Corker Proposes Sanity; UAW Says No Way

Newly elected Senator Bob Corker attempted to reign in the expenses of the Big 3 to achieve long term stability.  Specifically, Corker proposed bringing the Big 3 labor costs more in line with their competition.  Currently the Big 3 spend $70-75/hr in total compensation of it’s workers.  Honda, Toyota and the like only spend $44-48/hr.  Corker proposed lowering benefits to $62/hr by 2010, but the UAW refused to even split the difference.  And those numbers don’t even account for the 700,000 retirees continuing to receive full pay for zero productivity.  The pension plans of the Big 3 add another $31/hr expense to the balance sheet.

One doesn’t have to be a math wiz to see why there is a problem. In 2007 GM with $104/hr in current and former labor costs sold 9.37 million cars but lost $28 billion.  Meanwhile, Toyota with $48/hr in current and former labor costs made a $17 billion profit selling the same 9.37 million cars.  To put these labor costs in perspective, the national average in the private sector for pay plus benefits is $25-27.

Now I know that a lot of people think its unfair to change the pension for people after the fact, and -well- it is.  Unfortunately, if your pension costs drive the company out of business, your benefits drop to ZERO.  It sucks. It’s unfair.  It’s called life. The fact is that both current and former employees of the big 3 are going to need to cut back on their benefits if the companies are to survive.  Here’s one way to lessen the pain: fire your union.  You could drop your pay by your dues and not even see a difference and they are the ones that got you here in the first place.

The sad fact is that the bailout – in a not sane form will eventually be approved.  Because this bailout is as much about the auto industry as it is about the Union Machine.  If all the union companies fail while nonunion ones profit – people might realize that the days where unions were actually needed ended decades ago.  The only people really benefitting from unions are union officials and Democratic campaigns.  Unions paid in $400 Million to Obama alone.  So even if this doesn’t get approved now – it will next month.

Government “Helps” Dow Find The Bottom

In an attempt to solve a problem created by government interference with the free market, the government has promised $700 Billion of additional “help” (minus a considerable amount of pork to get this “absolutely necessary” measure passed).   The market’s reaction? Sell, Sell, Sell! Apparently the greedy wall street bastards have less confidence in the government powers and promises then -well- the government’s own view.

The DJIA is not a perfect measure of the market but it’s an easy reference point.  Here are the closing of the Dow for the last few weeks:

Date Dow Change Notes
Mon, Sep 15, 08 10,917 The week before
Tue, Sep 16, 08 11,059 142
Wed, Sep 17, 08 10,609 -450
Thu, Sep 18, 08 11,019 410
Fri, Sep 19, 08 11,388 369
Mon, Sep 22, 08 11,015 -373
Tue, Sep 23, 08 10,854 -161
Wed, Sep 24, 08 10,825 -29 President Bush proposes $700B bailout
Thu, Sep 25, 08 11,022 197
Fri, Sep 26, 08 11,143 121 Democrats claim they have an agreement
Mon, Sep 29, 08 10,365 -778 House Republicans rejects first bill
Tue, Sep 30, 08 10,850 485
Wed, Oct 1, 08 10,831 -19 Senate passes revised bail out
Thu, Oct 2, 08 10,482 -349
Fri, Oct 3, 08 10,325 -157 House passes revised bail out; Bush signs
Mon, Oct 6, 08 9,955 -370
Tue, Oct 7, 08 9,447 -508
Wed, Oct 8, 08 9,258 -189
Thu, Oct 9, 08 8,579 -679
Fri, Oct 10, 08 8,451 -128

Note that in the week and a half before this “crisis” was declared such, the Dow dropped 92 points.  In the week and a half that the government displayed its competence at promising help without mentioning how we got here, the Dow dropped another 500 points.  And in the sole week since the ill-conceived  solution became law the Dow has plummeted another 1874 points.

How many billions will it cost tax payers to bail us out of this bail out?

UPDATE: Another week and the Dow has “recovered” to 8852.  Only another 2000 point gain is now needed to get us back where we started…

How The $$ Crisis Happened: A Historical Look

There has been some finger pointing on this Fannie & Freddie, sub-prime mortgage debacle – but not nearly as much as – oh – the baseball steroid scandal.  Why?  Well a lot of the congressmen to blame are still around and an election is coming up…. So here’s a look at the long road to colapse as well as some of the warnings that could have prevented it.

