Category Archives: Politics

Strategies to address the elephant in the python: housing market stability we all want

February 12, 2011 – 8:07 pm

I spoke yesterday in Utah at the mid-Winter Housing Finance Conference on the subject of loan Servicing (what’s wrong and how to fix it). The focus of my presentation was on outlining a new vision for default management – the business of Banks (loan servicers and investor) working with consumers in default on their mortgage. Here is the document I shared with the audience.

Implementing the ideas shared in the presentation is possible – I know of others or am personally involved in implementing several of these approaches myself. The end result of adopting these approaches would be much higher success in preventing residential real estate foreclosures than the default industry is achieving today PLUS significant reductions in investor mortgage loan loss severity relative to current approaches.

Strategies to Address the Elephant in the Python: Housing Market Stability We All Want

Tags default, distressed consumers, foreclosure alternatives, foreclosure prevention, foreclosures, housing market, housing policy, housing stability, housing strategy, loan modifications, short sales | Comment (0)

Business Life People Politics Public Policy Real Estate World World Affairs

Responsible 2nd Chances: Loan Modifications Addressing the Issue of Negative Equity and (Borrower) Moral Hazard

January 9, 2010 – 11:46 pm

Proactive government and bank efforts to help distressed borrowers have largely, if not exclusively, been focused on ‘home retention’ programs in 2009. On the one hand this focus makes sense: the first question that should be asked and answered when a family stops making their mortgage payment due to financial hardship is whether an change to the loan terms would make the home affordable for the same borrower (thereby avoiding all the negative effects of a pre or post foreclosure home sale) while being acceptable to the investor.

On the other hand, given constrained resources this almost exclusive focus on home retention, which has come thus far at the expense of those that could not afford to keep ownership of their home, has been a little confusing to me, a former Chief People Officer who had to layoff over 7000 people between mid-2007 and mid-2008 due to the mortgage crisis. Most of these above mentioned responsible employees of my former mortgage bank employer, unfortunately fall into the latter category of families who would not be able to afford homes they once could, and I think we have missed the boat thus far on properly providing and supporting home and life transitions for these families.

My issue with the focus of government and bank programs thus far is not that they shouldn’t focus on helping every family in trouble first try to keep their home if they want…but on the public message and conversation we are having.

America is undergoing a fundamental shift in consumer behavior and economic activity today, and as Charles Darwin said, ‘It’s not the strongest species that survive, nor the most intelligent. It’s the ones most adaptable to change’.

Americans (myself included) need to adapt to the new economy…and if this means they need to sell their home and move…so be it. (Family), jobs and financial stability are more important, in my view, than holding onto a home one cannot afford.

Notwithstanding the above gap in proactive bank and government programs till date, let’s circle back to the issue of home retention first. Early results are in on government and bank home retention efforts…and performance thus far is viewed as below expectations. Only about 20% of the families in trouble have been provided a temporary modification (mod) yet…and conversion rates of these temporary mods to permanent mods are very low thus far. 2 things should be noted before one judge’s the above too soon:

1. The number of loan modifications attempted (this is where progress starts – with a step in the right direction) is significantly larger than in the previous year/s and under the previous administration/team

2. In some ways, the problem isn’t the number of people in trial mods. While lots of effort is and will be put on solving the current problem (hopefully successfully) of converting the 75% or so performing trial mods into permanent ones (except where there was mis-statement of income, which is not kosher in my view), the real issue is improperly set expectations…and lack of enough alternate modification programs (addressing the diversity in situation among those in trouble right now).

A key flaw in most loan modifications offered today including HAMP is highlighted by the article I am including below on a recent by the New York Federal Reserve Bank: they do not address the issue of negative equity.

Since 25% of US homeowners have negative equity today, and since our national goal is to do more to help those in trouble who want to retain their home, I thought I’d resurface a simple loan modification proposal I first introduced in an April 2009 blog….which I believe could significantly expand the success of our home retention efforts.

Responsible Second Chances: A break today in exchange for some of tomorrow’s upside

For every American family who is unable to afford the payment on their primary residence, I would offer them a one page loan modification with the following terms:

1.    Reduction in loan principal down to current market value.
2.    30 year fixed mortgage at current historically low market rates.
3.    25% of any equity appreciation from the written down loan principal (the remaining 75% would go back to the investor taking the loss on the principal write-down today)…thereby reducing the bite of the loss of principal taken today.

4. Requirement that if the borrower misses more than 3 mortgage payments again and is unable to reinstate their loan, they would voluntarily exit the property within 6 months of falling behind…either via a Short Sale or Voluntary Foreclosure.

Why do I think the program above would help many not being helped today? Here’s why:

1.    It addresses the issue of negative equity…which is critical, per the article and study mentioned below
2.    It is ‘economically’ the right answer (in effect, any family that can afford their home today at current values and mortgage rates, gets to keep it)
3.    It addresses the issue of moral hazard: there’s no free lunch in America (at least not for long). The family gives up 75% future equity appreciation in exchange for the investor taking a significant loss on the loan today (via the principal write-down). This should largely eliminate, in my view, the need to collect financial hardship documentation…which is a key reason many mods are not becoming permanent today.
4.    It is simple to understand, unlike the HAMP program…which does not result in a principal reduction, as many borrowers applying for HAMP mistakenly believe it does.

5. It addresses the issue of what happens if the loan goes bad again…which is important for the investor who is making a big compromise today.

Implementability

It is likely my proposal is not implementable in many parts of the private market…particularly the securitized loan market. However, it could be implemented for government sponsored and owned enterprises…Fannie Mae, Freddie Mac and FHA…which represent a large part of the market.

Article from DSNews.com: Fed Study Finds Principal Writedowns Minimize Risk of Redefault

Servicers who lower distressed homeowners’ mortgage payments by reducing the principal balance, as opposed to just making interest rate adjustments, are much more likely to see the payments keep coming in and ward off a redefault, according to a new study published by the Federal Reserve Bank of New York.

The economists found a definite pattern among modifications made since December 2005 that suggests “an intention among servicers to make the loans more affordable, while not losing any of the underlying principle.” However, their analysis shows that modifications that trim off some of the loan balance have higher rates of success and “can double the reduction in re-default rates.”

