The Hackenblog

“‘State controller John Chiang warned today that if legislators and Gov. Arnold Schwarzenegger fail to come up with a budget-balancing package in the next week, he would begin paying California’s bills with IOUs on July 2.’” (via Calitics)

Y’know, this would be funny if it were remotely funny at all. Fuck.

“It’s Man Monday here at Deals Of The Day and we’ve got a whole host of bargains that will help you feel like a rugged, rough, tough, todger-waving bloke. Just like that Jason Statham, that David Walliams or er, that Alan Carr.

“The bargains are all direct from the forums at HotUKDeals, although we overheard some bloke going on about them while we were snorting up some A-grade Columbian off a model’s back in Tizer’s nightclub in Nuneaton at 1.45am this morning. Raaarrrrgggh!”
HotUKDeals Of The Day – Monday 15th June, by Andy Dawson, Bitterwallet, June 15, 2009

Raaarrrrgggh! Fanboys, take note.

“People with HIV or AIDS and their providers rallied at the State Capitol today to oppose the governor’s proposed budget cuts to a variety or programs which literally keep people alive. During the public comment period of Conference Committee, people told us about the importance of these programs in their daily lives. The testimony below from a brave 24 year old woman born with HIV was especially poignant.”

The Human Cost of Cuts – Linnea’s Story, Budget Blog, June 10, 2009

There has to be a better way to “save” California than letting this young woman die. There just has to be a better way.

“They’ve recycled cans, baked cookies, hawked magazines, written letters and, in one case, even sold barbecue-flavored crickets.

“‘They tasted like Cheetos but with legs,’ said Brenda Llamas, a 13-year-old trumpet player from Pacoima Middle School.

“With proposed state budget cuts threatening to strip schools of much-needed cash, music students in the San Fernando Valley have shown they’re not willing to leave anything to chance. Saturday was no exception as five middle school bands squared off in the first Battle of the Bands Family Music Festival at Sutter Middle School in Winnetka.

“Jazz bands, concert bands, rock bands and orchestras took the stage in button-up vests and bow ties for a chance to honk, strum and strike their way to victory. The prize was a big one, considering that some schools might receive as little as $200 in spending cash next year. First place would bring $2,500 (second place $750) to buy instruments, sheet music and supplies.”
Music students hold a noteworthy fundraiser in the San Fernando Valley. Youths battle it out onstage to help their cash-strapped schools, by Esmeralda Bermudez, LA Times, June 7, 2009

Ow, it’s tough you have to subsidize your own High School music education. But go, kids, go! You’re undaunted and I’m impressed!

Some of you might recall when I blogged about the starting to start-up comic publisher, Furies Publishing, (Furies, not furries) and asked that y’all go look them over and click on their Google ads.

Well, thank you, all those clicks added up to almost $100! And then Google pulled their ads for some obscure reason and now the Furies won’t ever get that money your diligent clicks to Google’s advertisers made for them. This is very sad.

What is even SADDER is that the Furies are very clever women who were planning to spend that first $100 on cute little marketing thingys like bookmarks, bookplates, whatnot. What is totally TRAGIC about this is that these Furies know cute, like CUTE, like, Lawdy, do they know CUTE. So, now, not only do they not get their first start-up $100 to make some cute marketing things, we, World, will not be able to get any of these cute marketing things. And all because of Google Legree.

However, the Furies still have a donation button on their website. It’s tastefully at the bottom of the left sidebar. If any of you fine people who read this blog could toss them a few bucks, like more than $5, I’m sure they’d send you some cute Furies swag when they get enough dosh to make some. This is also a good deed: these are very brave women to even be thinking about starting a business, let alone one as risky as comics, in this economy. They’re taking it slow, so the Google shenanigans is a big-ish set back.

Also, if you could spread the word about the Furies Fundraiser, I’d be much obliged.

Arnold can’t do math:

“In the short-term, expenditure reductions in any of these programs (CalWORKS, etc.) have significant implications for the state economy. The multiplier effects for these programs are found to range between 1.05 and 1.44, meaning that output and employment resulting from human services program expenditures are greater than the expenditures alone would suggest.

“In particular, In-Home Supportive Services are found to provide in excess of a 40 percent boost to the local economy. The multipliers for CalWORKs and Food Stamps are also significant and comparable at 1.34 and 1.37, respectively. Other programs, those that provide primarily services and less in the way of cash benefits, are found to have a smaller multiplier effect. The importance of these services, however, should not be diminished by the smaller multipliers that were found. This report discusses the likelihood that service reductions in many of these programs may result in the following: a higher incidence of homelessness, poverty, malnutrition, substance abuse, violence, and negative health outcomes for toddlers and infants. Aside from the toll these harmful circumstances have on the individuals involved, a higher incidence of these maladies produces not only higher economic costs today, but in the future as well. This suggests another sort of multiplier that ought to be included in the analysis – the indirect effect of reducing the demand for services tomorrow by providing them today.

