At this moment, nobody has flood insurance

Given that Congress is still screwing around with other things, the National Flood Insurance Program isn't funded yet. I haven't seen anything correcting any of this, and you'd think that FEMA would make it prominent if indeed it's been fixed in June.

Hey, Big Deal time -- for those of us with June flood insurance premiums, Congress has still not approved or funded flood insurance as of 5/31. So there is NO flood insurance right now.

I may be reading it wrong, so don't take MY word for it:
http://www.fema.gov/pdf/nfip/w_10063.pdf

The NFIP homepage is here:
http://www.fema.gov/business/nfip/

Turns out it applies to EVERYONE.

Congress has time for everything EXCEPT real business at the beginning of hurricane season. This is unreal, like something out of a Roger Corman movie, only this time CONGRESS is the buncha zombies.

Hey, some folks may be in technical DEFAULT on their mortgages over this.

Yep, if your loan requires flood insurance, as so many do, you could be in default. In fact, any mortgage-backed securities based on loans with flood insurance just got riskier too. But since those are all FNMA- or FHLMC-based, nobody cares; we're going to bail all those out anyhow.

Props to My Lovely Wife (or Dr. Melissa Williams) for pointing this out. I thought she was kidding. She wasn't. This is just too much.

UPDATE:

Ilyce Glink, Chicagoland real estate guru extraordinaire, THE Glink of ThinkGlink, has a post on this from 5/28. No updates in sight, either.

SECOND UPDATE:
From Insurance Journal on 6/16/10. Wow, just wow.

Another Update:
Turns out this has been in the HouChron at least once. Forgive me for missing it, but I've never considered the Chron a real newspaper.

Kagan shows how politics influences science

Now this is a blog about business and business stuff, usually. I'm adding this reference because 1) the Supremes have a big say in how we live our lives, and 2) the whole "global warming" hoax has been defended over and over using "science."

If you don't want controversy, and to be really disgusted with politics, don't read further. Go someplace like here and pick a topic.

National Review Online has a great piece today about Elena Kagan's role in a critical industry group's report on the medical necessity of partial birth abortion. [The procedure itself is bad enough, but lying and asking others to lie about its efficacy is pretty despicable in my opinion.] Ms. Kagan basically told an industry organization, a scientific body, how to draft its opinion to make sure that the opinion's summary could be used to defend the White House's position. Her wording reversed the groups scientifically-derived opinion for politics. Shame on her, and I mean that.

Seems like our current Secretary of the Interior Mr. Salazar was doing the same thing with the 6-month ban on new deep well drilling in the Gulf. Looks like George Soros is poised to win on that one.

I'll say it again: John Lennon's "follow the money" quote was spot on. Ok, so the Yoko thing was hinky, but he generally had a good head on his shoulders. Thanks, John.

So "science" is being used here to shut down an industry, right here, right now.

When you add VP Gore and how he has misrepresented "science " to justify his theories, some of this "science" stuff starts to sound more like "religion" (belief without evidence, in this context). Heck, global warming even has martyrs now. "You can't say anything, or he won't be able to save the world."

Thank goodness the ban has been overturned. For now...

Dean Kagan, and I use that word loosely, can hold whatever opinions she'd like on the "slippery-slope" that is abortion rights in this country, but this is unethical, even if it was "her job." She "vas chust doink her chob." Which is what they said at Nuremberg.

The whole episode points out how politicians like to use "science" to justify their policy agendas just as long as science can be manipulated to their ends. Disgusting.

Tenuous grasp on Finance Reform, Sen. Byrd passes

With Senator Robert Byrd's (D; W by God V) passing, it looks like we could be back a few notches on the Frank/Dodd bill. The 2,000-page monster was hammered out a few days ago in the middle of the night, and there's stuff in there that NOBODY can understand, so maybe waiting is a good idea.

On another note, it isn't clear at this point whether the Hon. Mr. Byrd will be buried with his Grand Dragon hood or not. Glenn Beck (shame on him - not really) led with this earlier today. It's a pretty good question, I think, and it's what I thought when Melissa came in to tell me about his death. Maybe that's wrong, but I think that it matters that one was a ranking member of one's local KKK chapter.

