Wednesday, January 30, 2008

You Walk Away

Foreclosures are through the roof. There were 75% more foreclosures in 2007 than in 2006. Look for 2008 to be even worse.

But what recourse does a family have that bought at the peak and is paying a lot more per month for an "asset" that is depreciating in value? Meet You Walk Away:

I spoke with John Maddux a "senior advocate" with You Walk Away (YWA) about the business. As one might expect it is booming. For $995 one receives a half hour of legal counsel where individual strategies are mapped out and all the laws pertaining to recourse vs. non-recourse loans as well as judicial procedures are explained to the customer. YWA also files the necessary legal papers to stop mortgage companies from calling and informs you immediately of how many days you will be able to stay in the house for free. Should the lender take longer to process the documents, YWA will keep you informed of any extra time.

With the amount of money at stake, the fee seems reasonable for the services provided.
More from Mish:

If banks can make "business decisions" to ignore risks, to lend money with no down payment, and fire people at at the first sign of trouble without any remorse, why shouldn't consumers be able to do the same?

Take a look at previous values on homes now being auctioned. Did not lenders make a business decision to ignore insane valuations placed on those homes?

Indeed they did, and one reason was they could securitize the garbage and sell it to pension plans and foreign investors as far away as Norway (see Citibank SIVs Hit Norway Townships). Is Citigroup about to refund Norway townships for the mess it created?

Another reason banks ignored insane valuations is they thought lucrative fees would more than make up for losses on foreclosed properties. They thought wrong.

As a result, lenders became home owners and are now in hock with the auction business.
This thing is going to stay with us for years. America will be very different when it's all over. I just hope we keep our wits about us and come out the other end stronger and better...

Thursday, January 10, 2008

Unity08 on Health Care

Unity08 is an astroturf organization whose major platform is ... uh... unity I guess. But fundamentally it's an organization whose major purpose is to shape the political debate for Campaign 2008, trying to reverse the slide towards populism. Populism is readily apparent in the platforms of the Democratic candidates, especially Edwards. But this year is especially surprising given the populism seen in the campaigns of some on the GOP side, particularly in Mike Huckabee's campaign but also amongst the Paul crowd (though they don't explicitly endorse traditional populism). Thus there is great angst amongst the "Village" elders that the rabble may actually have a voice in this campaign.

Anyway, Unity08 is a collection of "centrist" politicians that claim that partisanship is hurting the country. They' held a "convention" of sorts in Oklahoma last weekend, rallying around Michael Bloomberg, billionaire mayor of NYC, truly a man of the people. Lately they've been all over the MSM talking about forming an "American" administration, made up of Republicans and Democrats. Kumbaya and all that...

(Aside: Where the hell were these guys in 2000, when the country was truly split ideologically, and the man that made it into the White House got there by losing the popular vote by 500,000 votes but won a 5-4 Supreme Court decision after 5 weeks of legal wrangling? I could see the need for a "compromise" administration then; but Bush took all the marbles and filled the govt with far right ideologues. These guys haven't made a peep the last seven years.)

Anyway, it's looking like it's going to be a Democratic year, and populist sentiments are running high on both sides of the isle. Unity08's job is to undercut populism and shift the debate in favor the big money interests that truly run the country.

Unity is nice and all, but where does Unity08 stand on the issues? I went to their website to find out.

Turns out Unity08 doesn't take a position on any of the issues. Instead, it's all member driven. And some of runs so contrary to "unity" that you might feel like it's 1984.

Take health care for example. The members of Unity08 get to rank the issues, and they've placed health care at the 2nd most important, just behind energy independence. I would agree with that, but I wanted to find out more. The have a number of links under health care, including one that says "solutions to the problems".
This brought me to this Unity08 page, which has a single link to a site that has "good ideas". It's url is Something was telling me that it wasn't a site about Urodela...
Sure enough, my fears were confirmed. The "solutions to the problems" facing health care in this country can be found in the Bishop of Bipartisanship, the Emperor of Unity, Newt Gingrich!!! Under the issues, Gingrich links to "the Center for Health Transformation". If you go back to the Unity08 health care page, you'll see another link to "Health care transformation". Hmmm... transformation... I clicked on the link, and sure enough it also links the Center for Health Transformation. So who is the Center for Health Transformation?

