Fear of Clowns

"Faith may be defined briefly as an illogical belief in the occurrence of the improbable."
- H. L. Mencken
gozz@gozz.com

Thursday, February 26, 2009

Jesus is still there for you when you're tempted to go to the authorties 

A small insight into Allen Stanford's criminal congregation,

At another meeting two days later, an executive pounded the table stating "the assets are there," the complaint states.

The next day, a confidential informant in attendance "broke down crying because of the revelations the previous day" and threatened to go to authorities.

"Soon thereafter, Attorney A walked over to (the confidential informant) and suggested they begin to pray together," the complaint states.

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Saturday, September 27, 2008

Duh 

Voluntary regulation,

The last six months have made it abundantly clear that voluntary regulation does not work.
- SEC Chairman Christopher Cox

Also breaking: Disarmed bomb fails to explode, engineless car won't start.

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No bailout for shithead bigwigs 

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Thursday, September 25, 2008

$700B bailout doesn't sit pretty with me 

Having only read the main articles in the NYT and WaPo for over a week, it seems to me a really shitty bad idea to buy $700B in shitty investments from the banks who made the shitty investments. I appear to mostly agree with Republicans in the House at the moment - as far as that the bailout is a bad idea. Their offered alternative that tax cuts are the solution is baldly ludicrous, but predictable. I can think of a number of better ways to spend $700 billion and government is still sort of by the people so I think my government should come up with a better idea.

Among my better ideas of what to do with $700 billion would be creating a single-payer health care plan available to all Americans, paying off 7% of our national debt, or even giving it to the banks who haven't gotten themselves in deep trouble by acting like imbeciles.

The roots of the problem are the mortgages that shouldn't have been issued and the banks that made those mortgages possible. These banks aren't Krugman's "marble building" banks, but investment banks - banks that have an army of actuaries that certainly could (and maybe did) advise that such-and-such a percentage the mortgages their employers were investing in would go into foreclosure. And these are the banks the proposal mainly aims at bailing out.

Secondly, the administration claimed we had to bail out Bear-Stearns to avoid something like this happening, then that we had to seize Freddie and Fannie to avoid something like this happening, yet it happened. I certainly wouldn't want a doctor who had two failed plans to prevent a catastrophic illness to do emergency surgery on me once the illness came.

Thirdly, there are a lot of homeowners currently behind in mortgages or in foreclosure; assuming the risk of the bad debt banks currently hold isn't going to do anything about the bad debt coming down the pipe. I find it dubious that the bailout would prevent an extended recession or depression.

I would support legislation allowing judges to rewrite the terms of mortgages along lines laid out in the legislation. I may also support creating a special fund and allowing investment banks offer debt to the government that the government could accept or reject - and some on the Hill are suggesting something along those lines. Making this $700 billion available "as widely as possible" as the White House is pushing appears ripe for abuse and smacks of free money for bankers who screwed up.

Almost forgot: we need to reinstate the regulation of banks that's been dismantled over the decades of Republican ascendancy in Washington.

So that's that I think now based on the limited reading I've done since the crisis exploded.

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Tuesday, September 16, 2008

How many mortgages does $85 billion make? 

It could buy outright half a million $175K homes. The number of defaulted mortgages $85 billion could have prevented is beyond my guesstimating more accurately than being sure it's at or beyond the metaphor "An ounce of prevention is worth a pound of cure."

Reposting an excerpt from my excerpt from the NYT Editorial Board's editorial yesterday,

Preventing foreclosures is the key to stanching the crisis, but policy makers have been unconscionably slow to address that aspect of the crisis.

Hindsight is a lot better than Dick Cheney's aim.

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GOP embraces socialism in a big, big way 

According to my math, the FED just spent about $5000 per taxpayer on a gambit to save our asses in exchange for 80% of a company whose worth nobody knows. If you pray, pray now that this is the first crisis Bush/Cheney, Inc. gets right for the whole country. That said, the damage done may be beyond divine intervention.

I don't want my promised tally to be a running tally, so I'm indefinitely postponing it as events unfold.

ADDENDUM:

[AIG's] management will be replaced, though Fed staffers did not name the new executives.

