Archive for August, 2011
26 Aug 2011

“When You’re Holding a Hammer, Everything Looks Like a Nail”

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Via Theo.

26 Aug 2011

Nancy Grace Augusta Wake, CA, GM (August 30, 1912 – August 7, 2011)

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Earlier this month, the most remarkable female secret agent of WWII passed away in a royal home for disabled veterans at the age of 98. Her ashes will be scattered, at her own request, at the former Gestapo headquarters in Montlucon, in central France, where she once led a successful attack.

Her war-time actions are believed to have saved thousands of allied lives. Her resistance network rescued hundreds of Allied airmen, some of whom she personal escorted to the coast. The maquis under her command killed at least 1400 Germans. One German casualty was a German sentry which Nancy Wake personally killed with her bare hands. The Gestapo called her Die Weiße Maus and she headed their most-wanted list with a reward of 5 million francs on her head. Nonetheless, she survived the war, and became one of the most decorated female combatants of WWII. Her life eventually was the basis for a successful novel and film.

Daily Mail:

A male comrade-in-arms in the French Resistance summed her up as: ‘The most feminine woman I know, until the fighting starts. And then she is like five men.’ She lived up to both parts of that compliment.

So feminine was she that when escaping from pursuers on one notable occasion, she dressed in a smart frock, silk stockings, high-heeled shoes and a camel-hair coat, arguing that she didn’t want to look like a hunted woman.

In that same outfit, she jumped from a moving train into a vineyard to avoid capture at a Nazi checkpoint.

And so aggressive was she that, after being parachuted into France as a Special Operations Executive agent, she disposed of a German guard with her bare hands and liked nothing better than bowling along in the front seat of a fast car through the countryside, a Sten gun on her lap and a cigar between her teeth, in search of Germans to kill.

Passionate and impulsive, with a tendency to draw attention to herself, she was not the ideal undercover agent. Her superiors didn’t think she would last long behind enemy lines.

But Wake proved them wrong and died this week, aged 98, in a nursing home for retired veterans in London. Her death brought to an end a life of such daring, courage and glamour that she was the inspiration for the Sebastian Faulks novel Charlotte Gray, which was made into a film starring Cate Blanchett.

Wikipedia article

25 Aug 2011

Down to the Crossroad

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Ted Gioia, in Alibi Magazine, takes seriously the Faustian bargain at the center of the American Blues tradition.

Years later, Tommy Johnson’s brother Ledell told an interviewer how his sibling explained his skill at the guitar. “If you want to learn how to play anything you want to play and learn how to make songs yourself, you take your guitar and you go to where a road crosses that way, where a crossroad is,” Tommy Johnson had told his brother. “Be sure to get there just a little ’fore twelve o’clock that night so you’ll know you’ll be there….A big black man will walk up there and take your guitar, and he’ll tune it. And then he’ll play a piece and hand it back to you. That’s the way I learned to play anything I want.”

Hat tip to Fred Lapides.

25 Aug 2011

Yale Accidentally Exposes 43,000 Social Security Numbers to Search Engine Access

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Liberals, as we all know, basically believe we ought to abolish democracy immediately, and just turn running the entire world over to the kind of morally superior, highly educated, and totally enlightened beings who run Ivy League universities.

IvyGate, however, finds that the omniscient wisdom of Yale, for instance, is not all that it might be, even in the fairly obvious matter of routine identity theft prevention.

Remember that time when you first matriculated? And Yale was all like, “Hey guys, no big deal, but we’re going to need all of your personal information. Yeah, that Social Security number? Fork it over. Don’t worry, though. We’re world-class academics. We know not to do anything stupid with it, like make it available on Google, or whatever.”

Yeah, well, turns out Yale was wrong.

The university announced on Friday that around 43,000 Social Security numbers — belonging to current and former students, faculty, staff and alumni – were released into the Google ether at some juncture in the past, apparently by force of sheer incompetence innocent mistake.

25 Aug 2011

Classical CDs Beat Other Genres in Sales

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Variety has some good news.

