Join us, the members of the Conspiracy as we offer thoughts on government enforced intellectual property issues. . . . In this production, Gardner Goldsmith looks back at history, in an attempt to answer the question: Is government-enforced copyright and patent “protection” reconcilable with a free society?

The answer is no.

And is it economically efficient? No.

Take a listen! And then comment by calling 206-984-1069! Be Seeing You!

[Audio clip: view full post to listen]

Hot damn. The government is going to stimulate the economy. Not with a lap dance or lubricated love glove, but with taxpayer dollars. Come summer, Mister and Miz America will get a rebate from Uncle Sam. What a man! Some people will get more than a thou of their own money back. Consumers will rush out and pump the economy. Wal-Mart here we come. Simultaneously, just like in romance novels.

Meanwhile, back at Rancho Notorious for Tax and Spend, pols will do it the usual way. On top, with the lights out.

Suddenly, next Summer…

Americans feel soiled and empty after trysting with Wal-Mart. Thanks to Helicopter Ben’s interest rate cuts/puts, the heat was fleeting. (Folks with saving accounts never defrosted.) “Is that all there is?” asks the collective Peggy Lee, “A couple of plastic lawn chairs and a bag of groceries?” Wal-Mart winks and promises more trash for more cash. While Starbucks says coffee is for closers.

Real estate! Will the stimulus pack bring sexy back? Rebates are the front load of the package; the spoonful of sugar that helps the medicine go down. The potential kicker, as agreed upon by President Bush and the House of Reps (the Senate still has to sign on) is the lifting of limits and loosening of standards governing Fannie Mae and Freddie Mac, the GSE mortgage giants.

GSE equals government-sponsored enterprise. GSEs are private companies, but enjoy considerable support and advantages from the federal government. In return, they perform certain public chores and are regulated differently than non-GSE mortgage meisters. The largest GSEs are Fannie Mae and Freddie Mac. Their original mission was to buy conforming (not subprime) mortgages from lenders, thereby enabling them to make more loans. Fan and Fred hold some mortgages and market others as mortgage-backed securities (MBS). The securities are GSE guaranteed. While Fan and Fred aren’t pure government poodles, investors assume taxpayers will clean up after any mess they make, or do a bailout should they fail. The bailout assumption is fed by unclear policy re the level of support the GSEs would receive in a major crisis. The chance of meltdown is said to be slim. Until recently, so was the chance of a national housing crash. And until well into 2007, many financial pundits said subprime damage was contained.

Together, Fannie and Freddie back more than $4 trillion in mortgages. The question has often arisen as to whether their capital cushion is too thin to support such massive debt. At times, it’s been difficult to measure their cushion, due to pervasive book juggling.

Before Wall Street screamed bloody murder at the opening of 2008, President Bush was resisting pressure to lift the financial limit on the mortgages Fannie Mae and Freddie Mac purchase and securitize. The Office of Federal Housing Enterprise Oversight (OFHEO), the GSEs’ wimpy watchdog, also objected to lifting the limit and continues to do so post stimulus agreement. The present GSE limit is $417,000. The stimulus would snap the cap to $625,500, and to $729,750 in extra pricey housing markets. Allowing Fannie and Freddie to purchase and securitize jumbo mortgages, the oversize loans MBS investors now shun as too risky.

The jumbo shun makes lenders, Realtors, developers, and the pols who represent inflated housing markets, sad. The cap snap makes them happy. A GSE guarantee could stimulate investor interest in jumbo! Hopefully, jumbo won’t get too frisky and drop dead in the sack ala Nelson Rockefeller. Taxpayers would be flattened.

Speaking of being crushed, Fannie Mae and Freddie Mac are big buyers of mortgages cut by Countrywide Financial. They bought some 40% of Countrywide loans in 2006. The year mortgage lending went sub-cellar. Countrywide has been hit hard by lack of investor appetite for jumbo — and by its own unhinged underwriting. Of late, the mega lender has been denying bankruptcy rumors while selling itself to Bank of America. Bankruptcy talk caused Fan and Fred shares to tumble. That happens a lot these days. As do massive write downs. The GSEs took it on the chin in the 3rd quarter of 2007. Freddie had a record loss of $2 billion, Fannie lost $1.4 billion. The 4th quarter is expected to follow through.