1977 – Community Reinvestment Act – President Carter & Democratic Congress

The CRA was a result of national pressure for affordable housing, and despite considerable opposition from the mainstream banking community. The CRA mandates that each banking institution be evaluated to determine if it has met the credit needs of its entire community. That record is taken into account when the federal government considers an institution’s application for deposit facilities. The Act charged the Federal Reserve System to implement the CRA through ensuring banks and savings and loans met their CRA obligations. The CRA is also enforced by the “FDIC”, CRA Statute.  – wikipedia.org

1989 – Financial Institutions Reform Recovery and Enforcement Act – President Bush Sr. & Democratic Congress

FIRREA was enacted in the wake of the savings and loan crisis of the 1980s. As part of a general reform of the banking industry, it increased public oversight of the process of issuing CRA ratings to banks. It required the agencies to issue CRA ratings publicly and written performance evaluations using facts and data to support the agencies’ conclusions. It also required a four-tiered CRA examination rating system. Fed Chairman, Ben S. Bernanke, states that this law greatly increased the ability of advocacy groups, researchers, and other analysts to “perform more-sophisticated, quantitative analyses of banks’ records,” thereby influencing the lending policies of banks. – wikipedia.org

1992 – Federal Housing Enterprises Financial Safety and Soundness Act – President Bush Sr. & Democratic Congress

This required the Federal National Mortgage Association, commonly known as Fannie Mae, and the Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, to devote a percentage of their lending to support affordable housing. This in part, contributed to increased Fannie Mae and Freddie Mac pooling and selling of such loans as securities , (i.e. securitization), and expanded the secondary market for those loans. – wikipedia.org

1993 – Executive Order Regulations Change – President Clinton

In early 1993 President Clinton ordered new regulations for the CRA which would increase access to mortgage credit for inner city and distressed rural communities. The new rules went into effect in 1995 and featured: requiring numerical assessments to get a satisfactory CRA rating; using federal home-loan data broken down by neighborhood, income group, and race; encouraging community groups to complain when banks were not loaning enough to specified neighborhood, income group, and race; allowing community groups that marketed loans to targeted groups to collect a fee from the banks. According to a United States Department of the Treasury study of lending trends in 305 U.S. cities between 1993 and 1998 467 billion dollars in mortgage credit flowed from CRA-covered lenders to CRA-eligible borrowers. The number of CRA mortgage loans increased by 39 percent. Other loans increased by only 17 percent. – wikipedia.org

Under the Clinton administration, federal regulators began using the act to combat “red-lining,” a practice by which banks loaned money to some communities but not to others, based on economic status. “No loan is exempt, no bank is immune,” warned then-Attorney General Janet Reno. “For those who thumb their nose at us, I promise vigorous enforcement.”    The Clinton-Reno threat of “vigorous enforcement” pushed banks to make the now infamous loans that many blame for the current meltdown, Richman said. “Banks, in order to not get in trouble with the regulators, had to make loans to people who shouldn’t have been getting mortgage loans.”  – CNSNews.com

1994 – Riegle-Neal Interstate Banking and Branching Efficiency Act – President Clinton & Democratic Congress

This repealed restrictions on interstate banking, beginning a wave of bank mergers. This gave advocacy groups power to demand more loans to their constituents because CRA allowed them to charge noncompliance and stop such mergers. Fed Chairman, Ben S. Bernanke, states that over time community groups and nonprofit organizations established “more-formalized and more-productive partnerships with banks.” – wikipedia.org

1999  – Bank Deregulation Bill President Clinton & Republican Congress

Deregulation, as a liberal hot word, has been attempted as a scapegoat in this crisis.  This is primarily due to the fact that this is the closest that Democrats can tie Republicans to the banking mess.  In truth, the deregulation helped cushion the meltdown as banks stronger in non-mortgage interests were able to come in and buy up some of the failing banks.  Saving tax payers from bailing out  Merrill Lynch, Bear Stearns, and Lehman Brothers along with Fannie & Freddie.  Also Clinton and 139 Dems seemed pretty happy about it at the time.

Summary Facts: Treasury Secretary Rubin and Deputy Secretary Lawrence Summers both supported the bill. Europe already had so-called universal banking. Big, diversified financial institutions have been weathering the crunch better than anyone else and have occasionally swooped in to lessen the pain – which would have been impossible prior to Gramm’s deregulation. The root of this crisis is subprime loans lavished on people who couldn’t truly afford their homes. – TownHall.com

President Clinton signed into law today a sweeping overhaul of Depression-era [New Deal] banking laws. The measure lifts barriers in the industry and allows banks, securities firms and insurance companies to merge and to sell each other’s products. “This legislation is truly historic,” President Clinton told a packed audience of lawmakers and top financial regulators. “We have done right by the American people.” The bill repeals parts of the 1933 Glass-Steagall Act and the 1956 Bank Holding Company Act to level the domestic playing field for United States financial companies and allow them to compete better in the evolving global financial marketplace.  – Nov 13, 1999 NY Times

2002 – Executive Order Regulations Change – President Bush

In 2002 there was an inter-agency review of the effectiveness of the 1995 regulatory changes to the Community Reinvestment Act and new proposals were considered. The Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve System, and the Office of the Controller of the Currency put new regulations into effect September of 2005.The regulations were opposed by a contingent of Democrats because the action “undercuts the statutory purpose of the Act for institutions to meet the needs of low and moderate-income persons and communities by OTS.” The regulations included less restrictive new definitions of “small” and “intermediate small” banks. Intermediate small banks were defined as assets of less than $1 billion, adjusted for inflation (small banks can opt for large bank exam). Large banks have their CRA performance evaluated according to lending, investment and service tests. – wikipedia.org