The classical recording industry is managing to experience sales growth despite the recession, and capitalist enterprise is gradually excavating the enormously valuable recorded repertoire lost to contemporary humanity in the cataclysmic media transition which eliminated the long-playing record.

Nielsen SoundScan’s report for the first half of 2011 indicates that classical music had the biggest gain in sales of all genres, 13%, over the first half of 2010, for a total of 3.8 million albums.

Granted, that’s still a small percentage of the total market (about 2.4%), but it shows that classical is holding its own and then some, with other genres up slightly or slipping.

Moreover, the majors are being supplanted by a swarm of activity from other, smaller, nimbler sources.

Many orchestras increasingly take matters into their own hands, no longer relying on the majors for exposure. The Chicago Symphony has its own label, CSO Resound, so do the Boston and St. Louis symphonies, as well as the London Symphony, London Philharmonic and several other foreign orchestras. With Telarc reduced to a shell of its former self after the takeover by Concord, its two once-regular orchestras, the Cincinnati and Atlanta symphonies, have just formed their own labels.

Probably the most successful and luxuriously packaged inhouse orchestra label is the San Francisco Symphony’s SFS Media, which in 2010 completed its decade-long Mahler project on 17 SACDs and just issued a capstone documentary, “Keeping Score: Mahler,” on DVD and Blu-ray. SFS Media claims to have sold more than 130,000 Mahler CDs worldwide at premium prices — a roaring success for a classical series.

Likewise, individual artists and small ensembles now routinely bypass the majors and minors alike in favor of their own boutique CD labels — like New York new music collective Bang on a Can’s Cantaloupe, pianist Wu Han and cellist David Finckel’s ArtistLed, plus composer Philip Glass’ Orange Mountain Music.

Free of the old restrictions, these labels can offer as many choices to their fans as their markets will bear. In the prolific Glass’ case, Orange Mountain Music has issued at least 75 releases since its launch in 2003, and the Music@Menlo festival in Silicon Valley exhaustively documents its concerts in massive annual boxed sets.

Naxos, the budget label that upended the classical record industry in the 1990s with its no-frills, high-quality recordings, has turned itself into a big distributor of small labels, with 148 of them (mostly classical) now under its umbrella. Harmonia Mundi, once and still a specialist in early music, also distributes a long string of small labels.

If the majors don’t want to keep their rich classical catalogs in print, others are happy to step into the breach. The online retailer ArchivMusic, now owned by piano manufacturer Steinway, has been making deals with the majors that allow it to press custom copies of out-of-print classical CDs and sell them on its website (the titles now number well in the thousands).

Hat tip to Adam Krims.

25 Aug 2011

Speaking of Going Off Half-Cocked

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The pink polymer framed Taurus 738 TCP is chambered in .380 ACP has a six-round magazine and weighs only 10.2-ounces (.289 km.)

Guns and Ammo forwarded a cringe-inducing report. Earlier this month, on August 9th in Chandler, Arizona, 27-year-old Joshua Seto was attempting to secure his fiancee Cara Christopher’s pink Taurus .380 in the waistband of his trousers, before stopping in a Fry’s Food Store to make a purchase.

The unfortunate Mr. Seto, at the time under the influence of prescription drugs, accidentally discharged a round which struck him in the penis before proceeding through his left thigh.

The Arizona Republic reported:

The bleeding started immediately and was heavy, according to police dispatch recordings released Sunday.

“He is still conscious, there is just a lot of blood,” Christopher, 26, told 9-1-1 operators and dispatchers.

One operator told Christopher to apply direct pressure to the wound with a dry towel or T-shirt, but to avoid looking at the wound.

“I did look at it,” Christopher said. “It’s pretty bad.”

There was talk in the Arizona papers that Mr. Seto might even be prosecuted as the result of his accident.

The local police also proceeded to advise gun-owners to use holsters for carrying sidearms.



My own opinion is that semiautomatic pistols offer a real advantage over revolvers for concealed carry in being flat sided and basically rectangular. They tend to have fewer protrusions and tuck up against the body more comfortably.

