Thursday, April 29, 2010

Wednesday, April 28, 2010

Our police are out of control

Wow. This tape sounds like the Soviet Union.

Official: "We don't need any grounds."

Shopper: "Well, that's ridiculous."

Official: "That's the United States. I'm sorry. I don't know what to tell you."

Shopper: "You don't need any grounds for your actions?"

Official: "Absolutely not."

Official: "We catch 3 terrorists a day at this border crossing." (either this guy is full of shit, or we are to believe that they are catching ALL of them)

official: "Stop shaking your head. You're a Canadian citizen?"

Shopper: "what are you going to do? Shoot me?"

Official: "Was that a threat?"

"You're in a lot of trouble. You ever hear of obstruction of justice? ... As soon as you pulled away, that's assault. Do you understand how much trouble you are in right now? You're going to jail."

Fortunately, the Canadian man -- identified only as "qtronman" on YouTube -- had recorded the incident, and he later uploaded the recording, so we know the border agents are lying.

The couple were on their way to a mall in Niagara Falls, in the United States, when they were ordered out of their car by a U.S. border guard -- apparently because they didn't care for the Canadians' impatient tone when they couldn't name the specific stores they'd be visiting.

Throughout the exchange leading to the arrest, the Canadian man comes across as exasperated but cooperative -- not out-of-line for a person dealing with other adults he considers to be acting in an abusive and irrational way. He didn't bow and scrape, though, which may have antagonized the border guards.

The officials, on the other hand, sound provocative, and even as if they're enjoying their use of authority.

I always wondered what it was like to live in a country as it became a dictatorship, always wondered how the people there could be swept up by a Mussolini, a Stalin, a Hitler. Now I know. I don't like where this country is headed. The groundwork is there for a police state- all we need is the dictator to pull it all together.

My Underwater Home

This Wall Street Journal column reads like my own history. I had been single since my divorce from my first wife in 1999. Child support was high, and I didn't have a lot of money, so I rented. That was OK by me, because I was left with little money at the end of the month, and renting fit my bachelor lifestyle just fine.

That was until three events occurred that would shape my financial future far more than I ever knew. The first was that my ex-wife threw our 16 year old son out of the house in 2004. It seems that he was getting more expensive to take care of than the child support was giving her, and at 17 years old, his tax credits would no longer be available to her.

The second factor was that I got engaged, and my new wife to be (and her cat) moved into the house in preparation for the upcoming nuptials. Then, my daughter was thrown out of the ex-wife's house for the same reasons that my son had been tossed out. All of a sudden, there were four people and a cat living in a two bedroom apartment.

It was obvious that we had to get a place to live that would better suit our family. The wife to be and I planned ahead, and decided that a three bedroom home would be good for us now, and then when the kids moved out, would still be small enough to be manageable. I thought about renting, but EVERYONE from financial experts to family told us that buying was the way to go.

We shopped around and found a 1500 square foot house with three bedrooms and two baths on a quarter acre lot for the low asking price of $250K. At the time, the median home in the Orlando metro area was selling for $255K, so we were NOT being greedy, especially considering that we were making a combined $110K a year. We made an offer, and after some back and forth, we settled on a price of $236K. Everyone I knew said that I had gotten a great deal. The following paragraphs are from the article, but it is like the author was at my closing:

Because we were plunking down only 7% or so on the down payment, we were faced with a steep insurance fee. I was naively insulted by this PMI–the idea that we were risky borrowers out of the box. So we opted for a "piggyback" loan, a second loan that would cover the rest of the down payment and allow us to avoid the PMI. We would pay about the same per month, and when our home's value rose, we would refinance and combine the two loans into one. A lot of the people I turned to for advice were recent homebuying colleagues facing similar questions, or longtime owners who were doe-eyed by low interest rates. I don't recall anyone saying "Dude, wait a few years."

We negotiated a bit on the price and closed the deal in May [2007 for about $232,000] at a 6.12% rate. At the time, I didn't know that the second loan was a de facto home-equity line of credit. I knew it would be a higher rate–a little more than [2] percentage points higher. But the loan amount paled in comparison to the main mortgage, so I wasn't overly concerned.

On signing day I thought I was prepared for the blizzard of paperwork. I wasn't. This is apparently a rite of passage not exclusive to any era. There was at least one big reveal: Our piggyback loan was actually a balloon loan. In 15 years, we'd have to pay a big chunk, in the thousands, in full. I was taken aback by this–how could I have missed this detail? I'm not a financial luddite.
 Zillow now estimates my house to be worth about $110K. That may be high, as Zillow estimates that the home 2 doors down is worth $145K, and it just sold for $110K. The tax assessor values it at $99K. That's right- my home is worth about 45% of what I currently owe on it. (If you want to read how that happened, and how the banks profited by it, read this)

To make matters worse, both my wife and I have taken reductions in salary. We are making 14% less now than we were when we bought the house in 2007.

One thing the Fitzgeralds in the article failed to really appreciate is this: I owe $125,000 more on my home than it is worth. In 15 years, I will still be underwater on this home, but I can rent a comparable home for $700 less than my monthly payment is now. Even including the mortgage tax deduction, that comes to $500 a month. In 15 years I will have paid $90,000 more for this home than I would have paid to rent, and I will still be underwater. That is $90,000 more that could be in my retirement fund.

No thanks. My decision has been made.

Maybe they didn't do it after all

The lead FBI investigator can't remember any details about the investigation she was heading up, the tapes that supposedly prove that the Hutaree were planning to kill cops are unclear, and they still haven't figured out if the weapons confiscated were illegal to possess.

It takes over a month to run a serial number to see if it is stolen, measure the barrel length, and see if a gun is full auto? This is starting to look more and more like the Hutaree are being used, as is the rest of the RKBA crowd, as a strawman for the Obama administration's ineptitude.

Edited on 4/29/2010 to add:

The judge doesn't think they did it, either.

Arthur Weiss, a lawyer for Thomas Piatek, 46, of Whiting, Ind., said disgust with the government as recorded by the undercover agent is similar to what's said daily by radio and TV talk-show hosts Rush Limbaugh, Glenn Beck and Sean Hannity.
"Millions of people" are talking about "taking our country back," Weiss said.

Monday, April 26, 2010

My Senator on Health Care Reform

I sent a letter to my Senator (Bill Nelson) asking his where Congress gets the power under the Constitution to require that citizens purchase Health Insurance. Here is his reply:

Dear Mr. Street Pharmacist:

Thank you for contacting me about health care reform. On March 25, I voted to pass the Health Care and Education Reconciliation Act. This legislation made some improvements to the Patient Protection and Affordable Care Act, which passed the Senate last year with my vote. President Obama signed both these pieces of legislation into law.

Under this new law, insurance companies will not be able to discriminate against folks with pre-existing conditions. Those who can't afford insurance will receive tax credits and subsidies to put toward the cost of purchasing a plan. Small businesses with less than 50 employees will not be required to do anything different, but they will have the opportunity to take advantage of tax credits if they choose to offer insurance. The government will invest in training more primary care doctors, paying them better, and making sure they have the opportunity to practice in the parts of the country that need them the most. Seniors in the Medicare Part D doughnut hole--the gap where they are forced to pay 100% of their prescription costs--will receive a rebate this year to help cover those costs, and the doughnut hole will be closed entirely by 2020.

There has also been a lot of misinformation out there about what exactly this new law does, so let's be clear: if you have health insurance now, you can keep it. If you own a business that offers health insurance, you don't have to do anything different. And members of Congress did not exempt themselves from any part of this law. In fact, members of Congress and their staffs are specifically required by this new law to purchase their health insurance through the State-based exchanges beginning in 2014. For a complete summary of the law in plain English, and tools to help you figure out how it will affect you personally, please visit the nonpartisan Kaiser Family Foundation's website at

Again, I appreciate hearing from you on this important issue. Please don't hesitate to contact me in the future.


Senator Bill Nelson

A form letter. It didn't even come close to answering the question.