As investors abandoned subprime MBS in 2007, Fannie Mae and Freddie Mac mounted a rescue mission. Fannie funded over $66 billion in subprime mortgage loans in the first half of 2007. But Patricia Parsons, director of product development, said Fannie “would continue to step lightly into this business.”* According to Becky Froass, senior director in industry and state relations at Freddie Mac, the company’s MBS portfolio held 15% subprime in 2006. Freddie hoped to buy $9 billion more in 2007.

Then there are the lawsuits and investigations. Just like the subprime and/or jumbo players who operated sans government mattress, Fannie and Freddie have acquired a saucy rep.

In January, the Ohio Public Employees Retirement System and state Attorney General Mark Dan filed a class action suit against Freddie Mac. The retirement fund lost $27.2 million in Freddie Mac MBS. Attorney General Dan alleges Freddie Mac hid the fact that the securities were backed by subprime. Saying the GSE “participated in one of the largest housing investment deceptions in modern U.S. economic times.”** In 2006, Freddie coughed up $410 million in a national class action suit headed by two Ohio pension funds. In that case, fudged financial statements were at issue. And OFHEO is seeking $215 million in damages from Fannie Mae, related to account manipulation at Fannie during the reign of former Chief Executive Officer Franklin Raines.

In November, 2007, the office of New York State Attorney General Andrew Cuomo issued subpoenas to Fannie and Freddie. Seeking, among other things, “Information about all of the mortgage loans Fannie Mae and Freddie Mac have purchased from any bank, including Washington Mutual, and the mortgage backed securities associated with those loans.” According to Cuomo, Washington Mutual, aka WaMu, colluded with First American Corporation and subsidiary, eAppraiseIT (one of the nations largest appraisal management companies) to inflate appraisal values on homes WaMu mortgaged. If so, the value of the mortgage backed securities based on those appraisals would also be false. In 2007 alone, WaMu provided Freddie Mac with $24.7 billion in potential MBS. Fannie Mae bought $7.8 billion.

President Bush and his fellow economic stimulators say the GSE cap will only be raised temporarily. All the bad buzz re Fannie and Freddie could be as false as the alleged false appraisals buoying WaMu MBS. And buying, securitizing, and guaranteeing jumbo mortgages when housing values are slip-sliding may be a wise financial strategy. But come Summer, when the rebate part of the stimulus package arrives, taxpayers might want to sink their windfall into a bottle of generic hooch and party as if it were Fat Tuesday. Because the GSE jack in the back could mean one long stint in Lentville.

Carola Von Hoffmannstahl-Solomonoff
Mondo QT

*“Risky credit shunned by Wall Street,” Neil J. Morse,Inman News, 09/28/07

**“Ohio vs. Freddie Mac: Mortgage lender hid big risks, suit alleges,” James Nash,Columbus Dispatch, 01/23/08

Sources include but are not limited to:

“Fannie Risks Won’t Rise With Bigger Loans, Mudd Says,” Kathleen Hays and James Tyson,Bloomberg News, 01/29/08

“Fannie and Freddie to the Rescue?,” Dawn Kopecki,Business Week, 01/25/08

Statement of OFHEO Director James B. Lockhart on Conforming Loan Limit Increase,Office of Federal Housing Enterprise Oversight, 01/24/08

“Housing slump to continue: Fannie CEO,” Marcy Gordon,Associated Press, 01/08/08

“No Rescue Here: Fannie Mae and Freddie Mac are in no position to bail out the housing market,”Washington Post, 11/23/07

“On Wall Street: Subprime flames lick at Freddie,” Saskia Scholtes,Financial Times, 11/23/07

“New York Attorney General Cuomo Sends Letters of Notice and Demand to Freddie Mac and Fannie Mae,” Press Release, 11/06/07

“Fannie Mae Ex-Officers Sued by U.S.,” Eric Dash,New York Times, 12/19/06

Send comments or confidential tips to:

mailto:editor@mondoqt.com

I’m spending the week at the Porcupine Freedom Festival in Gilford, New Hampshire, this week, and so there likely won’t be any posts for this week.

