From Pine View Farm

This came through in my Quotes of the Day email a few days ago (emphasis added):

On two occasions I have been asked [by members of Parliament!], ‘Pray, Mr. Babbage, if you put into the machine wrong figures, will the right answers come out?’ I am not able to rightly apprehend the kind of confusion of ideas that could provoke such a question.
– Charles Babbage, 1792 – 1871

I figured I could do something with it, but what it was was not readily apparent.

So I decided to let it sit on the back burner of my brainpan for a while.

Then my friend Nancy nailed it. Put in the wrong numbers, and you get the bailout:

Re the quote: “. . .if you put into the machine wrong figures, will the right answers come out?”

That sounds like the Sec’y of the Treasury & Congress wrestling with the housing crisis!! {How in hell did it happen & whom shall we give the bailout $s to??}

Fortunately, Steve saved me the trouble.

The Bushie Legacy:

But a review of some of the publicly held builders’ annual reports reveals another human cost – job loss in the industry.

Hovnanian Enterprises Inc., of Red Bank, N.J., filed its Form 10-K on Christmas Eve, disclosing employment of 2,816 people as of Oct. 31. That was down from 4,318 a year earlier, or a loss of more than 1,500 jobs.

Beazer Homes USA Inc., of Atlanta, had 1,444 employees as of Sept. 30, 2008. It cut 1,175 jobs since Sept. 30, 2007, or 45 percent of its workforce.

Regionally, Orleans Homebuilders Inc. reduced its headcount by more than 20 percent during its fiscal year ended June 30, to 544 people. The Bensalem company said between June 30, 2006, and Aug. 31, 2008, it slashed its workforce by more than 50 percent.

Toll Bros. Inc. , the nationwide luxury home builder, eliminated 1,169 jobs over its fiscal year ended Oct. 31. Its workforce of 3,160 is now smaller than it was during its fiscal year ended Oct. 31, 2003. Employment peaked at 6,147 as of July 31, 2006.

Free hand of the market my anatomy.

Free hand of greed, fraud, and duplicity.

We’ve all been enronned.

Tim F. explains it here.

Jon Swift has posted his Best Blog Posts of 2008 (Chosen by the Bloggers Themselves).

Read it.

Now.

Why?

He may well be the best writer on the innertubes. His thumbnails of the entries are a hoot.

(Plus I’m right near the top because I happened to be sitting here when his email requesting a submission came in.)

Listen here.

Tuesday, Triumph Brewing Company, Chestnut between Letitia and Second, Philadelphia, 6 p.

If all goes well, I’ll be somewhere else.

Hoist one for me.

Robert Samuelson:

It’s the end of an era. We know that 2008, much like 1932 or 1980, marks a dividing line for the American economy and society. But what lies on the other side is hazy at best. The great lesson of the past year is how little we understand and can control the economy. This ignorance has bred today’s insecurity, which in turn is now a governing reality of the crisis.

. . . he means only those persons who think like him. Ya know, the ones who persist in error, despite reality and human nature.

He doesn’t include all those other folks, such as–just to pick a name out a hat–Paul Krugman (you may have heard of him–Nobel Prize and all that)–who have been predicting the failure of Reago-Bushonomics for years.

Robert Reich shares his analysis. Follow the link for his rationale:

1. The poor and near poor, with family incomes typically under $20,000 a year. . . .

2. Middle and lower-middle class households whose breadwinners are within five years of being eligible for Social Security. . . .

3. Middle and lower-middle class retirees. . . .

No, not that fast lane. This fast lane:

Back in October 2000, just before he was elected president, George Bush described his base as “the haves and the have mores.” The remark was made in jest at the annual Al Smith Black Tie dinner, but the joke turned out to be on all those people who used to have just about enough, and who now, eight years later, have next to nothing.

According to government data, as of September, 31.5 million Americans were using the food stamp programme, up 17% from the previous year. That’s 10% of the US population. These are staggering figures.

They bring to mind another staggering figure I recently came across that I have been unable to remove from my subconscious. It is $163,987,000 – the salary that Henry Paulson, now secretary of the US Treasury, took home in 2006 for his services as CEO of Goldman Sachs.

More here.

The computer mouse turns 40.

I sure hope 40 cheese straws constitutes a balanced supper.

(Aside: The recipe is wussified. If you want to try it, remember to quadruple the cayenne and add some Frank’s Red Hot, then sprinkle the straws with cayenne before they go in the oven. Oh, yeah, and use a metal cookie press with the squiggly mold. A plastic cookie press won’t take the strain.)

Slackware runs this site.

The review is here.

They’re not dummies. They like it.

