Monday, January 30, 2012

Last Call

Having taken over Washington Monthly's Political Animal blog for Steve Benen (now part of the Maddow team at MSNBC, and more power to him there, he's badly needed), Ed Kilgore is doing a pretty solid job so far.  He flags this article from The Hill written by FOX News punching bag Juan Williams and immediately asks the correct question: How long will Juan Williams now last at FOX after stating the obvious about the network's racial dog-whistle language?  Williams states:

The language of GOP racial politics is heavy on euphemisms that allow the speaker to deny any responsibility for the racial content of his message. The code words in this game are “entitlement society” — as used by Mitt Romney — and “poor work ethic” and “food stamp president” — as used by Newt Gingrich. References to a lack of respect for the “Founding Fathers” and the “Constitution” also make certain ears perk up by demonizing anyone supposedly threatening core “old-fashioned American values.”

One has to wonder then why Williams is hanging out at FOX News, arguably the number one source for disseminating these code words.  I have zero sympathy for the guy, he made his choices and he has to live with them.  But Kilgore immediately grasps the issue:

When Newt Gingrich turned Juan Williams into the perfect foil during the January 19 Republican candidate debate in Myrtle Beach, SC, ironic symbolism certainly abounded. Aside from the fact that Newt vaulted himself into the lead by beating up on an African-American journalist on MLK Day in the Cradle of the Confederacy, there was the additional fact that Williams is a Fox News panelist who briefly became a conservative celebrity after NPR fired him for on-air remarks deemed insensitive to Muslims. The debate audience didn’t know or care, presumably viewing Williams as just another “race-card” player who needed to be slapped down for suggesting anyone railing against the work ethic of food stamp recipients might be appealing to atavistic motives. 

Now, I think Kilgore is on the right track, but my cynical side wants to move the grubby, Cheeto crud-covered GOP chess pieces forward a few moves and says Williams lobbed such a fat, tasty curveball over the plate of Gingrich in South Carolina for a reason, and that is to make a horse race out of the coronation of Marquis du Mittens as long as possible to keep the faithful glued to the primary noise machine.  With Newt down in Florida and big by most accounts, he's pitched another juicy one right into Gingrich's ego wheelhouse with the primary just hours away.

Just the kind of scrum FOX excels at creating and running with.  Williams knows damn well what he's doing now, just like he damn well knew what he was doing in South Carolina, people.

Like I said, zero sympathy for this phony simp's symphony.

Turn On The Lights, Watch The Roaches Scatter Part 85

Foreclosuregate is the hell that remains fresh each new day, it seems.  ProPublica's Jesse Eisinger and NPR's Chris Arnold drop this bunker buster on Freddie Mac, and there are some ugly, ugly questions that need to be answered as a result.

Freddie Mac, the taxpayer-owned mortgage giant, has placed multibillion-dollar bets that pay off if homeowners stay trapped in expensive mortgages with interest rates well above current rates.

Freddie began increasing these bets dramatically in late 2010, the same time that the company was making it harder for homeowners to get out of such high-interest mortgages.

No evidence has emerged that these decisions were coordinated. The company is a key gatekeeper for home loans but says its traders are “walled off” from the officials who have restricted homeowners from taking advantage of historically low interest rates by imposing higher fees and new rules.

Freddie’s charter calls for the company to make home loans more accessible. Its chief executive, Charles Haldeman Jr., recently told Congress that his company is “helping financially strapped families reduce their mortgage costs through refinancing their mortgages.”

But the trades, uncovered for the first time in an investigation by ProPublica and NPR, give Freddie a powerful incentive to do the opposite, highlighting a conflict of interest at the heart of the company. In addition to being an instrument of government policy dedicated to making home loans more accessible, Freddie also has giant investment portfolios and could lose substantial amounts of money if too many borrowers refinance.

“We were actually shocked they did this,” says Scott Simon, who as the head of the giant bond fund PIMCO’s mortgage-backed securities team is one of the world’s biggest mortgage bond traders. “It seemed so out of line with their mission.”

The trades “put them squarely against the homeowner,” he says.

Those homeowners have a lot at stake, too. Many of them could cut their interest payments by thousands of dollars a year.

