Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Arcanaut
novahockey
quarterback
ScottC
yellojktVital Statistics:
| Last | Change | Percent | |
| S&P Futures | 1832.3 | -5.1 | -0.28% |
| Eurostoxx Index | 3111.5 | -6.0 | -0.19% |
| Oil (WTI) | 102.7 | 0.3 | 0.24% |
| LIBOR | 0.234 | -0.001 | -0.41% |
| US Dollar Index (DXY) | 80.08 | 0.067 | 0.08% |
| 10 Year Govt Bond Yield | 2.68% | -0.03% | |
| Current Coupon Ginnie Mae TBA | 105.7 | 0.1 | |
| Current Coupon Fannie Mae TBA | 104.5 | 0.3 | |
| RPX Composite Real Estate Index | 200.7 | -0.2 | |
| BankRate 30 Year Fixed Rate Mortgage | 4.32 |
Stocks are lower this morning after a weak housing starts number. Bonds and MBS are benefiting from the riots in Ukraine. Mortgage applications fell 4% last week. Inflation at the wholesale level remains under control.
January housing starts came in at 880k, well below the 950k forecast. December was revised upward by 50k. Bad weather certainly played a part, and the low number would be consistent with the weak homebuilder sentiment number yesterday.
Bad weather doesn’t account for the entire drop in homebuilder sentiment – a shortage of lots, rising materials prices, and a dearth of skilled labor contribute to the problem. Many skilled construction workers left the industry after the collapse and went to work in the energy patch. Interesting fact: The average age of a mason in Texas is over 60. Apparently wages have increased 50%.
Later on today we will get the FOMC minutes. Don’t expect anything market moving in there, but you never know. While the dovish tilt of the Chair remains in place, we picked up some more hawkish members. New voting member Charles Plosser is in favor of ending QE ASAP.
Servicers are coming under closer scrutiny. We saw NY State block a MSR deal between Wells and Ocwen. Consumer Advocates are criticizing servicers for not modding enough loans (as if more mods are more better).
Filed under: Morning Report |
All Things in Moderation 
And the Russians go down.
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You’re goddamn right I ordered the code red!
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That was an itch I had to scratch.
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Brent:
Way, way waaaaaaaaay far out in the weeds question–do you happen to know where Ocwen got its name? Like, was it founded by a Mr Ocwen? Or is that a mashing together of names?
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Michi, I have absolutely no idea…
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In a movie full of modern fairy tale tropes (no need for a Prince Charming, Prince Charming is, in fact, a duplicitous skunk, etc), it turns out that giving yourself a makeover, by yourself, for your own benefit as you plan to live alone forever in your ice castle is anti-feminist.
http://www.slate.com/articles/arts/movies/2014/02/_let_it_go_idina_menzel_s_frozen_ballad_it_sends_the_wrong_message.html
Or, as I like to express it: some people sure like to fucking complain a lot.
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Thanks, Brent–I was just curious. I knew an Ocwen, but that was her first name (for obvious reasons she went by Wendy) and it’s so odd that when I saw the name of that company I was wondering if it could be related.
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Now, this is a productive use of technology. And a pleasant reminder that, for the most part, we still live in a pleasingly patriarchal society (even if it’s now producing more man-boys than men): Kate Upton in a bikini in zero-g!
http://nymag.com/thecut/2014/02/here-are-photos-of-kate-upton-in-zero-gravity.html
Girl has as strong stomach. They don’t call it the Vomit Comet for nothin’.
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So, I just scanned the headlines at PL, apparently hack Sargent can keep UI renewal and Immigration reform fresh everyday.
Kiev?
Caracas?
Nope.
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What’s funny is his concern for the Republican Party.
It’s touching now that I think about it. He’s a giver.
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Ground shifting.
http://www.politico.com/story/2014/02/mississippi-2014-election-thad-cochran-chris-mcdaniel-103644.html?ml=po_r
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Wonder why they all voted for it then.
http://thehill.com/blogs/healthwatch/198651-dems-side-with-gop-on-medicare-cuts
This is why there is and never will be ANY cuts to any entitlement programs until they collapse.
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Troll, Greg has become America’s leading concern troll, constantly churning the same unreflective material about the sad yet happy death of the GOP.
I have noticed that whether he argues the merits or the politics of an issue depends 100% on which one he thinks favors his party. If they are wrong on the merits, he of course won’t admit it but will always say the public supports the Democrats, marking that as a good thing and all that really matters.
PL is such a technical wreck though that it is hardly manageable to go there. It never loads right for me anymore. I’m really disgusted that Volokh moved to Wapo as well.
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I can’t hear the Doors The End without thinking about Apocalypse Now.
FYI.
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Maybe he’s phoning it in and will act as MMfA’s liaison for Juicebox? According to Brock he’ll print anything.
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This is a great story about football, Mizzou, and how the next generation is going to make the discussion we’ve been having here moot.
EDIT: link fixed. Thanks, QB.
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This is a great story about football, Mizzou, and how the next generation is going to make the discussion we’ve been having here moot
Link goes to the Capital Hilton.
You don’t know the future; you only think you do. The discussion will never be moot.
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D’oh! Sorry.
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At qb: “You don’t know the future; you only think you do. The discussion will never be moot.”
Or, another way of putting it might be: all discussions are moot.
And, while nobody knows the future, the thinking mechanisms which allow for intuitive leaps and judgements in our head will only gives us the emotional feeling that we understand and can even predict the future, and generally the future will either: confirm our worst fears or be awesome just like we would expect it to be once everybody becomes as wise and mature as we are.
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Canada-Latvia 1-1 with 10 to go. USA rolling.
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USA rolling.
Office door closed?
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@Michigoose:
I’m probably reading this wrong. I hope I am: “And to think it took two sophomore Christian women in a red state in the middle of the country to show us how easy it could be.”
But, boy, does that sound like condescending twaddle. Look, Christian women in red states aren’t all remorseless monsters. I mean, of course, most of them are, but at least a few of them don’t have to be eliminated in the purge.
I know, I know. Not what she’s saying. It just raises my hackles. I wonder why that is.
Might be the topic. The Westboro Baptist Church is mostly as single family of sociopaths (possibly psychopaths) who get way more attention than they deserve, partially because they are good at it, and partially because they fit the description of what certain people want Christians and conservatives and Red Staters too look like. Sort of “A vote for Mitt Romney is a vote for Westboro!” type of guilt-by-association.
So when it ends with, “Look, not all red state Christians are homosexual hating psychopaths” it just rankles. Nobody likes the Westboro folks. Even the KKK is marginally more popular. The Westboro church pickets the funerals of soldiers. They have no friends in red state America. None.
