March 6, 2014This morning national treasure Gail Collins tackles a pressing issue that I spend way too much time thinking about: is the American Dream really just an oligarch problem?
My question for today is: Do you think it's fair to call these guys [that would be the Koch brothers] oligarchs? We have been thinking about oligarchs lately since our attention has been fixed on the former Soviet Union, which is Oligarch Central. In fact, the new Ukrainian government just responded to the tensions in its eastern region by dispatching two billionaires to serve as provincial governors.
"Oligarch" sounds more interesting than "superrich person with undue political influence." The Koch brothers have a genius for being publicly boring, while plowing vast sums of money into political action groups designed to make it difficult for anybody to make a good estimate of how much they've given to promote their goal of, um, saving the country.
Now, I realize that since it's become a proscribed strategy of the Democrats to demonize the Kochs, it might be a little less interesting to talk about them. But I find the casual reference to the Russian and Ukrainian oligarchs noteworthy. Obviously, the Kochs (and the ideologue billionaires more adept at keeping their names out of the press) don't seem to have the over-reaching power of the Russian moguls, but they certainly are spending an awful lot of money, and a lot of the ideas they espouse (the government's too big! taxes are theft! wealth is virtuous!) are calcifying into common sense amongst the angry Caucasian set that is the Koch's target audience, and the Kochs are not exactly being transparent about how they're spending their money.
I guess ultimately "oligarch" is a whole different thing than "billionaire," and I think that the negative connotation is deserved, at least in the case of these people who think that elections can be bought.
Posted at 10:29 AM
March 4, 2014This is maybe not the best news in the world, but the developers of the Domino Sugar Factory on the Williamsburg waterfront have reached a deal with the de Blasio administration.
The plan had previously been delayed due to City Hall concerns that the 660 affordable housing units set aside from a total of 2,300 were too few. In the new deal, developer Jed Walentas has now agreed to reserve 700 units for low and moderate income residents and to up the configuration of affordable units to two and three-bedroom layouts. In exchange, Walentas' firm Two Trees will be able to receive a zoning exception allowing the project to rise 55 stories -- 20 higher than current regulations.
I mean, the project will continue (and it is terribly ugly), but the Mayor did use his muscle to get concessions. (The affordable units will not be grand-fathered out, BTW.) Maybe it's just cosmetic, but de Blasio is not rolling over for developers like the previous two mayors.
Of course, Barclay's Center, the arena that a neighborhood got knocked down for, has long promised 2,000 affordable units, which ain't here yet. So there might be a bit of keeping the eye on the ball on this, too.
Posted at 5:47 PM
March 1, 2014Recall about a week ago when I mentioned that the relationship of certain loan servicers with massive rental companies should raise alarm bells?
Alarm bells officially rung:
Regulators and investors, which actually own most of the loans [Ocwen Financial] services, are also questioning the unusual arrangements between Ocwen -- "new co" backward -- and four other publicly traded companies where [Ocwen founder Bill] Erbey is chairman. The companies do things from buying up delinquent loans to renting out foreclosed houses.
The specific regulator is New York State's Superintendent of Financial Services, Benjamin M. Lawsky, who notified Ocwen and its sister companies that they were under investigation. The investors in question are the ones who were selling their stock in Ocwen yesterday once the news of the investigation broke.
Also important to note that this is not the first time that Ocwen has danced with regulators, as last December Ocwen agreed to a $2.1 billion dollar settlement with the CFPB and 49 states over allegations of mishandling mortgages.
To sum up the sins of Ocwen, the largest non-bank loan servicer in the country, they have systematically bungled home mortgages that they were being paid to service (much like the stories you've been hearing since real estate bubble popped), and now they are being investigated for the possibility that they may be pushing homes into unjust/sloppy foreclosure so that companies under common ownership can acquire the foreclosed home and turn it into a rental property.
That last one sounds insane, right? Right.
"If a mortgage goes into foreclosure and you lose those servicing fees, so what," said Christopher Wyatt, a housing consultant and former vice president at Goldman Sachs Group Inc.'s Litton Loan Servicing. "You can funnel it to one of your other businesses and still make money from it."
