Friday, December 16, 2005
Long ago, the New Orleans Pelicans played hardball-- care for a game?
WASHINGTON -- Thousands of Louisiana residents who lost their homes to Hurricane Katrina could recover at least 60 percent of their equity investment by selling to a government-created corporation, if legislation approved Thursday by a House committee gets final approval from Congress.
The bill by Rep. Richard Baker, R-Baton Rouge, also would settle the homeowners' mortgage obligations at a time when lenders are sending out foreclosure notices across the New Orleans area, where 205,000 homes were damaged or destroyed by the storm.
The Louisiana Recovery Corporation would be a public body appointed by the president and financed by federal bonds. The corporation is designed to be the financial engine that would drive the redevelopment of southeastern Louisiana, which was torn apart in the Aug. 29 storm.
The corporation would have the power to negotiate with homeowners to buy their flood-damaged homes and bargain with lenders to pay off the balance of those mortgages. According to the latest version of the bill, homeowners could get no less than 60 percent of the equity they had in their homes before the hurricane hit, based on various factors. Lenders would get no more than 60 percent of what is owed to them.
Evolving future plans make it difficult for me to say all I'd like to say about this right now. But this bill seems likely to pass, and, natural questions do seem to surface immediately. (I've invested in distressed properties and have worked with investors who regularly negotiate with banks.)What makes Baker so certain that he can buy out ALL lienholders (First and Second Mortgages, Home Eq loans, Judgments... etc) for 60 cents or less on each dollar owed?
For this Corporation to work, that's what will have to happen. Baker seems fairly confident the Corporation can negotiate that far-- most likely by bundling and paying off hundreds of "at risk" mortgages en masse
to large (out of state?) developers.Beautiful people of greater New Orleans: think about that long and hard before you reflexively pay off your mortgage for top dollar. Think about the position your bank is in. They don't want to foreclose on a flooded, moldy property. They don't want to have it go to auction given all the uncertainty right now. Perhaps, if you play your cards right, they might be very happy to make a deal-- if they think the property is at risk.
Remember, if Baker's bill passes, many mortgageholders of flooded properties will eventually settle their claims with this Corporation for about half (or less) of what they're owed.
What an interesting predicament.
So, given that eventuality, if you have a flooded home and received an insurance check, should you pay off your mortgageholder in full (100%), or should you see if they are willing to negotiate a bit? Perhaps 70 or 80 cents on the dollar right now sounds a lot better to them than 60 cents (max!) at some later date. Would it help you if your mortgage obligation was reduced by 20 or 30%?
Just a far-flung thought. I'm certain other private investors are having similar thoughts right about now.
To determine the pre-Katrina value of the property, the bill instructs the corporation to consider four factors, if possible: an appraisal, an assessment, the market value determined by a formula used by the National Flood Insurance Program and "any other evidence of pre-event valuation that the corporation finds is sufficiently reliable and subject to adequate verification."
For example, if the ultimate value of a home is determined to be $300,000, and $200,000 is owed on the mortgage, the homeowner would receive at least 60 percent of the $100,000 in equity, or $60,000. Other factors, such as home improvements, could drive up the value, while such things as environmental hazards could push it down.
Baker declined to spell out a precise formula for figuring out what the corporation should offer homeowners. Instead, he provided guideposts tied to a home's pre-Katrina value that take advantage of what was a relatively hot housing market. The original version of the bill introduced by Baker in October tied the offer price to post-Katrina value.
That was one of many points Baker negotiated to win support from members of the Louisiana delegation, many of whom were at first skeptical of the complex bill. He also agreed to strip from the corporation the power to seize property through eminent domain and force the corporation to abide by redevelopment plans devised by local officials. He also increased to three the number of nominees the governor would have on the seven-member board.
In a nod to concerns on Capitol Hill of how Louisiana political leaders would spend billions in federal money, the bill makes it likely that the chairman and a majority of the board would be from outside the state [read: Tejas].
That revision to value homes at pre-Katrina levels
is humongoid. One can't be sure how well the Corporation will actually live up to this provision, but this is a very interesting development indeed.
