why are they doing this?

    “The ramifications of losing those exemptions are enormous to these firms,” David S. Ruder, a former S.E.C. chairman, said in an interview. Without the waivers, agreeing to settle charges of securities fraud “might have vast repercussions affecting the ability of a firm to continue to stay in business,” he said.

    S.E.C. officials say that they grant the waivers to keep stock and bond markets open to companies with legitimate capital-raising needs. Ensuring such access is as important to its mission as protecting investors, regulators said.

    …………

    Thomas Lee Hazen, a securities law professor at the University of North Carolina at Chapel Hill, said that it is understandable that the S.E.C. might relax some potential sanctions on Wall Street firms — where it appears that lessons have been learned, or when a fine is thought to be sufficient punishment.

    “The ripple effect of having a sanction that could shut them down or could seriously impede a company’s operations would seriously affect a lot of innocent customers,” he said. “It’s a very fine balance. That’s not to say that the S.E.C. is striking the balance properly. That is in the eye of the beholder.”

    Let’s be clear here. The SEC is using regulatory forbearance to subsidize fraud.

    If people stopped investing in firms that committed fraud, the firms would be less inclined to defraud investors.

    It’s Official, We Have a 2nd Tech Bubble in 15 Years

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    How do I know this? I know this because Paul R. La Monica says that we are not in one.

    When he says, “If you want to declare that tech stocks are once again a bubble … you’d be dead wrong,” any sane person would start shorting tech.

    This is a guy who called short sales the next bubble, and used a song about masturbation to suggest that it was time to reenter the market. (My posts about him can be found at this link.)

    In the world of investing advice, it’s hard to find someone who gets it right even half the time, but there lots of people, like Paul, who can be counted on to function reliably as a reverse barometer.

    I’m just sayin’.

    Appeals Court Rules that Prop 8 Is Unconstitutional

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    It was a 2-1 decision, and the opinion is a pretty strong:

    “Although the Constitution permits communities to enact most laws they believe to be desirable, it requires that there be at least a legitimate reason for the passage of a law that treats different classes of people differently,” Judge Stephen R. Reinhardt wrote in the decision. “There was no such reason that Proposition 8 could have been enacted.”

    “All that Proposition 8 accomplished was to take away from same-sex couples the right to be granted marriage licenses and thus legally to use the designation ‘marriage,’ ” the judge wrote, adding, “Proposition 8 serves no purpose, and has no effect, other than to lessen the status and human dignity of gay men and lesbians in California.”

    BTW, all three judges agreed that the defendants request that the judge Vaughn Walker recuse himself was pretty much a crock of sh%$.

    The precedent on this case is fairly straightforward, the Supreme Court ruling on Colorado’s Amendment 2 about 15 years ago, where they said that voters can’t strip rights from a group just because they make them feel squicky, the so-called “rational basis” test.

    The question now is whether or not this case goes to the full appeals court (en banc), or to the Supreme Court.

    And while we are on recusals.  Seeing as how Scalia has publicly, and repeatedly, made comments explicitly stating that he has pre-judged the matter, how about he recuse his flabby ass from the case?

    If SCOTUS takes it, it will be closer though, as O’Connor has been replaced by Alito, who is an almost certain vote against gay civil rights.

    And While We Are Talking About White House Spelunking…

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    It looks like the White House is preparing to cave to the Conference of Catholic Bishops on reproductive rights:

    A top adviser to President Barack Obama’s re-election campaign suggested on Tuesday that the administration was open to working with Catholic hospitals and universities over their objections to providing birth control services to women.

    “I’m less concerned about the messaging of this than to find a resolution that makes sense,” David Axelrod said on MSNBC.

    “I heard earlier Joe [Scarborough] say, ‘Well, there may be compromises that can be reached.’ We have great respect for the work that these religious institutions do. … We certainly don’t want to abridge anyone’s religious freedoms, so we’re going to look for a way to move forward that both provides women with the preventative care that they need and respects the prerogatives of religious institutions,” he explained.

    Jeebus.

    It’s like capitulation is so firmly engrained in their DNA that they can’t stand their ground even when it is to their advantage to do so.

    These days, the Catholic Bishops is as likely to support Democrats as the Chamber of Commerce, so all you are doing is pissing off your base.