LEFT is RIGHT

2009-11-24T09:30:00.000-08:00

I present to you.... Palin's America:

Strong, American, Determined, and..... Clueless.

2009-11-23T08:49:00.000-08:00

We've added a new widget on the left sidebar, headlines from Globalpost.com. Globalpost was created this year with an eye toward covering world news that the U.S. news organizations are slowly but surely abandoning (due to budget constraints among other factors). Check them out as they increasingly provide important global news that you would otherwise never hear.

2009-11-20T12:56:00.000-08:00

"I just spent 9 hours of my day, $40 of my hard earned money on two of your books, and took the whole day off work to watch you jump on a bus and throw a half-heated wave to the crowd you were avoiding.

"I have never felt so disrespected. How can you claim that you are different? You aren’t. You are just as selfish as everyone else in Washington. It breaks my heart. I thought you might be the answer to the turmoil this country is under but you aren’t. You just slapped hundreds of Hoosiers in the face. The hard working type of people that you claim to represent.

"You say in your book that you chose to sleep well over eating well. At the end of the day I know that you don’t care that you wasted the whole day of some 20 year old college student who lives on their own. I understand that all that matters is that I spent my money on two of your books. I’m sure your eating well. You certainly have no reason to be sleeping well."

One of many angry letters from 300 Palin supporters who waited for 5 hours in the rain to get her to sign copies of her new book but instead got dissed by Governor Quitter.

Excuse me while I step outside to shed a few tears for these oblivious teabaggers (tears of laughter, that is...)

UPDATE: Best name given to Ms. Palin in the comments: "Media Whore of Babble-on". Oops, here come more tears!

UPDATE II: Check out this video of some of the supporters waiting for the book-signing.

Bits

2009-11-20T08:52:00.000-08:00

Saddest friggin' story of the year

The last thing we need is more food for global warming naysayers: stagnant change in global temperatures during this decade. You can "blame" cyclical changes in ocean currents and solar activity for the pause in temperature increases, but it's only temporary.

I'd rather call these works of art instead of billboards.

Glenn, I agree with most of what you say. However, one of the 9/11 planes was flown into a military target, the Pentagon. So using Eric Holder's justification of trying terrorist suspects, who attack civilian targets, in civil court and trying terrorist suspects, who attack the military, in military commissions, then where do you draw the line, since we're apparently going to try the 9/11 terrorist suspects in civil court? The obvious solution, of course, is to try all foreign suspects in civil court.

Need a short break? Check out these incredible photos of the surface of Mars

2009-11-19T13:57:00.000-08:00

The banks, basically, are going to end up dragging the economic recovery out much longer. They are holding on to foreclosed houses so that they don't have to immediately declare the loss (if they did then their books would look a lot worse). Anything they can do to forestall the process (see all the steps below) results in house values being higher now, and thus allows them to slowly sell off their housing stock at higher prices. But, the longer they drag on the recovery, the longer it's going to take for people to be able to afford houses. It's a vicious cycle where the banks lose less in the short run and middle class consumers lose more:

Another wave of foreclosures looms

By Stephanie Armour, USA TODAY

A second wave of foreclosures is poised to hit the market, potentially undermining housing recovery efforts as more homes add to the glut of inventory and drive down prices. These homes largely represent loans that are delinquent but have not yet resulted in foreclosure sales.

About 7 million properties are destined to go into foreclosure, according to a September study by Amherst Securities Group, compared with 1.27 million properties in early 2005.

"There's a huge supply out there," says Dean Baker, co-director of the Center for Economic and Policy Research in Washington, D.C. "The foreclosure process can take a long time. When it comes to (the housing recovery), we're not home free."

There is often a long lag time between a borrower going delinquent and the bank taking the home. Here's why:

•Moratoriums. New state laws imposing short-term moratoriums have slowed the timeline from delinquency to foreclosure.

•Overwhelmed lenders. Banks dealing with a surge in refinancing, mortgage modifications and defaults are overwhelmed with demand, so it can take longer to initiate a foreclosure sale.

•Modifications. Many loans now are first examined to see if they might qualify for a modification. This drags out the timeline and means it is taking longer for homes to go into foreclosure.

•Asset write-downs. Banks may in part be waiting to liquidate homes through foreclosure because they don't want to write down the value of the asset. Lenders can keep homes on the books at a higher value until they are sold at foreclosure.

"There is a lot of foreclosed property in the pipeline that will hit the market and depress prices," says Mark Zandi at Moody's Economy.com. Foreclosed homes often sell at prices below those on the market and can therefore drag down overall home values.

The shadow market of foreclosed homes eclipses the number of homes lost this year. Zandi anticipates there will be about 2.4 million homes lost next year through foreclosure, short sales and deeds in lieu of foreclosure. That compares with 2 million homes lost in 2009.

Jumana Bauwens, a spokeswoman at Bank of America, says the bank is projecting an increase in foreclosures in part because customers will not be qualifying for existing loan-modification programs.

Banks rule government (see 2008-09 bank bailouts) and they rule us (see above). Banks own us all.

