Prometheus 6

If the current crisis deepens, Treasury's $250 billion passive investment -- which is less than a quarter of total bank capital in the United States -- could grow. And having said yes to banks, the government might find it hard to say no to buying stakes in other industries that also show up, cap in hand, or to other types of debt.

Think the Bailout Is Radical? Just Wait.
By Greg Ip
Sunday, October 19, 2008; B01

In the past month, the unprecedented has become routine. The Treasury Department and the Federal Reserve, headed by Republicans, have intervened in the U.S. economy to an extent that would have shocked liberals a year ago. The Treasury is now a major shareholder of U.S. banks, the Fed is a principal lender to private business, and the American taxpayer stands behind huge swaths of the financial system, from home mortgages to business bank accounts. "Socialism has now washed over free-market capitalism," Sam Donaldson of ABC News recently sighed.

Momentous? Sure. Socialism? Hardly. Breathtaking though these past weeks have been, they're nothing compared to what both the United States and other Western countries have experimented with in the past. But even though they have often departed from free markets in response to crisis, they eventually find their way back. Let's not get hysterical about changing the very nature of our system over the long haul. But in the meantime, don't rule out even more radical action.

Although many universities say that they take grading scales' differences into account when making admissions decisions and that they also look at such factors as class rank, which would be unaffected by the changes Fairgrade advocates, there are financial benefits, beyond scholarships, to having higher grade-point averages. Student discounts on car insurance, for example, are often determined by GPAs, and the savings can be significant. In Virginia, Geico offers students who maintain a 3.0-or-above GPA discounts of up to 15 percent, company spokeswoman Chris Tasher said.

Grading Bar Too High, Loudoun Parents Say
It Takes a 93 to Earn an A; 84 Gets a C
By Michael Birnbaum
Washington Post Staff Writer
Sunday, October 19, 2008; C06

A parent-led campaign to overhaul Fairfax County's grading scale has sparked a similar effort in neighboring Loudoun County.

The Fairgrade group is seeking to lower the Fairfax school system's cutoff for an A from 94 points to 90 on a 100-point scale, arguing that the higher bar hurts competitiveness in college admissions and scholarships. Now the effort has traveled up the Potomac River as Fairgrade Loudoun tries to make a similar change to the Loudoun school system's 93-point A.

Virtually every emergency measure over the past few weeks has had secondary and sometimes unpredicted effects, according to economists, and this is one of the key dangers in the weeks ahead, as the government issues more short-term loans to corporations, buys toxic securities and invests in banks.

One of the first examples of unintended consequences came as Lehman Brothers filed for bankruptcy protection. The bank's fall spurred investors to pull out of money-market mutual funds, many of which were tied to Lehman debt. Fearing a run on money-market funds, the Treasury on Sept. 19 announced it would guarantee these funds.

That made money-market investors feel better. But in turn, it led community bankers to erupt in protest as they saw investors pulling out of their bank accounts to invest in money-market funds -- which always paid more and now were just as safe.

"The unintended consequence would have been a run on the banks," said Ken Guenther, former chief executive of the Independent Community Bankers of America.

Financial Rescues Can Set Off New Problems
By Peter Whoriskey and Zachary A. Goldfarb
Washington Post Staff Writers
Sunday, October 19, 2008; A01

If there was one thing policymakers could agree on during the recent economic turbulence, it was that interest rates on U.S. home mortgages ought to come down, and fast. But as the government stepped in recently to shore up the nation's banks, those rates went up.

Chalk up another case of unintended consequences.

Pioneering Black Dancer Found Homeless On New York Streets
By admin on Oct 17, 2008 in Case Studies, Featured

This is the second in a series of case studies examining the root causes of homelessness by investigating the circumstances and history of specific individuals in hope of bringing some level of understanding and recognition of anyone’s potential vulnerability.

In March of 1998 a homeless 71-year-old African-American man was discovered in the streets of Brooklyn, New York. Disorientated, his feet frozen and barely able to stand, he was taken by paramedics to Kings County Hospital Center where he was diagnosed as suffering from dementia.

