Sunday, November 21, 2010

Last Call

The more the courts dig into the banks' paperwork on mortgages for the last several years, the more we're finding out the banks broke the law.  David Dayen is on the case:

Of far bigger importance is the possibility that the trustees for the mortgage-backed securities they created never secured the assets from the originators. If the notes never transferred to the trust, there’s no way to retroactively do that now; the trusts are governed by very specific pooling at servicing agreements that for the most part give the trust 90 days to transfer all the required assets. You cannot transfer the loan after it’s slipped into default, 3 or 4 years after setting up the trust. It violates the laws and contracts under which the investors purchased the securities.

Now we have documented evidence, beyond anecdote, that Countrywide, one of the largest subprime lenders, which securitized almost all of the loans they made, never sent the notes to the trust. In a deposition provided to a US Bankruptcy Court in the District of New Jersey, Linda DeMartini, a supervisor for Bank of America Home Loans (BofA bought Countrywide in 2008), admitted that the original notes never transferred from Countrywide into the trusts.

In other words, when Coutnrywide turned its mortgages into securitized cole slaw, they never turned in the paperwork.  Anything after that 90 period means that whatever Countrywide did afterward is legally null and void, including trying to foreclose.

This is a deposition from one supervisor, but it could mean that all mortgage pools that Countrywide sold are suspect. That would amount to perhaps hundreds of billions of dollars in MBS. And the law appears to be air-tight on this, and not governed by the Constitution but New York trust law and the specifics of the pooling and servicing agreement.

Now, tell me again how the banks are planning to get out of this.

They're not.  They're screwed and they know it.  That's why they are trying to do everything they can to buy Congress off to retroactively make everything they did legal after the fact.

We can't let that happen.  More on this from Yves Smith:

This is significant for two reasons: first, it points to pattern and practice, and not a mere isolated lapse. Second, Countrywide, the largest subprime originator, reported in SEC filings that it securitized 96% of the loans it originated. So this activity cannot be defended by arguing that Countrywide retained notes because it was not on-selling them; the overwhelming majority of its mortgage notes clearly were intended to go to RMBS trusts, but it appears industry participants came to see it as too much bother to adhere to the commitments in their contracts.

Banks are potentially on the hook for trillions of dollars in putbacks, folks.  Bye bye, banks.  Bye bye, economy.


Science Is For Losers

Proudly they march, displaying their ignorance for all to see as both sword and shield.  One dares to point this out...

In a Washington Post op-ed yesterday, former Republican Rep. Sherwood Boehlert (NY) articulated his confusion as to why “so many Republican senators and representatives think they are right and the world’s top scientific academies and scientists are wrong.” Allowing for debate over policy, Boehlert said he finds the GOP’s “dogged determination” to deny the actual science “incomprehensible”:
Watching the raft of newly elected GOP lawmakers converge on Washington, I couldn’t help thinking about an issue I hope our party will better address. I call on my fellow Republicans to open their minds to rethinking what has largely become our party’s line: denying that climate change and global warming are occurring and that they are largely due to human activities.[...]
Why do so many Republican senators and representatives think they are right and the world’s top scientific academies and scientists are wrong? I would like to be able to chalk it up to lack of information or misinformation.
I can understand arguments over proposed policy approaches to climate change. I served in Congress for 24 years. I know these are legitimate areas for debate. What I find incomprehensible is the dogged determination by some to discredit distinguished scientists and their findings.[...]
There is a natural aversion to more government regulation. But that should be included in the debate about how to respond to climate change, not as an excuse to deny the problem’s existence. The current practice of disparaging the science and the scientists only clouds our understanding and delays a solution.
While normally walking lockstep with this crowd, the GOP is rebuking the approach of “leaders of some of our nation’s most prominent businesses,” says Boehlert. The U.S. Climate Action Partnership, for example, is “no collection of mom-and-pop shops operated by ‘tree huggers’” but rather a group of “hard-nosed, profit-driven capitalists” like General Electric, Duke Energy, and DuPont pushing Congress to see climate change as an opportunity to “create more economic opportunities than risks for the U.S. economy.” “My fellow Republicans should understand that wholesale, ideologically based or special-interest-driven rejection of science is bad policy,” he said.

...and one is destroyed for it by the Republican "intellectuals" who admit that there is global warming, but say anything we do about it will make the free markets sad.  The party of Reagan is dead.  Ronnie couldn't get elected to county soil commissioner as a Republican in 2012.

Let's Just Bring Back Jim Moose Laws While We're At It

And just to tie everything together over the last three days, Sarah Palin has weighed in on the TSA controversy.