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Kevin:
The way I read it was that he was pointing out that the Westboro “church” doesn’t reflect the beliefs of most Christians, and that a good example of that is what those two Mizzou students did.
Are you carrying a chip on your shoulder today? 🙂
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KW,
On this particular set of issues, I think there are a number of things going on that the left uses to support its belief and claim that gay normalization is inevitable and already done. Of course, this has become a standard conceit of the left: at a certain point, the left establishment just starts asserting without end that its idea is inevitable and irresistable.
On this issue, the left has simply succeeded in cowing and terrorizing a lot of people into silence. They got here by taking control of academia and corporate America. And the young are nothing if not kneejerk confirmists in their nonconformity, and cowards in their bravodo. There is no chance that all the guys in the locker room feel totally fine with homosexuals there. The left can do all the ridiculing it wants, and they will succeed for a while at least in silencing most of these people.
But the future isn’t inevitable. The truth isn’t permanently suppressed. Young people–foolish and inexperienced–become middle-aged and old people–wiser and experienced. Ideas have consequences, and those consequences have consequences. The Soviets didn’t crush us. Hippies became yuppies. The world turns.
This new left-wing trope–discussion of the merits is irrelevant, because we win through demography and “progress”–is a calculated evasion and a propaganda strategy, but none of it is inevitable let alone inevitably permanent.
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No Christians are like the Westboro Baptist Church freaks, who a Democrats by the way.
The Branch Davidians were Unitarians by comparison.
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“Office door closed?”
Nah, tv on mute.
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2-1 Canada. final
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Continued: the triumphalistic rhetoric won’t change the fact that, inside, most people still instinctively know that homosexuality isn’t normal, don’t want to be forced to treat gay marriage as normal, and in fact don’t like sharing locker room space with gays. Most people still instinctively know that gay scout leaders are a terrible and absurd idea. They’ve just bowed to economic and social extortion and/or peer pressure (among the young). Any Missouri player who dissented undoubtedly would have been punished and persecuted.
And btw, what are we to make of this from the column:
“So how do two devout Christians reconcile helping a man they consider a sinner? “Yes, practicing homsexuality is a sin,” Lakers says. “But so is lying, so is cheating, so is coveting. I sin every day. God hates the sin, not the sinner. If God hated all the sinners, he’d hate me!””
According to our gay rights defenders, these people are homophobes. Unrepentant, defiant homophobes. In fact, this is hate speech according to the homophiles. What is to be done with such people? How can they even exist?
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Nah, tv on mute.
Heh.
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who are Democrats by the way.
I doubt that:
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Hmmm. Semi-corked by Kev again.
The idea that there is something remarkable about people standing en masse against Westboro is ridiculous. The idea that we didn’t know Christians are very much against Westboro is ridiculous.
And those to Christian girls said homosexual behavior is sin, yet liberals are holding them up as examples. They distinguished between sin and sinner, yet liberals think they are modeling the right behavior. Sure, sure they do.
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Here’s a puzzler: if Johnny has the right to chose what restroom to use, why doesn’t Jane have the right not to have Johnny in her restroom? And why don’t athletes have the right to decide for themselves who is in the locker room with them?
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This might sting.
Phelps has run in various Kansas Democratic Party primaries five times, but has never won. These included races for governor in 1990, 1994, and 1998, receiving about 15 percent of the vote in 1998.[38] In the 1992 Democratic Party primary for U.S. Senate, Phelps received 31 percent of the vote.[39] Phelps ran for mayor of Topeka in 1993[40][41] and 1997.[42]
Support for Al Gore
Phelps supported Al Gore in the 1988 Democratic Party presidential primary election.;[42] in his 1984 Senate race, Gore had opposed a “gay bill of rights” and stated that homosexuality was not something that “society should affirm”), a position he had changed by 2000 when he had the support of homosexual advocacy groups for his presidential campaign. Phelps has stated that he supported Gore because of these earlier comments.[43] According to Phelps, members of the Westboro Baptist Church helped run Gore’s 1988 campaign in Kansas.
http://en.m.wikipedia.org/wiki/Fred_Phelps
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@Michigoose: Fred Phelps (the ringleader) has actually run for office as a Democrat, but that means nothing, when it comes down to it. So has Lyndon Larouche. They may all be registered Democrats but it says absolutely nothing about every other Democrat on the planet, just like the fact they have “Baptist” and “Church” in their name says absolutely nothing about Christians or Baptists or Churches.
Phelps was a Gore delegate when he ran for president in 1988. Back when Gore was less homosexual friendly.
http://www.georgialogcabin.org/news/Fred-Phelps-Al-Gore-Westboro-Baptist-Church-God-Hates-Fags/200010251159.shtml
Fred Phelps is probably also gay. But that doesn’t say anything about homosexuals in general. 😉
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Well, we all know that California is the reddist of red states and Kimmel’s audience skews 62 years old +.
http://dailycaller.com/2014/02/19/no-one-in-jimmy-kimmels-audience-says-theyve-signed-up-for-obamacare/
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@Michigoose: “Are you carrying a chip on your shoulder today? ”
As I observed, it raised my hackles in a manner that prompted the question: I wonder why. I think it’s fair to say it’s a chip. Not really intentional, just my immediate, gut reaction. Like, really? I can’t help but read it like: look, Christians and red staters can actually be like normal people.
I tend to think stuff like that should be received the same way you’d look at that same description being applied to African-Americans: “And, of all people, it was a black person who showed us the value of thrift and hard work.” I mean, wouldn’t that sound racist to you? Maybe I’m imagining things. Wouldn’t be the first time.
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@Troll: People with jobs who have time to go to Kimmel aren’t going to be signing up for Obamacare.
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@quarterback: “and in fact don’t like sharing locker room space with gays”
This doesn’t bother me. Guys who wave their junk around in my general direction bother me, and I don’t know if they are gay, straight, or other. I just have no interest in seeing them do the helicopter while I’m trying to get dressed for work. They can be as fabulous as Liberace, if they observe decorum I’m perfectly content sharing my locker room with them.
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Interesting that I’m not allowed to express having my hackles raised without being mocked and being told that I’m reading more into something than was meant. . .
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Michigoose, not only will I allow you to raise your hackles, I encourage it.
And I fully confess I was probably reading more into it than was meant. Yet I clearly *feel* that what I’m reading into it was the writer’s actual intent, when it’s unlikely. So, despite the fact I intellectually know she was not intending to be patronizing and condescending, I *feel* like she was. And that feeling informs my reaction, even though I should know better.
We’re monkeys. Monkeys, I tell ya!
But, please. Raise your hackles all you like. I, for one, pledge not to mock you. 🙂
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So, despite the fact I intellectually know she was not intending to be patronizing and condescending, I *feel* like she was.
