Wednesday, August 6, 2014

This & That, August 6, 2014


I have blogged recently concerning the plethora of auto loans to unqualified persons. Now we learn the government is also becoming concerned.

Back tracking a bit to our recent past, do you remember these terms: subprime loans, collateralized debt obligations, credit default swaps, too big to fail, and Troubled Asset Relief Program?

Here is how they were all connected:

  • Unqualified applicants were given loans at high interest to buy homes.
  • Banks mixed these high risk loans with good loans into something called Collateralized Debt Obligations (CDO'S) and sold them to investors. The banks did not tell the investors that there were some very bad loans included in the CDO'S. 
  • Prudent investors bought insurance from insurance firms like American International Group (AIG). In exchange for premium payments to AIG they were insured against defaults on their CDO investments.  The insurance policy was something called a Credit Default Swap (CDS).
  • When the unqualified borrowers of  housing loans defaulted, so to did the CDO"S and because investors had insurance against such a failure they put in claims with AIG for full payment.
  • The defaults on the bad housing loans cascaded throughout the financial system and ended up with the federal government rescuing all parties considered too big to fail. This included the auto industry, Wall Street banking and investment firms and AIG. The final total of the rescue via the Troubled Asset Relief Program (TARP) still doesn't have a bottom line, but it is in the trillions. 
Recently there is talk of the same thing happening in auto sales.

  • Unqualified applicants are being given loans at high interest to buy cars.
  • Banks are mixing these auto high risk loans with good auto loans. 
  • The new thing is that bank analysis, credit rating agencies and insurance companies are warning investors of the risk. That was not the case during the housing bubble.
  • Also the government is getting involved in investigating the auto loan business.
Still it is reported that, "This year, G.M. Financial sold investors a roughly $730 million bond made up of auto loans that carried an average annual interest rate of about 13 percent."

NYT; Focusing on G.M. Unit, U.S. Starts Civil Inquiry of Subprime Car Lending, by Michael Corkey and Jessica Silver-Greenberg, August 4, 2014


Well, I thought there was a right to farm, but not in Missouri according to a coalition of farm groups and agra corporations. The primary villain is the Humane Society of America.

Out of state funding from the Humane Society and others are lobbying state legislatures in various farm states to pass laws and/or give their agricultural regulators additional power to regulate, among other things, a minimum space between livestock and control genetically modified crops. 

To fight this, the coalition mentioned above, has put together an amendment to the state constitution:

While the amendment mentions possible litigation, there appears to be no conflict with existing federal agricultural laws or regulations. 

Voting begins today, August 5, 2014.

August 6, 2014: reports the Amendment won by 2500 votes. The Missouri Secretary of State will probably do a recount.


Sunday, August 3, 2014

This & That, August 3, 2014


On April 15, 1963, Anna Marie Yocum was murdered at her home. Robert John Dowlut, age 17, was tried and convicted for second degree murder and sentenced to life imprisonment. On April 1, 1968 he was release on orders of the Indiana Supreme Court, and a new trial was ordered. This new trial never took place.
Mr. Dowlut went on to become the general counsel for the National Rifle Association and a respected advocate for the expansion of the Second Amendment right to bear arms.

In 1931, Harlon Carter, age 17, shot and killed 15 year old Ramon Casiano, a Mexican-American in Laredo, Texas. That case was overturned by the Texas Court of Appeals.
Mr. Harlon, later came to be the Chief Executive Officer for the National Rifle Association from 1977 to 1985 and a respected advocate for the expansion of the Second Amendment right to bear arms.

There are extenuating circumstances (serious ones) regarding the two killings. And you can read them in the sources noted. I just thought it was an interesting footnote to two very competent and successful advocates for the expansion of Second Amendment rights for individuals.

Most recently a decision was made to allow citizens to carry guns outside their homes in Washington D.C.. The justice in this case said that previous higher court decisions supported his decision. Much of these previous judgements were directly or indirectly due to the efforts of Robert Dowlut and Harlon Carter.


Mother Jones; The NRA'S Murder Mystery: One Court Sent Him To Prison For Shooting A Woman, Another Set Him Free Over Bad Police Work. Was The NRA'S Top Lawyer Railroaded-Or  A "Bad Guy With A Gun?", by Dave Gilson

Wikipedia; Harlon Carter; Syracuse senior federal judge tosses DC ban on carrying handguns in public, away from home, by Catie O'Toole, July 27, 2014


I don't want to diminish this by editing of paraphrasing and possibly water down the comments so:

"KKK joins immigration debate with calls for "corpses" on the border
With thousands of undocumented children amassing at the U.S. border, Robert Jones, Imperial Wizard of the Loyal White Knights of the Ku Klux Klan, doesn’t want amnesty. He wants “corpses” on the border. “If we can’t turn them back, I think if we pop a couple of them off and leave their corpses laying at the border maybe they’ll see we’re serious about stopping immigration,” Jones said."

Photo: Al Jazeera America
(Notice the agency that took the photo? This should impress are friends and enemies abroad)

Southern Poverty Law Center, August 1, 2014. 


Hypothermia it seems, can save you as well as kill you. There appears to be a space in between that is neither life as we define it and death as we define it.

We're not talking here about cryonics. If you have opted for cryonics, then sweetheart, you are graveyard dead. 

No, we are looking at the space in between. It's a space doctors have known for years. They have used this space for people in cardiac arrest. And if you get knifed or shot in Pittsburgh, there is a doctor there that plans to drain all your blood and replace it with saltwater. 

So, tell me , if you could be put in suspended animation when would you want to be walking around again? What do you foresee the downside might be if you returned 50 to 100 years from today? Would you be alone? If you are a senior citizen now, how would 'those people' treat you?

I personally want to go back in time, not forward.  Unfortunately that is not an option yet.

New Republic; Science Is Changing What It Means to be Dead: If you could freeze yourself until a future age, are you sure you'd want to?, by Judith Shulevitz, July 24, 2014


Jamie Dimon and Lloyd Blankfein are the chief executives for JPMorgan Chase and Goldman Sachs respectively. Both of these men are making big bucks for their companies and shareholders and themselves by actively helping American corporations renounce their American citizenship for lower tax bills abroad. You may have read about this increasingly new scheme called 'inversion'. It appears to be a win-win-win for firms like JPMorgan Chase, Goldman Sachs, corporations, and shareholders. The only losers are you and me.

Guess what, it's legal. The brouhaha is over money, especially corporate taxes that will no longer go into the United States Treasury. There are attempts in Congress to stop inversions and to even make the prohibition retroactive. My take is that any attempt to thwart inversions by legal means will fail. I can't see lower courts upholding these legislative prohibitions and certainly not the Supreme Court.

Possibly, a change in tax laws will slow down the process, but that may involve reducing corporate tax loopholes and corporate subsidies. Oh, and yes both JPMorgan Chase and Goldman Sachs were bailed out by you.

New York Times; Banks Cash In on Inversions Deals Intended to Elude Taxes, by Andrew Ross Sorkin, July 28, 2014.