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Links 9/22/10

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Apologies for thin links. My day job calls.

Scammer Flips Free Kitties For Profit Consumerist

Stroke gene discovered PhysOrg

Ally Financial legal issue with foreclosures may affect other mortgage companies Washington Post

Housing isn’t even close to stabilizing MarketWatch

Rates are Low–Where Are All the Refis? Adam Levitin, Credit Slips

China’s Currency and the Trade Deficit Dean Baker

Where Did HAMP Go Wrong? Adam Levitin, Credit Slips

The Public Assistance Cycle Michael Panzner

Wen is right to worry about China’s growth Martin Wolf

Antidote du jour:

Picture 6

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16 comments

  1. attempter

    Re “where did HAMP go wrong?”

    The answer as always is that it didn’t go wrong from the criminal persepctive of those who intended and designed it as a scam.

    I’m sorry to have to keep criticizing those like Levitin or Konczal who I think mean well, but this kind of exculpatory pseudo-analysis does not help, it only harms.

    It’s obviously false to claim, the way this implicitly does, that the administration set out in good faith to do anything other than for as long as possible to fraudulently induce debtors to keep paying instead of walking away.

    So just like with the Konczal unemployment piece, we have an academic-style analysis of the mechanical defects, effects fraudulently palmed off as causes. The overall effect is obfuscation.

    When are people going to learn that when you see a pattern of action among those who have the power to do something different, the best theory is always that their actions reflect their intentions, no matter what lies they tell?

    Why is every aspect of organized crime so easy to recognize where the Mafia or the Colombian cartels or the Crips and Bloods do it, but seemingly so hard to acknowledge where the banks and governments do the exact same things?

    ***

    The job of bailing out the banks is made harder by contradictions like this:

    (7) inability to decide whether the program was about stabilizing the housing market or about helping honest but unfortunate debtors. To accomplish the former, the trick is to constrain supply by preventing foreclosures.

    Now of course they never cared about helping any non-rich debtors, but nevertheless reflating the bubble might involve helping some along the way. The HAMP could have gone a different route and still helped with the bailout, but taking a longer-term perspective.

    But of course each bank wants the long-term bailout in general but at the same time wants the prerogative of immediate greed. So in a prefect world, each bank would like to foreclose on its own debtors while all other banks refrain. Obviously that’s not going to happen.

    One of the few things that gives me optimism is how everything in this kleptocratic system is grounded in psychopathic personal greed. Nowhere is there any sign of idealism, loyalty, willingness to personally refrain for the sake of long-term strategy.

    In 1945 Hitler’s SS kept systematically killing even though they knew the war was lost, none of them were any longer even being paid, and they could expect their own head to go into the noose unless they ran now to find a good place to hide. They kept on because they were doing it out of warped idealism and loyalty. But I expect today’s killers to quit the second a paycheck bounces.

    1. DragQueen Capitalism

      I love that someone gets it, and puts it so elegantly. The real topper is how cynical they now are. Even the acronyms now state their real intention: TARP, to cover over and hide from view, and HAMP, to hamper the recovery.

      Bloomberg’s Pasek yesterday in a column about Hong Kong’s property market: “Zero rates bail out the wrong end of the market, Ultralow rates penalize households as interest on savings evaporates. And so, rates at current levels are cannibalizing recoveries.”

      So Bernanke fools no one; he knew precisely what affect his ZIRP policy would have.

      As the smart-alecks said during the boom, re buying RE, this isn’t rocket science, the same applies now.

      When the conscience of a liberal can call for more and more government stimulus to reinvigorate a moribund economy while simultaneously chastising that same government for its inaction on the Climate Change front, the depth of our 3-D (Denial, Delusion, And Depression) problem becomes manifest.

      Even without Peak oil Production causing resource-restraint economics to hold sway, the reduction of the burning of fossil fuels on a global scale will impact those economies that are most dependent on them. Those are the OECD economies, and out of those, the one that’s the most dependent, the US economy, is the one that’ll suffer the most. If the mere 300 million people who burn 20% of the oil that goes up in smoke on a daily basis do nothing to curtail their consumption, what good does it do for those outside that favored population to constrain their fossil fuel use?

      Krugman’s stance demonstrates that Liberals are as loathe to admit this as much as tea-baggers. Until this fact is confronted, the starker the 3-D picture will loom.

