So now President Obama seems to be interested in providing up to $100 billion for those in foreclosure or about to be. It's a really great gesture. It will surely help his approval rating. And it will help guarantee that he receives the full $850 billion he has wanted for the Democrat proposed stimulus plan.

But I am opposed to this. Not because I don't want people to keep their homes. But because this is a terrible idea.

First there are the homeowners who are not in foreclosure. Those of us that are doing everything we can to maintain our homes are at a disadvantage. We get nothing from the proposed stimulus except the $120 a month that has been stated. Which is little to nothing compared to the cost of a mortgage, and raising a family, while trying to save enough money to ensure that if we lose our jobs we have something as a cushion.

In fact, it seems almost beneficial to allow your home to go into foreclosure these days. The Government is so busy trying to ensure you cannot lose your home that they are basically encouraging people to do so. You can negotiate a lower interest rate, defer payments, extend the life of a mortgage, remove interest, and soon there will be payments from the Government to subsidize your home. Given all that, why the hell is it worth struggling to stay out of foreclosure?

Second, in spending money on the foreclosures it is that much less money spent on the economy. Given I think the stimulus plan is as much of a waste as the Bush stimulus plan, basically a political look good tool or polispeak for the masses. But if spending money is the plan to turn the economy around, why dilute that plan?

In effect the average American will be paying back, at some point in the future via taxes, the money they receive + the money given to homes that are not their own + money given to businesses that made bad business decisions. And that is just the looking forward money (and does not include his new spending for new Government programs). The Government has already obligated us to pay back previous money received + several bank bailouts (which did nothing to improve the stock market and retirement accounts) + auto industry money + bailing out an insurance giant. All while inflation is creeping higher.

And none of the money going to any business or institution has any guarantee of repayment. Nor if there were repayment, any way planned of how that money would be assessed. The money could be used to fund pet politician projects (like ACORN was initially set to receive) or some other Government inspired spending spree. We don't know.

Which says nothing of the fact that the Government has no idea how the money will be spent, or where it is spent. Billions are unaccounted for at this moment, and the Obama Adminsitration has stated it intends to add tens of billions more into the pot with little better knowledge than before. Unless you believe that Congress got a lot smarter since the elections in November. The majority of politicians that were there before are still there. Like Barney Frank and Chris Dodd, who couldn't figure out what was happening in the economy until after the problems hit the news. And they head financial oversight committees, still. Think they are any smarter or more adept than 3 months ago?

But again on the foreclosures. I have enough trouble paying my mortgage, my household expenses, taxes, and preparing for higher corporate taxes. It's hard enough to do all that in an economy that is just flat, and this is anything but. Now the Obama Administration believes I should add on someone else's house? Which I will never get a benefit from.

That's a hard sell to me. Probably why I did not vote for President Obama. These are no surprises. But they are as bad a set of decisions as I expected them to be. This is not going to help the economy, though I expect it to temporarily help the approval ratings of Congress (which needs it badly).

I don't entirely blame President Obama though. This entire stimulus plan was the idea of House Speaker Nancy Pelosi. She has been fighting for this for months, increasing the amount each month as she went along. Pelosi has had the distinction of being the worst Speaker of the House, with a Congress of the lowest approval rating, that accomplished the least things, at a higher cost, than I believe any other Congress has done in 111 sessions. That's like betting on the horse that went lame and was pulled from the race. Obama made the bet so he gets that blame, but Pelosi made the horse lame and that's on her all the way.

Spending tens of billions on foreclosures sounds nice, but that's all it is. Polispeak. It is almost entirely probable that it will have no effect except a long-term negative. In fact it may speed up the downward trend President Obama was elected to fix. But it's going to happen, so be prepared.

Labels: Barney Frank, Chris Dodd, Congress, corporate taxes, Nancy Pelosi, Polispeak, President Barack Obama, Speaker of the House

This year Christmas has come before December, especially if you are a money center bank, a brokerage house, insurance company, or car manufacturer. For regular people though the holiday may not arrive at all. Such is the way things happen when the Government gets involved.

