Ten Years Ago

This piece from the September 30, 1999 issue of the New York Times tells about a program initiated by Fannie Mae to "help increase home ownership rates among minorities and low-income consumers." And how would this program increase home ownership? Ah, it was a brilliant plan - brilliant I tell you:

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans.

To be honest, they didn't do it our of pure altruism; there was some "pressure" applied by various parties also deeply interested in the welfare of minorities and low-income consumers.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

But hey, they were just doing it for the children, weren't they? And how did they propose to help those minorities and low-income consumers? With a plan that was a brilliant as it was daring: they would loan money to people who couldn't repay it!

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

I just feel a warm glow all over knowing that the government cares so much about minorities and low-income consumers, don't you?

And now, after the government has done so much to help, they are going to do even more!

Oh, I am flushed with giddy anticipation at the wonders our Glorious Leaders have planned for us poor minorities and/or low-income consumers ten years from now. I mean, who could have guessed ten years ago that these programs would be so stunningly successful? The sourpuss who wrote this piece did mention a wee tiny dark cloud on the horizon, a cloud no darker than a man's hand, one might say:

Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

Good intentions are really all that matters, and no one but no one has more good intentions than Our American Government.

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Call your Congresscritter. Make their lives as miserable as they have made yours.

I added a new post to Rockonomics today, for those of you interested in trading-related stuff.

Chicago Tea Party

Enough is enough.

You can lead the borrower to the bank...

...but you can't make him take out a loan.

This story from Bloomberg highlights the fundamental problem with the Billionaire Bank Bailout Bill III Congress is gonna pass tomorrow.

People are not taking out loans like they used to because we are afraid we won't be able to afford the payments.

It's simple stuff like this that convinces me Congress, Treasury and the Fed are conspiring together to make the Bankers rich regardless of the damage it does to everyone else.

We now have the government Alexander Hamilton wanted. Ain't it a sight?

Congress Does What Jesus Can't

This is not original with me. I heard it from Guy Adami on Fast Money yesterday.

We all pretty much understand how much a million dollars is, and I guess we could all figure out how to spend a million dollars, right?

But does anyone really understand how much a trillion dollars is? Here's a little illustration.

If Jesus started spending a million dollars on the day he was born a little over two thousand years ago, and if he spent a million dollars a day, every single day since then, right up until today...

...He still wouldn't have spent a trillion dollars.

It'll be almost another thousand years before he is able to spend a trillion dollars, even at the rate of a million dollars a day.

But Congress is gonna spend a trillion dollars (that they don't have), to bail out the banks that lost trillions.

Makes you feel all warm inside, doesn't it?
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Call your idiot Congressman and tell him that giving money to the same idiot bankers who got us into this mess is not a real good idea. Here's the links to find their contact information:

House of Representatives
Senate

Morons & Bastards

It's hard to imagine that there is a group of people more contemptible than Congresscritters, but Wall Street bankers have managed to fill that role. Now the morons in Congress are beating up on the bastards of Wall Street as if their own halos are tight and wings are secure.

In the immortal words of the bard, a pox on both their houses.

Your Daily Dose of Bad News

Layoff Daily. What a great idea.

Uncle Sam Wants to Pay Off Your Mortgage

Well, that's not exactly what the stimulus package is supposed to do, but the amount of money that the government is committing to "rescues", "bailouts" and "stimuli" is - according to Bloomberg, which has actually kept track of these things - NINE POINT SEVEN TRILLION DOLLARS. (I think it has a bit more impact when written out like that.) That's enough money to pay off 90% of the mortgages in the country.

Lemme ask a question: Would you be more likely to get out there in the economy and spend money if the government paid off 90% of your mortgage?

Uh huh, I thought so.

That ain't gonna happen, of course. Instead, the money is going to spent so that billionaire bankers don't have to sell their private jets to afford their third vacation home in the Bahamas.

Truly, if you are a banker who is not a miserable greedy lying bastard, you must be embarrassed beyond words. I'll bet you've been considering a job that held in higher esteem, like maybe becoming a used car salesman, or a pimp.

Best Analysis Yet

This analysis of our country's financial condition, by James Quinn, is the best I have read yet. Among the most salient points, since 1980:

• The National Debt has grown by 1,150%
• GDP has grown by 500%
• Consumers have increased their total debt level by 738%
• Revolving credit increased from $56 billion in 1980 to $982 billion
  today, a 1,750% increase

In other words, we've borrowed way too much money. And the money the government is spending to "stimulate the economy"? That will be borrowed as well. The change we can believe in is this: we will borrow and spend our way out of the largest debt bubble in history.

Quinn compares the US situation today to that of Japan in 1989 and concludes that we will be very lucky if we make out as well as Japan did.

If Wishes Were Nuts...

