Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Memetrics
novahockey
quarterback
ScottC
yellojktVital Statistics:
| Last | Change | Percent | |
| S&P Futures | 1434.2 | 7.3 | 0.51% |
| Eurostoxx Index | 2507.7 | 9.2 | 0.37% |
| Oil (WTI) | 91.23 | 1.3 | 1.39% |
| LIBOR | 0.36 | -0.002 | -0.55% |
| US Dollar Index (DXY) | 79.74 | -0.141 | -0.18% |
| 10 Year Govt Bond Yield | 1.64% | 0.03% | |
| RPX Composite Real Estate Index | 194.5 | 0.1 |
Markets are higher this morning on speculation of further stimulus measures out of China, in spite of some lousy economic data. Bonds and MBS are down.
2Q GDP was revised down to +1.3% from +1.7%. Big revision downward. Durable goods slumped 13% on a decline in aircraft orders. Revisions were down across the board. About the only bright spot was a drop in initial jobless claims to 359k. While some might dismiss the drop in durables as just normal volatility, I would point out that Caterpillar has already warned. Speaking of which, we are getting pretty close to pre-announcement season, when companies that are going to miss their quarter fess up to the Street.
Yesterday’s report from the Commerce Department noted that sales of new single-family houses in August were at a seasonally adjusted rate of 373k, up 28% from Aug 11. The shocking statistic from the report was that the median sales price of a new home was 257k, up 17% from a year ago. The homebuilders aren’t reporting price increases like that – KB Homes said sales prices were up 5% YOY in their 3Q results, while Lennar reported a 4% price increase. Is it perhaps that bigger houses are being sold now and that accounts for the increase? Nope – McMansion builder Toll Brothers reported prices increased only 1%, and we all know that the remaining problems in the real estate market are at the high end, where it is cheaper to buy than build. And if prices really were increasing 17% YOY, housing starts wouldn’t be 750k, half of the 1959-2002 average run rate. So something fishy is going on – perhaps Commerce is trying to put out good statistics to help Obama’s campaign and intends to quietly revise the numbers downward once he gets elected.
The first time homebuyer is still struggling to get involved in the real estate market. The latest NAR Confidence Index Report showed that first time homebuyers were only 31% of all sales, much lower than their typical 40% share. Tight credit and cash buyers account for the drop. Buyer traffic has jumped considerably over the past year, while seller traffic has remained flat.
Filed under: Morning Report |
All Things in Moderation 
Sorry to go off topic but Matt Taibbi thinks he knows why the race is as close as it is.
http://www.rollingstone.com/politics/blogs/taibblog/this-presidential-race-should-never-have-been-this-close-20120925#ixzz27eeZLTff
LikeLike
lms:
Matt Taibbi thinks he knows why the race is as close as it is.
And only adds to the mystery of why any thoughtful person pays any attention to this douchebag.
LikeLike
Without generalizing and name calling, I think the Taibbi column was devoid of factual analysis.
This was the first one I ever read. If they are all like that – if they do not, for example, even recognize that the two parties have roughly equivalent bases – then I would begin to understand dismissing him out of hand.
It doesn’t occur to Taibbi that WMR had advantages that worked in his favor, absent his inconsistency and public personality. It doesn’t occur to him that the economy gave the Rs a platform. It doesn’t occur to him that Americans do not loathe successful persons for being successful. Fortunately we do not worship them, either, of course.
One problem Taibbi seems to have here is the oversimplification of complexity. Pinning America’s problems on one single culprit – Wall Street, for him, as opposed to moral decline for Santorum – is a flawed hypothesis. Leads to incorrect conclusions, and inability to deal with the world we have.
LikeLike
mark:
Without generalizing and name calling…
I figure someone who routinely calls other people names like “douchebags” (as he did in this very column) is fair game.
One problem Taibbi seems to have here is the oversimplification of complexity.
Yes. That is a problem he routinely labors under, because his purpose seems not to convince and/or explain but rather to rile up the faithful. He feeds red meat to the rabid crowd, nothing else.
LikeLike
The source aside, Taibbi raises an interesting question. No president has ever been re-elected with unemployment over 7.4%. BY standard historical trends, this should have been a cakewalk for Republicans. Yet Obama by nearly all indications has this one nearly in the bag and by a wide margin. What gives?
Is the cult of The One that strong?
Is Romney really that bad?
Should Republicans have nominated a True Conservative?
And if so, who?
These are valid and interesting questions.
LikeLike
yello:
The source aside, Taibbi raises an interesting question. No president has ever been re-elected with unemployment over 7.4%. BY standard historical trends, this should have been a cakewalk for Republicans.
Taibbi’s point was that this, and all elections, should be a cakewalk for Dems.
LikeLike
Taibbi’s point was that this, and all elections, should be a cakewalk for Dems.
And that is where he and I disagree. This should have been Romney’s to lose. And so he has. How?
LikeLike
yello:
This should have been Romney’s to lose. And so he has.
Not yet.
LikeLike
I think so too yello. If Romney indeed loses this, I think he probably will, it will be discussed ad infinitum.
Scott, I read lots of stuff written by douchebags.
LikeLike
And that is where he and I disagree. This should have been Romney’s to lose. And so he has. How?
I can understand the media’s desire to declare the election over already, but we haven’t even had the debates yet. It isn’t like it is the 2 minute warning and Romney is down by two touchdowns… 6 weeks is an eternity…
LikeLike
Personally, I think Taibbi raises a lot more questions than he answers and considering that we all hear how broken our political system is I think the questions are both valid and interesting. I don’t think it’s over until the fat lady sings but I am surprised Romney’s not doing better than he is if as we’ve always been told, “it’s the economy stupid”. Anyway, I mostly thought his questions regarding the media’s lack of unbiased reporting and keeping the horse race alive were interesting and valid.
To me the biggest reason the split isn’t bigger is the news media, which wants a close race mainly for selfish commercial reasons – it’s better theater and sells more ads. Most people in the news business have been conditioned to believe that national elections should be close.
This conditioning leads to all sorts of problems and journalistic mischief, like a tendency of pundits to give equal weight to opposing views in situations where one of those views is actually completely moronic and illegitimate, a similar tendency to overlook or downplay glaring flaws in a candidate just because one of the two major parties has blessed him or her with its support (Sarah Palin is a classic example), and the more subtly dangerous tendency to describe races as “hotly contested” or “neck and neck” in nearly all situations regardless of reality, which not only has the effect of legitimizing both candidates but leaves people with the mistaken impression that the candidates are fierce ideological opposites, when in fact they aren’t, or at least aren’t always. This last media habit is the biggest reason that we don’t hear about the areas where candidates like Romney and Obama agree, which come mostly in the hardcore economic issues.
LikeLike
It isn’t like it is the 2 minute warning and Romney is down by two touchdowns… 6 weeks is an eternity…
It’s not the two minute warning but it is late in the fourth and I would say that Romney is down at least three touchdowns. He MUST carry Ohio, Florida, Virginia and a state to be named later. There are very few undecideds left and most are breaking to Obama. Early voting in Merlin starts in exactly one month. Romney needs to start shifting the momentum now and he is no Tom Brady.
LikeLike
“Is the cult of The One that strong?”
think we will find out if turnout returns to historical norms among minority and young voters. For example, turnout in VA was up 40% among African American voters in 2008 for about 200,000 votes. And he pulled 95% of the AA vote. (mabye 98%) He won VA by about 150k votes. Are all those people going to turn out again? Also, the white vote was down in VA. do they stay home again? all of this is TBD.
LikeLike
“ScottC, on September 27, 2012 at 9:11 am said:
yello:
The source aside, Taibbi raises an interesting question. No president has ever been re-elected with unemployment over 7.4%. BY standard historical trends, this should have been a cakewalk for Republicans.
Taibbi’s point was that this, and all elections, should be a cakewalk for Dems.”
Taibbi is engaging in the classic “economic determinism” argument that always results in frustration for Democrats/progressives when a chunk of the electorate chooses to “vote against their own economic interests” as progressives see them, namely plans to raise taxes on someone else and redistribute to favored constituencies. Romney himself parroted a caricature of the same argument with his conflation of the 47% of likely Obama voters with those who receive government transfer payments.
Mark – This wasn’t a particularly good Taibbi column. His vitriol goes best with topics that are outrageous enough to deserve it, such as the Jefferson County scandal or LIBOR.
LikeLike
jnc:
This wasn’t a particularly good Taibbi column. His vitriol goes best with topics that are outrageous enough to deserve it, such as the Jefferson County scandal or LIBOR.
This column was typical Taibbi, including the ones you reference in which his sole goal is to mindlessly trash Wall Street. Even if you think WS deserved to be trashed in a particular instance, praising Taibbi for doing the trashing is like trying to sell someone a stopped clock by pointing out that when it gets the time correct, it really is correct.
LikeLike
JNC, I rely on your judgment that he can write an insightful column. But I don’t intend to chase down his writing either.
