Tag Archives: OWS

I See Paris, I See France, I Occupy Dior Underpants

If Republicans want to win, they must rebrand “capitalism”
Selwyn Duke | Renew America

I could almost cringe when I hear — as I did repeatedly during Monday’s South Carolina GOP debate — Republicans talk about “capitalism.” “I believe in capitalism….” “Barack Obama doesn’t believe in capitalism…..” Capitalism this and capitalism that — look at me with my plump wallet, walking stick and tony top hat. Oh, it’s not that I don’t believe in free enterprise; it’s that we shouldn’t use words that conjure up sentiments akin to the preceding rhyme . .

`Twas brillig, and the slithy CEO
Did gyre and gimble in the wabe:
All mimsy were the patnerships,
And the LLCs outgrabe.

“Beware the Cap’talist, my son!
Privation bites, and ghettos catch!
Beware McMegan bird, and shun
Ell Bee Oh Bandersnatch!”

He took his Montblanc plume in hand:
Long time the Chomsky foe he sought —
So rested he by keyboards three,
And scribbled ‘while in thought.

AND he then, Fritz Luntz-an struck, did send
The Cap’talist, eyes of flame,
A-whiffling through the web’ral wires,
And, withal, another name!

One, two! Adieu!! The sickness through!
The devil’s something dead!
The poor of commons, as Burmese bugs?
Lo, I call ‘Freedom!’ in its stead!

“And, has thou slain the ‘Cap’talist’?
Penthouse bred, deceptive ploy!
O frabjous day! Callooh! Callay!’
Christian Dior! And Rent-a-Boy!”

`Twas brillig, and the slithy CEO
Did gyre and gimble in the wabe:
All mimsy were the industries,
And the LLCs outgrabe.


Dennis Prager: Don’t taunt the fat “Blow Me” governor

Dennis Prager, National Review Online:

January 10, 2012
Leftism Makes You Meaner
They have to be cruel to say about us what they do.

“Only a fool believes that all those with whom he differs are bad people. Moreover, just about all of us live the reality — often within our own families — of knowing good and loving people with whom we strongly differ on political, religious, social, and economic issues.”

“That said, I have come to believe that the more committed one is to leftism, the more likely one is to become meaner.”

“Did I say ‘meaner’? That makes no sense — meaner than what? A kitty? A skunk? Remind me to correct that. But did you see where New Jersey governor Chris Christie responded to a protestor? He said, ‘You know – something may go down tonight, but it ain’t gonna be jobs, sweetheart.’ That was a typically kind and conservative thing to say. But look what he’s gotten in return: bloggers likening him to a killer whale or a Depression-era German airship. I imagine it won’t be long before a leftist says fellating Christie would be like bobbing for licorice in a hamhock barrel. Some liberal will suggest, when the sweetheart governor confronts protestors by dropping his shorts, a willing young man or woman ask ‘Could you open the flap, or a fold, or something?'”


Kathryn Jean Lopez: Nobody from New Jersey wants fellatio

Kathryn Jean Lopez, National Review’s The Corner:

January 9, 2012
Who’s Really Obsessed with Sex?

Slate deserves some kind of award for interpretive stretch in reporting that Chris Christie was talking fellatio on the campaign trail Sunday . .

I suspect he would have reacted the same way to a male protester. Call him a bully, guilty of Garden State chauvinism. But this is ridiculous.

“This is ridiculous. A New Jersey governor may tell anyone ‘You know – something may go down tonight, but it ain’t gonna be jobs, sweetheart,’ and it would hardly be a invitation to fellate him. It would be a playful jape, as in ‘You’re going down to defeat, my worthy friend, in this battle of wits.’ The gentleman would then expect a reply from you, sir. You’d say ‘I don’t swing that way, Bruce Vilanch,’ adding ‘Didn’t they try to land something like you at Lakehurst? Didn’t 97 people die?'”


Chris Christie, one whale of a classy guy

Governor Mister Future President:

January, 9, 2012
Chris Christie to Occupy protester: You’re going down, sweetheart

After Christie took the stage, protesters changed their message to “Christie kills jobs!”

