No Runny Eggs

The repository of one hard-boiled egg from the south suburbs of Milwaukee, Wisconsin (and the occassional guest-blogger). The ramblings within may or may not offend, shock and awe you, but they are what I (or my guest-bloggers) think.

Archive for December 9th, 2008

Refinancing defaulted mortgages – FAIL

by @ 15:45. Tags:
Filed under Business, Economy, Politics - National.

CNN reports on a statement from US Comptroller John Dugan that states that over half of those that had their defaulted mortgages adjusted through the Hope Now Alliance, a coalition of lenders, servicers, investors and counselors, redefaulted on their mortgages within 6 months of having the adjustment. Some numbers from the article:

– So far in 2008, 1.7 homeowners have had their mortgages adjusted through this program.
– 53% of those who had their mortages adjusted in the first quarter of 2008 have redefaulted within 6 months.
– At least 51% of those who had their mortgages adjusted in the second quarter of 2008 have redefaulted within 6 months. This percentage could easily increase, as those who underwent the adjustment in June (and possibly part of May) have not reached the 6-month threshold.

Despite these failures, FDIC chairwoman Sheila Bair wants to extend this program to reduce payments to no more than 31% of gross monthly income by lowering interest rates to 3% and extending the mortgage to 40 years, with the government eating 50% of the loss of those who make it past 6 months without redefaulting to the tune of an estimated $24.4 billion.

Now, what did Albert Einstein say about insanity? I believe it had something to do with doing the same failed thing over and over while expecting a different result.

Congrats on the big 1-3 Scott

by @ 12:46. Filed under Miscellaneous.

Scott Feldstein has had a web presence for 13 years. Yes, he is one of the “old-timers” who had hard-coded his stuff, and he was around before there was such a thing as a “blog”. Little-known fact about Scott; he self-hosts rather than trusting a hosting company.

Drinking Right tonight

by @ 10:43. Filed under Miscellaneous.

This is the Emergency Blogging System. Tonight’s Drinking Right is ON! You are instructed to shovel yourself out of however inches of snow you’re under and report to Papa’s Social Club, 7718 W Burleigh in Milwaukee, at 7 pm.

As The Chad says, “It’s better to weather the weather with drinks and friends.”

This has been an Emergency Blogging System alert. Had it been a test, you would have been graded. Hell, if you’re not there and you don’t have a better excuse than the weather, you will receive a FAIL.

It’s Fitzmas! (now complete with indictm…er, criminal complaint)

by @ 8:45. Filed under Politics, Politics - National.

(H/T – Eric Odom’s Twitter stream)

The Chicago Tribume is reporting that Illinois governor Rod Blagojevich (D-with the reference in paragraph #4) was taken into federal custody this morning. This comes a few hours after the Trib reported that the federal investigation into pay-for-play allegations against Blagojevich led by US Attorney Patrick Fitzgerald had been expanded to include Blagojevich’s choice for Barack Obama’s replacement in the Senate.

I’m under no illusions that Blagojevich will either be convicted or not pardoned. Fitzgerald has but 40 days to get a conviction before he is no longer US Attorney. Further, Blagojevich and Obama share a friend convicted on public corruption charges, Tony Rezko, and Obama will, as of January 20, have the power to make all of Blagojevich’s federal charges disappear.

Revisions/extensions (9:35 am 12/9/2008) – The Trib comes through with the two-count-apiece indictment criminal complaint against Blagojevich and his chief of staff John Harris. The first count involves multiple instances of play-to-play, including the attempted sale of Obama’s Senate seat for personal gain. The second involves a scheme to have members of the Trib’s editorial board, who had been agitating for Blagojevich’s impeachment, fired in exchange for help in disposing of Wrigley Field. The short-version press release is also available from the Trib.

R&E part 2 (12:24 pm 12/9/2009) – A few updates. First, I have to thank Emperor Misha I and Allen Fuller for linking to me. Welcome those of you from Anti-Idiotarian Rottweiler and RootsHQ.

Second, I just got done listening to the press conference with Fitzgerald and the FBI Special Agent in Charge. One important item from the conference; in response to a question of whether Obama knew anything about the attempt to sell his vacated Senate seat, Fitzgerald pointed back to the indictment complaint/affidavit combo and said that it didn’t indicate that Obama or his team knew anything about that. He pointedly refused to say whether any evidence not included in that did indicate either Obama or his team knew anything, which is standard procedure regardless of whether the evidence exists or not.

I suppose I should answer the Emperor on how this will go away because I didn’t explain it very well above. I doubt it will get to the point of Blagojevich needing a pardon, but if it does come to that, it will happen. The fact that Fitzgerald included the shakedown of a childrens hospital as part of count #1 makes it likely that, if necessary, it will happen later rather than sooner (say the third quarter of 2011).

However, a pardon isn’t the only way that Obama could influence this. It has become customary for the entire US Attorney corps to be replaced by an incoming administration. I would expect the new US Attorney for Northern Illinois to “quietly” seek the dismissal of charges. Whether Blagojevich would have any legitimate juicy dirt on Obama or not, he strikes me as the type to try to use that to try to strike a deal. Obama can’t risk that dirt coming out, whether or not it is real.

R&E part 3 (12:29 pm 12/9/2008) – I really need to check my overbloated feed. I somehow missed doubleplusundead linking to me. Guess that’s why I’m a Moron.

R&E part 4 (12:33 pm 12/9/2008) – DrewM. live-blogged the press conference for those of you who missed it.

R&E part 5 (1:51 pm 12/9/2008) – I erred in calling this an indictment. It is a criminal complaint; the indictment will come from a grand jury. Sorry about that.

R&E part 6 (1:56 pm 12/9/2008) – Blagojevich and Harris are free on $4500 bond. They do have to turn over their passports and any firearms under the terms of the bond. They best not have any handguns because they’re both Chicago residents.

R&E part 7 (2:24 pm 12/9/2008) – Obama is “saddened and sobered” by the indictment, but says it’s “inappropriate” to comment on it at this time. He had “no contact with the governor or his office,” so he had no idea what was happening.

R&E part 8 (2:59 pm 12/9/2008) – Obama senior adviser David Axelrod contradicts those claims in an appearance on “Fox Chicago Sunday” from 11/23 (starting at the 1:14 mark, with the money quote at 1:20):

[youtube]http://www.youtube.com/watch?v=konL35ur0Bo[/youtube]

Oops, Obama did it again!

R&E part 9 (4:16 pm 12/9/2008) – With a hat-tip to Allahpundit, I direct your attention to Jake Tapper, who has a couple more tidbits on Obama’s closeness to Blagojevich, and the $999 million questions – “But there remain questions about how Blagojevich knew that Mr. Obama was not willing to give him anything in exchange for the Senate seat — with whom was Blagojevich speaking? Did that person report the governor to the authorities?”

The Leftosphere thinks that Obama chief of staff Rahm Emanuel did tip off the authorities. He may have, and if he did, I’ll gladly give him a couple of “atta-boys”, but judging by the publicly-available timeline, I believe Fitzgerald and company knew about this the moment they reviewed the wiretaps.

R&E part 10 (4:46 pm 12/9/2008) – With a tip of the hat to EM Zanotti, I have bad news for friends of clean government – Blagojevich is going nowhere.

Meanwhile, Rick Moran has the definitive south-of-the-Waukegan-toll-plaza view. While I won’t be able to listen to Rick’s BlogTalkRadio show live because of Drinking Right, I will tune in sometime before 2 pm tomorrow. If you’re not going to DR, at least tune in to that.

…..Two Bits

by @ 5:42. Filed under Economy, Politics - National, Taxes.

Barack Obama was on Meet The Press with Tom Brokaw this weekend.   Obama provided the following perspective on the auto bail out during the interview:

MR. BROKAW:   …should the current management be allowed to stay in their jobs?

PRES.-ELECT OBAMA:   Here’s what I’ll, I’ll say, that it may not be the same for all the, all the companies, but what I think we have to put an end to is the head-in-the-sand approach to the auto industry that has been prevalent for decades now.   I think, in fairness, you have seen some progress made incrementally in many of these companies.   You know, they have been building better cars now than they were 10 or 15 or 20 years ago.   They are making some investments in the kind of green technologies and, and the new batteries that would allow us to create plug-in hybrids.   What we haven’t seen is a sense of urgency and the willingness to make tough decisions.   And what we still see are executive compensation packages for the auto industry that are out of line compared to their competitors, their Japanese competitors who are doing a lot better.

Now, it’s not unique to the auto industry.   We have seen that across the board.   Certainly, we saw it on Wall Street.   And part of what I’m hoping to introduce as the next president is a new ethic of responsibility where we say that, if you’re laying off workers, the least you can do, when you’re making $25 million a year, is give up some of your compensation and some of your bonuses.   Figure out ways in which workers maybe have to take a haircut, but they can still keep their jobs, they can still keep their health care and they can still stay in their homes.   That kind of notion of shared benefits and burdens is something that I think has been lost for too long, and it’s something that I’d like to see restored. (Emphasis mine)

Today, Nancy Pelosi echoed the meme  of “shared sacrifice:”

Pelosi said that everyone involved in the U.S. auto industry, including management, labor unions, parts suppliers, investors and dealers, would have to make a sacrifice to ensure the continuing viability of the industry.

“We call this a barber shop: everyone’s getting a hair cut,” said Pelosi, speaking at a press conference in the U.S. Capitol.

According to these Democrat leaders, the threshold for determining when a sharing of sacrifice should occur is when you are leader who has been fiscally irresponsible with your charge.   You should share even more if your irresponsibility requires the American taxpayer to bail you out.

Hey wait!

Hasn’t Congress been irresponsible with their financial responsibilities?

  • Leaving Fannie and Freddie unchecked and unsupervised.
  • Ignoring the risk of leverage on exotic financial instruments and leaving them completely unregulated or over seen.
  • Constricting energy exploration which resulted in a 24 month hyper price speculation.
  • Giving Hank Paulson nearly completely unchecked ability to spend $700 billion entirely on his whim.
  • Adding over $100 billion of pork to the TARP bill….just because.

And who is now bailing out Congress’ financial irresponsibility?   That’s right, you and me, the American taxpayers.

If sharing the pain is what Pelosi and Obama think should happen to leaders who rely on the American taxpayers for a bailout,  Democrat and Republican Congress people alike,  ought to be answering the door and the American taxpayer ought to be knocking….

Shave and a haircut, two bits!

 

A Bridge To Nowhere

by @ 5:39. Filed under Business, Economy, Politics - National.

It appears that there may be an agreement to bail out the auto industry is close to fruition.   Being discussed is providing a $15 billion loan to the three US auto makers.

The term “Bail out” has gotten an increasingly negative response from the American public.   It probably has something to do with the fact that Hank Paulson threatened and then lied to the American public and seems unsure of how to spend the rest of his piggy bank; “To buy mortgages or not to buy mortgages, that is the question.”   As a result, Congress has come up with a new term to describe their steps toward socializing our economy, “Bridge Loan.”

In normal finance and banking arrangements, a “Bridge Loan” is just what it sounds like; it is a loan for a limited period of time.   Bridge loans are often provided during the riskier parts of a project for example during the construction process, when  collateralization is difficult and day to day value of the asset is difficult to determine.    For this reason, providers of bridge loans generally have tight controls over what they are financing and often  require that there is assurance of permanent financing for the completed process before they offer the interim financing.   In other words,  Bridge Loan providers  generally know exactly what the plan is, and how it will be executed, before a bridge loan is provided.    

Leave it to Congress to turn normal business terms on their head!   With their “Bridge Loan” Congress has no idea what they have or where they are going to with their “project.”   They are loaning money to enterprises who have no reliable plan that allows them to pay it back.

Of course “not knowing where they are going” doesn’t stop Congress from making demands along the way.   Rather than ensuring a reorganization of the automakers that would focus on developing a profitable business, Congress is focused on enforcing their “Green Dream” on the industry and thereby ensuring that the money lent to them will never be repaid.

Barney Frank had a moment of candor regarding the farcity of calling the $15 billion a “bridge Loan”:

“We don’t think the $15 billion is enough to get them into March, but given the administration’s insistence "¦ that’s where we are now,” Frank said.

Frank said that in the new Congress, which will have stronger Democratic majorities and a friendlier White House, the funds taken from the energy loans this year to prop up the ailing industry would be restored.

“Once we get a new administration we will replenish that money,” he said. “We will not see a diminution of funding available for energy efficiency.

“The reason for that is that then you get the new administration "” the Obama administration "” able to take it up from there and make the longer-range projections,” he added.

Yup, a new administration with longer-range projections with even greater demands for greenery and even less concern about financial viability.   It seems like the only bridges that Congress is able to finance are bridges to no where.

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