I like David Brooks. I always have. I agree with him slightly more often than I disagree with him. but he is careful with facts and careful separating facts from both his own opinions and those of others. Sometimes he is wildly wrong, especially in retrospect, but who isn’t?
I follow Simon Johnson and respect his rigor. I have come to take Krugman lightly as a columnist because he is engaged in polemics at his column and his blog. Yet Johnson and Krugman come from the same general school of thought.
I think Big Red is a mere gossip columnist. Haven’t read her in maybe ten years, so if Dowd is doing better let me know.
I think George Will is a good writer but a seriously lazy columnist in terms of fact presentation.
The WaPo has two real old timers I think of as pros. Pearlstein cares about getting stuff straight before he opines. Pincus is really close to the Pentagon. He has always been right, AFAIK.
I read Mallaby at FT. I read Zakaria and Ignatius.
I enjoy Milbank – he is like a guilty pleasure. A lightweight humorist, not quite in Gail Collins’ league yet.
Parker always makes sense to me. Might be her style. Dionne, Robinson, Kagan and Samuelson are often good reads. I like Tom Friedman’s overly-optimistic books. Al Hunt at Bloomberg seems very fact based to me.
I don’t think directly reading Taibbi would add anything to the mix.
LikeLike
I hope this won’t shock all of you but one of the reasons I like to link to Taibbi is because his writing usually leads to interesting discussions here. We can’t always just agree that the economy sucks and housing will lead the way out once deleveraging is complete. I generally won’t bring up women’s issues any more, and a few other subjects I’ve taken a beating on, so I let Taibbi bring them up instead…………lol
LikeLike
It’s not the two minute warning but it is late in the fourth and I would say that Romney is down at least three touchdowns.
That’s assuming you believe democrats outnumber republicans by 11 percentage points. That might be true, it might not be.
There will be no sampling bias on election day.
LikeLike
The narrative is that Ohio is a last stand for Romney. As The Daily Beast (perhaps on-par with Taibbi for impartial political commentary) puts it:
Embedded in that article is a painfully tortured metaphor to a country song, but the point is what is Romney’s path to victory with less than a month and a half left?
LikeLike
The counter narrative to “Romney is Doomed”:
“September 25, 2012, 10:52 pm
Obama Without Romney
By ROSS DOUTHAT”
Key observation:
“As of this writing, Romney trails in the RealClearPolitics polling average by almost exactly that figure – 3.8 points. He has squandered almost two seasons’ worth of opportunities and allowed his failures as a candidate to eclipse his opponent’s failures as a president. But as he prepares for the debates that offer his last best chance, he has one reason to be hopeful: The case he has failed to make is still there to be made.”
http://campaignstops.blogs.nytimes.com/2012/09/25/douthat-obama-without-romney/
See also:
“60 Minutes’ shows debates could be a Romney reset
By Jonathan Capehart
Posted at 12:48 PM ET, 09/24/2012”
“If that Romney shows up at the debate in Denver on Oct. 3 and Obama lives up to his reputation for being a bad debater, we could be just a week away from stories declaring a reset for Romney.”
http://www.washingtonpost.com/blogs/post-partisan/post/60-minutes-shows-debates-could-be-a-romney-reset/2012/09/24/f35483b4-0663-11e2-858a-5311df86ab04_blog.html
I don’t believe that Romney has no chance of winning, but I do believe that if everything remains as it is now (most significantly the economy doesn’t get dramatically worse), then his current trajectory is a losing one.
I do not understand why there has not been a clear Romney ad with the Obama stimulus unemployment predictions charts and his statements about the summer of recovery and cutting the deficit in half juxtaposed with the current statistics. Romney should publicly and repeatedly call Obama out to give an explanation of why his policies didn’t produce the promised results.
LikeLike
There will be no sampling bias on election day.
Absolutely true. That’s why they make them play the games. But some people like to play outside the rules such as the continuing voter registration shenanigans going on in Florida.
LikeLike
“lmsinca, on September 27, 2012 at 9:27 am said:
…
Anyway, I mostly thought his questions regarding the media’s lack of unbiased reporting and keeping the horse race alive were interesting and valid.”
Jon Stewart said it best:
“The bias of the mainstream media is towards sensationalism, conflict and laziness”
http://www.politico.com/blogs/politicolive/0611/Jon_Stewart_Press_biased_towards_.html
LikeLike
Romney should publicly and repeatedly call Obama out to give an explanation of why his policies didn’t produce the promised results.
I agree that that would be a far more effective strategy than his new ‘I’m a friend of the working man’ pitch. Perhaps congressional leaders don’t want anything that would focus attention on their share of the economic culpability from their intransigence right before the election.
LikeLike
After the debate the media will raise talk of a Romney comeback because it’s advertisiing that matters and in order to sell new advertising dollars the media rule is that the story has to change.
So if there’s nothing else to talk about next week, we will see a raft of, who is repsonsible for Obama’s debate performance and will it matter, stories.
LikeLike
banned:
After the debate the media will raise talk of a Romney comeback because it’s advertisiing that matters and in order to sell new advertising dollars the media rule is that the story has to change.
If this is the case, what makes the current media narrative any more believable than the one that they will change it to later?
LikeLike
As I have noted before, I simply find the actual behavior that Wall Street engaged in those instances more offensive than Taibbi’s “mindless trashing” of it. I’d feel differently if they hadn’t been bailed out by the tax payers and/or there had actually been some legal accountability, but there hasn’t been nor will there be.
This is still the best rebuttal to Taibbi & the whole “economic determinism” argument, but neither candidate is making this case:
“Why Voters Tune Out Democrats
By STANLEY B. GREENBERG
Published: July 30, 2011”
LikeLike
jnc:
As I have noted before, I simply find the actual behavior that Wall Street engaged in those instances more offensive than Taibbi’s “mindless trashing” of it.
As I have pointed out before, much of the behavior that WS engaged in in Jeff County was actually required by the local pols in order to do business there.
I’d feel differently if they hadn’t been bailed out by the tax payers…
Is it still a “bailout” if the taxpayers actually make money on it?
LikeLike
The registration thing boggles my mind, simply because Medicaid is much harder — and it’s the same population that is of concern. old and poor. interestingly enough, voter ID does not suffice for Medicaid ID purposes.
https://www.healthykids.org/renew/citizenship/
VA let’s you use your concealed handgun permit as voter ID. few of my friends are planning on doing that just for fun. have no idea if you can pack and vote at the same time. it’s typically in a school, so probably not.
LikeLike
After the debate the media will raise talk of a Romney comeback
The media are doing their best to keep expectations low so that if all Mitt does is keep from drooling on himself, they can declare a comeback performance. It’s all part of the pro-wrestling spectacle aspect of a modern election.
LikeLike
yello:
The media are doing their best to keep expectations low so that if all Mitt does is keep from drooling on himself, they can declare a comeback performance. It’s all part of the pro-wrestling spectacle aspect of a modern election.
If the media manipulates its coverage in service to the “pro-wrestling spectacle aspect of a modern election”, why do believe the current media narrative that Romney is woefully behind?
LikeLike
“yellojkt, on September 27, 2012 at 9:46 am said:
Romney should publicly and repeatedly call Obama out to give an explanation of why his policies didn’t produce the promised results.
I agree that that would be a far more effective strategy than his new ‘I’m a friend of the working man’ pitch. Perhaps congressional leaders don’t want anything that would focus attention on their share of the economic culpability from their intransigence right before the election.”
That and President Obama can’t bring himself to say anything that would be seen as admitting that Paul Krugman, Christy Romer, and/or any other members of the “professional left” were right and his administration was wrong, which is one of the few coherent explanations that can be offered. He’d rather have a week long budget negotiation with Eric Cantor.
Remember, the only mistake his administration has made in the past four years was not communicating how great they were well enough.
HAMP was ideal housing policy, the country just needed a better bedtime story.
Romney should turn Obama’s hubris against him and play to the electorate’s natural preference for using a 2×4 on incumbents who aren’t getting the message about policy and mistakes.
LikeLike
In the commodities department, nat gas is back about $3 to $3.24 and this time I don’t think it will drop back below 3 unless the fiscall cliff, yada yada yada.
Gold reaches $2000 by spring. Oil putzes around right here possibly for the rest of the year give or take 5% unless the MIddle East yada yada yada
It looks like Arcelor Mittal is betting on a recovery in steel, which means you should too
http://www.steelorbis.com/steel-news/latest-news/arcelormittal-plans-upgrade-and-restart-of-pennsylvania-coke-plant-711844.htm
LikeLike
“It’s all part of the pro-wrestling spectacle aspect of a modern election”
They didn’t make Linda McMahon a Sensate candidate by by using real referees and rules. The did it by telling a story about good and evil, just like the media would have no customers if they talked facts and figures.
LikeLike
should say gold $2000 by the END of spring, mea culpa.