“Really?” Christie sneered, walking towards the protesters in a menacing way. “You know – something may go down tonight, but it ain’t gonna be jobs, sweetheart.”

“Get it? You’re going to suck a penis – because you’re female. That’s right. I heard your voice and I looked in your direction and I told myself ‘It’s a woman. This will be easy.’ And I said ‘Go suck a cock.’ Funny, huh? Now if YOU had insulted me based solely upon my appearance, you know what you’d be? A bitch. If you said I’d be in Cape May tonight wearing a bib and going down on a dead humpback whale, because I’m fat, what a bitch you’d be. If you said that I’d look like an over-cranked weedeater in a pail of paint as I tore through a whalefull of gut blubber, my only want in life being to tear open its belly and pack my mouth with scrumptious half-digested lobster tails I’d say: ‘Here’s a nickel, bitch – go buy yourself some class.'”


High profile conservatism too serious to be seen

Ha ha. Ho ho. The liberals, please. You know how they are, it’s so obvious, they’re all ‘blearrgh,’ do I need to write this? I don’t think so. No. Right, here it is:

Got equality ‘cuz you want it?
Rick Esenberg | Shark and Shepherd

. . but I did note with interest today’s contribution by George Wagner because it plays off a theme – perhaps the only theme – that might result in President Obama’s reelection. Income inequality.

The Theme From Income Equality. A rip-off of Lara’s Theme, modulated largely from minor to major, it sounds like Phillip Sousa if he were Spike Jonze. Look how #OWS try to march to it in waltz time but only the Polish cadre can stay in line. National comedy ensues, woes vaporize, Obama beats Chet Bainbot in a landslide.

Mr. Wagner goes after the unequal distribution of income with about as [sic] nuance and appreciation for economics as does the President. “We” want incomes to be more equal so all that “we” must do is pass a law to make it so. All we need to [sic] is tax away what the awful one percenters don’t need or, perhaps more accurately, whatever amount it is that “we” want.

Lawyer Rick gets the quotes right. I’m not sure about the rest of his journalism. This fairly resembles the conservatives’ response to income equality, which goes like this:

They “say” all you have to do is give them your whole paycheck. They say “they” just want to take your every penny and leave you homeless. I’ll tell “you” I “think” this is crazy. So who’s crazy: me “or” them?

I give credit where credit is due. When you’re too smart to make any argument about an issue, you’re really smart.

We live in coarse times in which the notion that someone has a right to keep what they earn is regarded as antiquated and insufficiently sophisticated. Because fortunes can’t be accumulated without some publicly provided infrastructure and the rule of law enforced by the state, there is no such thing as property rights free from the claim of the state.

If the logic of that eludes you, you’re not the first.

But, in fairness, no one (at least not since FDR) proposes to take it all and what could be the harm of evening things out a bit?

And now you see why Harvard trained attorneys are so popular: They’re clowns. Even FDR never wanted to “take it all,” but it probably sounds plausible while you’re dancing the carioca.

Eventually, Rick tries to say something like Reagan’s lower tax rates didn’t even change government revenues, so why bother? Let’s ignore his general irrationality and point out he’s ignoring Ronnie 1.) revamped the entire tax code 2.) shifted tax burdens onto poor and middle class Americans to pay for cuts, and 3.) blew up the national debt. Rick can wink at Arthur Laffer all he likes, but the grifter left long ago with Ronnie’s silverware. Arthur has forever refused to place his curve’s peak — which is only the whole point of graphing a revenue/rate dynamic in the first place. The reason for Laffer’s cowardice: the Euros have proven rich folks will still work when you tax them at 70%. So much for the conservative lean of Laffer economics.

Liberals aren’t too hot on 70% anyway. The Bush tax rates, essentially a 3% cut on Clinton’s (which peaked at 39.6%), lost us $2 trillion over 10 years. That’s a number of bridges, schools and jobs gone to ghost. That’s plenty of unemployment checks for recession-bruised families in need of food, shelter and clothing.

But let’s avoid realities, please, while mocking unserious people. Liberals are silly. Do I need to point it out?

Where can you find a decent gulag nowdays?
Rick Esenberg | Shark and Shepherd

Speaking of The Nation. It’s grown nostalgic for the Soviet Union. I mean, after all, where is the front without the communists?