And Rick Reilly might feel badly that you evidently think that he’s a girlie-man for writing that! 😀
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Shot: “I would suggest they contact the plan to make sure what doctors are available to them,” he said.
Chaser: Tammy says she finally found an in-network doctor, but the problems don’t end there. We looked him up using the couple’s plan info, and the Blue Cross website shows him as in-network.
But that same doctor’s officer told Tammy he won’t see patients with insurance from Covered California.
Better than the status quo.
http://sacramento.cbslocal.com/2014/02/18/mans-back-surgery-on-hold-as-doctors-deny-covered-california-coverage/
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We looked him up using the couple’s plan info, and the Blue Cross website shows him as in-network.
But that same doctor’s officer told Tammy he won’t see patients with insurance from Covered California.
I’ll bet that’s the same problem that Maryland’s web site is having, and in this case it isn’t a problem with the ACA, it’s a problem with the insurance companies. The companies aren’t giving accurate information to the web site as to which doctors are covered under which plans. After I found that problem the third time, and since I didn’t yet have a PCP anyway, I did the easy thing and just enrolled with the VA.
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For me, I simply asked my primary physician which plan(s) on the ACA that he accepts. He told me that he, and everyone else under the Warren group, worked with my preferred hospital and they all offer the same plan(s) as the hospital. He told me which plans they were and I chose appropriately for me. This means I get to keep all my doctors and my preferred hospital.
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The Rick Reilly column wasn’t just patronizing and condescending in how it treated Christians but offensive. No doubt it was unintentionally so, because the author is simply oblivious to vast swathes of the public and operates on the premise that these two young ladies are a rare species who hate sin but not the sinner.
Of course, liberals who claim to respect what they said have a problem, because it is now an article of the liberal faith that sin/sinner is a false distinction at least as to homosexuality. So, what say you, Michi?
Are those two girls homophobes? If not, why not?
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So, what say you, Michi?
Me?
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So that’s a yes, they are homophobes?
That doesn’t seem consistent with the idea that the discussion is moot.
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He told me which plans they were and I chose appropriately for me. This means I get to keep all my doctors and my preferred hospital.
Surely not! Why, we all know that there’s nothing but trouble with the ACA!
(I should have known it was too easy when I didn’t have any problems at all signing up despite hearing that Maryland’s website was embarrassingly bad).
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Most people still instinctively know that gay scout leaders are a terrible and absurd idea.
Homosexuals are still banned from adult leadership positions. Boy Scouts who come out as gay are allowed to stay in the program until they are eighteen years old.
Girl Scouts have never had any restrictions on the sexual orientation of adult leaders. The program would probably collapse if they did.
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“Blue Cross website shows him as in-network.”
The doc might have been — or is — for a non-ACA plan.
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Homosexuals are still banned from adult leadership positions.
Maybe I was singularly incurious, but I have to say that whether or not my teachers or Scout leaders were married or not–let alone did what married people do (or not)–never crossed my mind until I was in about junior high. I just thought “Miss” meant young and “Mrs” meant old. It was kind of odd when the two sixth grade teachers married each other (I was in fourth grade at the time) and young Miss Shepard became old Mrs Kissel (with Mr Chalfaunt, the gym teacher, as best man) in the school gym one day.
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Miss Shepard became old Mrs Kissel (with Mr Chalfaunt, the gym teacher, as best man) in the school gym one day
best after school special ever.
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Maybe I was singularly incurious, but I have to say that whether or not my teachers or Scout leaders were married or not–let alone did what married people do (or not)–never crossed my mind until I was in about junior high.
You know that isn’t the issue, right?
Girl Scouts have never had any restrictions on the sexual orientation of adult leaders. The program would probably collapse if they did.
If there are as many gays as some people claim, the solution is obvious. Gay men can fill the Girl Scout leader ranks. Or would they have to be gay transgendered? Very confusing. The only real solution is to have 50 different scout groups, 50 restrooms, etc., assuming Facebook’s 50 categories are the new accepted standard. This solution would not satisfy the demands of the transgendered woman who wants to be in the men’s locker room, but fair is fair. To each their own, or each to their own.
Well, wait, thinking while typing. There could be two straight men’s locker rooms, one for straight men who want to share with transgender women, and one for those to don’t (call them the straight male transphobes).
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best after school special ever
Even better–we got out of class for it!
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You know that isn’t the issue, right?
Simply an observation. Not every pearl that drops from my keyboard is meant to be insightful.
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Homosexuals are still banned from adult leadership positions.
Plus the only adults who would ever have leadership positions in scouting are people who have kids in the pack / troop / whatever. It isn’t as if some childless dude is going to show up at a school and say he wants to be a den leader..
I have to imagine the sample size of people who would even be in a position to be a scouting leader is pretty small…
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Plus the only adults who would ever have leadership positions in scouting are people who have kids in the pack / troop / whatever.
I spent four years as an assistant den leader which is the lowest leader rank you can have and still get to wear the spiffy uniform. Every year we had to sit through the youth protection seminar. Basically no leader is ever be left alone with kid and there should be two leaders on site at all activities.
Lots of leaders in Boy Scouts (not Cub Scouts) stick around long after their kids have aged out of the program. When I was in Scouts back in the 70s long before there was any awareness our troop leaders were a married couple and there was some hanky panky going on with them and some of the older scouts. But at least the Scoutmaster let me read his Hustlers once all the work was done.
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OT: Nova you may find this of interest.
“Spoiler Alert
Robert Sarvis and the Libertarian Party of Virginia say their statewide shake-up is just getting started.
by Tom Nash
February 18, 2014”
http://www.styleweekly.com/richmond/spoiler-alert/Content?oid=2033594
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@qb: “No doubt it was unintentionally so, because the author is simply oblivious to vast swathes of the public and operates on the premise that these two young ladies are a rare species who hate sin but not the sinner.”
I would express as the author being oblivious to the fact that red state America and Christianity and Republicans did not produce Fred Phelps and the Westboro Baptists. That Fred Phelps and the Westboro people resemble your average Christian, or red-stater, or Republican just about as much as they resemble your average Atheist, blue-stater, or Democrat.
Of course, humanity has been ignorant or applied very superficial to groups they aren’t a part of since pre-history. So it should be neither surprising nor shocking.
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@Michigoose: “Maybe I was singularly incurious, but I have to say that whether or not my teachers or Scout leaders were married or not–let alone did what married people do”
If the teacher in question was an attractive lady, I wondered what I could do to peek down her shirt or maybe accidentally brush up against a boob. Otherwise, no, I wouldn’t care about what who did where.