While principal writedowns essentially mean the lender or investor must eat a loss, many analysts argue that it’s a smaller loss than comes with the eventual foreclosure and the price tag of a nonperforming asset in today’s housing market, already swollen with REO inventories and vacant properties.

According to the New York Fed’s economists, when a borrower’s monthly mortgage payment is cut by 25 percent by reducing the interest rate only, the borrower is 11 percent less likely to default within one year.
But, if the monthly payment is lowered by the same 25 percent, this time by shaving 25 percent off of the outstanding loan balance, coupled with a small interest rate cut, the chances that the borrower will defaulting again within one year drops by nearly 27 percent.

The report’s authors also concluded that borrowers who have a loan-to-value (LTV) ratio of 115 percent or higher – meaning they owe 15 percent or more than their homes are worth – pose a 51 percent higher risk of redefaulting after a modification.

According to a blog by Wall Street Journal reporter Nick Timiraos, the findings of the New York Fed paper could have big implications on the administration’s Home Affordable Modification Program (HAMP). Timiraos explained that while the program doesn’t preclude principal forgiveness on the part of lenders, HAMP’s primary push is on lowering interest rates and extending the loan term to bring monthly payments down – exactly the types of modifications that the Fed report says have a higher chance of becoming delinquent again.

The Congressional Oversight Panel and the special inspector general for the Troubled Asset Relief Program (TARP) have criticized the government’s mortgage modification efforts on numerous occasions for not addressing the issue of negative equity, which would ultimately involve trimming LTV ratios by shaving off outstanding mortgage balances.

A growing number of mortgage experts and foreclosure counselors agree with the federal watchdogs and the New York Fed economists that principal reduction is a powerful incentive for borrowers to keep up with their restructured payments, particularly now, when such a large number of mortgages are underwater.
First American CoreLogic says that nearly 10.7 million, or 23 percent, of the residential mortgages in the United States had negative equity at the end of the third quarter of 2009, with the homeowner owing more on the home than it was worth.

A modification is only worthwhile if it induces borrowers who would otherwise default to continue paying, the New York Fed’s economists noted, and they argue in their analysis that borrowers with positive equity in their properties have a strong incentive to keep current on their mortgage, since delinquency and foreclosure will ultimately lead to a loss of the asset.

“In fact,” they wrote, “borrowers with positive equity (that is, borrowers whose house is worth more than the balance on their mortgage) should rarely default, since refinancing the mortgage or selling the property are better options than foreclosure, which may cause the borrower to lose [their] equity.”

Tags foreclosure prevention, HAMP, home retention, loan modification, Making Home Affordable, negative equity, principal writedowns | Comment (0)

Life Los angeles Politics Public Policy Real Estate

“Shadow REO Inventory” Presents Govt Unique Opportunity For Affordable Housing Expansion

October 16, 2009 – 7:00 pm

If there was ever an example of what it means to “swim upstream in a river” in life or in business…the below article describes it in detail. Despite what is possibly history’s most ambitious and concerted recent effort to protect and expand affordable housing in NYC (led by Mayor Bloomberg)….the City’s total stock of such housing declined over the past 7 years.

This reduction in affordable rental housing is bad news for the City’s lowest income residents, and generally bad news for our society…as housing costs are most families’ single largest expense…and increasing rents without similar increases in earnings….mean the poor continually get “squeezed”….thereby perpetuating a cycle of financial and personal hardship which makes it difficult for families to lift themselves out of poverty into financial stability and growth.

I have been a keen observer of the situation in NYC, as the affordable housing reality on the ground is similar in my hometown of Los Angeles. Here too, affordable housing stock has not kept up with the need for such housing….and the situation has gotten worse (not better) over the past decade.

Not since the end of the 2nd world war – when a lot of the workforce housing that supported the war was converted into affordable housing for lower income families – has affordable housing been created en masse across the USA. And today…I believe history has presented this country and government with another such opportunity…to try to make a big dent in “solving” our affordable housing needs, particularly in high cost urban areas such as Los Angeles and NYC.

As it did back in the 1940’s, the US federal government today either directly or indirectly “owns” or will own a large number of vacant and foreclosed properties. An example of this indirect ownership are the over 100,000 foreclosures estimated to currently be on the balance sheets of Fannie Mae and Freddie Mac. In fact, some have estimated the total “shadow inventory” of current and future foreclosed properties (not yet listed on the market) to be as high as 7 million properties nationwide.

Many housing market observers, myself included, believe this shadow inventory presents significant ongoing risks to the housing market. In other words, as this shadow inventory turns into actual properties listed for sale on the market, it is likely to drive imbalances in real estate demand vs. supply…thereby resulting in declining home prices…which will present risks to millions of homeowners as well as the broader US housing and economic recovery.

Given the above, perhaps it makes sense for the government to come up with a creatively designed program (i.e., one that minimizes/eliminates taxpayer burden) to convert a large number of the properties they either own or will own (directly or indirectly) into affordable housing? Fannie Mae and Freddie Mac REO’s are one good candidate for this type of policy/strategy…as are REO’s owned by the FHA and other governmental agencies.

If we could design the right program and policy to achieve this, it could have enormous social and economic benefits for the US….including helping move the ball forward on a key goal of de-concentrating poverty outside traditionally large, generally poorly maintained, and often crime-ridden public housing developments (aka “projects”) nationwide.

Is this just a dreamer’s dream…or can and will it become reality?

