Rolfe Winkler

Democratic Congresswoman Laura Richardson has even Hillary Clinton beat for selective memory problems. Remember how Hillary kept repeating the Bosnia story? That she dodged sniper fire, etc.? She always knew it was a lie, but she needed a concrete example of her foreign policy experience. It was telling that that was the only story she could come up with. I hope the Clintons (and the Bushes) disappear from American politics permanently.

But I digress. Here’s what Richardson said of her property in Sacramento in a statement this past Wednesday:

the residential property in Sacramento California is not in foreclosure and has NOT been seized by the bank.

Moreover:

I have worked with my lender to complete a loan modification and have renegotiated the terms of the agreement — with no special provisions. I fully intend to fulfill all financial obligations of this property.

These are bald-faced lies. According to the WSJ:

The Sacramento home of Rep. Laura Richardson was sold in a public auction two weeks ago for $388,000….James York, the Sacramento broker who bought the three-bedroom, 1.5-bathroom home, rejected the idea that the home hadn’t been seized. The sale of the home was announced in March. “She’s walked away from the property,” he said. “I would be happy to resell her the home for the $535,000.”

Recall from the original story:

The Southern California Democrat bought the house for $535,000 with no money down in January 2007 and owed nearly $575,000 to Washington Mutual when the mortgage was sold earlier this month at a significant loss to Red Rock Mortgage Inc.

And there is additional irony here:

Richardson didn’t vote on the housing rescue deal that passed the House of Representatives two weeks ago and in a statement attributed her absence to her father’s funeral. But Richardson did vote last fall in favor of the Mortgage Forgiveness Debt Relief Act, which passed and prevents the federal government from charging income tax on debt forgiven as a consequence of foreclosure.

Let us pause for a moment of silence in memory of the institution that WAS the Wall Street Journal. As a long-time subscriber to the paper, I’ve noticed it’s devolution since Rupert Murdoch took over. Here’s a clue from the paper itself:

News Corp. Chairman Rupert Murdoch named Wall Street Journal Publisher Robert Thomson as the paper’s new managing editor, succeeding Marcus Brauchli, who left under pressure last month….The move is expected to speed the pace of change at the nation’s second-largest newspaper, creating a more direct pipeline from News Corp. to the paper’s editors….

For the first few months under the new ownership, Mr. Brauchli ran the operations of the paper. Mr. Thomson remained in the background….

Mr. Brauchli presided over a number of changes — more general news, a more urgent and splashy front page, shorter stories — but Mr. Murdoch decided that change wasn’t happening as quickly as he would like…..

Indeed. Now the news page is littered with “general interest” stories: daily updates on the Myanmar Junta refusing aid for cyclone survivors, multiple articles per day about the recent Chinese earthquake. We get it, the Burmese Generals don’t want aid and an earthquake killed lots of Chinese.

I don’t mean to make light of those stories. But the fact is, if I wanted daily updates on those topics, then I’d read the New York Times.

And that’s the point: Murdoch wants to move the Journal away from its roots covering all-things business so that it can compete with the Times more effectively in general interest news.

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The BBC reports on the latest subprime writedown at a major bank. The conventional wisdom is that most of the subprime related credit losses that have to be taken already have been. Going forward, a larger problem for bank net income will likely be increasing provisions for loan losses, as opposed to straight writedowns on holdings gone South. Here’s a list of writedowns to date for major banks worldwide:

MAIN CREDIT LOSSES SO FAR

• Citigroup: $40.7bn
• UBS: $38bn
• Merrill Lynch: $31.7bn
• HSBC: $15.6bn
• Bank of America: $14.9bn
• Morgan Stanley $12.6bn
• Royal Bank of Scotland: $12bn
• JP Morgan Chase: $9.7bn
• Washington Mutual: $8.3bn
• Deutsche Bank: $7.5bn
• Wachovia: $7.3bn
• Credit Agricole: $6.6bn
• Credit Suisse: $6.3bn
• Mizuho Financial $5.5bn
• Bear Stearns: $3.2bn
• Barclays: $3.2bn

Source: Bloomberg and company reports

The main impact of credit losses is that they reduce bank lending. A handy way to think about it, is that banks typically lend out $10 for every $1 in capital on the books. So credit losses of this magnitude can be incredibly DEflationary.

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