Morning Must Reads: August 13

In the news: another Obamacare delay; Iraq's al Qaeda affiliate moves into Syria; NYC's stop-and-frisk; New Jersey's primary for Senate; BlackBerry up for sale; and a defiant Anthony Weiner

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Mark Wilson / Getty Images

The early morning sun rises behind the US Capitol Building in Washington, DC.

  • “In another setback for President Obama’s health care initiative, the administration has delayed until 2015 a significant consumer protection in the law that limits how much people may have to spend on their own health care. The limit on out-of-pocket costs, including deductibles and co-payments, was not supposed to exceed $6,350 for an individual and $12,700 for a family. But under a little-noticed ruling, federal officials have granted a one-year grace period to some insurers, allowing them to set higher limits, or no limit at all on some costs, in 2014.” [NYT]
  • The Islamic State of Iraq and the Levant, a version of Iraq’s al Qaeda affiliate, is surging onto the front lines of the Syrian war.
  • A federal judge rules NYC’s stop-and-frisk practice violated the constitutional rights of minority New Yorkers.
  • Does Cory Booker really want to come to Washington?
  • Terry McAuliffe sidesteps GreenTech questions.
  • 7 bills that could actually pass once Congress comes back from recess
  • BlackBerry puts itself up for sale.
  • Hillary Clinton talks voting rights.
  • The Feds let “Whitey” Bulger get away with murder.
  • James Pethokoukis: “Rand Paul is dead wrong. Milton Friedman would have supported the Fed’s bond buying.”
  • Ezra Klein: Politics isn’t a zero-sum fight between corporations and the poor.
  • Anthony Weiner stays defiant in a BuzzFeed Brews interview.
655 comments
forgottenlord
forgottenlord

Huh, the things I learn about my own country surprise me sometimes, but then we actually seem to be reasonable people.

Apparently, in child pornography cases, our Supreme Court ruled back in 2001 that "if the photo or video was taken by one of the people involved, and if it was consensual and kept private, then the image is not considered child pornography."  So as long as the content is kept private, the only thing that matters is age of consent laws.

notsacredh
notsacredh

Besides "Stink Finger", did Frank Zappa write any other love songs?

DonQuixotic
DonQuixotic

"There are no real people here, only facades"

So deep man.

mantisdragon91
mantisdragon91

Clearing up some of the lies associated with the housing collapse.

There are a lot of bad things you can say about Fannie and Freddie: that they were part of the oversubsidization of housing in America, that they’ve had an overlarge side business of funneling cash to friendly politicians, that some of their “innovative” practices, like requiring the use of the electronic mortgage registration system, MERS, have proven to be detrimental (by clouding title and facilitating foreclosure abuses). And it’s pretty easy not to like the use of Fannie and Freddie as pretty much the only game in town now in mortgage-land.

But a common charge, “Fannie and Freddie caused the subprime bubble” is plain barmy. As we’ve noted on this blog repeatedly, with the generous help of Tom Adams, and also detail in ECONNED, collateralized debt obligations were a bigger driver of the toxic phase of subprime issuance (third quarter 2005 through 2007) than is commonly realized. And CDOs were created strictly from “private label,” meaning non-Fannie/Freddie mortgage pools.

McClatchy (hat tip lambert strether) does a nice job of shredding this erroneous line of attack on the GSEs, with simple talking points to use with resistant true believers:

Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height from 2004 to 2006.

Federal Reserve Board data show that:

* More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.

* Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.

* Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that’s being lambasted by conservative critics.

Yves here. As we and others have pointed out, Fannie and Freddie’s share of lending to moderate and lower income borrowers FELL as the subprime market became reckless:

This much is true. In an effort to promote affordable home ownership for minorities and rural whites, the Department of Housing and Urban Development set targets for Fannie and Freddie in 1992 to purchase low-income loans for sale into the secondary market that eventually reached this number: 52 percent of loans given to low-to moderate-income families….

But these loans, and those to low- and moderate-income families represent a small portion of overall lending….

Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication. One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble.

During those same explosive three years, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two thirds of all U.S. mortgages, supplanting Fannie and Freddie, according to a number of specialty publications that track this data.

Fannie and Freddie are not only zombie financial firms, they seem to have more than the normal number of zombie news stories associated with them.

roknsteve
roknsteve

Poor baby Edward Snowden is complaining about the media.  Oh, the irony.

mantisdragon91
mantisdragon91

Birthers for Ted Cruz 

The possible 2016 presidential candidacy of Canadian-born Texas Sen. Ted Cruz presents something of a conundrum for the birthers who have spent the past several years declaring that President Obama was born in Kenya and therefore ineligible for the presidency. While the Congressional Research Service [PDF] and many others hold that Cruz is eligible since his mother is a US citizen, birthers contend that Obama is ineligible to be president since they believe—without any real evidence—that he was born abroad to an American mother.

This weekend, arch-birther Donald Trump tried to avoid a question about Cruz’s eligibility, saying that he wasn’t sure where Cruz was born.

But Lord Christopher Monckton, columnist for the birther “news” site WorldNetDaily, seems to have no qualms about Cruz’s eligibility, writing that he wants to erect a statue of Cruz and can already envision the Texas senator as a successful two-term president:

Ted Cruz is one to watch. And let us not wait until after he has served two spectacular terms as President of the United States before we engage some rising Michelangelo to carve a noble statue of him.

For the newly minted senator from Texas, who has already gotten off to a good start by speaking out against killing little children in their mother’s womb and has proposed to defund ObamachaosTM, now proposes to sweep away the hated, corrupt Infernal Revenue “Service” and replace today’s graduated income tax with a flat-rate tax that is the same for everyone.




