Well, this one woke me up this morning. From the Washington Post article:
Created more than four decades ago to help expand homeownership, Ginnie Mae works in the guts of the financial system, offering a secondary layer of government insurance that helps make it easier for mortgage lenders to provide financing for home buyers. The first layer of government backing comes primarily from the Federal Housing Administration, which principally seeks to help first-time home buyers who have impaired credit or little money for down payments. The FHA insures the mortgages made to these borrowers, promising that the lender will ultimately be repaid if the borrower defaults. The FHA has the primary responsibility for monitoring the lenders.
Then Ginnie Mae enters the picture. Mortgage lenders often want to bundle the loans they’ve made into securities and sell them to investors. Ginnie Mae guarantees those securities, ensuring that investors continue to get their principal and interest without interruption if any of the loans go bad or lenders are otherwise unable to make payments to investors. This additional insurance makes the securities easy to sell, generating new cash for lending.
The money line:
“Ginnie is like an accelerant to a fire,” said Anthony Sanders, professor of real estate finance at George Mason University.
So we’re looking at a federally-based reinsurance for lousy loans which then protects banks looking to bundle risk to get cash to go make more lousy loans. I’m sure in a gentler time this made some form of sense, but now it’s a loophole.
Actually, I didn’t post this to rail on housing. I’ve done that before. I want to point the barrel at government oversight overall. Much legislation and agency creation is targeted in a time when it “seems right” to make a move to protect some business or consumer from itself, and later that becomes a loophole for lousy business practices protected by your and my money.
So what’s this about all the good intentions around government-run healthcare? Were HMO’s not a bad enough idea?
I’ve known and suspected for a long time that many leading science academics of all stripes hide some of the most atrocious behavior behind “but science is OBJECTIVE” disclaimers. But the entire flap over “climategate” brought a pattern to mind – that of when the proverbial roles of David and Goliath flip flop.
It’s happened very frequently throughout history – interestingly the results of the flip flop are less tragic (and usually less bloody) when the individual or institution in the role of David realize that
A) I now have the power that I fought against, hence I am now “the establishment”
B) it really didn’t feel great to be persecuted because I was the little guy, the underdog – and perhaps I should be more magnanimous than those who persecuted *me*
From Valerie Jarret continuing to claim that the Obama administration is still trying to ’speak truth to power’, to the colluding scientists that did to climate analysis what Enron did to corporate finance and internal whistleblowers….to news organizations that write as if their 60’s anti-establishment behavior towards the institutions they knew as ‘bad guys’ 40 years ago constitutes ‘objective journalism’ - it all rates a big “are you KIDDING me?”
How is this behavior ANY different than what the Roman Catholic church did to Galileo? Science hasn’t been “David” to the church’s “Goliath” since the age of Enlightenment gave way to the age of Modernity. There are bloodier examples – Jacobins in the French Revolution, Lenin/Stalin in the USSR towards the peasants they ‘freed’ - in order to starve them to death later. It is not “those who ignore history are doomed to repeat it” – instead, the winners can’t stop reliving their own history even after they have the power, their ideas are unable to hold together if they actually win.
It’s possible that the battle you happen to be fighting determines what the behavior of the winner is in the end. Lily Tomlin pointed out “the problem with winning the rat race is in the end, you’re still a rat.” Perhaps the reality is that “The hardest thing about any political campaign is how to win without proving that you are unworthy of winning.” (Adlai E. Stevenson) and the ideas that won weren’t really better than the ones they replaced – they were only able to shine in the contrast of another alternative, not stand on their own as a philosophical whole.
The most risky time for an idea – which includes strategy – is if the idea is actually adopted. The advocacy, the debate, the analysis are the easiest phases. Strategy – effective strategy – only amounts to success in execution.
Hey, we’re awake. Lynn and I have both been busy doing our real jobs, and the other three are just lazy. (Yes, I’m kidding.) Anyway, I’d commented a while back that there was nothing to report since everything was just waiting for votes that we already knew would happen. I’ll get back to healthcare and cap-and-trade when something really starts moving.
For now, I’m thinking about being thankful, in my own way of course. I’m, of course, thankful for my wonderful wife and odd dog, and for the family I occasionally see. Moreso, I’m thankful for the people in this world who use basic logic instead of hyperbole to rule their lives. Here’s a great example of that, and a reminder that we should be thankful for farmers who harvest the food we so much take for granted.
I had to laugh at a recent Nicholas Kristof column in the New York Times, in which he had traveled back to his family’s farm in Oregon and was remembering how it was when he was a boy. But that idyllic time is lost, all lost, and Kristof concluded that farms have lost their soul. Or at least “industrial” farms operate at a soul deficit. I don’t know exactly what Kristof meant by the loss of soul. Reading what others write about agriculture, I sometimes think that what others see as “soul,” we farmers remember as grinding poverty and isolation. Does the fact that I follow the grain markets on my iPhone imply a loss of soul? If so, then this “soul” business is all cabbage, and the hell with it.
Go read the whole thing, and remember that behind all the food we’ll get this weekend are hard-working people who balance tradition and technology to garner a living and provide us with life.
Happy Thanksgiving.