I've recently been involved with a group that is trying to exert influence over Arizona's budgeting process. State budgets are deadly dull things, right up until we find out that our state is insolvent. Then it gets exciting.

Things have been very exciting in Arizona lately.

The Center on Budget & Policy Priorities released a report indicating that 46 of 50 states are facing insolvency. Not mere "budget crunches" - actual insolvency. Arizona leads the pack with a budget shortfall that totals almost 16% of the general fund.

We wish it were different.

We wish we had enough money to pay for everything people want from their government. We wish we didn't have to exercise fiscal restraint. We wish we didn't have to make hard choices. We wish we didn't have to work so hard and get so little in return. We wish greedy people wouldn't shove and grab. We wish lazy people would work hard. We wish sick people would get well, and poor people would get rich, and bad people would behave, and good people would be even better. We wish someone else would fix it. We wish someone else would sacrifice. We wish that wishing would change things. We wish for a fairy godmother instead of self-discipline. We wish for strokes of good fortune instead of years of diligent labor. We wish for Easy Street and Happy Days instead of "nose to the ground", "hand to the plow" and "shoulder to the wheel".

For a long time, we've inhabited a fantasy world where dollar bills were equated with wealth, credit was the same as money, and good intentions were the same as good works.

We wish lies were the truth.

But all of our wishes and all of our good intentions have amounted to less than nothing. When Fantasy Worlds collide with the Real World, the Real World always always always always always wins. Fantasy is fine, as long as it is never exposed to the harsh ways of reality.

We have fantasized since August 15, 1971 that printing money was the same as creating wealth. We managed to avoid reality for 38 years. That's really quite impressive. But we can't do it anymore. Reality is here. The fantasy is over.

Arizona will be bankrupt within 4 months, unless we stop fantasizing.

Sorry folks, it's time to live in the real world again.

VDH makes some good, if politically incorrect, points.

The (Near) Death of the State by Llewellyn H. Rockwell, Jr.
Yesterday was one of the worst days in decades for the power elite. It was one of the best for liberty.

I knew Tiger Woods was a terrific golfer, but this is ridiculous.

(I love it!)

Big Time Crooks

Somebody knew something in the days before the Bear Stearns debacle. This kind of behavior is criminal; it is theft on a grand scale, but I guarantee you that no one will go to prison for it. When it is bankers who rob the banks, and bankers who write the rules, you can be sure no bankers will ever serve time.

On Marriage

My (common law) wife and I have a marriage, but we have never had a wedding. In previous times, I might have said that we lack "the benefit of a wedding", but I no longer think a wedding confers any benefits. Here's why.

We each had previous weddings. We each had the official sanction of both church and state governments, and when push came to shove, neither the state nor the church did a thing to help us keep our original marriages intact. If there is some alleged benefit to having the official sanction of the government and/or the church in the initiation of marriage, we sure didn't see it.

Now the state - and some churches, including my denomination, the ECUSA - are granting the status of "marriage" to homosexual couples. If homosexuals want to make a commitment to one another, that's fine with me. I figure you take love where you can find it. But for the entire history of the human race, a "married couple" has had a male "husband" and a female "wife". Now the state has decided that "marriage" doesn't mean that at all. Now it just means, "Bruce and Steve want the legal right to file their taxes as if they were married." And if Bruce and Steve want to get a divorce, then the state grants them that as well, no questions asked. It won't be long before the state grants a marriage license to any conceivable combination of entities, sentient or not. If a guy wants to have a marriage contract with his Pepsi Machine and his pet hamster, the California Supreme Court will allow it and the rest of the moron governments will follow suit.

The churches are mostly toothless in the face of this debacle. The ones that just follow whatever the gubbmint says, like the idiot Episcopal Church of the USA, (I can call it idiotic 'cause it's my church), will not draw the line anywhere; they are clueless. Some of the more "conservative" churches, (I use scare quotes because the only thing they are conserving is their imaginations of the past), will fuss and fight and condemn the godlessness of the culture but will not do the one thing that will make a difference: quit getting in bed with the government.

The churches in America act as agents of the state when their ministers announce that the happy couple is now married "according to the authority vested in" the minister himself by the state. If the church has the authority to make a couple married, then that authority should be coming from God, not from the state. And if the church does indeed possess that authority, then she should exercise it without apology and without qualification.

The Bible has a lot to say about how a couple should treat one another if they are married, but it is utterly silent on how a couple goes about becoming married. When a man and woman choose to live together as if they were married, then the only biblical response is to hold them to scriptural principals of behavior towards one another. If the church is going to claim the authority to marry people, then they better come up with a good explanation for how they gained that authority. Otherwise, please just shut up.

Those who spend much time around me know that I have a deep interest in matters economic and financial. In fact, I know enough economics to truly understand why it is known as "the dismal science". Nevertheless...