As City Adds Housing for Poor, Market Subtracts It

By MANNY FERNANDEZ; October 15, 2009

Mayor Michael R. Bloomberg is closing in on a milestone: building or preserving 165,000 city-financed apartments and houses for low-, moderate- and middle-income families, the goal of a $7.5 billion housing plan he announced in 2002 and expanded in 2005.
It has already financed the creation or preservation of 94,000 units, including 72,000 for low-income households, city officials say.
But those efforts have been overwhelmed by a far larger number — the 200,000 apartments affordable to low-income renters that New York City has lost over all, because of market forces, during the mayor’s tenure.
The shrinking supply of these apartments, highlighted by researchers at New York University, illustrates not only the increasing strain that housing costs have had on this city of renters, but also the limits of the mayor’s success in providing the city’s poor with reasonable places to live. While the mayor’s plan has put thousands of low-income families in new or rehabilitated buildings and helped stabilize neighborhoods, it has been nearly drowned out by the twin waves of gentrification and rent deregulation.
“We’re losing units even with additions to the stock under the mayor’s housing plan,” said Victor Bach, a senior housing policy analyst for the Community Service Society, a nonprofit antipoverty group, and a member of a panel that advised the Bloomberg administration on housing in 2002. “I’m not knocking the plan. I’m just saying it hasn’t done much to stop the hemorrhaging of lower-rent units across the city.”
Including public housing, the number of apartments considered affordable to low-income households — those earning less than 80 percent of the city’s median income, or less than $37,000 — decreased to 991,592 from 1,189,962, a drop of nearly 17 percent, from 2002 to 2008. About 42 percent of the city’s households fit in that income category in 2008.
The data were supplied by the Furman Center for Real Estate and Urban Policy at New York University, which analyzed the city’s Housing and Vacancy Survey from 2002, 2005 and 2008. The center and other housing experts consider an apartment affordable if it costs no more than 30 percent of a family’s income, or about $925 a month for a family earning $37,000.
Although the numbers present a gloomy picture, they did contain a glimmer of hope. The worst years were between 2002 and 2005, when the city lost affordable apartments at the highest rate of the mayor’s tenure. In the next three years, as the mayor’s plan took hold, the city actually gained about 8,000.

Click here for the rest of the article: As City Adds Housing for Poor, Market Subtracts It

Tags affordable foreclosures, affordable housing, affordable housing development and preservation, affordable housing supply, fannie mae, foreclosures, freddie mac, los angeles affordable housing | Comment (0)

Life Politics World World Affairs

Contrarian View: Tough Times All Around Will Raise America’s Reputation Abroad

March 12, 2009 – 7:20 pm

Most everyone knows that America is not very popular abroad right now, and hasn’t been for the past several years. Just ask any American who has travelled abroad recently. From Davos to Delhi, the general current perspective is that America is on the decline and other countries (such as China and India) will be the global leaders of tomorrow.

While I certainly agree that countries like India and China will continue to gain importance and power as their economic power increases to levels consistent with their massive populations, I disagree with this pessimistic view of the future of America.

I am an Indian born immigrant to America myself and based on what I’ve learned and seen of the world and America, I believe the American framework of life, liberty and opportunity is superior to the socio-economic frameworks in place most anywhere else.

The election of Barack Obama as US President is but one example of the beauty of the American framework….and this example is repeated daily, in ways small and big, by those who weren’t born into money or power but who gain opportunity and success in America as a result purely of their hard work and smarts.

As the economic crisis works it’s way around the world and once fast developing countries slow down and deal with the now-more-apparent weaknesses in their own social, economic and legal frameworks….I actually think America’s reputation abroad will improve.

Tags america's reputation, america's reputation abroad, american views abroad, criticism of America, developing countries, emerging economies | Comment (0)

Business Life Los angeles Politics Public Policy Real Estate

One Key Missing Piece: Early Thoughts on the Obama Plan for At-Risk Homeowners

March 6, 2009 – 1:00 am

I am pleased to see the Obama administration attempting – much more aggressively than the Bush administration ever did – to help (3-4 million) at-risk homeowners stay in their homes through a variety of loan modification initiatives and incentives which are designed to lower the at-risk homeowners’ payments to levels they can afford to sustain going forward. Creative and aggressive loan modifications are absolutely a critical part of any well designed foreclosure prevention and housing market stabilization program, and the Obama team’s plan included 2 additional elements I liked:

1. A clear stated definition of who the plan is not designed to help: Speculators. This is important because the American taxpayer cannot afford to help everyone, and everyone – particularly speculators – doesn’t deserve help. If anything, I wish the administration had made a further differentiation in treating homeowners who used their homes as a piggybank (by taking out cash and spending it) vs. those who didn’t (these latter borrowers are the most responsible group of at-risk homeowners)

2. Focus on a key practical issue – the lack of standardization (across Banks) on both the loan modification program guidelines (which the Obama plan says they will standardize) as well as documentation/forms (which I assume they will standardize consistent with the new standard guidelines). I cannot emphasize how important an issue this is and will continue to be from an execution standpoint. Just last week, I was in a discussion with a Los Angeles non-profit focused on foreclosure prevention, whose employees were telling me what a barrier to success it is to have different documentation requirements at each Bank.

I don’t know how well the programs the administration is trying to get implemented will work, but I know attempting this is absolutely the right thing to do…and if the administration and others involved in execution remain focused and flexible, they will learn and adapt from early experiences to re-design or enhance the programs to be most successful.

The above being said, I think the Obama plan as announced thus far fails to address what would happen to a critical, real and very large number of at-risk responsible borrowers: those that don’t qualify for a loan modification for their primary residence even under the expanded framework.

This set of borrowers would be particularly heavily concentrated in high cost regions such as California where I live, where the market (in the boom days) was heavily non-conforming and where as a result, refinance options will continue to be scarce despite the Obama plan. Also, there are just a lot of people, particularly from the financial services, real estate and mortgage industries who will just not make the kind of money they used to make during the boom days…anytime soon.

The right answer for these borrowers is not foreclosure; nor is it to keep them in homes they cannot afford anymore. We can and should help these borrowers avoid foreclosure and adapt their housing costs/reality to their new economic reality in a manner that is respectful and graceful – by aggressively implementing short sales programs that work (the short sales process currently practiced is broken and must be fixed).

In order to work, a short sale program must be systematic (just like loan modification programs are)…with clear guidelines, documentation requirements and approval/execution timeframes. Designed right, these programs save the Banks enough money (relative to the foreclosure option) that the Banks should be able to give the homeowner a helping hand (cash) to help them with their move and new rental.

And the best part? There’s no need for additional bailout money needed to “bridge the gap” and help prevent foreclosures even for those responsible homeowners that didn’t qualify for a loan modification or refinance.

Tags foreclosure prevention, lender assisted short sales, loan modification, making homes affordable, obama housing plan, obama making homes affordable plan, short sales, systematic short sales | Comment (1)

Life People Politics spirituality

Reconsidering my decision to tune into the Inauguration

January 18, 2009 – 12:50 am

The US Presidential Inauguration is this coming Tuesday…and it couldn’t come soon enough. It is clear that the problems facing the US and the world at large are very serious and we need vigorious action oriented leadership with the public’s confidence at the helm in this country ASAP.

