December 21, 2011

Obama's Popguns of Singapore

From the NYT:
Countrywide Will Settle a Bias Suit 
By CHARLIE SAVAGE 
WASHINGTON — The Justice Department on Wednesday announced the largest residential fair-lending settlement in history, saying that Bank of America had agreed to pay $335 million to settle allegations that its Countrywide Financial unit discriminated against black and Hispanic borrowers during the housing boom. 

The British defense of Singapore after Pearl Harbor is famously (although not necessarily all that accurately) said to have suffered from the long-held assumption that Singapore's big guns must point out to sea to defeat an attack by an enemy navy. Yet, the Japanese army, not the navy, came by way of the Malaysian mainland.

Similarly, for decades, the conventional political wisdom was that the main problem with the mortgage business was its irrational refusal to do enough business with blacks and Hispanics. Thus, the government laboriously constructed legal and political guns to pound down this intractable problem.

Over time, the more politically nimble sort of lenders, such as Angelo Mozilo of Countrywide, came around to the government's point of view that they were leaving money on the table. In 2003, Mozilo trumpeted in a Harvard address that Countrywide was going to lend $600 billion (with a b) to minorities and low income communities. And then in early 2005, Mozilo upped the commitment to a trillion bucks, with Countrywide's board member Henry Cisneros (Clinton Administration HUD secretary) delegated to advise him upon it.

When the mortgage system went into the ditch in the Sand States in 2007-2008, however, it  turned out that the problem was largely one of lenders lending too much to minorities, which had driven up home prices to unsustainable levels.

Here we are in late 2011, and the Obama Administration has just fired one of its guns at the most notorious symbol of mortgage mania: Countrywide. Of course, its guns are still pointing in the wrong direction. More amusingly, the big gun turns out to be popguns.
A department investigation concluded that Countrywide loan officers and brokers charged higher fees and rates to more than 200,000 minority borrowers across the country than to white borrowers who posed the same credit risk. Countrywide also steered more than 10,000 minority borrowers into costly subprime mortgages when white borrowers with similar credit profiles received regular loans, it found.

Let's do some math: $335 million divided by 200,000 minority mortgage borrowers equals a $1,675.00 payout per victim of racism. That's out of 2.5 million mortgages examined, according to Business Insider. Hhmmhmmmhmm ... Keep that in mind as you read onward.
Attorney General Eric H. Holder Jr. said the settlement showed that the Justice Department would “vigorously pursue those who would take advantage of certain Americans because of their race, national origin, gender or disability,” adding: “Such conduct undercuts the notion of a level playing field for all consumers.  It betrays the promise of equal opportunity that is enshrined in our Constitution and our legal framework.” 
The settlement is subject to approval by a federal judge in California; according to the proposed consent order filed Wednesday, Countrywide denied all of the department’s allegations. 
Dan Frahm, a Bank of America spokesman, stressed that the allegations were focused on Countrywide’s conduct from the years 2004 to 2008, before Bank of America purchased it. ...
The problems stemmed from a Countrywide policy that gave loan officers and brokers the discretion to alter the terms for which a particular applicant qualified without setting up any system to comply with fair-lending rules, the department said. Lending data showed that Countrywide ended up charging Hispanics and African-Americans more, on average, than white applicants with similar credit histories.

So, if you are Asian or white and you got cheated by Countrywide's boiler room operation into paying higher fees on your mortgage than you should have, you are out of luck because you are the wrong race?

Basically, Countrywide and independent mortgage brokers were running high pressure boiler rooms during the peak of the housing bubble. To up commissions, their salesmen often stuck a bunch of extra fees in the fine print. Moreover, they talked about 5% (10,000 out of 200,000 minority borrowers who extra fees) into getting subprime loans with higher interest rates who would have qualified for prime loans.
In 2007, for example, Countrywide employees charged Hispanic applicants in Los Angeles an average of $545 more in fees for a $200,000 loan than they charged non-Hispanic white applicants with similar credit histories. 

Of course, the joke is that $545 in rip-off fees is a pittance compared to how much was lost on these loans on average.

Of course, it's not as if Countrywide tried to keep secret that they were going after minority borrowers.

For salesmen whose commissions pay off when fees are paid at closing, not when the borrowers write their monthly checks, being told to rope in marginal minority customers is like telling hyenas to eat raw meat. Countrywide's office in high-IQ Santa Monica was notoriously hard to make money at, but their Inglewood office in the 'hood brought in huge margins.

This is highly reminiscent of the argument between Malcolm Gladwell versus Judge Richard A. Posner and myself about whether or not car salesmen consciously exploit blacks and Hispanics. As Gladwell wrote in 2006:
One of the most bizarre reactions that I received from reviewers of Blink is an absolute inability to accept the notion of unconscious prejudice. Here is an example from a fairly well known writer named Steve Sailer. Sailer, in turns, quotes from a very hostile review of Blink in The New Republic by Richard Posner.

Posner and I said that of course car salesmen rip off blacks and Latinos consciously. While Gladwell claimed that the car salesmen who charge blacks and Latinos higher prices are, when you stop and think about it, the real victims. If only they had read Blink and realized that they were unconsciously assuming that blacks and Latinos were easier to rip off than, say, Armenians or Koreans, then they would have stopped doing it, and the car salesmen would have made more money!
Independent brokers processing applications for a Countrywide loan charged Hispanics $1,195 more, the department said. ...

Of course, a much higher fraction of the independent brokers exploiting Hispanics were Hispanics themselves. This shouldn't be a surprise: Countrywide issued many press releases over the years patting itself on the back for all its hiring of Hispanic salesmen and its efforts to find independent Hispanic brokers. The mortgage meltdown has some of the attributes of a classic affinity scam, like Mormons getting suckered by a Mormon conman.
“Chances are, the victims had no idea they were being victimized,” said Thomas E. Perez, the Justice Department’s assistant attorney general for civil rights. “It was discrimination with a smile.” 
In addition, from 2004 to 2007 — the peak of Wall Street firms’ demand for subprime loans that they purchased, bundled and resold as securities, a major cause of the ensuing financial crisis ...

And Fannie Mae and Freddie Mac's peak demand, too, or that was more like 2005-2008. Countrywide was famously in bed with Fannie.
...— Countrywide allowed its brokers and employees to steer applicants who qualified for regular mortgages into a riskier and more expensive subprime loan. 
The odds of a minority applicant being steered into such a loan were more than twice as high as those for a non-Hispanic white borrower with a similar credit rating, the department said. About two-thirds of the victims were Hispanic and one-third were black, the department said.

Oddly enough, steering into a subprime loan apparently only happened to about 5% of these minority victims of higher fees, and to only about 0.4% of all Countrywide borrowers examined by the Justice Dept. I'm surprised that percentage isn't higher. We've been hearing for years about how the foreclosure crisis was caused by minorities getting forced into subprime loans, but with notorious Countrywide, it was quite rare.

Now the Justice Department quantifies the discrimination and comes up with a price tag of $1,675 each -- a distinct anti-climax. I mean $335,000,000 is about Angelo Mozillo's compensation during the last decade even after his SEC mini-fine.
If a judge approves the settlement, victims will receive between several hundred and several thousand dollars, with larger amounts going to those who were steered into subprime mortgages despite qualifying for regular loans.

