Sunday, October 28, 2012

Can we blame Fannie again?
What did the ‘Friends of Angelo’ know and when did they know it? I know it’s not respectable to blame Fannie Mae for the financial meltdown. I understand that the Wall Streeters who oversold toxic securities bear much of the blame. But I don’t understand why the Justice department’s civil lawsuit against Bank of America for “brazen” mortgage fraud doesn’t put Fannie Mae back in the center of the vortex of culpability.

Bank of America is on the hook because it’s now owner of Countrywide Financial, (formerly headed by Angelo Mozilo, who liked to shower favors on powerful politicos like Dem bigshot and former Fannie CEO Jim Johnson). If I read the allegations in the stories correctly, Fannie bought up Countrywide’s crap mortgages (from which internal controls had been removed) and then repackaged them into securities for sale–laundering and legitimizing them, in effect, for Wall Street to then spread around.

This enabled Countrywide to gin up more crap mortgages....
The REALLY inconvenient truths about global warming. Last week we explosively revealed a 16-year 'pause' in rising temperatures - triggering a bitter debate. You decide what the real facts are...
Q: Is the world warming or not?

A: The Hadcrut 4 figures that show a ‘pause’ in warming lasting nearly 16 years are drawn from more than 3,000 measuring stations on land and at sea. Hadcrut 4 is one of several similar global databases that reveal the same thing: that since January 1997 there has been no statistically significant warming of the Earth’s surface.

Between 1980 and the end of 1996, the planet warmed at a rate close to 0.2 degrees per decade. Since then, says the Met Office, the trend has been a much lower 0.03 degrees per decade.

However, world average temperature measurements are subject to an error of plus or minus 0.1 degrees, while any attempt to calculate a trend for the period 1997-2012 has an in-built statistical error of plus or minus 0.4 degrees. The claim that there has been any statistically significant warming for the past 16 years is therefore unsustainable....

Q: But isn’t the world still much warmer than at any time in recorded history?

A: Ever since it was published on the cover of the IPCC’s Third Assessment report in 2001, the ‘hockey stick’ graph showing stable or declining temperatures since the year 1000, followed by a steep rise in the 20th Century, has been controversial. There were no thermometers in 1000, so scientists use ‘proxy’ data from items such as tree rings, lake sediments and ice cores.

The hockey stick authors have also been accused of eliminating the ‘medieval warm period’ (MWP) at the end of the first millennium.

Two new separate peer-reviewed studies, published in prestigious academic journals last week, reinstated it. The first study, led by Bo Christiansen of the Danish Meteorological Institute, concluded: ‘The level of warmth during the peak of the MWP in the second half of the 10th Century, equalled or slightly exceeded the mid-20th Century warming.’

There was also a pronounced warming period in Roman times....
Plan for hunting terrorists signals U.S. intends to keep adding names to kill lists
Over the past two years, the Obama administration has been secretly developing a new blueprint for pursuing terrorists, a next-generation targeting list called the “disposition matrix.”

The matrix contains the names of terrorism suspects arrayed against an accounting of the resources being marshaled to track them down, including sealed indictments and clandestine operations. U.S. officials said the database is designed to go beyond existing kill lists, mapping plans for the “disposition” of suspects beyond the reach of American drones.

Although the matrix is a work in progress, the effort to create it reflects a reality setting in among the nation’s counterterrorism ranks: The United States’ conventional wars are winding down, but the government expects to continue adding names to kill or capture lists for years.

Among senior Obama administration officials, there is a broad consensus that such operations are likely to be extended at least another decade. Given the way al-Qaeda continues to metastasize, some officials said no clear end is in sight.

“We can’t possibly kill everyone who wants to harm us,” a senior administration official said...

...Before the attacks of Sept. 11, 2001, the United States recoiled at the idea of targeted killing. The Sept. 11 commission recounted how the Clinton administration had passed on a series of opportunities to target bin Laden in the years before the attacks — before armed drones existed. President Bill Clinton approved a set of cruise-missile strikes in 1998 after al-Qaeda bombed embassies in East Africa, but after extensive deliberation, and the group’s leader escaped harm.

