Tuesday, October 19, 2010

Rent is Too Damn High Party (Update: Now With More Hasidim!)

Edit: fixed malformed link.

Now THIS is how you do "single-issue candidate". Jimmy McMillan of the "Rent is Too Damn High Party" absolutely stole the show at the New York State Gubernatorial debate last night.

Gawker called him "crazy"; HELL no, he isn't crazy. He's cogent, on-message, has a striking appearance that helps get him attention (which you need as an issue candidate) and the sort of emphatic, impassioned delivery that'd make a preacher cry.

I'm sure a ton of people would (will?) happily vote for him; Cuomo would be insane not to leverage this.

Edit: Ah, or perhaps Cuomo should leave well enough alone. McMillan is trending high right now, but already people are noticing that he found a target for his ire back in 2005. That would be, *ahem*, "the Jews". Utter ethical dubiousness aside, I don't think it's a terribly wise position for a gubernatorial candidate in New York, of all places.

It is a rather weird case. His specific complaint was, from what I can gather, that Hasidim (ultra-Orthodox) Jews living in the Williamsburg area of Brooklyn were systematically refusing to rent to outsiders. Considering that's a common complaint about the so-called "black hats" in Israel, it's plausible that he might not understand the distinction. But, then again, he also blamed "the Jews" for the 2001 WTC attack. That is, uh, a wee bit less plausible.

On the other hand, he claims that he's renounced that stuff:
There have been comments that I have attempted to label me anti-semitic or anti-Jewish. This has been nothing more than "kill the messenger" and "character assignation" politics as usual which was spread by opponents that have nothing better to say. It may sound trite in this matter but even in this campaign I rely on Jewish close friends and advisors.

However, if I have ever made any biased remarks toward anyone or any group I heartfeltly apologize. Further, I apologize to the Jewish community for having to suffer the boorish bias of anyone. Even the reminder that there is still bias in America bias is painful; as a Black-American Man I empathize fully with the Jewish-American community.
Hey, they forgave Bob Byrd.

Friday, October 15, 2010

Wall Street's Pathologies

While I'm KrugPostin', here's a KrugLink to a piece in the NY Observer about, well, just what kind of asshats are working on Wall Street these days.

"The first thing that needs to happen, I think, is to get these people out of their homes," a man wearing a bespoke blue-striped shirt, a Herm├ęs tie patterned with elephants and Ferragamo loafers said recently. "Correct! I'll explain," the veteran member of a bank restructuring and advisory team said.

Amid evidence of sham documents and widespread paperwork gaffes, if not systemic fraud that increasingly looks like it may be terrifically deep, Bank of America recently halted all foreclosure proceedings around the country. That followed similar announcements from the home-loan giants JPMorgan Chase and GMAC.

But Wall Street does not sympathize. "You had people putting zero down to get massive houses they couldn't afford to be in," he said Monday morning, "but now they want to stay. And the government wants to let them stay, because they're voters." A few hours later, the Goldman Sachs arm Litton Loan Servicing said it had suspended certain foreclosure proceedings, too. "Talk about a financial scandal," a Wall Street Journal editorial this weekend joked. "A consumer borrows money to buy a house, doesn't make the mortgage payments and then loses the house in foreclosure—only to learn that the wrong guy at the bank signed the foreclosure paperwork. Can you imagine?"

"The problem is they don't deserve to be in that place. They probably deserve to be there less than they used to," the source continued, referring to incomes lower now than they'd been when the loans were made in the first place. "You do need to foreclose, and you need to go back to people living in houses that are consistent with their income levels."
At this point, I'd like to remind readers that there are reports all over the place about people getting foreclosed upon that paid in full and paid in cash. Including in the Observer. Moving on...

In order to understand Wall Street's shrug during this foreclosure crisis, which as many as 40 attorneys general are expected to announce an investigation into this week, the key is to appreciate just how deeply connected the gesture is to Wall Street's view of who's to blame for the financial crisis.

The feeling, the idea at the bottom of all the others, is that even if Wall Street aggravated the crisis by bundling and betting on mortgage-backed securities that turned out not to live up to high ratings, it was not a matter of, as Citi chairman Richard D. Parsons told The Observer this summer, "bad people trying to do bad things." The loans wouldn't have been there in the first place if American home buyers, driven by what The Weekly Standard calls immediate gratification without personal responsibility, hadn't overstepped their bounds.

So when Ken Bentsen, the executive vice president for public policy and advocacy at Wall Street's largest trade group, the Securities Industry and Financial Markets Association, talks about this foreclosure fraud crisis, he points out that the homeowners arguing about administrative problems are the ones who've gotten themselves tied up in the foreclosure route in the first place, regrettably. "No one has raised the question that anyone who's going through this process shouldn't have been in the foreclosure process," said Mr. Bentsen, who, as a congressman from Texas, helped write the Sarbanes-Oxley and Gramm-Leach-Bliley acts.

"Look, I think it's just human nature. People want to have a bogeyman," Ralph Cioffi, the former Bear Stearns hedge fund manager, who was found not guilty of fraud, said in a recent Observer profile about anger at banks and bankers. "People don't want to take responsibility for their own actions."
Apparently not.

