Loyalty without truth
is a trail to tyranny.
|Sunday, 23 December 2007 at 0h 52m 55s|
The bottom is nowhere near
Photo and link courtesy of the New York Times
Click on the image above for a cool interactive graphic that lists the percentage of home mortgages
per county that are sub-prime.
What is intriguing to me, is that almost every single county has at least 20% of the home
mortgages from sub-prime criteria
(Click the pic above, and see for yourself). These loans are very risky, because there is no down
payment money to cushion the two years of payments, teaser interest rates that will spike
in a year, and the mortgage holders have a high ratio of income to house payment. 40% of sub-prime
loan default within 10 years (I heard that from Paul Krugman). There are 51 million morgages. 20%
million is about 10.2 million homes.
Of course, that doesn't necessarily mean 10.2 million securitized mortgages will all become
worthless. Homes which default can be resold, but sometimes not, and not without a loss when the
market prices drop
But what does this mean in terms of monetary loss? Well, 10.2 million times $200,000 (the average
home value) is
102 times 2 with 10 zeroes, 2,040,000,000,000 , 2.04 trillion dollars !!! Keep in mind that
various securities firms (Bear Stearns, Morgan Stanley, Goldman Sachs) were reporting losses in the
billions of dollars.
The effects of price deflation and market glut have yet to transpire, and that will come in the
next 5 or 6 years in various markets where the availability of land is not a factor in the housing
price. Thus of the 2,040 billion dollars in the sub-prime real estate, the other 80% of real
estate will still be affected by the price decline on the securitized assets( Securitized assets, are
bundled mortages or financial obligations that yield interest payments on a periodical basis).
Now stay with me on this. If there is a 30% decline in the housing sector for 80% of the above
2,040 billion that is not in a tight housing market like San Francisco and New York City, that is
24% of 2,040 billion dollars in lost value, which is 489.6 billion dollars.
Now if we furthermore
assume half of the remaining 20% (10% of all sub-prime mortgages) will default (which is very
conservative) then we also have to include $200,000 (the average) times 10% of 10.2 million
mortgages in lost value, which comes to 240 billion more. That makes the lump sum a conservative
low ball estimate of $730 billion dollars.
If we take the high end of 40%, then we have to add 4 times 240 to the 489.6, to get 1.5 trillion
Click on the picture for the 20 year history of various real estate markets as bar graphs. COOL!!!
Photo and link courtesy of the New York Times
Now if there are more defaults, or the economy slows down and further squeezes the market, then the
losses get closer to and begin to surmount two trillion dollars, which is about the same amount of
money wasted on the Iraq adventure. Can the out-sourced and down-sized US Economy take a 4
trillion dollar hit without anything to show for it (as in, no infrastructure was built and no
actual capital investment occurred) ?
I guess we will all find out.
[SOURCE: New York Times ]
|Thursday, 20 December 2007 at 7h 47m 20s|
Sensationalism and schadenfreude
Schadenfreude SHOD-n-froy-duh, noun:
A malicious satisfaction obtained from the misfortunes of others.
Don't you just love the headline of today's San Fran Comical. Here is the
page story, and the picture that blasts at you from the the front page.
Diana Reggi breaks down at her Albany home as she talks about her son, Remo. The 20-year-old was
gunned down while sitting in a car two years ago.
[SOURCE: San Francisco Chronicle]
Some other award winning stories that actually add to the breadth of the public's knowledge:
- 3 Harrowing, Cold Nights: Father says he tried to keep his kids warm and calm during
ordeal mountain near Chico.
- Google Can Buy DoubleClick: Federal antitrust regulators clear search giant's $3.1
billion purchase of online ad firm
- Huckabee On Giuliani's Heels. Poll: Largely unknown candidate soars to second place in
state GOP presidential race.
- Vallejo House Fire Kills 3. Officials investigating blaze that broke out just after
- Woman's Body Found In Landfill. Slain victim discovered in Milpitas site. Convicted
felon, who may have been personal trainer, arrested.
- Girl With Object In Throat Dies. Tot rushed to the hospital last week dies of her
injuries. Teen boy will now face murder charge.
Are you kidding me? What is relevant about the suffering and pain experienced by other people? Why
is that news?
There are other stories ( MySpace sex phobias, Tacoma's ban on certain types of alcohol) but not
one story on the recent FCC decision to allow one media company own a radio, television, and
newspaper in the same market. Despite the overwhelmingly unananimous public opinions to the
contrary at the 3 hastily erected public forums, FCC boy chairmen Kevin Martin gave the
corporations what they wanted, the will of the people be damned. Here is a
link to that story from Marketwatch.
