Last Call

Republicans looks like they will buy three more weeks of government operation at the price of $6 billion in cuts, and the Dems are all but thrilled to take it.

As the standoff continues over funding the government for the rest of the fiscal year, both parties agreed on Friday to move ahead with a three-week stopgap bill that would cut an additional six billion dollars and avoid a potential federal shutdown.

The measure, introduced by House Republicans, eliminates or reduces money for 25 government programs, saving $3.5 billion. Republicans chose from a list of programs President Obama wants cut or eliminated his 2012 budget and from items Senate Democrats proposed in a bill that failed earlier this week.

The bill also rescinds funding that U.S. Department of Commerce never spent on the 2010 U.S. Census and eliminates $2.6 billion in earmarks that were extended in last year's spending bill.

The House is expected to vote on the bill early next week and send it to the Senate for a vote.

So what's getting cut now?

* Climate Effects Network – Science Application (U.S. Geological Survey) = -$10.5 million. This program to “provide data for forecasting the effects of climate change” was not funded in the President’s budget request.

* Greenhouse Gas Cap and Trade Funding (EPA) = -$5 million. This funding was provided by the last Congress for the EPA to assist Congress in enacting the Cap and Trade legislation. This program was not funded in the President’s budget request.

* Local Government Climate Change Grants (EPA) = -$10 million. This program was not funded in the President’s budget request. In addition, the Administration has indicated that this program lacks focus and effectiveness, and is too broad to allow fair competition for grants.

* Targeted Airshed Grants (EPA) = -$10 million. The program funds diesel retrofits and replacements for pollution reduction. Funding for similar programs is already available, and the program was not funded in the President’s budget request.

Surprise, a bunch of environmental programs.  Oh, and this:

* Corporation for Public Broadcasting = -$50 million. The bill terminates the “Fiscal Stabilization Fund” which provides funding increases to public broadcasting stations to offset reduced public donations. The bill also terminates the “Radio Interconnection” project that was completed in 2010. These programs were also terminated in the President’s budget request as well as the Senate Democrats’ most recent CR proposal.

Both the White House and Congressional Dems were curiously more than happy to put this on the block.

But hey, this way Democrats get...hey, what ARE Democrats getting out of this, anyway?

Does anyone in the Donks know?

Our Real Domestic Terrorist Problem, Part 2

One day after GOP Rep. Peter King created a circus by asking if American Muslims were a menace or a domestic terror threat, good old-fashioned police work turned up a real conspiracy bust in Alaska involving an actual threat, not just the condemnation of an entire religion.

Militia activist Schaeffer Cox and four associates who reportedly stockpiled weapons were arrested on Thursday for allegedly conspiring to kill multiple Alaska State Troopers and a federal judge.

The Fairbanks Daily News-Miner reports that the group -- Cox, Lonnie. G. Vernon and his wife Karen Vernon, as well as Coleman Barney of North Pole and Michael Anderson -- were taken into custody by state police. All five face several state charges, including "conspiracy to commit murder, conspiracy to commit kidnapping, conspiracy to commit arson, misconduct involving weapons in the third degree, hindering prosecution in the first degree and tampering with evidence," according to a press release by the Alaska State Troopers.

Only one of the individuals, Lonnie G. Vernon, has been charged on the federal level so far. He's alleged to have threatened to murder U.S. District Court Judge Ralph R. Beistline from on or about Feb. 4, continuing through Feb. 16.

U.S. Attorney Karen L. Loeffler, the top federal prosecutor in Alaska, confirmed to TPM on Thursday that Vernon was the only individual facing federal charges. "I can't really comment beyond anything else of what is publicly charged -- Mr. Vernon is charged with threatening to kill the judge and his family, and he was arrested on that. Everything else, all the other arrests, are state."

A calculated conspiracy to commit murder of a federal judge and Alaska State Troopers, possible kidnapping and arson and the weapons to get it done.  These guys?  An actual domestic terror threat.  Also, strangely not one of them is a Muslim.  What they are is a bunch of people who say that Obama isn't the President, and that the federal government is too big and too powerful, and that the rules don't apply to them because they are the true patriots.