So, the Wall Street titans, having screwed up so badly that they needed to be rescued from their own financial crapulence by the American people, are right back to blaming absolutely everything on poor people. Let the borrowers suffer. I have a tee time to get to!

Never mind that the wealthy are more likely to play the "jingle-mail" card than the poor are. Never mind that the professionals involved all signed off on this nonsense. And never mind that everybody said that the crash couldn't happen, that home prices couldn't go down, and that anybody who said otherwise was a crank. And never mind that the institutions that these guys work for were more precariously leveraged than a thousand insolvent homeowners. No, it all comes back to the OTHER guy.

And why?

"Because people don't want to take responsibility for their own actions".

No, Government Hasn't Gone Up

Yeah, Krugman's been banging on this one for a while, but he linked to a great post by Menzie Chinn that shows the situation.

I've been lecturing on the government sector in my macro course. In updating my lecture notes, I plotted out some interesting graphs, which link up nicely with this previous post. The following four figures highlight: (1) normalized Federal outlays are not much higher than in 1986; (2) government consumption to GDP is back up to 1991 levels; (3) the cyclically adjusted budget deficit is only 2 ppts larger than that recorded in 1987; and (4) Federal consumption remains far below the previous peak in 2007.

One of the topics stressed in the textbook and lecture notes is the endogeneity of the budget balance, and especially the transfer and tax components. This leads to the first graph, of transfers normalized by nominal GDP, and transfers normalized by potential GDP...

...Notice that government transfers as a share of GDP looks particularly high because of the collapse of GDP in the Great Recession which started in 2007Q4. Normalizing by potential GDP highlights the fact that, while the ratio is the highest over the last forty three years, it is only slightly higher than that recorded in the mid-1980s, during the Reagan administration.

Normalizing government consumption and investment illustrates that overall spending by the government in purchases of goods and services is not particularly high. Even dividing by nominal GDP indicates that we are only (almost) back to the levels of 1990. Normalizing by potential GDP indicates that we are still only back to the levels of the early 1990's (this spending includes defense)...

...So, it is true that the Federal government's role in terms of spending and transfers has increased against the backdrop of a massive decline in output starting in 2008Q4 -- but some of the movements in various indicators are distorted by the large negative output gap that has opened up.
That latter bit is why I liked the post so much. Focusing on spending as a percentage of GDP is really prone to distortion. That measurement of spending as a percentage of potential GDP neatly removes that problem. It reinforces what I've known for a while: that you don't need to cut social spending. Just end the damned wars, end the Bush tax cuts, and end the recession. Do those things, and the budget falls neatly into place.

Obama Hit by Foreclosure Scammers?

Holy Hell. From ZeroHedge:

Just like we have been saying all along, this is so much bigger than  "affidavits."

Here is another piece of the puzzle, without bringing up the REMIC issues...

Now that YOU are effected personally in this, Mr. President, what are you going to do about it?

Let's get off the whole CNN Axelrod signals White House opposition to foreclosure moratorium BS...

"The Obama administration opposes a moratorium on home foreclosures, but wants problems involving improper paperwork resolved as quickly as possible, senior adviser David Axelrod said Sunday."I'm not sure about a national moratorium,"

Like my dear friend at the Hamlet puts it
It’s not the foreclosure affidavits only. Hello? It’s the whole kit-n-caboodle. it’s the fabricated assignments of mortgage, fake allonges, robo-stamped endorsements in blank, and satisfactions of mortgage, ignoring SEC and IRS regulations, disregard for the steps required by the REMIC rules. It’s all the top national banks and their servicing arms. The whole of it is a sham. Don’t believe the propaganda that insists otherwise.

Got it?

Now for the fireworks...
I won't quote the whole thing, but the post (appears to be Michael Redman from 4closurefraud.com) gets into how it's quite likely that multiple people were posing as Marshe Craine, the same "vice-president" from Chase Manhattan, in the same sort of documents that Obama put up. "Marshe" had one signature in one form, and an entirely different signature in Obama's forms. And wasn't with Chase to begin with, but another (sketchier) outfit called Mortgage Electronic Registration Systems, or MERS.


Of course, the whole thing relies on photos that I haven't reproduced here, so you should check it out yourselves. And it's not exactly unlikely that this would happen, because it has apparently happened to half of the damned country!

But it does put things in perspective:

So you see, this whole Foreclosure-Gate crisis has nothing to do with the "deadbeat" borrowers, it never has.

It has to do with the complete lack of the respect of the law by the banking industry.

They got away with it up until now and are trying their damnedest to paper over their crimes.

It is time to say no more...

They tricked all of us, even you Mr. President, and completely disregarded the basic laws of this country to make a buck.

I have been beating this drum, along with a few others, for years now and it is time to come to an end.

Mr President, now that you have had the fraud perpetrated on you personally, what are you going to do about it?

The system is broken and the foreclosures need to be stopped NOW.

It is actually worse than you can imagine...
What's that old line? Look at any great fortune, and you'll find a great crime?

