Words of Wisdom from Greg

Cassandra, a Trojan princess, for her beauty, was given the gift of perfect prophecy by the god Apollo.  When she refused his attempts at seduction, he cursed her:  no one would believe her.  After the fall of Troy, she was abducted from the temple of Athena, and eventually murdered.  These are metaphors for our natural interest in "knowledge," but our frustration of its not necessarily bending to our will.  Ultimately, we prefer to destroy the truth, because it is not in our control.

 

Apparently the ancients understood these things very well.

Greg's Rant Today

 

I have yet another new theory.

 

Have noticed that when I talk to people about the things I know, mostly they can't take the information as interesting, and on its own.  They are often very troubled because "I" am the one to impart it to them, and certainly "I" have no right to dare to do that. 

 

My new theory runs like this.

 

When we are young, and have decent people around us, our minds are generally very flexible and open to receiving information.  At 13, the sex hormones kick in, and these change our focus of interest and our brains.  Now I think at about 18, it is "normal" for humans to get another new focus, and this is the desire to push away "domination."  At this age, this probably IS the critical issue before us, at least in the natural state.  So, at this point, it gets harder to receive information (especially from others).  (If you willingly PAY for the receiving of information, then this kindof washes the taint of domination away, however.) 

 

The key in conversation works like this. 

 

If you spout off some information that you have studied, and feel fairly confident about, if the other person ALWAYS responds with something like, "no, it's not the way you say, it's the way I say," then the anti-dominance issue has trumped the natural curiosity about obtaining new information.  In short, it's like the bull who sees the red cloth, and this becomes paramount in the bull's "thinking."  Of course, this is a pity, because then the information can't be discussed in an interesting way, for it's own sake, and little advancement can take place in understanding. 

 

Case 2 is now you spout off some information you have studied and feel fairly confident about.  And now the other person says something like "that's interesting, I never thought about that.  Does it really work that way?  And, if we assume that's true, maybe this and that will be the outcome."  In short, in this case, your sharing of information creates a STARTING POINT for more exploration, weighing, and measuring.  But this second type of response is actually fairly rare.  In this case, the information has been de-personalized and is non-threatening, personally to the person you are talking to.  The red cloth of feeling dominated is held at bay, and some new understanding can take place.

 

I think that in the first case, probably the person has from a very early age FELT dominated by father/mother/sibling (whether justifiably or unjustifiably), and has not resolved this feeling successfully in adulthood.  This is a great pity.  However, it makes sense, because now I believe that the ability to keep "domination" far away after age 18 IS a critical and "normal" thing for humans to try to have.

 

Anyway, give my theory a test, and see if you can identify the people who are in category 1 and 2.  Category 1 is much more common, like about 80%, I suppose.

https://mail.google.com/mail/?ui=2&ik=4b0593e8c4&view=att&th=1427604823927401&attid=0.1&disp=safe&zw

Mortgage Meltdown

On yahoofinance today is an article about the new book by Timothy Howard called “Mortgage Wars.”  Howard was CFO of Fannie Mae, before being accused of accounting fraud in 2004 (a charge later dismissed in court in 2012). 

 

He claims that the mortgage crisis was caused by “free-market idealogues” who were “blinded by faith” in their “new” ideas.  These were none other than Alan Greenspan and Larry Summers (and Treasury Secretary Hank Paulson), who supported the big banks’ desire to reduce the power of Fannie and Freddie, because of their dominant position in mortgage lending, because, in turn, of their ability to set mortgage standards.  The henchman-lieutenant was Armando Falcon, who made the accusation of accounting fraud against Howard and Fannie CEO Franklin Raines, which led to their departure in 2004.  And, after that date, normal, prudent mortgage standards were set aside.  This is where the mortgage situation remained until the 2008 crash.  

 

Later, Fannie and Freddie were BLAMED for the financial crisis.  However, in the book, Howard indicates that the big banks want to set the blame this way so that we can go back to lending from your local bank with mortgage terms of less than 10 years.  The standard home mortgage term in the US before 1929 was 1 year.  This is because commercial banks can’t justify, in a business sense, making long-term loans at fixed interest rates, because it is too risky.  That system works fairly well in good times, but in 1929/30, when it came time for millions of people to “roll over” their 1-year home loans, the banks refused, or were not in a position to do so, and this set in motion a huge chain of defaults, foreclosures, and bankruptcies.  Because these were brought about by a crisis of liquidity – they were mostly needless defaults, foreclosures, and bankruptcies. Howard says that a return to this world will be a disaster.  (Which it will.)  Incredibly, it is still current policy and “wisdom” to “wind down” Fannie and Freddie, which will replace it with the pre-1929 model for mortgage lending, and this model, in addition to being unstable and expensive, will not be able to support the VOLUME of homeownership that we have known since 1945.

