I wonder if it’s just a coincidence that The One is speaking at Arizona State’s graduation….on the eve of the NRA Convention?

Hmmmmm….

Time Magizne is reporting Turbo Tax Tim’s department (who is part of the Obama administration, you remember), knew about the AIG payments back in February, not last week as claimed.

Someone’s tellin’ a fib.

Why is everyone so angry about these AIG bonuses? The standard answer I’ve heard is that it’s rewarding failure.

So then…why are we bailing out deadbeats who can’t or refuse to pay their mortgage? Isnt’ that failure?

Either I’m a fucking moron, or the people in his cabinet are. Otherwise, the administration wouldn’t be expecting me to believe The One and and those who work for Him weren’t aware of the AIG bonuses until this month.

It wasn’t until Thursday, March 5, 2009, administration sources told ABC News, that officials of the Federal Reserve Bank of New York informed officials of the Treasury Department of the full extent of the $165 million in bonuses pending for the controversial Financial Products Subsidiary.

I’m confused, help me out with this.

The Federal Reserve Bank of New York essentially took over AIG in September of 2008 - they installed their own CEO, went into receivership, the whole nine yards. The Federal Reserve Bank of New York had generous access to sensitive company documents like compensation and employment contracts (ignoring any SEC filings and congressional testimony for a moment). The takeover of AIG was kind of a big deal, right? HUGE  fund transfers to AIG, so you’d think the head of the NY Fed would want to be kept apprised of any significant issues related to AIG. Right? RIGHT?

The President of the NY Fed in September of 2008, while this was going on, was Treasury Secretary Tim Geithner. You know, part of Obama’s administration. What kind of Federal Reserve Bank was Geithner running if he was unaware of these bonuses? Was he too busy trying to clear up his Turbo Tax issue these payments just sat on his desk covered in TPS report for months?

Jake Tapper points out in the article above that by the time the NY Fed started reviewing AIG’s retention program, Geithner was already under consideration for Treasury and he recused himself from the AIG case. Fine, but just because you recuse yourself doesn’t mean some great power sucks all the knowledge you have of the issue out of your brain, never to be accessed again. A nominee has to keep up with current issues in their jurisdiction. SCOTUS nominees are asked their professional legal opinions on issues facing the court, sometimes even on cases they may be adjudicating. Treasury Secretary nominees are no different.

Turbo Tax Tim was nominated on November 24, 2008. On December 10, 2008, just a measly 16 days after Turbo Tax Tim was nominated to head the Treasury, Bush administration officials testified before the House about AIG’s retention program.

On Wednesday, lawmakers grilled Assistant Treasury Secretary Neel Kashkari about AIG’s bonus plan. Rep. Donald Manzullo, R-Ill., asked if a $3 million bonus was too much.

“It is excessive for a failing institution, yes,” said Kashkari.

But so far, no one’s stopping AIG from paying millions to some employees in its new retention program. The company has told 168 employees they’ll receive between $92,500 and $4 million per individual if they stay with the company for one year. That angers some on Capitol Hill.

“These so-called retention payments are nothing less than bonuses,” Rep. Elijah E. Cummings, D-Md., told CBS News. He sent letters to AIG, demanding details of the retention program.

Did Geithner neglect to read the testimony of the rocket-scientist-turned Assistant Treasury Secretary? I don’t know what’s worse - if he neglected to read it because he figured Neel Kashkari was nothing more than a Bush hack (professional malpractice to say the least)….or if he did read it and is now lying to cover his ass?

So let’s see….if I were to give The One the benefit of the doubt and accept His contention that no one in His administration knew the AIG retention bonuses were coming down the pipe, I’d have to believe the following:

- No one in The Office Of The President Elect paid attention to the business conducted in Congress between the election and the inauguration.

- The nominee for Treasury Secretary used a Harry Potteresque Pensieve to store all his memories and knowledge of what was going on with AIG and forgot to spill it out in that little bowl to revisit the memories until recently.

- The staff of the NY Fed keeps its leaders in the dark about controversial issues.

- The Obama administration doesn’t know what the SEC does, or what information is available in a financial statement.

- While there was a vague knowledge of some retention payment plan in place at AIG, no one running Congress, TARP, the NY Fed or Treasury knew the specifics. If they knew the specifics, I’d have to believe these folks just assumed no one at AIG would want to retain staff in the Financial Products Division. I’d have to further believe that anyone who knew of these retention programs assumed AIG would honor some contracts, but not others.

I can keep going, but you get the point.

Te believe the complete bullshit statement that no one in the Obama administration knew anything of these retention payments until March, 2009, I’d have to believe everyone running the country right now are unprofessional, incompetant and utterly, totally, completely clueless.

Well wait a minute, maybe I’m not a fucking moron after all.

From a faux outrage story on the AIG bonuses:

“This is ridiculous,” exclaimed Sen. Jon Tester, D-Mont. He said AIG executives “need to understand that the only reason they even have a job is because of the taxpayers.”

