This is not a joke.
Various Philadelphia media outlets have told the tale of one Patrick Rogers, who was increasingly unhappy over his inability to get satisfaction from Wells Fargo over fees related to his mortgage, and initiated foreclosure proceedings as a way to get their attention.
Now how exactly could he do that? And is his action a possible template for other frustrated homeowners?
Read more...Mike Konczal (thanks to ed at ginandtacos) reported earlier today on the latest release of a movie coming to states and cities all over the US, namely the sale of state and local government assets to alleviate pressures on strained budgets.
For those new to this concept, the term of art is the anodyne “infrastructure sales” and the company that more or less invented this lucrative business is Macquarie Bank of Australia (known down under as “the millionaires factory”), although US firms clearly intend to exploit the once in a lifetime opportunity presented by widespread state and municipal budget distress and downgrades.
The problem, of course, is that these deals put important public resources paid for by taxes (or even worse, financed by bonds and thus potentially not even yet fully paid for) in the hands of private investors. They then earn their returns by charging user fees of various sorts. The public must rely on the new owners for reinvestment and maintenance, and depending on how the deal is negotiated, may have ceded control as far as fee increases are concerned. This is tantamount to selling the family china only to have to rent it back in order to eat dinner.
Read more...Gulf spill ‘devastated sea life’ BBC
Should Employers Be Allowed to Ask for Your Facebook Login? Atlantic (hat tip reader Crocodile Chuck)
The Death of BCC? NeoSmart. Tell me this isn’t true.
Scientists warn of $2,000bn solar ‘Katrina’ Financial Times. So when will your local theater carry a disaster movie on this theme?
As readers may have noticed, I grumbled over the weekend about the decision by federal prosecutors not to bring charges against Countrywide’s Angelo Mozilo. I attributed it to two causes: extreme deregulation (you can’t prosecute if virtually nothing is a crime) and timid prosecutors. A lively debate arose in comments, with our Richard Kline contending that the real reason no Big Name had been brought to justice is that a trial would make it all too evident that there were plenty of other powerful people who had committed equally heinous acts. Can’t expose how widespread corruption is, now can we?
Other readers argued the revolving door issue, which was (in essence) don’t ruffle the law firms that will be your prospective employers. I begged to differ, in that tough, effective prosecutors were magnets for new law school grads precisely because they were great training grounds. Someone who came out of those boot camps would be more valuable than a largely untested staff member at a regulatory agency.
I got this e-mail from someone who has seen the SEC from the inside:
Read more...Radar trick tracks bats and bees BBC
Gulf Oil Spill Update: Scientist Finds Gulf Bottom Still Oily, Dead Huffington Post
Ducks are Immortal Paul Kedrosky. Hate to say it, I’ve eaten enough coot to disprove this theory.
FBI: Web-based Services Hurting Wiretapping Efforts PC World
Paul Krugman was kind enough to link to me with respect to a Guardian article pointing to his criticism of the fiscal stance, and arguably more important, the political role that the Bank of England governor Mervyn King is taking. However, Krugman said I was in error in claiming he never criticized Greenspan for compromising Fed independence.
As an aside, I’m taking King’s side a bit more than I might otherwise. Yes, I agree fully with Krugman that austerity is a bad idea in the UK and pretty much anywhere still in a hangover after the global financial crisis. But there seems to be a lot of opportunism in the broadsides against King. He is the only central banker that has stood firm against the bad practices of the major dealer banks. And his dim view is reportedly widely shared among Bank of England staff. My sense (which UK readers confirm) is that the piling on seems unduly aggressive, and looks to be an effort to discredit King in order to weaken him (and as much as possible, the Bank) as a reformer.
I’m still going to quibble a bit. The NC remark in question about Krugman was: “And he’s said nothing about the “political” Greenspan and Bernanke.”
Read more...It is a tribute to the messaging skills of the American corpocracy that a phony budget crisis in Wisconsin has been used to scapegoat unions. This row serves as a very convenient way to shift attention from the real cause of fiscal stress in states that have serious budget gaps (yes, there are a very few states like New Jersey that have gaping pension shortfalls, thanks to years of government use of wildly optimistic return assumptions as an excuse to underfund them, but contrary to the railing of Chris Christie, his state’s problem is an outliers).
First, let’s debunk a couple of issues thrown out by Wisconsin governor Walker’s camp before turning to the real culprit in state budget’s supposed tsuris. The state budget is not in any kind of real peril. The Wisconsin Legislative Fiscal Bureau estimated that the state would end fiscal year 2011 with a gross positive balance of $121. 4 million and a net balance (after mandated reserves) of $56.4 million. Walker asserts there is actually a $137 million deficit. But where did that change come from? Lee Sheppard of Forbes estimated that Walker’s tax cuts for businesses would cost at the bare minimum $100 million over the state’s biennial budget cycle. Other sources put a firmer stake in the ground and estimate the costs at at $140 million. Viola! Being nice to your best buddies means you need to go after someone else.
The second major canard is that Wisconsin state employees are overpaid.
Read more...The New York Times’ Gretchen Morgenson dutifully tells us, based on a Los Angeles Times sighting, that federal prosecutors will not be filing charges against the Tanned One, Angelo Mozilo of Countrywide. This follows the failure of investigations to lead to a criminal prosecution of another major perp in the financial crisis, one Joseph Cassano, the head of AIG’s Financial Products unit.
There has been far too little discussion of why no legal action has been taken.
Readers can no doubt come up with additional reasons, but I see at least two.