Sunday, April 25, 2010

Who is John Galt?

I recently sat through a lecture on nutrition, and the speaker attempted to make the case that nutrition and restaurant food are mutually exclusive. I agree. After all, if people complained about a restaurant's food the way they complain about hospital food, the restaurant would soon be out of business for lack of customers.

There are only a few things that bring flavor to food, and those items are: fat, sugar, and salt. All three of them are bad for you to one extent or another. The speaker in this case tried to say that since those restaurants are putting fat, salt, and sugar into food, the government needs to step in and regulate these ingredients and mandate the levels of them. There was something in there about weight gain, health problems, blah, blah.

The speaker was formerly a manager of a restaurant that was a part of a national chain, and he was complaining that the restaurants only want to sell food, and do not care about health and nutrition. He said that as a manager, he was not paid to think about the health concerns of his customers, only sales numbers.

During the question and answer period, I pointed out to the speaker that no one holds a gun to the people who eat in establishments, and overeating is the responsibility of the person stuffing his face, and that making a law to tell me what to eat because others want to lose weight is wrong. He replied, "Not if my taxes are paying for your health care."

The next speaker in the seminar began talking about cardiac problems. He then made a statement that 600,000 pacemakers are inserted per year all over the world, and more than 58% of them are for white males over the age of 60. He tried say that this fact made the health care industry racist, because white males constitute far less than 50% of the world population. He went on to say that this was accomplished by keeping costs high, ensuring that the whites (who obviously cheat their way to the top) are the only one who can receive care.

He used the example that a pacemaker can cost upwards of $50,000 installed, and that a stent (used to open blocked cardiac arteries) cost up to $5,000. He said that laws should be put in place to set prices at a level that people could afford.

I walked out. How can you argue with people who do not understand economics? If you tell me that I must not sell a product for more than a certain price, what will you do if I simply refuse to produce said product?

I feel more and more every day like I am living in an Ayn Rand novel. It would be funny if it weren't so true, except it won't be Reardon metal, it will be some medical breakthrough. Perhaps a drug? Reardonodon? Reardonalanine?

Friday, April 23, 2010

I am tired of my governor kissing Obama's Ass

Governor Christ's office announced today that Obama's programs have saved or created 33,218 jobs in the state of Florida in the first quarter of the year.

That is perplexing to me, since the Agency for Workforce Innovation claims that in March of 2010, Florida saw 12.3% unemployment, which is the highest it has been since 1970. 1.1 million out of Florida's 9.2 million workers are out of work. Florida’s total nonagricultural employment in March is 7.1 million, down 4,000 jobs from the previous month and down 149,600 jobs from a year ago.

Tuesday, April 20, 2010

More signs that our country is living the movies

In this case, it is Demolition Man.

John Sparton:"Do you have the salt over there, Bob?"
Lenina Huxley:"Salt is not good for you, hence, it is illegal"

That's right, the Federal Government now says that the U.S. Food and Drug Administration should regulate the amount of salt that can be added to foods to help Americans eat less sodium.

Because Americans get most of their sodium from processed and restaurant foods, it is not enough to simply tell them to eat less salt and regulation of the food industry is needed, the Institute of Medicine said.

The FDA is already putting together measures to do this, the Washington Post reported.

See, now that the Government controls your health care, they control your life. You that voted for Obama... Are you ready to admit yet that it was a bad idea? Or are you such a fanboy that you can't admit that he is a tool?

Articles of Confederation, 6 through 8

We are continuing our examination of the Articles of Confederation. We began our examination with the theory of natural rights, and then followed it with a post on the Preamble and First Five Articles. The next two posts will examine the next four articles, VI through IX (six through nine for those of you ignorant of Roman Numerals) which deal with relations with other nations, including war and defense. As in the past, Articles in black, my comments in blue:

Article VI No State, without the consent of the United States in Congress assembled, shall send any embassy to, or receive any embassy from, or enter into any conference, agreement, alliance or treaty with any King, Prince or State; nor shall any person holding any office of profit or trust under the United States, or any of them, accept any present, emolument, office or title of any kind whatever from any King, Prince or foreign State; nor shall the United States in Congress assembled, or any of them, grant any title of nobility.
No two or more States shall enter into any treaty, confederation or alliance whatever between them, without the consent of the United States in Congress assembled, specifying accurately the purposes for which the same is to be entered into, and how long it shall continue.

No State shall lay any imposts or duties, which may interfere with any stipulations in treaties, entered into by the United States in Congress assembled, with any King, Prince or State, in pursuance of any treaties already proposed by Congress, to the courts of France and Spain.

No titles of nobility, and all negotiations and treaties must go through the Confederate Government.

No vessel of war shall be kept up in time of peace by any State, except such number only, as shall be deemed necessary by the United States in Congress assembled, for the defense of such State, or its trade; nor shall any body of forces be kept up by any State in time of peace, except such number only, as in the judgement of the United States in Congress assembled, shall be deemed requisite to garrison the forts necessary for the defense of such State; but every State shall always keep up a well-regulated and disciplined militia, sufficiently armed and accoutered, and shall provide and constantly have ready for use, in public stores, a due number of field pieces and tents, and a proper quantity of arms, ammunition and camp equipage.

No states can maintain a military without going through Congress, except the militia, for which the arms will be kept in storage. Note here that there is no mention of the people keeping and bearing arms, that the state is required to keep the arms.

No State shall engage in any war without the consent of the United States in Congress assembled, unless such State be actually invaded by enemies, or shall have received certain advice of a resolution being formed by some nation of Indians to invade such State, and the danger is so imminent as not to admit of a delay till the United States in Congress assembled can be consulted; nor shall any State grant commissions to any ships or vessels of war, nor letters of marque or reprisal, except it be after a declaration of war by the United States in Congress assembled, and then only against the Kingdom or State and the subjects thereof, against which war has been so declared, and under such regulations as shall be established by the United States in Congress assembled, unless such State be infested by pirates, in which case vessels of war may be fitted out for that occasion, and kept so long as the danger shall continue, or until the United States in Congress assembled shall determine otherwise.

No State can make war, or prepare for war, without running it through Congress first, except in the case of pirates.

Article VII.
When land forces are raised by any State for the common defense, all officers of or under the rank of colonel, shall be appointed by the legislature of each State respectively, by whom such forces shall be raised, or in such manner as such State shall direct, and all vacancies shall be filled up by the State which first made the appointment.

Not much to comment on here.

Article VIII. All charges of war, and all other expenses that shall be incurred for the common defense or general welfare, and allowed by the United States in Congress assembled, shall be defrayed out of a common treasury, which shall be supplied by the several States in proportion to the value of all land within each State, granted or surveyed for any person, as such land and the buildings and improvements thereon shall be estimated according to such mode as the United States in Congress assembled, shall from time to time direct and appoint.
The taxes for paying that proportion shall be laid and levied by the authority and direction of the legislatures of the several States within the time agreed upon by the United States in Congress assembled.

This is why the large states were upset that they got the same vote as a smaller state, but had to pay more taxes.

Article 9 is the longest, and will be getting its own post. See ya there! 

Monday, April 19, 2010

The Articles of Confederation, the preamble and first 5.

Having already described the concept of Natural Rights, we now continue our study of the meaning of the constitution. The "Articles of Confederation" were the precursors of our Constitution, and I think that no study of the Constitution can be made without reading and understanding them. What I want to do is discuss the Articles, and then move on the problems and arguments that resulted, which should give us a good idea of where our founding documents came from. We will begine:

The Articles of Confederation were referred to as "The Articles of Confederation and Perpetual Union" and was the basis for the Union of the States. They were written by the Second Continental Congress and the draft was sent to the States for ratification in November of 1777. The ratification process was completed in March 1781, legally federating the sovereign and independent states, already cooperating through the Continental Congress, into a new federation called the "The United States of America."

