Blog on the Run: Reloaded

Thursday, July 1, 2010 9:07 pm

Financial regulation reform

Filed under: We're so screwed — Lex @ 9:07 pm
Tags: , ,

Kunstler: far too little, way too late:

President Obama made a very interesting remark when the financial regulation package passed in the senate the other day. He said the bill would make sure that “Main Street is never again held responsible for Wall Street’s mistakes.”

Whoosh….

That was the sound of something going over America’s head. Something about the size of Rodan the Flying Reptile. And frankly I don’t think the president even meant to be coy or deceptive. It just means he doesn’t get it either.

Never again….

Never again?

What the [expletive]?

Why even this time?  Why isn’t there an army of federal attorneys out there, their teeth bristling with subpoenas, beating the bushes in every lane and skyscraper floor of lower Manhattan (and Fairfield County, Connecticut, not to mention a thousand office parks around the USA) to roust out the grifters and swindlers who took Main Street to the cleaners this time.

I asked this same question of my rep, Howard Coble, in a recent e-mail. Here’s what he said:

As you may know, recently the Securities and Exchange Commission announced a civil fraud suit against [Goldman Sachs] for questionable mortgage-related transactions.  Concurrently, the Justice Department has launched a criminal investigation into the firms’ activities.  Finally, congressional investigations regarding Goldman’s role in the financial crisis are ongoing.  We have noted your thoughts regarding these actions should legislation be debated in the coming months that would affect these transactions.  Finally, until these inquiries are concluded, as a member of the House Judiciary committee, I am hesitant to express an opinion.

Apparently Howard is shocked, shocked to find that gambling is going on in here. (Your winnings, sir.)

Kunstler continues:

The audacity of cluelessness! And the hilarity of “next time.”

Earth to President Obama: there isn’t going to be a next time. This time was enough to git ‘er done. Wall Street – in particular the biggest “banks” – packaged up and sold enough swindles to unwind 2500 years of western civilization. You simply cannot imagine the amount of bad financial paper out there right now in every vault and portfolio on the planet. Enough, really, to sink any company even pretending to trade in things more abstract than a mud brick or an hour of labor. What’s more, the cross-collateralized obligations between them are so vast and intricate that all the standing timber in North America could not be fashioned into enough pick-up sticks to represent the hideous death-dealing tangle of frauds waiting for the wing-beat of a single black swan to come crashing down.

Granted, that’s not great. But, hey, it could be worse. It’s not like there’s actually a black swan out there — like, say, $1.4 trillion in commercial real estate financing coming due by the end of 2014, with half those loans currently under water, or anything.

Oh. Wait.

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Friday, February 19, 2010 11:55 pm

Remember how government stimulus was at least partly intended to unfreeze credit markets?

Filed under: I want my money back.,We're so screwed — Lex @ 11:55 pm
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Fec does. And his roundup not only shows that it hasn’t worked as intended (although lenders who got money suffered no consequences for failing to lend it), it also reminds us of the upcoming tidal wave of commercial real estate default, a wave whose victims will be primarily small lenders.

Wednesday, February 3, 2010 12:00 am

Odds and ends for 2/2

Punxsutawney Phil weighs in on this whole Groundhog Day thing. Spoiler: He is, profanely, obscenely, NSFW-ly not a fan.

Bestest snow in a decade: The night we moved into our current house in January 2000, we got what likely will be a strong contender for snowstorm of the century. This past weekend’s storm, which dumped better than 6″ on us and close to a foot not far north of here, was almost as good. Got to go sledding and have a snowball fight with the kids — they killed me. Enjoyed Cajun crab-corn chowder and other good eats with good friends. Settled into a warm armchair Sunday night with a great novel and some Nattie Greene’s Red Nose winter ale. Ahhhhh.

Bad news, worse news for banking: The current commercial real-estate bubble could take down the banking system when it pops. And CRE ain’t the only potentially lethal problem out there. I’ll say one good thing about the free-marketeers: They can certainly f\/(% up a banking system.

Goldman Sachs to tell THE president to get bent, pay ITS president a $100 million bonus: Someone explain to me again why we don’t want to punish the banksters.

More insider trading that the SEC somehow manages to overlook.

While Jim Bunning does the taxpayers a few favors on his way out the door, Chris Dodd is throwing Molotov cocktails: Dodd, along with Richard Shelby and Paul Kanjorski, has pretty much killed the proposed ban on proprietary trading by banks. Because the one thing we desperately needed was even more taxpayer money at risk. Or has he? Goldman Sachs’ stock price seems to think Dodd hasn’t killed it after all.

Has prop trading really killed even one bank? Tennessee Sen. Bob Corker asked that question today. The answer is yes: Merrill Lynch, which the Fed bribed Bank of America to take over. (That transaction itself has raised all manner of, for BAC officers/directors, ugly questions about what stockholders were and weren’t told about the ML takeover.)

