Bob Morris @ Aug 31st 2007 10:43 - Category: Credit crisis ;
It only applies to 80,000, a mere drop in the bucket compared to the millions of mortgages about to reset. Plus, as Mish points out, seems designed to help lenders, not homeowners. Big surprise, eh?
Bob Morris @ Aug 31st 2007 10:22 - Category: Unfiled ;
It’s getting so California heat waves hardly rates as news, except of course if you live there, like Sue and I used too, and blackouts happen. When it’s 109 and the power goes off and with it air conditioning and traffic lights, then things get unpleasant quickly.
Bob Morris @ Aug 31st 2007 01:06 - Category: Unfiled ;
We’ve been in Tucson Arizona for a few days. Per capita income here is a low $29k. The economy is primarily based on providing homes and services for the retired. Some retirement projects have thousands of homes, all nicely managed and well-run, but most are dead set against allowing homeowners to install solar power. How crazy is that? It’s a desert here. Yesterday was 106 F. But the managed communities won’t allow solar because some pinhead thinks it might mar the beauty of thousands of roofs. Or so they think. In ten years such obstinate thinking in the face of reality will be looked at as being nearly criminal.
Driving around you see lots of billboards for the big national home builders. Lennar. Pulte. Standard Pacific. I’m sure lots more are here too, and right now they are all dead in the tracks because of the subprime crisis. Since the economy here revolves around building homes, unemployment will now be rising rapidly.
Tucson seems a microcosm for cluelessness about climate change as well as a city about to get impacted hard by the subprime debacle.
Bob Morris @ Aug 31st 2007 00:15 - Category: Socialism ;
Louis Proyect, The Unrepentant Marxist, has a piece on Hugo Chavez, inquiring if Chavez actually said something that was attributed to him. Here’s what Chavez may or may not have said (roughly translated from Spanish).
The PSUV [Chavez’s party] doesn’t call itself “marxist-leninist” because it is a dogmatic thesis that has passed and doesn’t accord with the reality of today…the thesis of the working class as the motor of socialism and the revolution is obsolete…the worker of today is another thing, is distinct, is involved with information and telecommunications technology and Karl Marx could not have dreamed of these things.
Rather than take this idea and explore it, Proyect instead questions the motives of various socialist groups for spreading this thought, apparently because it’s not properly socialist and disrespects Marx. What is it with the socialist Left that they spend inordinate amounts of time having such theological, oops sorry, political arguments? The Gospel According to Karl. Thou Shalt Not Deviate or Question.
When Marx did his writings, the line between working class and bourgeoisie was clear and defined. Workers worked in the factories and the owners exploited them. The class boundaries were completely obvious to everyone.
In 2007, especially in the U.S., the boundaries aren’t clear at all, and Marxists do themselves and those they wish to organize a disservice by trying to make the class structure of today fit that of 150 years ago in England. Let’s take an M.D. who works for Kaiser, he makes $150,000 a year, has a nice house and drives a Mercedes. But he doesn’t own the means of production so therefore under Marxist theory, he is a member of the proletariat, of the working class. But I doubt he or anyone else views him as working class. Nor would approaching him as such be an effective organizing technique.
Also, especially in the U.S., most do not identify themselves as members of the working class, but as middle class, even if they aren’t. To organize, you need to reach people where they are now (or where they think they are), not where your theory tells you they should be. Also, most jobs here are service-oriented and involve some, maybe a lot of technology, and that tends to blur class boundaries even more.
Marxist theory needs some updating to bring it into the 21st century technological service-oriented world. And after 150 years, why wouldn’t it?
Bob Morris @ Aug 30th 2007 00:53 - Category: Climate change ;
“The second uncomfortable message I have to put out to you tonight is that when it comes to dealing with a problem of this scale, small is no longer beautiful. We have to start thinking on the biggest possible terms….”
PS Northwest passage open for first time ever.
Bob Morris @ Aug 30th 2007 00:14 - Category: Unfiled ;
From Joe Bageant, author of Deer Hunting With Jesus. He grew up redneck in Virginia.
Only the deadest political ear could fail to hear class resentment in [country music] lyrics. Growing up in the poor white working class leaves you angry for life, even after you’ve become successful. But the time is growing very ripe for liberals to wise up and come explain to my people just who it was that made them a growing permanent underclass. If we speak honestly, they will listen. But first we must unsell ourselves that our moral high ground and political awareness makes us superior.