“Finally, many of these programs are funded by federal in addition to state expenditures. These federal dollars are often only available as matching funds to state expenditures. The effect of matching funds was found to raise the multiplier for some state spending as high as 7.35. With matching funds, $1 in state spending translates into between roughly $3 and $5 in total spending on most of these programs. The effect on output and employment, and on the economic stimulus effect of state spending on these programs, is thus significantly magnified.”
SPENDING ON COUNTY HUMAN SERVICES PROGRAMS IN CALIFORNIA: AN EVALUATION OF ECONOMIC IMPACTS (pdf), By Jon Haveman, Ph.D., Beacon Economics, Eric O’N. Fisher, Ph. D., California Polytechnic State University, Fannie Tseng, Ph.D., Berkeley Policy Associates, Presented to Child and Family Policy Institute of California, March 17, 2009 (via, which has more links and is a faster read)

$1 CA dollar can, with matching funds, turn into up to $5 spent in grocery stores, doctors, public transit, etc. in California. I’m not very good at math either, so bear with me:

$1M = $5M, so $500K = $2.5M, $0.50 = $2.50, but $0 = $0, which is what I think the heartless bastard rightwingnuts in California ultimately want. Don’t any of those people have businesses, homes or investments in California? Or, y’know, humanity? Because sinking the whole State to gratify some sick fear and loathing of children, disease and poverty seems pretty crazy to me.

So, really, the only reason Arnold is going after these programs is because they have no powerful advocates. And he’s a heartless bastard placating heartless bastards.

Fuck California:

“Consider this partial list of the governor’s proposed cuts to health and humans services:

· Elimination of the CalWORKs program;
· Elimination of the Healthy Families Program;
· Eliminating certain Medi-Cal state-only programs;
· Elimination of community based services programs at the Department of Aging;
· Eliminate State funding for Community Care Licensing;
· Elimination of remaining General Fund for Maternal, Child, and Adolescent Health;
· Elimination of funding for community clinic programs, such as Rural Health Services and the Seasonal and Agricultural and Migratory work programs;
· Elimination of funding for drug treatment programs established by the voters through Proposition 36;
· Reducing in-home supportive services eligibility and care provider pay;
· Reducing funding for foster care rates; and
· Reducing SSI/SSP monthly payments benefiting the aged and disabled to the minimum allowed under federal law.

“All of us know someone who will be affected by these cuts. This is not just a matter of balancing the state’s books. For some Californians, it is a matter of life and death.

“A society in crisis should not throw women, children, and seniors overboard first.”
Impact of Governor’s Proposed Health and Human Services Cuts, Budget Blog, by Assemblymember Noreen Evans, May 27, 2009 (also see Noreen Explains the Budget Crisis)

I think what you mean, Assemblymember Evans, is that a civilized society in crisis should not throw women, children, and seniors-who-didn’t-buy-their-home-in-the-1950-70s overboard first. We’re talking about California, not, y’know, something civilized.

By the way, when you run for higher office, Noreen, I’m sending you some money.

They’ll decide your project is obscene, sorry, “disturbing,” after they’ve taken the job.
Docucopies fucks over the Yaoi Press (also, via)

Here’s the TOS. Not a word about what kind of “disturbing” content they reserve the right not to print. Jerks.

For those of you wondering what the hell is going on in California:

“Assemblywoman Noreen Evans, Chair of the Budget Committee, spells out slowly for everyone the structural problems and false assertions about the California budget process.”

(via)

“But the California precedent still has me rattled. Who would have thought that America’s largest state, a state whose economy is larger than that of all but a few nations, could so easily become a banana republic?”

But, Paaaaauuuuuuulllll! It’s not a banana republic! It’s a Libertarian Paradise!

Me, I think it’s more of a dystopia.

Furies Publishing (working title: 3 Girl Group) is just in the begin to beginning stages and trying to raise a little money. Please go over and click on their Google Ads or drop them a donation (the donation button is way down the sidebar, or here for those of you who’d just like to toss them a little long green. Their blog content is worth a look). Furies Publishing will publish translated Asian and original English comics in serial and book formats, and probably some in e-formats. Please support them.

Here’s why they go by the names they write under on the blog:

“Virgil, probably working from an Alexandrian source, recognized three: Alecto (”unceasing,” who appeared in Virgil’s Aeneid), Megaera (”grudging”), and Tisiphone (”avenging murder”).” Wikipedia

“Carson Joseph said he had struggled to find steady work since being released from prison four years ago, and when he graduated from a new job training program last week he hoped it would finally give him ‘a step up on the ladder.’

