I'm one of those people fascinated by the mortgage/foreclosure crisis: how it happened, how it was allowed to happen, the resulting effect on Americans and their communities ...
So I've recommended Michael Lewis' The Big Short to a lot of people. Lewis is one of these talented writers who can take a sprawling, complicated issue and make it easily digestable. In this case, he focuses on the six or so people who saw the bottom coming and bet against the American mortgage machine. By doing so, he encapsulates exactly what was going on and how things were slipping through the cracks.
Fresh Air's Terry Gross also focused on the "complex foreclosure mess" last night with New York Times financial reporter Gretchen Morgenson.
One of the things that both Morgenson and Lewis talk about is how a bunch of risky loans would be pooled together — and because that seemed to equal a diverse portfolio — it would be given a better rating.
From Fresh Air:
"Thousands of them would go into one security, like say 10,000 mortgages, from a variety of places. They were trying to achieve diversification in these pools so as to diminish the risks associated with them.
And so you would have varying economic ability to repay in the loans. You would have very high-grade loans, you would have subprime loans, you would have a variety of loans from different geographic areas. And so this would, you know, it was hoped, be put into a security that would perform well over time and, you know, where people would repay the mortgages. And at the end of the line, the owner of the securities, and there were many of them because they were sliced up into varying risk degrees, okay. But in case, the idea was that everyone pretty much would get repaid at the end of the line.
Well, what was happening that many people did not recognize was that the types of loans were poisonous, toxic as you describe them, made to people who could not repay them, carried interest rates that would ratchet up dramatically after a few years, thereby making certain that they couldn't be repaid."
Lewis goes even further, talking about how loans were made to people who had very little credit history (thin credit files). Say, recent immigrants to the country. Because they had no previous credit history, it was easy to manipulate a high credit score. These loans would then be used to help achieve a certain average credit score in the pool of mortgages, making them appear to be less risky.
So if you're interested, both Lewis' book and Gross' interview are worth a look.
Seems Mayor A C Wharton is interested, too.
Wharton filed 135 lawsuits against the owners of blighted property this morning as part of the Neighborhood Preservation Act.
The properties are spread across the city, but many are clustered together. Five are located on Forrest Avenue, for instance, while another five are on North Hollywood and another five are on Grenadier Cove in Frayser. (Another five are on nearby Elbert in Frayser.)
MATA's intermodal terminal, currently about 60 percent done and scheduled for completion next May, is already a million dollars over budget, and that figure is climbing.
MATA staff have already processed $959,997 in change orders for the original $9.62 million intermodal project, $750,000 of it stemming from a problem with the building's original design. Procurement policies say that staff can do change orders up to 10 percent of the contract amount.
Because the transit authority estimates an additional $650,000 in costs related to the design problem, the MATA board had to approve changing Zellner Construction Services' contract to reflect a cost of $11.48 million for the facility.
MATA is seeking reimbursement of all the construction-related costs — roughly $1.4 million — through the architect's errors and omissions insurance.
In other news, MATA board members and staff will participate in a retreat early next month. As part of the retreat, they've challenged themselves to ride MATA to the retreat facility.
During this week's upcoming Indie Memphis film festival, I can personally recommend "Gerrymandering," "The New Year," and the Rock for Love concert film, screening October 22nd at Playhouse on the Square.
The long-awaited film features performances from Rock for Love 2 and 3, including Lord T and Eloise, the Magic Kids, Al Kapone, River City Tanlines, John Paul Keith and the One Four Fives, among others.
Produced in partnership with Makeshift Music, the annual Rock for Love shows benefit the Church Health Center.
The screening after-party, held on the roof of Playhouse — is it becoming *the* venue for things or what? — will include performances by Snowglobe, Pezz, and the New Reaches.
Tickets are available online at Indie Memphis or at the door.
As part of its new "Days of Giving" program, Wells Fargo distributed $1,000 to eight local non-profits, including the Memphis Union Mission and the Vance Avenue Youth Development Center, at the Memphis Botanic Gardens this morning.
But demonstrators with the Mid-South Peace & Justice Center were on hand to ask the lending giant to pay the more than $60,000 it owes Memphis and Shelby County.
By looking at foreclosures, deed transfers, as well as board-ups, demolition, and grass cutting fees, the group found 30 homes and 15 properties that Wells Fargo owes money on.
The city of Memphis also has a lawsuit pending against Wells Fargo that alleges the company engaged in predatory lending practices.
"They owe $60,000 in back taxes, fines, and fees for grass cutting," said Brad Watkins with the Peace & Justice Center. "That's just the data we had. That's not the whole of it. We don't have any data from 2010."
City taxes are due at the end of August. Since county taxes are due this month, the group chose not to include 2010 delinquencies.
"They just kind of left these open sores in our neighborhoods," Watkins said. "Now they want to get around it with throwing a little money around."