2009-11-18T11:50:00.000-08:00

Jean Ross on the Legislative Analyst’s Office Forecast
November 18, 2009

In response to the forecast on the state’s long-term budget situation today by the Legislative Analyst’s Office, Jean Ross, executive director of the California Budget Project, a nonpartisan public policy research group, released this statement:

“Today’s forecast issued by the Legislative Analyst’s Office shows that California is not out of the woods and won’t be for some time. Although the recovery appears to be under way, the weak economy will continue to take a toll on the state’s General Fund in the near future. Funds from the American Recovery and Reinvestment Act (ARRA) have provided an economic boost and helped prevent even deeper cuts. But California’s budget shortfalls are certain to continue beyond the expiration of ARRA funds in 2010 and 2011. California, like many states, needs a second round of federal aid as we face record unemployment and continuing economic weakness.

Today’s forecast also increases the urgency for true prison reform. Earlier this year, the Legislature failed to enact sufficient policy changes to enable California to significantly reduce growth in corrections and meet a $1.2 billion savings target specified in the July budget agreement. California must significantly rein in its out-of-control prison spending.

It’s also clear that California cannot afford to subsidize the state’s largest and most profitable corporations through the tax cuts enacted in September 2008 and February of this year. The Legislature should repeal corporate tax cuts that were included in these budget agreements that could cost the state as much as $2.5 billion per year when fully implemented.

Policymakers should strive to do all they can to avoid yet another round of cuts to state services that would further weaken the economy and undermine the effectiveness of programs and services that Californians depend on.”

– California Budget Project

In other words, here in California we're going to be even more fucked than the forecasted fuckedness from earlier this year.

2009-11-16T12:06:00.000-08:00

Notice tht Mr. Roubini doesn't even mention the stock market. That's because the market is totally dissociated from economic reality. As severe as he sounds, I still think that things will be even worse:

The Worst is yet to Come: Unemployed Americans Should Hunker Down for More Job Losses

Nouriel Roubini
Nov 15, 2009
From the Daily News:

Think the worst is over? Wrong. Conditions in the U.S. labor markets are awful and worsening. While the official unemployment rate is already 10.2% and another 200,000 jobs were lost in October, when you include discouraged workers and partially employed workers the figure is a whopping 17.5%.

While losing 200,000 jobs per month is better than the 700,000 jobs lost in January, current job losses still average more than the per month rate of 150,000 during the last recession.

Also, remember: The last recession ended in November 2001, but job losses continued for more than a year and half until June of 2003; ditto for the 1990-91 recession.

So we can expect that job losses will continue until the end of 2010 at the earliest. In other words, if you are unemployed and looking for work and just waiting for the economy to turn the corner, you had better hunker down. All the economic numbers suggest this will take a while. The jobs just are not coming back.

There's really just one hope for our leaders to turn things around: a bold prescription that increases the fiscal stimulus with another round of labor-intensive, shovel-ready infrastructure projects, helps fiscally strapped state and local governments and provides a temporary tax credit to the private sector to hire more workers. Helping the unemployed just by extending unemployment benefits is necessary not sufficient; it leads to persistent unemployment rather than job creation.

The long-term picture for workers and families is even worse than current job loss numbers alone would suggest. Now as a way of sharing the pain, many firms are telling their workers to cut hours, take furloughs and accept lower wages. Specifically, that fall in hours worked is equivalent to another 3 million full time jobs lost on top of the 7.5 million jobs formally lost.

This is very bad news but we must face facts. Many of the lost jobs are gone forever, including construction jobs, finance jobs and manufacturing jobs. Recent studies suggest that a quarter of U.S. jobs are fully out-sourceable over time to other countries.

Other measures tell the same ugly story: The average length of unemployment is at an all time high; the ratio of job applicants to vacancies is 6 to 1; initial claims are down but continued claims are very high and now millions of unemployed are resorting to the exceptional extended unemployment benefits programs and are staying in them longer.

Based on my best judgment, it is most likely that the unemployment rate will peak close to 11% and will remain at a very high level for two years or more.

The weakness in labor markets and the sharp fall in labor income ensure a weak recovery of private consumption and an anemic recovery of the economy, and increases the risk of a double dip recession.

As a result of these terribly weak labor markets, we can expect weak recovery of consumption and economic growth; larger budget deficits; greater delinquencies in residential and commercial real estate and greater fall in home and commercial real estate prices; greater losses for banks and financial institutions on residential and commercial real estate mortgages, and in credit cards, auto loans and student loans and thus a greater rate of failures of banks; and greater protectionist pressures.

The damage will be extensive and severe unless bold policy action is undertaken now.

Roubini is professor of Economics at the Stern School of Business at New York University and Chairman of Roubini Global Economics.

2009-11-12T13:30:00.000-08:00

Rabid, sociopathic ultra-conservative Marty Beckman is starting to see the light (excerpt):

"....Just as morphing into an extremist took a couple years, un-becoming an extremist happened over time. One by one I saw the flaws in conservative orthodoxy: attempting to fight terrorism with torture, which only aided our enemies' propaganda efforts and thus created more terrorists; seeking to liberalize the Muslim world while curtailing rights for gay people at home; criticizing public schools for lackluster results and therefore cutting funds further; disdaining the weak while never analyzing why they are weak; always seeing the effect but never the cause, which on a mass scale perpetuates the effect...."

