While the chart is loaded with legal terms and appears to be authoritative, its provenance depends on authorship. If the author is a financial meltdown enthusiast of some sort, the chart could be dismissed as a narrow-focus example, an exaggeration, or perhaps just plain wrong. The chart follows the paths taken by just one mortgage (the author's), through our securitization maze.
We're learning in real-time about a consumer debt system that ran amok. Have a look at this example of ridiculously reckless development, before we examine the author's bona fides.
Dan Edstrom's chart isn't the product of a hobbyist, although more than a few banks must wish that it was. Dan is a Securitization Auditor. Not only does he analyze mortgage transactions in a professional capacity, he also lectures at securitization seminars given to attorneys. Why do attorneys pay $500 to attend his one-day seminars? The HuffPo article and a related post on the Zero Hedge financial blog, mention only that Dan is employed by DTC Systems.
Dan's bio presents a strong claim to mortgage securitization expertise: President of DTC Systems, Inc, having been in Information Technology for the last 18 years as a Systems Architect and Software Architect. The transformation of complex business requirements to complex Wall Street Engineering was an easy one. Securitization Expert, Daniel Edstrom analyzes complex financial engineering securitization transactions as well as providing a failure analysis, with well over 4,000 hours of research into Securitization. Besides working for his own company, Daniel is a Senior Securitization Analyst for Luminaq.
If this post hasn't been sufficiently alarming, consider that Dan needed a year to chart the myriad transactions associated with his own mortgage! After such effort, by a mortgage securitization expert who knows all the institutions, transaction paths and players, the mortgage disaster is easier to understand and more reprehensible than we knew.
It sure was good news to see The Wall Street Journal announce that America had launched a brand new battleship. The ship is named for a Marine hero who gave his life while saving others. To be fair, the Journal is merely passing along a wire piece from the Associated Press. Problem is, America decommissioned all its battleships years ago, if fact, all battleships were removed from the Naval Registry in 2006.
Here's the article:
While Old Media is bemoaning its fate in the Internet age, someone ought to consider old habits, like fact checking. The article mentions "battleship" twice while also describing the ship as a destroyer. That's like confusing a Mustang with a stretch limo. Poor Old Media, just can't get it right.
The USS Jason Dunham is America's newest destroyer, named for a Marine Corporal who won the Medal of Honor. The Jason Dunham is the 59th Arleigh Burke-class destroyer. The first Arleigh Burke-class destroyer, named the USS Arleigh Burke, was launched July 4, 1991.
As you can see from these pictures, it's fairly difficult to confuse a destroyer with a battleship. The Associated Press really, really wanted get it wrong, and they admirably succeeded. The Wall Street Journal shares blame, for trafficking such gross inaccuracy.
Old Media's problem isn't just its appalling lack of accuracy. Old Media peddles false equivalency in place of genuine comparison. The former appeals to intellectual lightweights while the latter is hard work. But perhaps Old Media's biggest failing is that it doesn't publish terribly interesting stories. Years of downsizing has led Old Media to ignore most stories that have nothing to do with abduction, murder or political echo chambers.
Case in point, who was Arleigh Burke, and why does America need another warship?
Arleigh Burke was a naval officer who served in WW2, Korea and during the Cold War. His 38-year career originated with destroyers. He was known for pushing his ships to the limit of their endurance and won several combat awards. He rose up the ranks to become Chief of Naval Operations in 1955. Admiral Burke lived to see the first launch of a class of warships bearing his name. He died in 1996, at the age of 94. His epitaph simply reads: Sailor. You should recognize at least three faces in the 1961 photo (below), which shows Admiral Burke in the back of the room.
Just a little digging reveals that Arleigh Burke-class destroyers will become, for all intents and purposes, America's destroyer fleet. Very few of the advanced Zumwalt-class destroyers are planned and the first two won't be delivered until 2015. The last Spruance-class destroyer was decommissioned in 2005. Arleigh Burke-class destroyers will also replace older Charles F. Adams and Farragut class guided missile destroyers, according to the Navy.
American citizens have paid for 59 Arleigh Burke-class destroyers over the past 20 years. What have we purchased? In part, necessary technology upgrades. The Navy says that Arleigh Burke-class destroyers develop 100,000 horsepower, with speed exceeding 30 knots. Considering that Admiral Burke hit 34 knots in WW2-era destroyers, if safe to assume that, for obvious reasons, the Navy's official speed rating is a bit understated.
We also purchased lower operating costs in ships that can attack all manner of targets and defend themselves against all manner of threats. Arleigh Burke-class destroyers are the first U.S. warships with an air-filtration system that defends against nuclear, biological and chemical warfare. Their biggest value is the Aegis Combat System, an integrated target acquisition and defense system that can attack in-bound ballistic missiles. This means that Arleigh Burke-class destroyers play a crucial role defending countries like Israel, from countries like Iran. They are a vital asset, helping keep the lid on WW3. They may actively prevent such war from occurring.
Production of the Arleigh Burke-class will be expanded to offset reductions in planned Zumwalt-class ships. America now defends the free world in a cost-effective manner, with destroyers that can shoot down nuclear missiles.
This post is an example of the care and effort Old Media has abandoned for cheap sensationalism. A few web searches, a little data synthesis and a modicum of writing produce something more interesting and relevant than an erroneous wire piece. A junior reporter could have produced something better - with a few quotes from Naval officials, military technology experts, etc., - in no more than 1-2 hours.
Is Old Media's problem really digital technology, or are well-informed readers simply tired of being insulted?
Just in case the last four posts went by too quickly, this post puts the Top-30 increases over 52 years of Muana Loa data in context. Let's begin with a look at the Top-30.
You might be thinking that TheRaven's Mega Melt Enthusiasm is misplaced. Where's the evidence that we face impending acceleration of global temperature increase, melting ice and rising seas? The Top-30 list helps discern some patterns.
Each year in the list is color-coded. This makes it easy to see that 1998 contributed more Top-30 records than any other year. Also, note that the magnitude of CO2 increase in the Top-30 ranges from 2.64ppm up to 3.92ppm. Those increases are +30% to almost 2-times their respective trailing, 5-year averages. Given the concentration of Top-30 jumps in CO-2 over the past dozen years, this is evidence of ongoing trend acceleration.
Said concentration, over the past dozen years, is a bit less obvious. This summary improves clarity.
Top-30 records have been created in only ten years (out of 52). Twenty-three records (3/4th's) have occurred in over just the past dozen years and, thus far, 2010 is the 5th-most productive year on record. While 2010 won't deliver the future-shock awesomeness of 1998, I've got high hopes for 2011. Given population and economic growth that's occurred since 1998, ongoing recovery in the world economy and comparatively greater limitations in Earth's ability to absorb atmospheric carbon, I'm looking at 2011 pretty much as the Cowboys view it. TheRaven and the Cowboys both say....
CO2 jumped an impressive +2.88ppm over October 2009, the second-highest October increase in the history of Muana Loa data! Perhaps equally impressive, October 2010 recorded the 16th highest annual increase of any month over the past 52 years.
If global ice melt were the Olympics, 2010 has shaped up as a fairly decent year. In the harbinger competition, 2010 has won a gold (April),a silver (October) and a bronze (May). We'll just overlook the disappointing stretch from June through September.
Your Mega-Melt Enthusiast is back, with a vengeance!
September 2010 saw only a +2.02ppm increase, over September 2009. This is spot-on the trailing 5-year average annual increase, but TheRaven has predicted continued acceleration in CO2 growth, not more of the same-old, same-old.
Mega Melt Enthusiasm grows cold, waiting for October to bring bigger news.
CO2 isn't the only made-man agent of ice destruction, but NOAA's Muana Loa observatory has been recording and publishing monthly CO2 levels since 1958. That's a great data set for advancing my new role as a ....
We're not talking about some fast food concoction. Nope, this is the real deal, the defining event of the 21st century, unfolding in real time for everyone but our elected Republican politicians. TheRaven says: stop worrying about government gridlock and embrace the rising seas.
CO2 levels are simply the harbinger of the inexorable loss of all surface ice. Rising temperatures follow rising CO2 and rising seas follow rising temps. CO2 hasn't been this high in the past 15-30 million years and, when it was, Earth was much warmer, there was very little surface ice and Hollywood didn't need CGI to conjure up gigantic reptiles.
It's possible that CO2 has never risen so much in such a short time span, except for that unfortunate accident 65 million years ago that ended the careers of a few dinosaurs.This blog is a guide to your future. Enjoy the ride.
TheRaven has a bit of catching up to do. This post will cover July 2010 and the next three will bring us current with October. You know the drill: CO2 levels rise in summer and fall in winter. This isolating cycle has marched steadily higher for the past 50+ years and has greatly accelerated over the same period. The rate of average annual increase roughly tripled between 1960 and 2000. The Great American Banking Disaster, which put the developed world's economy into a tailspin, didn't put a scratch in CO2 growth.