LikeLike
The NYT Editorial page finds a tax increase it doesn’t like, because it’s hitting the “wrong” people:
Related:
“Taxes Threaten an Island Culture in Georgia”
http://www.nytimes.com/2012/09/26/us/on-an-island-in-georgia-geechees-fear-losing-land.html?ref=opinion
LikeLike
ScottC, on September 27, 2012 at 10:23 am said:
“As I have pointed out before, much of the behavior that WS engaged in in Jeff County was actually required by the local pols in order to do business there.”
Both sides of a criminal transaction are culpable. You also leave out the clear antitrust violation of Chase paying off Goldman Sachs not to bid.
“Is it still a “bailout” if the taxpayers actually make money on it?”
Yes, in that it disadvantages those institutions that would have benefited by the demise of the poorly run/inadequately capitalized ones. Market discipline was avoided. And as was noted by Mr. Greenberg and others, there’s the injustice of:
“If you owned a small business that was in trouble or a home or pension that lost much of its value, you were on your own. As people across the country told me, the average citizen doesn’t “get money for free.” Their conclusion: Government works for the irresponsible, not the responsible. ”
Fiat justitia ruat caelum
LikeLike
jnc:
Both sides of a criminal transaction are culpable.
Another reason to ignore Taibbi’s nearly singular focus on WS’s behavior. And I think a government official who demands a bribe is a whole lot more culpable than the guy who ends up paying it.
Yes, in that it disadvantages those institutions that would have benefited by the demise of the poorly run/inadequately capitalized ones.
I agree, but 1) the taxpayers have not been disadvantaged (in fact they are also beneficiaries) and 2) the disadvantaged are also part of Wall Street. So I don’t understand why the bailout should effect your feelings.
LikeLike
“BILL MOYERS: He said, I have to suspend the rules of the free market in order to save the free market.
DAVID STOCKMAN: You can’t save free enterprise by suspending the rules just at the hour they’re needed. The rules are needed when it comes time to take losses. Gains are easy for people to realize. They’re easy for people to capture. It’s the rules of the game are most necessary when the losses have to occur because mistakes have been made, errors have been made, speculation has gone too far. ”
http://billmoyers.com/segment/david-stockman-on-crony-capitalism/
LikeLike
jnc
DAVID STOCKMAN: You can’t save free enterprise by suspending the rules just at the hour they’re needed. The rules are needed when it comes time to take losses. Gains are easy for people to realize. They’re easy for people to capture. It’s the rules of the game are most necessary when the losses have to occur because mistakes have been made, errors have been made, speculation has gone too far. ”
I think that’s the best argument against the way the bailout happened. If the rules had been followed we wouldn’t be worrying about when it’s going to happen again.
LikeLike
Lms, should GM and Chrysler received bailouts?
LikeLike
should GM and Chrysler received bailouts?
Why shouldn’t they have, McWing?
LikeLike
Probably not McWing, but I understand why some people are glad they did. I also understand why people support the bank bailouts. It’s hard to watch all the car manufacturing be taken over by foreign countries and it was hard to imagine what would have happened if we hadn’t bailed the banks out. There’s a trade off when we change the rules though for some industries and not others.
It’s the same with Obama’s drone policy. Sure, he’s killing terrorists, but at what other cost and consequence. We are a country full of contradictions.
LikeLike
I’m trying to understand Lms perspective. Is the problem with bailouts or with who gets bailouts.
It doesn’t make sense, from my perspective, to bail anybody out. I was and still am against TARP for example.
LikeLike
“Michigoose, on September 27, 2012 at 11:07 am said:
should GM and Chrysler received bailouts?
Why shouldn’t they have, McWing?”
His argument is you can’t both agree with Stockman’s take on the necessity of market discipline with regards to taking losses and not being bailed out and also simultaneously support the auto bailout.
The only semi-reasonable justification I heard for the auto bailout was from Bob Lutz on Bill Maher’s show who argued that a large part of Detroit’s ongoing profitability problems were due to the government’s CAFE standards forcing them to build and then heavily discount fuel efficient vehicles in order to achieve the total fleet MPG standards. This was necessary to allow them to sell the cars that they were good at selling, namely SUV’s and pickup trucks that couldn’t by themselves meet the standards.
His argument was to effectively cede the fuel efficient sales to imports and focus American car making on what it was good at, but that was prevented by the CAFE regulations.
LikeLike
jnc:
The only semi-reasonable justification I heard for the auto bailout was from Bob Lutz on Bill Maher’s show who argued that a large part of Detroit’s ongoing profitability problems were due to the government’s CAFE standards forcing them to build and then heavily discount fuel efficient vehicles in order to achieve the total feel MPG standards.
This exemplifies why it grates on me to see liberals put forth (or agree with) free market arguments against the bank bailouts. They are not opposed to government intervention in principle…they advocate for government intervention in the market (like telling car manufacturers what they have to build and how they have to build them) all the time.
Stockman’s pretense that the hand of government was not already involved and effecting outcomes in the banking world, and that the bailouts represented a singular deviation from free market “rules”, is false.
LikeLike
Dang. Speaking of beloved impartial political commentators, Charles Pierce totally steals my ‘Mitt not drooling wins him the debate’ observation, but much more eloquently:
Read more: http://www.esquire.com/blogs/politics/presidential-debate-denver-2012-13132734#ixzz27gxHsplO
LikeLike
yello:
Charles Pierce totally steals my ‘Mitt not drooling wins him the debate’ observation, but much more eloquently
c.f. Palin, Sarah L., 2008, debate with Biden, Joseph R.
By not drooling she was deemed a serious politician at that point.
LikeLike
ScottC, on September 27, 2012 at 10:52 am said:
“The disadvantaged are also part of Wall Street. So I don’t understand why the bailout should effect your feelings.”
Not necessarily. I’d argue that some of the regional banks would have made gains at the expense of the larger ones, similar to how Wachovia originally grew. Regardless, I don’t view Wall Street as a collective that has some sort of revenue sharing scheme like the NFL. If Wells Fargo didn’t need capital they shouldn’t have been forced to take it. If the entire bailout comes down to a scheme to save one politically connected bank, i.e. CitiBank, and then cover that up by making it an argument about the “system” then that’s just wrong.
http://finance.fortune.cnn.com/2012/09/20/bair-bull-horns/
There’s also the fundamental injustice of allowing the banks, and their officers, to get away with neither admitting nor denying guilt for their part of the mortgage system collapse and having the individuals on the other side of the transaction go to jail.
“The Mortgage Fraud Fraud
By JOE NOCERA
Published: June 1, 2012”
“In Prison for Taking a Liar Loan
By JOE NOCERA
Published: March 25, 2011”
Two different systems of justice, one for the politically connected and one for everyone else is anathema to the core principles that this country was founded on.
LikeLike
jnc:
Regardless, I don’t view Wall Street as a collective that has some sort of revenue sharing scheme like the NFL.
Taibbi certainly seems to.
Two different systems of justice, one for the politically connected and one for everyone else is anathema to the core principles that this country was founded on.
I definitely agree. But of course pretty much most of what our federal government currently does is anathema to the core principles that this country was founded upon.
Also, the disadvantaged are everyone who has a savings account…
That’d be a pretty difficult case to make given that pretty much everyone who has a savings account has his money guaranteed by the taxpayers.
LikeLike
p.s. thanks for the explanation, jnc!
LikeLike
“ScottC, on September 27, 2012 at 10:52 am said:
“The disadvantaged are also part of Wall Street. So I don’t understand why the bailout should effect your feelings.””
Also, the disadvantaged are everyone who has a savings account, in that one of the ongoing bailouts that the Fed is doing is to allow the banks to borrow at zero percent and then lend back to the Treasury.
LikeLike
“lmsinca, on September 27, 2012 at 9:34 am said:
I hope this won’t shock all of you but one of the reasons I like to link to Taibbi is because his writing usually leads to interesting discussions here.”
By the way, I think your plan worked.
LikeLike
scott:
“If this is the case, what makes the current media narrative any more believable than the one that they will change it to later?”
Sorry I missed this because I was laying waste to Mark Zandi in Ezra’s column
You know me, I don’t believe anybody. That’s the benefit of being a cynic.
LikeLike
Sorry I missed this because I was laying waste to Mark Zandi in Ezra’s column.
Link? I have Ezra in my newsfeed but I rarely bother to read the comments.
LikeLike
As far as expectations go, you will recall that after Reagan showed early signs of his upcoming Alzheimers disease in the first 1984 debate, we all held our breath to see if he would make it through the second one. I don’t think even Walter Mondale wanted to win that one.
LikeLike
yello:
http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/09/27/study-obamas-plan-would-create-more-jobs-than-romneys/#comments
Mark Zandi is to economics, as porn is to film, tell me what i have to do and say to get paid today
LikeLike
McWing, honestly, I’ve never taken a stand on the auto bailouts one way or another. All I’m saying is we probably shouldn’t have done either bailout unless we were also going to bailout homeowners who took the biggest hit. What’s difficult to imagine, because none of us really knows, is what would have happened without either one. I understand the inclination to make it a partisan issue but I don’t personally think it should be.
