There was a full moon last Wednesday, when Ischa was born. A month earlier, I was at a Christmas party in Belgium, and was warned to return home on time ‘because babies tend to be born when there’s a full moon.’ Why that would be so, no-one has yet told me. But it is a fact that last Wednesday, the delivery ward in the hospital was full, and two women had to be referred to another hospital. The nurse who served breakfast confidently told me she knew it would be busy when she came to work the night before – she had noticed that the moon was full.

I’ve also been told that children born under a full moon would somehow be special. Ischa is absolutely adorable (I know, I know, all parents suffer from this kind of prejudice); he’s been rather kind to his parents (so far!) by sleeping relatively well at night; he’s a big supporter of the nappies industry; and he makes an interesting case study for international private law scholars, since, “just as his older brother”:https://crookedtimber.org/2006/08/21/whats-in-a-name/, he has two different official surnames thanks to the unwillingness of the Belgian state to recognise the surname that his parents have chosen for him. Yet whether any of that can be traced back to his being born under a full moon — I doubt it.

The news that over a million homes went into foreclosure in the US in 2007, affecting about 1 per cent of all households or around 3 million people, supports the view that foreclosure has taken over from bankruptcy as the primary mode of financial catastrophe.

As with bankruptcy, however, the high frequency of financial distress is partly offset by the fact that US law and standard contractual arrangements are more debtor-friendly than in other countries. Compared to those in other places (at least in Australia) US mortgage contracts have commonly favored borrowers in two important ways. First, they have been fixed rate contracts with no, or limited penalties, for early repayment. That means that borrowers can stick with their fixed rate if market rates rise, but can refinance at lower cost if market rates fall.

Second, most mortgages are non-recourse, meaning that the lender can take the house but cannot recover the debt from the borrowers income or other assets. That means that once the value of the house falls below the amount owing (equity becomes negative) the borrower can walk away from the house and the debt. As Felix Salmon notes, the difficulty of pursuing deficiency payments means that most loans are non-recourse in practice even if the contract says otherwise

In the jargon of financial assets, the standard contract gives borrowers both a put option on the house (the ability to walk away) and a call option on the debt (the ability to pay early). Both of these make the contract more valuable to borrowers and less valuable to lenders. There’s quite a good discussion of all this from Tanta at Calculated Risk, though the author makes heavy weather of the put option and seems to me to be unreasonably exercised about the fact that households are now treating their debts to banks with the same calculating attitude that corporations have long shown to their workers and other creditors, paying them if it is profitable to do so and defaulting otherwise.
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In November, we’ll be sending out our most liberal, least trustworthy candidate to take on Hillary Clinton—perhaps not more liberal than Barack Obama, but certainly far less trustworthy. And the worst part for the Right is that McCain will have won the nomination while ignoring, insulting and, as of this weekend, shamelessly lying about conservatives and conservatism.

(Over at the Corner.)

In this election the right hand has no clue what either the right or left hands are doing. Apparently. Nor can I really believe it’s some sort of deep game – Operation Briar Patch.

This can’t last. Quite possibly, it can’t last another week. If McCain wraps it up, what will Republican wisdom be? (Obviously the bumperstickers won’t read ‘McCain: probably less liberal than Obama’.) There are basically three options: 1) McCain as maverick liberal goes down the memory hole. Don’t look back. We have always been at peace with McCainia. 2) McCain as new direction. So far, there is zero evidence of this sort of framing. But there is obvious desire to get the Republican party back on track, after Bush. So, if McCain is it, there is an advantage to brandishing his former maverick status as evidence that real change has been achieved. 3) It was personal, not political. It will be discovered that McCain’s maverick status was just a function of his personal rivalry with Bush. We’re done with Bush, so we’re over that.

It is very hard for me to imagine a world in which Republicans reliably say any of 1)-3) about the formerly anathema McCain. But they can’t call him a liberal, or run him as an ‘until 2012’ placeholder. What, then? What will be the reason why McCain was obviously always the best man for the job?