Status Update

I just wanted to be open and accountable to the public about where I am in my various writing projects:

Metaeconomics; took it off market for some re-diting, simplifications, expanded and comparative definitions, and reindexing with glossary. No set deadline.

Eventology Study; about 3/5ths done, but need to create more space for myself to complete the more poetical aspects. Hope to finish by next year's end.

Semi-autobiographical fiction about childhood; thought I was about 1/3 done, but still searching for the structural edits-- I think I may chop off a bunch of this second and first draft... feels years away still.

Crime novel; stuck in research is the simplest way to say that. Beyond which am amazed at our morally gray world, where truth is stranger than fiction. Always said this was gonna take four to six years at least... make it eight!

New historical fiction idea was crystallized for a vehicle and I have developed a very promising first draft outline. Wont be talking too much about this one for quite a while, but am excited to have finally found a vehicle for something I have been pondering... forever?

New economics book regarding "micro-economics," from about a 177 degree viewpoint of the meta-economics text. Should be eminently more readable and relevant... I hope!!

Anyways, just wanted to say thank you to those of my friends (dare I call them fans?) who have not only been reading my work, but been giving me feedback... and seriously amazed at the overall positive scope. That said, if anyone has indeed read my work, and was holding back comments for me that weren't entirely positive-- seriously, please (a) let me know you even have read the work, and (b) your true thoughts and responses. It's the only way I will get better as a writer and communicator!!!

THANK YOU.

Truth in Politicking

So here is a suggestion for Elections Reform in line with Food Labeling, Credit Card Disclosure Reform, and Truth in Lending type of consumer information:

Each Candidate for any elective office must fill out the following Disclosure Form;

JOB SOUGHT

NAME OF CANDIDATE

(200 characters or less, in his or her own words, answer "why I want the job.")


BUDGET AND LEGISLATIVE PRIORITIES

existing Federal Budget......... Reform? .........% Change Proposed
29% goes to Military.............. (Y/N) ..............(+%, None, or -%)
21% goes to Health
8% goes to Interest on Military Debt
12% goes to Interest on Non-Military Debt
7% goes to Income Security and Labor
4% goes to Housing and Community
4% goes to Veterans' Benefits
4% goes to Food
3% goes to Government
3% goes to Education
3% goes to Environment Energy and Science
1% goes to International Affairs
1% goes to Transportation

STATEMENT

(200 characters or less, in his or her own words any comment on Priorities above)


CANDIDATE BACKGROUND

(200 characters or less, in his or her own words background and experience statement)


CANDIDATE INFORMATION

(Legally Registered information including contact information and party affiliation)


TRANSPARENCY INFORMATION

(Public website and resources to conduct due diligence by any citizen including full and current list of contributors)

****

Now the example above is for any federal lawmaker.

That said, City Dog Catcher would have the same form, but with fewer budget categories.


Some other notes:

(a) A Candidate could maintain exact funding levels, yet favor reform
(b) A Candidate could propose changes in funding levels, yet be against reforms (so to say not correct the status quo, just increase or decrease program funding)
(c) A Candidate could favor no reform, no changes, but claim to be a strong advocate (for example in Education) in the STATEMENT
(d) A Candidate could zero out every category (unrealistically) except one (or two) to demonstrate their commitment to one (or several) issues, but ought to indicate "reform"
(e) Unless this becomes some sort of mandated law, this would be voluntary and it is conceivable candidates would choose not to disclose or follow this format (or similarly agreed format)-- this could become dicey because if candidates begin to make their own forms this idea dies from the same clutter and confusion currently in the system


FInally;

A second scorecard could be more easily created by Transparency/Watchdog organizations by comparing voting record (in category) with opening Disclosure Form to determine veracity of such original statement, and the subsequent mathematical deviations from that original intent (or stated intent).

Call that the power of Plain English, combined with unified data points for more clear universal measure.

Mortgage Madness

You gotta love the old commercials from the local (appliance, auto, carpet) guy where he says, "I'm going crazy."



Pitch lines then vary for instance, "until Sunday at Noon;" or "with prices like these...;" or "always and forever, so stop in anytime and I will make you a heckuva deal."