This presentation is well worth your time. Since we are in an election year, we'll have the candidates and the talking heads in the media telling us what is going on. Do yourself a favor: instead of listening to them, (let alone believing them), educate yourself. This presentation tells exactly where we are financially, how we got there, and what will happen in the future without some significant changes.

I repeat - take the time to educate yourself. Don't depend on someone else to tell you.

This is hysterically funny if you take the point of view that our country is totally screwed - which I do. Not so funny if you harbor any hope of us getting out of this mess with our freedoms or our constitution intact.

A bill winding its way through the Congress, (the so-called Dodd-Shelby Bill, also known as HR3221), is supposed to help "troubled homeowners" keep their homes. The reality is that the bill will use $300 billion in taxpayer money to bail out banks that made stupid loans.

Oh, and the bill was basically written by Bank of America.
And BofA is trying to buy Countrywide, but doesn't want to be responsible for all the bad loans Countrywide wrote.
And Countrywide made an extra-special, super-duper home loan to a guy by the name of Christopher Dodd, who just happens to be the sponsor of the "Dodd-Shelby" bill.

Ain't that just a knee-slapper?

Here's the actual BofA presentation from March 11 of this year proposing what is now the Dodd-Shelby bill.

When the revolution comes, the first people up against the wall are going to be the bankers.

I've retired from the Boar's Head Tavern, (thanks for six great years, Michael), but I guess I still need a place to talk about what's on my mind. So R/A is back in business.

When my marriage broke up several years ago, Mary Gauthier's CD Mercy Now, served as the soundtrack for the dissolution of my life. I queued it up today for the first time in several years, and I must say it has aged very well. IN other words, I like it because it's good, not just because it made me feel good back then.

Arthur Robinson has written a terrific article on the politicization of science for Human Events. We are teetering on the edge of a return to the dark ages when the UN decides that scientific fact can be better determined by polling and politics than by the scientific method.

If you haven't discovered it yet, Gary North's website is well worth at least a weekly visit. He updates it daily, and I almost always find something worthwhile there.

Hit 'Em Where It Hurts

As most of you know, I traveled to New York last month to protest the bailout of Bear Stearns by you, the taxpayer. Perhaps you pay no attention tpo what is happening with our country's finances, and if so, that is fine. The short version of the story is that speculators made spectacular bets that they could rich with mortgages. It turns out they were wrong, and now they have gone to the government and asked to be bailed out. They are going to raise YOUR taxes to do it.

Do you like paying for other people's mistakes?

Would you like to do something about it?

There is something VERY powerful and VERY simply you can do about it.

(I like simple and powerful.)

Here's the what you do: Between June 5 and June 15 this year, pull all your cash out of the bank. All of it. For those who want to know more, here's a website describing it. In short, what will happen when you pull your cash out of your bank is that the banks are forced to lend less money. Since the bankers are the ones who made the bad bets, lost a ton of money and are now asking Congress to make good all their bad bets with YOUR tax money, it only makes sense to hit them where it hurts.

Let's do this together.

Ruminations on Baptism

If you were baptised as an infant, then someone made a decision to do something good for you, a decision that you were incapable of making for yourself. In baptism, the child is welcomed into the household of faith and accepted as a part of the community of faith - all very good things indeed. But the best part is that the "good thing" of infant baptism occurs not by an act of the child's will, but by the will of another who is wiser, more loving, and far less self-centered than the child.

We baptise babies who know nothing about what we are doing or why we are doing it. They neither ask for it nor want it nor - in many cases - welcome it, but it is a very good thing we do for them, and we do it because we love them.

Infant baptism is a vivid picture of the work Christ did on our behalf. I am aware that much of Christendom prefers believers baptism and I respect their opinions, but the picture presented to us in infant baptism is profound, and we would do well to meditate on it.

The scriptures tell us that even though we were "dead in our trespasses and sins", Christ made us alive. Note that it does not say say we were sick, or weak, or disabled - it says we were dead.

But because of his great love for us, God, who is rich in mercy, made us alive with Christ even when we were dead in transgressions... Eph 2:4-5

When you were dead in your sins and in the uncircumcision of your sinful nature, God made you alive with Christ. Col 2:13

The scriptures tells us that we were sinners and enemies of God, but in spite of that fact, Christ reconciled us to God through His own self-sacrificing death.

But God shows and clearly proves His love for us by the fact that while we were still sinners, Christ died for us... For if while we were enemies we were reconciled to God through the death of His Son, it is much more certain, now that we are reconciled, that we shall be saved through His life. Rom 5:8,10

He did all these things because He loved us, not because we loved Him. Christ found us in a state where we were incapable of helping ourselves, incapable of asking for help and incapable of even knowing that we needed help. And yet, in just such a state, He saved us because He loves us.