So as we approach the Inauguration, and in light of President Elect Obama having invited gay bishop Gene Robinson to lead prayers at Sunday celebrations leading upto the Inauguration, I’m reconsidering my stand on whether I’m tuning into this historic occasion.

I still believe the selection of Rick Warren for the invocation at the inauguration was a poor one, in light of the major recent loss the LGBT community has suffered in California with the passage of Proposition 8 (and generally during the last 8 years with similar constitutional amendments having been passed in 30 states). But I am also practical enough to realize 2 things:

1.The LBGT community is hardly likely to part with the Democrats in favor of the Republican party anyone soon given the continuing strong influence of social conservatives over the Republican agenda and party. The Obama team clearly understood this and so from their standpoint and given their objectives, selecting Warren was likely seen as a relatively risk free method of bringing more political support to the table.
2.The country and the world has more pressing issues to be addressed right now, and we have to prioritize and pick our battles. In fact, the country (and President Elect Obama) need every capable individual on the ground pulling their weight and trying to drive the country forward in the right direction

So I decided I do want to participate in history….and am now planning to tune in.

I think all of us need to give our new President a chance to make an impact before judging him. In fact, some judgment errors are to be expected as the team moves forward and makes decisions. I would even go as far as to say if we don’t see some (hopefully small) mistakes, it is a signal that our President and his team are not making decisions quickly enough.

Tags gene robinson, lgbt community reaction to warren selection, presidential inauguration, tuesday's inauguration | Comment (0)

Life People Politics Public Policy World World Affairs

Redefining the War on Terror

November 28, 2008 – 10:33 pm

The Mumbai “terrorist” attacks are a clear message to President Elect Obama, us, and the rest of the world. The problems of the world aren’t just economic….they are equally urgent, social and extend deeply into our homes and places of worship.

The Bombay attacks are highly symbolic in their location/s, organization-level and timing. And they hit home. I definitely feel the significance of these particular attacks personally. The violence was directed at the heart of India’s financial system where my (our) friends hang out, my (our) colleagues stay when they visit India, and our companies establish offices when they enter the Indian market (the 5 star hotels Taj and Oberoi in Bombay have been the India office for many a blue chip multi-national corporation). The targeting of westerners by the attackers is particularly galling since it targets a big source of support and growth for India and it’s democracy, philosophies and people. India is getting more integrated with the west and the global economy, and the attacks sought to strike at the core locations and symbols of this progress.

So what? Since change is in the air, here’s the 2 key changes I’d like to see made immediately in our”war on terror”:

1. Rename it in a way that reflects what it is. In some ways I think we have glorified what is really going on, by allowing this global problem to be named a “War on Terror” fought against Terrorists. Certainly the acts can and do bring terror into people’s hearts. But why not (at least) try to take away this terrible power? There is clearly no moral equality in this war, and the battleground is people’s minds and hearts (not a physical battlefield). The truth is these so called terrorists are generally pathetic (and often unlucky) losers perpetrating violence in the name of God. Calling their movement what it is will go a long way towards accelerating it’s end, in my view…and also helping make it less and ultimately non-violent.

2. Acknowledge that this is not only about Islam and is truly global/multi-national. Violent Islamic fundamentalists are certainly creating massive problems worldwide, but the problems extend beyond Islam. In my (our) lifetime the forces of religious fundamentalism have risen dramatically across the globe in reaction to the forces of globalization, westernization and modernity….and many outside Islam are also perpetrating violence in the name of their God. Broadening the focus beyond Islam will, I think, help address it more quickly in Islam also…as it will remove the ego and pride barrier created by the perceptions of denouncing an entire (and majorly important and large) religion.

Tags india and pakistan, islam, mumbai attacks, terrorists, war on terror | Comment (0)

Life Politics Public Policy

Equality for all: US Supreme Court Decision and Timing

November 18, 2008 – 12:36 am

I am a strong believer that civil rights issues should be resolved through the legal (not political) process and feel it is only a matter of time until the US Supreme Court strikes all the discrimination that has been “constitutionalized” during the last 8 Bush years on the issue of gay marriage (sadly, fully 30 states now “ban” gay marriage via their constitutions). I was feeling like a naive optimist after a conversation over brunch this past weekend, where a (clearly very smart) lawyer made a strong argument that the US Supreme court wouldn’t do what I say it will…at least not for the next 20 years!

Then today I saw 2 key arguments/quotes that give me hope that every individual and family will have equal rights and equal protection under the law in the USA sometime soon (despite the recent and unfortunate voter approval of the discriminatory Proposition 8 in California):

I was reading a fascinating article on the Princeton alumni website today entitled: “Her husband bakes, Scalia sings: Ginsburg describes the lighter side of the Supreme Court”. Here’s a direct quote from the article:

As she examined a small booklet with the text of the Constitution, she described her “favorite provision:” the end of section one of the 14th Amendment. She read aloud from it. “… (N)or shall any state deprive any person of life, liberty or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”

You can click here for the full article: http://www.princeton.edu/main/news/archive/S22/48/08A80/

Then, I saw an LA times opinion piece by Brian Gray, a Professor at UC Hastings College of Law in San Francisco, which draws a parallel between the arguments against Prop 8 and a decision made by the US Supreme Court on a Colorado proposition, which had (and I quote): ‘barred the state and its political subdivisions from adopting or enforcing any law “whereby homosexual, lesbian or bisexual orientation, conduct, practices or relationships” are the basis of a claim of discrimination.’

Here’s what happened on the Colorado issue (and I quote again):

“Following the enactment of Colorado’s Amendment 2, its opponents filed suit claiming that it unlawfully singled out gays and lesbians as a class to deny them rights that other citizens not only possess but take for granted. These rights include access to housing, government services, public accommodations and public and private employment opportunities without regard to an individual’s race, sex, religion, age, ancestry, political belief or other characteristic that defines each of us as a unique human being. Amendment 2, the opponents argued, therefore denied gays and lesbians the equal protection of the laws, which is a guarantee of the 14th Amendment to the U.S. Constitution.

