Month: September 2011


Pass the Popcorn

Even if the mortgage non-transfer transfers conducted through MERS fulfill the technical obligations required by existing real estate and trust law (they don’t), they still don’t excuse the illegal evasion of recording fees for local county clerks.

We’ve had a couple of smaller counties file suit, but now it’s Dallas, Texas, which turn over a huge rock, and reveal what is underneath:

Mortgage Electronic Registration Systems Inc., along with Bank of America Corp., was sued by Dallas County District Attorney Craig Watkins over claims its mortgage-tracking system violates Texas law.

Merscorp Inc.’s MERS, which runs an electronic registry of mortgages, cheated Dallas County out of “tens of millions in uncollected filing fees,” Watkins said in a statement. MERS tracks servicing rights and ownership interests in mortgage loans on its registry, allowing banks to buy and sell loans without recording transfers with counties.

Watkins, in a complaint filed yesterday in state court in Dallas, claims MERS was established by banks including Bank of America to avoid paying filing fees, as well as to ease transfers of mortgages. The county asked the court to hold Bank of America liable as a shareholder of MERS and said the bank “knew or should have known” that the system would cause improper filing.

We are talking billions, if not tens of billions of dollars in fees that were illegally evaded by the banks, and Dallas County is big enough that the banks can’t afford to settle to make the problem go away.

My heart bleeds for these ratf%$#s.

Our Banking Model is Unsustainable

Martin Wolf notes that banks current business model is predicated on a 15% return on equity, and this is fundamentally unsustainable:

According to a FT article last week, Lloyds’ bank has a target return on equity of 14.5 per cent. Banks like to argue that this is the level of return on equity they need to earn, in order to gain funding from the markets. Naturally, remuneration is linked to achieving such objectives. The question, however, is whether such objectives make any sense. The brief answer is: no.

Forget banks, for the moment. What would you say if someone offered you an investment with a promised real return of close to 15 per cent? You might say: “How much can I buy?” Alternatively, you might say: “What is the catch?” Sensible people must take the latter view. If you thought that you were being offered a reliable real return at such an exalted level, you would buy as much as you could. This must be particularly true now when real returns on the bonds of relatively safe governments are close to zero.

So what is the catch? The obvious answer has to be that the real return in question is extremely risky, because it is volatile and offers a significant chance of total wipe-out.

Indeed, it is perfectly obvious that these cannot be sustainable safe returns in economies growing at 2 per cent a year, for such a large and well-established industry. At a 15 per cent real return, the value of cumulative retained earnings would double in five years and increase 16-fold in 20 years. Pretty soon, bank equity would be the only real asset in the world!

He notes that at some point in the late 1970s, probably starting during the Carter era deregulation of the banks,* their return on equity diverged significantly from the overall rate of growth of the economy, and the way that they did this was by the same way that anyone increases return, by increasing risk.

They increased risk by both increasing risk inherent in each individual investment, and they did so by becoming even far more leveraged, raising the risk that even small setbacks would leave them illiquid or insolvent.

This doesn’t matter to the banks, because they are back stopped by government deposit insurance, so they are, in essence, gambling with the taxpayer’s money.

We need banking to be dull again.

In any case, go read the whole post, particularly the bit where he figures that the additional cost of capital from this is just 15 basis points. (0.15%)

*Yes, the last generation’s Barack Obama was the one who initiated the dismantling of the depression era banking regulations, and who stood idly by as the savings and loans went insane. Reagan was worse, but Carter got the ball rolling.

This is What You Get When You Cut a Deal With the Devil

Could it be ………… Satan?

As Obama did when he kowtowed to the insurance industry and killed the public option.

You get accelerating inflation for medical insurance:

The cost of health insurance for many Americans this year climbed more sharply than in previous years, outstripping any growth in workers’ wages and adding more uncertainty about the pace of rising medical costs.

A new study by the Kaiser Family Foundation, a nonprofit research group that tracks employer-sponsored health insurance on a yearly basis, shows that the average annual premium for family coverage through an employer reached $15,073 in 2011, an increase of 9 percent over the previous year.