TheRaven is on an enthusiastic hunt for new monthly records, defined as new highs in year-over-year CO2 growth. Sadly, July was a disappointment. July 2010 saw +2.29ppm CO2 increase vs. July 2009. This puts July 2010 pretty far outside the Top-30 increases seen over the entire data series. The July 2010 increase was modestly higher than trailing 5-year average.
In 1604, a European monarch was moved to write a treatise on a new social problem. King James I of England, of King James Bible fame, was upset by the introduction of an addictive new product to his realm. He predicted this product would damage certain parts of the body, such as the lungs, and applied a stiff excise tax to curb its use.
The CDC publishes periodic reports on tobacco use in the 50 states and DC. The counterblaste continues, more than 400 years after the King of England couldn't stem the tide. The CDC just published its 2009 report on tobacco use, which may be read here. This post provides data from the CDC report as visual information.
We begin with tobacco use by men. Combined use of cigarettes and smokeless tobacco products are ranked from highest to lowest state. The CDC report covers population subsets that use both forms of tobacco. That data was used to eliminate overlap between cigarette and smokeless use ratios.
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Fun fact - ratios of cigarette use are higher for men in all but eight states. The states in which female cigarette use is at least one percentage-point higher are: Arkansas; Idaho; Kansas; Montana; North Dakota; South Dakota; West Virginia; and Wyoming. (It should be noted that men in Wyoming and West Virginia are heavy users of smokeless tobacco).
We now look at use by women. Fun fact - the three states with the highest ratios of female smokeless users are: Alabama (2.5%); Indiana (2.4%); and Tennessee (1.9%).
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The third presentation juxtaposes adult tobacco use with higher education attainment. Higher education attainment is defined here as the proportion of adults who've earned a bachelors degree (or higher). Education attainment data is from 2008 and was published by the Census Bureau. Note the correlation between high levels of tobacco use and low levels of higher education attainment, and vice versa.
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Fun fact - more adults use tobacco than have obtained a bachelors degree in nine states, including: Alabama; Arkansas; Indiana; Kentucky; Louisiana; Mississippi; Missouri; Oklahoma; Tennessee; West Virginia and Wyoming.
While the CDC surveyed 432,607 adults, its survey was limited to persons with land line telephones. The CDC reports that persons who rely exclusively on cell phones are twice as likely to use tobacco. If survey results differ from reality, the only logical conclusion is that reality is worse.
Accepting that no one sees tobacco in a positive light, our next presentation compares current (2009) levels of tobacco use with state cigarette taxes in 1995. Big tobacco still held sway in historic "tobacco states" 15 years ago. Higher levels of tobacco tax are associated with lower consumption, so the converse must hold true. Comparing current levels of tobacco with tax rates in effect 15 years ago makes sense because, as we all know, nicotine is highly addictive.
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Fun fact - four states had a cigarette tax of less than ten cents per-pack in 1995: Kentucky ($0.03); North Carolina ($0.05); South Carolina ($0.07); and Virginia ($0.03).
In context of public disapproval of tobacco, 15 years was a long time ago. State legislatures have had more than enough time to see cigarette taxes as the most effective deterrent to long-term public health issues, such as lung cancer. Anti-public smoking laws gained traction years ago. Have the states wisely applied retail economics to reduce their tobacco problem?
The Federal government finally got religion and quadrupled its excise tax in 2009, from $0.24 to $1.01 per pack. Have a look at state tobacco taxes in 2009 and then we'll compare 1995 with 2009.
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Uh-oh. 2009 tax levels indicate that the states with the biggest tobacco problem, who needed to raise taxes the most, in fact did the least. Pennsylvania and Montana are exceptions. Let's have a look at differences between 2009 and 1995 tax levels to zero in the culprits.
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Fun fact - five states didn't raise cigarette taxes by a single penny between 1995 and 2009. More than 20% of adults are tobacco users in four of these states:
(1) Florida ($0.34 tax / 18% use);
(2) Mississippi ($0.18 tax / 27% use);
(3) Missouri ($0.17 tax / 26% use);
(4) North Dakota ($0.44 tax / 24% use);
(5) South Carolina ($0.07 tax / 23% use).
South Carolina is its own special case. South Carolina's cigarette tax remains a pathetic $0.07 per pack. With regards to the health of its citizens, failure of the South Carolina legislature to take appropriate action can only be described as cruel and irresponsible.
To put cigarette tax in a broader context of responsible vs. irresponsible politicians, the ten highest-tax states average $2.23 per pack while the ten lowest average only $0.30.
Does any of this really matter? Has any scientific evidence been established that demonstrates higher levels of cardiovascular disease, stroke and lung cancer in states that have high levels of tobacco use and low tobacco taxes?