Rated A (but Investor Discretion Advised)
The fuse coiling up, around, over and through the financial markets continues to burn. Now it’s the Ratings Games. From Bloomberg online:
June 29 (Bloomberg) — Standard & Poor’s, Moody’s Investors Service and Fitch Ratings are masking burgeoning losses in the market for subprime mortgage bonds by failing to cut the credit ratings on about $200 billion of securities backed by home loans.
The highest default rates on home loans in a decade have reduced prices of some bonds backed by mortgages to people with poor or limited credit by more than 50 cents on the dollar and forced New York-based Bear Stearns Cos. to offer $3.2 billion to bail out a money-losing hedge fund. Almost 65 percent of the bonds in indexes that track subprime mortgage debt don’t meet the ratings criteria in place when they were sold, according to data compiled by Bloomberg.
Want to sell investment crapola? Grind it up into pieces, hide it in a financial tortilla and smother it with an exotic 5-cheese Wolfgang Puck-made queso and you’re good.
CNBC Gives a Crash Course in Crashes…
Primer on Subprimes.(Spotted on HP)
Ann Richards - Politics, Property Rights and Texas
The Unforeseen shows how effectively Richards’ political opponents used Property Rights to defeat her in 1994. The Governor illuminates the issue with her own take on what happened and why it worked.
William Greider, “Market Orthodoxy is Breaking Down”
“…We’re borrowing hundreds of billions of dollars every year from our rivals in Asia and Europe to finance our consumption…”
William Greider on the Human Condition and Your Moral Obligations
William Greider features prominently in the film. If Wendell Barry is the poetic narrator, Greider is his journalistic counterpart.
The next clip, entitled “Market Orthodoxy is Breaking Down” is for you Justin.
Wendell Berry’s poem “Santa Clara Valley”
As we’ve trekked across the country, at every screening someone asks about the poem featured in the film. Reading excerpts from his “Santa Clara Valley”, Wendell Berry scores the most symbolic moments in the film: the opening shot of the skyscraper-in-progress; the rancher walking underneath a never-ending freeway; and the return to west Texas montage of rainy pump jacks, barbed wire fences, windmills, migrating geese and a lone tree standing by a reflecting pool. We are of course most grateful to Mr. Berry for sharing his inspired work — his poem served as a guide post for me throughout this, at times meandering, project. So, as promised to many of you who have requested the full text, here it is….
From SABBATHS by Wendell Berry
III. (Santa Clara Valley)
I walked the deserted prospect of the modern mind
where nothing lived or happened that had not been foreseen.
What had been foreseen was the coming of the Stranger with Money.
All that had been before had been destroyed: the salt marsh
of unremembered time, the remembered homestead, orchard and pasture.
A new earth had appeared in place of the old, made entirely
according to plan. New palm trees stood all in a row, new pines
all in a row, confined in cement to keep them from straying.New buildings, built to seal and preserve the inside
against the outside, stood in the blatant outline of their purpose
in the renounced light and air. Inside them
were sealed cool people, the foreseen ones, who did not look
or go in any way that they did not intend,
waited upon by other people, trained in servility, who begged
of the ones who had been foreseen: ‘Is everything
all right, sir? Have you enjoyed your dinner, sir?
Have a nice evening, sir.’ Here was no remembering
of hands coming newly to the immortal work
of hands, joining stone to stone, door to doorpost, man to woman.Outside, what had been foreseen was roaring in the air.
Roads and buildings roared in their places
on the scraped and chartered earth; the sky roared
with the passage of those who had been foreseen
toward destinations they foresaw, unhindered by any place between.
The highest good of that place was the control of temperature
and light. The next highest was to touch or know or say
no fundamental or necessary thing. The next highest
was to see no thing that had not been foreseen,
to spare no comely thing that had grown comely on its own.
Some small human understanding seemed to have arrayed itself
there without limit, and to have cast its grid upon the sky,
the stars, the rising and the setting sun.
I could not see past it but to its ruin.I walked alone in that desert of unremitting purpose,
feeling the despair of one who could no longer remember
another valley where bodies and events took place and form
not always foreseen by human, and the humans themselves followed
ways not altogether in the light, where all the land had not yet
been consumed by intention, or the people by their understanding,
where still there was forgiveness in time, so that whatever
had been destroyed might yet return. Around me
as I walked were dogs barking in resentment
against the coming of the unforeseen.And yet even there I was not beyond reminding,
for I came upon a ditch where the old sea march,
native to that place, had been confined below the sight
of the only-foreseeing eye. What had been the overworld
had become the underworld: the land risen from the sea
by no human intention, the drawing in and out of the water,
the pulse of the great sea itself confined in a narrow ditch.Where the Sabbath of that place kept itself in waiting,
the herons of the night stood in their morning watch,
and the herons of the day in silence stood
by the living water in its strait. The coots and gallinules
skulked in the reeds, the mother mallards and their little ones
afloat on the seaward-sliding water to no purpose I had foreseen.