The point was (as I havent seen "that guy" for a long while) that the owner was irrationally trying to reduce stocks or inventory, and/or needed to pay for his divorce, expansion, or next years order.

Thats capitalism.

Crazy Guy, then either procured enough customers with enough profit margin and cost recoupment to justify another year in business, or he went out of business. Simple enough, which was why Crazy Guy would occasionally (or in the case of a really poor business model, regularly) reach out to his local TV Market and plead for assistance in the form of mutual benefit-- he took a loss so you could help him keep his lease (or whatever).

So where is this commercial:

At ABC Mortgage, our Sales manager has absolutely gone apeshit with this Financial crisis, and, not to talk out of school, but on top of all that his wife and his girlfriend are suing him-- right when the Federal government has specified NO MORE GOLDEN PARACHUTES!

His loss is your gain, we are renegotiating all of our current mortgages, and selling up to meet volume for the first two hundred customers (limit one mortgage per customer, some customers will not qualify).

But hurry, his divorce finalizes next Friday, and if we dont firm up our balance sheets to meet Sarbanes-Oxley-- he's fired!

So, come on down to ABC Mortgage and get you a 5% mortgage amortized over 40 years! Who said you couldn't afford that house?



And there you are. No CITI or AIG bailouts... pure capitalism. Oh, wait, I am dreaming again... sorry.

First problem is that brokers only arrange mortgages for banks/lenders, who then sell mortgages to servicing agencies, and once those are seasoned (paid on regularly for 30 ~ 120 days) they are then packaged and sold to the "Secondary Market," which means Fannie-Freddie (whom by now you have all met, and now as taxpayers own). Lets stop there, even though there were then from those secondary mortgage packages a variety of collateralized debt obligations which hypothecated the real (or implied) values of those packages.

Next problem is that Crazy guy from ABC Mortgage, aside from only being an arranger (still remember that guy in So Cal, "The Loan Arranger" for auto finance) 99% of the time, has no more inventory. There is a credit freeze like, literally, no one's business.

Finally, ABC Mortgage, probably did go out of business, and not the Servicing company or Lender (such to say that Countrywide the #1 mortgage company was bought by B of A for a song, and hence still exists).

So, before I complain about how Republicans are Communists (as I expect to do so in a future blog), lets just cut to the number one simplest and most effective way to sort the mortgage mess in short order (as I had promised to write this solution a while ago):

Extend amortization.

Before I go into the maths, let me just state that for the borrower the principal stays the same and it will take longer to pay off the mortgage; for the servicer no long term loss (possibly even more profit over time); the Lender must keep the liability on the books longer, reduce cash flow; and for the secondary market only reduction in cash flow operations. There would only be minor modification of existing contracts (as opposed to major overhauls on a case by case basis). And as for our friends in the "tertiary" markets, the CDO's and derivatives, principal is maintained, defaults mitigated, and only cash flows reduced. Everyone loses just a little bit, but everyone also wins: Borrower gets lower payment and keeps house; Servicer makes more money over time; Lender keeps principal in tact; and so do the secondary and tertiary markets.

The eloquence of this solution is best revealed exactly as it relates to the derivatives. A simple "pick-a-workout" could be sent to all Borrowers in any one CDO class. The post card size item, or letter, would simply show four options including payment adjustments:

1. Keep your mortgage as-is (including disclosures and updates in adjustment estimates as average or worst case)

2. Re-Amortize to 30 years (in other words if you have been paying for x years on a mortgage you extend the mortgage by x years)

3. Re-Amortize to 40 years

4. Re-Amortize for 50 years

NO PRODUCT CHANGES, No messy paperwork, no complex negotiations, and none of this victim stuff. What I mean by that last comment is (a) the people who barely pay on time and can hardly afford the mortgages are much of the focus of the attention {this is why they called it the "sub-prime" crisis, but this has always been the 'secondary market situation'}, but (b) the other 92% of mortgages in the class being paid on time are not benefiting nor being assisted or relieved. The message = Dont pay your mortgage, lose your job, and plead hardship to get a 4% loan.

This current predicament of one-at-a-timing it, then freezes the Secondary market (existing packages are totally kaddywampus right now) and disallows the resale to derivative products.

