There’s always something to howl about.

Category: Big Mother (page 5 of 15)

Obama’s “plan” for Fannie and Freddie? It’s FHA, as it turns out.

That’s not what they’re actually saying. But the law of unintended consequences will win out in the end. From the Wall Street Journal:

All of the administration’s proposals envision a scaled-back role for the government. One includes a new government backstop of certain mortgages under a federal “reinsurance” model, while another would propose a more limited backstop that would scale up primarily during times of economic crisis. The third option proposes no such government backstop beyond existing federal agencies such as the Federal Housing Administration.

Owner-occupied transactions are already overwhelmingly FHA — with the result that HUD is well on its way to becoming the biggest player in the lender-owned market. Getting rid of Fannie and Freddie won’t matter at all if their role in underwriting bad mortgages for unqualified buyers is supplanted by FHA.

Farewell to Fannie and Freddie? Hold your breath…

The Obamanation plans to offer up three proposals to eliminate FannieMae and FreddieMac from the secondary mortgage marketplace. Expect to hear much mournful keening, in coming weeks, from the country’s best enemy of private property, the National Association of Realtors.

From the Wall Street Journal:

More than two years after the government seized Fannie Mae and Freddie Mac, the Obama administration will recommend phasing out the housing-finance giants and gradually reducing the government’s footprint in the mortgage market, according to people familiar with the matter.

The administration is expected to include three options for a post-Fannie and Freddie world when it releases a long-awaited proposal for the future of the nation’s $10.6 trillion mortgage market, which could come as soon as Friday. Together with federal agencies, Fannie and Freddie have accounted for nine of 10 new loan originations in the past year.

The White House’s “white paper” will begin what promises to be a prolonged and fiery debate about the future of how homes are financed across the U.S. Any wind-down of Fannie and Freddie would happen gradually to avoid roiling markets, and the central, unanswered question is what kind of federal function, if any, the administration and Congress will invent to take their place.

Steps to reduce the government role in the mortgage market likely would raise borrowing costs for home buyers, adding pressure on the still-fragile U.S. housing markets. Consequently, analysts believe any transition could take years and would be driven by the pace of the housing market’s recovery.

The fight over how to restructure the housing-finance system has roiled Washington, and yet both parties have been hesitant to propose detailed legislation.

For conservatives, Fannie and Freddie played a starring role in the financial crisis, and any solution that is viewed as replicating their function could face fierce opposition from some Republicans. But more moderate Republicans may resist such an approach and could join Democrats who have said a federal role is necessary to ensure broad access to home ownership.

While advancing one detailed plan risks providing fodder for partisan battles, offering multiple proposals may help the administration force those views into the open, said Michael Barr, Read more

“If government doesn’t steer capital into housing, the capital doesn’t disappear; it could fund other job-creating businesses.”

The Washington Post:

Advertised as a way to stabilize the housing market, government-backed mortgage securitization ended up distorting and destabilizing it. The resulting misallocation of resources – evident not only in today’s massive bailout of Fannie and Freddie but also in the vast quantities of land, water and energy wasted on suburban sprawl from Las Vegas to Fort Lauderdale – is a true American tragedy. Today’s housing crisis is an opportunity to make sure nothing like it ever happens again.

Damn straight. This is the Post, so the solution proposed is still WelfareLite, but any movement away from Rotarian Socialism is a move in the right direction.

This Article is a Waste of Your Time

The NAR has come out against the Debt Reduction Commission’s recommendation to eliminate (actually, not eliminate but rather greatly reduce and alter) the mortgage interest tax deduction (MID)…  Isn’t that a shock?  No? You knew those dip-shits at NAR would knee-jerk react to their sacred cow?  Hey, I warned you in the title that this article is a waste of your time.

What has caught my eye is the speed with which the NAR propoganda hit mainstream agents and found its way to popular social media sites like Facebook.  A quick look this morning and I must have caught half a dozen agents I know personally, out there spreading the bullshit around on behalf of the NAR; not realizing how hypocritical and stupid they looked.

