Almost exactly nine years ago, Sept. 30, 1999:

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry."

Splendid. Just fucking splendid.

'

Posted by: Ace at 12:43 AM | Comments (21)
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Radioactive death? I'm just assuming. Some kind of toxic assets, it seems. Possibly vampires.

See Long War Journal and Former Spook.

The MV Iran Deyanat was brought to Eyl, a sleepy fishing village in northeastern Somalia, and was secured by a larger gang of pirates - 50 onboard and 50 onshore. Within days, pirates who had boarded the ship developed strange health complications, skin burns and loss of hair. Independent sources tell The Long War Journal that a number of pirates have also died. "Yes, some of them have died. I do not know exactly how many but the information that I am getting is that some of them have died," Andrew Mwangura, Director of the East African Seafarers' Assistance Program, said Friday when reached by phone in Mombasa.

News about the illness and the toxic cargo quickly reached Garowe, seat of the government for the autonomous region of Puntland. Angered over the wave of piracy and suspicious about the Iranian ship, authorities dispatched a delegation led by Minister of Minerals and Oil Hassan Allore Osman to investigate the situation on September 4. Osman also confirmed to The Long War Journal that during the six days he negotiated with the pirates members of the syndicate had become sick and died. "That ship is unusual," he said. "It is not carrying a normal shipment."

Whatcha got in the trunk?

Thanks to DrewM.

Posted by: Ace at 12:22 AM | Comments (15)
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Whoops, forgot.

This is odd. Rob writes:

Puh-puh-puhleaze stop using the word "dick" as a pejorative. In case you didn't know this, it got started when lesbians in the early 80's thought it would be cute as a response to the use of the word "cunt", which they naturally projected onto every man since the beginning of time. People that casually call anybody they don't like a "dick" sound like victims of Progressive Education.

That couldn't possibly be true, could it? That sounds insane. "Dick" is such a great put-down. That's like saying "a-hole" was pushed as a derogation by zealous anti-sodomites.

Either way, I like it. Whether the cooter-miners popularized the insult or not, the world is now slightly richer in that special class of on-the-border profanity you can kinda get away with using in mixed company, around kids, or on TV.

What the Hell Am I Thinking? Of course it's not true. I lived during the eighties. "Don't be a dick, dude" was not invented during my youth.

Rob, where the hell are you getting this nonsense from?

Posted by: Ace at 11:55 PM | Comments (45)
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I think this is an important sentence. Because I think it sums much of the controversy up.

You're angry. I'm angry. House Republicans are angry. We're all angry at having to put up huge amounts of cash to rescue a financial system because a lot of very rich people rolled the dice with other people's money and lost.

Now let me tell you something very simple and very important: You can try to prevent a financial meltdown or you can teach Wall Street a lesson, but you can't do both at the same time.

I think that's crucial. And I think a lot of people are postulating a third possibility -- hey, we we teach Wall Street a lesson and avert a financial meltdown!

This possibility, however, seems to require the economic equivalent of Magic Beans -- a cadre of fantastically wealthy individuals and corporations ready, willing, and able to do the exact same job (buying the toxic assets, holding them for two or three years until they appreciate in value and can be disposed of in an orderly fashion and at a profit) that many are urging the government to do.

The problem with waiting for this super-team of capitalists to step forward is 1) they haven't done so yet and 2) there's no evidence they will step forward, especially given that we are on the edge of a possible light-to-moderate depression and "two or three years of holding" such assets may stretch into 15.

So, we all seem to agree that someone with the money and patience to hold these assets and dispose of them in an orderly, non-distressed fashion should buy them and hold them for two or three years.

And therefore save the economy from a "financial Pearl Harbor."

But some insist we must wait for these private actors to come forward, and if they do not, then we should just accept the financial Pearl Harbor as the cost of true capitalism. And even though we have someone with the money and patience to do this -- the US government -- doctrine requires that one actor refuse to act.

And so we wait for our rescue by unknown legions of deep-pocketed financial superheroes.

At any rate, let me get back to this guy:

Now let me tell you something very simple and very important: You can try to prevent a financial meltdown or you can teach Wall Street a lesson, but you can't do both at the same time.

So which will it be?