“Joseph, 29, was among 22 residents from Nickerson Gardens and other public housing developments who graduated Friday from the Sherwin-Williams Home Work Painter Training Program.

“The two-week program sponsored by the U.S. Department of Housing and Urban Development is funded primarily by Sherwin-Williams, Los Angeles housing officials said. It focuses on teaching students about asbestos, mold and lead-based paint and gives them materials and real-world experience painting units in their own housing projects.

“‘There’s more to just putting paint on the brush and then putting it on the wall,’ Joseph said.

“The program has been in existence since about 2003, but the housing authority of the city of Los Angeles brought the series to Southern California last year. Housing officials said that so far 91 people had been trained during sessions at Jordan Downs, Estrada Courts, Mar Vista Gardens and Nickerson Gardens.

“The two remaining sites for this year’s programs are in Rancho San Pedro and Ramona Gardens.”

~snip~

“‘I was all for it,’ Joseph said. ‘I thought it’d be a great opportunity for me.’

“He’s not sure whether it will lead directly to employment but said he is confident that the training will help. Bob Ballew, who works for Sherwin-Williams running the training courses, said 72% of the roughly 5,000 graduates of the program across the nation have found employment.

“‘In spite of all the negative, this is something positive,’ Ballew told the graduates Friday. ‘Even though the economy is bad, we hear the doom and gloom, there is still an opportunity to find employment.’”
Public housing residents learn tools of painting trade, by Amanda Covarrubias, LA Times, April 13, 2009

You know what they say at Homeboy Industries: Nothing stops a bullet faster than a job.

Thank you Sherwin-Williams for being cool enough to have a program like this and thank you City of LA for being smart enough to bring it here. I feel hope today, that’s probably a mistake on my part, but that I feel hope today.

“WASHINGTON (Reuters) – Moving with unusual speed, the Democratic-controlled U.S. House of Representatives on Thursday passed legislation to recoup most of the $165 million in retention bonuses paid to American International Group Inc employees.

“Responding quickly to public outrage over the bonuses after the giant insurer received government bailouts of up to $180 billion, the House voted 328-93 to approve a 90 percent tax on bonuses for some executives at companies getting federal aid.

“The tax would apply to executives with incomes over $250,000 who worked for companies that got at least $5 billion in government aid. That could ensnare others getting federal help, such as mortgage financing company Fannie Mae.”
House votes to recoup bonuses from bailed-out firms, by Jeremy Pelofsky and Susan Cornwell, Reuters, March 19, 2009

“Watching the national news media struggle to cover the economic crisis lately, one could be forgiven the fear that the United States had grown too ignorant and lazy to govern itself.

“Between mis- and disinformation, cheap political posturing and crowd pleasing histrionics masquerading as commentary, the public has been inundated by a flood of dangerous nonsense. Cable news networks must think their audiences have the attention span of fruit flies.

“Many in the New York/Washington media establishment appear to identify with the financial and political geniuses who got us into this mess, and to share their values. Jamison Foser at mediamatters.org noticed that coverage of President Obama’s budget in The Washington Post and The New York Times centered mainly upon increased taxes affecting “the oil and gas industry, hedge fund managers, multinational corporations and nearly 3 million of the nation’s top earners,” poor babies.

“ABC News produced a heartbreaking tale of woe about harried professionals scheming to reduce their incomes to avoid higher tax brackets. A dentist told the reporter she was contemplating cutting her income from her current $320,000 to under $250,000 by having her dental hygienist work fewer days and by treating fewer patients.

“Neither she nor the reporter appeared to have any idea how marginal tax rates work. To wit, she’d pay the higher 36 percent rate only on income above $250,000. The current rate is 33 percent. Hence, Dr. Happy-Tooth’s brilliant plan would save her exactly $2,100 in taxes at a cost of $67,900 in forgone income. No wonder people like her vote Republican.

“ABC subsequently filed an amended version of the story making itself look a bit less foolish.”
Simple story fails public, by Gene Lyons, Arkansas Democrat Gazette, March 12, 2009

Is it even possible for ABC and Greedpublicans to look less foolish?

As usual, Gene Lyons nails it.

“NEW YORK (Reuters) – Wall Street ushered in the Barack Obama presidency with a record Inauguration Day drop on Tuesday amid fresh signs the global bank crisis was far from over.

“High expectations for details on how the new administration would address the growing banking crisis and faltering economy were dampened after the inauguration speech concluded with little new information to digest.”
Banks sink stocks on Inauguration Day, by Chuck Mikolajczak, Reuters, January 20, 2009

High finance – it’s wonderful.

I’m really looking forward to the Obama Administration. I’m just a little annoyed that the first order of business – The Stimulus – is the political/economic equivalent of a 50-foot dive into a shot glass.

It’s not that I don’t think the O Team can do it, I’m just sorry they have to on their first day on the job.

