Half of recent mortgages are "iffy"

Well, at least from January 2006-June 2007, almost half of U.S. mortgages failed financial institutions' underwriting guidelines. According to a firm they hired to check that out!

So, what happened? They kept underwriting the loans. Moody's, Fitch and S&P deliberately declined to accept this information.

Part of (a Financial Crisis Inquiry Commission hearing held in Sacramento on Sept. 23) focused on the role that Clayton Holdings, a firm that reviews loan files on behalf of investment banks, played in the mortgage securitization process by which one home mortgage after another got packaged up into mortgage-backed securities by Wall Street and sold to investors all over the world. The banks hired Clayton to do some forensics — to examine the mortgages that went into the securities and determine if they complied with some basic level of credit underwriting guidelines and “client risk tolerances,” as well as with state and local laws. If a loan met the underwriting “guidelines,” Clayton would rate the loan “Event 1”; other ratings meant that the loan did not meet the guidelines, with varying degrees of flaws.

According to Vicki Beal, a senior vice president at Clayton who testified at the Sacramento hearing, one of the main services Wall Street paid Clayton for was a detailed examination of the loans that deviate “from seller underwriting guidelines and client tolerances.” ...

Of the 911,039 mortgages Clayton examined for its Wall Street clients ... for the six quarters between January 2006 and June 2007 ... only 54 percent were found to meet the underwriting guidelines. Standards deteriorated over time, with only 47 percent of the mortgages Clayton examined meeting the guidelines by the second quarter of 2007.

So, did Wall Street throw all those mortgages back into the pond as being too risky for securities they were going to sell to clients? Of course not — many were packaged right into their product. ...

The Times’ Gretchen Morgenson reported on that Clayton Holdings had in fact offered to make its data available to the three ratings agencies that rated mortgage-backed securities, but that each rejected Clayton’s offer.

And yet, as Krugman notes, the hacks at the WSJ say we should just accept bankers' words that the recent uncovering of fraud is nothing more than a paperwork issue.

And, the Obama Administration keeps its thumbs up its collective ass, perhaps hoping for campaign contributions. You know, if the GOP weren't up shit creek on being Wall Street shills, they'd have a ready made slogan ....

That instead, the Greens can use in 2012:

Let's foreclose on the White House!

A Chinese New Deal for the US?

Over at Salon, Andrew Leonard has an infrastructure wet dream. The gist is that, if Congress won't appropriate, and Obama won't seek, massive infrastructure project stimulus money, let's get Beijing to plow a bunch of its massive monetary stockpile back into our country.

Well, aside from protectionist-type issues, which Leonard does mention, there's a huge flaw or two in this. And, anybody who thinks about the dingy skies in most of China, the slipshod factories there, and other things, knows it right away.

As I Tweeted to Leonard, and here with a touch more expansion, China wouldn't build U.S. infrastructure per U.S. EPA, OSHA, wage/overtime and other standards. It's an elementary mistake on his part.

Beyond that, they wouldn't build the products here, if they could avoid it. The steel for bridge girders would all still be Made in China.

Was Lincecum really better than Halliday in NLDS?

Baseball stats "guru" Bill James (scare quotes on purpose) claims that Tim Lincecum's 14K NLDS performance against the Braves was better than Roy Halladay's no-no against the Reds. And, as in this mano-a-mano story from ESPN, it's repeated ad nauseum.

But, Herr James overlooks that Braves vs. Reds, in the two hurlers' opponents, is a no comparison as far as bats the two faced. And that's why Halladay's night was better.

One other thing that James and those overly wedded to current sabermetrics miss. Hits, even if partially dependent on fielding, aren't 100 percent dependent, like they claim. At the same time, especially given a man in blue like Hunter Wendelstedt, walks are at least as much outside a pitcher's control today as are hits.

Is Iran getting too old to be such a threat?

Yes, we hear about how young so many countries in and around the Middle East are, but, for Mad Mahmoud Ahmedinejad, Ayatollah Khamenei, et al, the youth boom may not last so long. And, while frustrating to their attempts to tighten their authority, it's had the flip side of "projecting power."

So, why will Iran gray out? How quickly? And, what does it mean?

As far as the why? It's got a rapidly declining birthrate:

As recently as the late 1970s, the average Iranian woman had nearly seven children. Today, for reasons not well understood, she has just 1.74, far below the average 2.1 children needed to sustain a population over time. Accordingly, between 2010 and 2050, the share of Iran's population 60 and older is expected to increase from 7.1 to 28.1 percent. This is well above the share of 60-plus people found in Western Europe today and about the same percentage that is expected for most Northern European countries in 2050. But unlike Western Europe, Iran and many other developing regions experiencing the same hyper-aging -- from Cuba to Croatia, Lebanon to the Wallis and Futuna Islands -- will not necessarily have a chance to get rich before they get old.

This is far more rapid than similar declines in developing nations. That's part of why Iran may not "strike it rich."

Meanwhile, what drives Iran now? What's a good analogy? Despite Ahmadinejad's sometimes buffoonish antisemitism, it's not Nazi Germany. A better analogy might be the old USSR, needing the U.S. as a focal point:

Ayatollah Ahmad Jannati, head of the powerful Guardian Council, put it plainly in a 2009 interview with Etemad newspaper: "If pro-American tendencies come to power in Iran, we have to say goodbye to everything. After all, anti-Americanism is among the main features of our Islamic state."

In fact, KARIM SADJADPOUR says we need just take George Kennan's famous 1947 essay about Stalin's USSR, and replace that with "Iran" and "Communism" with "Islamism."

Combine that with the aging mentioned above, also parallel to the the Soviet Union in a later stage of its life, and one has to ask if Iran of the ayatollahs will implode of its own accord at some point. The most likely answer is no, because it has China as a backstop that Gorbachev didn't.

But, there’s a flip side:

By 2020, the number of 15- to 24-year-old Iranians will have shrunk by 34 percent since 2005, according to the U.N. Population Division. This largely reflects the sharp downturn in the Iranian economy that occurred after its 1979 revolution, as well as the clerical regime's embrace of contraception. But from 2020 to 2035, the number will again swell by 34 percent, even if birth rates continue to decline. Why? A very high proportion of Iranian women are now of childbearing age, which means that even though young Iranian women are having far fewer children than their mothers did -- indeed, not enough to sustain the population over time -- their numbers are still sufficient to create a temporary "echo boom."

So, Iran could become more unstable before any implosion, unstable to the external world.

It's an aging world, and not just in the West

In much of the "developing" world, the population bell curve is also projected to shift sharply right, toward senior citizens and near-seniors, by no later than 2050.

But why?

One reason? Blame the boob tube:

In Brazil, television was introduced sequentially province by province, and in each new region the boob tube reached, birth rates plummeted soon after.

Coaxial cable and satellite dishes as contraceptives, eh?

And, what does it mean?

1. For the U.S., it’s true we’re not facing the age bell curve of much of Asia or Europe. But, that's not necessarily good. For one thiong, that means that we could be expected to pick up yet more of the world’s military policing burden. At the same time, birth rates are falling in Mexico, and in parts of Central America. That could reduce illegal immigration. That sounds good, right? Well, maybe, or maybe not, depending on how much illegals bolster Social Security and Medicare.

2. Job obsolescence and related issues will loom even larger. Also not so good.

One way for Obama to win back the left?

He could do this without alienating moderates, either - call for an international conference to discuss details of a Fifth Geneva Convention, specifically, one on how to deal with terrorists.

That said, while it sounds great, Obama,like Bush, is too addicted to the imperial presidency to actually do this. At the same time, as a Democrat, he's afraid of "soft on terror" criticism.

Cardinals cluelessness?

Did Mozeliak or Tony the Pony know Jake Westbrook's left shoulder was iffy enough, when trading for him, that he would need post-season surgery?

Obama teh Stupid - worse than Carter!

In an interview with Peter Baker for the NYT Magazine, Preznit Kumbaya said — get this — that he expected Republicans to offer him more cooperation after November's elections, no matter the outcome.

“It may be that regardless of what happens after this election, they feel more responsible, either because they didn’t do as well as they anticipated, and so the strategy of just saying no to everything and sitting on the sidelines and throwing bombs didn’t work for them,” Mr. Obama said. “Or they did reasonably well, in which case the American people are go

ing to be looking to them to offer serious proposals and work with me in a serious way.”
Has he not read the "Gesture to America" or whatever it's called? NO serious solutions will come forward from the GOP if it does well, and it will simply be more bitter if not.

How fucking dumb can you be and have a Harvard law degree, years of political experience and be elected President? Very, I guess.

Your former co-senator from Illinois? Not so dumb:

Senator Dick Durbin, the No. 2 Democrat in the upper chamber and Obama’s ally from Illinois, said the Republicans were to blame for the absence of bipartisanship. “I think his fate was sealed,” Durbin said. “Once the Republicans decided they would close ranks to defeat him, that just made it extremely difficult and dragged it out for a longer period of time. The American people have a limited attention span. Once you convince them there’s a problem, they want a solution.”

And, beyond the dumb, we get the continued, blatant lying:

“Democrats just congenitally tend to see the glass as half empty,” Obama said at a fund-raiser in Greenwich, Conn., last month. “If we get an historic health care bill passed — oh, well, the public option wasn’t there. If you get the financial reform bill passed — then, well, I don’t know about this particular derivatives rule, I’m not sure that I’m satisfied with that. And, gosh, we haven’t yet brought about world peace. I thought that was going to happen quicker.”

Well, let's see.

YOU sold out the public option.

YOU gutted financial reform.

YOU chose to double down on Afghanistan.

Obama is both stupid and lying on foreclosures

I don't know how else to explain his administration's mix of tone-deafness, cluelessness to the seriousness of the situation, and cluelessness to potential political capital.

First, in a number of ways, this is like the pre-bank bailout situation. And, more and more people are seeing the fraud, the big bank shadow and more looming in the background.

Plus, there's no excuse, not even the lying excuse of 2008, that nobody could have seen this coming.

So, for Obama mouthpiece David Axelrod to say a foreclosure moratorium is off the table is both stupid and idiotic.

Stupid because he knows better, he, like top bloggers, knows action is needed. Idiotic because you put down the shovel when you're already in a political hole - or you pick up a different tool when a new approach can be a winning one.

Already, the Wall Street types are pushing back against even basic elements of paper verification. So, is Obama's opposition to a moratorium motivated by campaign cash issues? We know that ultimately, folks like Goldman Sachs are behind CDO tranches behind this whole mess. And, G. Sachs took no bailout haircuts when AIG was made good 100 cents on the dollar.

At the same time, Obama can't punt, really, because the title insurance market runs on as tight a margin as did all the investment banks peddling CDO crap.

And, let's not forget the John Paulsons of the world who bet against those CDOs, and therefore have an interest in no moratorium.

Let's also note this type of fraud ain't exactly new.

Next, the idea of Bank of America self-insuring titles? Are state agencies going to accept and validate that? In many states, probably not. I'm no expert on the state-fragmented regulation of mortgages and related issues, but, at least in states that require court hearings for foreclosures, I don't think it's likely.

Beyond that, real estate financiers, by using computerization without any legal warrant, have brought this moment on themselves in other ways.

So, whether or not Obama is saying this shit for the darkest of neoliberal reasons, it sure looks that way. Or, option 2, it reinforces the idea that he's simply clueless.

As Andrew Leonard notes:

As Elizabeth Warren said in an interactive chat session broadcast at Whitehouse.gov while I was writing this post "the foreclosure problem is big and it is serious." Either she, or Obama, needs to make it clear to the general public just how serious it is and what the government plans to do. David Axelrod, obviously, is not the man for that job. Republican politicians are equally tongue-tied. For the most part, they've been remarkably quiet, aware that it is political suicide to defend the banks but ideologically opposed to any government intervention in favor of homeowners.

But time is short. Fumble this ball, and the game might be over.

Yep, that's about right.

Bosh was NOT key to Heat deal

J.A. Adande gets it wrong on Chris Bosh's centrality to the big deals, and I wonder why:

Bosh was the central figure in putting this all together. There are those familiar with the wheelings and dealings who insist Wade would have left Miami if he couldn't be assured of at least having Bosh by his side. And LeBron didn't want to replicate his experience in Cleveland as the only superstar. So no Bosh would have meant no Wade, so no LeBron.

"At least Bosh"? Well, LeBron is all that and more. "LeBron ... as the only superstar"? Well, Wade was already that himself. If that's not what Adande meant, then this is poor writing or editing.

I suspect Pat Riley fed Adande some of this, directly or indirectly, to keep Bosh pumped and happy. Otherwise, Chris, there's nothing wrong with being the third banana in this group. Ask, say, Lamar Odom in L.A.

Beyond Obama birthers to DNAers

Oy. The real purpose of these folks isn't to find Obama's alleged actual father, it's to humiliate him. The Malcolm X as Obama's father claim, if it didn't start with NYC nutbar Pam Gellar, at least got massive airplay from her. As for to whom you would compare Obama's DNA, that's easy - any black male at least 20 years older than Obama who ever got arrested. That's the "humiliate" part.

HTML5 has a downside

That is, its cookies and possible privacy snooping. Businesses will be able to gather a lot more information about our online habits, site visits, etc.

Of course, the option is to individually allow cookies. But, what if that makes sites even harder to load?

Goldman Sachs: Why for-profit college is pricey

Yep, that's probably part of the problem. The modern Octopus owns some for-profit colleges, like the Art Institute of Colorado. And it, like other for-profit collge owners, is chintzy on faculty salaries, a slavedriver on faculty workloads and more.

Shocking, no?

Hey, G-Sachs, pay your staff. And, don't foist an overpriced education bubble on us either.

Greg Mankiw fudges on taxes

The former Bush economic adviser admits he could easily afford to pay the higher marginal tax rates he would face if the Bush tax cuts expire, but then says it would cost him in future investments.

AND, he cheats big-time on how he figures this:

Suppose that some editor offered me $1,000 to write an article. If there were no taxes of any kind, this $1,000 of income would translate into $1,000 in extra saving. If I invested it in the stock of a company that earned, say, 8 percent a year on its capital, then 30 years from now, when I pass on, my children would inherit about $10,000. That is simply the miracle of compounding.

Now let’s put taxes into the calculus. First, assuming that the Bush tax cuts expire, I would pay 39.6 percent in federal income taxes on that extra income. Beyond that, the phaseout of deductions adds 1.2 percentage points to my effective marginal tax rate. I also pay Medicare tax, which the recent health care bill is raising to 3.8 percent, starting in 2013. And in Massachusetts, I pay 5.3 percent in state income taxes, part of which I get back as a federal deduction. Putting all those taxes together, that $1,000 of pretax income becomes only $523 of saving.

BUT, the story is JUST supposed to be about the Bush tax cuts, not every tax Mankiw pays. (Hey, Greg, did you forget your property taxes somewhere?)

And, it gets worse from there, as he gets into the estate tax and such.

What a gasbag. Or douchebag.

Umps, not just technology, behind blown calls

Steve Henson is one of several sports writers and columnists to review the rise of crapola in MLB playoff umpiring so far this year.

As a lifelong Cardinals fan old enough to remember Don Denkinger all too well, I can say that part of the problem with blown calls is umpire arrogance.

That starts with a stubborn refusal to want to reverse a call that is reversible by the umpire himself, like Golson's catch that was ruled a trap in Game 1 of Yankees-Twins. It goes beyond that to each umpire considering himself an island pretty much insulated from other umps.

Without, or in addition to, expanding replay, here's some other non-tech thoughts:

On at least some of these plays (the Golson catch a prime example) they wouldn't be blown calls if:
1. Umps got themselves in better position to make the calls;
2. Backup umps got themselves in better position to help out (the 1B ump on Golson, the 3B ump on Posey);
3. Umpires actually communicated with one another the way NFL or NBA refs do.

Arrogance among MLB umps, or a significant percentage of them, has been a problem for decades, not just years.