Where have we heard that before?

Meanwhile, Republicans want you to be afraid of Muslims, because if people take too close of a look at the actual domestic terror problem in this country, they might see something the Republicans don't want you to see, and make connections they certainly don't want you to make.

Michael Moore Presents "400"

One-third better than "300" and yes, it features a handful of people standing at the gates against a horde or millions, only the horde are the good guys.

Documentary filmmaker Michael Moore so admired the daily demonstrations against Wisconsin Gov. Scott Walker that he traveled from New York to Madison for one on March 5, 2011.

The liberal firebrand opened his speech by heaping praise on those fighting the Republican governor’s efforts to take collective bargaining powers from state and local government employees.

But he put more firepower into bashing the nation’s rich.

"Right now, this afternoon, just 400 Americans -- 400 -- have more wealth than half of all Americans combined," Moore avowed to tens of thousands of protesters.

"Let me say that again. And please, someone in the mainstream media, just repeat this fact once; we’re not greedy, we’ll be happy to hear it just once.

"Four hundred obscenely wealthy individuals, 400 little Mubaraks -- most of whom benefited in some way from the multi-trillion-dollar taxpayer bailout of 2008 -- now have more cash, stock and property than the assets of 155 million Americans combined."

PolitiFact then checks Moore's numbers, which he made available on his website to back his claim:

Since Moore’s statistics were for 2009, we sought figures for 2010.

The 2010 net worth of the Forbes 400 was $1.37 trillion, Forbes reported in September 2010. That same month, the total U.S. net worth was $54.9 trillion, according to the Federal Reserve Board report cited by Moore.

Wolff hasn’t updated his 2009 figures. So we used his 2.3 percent figure again, multiplied by the 2010 total net worth of $54.9 trillion, and found that the net worth of the poorest 60 percent of U.S. households was $1.26 trillion in 2010.

That’s less than the 2010 net worth for the Forbes 400.

How could it be that 400 people have more wealth than half of the more than 100 million U.S. households?

Think of it this way. Many Americans make a good income, have some savings and investments, and own a nice home; they also have debt, for a mortgage, credit cards and other bills. Some people would still have a pretty healthy bottom line. But many -- including those who lost a job and their home in the recession -- have a negative net worth. So that drags down the total net worth for the poorer half of U.S. households that Moore cited.

We also want to add one cautionary note, from Mitchell of the Cato Institute, about Moore’s methodology: The Federal Reserve uses hard numbers to calculate the net worth of all households, but Forbes uses assumptions and interviews along with hard numbers in estimating the net worth of the Forbes 400.

There’s no way to know how the differences between the two affect the net worth numbers, but Moore used the data that are available and there’s no indication he "cherry-picked" figures for a desired result, Mitchell said.

With that caveat, our assessment indicates that as of 2009, the net worth of the nation’s 400 wealthiest individuals exceeds the net worth of half of all American households.

We rate Moore’s statement True.

Astonishing.  And it's not even close:  the wealthiest 400 Americans have a higher combined net worth than some 155,000,000 Americans combined, and the super-rich win this battle by some $90 billion.  The combined net worth of the super-rich has actually increased since "Socialist, redistributionist" Obama took office.

Let me put it to you another way.  From 2009 to 2010, the country's total net worth went from $53.1 billion to $54.9 trillion.  The entire United States added $1.8 trillion in net worth gains.  $100 billion of that $1.8 trillion growth went just to the richest 400 people in the country. 400 out of 308,000,000 got an extra $100 billion last year.  $250,000,000 a piece, on average.

What was your share of the remaining $1.7 trillion?

Let me put in another way.  The country's net worth grew by $1.8 trillion from 2009 to 2010.  That $1.8 trillion growth is more than the entire combined net worth of 50% of the country, and by some $600 billion.  If a rising tide lifts all boats, and the country's net worth grew by nearly $2 trillion, why aren't the least of us prospering?  That's enough to double the net worth of half the country.  America is doing great!