“Mr. Paulson must have had some reason for doing what he did. No doubt he still believes that without all this frantic activity we’d be far worse off than we are now. All we know for sure, however, is that the Treasury’s heroic deal-making has had little effect on what it claims is the problem at hand: the collapse of confidence in the companies atop our financial system.

“Weeks after receiving its first $25 billion taxpayer investment, Citigroup returned to the Treasury to confess that — lo! — the markets still didn’t trust Citigroup to survive. In response, on Nov. 24, the Treasury handed Citigroup another $20 billion from the Troubled Assets Relief Program, and then simply guaranteed $306 billion of Citigroup’s assets. The Treasury didn’t ask for its fair share of the action, or management changes, or for that matter anything much at all beyond a teaspoon of warrants and a sliver of preferred stock. The $306 billion guarantee was an undisguised gift. The Treasury didn’t even bother to explain what the crisis was, just that the action was taken in response to Citigroup’s ‘declining stock price.’

Three hundred billion dollars is still a lot of money. It’s almost 2 percent of gross domestic product, and about what we spend annually on the departments of Agriculture, Education, Energy, Homeland Security, Housing and Urban Development and Transportation combined. Had Mr. Paulson executed his initial plan, and bought Citigroup’s pile of troubled assets at market prices, there would have been a limit to our exposure, as the money would have counted against the $700 billion Mr. Paulson had been given to dispense. Instead, he in effect granted himself the power to dispense unlimited sums of money without Congressional oversight. Now we don’t even know the nature of the assets that the Treasury is standing behind. Under TARP, these would have been disclosed.

“There are other things the Treasury might do when a major financial firm assumed to be ‘too big to fail’ comes knocking, asking for free money. Here’s one: Let it fail.

“Not as chaotically as Lehman Brothers was allowed to fail. If a failing firm is deemed ‘too big’ for that honor, then it should be explicitly nationalized, both to limit its effect on other firms and to protect the guts of the system. Its shareholders should be wiped out, and its management replaced. Its valuable parts should be sold off as functioning businesses to the highest bidders — perhaps to some bank that was not swept up in the credit bubble. The rest should be liquidated, in calm markets. Do this and, for everyone except the firms that invented the mess, the pain will likely subside.”
How to Repair a Broken Financial World, by Michael Lewis and David Einhorn, January 3, 2009 (this article actually starts at The End of the Financial World as We Know It. It’s all a time-worthy read.)

Yes! Nationalize it all! Then the taxpayers (like me!) would own it and we’re a Socialist/Capitalist Utopia! God, I never thought I’d live to see the day…oh, wait…I haven’t because the wingunts would go crazy if anyone other than bushco or zombieSt.Reagan tried to do anything remotely like that. Oh well. It was a nice thought while it lasted.

(So since it’s not going to happen, I might as well add that liquidating in calm markets might be trickier than it sounds. In The Greatest-Ever Bank Robbery: The Collapse of the Savings and Loan Industry, by Martin Mayer, he spends much of the last chapters describing the near impossibility of buying defunct S&L assets, mainly property, from the government. No one even knew which departments were in charge of selling it to buyers, with CASH, who called to inquire. Crazy, very crazy. I’m not sure it’s any better even now.)

By the way, I think Paulson panicked and started throwing money at whatever scared him most. I really do wonder what the hell he’s so afraid of. Maybe I should be afraid of it, too.

Greed and stupidity makes them suckers, one and all:

“For reasons that, at this particular moment in economic time, make little sense—and border on the totally embarrassing—I was in Monaco recently at a business conference that attracted many private-equity types who are still traveling grandly on the 2 percent fees private-equity firms pay themselves on the money they’ve raised. At my table in the ballroom of the Hôtel de Paris, in Monte Carlo, at a dinner hosted by Prince Albert of Monaco, there was a gentleman whose company, backed by private equity, had gone public and risen to $130 a share, but had, through the terrible autumn, dropped to $17. To my left there was a gentleman from K.K.R.—the seminal name in the corporate-buyout business, having survived and profited off a quarter-century’s worth of bubbles and busts. Actually, the gentleman joined K.K.R. after the collapse of Lehman Brothers, where he had been for many years. (By my quick calculation, in all that time of being compensated with Lehman stock, he probably lost between $30 and $120 million in the collapse. Still, he seemed to have homes in London, Dubai, and New York.) I asked, lowering my voice, ‘So … who’s on the brink?’

“‘Carlyle,’ he responded darkly. Indeed, Carlyle Capital Corporation, the arm of the Carlyle Group that invests in mortgage-backed securities, had defaulted last spring on more than $16 billion.”