They were a series of 13 Articles along with a preable, and I will touch on the big ones here (my comments in blue, the actual text of the article in black):

Preamble: Listed the States that were a part of the Union, which were the Thirteen Colonies: New Hampshire, Massachusetts bay, Rhode Island and Providence Plantations, Connecticut, New York, New Jersey, Pennsylvania, Delaware, Maryland, Virginia, North Carolina, South Carolina and Georgia.

Article I: Stated that the Confederacy would be called "The United States of America"

Article II: This one is important to understanding the mindset of the people who wrote our Constitution. The article states:
Each state retains its sovereignty, freedom, and independence, and every power, jurisdiction, and right, which is not by this Confederation expressly delegated to the United States, in Congress assembled.

Article III: This article states the purpose of the confederation:
The said States hereby severally enter into a firm league of friendship with each other, for their common defense, the security of their liberties, and their mutual and general welfare, binding themselves to assist each other, against all force offered to, or attacks made upon them, or any of them, on account of religion, sovereignty, trade, or any other pretense whatever.

Article IV: This article is long, so I am going to parse this one, so that it can be studied phrase by phrase:
The better to secure and perpetuate mutual friendship and intercourse among the people of the different States in this Union, the free inhabitants of each of these States, paupers, vagabonds, and fugitives from justice excepted, shall be entitled to all privileges and immunities of free citizens in the several States;
Doesn't this sound familiar? Except for paupers, vagabonds, and fugitives from justice, all inhabitants are entitled to all the privileges and immunities of one state have all the same privileges as citizens in another.

and the people of each State shall have free ingress and regress to and from any other State, and shall enjoy therein all the privileges of trade and commerce, subject to the same duties, impositions, and restrictions as the inhabitants thereof respectively, provided that such restrictions shall not extend so far as to prevent the removal of property imported into any State, to any other State, of which the owner is an inhabitant; provided also that no imposition, duties or restriction shall be laid by any State, on the property of the United States, or either of them.
The people of each State would be permitted to travel freely and trade freely between States under the same conditions as the residents of the State in which the commerce was taking place.  This was to prevent protectionism or import duties between States.

If any person guilty of, or charged with, treason, felony, or other high misdemeanor in any State, shall flee from justice, and be found in any of the United States, he shall, upon demand of the Governor or executive power of the State from which he fled, be delivered up and removed to the State having jurisdiction of his offense.
This is the extradition clause, to prevent a criminal from running between States to avoid prosecution.

Full faith and credit shall be given in each of these States to the records, acts, and judicial proceedings of the courts and magistrates of every other State.
The "Full Faith and Credit" Clause.

Article V:
For the most convenient management of the general interests of the United States, delegates shall be annually appointed in such manner as the legislatures of each State shall direct, to meet in Congress on the first Monday in November, in every year, with a power reserved to each State to recall its delegates, or any of them, at any time within the year, and to send others in their stead for the remainder of the year.
 Notice that there is no requirement for HOW the Delegates were to be picked. It could have been by vote, by heredity, or drawing names out of a hat. I think this is important, as it appears like each State in the Confederacy was intentionally staying out of the internal affairs of the others.

No State shall be represented in Congress by less than two, nor more than seven members; and no person shall be capable of being a delegate for more than three years in any term of six years; nor shall any person, being a delegate, be capable of holding any office under the United States, for which he, or another for his benefit, receives any salary, fees or emolument of any kind.
Ahh, yes. Term limits and conflicts of interest were being avoided with this one. (IMO, we should still be doing this.)

Each State shall maintain its own delegates in a meeting of the States, and while they act as members of the committee of the States.
In determining questions in the United States in Congress assembled, each State shall have one vote.

This was a problem that was later fixed by the Constitution. A large State would contribute and risk more, but still only get one vote, but granting more votes to larger states would allow large States to dictate to smaller ones.

Freedom of speech and debate in Congress shall not be impeached or questioned in any court or place out of Congress, and the members of Congress shall be protected in their persons from arrests or imprisonments, during the time of their going to and from, and attendance on Congress, except for treason, felony, or breach of the peace.

Another way to prevent shenanigans- a Delegate could not be prosecuted for doing his job. This prevents one state from avenging a vote that they were unhappy with, or interfering with a delegate to keep him from appearing in Congress to vote.

The first 5 articles dealt with the way the Confederacy would be set up and administered. The next post will deal with the next 4 articles, which dealt with external relations.

Saturday, April 17, 2010

The Broken window

The parable of the Broken Window was first expressed by the great French economist, Frederic Bastiat. Bastiat used the parable of a broken window to point out why destruction doesn't benefit the economy. The story goes like this:

A young hoodlum, heaves a brick through the window of a baker’s shop. The shopkeeper runs out furiously, looking for the miscreant, but the boy is gone. A crowd gathers, and begins to stare with quiet satisfaction at the gaping hole in the window and the shattered glass over the bread and pies. After a while the crowd feels the need for philosophic reflection. Several of its members are almost certain to remind each other or the baker that, after all, the misfortune has its bright side: It will make business for some glazier. As they begin to think of this they elaborate upon it: How much does a new plate glass window cost? Two hundred dollars? That will be quite a sum. Then, of course, the thing is endless. The glazier will have $200 more to spend with other merchants, and these in turn will have $200 more to spend with still other merchants, and so ad infinitum. The smashed window will go on providing money and employment in ever-widening circles. The logical conclusion from all this would be, if the crowd drew it, that the little hoodlum who threw the brick, far from being a public menace, was a public benefactor. After all, if windows were never broken, then the glaziers would soon be out of business.

The fallacy of the onlookers' argument is that they considered only the benefits of purchasing a new window, but they ignored the cost to the shopkeeper. As the shopkeeper was forced to spend his money on a new window, he could not spend it on something else. For example, the shopkeeper might have preferred to spend the money on bread and shoes for himself (thus enriching the baker and cobbler), but now cannot because he must fix his window.

Thus, the child did not bring any net benefit to the town. Instead, he made the town poorer by at least the value of one window, if not more. His actions benefited the glazier, but at the expense not only of the shopkeeper, but the baker or the cobbler as well. Moreover, the benefit to the glazier is relatively small, because most of what he charges is to compensate him for his tedious and strenuous labor, as well as the materials he uses.

The same thing happens here when we pas a law mandating that everyone gets free health care, or in the case of ObamaCare, that everyone is forced to purchase health insurance. People rejoice because they are getting "free" somethings, without reflecting that the net cost to society is high.

Suppose it was discovered that the little boy was actually hired by the glazier, and paid a franc for every window he broke. Suddenly the same act would be regarded as theft: the glazier was breaking windows in order to force people to hire his services. Yet the facts observed by the onlookers remain true: the glazier benefits from the business at the expense of the baker, the cobbler, and so on. Bastiat argues that people actually do endorse activities which are morally equivalent to the glazier hiring a boy to break windows for him (specifically the burning of Paris):

Whence we arrive at this unexpected conclusion: "Society loses the value of things which are uselessly destroyed;" and we must assent to a maxim which will make the hair of protectionists stand on end—To break, to spoil, to waste, is not to encourage national labour; or, more briefly, "destruction is not profit."

You reflect on how much trade would gain by the burning of Paris, from the number of houses it would be necessary to rebuild?

I have spent the last few weeks posting on how certain members of the financial industry profited through the buying off of politicians on both sides of the aisle, getting those politicians to change the rules of the game so those particular members profited immensely, and then getting out of the game before the now gamed system fell apart.

We see a repeat of history as the health care and health insurance industry game the system to their own benefit, and use the government to do it.

Subsidizing health insurance with taxes upon the rich, many will say, is justified because the rich can well afford the extra taxes. They ignore the fact that the rich do not simply roll around on top of large piles of money. What happens is that the things and services that the rich man would have bought will go unpurchased. The employees who produced the things that the rich man used to purchase (before the tax) will be laid off as demand drops.

You cannot make an economy grow by taking money from one sector and giving it to another, just as you cannot stand inside of a bucket and lift yourself off the ground by frantically tugging on the handle.