To the surprise of many, the U.S. Supreme Court agreed.”

Click here to read this fascinating LA Times article: http://www.latimes.com/news/opinion/la-oe-gray17-2008nov17,0,1425883,print.story

How long do you think it’ll be before all individuals, gay or not, have full equal rights in the USA?

Tags equal rights, equality, gay marriage, prop 8, supreme court | Comment (1)

Life Politics World Affairs

Rascist slurs at McCain/Palin rallies should be denounced by candidates and party

October 21, 2008 – 10:45 pm

I was trying last night to have a mellow evening at home after a full day of work. The full day of work was quite an experience after spending 3 blissful months ‘Exploring my Zen’ (as I like to call it) following the collapse of Indymac during the Summer. So here I was…cuddling with my 2 freshly bathed (and good smelling) Great Dane’s Lara and Tank…watching TV. But what I saw on CNN shocked me.

It looked (from the multiple clips they showed) like many people (definitely way more than a handful) at Palin/McCain rallies were screaming rascist comments and the crowd was supporting them. This included statements like “Obama bin Ladin”, “Mohammed Husein Obama”, “Them Commies”…etc.

Could this really be going on in America, without bipartisan public denunciation? As I recall, McCain actually defended the people attending their rallies during the final presidential debate. Is this new, or do these conversations go on in this rough tone more regularly? I sure hope I see McCain or Palin step up and call this nastiness what it is – unacceptable in America.

On a broader note: We take things like equal protection under the law and non-discrimination so much for granted at least all the places I’ve lived in America which includes Universities (New Jersey), Cities (Los Angeles, Chicago), Companies (McKinsey, Indymac, and many Fortune 1000 clients served while at McKinsey), or just plain walking around (anywhere….from San Francisco to Michigan to Oregon to Dallas to Seattle to Arizona…the list goes on).

But none of these “now so obvious” modern principles of equality so clearly embodied in the US constitution came naturally to Americans, or really to most societies around the world. They (for the most part) had to be inflicted on the majority by the righteous/enlightened minority or the founders of the modern day states.

Tags discrimination, mccain, palin, Politics, presidential race | Comment (1)

Education Life Politics Public Policy World World Affairs

Fighting and debating the wrong “war”

March 30, 2007 – 10:49 pm

I find myself quite uncomfortable with the near consensus I see in America today (as reflected in the media and recent policy coming out of the House and Senate) on the belief that “the war” on terror is going poorly, and the answer to this problem is for America and the world to pull out and leave the Middle East to solve it’s own civil and societal issues.

My two main contentions/concerns are as follows:

1. I feel everyone is missing the forest (the real war), as they are focused on the trees (Iraq, and sometimes Afghanistan). The war, and I do believe, we are in the midst of “the third world war” is much broader than just the conflicts in these 2 countries….and I fear “pulling out” of Iraq, may reflect a broader pull back on any sustained attack or defence against the root cause of the war….which I believe is largely, if not fully, unaddressed today (more than 5 years after 9/11).

2. The real war we have is not a physical war at all. It is a virtual or mental war….a war of beliefs and values (largely Islamic beliefs and values on key issues, but broadly religious fundamentalism and the violation of basic human rights using religious beliefs/edicts as a justification).

This real war is the ultimate untraditional war. Yet, the world has largely responded to it with traditional tactics….i.e., physical attack and defence. Hundreds of billions of dollars have been spent already, on physical conflicts in both Afghanistan and Iraq. Imagine what this money could achieve if appropriately redirected into fighting the real war….the war of beliefs.

I think it’s time to take a step back, somehow firmly but fairly extricate ourselves out of Iraq over time (I know this in itself is a huge issue, but I’ll leave my thoughts on Iraq specifically for a separate discussion. I will say I think it’s key despite all the past mistakes….to leave Iraq a much better and more peaceful place than it was and is), redefine and understand the real war against terror, and get cracking using more “untraditional” means such as economic policy, incentives, education, TV and the internet, opportunity and basic common sense and logic….to help the muslim world adopt a more moderate version of their religion (as has happened with other religions, including Christianity over the past few hundred years).

It won’t be easy for people to ignore the actual words from the Quran that are used by some to justify killing, discrimination against women, and other inhumane and backward practises….but this is religion….and muslims must adopt moderating changes themselves after debate and discussion….if they are to retain their pride….which is paramount when you are talking about religion and culture.

Tags Education, george bush, iraq, middle east, obama, Politics, Public Policy, war on terror | Comment (0)

Education Life People Politics Public Policy World World Affairs

How the middle east will be liberated

May 13, 2006 – 10:53 pm

Ultimately, I believe true ‘liberation’ and ‘freedom’ for the oppressed in the middle east (those that are denied opportunity and freedom….particularly youth, women and children) will have to be achieved by the people in the middle east for themselves.

Perhaps I am biased, being Indian (given our history of achieving freedom from the British through struggle). This freedom will be achieved on the ground over time with education, knowledge and a taste for how it feels to be able to determine one’s own future. Check out this great article from last week’s Wall Street Journal. To me, the media is the most important tool in helping bring information to people….so their own minds and hearts are changed. We should be spending billions on this….not mere millions. Look what TV, knowledge/information and opportunity have done for post-liberation India!!
Lastly, to clarify, I am talking about true internal change….not just a change in the broad, high level framework of government (which the US has facilitated in places like Iraq). The high level framework too is important…but not nearly enough in an of itself.Liberty TV

By KENNETH Y. TOMLINSON
May 6, 2006; Page A8

In recent weeks, we’ve heard a great deal in Washington about how we ought to be broadcasting to Iran. But it might be instructive to examine what U.S. international broadcasting is already doing.

Very recently, on a Persian-language satellite television broadcast from the United States, the people of Iran learned that Iran’s oldest and largest student organization, Tahkim Vahdat, urged the government to suspend uranium enrichment and to cooperate with the international community by restricting nuclear development to peaceful uses. The group called the government’s behavior “irrational and confrontational.” Needless to say none of this appeared in Iran’s government-controlled media; few rulers on earth exercise the degree of censorship enforced by the Iranian government.