Even if Freddie Mac was following its charter, the optics on this are pretty much "salted and scorched earth after getting blasted into glass craters" where the American housing market used to be.  If the entire reason the housing depression has continued is because Freddie Mac is making it so homeowners can't refinance, then it's not that somebody's head will roll, it's a question of whose cranium goes for a spin 'round the block.

HousingWire's Jacob Gaffney is already calling the piece a "witch hunt", saying that there's "no new evidence" that Freddie is doing anything bad, and that the entire point of Fannie and Freddie existing is to make money in order to stay in business, they're just hedging their bets that the credit markets will remain tight for the foreseeable future.

So far, that's been a very profitable bet.  But that still brings us back to the optics question and in an election year to boot, and the reason why the optics are bad is that Freddie is big enough to influence the entire mortgage market into something of a self-fulfilling prophecy, especially given the rule changes Freddie has made to issuing mortgages, making them tougher to refinance.

The much larger issue is that in order to fix the housing depression (now in year number five) we need something outside the current Fannie/Freddie/Ginnie Mae system, and that's for Congress and the President to step in with principal reductions and cramdowns.  There's still millions of foreclosed homes on the market, with another 1.9 million new foreclosures in 2011.  While that's down from earlier highs, 2012 is expected to be over 2 million more easily.

It's going to take decades at this rate to work through the foreclosures.  And Freddie Mac isn't helping in the least.  But the bigger problem is until something massive is done about the equally massive bloc of foreclosures on the market, the economy will continue to do the dead, smelly fish thing all over the country.

Getting Serious On Syria, Part 4

The UN is apparently looking to play the power sharing card in Syria, with a draft resolution that would reportedly ask President Bashar al-Assad to step down peacefully.  As fighting intensifies on the streets of Damascus, the push to get Assad to exit is gaining steam.

The U.N. Security Council will take up a draft resolution this week that calls on Syrian President Bashar al-Assad to step down and transfer power.

The move follows news that the Arab League suspended a mission to monitor whether al-Assad was abiding by an agreement to end a brutal crackdown against anti-government protesters.

Arab League Secretary General Nabil el-Araby arrived Monday in New York where he was scheduled to deliver the monitoring mission's findings to the Security Council the following day.

The news came amid opposition reports of renewed fighting Monday between Syrian forces and the rebel Free Syria Army in suburbs of the capital city of Damascus, where Syria forces have been battling to take back neighborhoods in Saqba and Maleiha.

The question then becomes "what's the motivational mechanism to enforce this", but given the Arab Spring so far, things may get far bloodier before they get better.

Honor: I Do Not Think It Means What You Think It Means

Mohammed Shafia, 58; his wife, Tooba Mohammad Yahya, 42; and their son, Hamed, 21, were found guilty of first-degree murder in the deaths of Shafia's three teenage daughters and his first wife in his polygamous marriage. Sunday's verdicts followed a three-month trial, in which jurors heard wiretaps of Shafia referring to his daughters as "whores" and ranting about their behavior.

All three were sentenced to life in prison immediately after their convictions, with no chance of parole for 25 years.

"This is a good day for Canadian justice. Our democratic society protects the rights of all," Gerard Laarhuis, the chief prosecutor in the case, told reporters outside the courthouse in Kingston. "It's a very bad day, because this jury found that four strong, vivacious and freedom-loving women were murdered by their own family."

Shafia and Yahya admitted on the stand that they were upset with Zainab for running off to marry a Pakistani man they hated, that Sahar wore revealing clothes and had secret boyfriends, and Geeti was failing in school and calling social workers to get her out of a home in turmoil.

In the three-month-long trial, Shafia testified, "My children did a lot of cruelty toward me," as he wept openly on the stand. He went on to say he believed his children "betrayed" him by dating and he did not hide his anger, saying a father would never expect that kind of behavior from this daughters.

In taking the stand, Shafia swore to tell the truth on the Quran and he again invoked the holy book to say Islam does not condone killing people to preserve a family's honor.

In a direct response to a question from prosecutor Laurie Lacelle, Shafia said, "To kill someone, you can't regain your respect and honor. Respected lady, you should know that. In our religion, a person who kills his wife or daughter, there is nothing more dishonorable. How is it possible that someone would do that to their children, respected lady?"

"You might do it," Lacelle calmly replied, "if you thought they were whores."

