Recent Items

Links 10/25/11

Posted on by

The Fading of Fall: Why the bright red leaves of New England are in danger Slate (hat tip reader 1SK)

Tristero’s story Digby. Cool and important technology.

WikiLeaks suspends publishing to fight financial blockade Guardian (hat tip reader Aquifer)

The Biographer’s Dilemma Joe Nocera, New York Times

Patrick Cockburn: Greece in a state of shock as Troika reforms take effect Independent (hat tip reader 1SK)

Banks Clash With Lawmakers on Greek Rescue Bloomberg. Quelle surprise!

News Corp. Shareholders Slap Down Murdoch’s Sons New York Times

Soldiers Burn Bill O’Reilly Books in Afghanistan Hollywood Reporter (hat tip reader 1SK)

Top Rahm aide set herself up for sweet CTA pension Chicago Business (hat tip reader 1SK)

The Hill Poll: Most voters say the United States is in decline The Hill (hat tip Pat Caddell)

Taking back ‘Obamacare’? Washington Post (hat tip Joe Costello). As we said in a 2010 post, Obama thinks every problem can be solved with better PR.

Occupy Obama John Stauber, Counterpunch (hat tip reader Aquifer). This is too rich. We had said that OWS was having the same effect that Elizabeth Warren would have had had she primaried Obama, that of broadening the spectrum of ideas allowed into mainstream media discourse. But this is even better. OWS may be about to take on Obama’s repudiation of pretty much all of his campaign promises head on.

Wall Street Protesters Turn Focus on City Halls Bloomberg. This is serious. Pressure on municipal governments to stop doing business with banks that score poorly on mortgage mods.

In Cautious Times, Banks Flooded With Cash New York Times (hat tip Lambert Strether). Notice the lack of agency:

Ordinarily, in a more robust environment, an influx of deposits would be used to finance new businesses, expansion plans and home purchases. But in today’s fragile economy, the bulk of the new money is doing little to spur growth…Lending levels have not bounced back from only a few years ago and the loans going out are not keeping pace with the deposits rushing in.

Timothy Porter of Pulaski charged with arson in house fire Green Bay Press Gazette (hat tip April Charney). Torch your house, go to jail, torch a bank, keep your bonus.

Antidote du jour:

Print Friendly
Twitter12DiggReddit0StumbleUpon0Facebook0LinkedIn6Google+0bufferEmail

70 comments

  1. Richard Kline

    The original question from non-cognizant observers regarding the Occupiers was, “What are their demands?” From the beginning, I have been far more interested in a much more important question, “What are their tactics?”

    Strategy, we’ll get to that. The Occupations are substantially populated by folks new to activism, and _this_ kind of activism is new to all its participants, so there is going to be a natural learning curve. That pushes strategy out the timeline a bit inherently. The Occupations look to have staying power, so that slow-build is no bad thing. But tactics matter in the immediate term. I personally think that the Occupations are, even if initially not perhaps fully intended as such, a brilliant method. A non-violent direct action of assembling and refusing to disperse is very difficult to impune and a confidence builder in that folks see they are not alone. But specific actions both garner attention, discomfit those who need to change or be confronted, and gather support from those not willing to protest but supportive.

    That’s a long lead-in to saying I think that bank-focused protests and actions are extremely promising. ‘Account outs,’ ‘sit-ins,’ pushes for institutional ‘divestment,’ and street theater to publicize abuses are very hard to counter, very visible, and have the potential to acutely pressure the most grossly malfeasant institutions. I’m very much looking forward to a wave of bank actions. They will also have the affect of forcing The Powers That Be to more publicly defend banks, highlighting the corrupted connivance of said Powers. The banks are sitting targets. The TBTF all exist only because of regulatory forebearance and massive transfers of wealth from the public. The TBTF banks can’t threaten to ‘take their money’ elsewhere, and have already ‘taken their business elsewhere’ in that they have red-lined small business and consumer lending (i.e. stopped lending to the citizenry anyway). The TBTF banks are up to their navel in lawsuits over every possible aspect of the mortgage securitization in which they were involved with criminal behavior at every level and scale, so any “We’re good citizens; really” smoke-blowing PR is readily countered even by small local groups of activists.