2004-07 – Fannie & Freddie

Economists at the Federal Reserve and Congressional Budget Office had begun to study them in detail, and found that – despite their subsidized borrowing rates – they did not significantly reduce mortgage interest rates…  [Then] Fed Chairman Alan Greenspan became a powerful opponent, and began to call for stricter regulation of the GSEs and limitations on the growth of their highly profitable, but risky, retained portfolios. In order to curry congressional support after their accounting scandals in 2003 and 2004, Fannie Mae and Freddie Mac committed to increased financing of “affordable housing.” They became the largest buyers of subprime and Alt-A mortgages between 2004 and 2007, with total GSE exposure eventually exceeding $1 trillion. In doing so, they stimulated the growth of the subpar mortgage market and substantially magnified the costs of its collapse. – wall street journal

2004 – House Hearing On Fannie & Freddie

This is an 8 minute video of excerpts from a House Hearing in 2004.  Don’t let congress re-write history.  See and hear with your own eyes who said and thought what about Fannie & Freddie.

2005 – GSE Reform Bill Filibustered By Senate Democrats

In 2005, the Senate Banking Committee, then under Republican control, adopted a strong reform bill, introduced by Republican Sens. Elizabeth Dole, John Sununu and Chuck Hagel, and supported by then chairman Richard Shelby. The bill prohibited the GSEs from holding portfolios, and gave their regulator prudential authority (such as setting capital requirements) roughly equivalent to a bank regulator. In light of the current financial crisis, this bill was probably the most important piece of financial regulation before Congress in 2005 and 2006. All the Republicans on the Committee supported the bill, and all the Democrats voted against it. Mr. McCain endorsed the legislation in a speech on the Senate floor. Mr. Obama, like all other Democrats, remained silent. – wall street journal

White House Warnings

Many critics say that President Bush should have sounded a louder warning about the coming Fannie and Freddie/GSE crisis.  But compared to congressional leaders that assured us that there was “no problem” and that the GSEs were “sound” GW looks like a genius.  Remember that the people that first created the problem, then missed all the warning signs, are trying to say they are the “only ones” that can “fix it” for us.

  • 2001: 1 warning
  • 2002: 1 warning
  • 2003: 6 warnings
  • 2004: 3 warnings
  • 2005: 1 warning
  • 2007: 5 warnings
  • 2008: 17 warnings before congress acted – White House & Gateway Pundit

Dark Knight Cash Cow

After setting all sorts of records opening weekend records with $158M, The Dark Knight had a solid second week rising to a combined $314M.  This means that Batman is currently holding the 23rd position of highest grossing movies of all time – after 2 weeks.  Another week should place it in the top 10 and gunning for the #2 spot (Star Wars $460M) in its first month.  The mighty Titanic still has some breathing room at $600M and it will be interesting to see if DK has the staying power to knock off the “king of the world”.  Here’s hoping.

Guide to .htacess Redirect Same File Type To Same Domain

I’m adding this guide to my site since it apparently doesn’t exist on the web yet (odd as that seems).  .htaccess files are great and handy but the online info about them is sketchy at best.  Everyone seems to have the same 5 examples on their page, copied verbatim from someone else’s site without any extra explanation.

So here was my quandry…

It’s well known how to redirect single pages (note the first option is the page being moved and is a relative location from the main domain directory while the second option is the absolute location to the new file – even if it is the same domain):

Redirect 301 /oldpage.html http://www.domain.com/newpage.html
Redirect 301 /oldpage2.html http://www.domain.com/newpage2.html
Redirect 301 /oldpage3.html http://www.domain.com/dir/
Redirect 301 /oldpage4.html http://www.domain.com/dir/newpage4.html

Or whole sites:

 Redirect 301 / http://www.newdomain.com/

But if you want to do a certain type of files (like all .html files but not every file on the domain) it gets trickier.  Your fine if you want to change servers:

RedirectMatch (.*)\.gif$ http://www.newdomain.com$1.gif

Or change file types:

RedirectMatch 301 /(.*)\.htm$ http://www.domain.com/oldsite/$1.html

But if you want to simply redirect old site links to a folder/directory on the same site you quickly will discover a problem with endless loops as the somefile.html redirect to /dir/somefile.html will keep getting redirected resulting in a url with /dir/dir/dir/dir/dir/dir/dir/….

[ This will result in a endless loop ]

RedirectMatch 301 /(.*)\.html$ http://www.domain.com/oldsite/$1.html

Since most people online are passing on magic code they really don’t understand, the syntax can take a while to understand. So here is the code you need to make it work:

<IfModule mod_rewrite.c>
RewriteEngine On
RewriteBase /
RewriteCond %{REQUEST_URI} !^/dir(.*)
RewriteRule ^(.*)\.html$ http://domain.com/dir/$1.html [R=301,NC,L]
</IfModule>

The <if> isn’t necessary but good programming. This doesn’t redirect if the directory name is in the url already.  The R=301 is the redirect code. The NC makes capitialization not matter.  And the L makes it quit at that point (if you have other rewrite options). Enjoy and thank the apache gods it didn’t take 3 hours of useless googling to figure this out.