"We're happy to address their concerns at the appropriate time," said Wachovia Communications Consultant Jamie Dexter. "We're going to dig into this and listen to what they have to say, but today is about celebrating these groups. That's what we're focusing on."
A certain magazine/website with an affinity for rankings has once again chosen Memphis for an unfortunate distinction, this time "most dangerous":
Memphis, Tenn., where gang crime has ramped up in recent years, takes the dubious honor of first place.
But to local law enforcement, the list itself seems, well, suspect.
"We're trying to figure out how they arrived at the conclusion that gang crime has ramped up," says MPD deputy chief Jim Harvey. "We don't know where they're getting that, because we don't know that ourselves."
In fact, MPD's data shows crime down more than 12 percent from this time last year and down about 29 percent since 2006.
"I don't understand how Memphis could be number one with the decreases in crime we've had," Harvey says.
Nationally, crime has dropped about five percent, and Harvey attributes Memphis' stats to the MPD's Blue Crush initiative.
This might not be the right blog for this, but Opera Memphis is selling dresses, robes, and pantaloons from its famed costume stock. And it's just in time for Halloween.
I hit the preview sale yesterday, and I have to say ... it was amazing.
They are only selling a fraction of it, but Opera Memphis' costume collection includes more than a million pieces. (Ed.'s note: It's a closet the rivals only my own.) It has costumes from at least 13 shows, a lot of them made in Europe, and the pieces date from 1940 to the present.
Costumes for sale include those from shows, such as La Boheme, which the opera has half the costumes for, and some are one-offs, period pieces that were used to fill in the chorus but don't go with any particular set.
"We have so many costumes and we only have so much space to store them," said director of development Christiana Leibovich. "We really love the idea of people being out in the community in really amazing costumes and being like, 'I'm wearing an original opera costume.' These are costumes you couldn't rent for the price we're selling them."
Some of the costumes are so well-traveled they even have passport stamps.
(More after the jump.)
Right now, the world is evenly divided between those under 28 and those over 28. By midcentury, the median age will have risen to 40. ... By 2018, 65-year-olds, for example, will outnumber those under 5 — a historic first. In 2050, developed countries are on track to have half as many people under 15 as they do over 60. In short, the age mix of the world is turning upside down and at unprecedented rates.
This means profound change in nearly every important relationship we have — as family members, neighbors, citizens of nations and the world.
The reasons include longer life expectancies in developed countries and lower birth rates.
(One of the key transitions in U.S. demographics has to do with different birth rates between residents born here and recent immigrants to the country, and that same trend is also keeping the country "younger" than some other developed nations.)
I’ve never heard so many people talking so quickly.
With 20 slides and five minutes to tell their stories, the 15 presenters at Tuesday’s Ignite Memphis event were urged to enlighten or entertain us, but to “make it quick.”
Presentations ranged from blogger Kerry Crawford-Trisler telling the audience how to make an “I like you, but …” mixtape to Computable Genomix CEO Brad Silver talking about the future of personalized medicine.
“This was an absolutely perfect opportunity to highlight what a truly remarkable, innovative city we have,” said Elizabeth Lemmonds of MemphisConnect, which, along with LaunchMemphis, organized the event. “We wanted a broad spectrum of topics, but also something that might not be told elsewhere.”
At least one presenter, web designer Zach Whitten, wanted to talk about technology singularity, or “the nerd rapture,” for fun.
“It’s always fun to get up in front of a group of people and rant,” he said.
Even so, Whitten did several run-throughs of his presentation the night before.
“I love the format. People think it’s so simple: I’ll just get up there with 20 slides and just riff on it,” he said. “You have a slide advancing every 15 seconds. It takes a lot of practice and concentration.”
About 200 people attended Ignite Memphis, and organizers expect to host a second event in the spring.
With all the talk of talent retention and attraction, I've recently been thinking that the city should ask some of its former residents to move back to town. Especially those with family still in the area.
I've talked to people educated here who say they plan to come back someday, just not for 20 or 30 years. But what if we could speed up their timetable somehow?
A story in yesterday's USAToday about Californians migrating to Oklahoma City has me thinking it's not impossible:
[Hollywood producer Neal] Nordlinger is running a software firm here and preaching the virtues of the heartland — low costs, unclogged streets, friendly people. "It's a dream here," he says. "The selling price of a house here would not be the down payment on a house in L.A. ... People in L.A. do something for you because there's something in it for them. Here, they genuinely want to help you succeed."
Memphis has a low cost of living, barely any traffic (as long as you shy away from Germantown Parkway), and I'd say the people here are pretty awesome. (Actually, if you read the story, a lot of it could be about Memphis.)