 

Although the 2008 crash started as a crisis of liquidity (as in 1929), it did not mature (as in 1929) because, fortunately, the Fed was by then led by Bernanke, who understood the issues, and supplied liquidity in abundance.  This policy action averted a 1929-style outcome.  Nevertheless, the Republicans have been busy, busy, busy crying that “we are printing too much money” and “eventually this will come to a bad end,” to the point that most people actually believe this.  About a year ago, a group of Republican Senators even took the unprecedented step of getting together and sending a letter to Bernanke expressing their grave concern about all the liquidity that was being supplied.     

 

Fannie and Freddie were created in the 1930’s under FDR in order to throw a “safety net” under homeowners, who, via government support, would be able to obtain a mortgage product that the FREE MARKET IS UNABLE TO DELIVER – a thirty-year fixed-rate mortgage.  FDR was interested in setting this program up because the old system that the free market could and did deliver – a normal home loan term of 1 year only – was highly unstable, and eventually resulted in catastrophe for millions of homeowners.  In other words, the “free-market solution” to the mortgage problem FAILED to deliver a stable product.  After Reagan was elected, however, the destruction of the FDR system became a Republican goal, in league with their powerful allies, the big banks.  Republicans just had to destroy Fannie and Freddie, first because it smacks of “socialism,” and second (and much more importantly) with Fannie and Freddie out of the picture, the big banks could make a lot more money, and the “power” of setting standards in the mortgage business would gravitate back to them.  The destruction of Fannie and Freddie was easy to accomplish – just accuse the management of accounting fraud, replace them with new managers who would do the Republican bidding.  (Which, in its first step included very relaxed underwriting standards.)  Ultimately the goal was to gradually phase Fannie and Freddie out, and put home mortgage lending back into the hands of the big banks. 

 

This conflict is nothing “new.”  We have tried the “free market” model for home mortgages before – and in the long run, it works very badly.  But, under the supply-side gurus, Greenspan, Summers, Rubin, and Paulson, it WAS packaged as something “new,” and yet, when implemented, it turned very sour within a short time.  But, the damage is done.  The Bush II Administration created the “myth” that the 2008 crash was a “sub-prime mortgage crisis,” and IT WAS CAUSED BY A LOT OF PEOPLE TRYING TO BUY A HOUSE WHO HAD NO BUSINESS BUYING A HOUSE !!  (It’s our fault, of course.)  In reality, as I have been saying, and confirmed, apparently, by Howard in his book, the failure of the system and cause of the crash was FAULTY IDEOLGY – specifically, belief in the very damaging “supply-side” agenda.  (free trade; flat tax; privatization; deregulation.)  And specifically, in this case, the deregulation of mortgage lending standards, put in place from 2004 to 2008, as a result of the departure of Howard and Raines.

 

In the bigger picture – this is just part of the titanic struggle being waged in the country between the socialist organizing principle and the fascist one.  The transition from socialism (in this case, power in the hands of Fannie and Freddie) to fascism (power in the hands of the big banks) has caused a lot of needless pain and suffering to MILLIONS of Americans.  Unfortunately, we have been convinced that it is “wisdom” and it is time for Fannie and Freddie to “wind down,” and their function to be replaced by the big banks.  At least Howard’s book lodges a protest against this outcome. 

 

And, at least now we know exactly what steps were taken to accomplish this result. 

 

Here is part of the article:

 

The saboteurs included former Fed Chairman Alan Greenspan and former Treasury Secretary Larry Summers.  Blinded by faith in private-market solutions, Greenspan and Summers supported the banking industry’s efforts to undermine Fannie and Freddie, he argues.

 

After the Savings & Loan crisis in the late 1980’s – early 1990’s, “Fannie & Freddie became the dominant providers of mortgage financing,” Howard explains.  Large lenders didn’t like that, nor did the Fed and Treasury (the Greenspan Fed and Paulson Treasury) because we were determining the standards for mortgages – which took control away from the lenders.”

 

But the real villain in Howard’s saga was Armando Falcon, former Director of the Office of Federal Housing Enterprise Oversight.  In 2004, Falcon charged Howard and then Fannie CEO Franklin Raines with accounting fraud, which led to their departure.  (And the subsequent relaxation of reasonable, prudent mortgage underwriting standards.)

 

In 2012, a Federal District Court Judge dismissed the charges.  For Howard, that development vindicated his view that Falcon fabricated the charges for political reasons.

 

“Falcon knew he would get support from the Bush Administration, Greenspan, and Summers – if he took the lead and knocked Fannie Mae down a peg,” he says.

 

 

 

I would argue that Falcon likely didn’t figure this strategy out for himself – probably, he was secretly DIRECTED to carry it out.  These things don’t happen by accident.