Ho ha The Nation. Communists. [heedless point — a few of those hardliners still lurk behind a fake door concealed by sliding panels to be released by yanking on the candlesticks in the perfesser’s law library. Voila: China! Gulags and all, AKA 19% of Earth.] Why do liberals play these games? Who are they trying to kid? This is so easy *yawn* mocking you all.

Btw, who was the short-arm reliever that tried to save the Soviets’ game of perestroika? Which of The Nation’s bleeding hearts threw that weak junk that Rick ripped back into the bullpen? Without even reading it? Mikhail Gorbachev.


Tom Clancy’s first-person shooter, Rainbow Six, targets #OWS protesters

Tom Clancy’s Rainbow Six first person shooter is developing its latest iteration. Alyssa Rosenberg at Think Progress mentions that previous releases had you gunning down nuclear terrorists, bio-terrorists, genocide-whetted Hutus and murderous masterminds who planned to wipe out Las Vegas. I remind no one in particular that Siegrfried and Roy reside in the area.

The newest version is on the way. And look who’s about to get shot in the face, for eternity:

It’s, uh, hmm. Who the hell is that? They’re short-haired, clean shaven, heavily armed, well-organized, hopelessly violent, and clad in tailored suits. Blackwater? Is that you?

. . the bad guys are basically Occupy Wall Streeters on steroids. Or, considering all the rioting, attacks against police, and pyrotechnics coming from the occupiers lately, just a better organized next step for the more violent members of the 99%.

The right-winger, tongue outside cheek, then points us to the latest anarchist “pyrotechnics”:

. . the conflagration that vaporized Denver. Breaking capital news: it’s butt-pucker Fahrenheit.


. . nowhere has the Clancyverse done better at upping the stakes and turning conservative boogeymen into national security threats than in the Rainbow Six franchise . .

Oh, it’s a game? Fair enough. How about Al Gore fanatics carrying liquid nitrogen tanks on their backs? They blast-freeze carbon-wasting citizens and snap them in half. Crack! Or eco-green maniacs dragging fast-food fans off to labor farms. They work the fatties like Burmese slaves for a couple weeks, then roll ’em onto compost piles to burn. Look, they wiggle like Turtles. Whatever. We’ll supply the men, you program the boogey.


An Open Letter to #Occupy from a Crabby Old Leftist: If I Didn’t Love You More than Life Itself Would I Care Whether You Ate Your Peas? (2)

Here’s coffee darling, I remember how you take it. And you have to eat breakfast before you go, you can’t save the world on an empty stomach.

I’m glad you listened to me with an open mind last night. I’m sorry the Fred Hampton piece gave you nightmares, you should have seen the ones I had when it happened. It pains me to be the one to tell you about such awful things, but if you’re going to devote yourself to the life you are choosing, I am a) qvelling with pride and b) trembling with fear for you. You have to know that changing the world is not a game, and you need to know what the stakes are.

The only truly free choices are informed choices. When they murdered Fred Hampton he was only 21, sleeping in his bed with his 19 year old girlfriend who was pregnant at the time with Fred Hampton, Jr. So as harsh as it is, you need to learn how to keep yourself and your comrades as safe as possible. And — no offense — but you have a way to go in that respect.

Stop getting upset, I am not blaming the victim in your case or in his. But it has been made clear what the moral issues are where Occupy and it’s forebears are concerned. You know now that police will beat the crap out of people, spray gas in their faces and possibly even risk people’s lives or kill them with little or no provocation.

I can tell you that as sickening and frightening as it has been to see, it isn’t new. If they’re loud and annoying enough to the 1%, it can happen to college-bound white kids. For a lot of non-white poor people, it’s “Welcome to my world, and the park I get beaten in has no exits.”

At the beginning it advanced the protest, and a lot of people were willing to suffer police violence. But after a while it no longer helps and, in fact, hurts the cause. How many times does one sustain blunt force trauma to the head before s/he stops looking like a hero and starts looking stupid?