Perhaps, enterprising homeowners may use this legislation as a
valuable piece of information to convey to the Loss/Mitigation departments of their mortgageholders, before choosing to settle their mortgage balances with any insurance payoffs they might have received.Disclaimer:
this is solely a political humor site, and no advice should ever be taken from it. Always consult a competent professional before making any financial decision. (There are literally dozens of them.) I only wish to ask entertaining questions at this site. That's my job, to ask questions.
Thursday, December 15, 2005
"The federal government is committed to building the best levee system known in the world"
Or, at least the best Category 3 levee system in the world
(Update: da po'blog
and World Class New Orleans
have more on this):WASHINGTON (AP) - President Bush is requesting $1.5 billion more to help make the levee system in New Orleans stronger
than it was before Hurricane Katrina struck the Gulf Coast.
At a news briefing at the White House, officials dodged the question of whether the levees would be built to withstand a Category 5 hurricane
, using broader language instead to promise that the city's citizens would be safe and the levees would be "stronger and better.""The federal government is committed to building the best levee system known in the world,"
Donald Powell, the top U.S. official for reconstruction, told reporters. "It's a complicated issue."
The money the president is requesting is in addition to the $1.6 billion
he has already committed to repair the breeches in the levees, correct the design and construction flaws and bring the levee to a height that was authorized before the hurricane, a Category 4 storm, hit on Aug. 29, killing more than 1,300 people.
From today's Times Picayune:
In a letter to [Sen. Mary] Landrieu and Gov. Kathleen Blanco, [Sen. David] Vitter suggested that $3 billion [for levees] isn't enough because the Corps of Engineers "has not included major categories of necessary work" in its spending estimates.
He called on Landrieu and the governor to work with him to get the levee allocation increased to $4.75 billion, including $3.75 billion he said it will cost to provide true Category 3 protection and $1 billion as the first down payment "on higher levels of protection throughout South Louisiana."Vitter said that getting financial estimates out of the corps is "like pulling teeth," because the agency is under pressure from the White House not to release numbers that would call into question the $1.6 billion proposed by Bush.
He said the corps' estimate of Category 3 protection work is low because it doesn't call for upgrades of levees that didn't fail after Katrina struck, even though they shared the same design as those that failed.
Wednesday, December 14, 2005
Moving at the speed of Norbizness
I swear, the fun switch over at HFPST
has no "off" position. Part two
in this series made me laugh in violent seizures. And everytime a Katrina evacuee laughs in December, an angel gets his wings.
Our New Orleans 2005
has the run-down on the best benefit album of 2005
. Proceeds go to Habitat for Humanity.
Buy it here
. And buy Chuck's outstanding boxed set
, too, while you're at it. (He's currently donating his profits to hurricane relief, as well.)
Speaking of hurricane relief benefits, if you are one of the lucky souls to have tix to see Willie Nelson and Arlo Guthrie at Tip's
, well, I envy you. (A second show on Friday has been scheduled; Arlo Guthrie "and friends" will perform. Only $20!).
And here's the top 10 albums of 2005 rated by some dude
who thinks his taste in music might be of value to us. I doubt it, but go see for yourself.
Won't last-- Make offer!
It is unclear whether a waiver of redhibition
will be required.
" Title="Del.icio.us" target="_blank">Del.icio.us
Boysie states: W is our "best friend"
The other day I linked to a fine little essay
on New Orleans written by Donald "Boysie" Bollinger, CEO of Bollinger Shipyards. Sunday evening, Boysie went to Washington to dine with the president and first lady. The Houma Courier
reported on what he told his hosts.
"We talked about levees, levees and more levees," said Bollinger, a Lockport native who ate an elaborate, multi-course dinner seated between Laura Bush and the president of Southwest Airlines.
"I said it is very important [President Bush] make a statement out of the White House about the government's plan on hurricane protection," said Bollinger. "The president is fully aware of the problems and the issues, and he realizes that it's very important that he makes a statement on it as soon as possible. He's very much on top of the issue and he is fully aware of the problems Louisiana, Mississippi and Alabama are facing."
The shipbuilding magnate's dinner invitation was connected to the leadership role Bollinger has played in state and national Republican party groups. He has been a delegate to every Republican National Convention since 1976. Bollinger also has served on the Republican National Finance Committee and national steering committee for President Bush and his father, the former president.
While many lawmakers in Congress appear to be losing touch with southeast Louisiana's coastal plight and rebuilding struggles, Bollinger said the president has not.
