Daily Archive: 04/10/2014

Apr 10 2014

Wall Street’s Predatory Land Grab

Laura Gottesdiener is a a journalist and the author of A Dream Foreclosed: Black America and the Fight for a Place to Call Home, who lived and worked in the People’s Kitchen during the occupation of Zuccotti Park. Last Novemeber she wrote about how hedge funds and private equity firms were building a “rental empire” by  buying up foreclosed properties by the thousands, renting them back to working people, and bundling up those properties to sell to Wall Street. If this sounds familiar, it should. It the same scheme that brought down the housing market with subprime mortgages and has the potential to do it again.

   You can hardly turn on the television or open a newspaper without hearing about the nation’s impressive, much celebrated housing recovery. Home prices are rising! New construction has started! The crisis is over! Yet beneath the fanfare, a whole new get-rich-quick scheme is brewing.

   Over the last year and a half, Wall Street hedge funds and private equity firms have quietly amassed an unprecedented rental empire, snapping up Queen Anne Victorians in Atlanta, brick-faced bungalows in Chicago, Spanish revivals in Phoenix. In total, these deep-pocketed investors have bought more than 200,000 cheap, mostly foreclosed houses in cities hardest hit by the economic meltdown.

   Wall Street’s foreclosure crisis, which began in late 2007 and forced more than 10 million people from their homes, has created a paradoxical problem. Millions of evicted Americans need a safe place to live, even as millions of vacant, bank-owned houses are blighting neighborhoods and spurring a rise in crime. Lucky for us, Wall Street has devised a solution: It’s going to rent these foreclosed houses back to us. In the process, it’s devised a new form of securitization that could cause this whole plan to blow up — again. [..]

This inundation has some concerned that the private equity giant, perhaps in conjunction with other institutional investors, will exercise undue influence over regional markets, pushing up rental prices because of a lack of competition. The biggest concern among many ordinary Americans, however, should be that, not too many years from now, this whole rental empire and its hot new class of securities might fail, sending the economy into an all-too-familiar tailspin.

“You’re allowing Wall Street to control a significant sector of single-family housing,” said Michael Donley, a resident of Chicago who has been investigating Blackstone’s rapidly expanding presence in his neighborhood. “But is it sustainable?” he wondered. “It could all collapse in 2016, and you’ll be worse off than in 2008.”

In her current article she focuses on how this is now happening in New York City.

When Predatory Equity Hit the Big Apple

How Private Equity Came to New York’s Rental Market — and What That Tells Us About the Future

   Things are heating up inside Wall Street’s new rental empire.

   Over the last few years, giant private equity firms have bet big on the housing market, buying up more than 200,000 cheap homes across the country. Their plan is to rent the houses back to families — sometimes the very same people who were displaced during the foreclosure crisis — while waiting for the home values to rise. But it wouldn’t be Wall Street not to have a short-term trick up its sleeve, so the private equity firms are partnering with big banks to bundle the mortgages on these rental homes into a new financial product known as “rental-backed securities.” (Remember that toxic “mortgage-backed securities” are widely blamed for crashing the global economy in 2007-2008.)

   All this got me thinking: Have private equity firms gambled with rental housing somewhere else before? If so, what happened?

   It turns out that the real estate market in my New York City backyard has been a private equity playground for the last decade, and the result, unsurprisingly, has been a disaster for tenants and the market alike.

In the Bronx, Benjamin Warren fears that he and other residents could burn to death in a fire because management has blocked both sides of the passageways between buildings designed to offer ways out of the massive apartment complex. (Warren has called the city and management multiple times to complain, but the routes remain shut.) Nearby, Liza Ash found herself intimidated by nearly a dozen hired men when she and other residents of her building, which had heat or hot water only sporadically this past winter, attempted to organize a tenants’ meeting in the lobby. A little farther south, Khamoni Cooper and her neighbors receive a constant stream of fake eviction notices ordering them to vacate their apartments within five days, even though all of them have paid their rent.

These three tenants — and nearly 1,600 more families in 42 buildings — are living through one of the largest single foreclosures to hit New York City since the financial crisis began seven years ago. But here’s the twist. The owner of these buildings is far from a traditional landlord. It’s actually a conglomerate of private equity firms that bet it would be able to squeeze more money out of these buildings than it ultimately could — and ended up unable to pay back the $133 million mortgage.

The problem is that, when things go bust, the tenants, far more than these private equity owners, end up shouldering the costs.

Wall Street’s Land Grab: Firms Amass Rental Empire, Ousting Tenants & Threatening New Housing Crisis

The Blackstone Group, a private equity firm, is now the largest owner of single-family rental homes in the country. In one day alone, Blackstone bought up 1,400 houses in Atlanta. And as private equity firms gobble up huge swaths of the housing market, they are partnering with big banks to bundle the mortgages on these rental homes into a new financial product known as “rental-backed securities,” reminiscent of the “mortgage-backed securities” that helped cause the last financial crisis. Could this new private equity rental empire help spark the next housing crisis? We are joined by Laura Gottesdiener, author of “A Dream Foreclosed: Black America and the Fight for a Place to Call Home,” who calls this wave of purchases “a land grab.” Gottesdiener’s latest article focuses on New York City’s rental market, a case study in what critics call “predatory equity.” Large firms have used abusive tactics to oust tenants in a bid to hike up rents – and tenants have been resisting. We are also joined by Benjamin Warren, who, along with nearly 1,600 families in 42 buildings, is a victim of one of the largest single foreclosures in the city’s recent history.

Apr 10 2014

#NotABugSplat

This is #NotABugSplat

#NotABugSplat photo jr_kpk_full_zps7f10cd11.jpg

Click on image to enlarge.

In military slang, Predator drone operators often refer to kills as ‘bug splats’, since viewing the body through a grainy video image gives the sense of an insect being crushed.

To challenge this insensitivity as well as raise awareness of civilian casualties, an artist collective installed a massive portrait facing up in the heavily bombed Khyber Pukhtoonkhwa region of Pakistan, where drone attacks regularly occur. Now, when viewed by a drone camera, what an operator sees on his screen is not an anonymous dot on the landscape, but an innocent child victim’s face.

The installation is also designed to be captured by satellites in order to make it a permanent part of the landscape on online mapping sites.

Pakistan 2004-2014 CIA Drone Strikes

Total strikes: 383

Obama strikes: 332

Total killed: 2,296-3,718

Civilians killed: 416-957

Children killed: 168-202

Injured: 1,089-1,639

New bill would force Barack Obama to publish US drone strike casualties

by Jack Serle, Bureau of Investigative Journalism

A bipartisan Bill that would force President Obama to reveal casualties from covert US drone strikes has been put before the US Congress.

If successful, the bill would require the White House to publish an annual report of casualties from covert US drone strikes.

The reports would include the total number of combatants killed or injured, the total number of civilians killed or injured, and the total number of people killed or injured by drones who are not counted as combatants or civilians.

The Bill would also compel the White House to reveal how it defines combatants and civilians in its covert drone war.

Past time to stop this wanton killing. It won’t win the nebulous, never ending “war on terror.”

Apr 10 2014

Eric Snowden at the Parliamentary Assembly of the Council of Europe.

The  real deal.  All 76 minutes.

Fingerprints and the Phone Dragnet’s Secret “Correlations” Order

By emptywheel

Published April 9, 2014

Yesterday, I noted that ODNI is withholding a supplemental opinion approved on August 20, 2008 that almost certainly approved the tracking of “correlations” among the phone dragnet (though this surely extends to the Internet dragnet as well).



In spite of the fact that ODNI already (briefly) released Verizon’s name as the provider in question and exacerbated it with this footnote I’m not surprised they’re trying to deny this request.

I am, however, intrigued by the language they use to fight the request, given that we’re talking about whether Verizon provides foreign call records under a domestic program.



From there, ODNI’s declaration goes on to claim that if Verizon’s name were made public, the bad guys would know to avoid Verizon. Which is sort of nonsense, given the reports that Verizon provides not just their own customers’ records, but also those that transit their backbone.

But I do find it interesting that, in a discussion about hiding the name of a telecom that was accidentally turning over some significant amount of entirely foreign call records under a program that – because it was targeted at domestic users – subjected those records to greater oversight than the foreign records turned over under EO 12333, ODNI started with a discussion of its EO 12333 authorized overseas collection. Particularly given that we know Verizon provides an enormous amount of that overseas collection.

That is, ODNI says that they can’t reveal Verizon was the provider that accidentally provided foreign call records under a domestic order – in spite of the fact that they already did – because if they do it will endanger its overseas collection.

She only has the 35 minute version mind you.

Apr 10 2014

Punting the Pundits

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Follow us on Twitter @StarsHollowGzt

New York Times Editorial Board: The Truth About the Pay Gap

Women are the primary or co-breadwinner in 6 out of 10 American families. That makes the economic imperative of addressing the wage gap between women and men important, as is every step President Obama can take in that direction.

On Tuesday, Mr. Obama recognized “Equal Pay Day,” the date that symbolizes how far into this year a woman must work on average to catch up with what an average man earned for the previous year, by signing two executive orders to help reduce the persistent pay disparities. [..]

On Wednesday, Senate Republicans blocked consideration of the Paycheck Fairness Act, which would apply the changes ordered by Mr. Obama for federal contractors to the entire American work force as well as make some other important updates to the federal Equal Pay Act. The outcome was entirely predictable. Republicans also stopped the bill in 2010 and 2012. But wage injustice matters to all Americans, regardless of party, and those who stand in the way of fairness do so at their political peril.

Charles M. Blow: We Should Be in a Rage

Voter apathy is a civic abdication. There is no other way to describe it.

If more Americans – particularly young people and less-wealthy people – went to the polls, we would have a better functioning government that actually reflected the will of the citizenry.

But, that’s not the way it works. Voting in general skews older and wealthier, and in midterm elections that skew is even more severe. [..]

Now we hear murmuring that Republicans hold a slight advantage going into 2014, not strictly because that’s the will of the American people, but because that may well be the will of the people willing to show up at the polls.

There is an astounding paradox in it: too many of those with the least economic and cultural power don’t fully avail themselves of their political power. A vote is the great equalizer, but only when it is cast.