However if the class (anyone with a mortgage that has been bundled in any particular derivative) is generally offered an amortization extension OPT-IN to be selected by some certain date (say 90 days plus 30 days grace), then that class of mortgages in the CDO (for instance) will be harmonized, not considered "toxic," and that same amount of liquidity would re-enter the Secondary Market by virtue of that Tertiary market buying that package of value (in four months to complete the example).

Thus under my "Class Reset" theory we could be out of this mess in six to nine months.

Here is a simplification of what the offer would look like to a homeowner in year two of a 3 year adjustable $365,000 mortgage LIBOR+3.25% (subprime):

(A) No Change (your payment will adjust in a year... other information)

(B) Your monthly payment will be: $2,188.36

(C) Your monthly payment will be: $2,008.28

(D) Your monthly payment will be: $1,921.38

****

And what if after all of this someone in hardship picks (D), and still cant keep up with the mortgage or refinance? Well ideally the borrower can THEN call the Lender to work out extraordinary arrangements or a forebearance. If after all efforts have been exhausted in earnest and good faith efforts, then in capitalism the property is foreclosed... No risk, no reward. And (Sorry, but I have to throw this one in here) to those punters at the borses who have whinged so endlessly as to become communists-- Dont place the bet if you cant afford to lose!

But we are not capitalists anymore, are we?

Aftergloworm Turning

One week since a huge landslide in Presidential politics for the historic figure Mr. Obama.

I imagine, although I've been busy, like most people, cobbling together the means to afford the predicament of this economic situation, the MSM has been focusing on several other items not related to presidential politics, or at least that is what I would hope will be happening.

Not to say that I dont appreciate a good honeymoon... thats all fine, for christsake the "O" Administration doesnt get into power for another 70 days, and it would be too bad if after his first month the desperately unimaginative and incurious Media are already "looking back to the 'first' 100 days."

That said, the fourth estate has been an overwhelming disappointment during the "W" administration. I think when some anchors got the Katrina "scoop," in other words it wasnt being covered or handled properly (a) some of the real news hounds smelled a story, but alas, I am growing cynical, I also think that some of the corporate execs felt there may have been liability in under reporting (or to be accurate in my guess, 'that the disinformation of the government around events and items related to the catastrophe in LA and secondarily in MS could subject that reporting organization to liability.' But of course that didnt or wouldnt bother Fox as a quasi-offical bully pulpit for the W admin.), therefore they put boots on the ground to investigate-- and began to WAKE UP.

If every MSM vendor is serving up the exact same pile of tripe in varying portions and from minutely differing vantages to form slightly different piles of the same garbage, then we have truly learned nothing in the past eight years.

How cool would it be (a la Woodward and Berstein) to actually scoop the Congressional Investigations? Go ahead reporters in waiting, cub reporters, and various CSI/Inspector Clouseau/Mrs. Marple wannabes... I would estimate there are literally dozens (if not thousands) of reports to be filed that discover real evidence of how foul the government and its administration has been and how we have been led astray. All of them potentially original, a potential scoop, and vitally important to the restoration of communication, democracy, and law and order in our society.

That is the duty of the Fourth Estate. Not to burnish the non-sequitur utterances of incompetents, nor to buy into the lies without introspection or vigorous discussion and examination. Sure there will be mistakes, but rather an honest mistake done for duty and country, than as a tool of the state, say I.

Lets explore the issues... Going into the meta of number of mortgages in default is fascinating for economists, chartists, and financial students like me... But how many reports of hardship, heartache, and wrongdoing can be found within these types of numbers? Countless.

The "horse race" type reporting was cheap, easy, and allowed the execs, reporters, and much of their field staff to drive small distances (with apologies to those who actually rode tirelessly with the campaigns) and appear to be offering comprehensive coverage of "what is happening in America."

Thank Gawd the two year Presidential Campaign is now finally over, and not to diminish from (oh theres another ten thousand stories) all the personal emblematic meaning Americans have from this historic result, but lets start ACTUALLY reporting on the Actual events from actual places on this earth in order to more clearly see how far we have been led astray-- and how much ground our society and the world need to make up for the unmitigated disaster of these last eight years!

Playing the "Hail Mary," for the Halftime Scoreboard

John McCain has stepped up some very negative imagery. No, not his stumbles, goofs, and foot-in-mouth whereby he shoots himself in the foot to barely escape suicide.... He is on the offense throwing some long bombs to the end zone, even though his team is down by just two touchdowns and its only a minute before half time.

