THE FINANCIAL SECTOR DID !!!

Sigh.

Mayor Bloomberg: “It was not the banks that created the mortgage crisis. It was, plain and simple, Congress, who forced everybody to go and give mortgages to people who were on the cusp… But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody.”

It seems there are people who can’t accept that some markets, particularly financial ones, are disastrous when completely unregulated — and thus find any far-fetched excuse to blame the government instead. Since this line of argument continues to pop up, how should one respond to the idea that Congress and Fannie Mae/Freddie Mac caused the housing crisis? Here are six facts to back you up:

[SOURCE: Mike Konczal | BigPicture blog | 5 November 2011]

The rest of the story is awesome. Click here for the exemplary and irrefutable analysis. (If you go to the link, make sure you also read the comments. Even the idiots and propagandista of the commentariat are amusing, and well worth the poignant awesome points made by various other responses.)

The author, Mike Konczal, is a fellow at the Roosevelt Institute.

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In the comments, Barry Ritholtz, proprietor of the Big Picture blog, himself weighs in on the matter:

Some pesky details worth considering:

-The origination of subprime loans came primarily from non bank lenders not covered by the CRA;

-The majority of the underwriting, at least for the first few years of the boom (2001-05), were by these same non-bank lenders

-When the big banks began chasing subprime, it was due to the profit motive, not any mandate from the President (a Republican) or the the Congress (Republican controlled) or the GSEs they oversaw.

-Prior to late 2005, nearly all of these sub-prime loans were bought by Wall Street — NOT Fannie & Freddie. Why? Because prior to 2005, the GSEs were not permitted to purchase non-conforming mortgages.

-After 2005, Fannie & Freddie changed their own rules to start buying these non-conforming mortgages — in order to maintain market share and compete with Wall Street for profits.

-The change in FNM/FRE conforming mortgage purchases in 2005 was not due to any legislation or marching orders from the President (a Republican) or the the Congress (Republican controlled). It was the profit motive that led them to this action.

[SOURCE: David Cay Johnston | reuters |28 October 2011 ]

In Illinois, many big corporations (Motorola, Chrysler, etc.) are being allowed to keep the state taxes their workers pay, rather than transmit those taxes to the state government. The idea is to incentivize the companies to stay in Illinois.

This will probably spread like wildfire across the United States. Workers are going to be taxed by the companies they work for, no different then the Roman Catholic church used to tax all citizens in the parishes before the French Revolution.

The more I bother to witness this Republican progression towards the official nomination ... the more I think that it is all just stage show for what has already been determined. No different than the Democratic party, to be quite honest. That is very sad for me to say, but the establishment has taken over both parties.

Romney, the corporate patsy and ex-corporate merger/bond salesman, appears to be the set up for the Rethuglican nomination. Versus Obama the water carrier.

Can I say how excited I am about the coming election? That's a rhetorical question.

Between 2002 and 2007, for instance, the bottom ninety-nine per cent of incomes grew 1.3 per cent a year in real terms—while the incomes of the top one per cent grew ten per cent a year. That one per cent accounted for two-thirds of all income growth in those years. People in the ninety-fifth to the ninety-ninth percentiles of income have represented a fairly constant share of the national income for twenty-five years now. But in that period the top one per cent has seen its share of national income double; in 2007, it captured twenty-three per cent of the nation’s total income. Even within the top one per cent, income is getting more concentrated: the top 0.1 per cent of earners have seen their share of national income triple over the same period. All by themselves, they now earn as much as the bottom hundred and twenty million people. So at the same time that the rich have been pulling away from the middle class, the very rich have been pulling away from the pretty rich, and the very, very rich have been pulling away from the very rich.

-- James Surowiecki, New Yorker Magazine, 16 August 2010.

A writer in an prior letter to the editor of the Pacifica Tribune made a very misguided statement concerning teachers still getting paid during the summer. The writer seemed to have an idea that teachers are getting something for nothing from the tax payers and should therefore be penalized.

