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I thought it was a crawfish buffet?
Voting has its consequences
I find myself in the really odd position of defending Alphonso against the Post here. HUD never had much regulatory authority to stop the subprime mess. RESPA was one method open to them, but they were politically stymied every time they tried to touch RESPA. There was a real feeling among the career HUD staff that 'if you can't beat them, join them' - that a loose FHA loan was still less bad for borrowers than a subprime, so it made sense to loosen underwriting for FHA if tightening subprime wasn't an option. And I think tanta has expressed thoughts along those lines herself. Personally, I didn't buy it, but I think that loose FHA underwriting during the boom was less crazy than the casual Post reader might conclude. And I think there isn't a lot HUD could have done via regulation (vs. bully pulpit and lobbying) to stop the freight train. And I wonder just where all the Post editorials were from 2004-2006 decrying all this loosening in FHA and conventional. The Post themselves may have come to this party a bit late.
He's a Bush appointee... thus what do you expect?
all Bush appointees were very pro-laissez-faire in almost all realms.
Look at what they did to the EPA as example.
the answer is always "private business knows best"
their whole meme is that "markets decide best".
the markets decided.
of course, it's not too long until a free-marketeer posts some inane bs like:
"we don't really live in a capitalist society... it's really socialism and communism! If we only had completely free markets then this would never have happened."
they as always will neglect that every time deregulation is so much as attempted a bunch of a-holes ruin it immediately with abuses.
In Communisim it's a Dog eat Dog world.
In Capitalism it's the other way around.
During the mortgage insanity up to 2006 anyone high in government standing up to say stop the madness would have been crucified. (and blamed for any correction)
We really could have a used a person that had the morals to stand up during this time.
whoops
should be 'could have used
G-7 issues a PINS petition* for US
To counter the ability of banks to hide certain activities in less-supervised markets, authorities said they will develop a system of international colleges of supervisors for each of the largest global financial institutions.
In that manner, authorities will be able to exchange information about the practices of these banks across the globe.
The banks will have to share their new plans for keeping enough cash on hand in turbulent markets. This is a key weakness of the current system, where the banks thought they could sell complex derivatives to raise cash in emergencies, only to find no buyers.
These circumstances "in which markets become unavailable" as the report describes it, need new international accounting standards.
*Persons in Need of Supervision , or PINS, is a term used to describe a
child under the age of 18 who has committed a status offense ( Examples
of a status offense are running away, using marijuana, or skipping school
"When Congress calls up and asks us, we'll give them advice," he said. "You have 534 massive egos up there, so unless they ask you, you don't volunteer anything."
We've seen plenty of maladministration among the principles of this Admnistration, but if I've ever seen this plain an admission of being out to lunch and uninterested in the job of being a Cabinet Secretary, I can't recall it.
The ubiquicerpt from the article:
"Homeownership appears to be a bigger priority in the administration than affordability and foreclosure," Sen. Christopher S. Bond (R-Mo.) told Jackson at a recent hearing. He added: "I'll tell you quite frankly, I think the emphasis on homeownership helped to drive the foreclosure crisis we're now in. . . . All these wonderful ideas . . . didn't do them any good when we put them in housing they couldn't afford."
Points at least for transparency. The HUD Secretary's stated goals were to increase homeownership and minority ownership. Both were mission accomplished. Which leads me to the interesting tightrope the Washington Post walks as it advances its own agendas. The comments make it pretty clear which way they and their readership leans.
Politically the WaPo wasn't about to give the Bush Administation any slack no matter what the HUD office did. Reverse every policy decision and we'd have had years of headlines and editorials screaming that HUD was doing nothing to advance minority ownership and the Bush Administration was only serving to protect the fat cat interests of big banking buddies. Oh uyeah sure the Post waxing poetic and saying what needed to be said? "Get rid of the incompetent (black) guy and put someone in their who will try harder to keep the poor and minorities from buying homes." Point being The Post is clearly not without blame either. As a matter of fact does anyone recall any member of the MSM former referred to as 4th Estate calling for less HUD involvement or advocacy?
Aren't there 535? Maybe if he could count he would have seen the problem.
Capitalism requires booms and busts...the current market correction is a healthy response to reckless lending and borrowing. The problem is that the government intervenes too much-- Fed money supply manipulation, enormous tax code subsidies that encourage consumers to take on mortgage debt, GSEs and other loan guarantee operations that create broad risks for taxpayers, and a ratings agency game that is uncompetitive and appears to be manipulated by the SEC.
