Wednesday, April 13, 2011

Last Call

Hey, all the "Wow, John Boehner is a really shrewd negotiator!" people?

Orange Julius got rolled by Obama.  Hard.  CBO numbers prove it.

A new budget estimate released Wednesday shows that the spending bill negotiated between President Barack Obama and House Speaker John Boehner would produce less than 1 percent of the $38 billion in promised savings by the end of this budget year.

The Congressional Budget Office estimate shows that compared with current spending rates the spending bill due for a House vote Thursday would cut federal outlays from non-war accounts by just $352 million through Sept. 30. About $8 billion in immediate cuts to domestic programs and foreign aid are offset by nearly equal increases in defense spending.

When war funding is factored in the legislation would actually increase total federal outlays by $3.3 billion relative to current levels.

I'm laughing my ass off.  The wingers got outsmarted AGAIN.  Hey guys?  You got a grand total of...nothing.  You got played.  You were had.  Obama rolled you like corn on a piece of buttered bread, and Boehner helped him.

That sound you're hearing is the Tea Party Uruk-Hai army coming for Boehner's orange ass. And man, that fight is going to be fugly tomorrow.

"Looks like meat's back on the menu, boys!"

Turn On The Lights, Watch The Roaches Scatter, Part 68

Looks like the banks have won Foreclosuregate, folks.

U.S. bank regulators announced pacts with the largest home lenders over allegations of shoddy foreclosure practices, jumping ahead of a states-led probe and leaving the amount of fines until later.

Under the agreements announced on Wednesday, the banks will compensate borrowers who were wrongly foreclosed upon and overhaul their mortgage operations, including undergoing an independent review of their 2009 and 2010 foreclosures.

The Office of the Comptroller of the Currency, the Federal Reserve and the Office of Thrift Supervision reached the settlements with 14 of the largest U.S. financial institutions, including Bank of America Corp, Wells Fargo & Co, JPMorgan Chase and Citigroup Inc.

"Our enforcement actions are intended to fix what is broken, identify and compensate borrowers who suffered financial harm, and ensure a fair and orderly mortgage servicing process going forward," acting OCC head John Walsh said in a statement.

Federal regulators and state attorneys general have been investigating bank mortgage practices that came to light last year, including the use of "robo-signers" to sign hundreds of unread foreclosure documents a day.
Lenders still face a probe by the state attorneys general and other federal agencies, including the U.S. Justice Department.

The partial settlement leaves in doubt the total costs facing the industry. It also fails to resolve legal uncertainty that has stalled foreclosures, keeping the recovery of the broader housing market in limbo.
Actually no, it doesn't leave in doubt the total cost.  The cost to banks will be a slap on the wrist at best, and that's if the regulators ever issue fines.  But what this does is pave the way for the state attorneys general to settle for a pittance and absolve the banks of civil penalties too, despite the notion that the banks may face severe criminal penalties.

Let's be honest here:  any settlement made with the state will guarantee the banks immunity from criminal or civil proceedings, and this set of deals opens the door to that happening much sooner now.

Mark my words, folks:  the banks are going to walk on Foreclosuregate, despite the widespread trillions in mortgage fraud they have committed and that I have documented in the Roaches series.  The odds of any meaningful penalties being applied to these criminals is now next to nil.

Count on it.  The Feds have folded, and the states will follow suit.

No Dealing On The Debt Ceiling, Part 2

Dear entire universe:  Eric Cantor is full of crap.  The GOP House majority leader is lying through his teeth.

Cantor spokesperson Laena Fallon notes that Republicans will not allow the country to default, but that they will raise the debt ceiling in the window, defined by the Treasury department, between when the country reaches its borrowing limit, and when it actually defaults on its debt. In an emailed statement, she writes, "The House will consider a debt limit increase within the window put forward by Treasury Secretary Geithner. Should he shift his estimation for necessary action based on revenues or outlays, we will move as well. However, as Republicans have made clear, we will not blindly raise the debt limit without meaningful spending cuts and binding budget reforms to ensure that we don't continue bad spending practices and max out the credit card in the future." 

I know Eric Cantor is bluffing about letting the country hit the debt ceiling because there is no concievable way the banksters are going to let him raise interest rates and wreck the markets for years with the mere threat of a serious default.  It will cost them a lot of money, more than Eric Cantor and his Tea Party chunderheads are worth.  This will not be allowed to happen, because the real people who run the country will not want to lose billions and billions of dollars as the bond market goes flat on its back.