    Tactics are developing . . . .

    1. curlydan

      Today, for example, OWS apparently headed to Rangel’s office to protest his votes on the free trade agreements. Great activism, making sure some of these critters in DC know they’re under the microscope on every vote.

  2. LeeAnne

    OWS calls for a Robin Hood tax on all “financial trades and currency transactions.”

    Congratulations! to the OWS crowd for the first good idea for a post industrial society in which only finance and multinationals prosper; an expansion of the Tobin Tax.

    All this peak oil and post industrial talk hasn’t put a dent in bankers’ pockets -odd that; while people all over the world face homelessness and starvation if they aren’t dead and disabled already of the anxiety intentionally created over the last 30 years and accelerated since the demolition of the Twin Towers.

    http://www.adbusters.org/

    Reactions from MSM should be very interesting. Next step: keep on nagging until TPTB are forced to invite OWS to the table to write proposals for legislation taxing every financial transaction under the sun to be returned to the municipalities robbed by Wall Street, with a new bank to regulate the scheme.

    If a new BANK for infrastructure being proposed in Obama’s phony jobs bill can be proposed on top of all the utterly failed banks we already have, a new bank can be discussed to regulate this Robin Hood tax -whatever its called.

    More at Reuters
    Wall Street protest plans global rally ahead of G20

    1. lambert strether

      I don’t think we want OWS “at the table.” The table needs to be sawed up and fed into a fiery furnace. We want a new table entirely, and OWS could be in the process of building one. That’s why a slow build is important, and why a focus on organization is even more important than a focus on tactics.

  3. LeeAnne

    Yves posted on National Nurses United leadership on this. here alternet.org

    So, OWS has joined them.

    Nurses to Obama: Push for a Global Financial Transaction Tax, Now!
    Will President Obama be the main holdout when world leaders meet early next month at the G-20 summit in France?

    Nurses from at least four continents, including a U.S. delegation from National Nurses United, will deliver that message November 3 at the G-20 summit meeting November 3 in Cannes – urging enactment of a financial transaction tax that could raise hundreds of billions of dollars a year to heal global economies, promote sustainable development and environmental security, and strengthen quality public services.

    Nurses will be joined by labor, environmental, non-governmental, and community activists who have made the push for a global FTT an international movement that has sparked the adoption of an FTT by more than a dozen nations, and prompted the European Commission to propose a global FTT which is expected to be a major topic at the G-20 summit.

    The call for a FTT, sometimes called a “Robin Hood tax” (a form of such a tax was actually in place in the U.S. for most of the first half of the last century), has become a powerful force in Europe especially.

    But a major stumbling block continues to be the opposition of the Obama administration, led by U.S. Treasury Secretary Timothy Geithner, former president of the Federal Reserve Bank of New York, who has personally lobbied European finance ministers to oppose an FTT despite the support for the proposal from ostensibly more conservative governments in Germany and France.

    1. Ignim Brites

      How is a FTT a “Robin Hood” tax? Sounds pretty much like a plain vanilla sales tax to me. No sure why this is not charged now. Ought to be applied to all transactions. It will do wonders for the HFT business.

  4. LeeAnne

    From ‘Nurses’ down to the end ‘France’ should be with blockquotes. Don’t know what happened to them.

  5. Moopheus

    If banks have too much cash and don’t want your deposits, then why I am I getting in my mail offers of basically cash payments for new accounts at local banks? One bank is offering $150 gift certificate at local restaurants. Sounds to me like somebody would like my business. Since our economy depends on people spending every nickel they have and then some, and letting Wall Street gamble with whatever is left over, it must be driving officialdom nuts that we’re holding on to our money.

    1. Yves Smith Post author

      That’s a criticism and not motivating.

      I think 20 link is plenty and I am NOT omniscient.

    1. LeeAnne

      NYPD or the ‘New York City Police Department’ bears no relationship to upstate New York.