Let's repeat that: "several hundred and several thousand dollars:" not exactly a home run for Eric Holder's theory of what caused the meltdown; more like a foul tip.
... Under federal civil rights laws — including the Fair Housing and Equal Credit Opportunity acts — a lending practice is illegal if it has a disparate impact on minority borrowers. Against the backdrop of the foreclosure crisis, the Obama administration has made a major effort to step up the laws’ enforcement.

So, it's a disparate impact case. I guess that's why white and Asian victims of being cheated by Countrywide can't get any compensation. The blacks and Hispanics are evidently getting paid the difference between what they paid in points and other mortgage fees and the average of what whites paid, not the difference between what they paid and what an honest broker would have charged them. What Countrywide should have done was rip off whites and Asians even more so then the Obama Justice Dept. wouldn't have a complaint.
In early 2010, the division created a unit to focus exclusively on banks and mortgage brokers suspected of discriminating against minority mortgage applicants, a type of litigation that requires extensive and complex analysis of data.

While they were crunching the numbers, perhaps they could have calculated the default rates on these loans. My guess is that even with the surplus origination fees Countrywide / Bank of America came out the loser in the long run due to defaults. (Of course, other losers include Fannie and the public.) To have had these risky mortgages make sense as paying propositions, Countrywide would have had to charge vastly higher fees.
Working with bank regulatory agencies and the Department of Housing and Urban Development, the unit has reached settlements or filed complaints in 10 cases accusing a lender of engaging in a pattern or practice of discrimination. 
The Federal Reserve first detected statistical discrepancies in the loans Countrywide was making and referred the matter to the Justice Department in early 2007, according to a court filing disclosed in 2010 as part of a civil fraud case brought by the Securities and Exchange Commission against Angelo R. Mozilo, the former chief executive of Countrywide.

In other words, the normal federal regulatory system noticed this disparate impact problem in early 2007, well before Countrywide cratered in 2008. Good to know that the Feds were on the watch against the really important mortgage lending problem!

In summary, there's a general problem with rip-off sales practices, whether in mortgage lending or auto sales. Experience, however, shows that fighting rip-offs by focusing on discrimination is a losing proposition. What happens is that clever people rip off not clever people, which has disparate impact on blacks and Hispanics.

But the problem can't be explained that way, because then it leads to the inference that blacks and Hispanics are less clever on average. So, enforcement tapers off because the whole subject becomes too embarrassing.

Clearly, the anti-discrimination method of regulating mortgage lenders turned out to be extremely bad as a way to prevent boiler room fraud and excess. It was not uncommon for lenders to respond to complaints about predatory lending to minorities by saying, "Okay, we'll lend more to minorities. (Fannie is buying!) And we'll hire some of your NGO's foot soldiers as loan counselors. And maybe make a donation to your fine organization. After all, we all have to do our part in fighting racist redlining."

We need instead to say that the clever shouldn't rip off the clueless, and it doesn't matter what races the clever and the clueless belong to. We all get clueless in the end.

92 comments:

Insufferable Spelling Nazi said...

Of course, it's guns are still pointing in the wrong direction.

it's = its

.

AllanF said...

And the dog that didn't bark... what was the race of the brokers doing the unethical steering into riskier, higher margin products?

At a guess the Santa Monica office staff was far less vibrant than Inglewood's.

Lugash said...

I am Lugash.

And the dog that didn't bark... what was the race of the brokers doing the unethical steering into riskier, higher margin products?

At a guess the Santa Monica office staff was far less vibrant than Inglewood's.


I can't speak about the independent brokers, but I worked as an outside contractor with Countrywide for a while. The subprime unit(Full Spectrum Lending) in my particular location was ~85% white, with some hispanics thrown in. It was also 98% male and under the age of 30. Just about all of them were sleazier than a used car salesman; listening to them in the break room was unbelievable. The handful of women looked like they could suck a golfball through a garden hose.

Angelo was definitely hyping minority lending. There were about a dozen minority outreach/urban affairs specialists who used to blast company wide emails to Angelo talking about all the good they were doing.

Ethics were practically nonexistent in the company, even outside the sales positions.

I am Lugash.

Anonymous said...

With respect to the small percentage that only 5% of the loans looked at were deemed discriminatory and what it suggests, it would be important to know what percentage of the loans were subprime that deserved subprime. Say it's half, then you've got 10% of the nonsubprime deserving who got swindled.

Lugash said...

I am Lugash.

Forgot to say that one of the execs in FSL, or maybe CHL overall, was Greek. I heard from multiple company veterans that he used to badmouth anyone who wasn't Greek or Italian, saying that they didn't have the ability to work or sell. Supposedly Greeks and Italians made up a big chunk of loan officers working in the smaller satellite offices.

I am Lugash.

RKU said...

Actually, there was a big study by the NY Fed Reserve bank that came a couple of weeks ago that seemed to pretty much confirm exactly what I'd always suspected from the beginning of the Meltdown: speculators were the ones responsible, especially in the hardest hit states of CA, AZ, FL, and NV.

Apparently at the peak of the Bubble in 2006, almost *HALF* of all mortgage loans in those states were going to "investors" (i.e. speculators), and those overly-leveraged speculators were also among the first to default when home prices stopped rising and the Bubble burst. So the "Minority Mortgage Meltdown" theory was always just nonsense.

Or perhaps not. I haven't seen any data, but it wouldn't surprise me if a very large fraction of the speculators responsible were indeed "minorities", just not black or Hispanic "minorities"...

Tom Regan said...

Steve's theory that certain ethnic groups pay more for cars because they like to be seen as big spenders doesn't ring true to me.
Perhaps there is an element of that, but it would seem more likely that on big-ticket items like cars and houses, overpaying reflects a lack of shopping around.
Some people spend days, weeks, months, researching prices, going from salesroom to salesroom or broker to broker, bank to bank seeking out the best rates.
Others don't. But the good news for them is that Eric Holder and the government is now saying 'If you can't be bothered putting in that kind of effort, we've got your back.' Especially if you're vibrant.
Pretty much sums up the ethos of this government as a whole. Gambling banks, feckless customers, failed businesses, welfare queeens - everyone gets a bailout.

Voland said...

As a broker in financial services I am intensely interested in knowing the racial breakdown of the lending agents who wrote these sub-prime loans. If I were a betting man I would wager a month’s pay that the majority of these “predatory” loans were made by agents of the same racial / ethnic / linguistic persuasion as the borrowers with whom they preyed upon. While demagogic liberals keep pointing fingers at “Wall Street” (white) bankers for pushing loans to unsophisticated brown and black buyers I have to believe that the most aggressive salespeople had roots in these same communities and sold them back to the banks for large up front commissions. A large chunk of these loans were undoubtedly made to “controlled” business such as friends, relatives, and acquaintances who knew them personally more than professionally. Many of these guys were strictly amateurs who are now selling other unrelated shitty products to the same suckers.

The most galling part of this is that the most of the non-ethnic loan brokers who pioneered the business and built it up over generations were completely bypassed by the newcomers who favored doing business with their own ethnic cohorts. Not only did they lose an enormous amount of money and watch their livelihoods melt down but they ended up getting smeared as racists by the likes of Holder and Obama. I would gladly give another month’s pay to know if the arch-creep, Eric Holder, is aware of this and is just keeping his bigoted mouth shut in an effort to help along “his people”.

anony-mouse said...

Of course the money is really coming from the Federal government (TARP) which bailed out Bank of America (assets guaranteed: 118 Billion) and bought preferred stock (repaid), anyways, which I suppose is one reason B of A didn't fight too hard.

A lot of those terrible mortgages are now owned by the Fed.

Imagine if the Japanese who attacked the British in Singapore were, say, really Welsh and you get a better idea.

Anonymous said...

"Countrywide also steered more than 10,000 minority borrowers into costly subprime mortgages when white borrowers with similar credit profiles received regular loans, it found."

This is totally illogical. If the minority borrowers and the white borrowers had similiar credit profiles, then by definition ANY loans made to them would be "subprime" as "subprime" simply means "with your credit, you couldn't get this loan, but here's some free money anyway."

It's bizarre that now "subprime" means "evil loan that evil banks evilly made for evil reasons" when in fact the term refers to the credit unworthiness of the recipient. So completely undeserving minorities got free money. What a friggin' CRIME, right?

It should be, and those who took this money should be jailed. But, of course, prisons are already overcrowded with these people.

Anonymous said...

conor friederdorifjoaf has a blog post on "grappling with ron pauls racism" that's like twenty thousand words. unbelievable.

Anonymous said...

So, basically it's damned if you do and damned if you don't.
NAMs are the eternel put-upon victims, poor innocent little lambs just waiting to be fleeced by big, evil whitey business - that's the modern American narrative.
Personally I'm fairly convinced that the pre 1965 USA, perhaps the greatest and most formidable nation state ever conceived, will be killed by legislative push toward race hustling and allied 'equality' bullpoopy.
In a century's time whatever political entity(s) that stands on the present soil of the USA will just be another mediocre also-ran continental state.American exceptionalism died with the elcetion of John F. Kennedy.

Anonymous said...

"Countrywide was famously in bed with Fannie".

In England that phrase borders on the Chaucerian and bawdy.

eh said...

The phrase 'perfectly absurd' wasn't coined for nothing.

Californian said...

One more shakedown by a government which has long since become one big racket.

Whiskey said...

Steve, a couple of comments. First, the racial caste system in who gets justice: NOT Whites or Asians without money and power, ALWAYS Blacks and Hispanics ... is part of modern American life. It fits the morality tale of making up for the assassination of Martin Luther King by screwing over every ordinary White person in America. Most of the media, law, and significant segments of the White voting public support this morality tale acting out in divvying up who gets what in politics, justice, and resources.

Secondly, we've had lots of people default on mortgages before. What made this crisis was not Juan Strawberry Picker making $14K a year walking away from his $700K mortgage. It was selling derivatives based on that mortgage to yield hungry and desperate German bankers, who were expected to fund Germany's unification costs without raising taxes.

Or: Demand by German bankers desperate and gullible for high yield and "safe" junk bonds acted like heroin in the global financial system. Sure Countrywide wrote a lot of junk loans, but SOMEONE HAD TO BUY THEM. It was not just the junk loans syndicated but derivatives on the loans syndicated that caused the crisis. And its not "greedy Wall Street Bankers" (that's like blaming bears for congregating around garbage dumps) but greedy German bankers tasked with funding East Germany's reconstruction without first Kohl, then Gerhard Schroeder, then Merkel raising taxes.

Whiskey said...

Note Countrywide did not keep the loans. Nor did much of anyone else. They all sold them. To eager buyers they had to beat off with sticks.

Why? Because the world is hungry for yield, and hardly anywhere safe is growing. Japan is aging and losing wealth, and is a pit anyway (look at Olympus, and that's a "good" company). Most likely Toyota, Honda, Nikon, all those brand names have serious and hidden impairments from the 1980's on their balance sheets too. China is a mess, how can anyone invest there and not get ripped off? Brazil maybe will take some major mining/oil company investments, but that is about it -- its very hostile to "hot money" seeing what happened to Thailand (not that I blame them either).

The biggest tell here is the collapse of anything else in the US to invest in. Why were so many German Landsbanken eager to take this garbage? Because nothing else offered any prospect of yield. They would have made out better buying Apple stock, but that was not in the cards for any number of reasons (principally as banks they can't hold stock). But look larger -- where are most people going to save for their retirement, with a decent yield and relative safety? Really?

The flip-side of junk investments blowing up the world economy is near total absence of growth in the only safe and reliable place the world has seen since 1914 to invest in: the US.

Dave in Seattle said...

Roissy has an interesting post where he toyed with the idea of becoming a broker.

http://heartiste.wordpress.com/2009/03/26/my-time-inside-the-housing-bubble/

Anonymous said...

In Michael Hudson's book "The Monster," a great account of the subprime debacle, the main "boiler room" victims appeared to be old black ladies who didn't read the fineprint.

Anonymous said...

And who made these 'victims' sign on the dotted line?

Simon in London said...

Equal treatment = disparate impact.

rightsaidfred said...

...Eric Holder and the government is now saying 'If you can't be bothered putting in that kind of effort, we've got your back.' Especially if you're vibrant.

Labor unions have declined, replaced by race unions run by the gov't.

Anonymous said...

"We've been hearing for years about how the foreclosure crisis was caused by minorities getting forced into subprime loans, but with notorious Countrywide, it was quite rare."

The person I have been hearing this from is you. Aren't you arguing against your main thesis that trying to make everyone a home owner and reducing the qualifiers for home ownership for the purpose of getting minorities to own homes is what caused the problem?

Someguy

Paul Mendez said...

I predict that next, Holder will go after prestigious universities for "predatory admissions."

Think about it. Each year, tens of thousands of unqualified minorities are cynically convinced by greedy admissions officers to pay a fortune in tuition at Ivy League schools they have absolutely no hope of graduating from. Tens of thousands more are given useless "ethnic studies" degrees that do not equip them for employment.

It's a disparate impact case if I ever saw one.

Camlost said...

In Atlanta the main scheme was for black mortgage agents to recruit within their neighborhood. They'd often have solid, prime loans arranged for blacks with moderate income, but then they would steer those customers to sub-prime loans with awful balloon payment schemes instead. Being short on future time orientation, blacks would take them without reading (or caring about) the fine print.

At every income level blacks were 4-5 times more likely to take a sub-prime loan than whites.

There's vast areas of Southside metro Atlanta that are devastated by the sub-prime crisis. The overwhlemingly white/asian northside of Atlanta metro was virtually unaffected.

Anonymous said...

Speaking of importance of laws, why are there over 11 million illegals in this country, and what is Holder doing about it?

And what about affirmative action that favors african immigrants over Polish immigrants, who are in fact discriminated by affirmative action. So, if you're an African whose ancestors sold slaves, you get AA. But if you're a Pole whose ancestors suffered under centuries of German-Russian rule, you must pay for blacks in America.

Jeff W. said...

Low IQ Hispanics and blacks need someone to take care of them and look out for their interests. They know this, and that is why they are always looking to government to act as their protector. High IQ people don't need a protector. They can navigate the marketplace successfully on their own.

The political problem is how to give low IQ people the protection they need in the marketplace without growing a corrupt thief state.

Anonymous said...

White people need to stop hoping for the GOP to represent them. They need to depend more on grass roots movement. What is missing in America is a movement that speaks for the white lower-middle class, working class, underclass, and poor. Without leadership, these people don't know what to do. Also, many are isolated in small towns. They need to be united politically. Since GOP runs after big money, it ignores these people. Dems pay lip service to them but Dem Party is now party of Jews, blacks, gays, and illegals.

