Bear Stearns was lunch money

(Via CJR's Ryan Chittum)

According to the WSJ, the government has drawn up contingencies for bailing out Freddie Mac and Fannie Mae. These would be the lynch pins of our secondary mortgage market.

The fact that the plans exist is not evidence that they are going in the tank (the US has plans to invade Mexico, not that we're ever going to do it), but there have been rumblings for over a year now that all is not well.

Chittum refers to a Bloomberg article that isn't exactly comforting:

Chances are increasing that the U.S. may need to bail out Fannie Mae and the smaller Freddie Mac, former St. Louis Federal Reserve President William Poole said in an interview. Freddie Mac owed $5.2 billion more than its assets were worth in the first quarter, making it insolvent under fair value accounting rules, he said. The fair value of Fannie Mae's assets fell 66 percent to $12.2 billion, data provided by the Washington-based company show, and may be negative next quarter, Poole said.

``Congress ought to recognize that these firms are insolvent, that it is allowing these firms to continue to exist as bastions of privilege, financed by the taxpayer,''

And if the worst happens?

``I worry about those institutions,'' retired Richmond Fed President Alfred Broaddus said. ``They are huge. They dwarf the Bear Stearns issue. In the very worst case scenario, I don't know how you do it other than extend money and the public takes the loss.''

It may never happen, but if it does - I'm sure we will be treated to some official saying that "no one could have conceived" that these two institutions could be at risk of failing. Right before the Fed cuts Freddie and Fannie a big, fat check.

Bingo

Lessig on Obama, via Siva - and I couldn't agree more:

...weirdly, the [Obama] campaign seems focused on the very last thing a campaign should be doing during a campaign -- governing. This is not a try-out. A campaign is not a dry run for running government. Yet policy wonks inside the campaign sputter policy that Obama listens to and follows, again, apparently oblivious to how following that advice, when inconsistent with the positions taken in the past, just reinforces the other side's campaign claim that Obama is just another calculating, unprincipled politician. 

The best evidence that they don't get this is Telco Immunity. Obama said he would filibuster a FISA bill with Telco Immunity in it. He has now signaled he won't. When you talk to people close to the campaign about this, they say stuff like: "Come on, who really cares about that issue? Does anyone think the left is going to vote for McCain rather than Obama? This was a hard question. We tried to get it right. And anyway, the FISA compromise in the bill was a good one."

Dog bites woman? Still not news

First Siva:

Remember all those stupid newspaper stories about how more and more women (of course, no statistics offered) are choosing not to work so they can become full-time breeders etc? Back when they appeared, we here at Sivacracy did our best to ridicule them. But, of course, there was no real social science either behind these "opt-out" stories or our refutations of them.

Well, now it turns out that someone has done the work. And we were right. I love saying that. We were right. No opt-out.

Then Kathy G:

..."studies" and research that reinforce retrograde, sexist stereotype tend to get wall-to-wall saturation media coverage, while those that don't tend to be ignored. Wondering whether this was the case with the Percheski paper, I looked it up on Google News (using several different search terms -- "American Sociological Review," Percheski, "opt out", etc.). And what did I find? A grand total of four mentions of the study: in a Reuters article, in a column in the Orlando Sentinel, and in blog posts for the Wall Street Journal and Business Week websites. That was it. 

Is there any doubt that if her study did indeed show a decline in women's labor force particpation, that every newspaper and website in the land would be shouting it from the rooftops?

FISA: We lose

(H/t to Glenn)

Hats off to the Democratic controlled Senate. They certainly are consistent.

H.R.6304 FISA bill amendments

• Remove Immunity for Telecoms (Dodd/Feingold) - Rejected
• Subject Immunity to [weak] Court Approval (Specter) - Rejected 
• Delay Immunity until the IG investigates what took place (Bingaman) - Rejected

I know which senator won't get my vote next time.

Final vote on the bill to follow.

Careful what you say now folks, because there's sure to be somebody listening.

Late Edit: (H/t Secrecy News)

Let's hope Sen. Whitehouse is right:

“If I were a litigant, I would challenge the constitutionality of the immunity provisions of this statute, and I would expect a good chance of winning,” Sen. Whitehouse said.

Later Edit:
The ACLU is going to press exactly that legal point.
Glenn has the full rundown of what happened today, why it's so godawful, and who's to blame. Obama is among them.

CNN's Mark Preston calls it analysis, I call it fluff...

