A woman's place is barefoot and pregnant in the home

That, apparently, is what the Republican commissioners of Frederick County, Maryland say.

Note that a woman staying home with the children, in today's day and age, is very much an upper middle class affectation. Nobody who's in the bottom 90% of income can afford it. Simply buying a house in most of the country requires two wage earners, because the median salary in most of the country won't even pay the mortgage note even with today's lower home prices.

So let's get this straight: Republicans in Frederick County, Maryland, just told 90% of the people in the county "yo, go live on the street, you bums." Because you can't afford to live in that (fairly expensive) county on a single wage-earner's income... well, unless you're a corrupt Republican politician in the top 10% of wage earners, anyhow.

-- Badtux the "Well, at least it wasn't cake" Penguin

Fundamental change

Bryan over at Why Now reminds us that today is the 107th anniversary of the 1st manned flight at Kitty Hawk.

My grandmother was born when the nearest city, 50 miles away, was an all-day trip on muddy roads via horse and wagon, lighting was kerosene lamps, heat and cooking was wood stoves, the bathroom was an outhouse, the running water was what you pulled out of the well with a bucket and a rope, the refrigerator was a large ceramic jug dropped into the well at the end of a rope, dinner was whatever you had harvested, and sausage was what you made in your own smokehouse from slaughtering one of your own pigs. Medical treatments for most diseases read as, “send home with palliative treatment to die” and graveyards were full of tiny little graves that read “Baby Smith” or “Baby Page” or “Baby Taylor”, where starvation was an ever-present threat only one bad harvest away. She went peacefully in her sleep with the Internet, space travel, big-screen TV’s, and modern medicine, where childhood mortality from disease was rare and starvation in America almost unheard of.

I think of what kind of progress children born in the 70′s will see in their time, and I feel sad. They were already born with man having reached the moon, and nothing done in outer space since then has matched that peak. Cars and aircraft are more fuel-efficient, quieter, faster, and more powerful, but those are marginal improvements on already-existing inventions. The Internet, which hit its stride in their mid-20′s, certainly was an innovation, but it’s pretty much the only real innovation of the past forty years (by real innovation, I mean one that changes how people live — by that standard, big-screen tv’s aren’t real innovation, since they’re merely an improvement upon an already-existing technology that doesn’t fundamentally change how people live). And given that things seem to be pretty much winding down, I doubt we’ll see any other real improvement… it’s all downhill from here, bay-bee.

We live in sad times. Our grandparents could exult in the march of progress, even if their own life was hard at times they could be confident that progress would help make their lives easier and more productive over time and that their own children would have an even easier and more productive life, assuming that nobody blew up the planet with nukes. But our own children… it looks like things are going the other way for them.

- Badtux the Reverse Progress Penguin

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The Obamapublican Plan

Preznit Hopey Changey is shocked, shocked I say, that his base hates his giveaway to the rich. Looking at the graph above (courtesy of DKos), I have NO idea why he would be so shocked....

- Posted using BlogPress from my iPad

Natural causes

In case, as time goes along, you're wanting to know how many Americans are starving, freezing, or otherwise dying because of the failure of Austerian economics at the zero bounds, look for two words: "Natural causes". Those are words that coroners always put on the death certificate when someone starves to death or dies of exposure here in America. Because, y'know, telling the truth might offend someone, yo.

BTW, this is not new. This has been the code for at least 100 years. When people at the end of the 19th century couldn't find work and starved to death (no food stamps or anything like that back then, y'know), that's what was on their death certificate: "natural causes". Reminds me of those folks hawking "all-natural supplements"... arsenic and cyanide are natural too, y'know?

-- Badtux the Helpfully Snarky Penguin

The new ownership society

So, asks a puzzled person, isn't the massive wealth redistribution that has happened over the past thirty years bad for the wealthy too? After all, the companies they own need customers for their goods, and if nobody has any money other than the wealthy, then there's less goods sold, and the wealthy get less money.

Ah, but... see, the thing is, money isn't wealth. Wealth is GOODS AND SERVICES. Money is just a handy intermediary to use to transfer goods and services around. What is wealth is what you *buy* with money -- things like, say, dachas on the Black Sea, McMansions on the ring road, that sort of thing.

During times of inflation, people took on debt or purchased assets at inflated costs. During times of deflation, people can not pay their debts in the now-suddenly-scarcer currency, and have everything taken from them by the ownership class. From 1937 to 2008, thanks to years of Keynesian economics, the supply of currency rose every year. Note that monetary inflation is the same thing as debt deflation -- your debts become worth less in real terms every year during times of inflation. People made major life decisions such as purchasing a home based upon the notion that prices would always rise -- a notion which 70 years of Keynesian economics applied to the money supply reinforced, because nobody under the age of 70 had any experience with monetary deflation (that is, shrinkage of the money supply -- NOT AT ALL the same as price and wage deflation, which lags monetary deflation for reasons I've previously discussed here). These people made a decision which seemed reasonable given their life's experience... and then had the stool of their entire life's experience kicked out from under them as they hung in the air and money suddenly became much scarcer.

So what's the end game? The new ownership society is where the wealthy own *everything* because the money supply has crashed so far that nobody can pay their debts -- and the owner class buys up the defaulted assets for pennies on the dollar. At that point, the ownership class really doesn't care if the money supply collapses all the way and they can't sell anything for money. Because they will own you. Think Latin America's oligarchs. They own everything, so their minions have no place to go and must labor in their fields and workshops to produce the hand-made goods and services they want. Their every need is taken care of by their serfs, who beg for crumbs of bread in exchange for being allowed the privilege of placing a bathrobe upon their master's back upon their master exiting his bath. What few things they need that their serfs cannot make in their master's workshop are bought by exporting agricultural goods, natural resources, and hand-made items from those workshops to more civilized nations and getting the technological goods they want back in return. Do these people care that they can't sell anything to their serfs? No. And neither will our ownership class, once they own everything -- including us.

-- Badtux the Apocalyptic Penguin

It is what it is

The middle class is being downsized away. There's a few folks like me whose creativity is hard to outsource and who get good salaries as a result. And then there's the former middle class, no longer needed partly because they've been outsourced to India and China... but also because we're just too damned good at making shit nowdays. As in, only 10% of U.S. workers are involved in manufacturing... but the United States is still the world's biggest manufacturer, even today with China making all our cheap shit and Latin America making all our underwear.

The deal is that technology has made probably 90% of all middle class jobs unnecessary. That was papered over for a while by putting the middle class to work trading dot-com stocks and selling overpriced real estate to one another, but the reality is that the jobs the middle class once worked are gone, and those jobs aren't coming back.

When there is only one solution, people adopt it sooner or later however much they hate it. With a permanent situation of more people than jobs, the unemployed will be supported from the general wealth. Call it Socialism or Christianity or whatever you please, but there's going to have to be a change in how our economy is organized because people do not voluntarily starve to death. They just don't. Hungry desperate people will do whatever it takes -- whatever it takes -- to survive, because humanity is a race of two-legged cockroaches in the end. The Republicans don't understand this, because they figure the entire world can be organized like Mexico -- i.e., them on top, and everybody else starving peasants. But that only works in low-tech resource extraction economies where the people don't have the resources available to do something about it. Once they do have the resources.... well. Bad Things Happen. Let's put it that way.

So: Reality is what it is. We will have socialism in America -- at least to some extent. Either that, or there won't be an America, just Somalia West, complete with warring warlords shelling each other's neighborhoods with artillery...

-- Badtux the Reality-based Penguin

Mexification Complete

U.S. now has wealth distribution typical of 3rd world banana republics. The Reagan Revolution is complete -- the wealth of America has now been transferred from the middle class to the top 1%, who now make 24% of the income -- and own 34% of the wealth. Meanwhile, the top 5% of Americans own more of America than the entire bottom 95% of Americans combined -- roughly 60% of America's wealth.

Congratulations, Republicans, for your successful Mexification of America. You took a country that had a thriving middle class and turned it into a nation where the vast majority of the middle class is groveling on their knees for trickle-down that looks an awful lot like the view from the bottom of a urinal. And you bastards in the former middle class.... SIIIIIiiiigh. You are too fucking stupid to even notice it, instead whining "thank you sir please give me more!" and voting for the same evil-ass politicians who butt-fucked you in the first place...

As for the Democrats -- I just got a letter from good ole' Barry Obama dated August 8 stating that the upcoming election is going to be critical to the future of America and please donate and please vote. I got that motherfucking letter *TODAY*, folks -- err, a week AFTER the election. Stupid-ass Democrats are fucking useless, the most inept buncha clowns to ever stumble drunk out of a clown car.

Siiiiigh.... we are so fucked, yo. So I guess I'll leave ya with a joke: Q: How is American beer like fucking in a canoe?

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A: It's fucking close to water.

That is all.

-- Badtux the Snarky Penguin

Who owns the damned mortgage, anyhow?!

By now pretty much everybody has heard about "mortgage-gate" -- where the banksters foreclosed upon homes where they didn't own the mortgage and where, in some cases, houses were foreclosed upon that didn't even have a mortgage on them.

Now, some folks say that this means that all these foreclosures were invalid. Well, probably not. Most of those homes that were foreclosed upon really were in default, though clearly bypassing the normal mechanisms resulted in atrocities. The real question is: Was the mortgage satisfied by the foreclosure action? Do the buyers have clear title to the formerly-foreclosed homes?

My best guess is that there are a lot of investment buyers who are going to get some unpleasant surprises shortly as they suddenly find the home they bought for cash at a foreclosure sale itself foreclosed upon by the real owners of the mortgages that the banksters fraudulently claimed they owned. Because see, if they are the legal owners of the mortgages, and the banksters, not the legal owners, got the money from the foreclosure sale... well. There was no legal foreclosure, and the mortgage lien has not been satisfied and legally remains on the title. And in many states, an unsatisfied lien above a certain percentage of the home's value can trigger a foreclosure sale.

Even in those states where the unsatisfied liens (unsatisfied because the banksters, not the owners of the mortgages, foreclosed on the homes) don't trigger foreclosure sales, the home now has a clouded title, meaning that you can't sell the damned thing without losing all your equity to someone you don't even owe money to. The deal being that the lien goes with the *house*, not with the owner of the house, and if nobody has paid it off either through a valid foreclosure or otherwise, it's still there.

Those of us in civil foreclosure states have a slightly easier (harder?) time of it here, because we're deed-in-trust states -- the deed to the home is in trust at a title agency, rather than having a lien on it. The title company gets to decide who to release the title to, and once they make that decision, there's an unclouded title -- if you were the valid holder of the mortgage and the title company released the title without paying you off (instead paying off a bankster who didn't own the mortage), you can sue the title company, but the title itself is clear and the buyer doesn't have to worry about someone foreclosing on him for a mortgage he didn't even know about. But even here there is going to be a problem with title companies having to fork over way more money than is in their reserves to the winners of the successful "you gave my title away without giving me my money!" lawsuits... and if the title companies collapse, who owns the titles to all the properties they currently hold in trust? And without solvent title companies to hold titles in trust, the whole deed-in-trust system collapses.

In short, it's a mess. But it's a mess for the buyers of the foreclosed properties in lien theory states, and it's a mess for the title companies in deed-in-trust states (which means it's a mess for both buyers and sellers there). As for the notion that the foreclosed properties will revert to their former owners... dream on. At best, if it can be proven that the property was fraudulently foreclosed upon, the former owner qualifies to get money equal to the equity he had in his home at the time -- which probably was none, for most of these properties, most of which were way underwater. In general, civil courts award cash damages rather than order substantive actions whenever it is possible to remedy the harm via cash, because that requires the least hassle on their part. In this case, from a legal point of view, the harm is the loss of equity that the foreclosed-upon homeowner experienced, and the remedy is, err, cash. And maybe an order to the bank that the foreclosure be stricken from the homeowner's credit report record, but that's the farthest that a court will go.

In other words, people saying that this is going to keep people in their homes, or return people to their homes, are smokin' crack. That's just not how our legal system works or, for that matter, has ever worked -- the English common law system we inherited is predisposed to cash remedies where those are sufficient to deal with economic harm done. All that's going to happen now is that the banksters are going to have to go back to the investors who own the mortgages and get the mortgages legally assigned back to them before going to foreclosure. Well, that and cleaning up the past mess is going to be a big issue, because now we have several million people nationwide who own homes with clouded titles, where they can't sell the damned things because there's someone out there, somewhere, who owned the mortgage and still has a legal claim to a lien on the home -- and until that is sorted out, the title is stuck in limbo.

-- Badtux the Legal Penguin

WASF

The Misfit has the word. And it ain't happy happy fun time.

-- Badtux the Waddling Penguin

Next right-wing target: Public libraries

Fox News proposes eliminating Chicago's public libraries. Because libraries are socialism. As are police forces, fire departments, interstate highways, post offices, and all those other things that our founding fathers supported and, in some cases, wrote directly into the Constitution (like post offices and interstate highways, which they called "post roads").

OMG... that means our founding fathers were.... (gasp).... SOCIALISTS! But I forget, that's those stupid liberal FACT thingies from those notoriously liberal TEXTBOOKS or from the actual text of the Constitution. It wasn't said by Rush Limpdick or Glenn BatshitCrazy Beck, so clearly it can't be true... clearly those wiley lie-berals have tampered with the text of the Constitution that's in our textbooks!

Remember, boys and girls, if you aren't stupid and ignorant, if you dare darken the doors of one of them thare libary places and, like, learn them un-American fact thingies, why... you aren't a REAL American. Yessiree, ignorant is the only American way to be, you don't wanna be one of them, like, fact-spewin' EGGHEDS, do ya?!

-- Badtux the Snarky Penguin

The economics of buying an REO for cash

Over at Calculated Risk, we find that mortgage delinquencies are at an all-time high. Yet people looking for low end homes to buy (like me, until recently) complain that nothing is available -- the short sales are stuck in short-sale hell because half of the people who have listed their homes as a short sale have no intention or ability to go through with it (because seconds won't release their liens) and are just using it as a delaying tactic, and the foreclosures are going to cash buyers for roughly 20% less than what the banks could sell them for if the banks would accept offers with financing contingencies. This is continuing to place appraisals into downward spirals that make it hard to have homes appraise at what the market value would be if we had an actual functioning housing market, thus makes it hard to get financing since it's hard to make the home appraise. Thus the banks prefer the cash investors despite the fact that their own best interests would be better served by issuing new mortgages to people who can actually afford these homes, but division A (distressed properties) doesn't talk to division B (originations) so it's like they're shooting themselves in the feet -- again.

So... who are these cash investors? How can they come in and buy a home for $390,000, then rent it out for $1700 per month, when my mortgage payments would end up at around $2900/month on that very same home? Wouldn't they lose $1200/month on that deal? Well, *NO*. Because they're not paying interest on the money they used to buy the home, these are wealthy dentists and lawyers and executives who have that much petty cash to spend. So let's do the math. $1700/month is a 5% return on investment if you have $390K to invest. Now, granted, the *actual* return is going to be less, because of management costs and taxes (which are around 1.2% per year here, so lop 1.2% off that 5% ROI). But Treasuries are going for roughly 0% ROI right now. People need a place to live, so it's going to take a *lot* to drive the cash ROI on homes down to 0%.

So that's the deal. It sure must be nice to be rich, because you win when the economy is up (you get to sell your investment properties bought during the troughs for ridiculous prices), and you win when the economy is down (you get to buy investment properties for 20% less than the "little people", then make a ridiculous ROI on them during deflationary times where everything else is at effectively 0%). The rich aren't like us. They don't have to work for a living unless they want to (remember, management companies are taking care of maintaining and renting these homes, for a percentage of the take). Their money does it for them. As an ordinary working stiff, isn't that, like, the coolest thing you ever heard of?

-- Badtux the Money Penguin