When it Comes to the Wall Street Collapse, McCain’s Hands are Clean
By Larry Johnson on September 23, 2008 at 7:11 AM in Current Affairs
There is no doubt that the Republican Party shares a significant portion of the blame for the debacle unfolding in the financial markets. But the hands of many Democrats are stained as well. It is noteworthy that Republican Richard Shelby, who chaired the banking committee, only received $38,000 in contributions from Fannie Mae while newbie Senator Barack Obama raked in $90,549. As I have noted before, what in the hell is going on that a junior Senator gets showered with such largesse? And Obama’s take from Freddie Mac and Fannie Mae was only slightly less than the $165,000 that Democrat chair of the Banking Committee, Chris Dodd snagged. Hell, Barack got $50,000 more than Senator Hillary Clinton and she had been in the Senate twice as long as Barack.
The one politician who can hold his head high and say, “I told you so” is John McCain. This is not a partisan talking point. It is an incontrovertible fact.
And if you want to compare the inaction of Barack Obama in 2006 with the prescience of John McCain, go ahead. Make my day.
Here are the facts. Verify them for yourself.
Let’s start in November 2004, when it became clear that Franklin Raines was in charge when Fannie Mae was lying about its earnings and convincing investors that it was making more money than the facts supported. Peter Eavis described the situation in a column at Street.com:
He made more than $20 million last year and is highly influential in Washington. But right now, no one in their right mind would want to be Fannie Mae (FNM Quote - Cramer on FNM - Stock Picks) CEO Franklin Raines.
The executive has fought a characteristically tenacious battle to protect his job and defend Fannie as allegations of serious accounting missteps have piled up. Even so, Raines could well be gone from the nation’s largest mortgage buyer by the end of this year, with his reputation in tatters. Much rests on what happens Monday. . .
His opponents over the past five years have included both the Bush and Clinton administrations, Federal Reserve Chief Alan Greenspan, rival banks and Fannie’s own regulator, the Office of Federal Housing Enterprise Oversight, or OFHEO. And don’t forget short-sellers, who have long wagered that losses on Fannie’s balance sheet will make the company a danger to the U.S. financial system. . . .
That said, if Raines goes, it will almost certainly go hand in hand with a massive restatement of past financial results. This column has estimated that a critical measure of regulatory capital could have been overstated by billions of dollars, and that as much as $12 billion of derivatives losses were kept out of the income statement.
A restatement of that size would almost certainly open the door to far-reaching reforms of Fannie and rival Freddie (FRE Quote - Cramer on FRE - Stock Picks), both of which operate under advantageous government charters. Those reforms could reduce the profitability of Fannie Mae, which has run its huge mortgage portfolio aggressively and become severely undercapitalized in the process.
Remember. This was written almost four years ago. Another warning came two weeks later (November 21, 2004) from Peter Wallison of the American Enterprise Institute, who wrote:
Investors worried about both interest rate and political risks have driven down the shares of the US mortgage groups Fannie Mae and Freddie Mac close to their 52-week lows. Political risk is probably an insoluble problem, but the companies are voluntarily taking on the serious interest rate risk that investors fear.
Unfortunately for US taxpayers, Fannie and Freddie have done the rational thing for companies that the markets regard as being government-backed, just as the savings and loans organisations did in the late 1980s. They have placed the risk of loss on the government, while keeping the gains. Now investors are worried by the political risk that the government’s response will be to weaken its implicit backing for the two institutions. Fannie and Freddie were established to add liquidity to the mortgage markets by purchasing mortgages from lenders, thus allowing them to make more residential mortgage loans. For many years after their creation, they simply purchased and held mortgages. In doing so, they took the interest rate risk associated with holding a fixed income asset–a mortgage–while funding it with variable rate liabilities. The S&Ls were ultimately destroyed by a similar mismatch. . . .
So if Fannie and Freddie are not lowering interest rates by purchasing these securities, why are they doing it? The question answers itself. The taxpayers, through the generosity of Congress, have offered Fannie and Freddie a great deal: heads you win; tails we lose. You can take interest rate risk by repurchasing your own mortgage-backed securities; if you earn substantial profits from your government support, you can keep them; if the market moves against you and you suffer losses, we will cover them.
The way to address this situation is to prohibit Fannie and Freddie from holding mortgages or mortgage-backed securities in their portfolios. That would reduce the risks they are taking on the taxpayers’ account, but would not significantly affect mortgage rates. With the concern about the risks being taken by Fannie and Freddie, it is worth considering.
Got it? Problem identified and a solution proffered. That is what you call responsible policy wonkism.
A couple of months later, Robert Blumen weighed in at the Mises Economics Blog. Blumen explains the problem with Government Service Enterprises (i.e. GSEs) as follows:
Fannie is primarily a political creature, not a private sector business firm. The company purchases mortgages from banks and then either resells them as mortgage-backed securities with a form of credit insurance, or holds them on its own books. Their role as an intermediary is to assume credit risk for those institutions that wish to assume interest rate risk only. Fannie along with its slightly less evil twin Freddie Mac, were created during the depression as government to purchase mortgages that were in default extend additional credit to home owners. Over time, their intermediary role has become less important relative to their activity as a mortgage investment portfolio. They currently hold more than $1 trillion in mortgages on their own balance sheet.