A very un-inflammatory article on “National Affairs” by Willam Schambra regarding “policy” presidents and the progressive movement explained a number of things I had wondered about – but left me some major questions
A summary of the approach is:
“For him[Obama], governing means not just addressing discrete challenges as they arise, but formulating comprehensive policies aimed at giving large social systems — and indeed society itself — more rational and coherent forms and functions. In this view, the long-term, systemic problems of health care, education, and the environment cannot be solved in small pieces. They must be taken on in whole, lest the unattended elements react against and undo the carefully orchestrated policy measures.”
And then the rest of the article describes the issues with successfully implementing a policy approach here in the USA. In that light, Thomas Friedman’s recent blather about how much better the Chinese have it because they can be autocratic in implementing policy explains a lot about that line of thinking.
“ Progressive reformers throughout the 20th century came to denigrate the wisdom and relevance of the American Constitution, which frustrated centralization and coordination by dispersing governing power across the states and over the branches of government. Once thought essential to American freedom, these institutions now came to be seen as impediments to coherent national governance.”
Here is one big question this article inspired: Take immigration reform and saving the earth/lowering the carbon footprint – two of the recent major policies that the Democrats and Obama are pushing for.
They seem to be in fundamental conflict.
A recent article “think globally, cull locally” by Mark Steyn correctly points out that
“Those Bangladeshis with their admirably low emissions move to Yorkshire and before you know it develop a carbon footprint as big as your guilt-ridden liberal environmentalist’s. … why not call not just for compulsory sterilization but an end to immigration, too? Keep all those Bangladeshis in Bangladesh, where they can’t destroy the planet.”
So, when you are a policy president who wants to A) get more democratic voters registered, and B) who wants to reduce the US carbon footprint, what exactly do you do? If you do (A) you ruin the policy design of (B). Is there an “upper Czar” who makes the call on which unintended consequence of which policy takes precedent?
I’m not sure that the policy approach can be coherent, even if you account for the sloppiness of humanity & the inability of social scientists to agree on what fundamental questions should be answered about it (much less what the answers should be).
In the case of strategy design, the strategy has to work within the environment and you have to design the strategy such that there is a “Force 10 from Navarrone” dam breaking intended consequence to it – otherwise, people who don’t see how the big picture fits together will mess it up.
If you’re smart and aware, you don’t have to be an autocrat to be successful. You simply have to be smarter than the average bear
Okay, I disagree with the football part. I still watch. But Victor Davis Hanson has a great article on dropping out of the current culture. I often get shock and surprise at how little of the current culture I follow, and it’s nice to know I’m not alone.
Some, by the way, would probably say that this DQ’s me from actually commenting on culture, and you’ll note that I don’t spend a ton of time actually railing on what I don’t watch. But I don’t believe that one needs to be immersed in culture to have an opinion. On specifics, yes. On generalities, no.
Thanks Victor. I’ve never been a joiner, but at least I don’t feel so alone.
seriously, I thought that conservatives were the non multicultural yahoos with no appreciation for the differences that ethnic diversity brings to the world.
Apparently not – from Yahoo news:
India outlawed gender-based abortion more than a decade ago. However, the death toll of female fetuses continues to rise. Also banned is the use of amniocentesis and sonography for sex-determination. But that hasn’t stopped what now amounts to “gendercide.” The illegal sex-selective abortion industry makes about $250 million a year in India.
“The number of girls killed over the past 20 years is going to change our society,” said Puneet Bedi, an antifeticide activist. These atrocities have left India without 10 million girls. “We are all going to pay the price,” Dr. Bedi added.
Without girls in India, there will be no wives, no mothers, and no future. Cruel methods of murdering newborn girls – often committed by senior women – include poisoning, starvation, and drowning.
I love this one: “International pressure is also needed. The 20th-anniversary celebration of the Convention on the Rights of the Child is this month. The convention upholds a universally agreed-upon set of nonnegotiable basic human rights standards and obligations, including the right to survival and protection”
Sure. Let’s just tell them their values are wrong in how they use the technology….. that’s going to make it all better.
As I mentioned before, the Romans practiced infanticide, and selected female babies out in far higher proportions. There is an anecdote that it certainly changed THEIR society. In Rome, the Christians were a bunch of poor stupid slaves as far as the Romans were concerned. There was a catch however….the Christans believed all life was precious, and were moved to rescue unwanted female infants. Within a generation or two, guess who the Roman men had to go to in order to get eligible wives? Chrisianity was probably looking pretty good in comparison to another battle campaign in Londonium….so, unintended consequences will often play out over generations.
I’ve talked about this before – as a woman, I seriously think the media, NOW and the overall “keep your hands off my body” crew have been selling – or been sold – a bag o’ poo. If it’s good for women, it should be good for all women, right?
Here’s an AP article on something that’s been bugging me. The article is highlighting a symptom, but the story is there.
Google Inc. said Monday that a board member who also serves as a director for computer maker Apple Inc. is stepping down, removing a potential conflict of interest as the two companies look to compete more directly.