If you offer no way for an 84 year-old activist to contribute other than by getting a face full of pepper spray, if black and brown people, who are always at higher risk, have no other means of contribution but to go through that repeatedly, you haven’t built a movement. And if you don’t build one beyond the steps already taken, Occupy will have squandered a chance to change the world. It will have been a flash in the pan and fodder for right wing propaganda.

Remember: when you make a choice in a crowd, you have made a choice for those near and around you as well. Someone who represents an example by extension of that is Scott Olsen. Only he can know how “worth it” it was or wasn’t. I’ll bet he’d have preferred the movement matured into Occupying things like The Indoors, Voting Booths, Halls of Congress, The Courts and other places in which protest might actually accomplish change. The truth is the “Powers That Be” would love for you to freeze your ass off outside all winter getting busted, beaten, gassed. Just because they might say you “backed down” wouldn’t make it true. Privately they would be saying you got smart.

My friend A. and I agree on this. In my case having been diagnosed with a neurological condition late in life has made me very sensitive to what it is to live with deficits. In her case she ran into a few right wing fascists a few years ago. With her skull. Repeatedly. Living in the aftermath of serious traumatic brain injury, she knows that neurons and, contrary to appearances, dendrites don’t grow on trees. And no cause was advanced and none of those fuckers ever did serious time for trying to kill her.

On the topic of infiltration, the good news is you have no need to implement any preventative measures at this time. The bad news is that’s because it’s too late, you’re already infiltrated to the tits. You have a serious problem distinguishing among friends, allies, unaffiliated but generally supportive types and extremely dangerous enemies who only mean you harm!

When the Oathkeepers offer to do security at your events it is not because they are your friends!! When the Ron Paul followers show up he doesn’t stop being a racist, misogynistic, homophobic Rand Paul siring freak. They don’t stop being a scary cult! I personally have argued until my temper got out of control with a Tea Party maniac who salivated to all her Facebook fans about the “young minds” she “would get” by infiltrating Occupy. They want to get you saying things like “Occupy and the Tea Party have a lot in common.”

Don’t say it. Here is what you have in common with the Tea Party: You can both sometimes be very loud, and neither of you is clear on what comes after “Step 1: Express anger.” Nothing else. Despite the fact that it seems recent history, you weren’t even born when the Tea Party (the Frankenstein’s Monster of the GOP) was really created, so I don’t expect you to know about them. But I do expect you to find out who and what they are before you let them tell you that they’re part of the movement. Before you throw the doors open to them.

On messaging: Stop saying you really have no one message. A) You will not succeed that way, and B) it’s crap. You have had a message from day one. Every successful social movement has one, maybe two clear things to say, and you need to get your message into simple words.

So what’s your message?  “Get the money out of the political process.” Want it shorter? “Overturn Citizens United.” Want to punch it up a little? “Smash the Corporatocracy!” It doesn’t make you a fascist to identify a unifying message and to ask people to stay on it. One reason the GOP has been so successful at dragging the country to the right is they know how to stay on message. It’s easier for them because they just care more for what their corporate masters want them to say.

I have cared deeply about saving the whales since before you were a tadpole, I have wished for Mumia’s freedom for at least that long, I truly wish someone had brought Death to the Patriarchy before I was born into it. And if you wake me up in the middle of the night, I can name 50 other issues I care about passionately because we are leftists and that is how we roll. But none of that means I need now to mention any of it or carry a sign about it. When you are at a demonstration you are there to bring attention and focus to, ideally, one issue.

That is, if you want the kind of clarity that brings results. Virtually every one of these social problems would be lessened if not eliminated if we could “Get the Money Out of the Political Process.” Sheesh, it could be so simple and you’ve made it so complicated.

Alright sweetie, I’m gonna stop. I’ve tired myself out talking again, I have a way of doing that. And I know you have to go meet your friend and try to fix your tent. I’m proud of you and I love you, and I know you’re smart. You always remember to feed the cat and not to carry any you-know-what if you might get busted. I know I taught you right. I’m not so sure about your friend — the nose-ring, it looks infected. Alright, I’m stopping.

(Fake) Mother loves you! It wouldn’t hurt if in between taking pictures of police brutality you used your phone to call me!


