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Tuesday, July 30, 2013

Is Anthony Weiner the Cleanest of the Dirty Shirts in New York City?


Anthony Weiner's proclivities have been well-chronicled. We know the downside -- and let's leave it at that. But is it possible that Anthony Weiner -- weirdness and humiliation and all -- might still be the BEST candidate for Mayor of New York City out of all the candidates running this year? 

Might Anthony Weiner be the cleanest dirty shirt in the dirty laundry bin? Might he be the brightest of the dim bulbs? Look at the alternatives. 

This analysis, my friends, might be exactly why Anthony Weiner is not and will not drop out of the primary race. (NYC Mayoral Primary Tuesday September 10th.)

Sunday, July 28, 2013

Newark's Emerging Housing Crisis


Newark's City Council may consider as early as this week the horrible, absolutely horrible idea of using eminent domain to seize mortgages on homes which are "underwater" in current value.  Why is this bad?  The one-sentence explanation is this: Housing prices, which depend heavily on bank credit for mortgage financing of purchases, will plunge if and when the government strongly discourages banks from making new loans.  

The Newark eminent domain proposal shoves all the risk on banks, yet their return on making a mortgage is simply the return on principal plus periodic interest payments. In case you haven't noticed, mortgage rates recently were at historic lows.  While banks have been tripping over each other recently to compete for refinancing business, this should never be confused with an indication that mortgage loans are a high-margin business.  They merely want to retain existing cash flow.

When you put aside the carefully-crafted sob story, mortgage eminent domain means that the government can swoop in on banks (or investors) holding mortgages and force them to take a loss on the mortgage by paying them only the current "fair value" of the mortgage.  The concept of saying to banks, "Accept our arbitrary determination of 'fair value' or get nothing" is the equivalent of the shotgun robbery.  I cannot imagine banks will want to engage in this business for long if eminent domain becomes the order of the day.  (And banks routinely drop lines of business which they deem unprofitable, so it would not be unheard of for name banks to stop issuing mortgages.)

Mortgage eminent domain will mean banks and investors -- not the homeowner -- would carry the risk of loss on real estate declining (temporarily) in value.  But they don't have the potential upside.

Banks are not charities but are in business to, ahem, make money.  The traditional way for banks to do this is by lending.  Eminent domain will make loans loss leaders for banks and their natural and foreseeable reaction is for banks to either stop making loans or to jack up interest rates to compensate for the risk of big losses.
If you want to see mortgage rates as high as credit card rates, then support this idea.  

If you think banks should just accept losses because, well, you decide that they should pay the price for homeowners overpaying for homes they probably had no business buying, then support this idea.

But don't fool yourself into thinking this will do anything but crash the residential housing market.

Wednesday, July 24, 2013

Mortgage Modifications Are Not Working

Now there's a surprise.

In many Northeastern states, new government figures show that over one-quarter (and in some states nearly one-third) of modified mortgages redefault anyway.  In New Jersey, 30% of already modified mortgages have gone into default a second time! In Maine, that figure is 32%. And more first-time defaults are on the way when interest rates rise and some variable rate mortgages re-set from historically low rates.

Think about that the next time your neighbor asks for a bailout. Principal reductions and mortgage modifications screw the banks, screw investors, ultimately will cause credit to dry up so YOU can't get a loan.

Read the new report from the TARP Inspector General here

The Plan: Huma Abedin Steals The Show From Weiner

Anthony Weiner held a painful and brief press conference Monday to admit to more sexually explicit text messages.

I am not writing today about the messages, the content or the context in which they were made. I write about the body language of Weiner (aka Carlos Danger) and his wife (for the moment), Huma Abedin.

Weiner is political toast. Not because of what he sent. Rather, it's because he showed that he was so uncomfortable during the press conference and furthermore during the very abbreviated question and answer session, he signaled to the news media that there is much, much more to this story.  