2009-11-11T12:18:00.000-08:00

In honor of Veterans Day, here's a short video that will warm the cockles of your heart:

Bits and Pieces for the Week of November 1 - 7

2009-11-06T16:43:00.000-08:00

Jon Stewart's spoof of Glenn Beck is priceless. (Mike)

If you're wondering how much safer (if any) cars have become during the past 50 years, check out this video. (Mike)

I just found my next car. (Mike)

237 reasons why women have sex. That would be 236 more than the number of reasons men have sex. (Mike)

I'm not sure of the rationale behind this product, but any way you look at it, it's disgusting to any rational person. (Mike)

As Veteran's Day approaches... one republi-KKKon Senator from OK is holding up Veteran benefits legislation. (7 of 6)

As usual, Focus fucks of the Family in Co. Springs, CO contributed 98K towards the defeat of the Maine Gay Marriage bill. These MF's have to start paying taxes. (7 of 6)

All honor killings must stop!! In all countries! (7 of 6)

Password hacking is a criminal's key to your private information. Think your password is secure? Try it out here and find out how safe you really are. (Mike)

Wow, the Commercial Real Estate Industry's implosion is really starting to accelerate. Rising Unemployment + collapsing CRE = End of Recession? Sure, on Planet Fantasy. (Mike)

Interesting... a FAUX poll actually tells the truth. Most Blame Bush for Economy. No surprise, republi-KKKons blame President Obama. (7 of 6)

2009-11-04T15:11:00.000-08:00

Came across this interesting bit of data:

For years American political leaders and media were fond of labeling Cuba an "international pariah". We don't hear much of that any more. Perhaps one reason is the annual vote in the General Assembly on the resolution, which reads: "Necessity of ending the economic, commercial and financial embargo imposed by the United States of America against Cuba". This is how the vote has gone:

Year	Votes (Yes-No)	No Votes
1992	59-2	US, Israel
1993	88-4	US, Israel, Albania, Paraguay
1994	101-2	US, Israel, Uzbekistan
1995	117-3	US, Israel, Uzbekistan
1996	138-3	US, Israel, Uzbekistan
1997	143-3	US, Israel
1998	157-2	US, Israel
1999	155-2	US, Israel, Marshall Islands
2000	167-3	US, Israel, Marshall Islands
2001	167-3	US, Israel, Marshall Islands
2002	167-3	US, Israel, Marshall Islands
2003	173-3	US, Israel, Marshall Islands, Palau
2004	179-3	US, Israel, Marshall Islands, Palau
2005	182-4	US, Israel, Marshall Islands, Palau
2006	183-4	US, Israel, Marshall Islands, Palau
2007	184-4	US, Israel, Marshall Islands, Palau
2008	185-3	US, Israel, Palau
2009	187-3	US, Israel, Palau

I wonder what Israel has against Cuba. I guess they think that those Cubans are scary, you know, with all those beaches and cigars and such. I know our stupid U.S. government does.

Bill Maher: Is This as Good as It Gets From Obama?

2009-11-03T12:26:00.000-08:00

Yeah, I'm disappointed, too. I thought we were sweeping into power; I thought change meant Change. I believed all that talk about another First 100 Days, a la Roosevelt. Well, that didn't happen. The question is, is this as good as it gets from Obama, or is he pacing himself? He may have a four and eight-year plan and they included a first year of just gettin' to know you and not gonna rock the boat too much. Well, Mission Accomplished on that.

It's still too early to lose hope in a guy as smart and talented as Barack Obama. But I would counsel him to remember: If you're going undercover to infiltrate how Washington works, so you become one of them for a while, to gain their confidence, well, it can be just like all those movies where a cop goes deep, deep, DEEP undercover with drug people and -- fuck, he's a drug addict, too!

Logic tells me that really smart guys like Obama and Rahm Emanuel know better what they're doing than I do. They certainly know things I don't know. I think we have the same general goals and beliefs. And this is what they do for a living -- I wouldn't even try it. But I will never stop having this doubt: that maybe if they had really charged in there riding the forceful energy of the historic election, and acted like it was an emergency moment -- which it was -- they could have gotten some big victories right up front, and there really could have been an historic "first hundred days" for this administration and the country. Instead of what happened, which is the Obamas got a dog. It could have worked -- the country had given its endorsement to "...and now for something completely different." There might have been a way to knock the Republicans back on their heels right away, with the argument that "The American people demanded we make these changes, and you are unpatriotic to stand in their way."

We'll never know. Because that moment passed, and now it could follow the pattern of World War I and devolve into boring, static trench warfare where nothing really gamechanging happens while both sides slowly bleed to death.

That said, I do not forget that if the election had gone the other way, we'd right now have a barter economy and be at war with Honduras.

2009-10-29T12:26:00.000-07:00

This is getting ridiculous. I can now buy a wristwatch that lets me know if I've
received (or am receiving) a phone call or email on my Blackberry that's in my pocket.

I'm guessing that the geeks are salivating right now...

Bits and Pieces for the Week of October 25 - 31

2009-10-28T21:58:00.000-07:00

Do you pay your credit card bills in full and on time? Well, that could start costing you... (Mike)

It really sucks to be Detriot (Mike)

Meet Sheriff Joe Arpaio's "tenacious field general", chief deputy David Hendershott. In the past year, Hendershott orchestrated numerous lawsuits against the county board and launched criminal investigations against two supervisors. He ordered the arrest of Supervisor Don Stapley, who was handcuffed in a county parking garage and booked into jail in September but not yet charged in that case. In addition, Hendershott directed a weekend interrogation of 37 county employees at their homes this summer, and he has filed State Bar of Arizona complaints against three county employees who have tangled with the sheriff. He's also leading an effort to strip control from the board and put Maricopa County under a court-appointed receiver. As long as Sheriff Joe gets the publicity everything is fine. (7 of 6)

2009-10-27T10:46:00.000-07:00

Bob Herbert rants against passivity:

Changing the World
By BOB HERBERT
One of the most cherished items in my possession is a postcard that was sent from Mississippi to the Upper West Side of Manhattan in June 1964.