I do believe we’ve become a nation, or maybe we always were, with little moral justification for what we do in a lot of cases. Just as I’m having trouble finding someone I believe in I can vote for I’m having trouble justifying half the shit we do as a nation.
LikeLike
“ScottC, on September 27, 2012 at 11:47 am said:
…
This exemplifies why it grates on me to see liberals put forth (or agree with) free market arguments against the bank bailouts. They are not opposed to government intervention in principle…they advocate for government intervention in the market (like telling car manufacturers what they have to build and how they have to build them) all the time.”
Yesterday’s market intervention begets today’s market intervention. We have yet to see what QE Infinity will result in.
“Stockman’s pretense that the hand of government was not already involved and effecting outcomes in the banking world, and that the bailouts represented a singular deviation from free market “rules”, is false.”
He wasn’t arguing that it was a “singular deviation”. He’s got a lengthy narrative that goes back to the 1970’s and places a big chunk of the blame on the Federal Reserve for practicing “vulgar Keynesianism robed in the ideological vestments of the prosperous classes. “. However, his point that the bailout was a significant escalating event and made matters worse with regards to crony capitalism is one that I agree with.
“Four Deformations of the Apocalypse
By DAVID STOCKMAN
Published: July 31, 2010”
LikeLike
Mark Zandi is to economics, as porn is to film, tell me what i have to do and say to get paid today
Thanks. I had never heard of the guy before today. And did you hear all those kind words when the comment cross-posted to Plum Line? They miss and worship you like islanders from a cargo cult.
LikeLike
jnc
By the way, I think your plan worked.
Yes, it usually does. I think I’ll just link him and other controversial writers from now on rather than going out on a limb with my own posts and or opinions…………hahahaha
LikeLike
They miss and worship you like islanders from a cargo cult.
Their loss is our gain.
LikeLike
lms, what would a good home owner bailout look like?
LikeLike
“bannedagain5446, on September 27, 2012 at 11:54 am said:
Mark Zandi is to economics, as porn is to film, tell me what i have to do and say to get paid today”
The important thing is to never question the model, and the multiplier calculations that went into it. Thus, people can say with precise certainty what the unemployment rate would have been absent the stimulus.
Or it could be exactly where it is now.
LikeLike
“yellojkt, on September 27, 2012 at 12:05 pm said:
Thanks. I had never heard of the guy before today. And did you hear all those kind words when the comment cross-posted to Plum Line? They miss and worship you like islanders from a cargo cult.”
Cao’s comments notwithstanding.
LikeLike
“Troll McWingnut or George, whichever, on September 27, 2012 at 12:15 pm said:
lms, what would a good home owner bailout look like?”
Bankruptcy mortgage cramdown.
LikeLike
J, who qualifies?
LikeLike
“lmsinca, on September 27, 2012 at 12:00 pm said:
…
Just as I’m having trouble finding someone I believe in I can vote for I’m having trouble justifying half the shit we do as a nation.”
You know who you secretly want to vote for.
Do it. Come to the Dark Side with me, Nova, & Mark.
LikeLike
McWing, I don’t know but probably the best idea was the cramdown via bankruptcy that was barely considered. I don’t really call bankruptcy a bailout though. I didn’t really expect anyone, government or otherwise to just throw money at us.
LikeLike
jnc corked me on the cramdown.
And, I’ll never cross over to the “dark side”.
LikeLike
“Troll McWingnut or George, whichever, on September 27, 2012 at 12:22 pm said: Edit Comment
J, who qualifies?”
Anyone who is willing to file for bankruptcy. That’s the beauty of it, there’s already a legal system and rules in place that provide for a hearing for both debtors and creditors. The only thing that needs to change is that primary mortgage debt can be modified by a bankruptcy judge (aka “crammed down”) to the current market value of the asset. This is the same way that second homes, cars, and boats are treated in the code. Primary residences are the exception.
LikeLike
Should a person declaring bankruptcy receive cram down merely because their mortgage is currently underwater?
What if their income can afford mortgage payment?
LikeLike
so be it, lms. if you will not be turned ….
LikeLike
if you will not be turned ….
run, lms, run!!! it’s the borg!!!!!!!!!
LikeLike
“What if their income can afford mortgage payment?”
All I know is that my father-in-law who can afford his payments has stopped making them. tried to refi — jumped through hoops and found that it was constant goalpost moving. and basically this weekend he said say fuck it. he’s stuck and not going to continue to sink resources into a property that is underwater by more than 200k. so he’ll stay until the bank is ready to deal or they take the house. and this is waterfront property on MD’s eastern shore.
LikeLike
McWing:
What if their income can afford mortgage payment?
Now you’re entering ethics territory rather than straight forward market adjustment. Why should someone be denied a cramdown simply because they can continue to pay on a mortgage which doesn’t reflect the actual market value of the house?
Wouldn’t that be somewhat like overpaying on your income taxes, just that the $$$ is going to a lender rather than the government?
LikeLike
So, he can afford to make payments but chooses not too.
LikeLike
yep. and he can’t be the only one.
[edit — which is something i’m not endorsing]
LikeLike
“Troll McWingnut or George, whichever, on September 27, 2012 at 12:32 pm said:
Should a person declaring bankruptcy receive cram down merely because their mortgage is currently underwater?
What if their income can afford mortgage payment?”
There are all kinds of income tests and “means tests” for bankruptcy, especially post BAPCPA so probably not. It would discourage gaming of the system. The other big advantage is it deals with the debtors total debt situation based on a predetermined priority of claims rather than advantaging mortgage holders at the expense of other creditors.
I.e. unilateral principle reduction benefits creditors like the credit card companies at the expense of mortgage holders in that it it frees up money that other wise would go to the mortgage payment to instead be used to pay off other debt.
http://en.wikipedia.org/wiki/Bankruptcy_Abuse_Prevention_and_Consumer_Protection_Act
LikeLike
run, lms, run!!! it’s the borg!!!!!!!!!
“If you will not be turned…” is Star Wars, not Star Trek. Major nerd faux pas there. The correct ST:TNG quote would be “Resistance is futile. You will be assimilated.”
LikeLike
“Troll McWingnut or George, whichever, on September 27, 2012 at 12:43 pm said: Edit Comment
So, he can afford to make payments but chooses not too.”
And bankruptcy helps to sort those people out from those who can’t make the payments rather than give everyone a blanket principle reduction regardless of circumstances.
A federal bankruptcy judge rules on the cramdown as part of the overall Chapter 13 plan submitted by the debtor and creditors have an opportunity to raise objections in court and appeal to a higher court if necessary.
http://en.wikipedia.org/wiki/Chapter_13,_Title_11,_United_States_Code
LikeLike
“Now you’re entering ethics territory rather than straight forward market adjustment. Why should someone be denied a cramdown simply because they can continue to pay on a mortgage which doesn’t reflect the actual market value of the house?
Wouldn’t that be somewhat like overpaying on your income taxes, just that the $$$ is going to a lender rather than the government?”
Isn’t the market value of the house always transient? We’re rewarding people who think they made a bad judgement and want out versus needing to be out because they can no longer make the payments.
What about the debtor whose property value fell 40% but can only afford the mortgage if it’s valuation would be lower (say below current market value)? Should they get a cramdown? Let’s say the bought a home for $400k but can now only afford a $100k mortgage. The current market value is $200k. do we cram down to $100k?
LikeLike
“yellojkt, on September 27, 2012 at 12:59 pm said: Edit Comment
run, lms, run!!! it’s the borg!!!!!!!!!
“If you will not be turned…” is Star Wars, not Star Trek. Major nerd faux pas there. The correct ST:TNG quote would be “Resistance is futile. You will be assimilated.””
LikeLike
“Resistance is futile. You will be assimilated.”
Being assimilated always sounded like being eaten to me.
LikeLike
Ok you already know my position on this, but far be from me to sit this one out.
A mortgage is a business contract, nothing more or less. As long as the borrower is willing to live with the penalites for default as spelled out in the contract, then it doesn’t matter if he has $5 to his name or $500,000
LikeLike
banned:
As long as the borrower is willing to live with the penalites for default as spelled out in the contract, then it doesn’t matter if he has $5 to his name or $500,000
Isn’t it standard that one of those penalties is, upon default, all amounts owed including remaining principle are immediately payable?
LikeLike
The cramdown analysis ignores what the effect will be on mortgage rates going forward. If lenders get less protection, they will price in the additional risk…
LikeLike
If lenders get less protection, they will price in the additional risk…
Brent, you may be overestimating the marginal additional risk. I am with JNC on this – cramdown as part of a 13 or even as an adjunct to a 7 takes properties that can only be foreclosed and sold at FMV and repackages them at FMV. The marginal cost differential to the lender is theoretically nil.
It is because of the bankruptcy structure that I favored the GM and Chrysler deal. It kept the assets producing rather than permitting them to be sold off at bargain prices to vultures, and kept the secondary producers alive. If conventional lenders would have done it that would have been better. But the US and Canada as new money lenders was not that big a gamble, and I think it was a success. I believe the PBGT would have been hit for big $$$ in the other direction, btw, if the forced restructure had not taken place.