Richard (RJ) Eskow: Invisible Social Security Cuts: Now You See Them, Now You Don’t

The unseen hand of antigovernment ideology can be found everywhere nowadays — even in your mailbox. The proof is in what you won’t find there, like your annual statement of earned Social Security benefits.

The government stopped mailing those out in 2011.

It’s also getting a lot harder to find Social Security field offices, or even to find someone to pick up the phone, as the Social Security Administration enters into yet more rounds of steep budget cuts.

Social Security customer service: Now you see it, now you don’t.

Robert Reich: Why the Minimum Wage Should Really Be Raised to $15 an Hour

Momentum is building to raise the minimum wage. Several states have already taken action — Connecticut has boosted it to $10.10 by 2017, the Maryland legislature just approved a similar measure, Minnesota lawmakers just reached a deal to hike it to $9.50. A few cities have been more ambitious — Washington, D.C. and its surrounding counties raised it to $11.50, Seattle is considering $15.00

Senate Democrats will soon introduce legislation raising it nationally to $10.10, from the current $7.25 an hour.

All this is fine as far as it goes. But we need to be more ambitious. We should be raising the federal minimum to $15 an hour.

Marge Baker: Rigging the Electoral System for the Rich

Either through electoral channels or a constitutional amendment, the American people must fight back against Supreme Court rulings like Citizens United and McCutcheon.

A poll conducted late last year found that more than seven in ten voters (pdf) think our election system is “biased in favor of the candidate with the most money.”

While nothing about this number is surprising – except, perhaps, that it’s not even higher – it does reveal the depth of cynicism characterizing Americans’ perceptions of our political system. We believe, correctly, that the system is rigged for the rich.

Especially in the wake of this month’s McCutcheon v. FEC Supreme Court decision that allowed our country’s wealthiest to dump even more money directly into our elections, it’s easy to feel overwhelmed by the enormity of America’s money in politics problem.

But as always, the biggest dangers create the biggest opportunities for change. With the McCutcheon ruling, the Supreme Court added fuel to an already awakened giant – a nationwide movement to reclaim our democracy that’s gaining steam like never before.

Robert L. Borosage: This Is Who They Are: The Republican Budget Vote

This week, the House of Representatives will vote on the Republican budget, presented by Republican Budget Chair Paul Ryan (as well as alternatives from the Democratic leadership, the Congressional Progressive Caucus “Better Off Budget,” the right-wing Republican Study Group budget and Congressional Black Caucus). Republicans are reportedly lined up to vote for the Ryan budget, with the exception of a handful that think it is not extreme enough.  [..]

This “identifies who we are.” So who are they. In brief summation, the Ryan budget is a remarkably disingenuous document. Its authors claim to be putting the “tough choices” before voters. But it identifies the taxes that Republicans would cut, but not the loopholes they would close or the taxes they would raise to pay for the cuts as promised. It identifies the savings that they would create, but not the programs that they would cut in achieve them.

Even with that, the Republican budget does identify “who we are,” what they value, what their priorities are. These are unsurprising but remarkably unconscionable.

Apr 10 2014

Breakfast Club: 4-10-14 (Pakistani Edition)

by angel d, I just cleaned it up- ek

Welcome to The Breakfast Club! We’re a disorganized group of rebel lefties who hang out and chat if and when we’re not too hungover  we’ve been bailed out we’re not too exhausted from last night’s (CENSORED) the caffeine kicks in. Join us every weekday morning at 9am (ET) and weekend morning at 10:30am (ET) to talk about current news and our boring lives and to make fun of LaEscapee! If we are ever running late, it’s PhilJD’s fault.  

(Truth be told, friends, we’re really not that disorganized; the fact that we’ve managed to put this series together and stick with it disabuses the notion that we’re disorganized, right?  Also, I wish I had a censored night once in awhile, but alas, this is something my producers made me say.)

 photo bunnycake.jpg

This Day in History

This bit was also cross-posted at Voices on the Square, The Stars Holllow Gazette and, probably at Docudharma.

Apr 10 2014

On This Day In History April 10

Cross posted from The Stars Hollow Gazette

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

April 10 is the 100th day of the year (101st in leap years) in the Gregorian calendar. There are 265 days remaining until the end of the year.

On this day in 1970, Paul McCartney announces the breakup of the Beatles.

The legendary rock band the Beatles spent the better part of three years breaking up in the late 1960s, and even longer than that hashing out who did what and why. And by the spring of 1970, there was little more than a tangled set of business relationships keeping the group together. Each of the Beatles was pursuing his musical interests outside of the band, and there were no plans in place to record together as a group. But as far as the public knew, this was just a temporary state of affairs. That all changed on April 10, 1970, when an ambiguous Paul McCartney “self-interview” was seized upon by the international media as an official announcement of a Beatles breakup.

The occasion for the statements Paul released to the press that day was the upcoming release of his debut solo album, McCartney. In a Q&A format in which he was both the interviewer and the interviewee, Paul first asked and answered a number of straightforward questions involving the recording equipment he used on the album, which instruments he played and who designed the artwork for the cover.