Badlands Journal

In the late 1990s, an entrepreneurial mechanic with a wife and one child bought a house for $65,000 with a down payment of $1,500 and took a fixed-rate FHA mortgage. His wife, a beautician, got a job as a clerk at a discount store. In the midst of the speculative real estate boom in Merced six years later, with three children now and a warehouse job, he took out an equity loan for $126,000, did some remodeling on the exterior (new stucco, paint, new lawn turf, foam sculpture), bought furniture, a big-screen TV and a nearly new Cadillac Escalade. It is estimated that about $35,000 went for the home improvements and goods. Where did the other $91,000 go? It didn’t go into the property. Why wasn’t the equity loan monitored for home improvements? 

Letter: Andrew Lahde, Lahde Capital Management
By Andrew Lahde...10-17-08
http://www.ft.com/cms/s/0/128d399a-9c75-11dd-a42e-000077b07658,s01=1.html
Today I write not to gloat. Given the pain that nearly everyone is experiencing, thar would be entirely inappropriate. Nor am I writing to make further predictions, as most of my forecasts in previous letters have unfolded or are in the process of unfolding.

Instead, I am writing to say goodbye.

Recently, on the front page of Section C of the Wall Street Journal, a hedge fund manager who was also closing up shop (a $300 million fund), was quoted as saying, “What I have learned about the hedge fund business is that I hate it.” I could not agree more with that statement. I was in this game for the money. The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behavior supporting the Aristocracy only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America.

The local McClatchy Chain outlets blared the good news this morning that the stock market rebounded yesterday. Hot damn! Today the Dow lost 110 points, the S&P 500 lost 1.2 percent and the Nasdaq composite lost 3.5 percent.

We didn't notice the list of foreclosure announcements was any shorter in the Merced Sun-Star. Yesterday, in fact, we noticed that the Sun-Star's publisher had received a notice on his $507,000 home in McSwain. Evidently, we’ve had a real estate speculator running the paper during most of the boom. Mr. Vander Veen must have believed the propaganda he has been publishing.

The only politician calling for a moratorium on foreclosures is Barak Obama, also the best funded presidential candidate. However, here in Merced, an Obama lawn sign from the campaign office is reported to cost $10, and a tee shirt, $25. Blue Dog idiocy at the wheel as usual.

Maryland's newest Blue Dog congressman, Dennis Cardoza, Shrimp Slayer-formerly Merced, ought to stop down at the old U of M and have a chat with Herman Daly, a distinguished economist recently retired from the World Bank to the university department that once fostered the work of Mancur Olson. Olson is important to the Valley because without his theoretical guidance, Brooks Jackson would not have been able to write so clearly his illuminating study, Honest Graft (1990), a seminal, prophetic work on political corruption in Congress that focused on the career of former Rep. Tony Coelho, Michael Milken's Friend-Merced.

On a weekend when the whole world is holding its breath to see how investors will respond tomorrow to numerous bailout plans here, there and everywhere, a story about a Bush administration plan to gut more crucial provisions within the Endangered Species Act might seem unimportant.

It is not. If the Pomboza, that awesome duo of former Rep. Richard Pombo and Rep. Dennis Cardoza, Maryland's newest congressman, had had their way in Congress, the act would have been gutted long before now. And the result of that would have been even more destruction of natural resources for the construction of more over-priced McMansions, bought by speculators for more subprime mortgages to default on when the boom busted. Yet, at precisely the moment when the values of the ESA, the Clean Air and Clean Water acts as well as state environment laws like the California Environmental Quality Act, and the people who have tried to defend them before land-use authorities and in court, should be respected more highly at least for the damage they prevented to the environment and to the global economy, the Bush administration is trying to do by administrative order what Congress three times denied by legislation during this regime, whose corruption has not yet begun to be fully analyzed.

I have been reading Richard McCormack and his Manufacturing and Technology New for several years to continue my education in what has happened in manufacturing cities like the steel town I lived in for a few years once. McCormack has always been the soul of solid journalism, passionate about manufacturing but factual to a fault. In this article, he puts the case bluntly for manufacturers -- managers and workers -- against these finance, insurance and real estate whining crybabies, in terms of character and in terms of the creation of wealth. I would add, which he does not, in terms of patriotism.

McCormack describes the American tragedy in as few words as anyone could do and a great deal fewer than most that have tried. It explains why McCain pulled out of Michigan today.

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9-30-08
Manufacturing and Technology News
http://www.manufacturingnews.com/news/08/0930/commentary.html
Commentary: Manufacturers Know All About Economic Collapse
By Richard McCormack
editor@manufacturingnews.com

It is sad what has happened to the United States.

The real derivative in play this week is the financial contribution to members of Congress in return for future favors. While there is no official, if unregulated, market in hedges against congressional revolts against finance, insurance and real estate (FIRE) speculation in the free market of members of Congress, the New York Stock Exchange’s gyrations are obviously tending in that direction at the moment. FIRE has been buying congresspersons for several decades. Not so many years ago, former House Speaker Newt Gingrich (R-GA) was preaching to America about the wisdom of Samuelson’s 101 Economics text, the intellectual equivalent of pre-DNA biology. It is a long, degrading story. The main target was American unions and the main tactic was “globalization,” i.e. the off-shoring of millions of American jobs. Meanwhile, Wall Street was peddling the illusion of universal home ownership, “the ownership society” promoted by our president, the neo-crusader.

John Kenneth Galbraith’s 1954 reflections in The Great Crash 1929 are instructive:

The attempted change should be seen for what it is: a final Bush administration gift to those who benefit when environmental laws are weakened.-– Concord Monitor

Below, we've included the Associated Press story by Dina Cappiello on Aug. 22 about more than 100 conservation groups throughout the nation (including three from Merced) that opposed the Bush administration's latest attempt to gut the Endangered Species Act. Three groups came from the Merced: San Joaquin Raptor Rescue Center, San Joaquin Valley Conservancy and San Joaquin Et Al. The story was widely distributed throughout the nation and even in the UK -- a partial list is also included. Finally, there is some information about a number of local business and political leaders, large Republican fundraisers, who stand to benefit from this last-minute attempt by the Bush administration to reward its contributors.

Badlands Journal editorial board

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Associated Press
Groups: Bush rushing to rewrite species rules...(AP) DINA CAPPIELLO...8-22-08
http://ap.google.com/article/ALeqM5hkF1lWZoKQaqIgrv4XHs4RAorcQgD92NHQMG6
WASHINGTON (AP) — The Bush administration is providing insufficient time for public comment as it seeks to loosen rules protecting endangered species, representatives of more than 100 conservation groups charged Friday.

Thanks to Sacramento’s man on the U.S. Supreme Court, Judge Anthony Kennedy, who created the meaningless “significant nexis” to determine the connectivity of waters to navigable streams, federal resource agencies have been up a creek as far as knowing their jurisdiction to enforce the Clean Water Act. The EPA has done nothing about more than 400 CWA enforcement cases since the Supreme Court ruling called the “Rapanos Decision.” Kennedy’s middle ground stood between four conservative justices who wanted CWA enforcement only on permanent streams and four liberals who voted for intermittent streams as well, including wetlands and vernal pools.