The AP continues its lack of anything resembling ethics with its tortured characterization of Sarah Palin’s comments about Vladimir Putin’s hostile flyovers near Alaska. Powerline has more.
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This post was written by bobsikes on September 30, 2008
Writing in the American Thinker, the simple exchange Ralph Alter went through with a Countrywide Underwiter puts the Fannie Mae failure in perspective. Working as a loan officer in Detroit, Michigan, Alter had the following exchange with an underwriter from Countrywide:
CW Underwriter: I need your help on the “Smith” file. We need you to complete the Government Monitoring Section of the 1003.
Broker: I did complete the Government Monitoring section.
CW Underwriter: But you haven’t filled in the borrower’s Race or Ethnicity.
Broker: If you notice, the Borrower checked the box indicating: “I do not wish to furnish this information.”
CW Underwriter: You also checked the box indicating that this interview was done face-to-face.
Broker: So?
CW Underwriter: So you saw him. Is he black?
Broker: I don’t understand. My client indicated his preference to keep this information to himself.
CW Underwriter: Well, you saw him and you know his race and ethnicity. Our ability to fund our deals and source new money depends on doing a certain percentage of loans with black and minority clients. If you want this loan underwritten at Countrywide, your need to furnish this information: Is he black?
These were the results of the ACORN presured rules that Barney Frank pushed through. The Bush administration attempted to reign in Fannie Mae. John McCain even testified in front of a congressional committee and had sounded the alarm. For Nancy Pelosi to get up in front of the House yesterday and blame the Bush administration for this collapse is a bald face lie.
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This post was written by bobsikes on September 30, 2008
They just weren’t good enough at the end. Jeff Wilpon’s statement that the Mets had overacheived is a fair one I believe. One Billy Wagner went down, it was just a matter of time. Duaner Sanchez was not fully recovered from his shoulder injury and the Mets had exhausted Aaron Heilman to ineffectiveness moved others to late inning roles they were ill equipped to serve in. For this club to get to the season’s final day was a testament to its players and the reamarkable job its interim manager did.
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This post was written by bobsikes on September 30, 2008
Fannie Mae and Freddie Mac do not deserve to be bailed out, but neither do workers, families and businesses deserve to be put through the economic wringer by a collapse of credit markets, such as occurred during the Great Depression of the 1930s.
Neither do the voters deserve to be deceived on the eve of an election by the notion that this is a failure of free markets that should be replaced by political micro-managing.
If Fannie Mae and Freddie Mac were free market institutions they could not have gotten away with their risky financial practices because no one would have bought their securities without the implicit assumption that the politicians would bail them out.
It would be better if no such government-supported enterprises had been created in the first place and mortgages were in fact left to the free market. This bailout creates the expectation of future bailouts.
Phasing out Fannie Mae and Freddie Mac would make much more sense than letting politicians play politics with them again, with the risk and expense being again loaded onto the taxpayers.
The financial markets were teetering on the edge of an abyss last week. The secretary of the Treasury was literally on his knees begging the speaker of the House not to sabotage the bailout bill. The crash of falling banks made the earth tremble. The Republican presidential candidate suspended his campaign to deal with the crisis. And amid all this, the Democrats in Congress managed to find time to slip language into the bailout legislation that would provide a dandy little slush fund for ACORN.
ACORN stands for the Association of Community Organizations for Reform Now, a busy hive of left-wing agitation and “direct action” that claims chapters in 50 cities and 100,000 dues-paying members. ACORN is where Sixties leftovers who couldn’t get tenure at universities wound up. That the bill-writing Democrats remembered their pet clients during such an emergency speaks volumes. This attempted gift to ACORN (stripped out of the bill after outraged howls from Republicans) demonstrates how little Democrats understand about what caused the mess we’re in.
ACORN does many things under the umbrella of “community organizing.” They agitate for higher minimum wages, attempt to thwart school reform, try to unionize welfare workers (that is, those welfare recipients who are obliged to work in exchange for benefits) and organize voter registration efforts (always for Democrats, of course). Because they are on the side of righteousness and justice, they aren’t especially fastidious about their methods. In 2006, for example, ACORN registered 1,800 new voters in Washington. The only trouble was, with the exception of six, all of the names submitted were fake
Superficially, both parties are to blame: 133 Republicans and 95 Democrats voted against, large numbers in both caucuses. But a majority of Democrats voted in favor.
