Garland Jeffreys Ain't No Poser

Meatball's Forecast: Economy Set for Looptid

The Meatball accurately forecast the economic collapse. We are now officially reporting today that the U.S. economy has hit bottom and will now start an incremental recovery. Why? One reason: asset price discovery, which will be accelerated by this week's Treasury plan to back private investment in the housing market.

The sharp increase in the sales of foreclosed homes means so-called toxic assets can now be accurately valued, as prices can only be discovered at purchase. That means a torrent of credit will flow to purchasers who want to buy these pieces of economic crap.

Please note that the Meatball is not skipping along to Happy Days Are Here Again. We are only stating that "the market" (i.e., buyers and sellers of economic crapola) needs accurate valuations to connect credit to the thing that it will finance. Now that foreclosed homes are clearing, price formation will let the market get busy (but not in the Burger King bathroom like our Digital Underground friends).

Four Years Ago ...

... the Meatball predicted today's economic storm with uncanny accuracy. To read the post for March 20, 2005, visit:
March 20, 2005: Will Media Cover Looming US Economic Storm This Week?

Courant Launches Theater Blog

Amid the economic carnage of the newspaper industry, coverage of the arts continues to be slaughtered. That's why it's refreshing to note that the Hartford Courant has launched a theater blog by long-time critic Frank Rizzo. To read it, visit:
Behind the Curtain

Santelli Lace

I received some responses after my comments about Rick Santelli's stunt on CNBC were circulated in the media on Friday. These showed a profoundly ignorant interpretation of the foreclosure abatement bill offered by the Obama Administration. Alas, right-wing media traffic in profound ignorance, so it's not surprising. I will respond in a moment, but first here is the comment that circulated:

Rick Santelli's stunt shows just how low CNBC is willing to go to drive ratings at a time when objective reporting and sober analysis is needed now more than ever. To be true to the principles of journalism, Santelli should go to the local unemployment office and repeat the same question he asked all those traders, who he failed to point out had jobs. Santelli also showed an astonishing ignorance of the housing market, failing to point out that if one's house is bracketed by two foreclosed properties that house's value will collapse. CNBC seems more interested in stunts than analysis but that's the way NBC Universal rolls on cable.

I would like to add that what Santilli did was the equivalent of going to Yankee Stadium and screaming "who likes the Yankees?" It would be a gutsier thing to shout that remark at Fenway Park, of course.

The bill to help homeowners stay in their homes is paradoxically designed to help people who are paying their mortgages to retain the value of their homes. The bill isn't welfare for people who are past due; it's actually welfare for people who are current. Here's why:

Joan Smith owns a house in the middle of a block with an appraised value of $200,000. A house at the beginning of the block and a house at the end of block both go into foreclosure and the occupants are evicted. Both are then sold at auction for $80,000. Joan decides to sell her home and lists it for $200,000. But because appraised values are based on recent home sales, the appraisal for her home comes in at $80,000. If she wants to sell her house, all else (square footage, etc ... ) equal, that's the price point she needs to set. If the evicted occupants were allowed to stay in their homes, the value of those homes as well as the ones they bracket would be more or less stable. And Joan would be able to get her $200,000, or something close to it. The bill effectively provides $120,000 worth of value to Joan, not to the people who are able to stay in their homes and who still must pay their mortgages.

So the foreclosure abatement bill essentially protects more people who are current with their mortgages, because everyone's home on that street would maintain value.

Santelli fails to point that out, but that's to be expected because his limited capacity for analysis hinders an understanding of complex things. It's unfortunate for homeowners that there are more Santellis than not out there with megaphones. And all those people who consider Santelli to be a hero will learn the opposite when they try to sell their fair homes.

Pontiac, RIP

The Meatball notes with regret the passing of Pontiac as announced this week by GM. We grew up as kids with Pontiac cars - notably the Star Chief - but had our best driving experiences in a low-ridin', V8-powered glistening machine known as The Pearl: a 1964 Grand Prix. That bad boy glided up and down east-coast-urban turnpikes, thruways and city streets on many a late night and dawn in the late 1970s, working on a dream. It didn't turn out as perhaps we wanted it to (does it ever? The dream is always sweeter than the taste) but I will never forget the roar of that engine as we tried to chase it down the only way we knew how: gunnin' at the start for the checkered flag a lifetime away.

An Analyst Too Far

A Bloomberg dispatch today quotes Oppenheimer & Co. analyst Meredith Whitney who reveals that she may well be the most naive person in finance. Whitney seeks to defend Wall Street bonuses by claiming that "If you can't compensate your employees,they're going to go somewhere else. You're going to get a different variety of folks who are going to come in." Yes, my dear child, you will get a "different variety of folks," the kind that doesn't lose $18.7 billion (Citigroup), $27.1 billion (Merrill Lynch), etc ...

Wall Street defenders such as Whitney and NY Times columnist David Brooks are fearful that salary and bonus restraints will lead to a migration of "superstars" away from finance. Please note that superstars don't lose staggering amounts of money and then go to the government begging for money. These are 21st-century Welfare Queens, and apologists such as Whitney need to be recognized as part of that crowd that simply doesn't get it.