"He's probably the best friend Louisiana has," said Bollinger. "There's lots of people forgetting us. He's not. I know he's not forgetting about us."
President Bush is committed to helping the region rebuild, said Bollinger, who anticipates an announcement outlining the administration's strategy in coming weeks.
"He just needs to get his arms around what each thing costs," Bollinger said.
So, our "best friend" allows weeks and months to pass before making a strong commitment to Category 5 levees and wetlands protection? Does Bush understand how many THOUSANDS of businesses decided to relocate from Louisiana while he was "getting his arms" around the projected costs? Flood protection will cost $35 billion, Dubya; the price of 16 U.S. embassies in Baghdad; the cost of 7 weeks in Iraq. Let's start there.
What did you do during the trillion dollar war, daddy?
The ultra-alert Pusboy
gave me warning of this. I still can't believe it.
Saving South Louisiana would be a rounding error in the context of this far-flung project of nation-building Iraq. When it's over, Bush's misadventure will be the most expensive war in American history
(save WWII). These are your "fiscal conservatives", America. These are the people who say the budget is "too tight" for Louisiana's needs. These are the people who love it when your blood boils seeing a black man steal a TV in a flooded city, while you remain silent as a trillion tax dollars are dumped into a fractious sandtrap destined for civil war.Congress expects $100B war spending requestLIZ SIDOTI Associated PressWASHINGTON - The Pentagon is in the early stages of drafting a wartime request for up to $100 billion more for Iraq and Afghanistan, lawmakers say, a figure that would push spending related to the wars toward a staggering half-trillion dollars.
Reps. Bill Young, R-Fla., the chairman of the House appropriations defense panel, and John Murtha, D-Pa., the senior Democrat on that subcommittee, say the military has informally told them it wants $80 billion to $100 billion in a war-spending package that the White House is expected to send Congress next year.
That would be in addition to $50 billion Congress is about to give the Pentagon before lawmakers adjourn for the year for operations in Iraq for the beginning of 2006. Military commanders expect that pot to last through May.
Since the Sept. 11, 2001, terrorist attacks, Congress has approved more than $300 billion for Iraq and Afghanistan
, including military operations, reconstruction, embassy security and foreign aid, as well as other costs related to the war on terrorism, according to the Congressional Research Service, which writes reports for Congress.
Murtha mentioned the $100 billion figure last week to reporters, saying "Twenty years it's going to take to settle this thing. The American people are not going to put up with it, can't afford it."
The service branches recently presented their individual requests for future funding to top Pentagon officials."They were very ambitious,"
said Loren Thompson, a military analyst with the Lexington Institute, a Washington-based think tank, who has close ties to the Pentagon.
The administration long has contended that it can't put a price tag on future costs because of the unpredictable nature of war. Critics, mostly Democrats, have accused Bush of delaying his war spending requests for as long as possible to keep budget deficit projections looking smaller.
Such a large funding request - coming during a congressional election year - would present Republicans in the House and Senate with a high-stakes political predicament. On one hand, GOP leaders could choose to sign off on the enormous amount of money - and anger fiscally conservative base voters who elected them to rein in government spending. Or, they could slice the Pentagon's request and leave themselves vulnerable to criticism that they are failing to support troops during wartime.
Thompson said $100 billion would not be surprising, given that bills containing war spending often escape close scrutiny and have turned into Christmas trees for the Pentagon's pet projects.
"The military hangs every wish, and every lost cause, onto the tree in hopes of getting it approved," Thompson said.
Analysts say they expect the services to seek a large chunk of money to replace equipment severely battered in Iraq. And, they say, even if large numbers of U.S. troops start returning home, as some administration officials have hinted, a lot of money still would be needed to relocate personnel and equipment.
Steven Kosiak, an analyst at the private Center for Strategic and Budgetary Assessments, called the figures cited by lawmakers extraordinary but not inconceivable."The number is so high," he said, "that it suggests that there's a significant amount of money in there for costs not directly related to the cost of military operations in Iraq and Afghanistan."
Tuesday, December 13, 2005
I attended a meeting of Citizens for 1 Greater New Orleans
wherein they reported the current status of their Levee Board consolidation petition
. In just two weeks or so, Citizens' has gathered nearly 50,000 signatures!