Republicans said a harshly partisan speech by Nancy Pelosi turned off about a dozen Republicans who were set to support the legislation. That prompted a devastating rejoinder from Democratic Rep. Barney Frank — they voted to tank the economy because their feelings were hurt?
The simplest explanation for the defeat: The public opposed the bill, and all the intensity was against it. Congressional staffers couldn’t pick up the phone without getting harangued by angry constituents. Everyone suffered from taser-level sticker shock from the $700 billion price tag.
Treasury Secretary Hank Paulson was caught between two different audiences. He needed the $700 billion figure to reassure Wall Street he’d have a big bazooka to deal with the crisis, though it’s unlikely he’d ever spend that full amount. But it alienated the very people he needed to pass the bill.
Meanwhile, Paulson and Federal Reserve Chairman Ben Bernanke were underwhelming in congressional testimony last week when explaining how the program would work — basically saying “trust us.”
In the end, Lincoln was proved right again: “With public sentiment, nothing can fail; without it, nothing can succeed.”
A number of Republican House members and staff, along with others who are plugged in, are telling me that Nancy Pelosi and the Democrats will come back with a new bill that includes all the left-wing stuff that was scrubbed from the bill that was defeated today in the House.
As this scenario goes, the House Democrats need 218 votes, and they have to pick up a number of black and Hispanic House members who jumped ship because the Wall Street provisions, in their view, were too benign. So things like the bankruptcy judges setting mortgage terms and rates, the ACORN slush-fund spending, the union proxy for corporate boards, stricter limits on executive compensation, and much larger equity ownership of selling banks through warrants will all find itself back in the new bill. Of course, this scenario will lose more Republican votes. But insiders tell me President Bush will take Secretary Paulson’s advice and sign that kind of legislation.
Personally, if this scenario plays out, I would probably withdraw my support for the rescue mission and switch to plan B, which would center on the FDIC and its bank-recapitalization powers. The bank-ownership issue, in particular, could lead to heavy nationalization of America’s financial system with a three-house Democratic sweep in November.
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This post was written by bobsikes on September 30, 2008
American History teacher, Betsy Newmark starts making the case this morning why the current financial crisis can be blamed on Democrats in her take down of Nancy Pelosi.
First she tries to make a deal without consulting the House Republicans. Then she demands that the GOP House members provide 100 votes for the plan because she wants to protect her Democratic Representatives and make sure that they don’t take the blame for a deal that may turn out to be very unpopular. She could have passed the bill last week if she wanted because she has the majority in the House and could have pushed it through as she has pushed through so many bills since she became Speaker. She’d probably have even gotten a few dozen Republican market.
Then John McCain shows up and says that the House Republicans have to be included in negotiating a deal. The Democrats then all run for microphones to say that John McCain was gumming up the deal. But he was actually bringing in the House GOP so that they could voice their concerns and influence the bill and get the support that Pelosi herself was demanding.
But she just wanted them to rubber stamp the deal that the Democrats and Senate GOP had made with Henry Paulson. And when they insisted on having a role in crafting the bill and refused to go along with a the deal as negotiated earlier, she goes and calls them unpatriotic for not having helped out more earlier. As Allahpundit points out, even Paul Kanjorski, the Democratic chair of the House Financial Services subcommittee on Capital Markets, Insurance, and Government-Sponsored Enterprises, admits that the Democrats had not involved the House GOP enough.
If she really thought that this was a patriotic deal that was absolutely necessary for the country’s financial health, she wouldn’t have cared whether she had GOP support or not. That’s the way she’s acted on innumerable bills since she became Speaker.
Newmark links to an important article by Bill Wilson whom outs the roll that Democrats have played in causing the crisis that has its links to the Clinton years. Wilson effectively traces the whys and hows:
In 1995, the Clinton Administration issued rules that required banks and lending institutions to give loans to people who could not afford them. The lending standards were essentially gutted. This was an overt act of government.
