Author Archives: Lila

Government Conspiracy Theory Blames Hybrid Mortgages for Depression

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Tom di Lorenzo at Lew Rockwell blog has this:

“Following Alan Greenspan’s pathetic “don’t blame me” speeches and books, various Fed branches have parroted his view that the Greenspan Depression we are in was caused by thrifty Orientals whose savings drove down interest rates.  So imagine my surprise upon receiving a hard copy of a Dallas Fed publicaton entitled “Taming the Credit Cycle by Limiting High-Risk Lending” and reading that “The present troubles emerged to a large extent from the growing use of hybrid adjustable-rate mortgages . . .”   Huh?  What happened to The New Yellow Peril?

There is no mention at all — not one word — of the role of Fed monetary policy in creating the housing bubble. The culprits, say these self-serving excuse makers (the author is Jeffrey W. Gunther), are “lightly regulated institutions” that are in need of the Fed’s “disciplining force.”

My Conment

Mr. di Lorenzo can relax –  this new tack does nothing to exonerate Greenspan. Look at this USA Today piece from early 2004, when housing was already showing bubbl-y tendencies:

“He [Greenspan] said a Fed study suggested many homeowners could have saved tens of thousands of dollars in the last decade if they had ARMs. Those savings would not have been realized, however, had interest rates shot up.

“American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage,” Greenspan said.”

Read through the whole piece and it’s  clear that American house buyers actually “preferred the stability” of the traditional fixed rate mortgages. In other words, it was only a concerted PR effort by Greenspan & Co. that changed people’s tastes in this.

Let that put an end to any moralizing of this issue.  Yes – rampant consumerism and debt binging exacerbated the problem. But the problem wasn’t caused by some moral defect in American consumers. It was caused by policies deliberately pushed by the federal government in the hope that the consumer would succumb. The chairman of the Federal Reserve thus acted no differently from any confidence man or grifter who spots a mark (a naive, uninformed person easy to manipulate), then sets about winning the mark’s confidence before baiting the trap….

You can see the chairman’s own words to the national association of credit unions on February 23, 2004. (Skip down to the last 2-3 paragraphs to catch the gist)

And now, just like any con man, the Fed chairman too blames his victims.

They had it coming to them...


Thought Control and the Sex Police

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The media these days has an unhealthy and strange preoccupation with the sex lives of politicians and “public figures”… especially when they’re adulterous.

All this, despite journalists’ protests that they’re interested in “privacy”…

The issue becomes doubly important because of the role sexual blackmail…or worse yet, sexual libel.… plays and has played in controlling political mavericks, reformers, or even whistle-blowers, whether in government or elsewhere.

I call it strange, because modernity is supposed to have removed itself so far from oppressive mores and bourgeois conventions….and yet in most commentary on the subject, one finds nothing more than the same hideous cliches – about guilt, predation, sex-pots, cheating, and high drama….
In point of fact, most spouses wander (or more accurately, cultivate fantasies of wandering) because of lack of emotional connection in their marriage.

That’s clear from Mark Sanford’s tepid (yawn) revelations..

Now, as a good Tory-Bohemian, I find myself often on both sides of this issue.

On the one hand, the nostalgic popular imagery of It’s a Wonderful Life, and Father Knows Best…..

And, as a Christian – even an unorthodox one, the fact that one is supposed to admire the impossible standard set in the Sermon On the Mount…

A standard that no normal human could follow to the letter..
A standard that perhaps no normal human should follow to the letter.
[I wonder if that was the point Jesus was trying to make?]

Yet, while no one casts stones at anyone for not giving away all his belongings, or for failing to keep the sabbath, or for slandering or lying, or for fraudulent business practices, strange that even the most benign friendship should bring out the sex police.

(As an example, think of McCain’s supposed affair with a lobbyist – an affair both of them denied and for which no proof existed beyond the media’s fervent desire for a little dirt…and mind you, if one were to be precise, it was McCain’s marriage itself that was grounded in adultery…Cindy being a former ‘other woman’).

Stranger yet, the sex police these days are usually so-called leftists and liberals.
Their modus operandi would have made the gestapo proud…

If there’s anything calculated to keep women out of public life, it’s this intensely misogynistic and pornographic scrutiny. If you don’t think that’s what all this is, why haven’t we been treated to sexualized nudes of, say, George Bush, as we have of Hillary?

Why wasn’t Ralph Nader lynched by the media mob in the same way as Cindy Sheehan?

So my sympathies are with scarlet women (and men), then and now, paraded up and down while the public stones them symbolically. Even Eliot Spitzer has my sympathy. The man after all did try to cordon off his extramarital life from his wife and children. He had that much concern for them. It was the guardians of public morality who had none.

I admit it. When there’s a stoning, I’ll take the side of Hester Prynne and Anna K.

I prefer Tolstoi’s intelligent, ambitious, restless, sexual, and deeply moral adulteress, to either her vain, shallow lover or her wooden, hypocritical husband….or even to her brother’s long-suffering wife, the plaintive, babied-out Dolly – so aptly named.

Tolstoi, being a man, could give Anna no credit for anything except beauty or sexuality, but the fact is, you read the novel for her. ..and not for Dolly, or for Levin, or for Karenin, or for Vronsky. She’s worth them all.

The other woman…..

Who’s to say how much this unspeakable she profited countless miserable marriages, neutered husbands, and pathetic, damaged children…by taking up the slack (physical or emotional) of the immoral “business arrangement,” by which I loan you my body to make babies and play with, and in return you fork over 50% or more of everything you make, or will ever make, while we endlessly bait, hurt, rob, insult, control, extort, blackmail, bore, manipulate, wound, sue, demean, abuse, and torture each other verbally, emotionally, and physically….all in the name of holy matrimony.

What a fraud….

And that’s how many children are raised today. Any wonder they became traumatized adults, easily manipulated by propaganda?

Where would respectable Victorian marriage have been without the brothel, asked Shaw..

And where would the nuclear family be without countless other women, whether they were only friends, sisters, neighbors, and “office wives,” or whether they crossed the boundary into a physical relationship?

Thank God for other women….and for other men.

It takes a village to raise a married couple…..

We all have an image of the other woman in our heads: the calculating predator who moves in on happily coupled men. The cloistered, diamond-draped mistress. The office sexpot who’s always just a little too close to your guy at his holiday party. She’s a staple of novels, movies, tabloids, even history books – from the restless Emma in Madame Bovary to Fatal Attraction’s bunny boiler to, most recently, Eliot Spitzer’s hotel call girl. And if you’ve never seen it, go YouTube the legendary clip of Marilyn Monroe purring “Happy Birthday, Mr. President” to her rumored lover, J.F.K. That’s the other woman as we usually imagine her.

More at Glamour, via Truth to Power blog.

Elis Regina Sings “O Bebado e a Equilibrista”

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Brazilian pop singer Elis Regina (1945 – 1982) is one of my new finds. One half of an album Elis and Tom (with Antonio Carlos Jobim) that’s considered one of the best in bossa nova, Regina was a passionate, supremely gifted, and original performer. Not as overtly political as other singers, her own unconventional life and stage presence lent weight to her political engagement. She was once vilified for a public performance in support of Brazil’s military junta (1964-1985) that later turned out to have been coerced. After that, the cartoonist Helfil, one of her detractors, became her friend, and she joined him to support a popular movement demanding the amnesty of political prisoners and exiled artists and intellectuals.

This was the subject of her classic 1979 performance of “O Bêbado e a Equilibrista” (Blanc/Bosco), which refers to “the return of Henfil’s brother.” This was the cartoonist’s older brother, Betinho, a leading sociologist, who had been exiled. Regina’s campaign was an important contribution to some 5000 Brazilian political prisoners returning from exile.

O Bebado e a Equilibrista
The Drunk and the Tightrope Walker (1979)

Lyrics: Carla Cristina
Music: Aldir Blanc/João Bosco
Translation: Steven Engler

Evening fell like a bridge
A drunk in a funeral suit reminded me of Chaplin’s tramp
The moon, like some brothel madam
Begged a rented shine from each cold star
And clouds, up there in the blotting paper sky
Sucked at tortured stains
What insane pressure
The drunk with the bowler hat made a thousand bows
For Brazil, my Brazil’s night
Is dreaming of the return of Henfil’s brother
Of so many people who left, in a dangerous situation
Our country is crying, gentle mother
Marias and Clarices are crying on Brazilian soil
But I know that pain this sharp can’t be pointless
Hope dances on the tightrope with an umbrella
With each step on that rope you can hurt yourself
Bad luck, the balancing hope
Knows that each artist’s show must go on

Housing To Recover Peak Only in 2020, Says Expert

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A gloomy forecast of where the US housing market is going at US News & World Report — Nowhere.

“Economist Celia Chen of Moody’s Economy.com has published a forecast suggesting that residential real estate could take 10 years to recover in most states-and 20 years in Florida and California.

Chen predicts that house prices will stop falling by the second quarter of 2010……..
By the time house prices stop falling, they’ll be down 43 percent from peak prices reached in 2006, as measured by the Case-Shiller home-price index.
That will mark the deepest housing correction since 1890, and probably ever in the United States (meaningful data go back only to the late 19th century)……….
Nationwide, price levels won’t regain the peaks of 2006 until 2020. In the worst-hit states, Florida and California, the rebound will take until 2030. Five other states won’t hit their 2006 peaks until after 2023. Anybody who doubts that it could take that long should consider the real estate bust in Japan, where prices are still down by half from the peaks they reached 15 years ago.
Other states, mainly those where the housing boom was muted, will bounce back faster. Homes in Texas, Oklahoma, and a handful of southern and Farm Belt states could regain peak prices within seven years, after falling by less than 10 percent.“

My Comment

The article goes on to point out, correctly, that housing takes up about 17% of the economy, so a prolonged Japanese-type slump makes any kind of “green shoot” being hyped today more likely to be astro-turf than lawn.

Actually, housing takes up more than 17% of the economy. If you factor in all the related services, from construction to home furnishings to financing, it probably takes up between 30%-40% of the economy.

Add to that the ongoing slump in commercial real estate, world-over, and you can see why some of us are legging it.

Some anecdotal evidence:

I spoke to an Indian management consultant recently. He’d just returned from visits to China and Cambodia and was extremely pessimistic about the prospects for real estate recovery there economic recovery in China.  He suggested a mark-down of about 40% from current prices.

Offices are sitting vacant everywhere. Traveling in the north of Morocco in 2008, I visited one of the hot-spots of investment – the coast from Tangier to Tetuane.  Hotels and apartment complexes were springing up on every available expanse of beach. But a businessman who was involved in exporting and importing clothes (from China) and semi-precious stones (from India) was skeptical. He said a lot of the residential boom there was tied up with the government’s effort to develop tourism and some of it was driven by drug money in search of a place to hide. Business, he said was not so good. He’d been trying to sell a warehouse for over a year, and despite a 15% markdown, had found no takers. He showed me a warehouse full of inexpensive women’s clothes, suits for $4-$5, made in China.

There were no buyers to be had. He was even thinking of shipping them to the US, because shipping costs had fallen so low. At least in the US, he said, you could find a market….

Everything, it seems, depends on the American consumer….

Americans Holding Swiss Bank Accounts Being Turned Over to IRS

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In the news:

“UBS paid a $780 million penalty earlier this year and turned over names of about 300 American clients in a deferred prosecution agreement with the Justice Department. In that case, UBS admitted helping U.S. citizens evade taxes, which experts say is not a violation of Swiss bank secrecy laws.

So far, three UBS customers whose names were divulged under the prior agreement have pleaded guilty to tax charges in federal court. Hundreds of others holders of secret accounts at UBS and other Swiss banks have voluntarily come forward to the IRS under an amnesty program that requires payment of taxes and penalties but generally does not include the threat of prison.”

My Comment:

I have mixed feelings about all this. On the one hand it bothers me that people who entered into a commercial agreement in which secrecy was part of the explicit deal are being “outed.”

On the other hand, I don’t think you should evade tax (avoidance is different from evasion) in ways that seem less principled than self-interested.

OK, OK, self-interest is a good thing and our taxes do go to fund war, mayhem, and looting…..

But then you shouldn’t accept anything the government’s involved in – not housing loans, not subsidies to business, not policing, not roads….none of them. In that case, I’d say your stand was principled.

Otherwise, it doesn’t look quite so heroic.