March jobs

The labor department reported that payrolls increased in March because there were 162,000 jobs added, and they claim that this is the best showing in three years, thus proving that the economy is improving. I believe that is a misleading report. The government hired 48,000 of those people for the census, and those jobs all end at the end of July. Expect unemployment to climb in August.

This article claims that private industry added 123,000 jobs. All of this is propaganda. (BTW 123K plus 48K is NOT 162K. Just sayin). There were actually 114,000 jobs added. What is funny is that Obama takes credit for adding the jobs created by a Census that was mandated in the Constitution, written nearly 200 years before he was born.

Unemployment is remaining steady, mostly because people's unemployment extensions are running out, and there are still no jobs out there. There are 6.5 million people who have been out of work for 6 months or longer. Even if you take the jobs report for March seriously, it will take us over 5 years at March's rate for us to hire those 6.5 million people and be back to a "normal" employment rate.

This all reminds me of Bagdad Bob. You guys remember him?

Friday, April 16, 2010

Political and legal roots of the foreclosure mess and the recession

I have recently been on a kick of looking at the mortgage foreclosure crisis that started the whole recession going. Part 1, Part 2, and Part 3, looked at securitization, and Part 4 looked at the strategic default. I also wrote a post here about the greed of originators who loaned money to people that they knew couldn't pay, knowing that the loan would be sold off to investors long before the first payment was due, thus removing all incentive for originators to make sure people could actually pay the loans back.

This post will look at why the process was so profitable, or to be more accurate, why did this happen so recently, and what changed that made it happen. The Republicans would have you believe that the Democrats are to blame, claiming that banks were required by the Clinton administration to loan to minorities. The truth is far more sinister.

The blame has its roots in the Great Depression, and the banking act of 1933, most commonly called the Glass-Steagall Act. The act separated the Commercial Banking and Investment worlds. At the time, "improper banking activity", or what was considered overzealous commercial bank involvement in stock market investment, was deemed the main culprit of the financial crash. According to that reasoning, commercial banks took on too much risk with depositors' money.

Commercial banks were accused of being too speculative in the pre-Depression era, not only because they were investing their assets, but also because they were buying new issues for resale to the public. Thus, banks became greedy, taking on huge risks in the hope of even bigger rewards. Banking itself became sloppy and objectives became blurred. Unsound loans were issued to companies in which the bank had invested, and clients would be encouraged to invest in those same stocks.

The Glass-Steagall Act prevented the banks from making these risky investments, and prevented another crash caused by greed and sloppy lending practices. At least until the Gramm Leach Bliley Act came along in 1999. This law relaxed the regulation and interinvestment restrictions between the Banking, Insurance, and Securities Companies, allowing loans to be converted into securities and sold to investors.

The bill was introduced by Phil Gram (R-Texas),  Jim Leach (R-Iowa), and Thomas Bliley (R-Virginia). The bill passed with Yea votes coming from both parties- 90 to 7 with 2 abstentions in the Senate, and 362 to 57 with 15 abstentions in the House. This was a true bipartisan effort. It was signed into law by President Clinton in November of 1999.

This law allowed mergers of companies like Citi Bank (Banking) and Travellers Group (Insurance) to form Citi Group ( a failed company that needed bailout), with brands like Smith Barney, Travelers, Citibank, and Primerica. 

The year before (1998) sub-prime loans were just 5% of all mortgage lending, but by the time of the mortgage crisis in 2008, the number of sub prime mortgages was near 30%.

According to the Congressional record, top Citigroup officials were allowed to review and approve drafts of the legislation before it was formally introduced. After resigning as Clinton's Treasury Secretary and while secretly in negotiations to head Citigroup, Robert Rubin helped broker the final deal to pass the bill, and he later became one of three CEOs that headed up CitiCorp, and also served as Citigroup's chairman until 2007. Robert Rubin received over $17,000,000 in compensation from Citigroup and a further $33,000,000 in stock options as of 2008. Rupin also was a part of the Enron scandal, but wascleared of all charges that he used influence with the Treasury to keep Enron's status from being downgraded so Citi would not lose money.

So there you have it- both parties sold us down the river.

Wednesday, April 14, 2010

Race and Political movements

In keeping with the theme for today's posts, I am going to talk in this post about the allegations that the TEA party is racist because it is predominantly made up of whites. As a disclosure, I am not a TEA party member, I have not attended even ONE TEA party rally or event, and I agree with most, but not all, of what they have had to say. With that out of the way:

The Tea party has been accused lately of being a racist organization, because the majority of those in the TEA party events have been white. Actually, an organization based in the United States that is a true random sampling of the American public SHOULD be mostly white.

According to the Census Bureau, the United States has a population that is 75% white, 15% Hispanic (of any race), 12% Black, 4% Asian, and 9% other. (The preceding numbers are more than 100% because Hispanics can be white or black, or any other race for that matter). Follow the math here: For a population of 304 million, That is a mean of 43 million and a standard deviation of 82 million. To keep it simple, we will assume that there is a TEA party rally of 304 people. We will see if the TEA party is truly independent of race. 

In a normal distribution with a truly random selection, there is a 99% chance that a TEA party rally with 304 attendees would have between 221 and 235 whites in attendance, and would have between 69 and 84 non whites. Now keep in mind that we are not talking about hispanics here, as hispanic is not a race, but an ethnicity. There is a 99% chance that there will be between 23 and 57 hispanics there of all races.

I knew that Statistics class would come in handy one day. My second disclaimer: I only got a B in that class.

So our theoretical TEA party rally, if we took a random picture of it, the people in that picture should be 72.4% to 77.4% white 99% of the time. The same is true of ANY random selection of people in the US. Anything outside of that tells you that there is probably some sort of non-random selection going on. That would either be a non-random process of selecting people to be at the rally, or a non-random process in framing the picture that was taken.

Race and Crime

A nightclub was the site of a shooting involving a fully automatic MAC-10 on April 11th. You would think that this had happened in the United States, after all the rest of the world and Hollywood would have you believe that there are shootings involving machine guns on every corner almost daily.

Instead, the shooting happened in London, which as you all know is located in the country formally known as Great Britain. (perhaps like Prince, they could change the name to an unpronounceable symbol?) Less surprising is that it involved people that are part of the rapper culture, which brings us to the point of this post.

According to the New Century Foundation's 2005 report, The Color of Crime, blacks are seven times more likely to commit murder, eight times more likely to commit robbery, and when they do commit a crime of violence are three times more likely to use a gun, and twice as likely to use a knife, than any other race. Read on for more statistics:

  • Of the nearly 770,000 violent interracial crimes committed every year involving blacks and whites, blacks commit 85 percent and whites commit 15 percent.
  • Blacks commit more violent crime against whites than against blacks. Forty-five percent of their victims are white, 43 percent are black, and 10 percent are Hispanic. When whites commit violent crime, only three percent of their victims are black.
  • Blacks are an estimated 39 times more likely to commit a violent crime against a white than vice versa, and 136 times more likely to commit robbery.
  • Blacks are 2.25 times more likely to commit officially-designated hate crimes against whites than vice versa.
According to the Black on Black crime coalition, blacks comprise nearly 14% percent of the U.S. population, but are 43% of the murder victims, and 93% of their murderers were other blacks. I would guess, and this is my opinion here, that the majority of killers and victims in those cases were gang members.

The CDC reports that the leading cause of death among black men age 15-24, age 25-34, and age 35 to 44 is homicide. 20% of all black women who die between the age of 15 and 24 are murdered, and 92% of the time, it is another black person who did it. Isn't it time for use to put a stop to this?