The banks complied and gave the loans. They got the money to lend by selling the bad mortgages to Fannie Mae and Freddie Mac. These semi-government entities “bought” the bad mortgages from the banks. But where did Fannie and Freddie get the money to buy the bad debt?
Fannie and Freddie got the money by packaging the bad debts into bundles and selling them to investors. Now, most people would never have bought these “mortgage backed securities” except for one thing: Fannie and Freddie marketed them as backed by the U.S. Government.
So, naturally, investors bought them. And over time, these securities were traded and treated just like real money. But of course they weren’t “real money.”
They were backed by little more than hope; hope that people with insufficient income or prospects would somehow be able to pay the mortgage.
When those mortgage payments failed to materialize, the securities couldn’t pay the dividends and the whole sordid deal started to fall apart
Wilson points out that even Bill Clinton saw the coming crisis and attempted to reel in governemnet created lending institutions. But even the politically savy Clinton was able to get anything done. Freddie Mac and Fannie Mae had become political giants.
There was ample warning. Since 1999, responsible members of Congress and the two presidential administrations have attempted numerous times to tighten the lending standards and force reform of the system.
But using millions in political cash, Fannie Mae and Freddie Mac blocked all moves at reform. And people like Frank and Dodd – and, yes, Barrack Obama — were there to defend the government social policy, while raking in tens of thousands of campaign contributions for themselves.
So now all of us will pay dearly for this failed utopian government policy. And while it will be an expensive and painful lesson to learn, learn it we must if we are to avoid a more costly repeat.
When government uses its power to distort the market for arbitrary ends, the scheme fails. Facts will not change just because some starry-eyed politician says they should.
It seems simple. So why do our politicians have such a hard time learning it?
Wrting in today’s Boston Globe, Jeff Jacoby details just how much Massachusetts Representative Barney Frank is involved in the crisis. Jacoby actually traces Democrat involvement to the Carter administration:
The roots of this crisis go back to the Carter administration. That was when government officials, egged on by left-wing activists, began accusing mortgage lenders of racism and “redlining” because urban blacks were being denied mortgages at a higher rate than suburban whites.
The pressure to make more loans to minorities (read: to borrowers with weak credit histories) became relentless. Congress passed the Community Reinvestment Act, empowering regulators to punish banks that failed to “meet the credit needs” of “low-income, minority, and distressed neighborhoods.” Lenders responded by loosening their underwriting standards and making increasingly shoddy loans. The two government-chartered mortgage finance firms, Fannie Mae and Freddie Mac, encouraged this “subprime” lending by authorizing ever more “flexible” criteria by which high-risk borrowers could be qualified for home loans, and then buying up the questionable mortgages that ensued.
And here, Jacoby points dierctly at Frank’s malfeasance. Frank is the Chairman of the House Financial Services Committee.
Time and time again, Frank insisted that Fannie Mae and Freddie Mac were in good shape. Five years ago, for example, when the Bush administration proposed much tighter regulation of the two companies, Frank was adamant that “these two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis.” When the White House warned of “systemic risk for our financial system” unless the mortgage giants were curbed, Frank complained that the administration was more concerned about financial safety than about housing.
Now that the bubble has burst and the “systemic risk” is apparent to all, Frank blithely declares: “The private sector got us into this mess.” Well, give the congressman points for gall. Wall Street and private lenders have plenty to answer for, but it was Washington and the political class that derailed this train. If Frank is looking for a culprit to blame, he’ll find one suspect in the nearest mirror.
Writing in today’s Hartford Cuorant, Kevin Rainey points out jusatat how much Demcrat Chairman of the Senate Banking Committee, Chris Dodd is up to his eyebrows in malfeasance:
During the last two weeks of unsettling events, the same people who had a hand in creating the mess have expected the public to believe they can find the way out. Any candid analysis of the road to this parlous state implicates officials in Washington and their cozy relationships. Public records show, for example, that Dodd, chairman of the Senate banking committee, received more campaign contributions from Fannie Mae and Freddie Mac employees than any other member of Congress. He is third on the list of Bank of America-related donations after Barack Obama and Hillary Clinton.