Attention All Agents:  Taxes are theft.  You may acquiese to some form of theft in the ignorant belief that it somehow does some good. But tax deductions? They are pure evil.  They are, by definition, designed to separate you from your natural freedoms through bribery and penalty.  The mortgage interest tax deduction is no different and in some ways worse.

You might make allowance for the mugger on the street stealing your money because (he says) his kids are hungry. (I think you should kick his ass, in no small part because it may be the best thing you can do for his kids… but that’s a different post.)   But do you really want to defend the guy who takes your money and then tells you that if you will walk where he tells you and stop where he tells you and wear what he tells you, he might (MIGHT!) give you some of your own money back? Are you that spineless?  Let me see if Ican put this into perspective:

I (the government) have declared that all real estate agents must give me 30% of their commission checks. But, I think funny underwear makes people laugh and laughter is a social good… so if you’ll wear funny underwear on your head I’ll give you some of your commission back.

Feeling pretty good about your deduction? Take that stupid underwear off your head and pay attention!  It’s not even true!  The vast majority of tax payers Read more

New Math… or An Old Game?

General Motors is preparing a public stock offering… you know, because it’s primarily owned by the government and unions right now.    The sale is expected to raise $10.6 billion, most of which is going to the government against the $50 billion bailout last year.  Since government is literally us (I mean, the $50 billion didn’t come from some savings account the Fed has from working nights and weekends as a pizza delivery boy, right?), that means we are selling an asset we purchased with bail out money… back to ourselves… and then putting the money we took from our left pocket into our right and claiming to have paid ourselves back.  Not sure, but I think there’s a nice big dollop of irony in there somewhere. 

This is all well and good so far as socialist, potato-passing goes.  I’m sure I’m not alone when I say that, while I don’t speak political gobbley-gook, I understand it just fine.

What bothers me here is the math.   The plan is to sell about 365 million shares at between $26 and $29 each, raising an estimated $10.6 billion.  This will value the company at around $48 billion which, surprise, surprise, is Ford’s capitalization.  As a matter of fact, if the shares sell near the high end of the range, GM’s capitalization will be closer to $60 billion – which means bigger and, ostensibly, better than Ford.  (Side note: Ford saw the problems ahead of time, made the difficult choices, accepted no public welfare, didn’t forever alter the bond market and our basic understanding of risk/reward investing, came through the worst economic times the auto industry had ever seen and recently reported record profits… but they’re market capitalization is the same as or less than GM’s? I suppose that’s the price you pay for actually thinking the rules of the market place should apply to everyone equally.  Makes one wonder though, how happy Ford’s stock holders would be – and how much money they might be spending right now – if Ford’s efforts had been properly rewarded in the free market and they were not in competition with the US Government.)

Back to the math.  Most of this ($10 Read more

The line for food stamps is over there. This is the line for deficit-funded mortgage bailouts.

James Pethokoukis at Reuters:

Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages – one in five – are underwater with negative equity of some $800 billion. Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama’s loan modification effort. HARP was just extended through June 30, 2011.

The move, if it happens, would be a stunning political and economic bombshell less than 100 days before a midterm election in which Democrats are currently expected to suffer massive, if not historic losses. The key date to watch is August 17 when the Treasury Department holds a much-hyped meeting on the future of Fannie and Freddie.

What would be the motive for doing something this dumb? To buy your vote, of course:

Keep in mind the political and economic context. The nascent recovery is already running out of steam. Wall Street economists just downgraded the government’s second-quarter GDP estimate of 2.4 percent to around 1.7 percent. And as even Treasury Secretary Timothy Geithner is warning, the unemployment rate may well begin to rise back toward the politically toxic 10 percent level given such sluggish growth. Many in the White House thought the unemployment rate would be dropping sharply by this point in the recovery.

But that is not happening. What is happening is that the president’s approval ratings are continuing to erode, as are Democratic election polls. Democrats are in real danger of losing the House and almost losing the Senate. The mortgage Hail Mary would be a last-gasp effort to prevent this from happening and to save the Obama agenda. The political calculation is that the number of Read more

Reasons to be cheerful, Part 3.1.3: Praising Cain: Change the world forever by learning to love your life the way you actually live it.

Imagine this: You are the High Priest of a nomadic tribe following a herd of foraging sheep. When the tribe needs food, a beast is slain and the meat is shared equally. The political structure is hierarchical, but even the Chieftain is governed by the unchanging traditions of the tribe.

One year the herd wanders toward the seacoast. You encamp a short walk away from a trading post built by a sea-faring civilization.

For the first time in their lives, your tribesmen discover a way of life different from their own. The traders live indoors, sleeping on beds! Their diet consists of more than meat and foraged nuts. They eat grain, fruit and fish, flavoring their water with delectable nectars.

Wealth is not shared. Villagers trade with each other to get what they need — and each family owns its own land! Disputes are resolved by reasoned conciliation, not by fiat. Even so, each family seems to own more weapons than your whole tribe combined.

Anyone can introduce a new tool, technique or idea at any time — upending the whole civilization if it comes to that — and not only is this not forbidden, it is avidly sought!

This is horrifying to you as High Priest, but your horror is nothing compared to the apoplexy of the Chieftain. As he watches tribesmen disappearing into the village one by one, he turns to you for a solution.

Now you understand the story of Cain and Abel.

Cain made a sacrifice of grain, Abel of meat, and the meat — the wealth of the herders — was pleasing to the god of the tribe. Why does Cain slay Abel in the story? To scare the tribesmen back into the herd.

The Greeks found a better way to live, spreading it with capitalistic abandon. Those who abhorred the Greek way of life crafted their mythologies to portray Hellenism as evil.

Would you like to change the world, forever, for the good, one mind at a time? Here’s how:

If you live in Cain’s world, stop pretending to live in Abel’s.

If your life depends on capitalism, private property and free trade, stop pretending to Read more

Reasons to be cheerful, Part 3.0.3: When you resolve never to let other people dominate you, you come to be indomitable.

That’s a lot to take in, so indulge me as we summarize what we’ve talked about so far:

  • You are a sovereign soul. Your purposive behavior is exclusively controlled by your self.
  • You cannot be governed. Other people cannot control your behavior, nor you theirs.
  • To the extent that other people — your religion, the government, your family or friends — might seem to control you, this is a consequence of your own freely-tendered consent, your own explicit, freely-chosen, on-going cooperation.
  • Because other people’s seeming control over you originates in your own sovereignty, you can recover your freedom at any time you want, simply by withdrawing your consent.
  • If you have surrendered any of your sovereignty in the past, your life will be better — for you — once you have regained full control over yourself.

If you have made the mental effort to recover your sovereignty in full, your life will already be better. This is a profoundly important reason to be cheerful, wouldn’t you say?

In other essays, I take up the mental, physical and moral benefits of a full commitment to self-adoration, but this is simple enough to see in summary: If you devote your life to doing everything you can think of to make your life better, more perfect — more perfectly, more abundantly rich in every kind splendor — your life will be immeasurably improved.

Now reflect that we’re talking about what might happen if the shit really does hit the fan. If the government of the United States does not collapse under its own vast weight, so much the better. But even if it does, your own unique life will still be better than it might have been had you not made this change, won’t it?

There is no downside to self-love. You’ve been poisoned on the idea, for your whole life, by people who know they cannot rule free minds. But just by daring to let your mind run free, by daring to be the uniquely beautiful specimen of humanity you have been all along, your life will be everything you’ve always known it could be.

Yes, the world outside your mind can be Read more

Reasons to be (less than) cheerful, Part 3.0.2: What has it cost us to have been so wrong for so long about selflessness and self-adoration?

You’ve been told your whole life that all the troubles of the world owe to selfishness, and that the only true path to happiness is to renounce the self and to damn the only life you have ever known. Who told you this? Amazingly enough, it was thugs, priests and politicians — and their many, many minions. If you’ve read this far, you must know by now that every bit of this is a lie, the Big Lie that has been used in infinite variations over the course of all of human history to con decent, honest, innocent people like you into giving up everything you have for the benefit of the worst sorts of people.

This is a premise I believe can be defended in reason to infinite precision: Everything squalid on the face of the earth, for all of human history, is the consequence of selflessness, of the deliberate, conscious, completely voluntary renunciation of the self by a person who has self-induced the belief that some objective he seeks can only be attained by an act of self-destruction.

But that argument is just the corollary of this one: Everything we know of splendor, within our own minds and in the world around us, is an artifact not just of selfishness but of the most profound and most profoundly-beautiful self-love. If there is any normal state for human beings — normal as a matter of ontology, not statistics — this is it: To be so much in love with the things you make with the time of your life and the effort of your mind and your body that you cannot bear for those things to be less than perfect.

Think of that: Whether you’re looking at a skyscraper or listening to a symphony or simply teaching a child to read, the source of the splendor you experience is self-adoration and nothing else — not just your own delight at being alive, or the child’s, but also the architect’s, the composer’s, the author’s and all of the people who worked on those creations. And then consider that it is self-love — the self-love Read more

Reasons to be cheerful, Part 3.0.1: You are ungovernable: Other people have power over you only because you have surrendered your own sovereign authority to them — and they can’t stop you from taking it back.

Let’s start with this idea: You are a sovereign soul. I have a lot more to say about the nature of the self, within this series of posts and throughout my writing, but, in a political context, this is the most important fact of your life: You cannot be governed.

All of human history, ultimately, is an attempt to contravene and negate and obviate this simple fact, and it is for this reason that every human civilization — so far — must be rated a failure. Some have been better than others, of course, and I sing the praises of the Greeks not just for what they did in the Hellas of old, but for what they are still doing all over the world. The Greek idea — each man has the right and power to own and control his own life and property — undergirds the best approaches we have seen — so far — to truly human civilizations.

And the United States — for a while — was the best-ever expression of that Greek ideal, the freest civilization ever yet seen on the earth. But like the polities of the Greeks before us, American society carried within it the seeds of its own destruction and the horrors visited upon you every day in the news are those seeds bearing their full fruit at last.

Here is the problem, for the government of the United States and for any would-be governor of human behavior: There is nothing I can do to cause or prevent your purposive actions. I can threaten you or beat you or tax you or imprison you or kill you, but I cannot cause you to do anything I want you to do, nor can I prevent you from doing anything I want for you not to do. You are a moral free agent as a manifestation of your nature as a human being, and there is nothing I can do to contravene or negate or obviate your sovereign freedom.

But wait. Isn’t it true, as Rousseau had it, that “man is born free, but everywhere he is in chains”? Indeed Read more

Reasons to be (not so) cheerful, Part 3.0.0: While it may be implausible that western civilization could collapse, this much seems certain: You will not be prepared for what happens next.

So: Let’s drop the shit-hammer, shall we?

Greece is broke. So is England, and so is most of the rest of Europe.

California is broke, Illinois is broke, and, if you count unfunded pension liabilities, not only are all the rest of the states, counties and cities broke, so are all of the surlier labor unions.

Social Security is broke, as is the metamorphosing medical scam to be known, soon enough, as no-healthcare-for-you!

The United States government is broke, of course, limping along, for now, on funds borrowed against the promise of future confiscatory currency inflation, future crippling taxation — or both.

Socialism is a Ponzi scheme, and, before you know it, you run out of suckers to milk. Sooner or later, welfare-state socialism has to collapse. As I’ve argued, I don’t think that time is now. Despite our talent, as a species, for forecasting apocalyptic, pandemic doom, in reality the sky hardly ever falls more than once or twice a day.

Moreover, even though we are enmired in a deep recession — and even though our puerile president is making that recession much worse with every boneheaded error at his command — even so, it is very likely that we are out-producing welfare-state socialism in the long run. That might stick in your craw, but it remains that — even despite the drag on the economy caused by taxes, regulation, deficit spending and waste — the trajectory of the standard of living of every American — and virtually everyone on earth — is steadily upward.

But, but, but! Government is impoverishing us! I saw it on the big-screen HD-TV in the bedroom, and also on the even-bigger-screen HD-TV in the living room, and, just to be sure, I followed-up on the high-speed internet connection on my 27″ quad-core iMac! Don’t try to tell me the world’s not going to hell in a hand-basket! I’ve got the best hardware and software in the world to tell me how terrible my life is!

That much is funny to me, but, even so, these circumstances can’t last forever. At some point the parasites will overwhelm the host, and, when that happens, Read more

So what if lenders are lousy at judging character? Who can’t identify fat people when they’re sitting on the other side of your desk?

Who says all academics are mindless time-wasters? A pair of brave scholars have demonstrated a correlation between obesity and mortgage defaults. A bad credit report is good evidence of insufficient thrift, but a good credit report is evidence of nothing dispositive. A bulging waistline, on the other hand…

We show that obesity is an economically significant predictor of mortgage delinquencies at the county level. In practice, however, loan contracts do not incorporate easily verifiable health risk factors such as obesity. The discrepancy between theory and practice suggests the existence of substantial cross-subsidization and misallocation of funds in the loan market. The potential for business opportunities and policy implications warrants further investigation of our results with more detailed, albeit costly data.

This is pretty dumb, practically speaking, but it’s nice to see that the idea of pre-existing conditions might have a future, now that it’s been outlawed where it actually makes sense, in the health insurance business.

As an aside, our own Tom Vanderwell makes a cameo appearance in this “study.”

Reasons to be cheerful, Part 2.9.5: Carrying a concealed firearm is the first step to reclaiming responsibility for your own self-defense.

Arizona State Senate Bill 1070 — the “Welcome to the Hotel California” legislation that has drawn so much attention nation-wide — will take effect on July 29th, 2010. Two other bills that will become law that day are more interesting to me, if not to TV-camera-mugging know-nothings in other states.

First, it will be lawful in Arizona for citizens to carry a concealed weapon without applying for a state permit. Arizona has always been an open-carry state, and, until now, a concealed carry permit required nothing more than a small fee plus 16 hours of instruction. With or without the legal requirement, the instruction is not a bad idea. But what will change on July 29th is the attitude of bad guys. Unlike thugs in, say, Chicago, criminals in Phoenix know there is a high degree of likelihood that ordinary people will be armed. As Robert A. Heinlein said, “An armed society is a polite society.”

Second, firearms manufactured and sold within the state of Arizona will not be subject to the Federal Brady Law’s national firearms database. It’s not a big deal right now, but it is plausible that there will come a time that the Feds — or their surlier successors — might try to confiscate every gun they know about. Having weapons Johnny G-Man knows nothing about might turn out to be an important advantage, if the shit hits the fan.

Look at this:

Isn’t that a sweet little pistol? It’s a Ruger LCP, specifically designed for concealed carry. It’s a .380, six rounds in the grip, one in the chamber, so it’s strictly a self-defense weapon. But it’s just a little bit larger in all dimensions than a pack of index cards, so it is very easy to conceal on your person. You can get a belt-mounted holster for it that looks like a camera case.

That’s a Realtor’s gun, a salesperson’s gun, a weapon for people who go to a lot of places they’ve never been before and don’t know what to expect. Less than ten ounces, and no one knows you have it until it turns out to be your Read more