I myself look with disfavor on the trend in recent decades toward double-action semiautos, lacking a safety because they are philosophically intended to be treated as if they were revolvers. I own one such semiauto, a .357 SIG, and if I were carrying it, I’d carry it with an empty chamber, and simply assume that I would inevitably have adequate time to rack the slide if I ever needed to shoot anybody.

This accident was obviously a fluke. The victim was evidently impaired by drugs. But we are all impaired some of the time. Advancing age and illnesses impair everybody sooner or later a bit. We all occasionally take prescription drugs and some of us drink.

It is probably a little safer to use a holster, as the cops suggested, but I read regular reports of users of DA autos shooting themselves in the leg while putting their gun in the holster. Tex Grebner managed to do the same thing with a regular Model 1911 variant as a consequence of confusion induced by a push-button-release holsters. Grebner pushed the safety accidentally.

If you aren’t Jeff Cooper, it may be a better idea to carry that semiauto in Condition 3, magazine full, chamber empty.

24 Aug 2011

On Climate Science


Yesterday, one of my liberal Yale classmates responded to my anti-Warmism posting by complaining that I was guilty of believing in a conspiracy of climate scientists.

I responded:

If there is no imminent catastrophe, “climate science” is a very minor and insignificant branch of geology populated by ill-paid, failed chemists and people unable to do physics. If the very existence of life on this planet as we know it is at stake, and vast new accretions of governmental power and revenue are required, climate scientists are cooler than ****, and you can just back up the truck full of money to
the loading dock at the climate science research center. Gosh, I wonder what position most climate scientists are likely to prefer?

24 Aug 2011

Political Advice

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In the late Montague Rhodes James‘ memoir of his time at school and university, Eton and King’s (1926), James remembers in particular Mrs. Ann Smith, an elderly college servant at King’s College, who tidied up college rooms and made the students’ beds for them.

James describes her as “tall and austere in aspect,” but with a gift for “noteworthy speech” and prone to apply the mot juste. Mrs. Smith was also evidently capable of penetrating political acumen.

“Politics, I don’t think she studied much, but after a General Election she has said to me, ‘Well Sir, simple as I am, I’ve always heard there was never better times than when the Conservatives was in power.'”

M.R. James, in later years

24 Aug 2011

5.9 Earthquake Hits Virginia

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Yesterday afternoon, when the earthquake hit, I was two steps up a rickety flight of stairs in an old warehouse in Remington, Virginia where we’re storing some of the many books we cannot fit into the charming, antique Virginia farmhouse we are currently inhabiting.

I thought someone must be opening an exceptionally violent garage door on the other side of the wall, then began guessing someone was running some piece of heavy machinery nearby in the building. The vibration stopped, and I proceeded upstairs.

I only learned that it was an earthquake when I got back to the car and turned on the radio.

WMAL, 63 AM, the station I listen to El Rushbo on, switched over to full-time broadcasting about this major news event. Sean Hannity never even came on. Instead, Conservative talk radio host Chris Plante was dragged out a pizzeria, where he had been lunching, back to the studio to cover what was essentially a non-event.

Chris and his associates interviewed all sorts of ordinary people, who testified to all of their personal earthquake experiences (typically just as interesting as mine).

My blood ran cold when Chris Plante, the conservative, proceeded in Pavlovian journalistic manner to interview a state legislator from Prince George County about “government’s response.” I would have said, in his position: “Response? What response? There was no actual damage. No injuries. There wasn’t anything anyone needed to do.” But, no. The politico happily bloviated on and on about how each and every level of government bureaucracy, all the “first responders” in particular, turned on every flashing light and siren, and spun their wheels vigorously. Our rulers, guardians, supervisors, and protectors had to justify their existence by seeming to take control, and keeping the rest of us alerted and informed, even if there was nothing in particular to alert us about, beyond potential heavy traffic resulting from government offices releasing their personnel to commute home early.

