Monday, October 18, 2010

Last Call

Bank of America has declared every single one of its foreclosures in 23 states in perfect order and will immediately resume foreclosure proceedings with new, perfect paperwork starting a week from today.

And if you believe that, allow me to show you this bridge I have for sale.

According to a spokeswoman for the bank, no errors were found during the review, and fewer than 30,000 foreclosure sales across all 50 states will be delayed as a result of the investigation.

The announcement comes one day before the bank's third quarter earnings report, and might ease investor concerns over the scale and timeframe of the bank's review process.

"This is an even better outcome than we previously thought," said Paul Miller, an analyst at FBR Capital Markets. "We thought January was a more likely time to restart the [foreclosure] process."

The news sent Bank of America shares up 36 cents to $12.34, or 3.01%.

The bank said in a statement that the review process "has been an important step to give customers confidence they are being treated fairly."

Bottom line:  BoA is now daring the various state Attorneys General to prove they are liars in court, and it is betting that once the election is over that the states will back off completely...and that a new business friendly Congress will absolve them of every dime of liability.

They are certainly acting like there's nothing but clear sailing ahead, and that they've already gotten away with it.  Supremely confident, one might say.

We'll see.

Farfeg-Nitwit, Or Das Boob

David Frum proves again why his "recovering winger who is much more reasonable now" act is pure tripe as he goes on a German purity spree along with Chancellor Angela Merkel, who over the weekend decided that "Hey, ethnic scapegoating works great in America, let's try it here!"

This immigrant population is disproportionately connected to almost all of the social problems of modern Germany. Yet the problem that has transfixed the country is, very understandably, the problem of crime. In Berlin, young men of immigrant stock are three times as likely to commit a crime as young men of German background, reports Germany's state broadcaster, Deutsche Welle. In a September interview, Chancellor Merkel endorsed claims that religious young men of Muslim origin were more likely to commit acts of violence than other young Germans.

These crimes seem increasingly the work of criminal gangs of immigrant origin that organize resistance to police authority in what the German media -- with tabloid exaggeration -- increasingly call "No Go areas." Violent assaults upon police officers jumped 60 percent between 2005 and 2009, according to the German newspaper Bild.

Less spectacular -- but as important to ordinary people's feelings of security -- is the perceived deterioration of public order: declining schools, rising welfare rolls and foiled terrorist attacks.

Because of very low birth rates among old-stock Germans, the proportion of foreign-born is highest among those younger than 20s. In the poor Berlin neighborhood of Wedding, three out of four students and at least half the parents lived on unemployment benefits and welfare, even before the global economic crisis. In 2005, The New York Times interviewed a teacher in a Wedding high school:

"In Wedding, [Evelyn] Rühle says, immigrant children today speak poorer German and have less contact with German culture than when she started teaching 20 years ago. Many Muslim students ... go to Koran classes outside of school and speak only Turkish or Arabic at home. Meanwhile, the growth of digital television has made a host of Turkish- and Arabic-language channels available, intensifying language problems and nurturing identities that are informed more by the Israeli-Palestinian conflict or the war in Iraq than by the local German environment."

Replace the word "Germany" in this article with "America" and the word "Muslims" with "Latinos", "Blacks" or hell, just use "Muslims" anyway and you have the modern GOP complaining about how "American culture" is under threat from those damn ferners and that we should segregate as much as possible because this is a "Christian nation."

Frum just can't help himself, like most Republicans.  Not even trying to hide the hate for those who aren't "American" enough.  Maybe enough scapegoating can keep it that way.

He Blinded Them With Science

At the White House Science Fair today President Obama announced (and let's face it, like the last President would have ever had a White House Science Fair) that he'll be appearing on the December 8th episode of Mythbusters as he challenges Jamie Hyneman and Adam Savage to revisit the myth of Archimedes' solar-powered boat-burning light beam and make it work.

Legend has it that during the Siege of Syracuse, circa 214 B.C., Archimedes destroyed the enemy ships with fire, the result of a “heat ray” involving a series of mirrors set up on the coast. But the question has long remained: Did it really happen that way?

“Mythbusters” has already tried to test this myth. In 2006, with the help of some students from the Massachusetts Institute of Technology, the show declared the myth “busted” because it took far too long for any reflected light to ignite a fire on a distant ship.

But apparently, Mr. Obama wants them to try again.

“Did Greek scientist and polymath Archimedes set fire to an invading Roman fleet using only mirrors and the reflected rays of the sun?” a press release for the show asks. “Will Adam and Jamie be able to pull this off, or will they have to report back to the president that they failed?”