They were eventually “privatized”, but not really. The default risk that Fannie assumes is probably underwritten by the Fed. Although Fannie denies this, they also rely on the perception of the market that their bonds have a similar default risk to US Treasuries, which will always be paid off in the same nominal amount of dollars so long as the Fed can print money. The Greenspan Fed’s policy of “too big to fail”, and its reckless expansion of credit whenever a large player started to wobble further reinforced the perception that Fannie was an extension of the US Treasury. This gave Fannie an advantage in competing against private firms who have a higher cost of capital. As a result, they have come to dominate that segment of the mortgage market in which they are allowed to participate. . . .
One of the most destructive side effects of the GSE explosion has been their role in the housing bubble. As the buyer of first and last resort of residential mortgages, they enabled banks to recycle their capital into new mortgages. The risk that piles up on Fannie’s balance sheet difficult to quantify, but could become a huge liability when the credit expansion reaches its inherent limits. Their mortgage-backed securities have been a favorite asset class of foreign institutions and central banks in their accumulation of US$-denominated debt.
By funneling domestic and foreign credit into residential real estate, they have created a variant of the mal-investment that Mises first identified in his business cycle theory. Mises noted that the extension of bank credit to producers would result in a form of mal-investment from the creationg of more higher order capital goods than could be afforded given the amout of available savings. The GSEs enable credit expansion to fund the construction of residential real estate, while the socialization of risk defeats the markets’ mechanism for containing credit which would occur naturally if private parties were required to bear the risk. The result is an over-consumption of housing, a mal-investment in home building and mortage-brokering, and the creation of the liability associated with the interest-rate and default risk of the mortgage credit.
This problem was clearly identified in early 2005. The Bush Administration did nothing. The Republican controlled Congress did nothing. The Democrats, although in the minority, did nothing. Four Republicans stood up. Most had the reputation for being mavericks and out of step with the Bush Administration. The four? Chuck Hagel, Elizabeth Dole, John Sununu, and John McCain. The bill, was introduced on 26 January 2005:
Federal Housing Enterprise Regulatory Reform Act of 2005 - Amends the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 to establish: (1) in lieu of the Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development (HUD), an independent Federal Housing Enterprise Regulatory Agency which shall have authority over the Federal Home Loan Bank Finance Corporation, the Federal Home Loan Banks, the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac); and (2) the Federal Housing Enterprise Board.
Sets forth operating, administrative, and regulatory provisions of the Agency, including provisions respecting: (1) assessment authority; (2) authority to limit nonmission-related assets; (3) minimum and critical capital levels; (4) risk-based capital test; (5) capital classifications and undercapitalized enterprises; (6) enforcement actions and penalties; (7) golden parachutes; and (8) reporting.
Amends the Federal Home Loan Bank Act to establish the Federal Home Loan Bank Finance Corporation. Transfers the functions of the Office of Finance of the Federal Home Loan Banks to such Corporation.
Excludes the Federal Home Loan Banks from certain securities reporting requirements.
Abolishes the Federal Housing Finance Board.
John McCain spoke a year later, 25 May 2006, in favor of this bill. Not a single Democrat added their name to the bill. McCain was out of step with his party and with the Congress, but his words were prophetic:
Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.
The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.
The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.
For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac–known as Government-sponsored entities or GSEs–and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.
I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.
I urge my colleagues to support swift action on this GSE reform legislation.
I defy you to find Barack Obama acting with foresight or wisdom on this matter. He was too busy figuring out how to run for President. He could not find the time to reach across the aisle and lend his prestige to this matter. He was not the only Democrat absent on the Senate side.
Fair is fair and right is right. No matter what you might think of John McCain and his politics, on this matter he was a leader, a maverick, and ahead of his time. The same can be said of Chuck Hagel, John Sununu, and Elizabeth Dole. Everyone else, Republican and Democrat in the Senate, asleep at the switch. This is fact, not spin.
Finally, I would recommend you read the report prepared in April 2006 by Robert Eisenbeis, W. Scott Frame, and Larry D. Wall, An Analysis of the Systemic Risks Posed by Fannie Mae and freddie Mac and an Evaluation of the Policy Options for Reducing those Risks. Someone in McCain’s office was paying attention. We cannot say we were not warned. We were warned, we just did not want to listen.
(Release: November 13)
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My mother lived through the Depression and is scared stiff and even she doesn’t what this crap railroaded through Congress….
When does McCain get the respect he deserves on this issue?? Never, unless he forces the issue, big time!
McCain has to address all the lies from the Obama camp and the failure of the media to report what’s true…When does he bury Obama?? SOON, I hope!!