      NYPD is in the area of the Twin Towers Demolition and totally militarized -as in; cops armed to the teeth with automatic weapons and attack dogs in Grand Central Station, a Chief of Police who likes hanging with celebrities in the Hamptons and brags about being equipped to ‘shoot a plane out of the sky.’

      That’s a long distance from upstate New York -geographically and mentally.

      1. skippy

        I understand that, was aware of geography, mental climate. It was only in the context ie. that the police determined it was a poor usage of resources. Conversely on Fuaxbs News today the OWS gang has increased crime by draining said precious resources.

        Skippy…Capisce.

        1. mk

          I saw some video of the crowd and they looked to be grandmas and grandpas, families, kids. The police didn’t want to arrest this group, they were afraid it would encourage more protests.

    2. alex

      Now that’s a story! My favorite part:

      NYS Police official: “these people were not causing trouble. The bottom line is the police know policing, not the governor and not the mayor.”

      Which is about as close as someone in that capacity can get to telling the governor to go screw himself.

      And who knew that the Albany Times Union (in which the story was originally reported) was a mouthpiece of the comintern?

      BTW, for those unfamiliar with NY State’s beloved governor, Andrew Cuomo is even less of a Democrat than Obama is. He went against his own party and allied with Republicans to do away with the “millionaire’s tax” surcharge on the state income tax. Thanks heavens we have a good authoritarian helping out suffering millionaires and suppressing dissent.

  6. Ignim Brites

    Greece might as well get used to being in a state of shock. It is a small and demographically old country, destined to get smaller and older. Forty years from now it will be much smaller, its remnant population all serving in the tourist industry in one form or another. Of the remnant population a large proportion will not even be Greek. Along with many nations, Greece will effectively disappear. Perhaps it will be absorbed by Turkey.

      1. aet

        …and anyhow, the old-time “Greeks” were all dis-placed by Slavic invaders in the sixth century AD….unless you’re one of them “pure-blood” racist types, ‘Greece’ as a distinct human entity is now as it ever has been – simultaneously being a geographical, a linguistic, and above all, a cultural construct. And as ideas never die, nether will “Greece” – even though, as Hercalites (As an aside: was Heraclites a “Greek”? or was he an “Athenian”? or a “Spartan”? Or was he a “Greek”, who did not know he was a Greek – as the nation of “Greece”, strictly-so-called, had yet to come into being?) truthfully said: “Everything changes”.

        As to Turkey, Europe won’t give Greece up without a fight.

        Since the fall of the Ottoman Empire, political division along linguistic, ethnic, and religious lines is par for the course in the part of the world once governed by that Empire – think of the separation of Turks and Greeks, the armenians, the creations of Israel – as indeed has also happened to all those other late-19th C empires – Russian, Hapsburg, Ottoman, German, English, French, Spanish, Portugese.

        Contrast the American Empire – which has grown ever-more powerful and influential, during the same time period, by (amongst other things) including ever more diverse people as equal citizens, regardless of their particular ethnicity or religion.

        I think I know which side history is on.

        Human rights are universal. And human rights do NOT cease to exist – simply because they are denied and /or violated by the violent, powerful, and willful.

        1. Ignim Brites

          Very interesting ethnographic point about the present day Greeks. Thanks. Not sure whether the rest of your comment tends to support or refute my prognostication about the future of Greece. The history of North America though illustrates very clearly that “cultural constructs” (Huron, Iroquois, Seminoles, etc.) do fade away to the point that they essentially cease to exist.

        2. Procopius

          I haven’t studied the language, but I’ve read a few translations. Everyone should read Plato’s “Crito,” where Aristotle explains why he is obliged to drink the hemlock. Especially libertarians. Also the Song of Roland, which explains loyalty to a liege lord (and therefore to the society as a whole), but that’s another topic. I think Heraclitus would regard himself as a Hellene. Certainly not a Greek. I think they also differentiated between Dorians and Ionians, the earlier and later waves of invaders that we call Greeks, but that may not have been significant in the context implied.

  7. b.