Cheryl Logue, of the 100 block of Landing Drive, jumped into a Comfort Ride Taxi around 10:45 p.m. and told the driver she didn’t know where she wanted to go, said Cpl. Gary Fournier, a Delaware State Police spokesman.

When the 35-year-old cab driver continued to ask for an address, Logue began punching his right arm, Fournier said.

The cabbie then ad libbed a destination: the local pokey, where our heroine chose verbally to assault the gendarmarie.

Aside: You know it was a slow news day when the first story on the front page of the Wilmington local rag is a high school basketball game.

I hear the groaner down by Fox Point.

Unintended irony strikes deep. Into your soul it will creep.

“We hope to do to this industry what Wal-Mart did to theirs, Starbucks did to theirs, Costco did to theirs and Lowe’s-Home Depot did to their industry. And I think if we’ve done our job, five years from now you’re not going to call us a bank.”

— Kerry K. Killinger, chief executive of Washington Mutual, 2003

He was right, though not in the way he intended.

Starbucks sells something. They sell really bad coffee, but it’s still something.

Costco sells something. If you have a chest freezer, it’s a great place to shop.

Walmart sells something. Inferior products from cheap labor, but still, it’s things.

Lowes and Home Depot sell real things that weigh lots of pounds.

WaMu sold (note the past tense) boxes of air.

And now they are gone with the wind.

They are truly not a bank.

At least, not any more.

Via Duncan.

Back when I worked for the railroad and had an office in 30th Street Station, I would wander the waiting room floor during breaks, enjoying the floor show that the public always provides.

Occasionally, I would be approached by a panhandler whose strategy was to say, “I’m trying to raise money for a ticket to Lancaster.” (Why Lancaster, I never figured out. None of them looked like anyone I’d ever seen in Lancaster, and I’ve spent a lot of time there. Besides, Lancaster is not well known for MD 20/20.)

I used to suggest that they check with Travelers’ Aid. Not actually being interested in getting home to Lancaster, they usually slowly moved away.

Well, no more.

Josh Marshall looks deeper into the Toussie almost-a-pardon. He has his doubts:

Needless to say, I’m not an attorney or a constitutional expert. But I’ve seen few if any press write-ups with quotes from people with relevant expertise who say the president is actually able to do this. And my discussions with people with relevant expertise give me the strong impression that the president’s action is highly dubious in constitutional terms, even if no Court case has specifically addressed this combination of facts.

Using “Bush” and “highly dubious in constitutional terms” in the same sentence. NOOOOOOOOOoooooooooooooo!

Addendum, the Next E-ve-ning:

Josh has more strengthening the case that Toussie may be able to hang on to his pardon.

Typical Bushie incompetence. No. Strike that.

A new high in incompetence, even for the Bushies.

And they’ve set a high bar in that field of endeavor.

H/T Karen for the link.

(Yeah, I know this is going to be blogged to death and no one will notice my little rantings back here in the last row, but, as my mother would have said, “Honestly!“)

Lead* from The Hill:

RNC candidate Chip Saltsman’s Christmas greeting to committee members includes a music CD with lyrics from a song called “Barack the Magic Negro,” first played on Rush Limbaugh’s popular radio show.

Gunnar Myrdal said that “the Negro problem in America is a white man’s problem.”

Clearly, these Republicans do have quite a problem.

I will not pretend to understand the dynamics of contemporary race relations in the United States. I will claim to understand a lot of the history of them, because I’ve studied it. And I have lived through major changes in them, from growing up under Jim Crow to living, these days, thankfully, not under Jim Crow.

Anyone who would argue that racial prejudice–not to mention religious prejudice, sex (”gender,” by God! is a grammatical concept–it has to do with words, not persons) prejudice, and other types of prejudice are not part of American society is a fool or a self-justifying bigot or a combination thereof.

Now, I’m not arguing that the “Barack the Magic Negro” guy is personally a bigot. I don’t know the gentleman and, fortunately, hope never to meet him.

I will argue and have argued that the Republican Party made itself the party of bigotry with the odious “Southern strategy.” Whether or not individual party hacks leaders were personally bigots is immaterial; the party set out to take advantage of bigotry for electoral gain (in much the same way as it cynically recruited fundamentalist right-wing Christians with its phony-baloney “family values” rhetoric).

I will say this with great certainty: Anyone who’s lived through any part of the 60 years of the current civil rights struggle and hasn’t figured out what he can’t say (or do) in public without getting into trouble is too stupid for words.

(That, of course, eminently qualifies him for RNC Chairperson.)

Steve has more over at ASZ. A nugget:

It is still up in the air whether the Republicans will ever learn that civility is the new way to win campaigns.

(The Hill via Huffington Post.)