To change the topic…
The Sisterhood of Shared Indignities (A Double Post by kenosha Marge and InsightAnalytical-GRL)
http://insightanalytical.wordpress.com/2008/09/23/the-sisterhood-of-shared-indignities-a-double-post-by-kenosha-marge-and-insightanalytical-grl/
“We’ve teamed up to reflect on our early experiences with–and without–baseball gloves and how our sensibilites about being a woman have developed from there…and where we are now during this political season.”
kenosha Marge and InsightAnalytical-GRL”
“SIsters” and “Indignities”
All will be well next week when Obama begins his “Faith Tour” through key battleground states.
And Dems criticize Repubs for politicizing religion?!?
Holy Moly!!
http://www.cbn.com/CBNnews/447440.aspx
Excellent anti-Obama TV ads aimed at Values Voters now airing in PA, CO, & NM
http://blogs.abcnews.com/politicalpunch/2008/09/nra-firing-away.html
http://www.gunbanobama.com/
Memorable Animated Graphic Tag line on all ads: “DEFEND FREEDOM [drumbeat] DEFEAT OBAMA”
Yesterday became and anti-obama rally!
http://wcbstv.com/topstories/united.nations.general.2.823131.html
Fantastic Work on this Larry!!!
I am the LEAST (financial) wonkish person I know and am the least likely to read long blogs but I made myself go through this one.
Now how can we get busy anchors and MSM gurus to stop long enough to read the truth???? I’ve quit emailing them (no response or polite auto responders) whoopee! I’m sure they have specific emails set up to go through and everything else gets dumped once you’ve proven your disagreement.
(that’s how I have my email set up so why not them?) lol
They USED to read me.
We’re all turning into Ostrichs!
The anchors and MSM don’t want this information to get out because they are thoroughly in the tank for Barack Obama. I’m nearly 50 years old and I’ve been following politics closely since Nixon beat Humphrey in 1968. I’ve never seen the bias in the mainstream press be anywhere near as blatant as it’s been this election cycle.
mccain looks more and more liberal?! progressive?!!!!
I admit, we are very worried about the housing market because of our real estate obligations, but I agree that the more the Bush people insist that Congress MUST ACT IMMEDIATELY, the more I wonder what the heck they’re really up to that we won’t know until it’s too late. I’m not surprised Dubya has come up with a national crisis right before the elections. It’s what we’ve suspected all along. I’m very uncomfortable giving these people some kind of carte blanche.
Downstairs article about Biden shows what a bumbling administration Obama this ticket would have. Biden actually tried to say that Obama didn’t approve of the ageism ad, even though Obama says in it that he approved! It’s Bush III. I don’t want this team in charge of my pension, savings, income etc.
Any time anyone who is trying to sell you something (politician, salesman, whatever) tells you that you “MUST ACT IMMEDIATELY”; that is the time to get a secure hold on your wallet and read the fine print.
Yes, and that is why I like McCain’s proposal to make this deal available to the public.
I also like that McCain does not want to give Paulson that much unfettered power. That is a staggering amount of money to hand over to anyone without oversight.
I heard Sarah Palin say that (making the deal public) in her speech Sunday. On that idiot Wolf’s show on CNN…he said it was just her regular stump speech. I was jaw-droppingly amazed at how much more of a twit he was than I’d already thought he is.
I LOVE the idea that they present us, we the people, with itemized account sheets, on the internet, of how they’re spending our, we the people’s, money. Man, I like her more and more. The Dems are going DOWN! They helped create this mess, while giving us weak platitudes these past two years, doing virtually nothing. And as a registered Democrat, I’ve had ENOUGH. It makes me so mad that all they did was plunge into the money and help themselves, just like the Republicans have done all these decades.
Democrats for McCain/Palin ‘08 here
Remember how the whole extent of Obama’s foreign policy experience was a speech he supposedly made when he was running for the Illinois legislature in a liberal district in 2002 opposing the War in Iraq? By the way, I understand that there are no contemporaneous tapes of the speech but the media took it as gospel and has run with it and ignored all the other errors of judgment on Iraq and all the other statements after that where he vascillated on whether he agreed with Bush. But here there is a statement on the very point that is causing the financial markets, where McCain sought to regulate Fannie Mae and Freddie Mac, but we here nothing of it in the MSM. Worse, I have heard on both CNN and MSNBC people referring to McCain as a deregulator who now is shifting gears to be a regulator.
ahmainjehad knew about this because they are all in on it, just like they manipulated the gas, they are doing it to the markets tooo,,but i heard iran blew obama off today,,they arent talking to him or anyone, obama thinks he has control over these thugs of the world, but he is in for a big surprise, they are playing him..just the same as he is playing us
S. 190 occurred in late Jan. 2005. Barack Obama was in the Senate. Where was he? Did he notice? Did he care? He was “present” but unaccounted for when John McCain was seeking to avoid the devastation which has now occurred.
Since he has been a candidate, however, Obama has promised all sorts of things to Americans–tax cuts for “95%” of the people, right?
FLIP-FLOP! Wait for it….
Now, Barack Obama is promising to “cut spending” and to appoint a commission, and to establish an “office” to watch government spending–er, we already have a government watchdog, a very good one who has been warning for YEARS that the government was overspending and was in danger of imploding. His name (recently retired) is David Walker, Sen. Obama.