    FWIW, my take on “Occupy Obama” – it is the wrong thing to do. It’s like the Salon drivel on Feingold’s all-too-predictable attempt to channel OWS, the article featuring the wrong headline:

    Feingold wants OWS to legitimize Supercommittee
    http://www.salon.com/2011/10/24/feingold_tries_to_reach_occupy_supporters/singleton/

    The only engagement with ‘stablishment figureheads and institutions that makes sense within the OWS dynamics is that of ridicule.

    Example: The folks that occupied the Wisconsin State Capital should have played this
    http://www.youtube.com/watch?v=SA9KC8SMu3o
    over and over again. Nobody should send petitions to the White House, old shoes would be more appropriate. OTOH this
    http://www.youtube.com/watch?v=_RFH7C3vkK4
    does not quite fit what OWS is trying to do.

    Occupy Obama should be a parade of Obama impersonators playing back his lies and deceptions, a carnival of Obama masks laying bare the Hollow Man himself, not another bloody petition to “make him do the Right Thing”. Enough with the “if the Czar only realized” posture already.

    McKibben makes the same mistake:
    http://www.salon.com/writer/bill_mckibben/
    You cannot effectively protest Obama-orchestrated Keystone XL if you spend most of your time explaining to him how he could stop himself. Aren’t you done prostrating yourself yet?

    “We’ll deliver a simple, powerful message to Obama staffers, and do a speak-out as well. We want regular folks telling the Obama staffers what they think. We want Obama to understand that the 99% demand action from him to put communities before corporations and people before profits.”

    You really think they do not know that? What makes you think they care what you want? How do you plan on making them care?

    1. doom

      +100, petitioning corporate puppets like Obama, you just keep the focus on his promises, which are invariably half-assed incremental sops that distract from the state’s wholesale derelictions. It’s too late for the little crumbs that Obama might deign to bestow with the permission of the banks. OWS can profitably continue talking among themselves until they articulate all of what they want.

      1. neverKnow

        OWS needs to repudiate Obama and: now. It’s the best chance to grow and the only hope for change.

        Don’t ask or demand from Obama. Oppose Obama.

        ‘Down with Obama.’

    2. Valissa

      The only engagement with ‘stablishment figureheads and institutions that makes sense within the OWS dynamics is that of ridicule.

      Satire and laughter are powerful tools.

      And if Obama’s political skills and experience really are as poor as is suspected by many, what good would trying to “occupy” him do anyway? It’s never been proved that he’s served or tried to serve anyone but his wealthy backers.

      Obama’s Mythical Political Skills Not Enough: Ramesh Ponnuru http://www.bloomberg.com/news/2011-10-24/obama-s-mythical-political-skills-won-t-save-him-ramesh-ponnuru.html

  8. ep3

    pension deal:
    sounds like more propaganda to me Yves. Propaganda to run public pensions into the ground. They set up programs like this, the public finds out about them and gets mad, rahmbo comes in and does away with all pensions for public employees over the age of 55, and then public service jobs turn into minimum wage jobs.
    What gets me about the pension battle going on in our country is that ppl don’t realize how a divide and conquer method is being used to eliminate well paying jobs. Now, i understand that what is behind this is voter demographics; baby boomers will vote to keep their benefits.
    But the logic of this whole “we can’t afford these benefits” campaigns is actually backwards. These pensions that we supposedly can’t afford are the ones we are paying out now and in the next 20 years. Not the ones that come due in 30 years. Yet cuts are not even being considered for current or soon to retire persons, only future retirees. And yes, I understand the argument that it’s wrong to pull someone’s pension away from them 6 months before they retire. but isn’t that America? How many steel workers, railroad workers, etc. lost their pensions at the last minute and nobody cared?

    1. JTFaraday

      Yea, well, how many younger people actually have defined benefit pensions? It seems to me that these are nearly nonexistent outside the public sector since about the advent of the much maligned Gen-X generation of the 1990s– who were forever denominated “slackers” because they had the misfortune of graduating into the Bush I recession.

      These are the same people who went out and got 2 or 3 degrees to, you know, pick up their slack. (And because education cures all ills, don’t you know).