Another program featured the story of Hossein Derakhshan, once jailed in Iran for starting an Internet blog. Upon his release, he managed to get to Canada where he now runs the most popular blog — in Iran.

Or consider this exchange that occurred on our nightly Persian-language news and current affairs program on the Voice of America.

Moderator, Ms. Setareh Derakshesh: “Our guests today are Mr. Bijan Kian, a businessman associated with the American Council on Foreign Relations, and Dr. Abbas Maleki of Sharif University in Tehran, who is currently a Harvard Research Fellow in the United States. Dr. Maleki, how do you see the possibility of direct negotiations between Washington and Tehran on Iran’s nuclear policies?”

Dr. Maleki: “From the beginning, direct talks have been part of Iran’s agenda. From Iran’s point of view, the nuclear issue is not a real problem. This is part of the overall process of development which is going on in all parts of our society, like nanotechnology, biotechnology, IT and so on . . .”

Mr. Kian: “It is amazing to hear about such claims as progress in nanotechnology in a country where there is widespread unemployment, poverty, drug addiction, prostitution, so many women’s issues and, finally, political repression and coercion. The real dispute is not between our two countries. It is between the Iranian people and the government of the Islamic Republic . . .”

Dr. Maleki: “Well! Using polemic language and slogans talking about political coercion is very easy. Even in the U.S., that technologically speaking is the most advanced country in the world, you still have poverty everywhere, unemployment and so on. Tehran is so much cleaner than New York. You can go and check the trash-ridden streets of New York. Go and have a look at poor people there. . . . Just look at the war in Iraq and Afghanistan and now this atmosphere of war the U.S. government is creating about Iran . . .”

Ms. Derakshesh: “Dr. Maleki: The majority of the people in Iran live under the poverty line — and Iran’s prisons are filled with political prisoners . . .”

Dr. Maleki: “Excuse me! You are the moderator yet you are passing a wild judgment.”

Ms. Derakshesh: “This is not my personal opinion, sir . . .”

Dr. Maleki: “Whose facts are these, where did you get them — that there are political prisoners in Iran?”

Ms. Derakshesh: “These are facts reported by credible international human rights organizations.”

Mr. Kian: “Whenever we talk about what is really going on in Iran, what we say will be branded as slogans by supporters by the regime. I have to emphasize that the American government is not in favor of war with Iran. Just look at what has been said by President Bush and his secretary of state.”

* * *
In VOA and Radio Free Europe/Radio Liberty, the U.S. has a model illustrating how broadcasting news and information (i.e., the truth) can lead to the liberation of a people.

That certainly occurred in the former Soviet Union and Eastern Europe. Recognizing that fact, the U.S. Broadcasting Board of Governors moved to increase television and radio to Iran long before the current crisis in that country. In early 2003 we launched Farda, a round-the-clock, youth-oriented radio service to Iran. A few months later we began broadcasting daily Persian news and current affairs satellite television.

The television launch may have been modest — $1.9 million for 30 minutes daily with repeats. But we have come to recognize that satellite television is to the future what shortwave radio was to the past.

That daily program today is an hour (with repeats), and by September, thanks to better than $9 million from the Bush administration and Congress, we will be broadcasting four original television hours — with news, debates and call-in shows — daily. Funds in a supplemental now before Congress could increase these broadcasts even more — and strengthen our coverage.

Small satellite dishes are proliferating in Iran and there are strong indications that VOA’s nightly programming is becoming a staple for large numbers of Iranians. Telephone polling (which tends to undercount audiences living under repressive regimes) show that better than one-in-five adult television viewers say they regularly watch VOA’s satellite television programs.

As was the case with RFE/RL and VOA in the Cold War, it is important that our broadcasts are provocative — and credible. Intense journalistic supervision is critical to achieving this goal. Truth does not lie half way between the views of Washington and Tehran. But talk and debate programs give Iranians a taste of freedom — and enlightenment.

Ultimately, the future of Iran rests with the people of Iran. Just as in the Cold War when the people ultimately prevailed over their oppressors, it will be the people of Iran who will deliver their country from the tyrants who rule them now. To paraphrase Winston Churchill, we can give them the tools — information the mullahs don’t want them to hear and debate challenging the lies of mullah-sympathizers — and the people of Iran can finish the job.

Mr. Tomlinson is chairman of the Broadcasting Board of Governors, which oversees U.S. international broadcasting.

Tags culture, freedom, media, middle east, Politics, Public Policy, World Affairs | Comment (0)

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If you don’t know it, you can’t fix it? Unsexy but critical: Data/Metrics

November 15, 2005 – 10:58 pm

I was reading an article about the french riots and the core liberal philosophy underlying french society and government. The french believe (rightly) that all people are equal and that race, color, ethnicity shouldn’t matter. As a result, they don’t measure any of their social outcomes by race, color or ethnicity.

No data on whether there are particular ethnic or racial segments of society that are having major problems? No way to fix these problems. If you’ve read the papers at all in the last few weeks, you know what I’m talking about.

Not sexy, but true (to me anyways). You achieve what you articulate and focus on. You fix problems you see. You improve metrics you measure and report regularly.

So why the hell is this the subject of a blog? Well, I’m not sure this is going to be a crowd-puller, but I was reading an article my boss sent me from the Wall Street Journal and I’m feeling validated (enough to share anyways!). The article is about Michael Walker, founder of the Fraser institute in Canada. A few snippets from the article which I totally agree with:

“A debate about government policy isn’t likely to be settled around values. But when there is objective measurement, resolution emerges”

“The dirty little secret of Canada’s single payer health system: that care is rationed through time rather than price”

“I firmly believe that you become what you think about, and that is as true for countries as it is for individuals”

Tags Business, data management, economics, measurement, Public Policy | Comment (0)

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Fitting yourself into a neat box: The problem with bundling opinions

September 21, 2005 – 11:03 pm

Some on this blog have complained about the use of labels to denote ‘bundles of opinions’. Liberal. Conservative. Democrat. Republican. Gay. Straight. Pro or Anti-Hindu. These complaints struck a cord with some of the feelings I have on this issue. Why do we need someone else…a political party, a social group etc to tell us which opinions and views ‘belong together’?