Or that upper middle class progressives somehow have all the answers. Not hardly. The best things liberals could do is listen to the white underclass. Then try to find common ground. White liberals scrupulously try to rid themselves of prejudices against people of color yet too often hold onto and nurture prejudices against the white underclass. How crazy is that? And you’re damn right the white underclass resents such insulting class bias - and for good reason too.
Imagine what could be accomplished if progressives and the white underclass joined together.
Bob Morris @ Aug 29th 2007 01:03 - Category: Credit crisis ;
Maybe [Chairman of the Fed Bernanke] is seeing the light that capitalism without financial failure is not capitalism at all, but a kind of socialism for the rich.– James Grant, the editor of Grant’s Interest Rate Observer, in the NY Times
If the Fed bails out collapsing investment banks and hedge funds but does nothing for the millions who will be losing their homes, that would be a recipe for serious social unrest. Grant suggests they will not be bailing out anyone. We shall see.
Bob Morris @ Aug 29th 2007 00:15 - Category: Renewable energy ;
Listed Green - the MLS for green, sustainable, energy efficient homes and developments worldwide.
They walk the talk too, the website is 100% solar powered.
Bob Morris @ Aug 28th 2007 08:38 - Category: Credit crisis ;
From the gifted pen of Jim Kuntsler
Sooner or later, though, millions of shlubs dependent on pension checks, or annuities, or monthly payouts of one kind or another will notice that something has stopped landing in the mail box. Re-po men with bad haircuts and tattoos will be driving other peoples’ cars to the auction barn. Young people accustomed to thrilling paydays will discover that their services are no longer required in the mortgage origination business, and will instead have to memorize dozens of excruciating formulas for different sorts of beverages more or less based on coffee. Millions of realtors will enter second childhoods as they move back in with Mommy and Daddy, who themselves must now change their plans, since it is no longer possible to flip the 1956-vintage raised-ranch in Hempstead to buy that half-million condo in Maui.
On a more working class scale, this means layoffs will happen at huge nationwide chains like Home Depot, Target, and Wal-Mart. The businesses that serviceand supply them will suffer too. Those that have homes may lose them, or go deeply into credit card debt at usurious rates trying to keep the bills paid.
The Home Equity Line of Credit money spigot no longer exists and commercial credit is getting considerably more expensive. All that cheap money that has been floating around has vaporized.
Just within the past month in the well-off Connecticut town we live in, many more homes are for sale. I wonder, are some of these due to adjustable rate mortgages resetting to much higher levels? The real estate bubble here was modest, certainly not like Los Angeles, where we moved from in Feb. But is seems odd that so many homes here are suddenly for sale.
So imagine what it must be like in a Detroit, where property values are already plunging and the median price is something like $75,000. Where will they be in a year?
Bob Morris @ Aug 28th 2007 03:55 - Category: Unfiled ;
That makes $21,000 so far in fines for putting up posters for the upcoming Sept. 15 antiwar march and rally in D.C.
ANSWER has been putting up posters since before the war started, politicians do it all the time. So why the selective prosecution? The answer seems obvious enough.
There is an effort underway by several branches of the government to disrupt the organizing for the September 15 march, which will be led by Iraq war veterans and their families.
Now more than ever, it’s important to be in D.C. on the 15th.
Bob Morris @ Aug 28th 2007 00:25 - Category: Unfiled ;
Colin at Celcias is bicycling across the nation and is currently pushing through Nebraska. He’s awed by the amount of corn grown there, but then does the math on the huge subsidies for corn ethanol.
Corn ethanol subsidies totaled $7 billion in 2006 for 4.9 billion gallons of ethanol. That’s about $1.50/gallon This breaks down to:
1. 51¢ per gallon federal blenders credit for $2.5 billion
2. $0.9 billion in corn subsidies for ethanol corn
3. $3.6 billion extra paid at the pumpIt only costs 38¢ more per gallon to produce ethanol so why the enormous subsidy?
Then there’s the huge amounts of water needed to grow the corn, as well as fertilizer and pesticide. Plus the price of corn is steadily rising, which boosts food costs in general because corn or corn byproducts are in most everything. It’s also being grown in Third World countries specifically to make ethanol, which means less people there get to use the corn for food. And that’s hardly for good.
Corn ethanol is problematic at best. There are better ways to create ethanol.
Bob Morris @ Aug 28th 2007 00:12 - Category: Unfiled ;
Malik Rahim, community organizer in New Orleans, talks about the unequal recovery from Hurricane Katrina.
It’s almost two year almost two years after Katrina destroyed much of New Orleans. What is the situation now?
It is still a tale of two cities. In the Deep South, everything is determined by racism and privilege. So, if you are white or a privileged Black, the recovery is just about complete. If you are poor, especially working poor, and Black, it’s like the hurricane happened six months ago.
…
When you look at what’s going on here versus more privileged areas, there is a difference. It is a qualitative difference based on race and class.
Bob Morris @ Aug 27th 2007 12:36 - Category: Unfiled ;
Some of the raging forest fires in Greece may have been deliberate arson for financial gain. Forested areas are not allowed to be developed, but cleared areas are. The Greek government is now saying the fires may be considered as terrorism. “So many fires breaking out simultaneously in so many parts of the country cannot be a coincidence,” said their PM.
More: John Robb says over 200 fires have been set in the past 24 hours, many “around the country’s biggest electricity plants”, which suggests deliberate sabotage and open source warfare rather than corporate greed could be the root cause.
Bob Morris @ Aug 27th 2007 10:36 - Category: Unfiled ;
The US Army is now offering a $20,000 signing bonus if new recruits join by the end of September.
Bob Morris @ Aug 27th 2007 00:25 - Category: Climate change ;
Steve Wozniak, co-founder of Apple, on building energy-efficient homes.
You build a home out of a type of wood that keeps the temperature constant without air conditioning or heaters. The miracle wood in this category is Southern Yellow Pine. As for renewable resources, more Southern Yellow Pine trees are planted each year than are used. I’m told this is the only tree with this benefit. The Southern Yellow Pine has a resin inside that melts and freezes at 71 degrees F., a very comfortable temperature for humans. The chemical actions of melting and freezing work to balance the temperature. If it’s a hot day, some small amount of the resin melts (it takes a huge amount of energy to melt a tiny amount) and the melting process pulls heat from the surroundings, from the home. When it gets colder at night, the resin-wood emits heat as it freezes.
Read the whole interview. Woz is taking a technological approach to climate climate and energy. He believes that while technology created these problems, it can also get us out of them. Contrast this approach to Jim Kunstler, who thinks quite the opposite.
This has been the heart of my beef with the rosy future crowd. Energy and technology are not the same thing, not interchangeable or substitutable. If you run out of one (energy), you can’t just plug in the other (technology).
Kunstler says, no matter what we do and no matter how many alt and renewable energy sources we create, that the coming energy shortages (combined with global warming) will mean drastic lifestyle changes for everyone.
His argument is echoed by the recent protests against Heathrow Airport expansion plans and also against the larger issue of carbon emissions by jets. Some of the more militant protestors want jet flights within Britain to be emergency only while others attack Leonardo DiCaprio for doing a documentary about climate change while flying around the planet in a private jet.
Me, I think Wozniak and the technophiles are correct. Technology will have to get us out of this because if it doesn’t, we’re all screwed. So, rather than ban jets and curtail flying, we need to create jets with greatly reduced carbon emissions. And to use that approach in all facets of dealing with climate change and peak oil.
Bob Morris @ Aug 26th 2007 00:59 - Category: Credit crisis ;
Private equity companies that bought out public companies like Chrysler now need immediate cash because of the credit crisis. This does not bode well for the employees of those companies.
It seems that private equity funds (I also call them Kings of Junk) that were hit badly by recent junk bond crash are engaged in violent cost cutting at the companies they now own. That will include lay-offs, unprofitable branch closures and chopping corporations into something that could be re-sold to other hedge funds.
In a highly unusual move, the Fed changed rules last week for big banks so they could borrow billions to prop up their brokerages.
But the cracks keep getting bigger and bigger and there is no way to contain them. I am still expecting the next big shoe to drop: Commercial Real Estate as discussed in the closing remarks of Foolish Concerns, Foolish Optimism, Foolish Logic. There is another big shoe to drop too, and that shoe is jobs.
Bernanke has his hands full and there are simply too many cracks to plug. He will fail.
FYI: Blogs by industry insiders with heavy coverage on the credit crisis. All are highly recommended.
Mish’s Global Economic Trend Analysis
Also check out
Bob Morris @ Aug 26th 2007 00:25 - Category: Unfiled ;
Windows Genuine Advantage servers have been malfunctioning and marking legitimate copies of XP and Vista as counterfeit.That’s right, the program that Windows PCs are forced to contact on a regular basis to prove their copy is legit decided to mark them as pirated instead. Microsoft is reporting the problem is fixed but offers no apology or explanation because, like the Bush Administration, they never apologize for anything. Feh.
As mentioned here before, my next laptop will be a Mac. Rather than create products people genuinely want, Microsoft loads them down with useless bloatware and anti-piracy schemes that backfire. Clearly, they are in decline. As an example, hardcore geeks and long-time Windows users are reporting serious, ongoing, major problems with Vista. Microsoft is quickly losing the core of their support.
From Jim Louderback, retiring editor of PC Magazine
The upshot is that even after nine months, Vista just ain’t cutting it. I definitely gave Microsoft too much of a free pass on this operating system: I expected it to get the kinks worked out more quickly. Boy, was I fooled! If Microsoft can’t get Vista working, I might just do the unthinkable: I might move to Linux.
Do it! I’m running I’m running Ubuntu Linux on one PC and find it preferable to Windows, it’s faster, easier to use, and doesn’t lock up for no apparent reason.
Noted software developer Joel Spolsky says
I’ve been using Vista on my home laptop since it shipped, and can say with some conviction that nobody should be using it as their primary operating system — it simply has no redeeming merits to overcome the compatibility headaches it causes.
Chris Pirillo on Spolsky’s comments
Now, when one of the world’s leading software developers states this (privately or publicly), you have to wonder why I’ve been taking such a beating for my position on Microsoft’s flagship desktop products. Initially, I didn’t complain about Vista or any Office product without always giving Microsoft suggestions for improvement. I only complain about the things I care about - as should you.
But they stopped listening a long time ago - and the Microsoft MVP program is about as effective in influencing product direction as eating graphite makes you a better swimmer.
Why bother with Windows when better, more secure, vastly more stable and less buggy operating systems exist?
Bob Morris @ Aug 25th 2007 00:23 - Category: Immigrant rights ;
There is nothing wrong with having a debate about immigration. But it is deplorable to falsely stereotype and malign millions of law-abiding people because of one’s desire for a particular outcome in that debate.
Bob Morris @ Aug 25th 2007 00:15 - Category: Credit crisis ;
Subprime crisis forces cuts in economic growth estimates
Credit crisis bleeds into retail
Bank of China, the second largest bank inChina, reports heavy subprime exposure, $9.7 billion.
Gosh, wasn’t all this supposed to be contained? That’s what the talking heads said… Condos and commercial real estate are at risk too. I mean, don’t even think about trying to sell a condo in South Florida. Over 65,000 are already for sale, with more being built - not that the new projects have much chance of being finished, most will go broke, leaving unfinished buildings and rancorous lawsuits in their wake. Wall Street whistled past the graveyard this week, but soon enough the goblins will make their appearance again.
Too many will be get mangled by the subprime crisis. Millions will lose homes, other their jobs. It’s more than just in subprime now, all types of mortgages are affected, and credit card interest rates are going up too. Businesses are finding it more difficult to get loans, and those that rely on short-term loans to keep going will get hammered.
Was it greed? Or “irrational exuberance”? There’s always the classic, “This time is different.” But it wasn’t different. The bubble popped just like all previous bubbles have. Suddenly and quickly. One of the biggest problems was leverage. If you buy $1,000 of stock with $1,000, and it drops 15%, you are down $150. If you use that $1000 of stock as collateral to buy $10,000 dollars of stock, and it drops 15%, you are wiped out and owe money to boot. That’s been happening to hedge funds. Except some of them were leveraged 100 times or more. Madness, isn’t it? But it gets worse
Suppose your leveraged hedge fund needs to sell stuff to raise money for the margin calls, but much of what you have is mortgage-derived securities, and right now, no one even knows how to price them much less wants to buy them. So you can’t sell them, even at a loss, even if you want to.
But it’s not just the hedge fund that is hurting then, it’s those who invested in it too. They could be your bank or credit union or retirement fund. It easy to see how this has metastasized from a subprime crisis to a much wider credit crisis.
And it’s really only just begun.
Bob Morris @ Aug 24th 2007 00:24 - Category: Uncategorized Tags: Cuban Five;
Bill Paparian was there on Monday for the 11th U.S. Circuit Court of Appeals hearing for the Cuban Five.
The defense attorneys told the appeals panel that prosecutors had made improper statements and the evidence used to convict was insufficient. “Every type of prosecutorial misconduct ever identified in case law occurred here, in some cases repeatedly so,” said defense attorney Brenda Byrn. The Cuban 5 “were never directed to obtain espionage-level information,” defense attorney Richard Klugh said.
Let’s keep mobilizing and organizing until they are freed.
Bob Morris @ Aug 24th 2007 00:15 - Category: Unfiled ;
Small squads of disaffected men who radicalize one another are more dangerous, harder to detect than lone-wolf radicals, authorities say.
Such self-radicalizing groups are difficult to spot and often have no overt ties with established extremist groups. This L.A. Times articles focuses on Islamist groups in the US, however such “leaderless resistance” has been a tactic of the far right in the US as well.
I suspect this might be what’s happening in Iraq too. The White House constantly says the threat is al Qaeda, yet it’s obvious there are dozens of insurgent groups, and they morph and change sides frequently. So, the problem for the US in Iraq is hardly just al Qaeda, dangerous as they are (and they did claim responsibility for 9/11.) But given the open source warfare approach being used by the insurgents, al Qaeda in Iraq may be only loosely linked with al Qaeda elsewhere, and indeed, that is what reports suggest.
Bush and the neocons appear solely focused on destroying something that doesn’t exist. There probably is no al Qaeda Central Command, and trying to eradicate them in Iraq is chasing ghosts in the mist.
What unquestionably does exists is lots of small groups, loosely affiliated, joining up to end the occupation - and to no doubt enrich themselves through gun running and drug dealing and to slaughter their enemies at the same time. Hardly a vision for peace.
Could there be sleeper cells of Islamists in the US? Sure. Might they want to do us damage? Absolutely. But if force obviously isn’t the answer, and indeed, just makes things worse, then what is the solution? Well, if the U.S. were to leave Iraq and Palestinians had a place to call home, then in my opinion, most of the quite real threat of Islamist extremism would disappear overnight.
Bob Morris @ Aug 24th 2007 00:08 - Category: Unfiled ;
Indeed, where have all the pensions gone? The bosses get platinum parachutes while workers increasingly get nothing.
Bob Morris @ Aug 23rd 2007 12:40 - Category: Credit crisis ;
And the “housing slump” will have been the trigger.
This will impact everyone. Rich, poor, left or right. That’s why I’ve been blogging about it. The social, economic, and political repercussions of the coming recession will be felt for years.
What happens when millions lose their homes and get laid off? We will be finding out.
Bob Morris @ Aug 23rd 2007 08:57 - Category: Credit crisis ;
Mish’s Global Economic Trend Analysis on the Fed lowering rates and opening the discount window.
A well respected source whose opinion I respect offered this viewpoint anonymously: “Basically this is a PR move coordinated by Fed to hide the fact that going to window is emergency move. It hides the fact that some banks have to.”
The implication is that something big is coming down the pike even if we do not know exactly what it is.
Precisely. If the subprime meltdown is so contained then why are the banks borrowing such huge amounts?
Then there’s Sentinel Management. They handle cash accounts for futures accounts and blew up last week saying the subprime mess had caused it. Not so says the SEC, because it now appears Sentinel moved money from client accounts into their accounts then used it as collateral to borrow more. Then the money vanished. Clients will be lucky to get 50 cents on the dollar. It’s a given the principals at Sentinel will go to prison, with a French hedge fund already facing major losses because of them.
Bob Morris @ Aug 23rd 2007 01:16 - Category: Unfiled ;
Just got back from a week in L.A. We were there on businss, and it was odd being back to where I lived for so long before Sue and I moved to CT.
We stayed at a friend’s house. Their cable modem access was a bit flaky (due to cabling out by the street, as it turned out) so I went to Starbucks frequently to go online.
LAX now has T-Mobile access everywhere (the same net provider Starbucks has) and the Phoenix airport has free wifi. LAX also now has lots of free power outlets for charging laptops, cell phones, iPods, etc.
Sooner rather than later, there will be wifi everywhere, and it’ll be as ubiquitous and reliable as landline phones. Imagine what all our gadgets will be like in five years. We’ll look back at what we have now as primitive!
Yet 2 billion people on the planet don’t have access to electricity and struggle to get potable water. The gap between the well-off and poor continues to widen.
And what would be the global warming ramifications if those 2 billion suddenly did get electricity? Just wondering…
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