smart enough to default

It’s probably not who you think.

New research using a sample of 24 million individual credit files has found that homeowners with high scores when they apply for a loan are 50 percent more likely to “strategically default” – abruptly and intentionally pull the plug and abandon the mortgage – compared with lower-scoring mortgage borrowers.

sailing the high $$$$

$1.2 billion …two helipads, two swimming pools and six-foot movie screens in all guest cabins, a mini-submarine and missile-proof windows to combat piracy, plus anti-paparazzi lasers that fire a bolt of light right at the camera’s lens. woot!

Abramovich yacht

song of the era

Tom Paxton sings “I Am Changing My Name to Fannie Mae”

[youtube=http://www.youtube.com/watch?v=etUq7IY_7Mc&hl=en&fs=1&]

unpredictable vast disruption

Nassim Taleb:

NT: My whole idea is to lower risk in society by developing a system that can resist human error, rather than one where human error rules. The first step is to make sure that no financial institution is too big to fail. Next, make sure governments don’t favor big companies. Governments should also decrease the role of economists – they’re no more reliable than astrologers, and they do more damage.

Q: Now that you’ve painted such a rosy outlook, do you have any advice on how individuals can guard against losing 40 per cent of their money in this extremely risky world?

NT: My advice is that instead of investing in medium-risk securities, you should put most of your money in very low-risk securities, and a little bit in high-risk securities. Then you might get a good black swan. Also, it’s good to have more than one profession, in case your own profession goes out of style. A Wall Street trader who’s also a belly dancer will do a lot better than a trader who winds up driving a taxi.

What?

the bigotry party

Dana Blankenhorn:

With Glenn Beck, I think we’ve got the GOP right where we want it. Let them have the racists, the nativists, the conspiracy theorists, and the religious nuts. They will scare away just about everyone else.

fame, success and busted

What happens to many athletes and their money is indeed hard to believe.

  • By the time they have been retired for two years, 78% of former NFL players have gone bankrupt or are under financial stress because of joblessness or divorce.
  • Within five years of retirement, an estimated 60% of former NBA players are broke.
  • MLB players have been similarly ruined, 10 in one month.

very very great error

The presence of a major ideological movement in the United States of America dedicated to the dual propositions that taxes must never go up, and that government expenditures don’t need to relate to government revenue in any real way as long as the Republican Party is in charge simply makes it almost impossible for the country to be governed in a responsible manner.

If we had a different political system, it’s possible that such an ideological movement would marginalize itself, lose elections, and the other guys would run the show responsibly. Maybe. You could at least imagine it happening.

But in our system even a defeated minority gets a ton of influence over policy and becoming completely dogmatic and irrational actually enhances that level of influence.

The Epitaph of Economic Jingoism:

XXXXXXXXXX

terrific…but appalling

The Nightmare of Christianity …my mother was into all the charismatic “fanatical evangelical” insanity. Her and her church believed that Satan and demons were everywhere in everything.

Obedience is listening attentively,
Obedience will take instructions joyfully,
Obedience heeds wishes of authorities,
Obedience will follow orders instantly.
For when I am busy at my work or play,
And someone calls my name, I’ll answer right away!
I’ll be ready with a smile to go the extra mile
As soon as I can say “Yes, sir!” “Yes ma am!”
Hup, two, three!

“It’s so funny how many people want to help you and love you and counsel you when there is money involved,” he replied.

contributing in other ways

The guy who invented the locomotive:

Stephenson was determined to extend his father’s pioneering work on a national and ultimately global scale, for the benefit of mankind and the working man in particular. He believed that railway development should be comprehensive, benefiting the whole population, not just the privileged few.

“The true and full effect of railways,” he wrote, “would not take place until they were made so cheap in their fares that a poor man could not afford to walk.”

raising or lowering taxes

An important question is, where are we on the Laffer curve?

The notion of the Laffer curve has been used to justify all sorts of tax cuts, under the assumption/claim that we are to the right of the maximum, so that cutting taxes will actually increase revenues.

Serious economists generally don’t believe this holds true in the U.S. right now, but the lure of the idea is undeniable: lose weight by eating more ice cream!

it becomes a psychological burden

Why do you want to change the way things work when Jesus Christ said we’re the best country in the universe?

Jotman:

One day — this was ten years ago — an African American lady lectured me for almost an hour about the greatness of America (relative to the rest of the world). She told me that in America people enjoy things that foreigners don’t have. I asked for an example.

“Like freedom,” she said.

Few Americans seem to realize just how good many people have it in other countries.

stop deliberate programming

Stephen Downes on fixing 21st Century learning:

First, it isn’t impossible to teach people facts. Quite the opposite is the case – we understand, and can prove (and have proved, over and over) that we can teach facts very simply and easily, through repetition, rote, memorization, practice examples, worked examples, and more.

Second, it isn’t wrong to teach facts. Or (perhaps more accurately) to learn facts. Having an easy memory recall of a body of facts will serve a person well in life.