Obama has just stolen John McCain’s reform mantle.
Obama: The Audacity of Mendacity!
http://apnews.myway.com/article/20080922/D93BUL0O0.html
God, why can’t people see that Obama is just a chamelon?
Obama on Friday at the Debate: I have already said that I will cut government spending, but let me be absolutely clear that I will cut more than what John McCain has said. So don’t be confused, I will cut government spending. I will also add more government programs, but these will be paid with the 200 billion dollars that I’ll collect from the top 2 percent of the population, those rich enough to pay more taxes and keep smiling.
And all the Democrats applaud.
The media is not allowing people to see what Obama truly is, and what is going on.
Every time I happen by a cable news station, it seems that all I hear about are John McCain’s connections to lobbyists, and the potential for racism to affect the election.
And then I can’t watch.
Harumph. This brings up a pet peeve of mine.
I’m sick and tired of seeing the Democrats blamed for Republican screw-ups.
In case you haven’t noticed, Republicans do nothing but screw up and then blame the Democrats. It’s amazing they’ve stayed in business as long as they have with this scam.
I’m waiting for the Heritage Foundation report which proves that the George W. Bush Administration was Bill Clinton’s fault.
The double standard is clear. When the Democrats screw up, everyone says “Wow—did those Democrats screw up, or WHAT?”
When the Republicans screw up , everyone says, “Well…both parties screw up. The Democrats are really as much to blame as the Republicans.”
Poppycock, say I! The Republicans achieved control over all three branches of government in 2000, and they set about taking apart the New Deal.
Eight years later, and we are teetering on the brink of the Great Depression. This could only be a coincidence to a Republican.
AMEN!
Do you know what is going on in this country.
Are you OK!
The Democrats have been in charge of the Congress the last two years in case you did not notice. Where are their actions? Which of them signed on to McCain’s bill? NOT A GODDAMNED ONE. So both Republicans and Democrats stand accused. If the Republicans were in control of the Congress now i would concede your point. they are not.
Amen Larry!! Excellent post!
Democrats didn’t want to change a thing for the last 2 years because they wanted to use all the issues in the election in 2008. Nancy and Harry have been horrible!
Right On Morgan.
Some from BOTH elements are WHOLLY to blame.
however (and off topic but should be included)
The illegal right turn into Iraq was all Repugs (and one Lieberdon’t)
WE’re FRIGGEN BROKE cuz of IRAQ dudes!!
no matter how some of you will try to excuse it and act like it’s part of the past (so is fannie & freddie) I will NEVER forgive ruining our MILITARY in the SANDS of Iraq! Not to mention the “innocent” civilians caught in the cross fire! No one seems to give a shit about them!! They breathe FIRE Over a ZYGOTE but NOTHING “CRICKETS” over the what? 100, 200, 500 THOUSAND that died because of W’s & Chainsaw’s greed?????
and all those in BOTH HOUSES that were complicit!!!
Well I’ll survive under McCain but I’ll NEVER forgive or forget what HIS PARTY DID!!!!!! EVER!!!
so you all need to understand that at least half the country feels this way
sorry it’s just the truth
and I do like MOST of you here so I’m not trying to fight just be honest
peace-out
don’t start with the 911 shit cuz MOST of those pilots were Saudi
why didn’t we BOMB THE SHIT OUT OF SAUDI ARABIA????
NO ONE WILL BE HONEST ABOUT THAT EITHER!!
ARGHHHHHHHHHhhhhhhhhhhh!
Well, that’s not really what Larry is saying.
He’s saying that most of Congress was asleep at the switch on this matter when this shit went down. In this particular instance, it was a bipartisan snooze.
John Sununu is a total ass–as much of a jerk as his ass-pinching daddy–but he was a stopped clock on this issue–as we know, they’re even right twice a day. He got lucky. Chuck Hagel’s right on this matter, too–but does that mean he’s off the hook for his shenanigans with the voting machines? Hell, no.
I don’t think Larry is suggesting that the GOP as a group were more prescient in any way. He’s saying JOHN McCAIN was, and a few others went along for the ride.
It is pretty amazing that a freshman Senator like Obama can rake it in so nicely from the moneybags in the industry, like that….surely, they didn’t throw money at him just because they liked his smile, after all…
They weren’t just snoozing, they deliberately blocked this legislation in the Senate.
I hold the opposition party to a higher standard, sometimes, especially when they come to Congress claiming to stop the corruption.
It’s been two years. Still corrupt. And they were going to act on all this when?
And don’t give me excuses about Repug’s blocking them. I’ve already gone there and had to back out of that nasty, little hole. Truth is, they’ve done NOTHING. NADA. ZILCH. ZIP. Except maybe planning to foist this dirty candidate on us, via their nasty, dirty primary against loyal Democratic voters.
And no, I don’t think Republicans are going to save the day…they’ve already proven the opposite in spades. I just personally think that it’s my responsibility, as a citizen of a self-governing nation to tell all my representatives that they will stop lying, cheatin’, and stealing from me.
For now, that means I will be voting against them.
