Just watch this video and you will want to prosecute those responsible. An incredibly good video. Everything about the Fannie Mae and Freddie Mac debacle in one rotten, fetid nutshell.
http://uk.youtube.com/watch?v=AiEWCnpNnBQ
And, sub-prime mortgage credit swap problems started to show up in early 2007!
http://www.gata.org/node/4797
Seriously, we should all demand accountability from Washington - an independent commission, not Senators or Congressman, to investigate...
Wednesday, October 1, 2008
Dear Elected Official:
Unfortunately, I do not believe this "bail out" will solve all of our problems. I know I am not alone. There is the possibility that the banks may still not inject liquidity into this market, which will rapidly cause our system to collapse. The time is now to act decisively and do the right thing. Here they are:
1) Ensure the Fed recapitalizes the banking system. They should also contact the major banks and guarantee there will be enough liquidity.
2) Restructure Fannie and Freddie. Restructure mortgages to limit risk. Ban risky and sub-prime mortgages from the derivatives and credit default swaps market.
3) Call for an independent investigation into how this fiasco occurred, who is responsible, and prosecute.
3) Institute major changes in Congress. Namely, any current laws that allow our politicians to profit for themselves. This should include changes in fundraising, lobbying and earmark laws.
4) Our elected officials should not be allowed to vote for laws that affect them directly or in which they have an interest. They should not be able to vote on a bill if they have received money from a company, non-profit or lobby that is going to profit from the bill.
5) Congress should not be able to make laws that directly affect them. That means fundraising, lobbying, earmarks, salary, ethics, etc. This has led to the current situation we are in.
6) We need an independent Congressional and Presidential accountability office. Either, the Government Accountability Office can take responsibility, or a new office can be instituted. It would be responsible for overseeing our elected officials to make sure there is no conflict of interest when laws are made.
This office would also oversee the ethics of our Congress instead of the elected officials who support cronyism. Industries don't allow their employees to accept money, or to be bribed with jobs or gifts. They do not allow money to directly benefit the employee, spouse, family or friends of the employee. Why can this happen in Congress?
7) The office would be accountable to the people. Newly elected officials would not be allowed to "touch" the office with new heads or employees.
You see, elected official, the American people are fed up with the corruption in Congress. It is unacceptable that the Democrats had such conflict of interest with Fannie and Freddie they were offered jobs that paid out millions. We are now bailing out their abuse. No wonder you are so eager to get this bill passed!
It is also unacceptable that our Congress turned it's head as Fannie and Freddie packaged these loans, sold them to financials institutions who turned them into derivatives, and sold them over and over again until no one knew what they had for assets.
Please change Congress before your fellow elected officials destroy our way of life with their greed. Because, if you do nothing, it will only be a matter of time before the American people finally get so fed up that they will look for some other form of government besides Democracy.
Sincerely,
A concerned citizen
1) Ensure the Fed recapitalizes the banking system. They should also contact the major banks and guarantee there will be enough liquidity.
2) Restructure Fannie and Freddie. Restructure mortgages to limit risk. Ban risky and sub-prime mortgages from the derivatives and credit default swaps market.
3) Call for an independent investigation into how this fiasco occurred, who is responsible, and prosecute.
3) Institute major changes in Congress. Namely, any current laws that allow our politicians to profit for themselves. This should include changes in fundraising, lobbying and earmark laws.
4) Our elected officials should not be allowed to vote for laws that affect them directly or in which they have an interest. They should not be able to vote on a bill if they have received money from a company, non-profit or lobby that is going to profit from the bill.
5) Congress should not be able to make laws that directly affect them. That means fundraising, lobbying, earmarks, salary, ethics, etc. This has led to the current situation we are in.
6) We need an independent Congressional and Presidential accountability office. Either, the Government Accountability Office can take responsibility, or a new office can be instituted. It would be responsible for overseeing our elected officials to make sure there is no conflict of interest when laws are made.
This office would also oversee the ethics of our Congress instead of the elected officials who support cronyism. Industries don't allow their employees to accept money, or to be bribed with jobs or gifts. They do not allow money to directly benefit the employee, spouse, family or friends of the employee. Why can this happen in Congress?
7) The office would be accountable to the people. Newly elected officials would not be allowed to "touch" the office with new heads or employees.
You see, elected official, the American people are fed up with the corruption in Congress. It is unacceptable that the Democrats had such conflict of interest with Fannie and Freddie they were offered jobs that paid out millions. We are now bailing out their abuse. No wonder you are so eager to get this bill passed!
It is also unacceptable that our Congress turned it's head as Fannie and Freddie packaged these loans, sold them to financials institutions who turned them into derivatives, and sold them over and over again until no one knew what they had for assets.
Please change Congress before your fellow elected officials destroy our way of life with their greed. Because, if you do nothing, it will only be a matter of time before the American people finally get so fed up that they will look for some other form of government besides Democracy.
