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Paul Merrell

Tomgram: Laura Gottesdiener, Security vs. Securities | TomDispatch - 0 views

www.tomdispatch.com/...ner%2C_security_vs._securities

banksters housing-market foreclosures equity-firms Blackstone Progress-Residential

shared by Paul Merrell on 23 Jun 14 - No Cached
  • I live in Washington, D.C.'s Capitol Hill neighborhood. I can more or less roll out of bed into the House of Representatives or the Senate; the majestic Library of Congress doubles as my local branch. (If you visit, spend a sunset on the steps of the library's Jefferson Building. Trust me.) You can't miss my place, three stories of brick painted Big Bird yellow. It's a charming little corner of the city. Each fall, the trees outside my window shake their leaves and carpet the street in gold. Nora Ephron, if she were alive, might've shot a scene for her latest movie in one of the lush green parks that bookend my block. The neighborhood wasn't always so nice. A few years back, during a reporting trip to China, I met an American consultant who had known Capitol Hill in a darker era. "I was driving up the street one time," he told me, "and walking in the opposite direction was this huge guy carrying an assault rifle. Broad daylight, no one even noticed. That's what kind of neighborhood it was." Nowadays, row houses around me sell for $1 million or more. I rent.
  • Washington's a fun place to live if you're young and employed. But as a recent Washington Post story pointed out, the nation's capital is slowly pricing out even its yuppies who, in their late-twenties and early-thirties, want to start families but can't afford it. "I hate to say it, but the facts show that the D.C. market is for people who are single and relatively affluent," a real estate researcher told the Post. The District's housing boom just won't stop; off go those new and expecting parents to the suburbs. And we're talking about the lucky ones. Elsewhere in the country, vulnerability in the housing market isn't a trend story; it's the norm. The Cedillo family, as Laura Gottesdiener writes today, went looking for their version of the American housing dream and thought they found it in Chandler, Arizona. They didn't know that the house they chose to rent rested on a shaky foundation -- not physically but financially. It had been one of thousands snapped up and rented out by massive investment firms making a killing in the wake of the housing collapse. As Gottesdiener -- who has put the new rental empires of private equity firms on the map for TomDispatch -- shows, the goal of such companies is to squeeze every dime of profit from their properties, from homes like the Cedillos', and that can lead to tragedy.
  • Drowning in Profits A Private Equity Firm, a Missing Pool Fence, and the Price of a Child’s Death By Laura Gottesdiener
  • ...4 more annotations...
  • Security is a slippery idea these days -- especially when it comes to homes and neighborhoods. Perhaps the most controversial development in America’s housing “recovery” is the role played by large private equity firms. In recent years, they have bought up more than 200,000 mostly foreclosed houses nationwide and turned them into rental empires. In the finance and real estate worlds, this development has won praise for helping to raise home values and creating a new financial product known as a “rental-backed security.” Many economists and housing advocates, however, have blasted this new model as a way for Wall Street to capitalize on an economic crisis by essentially pushing families out of their homes, then turning around and renting those houses back to them. Caught in the crosshairs are tens of thousands of families now living in these private equity-owned homes.
  • The same month that the family rented the house at 1471 West Camino Court, Progress Residential purchased more homes in Maricopa Country than any other institutional buyer. Nationally, Blackstone, a private equity giant, has been the leading purchaser of single-family homes, spending upwards of $8 billion between 2012 and 2014 to purchase 43,000 homes in about a dozen cities. However, in May 2013, according to Michael Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business at Arizona State University, Progress Residential bought nearly 200 houses, surpassing Blackstone's buying rate that month in the Phoenix area. The condition and code compliance of these houses varies and is rarely known at the time of the purchase. Mike Anderson, who works for a bidding service contracted by Progress Residential and other private equity giants to buy houses at auctions, was sometimes asked to go out and look at the homes. But with the staggering buying rate -- up to 15 houses a day at the peak -- he couldn’t keep up. “There’d be too many, you couldn’t go out and look at them,” he said. “It’s just a gamble. You never know what you’ve got into.”
  • Global private equity firms have not been, historically, in the business of dealing with pool fences and the other hassles of maintaining single-family houses. But following the housing market collapse, the idea of buying a ton of these foreclosed properties suddenly made sense, at least to investors. Such private-equity purchases were to make money in three ways: buying cheap and waiting for the houses to gain value as the market bounced back; renting them out and collecting monthly rental payments; and promoting a financial product known as “rental-backed securities,” similar to the infamous mortgage-backed securities that triggered the housing meltdown of 2007-2008. Even though the buying of the private equity firms has finally slowed, economists (including those at the Federal Reserve) have expressed concern about the possibility that someday those rental-backed securities could even destabilize -- translation: crash -- the broader market.
  • ince Wall Street was overwhelmingly responsible for the original collapse of the housing market, many have characterized these new purchases as a land grab. In many ways, Progress CEO Donald Mullen is the poster-child for this argument. An investment banker who enjoyed a brief flurry of fame after losing a bidding war to Alec Baldwin at an art auction, he was the leader of a team at Goldman Sachs that orchestrated an infamous bet against the housing market. Known as “the big short,” it allowed that company to make “some serious money“ when the economy melted down, according to Mullen’s own emails. (They were released by the Senate Permanent Subcommittee on Investigations in 2010.) As Kevin Roose of New York magazine has written, “A guy whose most famous trade was a successful bet on the full-scale implosion of the housing market is now swooping in to pick up the pieces on the other end.”
Paul Merrell