“Dear Mom and Dad,” it says, “I have arrived safely in Meridian, Mississippi. This is a wonderful town and the weather is fine. I wish you were here. The people in this city are wonderful and our reception was very good. All my love, Andy.”

That was the last word sent to his family by Andrew Goodman, a 20-year-old college student who was murdered by the Ku Klux Klan, along with fellow civil rights workers Michael Schwerner and James Chaney, on his first full day in Mississippi — June 21, the same date as the postmark on the card. The goal of the three young men had been to help register blacks to vote.

The postcard was given to me by Andrew’s brother, David, who has become a good friend.

Andrew and that postcard came to mind over the weekend as I was thinking about the sense of helplessness so many ordinary Americans have been feeling as the nation is confronted with one enormous, seemingly intractable problem after another. The helplessness is beginning to border on paralysis. The wars in Iraq and Afghanistan, nearly a decade long, are going badly, and there is no endgame in sight.

Monday morning’s coffee was accompanied by stories about suicide bombings in the heart of Baghdad that killed at least 150 people and wounded more than 500 and helicopter crashes in Afghanistan that killed 14 Americans.

Here at home, the terrible toll from the worst economic downturn since the Great Depression continues, with no end to the joblessness in sight and no comprehensible plans for fashioning a healthy economy for the years ahead. The government’s finances resemble a Ponzi scheme. If you want to see the epidemic that is really clobbering American families, look past the H1N1 virus to the home foreclosure crisis.

The Times ran a Page A1 article on Monday that said layoffs, foreclosures and other problems associated with the recession had resulted in big increases in the number of runaway children, many of whom were living in dangerous conditions in the streets.

Americans have tended to watch with a remarkable (I think frightening) degree of passivity as crises of all sorts have gripped the country and sent millions of lives into tailspins. Where people once might have deluged their elected representatives with complaints, joined unions, resisted mass firings, confronted their employers with serious demands, marched for social justice and created brand new civic organizations to fight for the things they believed in, the tendency now is to assume that there is little or nothing ordinary individuals can do about the conditions that plague them.

This is so wrong. It is the kind of thinking that would have stopped the civil rights movement in its tracks, that would have kept women in the kitchen or the steno pool, that would have prevented labor unions from forcing open the doors that led to the creation of a vast middle class.

This passivity and sense of helplessness most likely stems from the refusal of so many Americans over the past few decades to acknowledge any sense of personal responsibility for the policies and choices that have led the country into such a dismal state of affairs, and to turn their backs on any real obligation to help others who were struggling.

Those chickens have come home to roost. Being an American has become a spectator sport. Most Americans watch the news the way you’d watch a ballgame, or a long-running television series, believing that they have no more control over important real-life events than a viewer would have over a coach’s strategy or a script for “Law & Order.”

With that kind of attitude, Andrew Goodman would never have left the comfort of his family home in Manhattan. Rosa Parks would have gotten up and given her seat to a white person, and the Montgomery bus boycott would never have happened. Betty Friedan would never have written “The Feminine Mystique.”

The nation’s political leaders and their corporate puppet masters have fouled this nation up to a fare-thee-well. We will not be pulled from the morass without a big effort from an active citizenry, and that means a citizenry fired with a sense of mission and the belief that their actions, in concert with others, can make a profound difference.

It can start with just a few small steps. Mrs. Parks helped transform a nation by refusing to budge from her seat. Maybe you want to speak up publicly about an important issue, or host a house party, or perhaps arrange a meeting of soon-to-be dismissed employees, or parents at a troubled school.

It’s a risk, sure. But the need is great, and that’s how you change the world.

2009-10-23T09:35:00.000-07:00

If you're still confused by the current economy, including housing, check out this great explanation (here's the link):

US Housing Crash Continues - It's Still A Terrible Time To Buy - Falling House Prices Are The Solution, Not The Problem
By Patrick Killelea, last updated Thu Oct 15, 2009

House prices will keep falling in most places because those prices are still dangerously high compared to incomes and rents. Banks say a safe mortgage is a maximum of 3 times the buyer's yearly income with 20% downpayment. Landlords say a safe price is a maximum of 15 times the house's yearly rent. Yet on the coasts, both those safety rules are still being violated. Buyers are still borrowing 6 times their income and putting only 3% down, and sellers are still asking 30 times annual rent, even after recent price declines. Renting is a cash business that reflects what people can really pay based on their salary, not how much they can borrow. Salaries and rents prove that prices will keep falling for a long time. Anyone who bought a "bargain" this time last year is already sitting on a very painful loss.

It's still much cheaper to rent than to own the same size and quality house, in the same school district. On the coasts, yearly rents are less than 3% of purchase price and mortgage rates are 6%, so it costs twice as much to borrow the money than it does to borrow the house. Renters win and owners lose! Worse, total owner costs including taxes, maintenance, and insurance come to about 9% of purchase price, which is three times the cost of renting. Buying a house is still a very bad deal for the buyer on the coasts, but it does make sense to buy in the Midwest and some other places where prices have fallen into line with salaries and rents. Check whether you should rent or buy in your own area with this NY Times calculator.