Sincerely,
A concerned citizen
Monday, September 29, 2008
Obama "Truth Squads" in Missouri
This is the most scary thing I've heard yet! If Obama gets elected, it may be the beginning of our downward slide of freedom of speach in this country. Of course, we know he's an attorney and therefore can find ways to get around the law. He has asked lawmakers and prosecutors in Missouri to join a "truth squad" that will "target anyone who lies or runs a misleading television ad" about him. Prosecutors "plan to respond immediately to any ads and statements that might violate Missouri ethics law."
In other words, those poor Missourians can't make a mistake when talking about him without being afraid they'll be arrested? Big brother is watching.
Is Obama so thin-skinned he can't take a little jab in his side from the Republicans? He can't rebut these ads? Instead, he has to resort to threatening? What a whimp!
Something feels really creepy or "wrong" about this. Could it be our intuition that this man is up to no good? Names swirl in my head: Stalin, Hitler, Castro.
Obviously, we have some friends who feel the same way about Mr. Shadey. They've put up videos about the "truth squad" for all to see.
As George Washington said, "If the freedom of speech is taken away, then dumb and silent we may be led, like sheep to the slaughter." So, the 50% who favor him are going to take the rest of us down with them. Like sheep to the slaughter...
http://www.youtube.com/watch?v=iStZAbf47FA
In other words, those poor Missourians can't make a mistake when talking about him without being afraid they'll be arrested? Big brother is watching.
Is Obama so thin-skinned he can't take a little jab in his side from the Republicans? He can't rebut these ads? Instead, he has to resort to threatening? What a whimp!
Something feels really creepy or "wrong" about this. Could it be our intuition that this man is up to no good? Names swirl in my head: Stalin, Hitler, Castro.
Obviously, we have some friends who feel the same way about Mr. Shadey. They've put up videos about the "truth squad" for all to see.
As George Washington said, "If the freedom of speech is taken away, then dumb and silent we may be led, like sheep to the slaughter." So, the 50% who favor him are going to take the rest of us down with them. Like sheep to the slaughter...
http://www.youtube.com/watch?v=iStZAbf47FA
Friday, September 26, 2008
The McCain and Obama Debate in the corporate world...
Last night, I watched the debate between McCain and Obama. On the left, a man with years of experience. On the right, a man who talks as smoothly as the commentators who speak about him. How would they both fair if they were in private industry? Who would get hired for the job?
Have you ever hired anyone? What did you look for? Did you look for a person who is charismatic, personable, educated, and has great ideas? Or, did you look for a person who has experience, who has delt with the types of problems you’re facing, who has a proven track record your can depend on?
If we were hiring Mr. McCain and Mr. Obama for a position in a company, here's what we would find:
Mr. Obama comes in, shakes hands, sits down, smiles broadly and is very friendly. His resume shows he has gone to an Ivy League College. Very impressive! He’s worked in the community for a non-profit organization, then worked a short time in two positions related to your type of business. He’s an up and coming young man and well-liked.
He starts the interview by telling you he has great ideas for your company. He promises to improve it by offering new products your customers can't do without. He'll have to add departments, of course, and hire more people in order to grow your business, but it will be great.
You tell him the employees are unhappy because some of them don’t have a healthcare plan. You’d like to be able to offer it to everyone. What would he do? No problem, he says. Why not bring healthcare in-house? You can afford it. Of course, you’ll have to hire more personnel: doctors, office staff, healthcare facilities, etc. You’ll need to pay the hospitals and pay for prescription drugs, but people will want to work for your company because you offer this great benefit.
The thought of running your own healthcare is scary. You ask him about the expense. How can you afford it? I’ve got an answer for that, he says. No problem. He'll just raise the price of your merchandise for a small percentage of your customers, only 5% of them. You know, the ones who currently put at least 60% of your profits on your books? The "best" customers. They won’t notice it. It’ll be painless.
You wonder about this. Will they be mad? After all, the smallest group is already paying the greatest percentage. They help you keep the costs low for the smaller companies you deal with. Will they cut down on purchasing your product, or pass the increased cost onto their customers, or maybe leave your company? You try to think of the implications. They aren’t a popular group. Everyone hates them because they’re the most cash flush. Still, it’s something to consider.
You talk about one of your biggest expenses; the cost of energy. It’s cutting into your profit margin. You are seeing a drastic increase in transporting goods and running your factories. What can he do about it? Mr. Obama suggests an alternative energy source. A clean source. You realize that’s a good idea to cut down on pollution. Yet, you’re still using gas. Hmm. When will this new energy source be available? You’re hurting now. And, the energy costs are still rising.
You deal with many foreign countries. In fact, you have factories in some of these countries. You ask Mr. Obama’s strategy for dealing with difficult customers. How would he handle them? How would he keep your employees safe? He tells you he would negotiate with the difficult customers directly. Sit down at the table with them and talk it out. You’re a little distrustful of this technique. You know these guys. Some of them are dangerous and corrupt. But, maybe he’s right.
So, how would he keep your factories and employees safe while they’re in some of these corrupt countries? Well, he would ensure that there’s adequate protection. He guarantees you he could handle it. You’re not sure of his experience with this type of challenge, but you believe him.
You wonder how he does in a crisis situation. You ask the question: If you were out of town on a important sales call and there was a crisis in the company, what would you do? Mr. Obama says he can multi-task. Just give him a call. He can do two things at once.