Sourcewatch says this:

Center for Health Transformation (CHT), a think tank founded in 2003 in Washington, D.C., by former Speaker of the House Newt Gingrich as a project of the Gingrich Group, is a for-profit consultancy and membership organization "comprised of corporations and organizations that all have a vested interest in transforming health and healthcare," its website states.

Be sure to take a look at the Sourcewatch page, especially the companies behind CHT. If you're familiar with the health care industrial complex, you'll recognize many of the names.

But what does the CHT stand for? They have a number of initiatives they're in favor of, including promotion of health savings accounts and tort reform. Basically the GOP platform. Some Unity that is.

But if Unity08 were to put together a truly bipartisan ticket, say Sharpton\Tancredo, I may change my mind...

Wednesday, January 9, 2008

Health Care in America

I've seen this figure twice now, so I decided to go to the original article published in Health Affairs, Jan./Feb. 2008), by Ellen Nolte, Ph.D., and C. Martin McKee, M.D., D.Sc., both of the London School of Hygiene and Tropical Medicine.

It's a pretty interesting read. The measure rates of death due to amenable causes in 19 developed nations in 1997-98 and 2002-03. Their criteria for "amenable causes" is:

The selection of causes of death considered amenable to health care is based on our previous systematic review. In brief, for this paper we considered conditions such as bacterial infections, treatable cancers, diabetes, cardiovascular and cerebrovascular disease, and complications of common surgical procedures. We also included ischemic heart disease (IHD); however, in line with accumulating evidence suggesting that only up to half of premature mortality from IHD may be potentially amenable to health care, we here considered only half of IHD deaths to be "amenable." Throughout this paper, the term "amenable" mortality always includes half of IHD deaths.
They found the US was ranked 15th out of 19 in 1998 in our rate of death from amenable causes fr people aged 0-74. in 2003, we slipped to 19th. Dead last.

Here's the rub, though. We actually improved our death rate, but nearly as much as other countries improved theirs. Thus we got lapped. Here's the figure that illustrates the percentage change in death rate from 1998 to 2003:

We improved our rate by about 4%. The country that improved it's rate second worst was Greece, and they managed to improve it by 10.5%. Austria and Ireland managed to improve their rates by about 25%.

They speculate on what could be happening in the US:

The rate of amenable mortality is a valuable indicator of health care system performance, although it is important to note that the underlying concept should not be mistaken as definitive evidence of differences in effectiveness of health care but rather as a an indicator of potential weaknesses in health care that can then be investigated in more depth. At the same time, the findings presented here are consistent with other cross-national analyses, demonstrating the relative underperformance of the U.S. health care system in several key indicators compared with other industrialized countries. The underlying reasons for the observed lack in progress in the United States as a whole are likely to be manifold; however, it is equally clear that an aggregate national figure of amenable mortality as presented here will inevitably conceal large variations in terms of geography, race, and insurance coverage, among many other factors. This was recently demonstrated in the State Scorecard on Health System Performance, which revealed a twofold difference across the fifty states and District of Columbia on the measure of amenable mortality in 2002. It also estimated that if all states achieved levels seen in the best-performing state on this measure, about 90,000 premature deaths might be avoided annually. However, this figure still falls short of the 101,000 deaths that could be avoided if the United States were to achieve levels of amenable mortality seen in the three top-performing countries.
But don't let anyone tell that you we don't have the best health care in the country...

kos on the Clinton Haters...

A good set of comments from General kos-imo about what Clinton hate from the left will bring:

[T]he more assholish her detractors behave, the more you help her. The way she was treated the past few days in New Hampshire was a disgrace, and likely a large reason for her surprise victory. So keep attacking her for bullshit reasons, and you'll be generating more and more sympathy votes for her. Obama's "you're likable enough" was likely worth 2-3 points all by its lonesome self...