Waiting for the GOP to do anything for these people is like WAITING FOR GOPOT. We need community organizers of the less privileged whites. Just make sure they are not neo-nazi scum type. If these people continue to have no leadership, more will turn to stupid radical ideas.

The issues should be

1. Section 8 housing that burdens poor whites and working class whites than rich whites when it comes to integration. If rich whites wanna push section 8 housing, build more in rich white neighborhoods.

2. Affirmative action favors rich whites--with lib credentials--over poor, working class, and lower-middle class whites.

3. Lower income whites are hurt most by illegal immigration while rich whites benefit from cheap labor.

and other issues...


Only by getting these issues heard will the GOP ever pick up on them. While some issues are chosen from the top, some must be heard from the bottom. We need more populism from below. It's like if you want be saved from drowing, you gotta scream for help. White lower-middle, underclass, and poor don't know how to scream and demand. They still think they are led by Dems and GOP.

The Tea Party was a movement of better-educated whites. And it was bought out by the rich, why is why the Iowa TP endorsed Newt. Ridiculous.

We need someone like William Jenning Bryan.

Anonymous said...

Have poor whites march in rich white neighborhoods to build more Section 8 housing where the millionaires live. Rich whites will think twice about supporting Section 8.

Occupy Bill Gates Mansion.

Kylie said...

"Equal treatment = disparate impact."

Of course. Because one group is, on average, considerably less intelligent than the other.

You can turn it around, too. The two groups have to be treated disparately in order to preserve the fiction that they are equal in intelligence.

Ed said...

I'm one of those people who usually find that Whiskey doesn't make any sense. This time, Whiskey makes sense. And I actually know something about this subject.

The only caveat I have is that the problem isn't so much that you can't get decent, non-fraudulent, returns in the U.S., as you can't get decent, non-fraudulent, returns anywhere in the world. And check out what happens to the price of oil when the world economy approaches something resembling growth.

I'm not sure if German bankers should feature so prominently as the villains in the narrative, except that the Germans collectively made themselves an outlier as being one of the few countries to actually save (therefore they have to find places to invest) and one of the few countries to retain a large manufacturing sector (so they have to find places to export to). This now makes them, of course, the supervillains on the international economic scene.

Stuff Black People Don't Like said...

"Monster" is a great book. Though I'm still hoping Steve decides to sit down and write "The Minority Mortgage Meltdown."

Hell, he basically has it already written!

Whiskey is on point with his statement regarding the desire for CDS to bungled together and sold as securities. People thought the returns would last forever.

Little did they know the DoJ would still find a way to keep the American Dream going for the few - as Sailer mentioned - but not including white and Asians who were forced to take higher interest mortgages.

Meantime, FANNIE and FREDDIE keep losing billions...


Steve, have you read Michael Lewis' latest book?

newbie said...

Will chat TV be the next big thing(if it isn't already)?
One thing about news and social networking--twitter or facebook or whatever--, it seems people gravitate to news stories through social networking. Now, there are a million news stories all over the internet. Yet, without social networking, one reads it alone, even if the news is something that interests that person. But through social networking, even news that don't really interest you become appealing for the simple fact that it becomes a piece of 'shared news'; that makes it 'come alive'. People are, by nature, a social creatures and like to feel part of a 'shared community'. We may not wanna share our wealth, but we wanna share a sense of togetherness or connectedness or belongingness. It's like in ALL IN THE FAMILY when Meathead finds out he got good grades but isn't thrilled because Gloria isn't there to share the happiness with him. (They'd gotten into a fight.)
It's as if people are less interested in news per se than news/stories that connect them with others. So, social networking has had a huge impact on how we get the news. We go less for news than the fact that it pulls us into a community. In a way, we're advancing forward, yet in another way, it's like we're reverting to the old way of sharing information and news by
'word of mouth'. It's like he tells her and she tells him and he tells them and etc. The process has been accelerated and expanded, but the logic is the same.

Indeed, even if you vehemently disagree with some people you're connected via social networking, you often prefer to share news with them than go alone to news sites that agree with your views.

Now, TV is still something you watch alone or with a closed circle of people(except sports games at big bars). But suppose TV could make it possible to socially connect with other viewers with whom you can share views and opinions--via chats, video, etc--while you're watching the TV program. It'd be like facebook tv. Maybe such things exist already, in which case, it goes to show how behind the times I am.

Generally, it seems people use computer alone but socially connect with lots of strangers.
But TV is watched with other people(family or friends)but shut off from rest of the world.
Maybe this will change.

------

Btw, I never used an E-book. I was wondering... does it offer video clips? You know how there are illustrated books with photos? Do E-books offer videos instead of just still photos?
And is there a way a person reading a certain E-book can connect with others reading the same book and share views while rading it?

Anonymous said...

"Roissy has an interesting post where he toyed with the idea of becoming a broker."

Gambling is when you bet against the odds for huge gains.
Investing is when you bet with the odds for small gains.

Andrea Ostrov Letania said...

Sadism with a conscience is masochism.

Anonymous said...

These sub-prime loans are a case where two fools met. The bankers were fools to make them and the borrowers were fools to accept them. The only solution to our financial problems is to force the banks to take a haircut on ALL of their underwater loans. This will put some money in the consumers' pockets and shed some of the debt that is preventing an economic recovery. There is no need to compensate the bankers for their losses. It is just a way of speeding up the cycle of foreclosure and resale that they going through anyway. The solution to too much debt is to shed some of that debt--not to go deeper in debt to bail everyone out.

Anonymous said...

When are you going to write about student loans? Students loans are the next big bubble. They are worse than housing loans because a borrower can't exit from student loans by declaring bankruptcy. They are a debt for life. The dollar sum of student loans is ~1 trillion dollars.

Student loans have a minority tie in, too. Affirmative action admits unqualified minorities to college where they take out student loans. Because unqualified minorities are less likely to graduate, they will be more likely not to pay back student loans. The situation is worst for graduate programs such as law and medicine where minorities don't pass the bar exam or board exams at the same level as whites. Then they are stuck with hundreds of thousands of debt.

Larry, San Francisco said...

I got scammed by Countrywide. They had bought my first mortgage. When rates dropped they called me to refinance. They told me to start the process they needed $300. Not knowing much I thought that was the only fee I had to pay. I then got the loan offer which came in at 2.5 points with over $5,000 worth of additional fees. At that moment I freaked and found an honest mortgage broker (yes, they do exist). I am still mad about the $300 though.

Anonymous said...

Even if blacks and Hispanics weren't signed up to subprime loans but given good ones, the end result would have been the same when the housing market crashed. They still would have been unable to pay mortgages.

Carol said...

"The only solution to our financial problems is to force the banks to take a haircut on ALL of their underwater loans."

OK I'm confused. I thought Phoney and Fraudie owned most the loans now, and that forcing a haircut just takes it from the taxpayers.

Anonymous said...

The political problem is how to give low IQ people the protection they need in the marketplace without growing a corrupt thief state.

You mis-spelled "impossibility".

Anonymous said...

"It was selling derivatives based on that mortgage to yield hungry and desperate German bankers..."

Deutschland, Deutschland, Immer Faultes.

Anonymous said...

"I predict that next, Holder will go after prestigious universities for "predatory admissions."

Think about it. Each year, tens of thousands of unqualified minorities are cynically convinced by greedy admissions officers to pay a fortune in tuition at Ivy League schools they have absolutely no hope of graduating from. Tens of thousands more are given useless "ethnic studies" degrees that do not equip them for employment.