Even a conservative commentator, like Chris Plante, can be found to behave as a true product of the culture of journalism and officialdom, when push comes shove (even in the case of a minor 5.9 push), the journalist Plante goes running to Big Brother to participate in, and to cover with canine respect, the charade of official expertise gravely protecting us, the helpless public, from all perils and vissiscitudes, even in an instance where there is nothing but the empty semblance of a real event.

Bah, humbug!

Being engaged in something, kind of, sort of, resembling journalism myself, as you can see, I, too, felt obliged to cover the terrible earthquake of 2011, and here from BuzzFeed are 20 photographs of some of the worst damage.

23 Aug 2011

Rejecting Junk Science Is Not Religion

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Jonathan Adler got himself quoted approvingly by Megan McArdle, in her Atlantic blog, for identifying conservatives outraged by NJ Governor Chris Christie’s recent public testimony to his belief in Warmism as being guilty of “anti-scientific know-nothingism.”

Last week, Christie vetoed legislation that would have required New Jersey to remain in the Regional Greenhouse Gas Initiative (RGGI), a multi-state agreement to control greenhouse gas emissions through a regional cap-and-trade program. The bill was an effort to overturn Christie’s decision earlier this year to withdraw from the program. Given conservative opposition to greenhouse gas emission controls, the veto should have been something to cheer, right? Nope.

The problem, according to some conservatives, is that Christie accompanied his veto with a statement acknowledging that human activity is contributing to global climate change. Specifically, Christie explained that his original decision to withdraw from RGGI was not based upon any “quarrel” with the science.

    While I acknowledge that the levels of carbon dioxide and other greenhouse gases in our atmosphere are increasing, that climate change is real, that human activity plays a role in these changes and that these changes are impacting our state, I simply disagree that RGGI is an effective mechanism for addressing global warming.

As Christie explained, RGGI is based upon faulty economic assumptions and “does nothing more than impose a tax on electricity” for no real environmental benefit. As he noted, “To be effective, greenhouse gas emissions must be addressed on a national and international scale.”

Although Christie adopted the desired policy — withdrawing from RGGI — some conservatives are aghast that he would acknowledge a human contribution to global warming. According to one, this makes Christie “Part RINO. Part man. Only more RINO than man.” [“RINO” as in “Republican in Name Only.”]

Those attacking Christie are suggesting there is only one politically acceptable position on climate science — that one’s ideological bona fides are to be determined by one’s scientific beliefs, and not simply one’s policy preferences. This is a problem on multiple levels. Among other things, it leads conservatives to embrace an anti-scientific know-nothingism whereby scientific claims are to be evaluated not by scientific evidence but their political implications. Thus climate science must be attacked because it provides a too ready justification for government regulation. This is the same reason some conservatives attack evolution — they fear it undermines religious belief — and it is just as wrong. …

[E]ven the vast majority of warming “skeptics” within the scientific community would agree with Governor Christie’s statement that “human activity plays a role” in rising greenhouse gas levels and resulting changes in the climate.


McArdle refers to scientific “denialism,” then establishes a new confirmatory experimental principle: if three libertarians accept it, then it must be true.

I am quite convinced that the planet is warming, and fairly convinced that human beings play a role in this. (When you’ve got Reason’s Ron Bailey, Cato’s Patrick Michaels, and Jonathan Adler, you’ve convinced me). I reserve the right to be skeptical about particular claims about effects (particularly when those claims come via people who implausibly insist that every major effect will be negative) . . . and, of course, of ludicrous worries that global warming will cause aliens to destroy us. But generally, I think global warming is happening, and even that we should probably do something about that, though I’m flexible on “something.”

However. Even if you disagree, it is reprehensible to have a litmus test around empirical matters of fact.


It is always difficult in addressing the enormous pile of rubbish and intellctual confusion that constitutes Warmism to decide exactly where to begin.

Megan McArdle tells us that she is “quite convinced that the planet is warming.” What does she mean exactly? If McArdle means that the climate is generally warmer today than in the 17th century when the Thames froze regularly in the winter, she is obviously correct. If she, on the other hand, thinks that the widely noticed warming trend that began around 1980 has continued uninterrupted to the present day and constitutes a meaningful pattern, she is obviously wrong.