Read more...Open Letter to Westboro Baptist Church: AN OPEN LETTER FROM ANONYMOUS A bit grandiose, but they have good taste in targets. For background, see Anonymous targets www.GodHatesFags.com P2PNet (hat tip Slashdot)
The Real Reason Glenn Beck Hates Google Alternet (hat tip reader furzy mouse)
Is China Manufacturing Plastic Rice? Care2. The US once had adulterated meat…
China Leads Fight Against West’s Economic Formula in G-20 Scrap Bloomberg
Libya protest deaths ‘rise to 84’ BBC
They must put something in the water at the Fed, certainly the Board of Governors and the New York Fed. Everyone there, or at least pretty much everyone who gets presented to the media, seems to have an advanced form of mental illness, namely, an pronounced inability to admit error. While many in public life suffer from this particular affliction, it appears pervasive at the Fed. Examples abound including an overt ones like an article attempting to bolster the party line that no one, and hence certainly not the central bank, could have seen the housing bubble coming, or subtler ones, like a long paper on the shadow banking system that I did not bother to shred because doing it right would have tried reader patience Among other things, it endeavored to present the shadow banking system as virtuous (a necessary position since the Fed bailed it out) because it was all tied to securtization and hence credit intermediation. That framing conveniently omits the role of credit default swaps and how they multiplied the worst credit risks well beyond real economy exposure levels and concentrated them in highly geared financial firms.
Another example of the “it is never the Fed’s fault” disease reared its ugly head in the context of the G20 meetings.
Read more...Even if you don’t get all the political and business references, I suspect you’ll appreciate this video. Hat tip readers hum and Hubert:
Read more...Koalas bellow to attract a mate BBC
Researchers: 100 Percent Green Energy Possible By 2050 Green Car Reports
In a Field of Reason, Lawyers Woo Luck Too New York Times
China Agritech: more miracles in the plant John Hempton
It is really annoying when people, particularly those in positions of power, can’t even be bothered to take the trouble to lie well.
As we noted back in November, in a post titled, “Foreclosure Task Force: Worse Than Stress Tests?“, the officialdom was embarking on yet another hollow exercise in oversight:
Read more...Felix Salmon reports on a conversation with departing assistant Treasury Secretary Michael Barr on newly-commenced reviews of the practices of bank servicers.
Barr’s patter might sound convincing to the uninformed. An “11-agency, 8-week review of servicer practices, with hundreds of investigators crawling all over the banks”! Promises to hold miscreants accountable! Banks required to fix what’s broken!
Felix was skeptical, noting that the reviews were effectively a “physician, heal thyself” approach to a part of the banking business that has proven to be unable to change behavior…
In addition, as Felix pointed out, if the exams were to uncover issues that might pose systems risk, the Treasury is certain to reason to minimize them…
This “review” is clearly a Potemkin exercise, yet another stress test-type charade, in which the facade of a serious investigation is used to sell the message that all is well in the banking industry.
By Payam Sharifi, an economics Graduate Student at the University of Missouri-Kansas City
Here in the United States, discussions of our troubled times revolve around any of the following: the housing crisis, the federal debt, unemployment, the fiscal health of particular states, and sometimes even income inequality. Overseas, discussions can include these topics, as well as the plight of the Euro. One issue that I personally feel has gotten the short end of the stick is that of commodity prices, and in particular food and oil. There is a special significance to this issue: its ramifications affect nearly every human being in the world. As seen in prices on the NYMEX and other markets, oil and food prices are beginning to soar again, with the price of WTI futures hitting $90/barrel and Brent crude going over $100/barrel. This issue ought to be discussed again with a renewed interest – but the media and much of the populace at large have simply accepted high food and oil prices as an unavoidable fact of life, without any discussion of the causes of these price rises aside from platitudes. For example, a recent AP report quoted an opinion that gasoline was going to hit $4/$5 a gallon in 2011, but did not mention the possible relevance of speculation in the futures market. It seems that everyday observers (as well as even the financial media) find this issue so complex that they shrink from discussing it. I will now give my opinion on these issues, buttressed by what I have learned from a recent interview with commodities trader Daniel Dicker. His new book “Oil’s Endless Bid” is due out in April.
Read more...The chattering classes of the left are encouraged by the spectacle of 14 Wisconsin state senators having the intestinal fortitude to deny the governor a quorum for a budget vote that includes provisions to strip most state employees of virtually all of their collective bargaining rights. They were in turn emboldened by large scale demonstrations in the capitol, which seemed to get their momentum from the fact that students, rather than taking the day off when teachers called in sick so they could protest, turned out in large numbers to support them.
Don’t underestimate the ability of the Democrats to trade this opportunity away. All the defecting Senators are asking for is to slow down the process and negotiate the bill. Sounds reasonable, right?
As someone who been party to deal-making, the problem with being reasonable and measured is that that only works with fair-minded and/or experienced opponents. Being non-negotiable is not only terribly effective (you throw a tantrum and then make only token concessions to let the other side save a teeny bit of face), it also takes comparatively little in the way of bargaining skills.
The right wing, for the most part, has made being unreasonable and non-negotiable part of its branding. The left, peculiarly, has not adapted. And the result is that it too often winds up ceding way more ground than it needs to.
Many readers will point out that this ineffectiveness serves as useful protective cover, particularly with the Obama Administration. It has repeatedly sought to have its cake and eat it too, by appealing to as much as possible of the traditional Democratic base (which they figure they can abuse, since it has nowhere to go) while also playing up to corporate backers. The true state of play has reached the point that even purveyors of leading edge conventional wisdom like Jeffrey Sachs are now willing to say that we have two center-right parties in the US.
But this, while true, misses an underlying pathology.
Read more...