Veni, Vidi, Vici – Obama’s Foreclosure Reveal In Phoenix
As you may know, President Obama came to Phoenix in order to roll out his $75 Billion Plan to Fight Home Foreclosures. This was exciting for me, because Obama spent last night at a resort, Montelucia, about 3/4 of a mile from my house. Lots of excitement; even more jammed up traffic yesterday afternoon and evening. Still, all in all, pretty exciting for an old desert dweller. Our dog, Kiki, is still barking at all the helicopters. Interlaced into this post will be a series of pictures taken by various Phoenicians and submitted to the Arizona Republic for open use on their website. I would have taken proprietary photos for Emptywheel, especially of the shots going down the road right by my house and entering Montelucia, but, alas, I was tied up with conference calls with multiple attorneys, all of whom are every bit as annoying as I am. Trust me on the latter.
From the New York Times:
President Obama pledged on Wednesday to help as many as 9 million American homeowners refinance their mortgages or avert foreclosure, an initiative he said would shore up distressed housing prices, stabilize neighborhoods and slow a downward spiral that he said was “unraveling homeownership, the middle class, and the American Dream itself.”
The plan, more ambitious than many housing analysts had expected, was unveiled by Mr. Obama in a high school gymnasium here, in a community that is among the nation’s hardest hit by the foreclosure crisis.
“This plan will not save every home, but it will give millions of families resigned to financial ruin a chance to rebuild,” the president told the crowd. “It will prevent the worst consequences of this crisis from wreaking even greater havoc on the economy. And by bringing down the foreclosure rate, it will help to shore up housing prices for everyone.”
In a nutshell from the LA Times, the plan would:
• Remove restrictions on Fannie Mae and Freddie Mac that prohibit the institutions, both taken over by the government last year, from refinancing mortgages they own or have guaranteed when more is owed on a home than it is worth. The White House says this could reduce monthly payments for up to 5 million homeowners.
• Create incentives for lenders to modify subprime loans at risk of default or foreclosure. For lenders that agree to reduce rates to levels borrowers can afford, the government will make up part of the difference between the old monthly payment and the new payment. Participating lenders also will be required to cut payments to no more than 31 percent of a borrower’s income. Up to 4 million homeowners could benefit.
• Keep mortgage rates low for millions of middle-class families seeking new mortgages. Using money already approved by Congress for this purpose, the Treasury Department and the Federal Reserve will continue to buy Fannie and Freddie mortgage-backed securities to maintain stability and liquidity in the marketplace. The department, through its existing authority, will provide up to $200 billion in capital for this purpose.
• Pursue reforms to help families avoid foreclosure. The administration will continue to support changing bankruptcy rules so judges can reduce mortgages on primary homes to their fair market value, as long as the borrower sticks to a court-ordered repayment plan. As part of the $787 billion stimulus package that Obama signed into law on Tuesday, the administration will award $2 billion in competitive grants to communities experimenting with innovative ways to prevent foreclosures.
Here is the detailed plan (pdf) as put out by the White House. Obama was wildly received by the audience from the video I caught, and there were people camping out in line outside the high school he spoke at over a day ahead of his appearance. There was only one serious group of protesters, and they were not anti-Obama. They were demanding justice against our locally oppressive and deadly Sheriff Joe Arpaio. Ya gotta love that.
All in all, a short, but victorious, visit from the President of the United States.
Bmaz, recently on your front door: a presidential concession, a super bowl team, a president and a president’s bill stronger than expected, and no anti-obama protesters. Whatever you are doing right in them there hills, keep doing. and then tell us in the BayBlueState what to to be just like you.
Drink a lot, especially margaritas, and eat mexican food.
Heh – hasn’t helped me much!
Drink a lot, especially margaritas, and eat mexican food.
Heh – hasn’t helped me much!
maybe you need to use more salt
(wink)
That didn’t work too well for that Japanese Treasury Dept head, did it?
If you’re going to drink a lot, especially margaritas, and eat mexican food, do NOT get on the TV machine!
Bob in HI
Home refinancings under duress are hellish. Troubled consumers (as opposed to fraud artists like Madoff) have little leverage other than their ability to repay part, but not all, of their debt. They need leverage to counter the weight and inertia of massive lenders, whose staff may fear that being too straight up might make them lose their jobs or lose pay.
The single most helpful piece of leverage the government could provide is to bring back the bankruptcy “cram down”. That allowed bankruptcy court judges, in effect, to rewrite a mortgage based on the property’s current fair market value. (Lenders hated it, it forced them to realize a loss on an asset that had declined in value – imagine that.)