Fifty years previous and life had been very different for Arthur Bell. In the early 1940’s, Bell had been attending dance classes at the top black dance school, run by Katherine Dunham. In 1945, he performed the role of ‘The Boy Possessed’ in Carib Song, a Broadway show with a black cast, choreographed by Dunham.

McCain Using Same Robocall Firm That Helped Smear Him In 2000
October 17, 2008 04:29 PM

In his efforts to attack Barack Obama, John McCain appears to have turned to the same political consulting firm that was responsible for spreading vicious smears about the Senator during the 2000 South Carolina GOP primary.

Seems Ta-Nehisi has discovered one of the many reasons you can't take John McWhorter seriously...he must lie at least once per article.

Mike Lunsford says he got the idea after an Obama supporter in New York put up this display of a Obama mannequin being chased by a figure of John McCain wearing Ku Klux Klan robes.

I don't have a Lexis/Nexis subscription, so I have no way of checking to see if anything like this was ever reported. It would have to be for this shit-for-brains to see it in Villager's neighborhood.

And a note to the TV station that reported it: if you're going to pass around Javascript embed codes, it's up to you to make sure the autoplay is turned off like it is on your own page. Otherwise no one will use it.

National Discussion About Anti-Obama Display

Thousands of people across the United States are discussing race and politics after TV stations, newspapers, and political blogs picked up the story of a Fairfield man's anti-Obama display.

Mike Lunsford hung the display at a home at Symmes and Hicks Road in Fairfield this week.  His neighbors called Local 12 to express their shock, saying the display is racist and offensive.

But Lunsford, who spoke to Local 12's Shawn Ley spoke isn't shy about his views.

The make-shift ghost hangs from a noose above an"McCain-Palin" sign. A Barack Obama sign attached upside down. Obama's middle name: "Hussein" spray painted and misspelled above.

Mike Lunsford hung the ghost in his yard. He spoke to us off-camera, saying his views could hurt his employers business ... but he says make no mistake: He doesn't want an African American running the country.
 
Lunsford says he believes Barack Obama is not a "full blooded American." And he says the United States is a white, Christian nation - and only with white Christians should be in power. With Lunsford not willing to share his views on-camera:

"It's like whoa. He's definitely anti-black." 

James T. Harris can't handle the heat; walks off the set of CNN

James T. Harris stood in front of thousands of people and told Sen. John McCain to "take it to" Sen. Barack Obama and "hit him where it hurts."

But when fellow conservative Shelley Winters, who supports Obama, took it to him and hit it where it hurts, Harris punked out and walked off the set.

Video over there...personally, I think the boy planned his "heated" rejoinder and ealy exit planned from  the moment he accepted the invitation to show.

Study: 38 Percent Of People Not Actually Entitled To Their Opinion
May 23, 2007 | Issue 43•21

CHICAGO—In a surprising refutation of the conventional wisdom on opinion entitlement, a study conducted by the University of Chicago's School for Behavioral Science concluded that more than one-third of the U.S. population is neither entitled nor qualified to have opinions.

"On topics from evolution to the environment to gay marriage to immigration reform, we found that many of the opinions expressed were so off-base and ill-informed that they actually hurt society by being voiced," said chief researcher Professor Mark Fultz, who based the findings on hundreds of telephone, office, and dinner-party conversations compiled over a three-year period. "While people have long asserted that it takes all kinds, our research shows that American society currently has a drastic oversupply of the kinds who don't have any good or worthwhile thoughts whatsoever. We could actually do just fine without them."

PBS' The Newshour has been dropping into difficult school district all year. They've had a couple of passes at New Orleans, at they're back...this time in connection with Teach for America. Let us take a look.

There's a problem here. 

Affirmative Action in colleges and universities has been reduced basically to an opportunity for mainstream folk to meet minorities. This actually looks like its replacement to me.

I guess the best way of describing what I'm doing today is "I'm in deep thought." It's not entirely accurate; there's really little thought involved at all, just a lot of recognition of disconnected (appearing) facts. It's like plugging numbers into a quadratic equation...the relationships defined by the equation don't change, but in the specific instance the possibilities represented by the line that solves the equation collapse to a single point.