Tanta, Thanks for illuminating this apparently corrupt public servant.
mort_fin, interesting comment.
So many had an influence on this mess. The great Kool-Aid mixer Greenspan called the bottom in housing in 2006! Perhaps we need to teach the basics on how to identify a bubble in high school.
--
But critics say an equally significant legacy of his four years as the nation's top housing officer was gross inattention to the looming housing crisis. . . .
In a system of the Crooks people like Jackson, not unlike Greenspan, are political hacks and they do their part in serving the interests of their real masters while imitating to serve the interests of the American People. The American system of the past decade is as corrupt as any in history and its consequences are going to be felt for a very long time.
in pushing for more flexibility in government-backed loans.
Flexibility in government-backed lending always leads to fraud. The whole system of home mortgage financing was turned into fraud because of govts involvement in pushing debt (FHA, Fannie, Freddie, etc.) rather than regulating and monitoring.
Jas
--
"He's a Bush appointee... thus what do you expect?"
All Fed Governors are Bush appointees!
Jas
And I wonder just where all the Post editorials were from 2004-2006 decrying all this loosening in FHA and conventional. The Post themselves may have come to this party a bit late.
I very nearly wrote that in my post, but I was sidetracked by Gretchen Morgenson today.
In fact I do think Jackson deserves contempt for his backing of no-down and his going to the mat on DAPs. But no, I don't think that means FHA is responsible for the subprime boom.
--
"We really could have a used a person that had the morals to stand up during this time."
And where are you going to find such a person? Even if you did his, or her, chances for political power would be next to nil.
What we are witnessing are normal outcomes in a nation of born-and-bred dopes ruled over by Crooks. Breeding dopes became a necessity so that Crooks can rule with little difficulty, as they have and still are. Is much going to change with a new President?
Jas
I wrote in July 2007 about Jackson boasting that he and Bernanke knew about the subprime problem "about a year and a half ago"(late 2005 or EARLY 2006):
Not One Cent: Feds Knew Subprime Mortgage Danger 1 1/2 Years Ago
He said it in 2007 when he was in Hong Kong shamelessly trying to unload MBS on the Asians.
And I wonder just where all the Post editorials were from 2004-2006 decrying all this loosening in FHA and conventional. The Post themselves may have come to this party a bit late.
Not being a Washington Post reader, I'm going to guess: bemoaning the war in Iraq, the genocide in Darfur, and other government debacles like the response to Katrina,...and the White House's support of torture. Am I close?
There are doubtless things they could of written, but to hold the WaPo to the standards of someone whose job it was to forecast and oversee the housing problems is asking a bit much.
"You have 534 massive egos up there"
"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse (generous gifts) from the public treasury. From that moment on the majority always votes for the candidates promising the most benefits from the public treasury, with the result that a democracy always collapses over loose fiscal policy (which is) always followed by a dictatorship."
"The average age of the world's greatest civilization has been two hundred years. These nations have progressed through this sequence. From bondage to spiritual faith; from spiritual faith to great courage; from courage to liberty; from liberty to abundance, from abundance to complacency; from complacency to apathy, from apathy to dependence, from dependence back into bondage."
Alexander Tyler circa 1787 re the
fall of the Athenian Republic.
"Jackson had insisted he would stay in office until the end of Bush's term. But last month, several Democratic senators who hold HUD's purse strings called for his resignation. He had refused to answer their questions about allegations that he was engaged in political favoritism and cronyism. A federal grand jury is investigating whether Jackson lied to Congress about his involvement in contracts and whether he steered millions of dollars in government work at the Virgin Islands and New Orleans housing authorities to his friends.
Sen. Patty Murray (D-Wash.), head of the Senate Appropriations subcommittee that oversees HUD, said March 21 that Jackson had become unfit to lead the agency"
It took them long enough...
Alexander Tyler circa 1787 re the
fall of the Athenian Republic.
And this is fishy. Exactly how many democracies could you use to compare the life and death as a system of governance in 1787? Three? Maybe four? And if Athens is the poster child for democracy (pretty good reputation, even if they ultimately went down to the Spartans) what is the alternative anyway? Dictatorship. Tyranny. Think a little of history, of every other form of government; were the monarchies so free of taints? If you believe that there is an inevitable progress from bondage to bondage then what's the point anyway?