Just as we didn't hear about the delegate from Chappiquidick when Steady Teddy passed, we aren't hearing about how Byrd got elected in WV in the first place. [It's pretty well documented that he was in the Klan way back when, described as some kind of social club or something. That's just what the guys at Nuremberg said. Sen. Byrd brought so much prosperity, er, pork to West Virginia.]

Back to the Finance Bill: The news is that Scott Brown (R;MA) (and others, evidently) have indicated that they are unlikely to vote for the bill now that reconciliation has revealed a House move to tax banks differently. Darn.

UPDATE: We have hard evidence from Scott Brown that he will not vote for the modified bill. Good for him. The man apparently has standards.

Finally, the Supremes ruled today on the gun ban in Chicago, indicating again that, yes, the amendments in the Constitution apply to everyone. Including the 2nd now, and now just the 1st, 5th (that was the other day), etc. Thomas Sowell has a good take on it here. [Hint: It's not about safety, it's about self-determination. Duh.]

BofA hiring ... in Default Management

Bloomberg is reporting today that Bank of America has upped its job rolls in response to the recovering economy. Or not. BofA is hiring lots of folks to work with mortgage customers in trouble.

The other banks are doing the same thing, and they'll talk about it today in front of Congress. Should be interesting.

I guess "default management" is the new euphemism for "collections." Sounds much cooler, doesn't it?

Remember Charles Murray?

Remember that guy? He wrote "The Bell Curve" a few years ago, and he's argued in the Wall Street Journal that we should move to a trade-school structure in this country.

Salon.com has an article today in The War Room about how Murray is complaining that he's underpaid as a writer (he isn't, really, but that's how it's spun). Some of the linkys are interesting, so I posted it here.

This is just part of the ongoing debate about the value of writing, books, gatekeepers, etc. that began with the Internet. Same arguments have flowed about MP3 downloads -- are people willing to buy an album to get 2 songs? Are people willing to pay for content, whether printed or musical or ebook or opinion columns?

Laura Miller's post at Salon yesterday brings up some good points, but it all comes back to access. Posting to a blog, or publishing a PDF, is cheap, and evidently some folks have all the time in the world on their hands -- hence, the Internet!

The world needs gatekeepers, whether those are college professors, book editors, record company executives, talent scouts, or the "good old boy (gal) network". It's more needed now that so much information can be posted so quickly -- the signal to noise ratio of the Internet is getting smaller every day.

Our common constraint is bandwidth.

Mortgage help program loses more than it helps

Yahoo Finance is running an AP story that should shock no one. It turns out that the mortgage assistance program promoted by the administration (and Congress for that matter) is helping 27% of the applicants... and losing approximately 35% because they drop out.

Turns out that there was a push to take participants without verification of employment or income at the beginning of the program. Is that surprising to anyone? So, once the verification became part of the process the program lost some folks.

There's still some spin to this -- many of those that dropped out got some kind of mod from their lender. I'm inclined to see that as another "shakedown" (see below).

"You better help these folks mod their loans or YOUR BANK might be the next one under scrutiny in Congressional hearings..."

All the while, no plan for Fannie or Freddie is forthcoming from anyone. Crickets.

Quirky Corporate Governance goes Big Time! Cumulative Voting for EVERYBODY

This just in -- "one man, one vote" is dead. In a move that must make Lani Guinier smile, the Washington Post is reporting that cumulative voting is making its way to the mainstream.

We've had cumulative voting in corporate finance for a while now, but it wasn't until the 80s that it became the darling of lawyers who were left of center. Lani Guinier chief among them. You see, under cumulative voting, you get some number of votes that you can apply to one or two candidates if you want to, and therefore minorities (of opinion OR ethnicity) can have a more fair chance of representation in some form on school boards, etc. See here, with the usual Wikipedia caveats (it can say anything from one day to the next).

Amarillo already uses cumulative voting here in Texas, evidently, for their school board.

Here's something for the folks promoting this to consider, though. With cumulative voting, David Duke would probably have gotten farther than he did. You see, exclusive, biased thinking cuts both ways. Not only do you get to help those who need a voice, but you also get to bias the system toward the fringes. I'm not sure the legal scholars have all of that worked out. I'm also not sure they've thought all of the economic incentive problems through.

In any case, cumulative voting is waiting for it's next big opportunity. As a member of a vanishing majority (folks who actually understand the issues), I'm all for cumulative voting. By the time we get it, I'll need it.