If they are superstars, they are superstars in the world inhabited by carnival barkers, not bankers. These superstars created nothing of value. Nothing. They should all go, and some that we know should be frog-marched off-stage to be fitted for orange jumpsuits.

Treat Bank Execs Like the NFL Treats Players

The Obama Administration has taken the first step toward the wonderfully ruthless brand of contract performance structure followed by the National Football League, where, as we all know, they play for pay. The administration will propose Feb. 4 a $500,000 cap on executive salaries for banks that receive Federal welfare payments. That's a lot of dough for the nation's Welfare Queens but at least it shifts the balance of power. The Administration now needs to extend the NFL metaphor from the salary cap to the following areas:

1. No guaranteed contracts. If you stink, you're cut. Turn in your playbook under the watchful eye of armed guards, be escorted out of the building by these guards and then drop-kicked to the curb. It's up and good!

2. Make every potential exec take part in a white-collar version of the NFL Combine. Instead of running the 40, execs will have to maintain a clean balance sheet for 40 weeks while wearing shirts with numbers.

3. Instead of the Wonderlic exam, execs will have to explain credit default swaps in 140 characters or less. If the execs fail, they are barred from ever holding an executive position again.

We also propose that the official team uniform for bank executives be rendered in Guantanamo Orange, just to remind them of where they all belong.

So there it is. We don't need no stinkin' regulations. We just need to transform the process of executive search into the true competitive environment native to professional football, where there are no golden parachutes. And even if you win, you do so in the house of pain.

! -- RICO, Suave -- !

Tired of financial firms spending your tax dollars on curtains, corporate jets and other artifacts the elite lather themselves with because it isn't their money at risk and they feel it's their due? Well, take a tip from Hurricane Katrina victims denied insurance claims by State Farm Insurance. Instead of appealing under the rigged industry-driven process, many took the nuclear option and sued under a federal law originally formulated as a tool to prosecute the Mafia. They dropped the Racketeer Influenced and Corrupt Organizations lawsuit bomb on State Farm, and like a good neighbor, State Farm folded quicker than Alex Rodriquez in October, especially after a court ruled that a company hard drive containing damaging information could be submitted to a grand jury.

So here's the plan:

If you owned shares in or received a mortgage from one of the financial firms that received federal aid, sue them under the RICO statute. There will always be one high company official who fears trading in the pinstripes for an orange jumpsuit and thus will play Olympic gymnast and flip, flip, flip. After one goes, they all will fall, and the totality of the fraud against the public will be evident. Instead of the Nightly News, it will be the Nightly Perp Walk.

As the federal government is inert in the face of these elites, it will take citizen action to bring these worst kind of thieves to heel. Make 'em pay the hard way by taking both their freedom (refer information to prosecutors during discovery) and their money (the civil damages are quite nice in these cases).

To read more, visit:
Cornell University Law School: US Code Collection, Chapter 96 - Racketeer Influenced and Corrupt Organizations

Parket Waichman Allonso LLP: State Farm Adjustment Firm Settles with Katrina Victims in Civil RICO Lawsuit

A Return to Do-Nothingness: Please!

Unless the federal government wishes to deposit 10 large in my bank account so I can go out and spend like it's 1999 again, the Meatball doesn't want Congress spending money the country doesn't have on stuff the country neither wants nor needs. The one exception is health insurance, which should be nationalized immediately to make sure all the folks who lost their jobs because crackers in high places couldn't manage their way out of a paper bag can focus on dusting themselves to get out and look for work. Plavix can't wait. Health insurance isn't a privilege; it's a right in a mature capitalist society.

We do agree with an article today posted on Politico that states the U.S. Congress should stand down and let the economy delverage itself before the rebuilding begins. Paul Krugman seems to be driving this federal bailout bus toward nowhere, and he increasingly sounds like the Bush Administration and its invocations of mushroom clouds with his chant of the great depression, redux. Dude, you're wrong. Please get back to your tenured position at Princeton and play with your math and try to figure out where that $750 billion you wanted taxpayers to give to the banks went. We got work to do here.

To read the Politico piece, visit:
Politico.com: The case for doing nothing

Jimmy Wales: Wikipedia Appeal

Breakout Media Stars 2008

Here is a list of CM's best media practitioners of 2008

Print: Bob Herbert, NY Times
Herbert's confident, informed arguments in 2008 showed that the New York Times may be forgiven for hiring the one-note William Kristol.
Television: Rachel Maddow, MSNBC
Two questions for NBC News: What took you so long to give her a program, and why didn't she get the Meet the Press gig in addition to her program on MSNBC?
Online: Nate Silver, fivethirtyeight.com and Roger Simon, Politico
Nate Silver is not a professional journalist, which means his analysis of the 2008 campaign soared well above the one part speculation and two parts stenography that seemed to dominate the practice. Roger Simon, meanwhile, wrote consistently superior text on the campaign for the refreshingly fresh Politico.
Radio: The Faith Middleton Show, Politics, Burgers & Beer, WNPR
The show accurately predicted that the economy would be the top issue when other political analysts thought Iraq would be the decider. Oh yeah, the Meatball is a regular panelist on this show but the real stars are host Faith Middleton, panelist Ken Dautrich and producers Lori Mack and Cameron Henning.
Best Site 2008: fivethirtyeight.com
Nate Silver made this.