Until you realize that an overwhelming majority of that net worth growth went only to the richest Americans.  Meanwhile, the rest of us are told we have to tighten our belts because America is insolvent.  Where are these jobs that the rich are supposed to create with their investments?  Where's the shared sacrifice?  Where's the rising tide that lifts all boats?

Seems to me the "class war" the Village keeps talking about has been won a long time ago, and we lost so badly we don't even know that it's hopelessly over.  If .00013% of the country is getting 5.5% of the entire net worth growth of the country and the vast majority of us are losing money, exactly how is this a good thing?

Zombie Ants Are Real... And Icky

I had to share this, because I find it both disturbing and interesting.  What's amazing is that a special fungus can actually take over an ant's brain and they will go to a place that is idea for the fungus to flourish and then die, essentially feeding a new colony.

Check it out.  The article isn't kidding when it says it is not for the squeamish.  They're only ants but I feel bad for the little guys.

It's A Gas Gas Gas, Part 2

The AAA Fuel Price Report shows the national average is $3.54 a gallon today, it's $3.59 in the NKY.  Keep in mind three weeks ago, gas was $3.09 here.  Diesel is pushing $4 a gallon already.  We were facing a national trucker's strike in the summer of 2008 over $4-$5 diesel before the bottom fell out of the oil market as part of the crash.

Three years later we're right back over that barrel.  Oil barrel, that is.  And we don't even get oil from Libya.  Funny how that works.

Epic Fail: Worst Robbery Ever

It's every shop owner's worst nightmare.  A customer comes in and approaches the counter.  He is dressed a little strange, but that is normal for the regular crowd around this place.  Then he hands you a list of items and tells you he has a bomb strapped to him.  If he doesn't leave the store right now with the items, he'll explode.

Only thing is, this was a comic book store.  The list was valued at between $500 and $1,000 dollars and consisted primarily of Yu-Gi-Oh! cards.  The bomb was an obviously fake getup.  The store owner had an understandable concern about a young fellow who was nuts enough to walk in, shoot their attempt in the foot by saying upfront they were being forced to steal for fear of being blown up by their uncle, reveal a "bomb" while dressed in a strange wig and acting jittery as hell.  Common sense and this 17-year-old have failed to meet in his short and interesting life.

The next time you're telling a story at the water cooler and you say, "surely nobody is that dumb" just think of this story and realize you're wrong. Enjoy!

Financial Tsunami

Although the footage and the numbers continue to come in from Japan on today's massive 8.9 quake and 30-foot tsunami wave, Tyler Durden argues that the real wave felt 'round the world may be the financial devastation, and it could not have come at a worse time.

Two months ago many were scratching their heads when Japan announced it was buying Eurozone bonds.  After all - why would Europe want to have a marginal buyer (or as the case may be seller) of its debt be the country that is known by all to be the most indebted entity in the world? Of course, it became promptly clear that it was not the Japanese government doing the buying, but mostly its financial companies, with an emphasis on its insurance and reinsurance companies.

Fast forward to today when Japanese insurance companies are getting pummeled in local trading on concerns the payoffs to the decimated Japanese infrastructure will be unprecedented. So what will happen? Why a scramble for liquidity of course, just like we saw back in September 2008, when cash stricken companies sold all their liquid assets first, resulting in a toxic loop of self-fulfilling prophecy selling which almost tobbled the $25 trillion shadow banking system.

And what will said Japanese insurance companies sell first? Why the very same Eurozone bonds they acquired with so much pomp and circumstance, by the minions of the insolvent Eurozone, back in January of course. Furthermore, now that Japan will have no choice but to launch a mini round of Quantitative Easing and flood the market with JGBs, there will be a dramatic spike in supply for sovereign paper, which of course means yields across the board will rise. 