You shake hands, impressed with Mr. Obama. It was a great interview. He threw out a lot of ideas that seemed possible. He seemed to have a handle on everything.
Next, Mr. McCain walks in. He’s confident, friendly, seems to have a quiet, calm personality. He begins by telling you about his experience with these troubling countries you have to deal with. He’s dealt with them all. In fact, he’s been to all of them. He knows how they think. He was held captive in one of the worst of them for five years. When he got out, he made sure that all the other employees in that violent, corrupt country were released. He successfully negotiated with the same people who had held him captive, who had tortured him. You are quite impressed. In fact, you are amazed that he got out alive, yet was determined and brave enough to return to get his employees out safely.
You change the subject. What about the factory and employees here? What are your ideas? He tells you he knows your company is in trouble. There’s too much spending going on in some areas and some employees are taking advantage of the company. You unhappily know this. Everytime you hire a new employee to fix the problem, he says he’s going to fix it, then becomes part of the problem. You feel helpless.
Mr. McCain explains that he has a long history of battling this type of abuse and will make sure it’s stopped. He hates abuse of power, stealing and wasteful spending.You hear the commitment and forcefulness in his voice. You can see his track record on his resume. There’s a long list. He’s even taken on some of his friends, he tells you. You feel excited at the possibility that someone might finally be able to do something about this problem. He seems like an independent thinker.
But, he’s also concerned about the employees, he says. He’ll make sure, by cutting the fat that’s not needed, by curbing overspending and reining in the abusers, he’ll make the company more profitable and financially secure. That would be great, you think. You'd be able to pay off some of the huge debt you've racked up.
With this cost cutting, Mr. McCain says, he'll be able to offer your employees a large discount on healthcare, so that all of them can afford it. He won’t have to hire new office staff and doctors, or pay for their healthcare or drugs directly. The idea makes you think this may be the solution. This plan would save you money over the in-house healthcare plan proposed by Mr. Obama and the employees could choose who they want to cover them. Plus, there won’t be any threat of mismanagement, fraud, or abuse this way.
You bring up the cost of energy. It’s draining the company. How can he help? He smiles. He knows there’s a problem. The solution is a multi-pronged attack. First, he will make sure the company has enough oil to survive and thrive until eco-friendly alternatives are produced. With more oil, the costs will be kept down. He suggests that the oil be produced here, rather than buying it from foreign companies, some of whom are not our friends. That way, the billions spent in oil will stay here.
Mr. McCain also suggests the cleanest energy possible. Used safely and successfully in France and other European countries; it’s nuclear energy. It's one of the most inexpensive energies to produce and will keep the expenses down, too. And, when new eco-friendly products are finally developed, tested and brought to market, you can slowly convert to them, phasing out oil while minimizing your expenses to re-fit your factories. It is a plan that takes us from today into the future.
He goes on to discuss your customers, the lifeblood of your company. Slowly, you have been losing them and have had to lay off employees because of it. You don’t want to lose any more customers. It’s hurting the company. First, Mr. McCain lets you know that he'll keep the cost of your products the same. It wouldn’t be a good business decision to increase the cost of your product when you’re competing with cheaper, foreign companies.
Mr. McCain says he will be able to offer a price cut, a discount, for the few who purchase the majority of your products; the 5% who make up 60% of your profits. That way, they'll stay with you and won't go with your rivals in China and India. Your price cut will enable them to hire more employees and you’ll be able to keep yours. In fact, these companies may do more business with you and you'll need to add employees. You think about this. Why punish the companies who pay the majority of your profits? It doesn’t make sense.You like his suggestion.
You ask the "crisis" question: If you were out of town on a special sales call and there was a crisis in the company, what would you do? Mr. McCain tells you he would make arrangements with the client to meet at another time and would fly right home to help with the crisis. You are comforted by this. He’s given you the right answer.
You ponder your interviews. You're impressed with both men. You’re on the fence, actually. It’s almost 50-50.
Mr. Obama’s ideas sound exciting. Maybe he can accomplish all of them without raising expenses. You call his references. They tell you he was a wonderful community leader. He worked hard and accomplished much.
His other former employer says the same thing. But there’s a problem with his current employer. They tell you he spent more money than expected, millions in fact. And, some of the money went to companies and clients who had done favors for him. You’re not happy with that. Isn’t that what you’re trying to fix? Overspending and cronyism?
And, there are some questions about one of his first employers, a Mr. Ayers. He was in trouble with the law. Also, there’s a friend who helped him get up the corporate ladder, a Mr. Rezko. He wound up in jail on federal corruption charges. You are shocked at the news. Mr. Obama seemed so trustworthy. Maybe it’s just a coincidence.
Mr. McCain has a long list of references. You give them a call. They tell you he has a proven track record of success and years of experience dealing with difficult problems. He's shown through action that he’s true to his word. He's honest, sincere and does what he says he's going to do. He gets things done. He doesn't back down when the going gets rough. He doesn't follow the crowd, but thinks for himself. There are no shady business dealings.
