(for more of my comments on the subject, and links to an earlier article on the subject by Nicholas Kristof, please follow this link)

One of the unenviable area of focus of Nicholas Kristof’s writings is one of the most overlooked atrocities occurring on a daily basis, combining slavery, kidnapping, rape, torture, murder, and pedophilia into one act of human degradation.  As heinous as each of those acts are to Western, and I’d assume, all observers and the strong reaction any one of these acts would produce should it occur to a middle-class blond from Ohio, the well-practiced and almost perfected business of sex slavery, combining all of these crimes, goes largely unnoticed by all but Kristof readers.

His latest article can be found here, continuing on the article I mentioned in a previous post linked to above, follows yet another victim/survivor of the Cambodian sex trade.  Not content to add just one more personal story and one more name to the list of victims of the deviancy and perversions of Asian and Western businessmen and women, Kristof focuses on the ongoing threat and use of torture that is practiced to create the veneer of coquettishness and willingness of the captives of Cambodian brothels.

Those of us who are disgusted by torture and condemn acts such as waterboarding may have a more intense reaction to the acts described by Kristof and perpetrated on not suspects of terrorism, but kidnapped children who resist to selling their bodies to strange men for money they never see (please skip the following quote if you intend to read the entire article as it is perhaps the key anecdote in the article.  Otherwise, HIGHLIGHT the blank space to see the text):

“As in many brothels, the torture of choice was electric shocks. Sina would be tied down, doused in water and then prodded with wires running from the 220-volt wall outlet. The jolt causes intense pain, sometimes evacuation of the bladder and bowel — and even unconsciousness.

Shocks fit well into the brothel business model because they cause agonizing pain and terrify the girls without damaging their looks or undermining their market value.

After the beatings and shocks, Sina said she would be locked naked in a wooden coffin full of biting ants. The coffin was dark, suffocating and so tight that she could not move her hands up to her face to brush off the ants. Her tears washed the ants out of her eyes.”

We know these things happen, in great numbers, and continue on a daily basis.  We know that a large part of the problem is on the demand side, contributed to but not exclusively by Western businessmen (likely reasonably wealthy travelling businessmen travelling alone to Thailand, Vietnam, Cambodia and other Asian nations).  And we know, and I believe can agree on without equivocation, that the act may not be the most pervasive, but is certainly among the most perverse and heinous of any act being perpetrated on this Earth today or that has been in the past hundred years.  Then why can’t we make an effort to stop it at least on our side of the equation, where we have a right and responsibility to control it?

There seems to be a ununanimous but significant passive support for screening terrorism suspects and restricting their travel.  Even mideastern friends of mine exhibit a fair level of acceptance to the reality (I am paraphrasing, but one response I received from an ethnic Persian friend a few years ago, during the height of the War on Terror, was: “we know who is responsible for the attacks, so of course Mideasterners are going to be targeted.  What else can you do?”).

I don’t necessarily condone this or would support such a policy being enacted, but why isn’t a similar profile being used to stamp out the supply-side of sex slavery?  Is it because sex slavery didn’t cause towers to fall on national television?  The nation has not be adequately scarred to disband civil liberties for this particular offense and criminal group?

Is it because the victims of this act are not Americans, but brown-skinned Asians, dying out of sight in brothel dungeons, on motel room beds at the hands of an abusive John, or quietly of AIDs on the other side of the world?

Or is it because the ‘victims’ of this profiling would perhaps be overwhelming white and well-to-do males, pillars of local business communities, family men, and otherwise known to be respectable folk who have the courtesy to practice their most profligate sexual deviancy on dark-skinned children?

Or another reason entirey?  I hope Kristof and others who live wholly or halfway in this world of medieval bondage continue to explore this topic and demand an answer.  No doubt those who enslave these girls and pay for their services are the most vile.  But I would like to know how disgusting the rest of us are for being less than outraged.

UPDATE:  Kristof has a new article up continuing on the travails of sex slaves in Cambodia, detailing more gruesome tortures inflicted on the teenage captives.

… and the cow goes moo

I know for a fact (from personal experience) that there was a fair bit of subprime activity in Canada, albeit in a milder state: I saw nothing that rivaled stated income, negative amortizing, teaser rate mortgages in Canada (that apparently existed in the US).  Though I have seen many mortgages possessing each of those characteristics, just not all in one might-as-well-foreclose-now package.

Naked Capitalism links to a fairly lengthy Globe and Mail article that attempts to expose the role Conservative legislation played in allowing AIG (them again???) and others to expand into the Canadian market and spread risky mortgages to Canada.

“New mortgage borrowers signed up for an estimated $56-billion of risky 40-year mortgages, more than half of the total new mortgages approved by banks, trust companies and other lenders during that time, according to banking and insurance sources. Those sources estimated that 10 per cent of the mortgages, worth about $10-billion, were taken out with no money down.

…

irtually unavailable in Canada two years ago, high-risk mortgages proliferated in 2007 and early 2008 and must now be shouldered by thousands of consumers at a time when the economy is sinking quickly and real-estate prices are swooning. Long-term mortgages – designed to help newcomers get into the housing market sooner – are the most expensive in terms of interest costs, and least flexible when mortgage-holders cannot meet their payments and need extensions.”

The article makes no secret that it intends to lay the blame for part of the Canadian real estate decline (and our vulnerability to the housing problems of the US) on the Conservative Harper government.  I do not follow Canadian politics enough to have much of an opinion on that issue.  It does, in making it’s case, provide a fantastic time line on how GE’s Genworth Mortgage Insurance Co (known in the industry as GEMICO) became the provider of approximately 30% of Canadian mortgage insurance by taking over the struggling Toronto-based MICC (the rest being provided by the public company, CMHC).  With a Canadian government guarantee, no less.  I’m embarassed to say that I did now know the origins of GEMICO despite working in mortgages for a couple of years.

