March 7, 2007

Is a Mortgage Melt-Down Around the Corner?

Filed under: Biz Weak,Business Moves,Economy,Taxes & Government — Tom @ 2:45 pm

If it’s going to come, this is probably about the time:

Housing counselors and bankruptcy attorneys say they are seeing an increase in troubled borrowers who previously had good credit. “We have clients with 720-plus credit scores, and they are in awful products,” says Jennifer Harris, executive director of the Home Loan Counseling Center in Sacramento, Calif. Some of these borrowers took out option ARMs with low introductory rates and are likely to fall behind when their monthly payment resets at a higher level, she says.

Thomas Gorman, a bankruptcy attorney in Alexandria, Va., says he is seeing more financially strapped borrowers who “probably bought more house than they could afford and then took on more credit-card debt” to furnish the house and pay for the move. When the housing market cooled, they were “caught in the middle,” unable to sell their home or refinance and make their debt load more manageable.

Lenders are also tightening their standards. At a meeting with investors last week, IndyMac Bancorp Inc., the nation’s largest Alt-A lender, said it had raised the minimum credit score at which borrowers could finance 100% of a home’s value and took a number of other steps to tighten lending guidelines.

This article from about a month ago ties in to the problems mentioned. Here’s the money paragraph from it:

….. With ARMs, “the tag line you always hear…is you can refinance with no problem,” says A.W. Pickel, a mortgage banker with LeaderOne Financial Corp. in Overland Park, Kan., who is working with Ms. Keyes. “But it is a problem.” The appraisal for Ms. Keyes’s last loan was inflated, he adds.

Let’s see:

  • Dangerous loan products.
  • Government-sponsored enterprises (GSEs) like Freddie Mac and Fannie Mae lowering approval standards from about 2003-2006.
  • Inflated appraisals, possibly widespread.
  • Lenders who have closed deals when they often knew darned well that the borrowers were probably buying trouble.
  • Ignorant, naive, too-trusting borrowers.
  • Bankruptcy “reform” that could be forcing more borrowers into foreclosure before they fully realize what is happening to them.
  • Now, a possible overreaction (perhaps egged on by Congress) in standard-tightening by the GSEs and lenders. Here’s some evidence from USA Today that this is indeed happening on the lender side, while this subscription-only item at March 12′s Biz Weak says that Freddie Mac and others “are finding religion by instituting tougher underwriting rules.”

Well, you can’t say the mortgage-lending industry hasn’t gone all-out in trying to screw the whole economy up. I still don’t think they will, but they certainly deserve a Devil’s “A” for effort.

Carnival Barking (030707)

Filed under: News from Other Sites — Tom @ 11:34 am

Newshound’s 62nd on OH politics is here.

Boring Made Dull’s latest on Econ and Social Policy is here.

ADP’s February Employment Numbers: The First Release of a Hopefully Improved Report (Feb Report: +57,000)

Filed under: Biz Weak,Economy,Taxes & Government — Tom @ 9:25 am

After some significant “misses” last year when compared to Uncle Sam’s Bureau of Labor Statistics (BLS) reports that come out two days later each month, ADP has retooled its National Employment Report. If how Biz Weak assesses the upgrade (appears to require paid subscription) is accurate, it could prove more valuable than what BLS releases — but it will take at least a year, and probably two, before we’ll know that:

A Makeover For A Key Jobs Report

An overhauled version of Automatic Data Processing Inc.’s (ADP) National Employment Report is due on Mar. 7. The changes should get monthly results a little closer to the Labor Dept.’s initial monthly payroll figure. But the report’s more valuable contribution may be a better picture of the labor market in real time.

….. The ADP report now looks at nearly 400,000 businesses with payrolls totaling close to 23 million workers. That’s larger than the initial pool used by the Labor Dept. Plus, the data are now being collected weekly, vs. monthly, and a more advanced seasonal adjustment is in place.

The two measures will still diverge from time to time. When that occurs, early evidence shows the ADP numbers come closer to the government’s final annual employment revisions, released in early February, than the initial Labor Dept. jobs data. One reason is that the ADP report includes businesses not in the government’s initial survey. That makes the report “particularly powerful if you are trying to understand what truly happened to employment, as it will eventually be reported by the [government],” says Macroeconomic Advisers Chairman Joel Prakken.

It will take time to convince the financial markets, but if the revised ADP report proves to be a reliable real-time estimate of true labor market conditions, it will end up being quite valuable.

The final revisions referred to in bold are no small matter. The one just completed a month ago (blogged on here) “found” 981,000 previously unreported jobs, about 750,000 of which were added between April 2005 and March 2006, with the rest coming between April and December of 2006. After BLS’s February 2008 revision, there should be some pretty decent evidence as to whether ADP’s methodology really is picking up on job activity every month that BLS is taking a year or two to detect. By February 2009, the jury should be completely in for the period ending December of 2007. I would expect that there will be a lot of ink consumed and bandwidth burned in the meantime attempting to compare BLS and ADP.