~snip~

“And Blackstone, at the top of the market—indeed doing the last big deal of the bull market—paid $26 billion for Hilton Hotels. (Hotels, where private-equity guys spend most of their time, form a big part of the P.E. mythology. Not only has Blackstone become the biggest hotelier in the world, owning at various times mass-market chains such as La Quinta and Extended Stay America as well as Claridge’s, in London—reportedly Mr. Schwarzman’s favorite home away from home—but the Carlyle Group is named after the Carlyle Hotel in New York, David Rubenstein’s favorite hotel.) Actually, Lehman Brothers, Bear Stearns, and a few other banks paid $26 billion for Hilton—they lent Blackstone the money. Or, in fact, because Lehman and Bear have collapsed and their debts have been bailed out by the U.S. government, you’ve paid for the Hilton hotels—with their dramatically devalued real estate on which their empty rooms sit.”
The Ultimate Bubble?, by Michael Wolff, Vanity Fair, February 2009 issue (go read the whole thing, it’s…fascinating)

I hope this is the ultimate bubble and no one ever has to live through this at all. I bet they said that in the Depression, too.

Suckers at the top? Sure, why not? But maybe bushco made us tax-paying, hard working, honest types are the biggest suckers of all with the bailout, the tax cuts, Iraq, and all the other fuck the working and middle class attacks over the past 8 years. Who paid for all that? You and I and generations to come. Unless the U.S. hits the lotto, which I don’t think it even plays. Wait…where did that come from?

So, anyway, good luck, Mr. Obama! You’re gonna need it.

“The bank (Bank Medici) — founded and largely owned by high-profile banker Sonja Kohn, whom media say has close ties to Madoff — said it would cooperate fully with the FMA.

“‘Bank Medici will in every way cooperate with the government supervisor and take all measures to ensure the most transparency and efficiency possible in solving the current challenges,’ it said in a statement.

“It said Medici, which is 25 percent owned by UniCredit’s (CRDI.MI) Bank Austria, remains sound, has good liquidity and will present a new business model in the coming weeks.

“It said clients’ assets were not at risk ‘because of its (Medici’s) strong capital base.’”

“Banks across the globe have unveiled billions of dollars in damage from the scandal, with a number of private banks catering to rich clients and fund-of-fund businesses particularly prominent victims.”
Madoff-exposed Medici under state supervision, by Christian Gutlederer, Reuters, January 2, 2009

Why would a bank, any bank, be this stupid? Bank Medici possibly has a $3B exposure. But why wouldn’t they, or other banks, figure Madoff out in due diligence? They’re banks, they’re supposed to be smarter than this. And if they’re not, then consumers and governments better wake up and get tough pdq.

And don’t blame it on Sonja Kohn. Unless she personally guaranteed the investment with Madoff, it was up to the bankers and lawyers at Bank Medici to see through Madoff before they went out on a $3B limb.

(More Madoff Madness from the NYT: Madoff Scheme Kept Rippling Outward, Across Borders, by Diana B. Henriques, December 20, 2008. Via Pen Elayne)
By DIANA B. HENRIQUES
Published: December 20, 2008

Disrupter of Wickedness Stupidity bushco:

“Just before Christmas, an economics student in Utah figured out a way to help the environment by messing up the mechanics of an auction. The Bush administration had Bureau of Land Management auction offer a last minute auction to sell off 150,000 acres near Arches National Park.

“Tim DeChristopher, 27, just started bidding when the government tried to auction off the land. That threw a wrench into the whole auction. He went home — after a brief visit with police — owning 22,000 acres of land and owing $1.7 million. But he also pushed the price up for oil developers. So much so that the whole auction results are now in question. The AP says buyers were given 10 days to decide if they paid too much. I don’t think that offer applies to DeChristopher himself. They may have to have a do-over for the whole auction — but that would be under the Obama administration.”

~snip~

“DeChristopher didn’t start off his day hoping to stand in the way of Bush’s last minute sale to the oil industry. Instead, he went to his scheduled final exam. …one of his exam questions was whether this very auction was fair since only the oil companies were bidding. That got him thinking.

“DeChristopher went straight from the test to the auction. He passed the protesters and went inside, wanting to do something more, but not knowing what. Then a woman asked him: ‘Are you here to bid?’ That gave him the idea.

“Patrick Shea, who is representing DeChristopher, says that when he ran the BLM under President Clinton he required bidders to show they could afford their purchases. The lack of a requirement was part of the “rush” of the Bush administration to sell the land before leaving office, Shea says. It looks like once again deregulation has not turned out to be the capitalist’s best friend.”

~snip~

“DeChristopher says the most surprising thing was that he bought some of the land at $2.25 an acre. ‘That’s shocking — that we can sacrifice our public lands for as little as $2.25 an acre.’ There is some talk of environmental groups buying DeChristopher’s land. His first payment of $45,000 was due Monday.”
The hero auction wrecker, by Carol Vinzant, WalletPop, December 30, 2008 (more on Mr. DeChristopher)

If there’s a legal defense fund for my new hero, Tim DeChristopher, I’d like to toss a few bucks his way. What a guy!

