MemeStreams now requires a New User Password in order to create an account. If you want the NUP, and you know me, ask, and I'll give it to you.

Although it isn't visible to most users, MemeStreams is flooded with thousands of spam related accounts every day. New users who join have little chance of being noticed by the community because their posts are drowned in a flood of spam. As a consequence, MemeStreams hasn't been growing in a long time.

I think that spam is an important element in the development of social networking sites. MySpace faded from the limelight because Facebook was better protected from spam and scams. On Facebook, you only get messaged by your friends. Not businesses that you may or may not have a relationship with. Facebook has not just killed off MySpace - it has killed off personal email, too. My personal email is now mostly mailing lists and messages from companies that I do business with. Recently, Google+ came on the scene, but it hasn't resonated with users. I suspect that the lack of a feature for privately messaging people is part of the problem. You're supposed to use Gmail, and Gmail has spam.

Spam has certainly had a negative impact on MemeStreams. Putting an NUP in place is the first step toward taking control of this community. Once the spam is totally cleaned out, we'll be able to move toward inviting people who we want to participate and who have an interest in participating.

OK, lets say you bought a house for 200,000. You paid 80% LTV so your mortgage is $160,000.

Nearly 15 million homeowners owe more than their homes are worth; in this group, about half the mortgages exceed the home value by more than 30 percent.

If your mortgage now exceeds your home value by more that 30 percent, your home is worth, at most, $123,000. Its probably worth a lot less then that because you've probably been paying mortgage payments for several years and you're still 30 percent down, but lets stick with the best case scenario.

The hole is $77,000. If you can do a non-recourse foreclosure, you are out $40,000 and the bank is out $37,000.

$40,000 is the most you could ever be out on this home.

Now lets enact the Feldstein plan:

If the bank or other mortgage holder agrees, the value of the mortgage would be reduced to 110 percent of the home value, with the government absorbing half of the cost of the reduction and the bank absorbing the other half.

We're going to bring the mortgage down to $135,000. This costs $25,000.

The bank is out $12,500.
The government is out $12,500.

Now, you sell the house.

You are out $52,000.

$40,000 is the down payment you've already lost, and the other $12,000 is the difference between the mortgage value and the price of the house. (There is a lot of other principal that you also loose that I'm not accounting for here.)

Thats the best case scenario. If the value of the home drops further, you'll owe more. There is no limit to the amount you could owe.

So, lets recap:

Taxpayer looses $12,500 - a total of $350 billion.
Homeowner looses at least $12,000 - possibly more.
The Bank wins - they save $24,500 and their total losses are capped at $12,500!

In other words, as I said this morning, its a massive transfer of wealth from taxpayers and homeowners to the banks. It is extremely negative for homeowners. Feldstein argues that the whole program ought to be voluntary. I can't see any reason why a homeowner would agree to this.

Was this floated as a joke?

RE: How to Stop the Drop in Home Values - NYTimes.com

To halt the fall in house prices, the government should reduce mortgage principal when it exceeds 110 percent of the home value. About 11 million of the nearly 15 million homes that are “underwater” are in this category. If everyone eligible participated, the one-time cost would be under $350 billion.

$350 billion is a lot of money. Although programs like TARP were larger, much of the money was repaid. This won't be repaid. Thats only the first problem with this plan.

If the bank or other mortgage holder agrees, the value of the mortgage would be reduced to 110 percent of the home value, with the government absorbing half of the cost of the reduction and the bank absorbing the other half.

And in exchange for this reduction in principal, the borrower would have to accept that the new mortgage had full recourse — in other words, the government could go after the borrower’s other assets if he defaulted on the home.

This plan is fair because both borrowers and creditors would make sacrifices.

This isn't really fair.

Typically, ones mortgage starts at 80 percent of the value of one's home.

By the time your mortgage is, lets say, 130 percent of the value of the home, you're in the hole by 50 percent.

Right now if you walk away and its a non recourse loan, you are out 20%, and the bank is out 30%.

The most you can ever be out right now is 20%.