USAToday says that several factors have worked in Oklahoma's favor: It had made deliberate policy decisions to lure employers to Oklahoma or expand in the state, as long as they offer decent jobs with benefits. They've launched a state marketing campaign to bring skilled Oklahomans back from bigger cities. It also didn't have much of bust during the recent economic downtown, b/c it hadn't had much of a bust. They've launched a revitalization campaign in downtown Oklahoma City. And they're using their advantage in aerospace and defense technology to grow the field.
I think this is the thing I find most interesting, however, and comparable to our own city:
Newcomers say ambitious people can make a bigger impact faster in Oklahoma than they could in bigger, busier places. JD Merryweather's photography studio struggled in Santa Fe but took off in Oklahoma City. ...
Christy Counts returned to Oklahoma City from California six years ago, determined to start a Humane Society branch and head back to the West Coast. She's still here. "You can spend 15 years (elsewhere) trying to make a name for yourself," she says, "or you can spend two years (in Oklahoma City), work your a— off and make a difference."
By the time December rolls around, all the residents currently living at Cleaborn Homes will have moved out to prepare for demolition of the public housing development. But that leaves a number of students enrolled at Georgia Avenue Elementary, Vance Middle, and Booker T. Washington High schools most likely changing schools.
Today, the Memphis City Council asked MHA & HCD head Robert Lipscomb about the decision to move families —and the students — during the school year.
"The chair has received numerous calls concerned about the residents and the children being moved from their homes and their schools in the middle of the school year," said council chair Harold Collins. "Initially the chair saw it as a Memphis City Schools issue, but because our division is leading the charge, I thought we needed to publicly hear it."
Lipscomb told council members that the city has typically heard about Hope VI grants in February. This time, however, they did not receive word until June.
"Short-term, there's a bit of disruption. Long-term, we're moving them to a better situation," Lipscomb says. "I don't want to move kids in the middle of the school year, but it's the hand we've been dealt."
Case workers have been assigned to each of the families, but it's slowed down the process for residents eager to move.
"It's about 400 families and they've been ready to move for a long time," Lipscomb says. "They've expressed frustration to us: Why are you holding us up?"
Collins asked how to planned to re-populate the three schools, one of which — Booker T. — is Lipscomb's alma mater.
City Council member — and former school board commissioner — Wanda Halbert noted the city's lack of oversight or accountability from the school district.
"The city is responsible to improve the city," she said. "We can't focus projects and infrastructure around keeping the schools full."
Over the years, outside observers have talked about the school system's need to close schools with dismal enrollment numbers, but it's not a popular topic among school board members or administrators.
Lipscomb said he hoped redevelopment efforts would eventually revitalize area schools.
"Over time, people will come back, but we've got to clean that area up. As we rebuild [Hope VI project Triangle Noir], people will come back," Lipscomb said. "Sprawl is killing us. That's the problem."
The public seemed out in full force to check out the greenline for the first time (or maybe the 7th or 10th, given earlier news reports of overcrowding out there), even creating impromptu bike racks.
The Boll Weevils entertained/stung? the crowd at the Podesta block party.
As did the band of bikes, a bike-powered DJ booth that rode along the Greenline visiting all the block parties.
Yesterday, the local chapter of the Urban Land Institute hosted a rare look inside the Sears Crosstown building. I'll be writing more about it for this week's Flyer, but I thought I'd give you a sneak peek of some of my pictures.
Sears workers got 30 minutes for lunch. Period. Also, the cafeteria was known for its bread pudding.
More pictures after the jump.
The new Midtown Action Coalition, formed in response to the controversy over the proposed CVS at the corner of Cooper and Union, plans to hold a rally this Saturday at 10:30 a.m.
The rally, which will protest the demolition of the Union Avenue United Methodist Church, will be held at the corner of Cooper and Union, and organizers will be asking people to sign a petition to boycott CVS.
They say the petition has 1,200 signatures already.
Pinnacle Airlines is not taking off. So to speak.
After being wooed by Mississippi and then by local leaders in Shelby County, Pinnacle has decided to relocate to One Commerce Square.
“I am so happy to welcome Pinnacle Airlines and their employees to downtown Memphis. They have been terrific corporate citizens of Memphis for many years, and their belief in our city is truly inspiring," Memphis mayor A C Wharton said in a statement. "I know that they were considering several extremely enticing offers, including at least one that would have taken their corporate headquarters out of Tennessee altogether. This decision speaks volumes about our downtown business community’s long-term strength."
After what Wharton called an "unprecedented" joint effort by the Memphis City Council, Shelby County Mark Luttrell, the Center City Commission, U.S. Congressman Steve Cohen, Tennessee Governor Phil Bredesen, and the Tennessee Department of Economic and Community Development, the airline will take over 12 floors in the downtown building.
In August, the City Council approved $18 million in economic incentives for Pinnacle, including $3 million from a city economic development fund.
The Center City Commission (CCC) is hosting a welcome pep rally for Pinnacle employees this Friday, October 8th, at Main and Monroe from 8:45 to 9:15 a.m.