LOLOLOL!!!1111

I’d bet MY next non-taxpayer subsidized bonus that Senator Tester doesn’t understand that statement applies to him.

And let’s not allow this snorffle worthy comment go unnoticed.

“If they have any common sense at all … they ought to give it back,” House Majority Leader Steny Hoyer, D-Md., said Tuesday. “Have they no shame? Have they no sense of responsibility to the taxpayers of America?”

Ummmm…..the AIG bonuses totaled $165 Million. Only $165,000,000.

How much did Congress just promise to shell out under the banner of “stimulus” for Frisbee parks in Austin, TX and the like? $787 Billion. That’s $787,000,000,000.

Yeah, spending 0.02% of what Congress just did is outrageous! That’s zero-point-zero-two percent spent by AIG..and I should be outraged at that, but not at Congress for spending 98.08% more on dog parks and tit-mouse protections? Why won’t I think of the taxpayers! LOL!!!1111

Oh goodness this is funny stuff. My sides hurt from laughing so hard.

I have more on the good stuff in the article, but I have to go back to work and earn my non-taxpayer subsidized salary now so that I can pay for OctoMom’s food stamps.

The Inaugural Poem isn’t selling, but Atlas Shrugged is.

It’s my favorite book, and I’ve read it at least ten times over the years. It truly changed how I live my life. I’m currently listening to the audio book version on my commute. It’s excellent.

Can’t imagine why its popularity is increasing these days. I’m stumped. Oh well. Who is John Galt?

(hat tip to Malkin)

Advance copies of The One’s big speech tonight are floating around the internets. I don’t have time to read it right now. Besides, I like listening to these things live anyway. I find I comprehend complex subjects better when I’m not distracted by pretty pictures or shiny metal objects.

I want to leave you with something to think about while The One delivers his sermon on The Hill. It’s my screen saver at the office, it’s what I have written on a sticky note taped to my two monitors so it’s in my mind every moment I spend helping EVIL rich people minimize their tax burden. It’s something I know to be true, something I’ve witnessed first hand.

“The power to tax involves the power to destroy.” - Chief Justice John Marshall, McCulloch v. Maryland, 1819.

Remember that when you listen to The One lay out his big plans for the country.

… why can’t I find two qualified people to hire for my staff?

I’ve been looking for people since before Christmas. The quality candidates have jobs they’re happy with. I’ve seen one candidate I wanted to hire, and he was snapped up by some other firm very quickly. Since then, all I’ve seen are the less than desirable candidates.

So where are the 500 Million of unemployed every month? I only want two.

The One is set to announce his budget plans this week. I’m trying to say this without laughing…the focus is going to be on deficit reduction. After committing the country to 1 TRILLION DOLLARS in spending with the stroke of a pen, he’s all of a sudden concerned about deficits.

Anywhoo, the usual suspects are the target in his deficit reduction plan, the rich and the military. And if you believe the WaPo,  businesses.

Since The One has never run a business, I thought it might be helpful for him if I reminded him of a few, basic business principles. Feel free to add your own if you think it might help.

1. Businesses do not exist to provide jobs. They exist to make money for their owners. When costs they can’t avoid increase, like tax obligations, business owners look to eliminate costs they can avoid. Like payroll.
2. Business owners provide the capital, and expect a return on their investment. Interfere with either, and they’ll find other places to put their money.
3. No business with a good business model will commit to an annual, repeating fixed cost in exchange for a one time temporary tax credit.  Tax credits are generally seen as a bonus to a decision that was going to be made anyway. And if you keep in mind rule #1, a tax credit won’t encourage job growth. I think you might have gotten this message, but we shall see.
4. Fundamental to any industry in the private sector is equality of opportunity, not equality of results. Don’t believe me - then why isn’t AOL just as big as Google? The Google boys had the same opportunity as the AOL folks, they just did it better and the results reflect that. Punish a businessman’s ability to be better than his competitors, and all you’ll wind up with is a bunch of AOL’s. Businessmen won’t work hard if there’s no big payoff for their efforts. Settling for mediocrity isn’t exactly a payoff.
5. Businesses aren’t nameless, faceless entities that don’t think or feel or vote. They’re owned by people like me, run by people like me, and staffed by people like me. We understand when you attack and tax and impede “businesses” through your rules and regulations, you are doing so to us.
6. Businesses are the producers in this country. Governments are the parasites. We understand that, and we make our decisions accordingly. Do you?

To sum it up….your existence depends on our existence. Your success depends on our success. You might want to keep that in mind.

BUMPED & UPDATED

Thanks to everyone who offered their thoughts on my mortgage situation. There are a couple of comments I’d like to address before I get to what I’ve decided to do, and why.

First, the comment from Anon (which I assume is short for “Anonymous”):

I am not sure what the problem is here. You made an investment that was not guaranteed to stay the same or go up in value. The value of the investment fell. You made a poor investment. What is the big deal?