It is generally accepted by everyone that mankind has been living for the last eleven thousand years in a period of Interglacial Warming. So, yes, Megan, the planet is warming. That’s is what happens during periods between glaciations.

The catastrophist statists allege that there is a grave danger of “climate change.” Climate change is a heads I win, tails you lose kind of proposition, as the climate is always changing. There is a major warming (or cooling) trend direction of the earth’s climate, and there are constant short-term variations of irregular interval.

Geologic evidence indicates that periods of glaciation have lasted as long as nearly two hundred million years. Climate change is an enormously long-term phenomenon and the earth’s climate has moved from extremes far beyond anything known in human history during times in which there was no possibility of human agency playing any role.

Human observational capabilities with respect to phenomena occurring over geologic periods of time is limited by the brevity of our life spans and also by the brevity of the existence of our species and our civilization. Anyone attempting to draw some kind of conclusions on the basis of temperature patterns going back three decades is an idiot.


Warmism rests on unverifiable models and on one grand scientific metaphor, the notion that the earth’s atmosphere is like a greenhouse. But the greenhouse reference is only a metaphor.

A 2007 paper by Gerhard Gerlich and Ralf D. Tscheuschner argues, I think quite successfully, that the greenhouse model is incompatible with Physics.

The atmospheric greenhouse effect, an idea that authors trace back to the traditional works of Fourier 1824, Tyndall 1861, and Arrhenius 1896, and which is still supported in global climatology, essentially describes a fictitious mechanism, in which a planetary atmosphere acts as a heat pump driven by an environment that is radiatively interacting with but radiatively equilibrated to the atmospheric system. According to the second law of thermodynamics such a planetary machine can never exist. Nevertheless, in almost all texts of global climatology and in a widespread secondary literature it is taken for granted that such mechanism is real and stands on a firm scientific foundation.


Mr. Adler’s accusation that aversion to Warmism amounts to “know-nothingism” is based on uncritical acceptance of the greenhouse metaphor and acceptance of the proposition that increased atmospheric carbon dioxide causes warming. Only superstitious savages would deny that carbon dioxide must be decreased.

Well, the role of CO2 in warming and the timing of increased CO2 is a seriously controversial issue.

There are good grounds for doubt that CO2 really is meaningfully increasing.

There is excellent data also showing that historically increases in CO2 occurred after planetary warming, not before.

Patrick J. Michaels may accept the Greenhouse model and claims of increasing CO2, but Mr. Adler and Ms. McArdle ought to delve a little deeper into these issues before climbing on board.

I will only mention in passing that it is possible, further, to dissent from Warmist Catastrophism by taking the view that a slightly warmer climate would not be an entirely bad thing, particularly if you happen to live in Canada, Scandinavia, or Russia.

And, even if one were to surrender completely and abandon critical science and skepticism, even if one were to simply accept that everything Al Gore says is true, human reproduction and increased energy use and industrial development will inevitably continue. The undeveloped world will not relinquish material progress and efforts to close the gap with the developed world, and no collection of treaties and international conferences will prevent everyone in India and China from wanting an automobile and a full assortment of electrical appliances. If human population growth and economic activity really dooms the planet, the planet is well and truly doomed, because government efforts will not succeed in preventing growth and progress.

The real Know-Nothings, the real parties guilty of a lack of seriousness and respect for science, are the people who accept the herd consensus of interested parties and the community of fashion as probative, and who are willing to accept on its say-so unverifiable models as established science.

Adler and McArdle are totally wrong. It would take a very thick book to discuss all the ways that Warmism fails to represent legitimate science, worthy of acceptance and suitable as a basis for public policy. Some of the issues are technical, but a lot of all this is basically pretty obvious.