“The open question is whether that’s a one-time spike or the start of a period of higher increases,” said Drew Altman, the chief executive of the Kaiser foundation.

The steep increase in rates is particularly unwelcome at a time when the economy is still sputtering and unemployment continues to hover at about 9 percent. Many businesses cite the high cost of coverage as a factor in their decision not to hire, and health insurance has become increasingly unaffordable for more Americans. Over all, the cost of family coverage has about doubled since 2001, when premiums averaged $7,061, compared with a 34 percent gain in wages over the same period.

I wonder what could be driving this?  Maybe the desire to beat implementation dates for price controls?

How much the new federal health care law pushed by President Obama is affecting insurance rates remains a point of debate, with some analysts suggesting that insurers have raised prices in anticipation of new rules that would, in 2012, require them to justify any increase of more than 10 percent.

The difference between health insurance companies and Satan is that there are some things that Satan just won’t do.


The old definition was murdering your parents and asking for mercy because you are an orphan.

The new definition is House Majority Leader Eric Cantor whining about delays in disaster aid to his district:

House Majority Leader Eric Cantor, R-7th, is pushing for information on the status of Gov. Bob McDonnell’s request for federal disaster assistance for Louisa County residents in the wake of an earthquake there last month.

On Friday, Cantor held a conference call with Federal Emergency Management Agency and Louisa County officials. A readout of the call provided by Cantor’s office indicates that he asked FEMA officials about the timeline and process for determining whether the agency would grant federal assistance.

Maybe, just maybe, it had something to do with your attempt to use FEMA as a political chip in the budget fight you pig felching hypocrite.

Things That Make Me Want to Smash My Clock Radio With a Sledge Hammer

It goes off, and they have Bill “Felafel Man” Oreilly on pimping his book:

Last October, after NPR fired Juan Williams, O’Reilly went on Fox News and said NPR “is not a news organization” and “is basically a left-wing outfit” that “throw[s] out propaganda in violation of the First Amendment.” He called for “the immediate suspension of every taxpayer dollar going into the National Public Radio outfit” and likened the network to terrorists: “Terrorists want to create terror. Well what does NPR want to create? They’re intimidating, too.” To cap it all off, he called NPR “boring,” “dishonest,” and a “snake pit.”


So O’Reilly thinks NPR is a totalitarian snake-pit of pseudo-terrorism that shouldn’t get taxpayer money to promote its dishonest left-wing ideological agenda. Using taxpayer money to help sell his books, though, is perfectly fine.

And the interview itself was nauseatingly sycophantic.

Seriously, If I didn’t not donate to public radio because of their vociferous opposition to low power community radio, I would never give to them now.

Melissa Harris-Perry is a (Not Very) Useful Idiot

And what’s more, she is an idiot who is inadvertently enabling racists to use coded speech to race bait.

You see,she is claiming that “white liberals” are losing faith in Barack Obama because they are all a bunch of racists, who require a black man to be Superman in order to get their support:

President Obama has experienced a swift and steep decline in support among white Americans—from 61 percent in 2009 to 33 percent now. I believe much of that decline can be attributed to their disappointment that choosing a black man for president did not prove to be salvific for them or the nation. His record is, at the very least, comparable to that of President Clinton, who was enthusiastically re-elected. The 2012 election is a test of whether Obama will be held to standards never before imposed on an incumbent. If he is, it may be possible to read that result as the triumph of a more subtle form of racism.

You know, there is also the possibility that he’s just not doing a good job.

One indicator of this is that his favorability numbers are cratering among the Black community aw well:

New cracks have begun to show in President Obama’s support amongst African Americans, who have been his strongest supporters. Five months ago, 83 percent of African Americans held “strongly favorable” views of Obama, but in a new Washington Post-ABC news poll that number has dropped to 58 percent. That drop is similar to slipping support for Obama among all groups.

“There is a certain amount of racial loyalty and party loyalty, but eventually that was going to have to weaken,” said Andra Gillespie, a political scientist at Emory University, who studies African Americans. “It’s understandable given the economy.”