I know this is all terribly terribly boring. But remember if a guy takes your wallet at gunpoint and gets caught, he does hard time, probably. What if a multibillion dollar company takes your house? What happens to them?
Posted at 8:38 AM
February 28, 2014This is why I voted for Bill de Blasio.
So you may or may not know that I have some ties to the Brooklyn neighborhood of Williamsburg. Granted, not like the ties those have that were born and raised there, but my affinity group moved there in the Eighties, and I joined them in the Nineties for an eleven year hitch. And yeah, it's changed a lot now, to the point of near-unrecognizability, but the "development" projects spurred by zoning changes implemented by the Bloomberg Administration have not yet all been implemented.
Take for example the Domino Sugar factory on the waterfront, not far from the Williamsburg Bridge, with the iconic sign visible from Manhattan. When I lived there, it was still factory, with a couple hundred union jobs. Unfortunately, and in no small part because of a labor dispute, the factory closed in 2004. And it has been the target of (heinous) development plans ever since. And some of these plans even began to leverage community support, through design changes and increase in affordable rental units.
(Between you and me, even the so-called popular plans are still horrifying. Sorry, the neighborhood and its infrastructure is just not designed to support dozens of luxury condo skyscrapers, and frankly the families that lived there for decades deserve better. Actually, not sorry.)
The mayor's administration is insisting that the developer add even more space for affordable housing and, as a result, fewer market-rate apartments, in exchange for the zoning changes that [most recent developer Jed] Walentas needs to build his towers with spectacular views of Midtown Manhattan.
Lookit. The previous mayor had this Randian belief that enticing the super-rich and dangling huge incentives for luxury development would have a sort of trickle-down effect on the rest of the city. ("Hey, you may be priced out of the five boroughs, but imagine the really cool doorman job you can have!") This did not work. In the least.
Developers like Walentas are not only getting zoning rules unilaterally amended, but they're also getting a generous array of tax abatements, rebates, credits, etc. It does not behoove a smart mayor to basically pay some already rich guy to destroy neighborhoods.
OMG I'm anti-business! Well, show me one, one, real estate developer that had to find a new neighborhood further away from Manhattan because someone built a skyscraper next to them.
There are eight and a third million residents in New York City. It's time (and I congratulate de Blasio for doing so) to think of them as constituents and not as collateral damage to the wheels of "progress."
Posted at 10:23 AM
February 27, 2014God, that was the sort of publishing interruption that usually accompanies big old life tragedies or holiday seasons or vacations or that sort of thing. None of which are the case.
I made the ill-advised decision to take some (non-writing) side projects on top of the day job and everything else, and then managed to give myself a sinus infection in the process.
Oh, not that there aren't tiny little tragedies here and there, but no one likes a whiner, right?
We'll see if my left maxillary sinus decides to behave today, and then I'll start the process of figuring out which of the many very interesting developments are worth a couple hundred of words on my part.
Thanks for your continued support.
Posted at 11:02 AM
February 20, 2014Here is some news that demonstrates the modern disconnect in different ways!
Since you are reading this, you probably heard that yesterday Facebook purchased a messaging app called WhatsApp in a deal that could be worth up to $19bn. A bit of tech business news, that, which rocketed all over Twitter and the other various platforms where the digicognoscenti hang.  It's the biggest deal ever for a VC-funded company! WhatsApp is on track to scale to a billion users! Etc. (And of course then jokes. Always with the jokes. Personally, I like this one.)
And of course in the real world, people are watching the Olympics or praying for the Ukraine or playing GTA 5 or eating dinner. This is tailing effect to the weird mirror world that Silicon Valley tech billionaires live in: a transaction that is only salient to them gets swirled out into the world where we take our own garbage out, and we're supposed to get all hepped up because tech wealth is virtuous and we've run out of things to worship.
The world still spins, but their world spins more fabulously.