” I just thought “Miss” meant young and “Mrs” meant old. It was kind of odd when the two sixth grade teachers married each other (I was in fourth grade at the time) and young Miss Shepard became old Mrs Kissel (with Mr Chalfaunt, the gym teacher, as best man) in the school gym one day.”
That kind of fraternizing would get both of them fired these days. Or could.
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@yellojkt: “Every year we had to sit through the youth protection seminar. Basically no leader is ever be left alone with kid and there should be two leaders on site at all activities.’
Jeeze. Talk about sucking the joy out of everything. “Remember, don’t look directly at the children, and if you accidentally touch one, file a ‘Accident Physical Contact’ report immediately, and you will be suspended until the committee reviews the incident . . . “
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@quarterback: “Well, wait, thinking while typing. There could be two straight men’s locker rooms, one for straight men who want to share with transgender women, and one for those to don’t (call them the straight male transphobes).”
Would there be a locker room for women and straight men who want to change in the women’s locker room? Because a little eye candy can be motivating before a work out.
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@Michigoose: “I’ll bet that’s the same problem that Maryland’s web site is having, and in this case it isn’t a problem with the ACA, it’s a problem with the insurance companies. The companies aren’t giving accurate information to the web site as to which doctors are covered under which plans.”
It makes sense (as we didn’t go Single Payer) that a lot of the problems with the ACA are going to problems with insurance companies, who are heavily affected by the ACA. Sometimes people in those companies resent that, and I suspect having the government having such a heavy hand in what they can and can’t do tends to shift responsibility collectively at the companies (ain’t my job, the gummint took over!).
And I’m sure they get horrible specs and conflicting requests from the government, which end up with them doing things wrong and providing bad information. I work for the (county) government, so I know that sort of thing can happen.
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Fred Phelps is probably also gay.
That’s nearly a given.
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@Michigoose: “And Rick Reilly might feel badly that you evidently think that he’s a girlie-man for writing that! :-D”
Ah! Somehow I assumed a woman wrote the article. I’m not sure why. Well, can’t trust my brain.
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@yellojkt: “That’s nearly a given.”
I think it was an Adam Carrolla bit, but it may have been another comedian, that goes: “Let’s say you don’t think gay people should be married, and you say, yeah, I don’t think they should do that. That’s fine, that’s your opinion, I’m not going to think that you being opposed to gay marriage makes you gay. But these guys where that’s all they talk about, where it’s all they focus on, where all the do is right laws to keep gay people from being gay . . . you know, it’s just a little too big a deal to them. They’re just too concerned. They spend too much time thinking about it, so you gotta think, this guy is probably gay.” I’m paraphrasing. And then something about how more than one law maker who was the anti-gay guy turned out to be gay.
Fred Phelps is insanely over concerned with gayness. Way, way, way too concerned.
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That kind of fraternizing would get both of them fired these days. Or could.
And that’s sad.
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@yello, 3 years as a den leader myself…
Agree with the youth protection program… Everyone is so hyper-aware of it on these outings that I can’t see anything happening… Never say never, but…
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Everyone is so hyper-aware of it on these outings that I can’t see anything happening
A scout troop my son looked at but didn’t join had had a predator in a leadership position a few years earlier and it had been reported in the papers. I worked with a different leader at that troop and asked him about it. He shrugged it off saying that when the guy was confronted he admitted it, quit the troop and sought counseling. It still concerned me quite a bit the guy had evaded the screens that long.
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That kind of fraternizing would get both of them fired these days. Or could.
I’m not sure how. One teacher I know was set up with her now ex-husband who was also a teacher by her students. My son’s married-with-kid calculus teacher was carrying on a not very subtle affair with another teacher. I socialize with teacher and the stories they tell make me blush.
And as for after-hours, teachers party hearty. The highlight of my year is going to the lesbian gym teacher’s (redundant, I know) Cinqo De Mayo party.
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@yellojkt: Well, it would not work well here, as fraternization is against policy, and so if you knowingly fraternize with another employee you’re asking for a write up/termination. Unless you’re already married to that person when you or your partner start your job. I know that’s okay because I know more than a few married couples in the system.
I think they idea is that any blossoming relationship could become a sexual harassment suit where the system pays legal fees and possibly punitive damages.
Of course, there’s always the possibility of fraternizing and nobody getting called out but usually somebody complains. Best not to do it.
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Well, it would not work well here, as fraternization is against policy, and so if you knowingly fraternize with another employee you’re asking for a write up/termination.
I don’t see how this is enforceable if the two employees don’t have a supervisory role. But I know these rules exist. My brother met his wife at a bank with a no fraternization rule. The both left the bank when they got married.
Best not to do it.
Concur. Don’t get your honey where you get your money. But in engineering it seems to be honored more in the breach. Last two places I’ve worked one of the technical staff has married the receptionist.
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If the teacher in question was an attractive lady, I wondered what I could do to peek down her shirt or maybe accidentally brush up against a boob. Otherwise, no, I wouldn’t care about what who did where.
As far as I know, after a certain young age, this and the big 3 sports are all any of us thought about.
Would there be a locker room for women and straight men who want to change in the women’s locker room? Because a little eye candy can be motivating before a work out.
Naturally, and this multiplication of rooms would have to go on, once you start tracing out the different categories. I’m not sure what could be done, though, to accomodate the straight men who want to change in the women’s locker room but without any other men. My preference would be: my own personal locker room and restroom. What about me? I demand my rights.
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My preference would be: my own personal locker room and restroom.
That’s called your house! 🙂
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http://freakonomics.com/2013/02/08/sure-i-remember-that-a-new-marketplace-podcast/
Brief Freakonomics Podcast on False Memories, demonstrating in part how easy it is for us to be fooled by our memories (basically, we can’t trust our memories) and also revealing the partisan nature of memories. Essentially, they faked photos of Obama shaking hands with Ahmadinejad and of Bush lounging with Roger Clemons during Hurricane Katrina, and showed them to people and asked what they thought when the first saw those photographs. First, people came up with detailed memories of first seeing these false photographs that, previous to the study, did not exist, and their memories were heavily influenced by their political partisanship. Democrats remember when they saw that photo of Bush goofing off during Katrina and Republicans remembered when they first saw that picture of Obama shaking hands with Ahmadinejad. Even though what they were remembering hadn’t happened.
Lots of evidence of how unreliable our memories are out there.
You guys remember the McMartin Preschool?
http://law2.umkc.edu/faculty/projects/ftrials/mcmartin/mcmartinaccount.html
The kids had to start remembering flying to places in airplanes with schedules that never would have worked and secret tunnels that could not be found (and McMartin employees taking them to cemeteries, making them dig up coffins, and then hacking at the bodies with knives) before it became clear the prosecution was manufacturing memories in these kids wholesale.