The bottom will be here when buying a house to rent out clearly makes money. Then you'll know it's safe to buy for yourself because then rent can cover the mortgage and all expenses if necessary, eliminating most of the risk. For a rough indication of the wisdom of buying, divide annual rent by the purchase price for the house:

3% = do not buy

6% = borderline

9% = ok to buy

So for example, it's borderline to pay $200,000 for a house that would cost you $1,000 per month to rent. That's $12,000 per year in rent. If you buy it with a 6% mortgage, that's $12,000 per year in interest instead, so it works out about the same. Owners can pay interest with pre-tax money, but that benefit gets wiped out by maintenance costs and property tax, equalizing things. It is foolish to pay $400,000 for that same house, because renting it would cost you only half as much per year, and renters are completely safe from falling house prices.

It's a terrible time to buy when interest rates are low, like now. Realtors just lie without shame about this fundamental fact. Prices fall as interest rates rise, because a fixed monthly payment covers a smaller mortgage at a higher interest rate. Since interest rates have nowhere to go but up, prices have nowhere to go but down. The way to win the game is to have cash on hand to buy outright at a low price when others cannot borrow very much because of high interest rates. To buy at a time of very low interest rates is a mistake.

It is far better to pay a low price with a high interest rate than a high price with a low interest rate, even if the mortgage payment is the same either way.

Your property taxes will be lower with a low purchase price.

A low price gives you the ability to pay it all off instead of being a debt-slave forever.

Paying a high price now may trap you "under water", meaning you'll have a mortgage larger than the value of the house. Then you will not be able to refinance, and won't be able to sell without a loss. Even if you get a long-term fixed rate mortgage, when rates inevitably go up the value of your property will go down. Paying a low price minimizes your damage.

The US economy will not recover until interest rates are allowed to rise. To favor debtors and banks, the Federal Reserve forces artificially low interest rates on America, destroying the free market for money itself. The Fed prints up bales of money and lends it to banks at 0%, so the banks feel no need to pay you any interest for your money. While this does temporarily let debtors and banks evade the consequences of their own bad decisions, it also eliminates all investment in businesses, crippling the economy and leading to mass unemployment.

Investing in business is always risky, and it's especially risky in uncertain times like now. People with money will not invest until they feel interest rates are high enough to compensate them for the risk. Investors and banks refuse to risk their money at the Fed's artificially low rates, because at those rates, they will lose money. Would you loan money to a business at 4%, when the odds of losing your money are 8%?

Buyers borrowed too much money and cannot pay it back. Now there are mass foreclosures, and the Federal Reserve is buying up bad mortgages to let banks evade the consequences of their own foolish lending. Congress also authorized vast amounts of bailout cash from taxpayers, to be loaned to banks that can't even remember how to write a safe mortgage. These purchases and loans reward banks for making very bad gambles on lending.

The Federal Reserve's manipulation of interest rates punishes savers (did you check CD rates lately?) and keeps debtors in the maximum amount of debt possible without default. The Federal Reserve's motto seems to be "make everyone slave away for the banks, forever".

We also have legal contracts being modified to stop even well-justified foreclosures. No one was forced to borrow money. It was a choice -- a very bad choice, but completely voluntary. Grownups should be responsible for their own actions. To prevent a justified foreclosure is also to prevent a deserving family from buying that house at a low price, not to mention what this does to faith in contract law. No one in government or the media will even mention that everyone in foreclosure trouble got themselves into that spot by voluntarily borrowing money to spend on luxuries.

Should taxes and artificially low interest rates and newly printed cash be used to pay the debts of irresponsible borrowers, no matter how much they over-borrowed and overpaid for a house? Should savers be forced to pay the debts of other people who cannot afford "their homes" no matter how far it is beyond their actual financial means? If so, go buy the most expensive house you can right now! Borrow as much as you possibly can to buy a bigger house, and don't pay it back, knowing that the Fed and Congress will force the real repayment obligation onto savers, onto people who are living within their means, so that you can stay in "your home" rather than in a house you can actually afford. No one ever died because they had to rent.

Banks happily loaned whatever amount borrowers wanted as long as the banks could then sell the loan, pushing the default risk onto Fannie Mae (taxpayers) or onto buyers of mortgage-backed bonds. Now that it has become clear that two trillion dollars in foolish mortgage loans will not be repaid, Fannie Mae is under pressure not to buy risky loans and investors do not want mortgage-backed bonds. This means that the money available for mortgages is falling, and house prices will keep falling, probably for another five years or more. This is not just a subprime problem. All mortgages will be harder to get.

A return to traditional lending standards means a return to traditional prices, which are far below current prices.

Extreme use of leverage. Leverage means using debt to amplify gain. Most people forget that losses get amplified as well. If a buyer puts 10% down and the house goes down 10%, he has lost 100% of his money on paper. If he has to sell due to job loss or an interest rate hike, he's bankrupt in the real world.

It's worse than that. House prices do not even have to fall to cause big losses. The cost of selling a house is 6% because of the realtor lobby's corruption of US legislators. On a $300,000 house, that's $18,000 lost even if prices just stay flat. So a 4% decline in housing prices bankrupts all those with 10% equity or less.