LikeLike
I was thinking ROTJ:
Vader: Give yourself to the Dark Side. It is the only way you can save your friends. Yes, your thoughts betray you. Your feelings for them are strong. Especially for… sister. So, you have a twin sister. Your feelings have now betrayed her, too. Obi-Wan was wise to hide her from me. Now his failure is complete. If you will not turn to the Dark Side… then perhaps she will…
LikeLike
“The cramdown analysis ignores what the effect will be on mortgage rates going forward. If lenders get less protection, they will price in the additional risk…”
Right, and on the scale some here seem to think is appropriate, I think middleclass homeownership will shrink considerably and stay shrunk.
LikeLike
I was thinking ROTJ
I used Star Wars in the generic sense and wasn’t specifically limiting it to Episode IV: A New Hope. The less said of the prequel trilogy the better.
LikeLike
“Being assimilated always sounded like being eaten to me”
It means something else in EMT-land
LikeLike
And just for completeness:
LikeLike
As long as the borrower is willing to live with the penalites for default as spelled out in the contract, then it doesn’t matter if he has $5 to his name or $500,000
Wouldn’t cram-down terms only apply to people who want to stay in their homes? If they are walking away, it wouldn’t make any difference.
LikeLike
“On Thursday, BLS released newly revised data showing that the U.S. economy appears to have added 386,000 more jobs between April 2011 and March 2012 than the monthly reports had been showing. That would suggest that, in the last year, those monthly BLS reports have been understating job growth by roughly 32,000 jobs on average.
That could make a significant difference to the labor picture: It the U.S. economy had been adding, on average, 194,000 new jobs each month instead of 162,000, then the country would get back to full employment by 2021 rather than after 2025, according to the Hamilton Project’s calculator. (Though that’s still a slow, anemic recovery by either measure.)”
Funny that this study wasn’t finished before QE3 was announced, almost as if it was planned that way.
(I’m not really a cynic, I just don’t believe anybody)
LikeLike
banned:
(I’m not really a cynic, I just don’t believe anybody)
I don’t believe you.
LikeLike
yello
sorry I wasn’t speaking to a cramdown program but on the larger question of homeonwer default.
LikeLike
Nova, do you comment over at americablog? If not someone calling themselves dcinsider with your avatar is……………………..
Yeah, I think I know what assimilated means in EMT land……………..remember I used to work with hospice.
LikeLike
Nope — I’m only here and at Reason’s Hit and Run. I’ll have to check it out.
LikeLike
“Brent Nyitray, on September 27, 2012 at 1:10 pm said:
The cramdown analysis ignores what the effect will be on mortgage rates going forward. If lenders get less protection, they will price in the additional risk…”
Nope. Mortgage rates will rise as a result of this change and that’s a good thing. Currently, they are being artificially subsidized.
It also has the advantage of aligning appraisal interests with the banks. I.e. there will be less of an incentive for the banks to turn a blind eye or encourage inflated housing appraisals for debt to equity ratio qualifications if the mortgage can be crammed down later to off set this.
LikeLike
scott
In many states, and this varies, the mortgagee is only entitled to regain possession of the property, not any additional penalties beyond that. That’s why I always used to tell people to consult a real estate attorney before deciding.
It’s called recourse versus non-recourse, a term I am sure that you are familiar with.
LikeLike
banned:
In many states, and this varies, the mortgagee is only entitled to regain possession of the property, not any additional penalties beyond that.
Why should a state disallow a lender from writing such language into its business contract? As long as the borrower agrees to it, why should the state prevent it?
LikeLike
Nova
I’ll have to check it out
No need, you probably wouldn’t like it…………..it’s very liberal, that’s why I was surprised to maybe see you there. Plus, it’s very gay, not that that would bother you.
LikeLike
Apropos of nothing, what kind of a world is it where some bastard raises my bid for a call option by a single penny!
LikeLike
Becuase the mortgage business is a state operation legal-wise and both borrower and lender have to conform to the state rules, or did I misunderstand your question?
LikeLike
banned:
or did I misunderstand your question
Yes, I think you misunderstood. Obviously people have to conform to state law. My question is why should state law prevent a lender from writing in a default clause to the effect that upon default, all amounts owed are immediately payable?
You resort to what appears on its face to be a free market defense of a borrower’s right to just walk away from what he owes, ie as long as he is willing to accept the penalties in the contract everyone signed he should be able to walk. But the fact is that it is the arbitrary decision of the state, not the contract, which gives him the right to walk, by disallowing the lender from writing into the contract that upon default, all amounts owed are payable. So in order to justify the right to walk, you must justify the states decision to disallow the lender from signing a contract preventing it. You cannot appeal to the free market principle of “a contract is a contract”.
LikeLike
“ScottC, on September 27, 2012 at 1:45 pm said:
banned:
In many states, and this varies, the mortgagee is only entitled to regain possession of the property, not any additional penalties beyond that.
Why should a state disallow a lender from writing such language into its business contract? As long as the borrower agrees to it, why should the state prevent it?”
It depends on how you view the nature of a secured debt. Should it be secured by only the property being financed or something beyond that?
With bankruptcy cramdown, the secured portion of the debt gets reduced to the current market value of the asset. The remainder becomes unsecured debt and is paid out at the same percentage as the other unsecured creditors.
To do otherwise helps to provide a “risk subsidy” and distorts the pricing, potentially creating bubbles. The same thing is happening with student loan debt. You also have the incentives to re-characterize it by taking out secured debt, then writing checks on say an unsecured credit card account to transfer it over.
LikeLike
“bannedagain5446, on September 27, 2012 at 1:51 pm said:
Because the mortgage business is a state operation legal-wise and both borrower and lender have to conform to the state rules, or did I misunderstand your question?”
I believe he’s asking why banning a full recourse loan would be considered a desirable policy that the state should be permitted to enact.
LikeLike
“markinaustin, on September 27, 2012 at 1:39 pm said:
…
It is because of the bankruptcy structure that I favored the GM and Chrysler deal.”
The other important consideration is that creditors get their day in court before a judge rather than be forced to comply with unilateral executive branch action.
Due process matters.
LikeLike
jnc:
Ah, i get it. See I could live with it either way. That was tangential to my point (not fully explained my bad) that those seriously underwater don’t need to go through bankruptcy and have their finances evaluated nor a government cramdown program. If they are in a non-recourse state all they have to do is walk away and start over.
It’s a purely biusiness decision based on their contract within the context of their state law.
LikeLike
scott:
I take state law as a given. I don’t need to justify it.
Lendors don’t have to justify why student loan debt is treated much more severely than any other personal debt in terms of default, they just do the business and walk away happy. As I believe that Brent and I discussed last week, some mortgage lenders have walked away from Masscusetts after concerns over “litigation costs’ in that state as is their right.
LikeLike
banned:
I take state law as a given. I don’t need to justify it.
If your point is that, in some states, people can legally walk away from a mortgage, fine. I just don’t find that a very interesting discussion. It either is true or not, nothing really to discuss. What is interesting to me is what the law should be, and why.
LikeLike
“bannedagain5446, on September 27, 2012 at 2:23 pm said:
scott:
I take state law as a given. I don’t need to justify it. “
So you have no position on which approach is better public policy?
LikeLike
Off topic: For the football fans here:
“Gail: Replacement referees have done what Barack Obama couldn’t do – bring the nation together.”
http://opinionator.blogs.nytimes.com/2012/09/26/let-them-eat-crow/?ref=opinion
LikeLike
So we found a new lawyer for the eviction this time. We saved $300 so far and it’s already proceeding way faster. The lawyer sponsors a service just for evictions and doesn’t actually do the work himself unless there’s a court appearance necessary. We’re paying lower level staff to do the paperwork for the lawyer. Wish us luck, the last one took 4 freakin’ months. CA is not the best state to live in for landlords………..but I’m not leaving or selling my house.
LikeLike
Lulu:
Go get ’em Tiger.
LikeLike
jnc:
of course, but that is a seperate discussion that would sidetrack us even more I think
lms
Have you ever considered some of the online legal services that are cropping up? Mark might have a better handle on their worthiness than me, since I am a lazy good for nothing parasite on society while he has stayed in the business.
LikeLike
Good luck lmsinca.
Also, with regards to the earlier posts about poll bias:
“The Media Bias That Matters
September 27, 2012, 4:18 pm
Ross Douthat”
http://douthat.blogs.nytimes.com/2012/09/27/the-media-bias-that-matters/
LikeLike
scott
ok but given how commenting always falls off a cliff here after 4PM or so, perhaps better for another day?
LikeLike
Banned:
I’ll be around all night tonight, starting in about 2 hours. But no need to get into it if you don’t want to.
LikeLike
“bannedagain5446, on September 27, 2012 at 2:41 pm said:
jnc:
of course, but that is a seperate discussion that would sidetrack us even more I think”
I tend to side with Scott on this one and I’d limit the ability to “walk away” from debt to the bankruptcy process, provided primary mortgage cram down was enacted.