There’s been other studies about suggestibility in a police lineup or in influencing eyewitness testimony. Carefully crafted questions can get someone to change the race of an assailant or reverse who rear-ended who in a car accident. The moral is always: don’t trust your brain, kids!
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Speaking of McMartin, the prosecution and everybody involved in actually torturing those kids with that circus should be ashamed of themselves. One of the kids has made a public apology several years ago, but he’s really not the one who should be apologizing, he’s the one who should be apologized to:
http://articles.latimes.com/2005/oct/30/magazine/tm-mcmartin44
“We were examined by a doctor. I took my clothes off and lay down on the table. They checked my butt, my penis. There was a room with a lot of toys and stuffed animals and dolls. The dolls were pasty white and had hair where the private parts were. They wanted us to take off their clothes. It was just really weird.”
I know it was all a long time ago but still, that’s just fucking atrocious.
BTW, I know the guy who prosecuted the West Memphis Three. He has no doubt those guys did it. And the obvious lack of evidence not withstanding, he remembers the entire ordeal, and those memories tell him that they, without question, are guilty. Not to mention that Jessie Misskelley confessed, after 12 hours of interrogation. The brain can be a malleable thing.
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@quarterback: “My preference would be: my own personal locker room and restroom. What about me? I demand my rights.”
You are clearly the victim here. I smell a lawsuit.
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Judge Ito was the jurist for the McMartin trial.
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Asking people questions based upon false premises about something they saw or experienced is the classic way to create false memories, or at least a classic way. It works. Combined with the unreliability of eye witness identification and memory, it is a bit chilling. Both perception and memory are so fallible.
My job is litigating disputes about incredibly complex sets of facts often involving dozens of people and continuous events covering years. Tens or hundreds of thousands of documents, emails, coversations that exist in dim memory if at all. Often people involved in the dispute have been trying to reconstruct what happened, who said and did what, when they did it and why, before I am involved.
Imagine how that works.
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Elizabeth Loftus, the false memory pioneer, tells the story of a man whose life was destroyed.
I often tell witnesses a bit about memory fallibility to underscore the importance of caution in how they testify. I often say, bluntly, some of what you remember about your own life didn’t actually happen that way. You eventually learn that in every case there are contradictions between witnesses and between witnesses and other evidence. Sometimes, witnesses are lying, but sometimes their memories are corrupted.
A lot of our memory is fiction, and a lot of our bodies is actually microbes. Happy thoughts!
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Funniest thing I saw in the gym’s locker room recently was a fiftyish Asian woman standing stark naked in front of one of the full length mirrors with her back to the mirror and craning her neck so she could check out her own butt. I guess she was wondering if her squats were working yet. I didn’t stick around long enough to find out.
Funniest memory story I have is when my kids try to remind me of something that happened when they were little that never happened. They’re always so sure!
I’ve had to testify in a couple of court proceedings and it’s really tough to remember exactly how things went down or what they looked like, especially when the lawyers or judge get done with you! 😉
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He Who Must Not Be Named is moving:
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Taibbi has exposed and explained the most complicated financial scandals of the day…
A laughable claim.
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I knew you’d be disappointed if you went to Rolling Stone and couldn’t find him, Scott. My gift of the day to you!
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Read Taibbi’s wiki entry. That alone makes it incomprehensible how anyone with a checkbook still gives him a platform, and how anyone takes him seriously. What a loathsome human being.
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qb:
What a loathsome human being.
He’s a real class act. But the real problem isn’t so much that he is, to use a word he might appreciate, a douche, but that either he isn’t honest or he isn’t truly informed about the things he writes about, at least as far as the things that I know about go. He is mostly just a red meat-thrower to the rabid crowd. He appeals to those who already hate the objects of his scorn, and are looking to justify their hatred.
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What a loathsome human being
Oh, I don’t know. Even jnc has been known to link to him, and you can hardly count jnc as part of the rabid crowd.
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Mich:
…and you can hardly count jnc as part of the rabid crowd.
Not generally, but with regard to Taibbi’s hobby horse, banks, I definitely get the sense that jnc has an axe to grind. Calling the banking system a “criminal enterprise” is hardly the kind of tempered, considered opinion that usually characterizes jnc’s comments.
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We all have our blind spots. Taibibbi has obviously found his.
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I’m not much of a Buzzfeed fan most of the time, but this list of 18 is really, really funny.
Re #17: Winter is coming.
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@ScottC: “Calling the banking system a “criminal enterprise” is hardly the kind of tempered, considered opinion that usually characterizes jnc’s comments.”
It’s objectively inaccurate, but I think it’s revelatory in that pretty much everything that we are (a) dependent on but (b) do not really work in or have a deep and intimate knowledge of seems like a criminal enterprise (at least on an emotional level). Insurance companies, banks, hospitals (I’ve had hospital experiences where the words “criminal enterprise” seem perfectly appropriate, but I suspect the people working there don’t feel that way). I’ve certainly had experiences with big banks as relates to their credit cards that makes me feel like they were criminals, or that I was getting the shaft and being actively mislead so that I might make mistakes that would end up costing me money . . . but I’m sure these people do not look at themselves as criminals. Manipulative policies that end up with responsible folks paying confiscatory rates on credit cards (yes, they should open a credit line at a bank or something, but, jeeze, the credit card company can’t make money charging me 10% interest in this frickin’ economy? Criminals, I tell ya!)
But to the degree banks really do resemble a criminal enterprise, I tend to feel like we see the government walking hand-in-hand with them, even encouraging (or mandating) what amounts to criminally negligent behavior, at best (ahem, housing loans).
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@Michigoose: “Re #17: Winter is coming.”
So is the next book in the series. At some point in the far, far future. Expect the HBO series to end before the last book comes out. 😉
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@Michigoose: “What a loathsome human being.”
I ignore Taibbi, so I can’t say, but I generally try to save loathsome for, like, Idi Amin or Robert Mugabe. Or the prosecutors of the McMartin preschool case, to bring up something else I recently dredged up.
Matt Taibbi is just what passes for Rush Limbaugh or Glenn Beck or Michael Savage on the left, I think. He has an audience he plays to, and that’s what he’s doing more than providing insight or objective analysis. Like most people in the political press, where money is found in throwing red meat to the base, not dispassionate analysis. But I wouldn’t characterize the folks doing that as loathsome, myself.
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Re: Matt Taibbi: “In March 2001, as editor of the magazine The eXile, Taibbi burst into the office of New York Times Moscow bureau chief Michael Wines and threw a cream pie spiked with horse semen into his face, after Taibbi’s magazine had awarded Wines the title of “worst journalist” in Russia.”
Well, that’s pretty loathsome, I must admit.
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@Troll: Stop trying to judge the ACA on results. You should be judging it on its good—nay, noble—intentions.