It's disgusting how they couch this as some egalitarian free market approach. This is creating
media monopoly, and Keven Martin is padding his resume. Watch what his first job is after he
as FCC chairmen next year. Follow the money, and pay attention to the actions of man-servants who
UPDATE:Kevin Martin and the Republicans all like to say they are relaxing the rules because
of declining profits in the newspaper market, and they assert that combining the staffs will save
jobs. Note that these business are not losing money. Profits might be less, but the rate of
profit is still comparable with the average corporation on the S&P 500.
And these people always say they are saving jobs to get what they want. Every single media
consolidation that has occurred since 1980 has caused a round of staff firings, centralization of
news services, and pundit programing because it's cheaper. And since you have a captive audience
because you are the only company in town, who exists to provide alternatives? That's the
And what happens when the internet service providers decide to create traffic lanes on the internet
in order to milk more money from the users? You should know the answer.
|Wednesday, 19 December 2007 at 17h 23m 50s|
Private mercenaries at work
And play ...
Last week, Rep. Ted Poe (REPUBLICAN-TX) said on CNN that he did not believe that gang rape
in Iraq of former Halliburton/KBR employee Jamie Leigh Jones was “an isolated case of assault.” Poe
then encouraged “other victims” to notify his office.
[SOURCE: Think Progress ]
Some video of the Congressional testimony by one of the women, Jaime Leigh Jones, can be located at
the source below.
Jamie Leigh Jones, now 22, says that after she was raped by multiple men at a KBR camp in the Green
Zone, the company put her under guard in a shipping container with a bed and warned her that if she
left Iraq for medical treatment, she’d be out of a job.
“Don’t plan on working back in Iraq. There won’t be a position here, and there won’t be a position
in Houston,” Jones says she was told.
[SOURCE: Jesse Lee The Gavel]
Ever notice how news and information distribution is being taken over by journalist blogsites.
News shows are even now sourcing their own information from various blog journalist sources.
People who call themselves journalists that work for traditional media (television, newspapers) are
really no different than you or me, except maybe experience and a better ability to write everyday
than most people. But you too can use the telephone, do the research, fly to the locations, and
cull various connections. Of course it does help when it's your job, and the company backs you up
with funds to do the job. Assuming that is what the conglomerated media do.
Nope, it's hyperbole and trivialization with actual depth of information being replaced by quotes
from various politico's who caress the truth with ambiguity, brought to you by creamed and pomaded
rich people who look at the cameras and read the news like tying a knot in very cold weather.
That's why the blogoshere was able to explode. The number of persons who read and want to know
aren't going to participate in mental depravity. The old media is destroying itself. Media
ownership needs to be diverse in order to offer variety and obtain a functional competition. The
consolidation of media companies into only 10 to 20 across the nation owning 95% necessitates
I've discussed this before in earlier posts, but I'll re-explain. When large blocks of economic
control and wealth consolidate into a small number of equal sized institutions, competition is
expensive and unpredictable. Legal and advertizing costs are much higher. Groups of allies form
to mutual benefit because it is in the best interest of everyone to just keep prices high and divy
up the market. It happens that way historically for a reason. When instead, the number of
competitors is in the tens of thousands, or hundreds, the amount of people involved in
prohibitive. 20 to 50 CEO's and their assistants is small compared to 600 or 6,000. It is
possible to know 50 people. I myself know probably 1000 people and counting this year alone,
although the chances are good that I might not remember 20 to 30% by name.
Collusion between a small number of very large firms is so normative that some persons even realize
the clothes they wear have corporate logos. The European Medieval aristocracy used to have designs
and emblems that represented the line of wealth (the estate) and corporate logos have become and
extension of that historical root. Except nowadays the peasants who tote the emblem of their lords
don't really know they are doing so, because unlike the actual human form of a Baron or King, there
is no human face to a Nike symbol. It manifests its existence in legal forms, with factories in
distant lands and servants who distribute and purchase supplies. Those who man the helm of the
corporate office are just the current navigators, and those who own the boat they sail are filthy
Check out this site, especially the pie charts. The "investment
assets" and "Housing, Liquid Assets, Pension Assets, and Debt" is about 1/5 th of the way down.
the top one percent of households have 44.1% of all privately held stock, 58.0% of financial
securities, and 57.3% of business equity. The top 10% have 85% to 90% of stock, bonds, trust funds,
and business equity, and over 75% of non-home real estate.
|Wednesday, 19 December 2007 at 16h 31m 39s|
A Fire is a Friend Indeed
Dick Cheney's office just got burned. A fire started in the closet
DC Fire Chief has just publically stated that he cannot say where the fire started for "security"
The Agence-France Presse pap story is here
Don't you just love the way the story quickly reassures us in paragraph two that terrorists did not
set a fire in Dick Cheney's closet. Now why would a fire start in Dick Cheney's office? Aren't
document shredders working hard
|Tuesday, 18 December 2007 at 17h 45m 49s|
The moon explains the tectonic plates
The Moon affects the liquid envelope of the Earth, and the oceanic tides in particular. The Moon
affects the ocean tides more in some areas than others. For instance, in the channel between the
British Isles and the European continent, the tidal range can be 10 meters, compared to what you
see in the Pacific, where it is below a meter.