UPDATE: ADP’s reported employment increase for February is 57,000. This report, plus the claims to better accuracy described below, build a bit of drama into Friday’s employment report from the government. Plus, there’s an additional nugget ADP will apparently start providing — a large employer/small employer breakdown:

Other new detail in The ADP National Employment Report shows that employment at small and medium size businesses employing less than 500 workers grew 86,000, while employment at larger businesses declined 29,000. Over the last six months, small and medium size businesses accounted for most of the growth in private nonfarm employment.

One Way or Another, the Globalarmists Are Determined to ‘Cap’ the US

Filed under: Environment,Taxes & Government — Tom @ 7:49 am

From the BBC, an Al Gore Nobel Peace Prize co-nominee is up to predictable mischief:

US CO2 emissions ‘violate rights’
A delegation of Inuit has travelled to Washington to argue that the US government’s climate change policies violate human rights.

The group has filed a legal petition to the Inter-American Commission on Human Rights, demanding that the US limits its emission of greenhouse gases.

The Inuit say pollution is contributing to melting ice and thawing permafrost, affecting their way of life.

Temperatures in the Arctic are rising at about twice the global average.

Representatives for Inuit communities living within the Arctic Circle presented evidence to the Commission on Thursday in an attempt to link human-induced climate change to international human rights.

The hearing is the latest stage in the legal process, which began in December 2005 when the petition was filed.

Call for caps

The delegation is being led by Sheila Watt-Cloutier, a former chairwoman of the Inuit Circumpolar Conference, a representative body for Inuit in Alaska, Canada, Greenland and Russia.

Mrs Watt-Cloutier, who has been nominated alongside former US Vice President Al Gore for a Nobel Peace Prize for their work on climate change, was responsible for submitting the petition.

No word as to whether the group intends to go after Al Gore for his disproportionate emissions, or mainland China for its exponentially growing carbon footprint. (/sarcasm).

Couldn’t Help But Notice (030707)

“Deafening Silence” Report — Haven’t heard a lot of criticism of Jean’s Schmidt’s degree of principled conservatism since some of the annual vote ratings have come in (National Journal — Schmidt received an 86.8, highest grade in OH congressional delegation by almost 6 points; National Taxpayers Union — 58% and B-, 5th in OH delegation; Americans for Tax Reform — 100%, along with most of the rest of the local congressional delegation).

Maybe their RINO-ometers are broken. Or maybe they’ve really been using BS-ometers all along. Whatever meter they’ve been using (and this is a fault of many not looking at a big-enough picture), they most likely aren’t considering foreign policy, where Schmidt appears to have been about the most reliable conservative on the Hill.

Still to come (yet to be released): Citizens Against Government Waste, Club for Growth.


Reason Number 6,524 Why Government Regulation of Business Grows

From the Hartford Courant’s Consumer Watchdog George Gombossy (HT Techdirt):

Under pressure from state investigators, Best Buy is now confirming my reporting that its stores have a secret intranet site that has been used to block some consumers from getting cheaper prices advertised on

Company spokesman Justin Barber, who in early February denied the existence of the internal website that could be accessed only by employees, says his company is “cooperating fully” with the state attorney general’s investigation.

Barber insists that the company never intended to mislead customers.

State Attorney General Richard Blumenthal ordered the investigation into Best Buy’s practices on Feb. 9 after my column disclosed the website and showed how employees at two Connecticut stores used it to deny customers a $150 discount on a computer advertised on

….. Based on what his office has learned, Blumenthal said, it appears the consumer has the burden of informing Best Buy sales people of the cheaper price listed on its Internet site, which he said “is troubling.”

What is more troubling to me, and to some Best Buy customers, is that even when one informs a salesperson of the Internet price, customers have been shown the intranet site, which looks identical to the Internet site, but does not always show the lowest price.

It’s totally obvious that a customer should be entitled to the best price available. That it’s not happening at Best Buy, and that other practices like these are most likely happening elsewhere, partially explains why government grows. It doesn’t need any free excuses.


Here’s a two-word reaction to this USA Today article about ideas for closing the “$300 billion tax gap,” all of which involve either more paperwork, more audits, and/or more time-consuming tax-return preparation: Fair Tax.


Global Warming, Destined to the All-Purpose Excuse for anything that doesn’t go right. And I mean anything (warning: R-Rated content). Update, 9:30 AM: As a vehicle for promoting business products, apparently no industry is left behind (R-Rated content again).

I guess we’re going to have to live with Alan Greenspan running off at the mouth ad infinitum, but I wish, while issuing daily estimates of recession odds, that he could at least spare us gag-inducing claptrap like this (esp the bolds):

Greenspan said he has been careful to avoid making life difficult for his successor.

His contracts with clients stipulate that there will be no reporters present and no recordings. He said he tries to have an exchange with an audience, where he often learns something that helps him hone skills he has worked on for 50 years.

“I was aware of the problem that if I stayed public, I could make it difficult for Ben,” he said. “For the most part it has worked. I was beginning to feel quite comfortable that I was fully back to the anonymity I was seeking.”


Regarding the Libby verdict, Instapundit himself dug up a timely reminder from the Washington Post in 2004 (it must have killed them to report what they had to; just look at the nonsensical headline; bolds are mine):

Plame’s Input Is Cited on Niger Mission
Report Disputes Wilson’s Claims on Trip, Wife’s Role

Former ambassador Joseph C. Wilson IV, dispatched by the CIA in February 2002 to investigate reports that Iraq sought to reconstitute its nuclear weapons program with uranium from Africa, was specifically recommended for the mission by his wife, a CIA employee, contrary to what he has said publicly.

Wilson’s assertions — both about what he found in Niger and what the Bush administration did with the information — were undermined yesterday in a bipartisan Senate intelligence committee report.

The panel found that Wilson’s report, rather than debunking intelligence about purported uranium sales to Iraq, as he has said, bolstered the case for most intelligence analysts. And contrary to Wilson’s assertions and even the government’s previous statements, the CIA did not tell the White House it had qualms about the reliability of the Africa intelligence that made its way into 16 fateful words in President Bush’s January 2003 State of the Union address.

Of course, the WaPo didn’t get it right either. The report didn’t “dispute” Wilson’s claims and assertions — it refuted them.

And Scooter Libby’s the liar. Uh-huh.

The verdict doesn’t any bearing on the false garbage about outing a covert CIA agent, or cooked intelligence, or any of the other blather that piled up over a three decade three-year (it felt like three decades). But at least it gives Patrick “Unlimited Budget, Unlimited Discretion” Fitzgerald a trophy — for now.

UPDATE: Jay Tea at Wizbang has more, including another timely reminder –

Fitzgerald has stated, repeatedly, that the only crime he uncovered in the whole sorry mess was Libby’s lying to investigators. There was no crime at the core of the matter, no signs that there was a grand conspiracy to “out” Plame (who committed gross nepotism and abuse of her position by pushing for her husband to get the Niger mission) or “discredit” Wilson (apart from simply pointing out his two contradictory stories), and no orchestrated cover-up behind the whole thing.


I would hope that those who complain about “crushing dissent” and “chilling free speech” to get righteously, and correctly, madder than hornets about this (HT Instapundit). I expect to be disappointed. Update, 9:30 AM: I didn’t get to the last paragraph the first time I looked at the piece. Whoa –

The government has also proposed a certification system for Web sites, blog hosters, mobile-phone operators and Internet service providers, identifying them as government-approved sources of information if they adhere to certain rules.

I thought I had learned not to be surprised or disappointed about anything coming out of this particular country, but they’ve really got my dander up on this one.

Chicago Elections Herald a Return of the Big-Box Ordinance

Filed under: Economy,Taxes & Government — Tom @ 6:13 am

Following up on this post from a week ago Tuesday –

From the Chicago Sun-Times, Chicago’s Mayor Dictator for Life Richard Daley is putting a brave face on it, but it appears that there are labor-backed veto-proof majorities in place to create quite a bit of economically dangerous mischief in the Windy City:

“Where’s the message? Hello? I mean — come on. What message? I’ve been more [pro-] labor than they have. Every crane down here is labor,” said Daley, whose big-box veto cost him support from all but one major union.

‘I can work with anyone’

With 12 runoffs and three veteran aldermen already defeated, a City Council that has grown more rambunctious with every corruption-related headline could flash an even bigger independent streak.

That’s especially true now that the wife of Rep. Jesse Jackson Jr. will be occupying the 7th Ward seat once filled by fierce Daley loyalist William Beavers.

But after thanking the lunchtime crowd at Wishbone Restaurant, 1001 W. Washington, Daley said, “I can work with anyone. And I did that in 1989. You forget that. In 1989, I had 18 to 20 people against me at all times on any issue. But I work with them.”

The Mayor’s override of the “Big Box living wage” ordinance last year survived by only a few votes. That margin appears to be gone. Never underestimate the Mayor’s Dictator’s ability to “persuade,” but it won’t be easy.

Vista and Broadband Incompatibilities?

Filed under: Business Moves,Money Tip of the Day — Tom @ 6:08 am

This comes from the BBC about a week, so I don’t know whether it’s limited to the UK, or whether the problem has been solved. But if it is the case in the US, it looks serious enough to cause those wanting Vista to hold off for a bit:

Last Updated: Thursday, 1 March 2007, 12:52 GMT
Net firms tackle Vista headache

Windows Vista is causing problems for some new PC owners hooking up their machine to a broadband connection.

Some old installation discs that simplify the task of configuring a PC for broadband have refused to work on machines loaded with Vista.

One reader was warned by Virgin Media that it would be “weeks” before its software worked with Vista.

Other net service firms have also admitted that the appearance of Vista has caused some hiccups for users.

Lancet Lanced

Filed under: Scams,Taxes & Government,US & Allied Military — Tom @ 6:03 am

Nobody with any sense of proportion deems it credible, but plenty of people who don’t have one have been buying into last October’s Lancet Study, which claimed that 650,000 Iraqi civilians had died since the US-led invasion in 2003.

It was already quite suspect because the only other comprehensive effort at tabulating civilian deaths that I’m aware of currently shows totals of between about 57,000 and 64,000 as of when this post was created.

The UK Times Online on Monday (HT LGF) made it pretty clear that the work done by Lancet doesn’t come close to standing up to scrutiny. There’s lots more at the link:

The implication of the Lancet study, which involved Iraqi doctors knocking on doors and asking residents about recent deaths in the household, was that Iraqis were being killed on an horrific scale. The controversy has deepened rather than evaporated. Several academics have tried to find out how the Lancet study was conducted; none regards their queries as having been addressed satisfactorily. Researchers contacted by The Times talk of unreturned e-mails or phone calls, or of being sent information that raises fresh doubts.

Iraq Body Count says there is “considerable cause for scepticism” and has complained that its figures had been misleadingly cited in the The Lancet as supporting evidence.

….. Professor Spagat says the Lancet paper contains misrepresentations of mortality figures suggested by other organisations, an inaccurate graph, the use of the word “casualties” to mean deaths rather than deaths plus injuries, and the perplexing finding that child deaths have fallen. Using the “three-to-one rule” – the idea that for every death, there are three injuries – there should be close to two million Iraqis seeking hospital treatment, which does not tally with hospital reports.

“The authors ignore contrary evidence, cherry-pick and manipulate supporting evidence and evade inconvenient questions,” contends Professor Spagat, who believes the paper was poorly reviewed. “They published a sampling methodology that can overestimate deaths by a wide margin but respond to criticism by claiming that they did not actually follow the procedures that they stated.” The paper had “no scientific standing”. Did he rule out the possibility of fraud? “No.”

Well, I’ll be. (/mock surprise)

From the ‘So Overdue I Thought It Would Never Arrive’ Department

Filed under: Life-Based News,Taxes & Government — Tom @ 6:03 am

From Life News, covering an article written by Bishop Robert Basa:

….. Vasa of the Baker, Oregon diocese, says a person can’t call himself a Catholic and believe that there should be a choice to destroy human life via abortion.

“The direct, intentional taking of the life of an innocent human being is inhumane and unjust. It is not just a choice,” the bishop wrote in the March 1 edition of the Catholic Sentinel.

In his article, Bishop Vasa discussed an interview (Nancy) Pelosi, the nation’s leading Democratic elected official, gave to Newsweek magazine in November 2006.

“To me it isn’t even a question. God has given us a free will. We’re all responsible for our actions,” Pelosi told the magazine. “If you don’t want an abortion, you don’t believe in it, [then] don’t have one. But don’t tell somebody else what they can do in terms of honoring their responsibilities.”

Vasa said it was “categorically impossible for the same person to state that he or she believes simultaneously both what the Catholic Church teaches and that abortion is just a choice.”

“What we believe must inform what we do,” he wrote in the Sentinel.

Abortion “is not just a choice and it is not a just choice,” the bishop said. “It is an unjust choice which is diametrically opposed to the clear and consistent teaching of the Catholic Church as well as to the clear and consistent teaching of God himself in the Ten Commandments.”

Nancy, you do have a choice: Be a Catholic or be pro-abort.

Positivity: Hero from 2004 Gets Help in Return

Filed under: Positivity — Tom @ 5:58 am

From Hallam, Nebraska:

Help For Hallam Hero
Folks in the small town of Hallam got together Sunday night to help a man they call a hero.

Dan Ebbers helped rescue some of his neighbors after the Hallam tornado devastated the town in 2004.

Now it’s Ebbers who needs help.

Friends organized a dinner to help raise money for Ebbers who was burned badly in an accident.

For his wife the support is overwhelming.

Lauree Ebbers, Dan’s wife, says “I can’t believe the support Dan’s getting since his accident. These are all his friends, everyone he cares about. And they all came out on a day when the weather is not the best. They’ve all come out to support us and our children. It’s wonderful.”

Lauree says Dan Ebbers was disappointed he couldn’t attend the event she says he would have wanted to help cook.