I'm pretty sure I'll get back to being non-creative for you all today (that includes you, my humint-seeking friends). Meanwhile, we got one of them pre-approved wide open threads for you.

EFF Challenges Constitutionality of Telecom Immunity in Federal Court
Unconstitutional Law Cannot Shut Courthouse Door on Americans' Privacy Claims

San Francisco - The Electronic Frontier Foundation (EFF) Thursday challenged the constitutionality of a law aimed at granting retroactive immunity to telecommunications companies that participated in the president's illegal domestic wiretapping program.

In a brief filed in the U.S. District Court in San Francisco, EFF argues that the flawed FISA Amendments Act (FAA) violates the federal government's separation of powers as established in the Constitution and robs innocent telecom customers of their rights without due process of law. Signed into law earlier this year, the FAA allows for the dismissal of the lawsuits over the telecoms' participation in the warrantless surveillance program if the government secretly certifies to the court that either the surveillance did not occur, was legal, or was authorized by the president. Attorney General Michael Mukasey filed that classified certification with the court last month.

Unfortunately, they have descendants.

h/t blacksmythe.com

I'm even going to leave the technicolor initials in place.

M.T.: You don't think the unregulated CDS market was a major factor in the current crisis? Were you watching when AIG almost went under? Were you watching the Lehman collapse?

B.Y.: I think that Fannie Mae and Freddie Mac were also major factors. And I believe that many of the problems in the mortgage area can be attributed to the confluence of Democratic and Republican priorities: the Democrats' desire to give mortgages to people, particularly minorities, who could not afford them, and the Republicans' desire to achieve an "ownership society," in part by giving mortgages to people who could not afford them. Again, I believe that if you are suggesting that the financial crisis is a Republican creation, or even more specifically a McCain creation, I think you're on pretty shaky ground.

M.T.: Oh, come on. Tell me you're not ashamed to put this gigantic international financial Krakatoa at the feet of a bunch of poor black people who missed their mortgage payments. The CDS market, this market for credit default swaps that was created in 2000 by Phil Gramm's Commodities Future Modernization Act, this is now a $62 trillion market, up from $900 billion in 2000. That's like five times the size of the holdings in the NYSE. And it's all speculation by Wall Street traders. It's a classic bubble/Ponzi scheme. The effort of people like you to pin this whole thing on minorities, when in fact this whole thing has been caused by greedy traders dealing in unregulated markets, is despicable.

Treasury's Rescue Plan Hits Technical Snag
By Binyamin Appelbaum and David Cho
Washington Post Staff Writers
Friday, October 17, 2008; 2:16 PM

Banking regulators are working today to resolve accounting roadblocks that would hold up the government's plan to revive financial markets by investing $250 billion in the nation's banks.

The problem is this: Under existing rules, banks cannot count the Treasury Department's investment as part of their core capital, the foundation of money that supports a bank's operations. The very goal of the plan was to buttress those foundations, which have been eroded by recent losses, undermining the stability of the banks.

The Treasury's initial investment in nine of the largest banks cannot go forward until the accounting issues are resolved, people familiar with the matter said. Regulators are now working to figure out how to change existing rules to accommodate the program, the latest in a string of ad hoc measures to address the financial crisis.

Demand McCain and Palin Reject Dangerous Threats and Hate Speech

The Republican nominees are increasingly relying on a strategy of race-baiting and fear-mongering to win this election. It's completely unacceptable and it has to stop.

Watch a video from Brave New Films and then a news segment showing the McCain/Palin campaign and its supporters in action. Then, please sign the open letter demanding that they reject the politics of division and fear. We'll publicize the letter and make the sure the McCain campaign has to respond.

Then pass the video and the letter on to your friends and family and ask them to do the same.

My schedule this week has me backed up in my blog reading. I need to catch up because if I can give time to this email I just got, I can give time to some anti-race stuff from my fellow net denizens.