This would help millions of debtors, including many not in bankruptcy. Few lenders in pre-bankruptcy negotiations could rationally hold out for more, not when a filing would give them less, plus costs, too boot. Expect Sen. Chuck Schmer (D-Wall Street) not to be a great fan. But it’s one action that would have many positive consequences for many.
Right on!
But bankruptcy cramdown is a retail solution. If there are about 5 million to 10 million residential foreclosures looming, we desperately need a wholesale solution. None of the Obama proposals provides a wholesale solution.
Compelling mortgage holders (not just inducing them) to allow a federal agency (e.g., a reincarnated Home Owners Loan Corp on the Depression era model) to buy the loan at current market value and refinance it using guidelines even more homeowner-friendly than the voluntary guidelines would be one approach. Could a federal statute decree a moratorium on foreclosures? Could a federal statute exercise “condemnation” on mortgages in foreclosure?
If the federal government can condemn private real estate for the purpose of building federal projects, why couldn’t the federal government exercise an analogous power with respect to liens (mortgages) on private real estate for the purpose of preventing or mitigating national economic collapse?
ium
Wall St. might not like it, but I think the politicians know enough to not complain. Besides, the Dems are pretty united just now, and they need to be.
bmaz, what a cool, remarkable way to present the info. (And yes, it does warm my heart to see that he’s still flying to AZ in a Boeing ;-))
I have mixed feelings about this bailout, but it makes more sense than any other way through this mess. I hear from a couple of my local teachers that kids are moving through schools like carrots on a veggie platter — in a school for one week, then on to another school — because they don’t have reliable housing. If you want to disrupt learning and put kids behind in school, be sure they have to move all the time!
Apart from all the financially complex and frustrating issues, if a family has kids in school then those children need as much stability and permanence as possible. The money part pisses me off, but it’s almost certainly more cost-effective to spend more money upfront and keep kids in more stable environments (and yes, I know that not all foreclosed families have kids, but bear with me).
If this Housing Bailout keeps kids in their familiar classrooms, with their familiar teachers, and their familiar friends, then upfront it is hugely expensive, but over 5 or 10 years, it will almost certainly pay off in a way that the bankers don’t stop to consider — student socialization skills and learning.
A focus on improving schools and student learning can happen after the housing piece stabilizes. But this definitely had to come first!
(BTW: Don’t know if you saw it, but Tweety or KO or someone at MSNBC.com had the new Sec of Ed on last night — thrilling!!!)
Can you say, ‘overpriced McMansion subdivisions, built at the height of the bubble?’ Thought you could.
My area did not traditionally have this kind of turnover in student attendance.
The fourth picture from the top is the motorcade entering Montelucia, and that is the camel head, of Camelback Mountain, in the background. If you follow the slope of the head to the right, behind the building in the right foreground, my house is back there somewhere. And my barking dog.
… and your margaritas…
The home of the Keating/McCain gang and John Birch stronghold.
bmaz, please forgive my ignorance (I’m a long way away), but why would Phoenix have been hit especially hard by the foreclosure crisis? We’re sort of in the habit of thinking of AZ as prosperous, or we were.
Tomorrow, you know, all your Obama are belong to us — he will be in Ottawa by 10.30 a.m.
He’ll be gone by 5.30, though — this is mostly in the name of tradition, visit Canada first, although there are some real issues some of us would like to think will be addressed. I don’t envy Obama having to spend eight hours with our PM of the moment, but maybe he can be a good influence.
People are being allowed to gather on Parliament Hill for Obama’s arrival. Just as in Phoenix, that crowd will be giving him a rock star’s welcome, I’m sure. If there are any protesters, most of them will be there to shout at Harper, although the wars continue to hurt here.
Me, I’m waiting for Joe Biden to come to Toronto.
Let me take a shot at this:
Real estate speculation. People buying into the idea that timesharing is good or that they can get rich quickly by buying property (and renting it out to other people).
heh – great minds think alike
Boy, howdy!
And at least in my neighborhood and nearby, people started buying to flip them because prices rose so fast (as randiego points out, very much a West Coast problem).
And, in addition, lots of shoppers via Internet. Why not? No money down…
Anyway, what’s done is done.
Now, to cleanup and still allow kids to get enough education that they don’t make the same idiotic mistakes a few years hence…
This seems to be the nut of it. How do we avoid the mistakes of the past? We should have known all this was coming, having been there before…
Well, hey, not enough hours in a week to hang out at EW’s and also start my own blog, but I know more about this than I wish that I did.