It's a disparate impact case if I ever saw one."

Actually you've got it just wrong. The disparate impact will have been the result of unreasonable academic expectations that the universities will be expected to remedy in order to ameliorate this 'crisis'.

Anonymous said...

It wasn't the bankers being fools for making these loans, it was the shareholders of the banks for allowing the employees of the banks to get bonuses for sweeping up small change in front of the bulldozers.

Svigor said...

But if you're a Pole whose ancestors suffered under centuries of German-Russian-Jewish rule, you must pay for blacks in America.

FTFY

David Davenport said...

Steve, did you notice this over at Larry Auster's blog:

Telegraph columnist: Why we need to start discriminating again

The issue Ed West is confronting is liberal asylum law,...

West is someone to keep our eyes on. Recently he referenced Steve Sailer in making the point that diversity is a problem.
Posted by Lawrence Auster at 01:12 PM


Peek From the Right

David Davenport said...

Big big hit count blog Instapundit opines:

"And yet California spends a fortune on schools and pays its (unionized) teachers very well. .."

Hmm what is that brave Perfessor Reynolds, the Wizard of Insty, fails to notice about today's California college students with poor math and English language skills?


I’M NOT SURE IF I SHOULD TAG THIS “HIGHER EDUCATION BUBBLE UPDATE” OR “LOWER EDUCATION BUBBLE UPDATE:” Cal State campuses overwhelmed by remedial needs. “Wracked with frustration over the state’s legions of unprepared high school graduates, the California State University system next summer will force freshmen with remedial needs to brush up on math or English before arriving on campus. But many professors at the 23-campus university, which has spent the past 13 years dismissing students who fail remedial classes, doubt the Early Start program will do much to help students unable to handle college math or English. . . . The remedial numbers are staggering, given that the Cal State system admits only freshmen who graduated in the top one-third of their high-school class. About 27,300 freshmen in the 2010 entering class of about 42,700 needed remedial work in math, English or both.”

And yet California spends a fortune on schools and pays its (unionized) teachers very well.

Posted at 10:28 am by Glenn Reynolds


Instapundit.com

Secret note to Steve, not necessarily for publication: Steve, you could attract new viewers if you picked a quarrel with this fearlessly outspoken Invade all/Invite all Neocon and Lib Lib Libertarian.

NOTA said...

For hispanic borrowers, along with the IQ difference, you also often have a language barrier, unfamiliarity with the US legal system, etc. And for anyone whose family is pretty poor, you have the lack of savvy family and friends who can help you keep from being raped. When we were buying our house, I comparison-shopped, talked to family members with a lot more experience than I had in the real estate market, talked to a family member who is a real estate agent in another state, dicked around with spreadsheets working out how the different alternatives would work, etc. Plenty of people don't have anyone they know who's bought houses half a dozen times and knows enough to help them keep out of trouble.

There is a lot that goes into being an easy mark. But salesmen who live on commissions they can inflate when they run into one get very good at recognizing easy marks.

Anonymous said...

"Similarly, for decades, the conventional political wisdom was that the main problem with the mortgage business was its irrational refusal to do enough business with blacks and Hispanics."

If government (CBC members and DOJ bureaucrats in particular) were really concerned about businesses leaving money on the table due to discrimination they'd do nothing or, at worst, introduce small incentives for lending to blacks without reducing overall lending standards.

But that is NOT what they're really concerned about. What they really want is to force everyone else to pay for the substantially higher risks that lenders incur when lending to certain minority groups. It has long been known that a black borrower with the same income and credit score as a white borrower is far more likely to default.

I got deeply into debt just before and during the 2001 recession and for four years made immense personal sacrifices so as to pay off every last damn dime. It is something a very large fraction of black borrowers would not have done.

By the way, if black churches and groups like the NAACP really cared about helping blacks they'd be offering classes and counceling to help blacks avoid con artists and help them understand the fine print. Perhaps they do, but I doubt it.

Oh, and here's how the shakedown works. Bank of America/Countrywide only gets sued for $335 million? Perhaps because they've already paid the Afrogeld.

Anonymous said...

"Countrywide also steered more than 10,000 minority borrowers into costly subprime mortgages when white borrowers with similar credit profiles received regular loans, it found."


I think it is a mistake to take this, Eric Holder’s and Thomas Perez’s, Justice Department at its word. I just don’t believe that the statement that many or even a significant number of Hispanics and Blacks who would have qualified for regular loans instead got subprime loans.


The key words and I quoted them above are “SIMILAR CREDIT PROFILES.” If the Justice Dept. story is true it should read “IDENTICAL CREDIT PROFILES.”


More than likely the Hispanic and Black profiles indicated less cash savings, less retirement savings, more unsecured debt (both in credit cards and car loans), and more credit mistakes, e.g., late payments etc. I’d also suggest that there would’ve been more job insecurity with the Hispanic and Blacks than Whites on average.


So in the end, they were not SIMILAR for purposes of subprime versus prime.


Let us also recall that the Fed Government pushed for Fannie and Freddie to accept Sub Prime loans into its portfolio exactly so that companies like Countrywide could make loans to Hispanics and Blacks that otherwise would not have been made at all considering the actual credit profiles at issue.

Anonymous said...

OT:

"Barack Has No Pet Peeves Of First Lady; Michelle: "My List Is Too Long"

If she hadn't met him, she'd most likely be a single mother working for the city of Chicago now, living in the 'hood.

Truth said...

"If she hadn't met him, she'd most likely be a single mother working for the city of Chicago now, living in the 'hood."

I don't know, is that a general characteristic of Harvard educated lawyers?

Anonymous said...


This is totally illogical. If the minority borrowers and the white borrowers had similiar credit profiles, then by definition ANY loans made to them would be "subprime" as "subprime" simply means "with your credit, you couldn't get this loan, but here's some free money anyway."


You're operating under a faulty definition of "subprime."

A bad FICO score (or credit history ) is sufficient, but not necessary to enter subprime territory.

Inadequate income/asset documentation and/or high LTV (i.e. small down-payment) can make an otherwise prime loan non-conforming.

Thus to steer to subprime, the loan officer must simply fail to obtain/submit proper income verification or suggest a smaller down-payment (which, I think we can agree, would have frequently been met with enthusiasm on the part of the mortgagor).

Anonymous said...

I don't know, is that a general characteristic of Harvard educated lawyers?


Serious* question, T: Why did she have to surrender her Illinois state law license?

If a Nancy Reagan or a Laura Bush or a Lynne Cheney had had to surrender a law license, the NYT alone would have printed several hundred thousand [maybe even a million or more] words about it.

But since Michelle travels within the sphere of the sacred mythology of The Story of O, we haven't ever heard so much as a peep out of them.



*Not even trying for one-ups-man-ship; I'd honestly like to know the answer.

Steve Sailer said...

Michelle wasn't practicing law and I presume it takes money and time to keep the license, so why not give it up?

Kylie said...

"Michelle wasn't practicing law and I presume it takes money and time to keep the license, so why not give it up?"

There was no reason for her to keep it up and every reason for her to give it up.

Truth said...

"Serious* question, T: Why did she have to surrender her Illinois state law license?"

