F@$%ing Keynesians:

(H/T: Standard of Living)

And, in case seeing ten minutes of Peter Schiff hammer the same points over and over despite the objections of the voodoo-economic pros, here’s Uncle Strooge.

F@$%ing multiphonic duplicator feds.

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates — anywhere from three to four percentage points higher than conventional loans.

”Fannie Mae has expanded home ownership for millions of families in the 1990’s by reducing down payment requirements,” said Franklin D. Raines, Fannie Mae’s chairman and chief executive officer. ”Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.”

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.

”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”

Under Fannie Mae’s pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 — a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

Fannie Mae, the nation’s biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.

Home ownership has, in fact, exploded among minorities during the economic boom of the 1990’s. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University’s Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.

In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.

Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.

In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae’s and Freddie Mac’s portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.

The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.

The Onion does a better job.

Guess which is from Houston and which belongs in Chicago?

Pretty obvious….Chicago is on the right, with – yes – the highest gas prices in the nation.

How? Why? WHY!?!

Regardless how much as Dick Durbin stresses otherwise, it’s not the oil companies; it’s this.

The problem/regulatory motivation. From the Chicago Tribune:

Five years after the E2 nightclub disaster that left 21 people dead in a stampede, the city has drafted an ordinance designed to prevent such a disaster from ever happening again…

The actual solution (note that it only took 5 years…). From Save Chicago Culture:

The “Event Promoters” ordinance requires any event promoter to have a license from the city of Chicago and liability insurance of $300,000, but that’s just the start:

• The definition of “event promoter” is so loosely defined it could apply to a band that books its own shows or a theater company that’s in town for a one-week run.
• “Event Promoter” must be licensed and will pay $500 – $2000 [every two years] depending on expected audience size.
• To get the license, applicant must be over 21, get fingerprinted, submit to a background check, and jump over several other hurdles.
• This ordinance seems targeted towards smaller venues, since those with 500+ permanent seats are exempt.
• Police must be notified at least 7 days in advance of event.

The solution that doesn’t solve anything…back to the Tribune:

But the city’s licensed venues are already subject to stringent city regulations. Disaster struck when those regulations weren’t properly enforced; the city mistakenly allowed E2 to stay open months after a court ordered it shut. The bureaucracy didn’t do its job. So why make the city’s most well-managed clubs pay for it?

Yes, why should responsible private venues and promoters have to pay for the city’s own regulatory incompetence? I mean, the city’s solution to ineffective bureaucracy is…more bureaucracy!? Good god, goodbye entrepreneurship…

The effect this garbage will have on the Chicago music scene. A quote from today’s Jim DeRogatis article:

“The ordinance will reduce the amount of music in Chicago, make events more expensive for consumers, dampen the large and growing economic engine that is Chicago music and create a much less supportive business climate for Chicago’s small music business community.” [Alligator Records founder and CMC board member Bruce] Iglauer said.

Call to ACTION. What you can do…for that, let’s go back to Save Chicago Culture:

We are collecting signatures to present to the council voicing our opposition to this ordinance. YOUR VOICE IS NECESSARY TO ENSURE CHICAGO’S CULTURAL SCENE CONTINUES TO THRIVE. Please leave a comment as your expression of disapproval. These will be presented to the City Council and to all Chicago Aldermen prior to Wednesday’s vote.

(SCC began collecting on the 9th and as of 1:36pm today, there have been 5,522 signature-comments. I invite you to add your own.)

More importantly, activists are asked to attend this week’s City Council meeting—where the ordinance will be ultimately voted on—in order to make their opposition heard.

When: this Wednesday, May 14, 2008 at 10:00 a.m.

Where: Council Chambers, 2nd Floor of City Hall, 121 N. LaSalle Street, Chicago IL 60602.

If you are unable to be there in-person, according to the Office of the City Clerk’s website, you can view a live broadcast of City Council proceedings here…which is what I’ll be doing. Definitely not as cool but oh well. Hmm, anyone know of a program that captures live video stream? I have a feeling this is something I want to record.

Lastly, if I didn’t explain the story well enough, check out the following video. It’s from a previous City Council meeting in which the ordinance was discussed:

UPDATE: Jumping on the live stream, I quickly realize that the “Event Promoters” ordinance is not on the City Council’s agenda…which appears to be a good thing! From the Tribune:

A proposed event-promoter ordinance that prominent members of the Chicago music community say goes too far was put on hold Tuesday, a day before it was to be voted upon by the City Council.

The decision to further fine-tune the measure before it’s presented to the council was made by Ald. Eugene Schulter after an extraordinary meeting between aldermen and club owners at City Hall...

In response to the outcry, Schulter called an 11th hour meeting Tuesday on the third floor of City Hall that included club owners, members of the Chicago Music Commission, city attorneys and aldermen. At the meeting, Schulter concluded, “there are still unanswered questions and issues that should be considered” and decided against putting the ordinance on the city council’s agenda Wednesday.

More discussions with the music community will now likely take place, which leaves the door open to the ordinance being revised.

…making it the 2nd time in recent history that Schulter has reversed suit due to public pressure. Awesome!