Third, we need facts to do stuff. We need to know about psychology, about Freud and Jung and maybe Erikson and Arens, in order to do the job. We need to know about navigation and aerodynamics and where the brake lever is in order to fly an airplane.

But do we need these specific facts?

When you teach children facts as facts, and when you do it through a process of study and drill, it doesn’t occur to children to question whether or not those facts are true, or appropriate, or moral, or legal, or anything else.

We know now – and, indeed, have probably always known – that an education based strictly and solely in facts is insufficient.

now we’re talkin’

Paul Volker, chairman of the White House Economic Recovery Advisory Board, suggested banks should be restricted to trading on their client’s behalf instead of making bets through internal units that often act like hedge funds.

Congressional hearings this week.

pump your friends

The U.S. government delivered more than twice as many federal dollars to programs benefiting fossil fuels than it supplied to renewable energy from 2002 to 2008. This Administration? I’ve found no wrap up.

vast world wide conspiracy of

Doug Stych:

In most other countries, people who carried on like that would never be considered as spokesmen for a major political party. Hugo Chavez is the only current foreign leader who talks like Glenn Beck or Rush Limbaugh.

Can’t the right do better than that?

logic of lunatics

Naughton:

“So, let me get this straight. Bush inherited a $7 Trillion surplus, turned it into a deficit by funding an illegal war, fought by murderous private contractors, but Obama is the bad guy because he wants healthcare the entire rest of the developed world has had since the early 1950s?”

tearing wings off butterflies

John Hempton:

Politics makes people believe the strangest things – so let’s try make money from their stupidity.

I know someone that made billions (yes billions) of dollars betting that subprime lending would end in a crisis – and they only had to risk tens of millions of dollars to make that money.

Stupid ideology gave huge profit potential.

That stupid ideology came from the right because at the moment there is (much) more stupid ideology on the right – but again it was not always that way and will not always remain that way.

therein lies the battle

Bruce Bartlett:

Just so people know the round numbers, total spending this year is about $3.6 trillion. At most, $200 billion of that represents stimulus spending, so even if there had been no stimulus bill and the economy had done as well as it has done, we would be looking at a $3.4 trillion budget.

Revenues are only about $2.1 trillion, so we would be looking at a substantial deficit even if the stimulus package was never enacted.

Revenues would be even lower if Republicans had gotten their wish and the stimulus consisted entirely of tax cuts.

How tax cuts would help people with no wages because they have no jobs or businesses with no profits to tax was never explained. But many right-wingers are convinced that tax cuts are the only appropriate governmental response no matter what the problem is.

Looking at last year’s budget, only 38% was classified as discretionary; that is, under Congress’s control… All the rest was mandatory: entitlements and interest on the debt. Within the discretionary category, 54% went to national defense. Just $37.5 billion, 3.3% of the discretionary budget, went for international affairs including foreign aid. Over the years I have encountered many conservatives who thought that abolishing foreign aid was just about the only thing needed to balance the budget. Obviously, that’s nonsense.

Domestic discretionary spending amounted to $485 billion last year. With a deficit last year of $459 billion, we would have had to abolish virtually every single domestic program to have achieved budget balance. That means every penny spent on housing, education, agriculture, highway construction and maintenance, border patrols, air traffic control, the FBI, and every other thing one can think of outside of national defense, Social Security and Medicare.

This means that it is impossible to get control of spending without cutting entitlement programs. Many Republicans agree, but they never make any serious effort to do so. On the contrary, they defend entitlements when Democrats suggest cutting them. The Republican National Committee has run television ads opposing cuts in Medicare because Obama proposed using such cuts to fund health reform. Many demonstrators at right-wing tea parties were seen carrying signs demanding that the government keep its hands off Medicare.

Last year, we spent $456 billion on Medicare, and it is the fastest growing major government program. How likely is it that the people protesting Obama’s Medicare cuts will stand with Republicans if they propose cutting that program even more to balance the budget? They will switch sides in an instant. The elderly will fight anyone who tries to cut their benefits even as they hypocritically demand fiscal responsibility and rant about the national debt. The elderly are the reason why we have a national debt. Unfortunately, the ranks of the elderly are rising. … Furthermore, the elderly are a rising portion of the electorate. …

When I raised these facts with a prominent Republican recently he recounted that Reagan had cut spending. But he didn’t. Spending rose from 21.7% of the gross domestic product in 1980 to 23.5% in 1983 before declining to 21.2% in 1988. And that improvement came about largely because favorable demographics caused entitlement spending to temporarily decline from 11.9% of GDP in 1983 to 10.1% in 1988. (Last year it was 12.5% of GDP.) …

In short, there is no evidence that it is politically possible to cut spending enough to make more than a trivial difference in our nation’s fiscal problems. The votes aren’t there and never will be. Those who continue to insist otherwise are living in a dream world and deserve no attention from serious people.

$2.1 trillion revenue. $3.6 trillion budget.

the right-wing radio heavyweight

Rush Limbaugh declared on the radio:

Kid shouldn’t have been on the bus anyway. We need segregated buses — it was invading space and stuff. This is Obama’s America.

a fat out racist