Freddie to Stop Buying Interest Only Mortgages, Finally

27 Saturday Feb 2010

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Freddie Mac, interest only mortgages, Karl Denninger, Market Ticker

Karl Denninger at Market Ticker on Freddie Mac’s announcement that they are finally going to stop buying and securitizing interest only mortgages:

“Freddie (and Fannie) had no business getting involved in these toxic self-immolation devices in the first place as they are intended to do exactly one thing – asset-strip the borrower by forcing him or her to come back after the interest-only period and refinancing.

In an environment where home prices are not advancing, however, such refinancing is of course impossible, which leads immediately to foreclosure…Say thanks to the government – both past and present administrations – for conspiring with our banks to literally fleece the American Citizen for the benefit of Wall Street.”

And the fleecing will continue, thanks to the Christmas Eve blank check from the Treasury Department.

Democrats Cave on Torture Amendment: So What Else Is New?

26 Friday Feb 2010

Posted by Craig in Constitution, Democrats, Dick Cheney, Justice Department, Obama, Politics, Republicans, terrorism, torture, Uncategorized, war on terror

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2010 Intelligence Authorization Act, amendment, Article VI, Atlantic, Convention Against Torture, Cruel Inhuman and Degrading Interrogation Prohibition Act of 2010, keeping us safe, Liz Cheney, Marc Ambinder, Sylvestre Reyes, veto, White House

While all the attention in Washington yesterday was focused on the posturing and pontificating over health care reform, there was something else going on. Democratic Congressman Sylvestre Reyes, chairman of the House Intelligence Committee, proposed an amendment to the 2010 Intelligence Authorization Act. The amendment is called the Cruel, Inhuman, and Degrading Interrogation Prohibition Act of 2010 which, in essence, does nothing more than codify what already exists in Articles 1 and 16 of the United Nations Convention Against Torture. You know that treaty which under Article VI of the Constitution is supposed to be the “supreme Law of the Land,” but was signed and ratified pre-9/11 so is no longer applicable, apparently.

The amendment prohibits such acts as waterboarding, beatings, sleep deprivation, and mock executions among others. In other words, pretty much the chart toppers on the Cheney/Ashcroft/Rumsfeld/Yoo/Bybee hit parade. It applies to any “U.S. national, or any officer, employee, contractor, or subcontractor of the Federal government,” with punishment for violation being “fine or imprisonment for not more than 15 years, or both,” unless death results. Then the imprisonment is “any term of years or for life.”

And right on cue, here came the torture defenders, led by Liz Cheney, playing the predictable “keeping us safe” card:

“Late last night, Democrats in the House of Representatives inserted a provision dubbed “The Cruel, Inhuman, and Degrading Interrogation Act of 2010” into the intelligence authorization bill. This new language targets the US intelligence community with criminal penalties for using methods they have deemed necessary for keeping America safe. These methods have further been found by the Department of Justice to be both legal and in keeping with our international obligations.”

Sorry Liz, but just because they were found legal by the pretzel logic of Daddy’s Justice Department (and sadly, found to be merely “poor judgment” by the current Justice Department) doesn’t mean they are legal. It just means that laws and treaties have become an a la carte menu in post 9/11 America. We now pick and choose which ones to enforce and which ones to ignore. Again, sadly.

According to Marc Ambinder at the Atlantic, the amendment is also not popular at 1600 Pennsylvania Avenue (sigh):

“The White House isn’t happy; they’ve already threatened to veto the bill because it, in their mind, it infringes upon the rights of the executive branch by forcing the administration to disclose more about intelligence operations to more members of Congress.”

That sounds a lot like a previous administration to me. (Double sigh).

And speaking of right on cue, all House Republicans had to do was give the insinuation that they would accuse Democrats of being ‘soft on terror’ and ‘coddling terrorists’ and the gutless, spineless, Democratic leadership pulled the bill.

The Afghanistan Quagmire Deepens

25 Thursday Feb 2010

Posted by Craig in Afghanistan

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Afghanistan, children, civilian casualties, collateral damage, Kandahar, Marjah, NATO troops

Despite the fact that between 400 and 1,000 insurgents have 15,000 NATO and Afghan troops bogged down in Marjah, an operation in which the overwhelming numbers were supposed to make short work of those insurgents but which the Pentagon now admits is “moving more slowly than expected,” a “similar operation planned in Canadian-led Kandahar province will largely use the same tactic, its commander says.” Kandahar has a population 6 times that of Marjah. The quagmire deepens.