The crowd likes the near misses, the forty yard sprint dashes, the stunt plays... but why open this up now?

Dont the Pubs usually keep their powder dry until the last quarter?

My theories:

(1) McCain is officially desperate. The Obama obsession in the MSM is like a shiny object flying in the sky. Even though its scary, they aren't sure what the UFO is, it is fascinating. Never mind that something like 70% of the coverage (of which he probably gets only 10 ~ 20% more coverage than McCain, and that McCain's coverage is about half positive/half negative) can be interpreted as neutral or even negative... kinda like, "will the aliens eat us when they land?" Or as McCain recently goofed his attempt to describe the example of loaded or begging question, 'when did you stop beating your wife?' In Obama's case there is a litany of viral and implied begging questions such as "why is he not a Muslim?" (For point of reference, not one word in the MSM about McCains free pass on his declaration on being a "Baptist.")

(2) McCain finally hired someone who gets the power of the new media, albeit a rather sinister disciple of Rove, or some other Sith Lord. By spending a million dollars on the production and airing of a local/regional yet ludicrous advertisement (not to be confused with a lude interlude by Ludacris on Obama's behalf), and then having the MSM pick up the loaded question, for instance "why isn't Obama like Brittany and Paris?" The ad dollar is stretched out very well.

As you can tell my cynicism and pure observation (intention is as intention does) informs me that it is more of the latter that has the QB for McCain's team airing out long bombs to the endzone in hopes of tiring out the backfield defense. But there are some problems with this strategy as well.

(a) McCain prima facae does indeed look desperate. As much as he has temporarily short circuited the dialogue betwixt the factions by begging the question, his questions are clearly inherent fallacies: Obama rejects my superficial Gas Tax Holiday, Tax Prices are rising, therefore Obama is responsible for gas prices; Obama is a celebrity, many celebrities today are vacant mental space, therefore there is something unsubstantial about Obama; and now we have Obama speaks with inspirational rhetoric, the bible is filled with inspirational rhetoric, therefore Obama thinks he is a biblical figure. These are all undistributed middle fallacies, with a touch of the ole straw man for good luck.

As you can see, McCain is fond of this illogic, and even made a DOUBLE UNDISTRIBUTED MIDDLE FALLACY; A. (Right wing) elite professors inhabit Hyde Park. B. Obama lives in Hyde Park. C. Obama is a Liberal Senator. Therefore, these (A) Elite are (C) Liberals, and (B) Obama is (A) Elite. Obama may be a Liberal who lives amongst Elitists, but that does not prove him an Elite. Also, Just because these (Right Wing) Elitists live in the same neighborhood as a Liberal Senator does not make them "liberal."

From a strictly logical point of view it seems McCain has conceded the high ground to Obama in terms of Logic.

(b) America loves violence and aggression. Problem is that you better believe it would be very very very easy to make a goofy old man highlight reel of McCain (and its pretty much been out there since March). The difference is that most of that anti-McCain stuff has been through surrogates. What is shocking that McCain would go so schoolyard dirty so very early. It can very easily come back to haunt him with an equal and parallel violence, only closer to election day.

(c) An expansion of that last point, if the debates were going to be a tough slog for McCain before, he now will have to stand there, grimmace, and repeat the lines from the commercials which are (i) illogical, (ii) lame, and (iii) will have been thoroughly hashed out by the time of the actual debate.

I believe the Pubs have fumbled in the greater context.

They have surrendered the high ground, and now accuse Obama of playing the race card to drag him down.

They have lost the battle of logic and persuasion by logical means, so they are now at name calling and spreading rumors.

McCain will have to have a stellar 97 days of quick wit, full thought, and reasonable temperament-- none of which he is particularly known for-- in order to regain these losses.

Dont forget that for every Hail Mary play that the DB's and Safeties have to run, so do your receivers, backs and line men.

Maybe this is McCain's last stand? If so expect murkier and uglier depictions of the straw man McCain thinks he is running against for POTUS.

BETTING LINE: Watch for Team Obama's rope-a-dope by the second debate where these chickens come home to roost.