Tuesday, January 20, 2009

Hamas Declares Victory, Has Parade.

We're reliably informed by Monsters and Critics that those wild and crazy guys over at Hamas headquarters have declared victory in Gaza after not delivering on their promises to drown all the Jews in a lake of fire.

The victory parade. 

It'll be held in a place like the one pictured when the leaders of Hamas decide the time is ripe to check out of their cushy digs in Damascus and put in an appearance. 

Great job, fellows. I'm sure the people of Gaza thank you.

Friday, January 09, 2009

Citigroup Wakes Up, Smells Coffee

We're reliably informed by the Wall Street Journal this morning that Citigroup-you know, those pesky people who'll sue you at the drop of a hat when you get a little behind on your credit cards...where was I? 
Oh yes. Citigroup has dropped their opposition to the idea of letting bankruptcy judges 'cram down' mortgage loans on primary residences for chapter 13 bankrupt debtors.  

That provision is likely to be written into law as soon as President Obama takes the oath. He may say "so help me God. Got a pen, Senator Durbin?"

Historically, the idea has been opposed at every turn by the banking and credit industry over the last fifteen or so years with much hysterical braying over 'moral hazards' and 'the sanctity of contracts' and similar sanctimonious hand-wringing nonsense. 

They never believed it for a minute, folks-what they wanted all along was to milk that cow until it was dry and suck every last drop of equity out of the corpses of people who couldn't pay their bills in a growth market.

 Simply stated, foreclosure and resale was a good business to be in, when property was appreciating 20 and 30 per cent a year in places like Los Angeles, Las Vegas, and Miami. They were getting fat off of stripping equity out of defaulted mortgages that the courts could not rewrite.  If they thought it was such an important principle, why not extend it to commercial credit? I mean, money owed, defaulting debtors? 

"B-b-but Sparky!" you say, "Isn't this a good thing?"  Well, of course it is, little feller, but it's mighty good for the bankers too, which is why they're signing on to it.

As mother always said, follow the money. They've run the numbers.

The assets the banks were so ready to grab not all that long ago-residential housing in  Los Angeles going up 20 per cent a year-have now shown themselves to be a millstone around their necks, and they'll be better off if they can get some people to pay something rather than to add the houses to an already bloated, unsellable and deteriorating inventory.

I'm not ready to give these people the Socially Conscious Good Guy award just yet.  The whole sorry episode points to being careful what you ask for, because you could get it, and have to live with the results. Citigroup and their fellows wanted it, they got it, and now it is biting them in the ass good and hard.

Thursday, January 01, 2009

The Dougloid Papers: Cranky Three Year Old, Not Ready For Prime Time.

This month marks the third anniversary since I began to scratch the itch here, and it is a time for a little analysis and introspection. 

A lot has changed around here.

Most importantly, Jake set off to Afghanistan to practice the healing arts among his brothers and sisters in 101 ABN and among the good people of Paktia province-of whom there are many. 

If I had to take a guess I'd say that he gets great satisfaction out of putting hurt people back together, which is why he's where he is in the first place. He's scratching the itch too.

It cuts right through a lot of nonsense and is the medical trade slimmed down to its basic essentials. He's due back stateside in March at least for a while.  

It's also proof positive that the Army frequently makes pretty smart decisions and one of them was investing in a guy who had a rocky start and took a few wrong turns here and there. What he's become was worth the wait.

While we're on family matters, the young 'uns are growing like weeds, and they continue to prosper under the wise tutelage of their parents and grandma. The rest of us are fine, and we are all blessed with health and a reasonable level of comfort.

We also became owners of our own place and the Dougloid Towers is no longer a rental property with a grouchy land lord. As long as we pay the bank when we're supposed to, it is ours in fee simple absolute as the saying goes.

Much has also changed on the political level, about which no more need be said-except when the Outs start believing, as their tin pot Fuhrer El Rushbo tells them frequently, that they still matter. They don't, the ship has sailed without them, and the misapprehension that they have important things to say will be corrected here from time to time.

The economic world continues to be troubled amid rumors of major pending layoffs at Microsoft
and pending layoffs at Citigroup.

The big news  is that it's hitting hard in places where it was never expected to-that is, among people who wore shirts and ties and pushed paper instead of a shovel or a screwdriver or wrench or who carried plates in a downtown diner. That in itself is an interesting development. 

Back in slavery days, ole Massuh told the house negroes that they were somehow better than the field hands, they lived up in the big house and didn't stink and sweat like the field negroes, and the house negroes largely believed it, to their eternal discredit. It was a nice life too, although one  might not have appreciated the attentions of ole Massuh when he was in his cups and feeling randy. Be that as it may, when ole Massuh had blown his roll at the gambling tables and had to put up the collateral, the house negroes went to the same auctioneer that the field hands did.

That's one big  lesson that's going to be learned this year by a lot of folks, and that is to never forget where you're from and who your people really are. For most of us, it ain't the people in the limousines with the caviar and Moet Chandon either.

Something else we'll be watching is the foreclosure/mortgage/housing drama that has been playing out this past year. Trillions in paper equity have been wiped out in the residential housing market, and nobody's the winner here. 

The banks who funded mortgages that didn't make sense, and then put them in the blender and sold them off to other, equally foolish people, have had to back up to the government pay window for a bailout, but thus far have not seen fit to extend the favor in any great degree to people looking for a way to meet their obligations and stay in their homes-and there are a lot of them. Nobody's saying rescue the mortgage scammers or speculators here-just show some consideration to people who can maybe keep it together with some help.

Attempts are being made to resolve the problems people are having by some voluntary measures, but the creditor side community does not seem to be able to get its head out of the dark place it stuck it, and realize that anything's better than inventory you can't move-in this case, a deteriorating housing stock. 

One measure that seems headed for serious consideration will be revising the bankruptcy code to allow bankruptcy judges to "cramdown" primary residence mortgages by rewriting the loans.

Parenthetically bankruptcy judges already have this power in commercial bankruptcies and where the mortgage is a rental property or a vacation home. Senator Durbin is slated to introduce such legislation in the new session of Congress that starts next week.

As Howard Jarvis once famously observed , it's akin to hitting a mule in the head with a baseball bat-you may not change anything, but at least you've got his attention.

It will be my new year's resolution to get back to what matters most to me, and that is the aviation industry and what happens therein.