"Right here in America if you own your own home, you're realizing the American Dream." "A third major barrier is the complexity and difficulty of the home buying process. There's a lot of fine print on these forms. And it bothers people, it makes them nervous. And so therefore, what Mel has agreed to do, and Alphonso Jackson has agreed to do is to streamline the process, make the rules simpler, so everybody understands what they are -- makes the closing much less complicated." (President George Bush, 2002 speech to St. Paul AME Church, Atlanta)
Yah, well, Phil Gramm is still much worse, and he's now McCain's advisor. These guys just keep getting resurrected (see, for example, Cheney and Rumsfeld from the Ford administration). Shouldn't they be sent to an island somewhere where they can't do any additional harm?
Al Gonzalez needs a job...
--
"I very nearly wrote that in my post, but I was sidetracked by Gretchen Morgenson today."
I must agree with you, Tanta. The first sentence was statement of facts and then it goes downhill. Since when HELOC is a right? And what guarantee is there that home prices wouldn't be down another 25% and even in the areas where they might not be falling??
Jas
sdtfs
"We make the rules - the news, war, peace, famine, upheaval, the cost of a paper clip... you're not naive enough to think we're living in a democracy are you? It's the free market."
Gordon Gekko
Gorden and I laugh at you.
the ownership society got pwned.
--
J at Not One Cent writes: "I wrote in July 2007 about Jackson boasting that he and Bernanke knew about the subprime problem "about a year and a half ago"(late 2005 or EARLY 2006)"
A tiny example of the System of the Crooks... operates.
Lying is at the heart of the American econo-political system. With liars-only-need-apply for the top political jobs, including appointments, only a mentally blind dope can be optimistic about America's future. Nothing is going to change for the better any time soon.
Jas
--
"the ownership society got pwned."
Did you mean owned or pawned?! Either case you are right.
We are dealing with a society of slaves and masters, ladies and gentlemen. But, how is a born-and-bred dope to figure that out? One aspect of breeding dopes is that dopes can't see things for what they are. Yeah, we have a democracy. Crooks get to choose our political leaders and political appointees. For the most part Crooks escape the blame. What a system!
Economic slavery is rampant in America. Debtors to their eyeballs are nothing more than economic slaves (please read your Bible or Torah). Slavery has been primarily an economic institution thru history.
Jas
Conjure and I are always on the lookout for blends of hubris and mediocrity that create opportunities for profit. There's a lot of mediocrity out there, and even more hubris, so there's always something to celebrate.
Bears, rejoice!
plschwartz- Smoking marijuanna is NOT a status offense in the U.S. It is illegal for everyone, not just minors. Minors drinking alcohol, soldiers absent without leave, registered sex offenders sitting in a playground; these are all status offenses, because they are illegal because of the status of the person commiting them, and would be legal for somebody without a special legal status.
Jas Jain writes:
"the ownership society got pwned."
Did you mean owned or pawned?! Either case you are right.
Urban Dictionary: pwnd
Economic slavery is rampant in America. Debtors to their eyeballs are nothing more than economic slaves (please read your Bible or Torah). Slavery has been primarily an economic institution thru history.
Put away Das Kapital and go get some sunshine.
Slavery is an involuntary arrangement on the slave's part. In a democracy and in capitalism, you are free to choose, or to not choose.
What did you expect? The cabinet position of HUD secretary is a traditional reward for a political crony of either party, something like Ron Brown as Clinton's Commerce secretary. Since he obtained his job through a political connection, it's only natural that he try to make the boss look good.
But I'm suprised that June 2007 was dubbed "National Homeownership Month." Isn't every month supposed to be National Homeownership Month?
Jim A, your comment re status offenses at 1134a
well said
Tanta
once again outstanding post...much thanks to you and CR for educating me and maintaining a great blog.