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Why do Democrats love insurance companies? I mean, they use the force of law to fill their coffers.
Weird right?
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At some point in the far, far future.
Mr Martin has promised that a book will come out this year. . . but I’d sure hate to be the editor trying to hold him to that deadline!
BTW, Kevin, you’ll note that it wasn’t actually me that called Mr Taibbi “loathsome”. I was just quoting our esteemed colleague, qb. 😉
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@Michigoose: “BTW, Kevin, you’ll note that it wasn’t actually me that called Mr Taibbi “loathsome”. I was just quoting our esteemed colleague, qb.”
I knew it was QB, I was just talking to you, because I normally try to chat up the chick and ignore the dudes. That’s just how I role.
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@Troll: “Why do Democrats love insurance companies? I mean, they use the force of law to fill their coffers.”
Who do Democrats love anything? Lawsuits, lawsuits, lawsuits. Lawyers gotta eat!
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“ScottC, on February 20, 2014 at 8:01 am said:
Mich:
…and you can hardly count jnc as part of the rabid crowd.
Not generally, but with regard to Taibbi’s hobby horse, banks, I definitely get the sense that jnc has an axe to grind. Calling the banking system a “criminal enterprise” is hardly the kind of tempered, considered opinion that usually characterizes jnc’s comments.”
I’ll own that axe. I don’t think Taibbi has necessarily exposed the schemes as much as he’s taking things from the financial press and popularized them to a more mainstream audience.
And yes, when the business model is bribing local officials then it’s a criminal enterprise. More generally, it’s push the line as far as you can and then the resultant fines are the cost of doing business. And based on the current incentive structure, it’s the rational thing to do.
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jnc:
And yes, when the business model is bribing local officials then it’s a criminal enterprise.
If you are talking about the Jeff County situation, it was the “business model” of the local government to require bribing local officials in order to do business. But somehow that is the bankers fault.
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@Michigoose: I don’t believe for a second that Winds of Winter will be out this year. I’ll be happy to be wrong, but I don’t believe it for a second. The original target for publication of Dance With Dragons was 2006. And it came out in 2011. I’m guessing 2016 for Winds of Winter.
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I think he has more pressure with the TV series now.
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I normally try to chat up the chick and ignore the dudes
I should’ve picked up on that by now!
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I think he has more pressure with the TV series now.
Yes; that was what he cited when he said that he was going to get a book out this year.
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“ScottC, on February 20, 2014 at 9:57 am said:
jnc:
And yes, when the business model is bribing local officials then it’s a criminal enterprise.
If you are talking about the Jeff County situation, it was the “business model” of the local government to require bribing local officials in order to do business. But somehow that is the bankers fault.”
It is. They are co-conspirators who share responsibility, not innocent victims.
And there was the anti-trust aspect as well of paying off a competitor not to bid.
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jnc:
It is. They are co-conspirators who share responsibility…
I disagree. When government officials set up a system in which they only accept calls from people who have been vetted and introduced by a third party agent, arranging for kick-backs from that third party agent, while at the same time the third party agent makes demands on the callers in exchange for his introduction, I think the responsibility lies primarily, if not exclusively, with the government officials.
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@jnc4p: “I think he has more pressure with the TV series now.”
I think that’s why it will only be two years late instead of five. 😉
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@ScottC: “If you are talking about the Jeff County situation, it was the “business model” of the local government to require bribing local officials in order to do business. But somehow that is the bankers fault.”
Well, technically, it would be their fault for paying the bribes and the government for requiring them. When somebody tells you to break the law, there are other possible responses than: “Okay!”
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Kevin:
Well, technically, it would be their fault for paying the bribes and the government for requiring them.
If a restaurant owner says to a health inspector “I’ll pay you $10,000 if you overlook all of the code violations that I have here”, then I would say that both are at fault. But if the health inspector says to the restaurant owner, “Pay me $10,000 or I am sure to “find” lots of code violations”, then I think the inspector is pretty much exclusively at fault.
Likewise, if a bank says to a local government official, “Choose my firm to underwrite your bond issue and I will give you $50,000” then I think they are both at fault. But if the local government official says “I won’t even talk to you about underwriting unless you take care of my friend here,” then I think the local government official is pretty much exclusively at fault.
Context matters.
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@ScottC: ” “Pay me $10,000 or I am sure to “find” lots of code violations”, then I think the inspector is pretty much exclusively at fault.”
If there is no media or legal recourse that stands at least some possibility of being successful, then I suppose so. There are alternatives, and all options—including the paying of the bribe—bring risks. So deciding to do the wrong thing rather than the right thing, even if the right thing would potentially be harder or riskier, still leaves the bank culpable, at least morally, I would think.
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Kevin:
So deciding to do the wrong thing rather than the right thing, even if the right thing would potentially be harder or riskier, still leaves the bank culpable, at least morally, I would think.
I think you are conflating “right” and “wrong” with “legal” and “illegal”. In the case that a government official demands a bribe in order to do otherwise perfectly legitimate business, paying the bribe may indeed be technically illegal, but I don’t think there is anything morally wrong in paying the bribe at all.
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Along with the sheer volume of regulations. I pretty universally believed, is it not, that one cannot go the whole day without violating at least 3 laws and regulations. It has to be the same for business, no? If that is the environment there can be no heroes, only mordidas.
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” to do otherwise perfectly legitimate business”
No, it’s to guarantee the award and exclude competitors.
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jnc:
No, it’s to guarantee the award and exclude competitors.
Well, my comment to Kevin was a hypothetical to establish the principle I was talking about, not specific to Jeff County, but still I don’t think you are correct.
Officials of Jeff County has always utilized local investment bankers and brokers to “advise” them on their financing deals. The only way for a large (ie non-local) bank to win municipality business was to enlist these local investment bankers to lobby government officials on their behalf. The relationship between between the local bankers and the local politicians was corrupt. The local politicians would act on the advice of the local bankers in exchange for payoffs from the local bankers.
But the “services” of these local bankers was a requirement to get the business…without them, JPM could not win any business. It is false to suggest that by paying the local bankers JPM was “guaranteeing” itself business that it would otherwise have to “compete” for. In fact the only way to compete was to hire the local bankers. The system was one in which the competition to win business was not over the lowest fees or best interest rates, but rather over who could buy the “services” of the local bankers. And, of course, this system was put in place by the local government officials. This was a system that JPM had no control over.
Now, you can perhaps claim that JPM should have steered clear of this corruption and simply chose not to do business with Jeff County. But that this is the way Jeff County politicians did business is the fault of Jeff County politicians, and the business JPM wanted to do was, in fact, legitimate. They simply went about getting it in the only way that the government officials involved would allow it to happen.
