2008 - %3, October

Mortgage Hell

| Thu Oct. 23, 2008 11:41 AM EDT

MORTGAGE HELL....Sheila Bair, head of the FDIC, is working on a plan to help homeowners stuck with mortgages they can't afford. One problem she faces is that any plan that helps genuinely distressed homeowners would almost certainly help plenty of others who just feel like lowering their payment terms. But even if we grit our teeth and accept that, there's another problem:

Renegotiating troubled mortgages — as opposed to paying them off — is difficult because most have been packaged into securities and sold off to multiple investors. Mortgage servicers — companies that collect payments and work with homeowners — typically act on behalf of those investors, who often have competing interests. Getting servicers to rework mortgages has been a tough slog for the government under its existing programs, which encouraged but didn't require industry compliance.

Ms. Bair's proposal is designed to overcome some of these problems by significantly raising servicers' incentives to cooperate. The government would agree to share a portion of any losses on a new, more-affordable mortgage, should it go into default.

I suspect that this consideration was behind John McCain's plan to buy up mortgages at face value and replace them with new, cheaper mortgages. This may be a windfall for investors, but it also probably means that you don't have to negotiate a separate agreement with all the noteholders who own a piece of the securities. The terms of most (though not all) mortgages allow them to be repaid at face value at any time, which means you don't have to get the approval of all the noteholders to do so.

At least, that's my guess. It would be nice to read a definitive explanation of how all this works and what the problems are with renegotiating sliced-and-diced mortgages, but I haven't seen one yet. If anybody comes across something authoritative, let me know.

Advertise on MotherJones.com

GOP Gets Catty

| Thu Oct. 23, 2008 9:11 AM EDT

I told you it was going to get fun.

Here's John McCain, slamming George W. Bush and the Republican Congress in the Washington Times today:

"We just let things get completely out of hand," he said of his own party's rule in the past eight years...
"Spending, the conduct of the war in Iraq for years, growth in the size of government, larger than any time since the Great Society, laying a $10 trillion debt on future generations of America, owing $500 billion to China, obviously, failure to both enforce and modernize the [financial] regulatory agencies that were designed for the 1930s and certainly not for the 21st century, failure to address the issue of climate change seriously..."
"I think, frankly, the problem was, with a Republican Congress, that the president was told by the speaker and majority leaders and others, 'Don't veto these bills, we need this pork, we need this excess spending, we need to grow these bureaucracies.'"

And, naturally enough, Republicans are slapping back. Anonymously, of course. "One of the most senior Republican strategists in the land" tells Politico:

"Lashing out at past Republican congresses instead of Pelosi and Reid, and echoing your opponent's attacks on you instead of attacking your opponent, and spending 150,000 hard dollars on designer clothes when congressional Republicans are struggling for money, and when your senior campaign staff are blaming each other... 10 days before the election, you're not doing much to energize your supporters."

Let the finger-pointing, name-calling, and back-stabbing begin.

Conversation of the Day - 10.23.2008

| Thu Oct. 23, 2008 2:10 AM EDT

CONVERSATION OF THE DAY....Between Rahul Dilip Shah and Shannon Mooney, a pair of analysts at the credit rating agency Standard & Poor's, chatting via IM back in 2007:

RDS: btw: that deal is ridiculous

SM: I know right ... model def does not capture half of the risk

RDS: we should not be rating it

SM: we rate every deal

SM: it could be structured by cows and we would rate it

This was made public as part of a House committee hearing today. The New York Times reports on other revelations:

Among the documents uncovered by the committee was an internal board presentation delivered by [Raymond] McDaniel to Moody's directors in October 2007. According to the presentation, he told his board: Analysts and managing directors "are continually 'pitched' by bankers, issuers, investors." At times, he conceded, "we drink the Kool-Aid."

....Mr. Waxman's committee also cited an internal e-mail exchange between [Frank] Raiter, who had been asked to rate a collateralized debt obligation called "Pinstripe," and Richard Gugliada, an S.& P. managing director. Mr. Raiter had requested highly detailed data about each individual loan, known as loan level tapes, to assess the creditworthiness of the loans in the security, but Mr. Gugliada wrote: "Any request for loan level tapes is totally unreasonable!!! It is your responsibility to provide those credit estimates and your responsibility to devise some method for doing so."

Mr. Raiter responded: "This is the most amazing memo I have ever received in my business career."

Kinda reminds you of all those Enron emails and phone conversations gloating over how they'd created the California energy "crisis," doesn't it. Good times.