This is not a "pro-white" racial thing, as asians were found to commit crimes at one quarter the rates of any other race. It is a CULTURAL THING. In other words, I don't think this is because whites are any better than blacks or hispanics, and I don't think this is because of some genetic superiority. I think the problem here is the culture that I mentioned earlier- the thug rapper culture. Not the songs themselves, mind you, but the whole attitude of the music. Calling women whores, bragging about murder, stealing, drug dealing, and "gang banging." The music is merely just another symptom of the real problem:

Among men, blacks (28.5%) are about six times more likely than whites (4.4%) to be admitted to prison during their life. Among women, 3.6% of blacks and 0.5% of whites will enter prison at least once. (U.S. Department of Justice) Based on current rates of incarceration, an estimated 7.9% of black males
compared to 0.7% of white males will enter Federal prison by the time they are age 20 and 21.4% of black males versus 1.4% of white males will be incarcerated by age 30. (U.S. Department of Justice)
More black men are in prison in America than are in college. (The Black and White of Justice, Freedom Magazine, Volume 128) 

18.5% of all births nationwide are to unwed teen mothers, and two thirds of those are to black and hispanic women. Of teen births in 1999 to girls aged 10-14, 59% were to black teens, 30% were to Hispanic teens, and 11% were to white teens.

When a black man is successful, they call him "Oreo," or "Carlton" (after a character of the TV show "Fresh Prince"), or they call him a sellout. I have heard successful hispanics called "Potato"- brown on the outside, white on the inside. This culture that promotes drugs, violence, poverty, and punishes success is the real problem here. Bill Cosby said pretty much what I am saying right now, and was blasted for it. Bill Cosby had this to say:

We, as black folks have to do a better job. Someone working at Wal- Mart with seven kids ... you are hurting us.

The black community responded with:
We've been letting this fool talk CRAZY now for a couple of years now. But it might be time to stick this FOOLISH OLD BIRD in a home.

How is he gonna try and talk slick about working mothers. It shouldn't matter if a woman has one kid, seven kids, or WHATEVER ... If a woman is going out and working and trying to better herself and her children's lives, that's nothing to be embarrassed about.
Ignoring the point Mr Cosby was trying to make- having 7 kids on a Wal-Mart salary guarantees that they will grow up in poverty, and join the failing modern rap culture.

Look, there is nothing that makes a white better than a black. What the problem here is that too many are content to accept handouts. It is acceptable in this culture to get pregnant at an early age, for the father to split, to do drugs, and join gangs. Until we can have an adult conversation about the real problem, and can work on a solution, the problem will continue.

Too many are willing to simply say that the black man is being discriminated against, because it is easier to blame others than it is to fix yourself.

Tuesday, April 13, 2010

Caption contest

How about: "Bad Canadian! Bad! Bad! Don't you know who I am? I am THE ONE."
"Hey, smell my finger and guess what I just got done doing to America."

or find your own- post it here

Our situation summed up in one story

I am writing this post because I feel the need to show something to a Blogger friend. This post is for TOTWTYTR, who recently posted a comment to this blog:

Maybe I'm just drinking the conservative Kool Aid, but a close friend of mine who makes money from the financial industry, but not mortgages, explained it all to me. In addition I read up on it.

It started during the Carter Administration, but has gotten worse with each one since. Not only were banks and mortgage companies told that the government would make good on their losses, people like the excrable Barney Frank and Chris Dodd told the lending institutions they'd be labeled as racist if they didn't lend money to minorities who almost certainly couldn't pay it back.

As I said, there is plenty of blame to go around, but it's the politicians, not the banks that deserve the most blame.

Now this post is not a flame, I am just hoping that I can convince those of you who feel the same way that you are being deceived. Here is my proof:

This home right here, a 576 square foot home with 2 bedrooms and one bath, was used as collateral for a $103,000 loan, according to the Wall Street Journal. Less than two years ago, Integrity Funding LLC gave a $103,000 mortgage to the owner, Marvene Halterman, an unemployed woman with a long list of creditors and, by her own account, a long history of drug and alcohol abuse. At one time, Ms. Halterman says, 23 people were living in the tiny house or various ramshackle outbuildings. Ms. Halterman hasn't had a job for about 13 years, she says. She receives about $3,000 a month from welfare programs, food stamps and disability payments related to a back injury.

Now the Republican talking point states that the banks are not to blame, because they were FORCED to loan to minorities by the Democrats. Here is a picture of Ms. Halterman:

Oops. Not a minority. The motive here was not complying with some rule about minority lending, it was about money. The lending company was owned by Barry Rybicki, 37, a former loan officer who started it in 2003. Of the boom years, he says: "If you had a pulse, you were getting a loan."

When an Integrity telemarketer called Ms. Halterman in 2006, she was cash-strapped, owing $36,605 on a home-equity loan. The firm helped her get a $75,500 credit line from another lender.
Ms. Halterman used it to pay off her pickup, among other things. But soon she was struggling again.
In early 2007, she asked Integrity for help, Mr. Rybicki's records show. This time, Integrity itself provided a $103,000, 30-year mortgage. It had an adjustable rate that started at 9.25% and was capped at 15.25%, according to loan documents.
It was one of 197 loans Integrity originated in 2007, totaling almost $47 million.

At closing, on Feb. 26, 2007, Integrity collected $6,153 in underwriting, broker, loan-origination, document, application, processing, funding and flood-certification fees, mortgage documents show. A few days later, Integrity transferred the loan to Wells Fargo, earning $3,090 more, Mr. Rybicki says.

Now picture this, Integrity made a $103,000 loan, and collected $9,243 in fees, and only loaned the money to her for a few days, selling the loan before the first payment was even due. That is exactly what I said was going on, in my series of posts on the lending crisis. The payments on this loan were $881 a month, for a woman who only had an income of $3,000 a month in disability, welfare, and food stamp payments and had not held a job in over 13 years.

The home was valued at $132,000 by the appraiser, even though there is no record of similar homes in the area selling for that price. What makes this case so typical of all this subprime garbage are all the fees that were made by people who had no stake in it: The appraiser made money, then Integrity made money, and Wells Fargo made more when it was sold to HSBC, which also took a cut before dumping it on investors in mortgage backed securities that were inexplicably rated AAA by rating agencies that were somewhere between crooked and incompetent.

Actually, the piece perfectly illustrates the greedy, deceitful practices that has since brought our economy to its knees. It's a great piece of reporting.

Sure, it is easy to lay all of this at the feet  of the borrower, but you would be dishonest in not pointing a few fingers at the lenders who should have known better, but were instead blinded by greed and profit. Three different lenders loaned her money on the "equity" of this nearly worthless home: The first for $36,000, then one for $75,500 to pay off the first, and then another for $103,000 to pay off the second. Each time, she got money at closing, and the lender passed the loan off on investors.

Read the linked article and realize one thing: Just because the Democrats are your enemy does not make the Republicans your friends, and just because the Democrats are lying does not mean that the Republicans are telling the truth.

Monday, April 12, 2010

Natural Rights

To understand our Constitution, a person must understand the theory of "Natural Rights."  Natural rights are the rights that all humans possess merely by being born. This theory began with European philosophers in the 17th and 18th centuries, men like Thomas Hobbes, John Locke, and Thomas Paine.

These men believed that denying a person his natural rights would be absurd, like expecting a carnivore to give up meat. In his natural state, according to Hobbes, man's life consists entirely of liberties and not at all of laws - "It followeth, that in such a condition, every man has the right to every thing; even to one another's body. And therefore, as long as this natural Right of every man to every thing endureth, there can be no security to any man... of living out the time, which Nature ordinarily allow men to live."

This would lead inevitably to a situation known as the "war of all against all", in which human beings kill, steal and enslave others in order to stay alive, due to their natural lust for "Gain", "Safety" and "Reputation". Hobbes reasoned that this world of chaos created by unlimited rights was highly undesirable, since it would cause human life to be "solitary, poor, nasty, brutish, and short". As such, if humans wish to live peacefully they must give up some of their natural rights and create moral obligations in order to establish political and civil society. This is one of the earliest formulations of the theory of government known as the social contract.