You ponder your dilemma. You really liked Mr. Obama. He was charismatic. But, Mr. McCain has the experience, the results, the integrity. You make your decision. You know who’s the best man for the job. You call Mr. McCain and offer him the job.
Have you ever hired anyone? What did you look for? Did you look for a person who is charismatic, personable, educated, and has great ideas? Or, did you look for a person who has experience, who has delt with the types of problems you’re facing, who has a proven track record your can depend on?
If we were hiring Mr. McCain and Mr. Obama for a position in a company, here's what we would find:
Mr. Obama comes in, shakes hands, sits down, smiles broadly and is very friendly. His resume shows he has gone to an Ivy League College. Very impressive! He’s worked in the community for a non-profit organization, then worked a short time in two positions related to your type of business. He’s an up and coming young man and well-liked.
He starts the interview by telling you he has great ideas for your company. He promises to improve it by offering new products your customers can't do without. He'll have to add departments, of course, and hire more people in order to grow your business, but it will be great.
You tell him the employees are unhappy because some of them don’t have a healthcare plan. You’d like to be able to offer it to everyone. What would he do? No problem, he says. Why not bring healthcare in-house? You can afford it. Of course, you’ll have to hire more personnel: doctors, office staff, healthcare facilities, etc. You’ll need to pay the hospitals and pay for prescription drugs, but people will want to work for your company because you offer this great benefit.
The thought of running your own healthcare is scary. You ask him about the expense. How can you afford it? I’ve got an answer for that, he says. No problem. He'll just raise the price of your merchandise for a small percentage of your customers, only 5% of them. You know, the ones who currently put at least 60% of your profits on your books? The "best" customers. They won’t notice it. It’ll be painless.
You wonder about this. Will they be mad? After all, the smallest group is already paying the greatest percentage. They help you keep the costs low for the smaller companies you deal with. Will they cut down on purchasing your product, or pass the increased cost onto their customers, or maybe leave your company? You try to think of the implications. They aren’t a popular group. Everyone hates them because they’re the most cash flush. Still, it’s something to consider.
You talk about one of your biggest expenses; the cost of energy. It’s cutting into your profit margin. You are seeing a drastic increase in transporting goods and running your factories. What can he do about it? Mr. Obama suggests an alternative energy source. A clean source. You realize that’s a good idea to cut down on pollution. Yet, you’re still using gas. Hmm. When will this new energy source be available? You’re hurting now. And, the energy costs are still rising.
You deal with many foreign countries. In fact, you have factories in some of these countries. You ask Mr. Obama’s strategy for dealing with difficult customers. How would he handle them? How would he keep your employees safe? He tells you he would negotiate with the difficult customers directly. Sit down at the table with them and talk it out. You’re a little distrustful of this technique. You know these guys. Some of them are dangerous and corrupt. But, maybe he’s right.
So, how would he keep your factories and employees safe while they’re in some of these corrupt countries? Well, he would ensure that there’s adequate protection. He guarantees you he could handle it. You’re not sure of his experience with this type of challenge, but you believe him.
You wonder how he does in a crisis situation. You ask the question: If you were out of town on a important sales call and there was a crisis in the company, what would you do? Mr. Obama says he can multi-task. Just give him a call. He can do two things at once.
You shake hands, impressed with Mr. Obama. It was a great interview. He threw out a lot of ideas that seemed possible. He seemed to have a handle on everything.
Next, Mr. McCain walks in. He’s confident, friendly, seems to have a quiet, calm personality. He begins by telling you about his experience with these troubling countries you have to deal with. He’s dealt with them all. In fact, he’s been to all of them. He knows how they think. He was held captive in one of the worst of them for five years. When he got out, he made sure that all the other employees in that violent, corrupt country were released. He successfully negotiated with the same people who had held him captive, who had tortured him. You are quite impressed. In fact, you are amazed that he got out alive, yet was determined and brave enough to return to get his employees out safely.
You change the subject. What about the factory and employees here? What are your ideas? He tells you he knows your company is in trouble. There’s too much spending going on in some areas and some employees are taking advantage of the company. You unhappily know this. Everytime you hire a new employee to fix the problem, he says he’s going to fix it, then becomes part of the problem. You feel helpless.
Mr. McCain explains that he has a long history of battling this type of abuse and will make sure it’s stopped. He hates abuse of power, stealing and wasteful spending.You hear the commitment and forcefulness in his voice. You can see his track record on his resume. There’s a long list. He’s even taken on some of his friends, he tells you. You feel excited at the possibility that someone might finally be able to do something about this problem. He seems like an independent thinker.
But, he’s also concerned about the employees, he says. He’ll make sure, by cutting the fat that’s not needed, by curbing overspending and reining in the abusers, he’ll make the company more profitable and financially secure. That would be great, you think. You'd be able to pay off some of the huge debt you've racked up.
With this cost cutting, Mr. McCain says, he'll be able to offer your employees a large discount on healthcare, so that all of them can afford it. He won’t have to hire new office staff and doctors, or pay for their healthcare or drugs directly. The idea makes you think this may be the solution. This plan would save you money over the in-house healthcare plan proposed by Mr. Obama and the employees could choose who they want to cover them. Plus, there won’t be any threat of mismanagement, fraud, or abuse this way.