Weiner didn't just throw more wood on the fire. He got a tanker of gasoline and emptied it on the fire. 

Virtually running away from the media is guaranteed to make every ensuing public appearance an impromptu (and unavoidable) media event and reporter feeding frenzy.  The professional media will be there. The paparazzi will be there. And dozens of wannabe amateur videographers wanting to post video on YouTube or Instagram will be there too. Exposure shall become the order of the day, each day, for Anthony Weiner.  This will stop only with his political ruin, either in dropping out or becoming so toxic that he fades into irrelevance.  The latter fate may be more probable and painful for Weiner, as he has likely spent his entire life -- and defining himself to his personal core -- reaching for high elected office.

Remove the electability from Weiner and you have a shell of a man.  In essence, he is a walking zombie, basically dead but still moving. I am no psychiatrist but I think he is not at risk of humiliation, or of divorce, as he is of committing suicide.

As for Huma Abedin, at first she seemed very uncomfortable, spinning around and all but hiding her face. But then she spoke to the media. 

Huma Abedin showed far more composure and class than her husband.  She controlled the room.  She controlled the moment.  Huma Abedin took over the show and became its star.  In the process, Huma created and enhanced her prospects: political, financial...and personal. 

While most women -- and mothers -- her age would find it harder (relatively speaking) to find a new husband, Huma has likely made herself far more than a sympathetic victim.  Now, she may become -- dare we speak it -- a catch.  

Then, if you listened carefully to Huma's words, she was condemning her husband, basically damning him with the faintest of redemptions.  She verbally cuckolded him.

Amazingly, at perhaps the darkest hour of Anthony Weiner's political life -- if not his personal life -- Huma Abedin shoved him into virtual irrelevance.

Huma Abedin catapulted herself into immediate political and personal viability in a matter of moments. In perhaps no more than two minutes, she went from The Good Wife to The Up and Coming Star: Huma 2014.

And, single men out there, she may soon become available.  

Perhaps, just perhaps, that was the plan all along.

The Racism of Carlos Danger

New York City mayoral candidate and compulsive texter Anthony Weiner chose a Hispanic first name for what we are entitled to conclude is his sexually adventurous alter ego / nom de guerre, Carlos Danger.  Weiner admitted sending sexually explicit text messages from himself under the pseudonym of Carlos Danger at a press conference Monday (watch it here).

Why did he choose this first name?  What, the name "Sheldon" doesn't conjure up hot fantasies? (That's a reference, by the way, to the lament of Billy Crystal's character in "When Harry Met Sally.")  

Doesn't this play into the demeaning, if not racist, stereotype of the sexually licentious "hot" Latino? Why is this being tolerated?

Doesn't this infer that Latinos / Hispanics are merely objects for the sexual gratification -- of and by others?

Doesn't that further denigrate by extension the accomplishments of all people of Hispanic origin?

This choice of name is nothing but a putdown, the exploitation and perpetuation of a grossly offensive, degrading and demeaning ethnic stereotype.

A Republican -- heck, any conservative -- who came up with this would be on the road to political oblivion.

Friday, July 19, 2013

Vote Totals Disprove David Dinkins' Claim That Racism Led To Giuliani's 1993 Victory

Former New York City Mayor David Dinkins recently said his 1993 defeat for re-election was caused by "racism."  The voting results from the mayoral elections in 1989 (which he won, beating Republican Rudolph Giuliani) and 1993 (when Giuliani won the rematch) show this to be utter nonsense.  In fact, the facts make it very hard to make the claim.

To make a long story short, there wasn't much of a change between the 1989 and 1993 results (see these comparison charts here).  There was about a four percent swing, and the swing was remarkably consistent through each of New York City's five boroughs.  Moreover, if racism were such a factor, the odious emotional element of that suspected cause would presumably cause a spike in turnout.  But turnout in 1993, when Rudolph Giuliani beat Dinkins in a rematch of their 1989 general election matchup, was actually down from 1989.