By the way, what’s the deal with no money down auctions of public land, bushco? Don’t you jerks know that even housing auctions require a $5K cashiers check to even get in the door? Serves you creeps right.

Advantage DeChristopher! Sorry about the legal problems, dude, where can I send a check?

Update 123108: “Tim DeChristopher announced Wednesday afternoon that he would pay the U.S. Bureau of Land Management $45,000 to hold the 13 lease parcels he won in a Dec. 19 sale. His aim is to fend off drilling at least until President-elect Barack Obama takes office and new officials are in charge of the federal Interior Department and Bureau of Land Management.

“‘This would be the most effective way of ensuring we could protect the land at least until the new administration came in,’ DeChristopher said.

“The 27-year-old economics major faces possible federal felony charges after winning bids totaling about $1.8 million on 13 lease parcels that he admitted he had neither the intention nor the money to pay for.

“But since committing what he called an act of civil disobedience, DeChristopher has heard from hundreds of individuals around the country willing to chip in to keep drill rigs off the land and DeChristopher out of prison.

“So far, would-be benefactors have pledged $14,000, he said. ($14,050 now)

“DeChristopher, his lawyers and other advisers reckoned that if there were a specific reason for the fundraising, rather than just an ill-defined defense fund, enough money would roll in to allow him to write a $45,000 check to the BLM within the next couple of weeks.”
Land auction monkeywrencher has a new plan
Fundraising. DeChristopher hopes to run out the clock, by Patty Henetz, The Salt Lake Tribune, December 31, 2008

Tim DeChristopher Legal Defense and Land Paying For Fund

Agency auctions off moral high ground, by J. Scott Christianson, Columbia Tribune, December 30, 2008

Another good Tim DeChristopher story, more details.

“While modification advocates say it is better for investors to accept a lower rate of return rather than nothing, bondholders don’t see much benefit if modifications just delay an inevitable foreclosure.

“Moreover, some securitizations prohibit modifications, as is the case with the pool containing the Goldrick mortgage. Such clauses are meant to protect bondholders — sometimes a hedge fund, sometimes a pension fund — who have been guaranteed a certain return.

“So even though the Goldricks could afford to stay in their home if the interest rate was 6.5 percent, and the bondholders would benefit by continuing to receive income on the loan rather than have it stuck in foreclosure, the servicer of the loan — Saxon — cannot budge.”

See, I have never understood why it’s legal to sell mortgages or other kinds of debt/loan. A loan is a risk, a fairly well researched one, and, in my mind, a risk should stay with the institution that placed the bet—I mean issued the loan, yeah, loan. That’s naïve, you say? Well then, okay, but I really understand moral hazard now.

“The Goldricks took out a $375,000 mortgage in 2005, when they refinanced a previous mortgage on their 1,800-square-foot (167-square-meter) house in semirural Hampton Bays, some 90 miles east of New York city.

“At first, the interest rate was 6.5 percent and the monthly payment was $2,370. After two years, it rose to 9.5 percent and suddenly the payment of $3,850 was beyond the means of a family living off Patrick Goldrick’s salary as a cable guy.”
How one family’s mortgage is linked to meltdown, Reuters, December 29, 2008

$2,370/month for a $375,000 mortgage for a one-income family? Man, how much do cable guys make?

Well, anyway, I wish the Goldricks all the best and hope they work it out. They really are between a rock and a hard place and it’s not all their mortgage’s fault, but getting some help on that would sure help in other areas. I don’t know about anyone else, but I can’t function when my home is in flux. (Unless that’s part of the plan, which is seldom.)

When did bankers get so stupid? I remember reading in the 80s that banks were in trouble and would be the next meltdown because bankers had ceased to be cautious, intelligent, responsible pillars of the community and had become financial idiots. Never mind Wall Street, they’ve always been in their own class. Previously and usually the good citizens of our country were protected from those wolves, simply because working people just didn’t have enough money to be interesting to those wolves. No more, folks!

Greed makes you stupid.

That could be one of those sampler things. If only I could sew.

Of course the prison guard unions would hate it, but the libertarians would love it. They’ve been saying this for years.

“I’ve been using my trial membership in Netflix to watch the Showtime series Weed, about a suburban housewife who starts dealing pot to keep her household afloat. As the economy tanks, this has caused me to wonder if changing our approach to marijuana could free up enough money to help offset our state budget shortfalls.