    2. Debra

      Such reductionist analysis has the unfortunate effect of making us think that all we need to do is to find the evildoers, punish them by throwing them in jail, and locking them up for all eternity, and EVERYTHING WILL BE OKAY afterwards.
      I don’t believe that for one instant.
      I sincerely regret the dumbing down of our grandfather’s and great grandfather’s COMPLEX ideas about human nature, and the way we and society work.
      And the perpetual harping on the “evildoers” has the effect of dividing the world into.. the good and the evil. Of course… the people who indulge themselves in such reductionist thinking… NEVER consider for one moment that THEY could be part of the evil in this world, right ?? After all, THEIR INTENTIONS are GOOD, right ??
      Enough said.

      1. attempter

        This person is a frequent troll at my own blog who, no matter how many times she declares she’s done with me, always keeps coming back to spew more drivel.

        In this case, note the characteristic straw manning (I’ve consistently said replacing the cadre in itself does nothing, we must radically transform the structure), the false equivalences, and the blaming the victim.

        That’s because, as she’s often said, she supports the elites and think they really are entitled to rule. So when they attack and their prey tries to fight back, that’s really “evil” to the likes of her, or at best both sides are equally bad. Aggression and self-defense are morally equivalent.

    1. Glen

      Florida must be a mess.

      Here’s a guy that had his house foreclosed and HE DIDN’T EVEN HAVE A MORTGAGE:

      http://www.calculatedriskblog.com/2010/09/oops-no-mortgage-and-still-foreclosed.html

      Or maybe BoA’s a mess. Why we didn’t send in the accountants and audit the crap out of the TBTF zombie banks I will never know instead of just handing then trillions with no strings attached.

      You know, something things just do age like a fine wine. The whole TARP idea still sounds like something a three year old would propose, and has aged more like a dead fish in the hot sun, it just stinks. Geithner is supposed to the hard things, both at FBNY and at Treasury. He’s supposed to audit the banks and figure out how to get the shareholders and bondholders to eat the bad debt, not hand it off to the America people.

    1. anon

      At least (as far as we know) she didn’t sell them to a research facility or someone who trains dogs to fight. Many people respond to free kitten ads in order to sell the animals to a research facility, to a someone who trains dogs to fight or race (who uses the kittens for bait), or to someone who uses them to feed a snake.

      Rescue orgs have been trying to convince pet owners to not give away animals (unless you know the new owners) for decades now. There seem to be fewer people giving away pets now but it’s still a problem.

      Here’s
      an article that describes some of the problems dogs or cats might face with a new owner (but the same rules apply to other pets). http://www.saveourshepherds.org/free2good_home.html

  6. Chris

    I’m certainly no expert but I think Summers is being shown the door in order to placate the left, and to give the illusion of a “change in direction”. Reuters recently speculated who could replace him, and it was all Clinton retreads and other insiders. Color me once again, skeptical.

  10. rd

    A few comments on the refi issue from a personal perspective:

    1. HELOCs are the one place where ZIRP helps the local yokels. Many of the HELOCs are tied to short rates, such as Fed Funds rate so they are currently less than 5% with no end of ZIRP or otherwise very low rates in sight.

    2. We refinanced our primary mortgage in 2003. We are now only about 4 years away from having no kid expenses (college etc.) anymore. At that time, we expect to be aggressively paying off the mortgage and other debt, so it doesn’t look like a long-term payoff (10 yr+) from the interest rate reduction unlike our prevvious refinancing.

    3. There are quite a few fees and points involved with refinancing. On top of that, NYS has a 1% mortgage tax. Bundling our primary mortgage and HELOC would take several years for the interest rate reduction to pay off the difference in the fees, mortgage tax and average current interest rate considering the current low HELOC rate. I don’t see the Fed Funds rate going above 1% for at least a couple of years, so we probably wouldn’t see a significant savings until we were ready to start aggessively paying down debt.

    4. We live in interesting times. I would prefer to not pay upfront cash to banks and taxes or add additonal debt for a small interest rate reduction. I prefer to reduce debt or save the cash at this time.

    5. Please note that we are not upside down on the house so that isn’t a consideration at this time. People who are upside down probably can’t even go through the pros and cons of refinancing like I did above.

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