Read this article intro:

Analysis: McCain's camp highlights differences with Bush

WASHINGTON (CNN) -- John McCain and George Bush have a lot in common, but these two Republicans have also had some high profile differences, and McCain's presidential campaign is more than willing to point them out.
John McCain's campaign wants voters to know that he and President Bush are very different people.

What would you expect the resulting article to contain? Maybe some examples of issues/votes where McCain and Bush didn't see eye to eye, perhaps?

No. You get this bit of fluff:

His open defiance of the Republican establishment has helped to bolster his image as a "maverick" lawmaker willing to shun party loyalty and obedience for personal principle.

 and some quotes from Nicole Wallace, who is part of the McCain campaign.

They're "Totally different people" she assures us, and since she's working for McCain's campaign - I'm sure she has the inside scoop. How can we doubt her?

Preston's article devotes 3/4 of the article to quotes from Wallace, fundraising disparities, and other items that do nothing to highlight the differences between McCain and Bush.

It's bad enough that the assertions of difference come only from a McCain campaign operative, but look at the whole sentence (emphasis mine)

We feel like that is a record that must be given attention every time Barack Obama falsely accuses John McCain of running for George Bush's third term," said Nicolle Wallace, a veteran Bush operative who joined Team McCain in May.

For crying out loud - if McCain's so different, how come his political strategists are Bush hand-me-downs?

You can write this kind of fluff, but putting it under that headline and calling it "analysis?"

Please.

If a McCain operative couldn't give Preston a concrete example of differing policy views - he might have bothered looking for one on his own. Not that he'd have much luck - but it might have turned this piece into something other than a headline-copy bait and switch.

I got a better headline, for you Mr. Preston:

Spoonfed: McCain camp says he's different than Bush. I add boilerplate copy until my editor says it looks long enough to publish.

I'm hoping this guy has other articles that justify his having a job at CNN.

EWR

A less-than pleasant memory came back to me the other night.

Me, around 13 years old. I'm walking over to my dog, who is sitting down in the middle of our living room. I reach down to pet the side of his head and – before I do – he winces.

-because he's expecting to be hit.

It was an unimpeachable accusation. I was lousy to my dog. Didn't know how to train him, didn't bother trying. Good dog? I patted his head. Bad dog? I hit him. Really bad dog? I hit him hard. Or a lot. Or both.

My dog got the message: when he opens his hand, he's going to hit you.

That one day in the living room, he finally got a message to me.

I'd love to say I was a better dog owner after that day – but I doubt it. I didn't hit him anymore, but the damage was done.

---

So the boy had a birthday – and it was a big day for him. All his buddies were over; he played his head off for most of the day. He got presents, was the center of attention, he had a ball.

But eventually it all had to end and he had to go home and listen to mom and dad again. He's tired, cranky and so are his parents.

We let him run off and play while we collapse in our chairs. At some point we hear the boy playing with his new cymbals and pounding them on things.

At some point our minds ask the question: what things?

And E goes over into family room to find our boy slamming his metal cymbals into the wooden leaf of our new dining room table. It's been in our house for a grand total of two hours.

And now there are cymbal-shaped marks all over it.

We do our usual discipline routine – even though that's hopelessly inadequate. He sulks, we sulk.

And then for some insane reason we decide it's bath night. I get the duty.

The boy's having none of it. He's beyond reason – but this is the decision so we stick with it.

I tell him to go upstairs or I will take him upstairs. I give him the 1, 2, 3.

3. I take him upstairs.

I put him in the bathroom, howling the whole time.

I don't let him leave the bathroom, despite many tries.

I tell him to get ready for a bath or I will get him ready. 1, 2, 3.

3. I remove his clothes and put him in the tub.

And put him back in it.

And again.

And then he begins splashing water out of the tub. And opening the drain. And wailing louder than I can ever remember him. In a room lined with tile.

I didn't yell. I didn't hit. I just made him do what I wanted. What I'd told him would happen. So he'd believe me in the future.

You will take a bath. Even if you scream. Even if you fight it.

---

Years ago, when I was visiting Begobug, I learned something about parenting. Something this bath had clearly made me forget. Begobug had worked very hard to impress on her daughter that her boundaries should be respected. That people who didn't respect them were doing something she had a right to complain about.

Her daughter was pretty young at this point, so this wasn't pre-date coaching – this was feel secure in who you are. Your parents respect your space, that kind of thing.

