substitute

Finally pushed over the limit by this asshole (youtube video):

The talk radio mouths and the right-wing press have locked on to their version of the financial crash, and why foreclosed homeowners should not receive help.

The problem, they say, is that "political pressure" forced lenders to make bad loans to those who didn't deserve them qualify. Many of these people were clearly n... ni... ne... NE'ER-DO-WELLS. Everyone knows those people can't keep a mortage. If the government had let these experienced bankers use their own judgment, none of this would have happened. So we definitely don't want to spend money—OUR money—helping these people out any more!

The subprime and alt-A mortgages were largely written by people I saw daily over the last decade, our famous local "Mortgage Bros." These guys bought leads from cold-call telemarketers and sold refinancing to anything with a pulse, lying constantly about the risks. They upsold every potential loan, pushed the limit with interest-only ARM on subprime and alt-A garbage loans. They had no reason to care if the bank ever got the money or if their customers kept their houses. They used the system as it was presented.

The idea that these were stolid, cautious men in pinstriped suits, sworn to the fiduciary duties of their banks, who were somehow forced by dashiki'd oppressors in the Federal bureaucracy into giving money away to the NE'ER-DO-WELLS would be funny were it not such a repulsive lie.

Make no mistake. The financial industry made loans that could not be paid, knowing they were bad loans. They pushed those loans hard on their customers. And they knowingly mislead their customers into taking on impossible obligations. Thousands of these brokers committed criminal fraud.

If this was an attempt to redistribute wealth to the NE'ER-DO-WELLS, it backfired. The result was a lot of Harleys and speedboats and cocaine and blowjobs provided to the grinning, empty-souled asshole Fonzies of Orange County. If you don't want their customers to be saved from eviction, let's use the money to build them a very unpleasant jail.

From today's Los Angeles Times Magazine I bring you some pullquotes from an article about the Pelican Hill Resort in Newport Coast. The whole article is worth reading: Heaven is in the Details

Marie Friedlander, Certified YogaGolf Instructor
“Breathe through your nose,” says Friedlander in smooth, even tones. High atop the course at the Pacific View Tee, three middle-aged male golfers stand barefoot on mats with their arms stretched overhead and palms together. “Become aware of your stance. Stack your spine. Stare at your drishti.” The two-hour session concludes with the men remarking how much more flexible and relaxed they feel. One golfer, who had complained of lower back pain, heads to a canvas tent, where his swing is videotaped. He compares it with a previously taped swing playing on a nearby laptop. He smiles.

I'm not sure how a 5000-year-old Indian religious practice works with the conspicious-consumption ritual sport of the American executive, but I bet both can be done pompously. A brilliant move, though; now they can sell yoga hours to the men and not just the women. —Ed.

As for the attention to detail, it’s as if all the veteran hospitality professionals brought on board sat in one room and asked themselves, What detail would I like to add? What would contribute to the perfect experience? That’s why there are five types of coffee in each villa, a choice of soaps and Villeroy & Boch china; why no guest will ever have to request toothpaste, a razor or shaving gel; and why such touches as orchids in the sitting rooms and expansive patios with chaise lounges and tables contribute to the feeling that you’re staying at a close friend’s vacation home. The details go beyond the guest rooms: Risotto is finished in a 28-inch wheel of Parmesan and served in individual silver dishes; the spa features temperature-controlled beds and a waiting room full of art books; and the lobby is a study in opulent minimalism.

(The print edition has a photo of a chef spooning a saffron-rich risotto into a hollow that has been cut into an entire wheel of parmigiano. If there is a purpose here other than excess for its own sake, I'd love to hear it. —Ed.)

(Also, the phrase "opulent minimalism" deserves an award or a terrible punishment, probably both. —Ed.)

From today's Wall Street Journal:

"The margin calls hit some chief executives who had borrowed to buy company stock. These included Chesapeake Energy Corp. Chief Executive Aubrey K. McClendon, who was forced to sell nearly his entire stake in the company, which he had accumulated in recent years, including a $43 million purchase in July. "These involuntary and unexpected sales were precipitated by the extraordinary circumstances of the world-wide financial crisis," Mr. McClendon said in a statement. "In no way do these sales reflect my view of the company's financial position or my view of Chesapeake's future performance potential.""

RESEARCHERS FIND LARGEST YET SUBPRIME NUMBER

WASHINGTON, DC (AP) — Economists working at the United States Department of Treasury and top Wall Street banks announced the historic discovery of a very large subprime number, the biggest yet seen.

The group, working in secrecy for years and using banks and real estate holdings worldwide as a laboratory, found the gigantic number some time in the last year and is only now releasing the information to the public.

"This is a win-win," said Gary Leukotomakis, the Treasury's Chief New Economist. "We've shown that subprime numbers far beyond anything previously imagined are now possible, and even likely." Subprime numbers, which may seem esoteric to the typical American, are used in complicated financial transactions such as derivatives, credit swaps, REITs, "Jumbo loans," nonconforming loans, and spectacular, heart-stopping international financial crises.

Thad Labbé, a senior economician at Goldman Sachs, credited new financial technologies for the breakthrough. "We had always theorized about the power of a regulatory vacuum, but when we were able to produce one in the field everything took a quantum leap," he enthused. "Everything else we needed — weightless real estate, risk-free quantum risk, low-viscosity greed-through liquidity, and unpoppable Hyper-Bubbles — all of that stemmed from this revolutionary new postregulatory paradigm."

"In layman's terms," said Labbé, "it was like free money. But forever, because it's government science."

Tiara Hampton, a professor of Freedom Science at the Guthy-Renker Institute for Postscientific Study, agrees. "This proves what we've been saying all along, what naysayers have pooh-poohed. There actually is no hard limit to a subprime number, and the actual risk to researchers is nil." "In fact," she remarked, "risk in this quantum environment is entirely reversed, so that it's not possible to suffer consequences from so-called financial risk unless you're unrelated to the experiment completely."

Sources close to the team estimated the subprime number as nearly 700 billion, but cautioned that this number was not exact. "You have to understand," said one source with first-hand knowledge, "that the actual number will be the product of rectal extraction for some time. The important thing is that it's big, and bigger by a big number than the last big number."

Spokesmen for the research group said they did not yet know what would produce the next large subprime number, but that they were confident it would be discovered in much the same way.

The research group, which until now had been working behind a veil of secrecy, was funded by the Freedom Science Foundation, the Goldman-Sachs/Treasury Revolving Door Society, and subscribers like you.

(tip o'the hat to mcbrennan for the inspiration)

CALIFORNIANS:

If you're a renter, or you might be one, or you know and like people who rent, you should vote against Proposition 98 next Tuesday, June 3.

gordonzola has done a fine job of explaining why at this post and previously at this other post. I'll summarize here with cut and paste bits from his post:

State Proposition 98 on the June 3 ballot will change your life and change our city forever if it passes. This dangerous measure would end all rent control in California. Worse, it would also end just-cause eviction protections. If it passes, landlords will be able to raise evict tenants for no reason other than that they want to raise the rent.

Besides attacking tenants and rent control, Prop 98 will also end a number of environmental regulations as well as zoning and land use laws. Under Prop 98, developers will be able to ignore height limits in residential neighborhoods, build on environmentally sensitive areas and bring chain stores into neighborhoods where they are now prohibited. Prop 98 will also end requirements that developers build a certain number of units which are affordable to people with low and moderate incomes.

Also likely to be ended by this language will be laws requiring landlords to give 60 day notices for large rent increases or no-fault evictions, as well as laws requiring relocation benefits for no-fault evictions. Laws limiting the amount of security deposits or limiting when a landlord can hold on to a security deposit will also end. Prop 98 is a constitutional amendment so its provisions will override all other local and state laws (and make challenging it in court especially difficult).

Please vote. Without a good showing it's likely to pass, because they put it in a boring election between two important ones.

No, we're not running out of rice in the U.S. We are particularly not running out of rice in California, where we grow it. We're also not running out of wheat. If the Costco isn't selling you rice, they probably messed up their order and some junior manager is lying to you about rationing.

The price of food is indeed high and rising. People in less fortunate countries are rioting because they can't afford to eat. Here in the U.S., poor people are being squeezed. People like me don't even notice because we make good money.

This is a good time to think about what you eat. It's an even better time to take a good look at where the food comes from, how it's produced, and how it's distributed. As usual, the root problems are about money: farm subsidies, water subsidies, tariffs, big agricultural companies who control all of those things, and bad government all over the world.

And in the U.S. particularly it's about oil. Because you can't grow food the way we do without artificial fertilizer, which is made of energy. And once we have all that bounty of soy and corn, we have to sell it somehow. And so we convert it into ethanol and celebrate our new energy, free from foreign oil! ...that's made from foreign oil. And up go the grain prices.

For me the threat is not rice rationing at the supermarket. The threat is endless war to keep our own food prices low with cheap oil.

Funny how it comes back there every time!

Genentech makes an eye drug called Lucentis. It's expensive: $2000/month. They also make a cancer drug called Avastin. It's inexpensive: $40/month.

The two drugs are chemically very similar. So similar, in fact, that compounding pharmacies are repackaging Avastin and doctors are prescribing it for the eye problem.

Genentech doesn't like this. They want the money for Lucentis. So, they're stopping shipment of Avastin to all the pharmacies and sending it only to hospital pharmacies or directly to doctors. Furthermore, they're refusing participate in the NIH study to confirm or reject the similar usefulness of the two drugs, and not even providing drugs at cost to the study as is customary.

Result? $1-$3 billion more a year of taxpayer money into Medicare, because almost all the patients involved are over 65. I think it's great how the drug companies selflessly do research and development to keep us all healt... yeah.

Wall St. Journal article below.

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Impersonating the U.S. Government? Yup. False Census mailer? Yup. Official-looking eagle and star logo? Yup. Aimed at seniors? Oh yeah.

This time the Rev. Lou Sheldon, chief huckster of the religious right, has really boned it. I reported it so far to the Census Bureau and the Post Office. Oddly there's an article from last year about this from the SFGate site but no one is yet in jail.

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I heard a carnival barker-style bellowing ad on the car radio yesterday while listening to the all-news AM station. It was the usual mortgage broker appeal to refinance, this time with the added warning that rates were going up. The ad concluded:

"It's the biggest no-brainer in the history of Mankind!

threepunchstuff was kind enough to link me to a Salon.com article on the subprime mortgage mess, which quotes my old blog at length. Neato.