      With a pretty clear split between private sector and public sector workers post-babyboom, it seems likely that the support for public sector defined benefit pensions “paid for by private sector workers who don’t have them” (or the lengthy job tenures by which one earns one) is unlikely to rise. It’s “not fair”– and you can work against the sense of “fairness” only so much. So, what’s done is done and as a result there is *already* a diminishing base for continuing to do things this way.

      With even younger people today getting–quite obviously– hit up en masse with the random (in)justice of the contemporary labor “market,” maybe they will reconsider *how much* of a person’s basic security in old age should actually be tied to their position in that labor market in the first place.

      I think this is something the unified babyboom-yuppie generation, with its deeply individualistic moralism, would never have *seriously* considered, but younger people are finding themselves living in an obviously more chaotic time and they could, conceivably, decide they want a different kind of safety net as a result. Like one that actually functions as a safety net, rather than arrangements that pay the winners over and over again.

      We also don’t know what’s going to happen with the ostensible funds available for babyboom defined benefit pensions. Other shoes can still drop that cutting pensions for those 30 years out simply doesn’t address. Maybe Walker, Christie etc prep that by cutting 30 and then move down from there.

      Then the moral scourges will wish they had been nicer to now middle aged Gen X, with its forced fed “you’re on your own” libertarianism.

      I know we’re not supposed to drive wedges between the 99%, who are under assault by the 1%, but you can stick your head in the ideological sand only so much. Walker may have overplayed his hand, for example, but Christie is still semi-popular in NJ.

    2. Jim

      What gets me is how few public sector workers realize that it’s increased taxes on the working and middle-class that pay for these pensions. If public sector employees want to retain their defined benefit plans, why don’t they march to the homes of Corzine and have him contribute a chunk of his assets to the state. Instead of doing this, the public sector screams for more regressive taxation.

      1. JTFaraday

        I think that public sector workers–teachers, civil engineers, law enforcement (if you can keep it on a leash)–do work that is valuable to the community.

        But their *politics* are purely the politics of self interest, and that’s a problem because the only time they appear to the public is when they are “sticking their hands out” or when they have been put on the defensive by one anti-government cadre or another.

        The truth is NO ONE cares for civic life in the US, but public employees are citizens with a significant *personal stake* in caring for civic life, and they frequently have a better angle of vision on local governance issues than “mere” citizens. But, apparently caring for the whole is not in their individual job descriptions.

        Instead, voters get to see their unions– who are not exactly concerned with the common good either– while the civic realm has been reduced to electoral politics, which is relegated to professional politicians who are there to be commandeered by the wealthiest to run state and local governments in their narrow self interests.

        So, it’s not surprising that Christie, who may or may not have national political ambitions, would eliminate the “millionaire’s tax” AND withhold NJ’s traditional property tax rebates “in an emergency,” while going after the public sector employees–and that seems like a plausible plan to a fair part of the NJ public, who have been trained by experience to regard the various players in certain kinds of ways.

        The vituperation against public school teachers on one or two local talk radio stations is off the charts, for example, and has been for well over 20 years already.

        In fact, Christie’s work in NJ has followed the pattern of Walker’s in Wisconsin, it’s just that he’s finessed it a little bit better by refraining from doing things like trying to outlaw collective bargaining altogether, etc. He presents all his ideas as “reasonable,” based on analogies to private sector employment.

      2. JimS

        Private employers will always pay their workers worse than the public sector, because they can, and it’s only because of the public sector drawing workers away that they don’t pay their workers even worse.

        So suppose they successfully play the “unfair” card, and drag the public sector down. What happens next? They push down the private sector (because now they can) and start the “unfair” cycle round again.

        1. JTFaraday

          The private sector hasn’t “always paid their employees worse.”

          I’m sure most baby boomers in the public sector and other unionized jobs will tell you that they traded higher salaries for enhanced job security, just as baby boomer higher education faculty will tell you they traded higher salaries for individual autonomy.

          Now the environment surrounding Survivor Island has undergone a sea change and they’re finally being forced to wake up. Only because the waters is rising, though. Otherwise they’d still be asleep.

          Like I said. Under the individual career model of human existence, no one cared for civic life. (Plenty of moral scourges, though).