Like Hobbes, Locke was a major social contract thinker. He said that man's natural rights are life, liberty, and property. He greatly influenced the American Revolutionary War with his writings of natural rights.
According to Locke there are three natural rights:
  • Life- everyone is entitled to live once they are created.
  • Liberty- everyone is entitled to do anything they want to so long as it doesn't conflict with the first right.
  • Estate- everyone is entitled to own all they create or gain through gift or trade so long as it doesn't conflict with the first two rights.
According to Locke, the social contract is a contract between a being or beings of power and their people or followers. The King makes the laws to protect the 3 natural rights. The people may not agree on the laws, but they have to follow them. The people can be prosecuted and/or killed if they break these laws. If the King does not follow these rules, he can be overthrown.

Thomas Paine (1731–1809) further elaborated on natural rights in his influential work Rights of Man (1791), emphasizing that rights cannot be granted by any charter because this would legally imply they can also be revoked and under such circumstances they would be reduced to privileges:

It is a perversion of terms to say that a charter gives rights. It operates by a contrary effect — that of taking rights away. Rights are inherently in all the inhabitants; but charters, by annulling those rights, in the majority, leave the right, by exclusion, in the hands of a few. ... They...consequently are instruments of injustice.

The fact therefore must be that the individuals themselves, each in his own personal and sovereign right, entered into a contract with each other to produce a government: and this is the only mode in which governments have a right to arise, and the only principle on which they have a right to exist.

It is for these reasons that our Constitution was built upon the "Natural Rights" theory.
  • Men are endowed by certain rights by their creator.
  • Men constitute governments in order that they may protect those rights from others.
  • That they grant powers to that government so that it may function.
Governments cannot grant rights, they can only deny rights and liberties from one group, while allowing others to retain them. In a future post, I will examine some of how this works, and why certain things cannot be rights under this theory.

Sunday, April 11, 2010

You get what you pay for

Recently, a person came to this blog via a post by TOTWTYTR. The post s from December where 2 EMTs were accused of refusing to help a dying pregnant woman because they were on a break. People are screaming for them to be fired. I would have just placed a comment on the post itself, but it was an old post, and my comments are likely to be a little long.

In the current environment, there is a lot of talk about budget cuts, and much talk about how public sector employees are overpaid, get too many benefits, etc. but in all of this no one seems to notice how public sector employees are held to a higher standard. As an example, the woman who died was an employee of the coffee shop. If the situation had been reversed and the woman would have been off the clock, and the EMTs had wanted a cup of coffee, would people be calling for her to be fired for refusing to do her job while off the clock?

Currently in the State of Florida, and all across the nation, there is talk of cutting benefits. Florida is about to change the rules for the Florida Retirement System to cut retirement benefits in half, and to change the retirement age for high risk jobs from age 50 to age 65. Some departments are discussing cutting hours by not paying responders between the hours of midnight and 6 a.m. if the responder doesn't have to actually respond to a call for assistance, even though the responders must remain at work ready to respond. Can you imagine a receptionist being required to sit at her desk, but not getting paid unless the phone actually rings?

As a firefighter and as a Paramedic, I am exposed to all sorts of things that a government office worker is not.

Let me tell you the story of Oviedo Firefighter Shane Kelly. Firefighter Kelly stopped to assist victims of an auto accident on the Florida Turnpike in 2002. Shane was off duty. He was killed in full view of his wife when a tractor trailer slammed into the accident vehicles.  There were 2 occupants of the truck that killed Firefighter Kelly, and there was enough confusion as to which of them was driving that neither of them was ever charged.

The Federal Government ruled that Sean Kelly was acting in his capacity as a private citizen when he was killed, and since his death was not a line of duty death, his widow was not entitled to any of the benefits of the LOD status. Imagine how you would feel as an EMT, Firefighter, or other responder if you knew that helping an injured person carries the same risk of injury or death whether you are on duty or off duty, except that if you are injured, not only are you NOT paid for your time and skill, but you are not insured for that potentially career ending injury. Who will feed your family? Care for your kids?

In Firefighter Kelly's case, they rallied some politicians and were able to get an exception in his case, but there is no guarantee that the next accident victim will get the same exception. State law in Florida allows localities to each determine what constitutes line of death, and what does not. In a meeting with my employer's attorney, where Firefighters were attempting to get a written policy on what would be considered Line of Duty injury for off the clock employees, we were told that such decisions for off duty personnel would be made on a case by case basis by Administration AFTER the fact. I made a comment along the lines of, "So you get to decide AFTER I am injured whether or not you will pay for it. Will that decision take factors like the cost of treatment and PR benefit to you into account?" That REALLY pissed off the attorney. (I call em like I see em.)

Not only will the employer retroactively decide whether or not the employee who stops to help is covered if injured, they will decide on a case by case basis who they will provide legal representation to if the employee is sued by a personal injury attorney. That policy marked the end of my stopping to help in emergencies, and until that policy changes, I will no longer help anyone while I am off the clock. After all, requiring me to do something while not paying me is called slavery.

Many will say that I should just get my own insurance, and to that I reply: How many of you who are not in EMS would pay money to be able to do uncompensated work that could get you injured, killed, or sued? Other considerations: DO off duty EMTS carry equipment? Gloves, pocket masks, defibrillators? If they do not, what can they do that any other bystander can do? Or should the employer provide those items?

If I am at an accident scene, how can I keep other vehicles from hitting me? Should I block the lanes with my personal car, like we do with our ambulances and fire apparatus? If I do, and a semi crashes into my car- will my employer pay for my car? Will my own insurance pay? After all, they will surely argue that they do not cover me for high risk activity like using it as emergency equipment. If my wife is in the car when it is struck, who pays for HER care?

All of this is viewed in light of the new era of budget cuts. Cutting pay, retirement, benefits, and other compensation, and you get what you pay for.

Overheard at a party

I was at a party yesterday, and a person there was complaining that the attorney general was wasting the taxpayer's money on a lawsuit that "had no judicial merit." I said that I wasn't so sure, and that IMO the Obama health plan was unconstitutional. I asked him which part of the Constitution granted the Federal Government the power to force me to buy a product.

His reply was that the government already does this when they force you to buy car insurance. This was easy to rebut, because the Federal Government doesn't force you to buy insurance, that is a state law, and that law still allows a driver to be self insured, doesn't require you to have insurance if you don't have a car, nor does it require that you buy insurance to operate a car upon your private property.

I told him that the Obama plan will not work, because it requires an insurance company to cover a preexisting condition, so people will have no reason to get insurance until they are sick, and since the "fine" for not having insurance is significantly less than the cost of insurance, they won't. Thus, a person who gets sick will simply call and purchase the insurance while he is on his way to the hospital.

He responded with some talking point about the last 8 years, blah, blah, to which I responded that I didn't like Bush, either, but that this discussion had nothing to do with the exPresident, and that we were talking about Obama. He then said that we can't blame Obama until the first 2 years (HALF the term) are over. So I replied that we could then lay 9/11 and the recession of 2001 directly at the feet of Clinton, since that all happened during the first 2 years of the Bush Whitehouse. "That's different," he said.

I moved in for the kill. "So Bush is responsible for all 8 years he was in office, and the first two years of Obama." His wife, who was standing there agreeing with me, then took him away.

Every supporter of Obama uses the exact same words and phrases in their arguments, almost as if they are reading from a script. It is obvious that they are not thinking about this on their own, that they are simply parroting lines that they have heard somewhere else. This makes them easy to debate, as they are not putting any thought into this.

Saturday, April 10, 2010

"Competent to refuse"

Patient consent seems like a pretty easy subject when we are in school as a parafetus. In fact, many programs gloss over the subject, but in my experience no single issue gets medics in trouble as often as the subject of consent and refusals. What complicates things further is when a patient is forced to go to the hospital against his will, or a child has to go over the objections of a parent.

In order to explain how this happens, a little explanation about consent and mental capacity is in order. In order for patient care to happen, the patient must consent to this care. The law requires a medic to care for a person who for some reason is incapable of making an informed decision for themselves. Examples include unconscious or intoxicated adults, and children in the absence of their parent or guardian. This is called "implied consent."