To believe in Anthropogenic Global Warming, you have be an urban narcissist whose perspective on reality resembles Saul Steinberg’s 1976 “View of the World From 9th Avenue” cover. You have to be the sort of person who believes that human actions, the human world, biomass, and mental life absolutely dominate the natural world, that mankind could “destroy the planet” through nuclear war, or by further indulgence in materialistic consumption. You have to be a dualist and a fool, who believes that there is an essential disjunction between humanity and the natural world and that the key ingredient of the fundamental basis of life on this planet (photosynthesis) is a dangerous pollutant, and you have to be stupid enough to fail to notice that we are dealing with a popular theory based, at root, on a few years of warmer weather beginning in 1980 promulgated by the same people who were previously warning us about a New Ice Age.

Stupidity on this scale is incompatible with a role in the Conservative Movement. Sorry about that! That’s not religion. That’s just having intellectual standards.

23 Aug 2011

Repeating the Same Mistakes

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Friedrich Hayek and Ludwig von Mises

Jeffrey Tucker points out that the Austrian economists Hayek and von Mises explained long ago in the 1930s why the Keynesian policies of credit expansion being used today to try to bring about recovery would not be effective in restoring prosperity then or now.

Did you ever have the feeling that we’ve been through this before?

Think of it. Those in charge have only recently sworn — yet again! — that if we keep interest rates at zero, keep battling the symptoms of recession and unemployment with spending and jobs programs, clobber the speculators with regulations, and otherwise keep trying to revive moribund industries, all will be well. Just don’t cut government spending or let interest rates rise!

So where have we heard it all before? It was the 1930s, when the battle between F.A. Hayek and J.M. Keynes raged in the English-speaking world, not only in the academic journals but in the newspapers in London and the United States.

Hayek gave a series of lectures based on his previous works in German that tried to explain that the ruling elite and their theoretical apparatus had it all wrong.

In a thousand different ways he said the same thing: “To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about.”

Further, “because we are suffering from a misdirection of production, we want to create further misdirection — a procedure that can only lead to a much more severe crisis as soon as the credit expansion comes to an end.”…

Ludwig von Mises wrote in 1931:

    Credit expansion cannot increase the supply of real goods. It merely brings about a rearrangement. It diverts capital investment away from the course prescribed by the state of economic wealth and market conditions. It causes production to pursue paths which it would not follow unless the economy were to acquire an increase in material goods. As a result, the upswing lacks a solid base. It is not real prosperity. It is illusory prosperity. It did not develop from an increase in economic wealth. Rather, it arose because the credit expansion created the illusion of such an increase. Sooner or later it must become apparent that this economic situation is built on sand.
22 Aug 2011

Militants Go After British Doctors

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If anyone had any doubts that Chronic Fatigue Syndrome is essentially just a medical term for a confirmed habit of whining and malingering, this news item from Britain’s Guardian describing activists’ attacks on doctors questioning or investigating CFS demonstrates the existence of the sort of political constituency which genuine illnesses just do not have.

The full extent of the campaign of intimidation, attacks and death threats made against scientists by activists who claim researchers are suppressing the real cause of chronic fatigue syndrome is revealed today by the Observer. According to the police, the militants are now considered to be as dangerous and uncompromising as animal rights extremists.

One researcher told the Observer that a woman protester who had turned up at one of his lectures was found to be carrying a knife. Another scientist had to abandon a collaboration with American doctors after being told she risked being shot, while another was punched in the street. All said they had received death threats and vitriolic abuse.

In addition, activists – who attack scientists who suggest the syndrome has any kind of psychological association – have bombarded researchers with freedom of information requests, made rounds of complaints to university ethical committees about scientists’ behaviour, and sent letters falsely alleging that individual scientists are in the pay of drug and insurance companies.

“I published a study which these extremists did not like and was subjected to a staggering volley of horrible abuse,” said Professor Myra McClure, head of infectious diseases at Imperial College London. “One man wrote he was having pleasure imagining that he was watching me drown. He sent that every day for months.”