If there is one constant in the political universe, it's that the rich will get their way.  Cantor and company won't be allowed to jeopardize the no-cost loan industry from the Fed.  Expect a big, ugly smackdown from the business community over this very, very soon about the dangers of failing to raise the debt ceiling in an orderly fashion.

The GOP will not be allowed to do this.  It is an empty threat, pure and simple.

The Real Obama Doctrine

President Obama's budget speech this afternoon was, frankly, much better than I hoped for.  But it was the part about his overall vision of America, not the numbers, that made the connection for me.

Part of this American belief that we are all connected also expresses itself in a conviction that each one of us deserves some basic measure of security. We recognize that no matter how responsibly we live our lives, hard times or bad luck, a crippling illness or a layoff, may strike any one of us. “There but for the grace of God go I,” we say to ourselves, and so we contribute to programs like Medicare and Social Security, which guarantee us health care and a measure of basic income after a lifetime of hard work; unemployment insurance, which protects us against unexpected job loss; and Medicaid, which provides care for millions of seniors in nursing homes, poor children, and those with disabilities. We are a better country because of these commitments. I’ll go further – we would not be a great country without those commitments.

For much of the last century, our nation found a way to afford these investments and priorities with the taxes paid by its citizens. As a country that values fairness, wealthier individuals have traditionally born a greater share of this burden than the middle class or those less fortunate. This is not because we begrudge those who’ve done well – we rightly celebrate their success. Rather, it is a basic reflection of our belief that those who have benefitted most from our way of life can afford to give a bit more back. Moreover, this belief has not hindered the success of those at the top of the income scale, who continue to do better and better with each passing year.

The numbers part was pretty good too, some $4 trillion in deficit reduction over 12 years.  He took dead aim at the Ryan Unicorn Plan too.

Worst of all, this is a vision that says even though America can’t afford to invest in education or clean energy; even though we can’t afford to care for seniors and poor children, we can somehow afford more than $1 trillion in new tax breaks for the wealthy. Think about it. In the last decade, the average income of the bottom 90% of all working Americans actually declined. The top 1% saw their income rise by an average of more than a quarter of a million dollars each. And that’s who needs to pay less taxes? They want to give people like me a two hundred thousand dollar tax cut that’s paid for by asking thirty three seniors to each pay six thousand dollars more in health costs? That’s not right, and it’s not going to happen as long as I’m President.

But most importantly, this bright red line:

In December, I agreed to extend the tax cuts for the wealthiest Americans because it was the only way I could prevent a tax hike on middle-class Americans. But we cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society. And I refuse to renew them again

And that's what I wanted to hear most of all.  Now back that up.

Larry Flynt Shines A Light On Some History

NEW YORK – America’s most famous pornographer, Larry Flynt, talks about his new book, One Nation Under Sex, that reveals the salacious lives of presidents—and which politicians today he’s going after.

This week historians and Civil War buffs are marking the 150th anniversary of the start of the Civil War, but according to porn king Larry Flynt, there is much that historians don’t want us to know. In an exclusive first interview about his new book, One Nation Under Sex, he takes a break from gathering dirt on 2012 candidates to talk about how sex influenced the lives and political choices of presidents and first ladies, from the Founding Fathers to Abe Lincoln to today.

“There’s been a lot left out of history books, and we wanted to be more inclusive,” Flynt tells The Daily Beast. “For 35 years I’ve been exposing corrupt politicians, and I wanted to know if our Founding Fathers had the same follies or not.”
It's ironic that Flynt is the one who tackles the hypocrisy of the past.  Both parties will have to be honest about the issues and realities of our leaders.  More follow-ups to come as the stories begin to emerge.

Good. Maybe this will fix some of the hypocrisy from both parties. If people were more honest about their mistakes and actions, we wouldn't have to pretend to be shocked when someone falls off their pedestal. It's ironic that Flynt is the source of our education.

Denial Is Not A Defense

Last year, George Huguely admits that he swung his girlfriend by her neck and and shook her.  When she was found dead in a pool of blood, his defense is that he doesn't believe his attack actually killed her.  His attorney points towards a note found in the room from George that says to Yeardley Love that she is his best friend.