Producers of the television series are not saying exactly how Mr. Obama will help prove — or disprove — that myth. But the first presidential appearance is intended to help spur interest in math and science as part of the White House effort to increase American competitiveness in those subjects.

Good.  The President should be promoting a healthy interest in science, as Steve Benen lays out.

A few months after his inauguration, President Obama was showing so much passion for science and scientific integrity that one observer characterized him as "almost strident" on the issue. The description put a negative spin on what I consider to be one of the president's more endearing qualities -- I can't think of a modern president who speaks as often and as enthusiastically about science as Obama.

Indeed, nearly a year ago, the president announced that, from now on, there will be an annual White House Science Fair. Obama explained at the time, "If you win the NCAA championship, you come to the White House. Well, if you're a young person and you've produced the best experiment or design, the best hardware or software, you ought to be recognized for that achievement, too. Scientists and engineers ought to stand side by side with athletes and entertainers as role models, and here at the White House we're going to lead by example. We're going to show young people how cool science can be."

And that's exactly what this President is doing, and more (solar) power to him.  Science is how our economy is going to flourish and grow...or lack of it will cause us to sputter and stumble as the rest of the world passes us by in innovation and technology.  To keep up, we're going to need to make a commitment to science, math, and education in general.  (Also, burning things with solar radiation is neat.)

Or, you know, you can denounce it all as a hoax and then wonder why the rest of the world thinks we're superstitious hicks while businesses relocate out of here in droves.  Your choice, America.

Bad For Business

Now this is an interesting story from Bloomberg Business Week, stating that there's a sizable chunk of the business community that thinks the Tea Party's economic platform of "apply chainsaw to everything" might actually be bad for businesses.  The problem is, even going through all the Tea Party's credo of protectionism, ending subsidies to businesses, and ending the Fed, it's the rigid ideology that scares the Country Club Republicans the most.

The movement's energy could help boost Republican turnout, but it has also forced the party to spend time and money on primary contests in which inexperienced candidates—Angle, O'Donnell—have jeopardized Republican control of Congress. Despite her call to privatize Social Security, Angle is in a virtual tie with Senate Majority Leader Harry Reid and has raised an astonishing $14 million in the past three months. If Republicans fail to win the congressional majorities that seemed within reach earlier this year, she and other Tea Party candidates may take the blame.

To the movement's true believers, however, winning is less important than ideological purity. "We need people up here who understand that we've got to get back to limited government, and we cannot afford to have other Republicans who don't get that message," DeMint said recently on Capitol Hill. One cornerstone of their faith—the notion that large corporations are leeches sucking the blood of the people—is sharply at odds with Republican theology that has held sway for generations. "The business community writ large is the essence of the inside-the-Beltway type," says lobbyist Rich Gold, who represents Dow Chemical (DOW), Next Era Energy (NEE), and other energy companies. "And these people are the essence of the outside-the-Beltway type."

The Tea Party's chief theologian is Beck, the cable-TV personality whose rise has mirrored the movement's. Beck's world is full of demons, but the devil that enraged the sold-out crowd in a ballroom at the Atlantic City Hilton on Aug. 5 wasn't Obama or even House Speaker Nancy Pelosi. "Give the money to the people!" Beck shouted to a packed room of around 1,500. "Give us our money back—not to Goldman Sachs! (GS)"

In other words, all this populist stuff is starting to scare business as much as the Democrats actually holding businesses accountable is. Republicans may be happy to hand the keys to the economy back to Goldman Sachs, but the Tea Party certainly isn't going to put up with that.

Not in the least. Crazy isn't good for business.

I'd mention something about lying down with dogs getting you fleas, but I'd have to have some sort of sympathy for business first.

Playing The Paranoia Angle, Part 12

I'd say Sharron Angle strayed perilously close to EPIC FAIL territory, but she crossed that border with this rant on...crossing borders.  Angle has taken a lot of grief for her anti-Latino ads in Nevada, but she refuses to even own up to her own campaign spots when trying to convince Latinos to vote for her.