Well, we knew what the fortune was. And now we're discovering the crime.

Sunday, October 10, 2010

Israel Requires Loyalty Oath to "Jewish, Democratic State"

The Israeli Cabinet has apparently approved a bill requiring non-Jewish immigrants to swear loyalty to the "Jewish, democratic state". Yep, Yisrael Beitenu managed to push it through. Not exactly going to endear them further in the Muslim world, especially when the initial effects involve, you guess it, West Bank Palestinians.

Were the bill to be passed by the Knesset, the people immediately affected would be Palestinians in the West Bank and Gaza who either want to marry a Palestinian-Israeli citizen or have already married and are waiting on their papers to be processed, she said.

Earlier, Ahmad Tibi, an Arab member of the Knesset, told Al Jazeera that the bill was aimed at Palestinians - and not at Jewish newcomers to Israel since they already enter on Israel's Jewish Law of Return.

"Palestinians will have to say that this country is for Jews, and Palestinians are only guests. If you are saying you are democratic, you should treat citizens with equality," Tibi said.

He said that Israel was trying to impose this on the Palestinian Authority (PA) as a pre-condition for peace talks.

Direct peace talks between Israel and the PA, under the leadership of Mahmoud Abbas, are currently at an impasse due to Israel's refusal to extend the 10-month freeze.

Recognition of Israel as a Jewish state is one of Netanyahu's principal demands in any eventual peace deal with the Palestinians...

...Palestinians have repeatedly rejected Netanyahu's condition as it would amount to an effective renunciation of the right of return for Palestinian refugees.

"The new citizenship law will make it impossible for Palestinian refugees and their descendants to return to their homeland," Marwan Bishara, Al Jazeera's senior political analyst, said.
Theoretically, this doesn't change that much. Israel IS a Jewish Democratic state. What bothers me is that little comma there, since it implies that people have to swear to loyalty to Israel as a Jewish state in particular. Israeli Arabs are already feeling more than a little put-upon; this is only going to cement it.

And, as the AJ analyst said, this preempts one of the most important elements of any peace negotiation between Israel and the Palestinians: the question of Palestinian refugees. Requiring them to swear loyalty to the Jewish character of the state of Israel is not going to happen, not after they were pushed out in the first place. It's clearly a move to create "facts on the ground"; and the Palestinians are not going to look kindly on Israel pulling that tactic again.

Not that the negotiations are going anywhere. I'm not convinced that Netanyahu gives a damn about them in the first place. But if there's some future prime minister that is interested in peace and reconciliation, he or she is really going to have their hands tied.

Friday, October 08, 2010

Jailed Chinese Dissident Wins Nobel Peace Prize

Yep, you heard me right. Liu Xiaobo, an imprisoned Chinese democratic activist, has just won the world's most prestigious award. Huffpo:

Imprisoned Chinese democracy campaigner Liu Xiaobo on Friday won the Nobel Peace Prize – an award that drew furious condemnation from the authoritarian government and calls from world leaders including President Barack Obama for Liu's quick release.

Chinese state media blacked out the news and Chinese government censors blocked Nobel Prize reports, which highlighted Liu's calls for peaceful political change, from Internet websites. China declared the decision would harm its relations with Norway and promptly summoned Oslo's ambassador to Beijing to make a formal protest.

In Oslo, China's ambassador to Norway met with a state secretary at Norway's Foreign Ministry, ministry spokeswoman Ragnhild Imerslund said.

The Norwegian officials explained that the peace prize committee is independent of the government and that Norway wants to maintain good relations with China, Imerslund said.

This year's peace prize followed a long tradition of honoring dissidents around the world and was the first Nobel for China's dissident community since it resurfaced after the Communists launched economic but not political reforms three decades ago...

...The Nobel committee praised Liu's pacifist approach, ignoring threats by Chinese diplomats even before the announcement that such a decision would result in strained ties with Norway. Liu has been an ardent advocate of peaceful, gradual political change.

The Nobel committee cited Liu's participation in the Tiananmen Square protests in Beijing in 1989 and the Charter 08 document he recently co-authored, which called for greater freedom in China and an end to the Communist Party's political dominance.

Obama said in a statement that Liu "has sacrificed his freedom for his beliefs" and is "an eloquent and courageous spokesman for the advance of universal values through peaceful and nonviolent means."

"We call on the Chinese government to release Mr. Liu as soon as possible," Obama said.
No surprise that Obama said he should be released. They ARE Prizebuddies.

But this is a serious black eye for China. Just as they're starting to get a wee bit belligerent in the region, squabbling with Japan over the Senkaku/Diaoyu Island chain and with Vietnam over the Spratlys, here comes the Nobel Prize committee saying "hey, folks, remember how China is kind of an oppressive regime? You may have forgotten, but look at this guy! He's amazing, an utter pacifist, and they tossed him in a hole!"

It's going to embolden their external and internal critics, and it's going to be damned near impossible for their Great Firewall to block discussion of all this.

On the other hand, at least now the Chinese and the neo-conservatives have something they can finally commiserate about: how much they loathe the Peace Prize.