This opinion is nonsense. Teachers work 36 to 40 weeks out of the year. For a 36 week year, about 30 of those weeks a teacher works 70 hours per week. The other 6 weeks average 50 hours a week. 30 times 70 plus 6 times 50 equals 2100 + 300 or 2400 work hours per year. A person who works 50 weeks at 40 hours per week only works 2000 hours per year. A teacher works 400 more hours per year than a 40 hour week worker does for 50 weeks out of the year. That would be another 8 weeks for the 50 week worker by the way.

Teachers get a salary for the important hard work of teaching children. This salary can be paid over 12 months, or it can be paid over 10 months. People who propose a negative opinion about teachers based upon the notion of 2 months of summer vacation need to consult the math before they speak.

Teachers do more for society than bankers and stock brokers but get paid less than a waiter at a 5 star restaurant. And not everyone has the makeup to become a successful teacher, no matter how many credentials they obtain -- whereas most people can be a good waiter. Not everyone can manage 160 or more raw emotional children over a 9 month period grading enormous amounts of papers and dealing with a lot of irrational issues and stressful situations each and every week.

The old saw that says "those who can, do; those who can't, teach" is absolutely, ridiculously false. Such opinions think people are coming to the profession in droves because they can't make it in the real world. However, the average duration of new teachers is 3 years. Very few bad teachers can make it longer than 5 years. Too many new teachers cannot manage the stress-load, and either quit the profession or move on to college or administration. The new blood comes but it doesn't remain. Most schools have 80% or more quality teachers, which is no different then any other real world business or any large bureaucracy of individuals.

A 4 to 5 percentage drop in 2 years is incredible, given that the 2010 US Census was 308,745,538. One percent is 3.087 million, so 4 percent is 12.3 million people. And remember that a lot of people who went from full-time to part-time jobs are still considered employed. The population growth per year can be estimated from the rate of increase over the 10 years since 2000, which was 9.7 percent. Taking the 10th root (over 10 years) of the growth factor 1.097 obtains 1.009 or 0.9 percent growth per year. This is about 2.8 million per year.

So 12.3 million were classified as not-employed in 2 years and the population rose probably 5.6 million in those 2 years -- an estimate of new entrants into the work force since 16 years old are 18 years old in 2 year.

Notice the graph stays in between 59 and 58 percent since 2010, and is threatening to drop below 58 percent in the near future. A percentage is basically a fraction, and in this case the numerator is the number of employed, the denominator is the total population. The only way the value of a fraction ( or a per 100 number) stays the same when the denominator (total population) increases, is for the numerator (number of employed) to increase based upon the percentage of the increase. So at 58 percent, if the population increases by 2.8 million, the employed gains for the year between 2010 and 2011 would be 0.58 times 2.8 , or about 1.43 million, or about 115,000 per month.

115,000 per month is an average for the entire nation. If this is divided by 200 to represent the 200 major metropolitan-regional areas of the United States ( a collection of 1,000,000 people), then this becomes 575 new jobs per region per year. Divide the 2.8 million increase per year by 12 and then by 200, and you get 1,160 new persons entering the job market per month per region.

Notice the 1,160 is twice as large as 575. This means there are 2 people for every new job available per region per month.

And the percentage is looking to drop below 58% for the first time in the history of the this statistic.

Yikes.

Click here. Click here. Click here.

Click here for the London Guardian newspaper account that did the ground work of the story.

The skinny: they organized a scheme to funnel money through multiple European companies who distributed their newspaper in Europe for certain corporations to buy extra issues of the Wall Street Journal cheaply to increase (in some cases double) the circulation numbers so that they could get a higher rate to charge for advertisers.

In other words, they bought their own newspaper at a 50% or more discount so they could inflate the circulation numbers and charge their advertisers more money.

You have to read the story.

[SOURCE: London guardian | Nick Davies | 12 October 2011]