Some people in real estate are smart, savvy, creative, and should be in that line of work. But it’s very easy to get into and anyone who can walk and be social can get it — staying in is a whole different matter, but the market in my region (and yours also, I suspect) was so ‘hot’ that it was fast, easy money. And people who had no business got in — that’s one aspect that absolutely needs to be cleaned up.
I’m convinced that this bubble was inflated in order to launder drug money and other types of less-than-legitimate currency, although I don’t know whether the resources will ever be available to uncover it all.
I’d sure like to know which big developers link to Abramoff, Rove, and the Plantation Caucus. Because there have to be deeper roots beneath this disaster than appear on the surface.
And WaMu is a Cautionary Tale on many levels.
But so far, I haven’t seen anyone in Congress (among the Dems) step forward to advocate for more FBI resources.
And the GOP can STFU, because it was their watch that didn’t fund the FBI.
Two years ago, people were rolling in money with zero regard to the environmental impacts of anything they did. Fuck ‘em.
When this is fixed, DoE has to be involved on the energy efficiency piece, and DoTrans has to be involved in advocating for more bike, bus and ped.
The sprawl these people built is an environmental nightmare.
Uff, should be
“…who had no business selling anything or being allowed around large sums of money got in because there were no standards to entry…”
Have you noticed that all the “Flip This House!” shows on cable are quietly being retired? The party’s over…
FWIW, and not to be a smarty, but I for one knew it was coming. I wasn’t sure what form it would take, and I wasn’t quite sure how it would unfold, but the numbers didn’t add up six, four, and two years ago.
If we don’t ‘think different’ about a host of issues, we’re screwed.
But with Chu at DoE, this is the best shot we’ve ever had.
And now the Dept of Trans needs to step up.
Ron Sims is going to be #2 at HUD and you couldn’t find a more politically courageous person in my region, IMHO.
So if Obama can put out this mess, then there needs to be a much more integrated view of housing and also financing housing.
For starters, mortgages should be 15 years max.
Hope you get to surf on the Gold Coast at some point — Coolangatta or thereabouts. Lovely place.
Funny you should mention that. Last week I decided to take advantage (via Qantas) of the lowest priced airfare down-under in years. We’re headed almost exactly there (Byron Bay, to honeymoon) in September. A few days of seclusion there, then all over NSW visiting family. Pray for Surf!
Wow!!!!!!!!!!!!
I will hope for lovely surf and warm, uncrowded beaches for you!
Eat lots of fish for me, please.
(One of my kiddos happens to be on the opposite side of that continent at the moment visiting a longtime friend, and she’s going completely bananas over some of the fish meals she’s eaten.)
What a perfect honeymoon spot. Good on ‘ya.
Enjoy some Bundy Rum** for me looking out on the ocean ;-))
From Bundaberg, much farther north.
I’ve never been to Bundaberg, only as far north as Noosa for me, and that was incredibly beautiful.
So then wait a sec – you’re Ozzie? Who knew? Where are you located now?
No, I’m a Yank. Currently in the Puget Sound region; kinda here for the indefinite future as the adult child in the family taking on the major Elder Care load…. Which is another whole kettle of fish.
I hope you have some good barrimundi on your trip.
if ya got to go to Australia, make sure they put it out first
I think the whole palce is on fire, or something …
(ducking and running)
Actually, I’m curious to hear what randiego thinks when he gets back. I think it was last fall that I was talking with someone from Brisbane about 4 minute showers in that city — max! Water usage has become a huge problem as that city has grown. Water restrictions, water costs… kinda like LA, but worse.
It’s no surprise to me that Kevin Rudd’s first act as PM was to appoint a Minister of Environment. And IMHO, Oz is ahead of us with respect to getting serious about climate issues, though the appointment of Chu at DoE has me optimistic.
No need to duck and run this time.
Actually, the life cycles of many Australian plants are highly adapted to drought and heat — they need fire in order to explode their seed pods for many of those bushes and trees. However, the recent disasters in Victoria and NSW are far worse than anything even imagined when I first heard about ‘climatology’ in the late 1970s. We’re really beyond the worst imaginings.
Personally, I’d haul Bush and Cheney and Addington and Chertoff and the whole cabal of morons into the International Court on climate issues alone, quite apart from torture issues. However, they’re not the only thugs who need to be hauled into that court for ideological stupidity and venal conduct.