I’m reminded of the old George Carlin line about oxymorons, “jumbo shrimp and military intelligence.”

The Marjah offensive was also to be the first test of “a new NATO strategy focusing on protecting civilians.” How’s that working out so far? Not too good:

“The Afghanistan Independent Human Rights Commission said in a statement Wednesday that it had confirmed 28 civilians deaths in the Marjah fighting, based on witness reports. Thirteen children were among the dead.”

A number Canadian Brigadier General Daniel Menard referred to as “not bad.”

I think the parents of those 13 children and the families of the people who Brig. Gen. Menard called “collateral damage” might have a different perspective.

$600 Million for Police Stations in Afghanistan

25 Thursday Feb 2010

Posted by Craig in Afghanistan, budget, Politics

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$600 million, Afghanistan, deficit, Pentagon, police stations

Deficit? What deficit? When it comes to the Pentagon, the checkbook is always open (emphasis added):

“In an attempt to increase the size of the Afghan police force to 160,000, the United States military intends to invest more than $600 million to build approximately 200 police stations for the Afghan National Police by 2013. This was announced only days after President Obama signed an executive order establishing a new, bipartisan National Commission on Fiscal Responsibility and Reform.

Paul Giblin, spokesman for the U.S. Corps of Engineers, explained how the stations will be built. “There are five basic designs that are used for police stations, and they’re all pretty similar.” However, at the cost of nearly $3 million a police station, the structures will far surpass any standard set by local neighborhood precincts. In fact, the Afghan police stations will have a barbed wire perimeter with guards posted at each of the four corners. Additionally, reinforced concrete will make up the walls and roofs.”

At an average of $8,000 per person, $600 million could pay the health care costs of 75,000 Americans for one year. Priorities, anyone?

Senate Again Looks for Cover on Patriot Act Extension

24 Wednesday Feb 2010

Posted by Craig in Congress, Democrats, Politics, war on terror

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Harry Reid, lone wolf, Patriot Act extension, Senate, unanimous consent, wiretaps

First they tried to hide it in the so-called “jobs bill.” Now the gutless wonders in the Senate are going to try and pass an extension of the Patriot Act by unanimous consent, meaning they don’t have to go on the record with a vote:

“Senate Democrats are pushing for a short-term extension of key provisions in the Patriot Act as part of a package of must-pass measures…Senate Majority Leader Harry Reid (D-Nev.) is planning to ask for unanimous consent to pass an extension for a host of measures set to expire February 28, according to Senate sources.

The third provision allows the government to apply to a court for surveillance orders involving suspected “lone wolf” terrorists who do not necessarily have ties to a larger organization.”

The large package of bills includes a year-long extension of three provisions of the anti-terrorism law known a the Patriot Act, as well as extensions for expiring tax provisions, including unemployment insurance, COBRA, flood insurance, the law governing the highway trust fund, the federal flood insurance program and a measure governing satellite television signals.

…The first of the three expiring Patriot Act provisions provides the power to seek court orders for roving wiretaps on terrorism suspects who shift their modes of communication. A second allows the government to seek orders from a federal court for “any tangible thing” that is says is related to a terrorism investigation.

Karzai to Appoint Electoral Watchdog Commission

24 Wednesday Feb 2010

Posted by Craig in Afghanistan

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Afghanistan, Electoral Complaints Commission, Hamid Karzai, presidential decree

How much more American blood and treasure are we going to expend propping up Afghan President Hamid Karzai’s increasingly corrupt government?

“After his brazen bid to steal his re-election, Afghanistan’s president, Hamid Karzai, swore that he would do better — and the Obama administration swore it would ensure that he did. He hasn’t. It didn’t.

Mr. Karzai’s latest travesty: Issuing a presidential decree to take total control of the country’s electoral watchdog commission. Yes, that is the same commission that exposed widespread fraud in the 2009 vote.

The Electoral Complaints Commission adjudicates violations and will play an important role in the September vote for a new Parliament. By law, it has five members: three non-Afghans appointed by the United Nations and two Afghans, one named by the Supreme Court and one by a human rights commission. Mr. Karzai will now be able to appoint all five members.”

