Monday, July 4, 2011

Last Call

Frank Rich is pretty merciless in laying the failure to prosecute the Wall Street tycoons who cost America trillions at the feet of one President Barack Obama.

The fallout has left Obama in the worst imaginable political bind. No good deed he’s done for Wall Street has gone unpunished. He is vilified as an anti-capitalist zealot not just by Republican foes but even by some former backers. What has he done to deserve it? All anyone can point to is his December 2009 60 Minutes swipe at “fat-cat bankers on Wall Street”—an inept and anomalous Ed Schultz seizure that he retracted just weeks later by praising Dimon and Lloyd Blankfein as “very savvy businessmen.”

Obama can win reelection without carrying 10021 or Greenwich in any case. The bigger political problem is that a far larger share of the American electorate views him as a tool of the very fat-cat elite that despises him. Given Obama’s humble background, his history as a mostly liberal Democrat, and his famous résumé as a community organizer, this would also seem a reach. But the president has no one to blame but himself for the caricature. While he has never lusted after money—he’d rather get his hands on the latest novel by Morrison or Franzen—he is an elitist of a certain sort. For all the lurid fantasies of the birthers, the dirty secret of Obama’s background is that the values of Harvard, not of Kenya or Indonesia or Bill Ayers, have most colored his governing style. He falls hard for the best and the brightest white guys.

He stocked his administration with brilliant personnel linked to the bubble: liberals, and especially Ivy League liberals. Nearly three years on, they have taken a toll both on the White House’s image and its policies. Obama arrives at his reelection campaign not merely with a weak performance on Wall Street crime enforcement and reform but also with a scattershot record (at best) of focusing on the main concern of Main Street: joblessness. One is a consequence of the other. His failure to push back against the financial sector, sparing it any responsibility for the economy it tanked, empowered it to roll over his agenda with its own. He has come across as favoring the financial elite over the stranded middle class even if, in his heart of hearts, he does not.  

And the evidence is that the policies he bought into, namely the notion that the fraud that Wall Street perpetrated was so complex and so byzantine that only Wall Street could begin to understand it, let alone fix it, turned into Wall Street "fixing i"t to the tune of record corporate profits and massive productivity increases and a stock market that has rebounded solidly.  And it has come at the expense of 90% of the American public.

I like the President and I support him.  I will continue to do so because he has accomplished a lot of good this term.  But he has three major policy problems that he has so far yet to address:  prosecuting the Wall Street crooks, adopting Bush-era interrogation and civil liberties policies, and expanding the wars in the Middle East and north Africa.  These are things he has control over as head of the executive branch.

I'm hoping Obama will get a second term where he can fix those.  But Frank Rich is correct to question if voters will bother to give Obama a chance to do so.  The alternative is that a Republican president will absolutely make all three of those issues worse, plus countless others.  However, one has to admit that Obama has blown it so far on those key issues.

Although I'm still behind him, not everybody on the left is willing to forgive the President.

Home, Home I'm Deranged, Part 24

We're starting to see more calls that the bottom is in on the housing depression.  They were wrong then, and they are wrong now.  Worst part?  It's Obama's HUD Secretary making this idiotic call.

Prices for U.S. homes may climb as soon as the third quarter, ending declines as foreclosures decline make more home available for sale, Housing and Urban Development Secretary Shaun Donovan said.
“It’s very unlikely that we will see a significant further decline,” Donovan said yesterday on CNN.

“The real question is when will we start to see sustainable increases. Some think it will be as early as the end of this summer or this fall.”

Home sales have increased in six out of the past nine months and the number of property owners in default is declining, Donovan said on CNN’s “State of the Union” program. Housing prices will begin rising as the number of foreclosures declines, he said.

“In the long run, it’s a good time to buy,” Donovan said. “It’s so affordable today compared to where it’s been for generations.” 

Ahh, but there's  no reason to believe that's true.  The May housing numbers out from a couple weeks ago proves that.

Sales of previously owned U.S. homes hit a six-month low in May and supply rose, pointing to a housing market still struggling to regain its footing.

The National Association of Realtors said on Tuesday that sales slipped 3.8 percent month over month to an annual rate of 4.81 million units, the lowest since November.

It was the second straight month of declines. The drop was smaller than economists had expected, but the April sales figure was revised lower, leaving a report that was largely in line with expectations in financial markets.

Supply of housing is still 9.3 months and rising.  Housing prices continue to fall as foreclosures are still swamping the market.  There's no reason to believe housing prices will hit bottom anytime soon, especially as soon as this summer.  That's just wishful thinking.

Unfortunately, it's the Obama administration making this stupid claim, and it's going to be used by the GOP against the President when it doesn't pan out.