We ain’t seen nothin’ yet with respect to global warming.
(Wow, I’m a really font of joy, ain’t I…?)
The crisis has had significant effects all over the West. Prosperous, yes – but over-leveraged bigtime. The more overpriced the real estate, the bigger the impact.
PS – cheers to Toronto skdadl. I was born at Etobicoke General.
Yeah, bad enough that Barack had to share stage time with McCain, now he gets to meet a Canuck Yutz, up close and personal … then meet with Iggy thereafter … hope there’s Brain Bleach on Air Force One.
You’re not too fond of Sheriff Arpaio?
I live 10 minutes west of your Birthplace, randiego.
Cheers Petro…
MissDiego had a business trip there a couple years ago, so I tagged along. It was my first time back to Toronto since I was two.
What a cool, clean, cosmopolitan city – I was in love instantly – it felt like being transported to a different continent. How could you not love Canada (and Canadiens)?
I love this place, although the long winter sometimes makes me think of moving down South.
I bet that randiego even knows how to pronounce Etobicoke.
I love us too, but I can’t figure out why we keep getting such sorry excuses for politicians. And February is beginning to feel like the longest month.
’cause, like Leafs fans, we’re comfortable with mediocrity. *g*
I just took the kids to Karate … roads resemble a Curling Rink …
Heh, how do you think I ended up here? My parents spent a total of 4 years there. They’re Aussies – imagine coming from paradise and being plopped down into that long winter…
Lovely? Where from, if you don’t mind…?
Sydney. Convicts on my dad’s side, cops on my mom’s – which incidentally ’splains a lot.
Hopefully he can pull some of what sounds good off as a practical matter. On things like loan modification, a lot of mortgages have been so sliced and diced that they may not be able to be modified without somehow legislatively interfering with the existing contract commitments between sets of private parties, which is all going to be complex. Here’s hoping though.
OT – The DC Cir puts the kabosh on the release of the Uighurs to the US.
http://www.mcclatchydc.com/244/story/62415.html
Randolph dismisses the realities (that the US grabbed them, has no right to keep them, but there is no country to return them too now that we have violated the Geneva Conventions to transport them to GITMO) and instead says that the Uighurs say that they should be released to the US as a quid pro quo for their mistreatment and however “high minded” that might sound, it’s not an available option.
If I read your link correctly, the judge said that it’s not an option that he has available, not that it’s entirely unavailable.
I read it that way too, but it is still very upsetting.
I thought that Switzerland had offered to help? But the saddest thing is that there is a thriving Uighur community in the DC neighbourhood that was all prepared last November to take these fellows in. There is such a community here, although our government has given them the brush-off too.
Is it fear of offending China that keeps us from allowing them to stay? Are they genuinely bad men?
From all I know, they are completely innocent, but they did cross the shared border into Afghanistan — that’s their territory — and got picked up for various reasons, I believe. (I sit to be corrected by anyone who knows the history better.)
The problem is, they’ve now been abused simply by being detained for six years, and I believe that Chinese interrogators were allowed access to them at some point, so they’ve really been abused. So now people are afraid of them. This hurts my head.
BTW- the only silver lining to the Uighurs situation is that hopefully it will smack itself into the forehead of the Obama consultants who are advocating snatch and detentions without trials. It’s a tangled web that they will weave if they don’t think twice. There’s a reason Star Chambers have never been the winning solution.
I found 55,444 foreclosures listed when I googled Foreclosures Phoenix. You can check your own town/city, if curious.
I dunno this just sounds like socialism to me…….. harrrumph….
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How’s USA going to pay for this… didn’t here BO explain that.
Nor have I heard anything that remotely…
a) idetifies clearly means by which we got here (fraud)
b) corrects a)
c) gives fuel to something… anything new, that’s worthwhile and all that stuff
Cart before the horse AFAIC.
I totally follow your point, but part of the problem is probably coming from cities and counties who are faced with mind-boggling taxation problems (because of empty houses), while at the same time you have to pay out higher costs for social services.
The problem as I’m hearing it (admittedly, third hand) is that we’re going to pay anyway. We’re either going to be faced with frightful city bankruptcies or else we’re going to bail out people to at least remain in their homes — that way, the kids have more stability. The next problem is how they’re going to pay the mortgage when their businesses lay off (or whatever…).
But it appears to be kind of ’six of one, half a dozen of the other’ at the most basic, nutshell level.
