McCain kicks it Old School
Bob Morris @ Apr 15th 2008 20:17 - Category: Election 2008 Tags: McCain;
Archive for April 15th, 2008
AngryRenter.com says no mortgage bailouts
Bob Morris @ Apr 15th 2008 15:33 - Category: Credit crisis ;
Sure, some bought houses with little or no down with risky variable rate mortgages and are now feeling the pain. But they all weren’t deliberately scamming the system, and buyers, mortgage companies, and investment banks were all part of the bubble. AngryRenter says no one should get a bailout, and maybe they shouldn’t. But what the Fed is really worried about is the counterparty risk for all those sliced and diced mortgages that have been bundled into risky securities then bought, sold, or used as collateral for more trades.
This is why the US government forced the sale of Bear Stearns, who had literally trillions of notional dollars in trades with other entities. If Bear went down, then all those trades go bad too, something which could cause a cascade of failures.
The key point here is these are private trades made within the shadow banking system. They are not insured and unlike the stock market, there is not always a buyer for every seller. If the entity on one side of a trade goes bankrupt, the firm on the other side is stuck with a now worthless trade. Then maybe they start wobbling financially too.
I expect we will eventually have massive government intervention to prop up the real estate market, to prevent areas from turning into ghost towns and to ward off systemic failures.
Barcelona forced to import water by ship
Bob Morris @ Apr 15th 2008 10:47 - Category: Water ;
And will continue doing so until their extremely severe drought lifts.
Former mortgage industry employees can’t find jobs
Bob Morris @ Apr 15th 2008 10:14 - Category: Credit crisis ;
No one wants them, seems there’s a stigma, like they were all greedy pigs. Some internet job postings specifically say “no real estate or mortgage candidates” need apply, something which is certainly discriminatory and probably illegal to boot.
World Bank climate profiteering
Bob Morris @ Apr 15th 2008 05:36 - Category: Climate change ;
How exactly, does this work, you ask?
Quite simply: The Bank finances a fossil fuel project, involving oil, natural gas, or coal, in Poor Country A. Rich Country B asks the Bank to help arrange carbon credits so Country B can tell its carbon counters it’s taking serious action on climate change. The World Bank kindly obliges, offering carbon credits for a price far lower than Country B would have to pay if Country B made those cuts at home. Country A gets a share of the cash to invest in equipment to make fossil fuel project slightly more efficient, the World Bank takes its 13% cut, and everyone is happy.
Except the planet, of course, since this carbon credit shell game does little if anything to mitigate climate change.