The news is out now that Citigroup will receive another $20 billion, with guarantees for $306 billion in assets, before the holiday season ends. In fact they should have the money, your money, in hand before the holiday season officially starts this Friday. Santa it seems has a 401k.

The good part of this is that Citi should not fail. Thus money will be stable in over 100 countries around the world, for the time being. Another bonus that New York City officials must love is that Citi will not be sold off in parts, and thus tens of thousands of additional jobs should be secure. And there is a better than 50% chance that many of the major bonuses that help the Big Apple float will be paid out (contractual obligations don’t end when the company gets a Government bailout). And in all honesty that is a good thing for the U.S. economy too, as long as they spend the money and not hoard it in fear of future layoffs.

The bad thing is that none of the officials tasked with resolving the financial crisis the nation is in foresaw this event. Chriss Dodd and Barney Frank didn’t see it coming, not because they were asleep at the wheel like when they promised Fannie Mae and Freddie Mac would be ok, because they were too busy blaming anyone but themselves for missing the problem. Treasury Secretary Paulson missed it. Fed Chairman Ben Bernanke missed it too.

Not one of these men, each tasked with identifying this continuing problem, envisioned this problem. They have dozens of staffers and hundreds working behind the scenes crunching numbers. Yet they all missed the chance of this happening. And the public is left to assume that it was so sudden they couldn’t have known.

Not true.

“I believe that the move to junk rating of ACA, the probable $6 - 12 billion loss at JP Morgan [significantly higher than expected], eventual losses from Citigroup - which reinsures itself, oil breaking $100 a barrel, and the multiple overseas investments will all hit the market in mid-January 2008. Thus I think a move to 11,000 is more than probable.”

I said that in December of 2007. That’s without being a stockbroker for years, without financial racords, conversations with CEO’s, discussion of the Fed, data from international sources, or Congressional committees. Just me reading the news and analyzing the public information.

I in fact went on to say

“Will those experiencing deflation outweigh the inflation fears? And if more people lose their homes how much of our financial institutions are we willing to sell to avoid the harshest realities of a crash?”

I knew Citigroup was in trouble a year ago. I knew there would be a major crisis from the mortgage industry, and that a bear market would hit the stock market. And I defined it several times, months in advance, in detail. The main thing I have been wrong on is the severity and speed at which all these things happened.

My point about this is simple. If I can figure out how bad things were, and most likely will continue to get, then what the hell were all these people whose only job is to figure this out doing!?

If they can’t get off they political posteriors, open their Government entrenched eyes, and understand the degree of a problem that is apparent to a guy on a computer in Binghamton – without even a stock ticker – they why are we giving them control of $700 billion and more? How can we expect that a single dollar of that money will be put to a use that is effective?

Case in point. Citigroup is in big trouble. They insure themselves internally. They are failing. So what is the value of the $306 billion in assets today, what was it yesterday? Are we guaranteeing a value that was intially set for these assets, the current market value of these assets, or are we getting to pick up the debt and bad loans of Citigroup mixed in with actual assets? The difference is very important. And I doubt if Barney Frank and Chris Dodd are even aware that this question should be asked.

I asked how much are we willing to sell to avoid a problem a year ago. Today I am looking forweard and I have to ask a different question. How much of the American capitalist system the nation functions on are we willing to lose to avoid the pain of this crisis? And if we are willing to comnpromise the basis of our economy, how do we prevent losing the freedoms a solcialist nation cannot tolerate?

Labels: Barney Frank, Ben Bernanke, Chris Dodd, Citigroup, Federal Reserve, financial news, mortgage bailout, New York City, Treasury Secretary Paulson

You have to be impressed by the Congressional Democrats. They have balls. Not brains, just balls. Because that is the only way they can make the claims they do about the bailout deal.