I suspect part of the reason for non-recourse at the state level is meant to make up for deficiencies in the federal bankruptcy code.
LikeLike
jnc
Remember we’re not talking about one entity here but at least 3-4. The loan originator makes their money on points and fees. They don’t care what happens after that. Then you have the servicer, and possibly the MBS associated with the mortgage.
So who exactly does the mortgagor have some higher obligations too?
LikeLike
banned
Have you ever considered some of the online legal services that are cropping up?
We did look at that and even considered doing it ourselves. My husband decided not to though because those things tend to fall on my shoulders and he was worried about giving me too much work right now. He’s better off talking to a lawyer and letting them do all the work. He thinks it will go faster this way also and just two weeks faster pays for the lawyer. In 25 years this is the first year we’ve ever had to evict a tenant and two in one year is a little hard to take. At least they’re not hoarders like the last girl.
LikeLike
lms
Thank you for the kind words earlier btw.
LikeLike
The PL lost a lot of good people, some permanently and some still show up occasionally. It’s too bad but nice to see them acknowledge what they’ve lost. And we became the beneficiary of the creeps who run good people away. You’re welcome.
LikeLike
BTW
Nobody has ever asked me this question but I will throw it out there for any interested
If you can name only one book that does the best job of making the the post Civll War world understandable, what would it be?
In my case it would be The Prize, by Daniel Yergin.
LikeLike
In my case it would be The Prize, by Daniel Yergin.
non-fiction?
Did you read The Rise of Theodore Roosevelt by Morris?
Or 1912 by Chace?
LikeLike
No but i’ve read other TR biographies
1912 sound interesting
LikeLike
My first comment of the thread linked to Taibbi’s reasoning on why Obama is winning. Here are Krugman’s thoughts. I actually think Krugman is more right on this and I don’t generally respect his opinions all that much. I believe Republicans make a lot of assumptions about the American people that simply aren’t true and then get caught sort of flat-footed and surprised when their ideas are rejected by a lot of us.
I don’t think you have to call it a “war on women” for a majority of women to be insulted by some of the nonsense that has passed or been attempted by state legislatures across the country. I don’t think trying to pass off voter ID laws that disenfranchise ordinary Americans as a reasonable request really fools anyone any more than pretending to save Medicare by voucherizing it does. And you don’t have to be in love with the ACA to hope it isn’t repealed when finally people with pre-existing conditions will have the same access to the health care system that the rest of the population does. And everyone knows that the 47% who don’t pay federal income tax aren’t all just lazy Democrats.
How did that happen? Partly it’s because this has become such an ideological election — much more so than 2008. The GOP has made it clear that it has a very different vision of what America should be than that of Democrats, and Democrats have rallied around their cause. Among other things, while we weren’t looking, social issues became a source of Democratic strength, not weakness — partly because the country has changed, partly because the Democrats have finally worked up the nerve to stand squarely for things like reproductive rights.
And let me add a speculation: I suspect that in the end Obamacare is turning out to be a big plus, even though it has always had ambivalent polling. The fact is that Obama can point to a big achievement that will survive if he is reelected, perish if he isn’t; health insurance for 50 million or so Americans (30 million from the ACA, another 20 who would lose coverage if Romney/Ryan Medicaid cuts happen) is enough to cure people of the notion that it doesn’t matter who wins.
http://krugman.blogs.nytimes.com/2012/09/27/not-the-election-they-were-expecting/
LikeLike
lms:
I don’t think trying to pass off voter ID laws that disenfranchise ordinary Americans…
Which laws are you talking about?
(from Krugman)
…partly because the Democrats have finally worked up the nerve to stand squarely for things like reproductive rights.
Democrats do not stand for “reproductive rights”. They stand for legalized abortion. It is telling that Dems so often avoid characterizing their position honestly on this issue. This self-serving and false euphemism must be challenged whenever it is uttered.
LikeLike
For those interested in the on-going LIBOR saga, I received an e-mail this morning detailing Martin Wheatley’s (head of the UK’s FSA) comments on LIBOR reform. The gist of it is:
1. Banks’ submissions should be allowed to retain “some level of judgment” and be based on “hard data.” The “first priority” of a new administrator of the rate should be to create a code of conduct for rate submitters with specific guidelines that the submissions be corroborated by trade data. “Transactions will need to be recorded and there needs to be a requirement for regular external audit of submitting firms,” Wheatley said.
2. The FSA will encourage more banks to submit inter-bank lending quotes as part of the revamp, and could force uncooperative banks to submit quotes with its new powers.”
3. He also proposed banks wait three months before disclosing publicly their own Libor submissions. To rectify the “reduction in immediate transparency” he recommended lenders publish a regular bulletin that includes trading volumes.
4. Oversight will move from BBA to FSA, which will have much bigger powers than the BBA.
5. Organizations will be invited to bid to take over the day- to-day running of the London interbank offered rate from the BBA. I suspect this is operational part and some one such as Reuters can perform this function.
6. Hundreds of currencies and maturities for Libor will be cut where there isn’t enough trading data
7. FSA could impose criminal penalties on anyone who is found guilty of manipulating the rate.
8. Banks will have to comply with submission guidelines from Wheatley straight away until the new independent body is appointed to run Libor.
LikeLike
Remember we’re not talking about one entity here but at least 3-4. The loan originator makes their money on points and fees. They don’t care what happens after that. Then you have the servicer, and possibly the MBS associated with the mortgage.
So who exactly does the mortgagor have some higher obligations too?
The originator does care, because of putback risk – which is the risk that the investor can come after you years after the loan was sold and demand you buy it back at par if there was an underwriting flaw. This happens all the time. If the investor is the government, you have no choice – you are buying the loan back at par whether you like it or not Putback risk is the reason why all of these “underwater refi” ideas out of the government always end up going nowhere – originators won’t do underwater loans as long as the government has the right to force them to buy it back if it goes bad.
The servicer is trying to get out of the business – the advances are killing them. If you service a loan and the borrower stops paying, you are required to keep making principal, interest, property tax, and insurance payments even if you aren’t receiving the funds from the borrower. When the loan is finally disposed of (through short sale proceeds or foreclosure) you will get paid back, but in the meantime you have to find a way to finance these advances, and the investment banks are very reluctant to provide lines of credit for this activity anymore. Which means servicing is a business nobody wants to do any more and the last thing they need is obama telling them they have to do more for the borrower.
LikeLike
Scott
Which laws are you talking about?
Would you like me to link the 10 or 20 pieces I have bookmarked that detail and comment on the voter ID laws many Republican governors and legislatures are trying to pass? When they specifically target populations that generally lean Democratic, such as Hispanics and other minorities, poor people, women and college students, it doesn’t take a genius to make the connection.
Democrats do not stand for “reproductive rights”
Yes, I knew you’d pick up on that. Women still have the right to reproduce obviously and yes much of the restrictions are being imposed on abortion rights but also birth control and Planned Parenthood. You don’t have to be an abortion advocate to be insulted or feel threatened by some of this stuff.
From the latest polling I saw Republicans are now losing Seniors and Catholics now. What’s left?
LikeLike
lms:
Would you like me to link the 10 or 20 pieces I have bookmarked that detail and comment on the voter ID laws many Republican governors and legislatures are trying to pass?
Sure. I kind of doubt any of these represent “disenfranchisement”, unless you think that any regulations on the voting process which restricts access to voting represents “disenfranchisement”.
You don’t have to be an abortion advocate to be insulted or feel threatened by some of this stuff.
Well, people get “insulted” over all kinds of crazy things, so I won’t speak to what makes people feel this way or that. But to sensibly feel threatened, I actually I think you do need to be an abortion advocate, since all of these efforts are aimed at restricting access to abortion. I realize it is a Democratic political strategy to portray R attempts to restrict abortion as stealth attempts to restrict access to birth control, in an effort to shift the debate into more favorable ground. And obviously it works to some degree. But it is just that, a political strategy, not reality, and I for one am not falling for it.
LikeLike
The Catholic one is fascinating to me. we’ve completely ignored the Catechism for social doctrine and the principle of subsidiarity. all i hear is “we need to help the poor.” and that’s true. but we’re blind to the results. and we enable a government that has no interest in the concept of the “just war,” which requires that “there must be serious prospects of success.” and you can’t defeat a tactic. So i have no idea why were blowing up poor people in Pakistan.
LikeLike
Sure
I’ll just give you this for now as I’m working on a post about all the new Voter ID laws and proposals.
September 2, 2011, 5:05 PM
Conservative columnist Matthew Vadum is just going to come right out and say it: registering the poor to vote is un-American and “like handing out burglary tools to criminals.”
“It is profoundly antisocial and un-American to empower the nonproductive segments of the population to destroy the country — which is precisely why Barack Obama zealously supports registering welfare recipients to vote,” Vadum, the author of a book published by World Net Daily that attacks the now-defunct community organizing group ACORN, writes in a column for the American Thinker.