The Financial meltdown you are seeing is the result of Fraud at Fannie and Freddie. They had the DEMS on their side because they were giving loans to low-income people, that was what the DEMS wanted. Also take a look at who got money from Fannie, #1 Dodd, #2 Obama, #3 Kerry, they didn’t have much for McCain thouigh, maybe that tells you something. Franklin Raines, the CEO of Fannie that was removed in 2005, was the Head of OMB for Bill Clinton. The previous CEO was Jim Johnson, Obama named him to head his V.P. Search Group and Raines has been an Obama advisor.
It’s true that the Republicans since REagan have consistently messed up the economy.
Of course, what makes this election year totally weird is that the first president since FDR to straighten out the economy and implement truly democratic policies was Bill Clinton. The guy was wildly popular, he was the Democrats only success story since 1952 so you would think the Democratic Party would be determined to get him back and embrace Hillary. Instead, the Democrats push the only successful duo out of the Party and force a completely inappropriate, inept man onto the ticket. Then, the economy totally collapses and we know that the only person who could truly remedy this situation is Hillary. The Dems know this too and yet they were determined to keep her off the ticket and run her out of the Party. Weird, no?
I say there is something so rotten going on in the Democratic Party right now. Somehow, Obama’s backers are in this up to their necks.
Bill Clinton was popular because he governed from the center. I believe Hillary would have done the same.
There is something rotten in the Democratic party. You can thank netroots, moveon.org, the Daily Kos, etc. I’ve never seen such hatred and anger. And the way the forced the Clintons out? It’s scary what they’ve done and what they’re capable of doing.
Kaching!
That “prescient” 2005 Housing Reform bill also wanted to put the whole freaking thing under one new agency a la Homeland Security (BTW how’s that working out?): just like this bailout “plan” suggests doing as a new agency under the Secy of the Treasury this time. And who will that be running it if McCain is elected? Why, Phil Gramm: he of the Enron (you know Enron: the last bailout you financed) loophole, who will be the new Secy of the Treasury. I feel ever so much safer, knowing my old friend let’s-deregulate-the-markets Phil will be in charge, don’t you?
The Democrats are to blame for this. Through the Community Reinvestment Act, they compelled lenders to give loans to the “underserved”. They were underserved because they were credit risks.
The Dems:
- Mandated all banks entering into the new markets opened by Gramm’s 1999 Bank reform bill meet all CRA requirements. This guaranteed the infection of the international system by bad loans
- Controlled the corrupt management of Fannie Mae
- Steered Fannie Mae to give millions to Leftist organizations
- Steered Fannie Mae to give millions to Congress in lobbying money
- Blocked all reform and oversight movements by Congress
Here is a summary of all that went on in the 2000s…
This was no secret.. the Democrats in Congress did everything they could to keep control of Fannie and its millions.
FANNIE MAYHEM
http://online.wsj.com/article/SB121599777668249845.html?mod=googlenews_wsj
Paulson’s Fannie Test 07/15/08 – Does Hank Paulson want to leave the U.S. financial system better than he found it? That’s his test in the wake of his commitment to use taxpayer money to rescue Fannie Mae and Freddie Mac.
Fannie Mae Ugly 07/12/08 – Investors continued to flee Fannie Mae and Freddie Mac almost as frantically as the political class tried to reassure everybody there was nothing to worry about.
The Price of Fannie Mae 07/10/08 – It’s time Americans understood the price they could soon pay for the Beltway’s confidence game with these high-risk “government-sponsored enterprises.”
Too Political to Fail 04/21/08 – Fannie Mae and Freddie Mac aren’t held to the same standards of accountability as everyone else.
Fannie Mayhem 11/20/07 – Chuck Schumer is lucky Congress ignored his idea that Fannie Mae and Freddie Mac should ride to the rescue of the housing market.
Fannie More 10/23/07 – Barney Frank and Chuck Schumer have come up with a proposal that would increase the risk to taxpayers from Fannie Mae and Freddie Mac.
Fannie to the Rescue? 09/29/07 – Fannie and Freddie went up the Hill to fetch a pail of money.
Freddie Krueger Mac 05/10/07 – Just when you think they’re defeated, Fannie Mae and Freddie Mac arise in Congress to kill any attempt to clean up their dangerous habits.
The Fannie Tax 04/12/07 – Democrat Barney Frank and the Bush Administration seem to have found common ground on new rules for Fannie Mae and Freddie Mac. Naturally, there’s a catch.
Memo to Fannie 06/14/06 – A joke in Washington these days goes like this: “What’s the difference between Enron and Fannie Mae? Answer: The guys at Enron have been convicted.”
Freddie’s Friends on the Hill 04/27/06 – The Federal Election Commission sheds some light on how Freddie Mac rewards its friends.
Fannie Mae’s House 10/25/05 – Every Congressional session can be counted on to produce its share of bad bills. But the “reform” bill for Fannie Mae and Freddie Mac is in a class of its own.
Fannie’s Friends on the Hill 05/09/05 – Congress finally seemed ready to protect taxpayers from Fannie Mae and Freddie Mac. Then Republican Mike Oxley decided to ride to their rescue.