In listening to the Democrats, Barney Frank in particular you would think that the Republicans are staging a massive political coup. That the Republicans are the only reason why the bailout deal that was voted on today failed was their votes. That this is all about politics and the upcoming election.

But if you stop listening to the polispeak in Congress and look at the vote numbers and you see another picture.

The vote was 228 – 205 against the deal. That includes 94 Democrats, which could have easily made the difference and passed the deal no matter what the Republicans did. But they chose to go against their Party and Treasury Secretary Paulson, and President Bush.

Why? Because the deal was horrible. Because there is no confidence in the deal. Because the rush to pass the deal makes you wonder what is in it. Like the fact that a previous version included a stipulation that if this bailout actually got any money repaid that money would not go to taxpayers but would fund a Democratic initiative called ACORN (which has federal problems currently).

Or how about the fact that I have yet heard how the public, that will be buying these assets (bad mortgage loans) could or will get the money back. We will spend $10,000 each, out of our pockets, and if this ever makes break-even or profit there has been no discussion how we get that $10,000 back in our pockets directly. And under the current plans you never will. That is not a political problem, that is just a bad deal.

If this were as political as Democrats would like it to be, then this bad deal would have passed, Senator Obama would have the credit for it (or at least Senator McCain would have the blame) and they would use this to win the election. That didn’t happen.

If this were political, Republicans could have voted for this deal claimed it was because of Senator McCain’s influence and used that to win the election. It’s just that simple.

But Senator McCain, the Republicans, and 94 Democrats are not being political. They are doing their jobs. They are trying to structure a deal that works for taxpayers like you and me. They want to answer (I hope) the question of how the money comes back to you and me, if it ever makes money.

If we want to really be political about this, we can ask why Barney Frank and Chris Dodd could not see the impending problem as late as July of this year yet they are the heads of the Banking and Finance Committees in Congress. They were informed by supposedly brilliant minds on the exact status of the problem, and they crafted laws and regulations to control what happened. They also made enormous amounts of money from the very people they were (supposedly) watching.

Look, here is the reality. Senator Obama and McCain are Senators. One of them will be the next President. They are effectively the leaders of their respective Parties. They need to get into this fray (well at least Obama does as McCian is) and do their jobs. They need to forge a deal, stand together and say they endorse the deal. At that point it will have to pass. And to forge the deal they need to answer the question that I feel is most important, how I get my money back.

Everything that is short of this is polispeak. Every moment that Obama avoids this problem, every moment that they don’t answer the key question, every moment we have no deal endangers America and makes our near-term future that more bleak. And no matter how many Democrats blame Republicans, or how many deny their failure to do their jobs, the outcome remains the same.

Labels: Barney Frank, Chris Dodd, Congress, Democratic Party, Presidential election race 2008, Republican Party, Treasury Secretary Paulson, U.S. economy

I love listening to Harry Reid. He is absolutely partisan and 2-faced. He is the best example of what polispeak means. Listening to hear him talk today you just can’t escape this.

He is speaking about Republicans that didn’t want to go to the meeting at the White House yesterday, but he has no comment on the fact that Senator obama wouldn’t go until the President asked him to be there.

He speaks about Senator McCain and blames him for the failure of the deal, but fails to mention that there was no deal. House Republicans, and many in the Senate never liked the Paulson bailout proposal. There was no deal, except as expressed by Democrats and the media.

He wants to blame McCain, but he forgets that he stated earlier this week that there could be no deal if McCain was not on board, which he was not. He refers to McCain as an outsider, yet McCain is an active Senator with responsibilities to those that elected him.

Democrats like Chris Dodd and Harry Reid, and Barney Frank want to make it seem like this deal is good for America, yet those that look closely at the deal think it is not. And they want to add to the bail out items that are not part of the issue. They want to include the $50 billion that House Speaker Nancy Pelosi advocates, that does not have to do with the bailout but is another stimulus plan that is ineffective and a waste of money.