The article goes on to argue that changes in legislation allowing more private American insurers — beyond GEMICO — to compete in the Canadian mortgage insurance industry caused CMHC and others to insure riskier mortgages (going from insuring 25 year mortgages to 30 year mortgages) and setting off an arms race between the various insurers, all possessing some sort of Federal guarantee, to expand their markets and court the business of non-prime borrowers and lenders.

It seems understandable to me that competition might be encouraged to break up the duopoly of CMHC and GEMICO, but I am baffled as to why a federal guarantee was required to entice additional competition into the Canadian mortgage insurance market?  The article does not attempt to explain it and actually tends to stress the appeals of the Canadian mortgage insurance market for the US insurers.  Why was a Federal guarantee required to sweeten the deal?

Many within the Canadian banking and mortgage industries that I converse with have baffled me in their expression of safety in Canadian real estate, believing Canada’s downright-puritanical banks (relative to US and European counterparts) and lending standards would protect us.  Now that the Canadian housing market has started to turn (in Toronto and Vancouver especially), the Canadian employment situation has turned, the country has entered recession, and information about the prevalence of loose lending has begun to trickle down, I am expecting housing downturn equal in length if not depth to the US housing bust.  Of course, areas that experienced  the greatest housing inflation (i.e. Vancouver) are likely to fall first and farthest, as proved the case in the US (Nevada, Arizona, Florida, and California).

… and the cow goes moo

The Star has an article about recent election-year vandalism targetting Liberal supporters (yes, we have an election this year too).

I find it unbelievable but do not doubt The Star’s statement of facts.  Not only are homes with Liberal-supporting lawn signs being spray painted, phone and cable lines being cut, and… absolutely unbelievably… A CAR’S BRAKE LINES BEING CUT!

I have a huge Liberal sign up on my lawn (due to a misunderstanding, it was tacitly condoned but I am not a Liberal supporter).  I was thinking of taking it down, but not anymore.  I think I’ll try to find another couple.  Unbe-fucking-ievable.  I really do expect this sort of thing in Florida, but in Toronto?  The article indicates they expect it’s the result of a single perpetrator, which seems likely, but even one anti-Liberal nutjob in Toronto is hard to believe.

… and the cow goes moo

Found via John Robb’s blog (of Global Guerrillas fame).  He finally updated both sites after a couple of weeks of silence.  Thankfully.

And a direct link to Thomas Palley’s blog can be found here.

Palley offers a short commentary on the perhaps unearned reputation central bankers have now obtained based on the observation of a few decades of ‘moderation’ (longer periods of economic growth, shorter periods of decline, and relatively low inflation).  Despite its length, it manages to touch on a number of important factors in this attribution including, in my opinion, the most important and often underlooked:  The beneficiaries of the past ~30 yrs of economic growth and the lack of growth in real wages among many despite productivity gains (as detailed here by the Wall Street Journal which is now behind a paywall, by way of Naked Capitalism).

Key quote from WSJ:

“Ms. Sawhill said several factors could explain the divergence: a growing share of income going to the highest-paid workers, or to profits…”

With the loss of consumer credit propping up a illusionary high standard of living (more about that can be found via Mish), I think we’re about to see this stagnant wage inflation become apparent.  Working in mortgages, I was able to see firsthand (in a large volume, albeit in anecdotal accounts) how much the annual ~6% or so increase in real estate value in Canada was being treated as income through constant refinancings (RE/MAX offers a report that show homes in the top 5 appreciating regions in Toronto rising betwen 11% and 17% in value between 2006 and 2007).  To provide an example, a middle-class white-picket-fence detached suburban home away from Toronto’s downtown core, in the suburbs and outside of any of the high crime areas, 2500 sq. ft., accomodating for a family of 4 to 5 or so, you would be spending about $450,000 right now.  With an increase of 6% annually, it would be the equivalent of $27,000 per year of income if you were to use lines of credit or refinancings to draw money from your home value annually while maintaining the equity dollar value of your home.  According to this link at Statistics Canada, the average Canadian family of 2 persons or more had a MEDIAN income of $54,100 after tax in 2004.  The increase in property value, if tapped annually, would account for perhaps one third of a family’s total annual income.  If that is to disappear in Canada, as many (myself included) expect, we will be looking at a 33% salary cut for many working Canadians.  And there were MANY, from my experience, who used their home equity in this manner (once again, based on anecdotal firsthand evidence so I do not have any charts to post for you).  Most did not appear to be tapping their equity every year, but whenever the bills piled up, credit card debt grew to large, or a new car was needed, refinancing at the relatively low mortgage rates that have been available these past few years was often the first option.

The combination of masked wage stagflation and freefalling real estate prices is going to manifest itself in a sudden rise in statistical poverty, and an even greater rise in perceived poverty in the US.  And perhaps later in Canada as well.

ADD:  One thing I saw a lot of as well was “doubling down”.  Those who benefited from highly appreciating property values would be, even as late as 2008, intrigued by the paper profits and would draw down their home equity to purchase an investment property (or an additional investment property) effectively doubling down on their exposure to the real estate appreciation bubble.  These people were often well into the middle/upper-middle class and with their extremely high exposure, could be wiped out entirely should a real estate decline occur anything like that in the US.  Especially as their properties are, obviously, usually located in the hottest growing Canadian markets.  Rather than have one drastically overvalued property they’re still paying a mortgage on, now they may have two or more.

(I apologize that some of the stats and estimates were taken from different years, however I believe I kept them all within a 2004-2007 window, so they should be highly relevant still).

… and the cow goes moo