U.S. Politics, 14

[LindaElane]

If you're going to complain about inaccuracy, you could at least try to get your own facts right. The film is NOT banned in British schools and never has been, it just has to be accompanied by a disclaimer pointing out which bits are inaccurate, or at least currently unsupported. You know, like the argument that some polar bears have drowned while looking for the receding ice, cos no-one's actually seen that happen yet. None of which discounts the film's central premise.

OK, OK, they have to read a disclaimer. It seems to me that my local schools could not show it in 2007 when I was there, but yes, the ruling in 2007 eventually was that it could be shown with a disclaimer. There were nine significant errors highlighted by the judge -there could be many more, he just highlighted nine-, and the polar bear drowning one looks like the least hefty of the nine. Besides, IIRC, polar bears were an important part of what appeared to be the intended emotional impact of the film. I also remember almost laughing when I saw the film because it outright claims that the Aral Sea is 90 percent gone due to global warming. It shows really scary satellite footage of the Aral Sea all but disappearing. (It is actually diminished by about 90 percent due to Soviet irrigation projects which Inconvenient Truth inconveniently fails to mention).

IC is just a film with accuracy problems. "Waiting for Superman" also has some accuracy problems but not nearly as many as.* I think an accurate documentary about global warming would be great. But I do not need an inaccurate one. And again, I think it's highly ironic that so many US Democrats, including teachers' union leadership, are objecting to factual errors in "Waiting for Superman" (And you should hear the howls at the University school of education I attend)

===========

* a chief problem with "accuracy" in "Waiting for Superman" is the citing of facts such as "only 12 percent of children are proficient in math in....". They fail to mention that "proficient" is one category of a test called the NAEP , National Assessment of Educational Progress, but that there are four levels, not just "proficient" and "failing idiot". The level below proficient is called "basic" and means that students comprehend the basics but have not gone beyond it. I thought "Waiting for Superman" basically had important things to say, I just thought they used some deceptive rhetorical techniques and omissions. I mean...of course kids whose parents drive across town to enter a lottery for them to get into charter school are likely to do better than kids whose parents do not care to do that. For some reason though, that was not mentioned.

[TrueMetis]

I hear Sarah Palin is also busy bludgeoning fish to death. Not as noble as shooting elephants, or clubbing baby-seals (there must be some in Alaska, but apparently she's too big for Alaska now), but there you go.

What's wrong with clubbing seals? :huh: Shooting elephants is wrong because they are endangered but none of the hunted seal species are.

ETA and do they even club seals in Alaska? I though only the Inuit of the region hunted seals and they would be using things like harpoons and spears.

[TerraPrime]

It is not a Freudian slip. She does not know anything beyond "there's a bad man in Korea somewhere." Please nominate her GOP. Please

Stop picking on Palin.

Everyone can have a slip of the tongue.

It's the kind of sneering condescension from the elitists that us average joe types find so repulsant. I'd much rather have people like Palin, who reminds me of my own social group, despite her slip of tongue gaffes, than one of them hoity-toity intellectuals like Hilary Clinton. When Palin speaks, I can relate. When Clinton speaks, I just feel dumb. I don't like being made to feel dumb, lemmetellyadat.

[Renasko]

Someone struck the President.

This means WAR!

[Former Lord of Winterfell]

The cost of TARP keeps coming down:

New CBO report puts it at $25 billion. Credit where credit is due. Both parties can take some credit for this in the history books (because no one seems to want to take credit for it now due to TAA's poor understanding of it).

http://www.latimes.com/news/la-fi-tarp-20101130,0,6857809.story

In comparison, the net cost of the bailout of Fannie/Freddie is already at $125B, projected at around $154B, though it admittedly could go much higher.

http://www.washingtonpost.com/wp-dyn/content/article/2010/10/21/AR2010102101941.html

Which means that the whole "the problem wasn't Fannie/Freddie, but the nasty private speculators", really doesn't pan out. The speculator lossses were mostly paper losses that tended to balance out. The real problem is the writing of mortgages that should never have been made, proven out by the GSE's being stuck holding the proverbial bag after purchasing those mortgages.

[The Progressive]

In comparison, the net cost of the bailout of Fannie/Freddie is already at $125B, projected at around $154B, though it admittedly could go much higher.

http://www.washingtonpost.com/wp-dyn/content/article/2010/10/21/AR2010102101941.html

Which means that the whole "the problem wasn't Fannie/Freddie, but the nasty private speculators", really doesn't pan out. The speculator lossses were mostly paper losses that tended to balance out. The real problem is the writing of mortgages that should never have been made, proven out by the GSE's being stuck holding the proverbial bag after purchasing those mortgages.