Greek Fire, Part 38

As I mentioned this morning, Standard & Poor's sees either of the two bailout options open to Greece right now as default scenarios by their criteria.  That's bad news for European banks.

Standard & Poor’s said today a rollover plan serving as the basis for talks between investors and governments would qualify as a distressed exchange and prompt a “selective default” grade. That may leave the bondholders unwilling to complete the exchange and the European Central Bank unable to accept Greek government debt as collateral, impairing the lifeline it has provided the country’s banks.

“It sends all the officials and banks back to the drawing board to think of something new,” said Christoph Rieger, head of fixed-income strategy at Commerzbank AG in Frankfurt. “The ECB is saying it won’t accept debt in a default. Someone needs to give in -- either Germany or the ratings agencies or the ECB. One of three will have to compromise.” 

Ahh, but who will it be?  Germany's government is already on the brink with a majority of German voters against the Greek bailout efforts, so they can't pay any more.  The ECB has an awful lot of clout behind it as well but it's loaded up on bad PIIGS debts as it is, so they can't pay anymore.  And the ratings agencies aren't going to sign off on this deal and risk what little credibility they have left in saying Greek debt is AAA.

But somebody has to give.  The ratings agencies have called the ECB and Germany's bluff.  Somebody now has to eat this huge scheisseburger or the game's over and all three will lose.  Who will it be?  Not sure, but this means all that work and pressure the EU put on the Greek government to approve the next set of austerity/bailout measures is now moot.

Well, unless you're a Greek citizen...

Turn On The Lights, Watch The Roaches Scatter Part 73

In the wake of BofA's multi-billion dollar settlement, the rest of the banks want out of Foreclosuregate, and they're buying their way out.

As millions of Americans struggle in foreclosure with little hope of relief, big banks are going to borrowers who are not even in default and cutting their debt or easing the mortgage terms, sometimes with no questions asked.

Two of the nation’s biggest lenders, JPMorgan Chase and Bank of America, are quietly modifying loans for tens of thousands of borrowers who have not asked for help but whom the banks deem to be at special risk.

Rula Giosmas is one of the beneficiaries. Last year she received a letter from Chase saying it was cutting in half the amount she owed on her condominium.

Ms. Giosmas, who lives in Miami, was not in default on her $300,000 loan. She did not understand why she would receive this gift — although she wasted no time in taking it. 

So what's the deal here?  Why are banks doing this?  Simple.  You see, A) they've already written off loans like this, so if they recover them by reducing debt, their books look better, B) it costs them nothing to do this because of A and they gain a lot of good press, C) if people can't pay, the banks just have more lousy loans on the books they lose money on and D) the banks have too many damn foreclosed homes to deal with right now.

The banks say cutting mortgage balances would be unfair to borrowers who remain current as well as impractical because so many loans are securitized into pools owned by investors. Bank of America’s chief executive, Brian T. Moynihan, told the attorneys general in April that cutting principal for current borrowers would send the wrong message to all those who have struggled to pay their bills. His counterpart at Chase, Jamie Dimon, bluntly said it was “off the table.” 

But the banks are doing it anyway.  That's how bad the foreclosuregate log jam has backfired on the banks.  They want out of ARM loans and they want out now.  Of course, everyone else is going to want debt relief on their mortgage too.  Things could get very interesting.

Breaking News: Now That's A Hack, My Friend

NEW YORK (AP) — Hackers broke into Fox's political Twitter account early Monday, posting updates saying President Barack Obama had been assassinated.
A series of six tweets coming from the FoxNewsPolitics account reported that Obama had been shot to death in Iowa and the shooter was unknown.
Obama's fine and getting ready for a barbecue.  Still, I'm impressed that whoever it was got through and away with it.  Of course, one thing about computer crime is that the tracks that are recorded can be traced, so it's too soon to say they really got away with it. 

This is another reminder that no matter how trustworthy the source, editors make mistakes and random weird lightning strikes can happen to anyone.  As a culture we are still migrating from a time when printed word was correct or held to a certain standard to our current melting pot of information.  A grain of salt for everyone, on the house.

[UPDATE] Zandar here.  The Secret Service would indeed like to have a little chat with the folks behind this.