But during an appearance before a group of Hispanic children at Rancho High School in Nevada, Angle implausibly claimed she had no idea that the people in the ad were meant to be Hispanic, and claimed the ad was about the "northern border." From Las Vegas Sun reporter Jon Ralston:
Question: Why is it that in all of your commercials you have the image of Latinos? What do you see when you hear, and I quote, "illegal aliens?"
Angle: I think that you're misinterpreting those commercials. I'm not sure that those are Latinos in that commercial. What it is, is a fence and there are people coming across that fence. What we know is that our northern border is where the terrorists came through. That's the most porous border that we have. We cannot allow terrorists; we cannot allow anyone to come across our border if we don't know why they're coming. So we have to secure all of our borders and that's what that was about, is border security. Not just our southern border, but our coastal border and our northern border.
This is an example of how racism in politics works these days -- when a political candidate wants to exploit racial animus, all he or she has to do is leave themselves some semblance of plausible deniability. The problem is, Angle didn't leave herself any. When confronted by a high school student about her inaccurate, race-baiting ads demonizing Latinos, Angle dissembled and suggested she's actually concerned about a massive influx of Canadians. Then after demonizing Latinos, she has the chutzpah to ask for their votes.

Yeah.  She's worried about Canadians.  It's bad enough if you're going to demonize Latinos, but to then try to win the Latino vote by saying all those "scary immigrant ads" are really about Canada is just horrendous buckets of EPIC FAIL.

How stupid does Sharron Angle believe Nevada's Latino community -- or for that matter, all of America -- is, anyway?  Vote for Republicans.  They think you're morons.

[UPDATEGreg Sargent puts an end to all this "I was referring to our northern border" crap.

But here's what's funny about this: Angle's campaign makes direct references to Mexico in a previous ad and in a previous campaign mailer which both blast Reid on immigration in precisely the same terms the new ad does.

Game, set, match.

Turn On The Lights, Watch The Roaches Scatter, Part 25

It's just a $120 billion leak.  We can fix it.  Just give us a bit.  yeah, that's it.  Anyone have a pipe wrench?

Foreclosure-process errors that lead to putbacks of questionable home loans could cost the banking industry up to $120 billion, according to a note J.P. Morgan sent to clients late Friday.
Putback losses — which arise when investors in a mortgage-backed security demand that the banks that issued the security buy it back at par — are more likely to cost the industry in the neighborhood of $55 billion over a period of years, the note states. But the size of the losses will depend partly on the mix of loans that are returned to the banks, and under some scenarios, the figure could be more than twice that base estimate.

In its 43-page report, authored by a team of analysts in J.P. Morgan’s fixed-income strategy group, the bank argues that “many of the mortgage foreclosure problems highlighted in the past few weeks are process oriented and can be fixed in the near term.”

Those problems include the moratorium J.P. Morgan and other banks have placed on the foreclosure process and concerns about “robo-signing,” where foreclosures are completed without the required review of documentation.

Still, the analysts argue the putback risk is a potentially serious problem, the scope of which will depend on how many government-sponsored loans are returned to banks. Investors so far have been successful in putting back GSE, or agency, backed mortgages 40% of the time, whereas they’ve only succeeded at putting back private-label mortgages 20% of the time in most cases. But the latter loans could prove far more expensive for banks to buy back. 

Somehow I think that percentage is going to have to go up a little closer towards 100%, and fast.  $120 billion is just a starting number when you factor in all the litigation on the way.  This isn't going to be pretty, folks.  It's "reckoning" with a W-R-E-C-K.

As I said earlier today, the banks are going to have to eat metric tons of these bad mortgages because there's no way the underwriters will go forward without paperwork, meaning that the banks will have to buy out the mortgage loans.  When the investors get wind of this, particularly the big hedge funds that bought these cubic blocks of processed securitized mortgage cole slaw, they are not going to be happy holding a bunch of crap that has about the same asset value as, well, cole slaw.

They are going to LAUNCH ALL LAWYERS.  It will be fun fun fun as the big hedge funds go after the big banks with thousands, hundreds of thousands, maybe millions of homeonwers on the battlefield as ready victims of collateral damage.  And they're all going to want get out of foreclosure free cards, which the banks are looking like they will have to provide.  $120 billion won't even begin to cover it.

Exquisite, glorious chaos at its finest.

Watching Reruns Of Barmy Miller

In the People's Democratic Republic of Mooselvania, asking Joe Miller about his past when he said earlier that he wouldn't take questions about it is apparently illegal enough to cause his security detail to arrest journalists.

At a Joe Miller for Senate campaign event today in Alaska, members of Miller's private security team 'arrested' journalist Tony Hopfinger of the Alaska Dispatch. Hopfinger later told local TV news station KTUU that he was asking questions when he was told by Miller's security detail that he was under arrest and placed in handcuffs. The security guards kept Hopfinger in custody pending the arrival of Anchorage police. But when police arrived they released Hopfinger and said no charges would be filed.

William Fulton, one of Miller's security guards, released a statement claiming that Hopfinger became belligerent and menacing to the candidate while asking about the scandal surrounding Miller's work as city attorney for Fairbanks North Star Borough in 2007 and 2008. The security guards were apparently part of a team provided by "Drop Zone", the Anchorage-based private security firm hired by the campaign. 