That's mightily impressive, and shows what can be done when you offer a productive outlet for the frustration and anger everyone is feeling down here.
Gulf Coast tax dollars fund $2 billion embassy in Iraq
flags a WSJ snippet about the new, gargantuan U.S. Embassy in Iraq. The article states that "the 104-acre complex will include 21 buildings, swimming pool, food court and power station
... [The Embassy] is within its $592 million budget and ahead of schedule for June 2007 completion."
Oh, happy day! The Embassy is under its nearly $600 million budget! What a bargain!
Well, not quite
. See, we already spent $1 billion on "U.S. 'embassy' operations" in Iraq before any construction had begun. (Can we see an itemized breakdown on those "operations", perchance?) And the $592 million dollar construction budget doesn't include approximately $700 million needed to run the place and pay for the estimated 1,000 Americans and 400 Iraqis who will work there.So, right now, the Bush administration is spending millions of tax dollars building a power plant for the new Embassy in Iraq while it refuses to spend a dime to help Entergy New Orleans stay in business after the Katrina disaster.
Freedom isn't free! And Bush still refuses to commit to Category 5 levee protection-- something Entergy(N.O.'s only Fortune 500 company) has requested
along with numerous other area businesses. If no relief is given, it's likely Entergy will have to increase already high utility rates another 140%
on its New Orleans customers.
But I'm sure that Embassy food court is gonna be spectacular.
The floodwaters were salty...
so why not the rants
about the aftermath?
Support New Orleans: go to the Mall
Tomorrow there's going to be a noon rally for New Orleans in Washington D.C., near the White House. Senator Mary Landrieu will speak.
According to this web site
, the rally has the support of the entire Louisiana Congressional delegation. Hopefully, their message will penetrate that pesky, nonexistent "bubble"
If not, I suppose we'll have to get an insider's assistance
Monday, December 12, 2005
"A fundamental national security issue for the United States"
Blake finds a defense of New Orleans' port
that is so strong, so forceful, I almost hesitate to excerpt it. Suffice it to say, that once you understand our port's importance to the country, you understand why this sudden stinginess in D.C. is so petty and strategically idiotic.
The displacement of population is the crisis that New Orleans faces. It is also a national crisis, because the largest port in the United States cannot function without a city around it. The physical and business processes of a port cannot occur in a ghost town, and right now, that is what New Orleans is. It is not about the facilities, and it is not about the oil. It is about the loss of a city's population and the paralysis of the largest port in the United States.
Let's go back to the beginning. The United States historically has depended on the Mississippi and its tributaries for transport. Barges navigate the river. Ships go on the ocean. The barges must offload to the ships and vice versa. There must be a facility to empower this exchange. It is also the facility where goods are stored in transit. Without this port, the river can't be used. Protecting that port has been, from the time of the Louisiana Purchase, a fundamental national security issue for the United States.
New Orleans is not optional for the United States' commercial infrastructure. It is a terrible place for a city to be located, but exactly the place where a city must exist. With that as a given, a city will return there because the alternatives are too devastating.
If saving New Orleans is a major national security issue, what does that say about the people who've abandoned it?---
One of my very first posts dealt with Port Security. I think it aged well.
"Seasons change and so did I, you need not wonder why"
"After the second interview with him on Dec. 11... I [asked], 'Well, how is history likely to judge your Iraq war,'
" says Woodward.
"And [Bush] said, 'History,' and then he took his hands out of his pocket and kind of shrugged and extended his hands as if this is a way off. And then he said, 'History, we don't know. We'll all be dead.
President Bush suggested Friday that history will vindicate his decision to invade Iraq, saying he believed that a half century from now, it will be regarded as important a transition for the world as the democratization of Japan was after World War II.
"I'm absolutely convinced that some day, 50 or 60 years from now, an American president will be speaking to an audience saying, 'Thank goodness a generation of Americans rose to the challenge and helped people be liberated from tyranny
,' " Mr. Bush said.
"Save things worth saving"
Tulane University decided to scrap its Computer Science and Engineering programs, presumably, because of perceived "costs".Ashley Morris
Think about this... if there was no Tulane Computer Science and Engineering, there would have been no Yahoo.
Possibly no Silicon Graphics or Netscape either.
Save things worth saving. Save New Orleans. Save Tulane Engineering and Computer Science.
Tulane might as well scrap its Economics Department, too, then. What Econ major is going to take this institution seriously after such a decision? This site
makes a straightforward, "dollars and cents" case for saving the comp sci and engineering programs at TU:
The College of Engineering, which is expensive to operate, has a plethora of benefits. Among those benefits are our prestigious alumni. The largest single donations in Tulane University's history came from two engineering alumni. David Filo, founder of Yahoo!, and Jim Clark, founder of Netscape, both made donations in the amount of $30 million each. Another important fact is that the College of Engineering was furthest along in their goal to raise $58 million dollars for the endowment fund.
Now, a quote from David Filo, "That I was in the position to start Yahoo! was in large part due to Tulane. They gave me a scholarship without which I probably would have never been able to attend." This should say something about the quality of undergraduate engineering education at Tulane University. We, all of Tulane's students, are a bright group. We have produced some great minds. For the University to undermine this potential is wrong.
Wrong, untimely and stupid.
Big H/T to da po' blog
"Fallen so far off the radar screen"
While watching Press the Meat
Sunday morning, I lost my cool when a Wapo reporter quoted a White House "advisor" about Katrina. Chuck T.
found a link
to the quote:
I'm going to tell you something to amaze you; it amazed me yesterday. The last time the president was in the hurricane region was October 11, two months ago. The president stood in New Orleans and said it was going to be one of the largest reconstruction efforts in the history of the world. You go to the White house home page, there's Barney camp, there's Social Security, there's Renewing Iraq. Where's renewing New Orleans? A presidential advisor told me that issue has fallen so far off the radar screen, you can't find it.
Now, that wonderful snippet could be juxtaposed with nearly anything and serve my purposes. I will choose to follow it with the President's imitation of William the Conqueror last Friday after a ho-hum 215k November jobs number
Bush declared that the country's economy continues to gain strength and momentum, "thanks to good old-fashioned American hard work, and productivity, innovation and sound economic policies of cutting taxes and restraining spending."
Even though that "restrained spending" claim is (how shall we say?) without basis in fact
, you can expect to hear that ludicrous assertion repeated more and more by Bushco. After all, repetition is
reality for these guys. For them, there's plenty of money for tax cuts, for war, for KBR
(but I repeat myself), for giveaways to Big Pharma...etc but the only "restraint" I see is when it comes to helping South Louisiana and Mississippi.
RIP Eugene McCarthy
Eugene McCarthy challenged President Lyndon B. Johnson for the 1968 Democratic nomination during growing debate over the Vietnam War. The challenge led to Johnson's withdrawal from the race.
The former college professor, who ran for president five times in all, was in some ways an atypical politician, a man with a witty, erudite speaking style who wrote poetry in his spare time and was the author of several books.
"He was thoughtful and he was principled and he was compassionate and he had a good sense of humor," his son said.
When Eugene McCarthy ran for president in 1992, he explained his decision to leave the seclusion of his home in rural Woodville, Virginia, for the campaign trail by quoting Plutarch, the ancient Greek historian: "They are wrong who think that politics is like an ocean voyage or military campaign, something to be done with some particular end in view."
That is a spectacularly thought-provoking quote. I'd love to see der Karl wrangle with that one.
And I'd totally forgotten that McCarthy ran in '92.
Changed by a kiss
Shannon reminds us that the cultural contributions
of our city extend... into the final frontiers.
He also shares this piece
by Boysie Bollinger, CEO of Bollinger Shipyards, Inc., which I found unexpectedly magnificent.
I like old school star trek. My favorite episode is Plato's Stepchildren,
which contains a famous "first" in TV history.
T-P columnist Lolis Eric Elie helpfully explains
how Dyan French Cole (aka "Mama 'D'") became the city's spokesperson during a Congressional hearing last week. Many thought this was Rep. William Jefferson's doing-- which puzzled me-- but apparently it was one of Rep. Cynthia McKinney's staffers. That doesn't puzzle me.
Rep. Cynthia McKinney, D-Ga., requested that the hearings be held. Her special assistant, Mike Zmolek, helped assemble the list of speakers.