“Encouraging those who burden society to participate in elections isn’t about helping the poor,” Vadum writes. “It’s about helping the poor to help themselves to others’ money. It’s about raw so-called social justice. It’s about moving America ever farther away from the small-government ideals of the Founding Fathers.”
Late Update: Responding to what he says are misrepresentations of his view, Vadum writes that of course he thinks poor people have the right to vote, he just doesn’t want anybody to help them since their votes “could lead to the destruction of the republic.”
Vadum clarifies that it is “destructive to register welfare recipients to vote so that they can vote themselves more government benefits. It is even worse that our tax dollars are used to register welfare recipients at welfare offices. It is a policy that would cause the Founding Fathers to roll over in their graves.”
But, he adds: “Of course those who are legally qualified to vote should be allowed to vote but our tax dollars shouldn’t be used to underwrite the destruction of the republic.”
Matthew Vadum
An award-winning investigative journalist, Matthew Vadum is senior editor at Capital Research Center. His work is cited by Fox News, WND.com, Weekly Standard, Wall Street Journal, USA Today, and many other media outlets.
LikeLike
lms:
I’ll just give you this for now…
If this is representative of what you are talking about, I’d say your claims about “disenfranchisement” aren’t supportable.
LikeLike
lms:
BTW, as for the substance of the article linked to, I actually agree that allowing people the right to vote themselves legal, government provided financial benefits at the expense of other people is a real problem. An across the board flat tax would solve this problem without effecting voting rights. But for those of you who insist on a progressive income tax, the only way to solve the problem is via voting rights regulations. Or you can ignore the problem, I suppose.
LikeLike
Scott:
Here’s something I posted last week
Deny away and spin, though.
LikeLike
Mich:
I assume you meant this post. If so, there is obviously a difference between the consequences of the state being unprepared to properly implement a law and the consequences of the law itself. There is nothing in what you posted to suggest that the law qua law disenfranchises anyone. Although, again, I do understand the political strategy behind trying to suggest that it does.
LikeLike
michi — you’ve got a bad link
LikeLike
Or you can ignore the problem, I suppose
Haaahaaahahahaha, maybe we should curtail the voting rights of the super wealthy while we’re at it so they quit voting themselves more tax cuts while sending the poor kids off to war. IMO a flat tax is regressive so it won’t work and with the changing demographics, even with a flat tax, Republicans still won’t want certain of those demographics to vote. There are other issues on people’s minds besides taxes.
All you have to look at is the demographic changes projected to know why Republicans are doing this, or you can ignore it if you want. The point I was making via Krugman and the research I’ve done is that it’s pretty clear what’s going on with all these issues and Republicans can’t win if instead of reaching out to various voting blocks they alienate them. It catches up to them eventually. I think it will be this election but others are predicting it might take a little longer. Perhaps a better candidate than Romney would have been more successful, I really don’t know.
LikeLike
Agreed, generally, Lulu. It would be myopic if we did not recognize that the favors we in business take for granted like accelerated depreciation and the investment tax credit were not created by our lobbies – CoC, NAM, NFIB, etc. I speak only for the obvious bennies we in small business have come to rely upon, not the ones you and I will never see, like cheap leases of public land for energy exploration, or the ability to condemn private land for a power line or a pipeline. Point being that all constituencies that vote and all that raise money get heard – sometimes. It is a “whose ox” argument to say that [e.g.] persons on medicare should not have access to the vote.
I am in favor of voter ID laws and of a biometric US ID card. I oppose using either as a tool of exclusion of actual American citizens or legal aliens from legal rights they would otherwise have. I favor the public expense necessary to bring about compliance with such laws over a long enough period of time that it does not disenfranchise legitimate voters in a specific election or cost voters cash out of pocket to maintain.
This cycle, the timing of the legislation in some states and the burdens of it in others have been suspect, or the motives admitted [PA].
There have been some states that have enacted these laws timely and without undue burden on the voter. I am just fine with that.
LikeLike
lms:
maybe we should curtail the voting rights of the super wealthy while we’re at it so they quit voting themselves more tax cuts…
Actually I think that those who pay the most taxes have the most moral authority to decide what tax rates should be. The liberal vision in which people who pay little or no taxes get to decide how much the “super wealthy” pay is a pretty warped moral view, I think. But, again, a flat tax solve this problem, in that everyone is treated equally and therefore no one is paying “more” (as a percentage at least) than anyone else. I do realize, however, that equal treatment is anathema to liberal tax dogma.
…while sending the poor kids off to war.
Two points. First, you may have forgotten but the draft ended nearly 40 years ago, so no one is “sending” anyone, rich or poor, off to war. People volunteer.
Second, the only person committing US troops to combat at the moment is President Obama. If I am not mistaken, he was your man in 2008 (and probably is again).
IMO a flat tax is regressive…
It is not a matter of opinion. A flat tax, by definition, is not regressive. Just as a circle, by definition, is not a square.
All you have to look at is the demographic changes projected to know why Republicans are doing this…
Doing what?
Republicans can’t win if instead of reaching out to various voting blocks they alienate them.
Agreed. But if promising them a free lunch at someone else’s expense is the only thing that will keep them from being “alienated”, then they’ll have to remain alienated, as far as I am concerned.
LikeLike
lms:
Now this (third image on the right) is what I think is insulting to women, on more than just one level. But I don’t expect the liberal women here will find it so.
LikeLike
Scott, if you were a fecund woman why would you be insulted by the third image on the right? This is not a rhetorical question; I have never been a fecund woman but I have fathered three and married three. I am guessing all of them would have thought $18K sounded unreasonably high because they never spent like that. Is that all you meant? In other words, did you mean that the $18K number was an insult to their intelligence? If so, I get it.
What other “level” comes to mind?
LikeLike
mark:
In other words, did you mean that the $18K number was an insult to their intelligence?
Yes.
What other “level” comes to mind?
The implication is that women in general are incapable of supporting themselves and so, like children, must depend on their parents (or the government, a la ACA) to support them. The premise of the whole thing is hugely insulting to women.
LikeLike
(thanks, NoVA)
(thanks, NoVA)
Since I can’t seem to get it to link, FWIW here’s a copy-and-paste:
Michigoose, on September 20, 2012 at 12:04 pm said:
Changing the subject for the moment, for those who don’t think the new voter ID laws are turning into voter suppression, I’d offer up this excerpt from an article dated July 31st:
And in that context, you’ve got Republicans saying things like this:
Link (caution DJ! Benen!)
In their attempt to solve a problem that doesn’t need solving, Republicans may just have won a battle (which I don’t think they will) but lost the war.
LikeLike
Mark:
This cycle, the timing of the legislation in some states and the burdens of it in others have been suspect, or the motives admitted [PA].
That’s the point I’ve been trying to make (and explicitly stated at least once a while back): by trying to enact this legislation in time for the 2012 elections states have made it impossible for voters to meet the requirements.
there is obviously a difference between the consequences of the state being unprepared to properly implement a law and the consequences of the law itself.
And they knew exactly what they were doing, Scott, and what their motives were. If they’d done it in a reasonable time frame (say, for the 2014 mid-terms) it would have been one thing, but this is voter suppression.
LikeLike
Scott
Actually I think that those who pay the most taxes have the most moral authority to decide what tax rates should be
I know you do.
you may have forgotten but the draft ended nearly 40 years ago
No, I happened to be on the front lines in that battle and have the scars to prove it. It’s precisely because we don’t have a draft that the lower rungs of the economic ladder are overly represented in our military. Sure they volunteer, in many cases that’s their best chance at improving their lot in life so why wouldn’t they. My point was that generally those of us who don’t fight increase our monetary contribution to support the effort.
A flat tax, by definition, is not regressive. Just as a circle, by definition, is not a square
Hmmmmm, really? Of course it’s not technically regressive but some people, even economists who look at the entire economic picture, view it as essentially regressive at the lower ends of the economic spectrum as the rate may be punitive for some.
But if promising them a free lunch at someone else’s expense is the only thing that will keep them from being “alienated”
I was actually referring to the insults leveled at the 47% and all the other doors the Republicans have shut on seniors, gays, students, minorities and women. Society is a mixed bag. We can’t all be rich, healthy, white male and straight. Don’t worry though, I’m sure the Party will figure it out some day. I actually hope they do.
And sorry, I don’t understand the point of the image or your comment or why either one is relevant. I thought it was a spoof on Romney for telling kids to borrow money from their parents to start a business.
LikeLike
lms:
My point was that generally those of us who don’t fight increase our monetary contribution to support the effort.
I’m not sure how true that is, but be that as it may, if that was indeed your point, erroneously suggesting that the wealthy “send” poor kids off to war seems to me like a complete non-sequitur.
Hmmmmm, really?
Yes, really.
Of course it’s not technically regressive…
Like I said.
…but some people, even economists who look at the entire economic picture, view it as essentially regressive at the lower ends of the economic spectrum as the rate may be punitive for some.