BTW, I don’t know any of the JPM people involved, so maybe they are sleazy people who would have attempted to bribe officials even if it wasn’t required. Who knows? But the fact is that it was required, and that it was is on the local municipality, not the bankers who had to play by their rules.
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“And, of course, this system was put in place by the local government officials. This was a system that JPM had no control over.”
Nope. They could have actually obeyed the law and reported them to the federal authorities. This wasn’t some local ordinance that was enacted that JPM had to comply with, but rather pure “pay to play” corruption pure and simple.
JPM wasn’t a victim, but a willing participant because the cost of the bribes was far less than the guaranteed profits they received at public expense.
When a drug dealer buys off the local cop, they are both culpable.
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jnc:
They could have actually obeyed the law and reported them to the federal authorities.
Report what? That they didn’t hire a local banker as an advisor and therefore lost a deal?
This wasn’t some local ordinance that was enacted that JPM had to comply with, but rather pure “pay to play” corruption pure and simple.
Yes. If they wanted to engage in legitimate business with the municipality, they had to pay.
JPM wasn’t a victim,
I never said they were. It isn’t an either/or choice between “victim” and “co-conspirator”.
…but a willing participant because the cost of the bribes was far less than the guaranteed profits they received at public expense.
They were definitely a willing participant, but in a game that was dictated to them.
And I am not sure why the “guaranteed profits…at the public’s expense” is relevant except perhaps as rhetoric designed to appeal to populist emotion. Given that private businesses generally engage in business in order to make a profit, and a municipality’s primary source of revenue is tax revenues, anyone who does business with a municipality is making a profit “at the public’s expense”, whether they bribe someone to get the business or not. As for “guaranteed” nature of their profits, I don’t know all the details but I assume their profit was derived from two things: 1) underwriting fees and 2) where they were able to sell the notes relative to where they underwrote them. With regard to 2), such profits would not be “guaranteed” until they actually sold the bonds, which is actually the last stage of the whole process, well after they were hired as the underwriter. With regard to 1), my understanding is that JPM ultimately paid the local bankers about 1/3 of the underwriting fee. How much of that was kicked back to the politicians, I don’t know, but in the absence of the payment to the local bankers, either JPM would have kept the entire fee itself – also “at the taxpayers expense” – or it would have reduced its fee to what it actually kept, in which case it was the local bankers/politicians who got something “at the taxpayers expense”. In neither case, however, do I see how the “taxpayers expense” is relevant to whether JPM is as morally culpable for the situation as the local government officials.
Ultimately it seems to me that it is the job of government representatives, not private businesses providing services to the government, to act in and protect the best interests of their constituents, the taxpayers. When they fail to do so, it is primarily their fault, not anyone else’s. I guess you think otherwise. But I think of it this way: if your wife cheats on you, you may get pissed at the guy she cheated with, and whether she was the seducer or the seducee might either heighten or lessen the offense, but ultimately it was her responsibility not to cheat on you, not the other guy’s responsiblity to make sure she doesn’t.
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jnc:
I forgot this:
When a drug dealer buys off the local cop, they are both culpable.
I’ve made this point before, obviously to no effect: The analogy fails because a drug dealer’s underlying business is illegal, which the cop is duty bound to stop. A bank’s underlying business is perfectly legal, and far from trying to stop it, the “cop” (government) actually wants to engage in the business. The pay-off is for an entirely different reason.
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JNC – I have advised my construction clients [during each successive centex building boom] to wear recorders when dealing with municipal officials we suspected of pay-to-play. That is the only way you can stop this in its tracks.
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Pay-to-play is the apparent norm in the Ukraine, hated by the populace. It is the public who is victimized, not the politician; not the paymaster.
QB will recall that a sitting Congressman from FL was once a US District Judge who was impeached and removed for taking bribes.
In this nation, at every level, corruption both chases and is chased by politicians in all parties. I take it to be the job of every citizen and every honest business to root it out again and again and again. It is always with us.
I have posted a new and appropriate quotation.
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The arguments for and against monogamy are uninteresting to me. I believe in it and practice it. I married a woman who believes in it and practices it. We like it. Our kids appreciate it. Our parents practiced it as well, and we appreciated their relationships as well.
Clearly, other constructs are possible. French PMs are practitioners of one of the alternatives. One of my former law partners was a serial adulterer. I knew a woman who was the daughter of a famous San Antonio pol who screwed everyone she found attractive, regardless of her marital status, until shortly before she died.
BFD.
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Mark:
I have advised my construction clients [during each successive centex building boom] to wear recorders when dealing with municipal officials we suspected of pay-to-play.
What are the laws in Texas about surreptitious recording? Isn’t it the case in some states that you are not allowed to record conversations without permission, or at least notification?
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In Texas a private individual can record one’s own conversation [with someone] for one’s own protection.
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@jnc4p: “When a drug dealer buys off the local cop, they are both culpable.”
Whether the cop suggests it or the drug dealer. If the enter the transaction, they are both guilty.
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Whether the cop suggests it or the drug dealer. If they enter the transaction, they are both guilty.
Yep.
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@ScottC: “but ultimately it was her responsibility not to cheat on you”
Yeah, unless my wife was lying about her marriage status and had mislead the guy, I hold ’em both culpable. They are both in the wrong.
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Kevin:
They are both in the wrong.
I don’t, at least not nearly to the same degree. He’s got no obligation towards me at all. She does.
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Scott,
If you observe your neighbors car being stolen, you may not obligated either legally or morally, but it would benefit society to report the crime to police, no?
Why wouldn’t it have been better for JP Morgan to refuse to engage in these business practices and report what they knew to the appropriate municiple, country, state and federal authorities? To engage in the conduct, it seems to me, is to put the company (and therefore the shareholders) at increased risk, no? A risk potentially higher then if the bonds defaulted while they owned them. The taxpayers of the municiple district could have won/win and pretty sizable judgement against JP Morgan for engaging in the activity.
I tend to side with J here in that JP Morgan knowingly bribed, or allowed to be bribed, political officials.
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McWing:
If you observe your neighbors car being stolen, you may not obligated either legally or morally, but it would benefit society to report the crime to police, no?
Not a good analogy, because in the Jeff County situation the “victim” isn’t society or some third party, but rather the banks themselves who don’t enlist the right local bankers and therefore lose the chance to win the business. Plus I am sure it is not as though JPM saw a Goldman Sachs employee hand a bag of cash to the county commissioner in exchange for signing a contract. Undoubtedly the whole process took place behind a veil of legitimacy. The county quite naturally looks to the trusted local investment bankers for advice, who vet the proposals of the big-money outsiders and advise the naive county commissioners on what is the best course of action. So naturally the big banks have established relationships with the locals.