He in turn called the People's Hurricane Relief Fund, a local consortium of community groups spearhead by Community Labor United. They recommended Cole.
Referring to Mama D's outlandish rhetoric and her claims that the levees were bombed, Elie says:
Last week's testimony gave the rest of the nation one more reason to doubt that the people of New Orleans are worthy of their sympathy and support.
Sad, but true.
Excrement in Broadcasting
Instead of informative local talk, the big 870am
has resumed sending Rush Limbaugh's show out to 40 states from 11-2pm. Listening to Rush while driving around devastated areas in New Orleans makes his loony rantings seem even more hilarious than usual. Last time I tuned in he was talking about how Congressman Murtha was such a tremendous friend of our enemies. (Recall that Rush evaded Vietnam because the zits on his ass were too prone to infection, and that Murtha spent 37 years in the Marines and volunteered to fight in 'Nam.)
Sadly, I "missed" Rush's first post-K show broadcast in N.O., which had a memorable exchange recounted by Dave Walker in the T-P.
Limbaugh, the most listened-to radio talker in the land, introduced caller "Ray from New Orleans," where, said the host, "They're getting back to normal in the city."
"Things are not returning to normal," said Ray. "I wish you would come down here to see for yourself."
And thus began an extended segment, interrupted by a commercial break, in which Limbaugh, on his first day back on the air here after three months of local recovery talk, addressed New Orleans' problems both political and geophysical.
Ray set the tone by criticizing President Bush's fabulously framed Jackson Square TV speech to the nation.
"All lies," the caller said. "None of the things that he promised are happening."
Countering Ray's contention that New Orleans isn't progressing toward normalcy, Limbaugh then mentioned that he has friends here.
"And I'm not hearing this from them," he said. "I know it's bad but . . . I'm under the impression that the main problem that the local officials have is that they don't have enough Democrats coming back who fled or who were evacuated and they're worried about the next elections."
Limbaugh added that he'd heard about lots of good-paying recovery jobs going unfilled.
"There's no place for people to live," Ray said.
"The whole city?" Limbaugh countered. "There's nowhere to live? The French Quarter?"
Did the "All-Seeing MahaRushi" incredulously cite the French Quarter as a place full of vacancies?
Is his galactic stupidity "on loan from God", too?
(H/T suspect device
" Title="Del.icio.us" target="_blank">Del.icio.us
The fate of New Orleans is in your hands
NYT editorial via World Class New Orleans:
The price tag for protection against a Category 5 hurricane, which would involve not just stronger and higher levees but also new drainage canals and environmental restoration, would very likely run to well over $32 billion
. That is a lot of money. But that starting point represents just 1.2 percent of this year's estimated $2.6 trillion in federal spending, which actually overstates the case, since the cost would be spread over many years. And it is barely one-third the cost of the $95 billion in tax cuts
passed just last week by the House of Representatives.
Total allocations for the wars in Iraq and Afghanistan and the war on terror have topped $300
billion. All that money has been appropriated as the cost of protecting the nation from terrorist attacks. But what was the worst possible case we fought to prevent?
Losing a major American city.
"We'll not just rebuild, we'll build higher and better," President Bush said that night in September. Our feeling, strongly, is that he was right and should keep to his word. We in New York remember well what it was like for the country to rally around our city in a desperate hour. New York survived and has flourished. New Orleans can too.
Of course, New Orleans's local and state officials must do their part as well, and demonstrate the political and practical will to rebuild the city efficiently and responsibly. They must, as quickly as possible, produce a comprehensive plan for putting New Orleans back together.... So far, local and state officials have been derelict at producing anything that comes close to a coherent plan. That is unacceptable.The city must rise to the occasion. But it will not have that opportunity without the levees, and only the office of the president is strong enough to goad Congress to take swift action. Only his voice is loud enough to call people home and convince them that commitments will be met.
If the rest of the nation has decided it is too expensive to give the people of New Orleans a chance at renewal, we have to tell them so. We must tell them we spent our rainy-day fund on a costly stalemate in Iraq, that we gave it away in tax cuts for wealthy families and shareholders. We must tell them America is too broke and too weak to rebuild one of its great cities.
Our nation would then look like a feeble giant indeed. But whether we admit it or not, this is our choice to make. We decide whether New Orleans lives or dies.