You bring up the cost of energy. It’s draining the company. How can he help? He smiles. He knows there’s a problem. The solution is a multi-pronged attack. First, he will make sure the company has enough oil to survive and thrive until eco-friendly alternatives are produced. With more oil, the costs will be kept down. He suggests that the oil be produced here, rather than buying it from foreign companies, some of whom are not our friends. That way, the billions spent in oil will stay here.
Mr. McCain also suggests the cleanest energy possible. Used safely and successfully in France and other European countries; it’s nuclear energy. It's one of the most inexpensive energies to produce and will keep the expenses down, too. And, when new eco-friendly products are finally developed, tested and brought to market, you can slowly convert to them, phasing out oil while minimizing your expenses to re-fit your factories. It is a plan that takes us from today into the future.
He goes on to discuss your customers, the lifeblood of your company. Slowly, you have been losing them and have had to lay off employees because of it. You don’t want to lose any more customers. It’s hurting the company. First, Mr. McCain lets you know that he'll keep the cost of your products the same. It wouldn’t be a good business decision to increase the cost of your product when you’re competing with cheaper, foreign companies.
Mr. McCain says he will be able to offer a price cut, a discount, for the few who purchase the majority of your products; the 5% who make up 60% of your profits. That way, they'll stay with you and won't go with your rivals in China and India. Your price cut will enable them to hire more employees and you’ll be able to keep yours. In fact, these companies may do more business with you and you'll need to add employees. You think about this. Why punish the companies who pay the majority of your profits? It doesn’t make sense.You like his suggestion.
You ask the "crisis" question: If you were out of town on a special sales call and there was a crisis in the company, what would you do? Mr. McCain tells you he would make arrangements with the client to meet at another time and would fly right home to help with the crisis. You are comforted by this. He’s given you the right answer.
You ponder your interviews. You're impressed with both men. You’re on the fence, actually. It’s almost 50-50.
Mr. Obama’s ideas sound exciting. Maybe he can accomplish all of them without raising expenses. You call his references. They tell you he was a wonderful community leader. He worked hard and accomplished much.
His other former employer says the same thing. But there’s a problem with his current employer. They tell you he spent more money than expected, millions in fact. And, some of the money went to companies and clients who had done favors for him. You’re not happy with that. Isn’t that what you’re trying to fix? Overspending and cronyism?
And, there are some questions about one of his first employers, a Mr. Ayers. He was in trouble with the law. Also, there’s a friend who helped him get up the corporate ladder, a Mr. Rezko. He wound up in jail on federal corruption charges. You are shocked at the news. Mr. Obama seemed so trustworthy. Maybe it’s just a coincidence.
Mr. McCain has a long list of references. You give them a call. They tell you he has a proven track record of success and years of experience dealing with difficult problems. He's shown through action that he’s true to his word. He's honest, sincere and does what he says he's going to do. He gets things done. He doesn't back down when the going gets rough. He doesn't follow the crowd, but thinks for himself. There are no shady business dealings.
You ponder your dilemma. You really liked Mr. Obama. He was charismatic. But, Mr. McCain has the experience, the results, the integrity. You make your decision. You know who’s the best man for the job. You call Mr. McCain and offer him the job.
Is This The Perfect Storm?
My father was a little boy during the Great Depression. He said his family did okay because they lived conservatively and worked hard. My grandfather was a roofer and my grandmother made candies. They had a two-family house and rented the upstairs. Their furniture was utilitarian. They grew their own vegetables and, sometimes, meat. They got through it.
Now, America is in another economic catastrophe caused by it's own making. While it was speculation in stocks in 1929, now it's derivative speculation and sub-prime loans. But, people in stocks are seeing their savings fade away. Eerily similar...
While the other countries of the world are calmly observing, or maybe laughing to themselves, this will affect them, too. America is firmly rooted in almost every country in the world. Whether it's the exports from China, the customer service in India, or simply support for small nations like Georgia, it will all go out the window.
At this point, I don't see a way out of this. Something bad is coming. The house of cards is much bigger than it was in 1929. $700 billion is just a drop in the bucket and helps only a small number of banks. As I write, lending has essentially stopped; the grease that keeps our economy running. The dollar is dropping. Housing prices are dropping. All of our assets are being de-valued.
While Congress wants us to approve of a staggering $700 billion bill due to the sub-prime/derivative market fiasco, Americans are hunkering down. They are not spending and neither are the companies they work for. As this situation gets worse and companies cannot get money for their line of credit accounts, they won't be able to pay their creditors, and finally, they won't be able to pay their employees. This may take three months or more, but it will happen if banks do not begin to lend again. At the least, the lending rate will be elevated and the higher rate will be paid for on the backs of the consumer.
Next, we have the energy crisis. Our Democrats do not believe we should drill for oil. The result: higher gas prices. It's begun again. Due to Ike, we have gas shortages down South. Our reserves are down. Our oil refineries are temporarily closed. Every aspect of our economy will be affected by the gas shortage. People will struggle to make ends meet as we again see prices go through the roof.