First, anyone who would characterize a flat income tax as “punitive” seems not to know what the word means.
Second, if “regressive” is taken to mean, as you seem to mean it here, simply that the amount owed is more significant to the daily existence of low income people than to high income people, then quite literally any tax which does not fully equalize, dollar for dollar, after tax disposable income across the population, is “regressive”. Since I do not think it is the proper function of government to equalize after-tax incomes across the population, I find the fact that a tax may be “regressive” in this sense to be irrelevant.
I was actually referring to the insults leveled at the 47% and all the other doors the Republicans have shut on seniors, gays, students, minorities and women.
Wow. With all these “insults” aimed at, apparently, everyone but middle-aged white guys, it’s sort of unbelievable that the R’s actually hold the House, 31 Governorships, and may well take the Senate this year. I’d say its the Dems who are in trouble if they can’t dominate the political landscape with virtually everyone being “insulted” by the R’s.
LikeLike
Scott:
Do you think that any drugs should be covered by insurance?
LikeLike
Mich:
Do you think that any drugs should be covered by insurance?
I think whatever an insurance company wants to cover should be covered.
LikeLike
I don’t — sort of. i’m in the catastrophic camp. so not until you hit your out of pocket max. what that max is, i think, can be set between you and your insurance company.
i think of health care like silos. and there are 3 — with overlap of course.
1. routine and minor
2. unexpected and expensive
3 chronic and end of life.
briefly. pay for the first, insure against the 2nd, and plan for the 3rd. how you handle those with disabilities and pre-existing conditions, i think, is separate from insurance. but the case can be made that they belong in group 3 under chronic.
for BC specifically, i think there’s a case that it should be OTC.
http://www.bloomberg.com/news/2012-03-09/take-birth-control-battle-over-the-counter-commentary-by-virginia-postrel.html
LikeLike
I think there’s a case to be made that BC should be free.
LikeLike
lms:
I think there’s a case to be made that BC should be free.
Nothing is “free” except air. By “free” you can only mean “paid for by someone other than the user”. And I don’t think any such case can be made.
LikeLike
NoVA–
Mucking with hormones is a bit too risky (it seems to me) for BC to be completely OTC. And there are women who simply can’t take the pill, so what do you do for them?
I think there’s a case to be made that BC should be free.
Agree.
LikeLike
I think there’s a case to be made that BC should be free.
Sluts. Cheap whores. I demand video if I’m paying for your sex.
////Set Rush mode to off
LikeLike
lol yello, we all know that the more bc you take the more sex you have………………..or something.
LikeLike
free isn’t an option — assuming we’re not talking about the medicaid population.
if we’re ruling out hormonal BC (like the implantable rod), I suppose you’re into barrier methods like an IUDs, which has a larger upfront costs but lasts much longer.
my only point is that just because it’s health care, doesn’t mean its insurable. if we want to control costs, you have to stop paying the insurance company bloated premiums for “free” stuff that you can plan for and pay out of pocket. insurance is priced and sold right now based on the demands of the customer. and that customer is the employer. not the end user. i’d switch that.
so under NoVa’s plan, if its not OTC, walk into a clinic, get checked, pick up your script (for BC or my maintenance drug for [insert chronic condition] and don’t even bother with your insurance company. and the premiums would be vastly lower.
i think we have the same problem with prevention. you don’t screen everyone for free. you target your interventions to select risk groups and educate them that “you are in risk group .. get a test”
LikeLike
nova:
my only point is that just because it’s health care, doesn’t mean its insurable.
Quite right.
LikeLike
and that customer is the employer. not the end user. i’d switch that.
I would too. And I don’t actually disagree with your other points. I just think free bc and free condoms and lots of education regarding both are serious choices if we want to cut down on the number of abortions and unwanted babies. If we’re going to pay full price for prescriptions though there needs to be a cap on those as well. My daughter’s friend who just received her PLS diagnosis is taking one drug that cost $300 per month. Some things are just too expensive for average people.
LikeLike
yello:
Cheap whores.
If Scott’s card is correct, we’re certainly not cheap!! 🙂
LikeLike
Mich:
If Scott’s card is correct,
It’s Obama’s card, not mine.
LikeLike
NoVA:
so under NoVa’s plan, if its not OTC, walk into a clinic, get checked, pick up your script (for BC or my maintenance drug for [insert chronic condition] and don’t even bother with your insurance company. and the premiums would be vastly lower.
How are you going to get the pharmaceutical companies to buy into this??
LikeLike
Cost to average people is something that i admittedly did not factor in as much until ATiM. So i’m learning something. It’s nice to converse with actual people and not spreadsheets and briefing papers.
that said, if insurers are not buying the drugs like they are now, and “average” people are, i think prices would plummet. consider — the insurance co says to drug co “i have 500 women of childbearing age. what can you do for me for BC?”
or, drug co needs to compete in Northern CA for the $$ of (how many?) women. Drug company says “we can price this at $10 a month” and get the market share in this area? and if it’s not OTC, women go to their docs and say “tell me why not this brand of pill”
we tend to looks at medicines as something different. but they’re subject to the same market forces as Coke. outside of the rare/orphan drug category, it’s just like a product.
LikeLike
If Scott’s card is correct, we’re certainly not cheap!!
$18,000 buys a lot of birth control. That’s $50 a month for 30 years.
That’s the problem with women. You can’t live with them and it’s too expensive to rent them.
LikeLike
that $18k has to be a price for a health plan. that’s a lot for free BC.
LikeLike
I think you’d be right about drugs being just like other products, but since that’s an even more radical change that the PPACA, do we have an example anywhere of how that would work (in other words, a developed country that has individual consumers purchasing drugs rather than an insurance company)?
and birth control pills are hormonal, also, which is why I made the comment about not being able to go entirely OTC.
LikeLike
yello:
You grin and bear it ’cause the nights are long!
LikeLike
sure. the USA. tons of stuff have switch from script to OTC. and here’s the kicker. they’re magically safe for OTC use when their patent exclusivity expires. they don’t have the market to themselves with insurers and docs, so they compete for patients on the shelves. Claritin used to be script. prilosec.
another alternative to OTC is BTC — behind the counter. so if it’s not quite DIY, you talk to the pharmacist.
LikeLike
http://www.fda.gov/Drugs/DevelopmentApprovalProcess/DevelopmentResources/Over-the-CounterOTCDrugs/StatusofOTCRulemakings/default.htm
looks like the FDA switch Antidiarrheal to OTC in 1975. can you even imagine seeing the doc to get a script for Imodium?
LikeLike
anyway — i’m off. good weekends all.
LikeLike
Scott, I’ll respond when I have time to mince my words more carefully. But do you really think the R’s will take back the Senate?
LikeLike
lms:
But do you really think the R’s will take back the Senate?
I don’t know, but it is certainly enough of a possibility that, if your sense of who the R’s are “insulting” and shutting out (everyone but wealthy, middle-aged, heterosexual white men) is accurate, the Dems ought to be embarrassed by that possibility.
LikeLike
Scott
Since I do not think it is the proper function of government to equalize after-tax incomes across the population, I find the fact that a tax may be “regressive” in this sense to be irrelevant.
Since you obviously don’t fall in the category of tax payer that it would be relevant to I’m not particularly surprised.
And considering that Dems now hold the lead among all the demographics I mentioned, including a 17 point swing among seniors, I stand by my comments.
LikeLike
lms:
Since you obviously don’t fall in the category of tax payer that it would be relevant to I’m not particularly surprised.
I’ve read this a couple of times and I don’t know what the “it” refers to.
Beyond that, do you think that it is the function of government to equalize income across the populace? If not, then I don’t think the “regressiveness” of the flat tax is a legitimate objection to it, since, as I pointed out, any tax regime which does not equalize all incomes is “regressive” in the sense you are using the word.
And considering that Dems now hold the lead among all the demographics I mentioned…
Again, it must be a real mystery to you how R’s win any elections at all.
LikeLike
Again, it must be a real mystery to you how R’s win any elections at all.
Yes, it is.
I’ve read this a couple of times and I don’t know what the “it” refers to
Just the fact that you wouldn’t fall into the category of taxpayer that would suffer the punitive nature of a flat tax, the lower rungs of the income ladder. Look, I’m all for eliminating deductions and simplifying the tax code and using all income as taxable at the same rate, but I think we need to consider the fact (edit; make that idea, not fact) that the rate still needs to be progressive, that’s all.
LikeLike
lms:
punitive nature of a flat tax
No such nature exists. Treating all citizens equally before the law is not a punishment. In fact it is a progressive tax that is punitive by nature, penalizing those who make more money simply because they do make more money.
I think we need to consider the fact (edit; make that idea, not fact) that the rate still needs to be progressive, that’s all.
It only “needs” to be if one’s goal is to redistribute income from one demographic to another. If one’s goal is to distribute the cost of the proper functions of government equitably across the population, then not only is progressive taxation not “needed”, its implementation actually defeat the purpose.
LikeLike