While there is Internet access available on part of the site, it’s kind of spotty, and my cell phone has no service here. Not to mention this is supposed to be something like a vacation.

I am working on one project for someone who knows who he is and will be here Saturday. Aside from that, I’m going to be enjoying myself with hundreds of freedom lovers from all over the world.

PorcFest is the annual summer festival held by the Free State Project, a movement to get 20,000 liberty lovers to move to New Hampshire to work to restore liberty. People considering making the move come to PorcFest to meet other liberty lovers, tour the state and have fun.

If you’re nearby, consider joining us. It’s at Gunstock Mountain Resort all week.

For all of those of you who are younger than I am, you’re probably on Myspace, that huge social networking site which has a profile for almost everyone in the country under 30.

Now you can get Homeland Stupidity on Myspace.

This is just an experiment for now, to see what the level of interest is, but if it goes well, I’ll do more with Myspace in the future.

If you have a Myspace, add Homeland Stupidity to your friends!

I’m not copying Homeland Stupidity posts to Myspace at present, so if you want to be sure you get all the latest content delivered to you, I still recommend using RSS or email.

Homeland Stupidity passed another milestone last night, with the 10,000th comment left to the site.

The milestone comment from “george lucas” was a sentiment many of us can agree with, especially if we’ve just spent the entire lunch hour in line at the post office:

“The post office is officially on my shit list.”

Unfortunately, you didn’t win anything, because I can’t afford any prizes. Maybe if I didn’t have this horrible tax burden… but that’s another story.

Maybe by the time the 20,000th comment rolls around, I’ll have enough money saved up to buy the lucky commenter a keychain or something.

In the meantime, I want to thank all of you who comment here, for it’s you who make Homeland Stupidity what it is. And while I promise you’ll always find something to disagree with here, I hope that it will always be something to think about.

It’s been three days since I have been able to post anything to Homeland Stupidity. Fortunately, this isn’t because I got shipped off to Guantanamo. There’s been plenty of news, though, so I wanted to explain what has been going on behind the scenes.

As you may know, this site does not run on a typical web hosting service, subject to the whims of a hosting provider which tends to take down high traffic or controversial content if you wave papers with special words in their faces, or if they just feel like your site is using more than its fair share of resources.

Homeland Stupidity runs on a dedicated server which does little except serve out web pages and the occasional DNS request. Every other service, such as e-mail and backup DNS, runs on a second server in a separate data center. This setup has evolved over time to meet various challenges such as distributed denial of service attacks, the Slashdot effect, and so on.

On Thursday, the setup evolved a little further. I brought up a new server in a third location, the purpose of which is to store off-site backups of the other two servers and monitor them for any trouble. In the event that anything were to happen to either of the other two servers, such as a software crash, hardware failure or overzealous bureaucrats who don’t let the lack of probable cause stop them, this third server will notify me almost immediately, allowing me to restore normal services within as little as a few minutes, or from 4 to 24 hours in some of the worst-case scenarios.

Unfortunately, it took much longer to bring up the server and its new services than I’d planned. I originally figured it would take most of Thursday and part of Friday. Instead, it took from Thursday morning until earlier tonight to get everything set up and tested. I won’t bore you with all the technical details, but I will say that I did have to work around one bit of faulty hardware in the new server, which caused part of the delay. But most of the problem was that I could have planned it better. There was simply much more to do in bringing up this set of services than I’d planned for.

What’s done is done, though. Now, you have an extra level of assurance that Homeland Stupidity will remain online, come what may, and that even some of the worst possible things I can imagine will not keep it down for long. There are still a few changes to make behind the scenes, but they aren’t critical to providing the services, and I’m far enough behind as it is, so they can wait.

Normal posting, with the liberty-loving look at government stupidity you’ve come to know and love — or hate — will resume tomorrow afternoon, after I catch up on actually reading the news, and perhaps sleep.

When the police arrived, they arrested the dog’s owner — not for allowing his dog to dial 911 on his cell phone, but for the 150 marijuana plants he had growing in the house.