Japanese insurance and reinsurance companies will need to raise a lot of cash, quickly.  They're going to sell Eurozone bonds in order to do it, and as Europe faces this one-two punch of a bond market blowout and oil prices through the roof, it may simply be too much for the EU to handle.  Even though Japan takes disaster preparedness seriously and has invested hundreds of millions in quake-proofing the country, this one was so bad that the damage is still going to be in the billions if not tens of billions of dollars, not to mention the major loss of life.

The upshot is Europe just got kicked when it was down and the double barrels of a Japan sell-off and Libyan turmoil may break the system.

Turn On The Lights, Watch The Roaches Scatter Part 65

Foreclosuregate?  What's that?  The Fed's never heard of it.  There's no such thing as an erroneous foreclosure.

A months-long internal investigation into abusive mortgage practices by the Federal Reserve found no wrongful foreclosures, members of the Fed's Consumer Advisory Council said Thursday.


During a public meeting attended by Fed chairman Ben Bernanke, consumer advocates on the panel criticized the central bank's examiners for narrowly defining what constitutes a "wrongful foreclosure." At least one member of the panel, comprised of consumer finance experts not employed by the Fed, voiced concerns that the public would not take the Fed's findings of improper practices seriously, since the wide-ranging review did not find a single homeowner who was wrongfully foreclosed upon.

That's hysterical.  Anyone who's been reading the Roaches series here knows that's demonstrably false, because the MERS system is fundamentally flawed and banks will foreclose on homes without giving people a chance to challenge their bad paperwork.

But there's no problem, MERS is 100% accurate and so are the banks and shut up, that's why.

Kirsten Keefe, a member of the Fed consumer panel and an attorney at the Empire Justice Center in Albany, New York, said the Fed's report defined "wrongful foreclosures" as repossessions of borrowers' homes who were not significantly behind on their payments.

Based on that definition -- the homeowners were already in default -- the Fed found the foreclosures to be justified, members said.

But Keefe, who represents troubled borrowers, argued that the definition should be expanded to include foreclosures in which the wrong party brought the foreclosure action or cases that involve significant errors in foreclosure documents, like an inflated past-due amount, for example. Other consumer advocates at Thursday's public meeting appeared to agree.

"It is so dangerous to make the conclusion that we heard yesterday that there were no wrongful foreclosures," said Mark Wiseman, a former principal assistant attorney general in Ohio who oversaw consumer protection matters.

"That homeowners were not delinquent has never been our contention," said Rashmi Rangan, a member of the panel and the executive director of the Delaware Community Reinvestment Action Council. "Our contention is that many of these foreclosures were avoidable."

Mary Tingerthal, the Fed council's vice chair and the commissioner of the Minnesota Housing Finance Agency, worried that the public would only pay attention to the report's "headline" finding, she said, which is that bank examiners did not find improper foreclosures. The Fed did find significant problems in banks' mortgage operations, she said.

The Fed reviewed just 500 loan files, said Rangan, citing Wednesday's briefing.

500 loans out of what, millions?  Yeah, everything's hunky-dory.  Way to go, guys.  The banks are going to walk away with billions in free houses, folks.  Watch.

Power Tripping 101

When you have a GOP super-majority, you use it to remove as many minority voters from the rolls as possible.  Florida's GOP Gov. Rick Scott knows how to play this game.

In less than an hour yesterday, Florida Governor Rick Scott denied the right to vote to hundreds of thousands, maybe as many as a million, Florida citizens, turning back the clock decades and making Florida the most punitive state in the country when it comes to disenfranchising people with criminal convictions in their past.

The Florida constitution denies the right to vote for life to anyone with a felony conviction, unless he is granted clemency by the governor. Essentially it gives the governor, an elected official, the power to decide who will (or won't) be allowed to vote in the next election. 