Yeah, that seems fair and totally non-fascist, right?  Best part?  The folks on the right actually defending this nonsense like our old friend Dan Riehl:

The Alaska Dispatch is not much more than the equivalent of a Lefty blog playing pretend journalists. They embarassed themselves when they came at me over the Murkowski cocaine allegations and appear to have a vested interest in trying to hurt Joe Miller's campaign for the Senate. At one point, this Tony Pull My Finger Hopfinger was a HuffPo contributer, so it should be no surprise that they're covering Hopfinger's unhinged nonsense, too. You can Google him to see his many links to progressivism.

Which means of course that Hopfinger can't be a journalist and has to be a drity f'ckin hippie blogger...says the blogger.  Jim Hoft says Hopfinger was arrested for assault.

What a complete shock. A liberal reporter in Alaska was handcuffed and detained after he harassed Republican candidate Joe Miller after a town hall event. The reporter also assaulted a man.

Anchorage cops told the detail to let Hopfinger go when they showed up.  So if there were witnesses to the assault, as there should have been, why wasn't Hopfinger taken away by the police?  And if it was a private event, why was it advertised on Miller's Facebook page as a public one?

This story stinks.  Yeah, Miller was ambushed by Hopfinger...but it was a public event on public property and Hopfinger was asking questions with press credentials.  Miller's two opponents are wasting no time in attacking Miller for pulling this stunt too.  And let's not forget that all this started because Hopfinger was asking Miller questions that Miller still refuses to answer.  Apparently that's a crime if you're doing that of an Alaskan Republican and they sic their goons on you.

I wonder what Alaskans think of all this.  Hell, I wonder what right-wing bloggers really think about this, secretly.  Guys, what if this was a Daily Caller or DC Examiner reporter detained by the security detail of a Democrat?  You'd be yelling FASCISM as loudly as possible...and with good reason.

Nobody should be condoning or defending this.  Joe Miller should face these questions and "man up", right?

Jacking Up Rand, Part 4

Evan McMorris-Santoro has a round-up of  last night's Kentucky Senate debate between Rand Paul and Jack Conway, and it was a doozy.  Last week's Conway "Aqua Buddha" ad attacking Paul ended up being the center of the entire debate, with Paul basically refusing to answer any questions until Conway apologized for it and grousing the entire time in indignation.

"He's descended into the gutter," Paul, who referred to himself as a "pro-life Christian" said. "Jack, you should be ashamed of yourself. Have you no decency? Have you no shame?"

Several profiles have referred to Paul's membership in an irreverent student society known as the NoZe Brotherhood that was banned from Baylor for, according to school officials, mocking Christianity, a no-no at the Baptist university. A GQ profile last summer exposed some of Paul's shenanigans with the group, including one occasion where he and a friend allegedly led a female student to a creek, tied her up and requested she worship "Aqua Buddha."

Paul claimed the stories were not worthy of voter attention. Run on the issues of the day," he told Conway. "Don't make up stuff about me from college that you think you've read on the Internet blogs. Grow up."
"it wasn't from the Internet blogs," Conway shot back. "It was on CBS News, it's been in Politico, the Lexington Herald-Leader."

Conway refused to say whether or not Paul is a "good Christian," (as one of the debate's moderators put it) but said that the ad was not about Paul's faith.

"Values matter," Conway said. "Why did he freely join a group known for mocking or making fun of people of faith? And secondly, when is it ever a good idea to tie up a woman and ask her to kneel before a false idol called Aqua Buddha?"

Paul never once answered those two questions, and attacked Conway throughout for, it seemed, having the audacity to ask them.

As I said a few days earlier, the ad intimates a little too hard that Paul is anti-Christian, and that is a pretty low blow.  But as I also said, Paul did and said all the things the ad says he did, and Paul, given the chance here to answer questions about it and give his side of the story, instead pitched a fit and refused to believe that Conway would even do such a thing.

Paul is the one making a federal case out of this Aqua Buddha ad, and he just made things a lot worse for himself.  Not to mention Conway him Paul again on Medicare and Social Security and Paul still didn't have an answer for those, either.

This race is down to the wire here in the last two weeks, and I think Paul hurt himself badly last night.

Turn On The Lights, Watch The Roaches Scatter, Part 24

Hope you enjoyed your day off without any Foreclosuregate news yesterday, because today is going to be murder as Tyler Durden unveils another huge piece of the puzzle, starting with "Well, if Wells Fargo is the only bank not to voluntarily place a moratorium on foreclosures so they can check the paperwork delay until Congress can retroactively save their asses, what are they doing?