Despite the fact that he was doing absolutely nothing wrong by growing marijuana, that isn’t what this post is about. Instead, it’s about the extent of human stupidity.

Once upon a time, I ran a web site called Make Stupidity History. Unfortunately, time constraints have forced me to stop updating it, but while it was in operation I would go through the day’s news reports (okay, actually I went through TotalFark; tell Drew I sent you) looking for the dumbest person I could find, who then became the Stupid Person of the Day.

But The Smoking Gun has been doing it a lot longer. And they include documents: police reports, court filings, photographs, trial transcripts and much more.

So I was quite surprised when a book publisher contacted me through Make Stupidity History, told me about The Dog Dialed 911 and then sent me a copy. And while that site isn’t really in operation anymore, I figured the least I could do would be to read the book and say a few words about it.

The Dog Dialed 911: A Book of Lists from The Smoking Gun is what it says: a book of lists — of stupidity. It’s divided into several themes, such as Adult Entertainment, about the things adults do inappropriately; Boldface Names, about celebrities, who else; Under the Influence, of alcohol and other things; Image Bank, the photo gallery from Hell; Class Clowns, about stupidity in school; Government Affairs, which I thoroughly enjoyed; Animal Planet, where the people are dumber than the animals; Law & Order, or things you should never say to police; Freak Show and We the People, which defy description; and Bill O’Reilly. Yes, he got his own chapter.

The plot is simple but compelling: People are dumb, and we need to be reminded of exactly how dumb they can be.

I don’t want to give away the ending or spoil too many surprises, but I will share a couple of my favorite parts with you.

First, there are glimpses into the illustrious military careers of Marvin Gaye, Jimi Hendrix and John Kerry. Not to mention George W. Bush’s military dental records.

Then there’s the document where Jessica Simpson repeatedly confesses to being “stupid” but not as dumb as she looks. And the documents which prove Paris Hilton is an idiot, even if she doesn’t admit it.

There are teachers having sex with students, students having sex with each other, a man having sex with his neighbor Goats’ sheep, and a lot more sex.

There’s the drug dealer who inexplicably walked right up to a marked police car and asked the uniformed officer inside if he wanted to buy some cocaine.

Bill Gates and John Gotti appear on the same page, and not by accident.

A police sting operation goes awry when the cops decide to sample the illicit goods for themselves.

And the ending is unforgettable. But please don’t skip to the end; save it for last.

VidLit has a video preview of some of the hilarious and disturbing lists that will leave you shaking your head wondering how anyone could be so stupid. But the truth is, as I’ve seen time and time again, anyone could be so stupid.

Drawn from the extensive, 10 year archives of The Smoking Gun, The Dog Dialed 911 reminds all of us that stupidity isn’t confined to the government, it lurks within all of us.

(Oh, and to Hachette Book Group USA: Thanks for the free copy.)

Homeland Stupidity was unavailable for several hours Thursday night due to an unexpected failure of our DNS provider.

I switched the domain to a backup DNS provider and most service has been restored as of early Friday morning.

However, IPv6 service will be unavailable until further notice, as the backup DNS service does not support IPv6. This should have very little impact as very few people access the site using IPv6.

Update: I’ve been testing IPv6 connectivity and it looks like everything is back to normal as of Oct. 31.

A few people may be unable to access the site for several more hours as DNS change propagation takes place across the Internet.

The simultaneous failure of the DNS provider’s two disparate networks is extremely unusual. A notice posted in place of their Web site indicates that it is suffering from a DDoS attack, and hopes to have partial service restored soon. Obviously, I couldn’t wait that long.

I am also taking steps to ensure that unexpected failures of third party service providers do not disrupt site operations in the future.

Update: DNS service has been brought in-house rather than being outsourced, as it was previously. This will provide greater control, more flexibility and faster response to any trouble which may occur in the future.

Every few months I like to update my regular readers on what goes on behind the scenes here at Homeland Stupidity. This fall there’s some good news, some bad news, and from a few of you I need some help.

First, the good news. I’ve spent much of the summer quietly promoting Homeland Stupidity all over the Internet, and the results are beginning to show. Readership has more than doubled from six months ago, we’ve added contributing writers, and have been listed in Google News for a couple of months now.

Indeed, the site has outgrown the shared hosting account typical of almost everyone else’s site, and a short while ago, I moved it to a dedicated server, which has more than enough power to handle ten times the current levels of traffic, perhaps more. I moved before it was strictly necessary, because some of the traffic is coming in bursts, which many shared hosting providers can’t handle. This is also known as the Slashdot effect, where an extremely popular site links to you, and the influx of traffic cripples the web server. I’ve made technical improvements on the server software to handle being on the front page of two such popular sites at the same time, and indeed, a few weeks ago, exactly that happened.

There’s more good news, though, and you’ll have to keep reading to find out what it is.

The bad news is this costs money. While I save a significant amount of money by being skilled in system administration and handling that myself, the cost of a dedicated server is still fairly significant. I had planned for this, and for the foreseeable future, the costs are covered entirely by revenues from ads displayed on the site. Unfortunately, while the money is there for next month, and the following month, and going forward, the revenues fell just a bit short for this month.

That’s where you, my regular readers, come in. Many of you read this site via RSS, where I’ve been pleased to provide the full content of the site’s posts without ads. Unfortunately, you’ve also probably noticed that the frequency of posting has dropped this month, sometimes to once per day or less, and the timeliness of posting has dropped as well. Because revenues were short, I had to go find other things to do to cover the costs of running this site and keeping food in the refrigerator; this site is my full-time job.

This time next week, there won’t be a financial issue here, as the monthly revenue checks will be in. And the stats for the following month’s checks look more than sufficient to cover costs. However, we’ve run completely out of money, and there are still bills to pay between now and when the checks arrive.

Long time readers will know that I rarely ask for direct contributions to the site. The last time, in fact, was about nine months ago, and while there’s a page for doing so, nobody has in fact contributed directly for the last nine months. But the need is immediate and urgent. Some things just won’t wait for the ad money to arrive next week, and so I’m asking for a very few of you to contribute a very small amount of $5.00 or more to keep Homeland Stupidity alive for the next seven days.

Without direct, immediate contributions, it’s unlikely that I will be able to post anything for the next week, as I’ll be too busy offline scrambling to find the money necessary to ensure the bills are paid and Homeland Stupidity remains online. This, indeed, is what I spent much of the last month doing, rather than writing here. Your contribution will help ensure that I can remain on task and bring you the content you’ve come to expect, and hopefully this will be the last time that I have to make such a call for help from my readers.

Finally, I promised more good news. The more good news is I managed to convince an actual print newspaper to issue me press credentials. While this means I may occasionally have to write something for them, I’ve already been published in a special edition of the newspaper (not available online), and the press badge will pry open a few more doors and help me improve the quality of reporting here, as well.

I’m looking forward to the future of Homeland Stupidity. In almost two years it’s been a wild ride that’s taken me from a personal space for ranting all the way to a respected online destination for news, analysis and libertarian opinion. I hope you’ll contribute to ensuring that we can all take this ride together, and even if you can’t, I hope you’ll stay with us and see where this leads in the next two years.

Homeland Stupidity is undergoing a few changes, and for my regular readers, I thought it would be a good idea to let you know what you’re about to see.

The first change you saw earlier today: I’m not the only person writing here anymore. There are now three people, including myself, writing here. (The third will probably publish something in the next few days, if I can manage to light a fire under him…) And I’m looking for more. If you want to write about the stupidity of government, contact me and we’ll discuss it further.

The second change will be less visible, but very important: Homeland Stupidity is syndicating. While I can’t say who’s picked us up until it goes live two weeks from now, I can say I’m very excited as this will help us bring our important message of freedom and liberty to many more people not only in the U.S., but around the world as well.

A few other things have changed or are changing, as well:

As in 2005, we will carry links to up to the minute Atlantic tropical storm and hurricane information on every page of the site, and we’ll also mention them when the government manages to screw up its response to them, as we’re sure they will again. These links will reappear shortly after the first tropical storm forms.

I’m redesigning the site homepage and sidebar to provide better organization for the large amount of information available here, and those changes will probably go live in the next week or two.