We were walking on the side of the road, and begobug's daughter stepped off the sidewalk onto the grass, headed towards the road –

-and I grabbed her arm.

She gave me a panicked look. What are you doing?

She wasn't close to the road. At least not yet. There would have been time enough to stop her – if she'd really been going into the street.

I sort of shoved her over to the sidewalk – looking around for approval. See? Just helping her back to the sidewalk.
I could tell this was something that she was not used to – that nobody did this. Begobug had a look of polite indulgence on her face- but I could tell this was not good.

Her daughter's space had been messed with, and now she had to explain the situation. Fit it into her daughter's expectations of civilized behavior.

I let go and said something inane – all the while thinking:

What am I doing?

---

So the boy is howling, splashing. I'm washing his hair, not saying a word. Trying to keep the soap out of his eyes so that we won't have that problem at least. And all the while I'm thinking about Begobug and her daughter.

I've just manhandled my only son. Pulled his clothes off and stuffed him into a bath while he screamed at me to stop.

And then he did something – I can't remember what. Threw something, splashed me, tried to stand up for the umpteenth time – and I palmed his head and locked eyes with him.

"Listen!" I hissed. "You keep doing this – it's just going to get worse"

He stops long enough to listen – and I do the same.

What am I doing?

This isn't Hollywood, so my son resumes his tantrum. I try to chat with him, but it goes nowhere. He's past listening to me.

Behind me, E quietly opens the bathroom door long enough to deposit the boy's new bath toys and a bubble bath-dispensing robot.

The distraction allows the boy to focus. He wants the robot. I say he can have it after he cleans up the toys he's thrown all over the place.

He does, and soon he's happily splashing around in a bathtub full of suds. I just sit there. Lay off. Let him splash around with his robot. I'm back in my head.

I'm wondering which one of us is the beaten dog.

FISA: Have you called your senators?

(H/t to Glenn)
Other than voting against the bill entirely, there are two additional positions to press for.

• Supporting the Feingold/Dodd amendment - removing Telecom Immunity from the FISA bill.
• Supporting the Bingamann amendment - postponing civil actions against the telecoms, in exchange for making immunity conditional on the findings of the IG investigation into what has been happening.

Call your senators.

(McCain = Bush) = Trespassing?

 (H/t digby)
Librarian holding sign told she is trespassing



I think her case would be strengthened if she weren't accompanied by a guy in a giant pickle suit, but she was the one getting the ticket.

I'm sure there's some caselaw out there about the deference the Secret Service gets when protecting their people - but this looks mighty weak.

When bad loans are made, bad lenders will make them

CJR's Ryan Chittum finds another gem on the credit crisis.

The Center for Responsible Lending has released a report on the failings of California lender, IndyMac.

It's a nice arrow to have in the quiver when people start telling you that "people took stupid loans, or were victimized by greedy brokers."

CRL report highlights the what that previous statement is lacking: The bankers were plenty greedy, too.

IndyMac wasn't duped, they were hip deep in writing bad loans.

The report lists a case where a 68 year old retiree was applying for a mortgage on a house she owned - to pay off some debts. She earned (and disclosed) a fixed income of around $500 a month. She said she could afford a payment of no more than $120 a month.

Unbeknownst to [her], the processors at American Residential and IndyMac assessed her income at $1,100 a month and higher.

And then they did this:

...IndyMac instructed the mortgage broker to send copies of her Social Security award letters with the dollar amounts expunged: “Need copy of SSI letter blacked out for the last 2 yrs w/no ref to income.”

As in, we've fudged her income on a number of documents, don't let her actual income make it into our records.

This lady disclosed her income truthfully, told her lender what she was able to afford, and was promised a fixed interest rate of 3.875.

She got an adjustable rate loan, with a teaser rate that jumped after one month. Her interest rate has been as high as 10%.

Now, picture yourself in this person's shoes.

You've been honest with your lender and they've told you you're getting what you want, with rates you can afford. Then you find out you're not getting what you want, you can't afford the payments, and the lender won't deal with you.

You'd sue, right?

This lady makes $500 a month. The only reason she's got a lawyer is because her case looked good to an attorney who will take a third of her winnings - if she wins.

In the meantime, she still has to make payments on a loan that should never have been given.

Wanna bet there are people out there who are just as screwed who don't have lawyers? Or are afraid to spend months/years in court?

Google does child care - badly

(H/t to Sivacracy)

What's the difference between a salary and a perk?

