February 22, 2012 archive

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I’m lying to you now.

Tom Miller, HUD Officials Laugh at Schneiderman Publicly

By: David Dayen, Firedog Lake

Wednesday February 22, 2012 8:55 am

Whether you believe in Eric Schneiderman’s ability to deliver a legitimate investigation on mortgage securitization fraud or not, you have to admit that the united front on opposition to a settlement on foreclosure fraud collapsed the moment that he agreed to helm that federal investigatory task force. He immediately separated “pre-bubble” and “post-bubble” conduct, allowing for a settlement on the latter while he joined the investigation on the former. And eventually, every other AG on the Democratic side fell in line, as they didn’t have New York as an anchor to stay out of a settlement.

That’s just what happened. And now we have HUD Secretary Shaun Donovan and Iowa AG Tom Miller, head of the executive committee that settled on foreclosure fraud, clowning Schneiderman on the record, saying that he got next to nothing in exchange for his holdout.



There is no guarantee that the settlement will lead to the maximum amount of $32 billion in principal reduction that Donovan hypes. In fact, the government’s own press release only guarantees “at least $10 billion” in principal reduction. Needless to say, even the high-end amount is next to nothing relative to the scale of the problem for underwater borrowers. And according to this article, Geithner was won over when he learned that the program would not be “overly punitive.” We’ve chronicled the numerous ways in which the banks make out very easy on the deal, and can even profit off it.



Wow. This is on the record, with Miller saying that the release only looks like it was tailored to Schneiderman’s specifications. Miller, by the way, was announced today as one of President Obama’s re-election campaign co-chairs.

Schneiderman has promised that he would walk away from the task force if he found it insufficient, with his co-chairs slow-walking the investigation. With the task force barely begun, here’s the head of the state settlement and insiders close to Donovan just out-and-out clowning him, alleging that Donovan bait-and-switched him. We’re waiting for that walk-away any time now.

HUD Continues Defense of Allowing HAMP Modifications as Part of the Foreclosure Fraud Settlement

By: David Dayen, Firedog Lake

Wednesday February 22, 2012 11:06 am

The pushback from the Administration on one particular story arising from the foreclosure fraud settlement has been pretty intense. You cannot say that Shahien Nasiripour doesn’t have the attention of HUD.

Today, they devoted an entire blog post (unsigned, from “HUD Public Affairs”) to refuting Nasiripour’s story in the Financial Times (which they don’t link, so I will) about how bank servicers can count HAMP modifications toward the “credits” in the foreclosure fraud settlement. But really they only refute the title of Nasiripour’s story.



HUD also leaves key questions unanswered in their post. They say that “if a servicer receives a HAMP incentive of 40 cents for every dollar of principal reduction, it can receive credit at the applicable rate on the remaining 60 cents… in no event can the servicer receive more under the settlement than it would have in the absence of HAMP incentives.” But does this include the additional HAMP incentive for the borrower staying current? Also, isn’t it the investor, not the servicer, who receives incentive payments in the principal reduction plan inside HAMP?

In addition, if this is coming on line with the settlement over the next 6-9 months, as eligible underwater borrowers are identified, why would any servicer in the short term do a principal reduction through HAMP? As HUD says in their post, “most HAMP modifications do not include principal reduction.” That, of course, is why it has such a high re-delinquency rate (up to 30% of borrowers go delinquent within 18 months), because the modifications that servicers perform in HAMP are unsustainable. The entire point of the new HAMP tweaks was to encourage more principal reduction. So why add an incentive to delay principal reduction for 6-9 months?

HUD claims that they could not have exempted HAMP from the settlement, because “it would have freed (servicers) from HAMP’s extensive compliance regime, reporting requirements, and borrower-protection features.” This is a non sequitur. You could very easily have put those compliance guidelines into the settlement. It would have been a simple copy-paste. HUD answers this by saying that “it would make it less likely that HAMP-eligible borrowers would receive principal reduction.” I’m not following the logic there at all. You could just include the evaluation and reporting requirements across all loans as part of the settlement.

And it goes without saying that, until there are terms on a sheet of paper that everyone can read, these claims by HUD just aren’t entirely credible. We don’t know what’s in the settlement yet. That’s a factual statement.

I’ll say this, the criticism appears to be getting to HUD. Some Connecticut lawmakers savaged the miniscule $2,000 check to foreclosure victims (which the Attorney General of the state, who was on the settlement’s executive committee, characterized as $1,500 – what does he know that we don’t?) that’s part of the settlement. Heck, even Pat Robertson is calling for corrupt bankers to be put in jail, citing the experience of Iceland. It must be lonely defending this settlement.