Rents Are Rising But People Aren't Making Any More Money - 0 views

thinkprogress.org/...rent-up-wages-flat

financial-collapse housing-rental cost-of-living

shared by Paul Merrell on 04 Jul 14 - No Cached
  • The average apartment rent hit $1,099 in the second quarter of the year, new data from a real estate research firm shows, as the gap between the typical American’s cost of living and the wages she earns from working continued to widen.
  • Average rents rose by 0.8 percent from March to June, and are now up 3.4 percent over the past year, according to Reis Inc. data. In total, the average monthly rent price is now up almost 15 percent since 1990, after adjusting for inflation. By comparison, the median household income has grown exactly zero percent since 1990, the Wall Street Journal notes:
  • Even those gloomy national figures paint a rosier picture than the reality that tens of millions of American families face. If you do the math using the top-line numbers, rents still seem affordable: the average calculates out to about 26 percent of a person’s yearly income going toward rent. But that’s not how it actually operates on the ground. A full 50 percent of American renters spend more than 30 percent of their income on housing, which is what researchers define as the cutoff for affordable housing. More than a quarter face extremely unaffordable housing costs, meaning they spend more than half their income on housing. A New York Times and Zillow analysis found that median rent was above the 30 percent affordability threshold in 90 different U.S. cities, even before this most recent quarterly rise in rent prices. Rents are outpacing earnings in part because the demand for rental housing has exploded since the financial crisis. Foreclosed homeowners and others unable to afford or obtain a mortgage are turning instead to the rental market. Cuts to government housing aid spending and the broader stagnation of wages for working people increase the reliance on rental even more.
Paul Merrell