Huguely's lawyer, Rhonda Quagliana, said that the student "did not believe such a terrible thing could have happened." The defense maintains that their client had no intention of killing Love. In court, they said that a hand-written note from Huguely to Love reading "You are my best friend" was found in Love's bedroom.

Well, that clears it up then.  He didn't mean to, and doesn't believe it could have happened.  That whole swinging by the neck thing was just a thing.  What a slap in the face this must be to those who love and miss the victim.

Could Dems Retake The House In 2012?

Tom Jensen at Public Policy Polling finds that numbers among fickle independent voters have decisively turned against the Republicans in Congress.

43% of voters think that House Republicans are doing a worse job now than the Democrats did, compared to only 36% who think the GOP has brought an improvement. 19% think things are about the same. 62% of voters thinking that the Republicans have either made things worse or brought no improvement to an already unpopular Congress does not bode particularly well for the party.

46% of voters say that if there was an election for Congress today they would vote Democratic, compared to only 41% who would vote Republican. That five point advantage for Democrats is only a hair below the margin Republicans won by in the national popular vote last year. A victory of that magnitude for the Democrats next year would at the very least result in the party taking back a large number of the seats it lost last year, and it could be enough to take back the outright majority- hard to say at this point without knowing how good a number the GOP can do in redistricting.

The key to this strong movement back toward the Democrats right now is the same as the key to the strong movement away from the Democrats last year- fickle independents quickly growing unhappy with the party in power. Exit polls showed independents supporting the GOP by a 19 point margin last year at 56-37. Now only 30% of those voters think that the Republican controlled House is moving things in the right direction, compared to 44% who think things were better with the Democrats. Given those numbers it's not much of a surprise that independents now say they'd vote Democratic for the House by a 42-33 margin if these was an election today, representing a 28 point reversal in a span of just five months.

Not how sure I take the actual numbers seriously, but a 28 point shift towards Democrats is pretty hard to ignore, and it certainly makes sense.  It's not like Republicans have done a damn thing about jobs or the economy or anything other than going after Planned Parenthood and NPR, and threatening to shut down the government every 37 seconds if they don't get what they want.

I can see why independents would be horrified, but then again this is exactly what anyone with a thinking brain said would happen with a GOP House right now.  Obama's "The Only Adult In the Room" approach seems to be paying off, at least by one measure.

Still, we'll see what he says today in his speech.

(Oh, and bonus chuckles from Dan Riehl who complains that the poll clearly shows the problem is Republicans haven't destroyed government quickly enough, and Col. Mustard, who says that the poll showing the GOP has a serious problem with independents means PPP is too biased towards the Dems or something.  My Good Capitalist Friends On The Right are even more graphic (and decidedly less civil) about their opinion of Jensen's outfit.)

Welfare For Wall Street Wives

Matt Taibbi is back, and his latest piece on how you got screwed by the bailout is a jaw-dropper.  I've talked about the Fed giving no-cost, zero-risk loans to banks.  But through their "small business" loan program, TALF, the Fed basically gave no-cost, zero-risk loans to Wall Street's biggest players, and in at least two cases, their wives.

And when I say "loans" I mean the Fed backed them to the tune of $220 million in taxpayer money.

This is where TALF fits into the bailout picture. Created just after Barack Obama's election in November 2008, the program's ostensible justification was to spur more consumer lending, which had dried up in the midst of the financial crisis. But instead of lending directly to car buyers and credit-card holders and students — that would have been socialism! — the Fed handed out a trillion dollars to banks and hedge funds, almost interest-free. In other words, the government lent taxpayer money to the same assholes who caused the crisis, so that they could then lend that money back out on the market virtually risk-free, at an enormous profit.

Cue your Billy Mays voice, because wait, there's more! A key aspect of TALF is that the Fed doles out the money through what are known as non-recourse loans. Essentially, this means that if you don't pay the Fed back, it's no big deal. The mechanism works like this: Hedge Fund Goon borrows, say, $100 million from the Fed to buy crappy loans, which are then transferred to the Fed as collateral. If Hedge Fund Goon decides not to repay that $100 million, the Fed simply keeps its pile of crappy securities and calls everything even.