The crust of the Earth is also affected. The Moon’s tidal forcing causes significant heating and
dissipation of energy to take place. Part of this energy is heating the Earth, and part of it is
dissipated by forcing the Moon to recede from the Earth over time. There are people who propose
that the tidal effect of the Moon may have helped trigger the convection on the Earth that led to
the multi-plate tectonics. The other planets don’t have the same tectonic cycle. For most of them,
the crust is like a lid that doesn’t move much horizontally, and the magma and heat are blocked by
this lid on the surface. The Earth instead has rolling convective motion that drags the crust, and
then the crust plunges back down into the mantle and gets recycled.
[SOURCE: Bernard Foing Astrobiology Magazine ]
|Tuesday, 18 December 2007 at 17h 4m 19s|
Yep, that's what I think too
As we have seen in oh so many different contexts, the blind adherence to dogma and ideology, from
religious zealots to acolytes of Ayn Rand, seems to only lead to a broad range of problems, ranging
from errors in judgment to unnecessary pain. Ultimately, most political and economic extremists
collapse under the weight of their own slavish devotion to a universal idea that is inapplicable to
a specific situation. Some people call this consistency, but the word "stupidity" means the same
thing, and can be typed with less letters
[SOURCE: Barry Ritholtz The Big Picture blog]
|Tuesday, 18 December 2007 at 16h 48m 0s|
Oh my God. Bush is actually really destroying the government, while the media
corps all act like the emperor actually wears any clothes.
The head of the GAO just released a earth-shattering report yesterday, and in the national media, a
pin drops in some distant forest. What is this thing which shatters the Earth?
Yesterday, the Treasury Department released a troubling financial report that revealed the federal
government’s “total liabilities and unfunded commitments for future payments” related to Social
Security and Medicare are now estimated at $53 trillion, up from $20 trillion in 2000.
In a speech yesterday at the National Press Club, GAO Comptroller General David Walker said:
If the federal government was a private corporation and the same report came out this morning, our
stock would be dropping and some people would be talking about whether the company’s management
directors needed a major shake-up.
“The federal government’s total liabilities,” Walker explained, “translates into a de facto
mortgage of about $455,000 for every American household and there’s no house to back that mortgage.
In other words, our government has made a whole lot of promises that, in the long run, it cannot
possibly keep without huge tax increases.”
[SOURCE: ThinkProgress.org ]
SOURCE: Mary Mosquera Federal Computer Week ]
[SOURCE: Dan Friedman Congress Daily]
[SOURCE: GAO 2007
Report US Department of Treasury ]
David Walker is basically the Government's financial advisor/auditor guy. He is the top officer of
the Government Accountability Office, or GAO. A wikipedia history link is here.
Did you catch that dollar amount? $455,000 for every American household. What Mr. Walker means is
that every American is financing that kind of debt per year, which can be determined by taking the
entire interest payments of the government (406 billion in 2006) dividing by the number of
households, and making the result equal to the interest rate multiplied to the Principle ( interest
per person = i*P. When you divide by the interest rate, you get $455,000.
Look at that military spending
Now keep that chart in mind, when you consider what the GAO report said in it's official statement:
three major impediments continue to prevent us from rendering an opinion on the accrual basis
consolidated financial statements: (1) serious financial management problems at the
Department of Defense, (2) the federal government’s inability to adequately account for
and reconcile intragovernmental activity and balances between federal agencies, and (3)
the federal government’s ineffective process for preparing the consolidated financial
The entire statement is only 4 pages long. If you want a brief read, here is the PDF file link
to the statement of the GAO from the Department of the Treasury website.
|Monday, 17 December 2007 at 8h 14m 43s|
Oh the webs they weave
I write letters to the editor periodically. I've been doing so since I was in high
one I wrote in response to a Mr. Harold, whose letter to editor was published in last week's
Mr. Harold writes a letter accusing “liberals” of everything that is wrong with the Bush
administration, and says that invading Iraq to defeat terrorism was a good idea because Clinton
agreed. Oh, and moveon.org ran a defeatist ad in the New York Times.