First off, I wonder if this commenter would have a different opinion if I weren’t able to afford my monthly payments?If I bought this place while making $20,000 a year, because some mortage broker against all common sense told me I could afford it…would this poster then be saying “I’m not sure what the problem is here…”? I don’t pretend to know what angle they were coming at with this, but basically I get the sense that I should STFU and GBTW.

In any case, I’m a big believer of proper word selection. The word “investment”, in my world, is a term of art with certain financial and legal connotations attached to it. Saying I “made an investment” implies I expected my condo to increase in value over time and make a return on my money. I did not. I purchased a home with the thought that if it were to lose value, it would not lose 65% of it’s value. I did anticipate some decrease in value, about 25%. When I made the decision to purchase, I was getting a good deal at $40,000 under comps.

If this were an investment, I could walk away without any negative financial or legal implications. I’d unload this investment on the open market, and sure I’d have a loss, but my credit wouldn’t be hosed and I wouldn’t have to pony up $100,000 to unwind it. People are getting rid of bad investments right now - dumping their “investment” in Citibank and Bank of America on fears of nationalization and suffering staggering capital losses which they can carryback or carryforward and get some financial benefit. For my condo, there is no market for me to sell my unit to, nor do I get any sort of tax benefit for doing so, unlike an investment.

A few other commenters suggested I made the mistake of purchasing, rather than renting if my time frame was to move in three years. When you factor in the tax benefits I would receive from simply paying the bulk of my payments as interest, coupled with the assumption that I could handle a 25% decrease in value and still break even when I sold, the positive outweighed the negatives. However, the point that there was still a risk, albeit a small one, is fair. I agree. I accepted a small amount of risk in exchange for the other benefits. Had I assumed my unit would lose 65% of its value within 18 months of purchasing, I wouldn’t have bought it.

The fact remains….based on the decision points I had in front of me in October 2007, I made a good, solid financial decision. I played by the rules.

Which brings me to what I think I’m going to do.

What angers me the most about The Mortgage Miracle is not that I get nothing out of it, it’s that it rewards people who made bad decisions. The Mortgage Miracle expects me to foot the bill for those who neglected to make use of all the numerous (and free) financial education resources and bought a home they couldn’t afford. The Mortgage Miracle allows people who believed the snake oil mortgage brokers because they wanted that house so badly, no, they deserved that house, to get a free pass for not using common sense. The Mortgage Miracle teaches people nothing, if there are no consequences to their decisions. What it does teach, (is the key to The One’s plan?), is when you fail to think, the government will bail your ass out.

If I were to walk away from my condo, I would become everything I detest. I refuse to do that.

I believe there are consequences for my actions. I believe my word, my signature means something. I believe in analyzing all the facts surrounding a decision in my life, and sometimes it’s not always going to turn out in my favor even if I’m careful. I believe when they don’t, it’s not my fellow taxpayers who are to shoulder my burden. It is my burden.

I made the choice. It was my decision to make, and mine alone.  To expect the government and my fellow taxpayers to pay the consequences of my choices means eventually they’ll want a say in the choice in the first place. That is a slippery slope I do not wish to encourage. Unfortunately, I think we’re headed that direction.

And that my friends, is a very scary thought indeed.

- Original Post Below -

Since yesterday, I’ve been walking around snarkily asking people why I should continue to pay my mortgage. But I want to discuss it seriously now, here, with all two five of my readers.

Here’s an example of the situation I’m in:

1. Purchased my condo in October, 2007 for $200,000. Comps at the time were selling for $240,000.
2. I have a traditional, 30 year mortgage with payments I have no problem affording. The interest rate is about 1.5% higher than current rates.
3. I have an excellent credit score and I haven’t missed a payment on anything in over ten years. In fact, my mortgage payment is always early.
4. I purchased this condo as temporary housing, as I work an hour away and planned on moving closer to the office in three years. It was either pay the money to a rental company and the government, or a mortgage company and get a tax deduction. The amount of money I’d be paying every month was essentially the same.
5. My complex has a very high number or foreclosures and short sales. Every unit around me is empty, save two.
6. Comps, when there are sales, are going for $80,000 - $90,000.
7. Assuming my unit is valued at $85,000 right now, and this is the bottom of the market, it would take 32 years of growth at the rate of inflation (2.5%) to get the value back up to what I financed, let alone what I paid for it.
8. I have alternative housing available.

I am the poster child for “doing everything right” and “playing by the rules” yet The Mortgage Miracle won’t help me with my property value. It may give me a few extra bucks back in my pocket every month through a lower interest rate, if there’s a bank out there that will finance 200% of the property’s value. Which is doubtful.

So what would you do?

EDIT TO ADD: Just spoke to my mortgage broker. The Mortgage Miracle limits the financing to 105% of the value of the home. So if my home is only worth $85,000, under The One’s plan I can only finance $89,250. Also, my mortgage is not backed by Fannie or Freddie, so I don’t qualify for The Mortgage Miracle.