So we have a 25% drop among AAs, and a 28% drop among whites.

And we have no numbers at all broken out for white liberals.

So Harris-Perry is full of crap, but that’s the least of it.

You see, every time we get this sort of sh%$ spewed at us, it allows the real racists out there, and there are a lot of them, to claim that there is no racism, and that it’s all just a code word for the liberal agenda.

Dr. Harris-Perry is clearly a big fan of Barack Obama, and she is clearly wants to explain away what other people see as his failings, but tossing about specious accusations of bigotry where no objective data serves to make any statements about racism that much less credible.

I know that it’s easier than answering things David Sirota’s statement that. “Racism isn’t responsible for the president’s drop in popularity. His right-wing policies are,” but it is intellectually bankrupt, and it serves the purposes of the real racists out there.

These Folks Really Hate America…

Basically, a good old boy policechief and judge in East Podunk Bay Minette, Alabama have decided that they have the right to tell people to go to church or go to jail:

A new alternative sentencing program offering first-time, nonviolent offenders a choice of a year of church attendance or jail time and fines is drawing fire from the American Civil Liberties Union as well as national attention, officials said Friday.

“This policy is blatantly unconstitutional,” said Olivia Turner, executive director for the ACLU of Alabama. “It violates one basic tenet of the Constitution, namely that government can’t force participation in religious activity.”

But the local police chief who is heading up the program starting Tuesday called “Restore Our Community” says no one is being forced to participate.

“Operation ROC resulted from meetings with church leaders,” Bay Minette Police Chief Mike Rowland said. “It was agreed by all the pastors that at the core of the crime problem was the erosion of family values and morals. We have children raising children and parents not instilling values in young people.”

Rowland said the idea was simple: get people who are not yet hardened criminals to become involved in positive programs — hundreds of free resources offered by some 104 churches in the region with 56 agreeing to help monitor first-time, nonviolent offenders. Under the program, pastors would report weekly to the chief and offenders in the program would bring a signed sheet to prove they attended church.

They would also have to answer some questions about the services, Rowland said. And the offenders who voluntarily choose church over jail get to pick the churches they attend. If they complete a year’s attendance, Rowland said, their criminal case would be dismissed.

Here’s the kicker:

“The biggest question or complaint we have had is about separation of church and state,” Rowland said. “Those issues won’t come to the forefront because the offenders are not being forced to attend church, and what religion they choose is really up to them. We even have provisions for people who are from out of town to choose a place to worship in their own communities.”

Of course they aren’t forced to go to church, they have a choice, it’s just that the alternative is prison.  Just like people weren’t forced to confess to witchcraft, they had a choice, it’s just that the alternative is being drowned or crushed under stones.

I’m thinking of going there and founding a “Pagan, atheist, secular humanist, free love Church of Saccharomyces cerevisiae,” and seeing if I can get some of these folks to attend my church.

H/t TPM.

787 Finally Delivered

Only 3 years late:

Boeing’s long-awaited dream machine became a commercial reality on Sunday when the lightweight plastic-composites 787 Dreamliner was formally delivered to its first Japanese customer.

Boeing says the revolutionary carbon fiber design will hand 20 percent fuel savings to airlines struggling to avoid a new recession, and give passengers a more comfortable ride with better cabin air and large electronically dimmable windows.

The first $200 million aircraft was handed over to Japanese carrier All Nippon Airways three years behind schedule after persistent delays that cost Boeing billions of dollars.

“It took a lot of hard work to get to this day,” said Scott Fancher, vice president and general manager of the 787 program, at the outset of two days of celebrations at the plane’s Seattle production plant.

The blue and white-painted long-range aircraft, which boasts a graceful new design with raked wingtips, will leave for Japan on Tuesday and enter service domestically on Oct. 26.

Boeing has taken orders for 821 Dreamliners, which will compete with the future Airbus A350, due in 2013.

FWIW, Airbus is likely to be late with the A350, that’s the way of such endeavors, but it is unlikely to be as late, because EADS is not determined to shift all of its expertise to poorly supervised outside firms in order to hit quarterly numbers.

