Current Events Junkie

NYTimes update on foreclosures, 9/29/15

September 30, 2015-I like keeping my finger on the pulse of the planet. I am a current events and history junkie with an insatiable curiosity about how things work. To that end I do process commentary on events as they happen.

Yesterday’s New York Whines (er . . . New York Times) provided the latest update on the so-called sub-prime housing meltdown that began in 2007 and initiated the so-called Great Recession. While the economists and media claim the economy is now recovering, regular people like me have yet to benefit from the recovery.

The NYT front page headline, “More Foreclosures, This Time by Hedge Funds,” sits right under the photo of Dr. Obama offering his hand to Russian President Vladimir Putin. Putin is looking suspiciously at the hand, as though it is diseased.

In the foreclosure article, we learn that “Private equity and hedge fund firms have bought more than 100,000 troubled mortgages at a discount from banks and federal housing agencies.” My synopsis is that the banks are dumping these problems as fast as possible, because of hefty penalties and other cost/labor-intensive measures involved in foreclosures and loan modifications. Federal agencies, such as the Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA), with loans underwritten by banks such as JP Morgan Chase and Bank of America, are auctioning bundles of these loans to hedge funds that are paying with public pension money. The $60 billion private equity firm Lone Star, and its subsidiary Caliber, are the ones spotlighted in the article, but obviously they are not the only players. The federal agencies are discounting the loans as much as 30%. Non-profits are mad that they are not getting a larger share of the loot. The hedge funds offer up to four percent interest on these bundled mortgages.

HUD thinks this is a good idea because it saves them money. But Lone Star/Caliber are being accused of foreclosing at a much faster rate than the banks did, and it admits the return on investment comes from foreclosure and re-sale more than from loan modifications.

The NYT does not address is how much equity the stressed individuals have in their homes. My guess is those with more equity are at greater risk of being foreclosed on, because this represents more profit for the asset plunderers. Lone Star claims many of the homes have been abandoned, which means the home buyers lost everything they invested and must start over, without even a place to live. Finally, the overinflated prices of the housing boom left many people owing more than their homes were worth. These poor saps, I believe, are the ones the banks and hedge funds will not foreclose on. However, the modification deals Lone Star offers do not include reductions in principal, such that the “modifications” leave stressed home buyers worse off than before.

The most obvious question I had, after reading the article, is why HUD is offering 30% discounts to hedge funds rather than to the individuals who originally bought these homes. If individuals got the same deals the money churners and asset plunderers get, they could most likely make their mortgage payments, and this problem would cease to exist.

REVISITING 2007

The article prompted me to re-visit my journal–which functions as my therapist and best friend– to check the pulse of the planet (as I read it) when the housing meltdown began. I thought it might be fun to post some of the more interesting (to me) entries on a weekly basis, from an eight-years-later perspective.

Since tomorrow, October 1, 2015, signifies the beginning of the federal government’s fiscal year, it seems timely to fish the past for insights into where I was and where we were then, and where we’re headed now. If you like this idea, please so indicate. The following comes from the first week in October, 2007.

OCTOBER, 2007

Clarence Thomas autobiography, 2007

MY GRANDFATHER’S SON, CLARENCE THOMAS, 2007
Monday, October 1, 2007 – I went to Barnes and Noble hoping to buy a copy of Clarence Thomas’ book, My Grandfather’s Son, which comes out today. Jonathan, my B&N employee friend – a coin-collector and customer service book-orderer, a 20’s something kid who agrees with me so is very intelligent – told me B&N only ordered 12 copies of the book. Corporate B&N in New York “didn’t know Clarence Thomas was from Savannah.”

Well, Jonathan, you and I both know that’s a lie, but we’ll pretend they don’t want to undersell his book in his home town. He’s much too credible.

Sure enough, B&N’s 12 copies sold out in about ten minutes. They had to rush order 40 more copies. Should be here in 2-3 days. 400 more copies would be more cost-effective. They can save on UPS shipments.

Apparently B&N’s entire marketing department missed the 60 Minutes interview with Thomas last night, in advance of this pub date. 60 Minutes interviewed him right here in Savannah.

Is B&N trying to lose money? I would sell its stock real quick-like if I had it, and I would buy copies of Thomas’ book, instead, from another distributor. What is B&N trying to hide?