I'm curious as to where you think F&F bought and insured the loans on their book from if not from private originating banks?

Gnomes, perhaps?

[Former Lord of Winterfell]

I'm curious as to where you think F&F bought and insured the loans on their book from if not from private originating banks?

Gnomes, perhaps?

Not just banks, but yes, they bought them from private entities. And those private entities were willing to write crappy mortgages because they knew Fannie/Freddie would buy them up, and the private entities could clear them off their books, yet still pocket the processing fees.

The pipeline went Loan Originator ----->Loan Securitizer (Fannie/Freddie and some private entities) ------->Security Investors

The claim was that Fannie/Freddie really weren't the problem, and the problem occured after them in the pipeline, with those who invested in the securitized mortgages and CDS's that evolved around them. That's where TARP came in to a large extent. But as we now know, that total cost has dropped down to only $25B because those institutions were able to pay the money back, or never actually draw on the credit in the first place. The GSE's, on the other hand, are stuck with the actual crappy mortgages they purchased. And in fact, it looks like the total amount when you count the GSE's other obligations is closer to $250M -- ten times the cost of the TARP bailout.

[Tormund Ukrainesbane]

In his book Thirteen Bankers Simon Johnson, former head of the IMF, said that F&F, while they played their part, were not making the riskier loans out there. I'll try to find the passage later. I'm totally fine with F&F taking some blame for their part in all of this, but I hold that no one is trying to absolve the private sector of its substantial share of the blame

A huge number of loans are written knowing that they will be purchased by Fannie and Freddie before the ink is dry. If Fannie and Freddie weren't going to buy them, they wouldn't get written in the first place because the bank itself doesn't want that risk on it's balance sheet.

[ThinkerX]

A huge number of loans are written knowing that they will be purchased by Fannie and Freddie before the ink is dry. If Fannie and Freddie weren't going to buy them, they wouldn't get written in the first place because the bank itself doesn't want that risk on it's balance sheet.

Sounds like deliberate fraud on the part of the people putting the loan together to me, then. Fraud of the sort that means long stints in the grey bar hotel, if anybody bothered with a criminal investigation and anybody could be bothered to prosecute, that is...

[Former Lord of Winterfell]

Sounds like deliberate fraud on the part of the people putting the loan together to me, then. Fraud of the sort that means long stints in the grey bar hotel, if anybody bothered with a criminal investigation and anybody could be bothered to prosecute, that is...

Nothing inherently fraudulent about it, though I'm sure there was at least some given the volume of loans we're talking about. The problem was that Fannie/Freddie were deliberately buying loans up as fast as they were written, and if they couldn't see the logical consequences of that, shame on them. It was blindingly obvious that lenders had an incentive to lower their standards, as did Fannie/Freddie. Deliberately, as a matter of fact, because they didn't want to lose out on business to private securitizers who were also willing to securitize those loans.

[Tormund Ukrainesbane]

Sounds like deliberate fraud on the part of the people putting the loan together to me, then. Fraud of the sort that means long stints in the grey bar hotel, if anybody bothered with a criminal investigation and anybody could be bothered to prosecute, that is...

Nope, not fraud. The GSE's know exactly what they are buying. That's the beauty of it all. The banks write the loans because they know the GSE's will buy them. The GSE's buy the loans because they know that they take no risk on to their own balance sheets because the US Gov. will back them up if things go south. If there is fraud involved, it's between the government and the taxpayers.

[Former Lord of Winterfell]

Nope, not fraud. The GSE's know exactly what they are buying. That's the beauty of it all. The banks write the loans because they know the GSE's will buy them. The GSE's buy the loans because they know that they take no risk on to their own balance sheets because the US Gov. will back them up if things go south. If there is fraud involved, it's between the government and the taxpayers.

Well, the GSE's also bought them up because they figured they were smarter than the private folks, and would be able to hop off the carousel first if things started going bad. Unfortunately, they weren't, and they got stuck holding horrendous amounts of securitized mortgages when the potential purchasers of those securities figured out they were no longer a good investment.

[Tormund Ukrainesbane]

Well, the GSE's also bought them up because they figured they were smarter than the private folks, and would be able to hop off the carousel first if things started going bad. Unfortunately, they weren't, and they got stuck holding horrendous amounts of securitized mortgages when the potential purchasers of those securities figured out they were no longer a good investment.