I'm not even going to write too much about this. As intelligent folks, you can see the obvious. I do want to say that as much as I complain about gender equality, I am again reminded how lucky I am to be from the United States, where I can control my own destiny. These people's last thoughts revolved around knowing their own husband / father was killing them. Death is awful, death at the hands of someone that is supposed to love you is as bad as it gets.

Though, they surely knew he was a bastard, I doubt they knew just what kind of a bastard until it was too late.

Science Awesomeness

One of our readers linked to this, and it was too good not to share.

A ten-year-old girl randomly arranged some oxygen, carbon and nitrogen atoms.  In the process, she discovered a new molecule, one that has the ability to store and release energy in ways they haven't fully explored.  The girl, Clara Lazen, has been credited in the paper on the discovery.  The school is in Kansas City, Missouri.

This is what makes science so exciting.  Anyone who works hard can wow the entire world.  Some of our most amazing discoveries have come from the well studied, polished minds of disciplined science.  Others come from accidents or random observations that reveal something new.  Clara has accomplished the latter, let us hope she pursues science so she can continue to surprise us.

Home, Home I'm Deranged, Part 28

President Obama is finally relaxing requirements for federal aid to underwater mortgage holders, and it couldn't come any sooner.

The Obama administration, seeking to help more homeowners lower their interest rates and shed mortgage debt, will relax the rules on a federal loan- modification program and triple its incentives to banks.

The revised Home Affordable Modification Program, or HAMP, also would pay Fannie Mae and Freddie Mac (FMCC) to forgive debt on homes that have lost value. The government-owned companies, citing cost, don’t reduce principal, a policy that has limited HAMP’s reach because they own or guarantee nearly half of U.S. home loans.

Housing and Urban Development Secretary Shaun Donovan, Assistant Treasury Secretary Tim Massad, and White House National Economic Council Director Gene Sperling announced the program changes yesterday in a phone call with reporters.

“This will expand the reach of HAMP,” Massad said.

The HAMP program changes are separate from a new refinancing plan that President Barack Obama promised to deliver in his State of the Union speech on Jan. 24, Sperling said. That effort will be detailed in coming weeks. 

It took an election year to do it (not to mention several false starts) but it looks like the President is pushing ahead with refinancing aid to those who need it, and many more homeowners will qualify than the pitiful percentage when HAMP was first announced.  The problem remains however that any meaningful amount of homeowner mortgage relief will be completely blocked by the GOP.

One has to wonder if that's the point.  If anything is to improve, you'd better make your voice known in November for a Congress not controlled by the Republicans.

Greek Fire, Part 49

After months of meetings, it appears European leaders finally have an agreement on bailouts and a permanent EU facility fund, Reuters reports...and it will include a balanced budget for all Eurozone countries.  But the question of Greece is still very much up in the air.

Negotiations between the Greek government and private bondholders over the restructuring of 200 billion euros of Greek debt made progress over the weekend, but are not expected to conclude before the summit begins at 9:00 a.m. EST.

Until there is a deal between Greece and its private bondholders, EU leaders cannot move forward with a second, 130 billion euro rescue program for Athens, which they originally agreed to at a summit last October.

Instead, they will sign a treaty creating the European Stability Mechanism (ESM), a 500-billion-euro permanent bailout fund that is due to become operational in July, a year earlier than first planned. And they are likely to agree the terms of a 'fiscal treaty' tightening budget rules for those that sign up.

The larger issue of course is the balanced budget requirement.  This means that the individual Eurozone countries would have to give up individual sovereign budget control to the EU in order to meet the new rules.  And of course the first country that everyone wants to cede budgetary control to the EU is Greece.

Greece must surrender control of its budget policy to outside institutions if it cannot implement reforms attached to euro zone rescue measures, the German economy minister was quoted as saying on Sunday.

Philipp Roesler became the first German cabinet member to openly endorse a proposal for Greece to surrender budget control after Reuters quoted a European source on Friday as saying Berlin wants Athens to give up budget control.

"We need more leadership and monitoring when it comes to implementing the reform course," Roesler, also vice chancellor, told Bild newspaper, according to an advance of an interview to be published on Monday.

And if you think Greece is the only country that will have to give up control of their budget to the EU, you haven't been paying attention.  The Greek Fire is unquenchable, and it may burn through the fiscal sovereignty of the entire eurozone before it's done.


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