Fannie Turns a Page 12/23/04 – Fannie Mae – a slick, semiprivate firm operating with the patronage of politicians – is the kind of institution one still expects to find in a country like France.
Fannie the Centaur 12/17/04 – Understanding their half-man, half-beast nature is crucial to fixing Fannie Mae and Freddie Mac in the wake of their recent financial scandals.
Fannie Mae Liberals 10/14/04 – There were many moments of high entertainment during the House hearings on Fannie Mae’s creative accounting. But our favorite was the Mister Magoo performance given by Barney Frank (D., Massachusetts).
Fannie Mae Enron? 10/04/04 – The company was cooking the books. Big time.
Fannie Uncovered 09/23/04 – The housing-finance giant has been engaging in some accounting funny business.
Fannie’s Risky Business 02/25/04 – Alan Greenspan puts his credibility behind the cause of reforming Fannie Mae and Freddie Mac.
Christmas for Fannie Mae 12/23/03 – The Federal Reserve Board releases a new staff study about the impact of taxpayer subsidies for Fannie Mae and Freddie Mac.
White House Fannie Pack 11/11/03 – White House chief economist N. Gregory Mankiw dares to tell the truth about Fannie Mae and Freddie Mac. The mortgage giants were not amused, which means we’re getting somewhere.
Fannie Takes the Hill 10/09/03 – When the House of Representatives can’t get even a modest regulatory bill out of committee, the dangers of Fannie Mae become clear in reality.
Speaking Truth to Fannie 03/12/03 – The president of the Federal Reserve Bank of St. Louis warns of a potential crisis arising from Fannie Mae and Freddie Mac.
Fan and Fred Get the Business 02/19/03 – The year has not started auspiciously for the two mortgage-finance behemoths.
Fannie Mae’s Risky Business 09/23/02 – We’ve been suggesting that Fannie Mae was exposed to too much interest-rate risk. All of a sudden investors seem to agree with us.
Fannie Capitulates, Sort Of 07/15/02 – Fannie Mae and Freddie Mac end months of resistance, stonewalling and downright crankiness and agree to register their common stock with the Securities and Exchange Commission.
Fannie’s Inside Info 07/01/02 – Even in this post-Enron world, Fan and Fred do not provide as much information about these securities as private mortgage lenders do.
Inside Fannie 03/19/02 – Fan and Fred don’t function like other companies. They’re allowed to pile up debt, implicitly guaranteed by taxpayers, without being held to even the minimum of corporate governance standards.
Frantic Fannie 02/28/02 – Companies taking on so much risk and debt, and backed by taxpayers, ought to be more transparent in what they tell the world.
Fannie Mae Enron? 02/20/02 – Fan and Fred look like poorly run hedge funds: lots of leverage and snarkily hedged risk. Does the word Enron ring any bells?
PUMAs still not impressed with Obama - same numbers as in June - no decrease with the Dem convention
http://edgeoforever.wordpress.com/2008/09/23/pumas-still-not-impressed/
http://www.youtube.com/watch?v=BUJK3VUBVwg
This financial crisis has flipped the election on its head. And I do not think right now McCain is playing to his ultimate strength.
There will be no new programs outside of energy policy. It will be the opposite- hard decisons will have to be made to reign in spending. The courage to cut and veto intelligently. Someone needs to have the strength to say NO to special interests and party politics on both sides. Someone with the proven track record of building bipartisan coalitions to effect change and reform.
Barky Oblahblah doesn’t have the character, resolve, experience, or track record to lead. John McCain does.
ISNT IT FUNNY HOW AHMAINJEHAD KNEW ALL ABOUT THE COLLAPSE? GUESS HE HAS SOME FRIENDS HERE NOW DONT HE? HE HAS RANTED OVER AND OVER THAT AMERICA WILL COLLAPSE, AND WE WILL NO LONGER HAVE A MILITARY, AND HE IS COMING FOR US…GUESS THE DEMS ARE OPENING THE DOORS WIDE OPEN FOR THEIR BUDS
I’ve watched McCain speak and he is saying what you say he isn’t saying. It’s Obama who’s talking about spending, spending, spending, but the media isn’t covering it.
I am definitely going to watch the debate. Should be interesting.
Same old story, McCain is out there fighting back but the MSM isn’t covering it… just like with Hillary, and frankly with Kerry (I don’t like Kerry) But I would watch Kerry talk about things that would never get covered…in the MSM. They wanted BUsh and they want Obama! After the networks sold us the war in Iraq we shouldn’t listen to them anymore.
The debates are McCain’s only chance but if McCain wipes the floor with Obama… the networks won’t spend 20 hours talking about it… their commentary will be cut short.
Has anyone here considered that since Soros backs Obama, and Soros owns conrolling stock at Haliburton which has the contracts in Iraq and Afghanistan, perhaps Obama is set to fill the role of Bush? In this election, where nothing has been as it seems, and history will show us that everytime Obama was guilty of something he deflected/projected on his opponent first, that by his accusing McCain of being Bush 3, that it was part of the game plan to elect him and truly carry on Bush 3 through him?…I’m just saying
I didn’t just think it, I know it. He’s the corporate candidate, just like Bush was. Wonder if Biden will carry Cheney’s legacy in the VP slot?