  9. doom

    That Hill poll is a classic example of polling as propaganda. Mix power up with living standards so you get good numbers when you ask about fears of decline. Be very careful to say nothing about legitimacy, or rule of law, or whether the state fulfils its obligations. Now candidates can mouth gibberish about American greatness and avoid any mention of corruption, rights derogation, or repression.

  10. Jim Haygood

    Doug Short on today’s reported collapse in US consumer confidence:

    On a percentile basis, the latest reading is at the 1st percentile of all the monthly readings since the start of this data series in June 1977 and at the all-time low of non-recessionary months. Only five months in the entire history of this indicator, all during the Financial Crisis recession, have been lower than the latest consumer confidence number.

    http://advisorperspectives.com/dshort/updates/Conference-Board-Consumer-Confidence-Index.php

    Of course, ‘non-recessionary’ is provisional adjective which will only be confirmed (or not) retrospectively, when the NBER wise men finally bestir themselves to issue an Olympian ukase.

    Meanwhile, ECRI’s leading indicator has been falling for 11 weeks straight, and ECRI has asserted that the US definitely is in recession already.

    I’d put the probability of recession at 80%, rising to 100% certainty if stocks set new lows for the year.

  11. Susan the other

    Bloomberg on City Hall was very encouraging. It surprises me that Bloomberg would be so blunt when speaking about the banks. And the banks chose not to comment as usual.

    Did anyone see Paul Volker on Charlie Rose last night? Also Amy Goodman and Chris Hedges. But Volker was odd. He was talkative, very forthcoming about the bank mess. But clearly he is a supporter of the banks even in their disgusting present condition. Volker did ask why we need to write CDSs for 10 times the loss – speaking of 60 times losses – so he even understated it by a factor of 10. I wonder what 6T figure he was referring to. So that was disappointing. He isn’t backing any very serious regulations against the banks wild investment habits. The Volker Rule might be toothless, he said, if the regulators get lobbied by the banks!

    And a curious thing happened when Charlie Rose turned the conversation to mortgages. Volker was blacked out 3 times. I’m suspicious he said something verboten about securitization fraud. It is striking that Obama himself has never mentioned it. Securitization fraud has been studiously ignored by everyone in Federal Government positions.

    So anyway, its good to hear the municipalities are having none of it.

  12. petridish

    Here’s hoping that the OWS people understand the concept of a STATE BANK into which ALL public funds are deposited and through which the “benefits” of fractional reserve lending accrue to the PUBLIC.

    Time to beat these TBTF’s at their own slimy game.

    Remember Jefferson County, Alabama!!

  13. Hugh

    The Occupy Obama movement looks like good political theater but the goal of reforming the Democratic party is a waste of time. As it has shown for at least the last decade, and perhaps three, the party is unreformable. “Reform” just leads to people like Clinton and Obama and Congressional majorities run by and for Blue Dogs. Just say no.

  14. Typing Monkey

    Unexpected reaction?

    http://www.ft.com/intl/cms/s/0/af6f8064-fecf-11e0-9b2f-00144feabdc0.html#axzz1bpOxdL68

    UBS defies bonus-slashing in wake of scandal

    UBS executives said that last month’s $2.3bn unauthorised trading loss would not force the bank to dramatically rein in bonuses, as it set aside nearly 90 per cent of its investment banking revenues for staff pay.

    [...]

    The investment bank posted a third quarter pre-tax loss of SFr2.4bn, including the alleged rogue-trading loss but excluding an accounting technicality that handed the group a one-off gain.

    [...]

    Third-quarter earnings were flattered by a higher-than-expected SFr1.77bn gain booked on changes to the value of the bank’s own debt

    [...]

    As in the previous quarter, Asian clients and the bank’s very wealthiest customers continued to deposit funds, while clients in Switzerland’s European neighbours withdrew assets. “Onshore” European operations were hit in particular by the SFr1.5bn loss of funds “related to the departure of client advisers who had joined as part of a past acquisition in Germany”.

    Shares in UBS rose 2.15 per cent to SFr11.38 in early Zurich trading.?????