At a time when American, NATO and Afghan troops are putting their lives on the line to battle the Taliban, Mr. Karzai seems interested only in his own political power. That is hugely destructive. Mr. Karzai’s failure to build a credible, honest and even minimally effective government is the Taliban’s No. 1 recruiting tool.

Bring. Them. Home.

“Villain Rotation” in the Senate

24 Wednesday Feb 2010

Posted by Craig in Congress, Democrats, health care, Obama, Politics, special interests

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campaign contributions, Democrats, Glenn Greenwald, health care reform, individual mandate, insurance industry, Jay Rockefeller, PhRMA deal, President Obama, public option, reconciliation, Salon, Senate, subsidies, Villain Rotation

I hesitate to even comment on the health care reform charade any more because that’s exactly what it is and has been from the get-go, a charade. But Glenn Greenwald had a piece in Salon yesterday which nailed the situation perfectly. The bottom line is this–there will be no real reform for one reason–those in power don’t want it. Sure they, meaning the president and Democrats in the Senate, want to give the appearance of being for substantial reform, but the fact is they all benefit too much from the status quo. They aren’t about to kill the corporate goose that lays the golden campaign contribution eggs, and especially now that the Supreme Court has allowed corporations, like the insurance industry, to spend unlimited amounts on advertising for and against candidates.

Greenwald cites Sen. Jay Rockefeller as the latest example of what he calls “Villain Rotation.”

“They always have a handful of Democratic Senators announce that they will be the ones to deviate this time from the ostensible party position and impede success, but the designated Villain constantly shifts, so the Party itself can claim it supports these measures while an always-changing handful of their members invariably prevent it.”

From Politics Daily on October 4, 2009:

“Jay Rockefeller has waited a long time for this moment. . . . He’s a longtime advocate of health care for children and the poor — and, as Congress moves toward its moment of truth on health care, perhaps the most earnest, dogged Senate champion of a nationwide public health insurance plan to compete with private insurance companies.

“I will not relent on that. That’s the only way to go,” Rockefeller told me in an interview. “There’s got to be a safe harbor.”

Jay Rockefeller Monday:

“Sen. Jay Rockefeller (D-W.V.) threw a wrench into Democratic efforts to get a public option passed through reconciliation, saying that he thought the maneuver was overly partisan and that he was inclined to oppose it. . .

“I don’t think the timing of it is very good,” the West Virginia Democrat said on Monday. “I’m probably not going to vote for that.”

Greenwald:

“In other words, Rockefeller was willing to be a righteous champion for the public option as long as it had no chance of passing (sadly, we just can’t do it, because although it has 50 votes in favor it doesn’t have 60) But now that Democrats are strongly considering the reconciliation process — which will allow passage with only 50 rather than 60 votes and thus enable them to enact a public option — Rockefeller is suddenly “inclined to oppose it” because he doesn’t “think the timing of it is very good” and it’s “too partisan.” What strange excuses for someone to make with regard to a provision that he claimed, a mere five months ago (when he knew it couldn’t pass), was such a moral and policy imperative that he “would not relent” in ensuring its enactment.

The Obama White House did the same thing…[B]ack in August the evidence was clear that while the President was publicly claiming that he supported the public option, the White House, in private, was doing everything possible to ensure its exclusion from the final bill (in order not to alienate the health insurance industry by providing competition for it). Yesterday, Obama — while having his aides signal that they would use reconciliation if necessary–finally unveiled his first-ever health care plan as President, and guess what it did not include? The public option, which he spent all year insisting that he favored oh-so-much but sadly could not get enacted: Gosh, I really want the public option, but we just don’t have 60 votes for it; what can I do?.”

The problem was, and is, that the president and the Democrats in Congress are getting exactly what they wanted to start with. The backroom deal with PhRMA is intact. The individual mandate remains, forcing people to buy from private insurance companies. The president’s plan also raises the subsidies, which shovels taxpayers dollars to the same private companies, which in turn keeps the corporate contributions flowing and away from the Republicans.

If this plan passes, I would suggest buying stock in Aetna, WellPoint, United Health Care, et al. Maybe the dividends will help cover the cost of the premiums.