Here's what is interesting:

In each borough, Giuliani improved his performance in 1993 over 1989.  He still lost Brooklyn, the Bronx and Manhattan, just like 1989, but improved his margins in Queens and Staten Island.  Yet his comparative improvement in those two boroughs was only slightly under 43,000.  Giuliani's margin of defeat in 1989 was 47,080.  Simply put, Giuliani dented Dinkins' performance in his core areas just enough.

Turnout played a role. It's interesting to note that turnout was down (barely) in Manhattan and the Bronx, but also in Queens.  Brooklyn turnout was up, even though the borough vote still went for Dinkins. A big change, however, came from the City's smallest borough by population: Staten Island. Turnout increased over 20% in heavily-white-ethnic Staten Island, where Giuliani increased his lead over Dinkins by more than 26,000 votes.  But this turnout may have been less a referendum on the Dinkins' mayoralty than on Staten Islanders' desire to protest their long-perceived "second class" treatment by City government and vote "yes" on a non-binding referendum proposing that Staten Island secede from New York City and form its own city government. 

So is racism even a credible claim?  The numbers say otherwise.

July 2013 On Pace For Warmest Month -- Ever

YES IT IS RECORD HEAT. New York's warmest month ever -- July 1999 with an average of 81.4 Fahrenheit. Now, July 2013's average is 81.3 through yesterday, which is a full 4.9 degrees above average. After today, that mark may go up nearly one full degree. (Overnight low: 83; predicted Central Park high: 99.) But the real story is the dewpoint, which has NONSTOP been over 60 since at least June 22. This indicates impaired evaporation of moisture, again on a nonstop basis for nearly one month.

Wednesday, July 17, 2013

Surviving Zimmerman: Don't Protest The DOJ Search For Tips

The Justice Department has assigned a special e-mail address for the public to send tips regarding George Zimmerman, as the Department ramps up its investigation (and possibly tries to build a criminal case) into whether Zimmerman violated the civil rights of Trayvon Martin. 

Some conservatives, enraged by the prosecution in state court, have proposed sending an e-mail to that same address.  This is highly stupid, to be frank.  Anyone stupid enough to do this -- and there are plenty of them -- is also stupid enough to ignore the "Don't Feed The Animals" signs at the zoo. 

You risk prosecution for obstruction of justice by sending anything that isn't a bonafide tip. The risk of prosecution far outweighs any strategic benefit that might be realized by any action or protest you plan.  Besides, that e-mail address will soon be clogged with messages of vitriol for Zimmerman. If we couldn't find Bin Laden for ten years and can't find some young whippersnapper now hiding in Russia, what makes you so afraid that the feds will find (never mind, use) one juicy legitimate tip out of the thousands of messages that mailbox has assuredly already gotten?  I believe the Justice Department will never get anything useful from this e-mail solicitation -- and if it does, it won't be able to find it or use it.

Tuesday, July 16, 2013

Opportunistic Looting Under Cover Of Trayvon Protests

Let's stop viewing these civil rights demonstrations (ostensibly about Trayvon) as ideological in origin. The origins, the genesis, is economic.

While most protesters are indeed protesting some cause -- whatever it is -- there is a significant core of people who see these marches as economic opportunity: juicy opportunities to loot stores while police are overwhelmed with the bigger crowd.

These marches are about getting paid.

The use of demonstrations as effective cover for breaking-and-entering covert ops is not novel.  

The infamous riots of the late 1960s (e.g. Newark, Detroit) saw many stores in those downtowns sustain serious damage.

Looting was rampant in Brooklyn and The Bronx during the notorious Great Blackout of 1977, during which New York City was largely dark for nearly three consecutive days. 

Want to stop the marches and the mayhem? The police and local prosecutors should make it clear that property damage will be stiffly prosecuted.  Maybe the new anti-terrorism laws now in vogue should be unveiled for this new purpose to test their deterrent effect.