The Fed: One big counterfeiter, basically. Which, honestly, is sort of what I had thought, except that I figured there were important distinctions that were eluding me on account of I’ve got the economic skillz of a cinder block. Turns out I was more right than I knew, which does NOT make me feel as good as you’d think.

Not that what people want actually matters, but health-care reform with a public option is more popular even among Republicans in swing districts than the current Senate bill, which lacks one. And to no one’s surprise, although at least 51 Democratic Senators are on record as supporting a public option, now that reconciliation (i.e., simple majority vote) could make it happen, some of those “backers” are backpedaling, lest they upset their corporate overlords.

As is often the case, The New York Times’ David Brooks is guilty of slopping thinking. Matt Taibbi dopeslaps him back in the direction of reality and, in the process, puts in a shout-out for factual journalism over the false equivalence of “objective” journalism.

If you believe this, 26 states, including North Carolina, are insolvent. I don’t know whether to believe it or not, but, lord, it wouldn’t surprise me at this point.

I suppose it’s possible that repealing “don’t ask, don’t tell” will disrupt some military units … which is what desegregation opponents in the military warned Harry Truman 60 years ago. And as the fictitious Chairman of the Joint Chiefs on “The West Wing” observed, “You know what? It did disrupt the unit. The unit got over it.” More to the point, so, basically, did all the senior witnesses who testified before Congress on the matter today.

Why the hell isn’t someone under indictment for this?: The CIA is allowing some of its personnel to moonlight for private, for-profit corporations. This isn’t bad only because it divides CIA staffers’ focus/attention, although that division is, indeed, a bad thing; it’s bad because it gives certain corporations access to government secrets they’re not entitled to have.

Why, it’s almost as if someone’s looking out for the taxpayers’ interests: Defense Secretary Robert Gates has fired the head of the $350 billion F-35 program because of cost overruns and performance issues. He also has withheld hundreds of millions in payments to Lockheed Martin, the prime contractor on the fighter jet. There’s gotta be a catch; I just haven’t figured out yet what it is.

I personally think Khalid Sheikh Muhammad should be tried in New York City, and I think people who think otherwise for any reason other than the cost of security are incontinent. And here’s what I would call a conservative argument in favor of trying KSM in, if not in New York City proper, at least in a civilian federal court elsewhere within the Southern Judicial District of New York. And here are some other reasons why letting the White House, Congress and local officials butt into this is a bad idea.

Colorado Springs tries an interesting social experiment: Rather than raise taxes, the city is letting a third of its streetlights go dark, letting dozens of police and firefighter positions go unfilled, not paving any streets and cutting all kinds of other services. I am sincerely interested in seeing what happens with this.

The NFL may well be the most popular sports operation in America, but they still desperately need competent public-relations counsel.

As do Senate Democrats, who spent the weekend schmoozing with bank lobbyists in Miami. No way that could go wrong for the taxpayer.

Supposedly we now have a study that says abstinence-only sex education works: Except for the part where the program studied — which might, in fact, work, although I’d say more study is needed — was not, in several important ways, abstinence-only. More details here. This isn’t just apples to oranges, it’s apples to mountain oysters.

As does Sarah Palin, whose PAC spent more money in the last half of 2009 on copies of her book than it did in contributions to other political candidates, ostensibly the PAC’s primary purpose. For those of you following along at home, this is a way of funneling political contributions to her PAC straight into her own pockets.

Question of the day, from Eli: “… if only one political party’s base gets to be taken seriously, does it really have to be the one that parades around with pictures of the President Of The United States dressed as a witch doctor?”

What could possibly go wrong? A Michigan man with a sled tried to fashion a rocket pack out of an old car muffler, gasoline and gunpowder. Police say he had been … wait for it … drinking. (h/t: Nance)

Tuesday, December 1, 2009 9:50 pm

Odds and ends for 12/1

Green shoot (me): Delinquent balances underlying commercial mortgage-backed securities totaled $32.55 billion in October, up more than 500% from October 2008. They’re expected to top $65 billion by June, which would be a record 8.3% of the total.

Michele Bachmann, idiot: “Just over a year ago, 100 percent of the private economy was private.” Uh-huh. And just over a year ago, 100 percent of water was wet.

Jon Kyl, moron: The Arizona senator, who has repeatedly said President Obama needs to heed the request of Gen. Stanley McChrystal for more troops in Afghanistan, says any kind of deadline for getting them out — an “exit strategy” — would be “exactly the wrong way to go.” Perhaps he should have run that position past McChrystal, who said in October: “Gentlemen, I am coming into this job with 12 months to show demonstrable progress here — and 24 months to have a decisive impact. That’s how long we have to convince the Taliban, the Afghan people and the American people that we’re going to be successful. … That’s not a choice. That’s a reality.”