Mormon Church GOTV for Prop 8: "Do All You Can"

| Wed Oct. 22, 2008 11:27 PM EDT

Another night in Oakland, another round of Prop 8 picketing. This time a couple dozen people spread out on each of the four corners at MacArthur and High Sts. in east Oakland, California leading the fight against gay marriage. The scene was, oddly enough, jumping. Lots of teenagers, some grandmas, cheering, each with a sign. The most popular were "Prop 8 = Free Speech" (that 'equal' is making it into the anti-gay marriage push holds its own irony), and "Honk if you Support Prop 8" (the intersection was as loud as a a Manhattan thoroughfare). Detractors, those with No on Prop 8 signs and vocal drivers provoked screaming ("God created Adam and Eve, not Adam and Steve!"), middle fingers out of car windows, lots of pointing against windshields, a real show of humanity.

I talked to a few picketers and found out they're all from area Mormon churches. They've been picketing every night at various spots across the Bay Area. One young woman, Patricia, who's 18, said she and her church go to a different intersection most every night. I asked if she was going to vote. "Yeah, I'm voting, yes on Prop 8." Who are you voting for for president? Her response might be what surprised me the most, after the jump.

VIDEO: On Hardball, I Explain Why Sarah Palin Is a Socialist

| Wed Oct. 22, 2008 10:05 PM EDT

Who's the most socialistic governor in the United States? You betcha--it's Sarah Palin. That's what I said on Hardball (video below). But before we got to a highfalutin' discussion about ideology and the campaign, Chris Matthews, conservative radio talk show host Heidi Harris, and I discussed the troubles of GOP Republican Michele Bachmann, who might lose her seat because she played Hardball last Friday and lost. Bachman calling Democrats "anti-American," Palin spending $150,000 on clothes (which I discussed earlier on MSNBC)--these days, for left-of-center pundits, it's as easy as shooting pit bulls in a barrel

Election Pool

| Wed Oct. 22, 2008 8:28 PM EDT

ELECTION POOL....Do Republicans really think they might lose 34 seats in the House? Wow.

And as long as we're on the subject, it's time for predictions. There are three categories this year:

  • Winner and total electoral votes for president.

  • Composition of the House. Current composition is 235-199-1.

  • Composition of the Senate. Current composition is 49-49-2.

I suck at this, but I'll predict (a) Obama with 310 electoral votes, (b) 250-185, and (c) 55-43-2. Leave your predictions in comments. Winner gets a free subscription to Mother Jones.

Advertise on MotherJones.com

Palin and McCain

| Wed Oct. 22, 2008 7:55 PM EDT

PALIN AND McCAIN....Sarah Palin told James Dobson today that John McCain is 100% committed to the Republican Party platform on abortion. Marc Ambinder comments:

If McCain is going to implement it — something of which Palin is convinced from the bottom of her heart — then that means that McCain will support a constitutional amendment to ban all abortion (including those cases where the mother was raped or was the victim of incest), a constitutional amendment banning gay marriage, and he will oppose government-sponsored embryonic stem cell research.

Either Palin trying to mislead Dobson, equivocate, or perhaps [she] doesn't know what her running mate believes. McCain opposes a constitutional amendment banning gay marriage.... He supports embryonic stem cell research...he opposes a constitutional amendment banning all abortion.

Hmmm. Here is NBC political analyst Chuck Todd's impression of a joint McCain-Palin interview conducted today by Brian Williams:

There was a tenseness....I couldn't see chemistry between John McCain and Sarah Palin. I felt as if we grabbed two people and said "here, sit next to each other, we are going to conduct an interview." They are not comfortable with each other yet.

Let's summarize. Palin doesn't know McCain's own positions. Earlier this week she criticized his robocalling messages. The conservative base is practically bursting at the seams waiting to dump McCain after November 4th and embrace Palin as the future of the party. And to top it all off, it has to be hellishly embarrassing to sit beside her during an interview and be forced to pretend that she's talking like an actual adult while she's spouting her usual stream of index card nonsense.

So, yeah, he's probably not comfortable with her yet. I suspect McCain knows perfectly well what's in store from the Palin camp after they lose the election. Loyalty to her mentors, after all, is not exactly her strong suit.

Top 5, October 22: New Music

| Wed Oct. 22, 2008 7:01 PM EDT

mojo-photo-top5-1022.jpg

In this edition, Japanese dream-pop, dubstep new wave, Icelandic drum festivals, stoopid fresh Baltimore rave jams, and a tribute to Michael Jackson. No, I'm not making any of that up.

1. Shugo Tokumaru – "Parachute" (from the album Exit on Sony BMG)

This Japanese singer-songwriter has apparently been making his delicate, '60s-influenced ditties for a while now, but his work is finally starting to be available in the US. "Parachute" evokes psychedelia without getting too crazy, even though it sounds like there are about 100 different instruments being played here.