This is the deal of a lifetime. Think about it: You borrow millions, buy a bunch of crap securities and stash them on the Fed's books. If the securities lose money, you leave them on the Fed's lap and the public eats the loss. But if they make money, you take them back, cash them in and repay the funds you borrowed from the Fed. "Remember that crazy guy in the commercials who ran around covered in dollar bills shouting, 'The government is giving out free money!' " says Black. "As crazy as he was, this is making it real." 

And that's exactly what the ultra-rich did in order to keep the investment capital flowing.  And the notion that the Fed made money (and so did the banks) to pay the Fed back?  All of that is magic unicorn crap.

This whole setup — in which millionaires and billionaires gambled on mountains of dangerous securities, with taxpayers providing the stake and assuming almost all of the risk — is the reason that it's insanely premature for Wall Street to claim that the bailouts have actually made money for the government. We simply can't make that determination until the final bill comes in on all the dicey securities we financed during the bailout feeding frenzy.

In the case of Waterfall TALF Opportunity, here's what we know: The company was founded in June 2009 with $14.87 million of investment capital, money that likely came from Christy Mack and Susan Karches. The two Wall Street wives then used the $220 million they got from the Fed to buy up a bunch of securities, including a large pool of commercial mortgages managed by Credit Suisse, a company John Mack once headed. Those securities were valued at $253.6 million, though the Fed refuses to explain how it arrived at that estimate. And here's the kicker: Of the $220 million the two wives got from the Fed, roughly $150 million had not been paid back as of last fall — meaning that you and I are still on the hook for most of whatever the Wall Street spouses bought on their government-funded shopping spree.

It was a great deal if you could get it...and America's elite got the deal of the lifetime to keep their money in play, leveraged by the Fed, in order to turn a massive profit.  Only now is Congress looking into these TALF program transactions.   And remember, these two loans were just a tiny fraction of the loans that the Fed made to the fat cats.  Let's keep in mind that the banks got trillions and trillions in Fed loans because they lost trillions and trillions of dollars.  Want to know where all the national debt came from?  Take a picture of Wall Street.

And now we're being repaid by having America's social safety net ripped to shreds because "we can't afford it" anymore.  Well kids, the reason we can't afford it is the Fed gave trillions to the banks, and they're basically never going to pay it all back.

Big Casino killed this country's economy.  And us peons will be paying for it the rest of our lives.

A Kasich Of Serious Buyer's Remorse

Ohio Democrats are striking while GOP Gov. John Kasich's approval ratings just months into his term are already dismal across the board, calling for legislation that would allow for a recall of Ohio officials.

State Rep. Robert Hagan, a Youngstown Democrat, cited what he called "an attack on working people, an attack on organized labor, an attack on the ability to collectively bargain" as reasons he's co-sponsoring the measure. He said it also had to a lot to do with Gov. John Kasich.

"He's dividing the state," Hagan said. "He's hurting the people in this state and we think that this legislation that will be offered will go to the heart of those constituents and voters who have grown disenchanted with this governor."

Mike Dittoe, a spokesman for the House Republicans, said: "The reality is that this is nothing more than politics as usual from the minority caucus. We have a process in place in Ohio and the entire United States for keeping or replacing their elected officials. They're called elections."

Contentious debates over restricting collective bargaining have popped up in statehouses across the country. In Wisconsin, the governor signed into law last month a bill eliminating most of state workers' collective bargaining rights.

Kasich, a first-term Republican, has said his $55.5 billion, two-year state budget counts on unspecified savings from lifting union protections to fill an $8 billion hole. GOP leaders argue that Ohio's new law, which Kasich signed last week, will help city officials and superintendents better control their costs at a time when they, too, are feeling budget woes.

The Ohio law affects more than 350,000 public workers, including police officers, teachers and state employees. It allows unions to negotiate wages but not health care, sick time or pension benefits. It bans strikes and gets rid of automatic pay increases, replacing them with merit raises or performance pay.

"We're not going to dance around this," Hagan told reporters at a news conference. "This is in fact about what the governor has done, what the Republicans are doing with one-party rule."

 The recall legislation has zero chance, of course.  Kasich's not going to sign a bill that can be used against him even if it could pass the Republican dominated Statehouse.  But a petition to put the bill on a state referendum is a distinct possibility if it can collect the 440,000 or so signatures needed, and given Kasich's dismal approval ratings, I don't think that's going to be much of a problem.


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