As with so many other things, this isn't something that anyone voted on -- which I guess is the point. This type of thing comes from the court system. Those folks who can't change law in any legitimate way find it efficacious to just go ahead and legislate from the bench.

Oil Industry Update! It's the Chicago way!

Update:

Rep. Barton (R. - TX) calls the $20B BP commitment a "shakedown." In New Orleans, that's the kind of money that comes after someone tells you "where you gots your shoes." Evidently, it's the Chicago way too.

Later Update:
I hope Rep. Barton stands his ground. Apparently, over the weekend the media machine worked to convinced the sheep out there that he was kissing up to BP. I even heard it on conservative talk radio this morning (Joe Pags) -- he doesn't understand either. I thought it was pretty clear that Barton was apologizing for the shameful behavior of the elected representatives of the peepul in Washington, DC.

The problem with what Mr. Barton said is purely the SPIN about what Mr. Barton said. BP is entitled to due process, just like any other corporation or group or person. The SPIN has convinced people that he said something wrong, and the SPIN will get this used against Republicans for evermore. But that doesn't mean that what he actually said was wrong, it means that the media machine went into high gear to convince the sheeple out there that he was apologizing to BP for calling them before Congress or something.

I'm still with him on this -- the $20B promise is a shakedown, plain & simple. Call it whatever you want to, it amounts to a control play by the administration in something that it has no role in. There is a system for dealing with this, and it doesn't involve a slushfund of $5B per year to get things rolling.

Update:
There's been a lot of back and forth from both sides about whether Rep. Barton should apologize, with an effort from some Republicans to distance themselves from this statement.

Ladies & gentlemen, he's calling 'em as he see's 'em. I'm not sure what part of the shakedown people have trouble with -- the fact that it happened, or the relevant application of nomenclature. If our president is going to run an arm-twisting racket in the name of the peepul, let's at least have the decency to call it by the proper name.

OK, more today: NASA in the UK

I'm not sure that this is news (many folks predicted it, and there was evidence before the election that he planned to shake things up in the name of other programs).

Regardless, here's a good take on the current administration's support of space exploration from Times UK. A link from just after the election is here.

Summary: They don't really HAVE a space policy. Familiar?

Sounds like the administration has dusted off the space policy of Jerome Wiesner, Kennedy's science advisor who told him that manned space flight was a waste of money and time. Wow, back to the future. [Coincidence: Sitting Minn. Senator Al Franken has actually played Wiesner on TV -- he's an EXPERT.]

[By the way, there's a good, documented discussion of the changing role of the president's science advisor here.]

To his credit, Weisner's approach was probably sound and grounded in analysis. Manned space flight is costly, and dangerous, and requires heroic figures to undertake. So much more can be done, quantitatively, with robots. Heck, the entire Soviet moon program was based on robots bringing stuff back.

Unfortunately, (eventual) Senator Walter Mondale carried the torch on this, turned the sentiment to his own uses, and the Weisner criticism eventually became the "there's so much to be done DOWN HERE" whine that we've heard for 40 years. That approach seems to be working, by the way. Incrementalism at it's finest, with victories during the original lunar landings. Wow.

Again, if there are any questions about this we should send them to Sen. Franken, as he's officially an expert. Or at least he played one on TV.

UPDATE:
Here's the text of Neil Armstrong's letter to the current administration. He and Gene Cernan (the LAST man to walk on the Moon, and maybe the last America for a while) talked to Congress earlier.

Turns out, too, that John Glenn is asking NASA to keep the shuttle for a few more years. Not that simple, Mr. Glenn.

[For those of you in the Twilight generation, John Glenn was the first free man to orbit the Earth, and Neil Armstrong was the first guy to walk on the Moon. In real time, not via avatar. No kidding!]

Who's next? Oil Industry, looks like

"First they came..." refers to a famous speech given by a German minister after the war, in which he laments that he didn't consider speaking out against the Nazis until they came for him, after coming for the Communists and unionists, and all the other -ists. Oops.

I think it shows the dangers of factionalizing within a populace, and incrementalism.

So in this case, it's been the auto industry, and financial services, and aerospace, and now... oil & gas.