Your point about fraud really needs to be hammered by the netroots and the Dems, IMHO. And it does speak to the damage wrought by market fundamentalist ideology, plus failure to fund the FBI. (And I say ‘the FBI’, because the banks are national; so the law enforcement has to be national.)
Pretty much all that, except… (as I repeat ad nauseaum) the whole in productive US economy is still there unaddressed. Obama can only write so many of these funny money checks. America has do produce useful stuff, and right now we aren’t… not even close.
Legalize weed. Americans are really good at buying and smoking weed. Some are good at cultivation.
That’s what the economic stimulus package is meant to help address. This part is just the separate program that’s mean to to help address the foreclosure crisis. Which is maybe the most urgent problem caused by the bigger downturn.
With all due respect, people who are buying into that (”meant to address”) are going to be in for a big letdown… big letdown. That thing doesn’t address black hole US economy at all.
I completely agree with you. The only way that I see out is building a green economy, and I don’t say that just as a left idealist. I think it’s the only practical method and I also believe we’re approaching (and have the early phases of) the engineering to build it.
If you have time to put this on in another browser window, you might find it interesting. Eric Schmidt of Google gave a policy speech in Nov and the way that he wove some key issues together was, IMHO, quite persuasive, coherent, and refreshing: http://www.newamerica.net/events/2008/eric_schmidt
IMHO, he makes a reasonable case that this is not only do-able, but necessary.
It’s been my sense that much more of the early framework has occurred via non-profits and cities because the federal government was so despicably incapable under BushCheney. So there’s more in the pipeline than he speaks to in this presentation, but one of the key points that I think he makes is the potential for the desert regions to support solar collection and then redistribute it. (The buildout for the new grid will take about 15 years I understand.)
Don’t know about you, but I sure value having reliable, affordable electricity.
I’ve put time into getting my local power utility officers elected, partly because we came so close to getting totally screwed by Enron. What Schmidt describes is much needed if we’re going to keep all the servers humming that we seem to want.
I think that’s as good a place as any to start (I can think of at least 1/2 dozen others). Thing is, BO’s stimulus barely includes enough for seed money there, same w/stimulus’ $$ commitments to grid infrastructure. Problem is, our R&D on really effective long term grid is way behind. In every stage… engineering, materials, generalized modular generator/consumption hookups… the work is in infantile stages.
Just one example: if implemented w/current silicone technology we’re locked in w/materials guaranteed to be archaic before the whole thing’s built. Just +/- 8 yrs ago research was promising a functional light-based-cpu in 7 yrs. I presume people understand what this means economically (not just “smart” grid, but that’s a good example). From a 9/06 summary of Intel’s research:
Problem is, in last 8 years public research (Universities) has largely dried up on this front… slowed to a crawl. Reasons are complicated, but it’s been a consequence of “free market” (eg: corp. $$ dictating immediate need research in public universities… MS & Intel have made many of our best narrow focused subcontractors) from Universities at cost of developing long term “stuff”. Currently we are likely still at least 10 yrs away from a viable light based CPU.
This is true for grid technology across the board.
Obama has chosen to allow his Wall Street guys to dictate where these “stimulus” $$ go, and the people on front lines of R&D for this stuff have had, literally, no voice. To put it another way: he’s directing this massive investment through a totally broken Wall Street model which puts the businessmen/suits in position to choose winners/losers… seemingly ignoring massive evidence this model (extended to unbelievably lopsided dysfunction under Bush: eg. rewarding the suits and leaving worker’s pockets empty) is broken, not to mention consideration of ways to directly involve all the knowledge/expertise that exists (not just here but world wide) to try and get this right.
An apt analogy: current stimulus model akin to assigning management of the Manhattan Project to Haliburton. In such a scenario, where do you think priority decisions for profit & purpose will go? What would have happened if retired generals getting $m consulting fees were hired to direct the Manhattan project?
Obama is committing public money… tons of public money, to balance sheet of future generations. Therefore, the public… eg. the US citizenry should be involved in all this. In his “plans”, they are not… just more of the same: bailing out & financing the suits while putting best of our best on the sidelines waiting for the crumbs to fall.
Anyway, for BO’s expenditures there’s no wiggle room… eg. those $$s spent need to hit the bulls eye. Which for me cuts to the heart of my disappointment w/this guy: eg. not only has Obama not explained clearly the depth of US econ black hole, he’s relying on broken bureaucracies and banking/investment structures to implement it. Refusing to nationalize banks one indication, but only a surface one.
I don’t understand this at all.