Shortage of first-time buyers. From The Herald: "We were all corrupted by the housing boom, to some extent. People talked endlessly about how their houses were earning more than they did, never asking where all this free money was coming from. Well the truth is that it was being stolen from the next generation. Houses price increases don't produce wealth, they merely transfer it from the young to the old - from the coming generation of families who have to burden themselves with colossal debts if they want to own, to the baby boomers who are about to retire and live on the cash they make when they downsize."

High house prices have been very unfair to new families, especially those with children. It is foolish for them to buy at current high prices, yet government leaders never talk about how lower house prices are good for pretty much everyone except bankers, instead preferring to sacrifice American families to make sure bankers have plenty of debt to earn interest on. If you own a house and ever want to upgrade, you benefit from falling prices because you'll save more on your next house than you'll lose in selling your current house. Every "affordability" program drives prices higher by pushing buyers deeper into debt. To really help Americans, Fannie Mae and Freddie Mac and the FHA should be completely eliminated, along with the mortgage-interest deduction. Canada has no mortgage-interest deduction at all, and has a more affordable and stable housing market because of that.

Government "affordability" programs just encourage debt, making prices higher, not lower. True affordability is not more debt -- true affordability is lower prices. The government's false affordability programs have created more debt than can ever be repaid. Credit rating agencies then lied about the value of this debt, ending trust in the whole system.

The government keeps house prices unaffordably high through programs that increase buyer debt, and then pretends to be interested in affordable housing. No one in government ever talks about the obvious solution: less debt and lower house prices. That solution would harm bank profits! The real result of every "affordability" program is to keep you in debt for the rest of your life so that you remain an obedient worker. Lower house prices would liberate millions of people from decades of labor each. There is never anything in the press about the millions of people that were hurt and continue to be hurt by high house prices.

The government pretends to be interested in affordable housing, but now that housing is becoming affordable via falling prices, they want to stop it? Their actions speak louder than their words. The government will step in or stay out only if it helps corporate profits for congressional campaign donors.

Why is the failed market in health care exempt from anti-trust laws? Because the insurance cartel makes the most profit that way, and the cartel uses that money to pay lobbyists who get congressmen to vote against change.

Why is the failed market in housing propped up with taxpayer-subsidized loans? Because banks make the most profit that way, and banks use that profit to pay lobbyists who get congressmen to vote against change.

It is not government itself that is the problem, but corporate control of government, using congress to forcibly extract profits from you.

Deflation. There is fear of inflation, but it's not likely in the next few years. The actual amount of money created by the Fed lately is a trillion dollars, which sounds huge, but is small compared to the $10 trillion drop in housing "values" and another $10 trillion drop in stock market capitalization. The US government will not print extreme amounts of cash like Zimbabwe did, because significant inflation would mean that foreigners would no longer lend money to the US government unless interest rates were much higher to compensate them for inflation losses. Higher interest rates would push more people with adjustable mortgages into default, leading to more bank losses. So the Fed won't do it. The most likely scenario is like Japan: low inflation and low interest rates, with falling house prices for years to come.

Baby boomers retiring. There are 77 million Americans born between 1946-1964. One-third have zero retirement savings. The oldest are 62. The only money they have is equity in a house, so they must sell.

Huge glut of empty housing. Builders are being forced to drop prices even faster than owners. Builders have huge excess inventory that they cannot sell, and more houses are completed each day, making the housing slump worse.

Failure to re-regulate finance. The Graham, Leach, Bliley Act did away with the depression-era safety constraints placed on banks. This paved the way for record profits in the finance industry and an effective takeover of the US government by large banks, which has not yet been reversed.

The best summary explanation, from Business Week: "Today's housing prices are predicated on an impossible combination: the strong growth in income and asset values of a strong economy, plus the ultra-low interest rates of a weak economy. Either the economy's long-term prospects will get worse or rates will rise. In either scenario, housing will weaken."

Bits and Pieces for the Week of October 18 - 24

2009-10-23T00:04:00.000-07:00

For those who need help with the side effects of cancer treatment, suffer from chronic pain, muscle spasms, feel we can ease the US prison over population problem, want to tax it (like alcohol and tobacco) and balance state budgets, lower border crime with Mexico, and just want to spark a spliff once in awhile. Just Say Yes: U.S. Mellows On Medical Marijuana. (7 of 6)

My 2002 Prius is going to be proud of its latest offspring. Sure, it only gets 12 miles per charge, but it's a step in the right direction. (Mike)

I'd rather our military spend our taxpayer dollars on this cool stuff than on drones that kill Arab civilians. (Mike)

Welcome to the club... Frustrated Liberal Lawmaker Balances Beliefs and Politics. Mr. Blumenauer is just one example of what might be called the Frustrated Left, a substantial caucus of Congressional Democrats who dreamed that Mr. Obama would usher in a new era of liberal problem-solving only to see Congress and the new administration collide with the old problems of partisanship, internal disagreement and the challenge of mustering 60 votes to get just about anything done in the Senate. (7 of 6)

2009-10-20T12:57:00.000-07:00

A fake U.S. Chamber of Commerce press conference attended by real media reporters and crashed by a real C of C representative is quite amusing. The subject, which is the C of C's denial of climate change, is not:

2009-10-20T09:55:00.000-07:00

Bob Herbert has something to say about being big (snippet):

"....We need to make some fundamental changes in the way we do things in this country. The gamblers and con artists of the financial sector, the very same clowns who did so much to bring the economy down in the first place, are howling self-righteously over the prospect of regulations aimed at curbing the worst aspects of their excessively risky behavior and preventing them from causing yet another economic meltdown.