I am angry because this economic fiasco was created in Congress. They are not qualified to make complex decisions. They are politicians, not economists. This morning, watching C-Span, I saw a Senator ask a Fannie Mae expert what made up Fannie Mae's assets. That said it all. Duh! Um, mortgages, Senator? There you have it.
Now, America is in another economic catastrophe caused by it's own making. While it was speculation in stocks in 1929, now it's derivative speculation and sub-prime loans. But, people in stocks are seeing their savings fade away. Eerily similar...
While the other countries of the world are calmly observing, or maybe laughing to themselves, this will affect them, too. America is firmly rooted in almost every country in the world. Whether it's the exports from China, the customer service in India, or simply support for small nations like Georgia, it will all go out the window.
At this point, I don't see a way out of this. Something bad is coming. The house of cards is much bigger than it was in 1929. $700 billion is just a drop in the bucket and helps only a small number of banks. As I write, lending has essentially stopped; the grease that keeps our economy running. The dollar is dropping. Housing prices are dropping. All of our assets are being de-valued.
While Congress wants us to approve of a staggering $700 billion bill due to the sub-prime/derivative market fiasco, Americans are hunkering down. They are not spending and neither are the companies they work for. As this situation gets worse and companies cannot get money for their line of credit accounts, they won't be able to pay their creditors, and finally, they won't be able to pay their employees. This may take three months or more, but it will happen if banks do not begin to lend again. At the least, the lending rate will be elevated and the higher rate will be paid for on the backs of the consumer.
Next, we have the energy crisis. Our Democrats do not believe we should drill for oil. The result: higher gas prices. It's begun again. Due to Ike, we have gas shortages down South. Our reserves are down. Our oil refineries are temporarily closed. Every aspect of our economy will be affected by the gas shortage. People will struggle to make ends meet as we again see prices go through the roof.
I am angry because this economic fiasco was created in Congress. They are not qualified to make complex decisions. They are politicians, not economists. This morning, watching C-Span, I saw a Senator ask a Fannie Mae expert what made up Fannie Mae's assets. That said it all. Duh! Um, mortgages, Senator? There you have it.
Thursday, September 25, 2008
Shock! Congressional Dems allow drilling ban to expire!
Last week, Speaker Nancy Pelosi put a 290 page energy bill through the House banning offshore oil drilling where it counts - between 3 and 50 miles offshore where 95% of the oil and gas resides. It was killed, however, and the Dems allowed the 25 year drilling ban to expire. Score one for the good guys.
I guess she was too busy with the bail out to dedicate much time to getting it passed in the Senate. Plus, Bush promised to veto it. Maybe she's waiting for the election. If Obama gets in, it's probably a shoe in. If McCain gets in, with Palin's help (I hope), a bill banning offshore drilling will get vetoed.
The next few years, folks, will see if America can right itself or sink into the abyss. Right now, it's people with common sense against the wackos.
Why do I say that? Because, although we all want to see alternative energy begin it's journey to prominence in the USA, it's going to take a long, long time. Longer than 10 years.
Everything has a cost environmentally. Right now the ideal car is solar powered with a windmill on top. But, it will also need to run on electricity sometimes (cloudy and no wind), then become nuclear if driven over 50 miles. See? No solutions yet. All alternative cars are in the infancy stages.
Doing anything quickly is usually a mistake. (I hope I'm wrong about the $700 billion they're giving away.) And, that's what the Dems are pushing. Cut off gas and start replacing it with alternative energy sources. But, it's not that simple. Many Americans simply don't have the money to re-equip their homes and cars to environmentally friendly energy sources.
No, Americans will be using gas for years. The problem is, if the Dems cut off drilling, the cost will break us. We have to drill to supply ourselves. Enough with relying on other countries. Drill, drill, drill!
The United States needs something tangible to make itself strong again. White collar jobs aren't doing the trick. Industry is the key to strength and we need it back. We don't need to make toys or clothes. Leave that to China. We need to make energy.
Imagine the number of jobs that could be created drilling for gas and oil and by developing, building and installing wind, hydrogen, hydroelectric, nuclear, and solar products. So, what are we waiting for?
The United States of America was a prosperous, industrious nation. It can rise out of the ashes. It has it's people, the hardest working people on earth (and don't contradict me).
The only thing we need now, is a Congress smart enough to know it, too.
I guess she was too busy with the bail out to dedicate much time to getting it passed in the Senate. Plus, Bush promised to veto it. Maybe she's waiting for the election. If Obama gets in, it's probably a shoe in. If McCain gets in, with Palin's help (I hope), a bill banning offshore drilling will get vetoed.
The next few years, folks, will see if America can right itself or sink into the abyss. Right now, it's people with common sense against the wackos.
Why do I say that? Because, although we all want to see alternative energy begin it's journey to prominence in the USA, it's going to take a long, long time. Longer than 10 years.
Everything has a cost environmentally. Right now the ideal car is solar powered with a windmill on top. But, it will also need to run on electricity sometimes (cloudy and no wind), then become nuclear if driven over 50 miles. See? No solutions yet. All alternative cars are in the infancy stages.