Cartnoon

Prest-O Change-O

Whiskers and… Other Whiskers

Tinkerbell Is Dead!

Mary Martin Day

You’ve got to be taught

To hate and fear,

You’ve got to be taught

From year to year,

It’s got to be drummed

In your dear little ear

You’ve got to be carefully taught.

You’ve got to be taught to be afraid

Of people whose eyes are oddly made,

And people whose skin is a diff’rent shade,

You’ve got to be carefully taught.

You’ve got to be taught before it’s too late,

Before you are six or seven or eight,

To hate all the people your relatives hate,

You’ve got to be carefully taught!

Pain Without Gain

By PAUL KRUGMAN, The New York Times

Published: February 19, 2012

(I)n early 2010 austerity economics – the insistence that governments should slash spending even in the face of high unemployment – became all the rage in European capitals. The doctrine asserted that the direct negative effects of spending cuts on employment would be offset by changes in “confidence,” that savage spending cuts would lead to a surge in consumer and business spending, while nations failing to make such cuts would see capital flight and soaring interest rates. If this sounds to you like something Herbert Hoover might have said, you’re right: It does and he did.

Now the results are in – and they’re exactly what three generations’ worth of economic analysis and all the lessons of history should have told you would happen. The confidence fairy has failed to show up: none of the countries slashing spending have seen the predicted private-sector surge. Instead, the depressing effects of fiscal austerity have been reinforced by falling private spending.

Furthermore, bond markets keep refusing to cooperate. Even austerity’s star pupils, countries that, like Portugal and Ireland, have done everything that was demanded of them, still face sky-high borrowing costs. Why? Because spending cuts have deeply depressed their economies, undermining their tax bases to such an extent that the ratio of debt to G.D.P., the standard indicator of fiscal progress, is getting worse rather than better.

Meanwhile, countries that didn’t jump on the austerity train – most notably, Japan and the United States – continue to have very low borrowing costs, defying the dire predictions of fiscal hawks.



(A)s far as I can tell, austerity is still considered responsible and necessary despite its catastrophic failure in practice.

The point is that we could actually do a lot to help our economies simply by reversing the destructive austerity of the last two years. That’s true even in America, which has avoided full-fledged austerity at the federal level but has seen big spending and employment cuts at the state and local level. Remember all the fuss about whether there were enough “shovel ready” projects to make large-scale stimulus feasible? Well, never mind: all the federal government needs to do to give the economy a big boost is provide aid to lower-level governments, allowing these governments to rehire the hundreds of thousands of schoolteachers they have laid off and restart the building and maintenance projects they have canceled.

Look, I understand why influential people are reluctant to admit that policy ideas they thought reflected deep wisdom actually amounted to utter, destructive folly. But it’s time to put delusional beliefs about the virtues of austerity in a depressed economy behind us.

Hoover/Brüning 2012

Paul Krugman, The New York Times

February 20, 2012, 8:12 pm

(T)hinking about today’s column, I realized that it’s even worse than that. What defines centrist heroes, as far as I can tell, is that they are people who, faced with a catastrophic slump driven by private-sector abuses, and a severe shortfall of spending, declared that our most urgent priority is … to reduce budget deficits.

That’s often described as a courageous position, but it’s actually anything but: nobody in the Beltway dinner-party circuit has ever been ostracized for demanding entitlement cuts. And aside from being totally conventional, it’s also deeply wrong-headed – and if you ask me somewhat unethical, too, because it involves exploiting a crisis to push an agenda totally unrelated to that crisis.

On This Day In History February 23

Cross posted from The Stars Hollow Gazette

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

February 23 is the 54th day of the year in the Gregorian calendar. There are 311 days remaining until the end of the year (312 in leap years).

On this day in 1954, a group of children from Arsenal Elementary School in Pittsburgh, Pennsylvania, receive the first injections of the new polio vaccine developed by Dr. Jonas Salk.

Though not as devastating as the plague or influenza, poliomyelitis was a highly contagious disease that emerged in terrifying outbreaks and seemed impossible to stop. Attacking the nerve cells and sometimes the central nervous system, polio caused muscle deterioration, paralysis and even death. Even as medicine vastly improved in the first half of the 20th century in the Western world, polio still struck, affecting mostly children but sometimes adults as well. The most famous victim of a 1921 outbreak in America was future President Franklin Delano Roosevelt, then a young politician. The disease spread quickly, leaving his legs permanently paralyzed.

Poliomyelitis, often called polio or infantile paralysis, is an acute viral infectious disease spread from person to person, primarily via the fecal-oral route The term derives from the Greek polios, meaning “grey”, myelos, referring to the “spinal cord”, and the suffix -itis, which denotes inflammation.