Serious Answer:


ARDC Individual Attorney Record of Public Registration and Public Disciplinary and Disability Information as of December 31, 2008 at 10:54:43 AM:

Full Licensed Name: Michelle Obama
Full Former name(s): Michelle Lavaughn Robinson
Date of Admission as Lawyer
by Illinois Supreme Court: May 12, 1989
Registered Business Address: Not available online
Registered Business Phone: Not available online
Illinois Registration Status: Voluntarily inactive and not authorized to practice law - Last Registered Year: 1993
Malpractice Insurance:
(Current as of date of registration;
consult attorney for further information) No malpractice report required as attorney is on court ordered inactive status.
Public Record of Discipline
and Pending Proceedings:

It says VOLUNTARILY. She didn't have to, she chose to. In returning the spirit of "no-one-upsmanship, sometimes, one has to consider the source of the "news" he choses to believe, and do his own research.

Truth said...

"If a Nancy Reagan or a Laura Bush or a Lynne Cheney had had to surrender a law license, the NYT alone would have printed several hundred thousand [maybe even a million or more] words about it."

And rightfully so, seeing as none of them attended law school

Abraham Lincoln said...

The annual fee for an attorney's license is currently $289 in Illinois. There is also a continuing education requirement, but that did not start until 2008.

Anonymous said...

Truth, 12/23/11 1:35 PM: "If she hadn't met him, she'd most likely be a single mother working for the city of Chicago now, living in the 'hood."

I don't know, is that a general characteristic of Harvard educated lawyers?


Truth, 12/23/11 5:39 PM: It says VOLUNTARILY. She didn't have to, she chose to.


Again, an honest question: Does making such an abrupt about-face, in the span of just four short hours, not cause you any qualms at all?

Not any unease?

Not any tinge of embarrassment?

And, again, I'll repeat the other honest question: What happened in her legal career to cause her to walk away from the legal high life she was enjoying with Newton Minow, Bernardine "Dohrn" Ohrnstein, Steven Koch, and the rest of the Chicago mafiosi, and instead disappear into the intellectual & professional obscurity of the low-brow racial spoils sewer?

From Princeton NJ & Cambridge Mass to the Southside? That had to have been a helluvan emotional let-down.

Even fixers like Vernon Jordan keep their law licenses up-to-date, if for no other reason than appearances' sake.

Something happened, T - you don't just go to P-Town & Harvard & pass the bar, but then suddenly turn on a dime and walk away from it all - some judge or district attorney or senior partner ordered her to surrender her license [probably with the threat of jail time if she didn't].

And, for the third time, the honest question we here in flyover country would like answered: JUST WHAT WAS IT THAT SHE DID?

Anonymous said...

The annual fee for an attorney's license is currently $289 in Illinois. There is also a continuing education requirement, but that did not start until 2008.


As the racial-quota set-aside hire, with the double Ivy League credentialisms, at a firm like Sidley Austin, she should have been making EASILY $100,000/yr in 1990 dollars.

$289 in 2011 dollars should have been chump change for her back them.

AGAIN: SOMETHING HAPPENED TO CAUSE HER TO SURRENDER HER LAW LICENSE.

What was it?

Anonymous said...

Not so fat?

Anonymous said...

Aint no hoax anymore, at last economically.

gumbeask said...

"By the way, if black churches and groups like the NAACP really cared about helping blacks they'd be offering classes and counceling to help blacks avoid con artists and help them understand the fine print. Perhaps they do, but I doubt it."

Nah, professional courtesy forbids it.

Anonymous said...

"Let's repeat that: "several hundred and several thousand dollars:" not exactly a home run for Eric Holder's theory of what caused the meltdown; more like a foul tip."

Not even that. At least a foul tip means you're getting wood on the ball. Many people regardless of ethnicity who were taking out home loans for the first time got stuck with needless fees or points. I did, dumbell that I am. I got ripped off by a fellow white guy whose company went out of business just as the bubble started superheating.

It would be interesting to see which group got ripped off the least. I'm guessing East Asians, because independent Asian brokers had already figured out the future market for loyal creditworthy customers refinancing their mortgages as interest rates tracked ever downward. And in the Asian community word of mouth among friends and associates counts for a lot for who gets patronage. In fact, many Asian brokers ate their loyal customers' fees including the appraisal (mine did) because they still made money at closing -- tricking customers for a few extra hundred bucks is pretty stupid when the broker is going to get a couple thousand dollars commission on every refinance and stands to lose his ability to do business in the community for not offering rock bottom deals.

After my first loan, I refinanced my loan five times over ten years, from 7% down to 3.5%, using the same agent I met through Chinese friends, and it cost me nothing -- it just saved me money since refinancing allowed me to make bigger principal payments.

Kylie said...

"Now the Justice Department quantifies the discrimination and comes up with a price tag of $1,675 each -- a distinct anti-climax. I mean $335,000,000 is about Angelo Mozillo's compensation during the last decade even after his SEC mini-fine..."

Right, if you're looking at facts and figures instead of at signs and symbols.

But I think Holder and the rest of them are looking at the latter and from their POV, this is a definite win. They've proved that the tail wags the dog. When white bankers refuse to give blacks (and remember, none of this is about Hispanics, except incidentally) home loans, it proves the white banking institutions are racist. When white bankers give blacks home loans, it proves the white banking institutions are racist. Things are what Holder and co. say they are. And dictating the terms of others' reality is about as big a win as you can score.

"Let's repeat that: "several hundred and several thousand dollars:" not exactly a home run for Eric Holder's theory of what caused the meltdown; more like a foul tip."

Let me repeat that, Eric "My People" Holder's theory of what caused the meltdown is: black's failures are the fault of whites. So the white bankers have to pay. This will play well in any number of demographics. And it's no foul tip, he hit that one right out of the ballpark.

Signs and symbols, not facts and figures.

Evil Sandmich said...

I guess whites would be glad that Holder didn't take it upon himself to charge all white mortgage holders a penalty to make up for the discrepancy.

like Mormons getting suckered by a Mormon conman.

Bernie Madoff will always be my favorite.

ibmug said...

It used to be teachers' role was to prevent students from cheating. Now, teachers encourage students to cheat.

It used to be banks were supposed to deny loans to poor credit risks. But now, banks are supposed to expand lending to credit risks.

It used to be the idea of marriage was supposed to uphold core values. Now, marriage is supposed to encourage social degeneracy via 'gay marriage'.

It used to the government was supposed to uphold the law and protect our borders. Now, the government weakens our borders and laws and encourages more illegal immigration.

See a pattern?

Anonymous said...

Abraham Lincoln said...

The annual fee for an attorney's license is currently $289 in Illinois. There is also a continuing education requirement, but that did not start until 2008.


Oh, Abe, you sly dog, you.

It is a time-honored tradition that people be given an opportunity to resign rather than have their names dragged through the mud.

Anonymous said...


We need instead to say that the clever shouldn't rip off the clueless, and it doesn't matter what races the clever and the clueless belong to. We all get clueless in the end.


Downward mobility means always having the clever outperform the clueless, which some would say constitutes ripping them off.

What is interesting, it seems to me, is that all these politically correct nostrums about not judging people by the color of their skin and all cultures being equally worthy are selecting for people who are very clever in being able to navigate their way through the thicket of PC thorns while still outperforming the clueless.

We shall see what the future holds.

ibmug said...