The email came from the Los Angeles Urban Policy Roundtable, a.k.a. Earl Ofari Hutchinson and it's calling on folks to bitch about a depiction of Obama in a newsletter sent out by Chaffey Community Republican Women, Federated. Can't link it. Won't type it up. In fact, don't care.

You know when I'll care? When you show me a self-identified Black Republican organization that doesn't spend all its time trafficking in anti-Black imagery. I'm not saying I have to like their political positions at all.

Show me one and I'll care about that one. I really don't think you can. And as the Kamekazi wing of a party in decline, they'll go the way of the dinosaurs soon enough.

But they all are...plus she gases my head, which is always cool and useful.

Happy Birthday To Me!

Names4things was born many decades ago, on October 16th. Mr Names4things and Mr and Ms Names4things Jr (I really love my son-in-law), are all together in the very strange state of Florida. The strangeness? Aside from the peoples’ felonious sense of personal style, and the startling flatness of the Fort Lauderdale, it’s pretty much like Manhattan. The same franchises. The same paucity of independent commerce. But you can turn right on a red light, which you can’t beat with a whip, right?...

Lotsa McCain/Palin bumper stickers here, usually on gas guzzlers, and there’s a lot of that New South disrespect from the white Floridians– don’t look at you when they’re speaking to you, don’t quite care for your business… kinda like McCain debating with Obama, or a Sarah Palin Klan rally. By the way, there are not a few Palin stickers. Without McCain’s name. They’re like, fuck Mccain– we wants the Kluxer. Sad and stupid. Nice combo, eh?

But it’s not all of them, or even most, because we just flew down yesterday. I’ve engaged with some mighty nice white folk here. And you can’t possibly guage your opinion of everyone, on a few of their batshit members, right? Far be it from N4t to engage in that kind of bullshit, at this late date. Nonetheless, the majority of the people are extra friendly, and the heat is really hot. Those who know N4t, know that heat to her, is like kryptonite. Naturally, my super-powers are really fucking secret. Even to me. Now that is some bullshit right there.

Let's get it straight:

Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication. One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble.

During those same explosive three years, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two thirds of all U.S. mortgages, supplanting Fannie and Freddie, according to a number of specialty publications that track this data....

Fannie and Freddie, however, didn't pressure lenders to sell them more loans; they struggled to keep pace with their private sector competitors. In fact, their regulator, the Office of Federal Housing Enterprise Oversight, imposed new restrictions in 2006 that led to Fannie and Freddie losing even more market share in the booming subprime market.

What's more, only commercial banks and thrifts must follow CRA rules. The investment banks don't, nor did the now-bankrupt non-bank lenders such as New Century Financial Corp. and Ameriquest that underwrote most of the subprime loans.

These private non-bank lenders enjoyed a regulatory gap, allowing them to be regulated by 50 different state banking supervisors instead of the federal government. And mortgage brokers, who also weren't subject to federal regulation or the CRA, originated most of the subprime loans.

In a speech last March, Janet Yellen, the president of the Federal Reserve Bank of San Francisco, debunked the notion that the push for affordable housing created today's problems.

"Most of the loans made by depository institutions examined under the CRA have not been higher-priced loans," she said. "The CRA has increased the volume of responsible lending to low- and moderate-income households."

And the reason for the reminder...

The Next Wave of Foreclosures
by Sharona Coutts, ProPublica - October 17, 2008 9:43 am EDT

As financial markets stagger from one low to the next, it's easy to forget that the subprime mortgage debacle -- which has been blamed for kick starting the contagion -- still has a ways to run.

More than half a million mortgages, worth about $110 billion, will have their intro "teaser" interest rates reset over the next six months, according the latest available data from First America CoreLogic, a mortgage industry research group.

The majority of these mortgages -- about three quarters of them -- will likely spring to 10 percent interest, which will be unaffordable for many borrowers, said Guy Cecala from Inside Mortgage Finance.

"None of these loans are sustainable at 10 percent. Nobody in their right mind would continue to pay them at 10 percent," Cecala said.