Knowing how the system works and making a federal case for how the system works are two different things. And again, I am not saying JPM did nothing wrong. I am just saying that the real problem was corrupt politicians who were derelict in their duty, and that is where the lion’s share of vitriol belongs. Look, I get why offering bribes is deemed to be wrong. Even the most saintly among us are probably corruptible at some point, and so as protection against the eventuality we condemn the enticement. But the fact is that it doesn’t matter how many bribes get offered if no one actually takes it. It is accepting a bribe that poses a real problem, and soliciting one is even worse.
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@ScottC: “I don’t, at least not nearly to the same degree. He’s got no obligation towards me at all. She does.”
Dude! Bro code. I sleep with your wife and I know she’s married, I’m not only betraying you, I’m betraying all bros!
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“And I am not sure why the “guaranteed profits…at the public’s expense” is relevant except perhaps as rhetoric designed to appeal to populist emotion. ”
Because that was the quid pro quo. It wasn’t about JP Morgan simply having to pay a fee to participate in an open process but rather bribing the officials and their representatives to rig the bids.
You also don’t seem to have a problem with the LIBOR bid rigging either, but I’d note that you’ve been reduced to defending bribery as a legitimate business practice and I’d argue that shows the ultimate bankruptcy of your position.
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jnc:
Because that was the quid pro quo.
As I pointed out, any business arrangement with a government entity, whether involving corruption or completely above board, comes “at the taxpayer’s expense”. Hence, the fact that it was “at the taxpayer’s expense” is irrelevant to the issue. Had the government officials been totally honest, looked at several proposals, and chose the one that they sincerely thought was the best one for the municipality, the winning bank would still have made a profit “at taxpayers expense”.
I also have the sense that you think of the “bidding” process like, say, a construction project where a proposal is given to the competing companies, and each shows a price on where they can execute the proposal, with the lowest one winning. That is not how a “bidding” would have worked. In the Jeff County situation, recall they were already in financial straights due to the sewer project, and they were re-financing it in an effort to reduce their costs. So banks would have presented their own proposals for plans to do this. It would have been less like contractors bidding on an existing proposal and more like architects presenting their own proposals. So it wouldn’t have been the bank that simply had the lowest fees to win. It would have been the bank with the most attractive overall proposal to win, which is a subjective, not an objective, decision.
You also don’t seem to have a problem with the LIBOR bid rigging either…
Bid rigging is not the right term for what apparently went on with libor, but in any event that is not at all true. I have simply objected to the notion that any manipulation represented some huge rip-off of Main Street, which is how Taibbi and others framed it. BTW, I believe that most of the manipulation that has been alleged happened with regard to yen libor, not USD libor.
…but I’d note that you’ve been reduced to defending bribery as a legitimate business practice
Nope. I just think that when politicians demand bribes, they are more culpable for the corruption than those from whom they demand them.
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J,suppose one knows that contributing to a city council members reelection campaign increases, let’s say substantially increases the odds of winning a municipal contract, should it be done?
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I sleep with your wife and I know she’s married
Beyond bro code, it’s just wrong.
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Interesting. This is probably not a surprise to anyone, but I have always felt the same as Scott. My wife would never cheat, but if a girlfriend had ever cheated, my ire would have been directly mainly at her. I’m not sure what this says about any of us.
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qb:
I could never, ever date a married man. I’d feel like I was stealing or something.
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Mich, of course. Anyone with minimal integrity feels the same way.
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I’m just not sure why you and Scott would give the guy a pass.
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It’s not that I would give him a pass. I would just be more outraged at her, the betrayer.
Edited for coherence. I so need an editor.
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qb:
It’s not that I would give him a pass. I would just be more outraged at her, the betrayer.
Exactly.
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I so need an editor.
BioScribe is available for a fee. 🙂
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Well, I probably don’t need high tech just to keep myself from leaving extra words in sentences. But that’s your new business thingy, isn’t it?
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@Michi: of course it’s just wrong, but violating the bro code makes it worse! It’s bro-trayal!
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But that’s your new business thingy, isn’t it?
Yep, that’s me!
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Scott, do you think JP knew what was going on? If so should they have participated?
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McWing:
Scott, do you think JP knew what was going on?
I’m sure they knew that they needed the locals influence to get the biz. They probably didn’t want to know what the locals were doing to gain that influence, but they could have made an educated guess.
If so should they have participated?
Nope. As future events have made obvious.
I’m guessing that a big difference between us (me and jnc, me and you) is that you guys see the taxpayers as the primary victims, and I actually think it was other banks that wouldn’t play the game that were the primary victims. From what I can tell the county was in financial trouble prior to JPM’s involvement, and would have done a re-fi one way or another. Perhaps if the officials weren’t corrupt the fees paid by the county for the ultimate deal would have been smaller, but the real significant cost to the taxpayers came as a result of the type of deal they ultimately did – a synthetic fixed rate bond with mismatching floating indices on the loan and the swap – and while we will never know for sure, it is entirely feasible that the same deal would have been done even if the proposal process was entirely legitimate. It wasn’t the corruption which drove the structure, it was the need of the county to lower their financing cost.
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McWing:
I read something last night that suggests something I said is not true. I said that:
From what I can tell the county was in financial trouble prior to JPM’s involvement, and would have done a re-fi one way or another.
Apparently the first bond offering for JC that JPM was involved in was actually initiated by a lame duck county commissioner not for legitimate financial reasons but rather in an effort to reward two local firms that had supported his failed re-election campaign. There were three different series involved in the underwriting, and due to capital requirements the two local firms could not be involved in one of them, necessitating the involvement of a firm like JPM. Whether or not JPM representative were aware of the real reason for the issue I don’t know, but if this is correct then I was wrong to say that a re-fi would have been done even in the absence of the corruption.
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jnc:
One concession I will make, given what I read last night. The overwhelming cost to JC, and what contributed to its need to file for bankruptcy, was the failure of the swap to act as a hedge to its floating rate issues. Basically the correlation between the auction rate on their floating notes and libor was broken in 2008, and this produced escalating costs on what was ostensibly a (synthetic) fixed rate security. If the original bond and swap was structured as it was, ie with a mismatched floating rate index, not in order to produce cheaper financing in exchange for knowingly taking on the correlation risk (as I presumed it was), but simply as a method of generating profit for JPM while hiding the risks involved, which is possible, then this is where I think JPM is really culpable for serious wrong-doing. Unfortunately, most of the stuff I have read focuses strictly on the payoffs rather than on how exactly the structure was marketed to the county.
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Scott,
If JP knew of the wrongdoing, should they have still engaged in the business?
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McWing;
As I said yesterday, no they shouldn’t have.
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I missed that, sorry.
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