“A study done in June of 2005 by Jeffrey Miron, a Visiting Professor of Economics at Harvard, investigated just this question. He concluded that the annual cost of enforcing current weed prohibition was around $7.7 billion, split about 2/3 to the states and 1/3 to the federal government. (The Office of National Drug Control Policy does not agree with Miron’s conclusions.)

“Miron further concluded that, if the drug were legalized, it could yield an annual tax revenue of $2.4 billion if the tax matched prevailing sales taxes, and $6.2 billion if it were taxed at the rate of alcohol or tobacco. I suspect that many farmers would also appreciate having another cash crop to bolster their income.

“Adding the two figures together, Miron conjectures legalization could improve our nation’s balance sheet by $14 billion annually.”
State budget crisis – time to kick the potheads out of prison? by Tom Barlow, WalletPop, December 22, 2008

$14B is nothing to cough at. And it would bail out Philip Morris or Altira or whatever it calls itself now and their tobacco farmers in a big way. They could just switch to hemp production – smoke some, make paper and whatnot out of some – and hopefully not put too many chemicals in the final product. Yes, I know pot will never be legalized and mass produced, but a girl can dream, can’t I?

(Yes, I know there are problems with pot smoking, mainly that it’s illegal, but if you swap lung damage for liver damage, pot’s about the same damage as liquor, which is legal. Full disclose: I am not a canibis expert by a longshot.)

“I’m going to guess that the reason why there are so few female writers at Marvel and DC is because editors aren’t approaching them to invite them to pitch ideas. I’m also going to take another shot in the dark and guess that female writers aren’t approaching Marvel and DC editors in order to pitch ideas to them.

“The audience? Has nothing to do with it. Both male and female writers are perfectly capable of reaching any particular audience. There are a large number of male writers churning out soap opera scripts for predominately female viewers. I’m sure there are quite a few female writers who could crank out a popular Batman story.

“If Marvel and DC editors actually care about hiring more female writers, they should take a close look at the industry in order to see which women writers are producing material that appeals to the current superhero audience. And then they should approach those women and ask them to pitch ideas. And they should do it just as often and for the exact same projects as they approach male writers for. Who do superhero fans respond to? Which female creators (from any industry) do they speak highly of? Which female authors specialize in action/adventure sagas? Find out and go contact them.

“It’s not that difficult. Really.

“Finally, after you approach these women, make sure that they ‘get’ superhero comics. They have to understand the common tropes and the way that superhero universes and stories operate. Don’t grab an author who has spent her entire life writing love stories for teenage girls, pair her with a terrible artist, plunk her down on a Revanche miniseries and then throw your hands up in the air and proclaim women can’t sell superhero comics when nobody buys it! One, you hired someone who has no idea how to reach the superhero audience. Two, you gave the writer an unpopular character to work with. Three, you saddled her with a terrible artist.”
Where the girls aren’t, Digital Femme, December 20, 2008

No, really, maybe female comics writers should start blogging or put their superhero (and other) scripts online. If the story got a following or a scandal or some kind of buzz, it might get the attention of some editor at the Big Two. Y’know, if I liked a script online enough to follow it, I’d certainly start bugging the Big Two to make a comic out of it. But I’m funny that way.

Hey, why not? Beats waiting around for the phone to ring.

“While Hirsch chose to use a champagne bottle and waterfall to illustrate how credit card receivables became asset backed bonds. I feel that a trough and pack of wild hogs would have worked out just as well, though it would have been harder to draw!

“This is only one of the videos in the Marketplace’s collection of Whiteboard videos explaining our current economic situation. Other topics in the series include short selling, defaults, margins and the fallout surrounding a financial crisis. These short informational videos are an excellent way to gain a better understanding of what’s happening in our economy without needing your own personal economist.”
The idiot’s guide to why the credit card crisis is next, by Josh Smith, WalletPop, December 7, 2008

This isn’t just insane, it’s fucking insane. Has debt always been sold as an asset? This is a good explanation of what’s probably coming down the road. We never needed tougher bankruptcy laws. However, we’ve needed laws to leash the credit card companies for decades.

I’ve never understood why the health of the economy was measured in housing starts and consumer spending. If I ran the circus, it would be measured by employment and savings.

But I don’t run circus.

I’m late with the temp stock clerk who was murdered at Walmart and other people injured in the stampede story. I read a woman miscarried due to her injuries, which is equally shocking. I doubt Walmart is doing anything to help his family bury the poor guy, so if there’s a fund to help out, I’ve got a few bucks for it. Or if there’s a fund to hire lawyers and sue the fuck out of Walmart for a wrongful death due to their negligence in crowd control, then put me down for that, too.

Incredible as it seems, maybe Walmart should hire the local police’s Riot Squad for next year. I understand the Riot Squad is usually underemployed on Black Friday.

I seem to recall some horrifying incident like this happening every year in our sales-crazed consumer frenzied society. If stores can’t manage their crowds, maybe it’s time for professional help. Ask local law for the Riot Squad. Blackwater ops even. No, I’m not kidding. I wish I was.