AIG Still Lobbies to Relax Oversight Rules
After Receiving Federal Aid, Insurer Focuses on Laws Aimed at Keeping Tabs on Mortgage Originators
By ELIZABETH WILLIAMSON

WASHINGTON -- Even after receiving an emergency loan that gave the government an 80% ownership stake, American International Group Inc. is spending money to lobby states to soften new controls on the mortgage industry.

When the U.S. took control of failing mortgage titans Fannie Mae and Freddie Mac, it prohibited them from lobbying. But it hasn't banned the practice at AIG, a huge insurer that is still 20%-owned by public shareholders.

AIG is currently working to ease some provisions in a new federal law establishing strict oversight of mortgage originators, according to state regulators. The law requires that originators be licensed by the states, and that they supply comprehensive information so state regulators can track their activities.

Is This What McCain Thinks of Obama?
posted at 10/17/2008 9:28 AM ED

Psychologists believe that fleeting expressions can sometimes reveal how we really feel about other people. The photo above of John McCain, taken by Reuters photographer Jim Bourg, shows the presidential candidate going the wrong way around the table after the third presidential debate and sticking out his tongue in the direction of Barack Obama. Does it unwittingly convey what McCain really thinks of his opponent?

It seems unfair to pick a single photo to describe how a candidate feels -- all of us look like idiots during some part of each day. But we use expressions as guides all the time. Here is how John McCain, Hillary Clinton, and Barack Obama want us to see them. If unflattering pictures are deceptive, what about the flattering ones?

Or could it be that photos -- at least the ones that are not posed -- tell us something important? Psychologists such as Paul Ekman and John Gottman believe that microexpressions, rapid expressions often overlooked in everyday interactions, can give us important insights into a person's innermost thoughts and feelings.

So is that McCain photo a hatchet job, or a window into his soul?

I am not argung with Mr. Krugman.

I would just like to point out the Black communities, collectively, have been living with the conditions the mainstream communities now approaches with such fear for a very, very long time. The reasons we've been in that position for so long are just as structural as the reasons for the problems the mainstream communities now anticipates. And we not only need the help as much as the mainstream communites do, we've needed it longer and deserve it just as much.

So I don't want to see that reflexive exclusion American culture is so famous for (was that delicate enough that folks can think about it without all that sticky head-explosion residue?). 

Let’s Get Fiscal
By PAUL KRUGMAN

The Dow is surging! No, it’s plunging! No, it’s surging! No, it’s ...

Nevermind. While the manic-depressive stock market is dominating the headlines, the more important story is the grim news coming in about the real economy. It’s now clear that rescuing the banks is just the beginning: the nonfinancial economy is also in desperate need of help.

I read this headline

Thinking About Obama

Through some deep, bottom-up process, Barack Obama has developed strategies for equanimity, and now he’s become a homeostasis machine.

...and said to myself, oh don't bother thinking David. You so rarely get it right it's just not worth the trouble. But that's not precisely the case. In my gut I suspect Mr. Brooks gets it correct and spins it right.

When Bob Schieffer asked him tough questions during the debate Wednesday night, he would step back and describe the broader situation. When John McCain would hit him with some critique — even about fetuses being left to die on a table — he would smile in amusement at the political game they were playing.

[T]he charges appear to be wildly overblown — and intended to hobble Acorn’s efforts. 

The Acorn Story

In Wednesday night’s debate, John McCain warned that a group called Acorn is “on the verge of maybe perpetrating one of the greatest frauds in voter history” and “may be destroying the fabric of democracy.” Viewers may have been wondering what Mr. McCain was talking about. So were we.

Acorn is a nonprofit group that advocates for low- and moderate-income people and has mounted a major voter-registration drive this year. Acorn says that it has paid more than 8,000 canvassers who have registered about 1.3 million new voters, many of them poor people and members of racial minorities.

In recent weeks, the McCain campaign has accused the group of perpetrating voter fraud by intentionally submitting invalid registration forms, including some with fictional names like Mickey Mouse and others for voters who are already registered.