You say you want straight talk -- no spin, no bull, no sugar-coating. Okay, here goes.

First, stop fixating on Wall Street executives -- there will be time to deal with them later. Even if you clawed back every dime they made over the past decade, it would come to several billions of dollars. That's a rounding error compared with the size of the financial problem we're facing here.

Second, we need to act quickly. The financial situation is now downright scary. Don't look at the stock market -- that's not where the problem is. The problem is in the credit markets, which are quickly freezing. I won't bore you with technical indicators like Libor and Treasury swap spreads, but if you talk to people who work these markets every day, as I have, they report that the money markets are in worse shape than they were last August, or even during the currency crises of 1998.

Banks and big corporations and even money-market funds are hoarding cash, refusing to lend it out for a day or a week or a month. Even the best companies are having trouble floating bonds at reasonable rates. And the shadow banking system -- the market in asset-backed securities that ultimately supplies the capital for most home loans, car loans, college loans -- is almost completely shut down.

People are so nervous, and there is so much distrust, that all it would take is one more hit to trigger the modern-day equivalent of a nationwide bank run. Financial institutions would fail, part of your savings would be wiped out, jobs would be lost and a lot of economic activity would grind to a halt. Such a debacle would cost us a lot more than $700 billion.

Etc.

How We Got Here: This is old, I know. But if you didn't bother watching it when it first came out, here's a cute little animated flash of the subprime insecurities crisis.

Posted by: Ace at 10:29 PM | Comments (114)
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First off, on Dr. Rusty Shackleford's behalf, I'd like to thank Ace for his work to expose Ethan Winner, along with Winner & Ass., as the people behind the Palin smear video. As well as Dan Riehl (hey, buddy, remember White Trash Wednesdays?).

The real thanks go to Jawas Stable Hand and Jane Novak.

Both of them should be highly praised for their hard work. and their amazing Google skillz. If you people could read my email, you'd be astounded at what these two amazing women did. And please note that Jane was working hard to free a good man at the same time. And, well, look what she has wrought.

I couldn't let an Open Blog opportunity pass without recognizing these wonderful people. Did I help on this story? Yeah, sorta, I took out Rusty's grammar and spelling errors. But I'm a nazi about that stuff. And, along with Rusty, I downloaded and saved the original Palin Smear video which you can view below the fold as a reminder of the depths to which these people have sunk.

Thanks again, Ace. more...

Posted by: Open Blog at 10:20 PM | Comments (7)
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Here's the nut graf of John McCain's statement today.

"At this moment, the plan that has been put forth by the Administration does not enjoy the confidence of the American people as it will not protect the taxpayers and will sacrifice Main Street in favor of Wall Street. "

John McCain is doing something important: he is claiming to speak for the American people.

He might as well; nobody else is claiming to do so.

However, there's something deeper at work here. more...

Posted by: Open Blog at 08:18 PM | Comments (129)
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Very mild content warning. He says "custerfuck" a couple of times. You can manage. It's the most pro-religion, anti-atheism comedy bit I know of containing multiple uses of the word "clusterfuck."

The relevant bit starts at around 4:00 and concludes around 5:20.

Incidentally, if you want to watch additional Dane Cook clips from this show, then I have to give you the More Serious Content Warning, because some parts get pretty sketchy. Not this clip, but other ones you'll see on YouTube.

"Brain Ninjas," by the way, is pretty decent, and not too bad. It's about men and women fighting. He drops a lot of f-bombs but I don't think content wise it's objectionable. Just spicy language.

Near the end of the show he talks about one night stands and that's where it gets NSFW. Though, of course, that's the funniest part.

more...

Posted by: Ace at 07:28 PM | Comments (96)
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Watch her graciously greet a visiting foreign ecclesiastical dignitary from Africa, and not go running off the state in an undiplomatic freak-out as he exhibits his strange foreign customs.

Apparently some on the left think she should have done the latter.

I was the best man at my friend's wedding but am not a confirmed Catholic (or much of a confirmed anything). We told this to the priest, and he said I wouldn't be able to receive communion, which was fine by me, because 1) the rules said I shouldn't and 2) I didn't want to be a hypocrite and 3) well, who cares. It wasn't my church. I was there to be my friend's best man. Whatever was on the program, I was down for.