Because Obama is going to cut government spending and increase government spending. He is the perfect candidate. He is for less and for more. Like the present Democrats in Congress. They are for more and more and more and more and more, but less and less and less of what the Republicans are for.
We need not a great depression, but a HUMONGOUS MEGA DEPRESSION by the hand of the Democratic Party that want to grow our government to 4.5 trillion dollars by 2012. And why? What’s the idea behind the Dem Party grow grow grow grow government policy? What is the idea behind that idea?
He needs to say it more and louder. He needs to blanket the TV with ads, drive home his message. Plus, when McCain speaks on the economy, he needs to talk in terms and give examples average Americans understand.
The new MSM is not reporting on this. Only FOX has said anything about this. I guess in the second debate McCain could hammer this home. But I just don’t see how he can get through the media bias. I stoped watching MSM for quite a while now but this morning I looked at CBS up to the minute and the reporting on McCain and Palin are extremely biased. I have never seen anything like this.
I agree John. I am really discouraged after watching months of lies, misinformation and distortion. I stopped watching MSM in the spring, but reading about it peripherally, the deliberate engineering of this election is outrageous, and even this kind of intelligent and honest analysis will not get to the average voter. Obama is out there railing against the “greed of CEO’s and Wall St.” and NO ONE challenges his lies and reveals that he is up to his neck in Wall St. cash. We see him walk away from one thing after another. The Fourth Estate is dead.
Agreed. I learn absolutely NOTHING from any news show except FOX.
No way is it perfect, but I’m finding more balance and truth there, than on any other cable station.
(A year ago, if you told me that I would be writing that, I would call you a f*king lunatic.)
CNN’s coverage of the democratic primary was a sham.
As a conservative that’s how I felt when I started to defend Hillary during the Primary.
I was like “whoa.. i’m defending Hillary Clinton”
well if an opportunity arises for McCain at the debate to bring this up, it will not be a matter of whether the media will report it unless they plan on pre-recording the debate and cutting out the parts they don’t want Americans to hear.
I think the debate is going to be a big opportunity for McCain. I think he will highlight he not Obama took at stand on this financial crisis two years ago.
And by the way, where was Hillary at on this issue? She asleep at the wheel too?
Remember how well Hillary did in the debates? Somehow that loser who can’t say anything but “uh,uh, uh,” is on the ticket.
Politicians in this country suck.
The media is pretty sure that when the people of America are on their knees begin for food, they will not be, that they will just be reporting. Because after all, everybody would still need to watch TV.
You have been super busy, Larry. Two OUTSTANDUNG reports in a row.
And I thought McCain has been quoted as saying he does not understand economics well. Does not look that way at all to me.
I wish that McCain’s campaign team and ad people could come up with a short, pithy way of explaining this in a 30 second political ad. The topic does not lend itself to that very well. But somehow, some way, the American public at large needs to learn and know about the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190 ASAP. Because if he does not Obama may very well be able to steal his thunder. And if there is one t5hing Obama is good at it is taking someone else’s ideas and stealing them and making them his own.
I agree, but I think that McCain saying he does not know much about economics really shows that he does know more than it sounds when he says that.
For example, I understand how hip replacement surgery works, but I would not say I know much about the procedure or that I could perform it…
IMO, part of wisdom is knowing what you don’t know and that we all have limitations. Only the ignorant think they have all the answers and understanding on complex issues.
I have tried three times to post
hopefully third time is a charm.
Look what is in the wall street journal.
http://online.wsj.com/article/SB122212856075765367.html
Everyone should READ THIS, it is not long and does a great job of Explaining the Problem and cause
Wow! Thanks for the link.
Have you thought about joining McCain’s campaign Larry? I think you could give him some terrific pointers!
Fantastic report. Thank you.
Larry - you always write the best articles and most of all Thank you for reporting the truth.
I am exited about the Obama / Ayers relationship being reported in the WSJ because many people read it anyway and more will probably be reading it because of everything going on in the Financial Markets. Obama has done nothing but lie about his relationship with Ayers.
Obama wants to be Commander in chief but only shows that quality when it come to taking and spending money but he is missing in action when it come to making a decisions. He has taken more money from Freddie and Fannie than Chris Dodd. why would he want to turn off his money machine? I hope I we will soon see an ad call MISSING IN ACTION which points out his present votes and shows he is not in touch with the Amercian people but his actions are all self motivated
OT, I had to get in the face of an aggressive Democratic supporter at my son’e Elementary school open house. There were several “concerned citizens”, a couple of who, that wore Obama buttons, who were trying to lobby a vote for a local candidate in the upcoming Nov. contests. The woman asked for my support, and I asked her which candidate this woman supported in the primaries. The woman looked at me with a puzzled expression, and replied that this woman supports Barack Obama. I said “Thanks, and you can keep your flyer”, she then said “Why are you asking”?, and I told her I needed to know, because I am A PUMA (she didn’t know what that was), and I am not voting for any Democrats this year who support Barack Obama. She started following me and asking me why, and she wanted to know if I was a Democrat. I told her I was not only a Registered Democrtat, but I also had been a 10th Congressional District Delegate for Sen. Clinton for the state of Virginia, and so was my husband. She kept following me, and asking me what I was planning on doing in the election, and I told her I am supporting John McCain now, and I am no longer supporting Virginia Democrats until all of the ones who supported Obama are voted out of their positions. The crazy woman would not step back, and was trying to block my entrance to the school, continuing to ask me why. I finally said “Why is Obama’s Financial Advisor, Penny Pritzer hosting an event for Ahmadighinidadwhatever in New York”? and I blew past her still sputtering away.