Chronic fatigue syndrome – also known as myalgic encephalomyelitis (ME) – is common and debilitating. A recent BMJ (formerly the British Medical Journal) feature suggested that as many as one in 250 people in the UK suffers from it. Patients are sometimes unable to move and become bedridden, occasionally having to be fed through a tube. For more than 20 years, scientists have struggled to find the cause, with some pointing to physiological reasons, in particular viral infections, while others have argued that psychological problems are involved.

It is the latter group that has become the subject of extremists’ attacks. The antagonists hate any suggestion of a psychological component and insist it is due to external causes, in particular viruses. In the case of McClure, her “crime” was to publish a paper indicating that early studies linking the syndrome to the virus XMRV were wrong and the result of laboratory contamination. So furious was the reaction that she had to withdraw from a US collaboration because she was warned she might be shot.

A similar hate campaign was triggered by a study published in the Lancet earlier this year. It suggested that a psychological technique known as cognitive behavioural therapy could help some sufferers. This produced furious attacks on the scientists involved, including Michael Sharpe, professor of psychological medicine at Oxford University. He had already been stalked by one woman who was subsequently found to be carrying a knife at one of his lectures.

“The tragedy is that this tiny group of activists are driving young scientists from working in the field,” said Sharpe. “In the end, these campaigns are only going to harm patients.”

22 Aug 2011

Connect the Dots

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Bloomberg News is getting lots of attention this morning with its headline shouting Wall Street Aristocracy Got $1.2 Trillion in Secret Loans.

Citigroup Inc. (C) and Bank of America Corp. (BAC) were the reigning champions of finance in 2006 as home prices peaked, leading the 10 biggest U.S. banks and brokerage firms to their best year ever with $104 billion of profits.

By 2008, the housing market’s collapse forced those companies to take more than six times as much, $669 billion, in emergency loans from the U.S. Federal Reserve. The loans dwarfed the $160 billion in public bailouts the top 10 got from the U.S. Treasury, yet until now the full amounts have remained secret.

Fed Chairman Ben S. Bernanke’s unprecedented effort to keep the economy from plunging into depression included lending banks and other companies as much as $1.2 trillion of public money, about the same amount U.S. homeowners currently owe on 6.5 million delinquent and foreclosed mortgages. The largest borrower, Morgan Stanley (MS), got as much as $107.3 billion, while Citigroup took $99.5 billion and Bank of America $91.4 billion, according to a Bloomberg News compilation of data obtained through Freedom of Information Act requests, months of litigation and an act of Congress.

“These are all whopping numbers,” said Robert Litan, a former Justice Department official who in the 1990s served on a commission probing the causes of the savings and loan crisis. “You’re talking about the aristocracy of American finance going down the tubes without the federal money.”


Doctor Housing Bubble today looks at a home in the Bel-Air section of LA, whose declining price he describes as “chasing the market into the bottom.”

Why is this poor house’s market value tanking so horrifically? Doctor HB notes that the same trillions of federal loans to “a very familiar list of lenders… WaMu, IndyMac, JP Morgan, Wells Fargo, and Bank of America” have allowed a shadow market of 56 homes in the unprocessed foreclosure pipeline to loom over the 23 homes actually offered for sale on the local MLS. Your tax dollars at work.

Last week the California unemployment rate shot back up to 12 percent. Couple this with the underperformance of revenue for the state and we have heavy headwinds ahead. It will be a herculean effort for home prices to remain inflated in bubble markets as the economy and incomes slump. Part of what has held up the housing market in many areas is the building up of shadow inventory to control supply and try to increase home prices. This has been a dramatic failure and has cost the U.S. taxpayer trillions of dollars simply to keep the too big to fail banks afloat with financial swindles. There is no reason for this policy to continue unless we want to have another lost decade for our economy (this seems to be the path we are embarking on). Even prime locations are having a tougher time in this market. Today we will take a look at a home in the Bel-Air neighborhood of Los Angeles that is chasing the market into the bottom. …

Of the 23 homes listed on the MLS for Bel-Air 3 are short sales and one home is listed as a foreclosure. Yet this does not tell us the entire story and this is the continuing saga of problems that we will be facing for years to come.