No Dealing On The Debt Ceiling, Part 26

Just in case you still thought there was going to be some sort of last-minute deal that prevents the US from defaulting, my senator, Rand Paul, just decided he's now President and is dictating the terms of America's surrender to the Tea Party.  Chuck Johnson spots him on C-Span:

On Newsmakers, Senator Rand Paul (R-KY) said he will hold up the Senate’s business next week to force a debate on the debt limit. The Senate canceled its Fourth of July break to ensure discussions on raising the debt ceiling continues, but most of the discussions are happening behind the scenes.
Senator Paul said on Newsmakers that he “will filibuster until we talk about the debt ceiling.” He said the full Senate, instead of a small group of Senators, needs to engage in debate. He also said he and a group of conservative members would support raising the debt ceiling on one condition: “We will vote in favor of raising the debt ceiling if we can, but it will be contingent on passing a balanced budget amendment to the Constitution. “

So Rand Paul will block any other Senate action other than the debt ceiling, and he's making it clear that only a balance budget amendment to the Constitution is his price.  Johnson argues that the balance budget amendment is a smokescreen for forcing Obama to sign into effect the end of Planned Parenthood and other culture war stupidity, but I think Rand Paul actually wants that amendment.  He's that nuts, trust me.

And yes, Rand Paul is more than willing to destroy America's credit rating and economy otherwise.  He is a fanatic.

Only The Tea Party Game Matters

That's the distinct impression I'm getting from the collection of NY Times articles on GOP governors that Steve M. flagged down yesterday, that the better your Republican governor is at playing the political game, the better they are.

This weekend, The New York Times has run three stories about Republican governors -- John Kasich of Ohio, Rick Perry of Texas, and Nikki Haley of South Carolina -- and they all seem to be written according to a formula. The formula says that it doesn't matter very much what the public thinks of a governor, or at least it doesn't matter what non-right-wing members of the public think; it also doesn't matter much what the likely consequences of the governor's actions are. All that matters is how well the governor did in dealings with the rest of the political class. Just win, baby! Then you're a great governor!

So yes, no mention of Kasich's lousy numbers (or the fact his one-party rule is about to outlaw all abortions), no mention of Perry's problems with the budget (but Nikki Haley sure takes a couple shots in her article for not being conservative enough.)  And you only have to go back to last Tuesday for the Rick Scott article that says despite his 29% approval rating, he doesn't really give a damn about what the people think, nor should he.

Steve's right however that Kasich and Perry are portrayed as good ol' boys who know how to play their state's respective political games, while Haley is seen as an uptight "schoolmarm" (and Scott is "tone-deaf".)  All that matters to the Times apparently is how you handle schmoozing the political elite.  Kasich, former Senator and Wall Street lobbyist, gets excellent marks.  Perry, working on his third-term, certainly knows how to do it.  But neophytes Haley and Scott are portrayed as ham-fisted, ignorant, and difficult.  They are...but so are Kasich and Perry.

Kasich and Perry are given glowing reviews.  Haley and Scott are not...and all of it seems to be written from a Tea Party perspective.  Haley raises "questions about transparency" while Scott "failed to get an Arizona-style immigration bill passed."  Perry on the other hand completed "a fairly long conservative wish-list" and Kasich is "a get-things-done governor".

So apparently the key to getting good press in the Times?  Being a Tea Party governor who sucks up to the political elite.  You do that, you're golden.

Thanks For Helping

Big Dog:

President Bill Clinton says the nation’s corporate tax rate is “uncompetitive,” and called for a lower rate as part of a “mega-deal” to raise the debt ceiling.

Yeah, because less than a week after President Obama made a big deal of how the GOP is defending more corporate tax cuts while refusing to make any sort of deal, and after Clinton himself told Obama not to blink, the Big Dog comes stomping in and says the key to a deal is more corporate tax cuts.

And people wonder why Dems have a messaging problem.

StupidiNews, Fourth Of July Edition!

Hope everyone has a safe and happy 4th.

Art Project Captures Population And Imagination

So, I'm an art snob.  It isn't intentional, and I come by it honestly (thanks, Ma!).  It isn't that I don't get abstract ideas, I'm just a traditionalist and I prefer that my art challenge the eye but in the end make sense to most folks.  The examples I've seen of interactive art has failed to impress.

Until today.

With help from old and new friends, Candy Chang turned the side of an abandoned house in her New Orleans neighborhood into a giant chalkboard where residents can write on the wall and share what is important to them. Before I Die is an interactive public art project that transforms neglected spaces into constructive places where we can discover the hopes and aspirations of the people around us.

You can follow the link to read them all, they range from expected (see the world) to the juvenile (meet Robert Pattinson).  Sprinkled between these are some surprisingly touching and enlightening declarations.

Before I die, I want to:

Be the difference.
Be heard.
Get clean.
Get my house back.
Find my purpose, so I know for sure I've fulfilled it.

Those are the ones that jumped out at me.  They capture us as individuals and people, and show what is really on our minds.  We're not all shallow or simple.  Money isn't an issue for most, in fact I only recall one reference to it on the walls that I read.  But it also shows me that we are longing because we are lost, and one of our deepest fears is that we will fade away before we have a chance to leave a mark that really speaks for us.  The artist saw that need and gave people a chance to think, participate and share. I love that, and I hope it makes others happy as well.

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