Monday, July 15, 2013

A Democratic Proposal To Rig The Banks

A new Democratic proposal for hybrid public-private partnerships to run banks will make stuffing your money under the mattress look like a great idea.

A really misguided policy proposal from the Democratic nominee for New Jersey Governor shows why Barbara Buono is in Pierre Rinfret territory. Buono proposes a "public-private" bank to foster "investments" in things like "infrastructure" as well as "schools." Here's the crux of the problem: A public-private hybrid bank will be government subsidized and assuredly will be able to have advantages (e.g., being able to offer lower rates, better terms, loans to less-creditworthy borrowers, etc.) over pure private banks. This will drive out good banks from the state of New Jersey and leave the bottom-feeders of the industry, the subprime lenders and so on, which don't compete for prime business and give out only the riskiest (and highest-margin) loans to the least creditworthy.  

This is the type of proposal that would cause New Jersey real estate prices to crater because there would be too few banks remaining to issue good mortgages. There are already major national banks which DO NOT offer certain routine business services in the state; trust me on this. Buono's policy, if implemented (a long shot because she's an equally long shot in every poll), would be an unmitigated disaster.  This policy idea is almost as bad as Cory Booker's really bad policy papers issued last week. 

Sunday, July 14, 2013

How Smart Politicians React To Zimmerman Verdict

Want to know who the smartest politicians this upcoming week are? They're the ones from whom you aren't reading or hearing opinions.  They're issuing NO OPINION on the Zimmerman verdict of acquittal. Why? That's because they understand, and respect, the importance of the jury process and understand that our justice system depends on the procedure that is followed. 

Nothing is more protective of our fundamental rights to a fair trial, jury of our peers and due process than the set of procedures set forth in our Constitution and the rules of the various courts in this nation. These procedures are what separate us from the mob rule, tyranny of "the street" and absolute chaos characteristic of, say, the Middle East.  Without these procedures, we will have --- injustice.

Monday, July 8, 2013

Free From Prosecution Fear, Spitzer Running Now

Former New York State Governor Eliot Spitzer has now announced his bid for New York City Comptroller, and has approximately 84 hours from right now (noon Monday) to file 3,750 valid signatures from enrolled New York City Democrats in order to gain placement on the September 10th primary ballot for Comptroller.

But why is Spitzer reentering politics now?

It might be because the five-year statute of limitations on any federal crimes with which he could have been charged has now expired.

Spitzer resigned in March 2008 after his illicit -- and some argue, illegal -- activities involving prostitutes surfaced.  A range of possible federal crimes could have been charged -- and several people involved with the call-girl ring did in fact go to prison.  Those potential crimes and the related sordid details are not the focus of this report; just focus on the timing, because most federal crimes are subject to a five-year statute of limitations. This means that charges must be filed against a defendant within five years of their occurrence (with rare exceptions).  Therefore, if the last "overt act" in furtherance of a crime occurred in March 2008, the statute of limitations would have expired this past March.

Henceforth, Spitzer became "free" of criminal exposure this past spring.  Could his run this year -- as opposed to running for his old office in 2010 or U.S. Senate last year -- have been in contemplation of his new freedom from prosecution?

Booker Attacks Fairness, Attacks Equality

New Jersey taxpayers and homeowners may want to hide their pocketbooks if Cory Booker gets to the Senate. 

Newark Mayor Cory Booker (D-Facebook) launched an unprecedented attack on the core American concepts of fairness and equality with a new 15-page policy paper.  Among the shocking proposals: major new federal government giveaways including mortgage principal reductions, a minimum wage hike and a new government-funded trust fund giving $400 per year to each child whose parents receive the Earned Income Tax Credit.   

The EITC college fund proposal does not answer several contingencies. What happens to the money if the kids don't go to college? What if they don't finish? Is the money a loan or a grant? And -- here's the best part -- since Booker wants the government to match donations to the fund from families (or states or nonprofits), if the family of a grant recipient is able to make a donation, what the heck are they doing getting an EITC subsidy in the first place?!