An Open Letter to #Occupy from a Crabby Old Leftist: If I Didn’t Love You More Than Life Itself, Would I Care Whether You Ate Your Peas? (1)

Come in, sit. I’ll make you something to eat, don’t be silly, it’ll take me two minutes. I wasn’t gonna say anything, but you look a little thin.  I know you had a slice of pizza at the demonstration. but that was hours ago. You’re so hopped up on adrenaline you didn’t even notice. Believe me, I remember how that feels. I still get out to the barricades now and then, but by the time I get home my hip is killing me, especially if it rains.

A couple of days ago I turned 57. I decided to give myself the gift of self-indulgence, so I started to write this post. Being childless by choice, any pseudo-maternal urges were always sufficiently met by the presence of lovers and cats in my life, and I never expected to love a movement like a mother loves her child.

But that was before your tortuous and precipitous birth! And because you were unexpected, a “miracle baby” with such beauty and promise from the start, I was flooded with love and pride when I saw you! Then I saw you start to make some pretty obvious errors which is inevitable when you are new at something, how else can you learn?

So I tried to keep my mouth shut — who cares what a (fake) mother thinks, anyway? Like most real mothers around the world though, I struggled with raging over-protectiveness when I saw you start making the kind of mistakes that can get you killed or badly hurt before you know any better. These kind of mistakes, in combination especially, are also the kind that can kill the hopes and dreams of movements, and I want you to live for a long time and be successful, only partially because your dreams for America and mine are the same.

I know you’re barely more than two months old, but in today’s world you need to grow up fast. It’s because of the internet, and everywhere there is right wing crazy these days: there are guns, except for where there are bombs and guns, and people with apparently raging hard-ons to use them. And there’s the inability to just stfu about it for five minutes.

Some of us, though aware that the vast majority of this stuff comes from the racist right, have become very sensitive to violent rhetoric regardless of the source. If you were only old enough to remember, you’d know that the last time it was like this around here JFK, RFK and MLK. Jr ended up dead, as well as others who were not so well known. We older lefties have a “compare and contrast” example in our memories of a time that’s more like the present than any other before or since.

. . wow, for someone who wasn’t hungry, sweetie, you sure ate that fast! Here’s some more…no? You sure? OK, I’m wrapping it up for you to take with you. What? What if you get hungry on the train?

So, let me finally get to the point. Basically you know (fake) mother loves you. But I see three areas where there is some room for improvement. Some of my historical examples will come from the civil rights movement because of that whole ‘refusing to learn from history dooming you to repeat it’ thing. That goes for us too, not just the other side. And if you say you’re a serious, capable and committed activist for social change but you don’t know or care that every movement borrowed or learned at least something from the civil rights and early labor movements, please don’t say it out loud. You’re embarrassing me.




They’re listed in descending order of how hysterical I get when I think what could happen! Oy gevalt! You know what, I talked so long I’m too tired to give you the details now. Here’s an idea, why don’t you stay the night, you can Occupy Your Old Bedroom? They can take the park again without you tonight. You know what will happen when you get gassed again with your allergies!

Good, I’m glad you decided to stay. In the morning I promise we’ll have coffee before you go, and I’ll tell you the rest. Meanwhile, read this, and tomorrow we’ll compare and contrast. It’s just a Wikipedia page, but it’s pretty good. At least it’s the way I remember it happening. I was about 15 at the time.

Well, I may be an old broad with a chip on her shoulder about the military industrial complex, but I’m not dumb — I just stretched my present to myself into another day! You know, my mother used to say, to my constant amusement, “I’m cold, go put on a sweater!” As funny as that sometimes was there were a few times I wished I’d listened to her. She had an uncanny ability to predict when it might suddenly get colder. I guess because she’d lived through so many more winters than I had.

Sleep tight and don’t get any nightmares from reading that page, more tomorrow…

. . read part two HERE . .


Oakland cops are assholes

A You Tube user by the name of ‘antiprocon’ uploaded this video yesterday.

“While filming a police line at Occupy Oakland after midnight on Nov. 3 following the Nov. 2 general strike, an officer opens fire and shoots me with a rubber bullet. I was standing well back. There was no violence or confrontations of any kind underway. At 0:31 seconds you can see a tall officer in the front raise his weapon and then fire. This is the full clip of the incident.”