Cliff Lee ain't worth the long-term deal ... here's why

Hey, Texas stRangers fans, do you REALLY want to give Cliffy Lee a long-term contract, when he wears too long a dress to volunteer to pitch on short rest? Remember, he didn't offer for Philly last years, either. (I bet Halladay will, and of course, Sabethia has before.)

Jeff Passan lays down the smackdown:

The deeper truth: (The Rangers) didn’t trust Lee enough, and they never heard him request the assignment, because, he said, “I’m not going to go in there and demand anything.”

For somebody who wants more than $100 million to lead a pitching staff this offseason, Lee’s passivity is stark. There is an ethos in baseball, fair or not, that top-of-the-line pitchers ask for the ball under all circumstances. Lee refuses to ask for the ball; as such, he gives off the impression he doesn’t want it.

And, the Phillies saw that a year ago. That's why, when Ruben Amaro had a chance to, in essence, exchange Uncle Cliffy for Doc Halladay, he jumped.

Update: Now that the stRangers have whiffed on closing things out in Game 4, we'll see if Uncle Cliffy can trump momentum and a return to Tampa to win Game 5 on full rest.

Sabethia is again ready to go on short rest, too.

Obama politicizes terror like Bush

That's the claim of the Guardian, saying the Obama Administration politicized terrorism issues with its recent travel alert about Americans going to Europe.

Glen Greenwald is a bit skeptical, but, let's see if this has legs.

Pakistan's ambassador to Britain claims it's the Obama Administration attempting to justify its surge in attacks not just by drones, but also by helicopters, inside Pakistan. Considering that Pakistan retaliated by temporarily closing the Khyber Pass route into Afghanistan, this claim could be seen as having legs right there.

And, here's a summary of the European stance:

By making it clear that the US drone strikes were pre-emptive, and were not in any way combating an imminent threat, European officials raised fresh questions – this time directly involving a British national – about the legality of the attacks, which could be viewed as assassinations.

Yes, a lot of this is anonymously sourced, which starts Greenwald's complaint, but no more than in a typical U.S. newspaper.

That said, Glenn seems to have reduced some of his original skepticism.

That's in part because NATO is willing to jump on the politicization bandwagon. Of course, "NATO" should be in scare quotes, since it's a U.S. admiral doing the jawing.

Why real estate is even worse than claimed, especially in Big D

Many repoed houses that are resold? The official sale price ain't anywhere near being true. Oh, and shock me that this type of sales lying may have its ground zero in Dallas.

That's why Gov. Helmethair's claims about the strength of the Texas economy are bullshit. Unemployment is still going up in most major metropolitan areas, the heavy local reliance on property taxes looks shaky (especially with those fake resale Z prices, eh?)

And, I totally agree that this is part of the issue, too:

Compounding the problem is the seemingly endless prairie that stretches in every direction. Residential real estate in Dallas is all about what’s new, fresh, clean and contemporary, and beyond last year’s farthest-flung suburban outpost there is always more prairie, another slice of raw land on which to build this year’s model of the luxe domestic dream.

And, no, per the quote at the end of the story, nothing will change. Cheap gas prices will lead to more sprawl, not just suburban but exurban sprawl, while inner-ring suburbs on the north and east of Dallas, not just the south, will age ever less gracefully and ever more quickly.

I lived in suburban Dallas just about all of the last decade. Trust me on this one. I told residents of a Dallas suburb, back in late 2006, to vote against a new school bond issue in part because default and foreclosure numbers were already rising.

So, state Sen. Steve Ogden's plan to push more of school funding on a statewide property tax may not work so well, either. Especially if it caps appraisal rises not at 10 percent, but at even less than that.

The Big Three? No, the Dirty Three

Among the top eight automakers, the formerly Big Three are the bottom three on "green" ratings from the Union of Concerned Scientists.

Toyota's No. 1, right? Nope, its Priuses can't pull up its entire fleet. Honda is No. 1; Toyota ties with Hyundai - yep, Hyundai - for No. 2. (To be fair, Hyundai sells no pickups.)

Other details are no shock, like Chrysler just making minimum efforts and GM using its light hybrids more to boost horsepower than anything else.