However, the biggest objection should be that the working class, right above the subsidy threshold, will face the indignity of working hard so that the children of the non-working will have more access to college than their own children.  In essence, working is a punished activity. 

Booker also raises the issue of mortgage principal reduction. This is shades of the twice-vetoed New Jersey Residential Foreclosure Transformation Act (against which I testified before the New Jersey Assembly last year).  This is horridly bad policy for two strong reasons.  First, a principal reduction for some homeowners is about as unfair as it gets for every other borrower who is struggling to pay on time and in full.  The counterargument, that principal reductions are needed to avoid foreclosures, abandoned houses and falling property values due to blight, is pure bunk and also represents a form of bribery.  Principal reductions result in only a modest reduction in the homeowner's monthly payment, the same reduction that is achieved with a temporary moratorium on interest rate increases. The borrower's ability to stay in the home is barely affected, because the causes of that borrower's delinquency or default are often so great that their ability to pay anything  on the house is in grave question. Secondly, principal reduction forces the banks or the investors holding the mortgage to absorb and recognize an immediate loss, an event which will make them increasingly reluctant in the future to either issue or buy mortgages.  Those consequences will reduce real estate market liquidity when it becomes much harder to get a mortgage, on any terms, at any interest rate. 

In plain English, this means that homeowners paying their mortgages get to pay (through higher bank fees levied on their accounts and loans) for reduced mortgage balances for defaulting homeowners. So if you pay your mortgage, you're then paying for your deadbeat neighbor. This equates to 105, 110, 120% of your mortgage.

Each of these proposals is virtually guaranteed to result in the opposite effect of what is (purportedly) intended. And each proposal means that the working class and middle class will get hammered to pay for those below them on the income scale. 

Furthermore, there is no indication -- not from the press reports at least -- as to how the Questions That Shall Not Be Asked, will be answered, or how they will be answered. (These questions, of course, are: Who pays for these subsidies? and What will these subsidies cost?)

Cory Booker's policy paper makes it appear that Booker will be running eagerly to the left of President Obama.  We are rapidly moving to the point where the working poor are worse off than the non-working poor.  At that point, when people get punished for working, the concepts of fairness and equality lose their traditional meaning. Is this progressive? 

Sunday, July 7, 2013

Organ Snatchers Alert: Woman Awakens On Operating Room Table Moments Before Being Killed To Harvest Organs

An alarming report out of upstate New York that an alive woman regained consciousness on the operating table as she was prepared for her internal organs to be harvested must raise serious questions about the morality and the bizarre motivations behind the trend to encourage organ donations from the dying and relatives of the newly-dead.

This trend puts all people who encounter an emergency room or hospital operating room in mortal danger. As I reported back in 2010, a pilot New York City program to send two ambulances to cardiac patients in midtown Manhattan raised the spectre of people being allowed or encouraged to die so that a supermarket list of needed organs could be procured.  One's life may hang in the balance and be dependent, not on technology or the efforts of medical staff, but on the morality of the caregiver who may have a financial or other inducement to see you die.

Wednesday, July 3, 2013

Hispanics MOST Opposed To Amnesty, Says New Jersey Poll

This message deserves emphasis in full caps: HISPANICS ARE NOT PRO-ILLEGAL IMMIGRATION. 

A higher percentage of Hispanics consider illegal immigration to be a problem in their own New Jersey towns than any other group. This is the message from data in a new poll of 800 New Jersey residents released this morning.   This suggests that Rubio, McCain, et al. are wrong to suggest the Republican Party must bring in illegal immigrants to have a shot at getting to 270 electoral votes; far from it, the data suggest the Republican Party would LOSE Hispanic votes (they'll just stay home in protest) by pandering to amnesty advocates. Look at the data for yourself.