The city needs to fire this cop (they won’t). They’re cheering at Fox News.


Bankers lie to #OWS (part three): ‘When the government forced us to lend to minorities, that’s when the economy collapsed’

In part one, I detailed how, amongst businessmen like Michael Bloomberg and Conservatives universally, the misguided swore the stupid government forced lenders to loan to undeserving poor folks and minorities, causing the housing bubble and the subprime crisis. This liberal ‘social crusade’ was to blame for the collapse of the economy.

In part two, I demonstrated how perfectly wrong that was. The U.S. data on all loans originating in 2006, at the height of the subprime loan frenzy, showed that those banks most highly regulated and government-constrained to make loans to lower income and minority borrowers, the Community Reinvestment Act (CRA) banks, were far less likely to offer risky, ‘high-cost’ subprime loans. It was the government-independent institutions that generated the vast majority of subprimes. And, when they did, the brokers manufactured loans at higher APRs across the economic strata.

Federal Reserve Governor Randall S. Kroszner summed it up nicely:

Our analysis of the loan data found that about 60 percent of higher-priced loan originations went to middle- or higher-income borrowers or neighborhoods. Such borrowers are not the populations targeted by the CRA. In addition, more than 20 percent of the higher-priced loans were extended to lower-income borrowers or borrowers in lower-income areas by independent nonbank institutions–that is, institutions not covered by the CRA.

Putting together these facts provides a striking result: Only 6 percent of all the higher-priced loans were extended by CRA-covered lenders to lower-income borrowers or neighborhoods in their CRA assessment areas, the local geographies that are the primary focus for CRA evaluation purposes.

There it is. Only 6 percent of subprimes went to poor people. The crisis wasn’t because of the darkies. And it wasn’t because of the government.

So, the question becomes: Why were fatal, risky loans being made? Why did so many lenders do something so dumb? Why didn’t anyone flag the dangers? Bitterly, we know now it was the high-risk, high-cost loans that couldn’t be re-paid. When the loans died, the houses died, the banks died, the financial institutions and markets died, and the great recession was on.

So, who would be prompted to make loans that default? If you’re only going to be a stupid lender, you’re only going to get hurt, right? You would think. But thanks to Bush administration-era ‘business innovation,’ the answer was “No.”

For the first time in the history of lending, you could make all sorts of stupid loans and escape the consequences. You didn’t have to worry about whether a penny got paid back from the borrower to the bank. How? Why? Because lenders were the last people on Earth responsible for their own lending. Within days of making the loans — arrivederci — they sold them. All of them.

Home loans were boxed up and sold to giant secondary financial players. Those guys cut them to pieces and cabbaged them into “risk averse” bundles (mortgage-backed securities [MBSs] and collateralized debt obligations [CDOs]), and the bundles were then sold again, this time to ordinary American investors. They told Ma and Pa America that cutting and bundling made a losing investment impossible. ‘Trust us, people, there’s no harm in sight’ they said, and they put their ‘good’ name on it. Goodnight, thanks for shopping with Goldman Sachs. And, honestly, before everyone got hip to the game, they would have been right.

The problem began in the early 2000s when business types everywhere got smart. The government-independent players were running away with the industry. The Government Sponsored Entity (GSE) giants, Fannie Mae and Freddie Mac, whose job it is to buy home loans and then sell them elsewhere in order to keep the loan market moving, went cold. Mortgages by the thousands were being bought up, bundled and sold by outsiders:

Then in 2003-2004, the subprime mortgage crisis began. The market shifted away from regulated GSEs and radically toward Mortgage Backed Securities (MBS) issued by unregulated private-label securitization conduits, typically operated by investment banks.

Government-independent secondary market operators were making a killing buying up days-old loans, stewing them and selling them to investors across the world. The investors had such faith in the financial giants of the world that they didn’t ask why the loans wouldn’t tank.

So the market for loans, any loans, green-gilled loans, walking on club-feet and mumbering loans, went white hot. Lenders were handsomely rewarded for anything they managed, including mortgage dogshit. Especially dogshit.