"We should be going even further. We’ve institutionalized the idea that there are firms that are too big to fail and, therefore, “we, the people” are obliged to see that they don’t — even if that means bankrupting the national treasury and undermining the living standards of ordinary people. What sense does that make?

"If some company is too big to fail, then it’s too big to exist. Break it up.

"Why should the general public have to constantly worry that a misstep by the high-wire artists at Goldman Sachs (to take the most obvious example) would put the entire economy in peril? These financial acrobats get the extraordinary benefits of their outlandish risk-taking — multimillion-dollar paychecks, homes the size of castles — but the public has to be there to absorb the worst of the pain when they take a terrible fall.

"Enough! Goldman Sachs is thriving while the combined rates of unemployment and underemployment are creeping toward a mind-boggling 20 percent. Two-thirds of all the income gains from the years 2002 to 2007 — two-thirds! — went to the top 1 percent of Americans.

"We cannot continue transferring the nation’s wealth to those at the apex of the economic pyramid — which is what we have been doing for the past three decades or so — while hoping that someday, maybe, the benefits of that transfer will trickle down in the form of steady employment and improved living standards for the many millions of families struggling to make it from day to day.

"That money is never going to trickle down. It’s a fairy tale. We’re crazy to continue believing it."

Bits and Pieces for the Week of October 11 - 17

2009-10-16T00:05:00.000-07:00

Foreclosure update (and it's not looking too rosy) (Mike)

A case against increasing the Federal Debt (Mike)

A plan for Afghanistan (Mike)

William K. Black - How the Servant Became a Predator: Finance's Five Fatal Flaws The financial sector's fixation on accounting earnings leads it to pressure U.S manufacturing and service firms to export jobs abroad, to deny capital to firms that are unionized, and to encourage firms to use foreign tax havens to evade paying U.S. taxes. (7 of 6)

Obama does it again... America wins the President's Cup! - ;) (7 of 6)

How Arizona balances its expenses... Funds raided to square state budget. "Legislators swept $228 mil this year." Taking from one program to pay for another. Unreal is all I can say. (7 of 6)

2009-10-09T12:10:00.000-07:00

"The real question Americans are asking is, “What has President Obama actually accomplished?” It is unfortunate that the president’s star power has outshined tireless advocates who have made real achievements working towards peace and human rights. One thing is certain — President Obama won’t be receiving any awards from Americans for job creation, fiscal responsibility, or backing up rhetoric with concrete action."

- - Republican National Committee Chairman Michael Steele

Honestly, I would have been pleasantly shocked if the Republicans had shown even the slightest degree of graciousness. I wonder how many of the dwindling remainder of Americans registered as Republicans will finally follow the light out of the dark side.

Bits and Pieces for the Week of October 4 - 10

2009-10-08T17:57:00.000-07:00

President Obama wins the Nobel Peace Prize. (7 of 6)

You can't blame the Republicans for this grotesque behavior. (Mike)

Gold hits record high... more signs of instability in the dollar. (7 of 6)

The demise of the dollar. Even if we recover economically, looks like we will be left with worthless paper. (7 of 6)

3 Americans share the Nobel Prize in medicine. Can this inspire kids to go into science and medicine? Or will the theocracy win out? (7 of 6)

What's all this fuss about MERS? (Mike)

How to anger the faculty of a state-run university system. (Mike)

2009-10-08T12:44:00.001-07:00

Pull up a chair and enjoy this video. Humans generally refer to "sexual orientation" as which gender a man or woman prefers for a personal and sexual relationship. This Republican Representative has a "slightly" broader definition:

2009-10-06T13:32:00.000-07:00

The top ten things you didn't know about Iran

The assumptions most Americans hold about Iran and its policies are wrong

By Juan Cole

Editor's note: For more from Juan Cole, visit his blog Informed Comment.

Oct. 01, 2009 |

Thursday is a fateful day for the world, as the U.S., other members of the United Nations Security Council, and Germany meet in Geneva with Iran in a bid to resolve outstanding issues. Although Iranian president Mahmoud Ahmadinejad had earlier attempted to put the nuclear issue off the bargaining table, this rhetorical flourish was a mere opening gambit and nuclear issues will certainly dominate the talks. As Henry Kissinger pointed out, these talks are just beginning and there are highly unlikely to be any breakthroughs for a very long time. Diplomacy is a marathon, not a sprint.

But on this occasion, I thought I'd take the opportunity to list some things that people tend to think they know about Iran, but for which the evidence is shaky.

Belief: Iran is aggressive and has threatened to attack Israel, its neighbors or the U.S.

Reality: Iran has not launched an aggressive war modern history (unlike the U.S. or Israel), and its leaders have a doctrine of "no first strike." This is true of Supreme Leader Ali Khamenei, as well as of Revolutionary Guardscommanders.

Belief: Iran is a militarized society bristling with dangerous weapons and a growing threat to world peace.

Reality: Iran's military budget is a little over $6 billion annually. Sweden, Singapore and Greece all have larger military budgets. Moreover, Iran is a country of 70 million, so that its per capita spending on defense is tiny compared to these others, since they are much smaller countries with regard to population. Iran spends less per capita on its military than any other country in the Persian Gulf region with the exception of the United Arab Emirates.

Belief: Iran has threatened to attack Israel militarily and to "wipe it off the map."