Additionally, EADS has had nearly a decade to watch the missteps Boeing made in implementing the advanced technology of the aircraft, and so should be able to avoid some of them. (You know, little things like not having enough of the proper fasteners available).

Boeing, after having taken over McDonnell Douglas, after the path taken by that company, single source “risk bearing partners”, made them irrelevant in commercial aviation, decided to traipse down the same insane path.

EADS, by virtue of being what amounts a national champion in aerospace for the EU, cannot take this path, and so its ability to completely f%$# things up is somewhat more limited.

Someone Puts a Cost to the Activities of Patent Trolls

$500-billion over the past decade,* and that does not count reductions in innovation, as the trolls, as:

  • The patents are frequently of very low quality.
  • The proceeds from patent trolling don’t go to inventors in the first place.

The problem is that a myth of  “Intellectual Property” (When I use the term IP, I mean “Intellectual Product) has been created out of a limited exclusive license created, “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries“.

In other words, this is not property law, but rather it is public interest law based on the idea that temporary and limited restrictions to the free flow of ideas and expression only to the degree that these restrictions benefit the public as a whole.

Once you start calling it “property” you encourage all sorts of arbitrary applications, and Randroid thinking, and as opposed to encouraging innovation, you hamstring it.

*My unscientific gut says that this number is probably low by at least a factor of 2, if not a factor of 10.

Google™ Adsense™ Yet Again…

Yes, once again, the best and the brightest programmers at Google™ have developed software that “reads” my blog, and serves an advertisement that best serves the proclivities of my readers…………Not!!!!

I write about various fraudulent financial schemes, and we see ads for it. I write about how John McCain being a pathetic old man, and his ads appear.

And now, we have have Ron Paul ads (no link, no kidding) showing up when I always refer to him as a loony tune (though by the standards of the current Republican field, he seems almost sane by comparison).

 Seriously, I need to find someone else to serve ads for my blog.

Please note: once again, that I do not vet, nor do I endorse any ad that appears on my site, and I reserve the right to mock both the ads that appear on my site, as well as the advertisers.

Also, please note, this should be in no way construed as an inducement or a request for my reader(s) to click on any ad that they would not otherwise be inclined to investigate further. This would be a violation of the terms of service for Google Adsense.

And The Knives Come Out for Elizabeth Warren

You go, girl!

It appears that the powers that be in finance are trying to gin up a story about how there were irregularities on Elizabeth Warren’s TARP oversight panel because the details on compensation are not as granular as they would have liked.

It’s the usual suspects:

  • Politico, who has never seen a Republican talking point that they won’t echo.
  • The Boston Herald, which even if Rupert was forced to sell it, is still in his pocket.

In addition to being hostile to the idea that banks should be able to rip people off without consequences, she has also eloquently made the point that, “There is nobody in this country who got rich on his own,” because the accumulation of wealth is an artifact of the support that the rest of society provides you: (see the vid as well)

In the video (at left), which was filmed at an event in Andover, Mass., Warren rebuts the GOP-touted notion that raising taxes on the wealthy amounts to “class warfare,” contending that “there is nobody in this country who got rich on his own. Nobody.”

Warren rejects the concept that it is possible for Americans to become wealthy in isolation.

“You built a factory out there? Good for you,” she says. “But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.”

She continues: “Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”

It’s kind of an anti-Randroid philosophy that Democrats should be shouting from the heavens, but the only other political figure of any national stature who does is Bernie Sanders, and he ain’t a Dem.

I understand why the knives are out.  The Objectivist view of the divine right of wealth is an unspoken common wisdom among much of the political class, and real populism, as opposed to the teabagger rent-a-crowds,  is a threat to that.

In the Latest Episode of “The Forever War”………

Obama has signed of on building an archipelago of secret drone bases in Africa and the Arabian Peninsula:

The Obama administration is assembling a constellation of secret drone bases for counterterrorism operations in the Horn of Africa and the Arabian Peninsula as part of a newly aggressive campaign to attack al-Qaeda affiliates in Somalia and Yemen, U.S. officials said.

One of the installations is being established in Ethi­o­pia, a U.S. ally in the fight against al-Shabab, the Somali militant group that controls much of that country. Another base is in the Seychelles, an archipelago in the Indian Ocean, where a small fleet of “hunter-killer” drones resumed operations this month after an experimental mission demonstrated that the unmanned aircraft could effectively patrol Somalia from there.

The U.S. military also has flown drones over Somalia and Yemen from bases in Djibouti, a tiny African nation at the junction of the Red Sea and the Gulf of Aden. In addition, the CIA is building a secret airstrip in the Arabian Peninsula so it can deploy armed drones over Yemen.

The rapid expansion of the undeclared drone wars is a reflection of the growing alarm with which U.S. officials view the activities of al-Qaeda affiliates in Yemen and Somalia, even as al-Qaeda’s core leadership in Pakistan has been weakened by U.S. counterterrorism operations.

This is completely nuts, the Pentagon is going to bankrupt us by placing a constellation of bases around the world that:

  • We cannot afford.
  • Creates terrorists by placing a foreign military presence in other sovereign nations.

This sh%$ simply has to stop.

This is the Real Goal of the JSF Program

Norway is saying that it will not commit to buying F-35s unless it gets a formal commitment to integrate Kongsberg joint strike missile (JSM):

Norway’s Kongsberg has warned that the country needs a commitment from the US government within six months to integrate a national-specific missile on the Lockheed Martin F-35, or it could withdraw from the programme.

So far, Norway has received no assurance that the Kongsberg joint strike missile (JSM) will be integrated as part of the Block 4 software update on the F-35 in 2019.

The absence of such a commitment could prompt the Norwegian parliament to reject an expected request early next year from the nation’s defence ministry to buy the first four F-35s, in order to launch training activities in 2016.

“That is what I think is the critical issue [for the parliament’s decision]”, said Bjorne Bjune, Kongsberg vice president of business development, speaking at the Air Force Association’s annual convention in Washington DC on 20 September. “That decision needs to be forthcoming.”

Integrating the JSM as the Norwegian F-35’s primary surface-to-air missile system killer is considered an absolute requirement by Oslo, Bjune said. Norway has already invested $1 billion to adapt the naval strike missile into the air-launched JSM, and is planning to spend a further $200 million.

One of the unspoken goals of the JSF program, from the American perspective, is to kneecap the development of systems related to the JSF, either by not allowing integration of foreign systems into the aircraft’s (very) closed architecture, or by making it prohibitively expensive.

The problems that are occurring now, when Lockheed and the Pentagon are trying to convince allies to purchase the aircraft, are nothing compared to what we will see once the planes start to enter other inventories.

Simply put, once your country commits to purchasing the JSF, you will find nothing but delays, stonewalling, and excessive costs if you want to integrate, or update, an indigenous system into your fleet.

186282 Miles Per Second, It’s Not Just a Good Idea, It’s the Law…

Or maybe not:

Scientists around the world reacted with shock yesterday to results from an Italian laboratory that seemed to show certain subatomic particles can travel faster than light. If true, the finding breaks one of the most fundamental laws of physics and raises bizarre possibilities including time travel and shortcuts via hidden extra dimensions.

Scientists at the Opera (Oscillation Project with Emulsion-tRacking Apparatus) experiment in Gran Sasso, Italy, found that neutrinos sent through the Earth to its detectors from Cern, 450 miles (730km) away in Geneva, arrived earlier than they should have. The journey would take a beam of light around 2.4 milliseconds to complete, but after running the Opera experiment for three years and timing the arrival of 15,000 neutrinos, the scientists have calculated the particles arrived at Gran Sasso 60 billionths of a second earlier, with an error margin of plus or minus 10 billionths of a second. The speed of light in a vacuum is 299,792,458 metres per second, so the neutrinos were apparently travelling at 299,798,454 metres per second.

I’m inclined to think that this will be reversed after a thorough peer review, but I’m sure that we have a bunch of physicists who are reading the reports of the experiment very closely.