Lending became an open-ended game of paperwork and profit: it didn’t matter how you got someone to agree to a loan, you simply had to get them to do it. An explosion of stupid, crazy-ass fire sale and discount loans got plastered across America’s retail windows.

The mortgage qualification guidelines began to change. At first, the stated income, verified assets (SIVA) loans came out [got removed from the high-standards loan pool]. Proof of income was no longer needed. Borrowers just needed to “state” it and show that they had money in the bank. Then, the no income, verified assets (NIVA) loans came out. The lender no longer required proof of employment. Borrowers just needed to show proof of money in their bank accounts. The qualification guidelines kept getting looser in order to produce more mortgages and more securities. This led to the creation of NINA. NINA is an abbreviation of No Income No Assets (sometimes referred to as Ninja loans). Basically, NINA loans are official loan products and let you borrow money without having to prove or even state any owned assets. All that was required for a mortgage was a credit score.

Another example is the interest-only adjustable-rate mortgage (ARM), which allows the homeowner to pay just the interest (not principal) during an initial period. Still another is a “payment option” loan, in which the homeowner can pay a variable amount, but any interest not paid is added to the principal. Nearly one in 10 mortgage borrowers in 2005 and 2006 took out these “option ARM” loans, which meant they could choose to make payments so low that their mortgage balances rose every month. An estimated one-third of ARMs originated between 2004 and 2006 had “teaser” rates below 4%, which then increased significantly after some initial period, as much as doubling the monthly payment.

All of these bargain-fumbling fancies were designed to do one thing: get someone to bite on the front end of a deal destined to crash at the back. Regardless of the menial APRs at the beginning of the mortgage, these were big, high-cost deals. These were horrible to live with, even for the financially healthiest Americans.

But, my gosh, didn’t the sales pitch work:

The ratio of lower-quality subprime mortgages originated rose from the historical 8% or lower range to approximately 20% from 2004-2006, with much higher ratios in some parts of the U.S. A high percentage of these subprime mortgages, over 90% in 2006 for example, were adjustable-rate mortgages.

One-fifth of mortgages became “You’re out of your mind, you can’t possibly pay this back” gambles. All because the loans weren’t really loans — they were investments to be sold to suckers to be re-sold to other suckers.

Of course, a multi-trillion dollar system gone ravenous for toxic debt is suicidal. Such irresponsibility can’t survive. A violent crash was inevitable.

In the third quarter of 2007, subprime ARMs making up only 6.8% of USA mortgages outstanding also accounted for 43% of the foreclosures which began during that quarter.

The foreclosures, sadly, had only begun. You can fill in the rest of the story, you know what happened after that.


Bankers lie to #OWS (part two): ‘When the government forced us to lend to minorities, that’s when the economy collapsed’

Shorter part one:

These colored people, they have no money. They have no assets, they have no credit history, they have crappy jobs. Hell they barely know what a loan is, and we don’t speak Spanish. Nevertheless, in 1994, the Clinton administration demanded we, the hallowed bankers, start giving them loans . .

“It took a little more than a decade for the negative effects of the assault on prudent lending to be felt. By 2006, the shaky subprime mortgages began to default. In 2008, the bubble exploded.”

We’ve been faced with this lie before, and it still comes dressed up so many ways. The right-popular version of this charge is that the liberals’ big government Community Reinvestment Act (CRA) is mostly to blame.

Cause and Effect — Government Policies and the Financial Crisis
By Peter J. Wallison | American Enterprise Institute | November 2008

The current financial crisis is not–as some have said–a crisis of capitalism. It is in fact the opposite, a shattering demonstration that ill-considered government intervention in the private economy can have devastating consequences. The crisis has its roots in the U.S. government’s efforts to increase homeownership, especially among minority and other underserved or low-income groups . .

The two key examples of this policy are the CRA, adopted in 1977, and the affordable housing “mission” of the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. As detailed below, beginning in the late 1980s–but particularly during the Clinton administration–the CRA was used to pressure banks into making loans they would not otherwise have made and to adopt looser lending standards that would make mortgage loans possible for individuals who could not meet the down payment and other standards that had previously been applied routinely by banks and other housing lenders.