I have a practical answer to this question: most people don’t have or want to take the time to think through how they really feel about each issue that is important to our society, particularly if their own life is ‘OK’ in that particular area. So, they align broadly with a group or party…and vote based on this broad choice, thinking most of the time they will vote ‘right’ (i.e., consistent with a more thought through personal choice on any particular topic).

This practical consideration, however, doesn’t make me feel better about the choices available, as I believe they significantly (and potentially adversely) impact legislation ‘on the margin’ (i.e., active legislation today).

A few examples:

1. Why does a pro-free trade stance belong with an anti-gay rights stance? Trade doesn’t have much to do with religion.
2. Why can’t you be pro-teacher and pro meritocracy and pay-for-performance in education (charter schools in America)?
3. Why can’t you be pro-Hindu (one of the greatest, and most flexible religions in the world!) without being anti-Muslim?
4. Why can’t you be pro-business and pro-gay rights or pro-choice? Who do you vote for if this is the case?

I think it’s time we started voting for issues, not parties!!

Tags parties, partisanship, Politics, public affairs, voting | Comment (0)

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Actions are all that matter

September 1, 2005 – 11:04 pm

Almost everything I, and we, do at work or in life revolves around people and our relationships with them. I am fascinated by what makes relationships meaningful and what makes some people more successful than others in life. I have come to the conclusion that separating people’s actions from their words is the key to answering some of these questions. In fact, I believe actions are all that matter!

Having said that, I’ll caveat my statement by acknowledging the importance of communication, and education in our lives and for society. But at the end of the day, I’ve found that the only way to ‘cut through the crap’ and get to the heart of what’s right and valuable is to look at actions not words.

How many of you know people who claim to be bleeding heart liberals and who are vehemently anti-globalization? I know a few, who immigrated to America and stay here. How many of these folks have moved back to India (if that’s their home country) and stopped working their high paying corporate jobs? None.

How many people do you know who go to the temple everyday and discuss the importance of religion in their lives and decision making? I know a few. Many of these folks drive lavish cars and have a lot of money but would pass by a hungry homeless person without offering them a bite to eat. Also, most don’t engage in any significant charitable activity.

How many people do you know who are against allowing legal rights for same sex couples in multi-year relationships (as they believe this is anti-family) but are divorced or engaged in extra marital affairs themselves? I know many…and know there are even more I don’t know..most of whom voted for Mr Bush.

Tags culture, human behavior, relationships, spirituality | Comment (0)

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Capitalism: Imperfect, but our best available option

August 21, 2005 – 11:06 pm

I can’t help but offer an alternate view to the ‘critique of capitalism’ posted here a few days ago. Many critics of capitalism (including the author of the post above) compare the outcomes of capitalism (quoting the various ills in the world today e.g., inequality) to an imagined ‘ideal state’ that has never existed in the history of the world.

I’m a realist, focused on practical executable solutions (i.e., what should we do differently based on what we have learned) and believe the current outcomes of capitalism should be compared to the outcomes of pre-capitalistic and non-capitalistic socieities and economies.

This, more real, analysis reveals that although capitalism is by no means perfect (there are winners and losers in capitalism, just as there have been winners and losers in the evolution of our world. I believe the role of government is to mitigate the brutal ‘survival of the fittest’ results of capitalism), it is by far the best option available to countries and socieities seeking to improve their peoples standard of living.

Just go ask any Indian who tried to improve his or her families lot in life in the pre-1991 ‘socialist-democracy’ era and who has been trying to do the same post the 1991 liberalization of India’s economy. I think the answer is crystal clear. Non-capitalistic societies end up being extraordinarily political, with power, opportunity and information controlled by a few. Capitalism is an objective, fair system with the best (although not perfect) outcomes. I believe the best answer economically is a capitalist economy, balanced by government supported equality of opportunity (as much as possible – e.g., by ensuring equal access to education) and government provided ‘safety nets’ for those that fall to the bottom of the totem pole in capitalism.

Tags capitalism, economics, globalization, inequality, money, Politics | Comment (0)

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Value of life

August 16, 2005 – 11:07 pm

The ‘value of a life’ is a recurring topic of conversation in our home. It has always confounded (and impressed) me how much americans value a single american life. I’m told a whole bunch of marines will go in and risk their life to try and save just one of their brethren during war.

I find this most fascinating, being part of a generation of Indians who grew up reading almost daily about dozens if not hundreds of deaths in Sri Lanka (the LTTE problem), Andhra Pradesh (the Naxalites), Punjab (the terrorism/secession problem there in the late ’80s and into the ’90s), Kashmir (you all know this one, I’m sure), Assam..and the list goes on (and this doesn’t even include violence outside of India!!).

There was nary a day when one didn’t hear of a ‘brown bag’ exploding and killing all the people on a bus…or some story similar to that. Most of us got used to this over the years, and became relatively immune to the violence and death.

I’ll blog some other time about my hypotheses on what drives this dramatic difference in how a human life is viewed in different parts of the world.

Today I’m wondering and thinking of how one values a dogs life?

Yesterday, our beloved Great Dane Lara got ‘bloat’ – a relatively common but life-threatening condition that large breed dogs (particularly deep chested ones) are prone to. Here, for seemingly no reason, the dogs stomach gets filled with gas and twists on itself. Immediate surgery is required to reverse the condition, and many dogs die either during or soon after surgery. Aside from the emotional stress and pain, there’s also the issue of expense. We’re $1500 bucks down already (for the surgery) and just dropped her off at a 24 hour hospital which is going to cost another $500 or so per night. We’re lucky that we can afford the expense, and she’s lucky that we love her like crazy…but it does bring up the question: how far do we take this? What is the value of a dog’s life? Here we are trying desperately to save this beloved dog, who we got from a rescue 3 years ago (she was already sick, and has had orthopedic problems since)….should we be saving a human life instead?

I’ll tell the dog-lovers before I sign off that despite all the debates and questioning, the path forward is clear. We’ll do whatever it takes to have some more time with Lara. She is special, with a gentleness and human-like emotional quality we’ve never found before. What if we weren’t this lucky and didn’t have this choice to make?