What we seem to have lost is the Conservatism of Experience. COE isn't the same as Conservatism of Ideology.
Even ideological liberals can be conservatives of experience, by which I mean the realization that the world is a lot more complex than any ideology makes out.
For example, a young liberal might embrace all the 'anti-racist' cliches and then come to realize over time that realiity isn't so simple as PC liberalism says it is.
But this is true of young conservatives-of-ideology as well. They may start off by thinking free markets, free trade, family values, school choice, lower taxes, or whatever is the answer to all problems. But, in time, with more experience, he may come to understand that reality is a lot more complex than their pat ideologies make it out; just because Marx was wrong doesn't mean Milton Friedman was always right.
Conservatism of Experience comes with time, age, and life-lived. It comes from rubbing up against reality.

One could say all ideologies--left and right--are anti-COE since they try to explain the world according to an iron set of principles. If we define 'liberalism' as faith-in-ideology, then even young conservatives-of-ideology are liberals in this sense. They have more faith in ideology than understanding of reality. It is only with experience that the wiser COE is attained.

In the past, COE was a way by which young people learned from older folks; by which older people imparted wisdom-of-the-street to young people filled with ideas-from-schools. Not only were older folks more respected in the past but there was nothing like PC that came to dominate discourse.

Imagine the world where COE was once operative in a world without PC and where older people were shown more respect. Even an elderly liberal-leaning journalist(with a lifetime of experience) would have candidly told younger reporters about problems in the black community. Thus, younger reporters with naive idealism would gain something from listening to elders who'd faced and seen real reality many times.
Young peole might disagree with older guys, but as long as PC was not an iron-law(and destroyer of careers), older men with COE would have their say and offer a sobering perspective on real reality to younger people.
In politics, Daniel Patrick Moynihan was speaking from COE when he warned about the culture of poverty.
In journalism, young guys used to hang around bars with older guys like Mike Royko who were not afraid to be politically incorrect.

But all that changed with PC. Now, older people with COE who know better dare not speak the truth because not only will younger people in the profession disagree with them but attack them and ruin their careers, forcing them to retirement in disgrace. So, much of the COE wisdom goes unheard since older people who've seen and been awakened by real reality cannot speak the truth about it.

So, we have young people weaned and bred on PC entering institutions and dictating policy. As for older people who've been-there-done-that and seen real reality, they must conform to naive PC because any deviation gets an older person Watsonned. So much COE wisdom has been lost and suppressed as a result.

Truth said...

"Again, an honest question: Does making such an abrupt about-face, in the span of just four short hours, not cause you any qualms at all?

Not any unease?

Not any tinge of embarrassment?"

Not unless you have something else, Andrew Breitbart. I don't waste my time in senseless (and highly biased) projection. I know women who have given up their careers to raise kids...I know engineers who have given up the field to do other things. Come up with more than pixel masturbation, please?

Truth said...

Merry Christmas to all of Steve's Family, and a colorful and vibrant new year...

http://www.youtube.com/watch?v=fh8hB1tAip8&feature=related

Londoner said...

Merry Christmas, sorry, Happy Holidays to Steve and all iStevers.

Anonymous said...

More than likely the Hispanic and Black profiles indicated less cash savings, less retirement savings, more unsecured debt (both in credit cards and car loans), and more credit mistakes, e.g., late payments etc.

Or perhaps, in the case of some Hispanic borrowers, lack of legal residency status.

I wonder if the DOJ factored that particular demographic detail into their comparisons against 'similar' credit profiles. Seeing as how the most recent census refused to even inquire about it, I'm rather doubtful.

NOTA said...

There are nonprofits in the DC area that provide free financial education to hispanics in Spanish--the local Spanish language radio has call-in shows with some of the volunteers from time to time. And I've heard people talking on the radio about nonprofits offering the same thing for blacks. Both these are likely to help, but they're not the same as having personal experience or family members with experience dealing with this stuff, and they obviously can't substitute for native intelligence or lifelong familiarity with the US legal system.

A little Googling finds many references to people offering help for blacks trying to become financially literate,

One painful irony here is that the Malcolm Gladwell/Eric Holder PC explanation for what happened mostly assumes away lack of sophistication or knowledge or cleverness as a reason for minorities to get disproportionately screwed over in business transactions where screwing over the customer can pay off for the real estate agent or mortgage broker or car salesman or whatever else. To the extent those things explain the problem better than racial prejudice, that means the PC explanation prevents you from addressing the real problem.

At a larger scale, the whole inabiltiy to honestly talk about differences in intelligence means we don't have mainstream discussions about what to do to keep the left tail of the bell curve from getting screwed over by slick salesmen or clever MBAs with spreadsheets or slick military recruiters or whatever other bunch of con artists see dumb people as a potential source of ready cash or other advantage.

Anonymous said...

On the OT discussion of Mrs Obama giving up her license when she did, it's hard to say that's not a little strange. The money to go to law school, the three years of hard work, studying for and taking the bar...and four years later it's not worth $289/year to stay active? It could have been a way for her to cement the decision to leave big law and not get big law offers: I've given up law; I am no longer an attorney. Maybe. It could also be that in whatever line of work she was doing she didn't want to be shackled by the ethics rules attorneys are obliged to follow. Attorneys for instance can't call up a represented person directly to try to work out a settlement, they have to go through the other attorney. They can't participate in sting operations because that involves lying. Attorneys have a bad rap, rightly so, but no other license carries as many restrictions on doing business. I'm not saying the reason was nefarious, but $289/year it was not.

RKU said...

NOTA: At a larger scale, the whole inabiltiy to honestly talk about...what to do to keep the left tail of the bell curve from getting screwed over by slick salesmen or clever MBAs with spreadsheets or slick military recruiters or whatever other bunch of con artists see dumb people as a potential source of ready cash or other advantage.

Well, I think one central difficulty with today's American socio-politico-economic system is that the personal livelihood of a pretty sizable fraction of America's most influential elites largely depends upon "screwing over" a good portion of the general population, and not just the "left tail of the bell curve." After all, I think that the vast majority of the national wealth lost (or rather "transferred") during the Tech Bubble, the Housing Bubble, and lots of other sordid events of the last decade came from the *right* side of the Bell Curve, simply because the left side of the Bell Curve tends not to have enough wealth to weigh much on the scales, at least in absolute terms. Does anybody seriously believe that the bulk of the wealth lost during the Housing Bubble came from drug addicts, welfare recipients, illegal immigrants, or even the working-class and working-poor in general?

Here's another example. I'd guess that despite a few hyped horror stories here and there, the overwhelming majority of college students who've been taking out all those massive (and unpayable/undischargable) student loans come from the right side of the Bell Curve, if sometimes only just barely.

This is very different from the situation a few decades ago, when the vast majority of America's wealthy elite seemed to have ultimately gotten their fortunes from innovation and production rather than obvious parasitism. At some point, the over-parasitized host eventually just collapses in a heap.

Reg C├Žsar said...

"If a Nancy Reagan or a Laura Bush or a Lynne Cheney had had to surrender a law license, the NYT alone would have printed several hundred thousand [maybe even a million or more] words about it." --anonymous

Truth said:
And rightfully so, seeing as none of them attended law school.
12/23/11 5:43 PM

Abraham Lincoln said...
12/23/11 7:53 PM


I love how Truth's statement is immediately followed by Abraham "I studied with nobody" Lincoln's.

Abe didn't attend law school, either... nor college nor high school nor grade school. Which makes his law license even more suspect than those of Nancy, Laura and Lynne.

Anonymous said...

"The money to go to law school, the three years of hard work, studying for and taking the bar...and four years later it's not worth $289/year to stay active?"