That's the thing, they didn't know they would be able to "hop off the carousel", they knew they'd be left holding the bag. It's just that they knew the bill would get passed to you and I. Trust me on this, I'm on the phone with these assholes every day.

[ThinkerX]

And what happens if/when Uncle Sam decides to *not* back up Fannie and Freddies debt...or that of the other really big players here?

[Tormund Ukrainesbane]

And what happens if/when Uncle Sam decides to *not* back up Fannie and Freddies debt...or that of the other really big players here?

Won't ever happen. Well, as long as someone, somewhere, is willing to lend us money.

[ThinkerX]

Won't ever happen. Well, as long as someone, somewhere, is willing to lend us money.

In other words, the consequences are much too horrible to even think about, so the unwritten but enforced directive is 'Don't think about it. Just assume that enough money will somehow appear from somewhere to keep things going.'

[Shryke]

Ahh, the FLOW/Tormund double team.

Oh wait, here's Krugman:

But here’s the thing: Fannie and Freddie had nothing to do with the explosion of high-risk lending... In fact, Fannie and Freddie, after growing rapidly in the 1990s, largely faded from the scene during the height of the housing bubble.

Partly that’s because regulators, responding to accounting scandals at the companies, placed temporary restraints on both Fannie and Freddie that curtailed their lending just as housing prices were really taking off. Also, they didn’t do any subprime lending, because they can’t ... by law...

So whatever bad incentives the implicit federal guarantee creates have been offset by the fact that Fannie and Freddie were and are tightly regulated with regard to the risks they can take. You could say that the Fannie-Freddie experience shows that regulation works.

In that case, however, how did they end up in trouble?

Part of the answer is the sheer scale of the housing bubble, and the size of the price declines taking place... The result is a rising rate of delinquency even on loans that meet Fannie-Freddie guidelines.

Also, Fannie and Freddie, while tightly regulated in terms of their lending, haven’t been required to put up enough capital — that is, money raised by selling stock rather than borrowing. This means that even a small decline in the value of their assets can leave them underwater, owing more than they own.

http://www.nytimes.com/2008/07/14/opinion/14krugman.html?ex=1373688000&en=cfcd6ef6e7c0ce4a&ei=5124&partner=permalink&exprod=permalink

[Shryke]

To sum up:

Just to repeat the basic facts here:

1. The Community Reinvestment Act of 1977 was irrelevant to the subprime boom, which was overwhelmingly driven by loan originators not subject to the Act.

2. The housing bubble reached its point of maximum inflation in the middle years of the naughties

3. During those same years, Fannie and Freddie were sidelined by Congressional pressure, and saw a sharp drop in their share of securitization while securitization by private players surged

Of course, I imagine that this post, like everything else, will fail to penetrate the cone of silence. It’s convenient to believe that somehow, this is all Barney Frank’s fault; and so that belief will continue.

http://krugman.blogs.nytimes.com/2010/06/03/things-everyone-in-chicago-knows/

Your anti-government hard-on can't change reality. Sorry gents.

[Shryke]

Anyway, let's talk other kinds of stupidity:

http://online.wsj.com/article/SB10001424052748704584804575645192453277792.html?KEYWORDS=christie

New Jersey has less than 30 days to pay back more than $271 million from a canceled Hudson River tunnel project, the federal government said in a letter sent to the state last week.

The Federal Transit Administration threatened to charge interest, report the state to credit bureaus and ratings agencies and send the debt to the Department of Justice for collection if it doesn't get paid by Christmas Eve.

It also said it might withhold federal funding for other transit projects until the money is repaid. This was the second letter the agency has sent demanding payment.

The $271 million had been spent on the Access to the Region's Core project, a tunnel that would have allowed New Jersey Transit to run more trains into Manhattan.

New Jersey Gov. Chris Christie scrapped the project in October, saying the state couldn't pay the escalating price tag. He rebuffed in-person pleas from U.S. Transportation Secretary Ray LaHood to reconsider.

NJ Governor scraps large infrastructure project in a bout of political theater. Fed says "Alright, fine, but now we want the fucking money we paid you to build it back." Then NJ shits it's pants.

The claim is it costs too much, despite the rising costs only bumping the part New Jersey would owe from 14% of the money coming into the state to at most the high 30%s.

But hey, who needs jobs in this economy.

[Tormund Ukrainesbane]

Well, if Krugman says so. I'll just go ahead and close out this spreadsheet of hundreds of shitty Fannie/Freddie loans that my boss and I were just going over. Clearly they don't exist.