Good morning, All. 

It has been an interesting month (and more) on the financial front.  I found an interesting article by way of Eric Altermann at Altercation.  It is a very long article but I think Dean Starkman lays the case out plainly:  the mortgage mess was due to a systemic change in the culture of the mortgage/banking industry.  I would go even further and say that the change has permeated our entire economic culture.  I call it the 'industrial model' of economic activity.  Maximum through put for maximum profits short term and sustainability be damned.  Morals be damned as well, as Starkman makes clear.  This article provides one reason to reject Governor Palin's determined effort to 'turn the page' and not look to the past.  How can we figure out what went wrong if we don't look at the past?  And if we don't get a handle on what went wrong, how do we fix it?

I remember when we thought it was scandalous that the dead voted in Chicago.  Now it seems some of them can get mortgage loans.  "Mike Garner: Then the next one came along, and it was no income, verified assets. So you don’t have to tell the people what you do for a living. You don’t have to tell the people what you do for work. All you have to do is state you have a certain amount of money in your bank account. And then, the next one, is just no income, no asset. You don’t have to state anything. Just have to have a credit score and a pulse.

[reporter] Alex Blumberg: Actually, that pulse thing. Also optional. Like the case in Ohio where twenty-three dead people were approved for mortgages."  (the quote is from a NPR piece Starkman cites for a glimpse at the history of the subprime quagmire.)

I have wondered for a while now when the credit card market would blow up.  We have heard stories for some time of people relying on credit cards to meet their monthly expenses.  Moms who use it to pay for groceries and elders for their medications.  This story from MSNBC today gives a hint.  Now American Express is factoring into their equation of credit worthiness where its card members shop and who holds their mortgages.  And it seems that the criteria are used as a sledge hammer rather than a scalpel.  The card holder featured in the story refinanced an adjustable rate mortgage into a fixed rate 30-year mortgage but was slammed because the mortgage was with the infamous Countrywide.  

As the price of oil fell in the market over the last while and settled yesterday below $90/barrel, I wondered what OPEC and other producers might do.  I thought it likely that they would reduce production to keep their prices high.  The falling of the demand for gas as we drive less would give the perfect excuse.  Archcrone at The Crone Speaks has found some evidence that that is exactly what is happening.  She is absolutely right that we should continue to economize on gas usage.  That may be an inevitable outcome considering the rising un/under-employment rate.  Though prices may fall at the pump, if we don't have the income we still cannot buy.

We only have another month of the longest political silly season (elections if you prefer) and I can hardly wait.  The McCain/Palin Campaign has decided to go nasty, as if it hadn't nibbled on the edges of nasty before.  They can't make any headway on issues so character assassination will be the tactic.  I have always been amazed at the grace of losers in the most recent elections who made nice after being savaged by opposing candidates or their Swiftboat supporters.  I would much rather tell the bastards to do unspeakable things to themselves and subject any proposals they made to intense and minute scrutiny before I would even consider supporting them.  I really resent how politics has been hijacked by 'true-believers' who use scorched earth tactics to win.  I almost expect to see them organizing a mass burning at the stake for their opponents.  I, for one, am utterly sick of it.