Doing anything quickly is usually a mistake. (I hope I'm wrong about the $700 billion they're giving away.) And, that's what the Dems are pushing. Cut off gas and start replacing it with alternative energy sources. But, it's not that simple. Many Americans simply don't have the money to re-equip their homes and cars to environmentally friendly energy sources.
No, Americans will be using gas for years. The problem is, if the Dems cut off drilling, the cost will break us. We have to drill to supply ourselves. Enough with relying on other countries. Drill, drill, drill!
The United States needs something tangible to make itself strong again. White collar jobs aren't doing the trick. Industry is the key to strength and we need it back. We don't need to make toys or clothes. Leave that to China. We need to make energy.
Imagine the number of jobs that could be created drilling for gas and oil and by developing, building and installing wind, hydrogen, hydroelectric, nuclear, and solar products. So, what are we waiting for?
The United States of America was a prosperous, industrious nation. It can rise out of the ashes. It has it's people, the hardest working people on earth (and don't contradict me).
The only thing we need now, is a Congress smart enough to know it, too.
Wednesday, September 24, 2008
The Truth: Bush's Trail of Warnings about Fannie Mae and Freddie Mac
This info is just too important to miss. According to glennbeck.com, President Bush repeatedly warned about the problems with Fannie and Freddie. But, if you read our propaganda media, that never happened. This melt down has repeatedly been blamed on Bush (or the Republicans) to throw the stink off the Democratically-controlled Congress. Anyone with half a brain should know that this problem is not as simple as one man's fault.
Like I blogged previously about Fannie & Freddie, sub-prime loans were pushed by the Democrats and Clinton approved the bill to package sub-prime loans to institutional investors. That started the ball rolling.
Two Republicans, Sen. Phil Gramm, and Congressman James Leach, were part of the problem, too. Their bill kept the derivatives market unregulated. But, wait, read on: Their bill, the Gramm-Leach-Bliley Financial Services Modernization Act, was a bipartisan bill and passed the Senate 90-8-1-1. Sen. John McCain was reported absent during the roll call and was recorded as Not Voting. The House passed 362-57-15 and was signed into law by President Bill Clinton on November 12, 1999. (Info from wikipedia.com)
Sound entirely like the Republicans' fault? Not!
Now, on to Glenn's article about Bush's repeated warnings:
White House warned about Fannie and Freddie
September 23, 2008 - 0:49 ET
For many years the President and his Administration have not only warned of the systemic consequences of financial turmoil at a housing government-sponsored enterprise (GSE) but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted. Unfortunately, these warnings went unheeded, as the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems.
2001
April: The Administration's FY02 budget declares that the size of Fannie Mae and Freddie Mac is "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity."
2002
May: The President calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02)
2003
January: Freddie Mac announces it has to restate financial results for the previous three years.
February: The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that "although investors perceive an implicit Federal guarantee of [GSE] obligations," "the government has provided no explicit legal backing for them." As a consequence, unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market. ("Systemic Risk: Fannie Mae, Freddie Mac and the Role of OFHEO," OFHEO Report, 2/4/03)
September: Fannie Mae discloses SEC investigation and acknowledges OFHEO's review found earnings manipulations.
September: Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.
October: Fannie Mae discloses $1.2 billion accounting error.
November: Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk." To reduce the potential for systemic instability, the regulator would have "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE." (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)
2004
February: The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator: "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator." (2005 Budget Analytic Perspectives, pg. 83)
February: CEA Chairman Mankiw cautions Congress to "not take [the financial market's] strength for granted." Again, the call from the Administration was to reduce this risk by "ensuring that the housing GSEs are overseen by an effective regulator." (N. Gregory Mankiw, Op-Ed, "Keeping Fannie And Freddie's House In Order," Financial Times, 2/24/04)
June: Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying "We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System." (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)
2005
April: Treasury Secretary John Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system." (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05)
2007
July: Two Bear Stearns hedge funds invested in mortgage securities collapse.
August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options." (President George W. Bush, Press Conference, The White House, 8/9/07)
September: RealtyTrac announces foreclosure filings up 243,000 in August – up 115 percent from the year before.
September: Single-family existing home sales decreases 7.5 percent from the previous month – the lowest level in nine years. Median sale price of existing homes fell six percent from the year before.
December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying "These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon." (President George W. Bush, Discusses Housing, The White House, 12/6/07)
2008
January: Bank of America announces it will buy Countrywide.
January: Citigroup announces mortgage portfolio lost $18.1 billion in value.
February: Assistant Secretary David Nason reiterates the urgency of reforms, says "A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully." (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08)
March: Bear Stearns announces it will sell itself to JPMorgan Chase.
March: President Bush calls on Congress to take action and "move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages." (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)
April: President Bush urges Congress to pass the much needed legislation and "modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes." (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08)
May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.