The more she's attacked on personal grounds, the more sympathy that real person will generate, the more votes she'll win from people sending a message to the media and her critics that they've gone way over the line of common decency. You underestimate that sympathy at your own peril. If I found myself half-rooting for her given the crap that was being flung at her, is it any wonder that women turned out in droves to send a message that sexist double-standards were unacceptable? Sure, it took one look at Terry McAuliffe's mug to bring me back down to earth, but most people don't know or care who McAuliffe is. They see people beating the shit out of Clinton for the wrong reasons, they get angry, and they lash back the only way they can -- by voting for her.
I think this is probably what made all of the difference. Everyone is all a-buzz this morning about the discrepancy between the exit poll data and the final results in New Hampshire. Yet the exit poll data wasn't that far off, at least as far as Obama is concerned. Matt Yglesias shows here that Obama got pretty much the percentage that he got in the final polling before the election.

What probably happened is that the substantial number of undecideds broke for Clinton at the end because they grew sick about the media taking a giant crap all over her after what happened in Iowa. It's understandable; I wouldn't hesitate to vote for a candidate that doesn't really grab me if meant that Chris Mathews would feel at least little bit like the giant dipshit that he is.

Tuesday, January 8, 2008

Trading on CFC halted?

Just read in forums at Calculated Risk that trading on Countrywide is halted. Bad, bad news. I'll update this if I find the news link. No luck yet...

Update: I still can find news on this. Still looking...

Update2: Yep, trading was halted, but resumed so that CFC could say that there is nothing to BK rumors.


Countrywide resume trade


NEW YORK (Reuters) - Countrywide Financial Corp shares recovered some of their earlier losses after the largest U.S. mortgage lender rejected market speculation on Tuesday that it was planning to seek bankruptcy protection.

In trading following the end of a trading halt, the shares were down $1.00, or 13.1 percent, at $6.64 on the New York Stock Exchange. They had earlier fallen to $5.76.

Problem is, this story is a few hours old. CFC is now down over 30% right before the end of trading. Ouch.

Big News on the Big $hitpile

This ain't good
Countrywide Financial tells judge it 'recreated' letters -NYT
By MarketWatch
Last update: 11:25 a.m. EST Jan. 8, 2008

The Countrywide Financial Corp. fabricated documents related to the bankruptcy case of a Pennsylvania homeowner, court records show, raising new questions about the business practices of the giant mortgage lender at the center of the subprime mess, The New York Times reported on its Web site Tuesday.

The documents - three letters from Countrywide addressed to the homeowner - claimed that the borrower owed the company $4,700 because of discrepancies in escrow deductions. Countrywide's local counsel described the letters to the court as "recreated," raising concern from the federal bankruptcy judge overseeing the case, Thomas P. Agresti.
CFC is down 15% right now to $6.50 per share. Think Bank of America is rethinking their stake in this stinker?

Hard to imagine the a company led by such an upstanding, ethical CEO like Tan Man Mozillo would be caught fabricating legal documents. Hard to imagine...

Monday, January 7, 2008

The Bottom 40% vs. The Top 1%

Yep, I'm still digging though the CBO data released a few weeks ago, so here's a little more on income inequality. I decided to put together a graphic which will clearly illustrate just how much income inequality has changed since 1979. Some of this I mentioned in a previous post, but I felt I needed to make a separate post to drive home this point.

In 1979, the average household from the Top 1% earned $326,000 in after-tax income. The average income for 40 average households from the bottom 40% was $870,000. In other words, 40 typical households in the bottom 40% would split $870,000 40 times for $21,700 each.

In 1979, the average Top 1% household earned 15 times more than the average Bottom 40% household. Still, when you add the total income accrued by the Bottom 40% in 1979, they earned almost three times as much as the Top 1%.

So how have things changed since then?

(Click on image for larger version)

If you read any of my previous posts, you know that income growth has skyrocketed for the Top 1%. Currently, the average after-tax income for the Top 1% is $1,071,000. That is greater than if you were to add up the average 2005 income for the Bottom 40%, which is only $980,000. And remember, that income needs to be split 40 ways, with only $24,500 going to each household in the bottom 40%. In 2005, the average Top 1% household earned nearly 45 times as much as the average bottom 40% household.

The average Bottom 40% has grown almost 13% since 1979. For the Top 1%, the average household income has grown a whopping 228%.

Income inequality was bad in 1979. It has only gotten much worse since then.

Tuesday, January 1, 2008

EtOH induced coma

The first candidate to come out against limitless New Year's Eve shots taken from giant ice sculptures with little channels in them that lead to worshiping at the porcelain altar till daybreak gets my vote.

Rough night last night; even rougher day today.