Willem Buiter has strong critique of this mortgage relief proposal, and generally I agree w/most of what he says. Beyond Buiter’s comments, there’s nothing in this proposal… nothing, which addresses the gross excesses (countrywide and subsequent CDS/O geometric expansion of fraud) that got us here. That… I really don’t understand.
Only thing I come up with: Obama has taken suggestions from his Treasury Sec that tenacles of this mess have been intertwined so closely w/$USD and US Gov international obligations that there is no way to pull those tenacles out cold turkey w/out further exacerbating an already dire situation.
I’m damn sure he’s wrong in that premise, but it doesn’t matter as clearly Obama has chosen his path.
I agree w/him to significant extent, but stimulus package doesn’t even come close to doing what he talks about there… not even close. Beyond that, Obama hasn’t engaged public (as Schmidt advocates) on any of it, whether planning/implementation/destination for $$s spent etc. etc. If anything, Obama has disengaged public while giving photo-op events suggesting stimulus/mortgage relief will accomplish what it can’t.
Cruel joke IMO.
Regrettably, the best frameworks and implementations have occurred in (mostly) Europe… they’re way ahead of us. Some strong evidence that Bushies used NSA intercepts to steal some of their technology as well (I’ll have to dig up links later, getting ready for travel this morning).
Chu has made some promising statements, but stimulus package does not seem to back him up.
Obama’s statments on Japan’s “lost years” make no sense whatsoever, on any level.
Currently, I have -0- hope in this guy and am way past point of lamenting it all. More or less I’m looking for best ways to “go it alone” for foreseeable future, and whole lot of smartest people I know are telling me the same thing. Which, IMO, is destination he’s heading us towards: each for himself.
He’s just missed the boat entirely.
18 – not an option he has available under what he is saying is the claim they have made (right/entitlement which goes contra to Exec determinations of immigration). It is one he has under necessity, which is pretty much what IMO they argued. Focusing on the high minded issue vs the fact that gov brought them to US jdtn and can’t continue to hold them and can’t return them to China or Afghanistan – so that you have a necessity issue, got glossed imo, but that’s jmo.
25 – The Uighurs have been targeted somewhat like the Tibetans (somewhat) by the Chinese gov. They have not all been monk-like in their response, http://www.washingtonpost.com/…..02593.html
so I won’t swear all of them are saints vis a vis Chinese gov authorities(they very much want an independent state). OTOH, they are the kind of entity that the US has surreptitiously supported for a long time (like the Mujahadeen against the Soviets) as freedom fighters and they don’t have quarrels with the US.
Many of those who have fled also just flee to escape persecution and look for jobs and Afghanistan was a hanging out spot for those hoping to eventually get to Turkey. On the Uighurs ordered released, they were not captured in Afghanistan, although they had been in Afghanistan earlier. When the US invaded Afghanista, the Uighurs got out of dodge like a lot of others and fled to Pakistan. They were pretty much some of those we purchased in Pakistan and were never on “battlefields” and never involved in action against the US. But they were pretty convenient bounties for the Pak intel to collect.
The court after hearing evidence ruled that they were never enemy combatants of the us, much less illegal enemy combatants. That means that shipping them to GITMO was a war crime in and of itself. But now that there is no grounds to hold -now what? The district court had said that if Boumediene grants habeas and if it is determined they are being wrongfully held, they have to be released. IMO, we should have offered $$ and support to Afghanistan to take them back, but people are just leery of taking in guys we’ve used for human experimentation for years now. In any event, the Torture Conventions probably do prevent their return to China. I don’t know what you do with people that you illegally transport out of their place of refuge, when it is determined you can’t keep holding them and also that their native country will torture them.
Of course, if Obama comes out and grants asylum, that’s a slap at China. If he mentions that they were NEVER illegal enemy combatants, he’s ackowledging a US war crime and basically tieing everyone involved with the Uighur handling to that. If he mentions that this is the crap that happens when you buy people off the Taleban linke ISI, he slaps Pakistan in the face. If he grants refugee status or asylum without recognizing openly the truths that these guys were never illegal enemy combatants, the media and wingnuts will explode over the relocating the terrorists next door to innocent American victims. On that front, the fact that Dana Rohrbacher has been willing to be supportive of relocating the Uighurs here might help, but not much.
That’s just the ez thumbnail stuff. See, its not that I don’t recognize the complexities, its that I know Obama is not stupid and he had to have recognized those same kinds of complexities two years ago. He ran as the guy to fix the problems and the biggest problem is lies to Americans about what has gone on – if you try to fix that, you can’t avoid the criminality. If you don’t try to fix that, you perpetuate the problems. SO at some point you have to fish or cut bait about telling the truth.