Poverty endures solely because the left gain votes from it. Ted Cruz is one of the few politicians in either House of Congress who understand this. And he cares enough to do something about it. That is why he deserves his statue.

Of course, Monckton is a birther. In fact, he wrote an entire report [PDF] alleging that President Obama should and might be removed from office over the issue.

But at the same time, Monckton is perfectly happy with building a Michelangelo-inspired statue of Ted Cruz even before “he has served two spectacular terms as President of the United States.”

- See more at: http://www.rightwingwatch.org/content/birthers-ted-cruz#sthash.eDsjK1uK.dpuf

mantisdragon91
mantisdragon91

A lesson for the Ron Paul drones who think business will self regulate.

Since at least 2006, ExxonMobil has known that its 1940s-era Pegasus pipeline had many manufacturing defects like the faulty welds that recently sent crude oil spewing into an Arkansas neighborhood. The company also knew that the seams of the pipe have been identified by the industry as having another dangerous flaw: They are especially brittle, and therefore more prone to cracking.

"Having a crack or flaw in a pipeline is a whammy," said Patrick Pizzo, a professor emeritus in materials engineering at San Jose State University. "But having a crack embedded in brittle material, such as the heat-affected zones of the pipeline seams—that's a double whammy."

Despite those inherent risks, Exxon added new stresses to the Pegasus by fundamentally changing how it used the line. It began carrying a heavier type of oil, reversed the direction of the flow and increased the amount of oil that surged through it.

 http://insideclimatenews.org/news/20130812/exxon-knew-its-ruptured-pipeline-was-old-defective-and-brittle-and-still-added-new-stresses

notsacredh
notsacredh

@forgottenlord, I can see West Virginia from my porch. Of course I live on a hilltop and W VA is only 4 miles away as the crow flys, but still....

ahandout
ahandout

@DonQuixotic SDQ, (if that's your real name) you completely ignored this:

A Californian corporation has been awarded a contract with United States
Central Command (Centcom), which oversees US armed operations in the
Middle East and Central Asia, to develop what is described as an “online
persona management service” that will allow one US serviceman or woman
to control up to 10 separate identities based all over the world.
http://patdollard.com/2013/04/revealed-u-s-military-deploys-sock-puppet-army/

ahandout
ahandout

@DonQuixotic  Too funny, the drones swarm around to protect their imagined virtual community.  No wonder Democrats fall for Carlos Danger.

notsacredh
notsacredh

@mantisdragon91, it's like sending your ex-wife a laundry bill because you got bloodstains on your clothes when you beat her.

forgottenlord
forgottenlord

@mantisdragon91 

The theme of today: the Free Market benefits those that adapt.  Republicans aren't adapting, they're forcing.  They might be able to prolong their life a little long - just like Tariffs prolong the life of the companies they protect a little longer - but in the long run, they are just protecting themselves from adapting and will be destroyed when their time is due.

MrObvious
MrObvious

@Ivy_B 

I'm so glad the tea party is purifying GOP. No more crazy uncle in the closet. Let them parade.

retiredvet
retiredvet

"If there is a more down and dirty political venue than South Carolina, I haven’t seen it."

Ahem. I'd like to offer exhibit A as my contestant: Massachusetts.

DonQuixotic
DonQuixotic

@ahandout @DonQuixotic

SDQ, (if that's your real name)

Spoiler alert: it's not.

to control up to 10 separate identities based all over the world

OK?  And?

forgottenlord
forgottenlord

@ahandout

Of course Don Quixotic isn't his real name, numbskull.  It's a medieval Spanish book.

MrObvious
MrObvious

@ahandout @DonQuixotic

protect their imagined virtual community

How can we protect something imagined? For that matter how can you 'imagine' something that exist? But if it's all imagined, then are you really not psychotic for responding to something that is only imaginary to you?

Ivy_B
Ivy_B

@retiredvet Although to be fair to the first contestant, John McCain's black daughter wasn't used against him in Massachusetts. Nor in the distant past did a MA Senator beat another Senator senseless with a cane on the floor of the Senate.

ahandout
ahandout

@sacredh @ahandout  My response wasn't a question.  Perhaps it is a West Coast phrase.  It means, "I know" usually followed by the word dumb@ss or some other f word enhanced adjective.  I have a whole repertoire. 

notsacredh
notsacredh

It's probably about the common man's ages long battle with wooden structures. Are they shelter or a prison of our own making? By fighting them do we destroy our homes or set ourselves free? Of course it might just be the first road trip book. I don't know.

notsacredh
notsacredh

@ahandout, forgottenlord is telling the truth. It involves fighting windmills. It's probably allegorical, but I'm not willing to read between the lines.

notsacredh
notsacredh

@ahandout , and I'm a damned good troll when I do it too. A job worth doing is worth doing well.

notsacredh
notsacredh

@DonQuixotic, I only follow the essentials of existentialism. The rest seems unimportant somehow.    Am I back in college?

notsacredh
notsacredh

@DonQuixotic, it's those other damned voices in my head. If I do what they ask, they'll leave me alone for up to a week.

DonQuixotic
DonQuixotic

@forgottenlord@sacredh 

"let's just say that it seemed like you were speaking to me."

 Are you suggesting I'm normally not speaking to you?  My god, it really is all a facade.

*snaps fingers while playing a bongo drum*

notsacredh
notsacredh

@DonQuixotic. no. I've never seen Arrested Development. I watch very little tv other than movies.