Reality: No Iranian leader in the executive has threatened an aggressive act of war on Israel, since this would contradict the doctrine of 'no first strike' to which the country has adhered. The Iranian president has explicitly said that Iran is not a threat to any country, including Israel.

Belief: But didn't President Mahmoud Ahmadinejad threaten to "wipe Israel off the map?"

Reality: President Mahmoud Ahmadinejad did quote Ayatollah Khomeini to the effect that "this Occupation regime over Jerusalem must vanish from the page of time" (in rezhim-e eshghalgar-i Qods bayad as safheh-e ruzgar mahv shavad). This was not a pledge to roll tanks and invade or to launch missiles, however. It is the expression of a hope that the regime will collapse, just as the Soviet Union did. It is not a threat to kill anyone at all.

Belief: But aren't Iranians Holocaust deniers?

Reality: Some are, some aren't. Former president Mohammad Khatami has castigated Ahmadinejad for questioning the full extent of the Holocaust, which he called "the crime of Nazism." Many educated Iranians in the regime are perfectly aware of the horrors of the Holocaust. In any case, despite what propagandists imply, neither Holocaust denial (as wicked as that is) nor calling Israel names is the same thing as pledging to attack it militarily.

Belief: Iran is like North Korea in having an active nuclear weapons program, and is the same sort of threat to the world.

Reality: Iran has a nuclear enrichment site at Natanz near Isfahan where it says it is trying to produce fuel for future civilian nuclear reactors to generate electricity. All Iranian leaders deny that this site is for weapons production, and the International Atomic Energy Agency has repeatedly inspected it and found no weapons program. Iran is not being completely transparent, generating some doubts, but all the evidence the IAEA and the CIA can gather points to there not being a weapons program. The 2007 National Intelligence Estimate by 16 U.S. intelligence agencies, including the CIA and the Defense Intelligence Agency, assessed with fair confidence that Iran has no nuclear weapons research program. This assessment was based on debriefings of defecting nuclear scientists, as well as on the documents they brought out, in addition to U.S. signals intelligence from Iran. While Germany, Israel and recently the U.K. intelligence is more suspicious of Iranian intentions, all of them were badly wrong about Iraq's alleged Weapons of Mass Destruction and Germany in particular was taken in by Curveball, a drunk Iraqi braggart.

Belief: The West recently discovered a secret Iranian nuclear weapons plant in a mountain near Qom.

Reality: Iran announced Monday a week ago to the International Atomic Energy Agency that it had begun work on a second, civilian nuclear enrichment facility near Qom. There are no nuclear materials at the site and it has not gone hot, so technically Iran is not in violation of the Nuclear Non-Proliferation Treaty, though it did break its word to the IAEA that it would immediately inform the UN of any work on a new facility. Iran has pledged to allow the site to be inspected regularly by the IAEA, and if it honors the pledge, as it largely has at the Natanz plant, then Iran cannot produce nuclear weapons at the site, since that would be detected by the inspectors. Secretary of State Hillary Clinton admitted on Sunday that Iran could not produce nuclear weapons at Natanz precisely because it is being inspected. Yet American hawks have repeatedly demanded a strike on Natanz.

Belief: The world should sanction Iran not only because of its nuclear enrichment research program but also because the current regime stole June's presidential election and brutally repressed the subsequent demonstrations.

Reality: Iran's reform movement is dead set against increased sanctions on Iran, which likely would not affect the regime, and would harm ordinary Iranians.

Belief: Isn't the Iranian regime irrational and crazed, so that a doctrine of mutally assured destruction just would not work with them?

Reality: Iranian politicians are rational actors. If they were madmen, why haven't they invaded any of their neighbors? Saddam Hussein of Iraq invaded both Iran and Kuwait. Israel invaded its neighbors more than once. In contrast, Iran has not started any wars. Demonizing people by calling them unbalanced is an old propaganda trick. The U.S. elite was once unalterably opposed to China having nuclear science because they believed the Chinese are intrinsically irrational. This kind of talk is a form of racism.

Belief: The international community would not have put sanctions on Iran, and would not be so worried, if it were not a gathering nuclear threat.

Reality: The centrifuge technology that Iran is using to enrich uranium is open-ended. In the old days, you could tell which countries might want a nuclear bomb by whether they were building light water reactors (unsuitable for bomb-making) or heavy-water reactors (could be used to make a bomb). But with centrifuges, once you can enrich to 5% to fuel a civilian reactor, you could theoretically feed the material back through many times and enrich to 90% for a bomb. However, as long as centrifuge plants are being actively inspected, they cannot be used to make a bomb. The two danger signals would be if Iran threw out the inspectors or if it found a way to create a secret facility. The latter task would be extremely difficult, however, as demonstrated by the CIA's discovery of the Qom facility construction in 2006 from satellite photos. Nuclear installations, especially centrifuge ones, consume a great deal of water, construction materiel, and so forth, so that constructing one in secret is a tall order. In any case, you can't attack and destroy a country because you have an intuition that they might be doing something illegal. You need some kind of proof. Moreover, Israel, Pakistan and India are all much worse citizens of the globe than Iran, since they refused to sign the NPT and then went for broke to get a bomb; and nothing at all has been done to any of them by the UNSC.

-- By Juan Cole

2009-09-29T12:37:00.001-07:00

Glenn Greenwald counters the current and massive hysteria over Iran's test-firing of missiles: