Making Unique Observations in a Very Cluttered World

Friday, 10 February 2012

Top Republican at CPAC says - Jeb Bush could emerge as nominee at a brokered convention -

Top Republican at CPAC says - Jeb Bush could emerge as nominee at a brokered convention - 

Al Cardenas, head of the American Conservative Union, has said that Republican turmoil might lead to a brokered convention in which Jeb Bush, former Florida governor, would emerge as a “possible alternative” party nominee.

Mr Cardenas, who is running this year’s Conservative Political Action Conference (CPAC), a gathering in Washington of some 10,000 conservatives, told MailOnline that it was not certain that one of the four current Republican candidates would emerge victorious.

His comments came as Republicans fretted publicly about the perceived weaknesses of Mitt Romney, the establishment choice and frontrunner, Rick Santorum, surprise winner in three states on Tuesday, Newt Gingrich and Ron Paul.

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The most shocking extreme sport of the year - Tazer Ball - with a 300,000 volt electroshock gun -

The most shocking extreme sport of the year - Tazer Ball - with a 300,000 volt electroshock gun - 

A Toronto team is ushering in the world’s newest ultimate sports league, but don’t expect to see a home game anytime soon: One of the pieces of equipment used, a 300,000 volt electroshock gun, is considered a weapon in Canada.

“It’s not technically a police grade Taser,” said Eric Prum, 25, one of the founders of Ultimate Tazer Ball. “That being said, the first thing the [players] will tell you is that they hate getting tased. Those things really do hurt.”

The Toronto Terror is one of four teams in the newly minted Ultimate Tazer Ball league. The game puts two teams of four players on a field about the size of a hockey rink. Players have to get a large ball into a net while avoiding their opponents, all of whom are armed with the device.

“The reason it’s really cool in game play is because it causes your muscles to spasm, therefore you’re going to drop the ball, you’re going to trip, you’re going to fall over. And it’s fun,” said Mr. Prum.

The stun guns are not lethal. While high-rates of voltage are certainly painful, it is electrical current that kills.


The Top 12 Reasons Why You Should Hate the Mortgage Settlement -

The Top 12 Reasons Why You Should Hate the Mortgage Settlement - 

Here are the top twelve reasons why this deal stinks:

1. We've now set a price for forgeries and fabricating documents. It's $2000 per loan. This is a rounding error compared to the chain of title problem these systematic practices were designed to circumvent. The cost is also trivial in comparison to the average loan, which is roughly $180k, so the settlement represents about 1% of loan balances. It is less than the price of the title insurance that banks failed to get when they transferred the loans to the trust. It is a fraction of the cost of the legal expenses when foreclosures are challenged. It's a great deal for the banks because no one is at any of the servicers going to jail for forgery and the banks have set the upper bound of the cost of riding roughshod over 300 years of real estate law.

2. That $26 billion is actually $5 billion of bank money and the rest is your money. The mortgage principal writedowns are guaranteed to come almost entirely from securitized loans, which means from investors, which in turn means taxpayers via Fannie and Freddie, pension funds, insurers, and 401 (k)s. Refis of performing loans also reduce income to those very same investors.

3. That $5 billion divided among the big banks wouldn't even represent a significant quarterly hit. Freddie and Fannie putbacks to the major banks have been running at that level each quarter.

4. That $20 billion actually makes bank second liens sounder, so this deal is a stealth bailout that strengthens bank balance sheets at the expense of the broader public.

5. The enforcement is a joke. The first layer of supervision is the banks reporting on themselves. The framework is similar to that of the OCC consent decrees implemented last year, which Adam Levitin and yours truly, among others, decried as regulatory theater.

6. The past history of servicer consent decrees shows the servicers all fail to comply. Why? Servicer records and systems are terrible in the best of times, and their systems and fee structures aren't set up to handle much in the way of delinquencies. As Tom Adams has pointed out in earlier posts, servicer behavior is predictable when their portfolios are hit with a high level of delinquencies and defaults: they cheat in all sorts of ways to reduce their losses.

7. The cave-in Nevada and Arizona on the Countrywide settlement suit is a special gift for Bank of America, who is by far the worst offender in the chain of title disaster (since, according to sworn testimony of its own employee in Kemp v. Countrywide, Countrywide failed to comply with trust delivery requirements). This move proves that failing to comply with a consent degree has no consequences but will merely be rolled into a new consent degree which will also fail to be enforced. These cases also alleged HAMP violations as consumer fraud violations and could have gotten costly and emboldened other states to file similar suits not just against Countrywide but other servicers, so it was useful to the other banks as well.

8. If the new federal task force were intended to be serious, this deal would have not have been settled. You never settle before investigating. It's a bad idea to settle obvious, widespread wrongdoing on the cheap. You use the stuff that is easy to prove to gather information and secure cooperation on the stuff that is harder to prove. In Missouri and Nevada, the robosigning investigation led to criminal charges against agents of the servicers. But even though these companies were acting at the express direction and approval of the services, no individuals or entities higher up the food chain will face any sort of meaningful charges.

9. There is plenty of evidence of widespread abuses not that are appear not to be on the attorney generals' or media's radar, such as servicer driven foreclosures and looting of investors' funds via impermissible and inflated charges. While no serious probe was undertaken, even the limited or peripheral investigations show massive failures (60% of documents had errors in AGs/Fed's pathetically small sample). Similarly, the US Trustee's office found widespread evidence of significant servicer errors in bankruptcy-related filings, such as inflated and bogus fees, and even substantial, completely made up charges. Yet the services and banks will suffer no real consequences for these abuses.

10. A deal on robosiginging serves to cover up the much deeper chain of title problem. And don't get too excited about the New York, Massachusetts, and Delaware MERS suits. They put pressure on banks to clean up this monstrous mess only if the AGs go through to trial and get tough penalties. The banks will want to settle their way out of that too. And even if these cases do go to trial and produce significant victories for the AGs, they still do not address the problem of failures to transfer notes correctly.

11. Don't bet on a deus ex machina in terms of the new federal foreclosure task force to improve this picture much. If you think Schneiderman, as a co-chairman who already has a full-time day job in New York, is going to outfox a bunch of D.C. insiders who are part of the problem, you are smoking something very strong.

12. We'll now have to listen to banks and their sycophant defenders declaring victory despite being wrong on the law and the facts. They will proceed to marginalize and write off criticisms of the servicing practices that hurt homeowners and investors and are devastating communities. But the problems will fester and the housing market will continue to suffer. Investors in mortgage-backed securities, who know that services have been screwing them for years, will be hung out to dry and will likely never return to a private MBS market, since the problems won't ever be fixed. This settlement has not only revealed the residential mortgage market to be too big to fail, but puts it on long term, perhaps permanent, government life support.


McCain’s new ads in British bus shelters actually smell like baked potatoes -

McCain’s new ads in British bus shelters actually smell like baked potatoes - 
Commuters are treated to the smell of baked potatoes in this British ad for McCain.

The smell of potatoes baking is the secret ingredient in a new McCain Food campaign that has just launched across Britain.

At 10 bus shelters from London to Glasgow, commuters can press a button on a bulging 3D baked potato and get a whiff of a custom McCain scent.

“This is their biggest launch since oven chips (fries) in 1979,” an advertising spokeswoman told the Toronto Star.

“The idea is to bring the whole feeling, the smell and comforting warmth” of baked potatoes straight to potential consumers.

In a marketing first, the fibreglass potato also warms up and dispenses a discount coupon.

The $2.2 million campaign from the British arm of the New Brunswick frozen foods giant is promoting McCain Ready Baked Jackets, which are microwaveable pre-baked potatoes.

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