Sarah Palin isn't short on opinions. The 2008 Republican vice presidential candidate weighed in on airport security, questioning why it is "politically incorrect" to profile suspicious persons at airport security gates.

In a Friday Twitter posting, using web shorthand, Palin urged the Transportation Security Administration to "profile away" whenever national security is an issue. "We profile individuals/suspects in other situations," she tweeted. 
In a second posting, Palin wrote, "law enforcement profiles individuals/suspects when seeking info 2 prevent or deal w/other crimes; why can't this be done @aiport 2 prevent?"

Awesome.  Hey Sarah, let's just have two lines at the airport, white people and colored people, and subject everyone in the colored people line to "profiling".  Profile away, indeed.  Two reasons of course prevent this:  it's illegal to use racial profiling as a pretense to obtain evidence against someone (evidence gained this way is inadmissible in court) and singling out all people of a particular group of people as potential criminals to "prevent" crimes is also not only patently unconstitutional but immoral as well.

This of course hasn't occurred to Lady MacMoose here, but it's perfectly fine for the white chick in her late 40's to say "profile away" to guys like me.  Nobody would dare touch Palin or her family.

But why stop at airports?  Why not institute "profile away" at all public buildings, stadiums, schools, courthouses, office buildings, restaurants, stores, malls, anywhere where people can gather and terrorists can attack it as a soft target?  Just bring back Jim Crow laws as a national effort to fight terror.  Single out any Muslim, single out anyone darker than Sarah Palin, slap a "might be a terrorist" warning label on them, subject them to humiliation.  Only way to be sure. Millions of suspects out there.  We don't know for sure unless we constantly check "them".

Won't it be great with President Palin in two years?

Profile away, America.

Hail To The Moose, She's The Moose So You Must Hail Her

Frank Rich sees President Palin in our collective future.

If logic applied to Palin’s career trajectory, this month might have been judged dreadful for her. In an otherwise great year for Republicans she endorsed a “Star Wars” bar gaggle of anomalous and wacky losers — the former witch, Christine O’Donnell; the raging nativist, Tom Tancredo; and at least two candidates who called for armed insurrection against the government, Sharron Angle and a would-be Texas congressman, Stephen Broden, who lost by over 50 percentage points. Last week voters in Palin’s home state humiliatingly “refudiated” her protégé, Joe Miller, overturning his victory in the G.O.P. Senate primary with a write-in campaign.

But logic doesn’t apply to Palin. What might bring down other politicians only seems to make her stronger: the malapropisms and gaffes, the cut-and-run half-term governorship, family scandals, shameless lying and rapacious self-merchandising. In an angry time when America’s experts and elites all seem to have failed, her amateurism and liabilities are badges of honor. She has turned fallibility into a formula for success.

Republican leaders who want to stop her, and they are legion, are utterly baffled about how to do so. Democrats, who gloat that she’s the Republicans’ problem, may be humoring themselves. When Palin told Barbara Walters last week that she believed she could beat Barack Obama in 2012, it wasn’t an idle boast. Should Michael Bloomberg decide to spend billions on a quixotic run as a third-party spoiler, all bets on Obama are off.

Of course Palin hasn’t decided to run yet. Why rush? In the post-midterms Gallup poll she hit her all-time high unfavorable rating (52 percent), but in the G.O.P. her favorable rating is an awesome 80 percent, virtually unchanged from her standing at the end of 2008 (83 percent). She can keep floating above the pack indefinitely as the celebrity star of a full-time reality show where she gets to call all the shots. The Perils of Palin maintains its soap-operatic drive not just because of the tabloid antics of Bristol, Levi, et al., but because you are kept guessing about where the pop culture ends and the politics begins. 

But here's the problem with that:  at some point, Sarah Palin has to commit to run as a candidate in order to be a candidate.  And the second she does that, the GOP explodes. Independents would rather eat their own entrails than vote for her.  Most importantly, they'd rather vote for Obama.  The Republicans will kill themselves over Palin/Not_Palin as candidates.

Second, I don't see Bloomberg running in 2012.  He's smart enough to know that he'd be a disaster as President, with no real power and 90% of Washington out to fillet his ass.

Third, Palin has to run.  She has to, because her ego will not let her hold back in the position she has now.  She lacks discipline.  And that lack of discipline means she's going to get crushed from all sides.  She can play the media game.  She's going to get nuked by the politics.

But it's going to be a hell of a show.

Someone Had To Say It

In the words of Stewart Gilligan Griffin: "Who the hell do you think you are?"