During the actual ceremony, apparently the priest called an audible and decided that the it would look better if everyone got communion instead of three out of four, so he put the wafer in my mouth.

At that moment, I jumped up and spat out the communion wafer, screaming "OUT OF MY MOUTH, FOUL JESUS COOKIE!" and generally ran around like a jackass, screaming blue murder and cursing God and ruining my friend's wedding.

Uh, no I didn't. I ate the wafer and sipped the wine and bowed my head thoughtfully and pretended to be a good Catholic. I was there to be my best friend's best man, not to let everyone in the church know my precise feelings on transubstantiation.

This African cat is big on witchcraft. Which is, yes, in that Bible that so many people bitterly cling to. He gave her a general prayer of protection, which I'm quite sure she wasn't entirely comfortable with, but wasn't really there to have a debate with him over witchcraft and/or whether a priest had the power to protect oneself from such a thing or if such protection could only be had, if at all, from one's own faith in God.

She was welcoming a visiting priest from Africa who, in all likelihood, was also there to scoop up funds to improve the health and welfare of his congregation.

I'm not getting exactly what Palin was supposed to have done.

I know what I'd've done, because I've done it before when involved with religious ceremonies I wasn't familiar with. I'd have stood there, smiled, and thanked him for his blessing.

Which is -- Oh, look at that -- what Sarah Palin did.

Dirtbag creeps like Andrew Sullivan have engaged in strange and unwholesome practices with colorful and weird visitors from around the globe, but my God!, Sarah Palin bows her head respectfully when a visiting African priest says a blessing and it's a fucking scandal, isn't it?

Slublog's Experiences With Strange Religious Customs: Apparently this is some sort of epidemic -- he just sat there and nodded when people were doing odd religious stuff, instead of acting like Bill Maher at a baptism.

He wonders how widespread this sort of casual -- what's the word? -- "religious tolerance" is in this GOD-DAMN AMERICA we live in.

Further Adventures in Religion! I've worn the yarmulke at Jewish weddings and done the Elihenu chant they do at Seders. Four times.

After a Jewish funeral, they needed me because of the (forget the name of it) rule that you need ten men to have a prayer session. I wasn't Jewish, but I was a man, so they grabbed me and I went into a room where nine other guys prayed in Hebrew. I bowed politely and mouthed the words, kinda.

I'm not getting the outrage. I didn't become Catholic when I politely took the wafer and I didn't become Jewish when I stood in for the Tenth Jewish Man at the prayer.

It's just, you know, not being a fucking dick about things.

I don't get these people. They apparently can tolerate just about everything but someone's religious beliefs. Or even someone else tolerating someone else's religious beliefs.

Hmmm... So the rule is that if you go along with local religious customs, you obviously are an adherent of that religion?

Really?

Okay. I accept your trade.

Posted by: Ace at 06:35 PM | Comments (227)
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I trust no one is fooled that I know what I'm talking about. I don't. I'm just trying to keep up, kind of.

The TED spread, defined.

The current spread.

The commenter who tipped me to this says that 3.5 (or I guess 350 bps) is when we band together in desert grottoes and begin telling stories about "the video" and "the sonics" and how Captain Walker is going to fly us to Tomorrow-morrow Land on his busted-ass plane.

Nope! The commenter who said that was just pulling a number out of his ass, which I stupidly took (without checking) to be some sort of rule of thumb on Wall Street. It's not. Read nothing into the number 3.5/350 bps.

Well, nothing like a bright line. The higher the number is, however, the more illiquid the markets are and, in all likelihood, the worse the the economy will soon be.

But the 3.5/350 bps has no particular significance.

On the other hand, the previous record was 300 bps, which we got right before Black Monday, and we just passed that again.

And no -- this isn't going to be another Black Monday. Black Monday turned out to be a blip.

Posted by: Ace at 05:21 PM | Comments (126)
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Content warning on the spicy supposed scoop coming in an Esquire magazine below the fold.

It's nothing you don't read here three times a week, but it's different, because 1) it's Anne Hathaway and 2) if this rumor is to believed, she means it. more...

Posted by: Ace at 03:32 PM | Comments (282)
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