The stilts were feeding in the shallows, and the killdeer
treading with light feet the mud that was all ashine
with the coming day. Volleys of swallows leapt
in joyous flight out of the dark into the brightening air
in eternal gratitude for life before time not foreseen,
and the song of the song sparrow rang in its bush.
Texas Hill Country Development makes Sunday NY Times
Click image to read (Registration Required)
The Kickoff:
NEARLY two decades ago, Gene and Linda Lowenthal, who were living in Austin, decided that they would eventually want to move to the wide-open countryside. They bought 58 acres in this small town in the Texas Hill Country, about 45 minutes west of Austin, built a small house and moved here in the mid-’90s, finally free of noise and sprawl.
That freedom lasted about nine years. Then, bulldozers started appearing on hillsides once covered with live oak and mesquite trees. Houses and traffic lights popped up on once-forlorn roads leading to their home. Plans for a water line were drawn.
The Lowenthals had to choose: stay, or travel farther out into the Hill Country. “We just wanted a small house where we could enjoy the land and be left alone,” Mrs. Lowenthal said. “People could look at us and say, ‘Your land is worth 10 times more than what you paid.’ But what we wanted is going to be gone.”
Aurora Picture Show
More later on last night’s screening soon but here’s a pict…
Thanks Aurora Picture Show, Documentary Alliance, Houston Sierra Club & Memorial Park Conservancy for all being such great hosts.
Ann Richards - On Texas, Petrochemicals and Pollution
Presenting the first of many The Unforeseen interview outtakes. This particular segment from former Governor Ann Richards.
And the Beat(ing) goes On…
The subprime meltdown has claimed another victim. In this case, it’s not a homeowner, it’s the CEO of Swiss Bank UBS. Like my man Ben Folds says… It’s no fun to be The Man.
From the NY Times…
UBS was the first Wall Street firm to announce heavy losses in the subprime sector, although it was not the only brokerage firm to do so. Last month, Bear Stearns said that it would provide up to $1.6 billion in secured financing to bail out one of two hedge funds run by its asset management division that had sustained substantial losses in complex loans and securities backed by subprime mortgages.
What has this to do with The Unforeseen? It’s strangely reminiscent of the Savings and Loan meltdown which features prominently in the film. If you can, get your hands on a copy of FRONTLINE: The Great American Bailout. The episode focuses on Texas S&Ls and in fact features the Circle C development as well.
Here’s an excerpt from the NY Times Review of the program.
The program is particularly good at showing how the bailout is working, if that is the word, these days. For a look at the way the Resolution Trust Corporation goes about selling off “the empty shopping centers, the golf courses with no greens, the marinas with no water” along with $100 billion worth of securities, Mr. Krulwich visits Austin, Tex., heart of speculationland, where the Government is now “the biggest landlord in town.” He finds incompetence, confusion and possibly political favoritism, which keep raising the bailout bill to the Treasury.
One candid real estate speculator in Sacramento, Calif., tells of the bargains he has been picking up, like a brick house worth $80,000 for about $8,000. He says he would have paid more, but to his surprise his first offer was accepted. As an investor he thought, “Terrific buy!” As a taxpayer he thought, “What a rip-off!”
Now, flash forward to today… (CNN.com, April 11, 2007)
NEW YORK (Reuters) — The federal government should offer troubled borrowers hundreds of millions of dollars to bail them out of subprime mortgage loans, several leading Democratic lawmakers said on Wednesday.
“The federal government can send in an infusion of [money] to prevent foreclosure,” said Charles Schumer, a New York Democrat.
The cash infusion is needed right away and should go to both help fund community groups aiding troubled borrowers and to directly fund bailouts, Schumer said.
Don’t worry. The great news is that the Federal Reserve will be printing and dropping money from helicopters should things get too ugly.
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About The Unforeseen
The Unforeseen, executive produced by Terrence Malick and Robert Redford, premiered at the 2007 Sundance Film Festival. Called "the best film at the festival, hands down" by Film Comment's Gavin Smith, the film documents the struggles between development and preservation of Austin Texas.