Under this plan, they are offering to reduce the size of the hole, from 50 percent, to 30 percent.

The bank picks up 10% and the government picks up 10%. In exchange for this "deal," you agree that the loan becomes a recourse loan.

You are still in the hole by 30%.

If you walk, you are out all 30%. The bank is out 10%. And the government is out 10%.

In other words, the bank benefits from tax payer's largess and things get worse for the homeowner.

Furthermore, if this doesn't work, and the home value continues to drop, there is no limit to how much you can loose.

I'll bet a bunch of fat cats in Manhattan are laughing their assess off about this plan.

(There is some error in this analysis because these percentages aren't all relative to the same amounts, but I think its minor and I will update with accurate figures later.)

How to Stop the Drop in Home Values - NYTimes.com

Computer scientist Dennis Ritchie is reported to have died at his home this past weekend, after a long battle against an unspecified illness. No further details are available at the time of this blog post.

Dennis Ritchie, 1941-2011: Computer scientist, Unix co-creator, C programming language co-inventor – Boing Boing

I have a friend who loves Detroit.
He likes to break into the old derelict buildings.
He wears the post apocalyptic decay like a mohawk.
In Detroit, industrial music is redundant.

When you read the history,
it was not the automotive industry that destroyed that city.
It was the racism.

As you drive into town from the airport,
you pass neighborhoods with decently sized houses,
some are burned out,
black marks lick the wood above window frames,
evoking chaos nights when hundreds of homes were ablaze.
Halloween!

People still live in those neighborhoods.
People still live next door to those burnt out houses.
Children grow up playing night guns in those yards.

Why does it all feel vindicating?
Why is it all so fucking cool?

Because if the people who tell us what to do have failed,
that means that there is something for us to do.

We all yearn to be necessary.

---

The act of becoming an adult
involves identifying things that you care about
and taking responsibility for them.

It doesn't really matter what you take responsibility for,
because the need is everywhere.

It is the act of committing to something,
whatever it is,
that turns you into a man.

Getting to decide what to care about
is the greatest luxury that you will ever experience.

Erik Satie - Gymnopédie No.1

♫ Erik Satie - Gymnopédie No.1 [piano] ♫ - YouTube

Wow, it looks like MTV has posted the Liquid Television series from the early 90s -- possibly all of it! Good quality, too.

Liquid Television! | jwz

I cannot emphasize the boost I think it would give the economy if we had a system that said to people whose homes are worth less than the mortgages that you can write down your mortgages to the value of your home if you can make the payment. Or you can extend the mortgage out and lower the interest rate.

Bill Clinton: How to fix the economy - The Term Sheet: Fortune's deals blog Term Sheet

The cables being published are not the most sensitive ones. Those are usually “captioned” with markings that limit their distribution (limdis, exdis and nodis are the most common captions, but there are others for special topics). Captioned cables are not routinely shared interagency, so the low-level Defense Department type who leaked these did not have access to the more restricted material.

This has always been obvious, and yet many people acted as if the sky was falling and demanded radical over reactions that continue to cause problems today.

Guest Post: A Diplomat’s Guide to Reading WikiLeaks | Threat Level | Wired.com

The 2005 bankruptcy bill continues to have totally awesome positive impacts on our economy!

Senators Dick Durbin (D-Ill.), Al Franken (D-Minn.), and Sheldon Whitehouse (D-R.I.) have introduced the Fairness for Struggling Students Act of 2011 in the U.S. Senate. Representatives Steve Cohen (D-Tenn.), Danny Davis (D-Ill.), John Conyers (D-Mich.), and George Miller (D-Calif.) introduced the related Private Student Loan Bankruptcy Fairness Act of 2011 in the House of Representatives. Both bills would restore the ability to discharge commercial student loans in bankruptcy proceedings, reversing a 2005 change to the law for borrowers who find themselves unable to make payments on their loans.

These bills should be a rallying point for Occupy Wall Street.

Congress Proposes Relief for Student Loan Borrowers - Student Loan Ranger (usnews.com)