    Umm..the good news here is what, exactly (or even vaguely)?

    1. Maximilien

      The good news? I’ll give it a shot.

      Top performers at the firm were reportedly “demoralized” by the rogue trader’s losses. Demoralized traders denied their bonuses might quickly become pissed-off traders. Pissed-off traders might then go rogue themselves, and destroy the bank.

      So pay the bonuses and save the…..Wait! That’s not good news. That’s BAD news.

      You’re right. There is no good news.

  15. Herman Sniffles

    Regarding the Potempkin Obama refi plan, I just spoke with a good friend of mine who is a residential lender. He said that the underlying problem with this plan is in the contract between the lender and Fannie or Freddie. In this contact there’s a provision that says if the borrower misses three payments in a row, Fannie or Freddie can go back to the file and check to make sure that the lender “followed Fannie/Freddie guidelines.” These guidelines are, apparently, of the greyish variety. My friend (we’ll call him Mark because that’s his name)gave an interesting example that happened to him recently. Mark made a Fannie Mae loan to a union carpenter to buy a house 7 years ago. The carpenter lost his job recently, and when he missed his third payment foreclosure proceedings were inititated. Fannie went back to the file and found that Mark had forgotten to calculate the carpenter’s union dues payments of $35 a month in the income/expense worksheet. Even though this tiny mistake had nothing to do with the borrower losing his house (the problem was that he lost his job) Fannie used this to force Mark-the-lender to buy back the loan. In effect Mark’s company just cut Fannie a check out of his business account for the full amount of the loan. He ate it. Then Mark got stuck with the house and sold it for way less than the check he gave to Fannie. So what happens on these new loans that are going to be 125% to 150% of the actual value of the home being refinanced? If the lender makes one of these loans, and the borrower misses three payments, Fannie just digs up the file and finds out that the lender forgot to calculate in fish food for the guy’s tropical fish tank in the income/expense sheet, and then they demand a check from the lender for the amount loaned. The lender then cuts Fannie a check for 150% of the homes value, and gets stuck with a much more terrible loss when they have to unload the home in this sucky market. Mark says if they change this one item in the contract between the lender and Fannie – in effect releasing the lender from the liability of having to pay Fannie the loan amount and get stuck with the house – that there will be a “stampede” of refinancing. He also said that “as usual” releasing the lender from this liability will put it squarely on the back of the US tax paying public.

      1. skippy

        Funny enough you don’t see to many black and whites. While on our block we have tabby’s, tortoiseshell’s and our blue, all of the best nature. Now we have a striped tabby with white socks, that makes it a point, too travel hundreds of meters ( several blocks) and fight every cat it can find.

        Skippy…if only I could mentally project…the information…that I spent half my youth on the farm and standing orders were pelt, shoot or what ever it took to chase off strays. Maybe I should call the Feral Cat Club of Darwin[?], damnable duality!

      1. skippy

        Ahhh the “Laying of Hands” you should —- FEEL — privileged, considered a blessing.

        Skippy…snicker.

  16. Geo-environmental Engineer

    The story about the New England forests is almost a parable. We view the decline in color as a major change but it is important to realize that the current sugar maple dominated hardwood forest is actually a product of 4 centuries of human intervention. Similar to the financial markets, ecosystems can have a false appearance of stability.

    When Europeans arrived, much of the climax forest in New England was actually based on the white pine. However, it was such a superb timber source (the best ship masts in the world among other benefits) that it was completely logged out by the early 19th century and hardwoods began to become the dominant forest type.

    Farming then became a dominant industry where many of the forests used ot grow with second-growth timber of various types in non-farm areas. The continuation of logging and farming into the early 20th century with a gradual decline in farming over the past 100 years has resulted in the current forests of sugar maple and other colorful hardwoods.

    It is also important to remember that the entire New England region was covered by great glaciers until 10,000 years ago, so the forests in the Northeast are only that old. The New England type forests actually existed far south at that time and had to work their way north as the glaciers retreated.

    Some interesting info on New England forest history is here: http://harvardforest.fas.harvard.edu/museum/landscape.html

Comments are closed.