btw
visiting one of the links in your post i was amazed at all the fees for borrowing and buying RE
Appraisal Fee\t$336.00
Credit Report Fee\t$37.00
Mortgage Broker Fee\t$327.00
Settlement or Escrow /Closing Fee\t$352.00
Abstract of title search\t$158.00
Document Preparation- Title/ Closing/ Escrow\t$171.00
Attorney Fees\t$476.00
Recording fees\t$64.00
Home Warranty\t$385.00
Copy Fee\t$22.00
Email Document/ Fee\t$30.00
Processing- Title/ Closing/ Escrow\t$294.00
Delivery Fee\t$30.00
Title Search\t$189.00
Title Examination\t$156.00
Wire Fee\t$22.00
Endorsement\t$58.00
Administration Fee- Lender/ Agent\t$278.00
Flood Certification/ Search\t$24.00
Tax Service\t$63.00
Application Fee\t$257.00
Commitment Fee\t$233.00
Processing- Lender\t$413.00
Underwriting\t$933.00
Survey\t$22
Pest Inspection\t$92.00
Loan Origination\t$1212.00
Home Inspection\t$296.00
Mold Inspection\t$322.00
Loan Origination\t$1212.00
Transaction Coordination\t$239.00
Demand Fees\t$15.00
Radon Inspection\t$153.00
Septic Inspection\t$265.00
Title Insurance Binder/ Commitment\t$60.00
Notary Fees (mobile)\t$66.00
Document Preparation - Lender\t$244.00
almost $8,000 YIKES
"Aren't there 535?"
Of course not. Joe Lieberman has no ego.
"the ownership society got pwned."
The pwnership society?
Mock: Which link was that?
The Alexander Tyler quote from Anonymous | 04.13.08 - 10:30 am above has been debunked. See Snopes
for the complete analysis.
Slightly OT, but one activity HUD could have promoted--and did not--is the construction of affordable housing (usually apartment complexes)by the private sector. During the Clinton Administration, it became clear (& I think I remember Clinton talking about it) that a fair portion of such housing, that the gov't & private builder agree will be run as affordable housing for X years, -X years was ending soon (20 years perhaps?).
A friend who is disabled lives in such an apartment complex. It houses mostly seniors, but is also for relatively low income disabled people as well. It's a pretty nice place--though the quality of on site managers has varied greatly from bad to ok--and the business managing it first left repairs too late & then tried to have them done on the cheap. My friend has spent quite a bit of time finding out which agencies, who in particular at each agency to call, & call again, to make sure someone was making sure the repairs were done (or redone) properly.
She's told me that, as RE went up, a number of other such complexes in the state (Oregon) were turned into market value housing, leaving the former tenants, many of whom had lived in the same apartments for years, with nowhere to go. I remember reading an article (in the NYT?) of the same thing happening in NYC.
As far as I know, Mr. Jackson's idea of "home" didn't include construction of more such apartment complexes--although they are surely much needed--maybe now more than ever.
Heckuva job, Jackie.
As for this:
Capitalism requires booms and busts...
my comment is simply that unregulated Enterprise by its very nature is ungoverned and will therefore be less efficient and more destructive at the human scale than a well-regulated economy.
The word "govern" shares the greek root with "cyber" -- the verb 'to steer'.
It takes a light hand on the tiller to result in the most effective mixed economy; as a general rule a people do indeed get the government, and economy, that they deserve.
Mr. Jackson's idea of "home" didn't include construction of more such apartment complexes--although they are surely much needed--maybe now more than ever.
Home owners tend to vote Republican. Apartment dwellers tend to vote Democratic.
This is all you need to know to have the root understanding of this administration's policy directives over the past 7 years.
From the article:
Jackson said the goals were to encourage first-time home buyers and to help the FHA compete with the booming subprime market. In an online White House forum in 2007, he said the FHA "is undergoing a historic transformation to give homebuyers who do not qualify for prime financing a better alternative to high-cost, high-risk loan products."
what should be challenged here is why was FHA aggressively lowering its underwriting standards to compete with the private sector. given the mantra of the adminstration that the market is better than government, then it should be a good thing that FHA lost market share. even with the current crisis, is it not better for the governemnt to play a lesser role in subsidizing the housing sector. these subsidies contributed to the bubble in the first place. now most of the bailout proposals call for a bigger role for FHA. FHA has proven its incompetency and an expansion in its "market share" will only end up costing taxpayers.
SurferDude, you would be correct if government was logical and honest but government's policy is to increase bubbles, instability, and its market share.
Slavery is an involuntary arrangement on the slave's part. In a democracy and in capitalism, you are free to choose, or to not choose.
In later stages of the Roman Empire, taxes became so onerous that free citizens sold themselves into slavery to avoid taxes (slaves were untaxed).
Just another interesting example of how clever people find ways to avoid taxes--take a note, IRS.
So your first statement above is incorrect, while the second is true, I guess.
I'm doing so research re home sales in my major midwestern city and in our neighborhood I think well over 50% of the homes are short sales or in foreclosure. The odd thing is that a lot of these homes sold in the last few years for 100's of thousands of dollars more than they're on the market for now. So for an example a house near us sold for $270K in 2006 and 2 days after that sale date it sold for over $430K. Now it's in foreclosure and has been on the market for almost year and no one wants to buy it for slightly more than $200K.