 

Hmm.  Although I didn’t have the personal details, I have correctly identified these issues in my prior emails.  The sad result is that, in converting the home mortgage business from a socialist model to a fascist one, homeownership will slip out of reach for millions of Americans.  (Yahoofinance has a follow-on article on how homeownership is going to change.)  Of course, the hedge funds will step in to fill the void.  Blackstone Group has already bought up 40,000 homes and is kindly renting them – to the former owners.  And the big banks will step in too – to make you those 1-year mortgages, with high fees and no assurance that they will renegotiate the loan when it comes due.  Just like it was before 1929.  That is, apparently, “progress.”   

Fukushima Fallout (More)

I spent some time looking at the internet for information about the contamination of the North Pacific Ocean by the toxic plume being discharged at Fukushima.

 

It’s hard to know which articles are “hysteria,” and which ones are “coverup.”  You can get a sampling of what’s out there by googling radiation + “Pacific Ocean” + Fukushima.

 

Apparently someone recently has taken a Geiger Counter to Surfer’s Beach in San Francisco and a reading close to the breaking waves is 5 x what normal background radiation should be.  Readings farther away from the surf line were “normal.”  The higher readings were apparently due to the contaminated ocean water, the mist that the waves brings in to shore. 

 

There are also sea life troubles including starfish wasting syndrome (SWS), although this was observed to be happening (from unknown causes) before Fukushima.  Some salmon populations are under stress, and sea lion colonies have shown symptoms of disease consistent with starvation, and possibly poisoning.  There have been bluefin tuna taken from the ocean with obvious radiation sickness and damage.  The bluefin travels great distances, and has no doubt come in contact with the contaminated water.  Some articles note that yellowfin tuna and some other fish types taken are “normal,” however.  (I guess these fish don’t travel over the entire North Pacific?)  The species that are high on the food chain (like sea lions) will eventually suffer the most damage.

 

The worst part of the toxic plume of water is now lying from northeast of Hawaii to the Pacific Coast.  It will hit the US Pacific coast hard during 2014.  The source of the plume has NOT been contained in Japan, so radiation levels will continue to build.  For a few years it will stay in the North Pacific Ocean, as there is relatively little transfer of water from north to south.  The plume will double back, and will eventually hit Taiwan and the Philippines, in a somewhat diluted state.

 

The US has no plans for monitoring the ocean water.  Knowing how beloved cover-ups are for the US government, this makes me suspect that there IS danger.  As usual, the “what me worry?” attitude seems to be in force.  It would be a fairly inexpensive study to undertake.  One article stated that there is a bill before the Japanese Diet to ban all future reporting on Fukushima within Japan.  At any rate, there is actually nothing that anyone can do about it anyway – except to try to contain the source water from being discharged into the ocean.  It is surprising that the Japanese government didn’t ask for immediate international help with this, taking a “we can take care of it” stance instead.    

 

So, from all this, it would probably be a good idea to stop eating seafood of all kinds.  Also stay away from the beach, and do not swim in the water.  The radiation will stay at elevated levels for decades, although the radioactive iodine mostly will disappear within a couple of years. 

Fukushima Fallout

It remains to be seen whether the increases in radiation far away from Fukushima will be “dangerous” or not.  There is no doubt that sea creatures near the source of contamination in Japan have already suffered a lot.  Because the Japanese are a “traditional culture” (and therefore can’t change anything about themselves), they MUST continue to eat fish, even though this action now will be killing them slowly.  I heard last night on the news that the population of Japan actually fell 240,000 last year.  This is because the population/resource levels in Japan have reached the limit of the islands’ human carrying capacity, and so life is too hard.  In some sense, this means that a life in Japan is no longer worth living.  (Try telling this to the US Chamber of Commerce/Corporate America/Wall Street, ha-ha.  Their “religion” of “growth” will eventually bring the US to the same sorry state.) 

 

Nevertheless, it would probably be a good idea to not eat any more seafood.  About 20 years ago, it was discovered that 17% of Danish males are now sterile.  (The females are also suffering, but it’s much harder to devise clear tests for female fertility.)  The normal rate is about 2% to 3%.  My chemist friend reported this to me about 5 years ago.  The reason is that the Danes were eating seafood from the Baltic Sea, which contains a lot of industrial solvents dumped in it from Communist days, plus the fallout from Chernobyl.  The other reason is that Denmark makes a lot of beef, ham, chicken, and cheese, and to increase efficiency, they were using a lot of herbicides and pesticides and hormones in the process.  I thought my chemist friend told me that Danish legislation has now solved the problem, but in a recent conversation with him, he said that the legislation and public warnings have been successful only by stopping the rate of sterility from increasing further.  That is a success of sorts, but still represents a real problem.

 

Denmark is a small country with a relatively intelligent population, so the identification of the problem was fairly fast, and corrective action also.  The US is an entirely different situation, however, as we can expect denial and coverup for decades – that is just the American Way.  Mostly this is because the Great Corporations are in charge, and therefore PROFITS are more important than LIVES.