______________________

* It’s “lead,” as in the “lead into the story,” not “lede,” dammit. Misspelling a word does not make it more important or more special.

Steve lays it out over at ASZ.

The Booman explains why truth matters.

Wrapping up the year, from Fact Check dot org:

We’ve often said that the spin never stops in Washington. And the weeks since Nov. 4 offer further evidence of that.

Consider some of the bogus claims we’ve debunked just since Election Day:

• It’s not true that unionized auto workers at Detroit’s Big Three make more than $70 an hour, as claimed by some opponents of federal aid.
• And no, 3 million workers won’t be tossed out of work if aid is not forthcoming, as claimed by those favoring a taxpayer bailout.
• President-elect Obama never promised to seek a ban on all semi-automatic weapons, as claimed by some fearful gun owners.
• And no, Obama did not propose a Gestapo-like civilian security force as claimed by a Republican member of Congress from Georgia and any number of overwrought bloggers.
• Democrats in Congress are not discussing any plan to confiscate the assets in 401(k) retirement accounts, another falsehood spread about by chain e-mails and Internet postings.
• House Speaker Nancy Pelosi did not demand a 757-size personal jet, a false claim resurrected when Democrats criticized Big Three executives for flying to D.C. on their own private jets to beg for aid.
• And Pelosi’s husband doesn’t own a $17 million stake in a food company that she may (or may not) have tried to help with an exemption from a new minimum wage law.

For details, plus bonus features including video of misleading TV spots by the United Auto Workers and by auto dealers, please read on to the Analysis section.

Bonddad explains “securitization”:

This is where securitization comes into play. Instead of making one big pool of mortgages we “carve up the cash flows” – meaning, we make a series of bonds that pay people at different times. For example, one bond will pay principal and interest to a specific bond holder for three years beginning 3 years from now and ending 5 years from. Another bond holder will get principal and interest payments for 7-10 years from etc…. That’s all that securitization is – pooling a group of mortgages with similar characteristic (interest rate, length of maturity) and directing the various cash flows to different people at different times. That’s all.

This process has been going on for the better part of 25-30 years now without much incident. So – what went wrong this time?

The biggest problem with securitization is no one has a vested interest performing due diligence on the borrowers – the people taking out the mortgage loans. The mortgage brokers write the loan and sell it to a large investment bank. The investment bank pools the mortgage and carves it up into different bonds. The bond holders don’t hold all the collateral, only pieces of it. As a result, no one really owns all the mortgages for an extended period of time. Instead, the most they own is a piece of a larger pool of mortgages.

Let’s go back to the first few paragraphs. Remember – we’re using collateral composed of residential mortgages. What if we’re writing a lot of mortgages to people who aren’t credit worthy? That’s the central problem with the mortgage securities market right now – mortgage brokers wrote a lot of loans to people who couldn’t afford them. In other words, the collateral used as the basis for mortgage backed bonds was bad collateral. No matter how you carve the cash flows, you’re still using collateral that will eventually default.

Addendum, That Evening:

Mithras thinks Bonddad isn’t clear on what is the cart and what is the horse.

Frankly, I think that Bonddad pretty much nailed the mechanics of the process; that’s what I was interested in when I put up the post this morning.

As to where it went wrong, well, we can argue over the mechanics of what went wrong, and everyone can be right and everyone can be wrong all at the same time.

Whether it started to go wrong on Main Street, with the mortgage lenders, or on Wall Street, with self-designated Masters of the Universe, is really not the issue.

It went wrong when financial types convinced themselves and their regulators that the “invisible hand of the market” (whatever that is) was somehow inherently moral.

It doesn’t matter whether the initial mistakes were made by lenders or by Wall Street.

For all practical purposes, they colluded. Main Street signalled it was willing to make junk loans. Wall Street signalled that it was willing to “securitize,” well, just about anything, as long as it could find marks buyers. Hell, they would have “securitized” free paper matches if they thought they could find buyers.

Chicken or egg? Egg or chicken?

Doesn’t matter.

What matters is that, when greed takes control, good sense and judgement and moral sense go out the window. The “invisible hand of the market” knows not morality, but worships wealth.

I must say, though, that, as far as I am concerned, Mithras has a better handle on a solution: Make sure that the box of stocks Wall Street is trying to sell is not a box of air.

That breaks the fraud.

All that matters for a solution is breaking the fraud at the most efficient possible location.

Criswell predicts that the Bernie Madoff case will be the foundation of a Law and Order episode by March.

A fable of our times.

Via Susie.

Bumper Sticker:

An Obedient Woman
was never remembered by history.

Holy moly. Going out in a blaze of dumb.

Steve comments.

H/T Karen for the link.

Addendum:

Digby has a theory.

More lies. It’s the only weapon they have.