No Fly List: Govt Offers New Redress Procedures - 0 views

fas.org/...no-fly-redress

war & peace no-fly-list Due-Process

shared by Paul Merrell on 14 Apr 15 - No Cached
  • The government will no longer refuse to confirm or deny that persons who are prevented from boarding commercial aircraft have been placed on the “No Fly List,” and such persons will have new opportunities to challenge the denial of boarding, the Department of Justice announced yesterday in a court filing. Until now, the Government refused to acknowledge whether or not an individual traveler had been placed on the No Fly List and, if so, what the basis for such a designation was. That is no longer the case, the new court filing said: “Under the previous redress procedures, individuals who had submitted inquiries to DHS TRIP [the Department of Homeland Security Traveler Redress Inquiry Program] generally received a letter responding to their inquiry that neither confirmed nor denied their No Fly status.” “Under the newly revised procedures, a U.S. person who purchases a ticket, is denied boarding at the airport, subsequently applies for redress through DHS TRIP about the denial of boarding, and is on the No Fly List after a redress review, will now receive a letter providing his or her status on the No Fly List and the option to receive and/or submit additional information.”
  • If the individual traveler chooses to pursue the matter, DHS “will provide a second, more detailed response. This second letter will identify the specific criterion under which the individual has been placed on the No Fly List and will include an unclassified summary of information supporting the individual’s No Fly List status, to the extent feasible, consistent with the national security and law enforcement interests at stake.” The new redress procedures were developed in response to legal challenges to the No Fly List procedures, which argued that the procedures were constitutionally deficient or otherwise improper. The notice of the new procedures was filed yesterday in the pending lawsuit Gulet Mohamed v. Eric H. Holder, Jr., which is one of the ongoing lawsuits over the No Fly List.
  • The CRS report, which predates the newly announced procedures, reviewed many of the legal issues involved. See The No Fly List: Procedural Due Process and Hurdles to Litigation, April 2, 2015.
  • Paul Merrell on 14 Apr 15
     
    Still not good enough. There should be no no-fly list. And if we are to have one anyway, people should be notified before or at the time they are placed on the list Finding out only when you arrive at the airport and are denied boarding is B.S.  Say I decide I want to work in Thailand for a few years teach English as a second language. I arrange for a job there, make the initial payment for rental of housing, get rid of most of my possessions, sell my house, and make other arrangements for a long-term absence from the U.S. Then I get to the airport and learn I'm not allowed to leave the U.S. This is bureaucracy gone nuts, Kafkaeque.   
Paul Merrell

The Financial Crisis | The White House - 2 views

www.whitehouse.gov/five-years-later

Obama economy budget spin lies

shared by Paul Merrell on 18 Sep 13 - No Cached
  • But five years after Lehman Brothers' bankruptcy, we want to help everyone get the context and see the full picture. To mark the anniversary, we've asked senior staff from across the Obama administration to sit down and talk about the moments when key decisions were made — the factors they weighed, the results of the actions that President Obama took. Check out a behind-the-scenes look of the decision-making process that you won't find anywhere else.
  • Paul Merrell on 18 Sep 13
     