Democrats are being very political here. They are trying everything they can do to phrase this as a Republican or Senator McCain problem. They want to rush forward and throw money at this problem. That type of plan did not work when Bear Sterns failed, or when Fannie Mae and Freddie Mac failed, or when Lehman failed, or for AIG. They seem to think that throwing your money, my money, at this problem is more than just filling a leaking tub with more water.

Not one Democrat can state that the Paulson plan, as proposed and what they are trying to advance, will work and prevent another problem in a month. Not one can explain why a single person in the position of the Treasury Secretary, should be left with virtually sole responsibility and accountability of nearly $1 trillion dollars.

Harry Reid, and Chris Dodd are speaking about how they will be in D.C. and working on this deal all night tonight, and Saturday and Sunday if necessary. They are saying this is the most important issue before them. Yet they support that Senator Obama go off and focus on a debate, that can be postponed. This is the most important issue in America right now, that’s why all of Congress is doing their jobs – except for Democratic Presidential candidate. And the Republican Presidential candidate is the one being blamed for doing his part of the job.

Either Obama or McCain will be President in a little more than a month. One of those 2 will be faced with the resulting issues that this mortgage crisis bail out will cause. But Democrats believe that neither should be involved in the terms or process of this deal. That seems smart doesn’t it.

I find it completely partisan and polispeak when Barney Frank states that everything is fine in 2003 and July of 2008, and now is trying to blame everyone else for what he failed to stay on top of. Chris Dodd is no better. And as I mentioned above Harry Reid has flipped as well. Not to mention how Senator Obama sprinted from the meeting with the President yesterday to get out and in front of cameras, instead of going back to Congress to wotrk on the deal more as McCain did, is quite telling on who is using this as a means to win the Presidential election.

Our elected officials need to stop with the politicing and focus. This deal needs to resolve the liquidity issue, and ensure that we are prepared for the difficulties to come. It does not need to give away money to pet projects that otherwise would never pass. It is not an ad for the election campaign. It is not a gift to Wall Street, nor an open invitation for every company and industry with sagging sales to line up at the door. Neither should it be the start of the American Government as a real estate broker/business.

Anything short of that is false and stupid, and baseless polispeak meant only to prop up the political futures of selected individuals.

Labels: Barney Frank, Chris Dodd, Harry Reid, mortgage crisis, Nancy Pelosi, Presidential election race 2008, Senator Barack Obama, Senator John McCain

I just can’t step away from the most pivotal issue in the election and the lives of Americans right now. The spin in the media is that Senator McCain is avoiding Senator Obama on a debate of foreign policy – something McCain has experience at for decades and Obama has a speech in Germany. And many are calling the deep desire of McCain to serve the nation, as was called for by Harry Reid yesterday, a political stunt. Though they ignore the school boy-esque scolding that Obama received when the President called him to the White House today.

But I am tired of hearing Democrats and some media pundits running around blaming every economic woe of the nation on Republicans. There is certainly more than enough blame for all the politicians in Congress, which is why it has the lowest approval rating ever. Republicans have screwed up and spent more than they should. But Democrats have been no better, in fact those that are critical to the finance of the nation have been particularly blind. Mr. Magoo could have foreseen more with their level of information and influence over the years.

But lest my words be seen as partisan, which to an extent I am sure they are as with any pundit or blogger, I present talking heads from across the spectrum of the cable news media and pundits, as well as politicians themselves. Listen to those that we have elected, and their votes and assurances. Then tell me this is only a Republican caused problem.

And please explain to me why we should believe that those that planted the seeds for this problem, and fostered it to the debacle we are required to deal with today, should be believed when they say they have a solution

History of mortgage crisis back to 2003


Fannie Mae and Freddie Mac contributions – Sept 18 2008


Chris Dodd was watching closely but did nothing – August 2007


Treasury Secretary Paulson progress made – February 2008


Barney Frank – Improving regulation of Fannie Mae and Freddie Mac July 14 2008


Obama accuses McCain of opposing reform


Have Republicans tried to do anything?