Who has Sarah Palin's number?!?!?!?!

PRIVATIZE THE PROFITS
SOCIALIZE THE RISK

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Monday, September 15, 2008

Two from the NYT 

An "editorial" from some old guy in Boca Raton that makes sense what we're read about the sub-prime crisis, bail-out of Bear Stearns and the past three days' whirlwind. Sort of like a Cliff Notes of 6 months of financial headlines.

And from the editorial board (which at some point in the recent past applauded deregulation of the financial industry, I'm sure),

As long as foreclosures continue, housing prices will continue to decline and banks and other financial firms will continue to suffer losses. Continuing losses, in turn, could force more taxpayer bailouts, by reigniting fears that ongoing failures may threaten the entire financial system. Preventing foreclosures is the key to stanching the crisis, but policy makers have been unconscionably slow to address that aspect of the crisis.

It will require political will, but is not too late to try to decrease foreclosures by allowing homeowners to restructure their unaffordable mortgages in bankruptcy court. It is also not too late to stimulate the economy with intelligent government support, like aid to state and local governments, rather than campaign-year gestures like the tax rebates for virtually everyone that dominated the first stimulus package.

And it is certainly not too soon to look beyond the current crisis to the flaws and fallacies of the anti-regulatory ideology that has held Washington in its grip since the Reagan years and allowed the financial excesses that are now stressing the system to the breaking point.

Making and enforcing new rules is necessary, but that will not be enough. The nation needs a new perspective on the markets, one that acknowledges the self-destructive bent of unfettered capitalism and its ability, unchecked, to wreak havoc far beyond Wall Street.

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Chickens coming home to roost in a big way 

We want -- we want money being spent to help people buy homes. That's what we want ... Or if you're a consumer, maybe thinking about buying a house, if you look on your TV screens that say "March to War", you're not so sure you want to buy the house then, because you're not sure what the consequences of marching to war will be. Now we're marching to peace. We're marching to peace and the world is better off. We've overcome that obstacle ... Our nation's 68 percent home-ownership rate is the highest ever. More people own homes now than ever before in the country's history, and that's exciting for the future of America ... I set a good goal, which is adding 5.5 million new minority homeowners in America by the end of the decade.

- George Bush 3/26/2004

The Federal Reserve peeled out $300 Billion to bolster financial markets in the days after the 9/11 attacks. Maybe tomorrow I'll make a gruesome tally of what's been doled out since March in the last-second veer to avoid the impact of the GOP's attack on our economy under the flag of supply-side laissez-fair economics.

Here's an article mentioning the "d" word.

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Monday, August 25, 2008

Krugman on Republicans 

Krugman,

[I]n the world we actually live in, pro-corporate, inequality-increasing Republicans argue that you should vote for them because they're regular guys you'd like to have a beer with, while Democrats who want to raise taxes on top earners, expand health care and raise the minimum wage are snooty elitists.

If there's anything else we need to understand about the economics of the 2004 elections, I don't know what it would be. The queer phenomenon of down-and-out social conservatives gathering at the gated communities of their corporate overlords pitchforks and torches in hand, bellowing, "We are here to lower your taxes!!" is described in detail by Thomas Frank in his phenomenal book What's the Matter with Kansas.

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Friday, October 12, 2007

The rich get richer 

This should be the third or fourth nail in the coffin for the American idea that people earn what they're worth. To me, it seems reasonable to believe the most talented among us could be 4 or five times more productive than the average worker, but government policy has allowed the upper class to be rewarded thousands of times over what they'd have earned had they not been unusually fortunate in their investment gambles or born into wealth in the first place. From the Wall Street Journal,

The wealthiest 1% of Americans earned 21.2% of all income in 2005, according to new data from the Internal Revenue Service. That is up sharply from 19% in 2004, and surpasses the previous high of 20.8% set in 2000, at the peak of the previous bull market in stocks.

The bottom 50% earned 12.8% of all income, down from 13.4% in 2004 and a bit less than their 13% share in 2000.

The top 1% "earn" almost twice that of the bottom 50% combined. In effect America is an aristocracy.

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