    "- Home prices rising at the fastest   pace in 7 years"
Gary Edwards

The Business Offensive: A Symmetrical Ruling Class - 0 views

www.counterpunch.org/...ive-a-symmetrical-ruling-class

Ruling-Class American-Oligarchy Corporate-Oligarchs Corporate-Facsists

shared by Gary Edwards on 05 Nov 15 - No Cached
  • Since the close of World War II, America has sought an integrated policy as the militarization of capitalism
  • In the intervening years, this was not always easy to achieve, as, depending on circumstances, one or the other, the corporate-financial order, and the military itself, asserted itself and made strong demands on government.
  • the Cold War itself providing a cover for the US globalization of power via market penetration, international financial and monetary architecture under US supervision, and the steady build-up of an Armaments State.
  • ...16 more annotations...
  • Yet, the dynamism of early modern capitalism, realized in part through grinding methods of labor suppression, notably, the privatization of force, helped on by a compliant government, meant that within capitalism itself there was tremendous jockeying for power requiring the imposition of Order if major railroads and industrial firms were to enjoy their secure monopoly status.
  • Here government was crucial to harmonious internal structural arrangements, anticompetitive in its policies for the promotion of monopolism sector-by-sector including banking (the House of Morgan, whose offshoots firmed up the organization of railroads and manufacturing) as the means to systemic consolidation—an end to internecine competition—which was achieved in the early 20th century under Theodore Roosevelt and Woodrow Wilson (themselves the Janus-faced construct of the Battleship Navy and supposed liberal internationalism) setting the stage for the present era.
  • In practice, we see the interpenetration of business and government as the integration of monopoly capitalism in its own right.
  • By the late 1940s one can say that the military remained a junior partner of a synthesized ruling group or class, given the overwhelming thrust of business and its ascendant banking wing in defining American capitalism.
  • American capitalism could no longer go it alone, the military increasingly supplying the muscle for continued expansion and profitability. Korea and Vietnam were important chapters in the reshaping of a capitalist polity, with numerous interventions beyond mention the underpinning for a coalescent framework of elites, all making for a structural process of shaking down to the bare essentials the capitalist and military components in search of equilibrium. For otherwise, America feared its decline and would do anything to prevent.
  • Granted, it is hard to conceive of capitalism as a perpetual war machine, especially in America, which labors under the fiction of being, or if it ever was, then remaining, a democracy.
  • But there it is, an arms budget dwarfing all else, military bases strategically gathered worldwide, death squads euphemistically termed Special Ops, presidential-directed drone assassinations, the list goes on—so much so that one almost forgets capitalism is centrally about business and profits, not murder and mayhem.
  • the Great Capitalist Synthesis
  • an accomplice to the more successful militarization of capitalism by holding its own as an integral part in the relationship. In sum, the desideratum of business as usual, as in fleecing the consumer and jeopardizing his/her safety, destroying the environment, and best of all, removing itself from the constitutional foundations of the rule of law.
  • Corporations and banks have become a law unto themselves, with all the organs of government stretching from the Executive, Congress, the Supreme Court, to myriad regulatory agencies some unbeknownst to the public, sitting as a chorus of admiring voices egging them on.
  • Corporate Rescindment of Legal Rights: Business Power Run Amuck,
  • Class-action law suits, frequently the only feasible action of the poor for seeking redress of grievances against the giant corporations, are all but prohibited, replaced in contracts by compulsory-arbitration clauses, intended in the first place to kill class actions, which compel the individual standing alone to face insurmountable odds in a process by which the corporation names the arbitrator, keeps the proceedings secret, and determines the rules of procedure.
  • Civil courts are thrown to the winds.
  • It is as though capitalism, in this one seemingly minor area touching primarily the normalization of everyday relationships, has gone on the offensive, not of course to re-establish its relation to the military, but specifically and directly to exercise its domination over the people.
  • The now-and-future business polity is the fulfillment of the fascist dream, an authoritarian power structure of corporate consolidation supported through governmental suppression of dissent at home and an aggressively waged foreign policy to capture world markets.
  • The small print of the contracts one signs, whether for car rentals or nursing homes, and thousands of transactions in between, emboldens capitalism to go its solipsistic way, to the destruction of freedom, the planet, and human dignity.
  • Gary Edwards on 05 Nov 15
     
    "Since the close of World War II, America has sought an integrated policy as the militarization of capitalism. In the intervening years, this was not always easy to achieve, as, depending on circumstances, one or the other, the corporate-financial order, and the military itself, asserted itself and made strong demands on government. The result was never an intracompetitive mold because each needed and recognized the value of the other, but still there were periods of imbalance in their respective surges of governmental policy-emphasis. American capitalism had become a functional duopoly (C. Wright Mills' Power Elite was a good popular discussion of this general structure at an earlier point in our capitalist-development trajectory after the war), the Cold War itself providing a cover for the US globalization of power via market penetration, international financial and monetary architecture under US supervision, and the steady build-up of an Armaments State. There is nothing actually new here about the American historical pattern, except of course the more explicit and pronounced role to be assigned the military in the stabilization and expansion of American capitalism. The military was never at any point following the Civil War a negligible input in synthesizing the materials for an operational ruling class, but essentially, as in the late-19th century policy of the Open Door, business was sufficiently confident of its own power (the "imperialism of free trade") to carry forward the process of expansion largely on its own. Yet, the dynamism of early modern capitalism, realized in part through grinding methods of labor suppression, notably, the privatization of force, helped on by a compliant government, meant that within capitalism itself there was tremendous jockeying for power requiring the imposition of Order if major railroads and industrial firms were to enjoy their secure monopoly status."
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