Yearly Archives: 2010

Marshall Auerback: Don’t Get Angry – Get Some Real Change

President Obama can solve the economy’s problems and win back his base, but he has to get with the program first.

For once, let’s praise President Obama (marginally), not bury him. As Bo Cutter has already argued, in the aftermath of the elections, the president probably did the best he could do on taxes. Ideally, the issue shouldn’t have even been something to haggle over in the first place had the Democrats (including the president) dealt with it before the midterms.

That said, the president’s petulant rant directed at his base was pathetic and misconceived in the extreme. The “No Drama Obama” guise clearly does not extend to his now frustrated supporters. Obama still genuinely does not have a clue as to why he has lost the trust of so many progressives. Many would have been prepared to cut him some slack if he had given them anything over the past two years, rather than a perpetuation of Rubinomics — an economically regressive blend of crony capitalism and deficit reduction fetishism.

To deal with income inequality, you need something more radical. You need reforms such as caps on executive pay and probably a system that simplifies the tax structure (to avoid creative tax avoidance), along with a broad base and a few basic, low rates to ensure a modicum of compliance….

Treasury Bars Use of TARP Funds to Help Borrowers Facing Foreclosure

If you had any doubts about whose side the Administration is on, this story should settle all doubts. From the Nation:

Consider this: the recent Fed audit revealed over $3.3 trillion in emergency assistance to the banks and other corporate behemoths during the financial crisis–no strings attached….
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On MBIA’s Suit Against Morgan Stanley on a Second Lien Deal Gone Bad

n theory, I’m a wee bit late to the item at hand, a suit by failed mortgage bond insurer MBIA against Morgan Stanley on a second mortgage deal. But in practice, I’ve not seen any commentary on it and the suit has some interesting wrinkles.

Before we get to the details, however, a general issue: looking at this case is like deciding which of Cinderella’s bad sisters is less ugly. While mortgage bond originators and sponsors did not cover themselves in glory in the later years of the subprime business, MBIA is no prize. Of all the monolines, MBIA was the most dubious. In addition to the general, and now well known problem with the industry business model, that they were running at such high leverage levels that they could not take on any real risks, MBIA has its own special cause for concern, namely a less-than-arms-length reinsurance operation. And management has major ‘tude. I’ve never read investor reports that were as haughty and obviously truth-stretching as MBIA, and thus any claims it makes about the merits of pending litigation need to be taken with a fistful of salt.

Links 12/9/10

Please join or help publicize this West Palm Beach rally, Homeless for Holidays Rally Protesting Foreclosure Fraud, at the West Palm Beach courthouse Thursday, December 9, from 2 p.m. to 5 p.m..

Mountain gorilla numbers increase BBC

The Most Counterintuitive Theorem EVER Steve Landsburg…

What Should the 50 State Attorneys General Investigating the Mortgage Crisis Do?

I hope readers will give their comments and ideas on the inquiry underway by the attorneys general of all 50 states into foreclosure “improprieties”, to use the term of art, and other mortgage market abuses. Given that real estate is a state law matter, and some state governments are less captured that Washington DC, this […]

Guest Post: Secretary of the Navy Hatches Brilliant Plan to Sell More Gulf Seafood and Transport Oil to the War Zone

Secretary of the Navy wants to encourage service men and women to eat more Gulf seafood. Brilliant!

Guest Post: Department of Justice “Crackdown” On Wall Street Is Just a P.R. Stunt Targeting Small-Time Crooks

We should be ecstatic that the Department of Justice is finally prosecuting fraud, right?

Unfortunately, it’s just a p.r. stunt going after small fish and leaving the big criminals untouched …

Another Erroneous Securitization-Industry-Defending Post by Paul Jackson

It’s worrying to see Paul Jackson, the creator of the generally-respected Housing Wire, damage his brand by continuing to provide misleading and erroneous commentary in an area of keen interest to his readers, the foreclosure crisis.

One could have hoped that Jackson would have learned to question his sources after unwisely sticking his neck out for them in a his article “A Crime of Omission” in which he sided with forgers against the critic of servicers. A takedown of his post by our Richard Smith was validated less than seven hours later by an extensive, exclusive Reuters article that not only validated Richard’s post, but all of our previous reporting on the company at issue, Lender Processing Services.

But Jackson has offered another erroneous defense of securitization industry bad practices in the form of “BofA, the MBS unwind, and the other side of the coin.”

Links 12/8/10

Oriental hornets powered by ‘solar energy’ BBC (hat tip reader John M)

Ford Starts to Ship an Electric Delivery Van New York Times. This idea is 17 years overdue. I test drove a GM electronic car protoype in 1993, and the plan was to push for electronic delivery fleets to meet electronic vehicle purchase requirements mandated in California and the Northeast. Instead, the industry pushed to have the legislation rolled back.

California judge orders illegal GMO sugar beet crops destroyed Natural News (hat tip reader furzy mouse)….

Trojan Horse in Tax Compromise: GOP Plan to Bankrupt States, Break Unions (Updated)

This alert came via James Pethokoukis of Reuters:

Congressional Republicans appear to be quietly but methodically executing a plan that would a) avoid a federal bailout of spendthrift states and b) cripple public employee unions by pushing cash-strapped states such as California and Illinois to declare bankruptcy.

This report has serious, and apparently unrecognized implications:

Links 12/7/10

‘New life’ found in Titanic ruins BBC Exclusive: The unseen photographs that throw new light on the First World War Independent (hat tip reader Lance N) Maybe being a serf wasn’t so bad after all! Medieval Britons were twice as rich as the poor in the Third World today Daily Mail (hat tip reader May […]

Wikileaks Disses Chinese GDP Stats

We’ve harrumphed more than occasionally on the dubious quality of Chinese official releases (see discussions on GDP, inflation, and other drive-by-data-shootings for a selection of past grumblings).

So we are delighted to see that Wikileaks is on this beat too. From a March 2007 cable on a discussion between Clark T. Randt and “Fifth Generation Star Li Kequiang”:

Mirabile Dictu: The Treasury Flexes Some Muscle on the Volcker Rule?

As readers know, this blog has LOOONG been a critic of the Treasury Department’s stance towards big dealer banks, both in the Paulson era and from the very get-go of Geithner’s tenure. So on those all-too-rare occasions when Treasury seems willing to meddle in a real way with the “heads we win, tails you lose” arrangement the financial services industry has managed to devise with broader society, it’s important to applaud those efforts.

Admittedly, it is premature to declare victory, but the fact that Treasury is even taking a serious stance on the so-called Volcker rule is a surprise.

Some Lenders Sell Foreclosed Homes Without Obtaining Title

When you thought you’d seen every possible stuff-up in mortgage land, a new one comes to light.

When the housing market correction started, most savvy observers pointed out that prices needed to revert to long-term relationships with rentals and income levels. And many have also pointed out that it is reasonable to expect prices to overshoot on the downside.

Evidence of the latest self-inflicted wound comes via e-mail from Lisa Epstein of ForeclosureHamlet.org…