Targeted killing is now so routine that the Obama administration has spent much of the past year codifying and streamlining the processes that sustain it...
All about libertarians: Group’s mystique increases as profile is raised
It’s well known that libertarians hold fiscally conservative and socially liberal views. What is less known is that libertarians, in prizing liberty above all else, place less emphasis than others, according to the study, on caring for others, avoiding harm, behaving benevolently and acting altruistically — values that traditionally have defined virtuous and heroic behavior in nearly all of the moral systems of the world.

This calls to mind the muse of the contemporary libertarian movement, Ayn Rand, and her provocative position that altruists, far from being the self-sacrificing heroes that our culture makes them out to be, are “evil.” One who commits an altruistic act is, for Rand, like one who sacrifices his life in suicide — a madman or a fool.

“If any civilization is to survive, it is the morality of altruism that men have to reject,” Rand argued.

In his bestselling book “The Righteous Mind: Why Good People Are Divided by Politics and Religion” (2012), Mr. Haidt, a co-author of the libertarian study, breaks down the foundational moral principles that shape liberal, conservative and libertarian ideology. According to research Mr. Haidt has conducted, liberals rely on three of the six core moral foundations: care, liberty and fairness. Conservatives rely on all six — the three that liberals favor plus sanctity, loyalty and authority.

Libertarians have the narrowest moral sense, relying on only one of the six universal moral foundations — liberty. Revealingly, they score lower than both conservatives and liberals on measures of care for others and protecting others from harm. What libertarians do care about, almost to the exclusion of all else, is individual rights — the group’s “sacred value,” according to the study. Mr. Iyer and his colleagues found that the most prominent feature of libertarians is “self-direction” — or independence.

“They are less groupish, less likely to coalesce and subject themselves to party discipline,” Mr. Haidt says. Libertarians also tend to be less social than most.

The libertarian reliance on liberty and self, however, comes at a social cost. According to the study, libertarians showed lower than other groups on levels of loving feelings toward their families, friends, romantic partners and generic others, which brings to mind another gem from Rand: “To say ‘I love you’ one must know first know how to say the ‘I’.”...
Hey, Barney Frank: The Government Did Cause the Housing Crisis
It is certainly possible to find prime mortgages among borrowers below the median income, but when half or more of the mortgages the GSEs bought had to be made to people below that income level, it was inevitable that underwriting standards had to decline. And they did. By 2000, Fannie was offering no-downpayment loans. By 2002, Fannie and Freddie had bought well over $1 trillion of subprime and other low quality loans. Fannie and Freddie were by far the largest part of this effort, but the FHA, Federal Home Loan Banks, Veterans Administration and other agencies--all under congressional and HUD pressure--followed suit. This continued through the 1990s and 2000s until the housing bubble--created by all this government-backed spending--collapsed in 2007. As a result, in 2008, before the mortgage meltdown that triggered the crisis, there were 27 million subprime and other low quality mortgages in the US financial system. That was half of all mortgages. Of these, over 70% (19.2 million) were on the books of government agencies like Fannie and Freddie, so there is no doubt that the government created the demand for these weak loans; less than 30% (7.8 million) were held or distributed by the banks, which profited from the opportunity created by the government. When these mortgages failed in unprecedented numbers in 2008, driving down housing prices throughout the U.S., they weakened all financial institutions and caused the financial crisis....

Congressman Frank makes assertions about who was responsible, but he, like all those who hold his position, have no data. He says that the banks were responsible, but cannot challenge the numbers I have outlined above. These numbers show, beyond question, that it was government housing policy that caused the financial crisis. Even he has admitted it. In an interview on Larry Kudlow's show in August 2010, he said "I hope by next year we'll have abolished Fannie and Freddie ... it was a great mistake to push lower-income people into housing they couldn't afford and couldn't really handle once they had it."...
Countrywide Friends Got Good Loans

...Mr. Johnson led Fannie Mae from 1991 to 1998. He and Countrywide's Mr. Mozilo worked together to streamline the underwriting process. Mr. Mozilo told Dow Jones in 1995 that he was "working very closely ... with Jim Johnson of Fannie Mae to come up with a rational method of making the process more efficient by the use of credit scoring." Their efforts helped to lead to a boom in mortgage lending that brought huge profits to both companies but is now ending badly....