Previously, banks operating in poorer neighborhoods took depositors’ moneys but refused to loan it back to them in the form of car or home loans. The CRA demanded that institutions taking deposits from people in low and middle income areas loan the money back to their own depositors. As a result, the government has tightly regulated the “CRA banks” ever since, monitoring very closely their lending habits for color-blindness.

Conservatives swear it was the government’s CRA that murdered the economic planet. When you loan money to the browns and blacks, they warn, they’re going to screw up the loan. You’re not gonna get your money back. And when you force enough lenders to do this, a catastrophe is inevitable. Didn’t we just have a disaster? Need we say more, hmm?

But this is a lie, one debunked over and over again. It’s bull, and I can prove it. Of all the data and documents I’ve culled to understand the mortgage crisis and the implosion of the economy, there’s one I recently came upon that defeats this canard most thoroughly in examining the subprime mortgage frenzy.

Titled “The Community Reinvestment Act: A Welcome Anomaly in the Foreclosure Crisis,” it’s a bit of simple well-written research produced by a 3rd Avenue New York law firm, Traiger and Hinckley, specializing in “fair lending” counsel.

They crunched the data on all U.S. home loans from 2006 — the height of the subprime frenzy — in our 15 biggest cities. The analysis proves the opposite of what the right-wing and business harpies allege: the CRA, its banks, and its targeted beneficiaries, low and moderate income minorities, had almost nothing to do with the subprime crisis.

Our study concludes that CRA Banks were substantially less likely than other lenders to make the kinds of risky home purchase loans that helped fuel the foreclosure crisis. Specifically, our analysis shows that:

(1) CRA Banks were significantly less likely than other lenders to make a high cost loan;
(2) The average APR on high cost loans originated by CRA Banks was appreciably lower than the average APR on high cost loans originated by other lenders;
(3) CRA Banks were more than twice as likely as other lenders to retain originated loans in their portfolio; and
(4) Foreclosure rates were lower in MSAs with greater concentrations of bank branches.

Let’s look at who made loans back in 2006. Let’s particularly look at subprime loans. Subprimes are loans charged higher percentage rates because borrowers are higher risks, for any number of reasons: they have low-paying jobs, few assets, shaky credit histories, etc. These 2006 borrowers often got subprime, or “high-cost,” loans.

Look at the difference between the lending in 2006 by low and middle-income serving “CRA banks” and all other lenders for all loans. Then compare the same institutions lending subprimes:

All other institutions outpaced CRA bank lending for ‘all loans’ at around a 3.5:1 (77.2%/22.8%) pace. You would expect to see this because other lenders outnumber CRA banks, so that’s fine. But when you look at subprimes, the lending ratio suddenly jumps to 10:1. This is the opposite of what Bloomberg, Sperry, Wallison and other business types had claimed. Terrified as they were of government bullying, lenders were supposed to be rushing headlong towards poorer borrowers and giving them risky mortgages. No. Instead, it was the CRA-independent lenders, like Countrywide, that were doing it. The banks living among the poor folks were far less likely to issue subprime mortgages.

When you narrow the focus of the data even more upon Lower and Middle Income (LMI) borrowers, you still get the same contrast:

In loaning to lower and middle income borrowers, the CRA regulated lenders were far less likely to issue high-cost subprime loans. The data show they were generating far fewer subprime loans at the height of the crisis. The facts destroy the charge that minority lending caused our economic collapse. CRA banks, forced by big brother, were offering affordable mortgages to minorities. Period. Independent institutions, government-free, were pushing high-cost, high-risk loans on everyone.

When you look at what the lenders were charging, you see even more of the same. In a graph titled “Average Rate Spreads on High Cost Loans Originated by CRA Banks and Other Lenders,” the Traiger and Hinckley data show that independent lenders charged higher rates for their subprime loans:

Taken together, the 2006 U.S. loan data analyses demonstrate that the government-independent institutions were pushing far more subprime loans, pushing them upon far more people, rich and poor alike, and charging higher interest rates for them.

Much as our conservative and business bloviators would like, while being entitled to their own opinions, they are not entitled to their own nationwide loan data. The facts dismantle any pretense that lending to minorities caused the mortgage crisis and, thus, our collective misery.

Tomorrow, in part 3, the finish. Ciao.