patrick.net

Thanks for the link, SQT. It's fairly critcal of the GSEs overall, but I take exception to this part:

"By eliminating this temptation [of holding large portfolios of MBSs] and increasing oversight, the housing GSEs can be the shining institutions that they claim that they are - and that we aspire for them to be," he said.

I see absolutely no reason why the GSEs even need to exist, or at least exist as quasi-government entities --with the gargantuan moral hazards & implicit taxpayer bailout "guarantees". What public "benefit" have they provided exactly? Have they lowered housing prices? Just the opposite, in fact. Have they lowered overall mortgage interest rates? Nope --Alan Greenspan himself debunked that myth a while ago. The private MBS market, if freed from GSE & Fed manipulation --and, *gasp* actually regulated in a way to benefit CONSUMERS-- could handle mortgage liquidity and risk just fine, thank you.

But, overall this was about as critical as comments coming from Congress can be, I suppose.

Today's yield curve (from http://www.treas.gov/offices/domestic-finance/debt-management/interest-rate/yield.shtml)

1 m 3 m 6 m 1 y 2 y 3 y 5 y 7 y 10 y 20y 30y
4.88 5.05 5.27 5.22 5.12 5.07 5.04 5.05 5.08 5.23 5.12

Very clear inversion.

Regarding posting images:

Try ImageShack. You can post a link to your shack-hosted images. It's free.

GC, Sorry but I could not find the blocked comment in my moderation queue. It's generally best to spell 'socialist' as 'soc-ialist' and post your links one at a time.

HARM, I believe someone went ahead and unlocked it. Thanks.

@DinOR & SQT,

I have a solution for the image file uploading/hosting issue. I don't have time to go into it right now, but we can speak offline after business hours.

HARM,

That's a roger.

seamus,

Uh for them to be considered "sales people" would tend to imply that they had at least a working knowledge of the product? Most are "tools". They just mimic what their broker told them to say. There is little independent thought and certainly NO consideration as to what would be best for the "client" long term.

How can anyone resist granite countertop? Must over-bid 100K to get it! :)

SQT/seamus,

Yeah, but the difference is that a "salesman" stays with it until he/she closes the deal. Realtors on the other hand simply play the numbers game. They know we all need a place to stay and most of us own. So if you don't buy maybe the next guy/gal will! They cruise people around looking at a few homes and let you sell yourself. They're just there to write up the offer. That's not "selling" Not in my book.

So if you don’t buy maybe the next guy/gal will!

They may also pressure sellers too:

If you don't reduce your price now maybe your unneighborly neighbor will! :)

OT: Black Sea Fleet May Move to Syria

http://www.khouse.org/enews_article/2006/1087/print

Another Great Game on the horizon.

Black Sea Fleet May Move to Syria

Hmm... gold is shining again.

Let's see... how many potential conflicts are we looking at?

1. North Korea
2. Iran
3. India-Pakistan
4. Israel-Syria

History will look back at this era and tell us that the future of US is being decided in the middle east. If Americans lose there, the Americana (and the attendant way of life) as we know today will cease to exist.

It is debatable whether US should've invaded Iraq or not. But once US decided to get involved, she has no choice but to stay until total victory (in the political sense). That's why I find those politicians clamoring for US disengagement in Iraq either totally ignorant or traitorous.

The Middle East is the throat of US, South America her under-belly, Western Europe her former allies.

To US, North Korea is just an annoyance. To Japan, a manageable threat.

If the Russians are planning to move their Black Sea Fleet to Syria, they had better hurry up! LOL.

Korea has a strategic importance to China and Japan. But to a global player such as US, Korea is only important because Japan is a close ally of US.

Korea serves as a bridgehead to Northeastern China and Russian Siberia. It's evident from the map and history. Northeastern China could be easily cut off from the mainland. The Japanese did it. The communists also did it (to isolate and defeat the large nationalist army stationed there).

Joe,

The news could be an attempt to bluff. But it is evident that the Russians would fight the US influence in the middle east. US won round one (by occupying Iraq). But the end result won't be known until 20-50 years later.

I don't what Myers meant exactly. But here's a quote from him:

On 27 September 2005, only three days before leaving his post as Chairman [of the Joint Chiefs of Staff], [Richard] Myers said of the war in Iraq that, "the outcome and consequences of defeat are greater than World War II."