But since this isn't a political blog -- I figured I'd better post something about the new drilling moratorium. Lots of folks in the UHCL family derive their daily bread from the Gulf, and many from offshore oil support and service. Looks like the current administration has it's own agenda.

Secretary of the Interior Ken Salazar changed the results of the expert panel investigating the Deepwater Horizon explosion to make sure they were consistent with the administrations pre-determined 6-month ban on deep drilling operations.

Let's see how long this goes unanswered by the administration... Salazar apologized to the panel last week. Wow.

Heck, this kind of thing happens at the UN all the time! Climate change conclusions are a good example, repeatedly.

This just shows that our government is becoming more and more "progressive" all the time. Maybe we'll have more graft and corruption, too, just like the UN. Then we can "grow up" as a country and be just like Europe.

My heart goes out to the folks in the energy industry who are dealing with the effects of all of this now, including dealing with governmental agendas. Good luck to you guys.

This type of thing shows just how important an administration in Washington can be, and how the disposition of the Executive branch can have a ripple effect throughout America. It's troubling how we never seem to remember that during the campaign phase of elections, only after the do-nothings have been put in office.

One more thing:

I had a chance yesterday to sit down and talk with a fellow who's managing one of our local financial institutions. He'd asked to talk with me about UHCL programs and wanted to participate in some of our activities, and meet our finance students, so I took some time to stop by the branch. In talking with him I found out that one of if not his favorite book is Atlas Shrugged, so we had some good conversation about individualism and personal initiative.

Given my conversation yesterday, and my conversations with students over the past few semesters about their values and motivations, I'm more and more encouraged that things will be OK with America down the road. There are so many hard working and value-driven young people these days. It's very refreshing to see all the hard work and energy people are putting into making this country better and better over time.

I do want to recommend one thing, though:

To all of you who are concientious, and productive, and who value your quality of life and liberty -- I know it's tough to take time to pay attention to politics, but you'd better make time for it. And get out and vote. Because people who DO NOT share your values may end up setting the agenda in this country.

I'm not talking only of the recent presidential election. That's a blip. I'm talking about EVERYTHING. Congress, the tort system, everything. Make time to pay attention to this stuff, and share your opinion with as many people as you can.

For too long the "silent majority" has hunkered down and gotten their work done and kept America humming. I'm not going to advocate anything as radical as John Galt's solution (although I'd much rather be fishing right now). But folks had better wake up and realize that all that work you're doing to get ahead, all that effort, may end up with you finding out that there is no "there" there. By the time you get where you're going, the agendas of many different political movements may have converged to make this country something that it isn't.

Remember, it's easy to ignore the incremental denial of rights and marginalization of value systems when those things only impact someone else.

Please, heed the words of Pastor Niemoller:

"THEY CAME FIRST for the Communists,
and I didn't speak up because I wasn't a Communist.

THEN THEY CAME for the trade unionists,
and I didn't speak up because I wasn't a trade unionist.

THEN THEY CAME for the Jews,
and I didn't speak up because I wasn't a Jew.

THEN THEY CAME for me
and by that time no one was left to speak up."

American Exceptionalism

I've heard a lot lately about "exceptionalism." That's the idea that there's something different & unique, maybe even "special" about America.

Alexis de Tocqueville saw America through the eyes of an outsider. OK, this was before the Civil War, but a lot of his analysis is still relevant. Manybooks.net hosts his book here.

Some folks think it might be the "melting pot" that is our culture (others mock us for having no culture), and some suggest that it's our system of self-rule, under the Constitution, that keeps us unique.

I've even heard that exceptionalism is dead -- we're just like everyone else. Or, said differently, every country/culture is exceptional. According to Dash Parr, that's "another way of saying no one is."

Of course America is different. The challenge is going to be to keep it so.

New rules to help stop market meltdowns

From a story on FT.com today, it appears that new SEC rules are coming out next week to set floors on equity prices. This is an attempt to avoid the kind of firesale that we saw on May 6, and it's an echo of the limits that have been in place since 1987 to deal with daily changes in the S&P500, known as "circuit breakers." Although such a thing is common in futures markets, shutting markets down after max price changes is pretty new for equities, and not very well understood. Only time will tell if these limits are going to to harmful or worthwhile.

More here

UPDATE:

Washington Post Company is the first to trigger the circuit breakers, on 6/16/10. More here.