On this one, Obama probably did want the courts to decide it for him by affirming the lower court – then the courts could take the blame. Now it’s his pony and he has to pick up a curry and get dirty.
I guess it’s unlikely that 17 prisoners escape and are never recaptured.
30 et al
One problem with compelling the adjustment of the mortgages is the mortgage backed securities and credit default swaps. That kind of activity – a forced restructure of the mortgage, may be a triggering event for defaults of all kinds of Credit default swaps – which would cause huge banking and credit insdustry ripples – that exposure is bigger than mortage exposure and almost off the books and hard to predict where it will hit and in what degree. So hopefully they have put together something careful on how the restructuring would impact those areas.
(my bold)
Exactly. Personally, I’m as disappointed that there’s no talk of investigation/prosecution of those bubble blowers as I am about the lack of initiative against Junior’s torturers and enablers. And not only have these guys gotten a complete pass, they’ve been hired to fix the mess they made… on their own slow-walk time frame… geezus.
The big $$ dump into F&F is latest taxpayer charge that’s going to be financing this bad mortgage rescue proposal.
And AFAIC, the big-empty-black-hole entirely unaddressed is… what economic activity is going to fill the gap for those who are going to pay these things? Whatever fragile economy we had even into 3rd quarter of ‘08 is gone, and it was fragile.
I really don’t get it, not at all. AFAIC, hope has turned into a photo-op choreographed quagmire.
The stimulus is not going to come even close to getting the job done… not even close.
I’m beginning to think that these credit default swaps & all are like a Ponzi scheme on steroids, and for a while, so many people were involved that it will take years to sort out, plus of course the will to do so. I think that’s one reason why Geithner is slow-walking this. I also suspect that there are some very big names involved who participated in one way or another. Geithner is walking a tightrope: Confidence will probably not be restored until Geithner cleans out the fraud, because too many people know about it. But he can’t do it roughly, either, or there will be a run on certain very large banks, and chaos will ensue. That’s my SWAG, anyway.
Bob in HI
It might be a triggering event, but no more so than the foreclosure and ultimate sale at a substantial discount that is the likely outcome for a borrower’s home if the borrower would qualify for a bankruptcy court.
Now to be sure, many banks or other holders of notes, or their servicers, are widely suspected of hoarding foreclosures at various stages, precisely in order to avoid triggering either a CDS event*** or, and this is not necessarily secondary, a widespread recognition that their assets are worth only a fraction of the amount that is carried on their books.
I’d go so far as to say that it’s the insistence of the “banks” that the latter shall not happen that is the whole reason we need round after round of these creative programs. Without them, we’d have a lot of banks that anyone could see were hopelessly insolvent, and our system knows exactly what to do with those.
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***Remember, even pessimists are of the opinion that much of the face value outstanding of the swaps will offset, since opposite sides of bets are represented. The dreaded Lehman settlement turned out to be a little burpie compared to what had been feared. It’s the real losses they don’t want to be stuck with, and they’re perfectly willing to see more borrowers go down with the ship rather than have that happen.
(Or was that the Bear settlement? One ub’em.)
Checking back after the party is over: Mary wrote
I’ve also heard that there are legal problems regarding contractual obligations on these mortgages that have been sold and resold. The Feds would have to nullify all those contracts, and they can’t do that without Congress passing a law, can they? Lawyers please help me out here– I haven’t stated the matter quite right, have I?
Bob in HI
Heh, well they may be a little closer to that now…
Precisely. It is a conundrum. I realize that. But it would go a hell of a long way just for Obama to admit that, and to admit that there is no legal or moral basis for holding them. Admitting there is really a problem here is the first step to solving it. Just keeping mum and pitching the status quo doesn’t really cut it though.
45 – “it would go a hell of a long way just for Obama to admit that”
It would, for me at least. There have now been numerous court decisions over the years, as well as numerous non-court revelations, all pointing to the complete innocence of all kinds of people at GITMO from ever being “illegal enemy combatants” as well as all kinds of people at Bagram or in the concentrated population camps in Iraq.
To just say it out loud and accept national responsiblity for it would go so far – but it’s not just Obama. The elected Dems who will flat out say, despite the court cases, that we sent innocent people into depravity – well, I can’t even think of any off hand.