Although around 90% of polio infections cause no symptoms at all, affected individuals can exhibit a range of symptoms if the virus enters the blood stream. In about 1% of cases the virus enters the central nervous system, preferentially infecting and destroying motor neurons, leading to muscle weakness and acute flaccid paralysis. Different types of paralysis may occur, depending on the nerves involved. Spinal polio is the most common form, characterized by asymmetric paralysis that most often involves the legs. Bulbar polio leads to weakness of muscles innervated by cranial nerves. Bulbospinal polio is a combination of bulbar and spinal paralysis.

Poliomyelitis was first recognized as a distinct condition by Jakob Heine in 1840. Its causative agent, poliovirus, was identified in 1908 by Karl Landsteiner. Although major polio epidemics were unknown before the late 19th century, polio was one of the most dreaded childhood diseases of the 20th century. Polio epidemics have crippled thousands of people, mostly young children; the disease has caused paralysis and death for much of human history. Polio had existed for thousands of years quietly as an endemic pathogen until the 1880s, when major epidemics began to occur in Europe; soon after, widespread epidemics appeared in the United States.

By 1910, much of the world experienced a dramatic increase in polio cases and frequent epidemics became regular events, primarily in cities during the summer months. These epidemics-which left thousands of children and adults paralyzed-provided the impetus for a “Great Race” towards the development of a vaccine. Developed in the 1950s, polio vaccines are credited with reducing the global number of polio cases per year from many hundreds of thousands to around a thousand. Enhanced vaccination efforts led by the World Health Organization, UNICEF, and Rotary International could result in global eradication of the disease.

Eradication

While now rare in the Western world, polio is still endemic to South Asia and Nigeria. Following the widespread use of poliovirus vaccine in the mid-1950s, the incidence of poliomyelitis declined dramatically in many industrialized countries. A global effort to eradicate polio began in 1988, led by the World Health Organization, UNICEF, and The Rotary Foundation. These efforts have reduced the number of annual diagnosed cases by 99%; from an estimated 350,000 cases in 1988 to a low of 483 cases in 2001, after which it has remained at a level of about 1,000 cases per year (1,606 in 2009). Polio is one of only two diseases currently the subject of a global eradication program, the other being Guinea worm disease. If the global Polio Eradication initiative is successful before that for Guinea worm or any other disease, it would be only the third time humankind has ever completely eradicated a disease, after smallpox in 1979 and rinderpest in 2010. A number of eradication milestones have already been reached, and several regions of the world have been certified polio-free. The Americas were declared polio-free in 1994. In 2000 polio was officially eliminated in 36 Western Pacific countries, including China and Australia. Europe was declared polio-free in 2002. As of 2006, polio remains endemic in only four countries: Nigeria, India (specifically Uttar Pradesh and Bihar), Pakistan, and Afghanistan, although it continues to cause epidemics in other nearby countries born of hidden or reestablished transmission.

On This Day In History February 22

Cross posted from The Stars Hollow Gazette

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

February 22 is the 53rd day of the year in the Gregorian calendar. There are 312 days remaining until the end of the year (313 in leap years).

On this day in 1980, the U.S. Olympic hockey team makes “miracle on ice”.

In one of the most dramatic upsets in Olympic history, the underdog U.S. hockey team, made up of college players, defeats the four-time defending gold-medal winning Soviet team at the XIII Olympic Winter Games in Lake Placid, New York. The Soviet squad, previously regarded as the finest in the world, fell to the youthful American team 4-3 before a frenzied crowd of 10,000 spectators.

The United States did not win the gold medal upon defeating the USSR. In 1980 the medal round was a round-robin, not a single elimination format as it is today. Under Olympic rules at the time, the group game with Sweden was counted along with the medal round games versus the Soviet Union and Finland so it was mathematically possible for the United States to finish anywhere from first to fourth.

Needing to win to secure the gold medal, Team USA came back from a 2-1 third period deficit to defeat Finland 4-2. According to Mike Eruzione, coming into the dressing room in the second intermission, Brooks turned to his players, looked at them and said, “If you lose this game, you’ll take it to your graves.” He then paused, took a few steps, turned again, said, “Your fucking graves,” and walked out.

At the time, the players ascended a podium to receive their medals and then lined up on the ice for the playing of the national anthem, as the podium was only meant to accommodate one person. Only the team captains remained on the podium for the duration. After the completion of the anthem, Eruzione motioned for his teammates to join him on the podium. Today, the podiums are large enough to accommodate all of the players.

The victory bolstered many American citizens’ feelings of national pride, which had been severely strained during the turbulent 1970s. The match against the Soviets popularized the “U-S-A! U-S-A!” chant, which has been used by American supporters at many international sports competitions since 1980.

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