“The fiasco of medical care is certainly a product of connivance between greedy and heartless insurance companies, profit-driven hospitals, and avaricious drug-makers. But the public itself is responsible for its own suicidal diet of double cheez burritos and Dr. Pepper. How about a national health-care system with one basic requirement: to qualify, participants must be within ten pounds of their appropriate weight. Pretty harsh, huh? Maybe. But times are harsh too, and bound to get harsher. This system would have the great advantage of being absolutely clear. Let the United Way and other charities devote their resources to educating the recklessly obese about diet and exercise so they can eventually qualify.”
In the Reality Lounge, James Howard Kunstler, November 17, 2008

How about a national health-care system with one basic requirement: to qualify, participants must be within ten pounds of their appropriate weight.

Yes, harsh, but better than what we have now.

“The next potential victims of the nation’s credit crunch: nearly 1.5 million people who ride buses and trains each weekday in Los Angeles County. Transit officials say riders could soon be facing serious service cuts.

“That’s because the Los Angeles County Metropolitan Transportation Authority might have to quickly come up with hundreds of millions of dollars to pay investors, under terms of deals it made involving American International Group, the troubled financial and insurance giant.

“‘I’ve lost a lot of sleep over this,’ said Terry Matsumoto, the chief financial service officer and treasurer for the MTA. He said it was ‘absolutely’ certain the agency would have to cut service if the deals sour.

“The problem, Matsumoto said, could extend beyond the MTA to other large transit agencies that entered into similar deals between the late 1980s and 2003, when tax laws were changed to discourage such transactions. Among those is Metrolink.

“The news comes at a tough time for the MTA. The agency recently lost $133 million in state funds, and declining sales tax revenues mean it will have less money to help keep its buses and trains rolling.
An AIG spokesman declined to comment, citing the confidentiality of deals with its customers.

“Between the late 1980s and 2003, the MTA sold its rail equipment, more than 1,000 buses, a parking garage and maintenance facilities to investors that included Wells Fargo, Comerica and Phillip Morris in separate deals.

“Sale-Lease-back deals are a common way to raise money in the corporate world. A manufacturer, for example, could sell its factory to investors and then lease it back. The manufacturer gets a large chunk of cash and the investors get a steady stream of lease payments, as well as a tax break for their depreciating property.

“‘It’s a great way to get a shot in the arm in terms of cash without actually divesting yourself of your property,’ said Bill Holder, an accounting professor at USC.

“Many of the nation’s largest transit agencies participated in such deals. Among them are the San Francisco Muni system, the BART rail system in the Bay Area, the Chicago Transit Authority and the Washington, D.C., Metro system.

“Metrolink, the Southland’s commuter rail agency, also sold most of its train cars and locomotives in four lease-back deals — three of which involved AIG — and made a $35.5-million profit as a result, said spokesman Francisco Oaxaca. Metrolink, like MTA, must now find another firm to replace AIG.”
Transit services across U.S. threatened by deals with AIG, by Steve Hymon, LAT Bottleneck Blog, October 18, 2008

What a mess. I’d like to call the MTA stupid, because they are, but it appears they’re stupid like a lot of transit agencies. But our own stupid MTA wants a half cent increase in LA County sales tax to do more stupid things with? I think not. I think LA County voters aren’t stupid. Vote No on Measure R.

You think good business practices and common sense and, y’know, laws would keep us all safe from this kind of insanity, but then you turn your back on it and it nearly kills you. Capitalism – it’s like an urban raccoon, never turn your back on it.

“STOCKHOLM (AFP) — US economist Paul Krugman, a prolific New York Times columnist and fierce critic of Washington’s economic policies, won the Nobel Economics Prize on Monday, the Nobel jury said.

“Krugman, 55, a Princeton University professor, has formulated a new trade analysis theory which determines the effects of free trade and globalisation, as well as the driving forces behind worldwide urbanisation, the citation said.”
US economist Paul Krugman wins Nobel Economics Prize, APF, October 13, 2008

Of course it was only a matter of time. Congratulations, Dr. Krugman!

“He said bank CEOs would not want to ‘gravitate toward fast recognition of losses’ by prematurely going to the government without trying to solve problems on their own. Getting capital from the government might undermine the financial company’s management and make shareholders nervous.”
Investors seeking a bottom brace for more uncertainty as government moves to shore up banks, Courant.com, October 12, 2008

Shareholders shouldn’t be nervous or feel a lack of confidence in the clown management that made this mess. Shareholders should be fucking freaking out.

When this woman runs for re-election or President or anything, I’m sending her money.

Rep. Kaptur is magnificent! Is she always like this? Or is she rising to the occasion?