Friday, September 26, 2008

The Root Cause

Bad mortgages caused the banking failure.
The housing bubble was created from bad mortgages.
What caused the housing bubble?

This was the start. Carter signed the Community Reinvestment Act, Clinton enlarged the program, and Bush has had his hand in the mess to.

Then we have Fanni Mae getting mortgages and selling them to banks. They made money off each mortgage they sold, so to make more money, they moved down the income ladder and started pursuing subprime loans.

In 2003 the housing bubble was identified and President Bush did attempt to address it, but the Democrats stopped it.

Then in 2005, John McCain created The Housing Enterprise Regulatory Act of 2005. This bill was going to regulate Freddie Mac and Fannie Mae. The Democrats stopped this one too.

Now the crazy thing is everyone wanted to get poor people into housing they could afford. What the housing bubble did was drive prices up much faster than inflation. All this did was move affordable housing further away from the poor.

Then again in 2007 the bill came back, but Chris Dodd (D) blocked it. Barack Obama also held the bill back. Seems they both, and others, got some sweet mortgages out of it. Probably better deals than the work that has Ted Stevens in Federal Court today.

All the above is a summary of the first half of this. It's packed with information, all of which will probably have no bearing on anyone since I figure about now, everyone has made up their minds.

I was surprised to see that the Republicans tried putting some controls in the mechanism that created the housing bubble as early as 2003. I was pleased and surprised.

Now I'm going to go and watch the rest of the video.

Thursday, September 25, 2008

He's Still Right

government price fixing never works and always leads to failure.

Crisis or no crises. Though, it's easy to sell the first few times in as a fix, if the people are scared enough.

I think parts of the real estate industry are scams. I've paid $500 for a drive by appraisal. Now how do I get a job like that? I've also offered $227,500 on a house and had the appraisal come back at $227,500. Amazing how the appraisals always come back at the value I've offered to buy the house at.

The way I think it works is this: The appraiser figures that if I'm willing to spend an amount of money on a house, then it must be worth the amount of money that I'm willing to spend. But isn't that how it works? At object is worth what someone is willing to pay for it.

How many people bought houses with the intent of flipping it? What do you call someone who makes a bad investment?

Isn't it the homeowners who are upsidedown on their mortgages that are in trouble? More trouble than the banks who've made bad loans? What do you call someone who loans money to a risky proposition?

If we, as a nation, were upsidedown on our car loans, would the Fed Gov't bail out the auto industry? Does that make sense? That is what they are doing.

Now I'm starting to deviate from my original point, that Government price fixing never works and always leads to failure, and want to go off on how the homeowners who made bad choices are worse off than the banks, but since they don't have the organization or lobbying power that the banking industry has, they'll never get gov't action to save them.

Dr. Paul offered to address the issues that make for a weak financial environment and most everyone ignored him. The proposed gov't bailout is, at best, a bandaid, and, at worst, a double whammy for us, more gov't debt that we'll have to pay back with a weaker dollar. Kind of like a man, bleeding to death, trying to give himself a transfusion, figuring that if he can water down his blood, enough, he'll have enough to survive.

Tuesday, September 23, 2008

What's in a Name

Maier stood back and watched Heiki feel the heft of his newly acquired sword.

With his feet in a swordsman's stance, where powerful thrusts, cleaving slices, parrys, blocks, or tactical repositioning were all equally likely Heiki transitioned from one position to another. Many Maier recognized as classic techniques and positions, executed to perfection, but some seemed a bit unorthodox.

An adjacent fruit tree in blossom offered shade, but only the drunken bees who buzzed somnolently took notice of it. Heiki practiced atop a small grassy hill, nearby, enjoying the sun and the breeze that brought the scent of the blossoms.

When Heiki began to put the positions together, transitioning from one to another, Maier realized that the postures he hadn't recognized were transistion states that allowed more choices for the swordsman than traditional technique. His natural grace and agility became more apparent as the speed of his forms increased till he appeared to be dancing.

Heiki hadn't been encumbered by emotions, but he recognized them in others. Wistfully, Maier was looking off into the distance, lost to his thoughts, and it wasn't till Heiki pitched one of his boots (which he refused to wear) and hit him in the shoulder, did he realize that his charge had stopped and been watching him.

"The way you move, the skill and speed, you reminded me of a good friend I'd lost a long time ago" Maier explained.


Maier nodded.

"Battle." The obvious answer.

With a shake of his head, Maier replied, "No, a choice. Shiva once held that sword when he was my friend, but that was when I knew him by a different name."

"Shiva" a grim smile spread across Heiki's face, his eyes narrowed till he could only see death and he began his forms again, this time with a deadly air of commitment.

An age passed, the last form ended and Heiki held his sword between him and Maier as he examined it. The burneshed blade spoke of strength and quality, the edge was honed razer sharp, the hilt had a presence that guaranteed protection for the hand, the twisted double wire wound grip stuck to his hand in such a way that he knew it would never slip if drenched in blood, and, a pommel that seemed lacking some ornate features.

"Why is it called 'Mine'?"

"There is a relationship between the word and the sword."

Heiki turned his wrist and examined the other side of the blade, nodding as to say "go on".

"Speak a verse and slash."

With a sardonic smile, as if he was going to prove him wrong, and a flick of his wrist, Heiki executed a minute feignt with the smallest verse he knew "and Jesus wept".

When Heiki was 5, his father let him drive the car. He was small enough to sit on his fathers lap and big enough to see over the dash and steer. He was surprised at the power he felt and the control of the control of the car as it went down a country dirt road less than 10 mph. It overwhelmed him and if not for the comfort and security his dad's presence offered, it would have terrified him.

And he felt a child, timeless; when you could live a lifetime in a summers day, the warm sun shining, the smell of the country, and more power in his hands than he ever imagined as he spoke words anchored in the voice that created the universe.

"But why the name?"

"Know the verse 'Vengeance is mine, sayeth the Lord'?"

With a nod, Heiki understood the relationship between the Word and the sword.

"He's talking about the sword. It's His instrument of vengeance."

Again, Heiki began a series of forms, this time quoting verse "There will be no more night..."