And even so, Wells continues to refuse to halt foreclosures knowing full well it would face billions in impairments should it do so voluntarily, even though as we confirmed Warren Buffett's pet bank was recently caught with its robosigning pants down as well (an event which was sufficient for everyone else to invoke a self-imposed moratorium, even Goldman, whose Litton Loan Servicing unit was rumored to have serviced about 4 or 5 mortgages in the past century... but not the California real estate monster).

What is critical, is that Wells Fargo admits that should all avenues under existing legal guidelines be exhausted, and robofraud is certainly a dealbreaker that can not be "explained or validated away", then the bank will be forced to repurchase the loan. In other words, starting [Monday] Wells is preparing for the loan repurchase tsunami to hit the fan as investors and insurers everywhere swamp the bank with tens if not hundreds of billions of repurchase and recissions demands. Suck it in, Wells investors.

So the question becomes why?  The answer is the end of last week forced their hands with bank stocks tanking on Thursday and Friday.  Investors are spooked.  A long, drawn out mess will only increase the chances that the somebody can be singled out as the next Lehman Brothers, so the best bet is everyone to pull the pins on their respective mortgage grenades at once.

Readers can be confident that over the weekend loan investors and mortgage insurers have received identical letters from all other banks as well. The next step: an attempt by every single mortgage investor and insurance company to get every single mortgage repurchased by the originating company on grounds of robosigning fraud.

The banks had their party of a lifetime, and now the terminal morning after hangover has commenced. 

In other words, this is the week where the bottom starts falling out of bank stocks completely.  Don your crash helmets, kids.  Potential financial crisis point?  Meet precipitating black swan event.  The banks want this swept under the rug as a delay is only going to make things worse for them.  Banks stocks are already being hurt as evidenced by the end of last week. If they figure they can, say, start a financial meltdown two weeks before midterm elections, this may motivate Washington to save their asses and make this problem go away ASAP.

Timing is everything.  October?  Surprise!

Another One For The Fire

GOP Rep Darrell Issa is going to be a busy man should the Republicans take back the House.  Issa, as presumptive Chair of the House Oversight Committee, is adding yet another promise to investigate the "crimes" of the Obama Administration, this time saying he'll dive into Fannie, Freddie and subprime mortgages, but the real task is to determine if the Feds should be involved in the housing market at all, and find a way to pin the 2008 financial crisis on President Obama months before he actually took office.

The conservative Republican from California, who would become chairman of the powerful House oversight and government reform committee, said hearings would focus on whether the federal government should be involved at all in sponsoring home loans for the poor.

The investigations would centre on the roles of Fannie Mae and Freddie Mac, the nationalised government-sponsored lending institutions, which Republicans say contributed strongly to the 2008 meltdown by promoting subprime lending.

Mr Issa said the role of Countrywide, the bankrupt subprime lender, would also be investigated.
He did not spell out whether he would investigate alleged connections between subprime lenders and Democratic politicians.

“We need to look not only at the failure of Freddie and Fannie but even after that whether the federal government should be involved in financing home loans at all,” Mr Issa said.

It's funny.  If Issa really was interested in seeing what caused the housing meltdown, he'd be looking at the banks, not Fannie and Freddie.  After all, the government had to come in and clean up all the bad loans private sector lenders like Countrywide made in the first place.

But no, he's looking for "transparency" and is promising to find a way to pin this all on the Donks.  Just like his other laundry list of avowed investigations:

Examples of the type of investigations that would “open up government” included looking into the role of the department of agriculture in regulating the food industry.

Mr Issa also said he would investigate the Wikileaks disclosures, which he said “animated him at a time when we are at war”.

And he spoke vaguely about “looking into dangers to democracy, dangers to the well-being of people and issues that distort democracy”.

Elsewhere, Mr Issa has hinted he would investigate last year’s “climategate” scandal as part of the alleged “politicisation of science”.

And he has also mentioned the White House’s alleged role in trying to interfere in Democratic primary elections to influence challengers to drop out.

“If you have the power of subpoena, then your letters get answered,” he said.

Really?  Somebody ought to tell Henry Waxman that, because in 2007 and 2008 his subpoenas went unanswered by the Bush administration, and in 2009 and 2010 President Obama asked the Dems to back off in the name of bipartisanship.  It's a good thing Obama promised to look forwards and not backwards, otherwise the Republicans might have done something crazy like promise to start multiple witch hunts.

Oh wait.


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