As men, we are geared to performing, to working, to earning everything we get. We are constantly evaluated on the quality of our work - at home, in the workplace, in the church, on the athletic fields and courts - and we are all very aware of how well or how poorly we measure up. At work, when we perform well we get raises and promotions. When we perform poorly, we suffer. At home, when we work to our mate's satisfaction, we are rewarded in ways both overt and subtle. When we perform poorly, we pay the price. On the playing fields, the winners survive to play another day, but the losers go home.

The whole world operates under this paradigm. It is so deeply imbedded in our individual and collective psyches that we are offended when anyone suggests that maybe, just maybe, God does not operate by the same set of rules we do. We believe with every fiber of our being that God rewards those who do good and punishes those who do evil, because everything in our lives works that way. We are offended when the evildoer "gets off", (think OJ Simpson) and we cheer when the bad guy "gets what’s coming to him", (think Saddam Hussein).

It is little wonder that we men think God plays by the same rules. But baptism clearly shows us that God plays by an altogether different set of rules. Our baptism shows us that God extends His love, mercy and fatherhood to us regardless of our performance, and regardless of the quality of our choices and decisions. In fact, He made us alive when we were dead in our trespasses and sins, and He rescued us even when we were His enemies. If that wasn't enough, (and to me that is plenty!), He promises that just as He was responsible for starting this "good work" in us, He will take responsibility for completing it.

...being confident of this, that he who began a good work in you will carry it on to completion until the day of Christ Jesus. Phil 1:6

Furthermore, He has already planned the good works that He intends for "us" to "perform".

For we are God's workmanship, created in Christ Jesus to do good works, which God prepared in advance for us to do. Eph 2:10

Imagine! God not only plans the work we will do, but promises that He Himself will be responsible for making sure the work gets done.

We live in a world where those who perform are rewarded, and those who fail to perform are punished. There is Good and there is Evil and the two are locked in constant war. The world must be run according to Good/Bad dichotomies, else how would we function? If you are on the right side and do the right thing, you will be rewarded, but step across the line and you should expect to pay the price.

But the scriptures tell us clearly that God doesn't follow that set of rules. In fact, He "justifies the ungodly" (Rom 4:5).

In the creation story of Genesis, God offers Man free rein in the garden, with one minor prohibition. God forbids Man, (in the person of Adam and Eve), to eat from one particular tree. It is important that we understand what happened there, and particularly, to understand the name of the tree.

Many people seem to think that the prohibited tree was called "The Tree of Evil." They believe that if they avoid evil they will avoid the sin of Adam. Some think it was called "The Tree of the Knowledge of Evil." You shouldn't merely avoid doing evil, you should avoid even knowing about it. But both points of view share the mistaken belief that God intends us to both know and do Good.

Both views are mistaken. The tree God forbade was called The Tree of the Knowledge of Good and Evil. God never intended for man to have the power to discriminate between "good" and "evil". Rather, He intended us to "walk with Him in the cool of the day" and take all our cues - about everything - from Him. But ever since we learned about Good and Evil, we have chosen to depend upon our own ability to "Do Good" and to "Avoid Evil" rather than find our life in God Himself.

Most people recognize that our sins separate us from God, but what few recognize is that our righteousness separates us from Him as well.

...all our righteous acts are like filthy rags... Isa 64:6

We demand "righteous behavior" from ourselves and from one another, never realizing that God is as unimpressed with our righteousness as with our sin. In fact, is this not the whole point of The Parable of the Tax Collector?

To some who were confident of their own righteousness and looked down on everybody else, Jesus told this parable: "Two men went up to the temple to pray, one a Pharisee and the other a tax collector. The Pharisee stood up and prayed about himself: 'God, I thank you that I am not like other men—robbers, evildoers, adulterers—or even like this tax collector. I fast twice a week and give a tenth of all I get.' "But the tax collector stood at a distance. He would not even look up to heaven, but beat his breast and said, 'God, have mercy on me, a sinner.' "I tell you that this man, rather than the other, went home justified before God. For everyone who exalts himself will be humbled, and he who humbles himself will be exalted."

The tax collector went home justified, not because of his deeds, but because of who he trusted: God. Contrariwise, the Pharisee went home condemned, not because of his deeds but because of who he trusted: himself. Living in the realm of "Good vs. Evil" and "Right vs. Wrong" places our trust in ourselves and our own deeds. When we do poorly, we condemn ourselves. When we do well, we congratulate ourselves. But in both instances, we are failing to trust God.

In His divine wisdom, God has chosen to accept us in Christ, not because we do well or because we do poorly, but simply because He has made as an object of His love. If we place our trust in Him, and in His love, then we too will "go home justified". But if we place our trust in our own works, whether they are "Good" or "Evil", we will surely go home condemned.

God's love is a free gift given to us without regard to our performance, worthiness or gratitude. It is truly free - just as our baptism was. We can choose to enjoy it, or we can choose to ignore it, but nothing we do can change the power or the graciousness of that gift.