Alberto Gonzalez, imbecile: The former attorney general and unindicted co-conspirator, unable to find a job in any law firm, anywhere, or teaching law at any law school, anywhere, tells a political-science course at Texas Tech to “dream big” and hang in there until your crony network elevates you to power.

Mike Huckabee, deluded: Dude, God is telling you to pardon the wrong people. Plural.

Jason Linkins, not an idiot, moron or imbecile OR deluded: “I’d describe Politico‘s brand of journalism as banality, added to Scientology, multiplied by the spasmodic frenzy of a tween who hasn’t learned to displace their unfulfilled erotic needs onto emo vampires.”

Ben Nelson, just dumb, but United States Senator dumb, meaning he’s in a position to cause actual trouble: We need to pay for the Afghanistan escalation, but we don’t want to increase the deficit and we don’t want a war tax because we fought WWII without one, so let’s sell war bonds! (I am now cleaning my own gray matter off the walls of my study.)

Whom would Jesus card?: The Houston Salvation Army is among seven charities checking the immigration status of poor families before giving toys to the kids.

Things we don’t talk about when we talk about military missions and government spending.

Needed to create jobs: More direct infrastructure investment, fewer tax credits. This imbalance hobbled Stimulus I, which was no more than half as big as it needed to be to begin with.

The return of common sense: Fafblog on the war in Afghanistan: “Let us never forget just what’s at stake in the war in Afghanistan: nothing less than the success of the war in Afghanistan.” Pretty much.

Related: As the number of troops in Afghanistan grows, so will the number of contractors. Because that worked out so well last time. Comments Clavis at TPMMuckraker: “I think it would be cheaper if we simply paid the Afghanis to shoot themselves.”

Plus, he sounds exactly like Rush Limbaugh. Also.: MSNBC talk-show host Ed Schultz ain’t the sharpest tool in the shed. He had this to say about the Obama state-dinner party crashers (whom, I promise, I will mention no more): “What if one of them were a ninja? Obama could have been killed.” On hearing this, my thoughts ran roughly in this order: 1) Ninjas? Cool! 2) Yeah, and he could have been killed even though they weren’t ninjas. Idiot. 3) Pirates v. ninjas! 4) Obama v. Ninjas! 5) Obama v. Ninjas: The Video Game! (c) 2009 Lex Alexander. I win.

There are more things in heaven and Earth, Horatio David and Tamron, than are dreamt of in your philosophy: Of course they let bin Laden get away at Tora Bora on purpose. No other explanation comports with both the facts we have and Occam’s Razor.

And, finally …

Tiger Woods is changing careers: The Borowitz Report has the inside scoop.

UPDATE: I’m feeling generous, so here’s a bonus:

Write your own punch line: The COO of McDonald’s is retiring … for health reasons.

Must. Have.: Vodka. In a pill. (h/t: Maru)

Tuesday, November 3, 2009 8:45 pm

How do you spell “crash”?

Filed under: We're so screwed — Lex @ 8:45 pm
Tags:

Easy: CRE.

Tuesday, October 27, 2009 8:54 pm

Odds and ends for 10/27

Sunday, August 30, 2009 11:07 pm

Simple Answers to Simple Questions, commercial real estate edition

Filed under: We're so screwed — Lex @ 11:07 pm
Tags: ,

Welcome to another edition of Simple Answers to Simple Questions.

Today’s simple question: How bad is the commercial real-estate market?

A: Very, very, no-good, awful bad.

This has been another edition of Simple Answers to Simple Questions.

Thursday, July 23, 2009 8:35 pm

Second wave

Filed under: We're so screwed — Lex @ 8:35 pm
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You know the growing problems in the commercial real-estate market — the ones I said earlier that no one seems to be talking about?

In my naivete and general ignorance of the subject of finance, I had hoped that the reason no one was talking about those growing problems was that they weren’t growing, and maybe that they weren’t even problems, even as the “for lease” signs proliferated in Greensboro storefronts.

Unfortunately, they’re talking about ’em now:

Two of America’s biggest banks, Morgan Stanley and Wells Fargo, on Wednesday threw into sharp relief the mounting woes of the US commercial property market when they reported large losses and surging bad loans.

The disappointing second-quarter results for two of the largest lenders and investors in office, retail and industrial property across the US confirmed investors’ fears that commercial real estate would be the next front in the financial crisis after the collapse of the housing market.

The failing health of the $6,700bn commercial property market, which accounts for more than 10 per cent of US gross domestic product, could be a significant hurdle on the road to recovery.

Ah, crud. I had really been hoping not to read a sentence anytime soon containing both “collapse” and “commercial real estate.”

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