Tags death, dogs, human life, Life, living, relationships, value of life | Comment (0)

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perception is reality

August 14, 2005 – 11:10 pm

people, to me, are the most interesting and important thing in the world. priority number one, above work, above all the things i want to and need to get done in my life (in a macro sense, all said and done). personal relationships follow, then, as a key driver of my personal happiness and satisfaction…and people watching (and thinking about what i see) follows as an absorbing hobby.

so i’ve noticed, and often think about this: how we perceive a particular situation or incident seems to differ quite a bit from person to person. not surprising, i guess, since we view the world through the lens of our individual prior experiences and what we have personally learned through these experiences.

but perception, i believe, is reality (after all, our perceptions drives personal decisions and actions, which are real and tangible). but how can it be that there are over 6 billion people in the world walking around each with their own slightly and sometimes not so slightly different view of what’s real? isn’t the world we live in fascinating?

Tags behavior, culture, People, perception | Comment (0)

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Information and Opportunity

August 14, 2005 – 11:09 pm

I’m falling in love with blogging. I’ve never kept a personal diary, but always wanted to. The opportunity to share my thoughts (even if the line of thinking isn’t always ‘complete’ i.e., there’s no clean resolution at the end of each thought) and have others comment, provide feedback, and tell me theirs is invaluable. I can’t help but believe that over time, in aggregate, I will find more answers than I would have on my own. Certainly, I have already found a different kind of community.

So back to the theme of this one. I see information and opportunity as two of the key (if not the key) drivers of a lot of what I observe around me.

First, information: control of information is critical in most Indian families – information is power, and those in power limit access to information for those they want to keep less powerful than themselves. This could be husbands keeping wives less informed than themselves (a common occurance), the arab rich keeping information out of the hands of the common arab, the chinese government controlling information access to the common chinese…the list goes on. What we’re seeing globally is the loss of control over information. The media are key to this loss of control..the internet, print media, satellites, globalization etc. This is just the tip of the iceberg. I’m waiting to see what happens as the billions of Indians, Chinese, Africans and Latin Americans who do not have open access to information get it more and more over the coming decades.

Second, opportunity: I think the root cause of a lot of the ‘violence’ we see in the world is lack of opportunity. And I specifically mean economic opportunity – the opportunity to rid yourself of hunger, thirst, disease and other basic human needs. A person without opportunity has no hope. This is where faith steps in. Because religions brings back some form of hope (the hope of salvation, nirvana, etc). Lack of opportunity combined with lack of information leads to billions of people following the words of those who control them. Typically, this is religious and political leaders who promise some form of ‘light at the end of the tunnel’ if those listening do what they are told.

So how do we spread opportunity to those that don’t have it? And what role can an individual play in this?

Opportunity, to me, is the key to America’s dominant global position right now. I came here for it. So did almost everyone I know who wan’t born here.

I will be writing more on this topic over time as I think a lot of the public policy and foreign policy ‘answers’ lie in laws/policies/rules that in some way impact opportunity for the common man.

Tags development, foreign policy, information, opportunity, Public Policy | Comment (0)

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The missing link in education

July 30, 2005 – 11:13 pm

Education as a topic is of immense interest to me. I have seen what it has done for India i.e., created an educated populace that was primed for the opening of the capitalist pump in 1991, and positioned to harness economic opportunity to create immense economic growth and social value for India and Indians (e.g., great accumulation of wealth in American Indians, increased living standards, more jobs, hopefully an eventual reduction in poverty).

But as I go about my day to day life and interact with people both at work and socially, I can’t help but protest at the missing link in education worldwide: the lack of education on personal financial management and communication skills.

I feel the average individual I meet is relatively unequipped in both these skill sets which I believe have a disproportionate correlation with personal financial and professional success. Shouldn’t we be lobbying hard to get these courses included in both at the high school and college level?

Tags communications, Education, money management, personal finance | Comment (0)

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How responsible are muslims?

July 24, 2005 – 11:14 pm

We just saw an episode of 30 days in which a white american practising christian goes and lives for 30 days in Dearborn MI with a muslim family on the condition that he must live like them and answer the call to prayer 5 times a day.

The program was really eye-opening. First, I learned that Islam, Judaism and Christianity come from the same religious lineage. I think I knew this somewhere deep in my brain, but it was nowhere near top of mind so wasn’t a part of my daily ruminations. But the real debate this program raised in my mind is this: What should the 1.4 billion muslims in the world be doing about the actions of terrorist’s who are taking innocent people’s lives in the name of their god?

Should they feel somehow responsible? Do they have a special duty to severaly condemn the terrorist’s actions? Or are they the victims themselves? How must they feel now that their very core beliefs and their beloved religion of Islam is now being thought of as a breeding ground for fundamentalism and terror? Even open minded, liberal folks today are drawing the conclusion that Islam must be part of the problem here. After all, it can’t be mere coincidence that a huge proportion of the ever-increasing number of terrorist incidents are planned and executed by muslims.

What do you think?

November 9, 2008 Addendum

I really think this issue and question applies to all religions. I have seen a huge rise in religious fundamentalism (really across many/all religions) in my life, and in many religions violence is “justified” in the name of god. What should other more peaceful followers of the same religions do? How do they separate themselves from the fundamentalist minority (yes, it is typically a minority) who taint the image of others in their religion through their actions?

Tags international affairs, islam, terrorism | Comment (0)

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Category Archives: Politics

Strategies to address the elephant in the python: housing market stability we all want

Responsible 2nd Chances: Loan Modifications Addressing the Issue of Negative Equity and (Borrower) Moral Hazard

“Shadow REO Inventory” Presents Govt Unique Opportunity For Affordable Housing Expansion

Contrarian View: Tough Times All Around Will Raise America’s Reputation Abroad

One Key Missing Piece: Early Thoughts on the Obama Plan for At-Risk Homeowners

Reconsidering my decision to tune into the Inauguration

Redefining the War on Terror

Equality for all: US Supreme Court Decision and Timing

Rascist slurs at McCain/Palin rallies should be denounced by candidates and party

Fighting and debating the wrong “war”

How the middle east will be liberated

If you don’t know it, you can’t fix it? Unsexy but critical: Data/Metrics

Fitting yourself into a neat box: The problem with bundling opinions

Actions are all that matter

Capitalism: Imperfect, but our best available option

Value of life

perception is reality

Information and Opportunity

The missing link in education

How responsible are muslims?

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