And here's the other way to demonstrate the disconnect, based on Jeff Bezos' recent purchase of the Washington Post for $250 million, we can calculate the relative value of the Post, with it's paid dead-tree circulation of over 400,000, with it's place in history and all its Pulitzers, as compared to WhatsApp.
WhatsApp is worth seventy-six Washington Posts.
Have a great Thursday!
Posted at 10:19 AM
February 18, 2014This is the best trend piece I've read all week, and by best of course I mean yikes: the NYT finds that the mortgage abuse that cost The Banks so much a couple years ago are back and better than ever:
Shoddy paperwork, erroneous fees and wrongful evictions -- the same abuses that dogged the nation's largest banks and led to a $26 billion settlement with federal authorities in 2012 -- are now cropping up among the specialty firms that collect mortgage payments, according to dozens of foreclosure lawsuits and interviews with borrowers, federal and state regulators and housing lawyers.
Now, it's not really the business of a news article to bring this up, but this is an example of the Efficiency of Markets Solving Everything. The mere act of attending to mortgages got The Banks into a little hot water, so some smart guys thought to themselves, hey, maybe there's some way that we can buy the part of the mortgages that's a headache for The Banks (the trying to collect money part), and then find ways to make even more money doing it.
So then everyone is cheered and the crisis is over and Niall Ferguson smugs it up all over the place.
Yeah but, the thing that the Market is really efficient at is making money, not attending to consumer needs. Servicers don't make money by being thorough and competent — they make money by doing it quickly, and, in some cases, by doing it poorly:
...the specialty servicers are buying the rights to collect payments at discounts, along with the loan advances -- the money that the servicers pay to investors to cover any delinquent payment. The sooner the servicer can make the loan current again, the sooner investors pay back the servicers' advance in full. That kind of arbitrage could incentivize servicers to offer modifications that cause borrowers to default again, investors say.
Arbitrage! Which is good for the servicers, because it's too impossibly complex to explain to someone watching World News Tonight.
And if that's not sinister enough, check this:
The servicers also have relationships with companies that can benefit from foreclosures.
William Erbey, Ocwen's chairman is also the chairman of Altisource Residential, which buys up delinquent mortgages and owns foreclosed homes turned into rentals. Altisource's loans are serviced by Ocwen. According to securities filings, Mr. Erbey recuses himself from issues that relate to both companies and Ocwen adds it has a "strictly arms-length business relationship" with Altisource.
Recusal notwithstanding, I'd say the fact that an industry that has sway over whether homeowners are foreclosed upon or not has any kind of relationship at all with an industry concerned with globalized, centralized slumlording should raise all sorts of alarm bells.
Posted at 9:34 AM
February 14, 2014I know that Tom Perkins, he of the Kristallnacht reference, is eighty-two years old, and as such, he is allowed to have some peculiar ideas. After all, he was alive before we all had cellphones, and before there was even basic cable! He's bound to have a couple real doozies rattling around in that octogenarian head.
But this one goes above and beyond.
When challenged to say, in 60 seconds, how he would change the world, Perkins made a playfully controversial response. He suggested that, in the tradition of Thomas Jefferson's voting land owners and Margaret Thatcher's idea of only allowing taxpayers to vote, "The Tom Perkins system is: You don't get the vote if you don't pay a dollar in taxes. But what I really think is it should be like a corporation. You pay a million dollars, you get a million votes. How's that?" To which the audience responded with laughter. Perkins later said offstage that what he meant was that, with 50% of registered U.S. voters not paying taxes, "we got ourselves into a mess."
I'm still picking crazy out of my teeth from that one.
Though it really should make the rest of the Silicon Valley Self-Actualization Zone a little bit uncomfortable, because Perkins edged ever closer to coming out and saying that what would work best is a Plutocracy, and that's supposed to be a secret.
I guess all this is not so shocking considering that these comments were delivered at an event called The War On The One Percent.
Posted at 10:36 AM
February 10, 2014Last night I spent a diverting half an hour last night looking over Forbes' list of the billionaires of the world, all 1,342 of 'em.