It is debatable whether US should’ve invaded Iraq or not. But once US decided to get involved, she has no choice but to stay until total victory (in the political sense). That’s why I find those politicians clamoring for US disengagement in Iraq either totally ignorant or traitorous.

I wouldn't be too sure about that. The whole "pulling out of Iraq is a mistake/treason" rhetoric to me is a lot like the "escalation of commitment" syndrome that we see in f@cked borrowers. "We can't cut our losses now, because we've already got too much invested/at stake", etc.

At some point you need to rationally calculate whether or not any additonal commitment or continued involvement is worth the extra price. I fail to see what additional net benefit staying there is supposed to provide for the U.S. It looks like civil war along tribal lines is already well underway and to me, fewer U.S. troops means fewer U.S. targets. For that matter, we need to wean ourselves off ME oil as soon as possible for our own sake.

The news could be an attempt to bluff. But it is evident that the Russians would fight the US influence in the middle east. US won round one (by occupying Iraq). But the end result won’t be known until 20-50 years later.

More proxy wars? Looks like Iraq is a small conflict compared to what lies ahead. Does anyone know Mundane Astrology?

GC,

You are right.

I wonder how far the Russians are willing to push this?

I'm sure they are basically bluffing. Their military is in even worse shape than during the Cold War. They could not possibly depoly a large number of troops, planes, or ships to the Middle East, and even if they could, the troops would be ineffective. Better than the ME troops, but still pathetic by our standards.

Then again, they only have to deploy a few thousand to make things ugly. They're still a nuclear power, so we really can't be attacking thier soldiers.

Still, though, I would think that we could inflict unimaginable pain -- economically, politically, and through espionage, if necessary -- on the Russians if they were to start throwing their weight around in the region like that. And the Israelis might well call their bluff, even if we don't.

I’m sure they are basically bluffing. Their military is in even worse shape than during the Cold War. They could not possibly depoly a large number of troops, planes, or ships to the Middle East, and even if they could, the troops would be ineffective. Better than the ME troops, but still pathetic by our standards.

But they have over 10K of nukes. And we will be very nervous if they somehow lose track of some in that particular region.

I don't think Russia or China really wants a war with each other or anyone else. Putin's army can't even deal with the insurgencies in long held areas. China's economy is very fragile and growth dependent, and any disruption would cause fairly disasterous repercussions - the Communist-in-name-only leadership haven't forgotten how Mao et cie took power, yet.

Joe,

The most dangerous enemy of all is an enemy who believe they got nothing to lose, or worse, think that their rewards come in the afterlife. When these people come about in large numbers, it's best to stay out of the way and let them self destruct. America really needs to get out of Iraq. There is no upside. We don't have the political will to beat a whole region into submission. And every second we're there, we'll be resented for the same reason all occupying forces throughout history are resented. It really doesn't matter how nice or "freeing" we are, and we're not all that nice or "freeing". When we meddle in other people's destinies, they will be resentful and they will blame us for every single thing that goes wrong.

Just look at most of Africa. After 40+ years of post-colonial governments, they still blame everything going wrong on the European Imperialists.

Astrid,

it’s best to stay out of the way and let them self destruct.

Unfortuantely, they're coming here and destructing us. Isolationsim ended on 9/11.

The most dangerous enemy of all is an enemy who believe they got nothing to lose, or worse, think that their rewards come in the afterlife.

This is why they cannot be allowed to possess WMDs.

After 40+ years of post-colonial governments, they still blame everything going wrong on the European Imperialists.

They should look at Singapore, Macau and Hong Kong. Not only people in these ex-colonies are not starving, they actually have excellent seafood!

Unfortuantely, they’re coming here and destructing us. Isolationsim ended on 9/11.

Sorry, but I don't recall any of the 9-11 hijackers being from Iraq.
If Syria attacks us, do we bomb Canada?

There are plenty of successful examples of thriving democratic governments that were originally forcibly created by occupying powers. The post-Civil War southern USA. Japan. Germany. Panama. Greneda. India. The Phillipines. We're up to what, 20% of the world's population?

HARM,

The whole region is sick, you know that. Sadaam was a secular Soviet strongman. The Iranians are the religious strongmen. The Saudis are corrupt monarchist strongmen. They're all cut from the same cloth, and they all breed angry young men who aspire to kill us.

We are trying to reform the whole region, not just Iraq. We had to start somewhere.

They are coming to kill us. We've got to do something.