The new clemency rules not only roll back reforms passed by former Governor Charlie Crist, they are far more restrictive than those in place under former Governor Jeb Bush. Under the new rules:

• People with even nonviolent convictions must wait five years after they complete all terms of their sentence before even being allowed to apply for restoration of civil rights.
• The clock resets if an individual is arrested for even a misdemeanor during that five-year period, even if no charges are ever filed.
• Some people must wait seven years before being able to apply, and must appear for a hearing before the clemency board.
• A provision allowing people to apply for a waiver of the rules, in place under Bush and Crist, was eliminated.
• Everyone applying for clemency must provide various documents with their application - Bush and Crist had made an exception for those applying for restoration of civil rights.

All of this has to happen just to have the opportunity to ask for one's rights back. Even after the waiting period, the application, and the hearing, anyone could be summarily denied with no reason or explanation. And if that happens, he would have to wait another two years before he can start the process all over again.

And considering African-Americans make up more than half of Florida's prison population as well as more than half of Florida's ex-cons and 16% of Florida's overall population, well you see why southern states have traditionally made it impossible for felons who have served their time to be able to vote, the practice stretches back to Jim Crow days.  Scott's just going back to what works as far as being able to legally disenfranchise the black vote in the state, particularly the black male vote in the state.

Gotta keep that super-majority in any way possible, you know.

Completely Moosed Up This Time

I'm still absolutely convinced Sarah Palin will run for President out of sheer ego, but if she actually does she's going to have a miserable time of it.

Sarah Palin’s unfavorable rating is off the charts.

The former Alaska governor’s numbers are astonishingly upside-down, according to a new Bloomberg poll showing a 32 percentage point spread between those who have an unfavorable rating of Palin and those who view her favorably.

Of the 60 percent in the poll who have an unfavorable opinion of Palin, more than half of them – 38 percent among the whole survey – said they have a “very” unfavorable view of Palin.

Her “very” unfavorable rating is higher than the total favorability ratings of Newt Gingrich, Donald Trump and Chris Christie.

The new poll is a dip from a December Bloomberg poll showing Palin with a net favorable rating of 33 percent and a net unfavorable rating of 57 percent.

Now granted, I think the second she announces her 2012 run her numbers will improve noticeably.  They will not improve to the point where she would actually have a shot of winning, however.  I'm also solidly convinced that her favorable ratings will never go below 27% either, so this is about as bad as it's going to get for her.

Either way, I think America is largely over Sarah Palin at this point.  No doubt she'll find some way to get back to being the center of the universe again quickly.

StupidiNews!

• A massive 8.9 magnitude earthquake has struck off the coast of northeastern Japan, leaving dozens dead and triggering Pacific tsunami warnings for Hawaii and as far west as the California coast.
• France becomes the first country to diplomatically recognize Libya's National Libyan Council opposition as the legitimate government.
• California, looking for revenue to help meet the state's major budget shortfall, wants marijuana dispensaries to pay years of back taxes.
• Saudi Arabia's king has countered Friday prayer protests with billions in cash in handouts to citizens but tensions continue to mount.
• NASA does indeed have a Planetary Protection Officer, the person responsible for making sure space missions don't contaminate the Earth (and Earth life doesn't contaminate other planets.)

Last Call

Republicans show they are very, very bad at finance.

Check out this interview of Rep. Joe Barton (R-TX) -- he of apologizing to BP fame -- by ABC on Wednesday. Pressed repeatedly by Jon Karl to stake out a position on tax credits enjoyed by offshore oil companies, Barton argued that the subsidies represent equal treatment, and are required to keep the companies like Exxon-Mobil from going out of business.

"Over time if you put so many disincentives against any U.S. manufacturing or production company, or oil and gas exploration company, they'll go out of business," Barton said.

Barton, perhaps the oil and gas industry's staunchest support on Capitol Hill, says the subsidies for the industry should remain unchanged "so long as you believe that you believe in the free market capitalist system and they should be headquartered in the United States."

Well let's see, the US government gives away about $4 billion and change per year to the entire oil industry in the form of subsidies.  You figure ExxonMobil's share is maybe, half a billion a year.  Now, to you and me, $500,000,000 is a lot of money.

Here's the "bad at finance" part.