...Mr. Johnson returned to Countrywide several times to finance his growing real-estate holdings. In November 2001, he received a Countrywide loan of $1.3 million for a home in Palm Desert, Calif. The rate was 5.250% for five years, then became adjustable. Rates on such loans averaged about 6% to 6.2% about that time, HSH says.

In June 2003, Mr. Johnson obtained a $971,650 mortgage on a house in upper northwest Washington, D.C., with a rate of 3.875% for the first five years. About that time, the market average was about 4.3% to 4.9%, according to HSH.

In January 2006, Mr. Johnson got a $5 million home-equity line of credit from Countrywide on a residence in Ketchum, Idaho, near the Sun Valley ski resort. And in December 2007 he received a Countrywide home-equity line of credit for $1.01 million and executed a $1 million promissory note in connection with that home....

...Mr. Raines, who succeeded Mr. Johnson at Fannie's helm at the end of 1998, became a repeat customer of Countrywide while he was CEO. Two days before Christmas in 1999, Mr. Raines got a $1 million loan on his house in upper northwest Washington, D.C., refinancing it in November 2001. Property records don't show the interest rate in either case.

In April 2003, Mr. Raines refinanced again with Countrywide, this time getting a 5.125% rate for the first 10 years. According to HSH, the average rate for such a loan around that time was about 5.5% to 5.7%.

On July 31, 2003, Mr. Raines refinanced again, this time shaving a full percentage point off his initial rate, to 4.125%. The market rate at that period averaged about 5.1% to 5.4%, HSH data show....

...Mr. Raines, was forced to retire from Fannie Mae in 2004 when its regulator found it had violated accounting rules in an effort to conceal fluctuations in profit and hadn't maintained adequate risk controls. This April he agreed to a settlement that involved a donation of about $1.8 million to charity. He said the settlement was "not an acknowledgment of wrongdoing."...

Sunday, October 14, 2012

Global warming stopped 16 years ago, reveals Met Office report quietly released... and here is the chart to prove it
The figures reveal that from the beginning of 1997 until August 2012 there was no discernible rise in aggregate global temperatures

This means that the ‘pause’ in global warming has now lasted for about the same time as the previous period when temperatures rose, 1980 to 1996

The world stopped getting warmer almost 16 years ago, according to new data released last week.

The figures, which have triggered debate among climate scientists, reveal that from the beginning of 1997 until August 2012, there was no discernible rise in aggregate global temperatures.

This means that the ‘plateau’ or ‘pause’ in global warming has now lasted for about the same time as the previous period when temperatures rose, 1980 to 1996. Before that, temperatures had been stable or declining for about 40 years.

The new data, compiled from more than 3,000 measuring points on land and sea, was issued quietly on the internet, without any media fanfare, and, until today, it has not been reported.

This stands in sharp contrast to the release of the previous figures six months ago, which went only to the end of 2010 – a very warm year.

Ending the data then means it is possible to show a slight warming trend since 1997, but 2011 and the first eight months of 2012 were much cooler, and thus this trend is erased. ...
Pr. George’s officer charged with assault
A veteran Prince George’s County police officer was charged Friday with misconduct in office, reckless endangerment and second-degree assault for allegedly striking a Cottage City teenager with his gun — causing the weapon to discharge — then lying about what happened so he could criminally charge the young man, authorities and law enforcement sources said....
Climate Denier Phil Jones Reports No Temperature Change For Sixteen Years
Obama Administration pressures contractors not to warn workers of possible impending layoffs
...The Obama administration has sought to quell the fear of mass defense layoffs in presidential battlegrounds like Virginia, where letters sent in early November warning about the possibility of job losses could discourage thousands of defense workers from backing the incumbent.

The government’s guarantee to foot the bill for legal problems, as long as contractors heed OMB’s advice to refrain from warning about lob losses, is unusual.