The person in question is Arthur Levinson, Genentech Chairman and Apple board member. The number of actual corporate execs on the Google board is getting reasonably low. I should add the disclaimer that Paul Otellini from Intel (i.e. my CEO) is one of them, and that nothing I’m saying reflects the feelings of Mr. Otellini or the Intel corporation. Anyway, it’s somewhat interesting to see Google start to focus its board on doing business as opposed to starting up getting sage advice from industry leaders.
I’m more intrigued as to the why, though… Eric Schmidt, Google CEO, dropped off Apple’s board earlier due to the FTC looking at Google and Apple as competitors. The Levinson drop just clears out the rest of the dust that might cause the government to inquire… All that said, what’s in it for Google to actually compete with Apple on OS and client software in a way that got the feds interested in the first place?
The whole point of contention in this is Android. Google is working on an OS for the handheld market that they feel enhances their position in the client market and can direct more people to Google for their search services. I’m not sure that I get why they believe that they need to be in the OS business, though. I hear the reasoning… better control of content, focus on the actual consumer of data, etc. I just don’t get the draw for Google, an incredibly creative and efficient datacenter management company, to strike out in the client in a way that’s not going to generate direct revenue.
It’s all about ads and eyes in the end. Google thinks they get more relevance by throwing effort at the end point. I’m not there. I’ll have to think about this more and post again, but I see the initial move as one that will probably hurt them in the long term, and this is just an example.
Okay, I’ll admit it. There’s nothing to talk about.
From a government perspective, the strategy’s all over on the healthcare side. The Left is planning to do it on its own, and only the Left can stop the Left. The only strategy to look at there is in the aftermath.
I was going to write a foreign policy post on the Nobel about how the committee awarded the prize to the President so that they could handcuff any US aggression for the remainder of his presidency, but that was done in many ways by better people.
Business has been mostly slow. I finally saw something to post today, so I’ll get to that next. However, the markets are not recovering, mostly just vacillating. I’m still not enthusiastic about my or your portfolios.
I’ll have to go read the Journal more or something. Geez, it’s dull out there.
Amid all the flap about whether or not President Obama deserves the Nobel peace prize, or whether the award is a thinly veiled attempt by a small left leaning socialist democracy to influence the outcome in USA decisions related to Afghanistan – what appears to be lost is the complete irony surrounding the Nobel peace prize in the first place.
First, the people who have won the peace prize:
- Yassir Arafat – what more can you say?
-Al Gore – who I am guessing flew by private jet to accept the prize. Did he plant enough trees to neutralize that carbon footprint?
- What about Mohamed ElBaradei – the IAEA - the nuclear inspectors who according to the prize in 2005 used every effort to “prevent nuclear energy from being used for military purposes and to ensure that nuclear energy for peaceful purposes is used in the safest possible way”. Such as, India and Pakistan..no? Iran? hmmm. Maybe the prize IS for effort….
- How about irony with the Norwegians themselves, who can afford a comfortable socialist democracy because they tap & reap the profits from their oil reserves, but at the same time wag a warning finger at the world over the threat of global warming? UPDATED QUOTE from PJM (too funny to ignore): “The vision of Norway is now to be the aspiration of the world, albeit with the understanding that in the era of cap-and-trade someone will still buy Norway’s oil to power their carbon-foot-printing cars, and its timber for their ungreen homes, and still offer icky planes, rockets, nukes, and carriers to ensure Norway is safe in a fashion that it was not sixty five years ago”
- Or the peace prize itself – the financial rewards of which come from a fortune built upon the taming of nitroglycerine? “After his return to Sweden in 1863, Alfred Nobel concentrated on developing nitroglycerine as an explosive“
UPDATE: How about the irony that the Peace prize was established in the era where progressive, modern thinking was at its heyday? In 1901, many believed it would only be a few years until science and progress brought modern man into utopia on earth. We were evolving up to a better species, we were going to conquer all natural phenomena, we were going to stop being barbarians – who needed antiquated beliefs? Then we had WWI, WWII, and completely aside from “American imperialism” the world witnessed Cambodia’s killing fields, Stalin’s intentional starvation of the Ukranians, Mao’s “great leap”…. to the starvation of his own people.
At least one thing is forthright and clear-eyed about the award – they didn’t even try to give it to anyone between 1939 and 1943, or between 1914 and 1916.
Okay, I was wrong. A while back I predicted that this fall we’d see the market back down to the level it was at the beginning of the year after a weak summer rally. I was right about the weak summer rally. The markets didn’t go up substantially from when I made the call. However, the markets overall have been much more resiliant than I’d thought, and have held value steady. I’m still not convinced, nor are many others, that we’re on the rise here.
All that’s [sagging DOW, unemployment, lack of new car sales, etc.] enough to convince some observers that the economic recovery is faltering and could be heading for a “double dip” recession. And that would mean the recent green shoots of recovery turn out to be just a pause in a much longer economic slide.
I still believe that the markets are in for a fall, but maybe that’s out to next year. Frankly, that worries me a bit, as I’d hoped to see some of the recovery starting end of this year.
So, updating the thinking. I’m still convinced that we’ll see the DOW back to the 6-7k range next year, and then a period of 2-3 years of up/down between 7k and 9k while everything sorts itself out.
