Gee, mom, did God make Banks?

Everything that is "extra, extra complicated" really is "extra, extra complicated."
How to selectively avoid understanding almost anything.73

Oh darn. That $300 Billion bail out was supposed to help get credit started back up again, whatever that means. (For the numerically challenged, 300 billion is 300,000,000,000.) Gosh, we put the money into the “thing” at just the right places, but there are still all sorts of folks who can’t borrow anything. Nothing. Certainly not enough to keep business going and jobs in place.

Well, most of the most important people who could have signed off on those bail out checks, have. They are okay. They have enough money to last them through the disaster the rest of the country is facing. After what’s left straggles back to its feet, they can start the “trickle down.” Again.

“Trickle down” means that their banks will finally start loaning the money businesses need to keep going. Just before these "trickle down" folks start “trickling down,” most businesses will be in a failure state. They will be on their last legs. or, perhaps, on their backs. You know, “for sale” at a really cheap price. If the neo-con wet dream has come true by this point, it will be a shopping extravaganza if you have any money.

Gosh darn it, no one seems to have any money, though. Wait! There’s still the “trickle down” folks wandering around with what’s left of their $300,000,000,000! After all, they certainly haven’t lent much of it to anyone. Maybe, out of the goodness of their hearts and their great love of our country, they might be inclined to take a risk here and there, buy a few American businesses at bargain basement prices, and try to start the economy again.

That would be something new. Once again, they would wind up owning everything, strangling the rest of us not by “innovation,” “invention” or “competition,” but by good old fashioned business sense, funded with the tax dollars they took from us back in 2008. This next chapter of the “American Dream” just happened to have fallen into their laps by extraordinary good fortune!

They will have solved the labor problem, too. Labor problem? That means excessive wages and benefits will have been curtailed just in time for prosperity! The American worker's race to the bottom will be well under way by this time. No business means no jobs. No jobs means extra, extra low wages and plenty of desperate workers ready to gobble up any job (and any wage) they can get. It will be paradise! You know, just like "the good old days."

Captains of Industry. Maybe Dick Cheney will feel well enough to be President for a while. You know, well enough to “git ‘er did!”

Solution-wise this travesty makes the black hole of Calcutta look like a Sunday school social. Turn on your television. The man in the suit will explain everything. There is no solution. We just have to pump as much money as possible into these banks and then patiently wait and see if they start making loans again. Sort of like pushing a lobster through a key hole. It might work....

The reason it is all so complicated is because we just have to wait for these frightened bankers to get themselves into a little better frame of mind. They must be reassured. Right now, they are so freaked out with the prospect of being poor, they won’t even loan money to each other! The television man will provide you with 97 reasons why that is the case and another 231 reasons why this insanity is the only chance we have to get the lobster through the key hole.

Well, there is another solution.

A surprisingly American solution.

Here’s the plan. Split off a few billion of the bailout money and convert it to cash. (Bushie’s old Iraqi viceroy knows how to do this. And how! He was tossing around pallet loads of bundled U.S. hundreds to everyone who would stand still!)

Next, buy two or three thousand used Winnebagos. It’s okay. Gas is cheap right now, and we’ll be done with them before the price can get back to $4/gallon. Put a cot and a coffee maker in each one. Pack the back half of each Winnebago with cash.

Hire ten thousand bankers. There are plenty of unemployed bankers running around loose right now. Loan officers would be good.

Divide the bankers into three groups. Make them all Federal employees. The first group will go in the Winnebagos to make loans. The second group will be in charge of bookkeeping. The third group will be in charge of catching bankers from the first two groups when they cheat.

Next, park the Winnebagos in every city where the banks have not started loaning money, put out a sign, open the door and start making loans. I have to suspect that business will be good.

Pretty soon all those frightened bankers will get over their fright. Oh, whatever. In any event, they might stop buying each other, paying stock dividends and huge executive bonuses with our bail out money and start making loans again.

Total cost? $30 billion ought to get things rolling right along. Bailout money going to banks ($300 billion) hasn’t done much yet. Bailout money to businesses who need it and qualify might accomplish quite a bit.

God, is this ever complicated.