Perks are the first thing to go when times get hard.

There's a certain amount of pushback that Google was going to get, just from being conspicously successful - but it's clear that there are no miracles when it comes to balancing the books.

Sponsored day care is a perk, and Google's got bills to pay.

I'm sure they'll just blame it on interns...

(H/t CJR)
Fox news gets some unfavorable press in the NYT.

This is not news.

Then the hosts of Fox & Friends dedicated some air time to rebuking the NYT reporter and his boss. Fox showed photographs of the NYT employees and criticized their integrity.

Also, not news.

But here's the thing: they doctored the photographs - giving them yellow teeth, big noses and basically making them look like caricatures of themselves.

Seriously.

First-person experience

(H/t to tristero)

So, Christopher Hitchens decided that the only way to settle the question of waterboarding is to (you guessed it) be waterboarded.

He answers the "Is it...?" question in the title of his Vanity Fair article: Believe me, it's torture.

You may have read by now the official lie about this treatment, which is that it “simulates” the feeling of drowning. This is not the case. You feel that you are drowning because you are drowning—or, rather, being drowned, albeit slowly and under controlled conditions and at the mercy (or otherwise) of those who are applying the pressure. The “board” is the instrument, not the method. You are not being boarded. You are being watered.

Admittedly, Hitchens credentials as an objective observer are less than ironclad. It's not clear Hitchens motivations are deeper than merely wanting to annoy those he finds annoying.

However, I think his account of the experience (once you boil off the ego) does add to the conversation.
That he has been a booster of US Iraq policy in the past is merely seasoning.

He is a pompus ass, to be sure - but he can write a good aphorism:

I apply the Abraham Lincoln test for moral casuistry: “If slavery is not wrong, nothing is wrong.” Well, then, if waterboarding does not constitute torture, then there is no such thing as torture.

 Well put.

No easy answers

CJR's Trudy Lieberman finds a great article on health care in the Catholic Courier.

There's an awful lot of ink about whose plan covers more people, but the Courier gets what (in my opinion) is the real meat of the matter:

"Attempts to address the issue of the uninsured cannot succeed unless and until we examine the causes for the high costs of health services," said Ron Guglielmo, director for health care for the New York State Catholic Conference, during testimony to the state panel.

According to the Kaiser Family Foundation, U.S. health-care spending grew 6.7 percent in 2006 to about $7,026 per resident, accounting for 16 percent of the nation’s gross domestic product. Per-capita health-care spending has more than doubled since 1990. And, according to the Centers for Medicare and Medicaid Services, health-care spending is projected to rise to more than $12,750 per person by 2016.

If you cover more people and costs keep going up - you don't have a solution:  you have a recipe for breaking the bank.  

We need to get more dollars covering more people with preventative care. Otherwise we're just feeding the maw of the system that got us here.

Be afraid... be sort of afraid...

Chinese commuters are ready for anything

Okay, okay it's the Chinese police. They're showing off the high tech police tactics they'll use at the Beijing Olympic games.

(H/t to Crave)

First, blame the victim

Okay, CJR's been all over this one - but its like there's a reflex arc in the media these days.

• Lender deliberately or mistakenly suggests that homeowners who are defaulting on their homes resort to breaking the law.
• Media outlet reports what the lender said. It's not just a statement, it's a trend!
• Evidence that directly refutes the lender's assertion is ignored (or bizarrely, used to "support" the assertion).

I mean, cripes:

Half of defaulting mortgagees are trashing their homes - except they're not.

They're Buying and Bailing - except they're not. 

Defaulters are burning their homes - except they're not.

Phrases like "Jingle mail" and "Trash-out" are catchy, but you'd think the people writing them would bother to enlighten us with numbers instead of anecdotes.

Maybe next time they should try a circus

(H/t CJR again)

The WSJ is reporting:

As the last batch of stimulus checks show up in mailboxes, some economists and Democrats are rumbling that the government needs to again intervene to prop up the flagging economy.


The $152 billion stimulus package was meant to provide a short-term boost to the economy, and many economists believe it prompted Americans to spend more money. But by July 11, most of the checks will have been sent out, and much of the benefit is expected to fade by August even as fears of a recession continue to percolate.

Gosh, who'd have thought that passing out checks wouldn't solve a national economic crisis?

Obama: you listening now?

(via TPM)

Obama supporters liking telecom immunity? Not so much.