Exxon Mobil Corp. earned $9.25 billion in the last three months of 2010, its most profitable quarter since the record third quarter of 2008.

One oil company cleared over $9 billion in profit in one quarter last year.   Half a billion a year to a company that earns $40 billion a year is kinda, well, chump change. Even if Exxon Mobil got all $4 billion plus in federal subsidies, and it lost them, the company still would have made more than twice that in just the last three months on the year.  And Joe Barton wants you to think that if your taxpayer money doesn't go to Exxon, they will go out of business.

Now, I'm not The Donald or anything, but if we ended oil and gas subsidies tomorrow, I think every oil company in America would be 100% fine.  Joe Barton on the other hand thinks you're too stupid to check his math.  He wants you to feel sorry for Exxon Mobil and its fellow oil giants in an industry that made over $100 billion just in profit last year.  He says if you don't give them $4 billion, they'll go out of business.

Classic.

Joe Barton has gotten nearly $1.5 million in money from Big Oil since 1990.

And now he heads the House Energy Committee.  Quite a multiplier on their investment, is it not?  Meanwhile, because we're giving $4 billion a year in tax dollars to an industry that doesn't need it, we have to cut $75 million from a program to give homeless veterans a place to live because we can't afford it as a country.

Top Senate Democrats raised loud objections Thursday to a plan by Republicans in the House of Representatives that they said would eliminate 10,000 housing vouchers for homeless veterans this year, an effort to save $75 million from the 2011 federal budget.

Yeah, see, Republicans say thousands of housing vouchers go unclaimed, so instead of making the program work and making it easier for our combat veterans from the sandbox to get the help this country promised them when they took up arms to fight for us, Republicans would rather just trim the program because it's "wasteful".

To recap, $4 billion in tax money to energy companies earning tens of billions a year in profit, vital national interest.  Not wasteful at all.  Putting Afghanistan and Iraq veterans out on the street because we can't afford to help them as a result?  We can't afford to help them, sorry.  Got to cut waste.

Republicans are just wonderful human beings.

To The Shores Of Tripoli

The same creeping feeling I was getting in 2003 I'm getting again, looking at the news.  We will be in a shooting war with Libya inside 60 days.  Josh Marshall sees what's coming too.

I sit at my desk every morning listening to the sounds of cable television in the air. Now a lot of it is about Libya. And I'm just blown away by the constant, almost unanimous chorus in favor of some sort of active, military involvement in the country. At this moment, I'm listening to some person say that it just doesn't make sense -- that it's inconsistent -- for the President to announce that it is our national policy that Qaddafi should leave and yet not take military steps to make that happen. I've also heard numerous voices arguing that we 'didn't act' in the Balkans and then didn't act in Rwanda and that we should not make the same mistake today.

This is a wildly different standard for military action than we've ever heard before, even in an era where our interventions have become much more frequent and when they've often been wise and necessary.

 
The Village fix is in, just like Afghanistan, just like Iraq.  Count on it.  Nick Kristof in the NY Times:

"This is a pretty easy problem, for crying out loud.”

For all the hand-wringing in Washington about a no-fly zone over Libya, that’s the verdict of Gen. Merrill McPeak, a former Air Force chief of staff. He flew more than 6,000 hours, half in fighter aircraft, and helped oversee no-fly zones in Iraq and the Adriatic, and he’s currently mystified by what he calls the “wailing and gnashing of teeth” about imposing such a zone on Libya.

I called General McPeak to get his take on a no-fly zone, and he was deliciously blunt:

“I can’t imagine an easier military problem,” he said. “If we can’t impose a no-fly zone over a not even third-rate military power like Libya, then we ought to take a hell of a lot of our military budget and spend it on something usable.”

He continued: “Just flying a few jets across the top of the friendlies would probably be enough to ground the Libyan Air Force, which is the objective.”

General McPeak added that there would be no need to maintain 24/7 coverage over Libya. As long as the Libyan Air Force knew that there was some risk of interception, its pilots would be much less motivated to drop bombs and more inclined to defect.