S. 190 [109th]: Federal Housing Enterprise Regulatory Reform Act of 2005 - A bill to address the regulation of secondary mortgage market enterprises, and for other purposes.

So I also ask this, If Senator McCain did not go to Washington D.C., if the President did not call Senator Obama to the White House, are you sure there would be a resolution to the bailout crisis? Would that resolution be in the best interest of the nation?

Is a debate, that could be easily rescheduled, more important than the potential of 4 out of 5 Americans losing their homes and jobs?

And lastly, isn’t it a bit hypocritical that Democrats claim that the debate must happen because America wants this; yet they defended Senator Obama when he refused for 2 months every request that was made for Obama to join McCain in speaking directly with Americans at town hall meetings across the nation?

Labels: Barney Frank, Chris Dodd, Congress, Democratic Party, financial news, Freddie Mac, mortgage crisis, Senator Barack Obama, Senator John McCain, Treasury Secretary Paulson

I was writing about Stephen Colbert recently at Presidential Race Blog, and I wanted to say a bit more about him. The fact he is running for President is a statement. And that statement is making an impact.

Already in a poll of potential voters Mr. Colbert has gained better numbers (he received 2.3 percent of the vote with a 5 percent margin of error) than Gov. Bill Richardson (2.1 percent), Rep. Dennis Kucinich (2.1 percent) and former Sen. Mike Gravel (less than 1 percent). Considering the margin of error that potentially places him just behind former Sen. John Edwards (12 percent) and easily the closely ranked Sen. Joe Biden (2.7 percent).

On the Republican side, Mr. Colbert is running on both ballots, he had less than 1% of the potential voters, but again Ron Paul is hardly a frontrunner either. Even Senator John McCain has only 10 percent of potential votes.

Both the Democratic and Republican parties in South Carolina say that Mr. Colbert could run. In fact,

“Mr. Werner said, “our executive council would have a hard time not putting him on the ballot.’’

And it gets more serious when you consider Colbert’s viewers tend to be young, white, educated, and male. Their median age is 37 and there’s a 60/40 male-female split. So far this year, he’s drawn a nightly audience that averages 1.3 million viewers nationwide, 874,000 of them in the 18-49 year-old demographic. The U.S. Census bureau says South Carolina has about 1.4 percent of the nation’s population, which would suggest that Colbert has about 12,200 viewers there.

Greater minds than my own have found that Bill Richardson, Chris Dodd, Joe Biden, and Mike Huckabee, and yes Ron Paul too, are all potentially doomed by Mr. Colbert making any attempt to further his chances in South Carolina. Isn’t that interesting?

So what do we take from this?

The current political landscape is a horrible mess with as much truthiness coming from pundits and satirists as from the candidates themselves. There is reason for concern. Because this highlights how little many believe in the ability of our politicians in providing a cohesive and functional answer to the problems of the nation.

I want Mr. Colbert to get a delegate in either or both parties. I want him to be able to shake the stolid and grave foundations that both political parties are firmly entrenched in. I want there to be a question of ‘Who the hell did that happen’ in the media.

The point is that what we see politics today is little better than 30 seconds of showmanship. At least Stephen Colbert provides the honesty of absolute incredulity. That makes him more consistent and honest than any politician in decades perhaps.
If Mr. Colbert is able to get a delegate, or even a better than 10% vote total, the message will be clear. Politics has devolved as badly as major news media. This will be confirmation of how substance has been thrown to the wayside, with showmanship the guide to future elections. And with that, the degradation of the American quality of life will be apparent.

Sometimes it takes a slap in the face, or a joke in the worst of taste to wake people up about what is before them. I don’t think that is the intention, nor the fact, of what Mr. Stephen Colbert has done. But it’s close enough to both, that perhaps it will make a difference.

Maybe.

Labels: Chris Dodd, Dennis Kucinich, Gov. Bill Richardson, John Edwards, Mike Gravel, Presidential candidates, Presidential Race Blog, Ron Paul, Stephan Colbert