“I don’t know of any situation where the government has done this in the past,” said William Gould, a labor professor at Stanford Law School....
The New School Nurse Is Nurse Ratched
..."In Ken Kesey's 1962 novel One Flew Over the Cuckoo's Nest, Nurse Ratched maintained order in the mental institution by dispensing antipsychotic and anticonvulsant drugs to the patients. Fifty years later, the NY Times reports that some physicians are prescribing stimulants to struggling students in schools starved of extra money, not to treat ADHD, necessarily, but to boost their academic performance. 'We as a society have been unwilling to invest in very effective nonpharmaceutical interventions for these children and their families,' said Dr. Ramesh Raghavan, an expert in prescription drug use among low-income children. 'We are effectively forcing local community psychiatrists to use the only tool at their disposal, which is psychotropic medications.'"...
Video: Preview of Univision’s “bombshell” report on Fast & Furious
...The Obama administration clearly hoped that the Department of Justice’s Inspector General report on Operation Fast and Furious would be the last word on the scandal. which has been tied to hundreds of deaths in Mexico and the murders of two American law-enforcement officials. However, a new report from Univision to be broadcast tomorrow, previewed here by ABC News, may put the issue back on the front pages. One source called Univision’s findings the “holy grail” that Congressional investigators have been seeking...

Univision’s bombshell: Fast & Furious not just in Arizona, or Mexico
...The other shoe dropped on the ATF’s Operation Fast and Furious last night, and it should sting — if enough people pay attention to it. Univision reported that the effort wasn’t just limited to one ATF office in Arizona — it had other operations in Florida and Texas as well. The ATF and Department of Justice lost more weapons than they have so far acknowledged, and those weapons have been tied to even more murders than previously thought — including a massacre of teens and young adults. This report literally showed blood flowing in the streets as a result of Fast and Furious, as ABC News reports...
Terrifying: Increases in Real Per Capita Federal Spending Over The Past 35 Years
The above chart put together by my frequent collaborator Veronique de Rugy is, simply put, terrifying.

It shows the growth in inflation-adjusted federal outlays per capita. So what you're looking at is a trend line that accounts for population growth and inflation.

Two things stand out: George W. Bush was god-awful. And Barack Obama looks to be even worse (note: fiscal 2009 includes spending attributable to both adminstrations).
Eric Holder in His “Fixer” Role
...During the 1990s, Eric Holder operated as the “fixer” for Attorney General Janet Reno, and from Ruby Ridge to Waco to the Oklahoma City bombing, Holder made sure that the government suppressed information that would have placed the Clinton administration in a bad light. (Murder tends to make one look bad.) Ultimately, Holder was rewarded by being appointed U.S. Attorney General under Barack Obama, and one only can imagine the crimes that Holder now is concealing....
A big (and updated) version of the biggest, most important chart in American politics.
Surprise! Another Obama bundler benefits from “green-tech” subsidies
...An investment firm whose vice chairman has been an adviser and fundraiser for President Obama saw one of its portfolio companies win approval this year for $50 million in loans from the administration’s clean-energy loan program.

Washington-based Perseus says its affiliation with James A. Johnson, a major fundraiser for Obama’s campaign, played no role in persuading the Energy Department to award the loan to Vehicle Production Group, a Miami start-up that is manufacturing wheelchair-accessible cars and taxis....

...Johnson headed Obama’s vice presidential selection committee in 2008 and is the former chairman of housing mortgage giant Fannie Mae. He was listed as a campaign fundraising bundler for Obama in the 2008 race, according to the Center for Responsive Politics, and committed to raising $200,000 to $500,000 for the upcoming presidential race. …

Johnson had supported Obama as a young senator and, later, was briefly part of a three-member team leading his vice presidential search committee. But Johnson resigned in June 2008 amid revelations that he had received $7 million in deeply discounted mortgage loans from the chief executive of Countrywide, a company that had helped fuel the rise of subprime home mortgages. He said the controversy was a distraction for Obama’s campaign.

Johnson has personally donated $55,400 to Obama’s two presidential campaigns, federal donation records show, including a $35,800 check listed on Aug. 29 to Obama’s reelection effort. Pearl donated $1,500 to Obama’s campaign in 2008....
Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

This is known as “bad luck.”