“If we can’t do this, what can we do?” he asked, adding: “I think it would have a real impact. It might change their calculation of who might come out on top. Just the mere announcement of this might have an impact.”

Along with a no-fly zone, another important step would be to use American military aircraft to jam Libyan state television and radio propaganda and Libyan military communications. General McPeak said such jamming would be “dead easy.” 

We fly a few planes around, we scare a few Libyan pilots into defection, we play "Danger Zone" by Kenny Loggins as loudly as possible while doing it, and then we all have wings and beer on the way home. Duh, winning!  Tiger blood!  Adonis DNA!

What could possibly go wrong with our plan to depose Qaddafi?

Military commanders expect the United States to have a "significant presence" in Afghanistan for another eight to 10 years, according to a member of Congress who just returned from a trip to the region and has introduced legislation calling for a full accounting of the costs of the war.


Rep. Bruce Braley (D-Iowa) spent his congressional four-day weekend on a fact-finding trip to Afghanistan, meeting with Gen. David Petraeus, Amb. Karl Eikenberry and members of the Iowa National Guard. In an interview with The Huffington Post on Wednesday, Braley said that while there has clearly been some significant progress, challenges will remain even after 2014, when combat operations are supposed to end.

"It was very clear that under the best-case scenario, there will be some significant U.S. presence, according to them, for the next eight to 10 years," Braley said, adding that he expected that presence to include both military and civilian personnel. "That includes a very clear commitment that the drawdown will begin on schedule in July, and that the targeted date of being out with most combat forces by 2014 will be met. They continue to maintain that they are on pace to maintain those objectives." 

We'll be greeted as liberators and the oil will pay for the invasion and WARLOCK IS LATIN FOR WINNING PEW PEW PEW!

The lessons of Iraq and Afghanistan are that we have not learned a goddamn thing in the last nine years and we are basically screwed beyond my capacity for rational thought.  Last one out, turn off the lights.

New tag:  Libya Is Latin For WINNING.

A Billion Reasons Not To Believe The Recovery

The Forbes list of world billionaires is larger than ever.

This 25th year of tracking global wealth was one to remember. The 2011 Billionaires List breaks two records: total number of listees (1,210) and combined wealth ($4.5 trillion). This horde surpasses the gross domestic product of Germany, one of only six nations to have fewer billionaires this year. BRICs led the way: Brazil, Russia, India and China produced 108 of the 214 new names. These four nations are home to one in four members, up from one in ten five years ago. Before this year only the U.S. had ever produced more than 100 billionaires. China now has 115 and Russia 101.

Atop the heap is Mexico's Carlos Slim Helu, who added $20.5 billion to his fortune, more than any other billionaire. The telecom mogul, who gets 62% of his fortune from America Movil, is now worth $74 billion and has pulled far ahead of his two closest rivals. Bill Gates, No. 2, and Warren Buffett, No. 3, both added a more modest $3 billion to their piles and are now worth $56 billion and $50 billion, respectively. Gates, who now gets 70% of his fortune from investments outside of Microsoft, has actually been investing in the Mexican stock market and has holdings in Mexican Coke bottler Femsa and Grupo Televisa.

While nearly all emerging markets showed solid gains, wealth creation is moving at an especially breakneck speed in Asia-Pacific. The region now has a record 332 billionaires, up from 234 a year ago and 130 at the depth of the financial crisis in 2009. Sizzling stock markets are behind the surge. Three-fourths of Asia's 105 newcomers get the bulk of their fortunes from stakes in publicly traded companies, 25 of which have been public only since the start of 2010. 

The recovery is awesome if you're rich, and especially in you're one of the 1,210 billionaires out there.  The other 99.9% of us? Not so much.  The world's billionaires have more wealth than the GDP of Germany, the country.  Something's wrong with that.