"Americans are concerned about making their mortgage payments and keeping their homes. Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance sub-prime loans." (President George W. Bush, Radio Address, 5/3/08)
"[T]he government ought to be helping creditworthy people stay in their homes. And one way we can do that – and Congress is making progress on this – is the reform of Fannie Mae and Freddie Mac. That reform will come with a strong, independent regulator." (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/08)
Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans." (President George W. Bush, Radio Address, 5/31/08)
June: As foreclosure rates continued to rise in the first quarter, the President once again asks Congress to take the necessary measures to address this challenge, saying "we need to pass legislation to reform Fannie Mae and Freddie Mac." (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)
July: Congress heeds the President's call for action and passes reform of Fannie Mae and Freddie Mac as it becomes clear that the institutions are failing.
(White House Press Release)
http://www.glennbeck.com/content/articles/article/198/15484/
THERE YOU HAVE IT. CONGRESS CHOSE TO IGNORE THE ESCALATING THREAT OF COLLAPSE OF FANNIE MAE AND FREDDIE MAC.
Like I blogged previously about Fannie & Freddie, sub-prime loans were pushed by the Democrats and Clinton approved the bill to package sub-prime loans to institutional investors. That started the ball rolling.
Two Republicans, Sen. Phil Gramm, and Congressman James Leach, were part of the problem, too. Their bill kept the derivatives market unregulated. But, wait, read on: Their bill, the Gramm-Leach-Bliley Financial Services Modernization Act, was a bipartisan bill and passed the Senate 90-8-1-1. Sen. John McCain was reported absent during the roll call and was recorded as Not Voting. The House passed 362-57-15 and was signed into law by President Bill Clinton on November 12, 1999. (Info from wikipedia.com)
Sound entirely like the Republicans' fault? Not!
Now, on to Glenn's article about Bush's repeated warnings:
White House warned about Fannie and Freddie
September 23, 2008 - 0:49 ET
For many years the President and his Administration have not only warned of the systemic consequences of financial turmoil at a housing government-sponsored enterprise (GSE) but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted. Unfortunately, these warnings went unheeded, as the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems.
2001
April: The Administration's FY02 budget declares that the size of Fannie Mae and Freddie Mac is "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity."
2002
May: The President calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02)
2003
January: Freddie Mac announces it has to restate financial results for the previous three years.
February: The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that "although investors perceive an implicit Federal guarantee of [GSE] obligations," "the government has provided no explicit legal backing for them." As a consequence, unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market. ("Systemic Risk: Fannie Mae, Freddie Mac and the Role of OFHEO," OFHEO Report, 2/4/03)
September: Fannie Mae discloses SEC investigation and acknowledges OFHEO's review found earnings manipulations.
September: Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.
October: Fannie Mae discloses $1.2 billion accounting error.
November: Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk." To reduce the potential for systemic instability, the regulator would have "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE." (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)
2004
February: The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator: "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator." (2005 Budget Analytic Perspectives, pg. 83)
February: CEA Chairman Mankiw cautions Congress to "not take [the financial market's] strength for granted." Again, the call from the Administration was to reduce this risk by "ensuring that the housing GSEs are overseen by an effective regulator." (N. Gregory Mankiw, Op-Ed, "Keeping Fannie And Freddie's House In Order," Financial Times, 2/24/04)
June: Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying "We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System." (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)
2005
April: Treasury Secretary John Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system." (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05)
2007
July: Two Bear Stearns hedge funds invested in mortgage securities collapse.
August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options." (President George W. Bush, Press Conference, The White House, 8/9/07)
September: RealtyTrac announces foreclosure filings up 243,000 in August – up 115 percent from the year before.
September: Single-family existing home sales decreases 7.5 percent from the previous month – the lowest level in nine years. Median sale price of existing homes fell six percent from the year before.
December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying "These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon." (President George W. Bush, Discusses Housing, The White House, 12/6/07)
2008
January: Bank of America announces it will buy Countrywide.
January: Citigroup announces mortgage portfolio lost $18.1 billion in value.
February: Assistant Secretary David Nason reiterates the urgency of reforms, says "A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully." (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08)
March: Bear Stearns announces it will sell itself to JPMorgan Chase.
March: President Bush calls on Congress to take action and "move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages." (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)
April: President Bush urges Congress to pass the much needed legislation and "modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes." (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08)
May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.
"Americans are concerned about making their mortgage payments and keeping their homes. Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance sub-prime loans." (President George W. Bush, Radio Address, 5/3/08)
"[T]he government ought to be helping creditworthy people stay in their homes. And one way we can do that – and Congress is making progress on this – is the reform of Fannie Mae and Freddie Mac. That reform will come with a strong, independent regulator." (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/08)
Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans." (President George W. Bush, Radio Address, 5/31/08)
June: As foreclosure rates continued to rise in the first quarter, the President once again asks Congress to take the necessary measures to address this challenge, saying "we need to pass legislation to reform Fannie Mae and Freddie Mac." (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)
July: Congress heeds the President's call for action and passes reform of Fannie Mae and Freddie Mac as it becomes clear that the institutions are failing.
(White House Press Release)
http://www.glennbeck.com/content/articles/article/198/15484/
THERE YOU HAVE IT. CONGRESS CHOSE TO IGNORE THE ESCALATING THREAT OF COLLAPSE OF FANNIE MAE AND FREDDIE MAC.
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