Since when is it the government's business if I choose to live with a woman or a man as my partner? And if you can answer that, then explain why, based on that criteria, I would be unsuitable to volunteer my life to protect my fellow citizens.

Where is my right to privacy? How has giving up my privacy in every regard protected me? Tell me that, if you have an answer I would feel slightly comforted. But to have our phones tapped and our emails sifted (and surely recorded) without permission or knowledge or even judicial oversight, how is that fighting terror? Is giving investigators access to gathering dirt on a whim worth the minor benefit? Not for me. Obama has so far failed to correct a massive mistake in this regard.

How is it that banks bent rules and are now enforcing their law to the letter on those who were caught in the middle? How dare they preach financial responsibility when they are the ones who instigated and profited from the whole mess?

Obama isn't a celebrity, he's a hero. The man doesn't take time to parade and make us giggle, he gets to work and doesn't give up. It's easy to criticize from the sidelines, but turning around the problems we face is like trying to derail a train with kittens and string. It's asking too much that he not only lead our country but dance and sing and make us clap as well.

How can Sarah Palin run for a party that voted unanimously against paying men and women equally? How can quitting as governor qualify one for presidency? Does she truly not see the trap ahead, or is she so full of ego that she thinks she will win anyway? Sweetheart, even Superman isn't gonna bust through that glass ceiling.

No one side is right all the time, and it's our duty to listen and try to do the right thing. Make the party that wants to win actually have to do the right thing to earn votes. It's how we control this country, and get rid of the "it's us or them" mindset. It works to their benefit, not ours. Generally, the people who refuse to listen are afraid their ideas will flounder in the face of criticism. The people who are willing to listen and change when faced with new information change the world.

Zandar's Thought Of The Day

Unless President Obama gets a handle on the TSA this week, Republicans are going to make sure he gets blamed for their overreach, even though it was the Republicans who created this agency to begin with.

Joe Biden's response to this?

Vice President Joe Biden is defending the Transportation Security Administration's (TSA) controversial new pat-down technique, calling it a "necessary policy."

Biden acknowledged people have concerns that the TSA's use of full-body scanners and pat-downs are frustrating and intrusive but argued they are crucial to prevent another incident like the attempted Christmas Day airline bombing. 

It's not necessary if you're A) a Washington politician, and B) if you openly choose never to fly again because of the policy.  Best part is when airline ticket sales plummet because of these horror stories, they will be the first to ask for a government handout.

And what does Obama do today?  Back up Joe Biden.

President Barack Obama on Saturday acknowledged some travelers' "frustrations" with having to go through full-body pat-downs and scans at airports, but he said the enhanced security measures are necessary to keep America safe. 

No, they're not.  Humiliating people to the point where they don't want to fly is in no way "necessary".  The next time you'll see a terrorist attempt (and all they have to do is attempt) to board a plane with some ridiculous getup, prosthetic, hidden container, or swallow a condom full of explosive and we'll be on to mandatory body cavity strip searches in six months, because the terrorists can count on us overreacting every time.

Sacrifice a few pawns in order to cause complete chaos and cause millions of Americans not to fly because they despise their government that much.

That's what I call a win for the bad guys.  The President is on the wrong side of this one, morally and practically, and it's going to cost him.

Those Are Somebody Else's Centrifuges, I've Never Seen Them Before

North Korea continues to think they are fooling people.

A State Department team is traveling to South Korea Sunday, after a U.S. scientist reported that North Korea has a new uranium enrichment facility.

North Korean officials said the facility is operating and producing low-enriched uranium, according to Stanford University professor Siegfried S. Hecker. The scientist posted a report of his November 12 visit to the Yongbyon, North Korea, facility on the university's website Saturday.

The enrichment program claim is "yet another provocative act of defiance and, if true, contradicts its own pledges and commitments," a senior official in U.S. President Barack Obama's administration said.

The State Department team departed for Asia to "begin to coordinate on a response to this news," the official said.

"We have long suspected North Korea of having this kind of capability, and we have regularly raised it with them directly and with our partners in this effort. North Korea has tried to use missiles and nuclear tests to threaten the international community and extract concessions," the administration official said.

The enrichment facility is comprised of 2,000 centrifuges, according to Hecker's report.

They appear to be designed for nuclear power production, "not to boost North Korea's military capability," Hecker says.

That may be all fine and good, but the point is we're supposed to know about it, and of course North Korea had a separate facility with plausible deniability all this time.  You would thinking dealing with Republicans negotiating in bad faith would prepare the Obama administration to handle the Norks, but I guess not.

Part of me is hoping Kim Jong Il's son takes over in a rapid fashion and starts acting like an adult.  The father clearly can't.
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