--
"Slavery is an involuntary arrangement on the slave's part. In a democracy and in capitalism, you are free to choose, or to not choose."
baron samedi,
Little knowledge is dangerous. Debt slavery might have changed in form but not in essence. How does one pay his debt? By selling his labor! Just because he sells his labor to someone other than the debtor doesn't change the fact.
Interest payments have been one of the biggest sources of evil of man against man. Doping is necessary so that people would defend the evil practices of Debt Pushers in the name of freely incurred obligations between the lenders and the debtors.
Moral corruption has taken deep roots among Americans due to doping (propaganda).
Jas
Tanta, well done with your thoughts on the matter. Why would banks who are trying their best to shore up their balance sheets continue to loan out additional capital on a depreciating asset? Last week S & P changed it's forecast to a 20% haircut on national housing from 11%. The LEI has been down for the last 5 months. Consumer confidence is tanking and I could go on including the deteriorating employment picture but even Ray Charles can see what's coming. The banks are too late, but it makes no sense for them to add insult to injury.
There will be no lawsuits concerning this as all of it is in disclosure. Read the damn documents borrowers. Sounds like some folks are talking their book, and don't like what they see. Tough shit!
Re: voters voting themselves largesse (generous gifts) from the public treasury.
The rub comes if they vote for redistribution. Not to minimize individual hard work, but wealth is comprised largely of social labor, historical technology, class warfare and national conquest. The well-to-do could quickly adjust their activities to a new economic regime, and the loss of trickle-down could be offset by expanded productivity.
John and Jane Doe know, or would quickly learn, that they cant vote themselves a free lunch. And they couldnt be more irresponsible about credit than the bankers and the hedgies.
"You have 534 massive egos up there,
I'm kinda curious who's the one he thinks doesn't.
More corruption and incompetence associated with the "free marketeer" Bush administration and you're suprised? Considering the ongoing failure of supply side economics, what more proof does anyone need to see that Art Laffer and the Reaganomics crowd ripped off the US treasury and multiple generations of US Citizens?
Flouride anyone?
What is it with HUD Secretaries? They seems to have a higher percentage of 'resigning under a cloud of suspicion' and indictments than the other Cabinet Secretaries.
FreedomWorks writes:
Capitalism requires booms and busts...the current market correction is a healthy response to reckless lending and borrowing. The problem is that the government intervenes too much
Andrew Ryan: I am Andrew Ryan, and I'm here to ask you a question. Is a man not entitled to the sweat of his brow? 'No!' says the man in Washington, 'It belongs to the poor.' 'No!' says the man in the Vatican, 'It belongs to God.' 'No!' says the man in Moscow, 'It belongs to everyone.' I rejected those answers; instead, I chose something different. I chose the impossible. I chose... Rapture, a city where the artist would not fear the censor, where the scientist would not be bound by petty morality, Where the great would not be constrained by the small! And with the sweat of your brow, Rapture can become your city as well.
Re: voters voting themselves largesse (generous gifts) from the public treasury.
The problem is the pig men have already privately voted themselves those gifts and don't want to share any of it with the serfs.
Look up "economic rent seeking" and "crony capitalism" some time.
The rip-off occurs a long time before the popular vote is taken and anyone who doesn't know it is a sucker.
Jas,
To equate chattel ownership of another human being with being a wage slave is absolute bullshit.
An American worker is free to sell his services to the highest bidder- Ive gotten several nice pay raises to prove the point. An American worker is free to take on debt and, in the absence of court order otherwise, to decide the amount of debt they assume.
That there is a complex manner for determining the value of the labor, and a far more complex manner for determining the value of the debt, doesnt abrogate the worker/debtors responsibility to act in their own best interest.
A slave serves, and lives, at the will of their master. Not quite the same thing.
And its called marketing not propaganda, but I will agree with you that it may currently be the source of all evil.
Sam
baron samedi:
I fear JJ (whose name may not be spoken here) has been reading the Old Testament closely, particularly the part between Joseph's coat of many colors and Moses leading the slave escape. It explains how everyone, except the temple priests, ended up "serving Pharaoh" by becoming borrowers and then debt peons.
Appreciate the heads up.
Anyone denying the wage slavery of the supply side voodoo priests is completely delusional.