I mean, we toss the word around all the time, like a schoolyard taunt. But billionaires, my friends, are real. Like you and me. But with billions and billions of dollars.
Here's some fun things I noticed.
First thing I did is check (list is searchable) for one of the obvious candidates for wealthiest person alive: Vladimir Putin. It's long been no secret that power is not the only thing he's been amassing in Russia.&nbps; Not on the list! And for that matter, neither is Kim Jong-un, who presumably would be worth at least a cool billion. So the list does have its blind spots. I presume that billionaire criminals are also not on the list.
However, those Koch brothers we're always shining a light on (such as when some knucklehead at a Koch event leaves a confidential donor list behind)? Well they are actual billionaires, tied for number six on the list, with $34b a piece.
Which makes you wonder: why list them individually? Why not just call them "The Koch Brothers" and be done with it? Melinda Gates doesn't appear on the list, but you know for sure that some of Bill Gates' (#2) $67b has Melinda's name on it. Though sometimes the individual is noted as "X and family," (such as #40, German Larrea Mota Velasco and Family) which I guess indicate that there is some question of inheritance and interested spread among family members.
Speaking of family members, let's check the Walton family, scions of the fortunes generated by the notably union-averse largest private employer of the United States, Walmart. There are six Waltons (one "and family"). Members of the Walton family occupy rankings 11, 14, 16, 17, 276 and 346, with an aggregate wealth of approximately $114 billion. That's a lotta cabbage!
Coincidentally, here's a neat little story from a long-time Walmart employee about Walmart's slow degradation, and here's an explanation of why your Walmart shopping experience is shitty. Have a read.
Posted at 12:10 PMI've had this fascination with the "lobbying" Richard Berman. Basically, he is an industry shrill who owns a rat's nest of "non-profits" along with another rat's nest of for-profits that end up servicing the non-profits. In fact, last month I suggested that maybe at least part of Berman's motivations in his ceaseless (and sometimes purposely futile) lobbying is his own enrichment.
And now hey look, the NYT is on it! And the reporter, Eric Lipton, shares my suspicions:
But the dividing line between [the Employment Policies Institute] and Mr. Berman's firm was difficult to discern during two visits last week to the eighth-floor office at 1090 Vermont Avenue, a building near the White House that is the headquarters for both.
The sign at the entrance is for Berman and Company, as the Employment Policies Institute has no employees of its own. Mr. Berman's for-profit advertising firm, instead, "bills" the nonprofit institute for the services his employees provide to the institute. This arrangement effectively means that the nonprofit is a moneymaking venture for Mr. Berman, whose advertising firm was paid $1.1 million by the institute in 2012, according to its tax returns, or 44 percent of its total budget, with most of the rest of the money used to buy advertisements.
Maybe this double-dealing is not illegal. But maybe it's something that people, specifically Berman's clients, should be aware of?
Posted at 10:32 AMThat is to say, thanks for your kind thoughts aimed out to other people and the universe in general. That really is the best revenge, right? Kind thoughts.
And with that let's try to move on and may the lessons we've learned inform us in the good ways and not the bad.
Posted at 10:14 AM
February 3, 2014There's a whole lot written about Philip Seymour Hoffman out there. Not to be unkind, but a lot of it (most of it?) is daffy self-important bullshit, stuff that's more about the author than about Phil, stuff that gets basic facts wrong, stuff written by people who have sadly "fallen in love with writing." None it is a mortal sin or anything, but gosh it's cloying.
But I will say this: I don't think Phil had any idea his passing could rip a hole in so, so many hearts. But maybe that was part of the problem.
And those were a couple sentences that were absolutely no fun to write.
Posted at 12:27 PM
January 30, 2014The really frustrating thing about the hack-job double-down on Max Perkin's Kristallnacht that ran this morning — from the Free Market's mind straight to the Wall Street Journal's lips, is that I just can't get any love.
Five days on, the commentariat continues to drop anvils on Tom Perkins, who may have written the most-read letter to the editor in the history of The Wall Street Journal. The irony is that the vituperation is making our friend's point about liberal intolerance--maybe better than he did.
Then there's all this blather about how the IRS and Cuomo and de Blasio all did/said mean things, the kind of thing that wouldn't be out of place in a Daily Caller "thinker." Whiny bullshit and bad facts, mostly.
But what about me and people like me? You don't have to bend the truth or take things out of context; we are ardently opposed to people like Tom Perkins, who do nothing but suck equity out of the system and keep it for themselves. We are unambiguously reproachful of Perkins in the same way that good-minded citizens were against the robber barons of the late 19th Century (who at least employed people, FWIW). We're volunteering.
I mean, it's a fabulously dumb argument: "Liberals are mean to rich people and that's bad." Oof. Maybe money can ameliorate this self-possessed insecurity? But whether we give you the credit you so richly deserve for being a bad person or not, the issue is not "tolerance." The issue is income inequality, and all the tsk-tsks in the world are not going to stop the conversation.
Posted at 10:28 AM
January 29, 2014The State of the Union speech is about the only political theater I allow myself in non-election years. It's a very impressive ritual! The whole rigid chain of events to start, knowing when to clap, when to stand up, when the camera is on you, etc.
And last night was no exception. That was some theater-y theater! President Obama was about as chipper and upbeat as you see him. Some had suggested that the chumminess of the SOTU rivals that of the White House Press Correspondents dinner; Obama's tone matched it. And the topics he chose to highlight were fun too! He's finally on the income inequality bandwagon (though he frames it better than most), he managed a bare mention of gun control, he drew a foreign policy line in the sand, and he even gave a few minutes to the economic rights of women. That last won was unexpected, and I appreciate it on a substantive level and cackle with delight on a tactical level. When the opposition party has a hard time tripping over its dick on issues like abortion rights and birth control, why not throw 'em another one?
Speaking of the opposition party, has there ever been a Speaker of the House more fun to watch during SOTU than John Boehner? He gets the pomp and he knows how to walk through it, but that dyspeptic look he gets belies his congniscience of the hypocrisy of going through the motions and the fact that everyone can tell that he is aware of the hypocrisy of everything and then even yet all he can think about is Dean Martin's hamburger recipe. Also: he is very orange, a condition complicated by his predilection for green ties.
I had fun! And then the nice ladies came out for the GOP official response and I fell asleep thinking I was watching a low-rent Oprah rip-off.
But I made it through another one! I believe that makes ten, right here on titivil.com. Cheers.
Posted at 10:14 AM
January 27, 2014This is Henry Blodget, again saying the right thing on his website that I am sometimes dismissive of even though I'm officially on the author's page (awkward!). Enough about me:
One reason inequality is so bad right now, after all, is that the owners and senior managers of companies are hogging a greater percentage of the value the companies create for themselves than they ever have in history. Meanwhile, they are paying the lowest wages (as a percent of the economy) than they ever have in history.
Blodget writes this in the context of the wake of the World Economic Forum in Davos last week, during which the Great Men of the Planet duly noted the problems and causes of wealth/income inequality, and then looked all innocent as they claimed to have no idea how to fix it.
I mean, it doesn't really take a whole lot of creativity to figure this out. Let's take JP Morgan Chase's Jamie Dimon, who just got a raise. He's going to make $20 million next year, cash, before you even talk about stock options and private jets and the like. According to the Bureau of Labor Statistics, the mean annual wage of a bank teller is $25,790. So, a little quick division, and you get that Jamie Dimon makes as much as a little less than 800 bank tellers.
Or, to look at it another way, the Chase overdraft fee is $34. Roughly five hundred and eighty-eight thousand customers have to bounce a check to pay Dimon's salary.
But hey, don't listen to me. Listen to Blodget:
The idea that there's a law of economics that you have to pay people as little as possible is just an excuse designed to make senior executives and investors feel better about taking almost all of the company's value for themselves. It's not a law. It's a choice -- a selfish choice.
And that's the simple truth.
Posted at 10:10 AM