So the two failed lending institutions are big doners to Barack Obama and Hillary Clinton. It should come as an outrage in the first place that Freddie Mac and Fannie Mae, while sponsored by the US federal government, make campaign contributions in the first place. Why are they using assets for political purposes? And why is it mostly to Democrats and in its highest amounts to the Democrat candidate?
These abominations have occurred not only under Democrat stewardship, but also to the benefit of Democrat politicians and their benefactors such as the notorious “community activist organization, ” ACORN. According to the numbers at the Fannie Mae Foundastion’s own web site, during a period of time from 1992 to 2004, the Foundation made contributions totalling just under $700,000 to ACORN. A Google search of ACORN and investigation prompts 755.000 result hits.
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This post was written by bobsikes on September 28, 2008
We’ve already seen it this presidential season in the New Hampshire surprise in which what had been a 5pt lead for Barack Obama turned out to be a 5pt win for Hillary Clinton.
AJ Strata takes a look at discrepancies in data from Colorado and Pennsylvania while pointing out the clear differences in polling versus actual party affiliation numbers that exist in states.
These are the mysterious “inside the numbers” numbers we hear so much about. Both campaigns likely have the very best at using these numbers. Their opinions are what is driving both campaigns ground games now.
We’ve seen the Obama camp pull their people in some states and moved them top other states. I believe that They have pulled their operatives out of Georgia, North Carolina and Montana. One state they’ve been redeployed is in Wisconsin. This is likely one state where Democrats see weakness and/or are seeing as a must hold.
John McCain and Sarah Palin will be in Columbus,Ohio tomorrow. Republicans certainly consider this a must hold state. The campaign is continuing its hybrid strategy of both halves of the ticket appearing together. It seems to be working.
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This post was written by bobsikes on September 28, 2008
Comebacks like no other place.
Why does it seems this way? At Shea, I mean. I’ve never really understood. No one does. But it’s always there that knowing that at Shea Stadium the Mets can come back
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This post was written by bobsikes on September 26, 2008
From David Brooks:
If McCain is elected, he will retain his instinct for the hard challenge. With that Greatest Generation style of his, he will run the least partisan administration in recent times. He is not a sophisticated conceptual thinker, but he is a good judge of character. He is not an organized administrator, but he has become a practiced legislative craftsman. He is, above all — and this is completely impossible to convey in the midst of a campaign — a serious man prone to serious things.
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This post was written by bobsikes on September 26, 2008
From historian Victor Davis Hanson. Some quotes:
When the mortgage bubble burst, Americans were “shocked” at how many Wall Street buccaneers had been gambling in a vast pyramid scheme with someone else’s money. Paper fortunes were made buying and selling questionable sub-prime mortgages on the silly assumption that such gargantuan inside profiting would always expand — even as the number of homebuyers able to buy overpriced properties was shrinking.
Now after the recent crash in sub-prime mortgages and the stock of several investment firms, a trillion dollars in “assets” could be nearly worthless. An already indebted American government must restore some sort of trust to banks and markets by either printing money or borrowing hundreds of billions of dollars from foreign creditors to guarantee loans.
money.
We created the cultural climate for this shared madness. Television shows advised how to “flip” a house after putting in cosmetic improvements. Real-estate seminars and popular videos convinced us that homes were not places to live in and raise a family but rather no different from piles of chips on a Vegas table.
We created the phony populist creed that everyone deserved to own a house. So lawmakers got the message to relax lending standards in service to “fairness.” But Americans forgot that historically nearly four in 10 of us aren’t ever ready, or able, to sacrifice for a down payment, monthly mortgage bills, home maintenance and yearly taxes — and so should stick to renting.
In a larger sense, this zeal for quick profits and easy money reflected an oblivious too-good-to-be-true culture in which we drove larger cars but demanded more oil drilling from everyone except ourselves. We expected both expanded government entitlements and lower taxes.
Our government borrowed ever more money from foreign creditors, because it was a collective reflection of our own profligate financial habits. Of course, we should reform Wall Street and Washington — and punish severely the crooks in both places. But Americans should remember that Frankenstein was not the name of the monster but of its creator.
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This post was written by bobsikes on September 25, 2008