In the event that you have a patient with a medical condition that prevents them from understanding the refusal and its implications, implied consent is the ruler of the day. An unconscious patient gets transported under this doctrine. A patient with altered mental status is a little more difficult. Let me illustrate:

Last shift I was the duty EMS supervisor when one of my crews was dispatched to a fall. Just after arrival, they requested police response for a combative patient. I began driving that way, and within a couple of minutes they called and requested the supervisor.

When I arrived, they told me that the patient, an 80 year old man with a cardiac and stroke history, had fallen down and hit his head on the wall with enough force to go through the drywall and strike his head on the concrete block. The patient's 30-something year old son called because the patient would not get up off the floor. All adults present are intoxicated. One of the crew on scene met me in the driveway and said the patient's wife was agitated and wanted them out of the house, and had gone so far as to punch one of the crew members in the face. (Wow- an extra $1.50 an hour to be supervisor and deal with this kind of thing.)

I entered the house, and before I could say anything the wife starts yelling that she wants me to leave the house and telling me that she has a right to refuse. I introduced myself as the person in charge, and with every intention of smoothing things over and allowing the refusal, explained that there were certain rules that we must follow in order to accept a refusal, and that I wanted to ask a few questions. I began by asking the patient the standard "person, place and time" questions. He answered, but his speech was slurred, and he was argumentative about it, then asked me who I was and why I was in his house. Since I had just explained that, I told him that it was my feeling that he was impaired, and that we would be taking him to the hospital. He and his wife protested, and she accused me of practicing medicine without a license. I explained to them and to their family that he had no choice, so he punched me. The cops saw this and wanted to arrest him. He went to the hospital, I didn't press charges.

So why did I think he was impaired? The cognitive symptoms of a traumatic brain injury (TBI) can include:

- confusion, disorientation, and difficulty focusing attention
- Loss of consciousness may occur but is not necessarily correlated with the severity of the concussion if it is brief.
- Post-traumatic amnesia, in which the person cannot remember events leading up to the injury or after it, or both, is a hallmark of concussion or even more serious brain injury.
- Confusion, another concussion hallmark, may be present immediately or may develop over several minutes. A patient may, for example, repeatedly ask the same questions, be slow to respond to questions or directions, have a vacant stare, or have slurred or incoherent speech.
- Many brain injury victims experience what is known as the lucid interval.

Since he had many of these symptoms, and it is impossible to tell if the symptoms were caused by his stroke history, intoxication, or his injury, and there were no sober (competent) adults to keep an eye on him, the best and only legal thing to do is to take him in for evaluation.

Now there are many here who will accuse me of violating his rights, and to them I leave you with this story:

There was a woman who called 911 because her husband was acting odd. When we arrived, he asked repetitive questions, became combative, repeatedly asked us to leave, and physically assaulted us when we carried him to the gurney. He had been acting much like the gentleman in the previous story. He died on the way to the hospital. His kids were 3 and 5 years old, and will grow up without a dad. Keep that in mind. Every patient deserves an advocate that will look out for them when the patient themselves cannot. In the prehospital setting, that person is the paramedic.

Determining competence is a three step legal process:

Can an individual retain and comprehend relevant information?
Can an individual believe information?
Can an individual use that information to make a choice?

Thus the capacity to refuse is determined by his competence. If a patient refuses and evidence exists indicating an impairment of the patient’s capacities, it is appropriate to conclude the patient may be found incompetent in a court of law. Impairment may be determined by the patients actions, information from bystanders and caregivers, and a good assessment of the scene and patient.

The key here is trying to determine if the patient understands the nature of his illness/injury, as well as the consequences of refusing treatment. To make this determination, we look for his cognition, judgment, understanding, stability, and vital signs. Just because the patient does not wish to be treated is not sufficient proof that their capacity to choose is impaired.

Capacity is a legal minefield. Choose wrongly and you can be sued for abandonment and negligence, or for false imprisonment. For this reason, documentation of your reasons for making the decision that you did is vital.

Friday, April 9, 2010

Britain's "Free" Healthcare isn't free

Now that we are on the path to "free" healthcare, maybe we should see what is in our future here in the good old US of A:

$9 per gallon gasoline in the land where Great Britain used to be.

Thursday, April 8, 2010

Foreclosure Ripoff, Part IV (Strategic Default)

This is a continuation of Foreclosure Ripoff, Part I Foreclosure Ripoff, Part II, and Foreclosure Ripoff, Part III. You can read the rest of the story by following those links.

Strategic Default- Going John Galt on the Banks

What is a "strategic default" you ask? A strategic default is the decision by a borrower to stop making payments on a debt despite having the financial ability to make the payments. In other words, just walk away. Business does this all the time, and even uses the Bankruptcy Code to do it- See KMart. Some may call this unethical or immoral, but I am advocating making this decision as a financial one.

If you are sitting in a house that you owe $225,000 on, and that house is only worth $100,000 you WILL NEVER see a dime from the investment that you made in your home. Even if the housing market were to bounce back this year, and home prices increased at their historic rates of 5%, in 20 years your house would be worth  $265,000 and you will have paid $372,000 in interest and principal in that time.

Sometimes you have to recognize a bad investment and cut your losses. If you owned a stock that had lost 50% of its value, would you keep dumping money into it? Of course not. The more you pay into this investment, the more you lose.

In the above example, I hold on to that home, and lose $107,000. If I had walked away in year one, and bought another (identical) home in year 5 for $161,000, I can still sell that home for $265,000 in year 20, but I would have only paid $124,000 in payments during the 15 years I "owned" it. Even assuming that I rented a house for the 5 years that my credit was damaged, I still come out with a $75,000 profit, and I am more than $150,000 ahead of where I would have been had I stayed in the home.

It appears like the banks are seeing quite a bit of this.

Sure, a strategic default will hurt your credit. What will losing $200,000 by holding on to a losing investment (the house) do to you? In exchange, you get to take the money you were using to pay your mortgage and pay off other debts during the year or so it will take them to foreclose. Just be careful if you plan on using bankruptcy as an out: skipping the mortgage to pay the credit cards is a no-no. Talk to your attorney.

The IRS may want taxes on any money that is not collected, but until December of 2012, that is not the case for mortgages used to pay for a primary residence. Talk to your attorney or tax professional.

Unless you declare bankruptcy, your mortgager may come after you for the deficiency balance.

If you are going to do it, make your preparations and do it before the banks have their way in the Legislature and make Florida a non-judicial foreclosure state. They are trying to game the system by throwing large amounts of cash at Florida's Lawmakers. Get out while you still can. I know this isn't for everyone, but this is really worth a look.

I have put a great deal of thought into this. We still haven't seen the bottom yet. Interest rates are climbing, and the adjustable rate notes will be adjusting. Phase two of the housing crash is coming.

Foreclosure Ripoff, Part III

This is a continuation of Foreclosure Ripoff, Part I and Foreclosure Ripoff, Part II. You can read the rest of the story by following those links.

So the mortgage brokers, aided by the Realtors, began the fraud when they concocted information about income/assets and value of property on the individual loan applications. I know my mortgage broker fudged a few things, and at that he was more honest than most. He had a special appraiser that he used, and he told me that it was to my benefit- a too high appraisal, and my property taxes would be too high, too low and I wouldn't get the loan. Wouldn't you know, the appraisal was EXACTLY the agreed upon sale price for the house.

As a result, the mortgage brokers made thousands on each sale, billions as an industry.

Then the banks made billions when they originated the loans and then sold them to Wall Street Brokers. The asking price was usually about 102.5% of the loan amount. That means that a $200,000 loan was sold for about $205,000- usually within a few weeks of being written.

Wall street then sold them as mortgage backed securities to various funds around the world. These REITs made billions.

Then investors like myself, with their retirement money tied up in mutual funds, 401K funds, and retirement accounts that were professionally managed and heavily invested in these REITs see the value of their investments nosedive. As a result, my employer is going to cut retirement in half in the near future, meaning that I will soon have to make a decision to retire and look for another job, or face the prospect of having a much reduced retirement package in my later years. (The current math shows that if I retire now, I will make the same in retirement as if I stay another 10 years,)

The big investors got bailed out with tax money from my future, and the future of my children and grandchildren. Where is my bailout? To make it worse, the very banks and institutions that caused all of this are being paid by the government to fix the very problem that they created.