Joe,

America after 1941 was never isolationist. America has propped up Middleeastern regimes since that time.

Joe, please, no more 9/11 changed everything argument. Bin Laden didn't hate America nearly as much as he hated the American backed Sauds. He bombed us because he wanted to American action and blowback, and the Bush Administration and a coward/callous congress walked straight into Osama's trap.

Also, Iraq is not Afganistan. Iraq is not Bin Laden. But thanks to America's half assed efforts there, it's now a hotbed of anti-American activity that'll take generations to mop up.

The way to deal with terrorists is to policing them and treating them like the criminals that they are. The way to deal with state sponsored terrorism is to isolate the state and turn international opinion against them. By resorting to force and committing ourselves to war there, we are making them into religious and nationalist martyrs and upping their recruitment.

Peter P,

It's much easier to create a functional city state when you start with an unoccupied rock and llimit the population to less than 10 million. When you start in a region full of warring tribes, it becomes much more difficult.

We need less nuclear weapons and better control for all others of killing devices, including semiautomatic and automatic machine guns.

Joe,

A lot more Arabs hate us now than on September 10, 2001 or on March 19, 2003. Who do you think the people with relatives who died in the occupation will blame?

No, we can't control the hatred of the Arabs now hold for us, largely due to our actions since 9/11 and esp. after invasion of Iraq. But I think it's better to contain it at current levels, than escalate it further. These people are indeed dysfunctional, America's support of perceived corrupt regimes and for Israel has caused a small group to target us. By responding so clumsily, we've managed to substantially increase the number of America haters.

Unless you're committed to total genocide or at least several decades of high grade civil war that results in the death of a high proportion of the population (which is the solution of most past civilizations), we have no chance of pacifying the region

There are major difference between the organization of 1945 Japan/Germany and 2006 Middleeast. Those were highly structured and homogenous industrial societies, and ones who had no long racial memory of hatred for the US. Pacifying the Middleeast would make our failed efforts in Southeast Asia look like a cakewalk.

When you start in a region full of warring tribes, it becomes much more difficult.

Singapore is multi-cultural. The "warring" tribes include Chinese, Malay, and Indian. They seem to be living happily together. Must be the Bak Kuh Teh. :)

We need less nuclear weapons and better control for all others of killing devices, including semiautomatic and automatic machine guns.

I still think that nuclear weapons have contributed to peace. Without them we would have to fight several more world wars.

Astrid,

Oh, they've hated us for centuries. It's not just our troops in Saudi Arabia. It's our support of Israel. Before we came along, they hated the Britsh. Before that, they hated the turks. And the Spanish. And the French. And the Catholic Church. That region has been declaring jihad against the west for over 1,000 years.

Consider these specific examples. First, the stationing of American troops in Saudi Arabia in 1990. It's the thing that supposedly enraged bin Laden and caused him to hate us. Do you know why we stationed our troops there? To prevent Sadaam Hussein from invading over the country. Are you suggesting that we should have let him do this? No easy answers.

Second, consider our support for the despotic regimes in the region during the Cold War. Do you know why we supported them? To prevent the Communists from taking over the region and installing their own despots.

Now suppose neither the US nor the Communists had paid any attention to the region for the past 50 years. Do you think that Iraq, Iran, and Saudi Arabia would be flourishing, peaceful Jeffersonian democracies? Or would they still be stoning women to death, chopping off heads, and governed by brutal despots?

With respect to Iraq, the people of Iraq RISKED THEIR LIVES to participate in the government we set up for them. They do want what we are offering. They are trying to build a better life. I don't know if they will be successful. But we've got to give them the chance.

Peter P,

Still, Singapore is one small rock and the ruling family is able to keep a firm grip on its relatively small population. Control of larger areas is much more unwieldy. The Chinese are also the overwhelming majority, accounting for about 3 quarters of the population.

Astrid,

The people of Iraq do not hate us. Some of those in the Sunni Triangle perhaps, and the foreign terrorisrts who have gone there to join the jihad, certainly.

But the insurgency in Iraq woudl be 1,000 times worse if the people of Iraq really were outraged at the presence of American troops on their soil.

They know that we are trying to help them. They see how Sadaam treated them vs. how we do it. Having thousands of armed foreigners in your country might not be an ideal state of affairs, but they know our intentions are basically noble. And they want to live in a democracy, as we do. That is why they risked their lives to go to the elections that we set up.