2. Version Big-Fi – "Blue Monday" (New Order cover)
Dubstep's synthetic take on the traditional reggae rhythm creates menacing, apocalyptic sounds perfect for our anxious times; oddly enough, "Blue Monday's" abject grief is a perfect counterpoint. While versions of the omnipresent "Monday" are a dime a dozen, this is something special, although not without precedent: New Order's own brooding cover of Keith Hudson's "Turn the Heater On" for a John Peel session proved the band had a reggae streak themselves. (mp3 download at versionbigfi.com)

3. Björk & Thom Yorke – "Nattura" (single)
Shouldn't they just have called themselves, er, "Byörke"? Anyway, somebody let these crazy kids loose in the drum closet, and not surprisingly, the resulting tracks makes Radiohead's recent output sound like High School Musical. I can't even discern a time signature: 2/4 alternating with 7/8, maybe? But the song's purpose as a charity single for the environment echoes its weirdly compelling urgency: in Björk's world, Nature is not cuddly seals and pretty flowers, but a rumbling wave of unfathomable forces that will overwhelm us if we don't step lightly. (purchase on iTunes or listen while watching vintage Björk footage here)

The Obama Chronicles

| Wed Oct. 22, 2008 6:46 PM EDT

THE OBAMA CHRONICLES....Michael Ledeen is worried about Barack Obama:

I have nothing against hanging out with Marxist radicals. Some of my best friends are still Marxist radicals. I learn from them, even though I don't agree with them very often. But what's alarming about Obama is that he seems to have predominantly radical friends.

....And that pattern of behavior seems to me...to be a harbinger of the ideological nature of an Obama presidency....I fear that one of the catastrophes of an Obama Administration would be a high density of intellectual radicals, and not just on domestic policy, not just an increase in self-destructive political correctness in the schools and the media (the stifling of dissent in talk radio, etc. etc.), but also in foreign policy, where, as Andy tells us, Obama is a fan of dangerous characters like Odinga.

Remember way back in....oh....February? The conservative conventional wisdom at the time regarding Obama was remarkably sanguine. Sure, sure, he was a liberal, but he was thoughtful, cautious, nonradical, and always seemed willing to take the other guy's side into account. If this really did turn out to be a Democratic year — well, we could do a lot worse than Barack Obama.

Now, a change of heart was always in the cards. Once the campaign really heated up we'd hear about his likely Supreme Court nominations, his liberal voting record, his elite Ivy League background, etc. etc. That's all in a day's work. But it's not what happened. The conservative intelligentsia may not be quite willing to baldly support the "Obama is a secret Muslim" trope — that's a little too....common — but a significant chunk of them really, truly seem to believe that Obama is a Manchurian candidate of some kind. That he's a genuine 60s-vintage radical leftist hiding behind a carefully constructed, smooth-tongued exterior. And much like the John Birch Society conspiracy theorists of the same era, their best evidence of this is the very fact that he's thoughtful, cautious, nonradical, and always seems willing to take the other guy's side into account. Just look at his advisors — or should I say, "advisors"? His economic team is headed by Austan Goolsbee, Jason Furman, and these guys. His foreign policy team? Susan Rice, Tony Lake, and these guys. Domestic policy? David Cutler, Jason Grumet, and these guys. Of course, this is all a front for the rubes, deliberately designed to piss off guys like David Sirota and lull guys like David Broder into narcotic acquiescence. It's very, very clever.

But not quite clever enough. Despite a full quarter century of carefully hiding his radical views from the public while he ascended the political ladder, he screwed up. He palled around with Bill Ayers. He spent 20 years in an America-hating black nationalist church. He supported an Islamofascist opposition leader in Kenya. He approved grants to a guy who promoted Maoism in American schools.

Those seem like odd mistakes for a savvy guy like Obama to make if he was otherwise so good at hiding his inner radicalism, don't they? And yet, a lot of conservatives really seem to believe this stuff. Obama is a crypto-Marxist. A crypto-black nationalist. A crypto-appeaser. Everything you think you know about him is just a mask, the public side of a very careful, very deliberate, 25-year act. And nobody gets it except for us. Isn't that always the way?

Next stop: Arkham Asylum. Or, more likely, membership in the same loony bin groups that thought Bill Clinton was dealing blow out of Mena when he was governor of Arkansas. I wonder which crazy billionaire is going to bankroll the Obama Chronicles when January 20th rolls around?

Stream the New Guns N' Roses Track If You Dare to Face Its Super Rocking Thunderosity

| Wed Oct. 22, 2008 4:16 PM EDT

mojo-photo-axlroseold.jpgWas that convincing? Because it was a lie. Sure, there have already been enough leaks of this to flood a low-lying country, so this whole "official release" thing is a bit anticlimactic, but yes, the new G N' R song, the title track from the album Chinese Democracy, will be delivered to radio tomorrow. It's also been posted on the band's Imeem page, which means I can do this:

mojo-photo-gnrchinesecover.jpgThe album's wicker basket-y cover art is already getting mocked, although so far you can only see it in thumbnail form at Best Buy's web site. The retailer will, by the way, be the exclusive provider of the physical CD (and, it seems, vinyl) to potential buyers, whoever they may be.