Whatever you think of Moveon.org, they did not lie. The Swift-boat veterans group however (aided
by a Bush-Cheney team lawyer) did lie. The Republican organization Choice-point was given the
contract by Jeb Bush to purge the Florida voters of felons in 1999-2000, and was 90% inaccurate
because they loosely associated a list of names without bothering to verify they were correct –
costing 80,000 votes! Republican astro-turf groups (like Sproul and associates) organized fake
registration drives that threw
away Democratic registrations in Nevada, Arizona, and California during the 2004 campaign.
Republican Ohio secretary of State Blackwell manipulated the voting machine distributions so that
voters in Democratic districts had to wait in lines for 8 hours to vote. But Moveon.org gets your
ire because that’s what the right-wing spin machine tells you, and like a fool you listen.
And you want “facts, not negative spin” ?
FACT: The Cheney-Bush team did not convene the terrorism task force once during the entire 9 months
of 2001, even though they knew Al Quaida was intending to attack because the Clinton team
thoroughly briefed them in February 2001.
FACT: Cheney meet with oil & energy firms to look at oil maps of Iraq at the secretive Energy Task
Force that meet in April of 2001. FACT: The Bush-Cheney team ignored and stymied all of the
warning by lower level FBI agents. FACT: Bush signed an executive order halting the investigation
into the bin laden charity funding networks, because the Bush family has been friends with the
Saudi Arabian monarch family for nearly 40 years. FACT: When planes were grounded on September
12th, the bin ladens in the United States were all picked up by a private chartered plane and
allowed to leave the country without being questioned at all.
FACT: the Bush-Cheney team used forged Niger documents to falsely say that Iraq
purchased “yellowcake” uranium. FACT: the Bush-Cheney team created the “Office of Special Plans”
within the Defense department to alter and skew intelligence to suit their agenda. FACT: the Bush-
Cheney team used fake “dissidents” coached by public relations firms to make untrue statements that
were publicized by Judith Miller and other willing journalists.
The Bush-Cheney team is defunding the veterans administration and treating our troops
horrifically. There has been no beefing up of security in the United States at all. The funds
for first-responders has been cut by the Bush administration so they can ensure funds for their
political appointments and private contractors. The corruption is beyond anything this nation has
seen since Ullysses Grant. But somehow our troops are keeping “us out of harms way” by invading
nations that did not attack us and were no threat to our nation whatsoever, because of the Bush-
Cheney teams’ psychopathic dream of a New American Empire.
|Saturday, 15 December 2007 at 13h 49m 17s|
Negative home equity and dropping home prices
Click here if you are interested in reading about home equity, negative home
equity, and how the drop in home prices in various American markets will push a lot of home owners
into negative equity.
Here's a cool chart
This is a percentage distribution. The vertical axis represents percentage of mortgaged
homeowners. The horizontal axis represents the percent of equity, with positive meaning the value
of the house is more than the mortgage debt. Negative equity occurs when the value of the house is
less than the mortgage. According to the Census Bureau's 2006 American Community Survey (see table
here) there were 51,234,170 household with mortgage in the U.S. in 2006.
The dashed line is the boundary between positive and negative equity, the "break-even" point. A
very high proportion of foreclosures occur because the occupants can't afford the mortgage and
can't sell the house to pay off the mortgage. This is why negative equity is a very big deal, and
why declining prices is a very serious economic factor in the next 2 years. If the prices drop by
10% (the first 2 bars to the right of the dashed line) 9% of 51.2 million home mortgages will enter
into negative equity. That's close to 5 million homes.
|Saturday, 15 December 2007 at 19h 33m 2s|
Eighty percent of the country is stagnant
Here’s what the numbers say about percentage gains in after-tax income from 2003 to 2005:
- Bottom quintile: 2%
- Next quintile: 2.4%
- Middle quintile: 3.9%
- Fourth quintile: 3.7%
- Top quintile: 16%
- Top 10%: 20.9%
- Top 5%: 27.7%
- Top 1%: 43.5%
[SOURCE: Paul Krugman NY TIMES ]
If you include inflation from energy prices, food prices, and housing (which is easily 50 to 90% of
the income of eighty percent of the country) there have been no economic gains in the bottom four
Quintiles are 20% population blocks, ie. 20 percent of the population. What you do is rank
everyone based upon total value (income and capital assets) and than divy up the 20% blocks from
top to bottom. That's why 80% of the
country is represented by the bottom 4 quintiles. Each quintile is a way to group the population
based upon rank, except the richest person in the country isn't exactly the
valedictorian of some graduating class. He may just be some ruthless lucky dumbass with a ton of
money and a bad attitude.
GOTO THE NEXT 10 COLUMNS