Hi, sunk cost fallacy! Nice to see you!

I fail to see why throwing $289 a year and doing CLE credits for nothing is trivial. Then again, I'm a lawyer, so I know more than you do.

Might wanna sit this one out, champ.

Carol said...

The money to go to law school, the three years of hard work, studying for and taking the bar..

Look, plenty of lawyers go inactive when they find something better to do that doesn't require a law license. Like lobbying, or consulting, or investment banking.

Just notify the Bar, and the dues drop to a nominal fee and the very annoying CLE requirement goes away. And you can go active again any time.

Been dreaming of going inactive myself for years, but I need the license for my job.

Anonymous said...

Carole said:

Look, plenty of lawyers go inactive when they find something better to do that doesn't require a law license. Like lobbying, or consulting, or investment banking.

Just notify the Bar, and the dues drop to a nominal fee and the very annoying CLE requirement goes away. And you can go active again any time.


However, Abe claimed that there were no CLE requirements in Illinois until 2008, so the only cost until 2008 would seem to have been the very nominal $289.

Now, Abe might be wrong about that but you didn't address any of his mistakes, you just hand waved.

NOTA said...

RKU:

The way it looks to me, the raping of the folks buying houses, many from the left end of the bell curve, was of value to the real estate agents and mortgage brokers who did business with them. That fraud was never going to make huge money, and wasn't going to collapse the financial system by itself. But it supported the much higher-stakes fraudulent enterprise of constructing securities out of bundles of mortgages whose collective performance was being predicted from the last several years' history to price the securities. And those predictions were wrong partly because we'd been in a long house price bubble, and partly, I think, because the mortgages being included in those bundles were more often fraudulent In some way (like stated income loans) and were based on scraping the bottom of the barrel for potential home buyers.

And there's still another level of massive fraud going on now: the mortgage holders doing foreclosures have engaged in widespread document fraud. As with other fraud, nobody important faces any legal consequences for this, and since actually applying the law to the mortgage holders wrt registering mortgages properly would probably bankrupt some very important and politically connected companies, their lawbreaking will never have consequences, either.

I'm not much for populism, but the world would be made enormously better if a whole lot of the people responsible for this stuff were coated in a layer of tar and feathers.

Paul Mendez said...

@Anonymous Smart Lawyer Person:

So glad to hear that you have the "sunk cost" fallacy all figured out.

Too bad you weren't practicing law back in early 1915. You could have advised the Kaiser that just because he lost a whole heap of soldiers in 1914, he didn't really have to continue a war with costs that were already all out of proportion to what he had originally hoped to gain.

Anonymous said...

"Too bad you weren't practicing law back in early 1915. You could have advised the Kaiser that just because he lost a whole heap of soldiers in 1914, he didn't really have to continue a war with costs that were already all out of proportion to what he had originally hoped to gain."

Yes, and that worked AWESOME for him, right?

Are you mentally defective? You just repeated my point for me. Thanks, I guess?!

Creeper.

Anonymous said...

Had I known that the affirmatively qualified attorneys of Anonymous and Truth were on this thread, I would have sat it out. A&T use several brilliant legal tactics here:
1. Truth gives himself credibility by posting as an anonymous (although anon lawyer gives himself away by using Truth's trademark "champ").
2. Anonymous Truth gives himself more credibility by telling us he's a lawyer which should shut us up (although this would have been more effective had he said something in Latin, but of course he would have had to bill us for that).
3. Anonymous Truth Lawyer shares a valuable insight from his profession that incidentally coincides with a Psychology 101 insight. Having established thee existence of the fallacy, he proved that Michelle Obama is immune from it.

Big Bill said...

Isn't Holder going after the ACORN folks who enabled these loans? ACORN gave a one day homeownership class that qualified folks for "ACORN loans"--i.e. liars loans.

ACORN was the enabler. Without ACORN's seal of approval and blessing, poor black folks might have looked elsewhere.

Paul Mendez said...

You just repeated my point for me. Thanks, I guess?!

Maybe I did.

Or -- maybe -- I was simply pointing out that despite your self-noted legal brilliance, you are somewhat clueless when it comes to human nature.

Normal people do not easily ignore sunk costs, especially when said costs were high. A quick perusal of mankind's history, or a few minutes observation in any casino, would teach you that.

It is hard to imagine that the Kaiser would NOT have chosen to double down after the slaughter of 1914. Can you imagine Willy telling the Germans that their million dead and maimed sons, brothers and fathers were a "sunk cost," and he was going to negotiate a peace?

It is also hard to imagine that a financially successful minority woman with a Harvard law degree, surrounded by highly accomplished and powerful people, would balk at paying $289 to keep her license current.

I hope you practice patent law or something else where you don't have to pit your legal genius against us illogical, easily confused, average intelligence folks.

Truth said...

"1. Truth gives himself credibility by posting as an anonymous (although anon lawyer gives himself away by using Truth's trademark "champ")."

Do you really think I'd be that sloppy; Champ?

Technically, my trademark is probably "Sport." Champ is a supplementary belittlement option, kind of like something J.J. Evans started saying later on after he got famous for "Dy-no-Mite!"

Piper said...

This reminds me of the great auto-loan racial discrimination scandal/charade of the last decade. You remember: huge legal settlements and injunctions were obtained against wicked car-finance lenders who had no information at all about any borrower's race yet evilly discriminated against NAM's anyway.

How? Those lenders failed to prevent amoral car salesmen talking NAM car buyers into taking more costly loans so that those same salesmen could earn bigger commissions!

That's right--because NAM's shop around less and/or act less savvy when bullied by car salesmen, remote lending corporations were guilty of racism, no less wicked for being, not merely "unconscious," but actually non-existent.

Worst of all, in some of these cases (including the one against Nissan which set the stage for several others) the "remedy" was that NAM's--and only NAM's-- were to be given the lowest possible rate with no dealer markup on their loans. In other words, the settlement openly imposed actual racial discrimination against whites and asians in order to "compensate" for purely imaginary racism against NAM's.

So as Steve pointed out, addressing the problem of low NAM intelligence/future-time-orientation by accusing sharpies who exploit it of racism doesn't produce good results, and certainly no amount of bogus anti-discrimination prosecution can cure the underlying problems.

Anonymous said...

Steve could greatly improve the readability of his blog comments by implementing threaded replys. As it is, related comments are presented in blog order and you have to sift through a bunch of point-insult-counterpoint-counterinsult stuff which impedes the visibility of gem-like standalone insights. Likewise, it's easier to engage in a coherent discussion with others if all the related previous comments are found linked together.

Dualing comments should be threaded.

RKU said...

Paul Mendez: It is hard to imagine that the Kaiser would NOT have chosen to double down after the slaughter of 1914. Can you imagine Willy telling the Germans that their million dead and maimed sons, brothers and fathers were a "sunk cost," and he was going to negotiate a peace?

Actually, I'm pretty sure that's exactly what happened. Wilhelm and the German government made a couple of major attempts to negotiate a peace to end WWI with no territorial gains or losses on either side, but the Allied leaders repeatedly refused. This was probably because their own losses---i.e. sunk costs---had been considerably greater and also because they'd used the most ridiculous sort of war propaganda to get their populations enormously agitated. I can't remember the exact details, but I'm sure if you hunt around you'll find them pretty easily.

So your "sunk costs" argument probably does apply, but I think you'd gotten the historical facts backward.