For a quick review of the journey of bail out money so far:
http://money.cnn.com/news/specials/storysupplement/bailout_scorecard/

Youth for McCain!

A short and passionate tale of elderly street theater.

Senator McCain scheduled a nice, dull town hall meeting here in Albuquerque. Some of the younger ones wanted to travel down to the UNM (University of New Mexico) campus and stand around demonstrating.

All that seemed reasonable enough. After all, it was a magnificent New Mexico autumn day, sunny and mild, and who knows? A friendly crowd offered the portent of pleasant company and new acquaintances.

I got busy on my home-made sign right away. Spreading the cardboard out on the living room floor and unceremoniously dumping all three boxes of various, colored magic markers nearby on the carpet, I began. As a neighborhood organizer for the Obama Campaign, all manner of aggressive and outlandish ideas for my sign's message were rushing through my mind. Still, there was my anticipation of some design problems, not the least of them the fact that half of the markers were, well, frankly, dried up and useless. Naturally, those would be all the good sign colors.

Furtive memories of that now ancient rebellious glory in Chicago at the Convention in 1968 were, by now, coursing through these old bones like an IV of adrenalin. One lesson of those halcyon days was to always use at least a 1" x 2" for a holding board. Another lesson was to never underestimate the persuasive impact of, yes -- you've got it -- street theater!

The right wording and a few of my "most geezerly" old people clothes would be enough for me to launch my one man mission to sign up young people for my "Youth for McCain" movement! Taping an American flag from WalMart (spelled: China) on the handle of my cane, finished the picture!




Of course, it would take both sides of this masterpiece to fully communicate the compelling nature of this invitation to these, till now, misdirected young people. I added a great, paper sunflower from Dollar General to "draw in the young girls."

That Obama rally was clearly on its last legs. Moving bravely into the midst of the crowd, I began.

"Get a haircut!"
"Join the Army!"
"Buy some stock!"
"Get with the McCain ticket, you spoiled back sliders!"

For those intrepid enough to endure these "American Dream" introductions, I immediately followed up with:

"I'll bet you don't even have a mortgage."

It was a great success! The mortgage crack kept eliciting responses such as "I'm only eighteen," but nothing could deter me once I was obviously on a run. To top off any of these dramatic epithets which got this far, I went on:

"Damned spoiled punk kids! Ingrates! Can't you appreciate all the sacrifices and hard work us old geezers have done to make this world what it is?"

"Grampy McCain is better than you deserve! Now. just hold your nose and get out there and vote for him!"

"You'll look good with a uniform and a rifle!"

Naturally, I offered some well seasoned geriatric advice to the young ladies, too. The astounding and inspiring fecundity of the second candidate in the "Youth for McCain" movement could hardly be overlooked. They were all transfixed by me, my well aged wisdom, that is.

"Have some babies, dammit!"

"America's tax paying future is depending on you!"

Oh well, I assume you have a fairly good picture by this point. Everyone had a good time except the Republicans who found themselves trapped in the auditorium.

Obama for President!

What the Bail Out Looks Like When It Saves Homeowners.

Is this the way it’s supposed to work? 60

The following fiction is a conversation between a foreclosing homeowner, Mr. Smith, and an agent from the newly created Federal Mortgage Correction Agency, FMC, Agent Brown.

“Mr. Smith, I’m from the Federal Mortgage Correction. I understand that you’re considering foreclosure for your home here. Maybe, if we review your situation, we can offer you an attractive alternative. Let’s see. The property in question is this house, 423 Elm Street, right?” FMC field agent Brown asked.

“That’s right. Ellen and I bought this place in August of 2005. I’m pretty sure that our adjustable rate mortgage can almost be considered a sub-prime at this point.” replied the homeowner, Mr. Smith.

“That’s actually not too important, Mr. Smith. The FMC is totally directed at the future. What we are trying to do is to help you and your family keep this house.” the FMC man answered reassuringly.

“But, aren’t all the banks wrecked after the President’s bail out got shafted by Congress?” Mr. Smith responded, dejectedly.

“No, a good number of the shakier ones went down, but there are a lot of good banks that are still in business. Along with you and your house, part of our job is to get this thing working again. That includes the responsible banks that were able to go through the meltdown and stay open. We can help them, too.”