The housing prices in the Phoenix Valley went nuts…in ‘88 my parents bought a 900 sq. ft. place in a retirement area for $58K, by 2005 it was valued at $263K (no improvements, either). One of the main reasons I left there in 2004 (moved there in ‘92) was that my (now) wife and I would have had to pay way too much for too little house. The place we have now in SLC is 2200 sq feet, 2 car garage, 2/3 acre of land for $175…in the Valley that would have been 350K plus.
Very exciting.
Anyhow, here’s some eye/ear candy for us Obamabots.
i would say that mary gets it accurately. virtually 100% of all mortgages executed after bill clinton signed off on the repeal of glass-steagall[don’t you think it odd how it is that barack obombya doesn’t seem to have any interest in reviving glass-steagall?] were securitized. from residential mortgages to commercial mortgages. as mary said, they were “sliced and diced” into tranches and sold to investors all over the world. as income investments.
in many instances, each tranche had different terms. go talk to a mortgage banker about how all this was done. and about the various terms. my old college roommate was such a banker and he would tell you that there is no way that anyone could isolate individual mortages from those tranches. without lots of litigation. so, was barack obombya just doing a 3 card monte act? gulling the fools?
and then it gets even more complicated. there were these side bets[aka derivatives] that were/are linked to these mortgage securitizations. call them cdo, call them siv, call them bets on bets. but the long and the short of it is that all the securitizations of mortgage lending are linked to another raft of casino tranches….and these bets have their own population of investors. i concede that it is probably very difficult for most individuals to get their brains to wrap around the the reality that there really is not mortgage chain of custody.
this was revealed in northern ohio some months ago when national city bank of cleveland[virtually insolvent] attempted to foreclose on some residential mortgages. in this instance, the homeowner[s] had the presence of mind to hire an attorney and to contest the foreclosure[unlike most who acquiesce, take the hit, and become homeless].
most mortgagees attempt to defend themselves pro se. not a good idea. pro se defendants almost always lose.
but in this instance, the mortgagees’ attorney asked national city for the proof of a mortgage lien. and they didn’t have that paperwork. oh, they tried to assert to the federal district judge that they did. but they didn’t.
here is the story that the foreclosers don’t want those about to be foreclosed upon to know….when these mortgages were securitized, lots of lien paperwork was discarded. the banks were only interested in selling the paper. and the way the tranches were done, no investor asked for proof of lien when they bought the security.
so, mortgages are a legal morass if one wants to contest the validity of lienholder rights.
what really needs to happen is for a group of good, pro bono attorneys versed in contract law to defend mortgagees who refuse to submit to foreclosure proceedings.
barack obombya’s program is a vile scam. pure public relations. he makes george walker bush more benign every day. and that is the harshest of all judgments.
There’s a ton of lawyers and legal advocates who are not lawyers offering to defend such mortgages– for a price. Good luck finding one pro bono. My lawyer brother suggests basing the lawyer’s fee on the final settlement, not on up front or monthly fees. My wife’s currently involved in one such temptation and I’m trying to help her avoid falling into traps.
Bob in HI
perhaps you can tell me how solar can be made environmentally effective.
do you really think that covering a desert with solar panels is an environmentally friendly act?
more to the point, if the energy produced cannot be immediately transmitted into the electrical grid, how do you propose to store it? for future use. vast facilities of lead-acid batteries?
this is one of the quandaries of residential photovoltaic solar. a residence using those panels must have a battery room to store the excess energy.
do you think that batteries are an environmentally friendly component? i think that batteries have lots of environmentally unfriendly aspects.
do you know of a coherent scheme to recycle, dispose of, played-out batteries?
do you know of a residential solar scheme that factors in the battery room?
what do you think the capital cost is for a 1kW residential solar installation[including batteries and battery room]?
how many square feet of solar panels will be required for this 1kW electricity production?
i ask these questions to see if you really know what you are talking about.
The Oligarchs’ Escape Plan by Michael Hudson, another UMKC econ professor like William K. Black.
By the way, the concluding move in the IMF-centered escape routine that Hudson describes**, the attack on the currency of the nation in crisis after local and foreign elites have off-shored their funds under the support of the IMF, is a version of the “speculative attack” model of balance of payments crises. Unless one is an economist, the model itself might not be of much interest, but it’s notable that economists are in fact aware of such behavior and have tried to make models that take it into account. And that in fact it was the Shrill One (PDF) who was among the first to call the phenomenon out in formal literature.
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** The first relevant passage in Hudson begins: