Housing Doom

“He who defends everything defends nothing.” - Frederick the Great

June 29th, 2009

Crack of Doom: Twist Is On Vacation

 

It’s Monday, and I’m on vacation- sort of.  I’m in New York helping some family move, and the new place is without internet until Friday.

If there’s anything that we should know, drop us a line or feel free to post a comment here.  This is an open thread. In the meantime, I’ve got to figure out where I left the packing tape- I’ve got a bunch of boxes to pack!

May 10th, 2009

Happy Mother’s Day

It’s Mother’s Day, and with luck, I’m getting breakfast in bed, some handmade cards, and perhaps something made out of popsicle sticks.

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May 9th, 2009

The Great Federal Land Heist

While I support protecting the environment, I don’t think the federal government needs to seize private property to do it: [Hat tip Freedom's Phoenix!]

The excuse for this seizure is:

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May 4th, 2009

Crack of Doom: Beyond Housing

‘[The sky] was sullen, streaked and livid, and [Arthur Dent] reflected that it was the sort of sky that the Four Horsemen of the Apocalypse wouldn’t feel like a bunch of complete idiots riding out of’

Click the pic to go to the CBC photo gallery of the recent Halifax Wildfires.  Above is a detail of photo 2 — "The fire lights up the Halifax skyline in this photo taken from the Mic Mac Mall April 30.  (Submitted by Cathy Murray)"

Meanwhile, swine flu continues to be an issue in Nova Scotia and the Halifax area.[1] Weirdly, Doom’s stale post on the issue continues to be a top choice for Google searches on AH1N1.

When I first came to Housing Doom in mid-’06, my main concern was accounting rule SFAS 140, which allowed Fannie Mae and Freddie Mac to hide much of their accounting risk in off-balance-sheet "QSPEs."  Recent events [2] have made a mockery of this, because the two big GSEs have been effectively (if you’ll pardon the expression) nationalized.  Just look at our NY Fed H.4.1 topic and you’ll see a thoroughly unnatural constant level of foreign central bank holdings of Agency Debt extending back over a third of a year.

With American mortgage finance now subject to control from a command economy in Washington, most of the topics that I came here to blog about have effectively (there’s that word again) evaporated.  In retrospect, I think September 18, 2008 sent us into the next Kondratiev phase, and the topics I had been following basically left current events and became history.

I’m going beyond housing now, into studies some of which were strongly inspired by my experience here but, as an astute Doomer recently communicated to us, go well beyond our present mandate.  The gang at the Castle has enthusiastically supported my housing blogging efforts, and I owe a debt of gratitude to Doom commenters, especially the tough ones.  Beyond Doom, my blogging colleagues have been a great inspiration.  Several of them were important supporters.  Of these, the one I would like to single out is the late Doris Dungey, with whom I exchanged only a precious few e-mails, but who generously mentored this entire blogging sector.  You others still with us know who you are, and thank-you very much.  Of course it’s to twist and the members of her family, who do such wonderful work behind the scenes of this page, to whom I again owe a great debt of gratitude.  It’s been a blast :)

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April 17th, 2009

And yes I did say slavery

Mike made the point [13] that most people in developing countries are more exploited and miserable than the typical American, mortgage crisis or not. He has a point. I know just what it means to be able to buy bananas for 69 cents/lb at the local supermarket. It’s just that this level of exploitation seems to be slowly creeping into the middle class of the heartland. There is a famous story about the "boiling frog". The allegorical moral [11] is that if you put a frog into hot water it will hop out, but if you heat the water slowly it will never take alarm and you can boil it. For years it’s been clear (at least to me) that a similar process was at work with the steadily rising levels of debt in the U.S. The inexorable pressure on families is mostly happening quietly and in private, one payment, one notice at a time. Hopefully Doom can help people see their own stories as part of a larger pattern.


FIRST POSTED WEDNESDAY SEPTEMBER 13, 2006


During the course of a Wednesday morning radio interview [1] with Twist, host Charles Goyette [2] made an interesting remark. "It’s the buyer’s fault, after all," he said, implying that home buyers, whether investors or homeowners, are grownups and responsible for the obligations they enter into. Regular reader "Mike" made a similar point [3] earlier when he took me to task for using the "S" word (slavery) [4] late last month to describe the likely fate of many middle class borrowers should they actually have to pay the principal and interest on the loans they are saddled with now that the bubble has burst. Although my analysis is still very sketchy, I feel the situation for Joe Sixpack is sufficiently serious that the word slavery is not out of the question. Be warned that what follows is going to read more like a sermon than an argument. That the distressed borrowers and their families must not be called to account beyond a certain point, laying aside the practicalities, is simply an aspect of certain "bleeding heart" [5] tendencies that I will also try to justify.

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April 17th, 2009

Don’t Look Now But We Are All Iceland

… Iceland is confronted by more powerful nations, headed by the United States and Britain. They are unleashing their propagandists and mobilizing the IMF and World Bank to demand that Iceland not defend itself by wiping out its bad debts. Yet these creditor nations so far have taken no responsibility for the current credit mess. And indeed, the United States and Britain are net debtors on balance. But when it comes to their stance vis-à-vis Iceland, they are demanding that it impoverish its citizens by paying debts in ways that these nations themselves would never follow. … [1]

The Book of Noah (the bits after the Heritage USA thrill ride part at the beginning) provided some timely advice against invading Iraq that nobody really paid attention to. It’s urgent that we all now note that THE BIG GUY HIMSELF came down specifically to register HIS OPINION about stuff like the above:

Then Peter came up and said to him, "Lord, how often shall my brother sin against me, and I forgive him? As many as seven times?"
Jesus said to him, "I do not say to you seven times, but seventy times seven.
"Therefore the kingdom of heaven may be compared to a king who wished to settle accounts with his servants.
When he began the reckoning, one was brought to him who owed him ten thousand talents;
and as he could not pay, his lord ordered him to be sold, with his wife and children and all that he had, and payment to be made.
So the servant fell on his knees, imploring him, ‘Lord, have patience with me, and I will pay you everything.’
And out of pity for him the lord of that servant released him and forgave him the debt.
But that same servant, as he went out, came upon one of his fellow servants who owed him a hundred denarii; and seizing him by the throat he said, ‘Pay what you owe.’
So his fellow servant fell down and besought him, ‘Have patience with me, and I will pay you.’
He refused and went and put him in prison till he should pay the debt.
When his fellow servants saw what had taken place, they were greatly distressed, and they went and reported to their lord all that had taken place.
Then his lord summoned him and said to him, ‘You wicked servant! I forgave you all that debt because you besought me;
and should not you have had mercy on your fellow servant, as I had mercy on you?’
And in anger his lord delivered him to the jailers, till he should pay all his debt. So also my heavenly Father will do to every one of you, if you do not forgive your brother from your heart." - Matthew 18:21-35

Hat to to twist for pointing out the importance of the CounterCurrents article.  Professor Hudson has written some really profound stuff, and Doomers should seriously consider reading his whole article and other resources at his personal site.

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April 14th, 2009

Implode-O-Call Wednesday To Conference With Mike Morgan On Blogger Free Speech Effort

Something for Doomers to think about …

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ML-Implode To Conference With Mike Morgan (GoldmanSachs666.com) On Blogger Free Speech Effort

by Aaron Krowne

ML-Implode will be present on Mike Morgan’s Wednesday, April 15th conference call (details below), which is being arranged to kick off organization efforts in response to the Goldman Sachs attack on www.GoldmanSachs666.com . Goldman Sachs sent Morgan a cease and desist letter. Morgan responded by filing a Complaint in the United States District Court against Goldman Sachs. Aaron Krowne and other representatives and volunteers from ML-Implode will be in attendance on the conference call. We encourage everyone to attend the conference call or listen to the recording that will be posted online.

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April 13th, 2009

Goldman Sachs vs Mike Morgan: Lese Majeste comes to Wall Street

There isn’t much likelihood you’d get the two confused, as GoldmanSachs666, the blog, is devoted to the notion that Goldman Sachs, the bank, secretly created the current financial crisis through neglect or design. … Yet a cease-and-desist letter sent to Morgan last week from a law firm retained by Goldman Sachs wants his blog taken down[1]

Even Fox can see what’s coming, and they don’t like it one bit.

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April 12th, 2009

The Future is in Good Hands

One of the M cousins has a birthday today …

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April 8th, 2009

Freedom 2.0 — AP versus Google is Booting the Future

As we rebuild our economy, I do hope we keep in mind the value of openness, especially in industries that have rarely had it. Whether it’s in health care reform or energy innovation, the largest payoffs will come not from what the stimulus package pays for directly, but from the huge vistas we open up for others to explore. [1]

Monday was the 40th anniversary of the internet. And the text above is from an Op-Ed in that day’s NYT, written by the author of R.F.C.1, the very first permanent record of its development. It was indeed an exercise in openness, paradoxically enough. I was there for some of it, along the edges, working as a civilian for the Canadian Navy. We depended critically, for example, on Graphic User Interface (GUI) software developed on Multics by Ford researchers who gave it to us for free, and they (and the rest of the community) received PL/I code improvements that we returned to the collective. The net result was extended into Unix and C, among many other benefits without which today’s world would be hard to envision.

Monday also marked the start of another discussion,[2] this one an effort to enrich the business model of America’s newspaper industry by better protecting their intellectual property rights.

Taking aim at the way news is spread across the Internet, The Associated Press said on Monday that Web sites that used the work of news organizations must obtain permission and share revenue with them, and that it would take legal action against those that did not.

It has probably not escaped the notice of Doomers that what I have just done is a clear example of what AP is credibly threatening to suppress.  Indeed our customary way of following stories like this would seem to put us on a collision course with them.  How can we balance intellectual property rights, my right to free speech and the public’s right to benefit from the efforts of us both?

AP was hardly going to target a site like Housing Doom, they would have just looked silly. So their #1 target was Google.  The search engine giant is the news aggregator par excellence and, let’s face it, the principal enabling tool in my years-long study of US mortgage finance.  Just about every researching blogger depends critically on the search sector every day.  However, Google itself is obviously trying to do the right thing by content providers, as their CEO Eric E. Schmidt was at pains to point out [3] in his keynote speech to a newspaper publisher’s conference yesterday.  Indeed, the timing of AP’s attack the day before could hardly have been a coincidence.

Any open controversy reverberated little more than a soggy newspaper hitting a doorstep. Mr. Schmidt’s speech closing the annual meeting of the Newspaper Association of America here was a lengthy discourse on the importance of newspapers and the challenges and opportunities brought about by technologies like mobile phones.

His speech was followed by polite questions from industry executives that only briefly touched upon a perennially sore point: whether the use of headlines and snippets of newspaper stories on Google News is “fair use” under copyright law or a misappropriation of newspaper content.

So on the third day of this controversy, the biggest players seem to be settling into a long delicate struggle over great piles of money.  But “when elephants fight, the grass gets trampled.”  Bloggers like us are caught in the middle, left to comment, analyze, and occasionally express outrage.[4]

After failing to understand how to squeeze money through the Internet’s series of tubes, Associated Press Chairman “Willie Dean” Singleton is now shaking his fist at anyone that dares to mention one of its articles. Here’s why the venerable news organization’s approach will only make it more vulnerable to online news.

Traditional news organizations relished the days when it had one-way flow of information into people’s homes. They didn’t have to worry about just anyone discussing their ideas or challenging them in public.

The Internet has opened up millions of outlets where individuals can share their view at a very low cost of entry. It turns out that people have truly insightful views on the world around them and want to learn and share the latest news.

A lot of electrons [5] [6] [7] … (many more) … have already been shed on this issue since AP raised the temperature earlier this week.  And I’ve got some pretty serious sympathy for creator’s rights.  After all, my kid brother authored a key manifesto in this area of intellectual property over 20 years ago.  That’s one reason I was especially interested in this post [8] that pointed out that AP itself is an aggregator of sorts.

I’m not going to sweat AP’s search for rules of engagement for one simple reason (Techmeme, AP statement): I link to the real source material, which more often than not is a press release. On any given day you can easily bypass AP. And if the AP wants to find a better subscriber business model it needs to adhere to two words: Add value. Is AP trying to protect its “industry’s content” or PR Newswire’s?

Getting paid for valuable electrons is a tough and unsolved problem.  In the context of computer software, I spent a frustratingly large proportion of my career managing licenses and trying to do the right thing by the folks who were supplying us with intellectual property.  Indeed, towards the end of my career I was managing BitKeeper seats at our site, including e-mails back and forth with Larry McVoy and his staff.  That particular suite of software was a wonderful product, but Larry never really figured out how to supply his constituency and feed his family at the same time.  The players in AP vs Google need to review the disasterous outcome of that effort and the attending flame wars before they get too deep into shooting news aggregators.  There Be Dragons.

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