56 homes are in the shadow inventory for Bel-Air yet only 1 foreclosure has made it to the MLS! What is even more disturbing is that many of these homes in the shadow inventory were purchased right at the peak.

Ah yes, a very familiar list of lenders we see here. WaMu, IndyMac, JP Morgan, Wells Fargo, and Bank of America. Look at when the loan was recorded. Many of these shadow inventory properties were purchased during the mania in 2006 and 2007. This is only a sample of the 56 homes in the foreclosure pipeline. The shadow inventory is a big issue although the media wants to make it seem that it is only occurring in poor neighborhoods. Of course they don’t want to focus on neighborhoods where many of their executives live.

Why is the recession continuing? A large part of the answer is that failed mortgage loans have not been liquidated and resolved, the real estate market has been artificially kept in an unconstructive state of stasis by federal assistance. The large lenders received massive federal loan subsidies, allowing both them and their unfortunate insolvent borrowers to continue to reside in a financially comatose condition essentially on federal life support.

But the housing market and the economy cannot recover until the loans destined to die are really dead, the houses destined to be foreclosed are really foreclosed and resold, until the bad inventory is all sold at distress prices and the whole mess cleared off the national books.

In essence, the dégringolade produced by federal interventions in the home mortgage industry was so painful that government, Wall Street, and many home mortgage borrowers have all preferred to drag out the agony rather than take their medicine. That preference on every part is natural and understandable, but it is a major economic policy mistake, and the whole country is paying for it in both the literal and the figurative sense.

Hat tip to Glenn Reynolds for the Doctor HB story.

21 Aug 2011

And the Meltdown Proceeds

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Aaron Miller passes along a joke making the electronic rounds.

President Obama walks into the Bank of America to cash a check. As he approaches the cashier he says “Good morning, Ma’am. Could you please cash this check for me?”

Cashier: “It would be my pleasure sir. Could you please show me your ID?”

Obama: “Truthfully, I did not bring my ID with me as I didn’t think there was any need to. I am President Barack Obama, the president of the United States of America!”

Cashier: “Yes sir, I know who you are. But with all the regulations, monitoring, of the banks because of impostors and forgers, etc, I must insist on seeing ID.”

Obama: “Just ask anyone here at the bank who I am and they will tell you. Everybody knows who I am.”

Cashier: “I am sorry Mr. President, but these are the bank rules and I must follow them.”

Obama: “I am urging you please to cash this check.”

Cashier: “Look Mr. President, this is what we can do: One day Tiger Woods came into the bank without ID. To prove he was Tiger Woods he pulled out his putting iron and made a beautiful shot across the bank into a cup. With that shot we knew him to be Tiger Woods and cashed his check. Another time, Andre Agassi came in without ID. He pulled out his tennis racquet and made a fabulous shot whereas the tennis ball landed in my cup. With that shot we cashed his check. So, Mr. President, what can you do to prove that it is you, and only you, as the President of the United States?”

Obama stood there thinking, and thinking and finally says: “Honestly, there is nothing that comes to my mind. I can’t think of a single thing.”

Cashier: “Will that be large or small bills, Mr. President?”


John Kass, in the Chicago Tribune, warns that Barack Obama is in imminent danger of reaching the classic watershed moment of failed presidencies.

All the signs suggest that Obama is in immediate danger of a rabbit attack. It would ruin what’s left of his presidency. And it would horrify Democrats by ushering in, say, a President Bachmann.

It might happen while he’s on that ridiculous vacation of his. Obama is chilling at some exclusive multimillion-dollar estate on Martha’s Vineyard, even as thousands more Americans hit the unemployment lines, and as Republicans like Michele Bachmann make wild-eyed, crazed claims about bringing back $2 per gallon gas.

“I think it’s a little too early yet for the president to be attacked by a rabbit,” cautioned a veteran Chicago Democrat wise in the ways of Obama. “But it’s close. Real close.”

Anyone who thinks Obama is safe from a rabbit attack has forgotten what happened to President Jimmy Carter.

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