Kicking the (Yes We) Can Down the Road

23 Tuesday Feb 2010

Posted by Craig in health care, Obama, Politics

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2018, healthcare reform, insurance plans, Obama, tax

President Obama, who told a group of nurses in July that when it came to health care reform, “We can’t kick the can down the road any longer,” is in his plan released yesterday…..kicking the can down the road.

“Mr. Obama…identified a tax on high-cost insurance plans as a key mechanism for curbing the growth of health-care costs. He was right. Unfortunately, in the legislative process the tax already was whittled down several times. Now the president proposes delaying it until 2018 — long after he leaves office — and raising the threshold at which it applies.”

Hmmm, I remember candidate Obama treating with scorn John McCain’s proposal to tax health care benefits during the 2008 campaign. Oh well, another campaign promise bites the dust.

“…Overall..the president has proposed a plan whose uncertain savings are made even less certain, and whose known costs are increased..Now it postpones the key savings mechanism. Administration officials argue that Mr. Obama deserves credit for not dropping the tax altogether. But when did he stand up and fight for the better approach? And what credit or credibility is due a president who endorses a tax but leaves to his successor the unpleasant task of collecting it?”

Stand up and fight? President Obama? Surely you jest. Unless it’s fighting for the pharmaceutical industry to keep its monopoly via the backroom deal with PhRMA, or fighting to deliver millions of new customers to private insurance companies through the individual mandate.

Civilians Killed in Afghanistan “Believed” to be Insurgents

23 Tuesday Feb 2010

Posted by Craig in Afghanistan

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Afghanistan, civilians killed, NATO airstrike

More on the civilians killed Sunday in Afghanistan, from the New York Times (emphasis added):

“KABUL, Afghanistan — An airstrike launched Sunday by United States Special Forces helicopters against what international troops believed to be a group of insurgents ended up killing as many as 27 civilians in the worst such case since at least September, Afghan officials said Monday.

…Zemarai Bashary, a spokesman for the Afghan Interior Ministry, said the victims were all civilians. He said two Land Cruisers and a pickup truck carrying a total of 42 people were attacked by air near Khotal Chowzar, a mountain pass that connects Daykondi Province with Oruzgan Province in central Afghanistan.”

…The Special Forces helicopters were hunting for insurgents who had escaped the NATO offensive in the Marja area, about 150 miles away, according to Gen. Abdul Hameed, an Afghan National Army commander in Dehrawood, which is part of Oruzgan Province. General Hameed, interviewed by telephone, said there had been no request from any ground forces to carry out an attack.

Believed? Before we blow away 3 vehicles on a highway 150 miles from where the fighting is taking place, with no request from troops on the ground, shouldn’t the burden of proof on who is in those vehicles be a little higher than “believed ?”

White Collar Contracts MUST Be Honored—Blue Collar Contracts? Toss ‘Em

23 Tuesday Feb 2010

Posted by Craig in AIG, economy, Goldman Sachs, Wall Street

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AIG, bonuses, contracts, GM, Tim Geithner, UAW

The bonuses at AIG keep on coming:

“… AIG, the fallen insurer, paid out an additional $100 million this month, much of it to the very financial products division whose rampant risk-taking took the firm to the brink. And there’s another $75 million coming…[Treasury Secretary Tim] Geithner, and pay czar Kenneth Feinberg, say that while lamentable, the AIG payments must legally be honored.”

But yet last May during the General Motors–United Auto Workers negotiations, which the government insisted be a part of a GM bailout:

“People familiar with the UAW agreement said it largely mirrors concessions the UAW granted Chrysler LLC last month, including a suspension of cost-of-living allowances, bonuses and some holidays.

…The deal is the latest concession by the UAW after several years of cutbacks. Unlike past negotiations, which often dragged on for months and went past deadlines, the parties — under pressure from the Treasury, which has lent GM $15.4 billion — moved quickly to revise a contract approved in 2007.”

Compare that $15.4 billion for GM, which came with “pressure from the Treasury” to re-negotiate existing contracts, with the $182 billion given to AIG, no strings attached, and contracts that must be “legally honored.”

Sure sounds like a double-standard to me. White collar contracts? Sacred. Blue collar contracts? Toss ‘em in the garbage. But then again, Geithner wasn’t laundering money through GM to pay off his buds at Goldman Sachs, like he did through AIG (allegedly).