“In fact, Mr. Smith, if we can get your mortgage repaired here, just about everyone will benefit.” FMC Agent Brown answered.

“Even if the outfit that lent us the money is one of the ones than went belly up?” Mr. Smith asked.

“Let’s talk about your mortgage. You originally financed through Nationwide Mortgage Finance, here in River City, right?” Agent Brown began.

“That’s right, but they went out of business.” Mr. Smith continued.

“I know. But your mortgage wasn’t really in Nationwide, Mr. Smith. It had been ‘bundled’ and sold to a finance firm in Arlington. They packed it up and securitized it and a lot of other mortgages, then sold them to a company called Shelby and Barsh. S and B is out of business, but they weren’t holding your mortgage when they failed. Most of their assets, including your mortgage, were sold on ahead to an investment banking company called Mazzara which was held by a sovereign wealth trust in the UAE. That is where your mortgage is right now.” Agent Brown explained.

“They pretty much told me that when I spoke to the Mortgage Help Line, but they didn’t know the details. Our problem got started when we tried to refinance.” Mr. Smith complained. "We listed it for sale, but that went nowhere."

“Right, Mr. Smith. That is where we come in. I have our records of the history of that first mortgage here. Let’s go over the numbers and make sure that they are accurate.”

“You purchased the home at its appraised value in August of 2005 for $229,500. You made a $14,500 down payment. Your mortgage for the balance of $215,000 ran 48 months at 5.25% until it reset at 6.75% this year. Your mortgage payments at 5.25% were $1966 a month. You have a good record of making those payments until just recently.”

“When your rate reset, you were looking at $2430 a month, and you tried to refinance. The appraisal on your refinance dropped to $188,000 so the best loan you could get was going to short your mortgage payment around $500 a month. I assume that is when you decided to foreclose.” Agent Brown offered, checking his file.

“That’s right. We pretty much went from owning a $229,000 house at 5.25% to owning a $188,000 house with a 6.75% rate on a $215,000 mortgage. We made those payments for four months through the summer, but we just couldn’t keep up. It seems like everything else went up at the same time.” Mr. Smith explained.

“Is the Federal Mortgage Correction going to buy this house for us? I mean, how does that work? Ellen and I have thought about every possible way we could keep this house, but we came up with nothing.” Smith asked.

“Well, Mr. Smith, FMC isn’t going to buy your house for you. That isn’t exactly how the bailout works. What we can do is make it so you can stay in it with a mortgage payment you can afford. To accomplish that we can offer a two pronged solution.

“First, we can take some of the $700 billion, track down whoever holds your mortgage and make them an offer. Naturally, they would like to get all $215,000 that was financed in the first place. That is not going to happen. They are going to get to start talking to us at the current $188,000 appraisal, but from there, they will have to decide what it’s worth to them to not wind up owning your foreclosed house. I would estimate that this mortgage can be purchased from them for around $165,000 or so.”

“After we obtain the house, you and the FMC will have to arrive at a new mortgage agreement. That is the second prong. We never wanted to be in the mortgage business, so we’re already out of our comfort zone. The interest on your new mortgage is going to have to compensate us for our investment and our trouble. In our favor, we can make a little money. In your favor, you can have a solid thirty year mortgage at market rates -- a mortgage with a payment you can live with -- but you’re not going to get the money your mortgage holder lost getting out of your foreclosure. We’re the ones who did the heavy lifting on that account, and we will get that money. Your new mortgage will make it possible for you to pay for the house and settle with us.”

“Our purchasing muscle and the foreclosure threat knocked $23,000 off the appraised value you were trying to refinance. Your new mortgage with us will be for the appraised value of $188,000 and that figure will determine your mortgage payments. The outfit in UAE will have purchased a discounted copy of your $215,000 original mortgage and wound up with $165,000. Compared to worthless, toxic paper, which is what it was before we bought it, they will probably feel like they did the best they could have expected.”

“All the details of this agreement will have to wait until you get through the mortgage application process, but they will probably wind up looking about like what we have discussed. Can we make this deal?” the Federal Mortgage Correction agent asked, smiling.

What in the world could be better than bailing out bankers?