Turn On The Lights, Watch The Roaches Scatter Part 64

CNBC's Diana Olick puts today's RealtyTrac foreclosure numbers into perspective.  A 27% year over year drop in foreclosures doesn't mean the housing depression is starting to come out of the woods, it's about to fall off the cliff.

To prove the point, in this month's report RealtyTrac broke out the numbers by judicial foreclosure states (where foreclosure documents are filed in court before a judge) and non-judicial foreclosure states; the former are where the banks froze most actions, but they are also slowing the process and going over procedures in non-judicial foreclosure states as well. 

Notices of default, the first step in the foreclosure process were down 19 percent in judicial states in February and up 13 percent in non-judicial states. Bank repossessions, the final stage, were down 24 percent in judicial states and down 14 percent in non-judicial states.

The numbers are even more stark when you look at specific cities. I asked RealtyTrac for some specific data on that and they told me Miami ranked number seven in the top foreclosure rates in Q3 of last year.  In Q1 of this year, it ranks number 41. Florida is a judicial foreclosure state.  On the other hand, Los Angeles ranked 40th in foreclosure rates in Q3 of '10 and now ranks 24th in Q1 of this year. California is a non-judicial foreclosure state.

While an improving job market appears to be helping avert foreclosures, increasing negative equity is doing just the opposite; unfortunately, thanks to paperwork and judicial issues, at this point it is impossible to know which is prevailing.

RealtyTrac experts claim the foreclosure numbers have yet to show the final surge. While new defaults are falling, the pipeline is now so large that the numbers have nowhere to go but up.

Banks are scrambling to bunker up ahead of guaranteed litigation on the subject of MERS.  Millions, possibly tens of millions of mortgages are potentially fraudulent right now.  Banks own quite a bit of those mortgages.  The latest state to take judicial actions against MERS is Oregon.

Since October, federal judges in five separate Oregon cases have halted foreclosures involving MERS, saying its participation caused lenders to violate the state's recording law. Three of those decisions came last month, the key one in U.S. Bankruptcy Court in Eugene.

Attorneys say it's not clear whether lenders in Oregon will simply start over or head to court to foreclose, steps that could prolong the crisis for months and drive up costs, attorneys say. Some suggest lenders might not have access to the documents they need to comply with state law.

"A lot of us are questioning whether there is a solution," said David Ambrose, a Portland attorney who represents lenders in mortgage transactions. "It's pretty amazing. There are a lot of unanswered questions."

MERS is listed as an agent for lenders on more than 60 million U.S. home loans, about half of all such loans. 

The system is now falling apart.  Title companies are refusing to do business with MERS mortgages.  Foreclosures are grinding to a halt because the entire housing market is grinding to a halt.  That means housing is increasingly becoming no-bid: it doesn't matter what the price is when nobody's sure who really owns the house and if they are authorized to record the sale or not.  That means the cliff on foreclosures means a cliff on housing prices.  The final set of blocks are about to be knocked out from under the housing market, and then it's game over.

MERS is done for.  More and more states are realizing MERS screwed them out of hundreds of millions in records fees and now cash-strapped counties want years of avoided fees paid in full...plus interest.

An added bonus for the banks is the avoidance of county fees.  When MERS is used to turn a regular mortgage into an investment, financial institutions don’t pay “recording fees,” which are usually small charges of between $50 and $100, to the counties where the underlying properties are physically located.

This has some county clerks upset.

“The average Joe who comes into my building, hard working people, have to pay the fees,” said John O’Brien, register of deeds in Southern Essex, Massachusetts.  

“Why in God’s name can’t banks and Wall Street lenders do the same thing?  Play by the same rules!”

O’Brien has officially requested that Massachusetts Attorney General Martha Coakley file suit against MERS, seeking $22 million in unpaid recording fees associated with home loans that were bought, sold, and securitized since 1998.  

“I have challenged them to open their books and show me how many times they have moved people’s mortgages around,” O’Brien said.

$22 million in just Massachusetts.  And you'd better believe that states are going to go after MERS on this. The game is almost over and its death throes are going to wreck what's left of our economy.