Thus do I think like a free market capitalist.

The Robber Barons, by Matthew Josephson, 1934

THE ROBBER BARONS, MATTHEW JOSEPHSON, 1934
Tuesday, October 2, 2007 – I’m reading The Robber Barons, about Jay Gould, the money churner and asset plunderer par excellence. Gould was a master manipulator, but anyone who refused to play his games could have stopped him. He used Vanderbilt’s and others’ spite towards him to play out his line, then reeled in the big fish over and over. How many times do people bite before their mouths are full of holes and they are still starving?

I’m getting an explosion of awareness regarding American history. Why has this become my latest passion? I see the patterns set in motion long ago, in the history of human beings as we remember them, and in America.

The American history most astounds me. Lincoln essentially bought political favoritism by giving the West, the Louisiana Purchase, away to friends, political donors, and corporate railroad interests. Thus did he finance his war on the South.

I’m seeing Lincoln and Wilson as ego-driven megalomaniacs, not the great liberators their handlers claimed. They got us into two of the bloodiest wars to date, and the third great liberator, Roosevelt, got us into World War II.

I haven’t appreciated the intensity of my feelings for peace. What I’ve believed was my own violent nature is merely the reflection of a world so foreign to me that I had to identify with it to understand it. Once identified, I can forgive it, or so I hope.

Tuesday, October 2, 2007 – Vis à vis The Robber Barons, I don’t understand sleazy business practices. People like my deck contractor slit their own throats by promising more than they can deliver. He won’t get repeat business from me, nor will he get recommendations around town. In fact, I intend to tell anyone who cares to know what a thief and con he is.   He looked for opportunities to cut corners, let things slide, weasel out of obligations. He reminds me of the warlords who conquered the West like looters on a spree. They are still doing it.

I read, astounded that taxpayers have allowed these people to get away with such cruel dishonesty for so long. We have the veneer of civilization, but the viciousness has only changed garments and venue in time.

Jay Gould must be the idol of today’s Wall Street. This is why product quality has plummeted. Gould, et al. paid more attention to stocks than to managing tangible assets, and today’s brokers are doing the same. They have even less connection with the corporation’s tangible products than before. They deal only in electronic stock certificates, used in place of currency for the insiders. It’s a method for selling other people’s and taxpayers’ productivity. The companies’ products and services are only fronts for selling stock and feathering pension and benefit nests.

Wednesday, October 3, 2007 – I was reading 1910 cultural history and The Robber Barons last night, only because I wanted to do everything else less than that. So I read and marveled at how the illusion of external power has been cultivated over time.

Through all these wars and contests, who has benefitted, I wonder, as I sit in my lofty 21^st century perspective. I have the advantage of history to guide me. For all of recorded history, war and fighting don’t work. The fruits of victory are spoiled by the fighting.

The Unknown Reality, by Jane Roberts, 1977

SETH
Sunday, October 7, 2007 – I remember being disturbed by Seth’s mind-expanding notions. To think that even quarks have consciousness and can choose to be a part of a couch or a bird, can come or go from structures at will, by force of attraction or repulsion, is mind-boggling. Couches go through a great range of different quarks over their lives, but they still maintain their personalities as sofas, a large amalgam, a gestalt, an identity worthy of the label couch, expressing its individual nature in color, fabric, size, weight, and the numerous physical characteristics that define its nature. The same applies to me, as a human. But we are equals in the consciousness department, because consciousness knows no limits. All consciousness is omniscient, but you can only think about a few things at a time. Also, a physical brain has to be trained for certain types of consciousness, follow certain pathways, learn skills, techniques, observe the consequences of decisions along the path. Consciousness develops itself through loops and channels, rooms, gardens, vistas, and on other stages in the mind of god.

Through reading I explore the others’ minds, find much of value, much to challenge. I connect on my mental turf, in my chair, my home, through the efforts my body makes to seek their communication and companionship.

I’m more interested in the authors’ thoughts than personalities. I’m curious about their perspectives, their reasoning, facts, skill, whatever. Personality speaks through the writing. Certainly if the circumstances were right, I could enjoy the company of favorite authors, even cook dinner for them, but I would have to like them a lot for that.