Then when it comes time to foreclose, the banks have lost the paperwork, so they simply forge and create new paperwork, and take your home.

The double whammy here is that my 401K is worth about 40% of what it was in 2007, and the triple whammy is that my home is worth about 40% of what I owe on it.

Doing the math, it is impossible for me to retire EVER under those circumstances. I will have to work until the day I die. There is only one way out-

Continued yet again

Toilet Humor

Let's take a break from bitching about the economy and have a little fun:

I called my friend Andy Sable, a gastroenterologist, to make an appointment for a colonoscopy. A few days later, in his office, Andy showed me a color diagram of the colon, a lengthy organ that appears to go all over the place, at one point passing briefly through Minneapolis. Then Andy explained the colonoscopy procedure to me in a thorough, reassuring and patient manner.

Monday, April 5, 2010

Foreclosure Ripoff, Part II

This is part 2 of this post.

So what we have here is the banks are writing loans with little regard as to whether or not people can afford to actually pay the loan, securitizing and selling the paper to investors as quickly as possible, all with little accountability or oversight.

In the middle of all this, the Fed lowered the prime rate from 6.5% to 1.0% in the wake of the 9-11 attacks and the financial recession that followed.

This was a situation ripe for disaster. The banks were selling loans as quickly as they could in a feeding frenzy of subprime lending. Every major bank had a subprime lending department. This wasn't just in mortgages and real property. This was in credit cards as well. As credit became easier to get, more people got credit. The financial boom that began in the mid-90s was a result. Housing prices skyrocketed- nationwide they increased by 124% in just 10 years. In some real estate markets, the rise was MUCH higher. The Fed had to raise rates to compensate. This cause the Adjustable Mortgage Rates to climb, and many of the people with ARMs that they could barely afford to pay at the lower rate began to default when the increasing rates and payments pushed them over the edge.

The house of cards and paper began to collapse in mid-2007. As home loans began defaulting, the insurance companies providing mortgage insurance were among the first to go. Insurance giant AIG fell in September of 2008. Fannie and Freddie Mac went during the same month. By this point, bankruptcy filings had doubled, foreclosures were increasing, and housing prices had fallen 20%. Interest rates began to climb as some banks began to struggle.

As an example, the Middle District of Florida saw about 15,000 bankruptcy filings in 2006. In 2007 that had risen to about 26,000 and in 2008, it rose to 42,500. In 2009, there were nearly 63,000 bankruptcy filings, all in one Federal district. 2010 isn't shaping up to be any better. The first two months of the year have already seen 9,500 filings.

The government has responded to all of this by borrowing more money and dumping it into the economy. Over $4 trillion since 2006, and half of that has been in the last year. The banks made money by making loans that should not have been made. Then they were 'bailed out' by other banks who used funds supplied by our government, and those banks are being funded by more government dollars, and are making even more money by foreclosing on homes that they cannot even prove they own the paper on, and meanwhile the American Public is paying the tab- twice. Once in taxes, and again in losing their savings and their homes.

We as a nation are responding to a crisis that was caused by too much borrowing and spending by borrowing and spending even more. We are essentially paying our Visa with our Mastercard. I fear that we have not seen the end of this financial crisis.

To be continued...

Sunday, April 4, 2010

The foreclosure ripoff

Last month, I wrote a post about the foreclosure problem here in Florida and across the nation. When the financial problem began, I was a part of the crowd that was drinking the Conservative Kool-Aid and blaming government regulation and interference, with a heaping helping of blaming people for taking out loans they could not afford.

I have since reevaluated that position. There is blame enough for everyone, and the biggest crooks here are in the Nation's Financial Sector. Let me walk you through this (all names used here with the Exception of MERS are fictional for illustrative purposes, and are not intended to represent real or imagined people or businesses):

First National Federal Bank of Florida makes a loan to the Smith family so they can buy a home. That loan is written down as a "note" and the "note" is secured by a mortgage on the Smith home. The Mortgage states that if the note is not paid, the owner or holder of the note is entitled to force the sale of the home, and the proceeds are used to pay off the note, with the balance of the funds going to the Smiths. The mortgage is recorded at the County Clerk's office as an official record for about $10.

The bank sells that loan to a trust, where it is securitized, bundled with a few hundred other loans, and resold as an investment to the Franklin Secure Real Estate Investment Trust. The bank has made their money, and their risk is covered. There is no incentive for First National Federal Bank of Florida to make sure that the Smiths can pay the note, because the note will be sold long before the Smiths default. The only real motivation for the bank, is for them to originate as many loans as possible, and sell them quickly before they default. That is how an assistant manager at McDonalds qualifies to buy 5 houses.

The Franklin Secure REIT sells the notes to Richards and Company Investment REIT, who sells them to the Wells and Frederick REIT. The consumer never knows this, because the note is still serviced by the First National Federal Bank of Florida, who takes their payments and forwards them to the owner through a shell company (more on that in a minute).

There are thousands of mortgage transfers made each day in Florida alone, and continually recording these transactions at the County Clerk's office at $10 a pop is costing banks $600 million a year. They decide that there MUST be an easier way. This is the "way" that they came up with:

So, in 1999 a Corporation called Mortgage Electronic Registrations Systems (MERS) was formed. MERS is a shell corporation that is jointly owned by the Nation's large banks, has no financial stake in the real estate mortgages, but mortgages are all registered to MERS, and the 44 employees of MERS keep track of who actually owns what Mortgage. MERS is the registered holder on over 55 million mortgages. They avoid the $10 fee, and save the banking industry billions. The problem is that they have taken our Nation's Public records system, and made it so no one knows exactly who owns what, and during all the transferring that went on, the original note is lost. This makes it impossible in many cases for a bank (any bank) to prove they own the note, but that doesn't stop them from trying.

This allows mortgage fraud on a scale that was unheard of for the thousands of years of property law that existed before MERS came along. Fake assignments, contracts, affidavits, and other evidence has been used to take homes that banks had no right to take.

The reason why I support people fighting this is that since no one knows for sure who owns what, there is a chance that settling with who you think is the owner of your mortgage may result in the REAL holder taking your home when the note IS eventually found, or may result in more than one bank claiming that you owe them money. In one case here in Lee County, Florida, a homeowner was foreclosed upon by two different banks, both of whom claimed to be the owner of the mortgage and note, and both of whom had paperwork and "evidence" to prove it. (The cases are American Home Mortgage Servicing v. Joanne Fredenburg Case 08-CA-050001, and Deutsche Bank National Trust Co. v. Joanne Fredenburg Case 08-CA-051319)

There will be more to follow on this...

Friday, April 2, 2010

Congress doesn't care about the Constitution

Listen. at 44 seconds, "I don't care about the Constitution."

When confronted about the statement, he says: "It says that we all have the right to life, liberty, and the pursuit of happiness."

The reply, "That is the Declaration of Independence."

The congressman: "It doesn't matter to me. Either one."

Here is the secret: No one is dying because they can't be seen at a hospital. There is already a law in place that requires emergency departments to see you whether you can pay or not. It is called EMTALA, the Emergency Medical Treatment and Active Labor Act. No one can legally be refused care because they don't have insurance. The hospitals are not aggressive about pursuing payment, either.

I have patients that have been taken to the emergency room hundreds of times in the past few months, some of them occasionally go to the ER 5-8 times a day. My record is taking the same person to the ER 9 times in one day. That patient has NEVER paid a dime for either the hospital visits or the transport.

Anyone who tells you that this bill is about health or about care is a liar. Wanna see what health care will look like under Obama? Click here and look at what he is doing to the auto industry.

This is about the government controlling every facet of your life. Obama controls the financial sector, manufacturing, and now he has his sights set on health care.