For you journalists and senior editors looking for a story idea, Homeland Stupidity now has a small press kit available. I’ll be expanding the press kit over the next few weeks to provide important background information to journalists doing stories on Homeland Stupidity, the Internet, or the insanity inside the Beltway. Please let me know if there’s a question I should answer that isn’t already there.

Finally, two weeks ago I moved Homeland Stupidity to a dedicated server to accommodate the increased levels of traffic we’re seeing. The move went off completely transparently, without a single problem or even a second of downtime. The increased capacity will allow Homeland Stupidity to grow even further and become the Internet’s one-stop resource for bureaucratic bungling, government follies and incompetent incumbents.

Enjoy, and as always, let me know what you think.

We’ve moved to a new domain!

You can now find Homeland Stupidity at http://www.homelandstupidity.us/.

If you’re subscribed via RSS feed, you need to update your feed reader to point to http://www.homelandstupidity.us/feed/ now, or you will no longer receive new posts!

If you’re seeing this post, then you are on the new site. Welcome back to Homeland Stupidity!

Homeland Stupidity has been up and down, mostly down, over the last day or so. The reason for the outage is due to failed server hardware.

The server admins are working on it, but I don’t know at this time when we’re going to be up, and remain up. Until then the site will be up and down. You can follow along if you’re so inclined, which is about all I’ve been doing for the last day.

Hopefully this won’t last much longer. The site’s up now, and hopefully we’ll remain up and running.

Update: I’m putting up a failover server which will take over in the event of such an outage occurring in the future. While the current server is running well below capacity, if it’s down, I have no capacity at all. So hopefully this will be the last time you ever see any sort of outage here. Thanks for your patience.

As you might have noticed, there’s more than one way to subscribe to Homeland Stupidity and receive the latest news and information. For instance, you can subscribe via RSS or via e-mail. For those of you subscribed via e-mail, there has been a change you should be aware of.

Previous to today I was using the FeedBlitz e-mail service to provide mailing list services. I’ve since moved away from FeedBlitz and am running the mailing list in-house. I’ve already migrated all but three people into the new mailing list system, but it’s possible, if you’re one of the e-mail subscribers, that you’ve missed a message or two prior to this one.

If you’re one of the three subscribers I had to drop because your messages were undeliverable, feel free to re-subscribe. (If you got this message in e-mail, you’re already on the new system and don’t need to do anything.)

To subscribe or unsubscribe to e-mail for Homeland Stupidity posts and comments visit the subscription page.

Subscriptions for comments to individual posts are on the way and will be rolled out in the next few weeks.

I’m performing system maintenance and this post is part of my testing. Feel free to ignore it.

Or you can read it. Doesn’t make a difference to me.

MySQL is returning strange results for a particular query and I need to debug that query, and see if it has anything to do with custom meta tags in post 803. That post isn’t coming up in the query result, but it should be. Update: Post 803 is fixed. Somehow it was marked private, so you all should be seeing Friday night’s big news story.

MySQL is also running out of memory again after a while, and it shouldn’t be. Update: Just restart MySQL sometime in the middle of the night every night, and worry about its memory leakage later. Not a great workaround, but until I get moved to 5.0, it’s probably the best way. Update: OK, that time I broke it. Sorry.

Update: Also need to work the kinks out of the new mailing list system. Shouldn’t draw from FeedBurner. Should have a proper From: address. Subscribe and unsubscribe both work OK, though. Update: This is now fixed.

An American legend, “The Gun that Won the West,” will come to an end March 31.

U.S. Repeating Arms Company announced last week that it would close its New Haven, Conn., plant, laying off 200 employees, and ending production of its American-made Winchester rifles.

The company will continue making rifles under the Winchester name at its remaining plants in Belgium, Japan and Portugal, according to the Associated Press. But the rifles aren’t the same as those popularized by movies like Winchester ‘73 and Theodore Roosevelt’s 1909 African safari where he took a Winchester rifle with him.

The Associated Press has more coverage on the plant’s closing and the transfer of ownership of the Winchester name, and the Washington Post has an excellent read on the history of Winchester rifles. I highly recommend you read both.