Late edit:

Here's an excerpt from the response I got from the Obama campaign on FISA (emphasis mine):

Under this compromise legislation, an important tool in the fight against terrorism will continue, but the President's illegal program of warrantless surveillance will be over. It restores FISA and existing criminal wiretap statutes as the exclusive means to conduct surveillance - making it clear that the President cannot circumvent the law and disregard the civil liberties of the American people. It also firmly re-establishes basic judicial oversight over all domestic surveillance in the future.  It does, however, grant retroactive immunity, and I will work in the Senate to remove this provision so that we can seek full accountability for past offenses. But this compromise guarantees a thorough review by the Inspectors General of our national security agencies to determine what took place in the past, and ensures that there will be accountability going forward. By demanding oversight and accountability, a grassroots movement of Americans has helped yield a bill that is far better than the Protect America Act.

It is not all that I would want. But given the legitimate threats we face, providing effective intelligence collection tools with appropriate safeguards is too important to delay.  So I support the compromise, but do so with a firm pledge that as President, I will carefully monitor the program, review the report by the Inspectors General, and work with the Congress to take any additional steps I deem necessary to protect the lives - and the liberty - of the American people.

I'd respond to just the bold bits thusly:

Restores FISA exclusivity? Hah.
Guarantees a thorough review? Emptywheel's got your double-hah right here:

The bill takes an idea included in the House bill--a review of the program to find out what really happened--and dumps that review into the lap of the Inspectors General of the various agencies (the House bill had called for a bipartisan commission). The OPR review of the authorization of the program is included in this. An IG picked by the President and approved by the Senate will, a year after the bill is passed, present an unclassified report on the program (with classified annex). That review cannot name anyone in the private sector involved in the illegal wiretapping.

So the foxes will give us a thorough review of who raided the hen house? Color me unimpressed.

Did AIG get F'ed by CDS's on CDOs?

...FOTA thinks so.

(H/t CJR)

Here's the quote that almost makes sense:

A bear on CDSs [Credit Default Swaps] might not be an outright bull. Might be more like a slowly grazing cow, mooing, “Hey, c’mon, things aren’t as bad what the mark-to-market losses would have you believe.”

Something you can't blame on the price of gas...

Wireless companies have doubled their fees for text messages in just two years.

(via Crave)

Last October, Sprint Nextel was the first to introduce the new price of 20 cents per text message. AT&T and Verizon Wireless soon followed with their price hikes going into effect this spring. And this week Engadget reported that T-Mobile USA will match the other big three wireless operators in jacking up SMS texting rates to 20 cents per message. The price increase goes into effect August 29.

I've been one of those people who text infrequently enough to justify not having a text messaging plan. The odd month where my texting costs more than $5 is more than offset by the number of months that it doesn't.

At this rate, this logic should fail by the end of next year.

Crave points out that the wireless companies are doing this for the obvious reason - because they can.

It sure isn't bandwith-related. Other higher bandwidth services are charged differently. Good thing, too. According to Sam over at a gthing Science Project, if the same per-byte rate was applied to the other cellular data transmissions we'd freak:

It would cost you $5,991.88 to transfer - not even to buy - a single song [using the text messaging transfer rates]. 

Heller: Release the hounds!

The Heller opinion (PDF) broke new ground for gun rights in America - but Justice Scalia took pains to define the boundaries of this new territory:

Like most rights, the Second Amendment right is not unlimited. It is not a right to keep and carry any weapon whatsoever in any manner whatsoever and for whatever purpose: For example, concealed weapons prohibitions have been upheld under the Amendment or state analogues. The Court’s opinion should not be taken to cast doubt on longstanding prohibitions on the possession of firearms by felons and the mentally ill, or laws forbidding the carrying of firearms in sensitive places such as schools and government buildings, or laws imposing conditions and qualifications on the commercial sale of arms.

-as if this would head off foolish assertions of 2nd amendment rights.

Oh, Scalia - how little you  know your fellow Americans:

Atlanta airport gun ban is challenged (LA Times)
ATLANTA -- The showdown over gun rights spilled into the nation's busiest airport Tuesday after a Georgia legislator announced that he would walk into the Hartsfield-Jackson Atlanta International Airport carrying a handgun.

This should be an interesting discussion: Law-and-order conservatives vs. gun rights conservatives.

My money's on law and order. I can't wait to see this turkey in cuffs screaming about his rights.

(H/t to E)