I pity the fool that gets in my face from now until November 4th. I am going on the PUMA site again and printing out Talking points for voting for John McCain, and reasons why Democrats should abandon the party, the same way we were abandoned, and give their support to McCain, as well. I will be traveling at my own expense to Battleground areas and leaving flyers on cars at football fields, and outside churches, and political rallies. McCain could use assistance in several key areas of Virginia, the western Philadelphia suburbs, and in particular, Southwestern PA. around Pittsburgh. Also, if you live near Michigan, Ohio, or Florida, I beg you to lend your time to the effort of defeating Barack Obama. Better to forfeit our weekends for six weeks, than to regret it for at least four years.
I know the feeling. If someone is persistent with me (I have been bombarded with Palin smear emails), I give them more information than they ever wanted about Obama and the DNC fraud. If someone asks, tell them about the reported caucus fraud, the suppression and manipulation of the vote in FL & MI, the race-baiting, the relentless lies & hypocrisy (”new politics!” while he runs smear ads against Clinton and McCain on radio, with flyers, and in Spanish), his associations with Rezko, Ayers, Emil Jones, and now Wall St. There is so much information–if she/or anyone else asks why: educate them. People have NO IDEA who he is because of the media manipulation.
Here in KY, the people who had Clinton yard signs now have McCain yard signs. KY has lots of Democrats and would have turned blue for Clinton, we aren’t racist, we didn’t turn blue for Kerry either. But I had to take my Hillary sticker off my car (when you go into Lexington or Louisville all you see are Obama )after Obama told his supporters to get in people’s faces I didn’t want my Hillary sticker to get my tires slashed!
I am hesitant to put a McCain sign in my yard for fear of vandalism as well.
In my part of the country, the opposite is true. Peoople Obama yard signs.
Make that…People vandalize Obama yard signs.
You go girl!!
I am in Indiana next door to Ohio. I will see what kind of help they need there. I am already signed up to help McCain here in my own state.
Does Barack Obama not know that we already have an office to monitor government spending? It’s called the GAO.
http://www.politico.com/news/stories/0208/8733.html
FLIP:
http://apnews.myway.com/article/20080922/D93BUL0O0.html
Hmm. Imagine that. Barack Obama loves privatization! Yeah, you can forget about those tax cuts for “95%” of the people, Obamabots.
FLOP:
Meanwhile, behind the Congressional Curtains in Oz:
How can anyone make a financial crisis which could eat up to a trillion dollars in government funds any worse? Demanding an appetizer of $50 billion more in government spending. Democrats have assessed that as their price for supporting the biggest federal bailout in history, and Barack Obama leads the chorus:
http://hotair.com/archives/2008/09/22/how-to-make-a-bad-situation-worse/?print=1
You ask:
Most of Obama’s so called brilliance; his brilliant points during his speeches are items that are already in place, have been in place or are being legislated in place. He appropriates for himself what has been done, what is, and what is being done. That my friend is BRILLIANCE. Is is also called pathological lying. Which together with ‘charisma’ makes of a wonderful person.
One needs to understand why Obama is a Democrat and is not a Democrat. Is the OHitler affect. Once the MEGA DEPRESSION ensues, and he takes complete control of the military by firing the entire Admiral core, he will then become the ‘Hugo Chavez’ of North America. And that’s how he will go into the history books for the people of the 22nd. Century to read about.
Outstanding work, Larry. I don’t follow the financial news very closely (because I don’t understand it well) and I greatly appreciate this well-researched, thorough, post. It’s vital that people learn this about McCain; I had no idea he had been talking about this issue so far back. Thank you for always being informative and enlightening!
Excellent post. Great research. Thank you, Larry.
Larry,
I cannot estimate the number of people whom I have sent to this site, and it is writing like yours above, that I recommend as a political must read to everyone I encounter, (including the crew of the Today show that were dispatched to our house last week). You really dig into a topic and give us the facts, which is something that has been in short supply in this election. Thanks for the hard work and research, and your dedication to bringing us the facts. We all know here at NQ that you are a Hillary supporter, but you have not let that obscure your journalistic responsibility to reporting the news. You, and other NQ contributors are to be applauded. Please keep up the hard work, and keep your integrity as you inform us and carry on the fight.
All the Today show will do is give Obama’s camp a heads-up on what is being said on this site so he can add it to the Truth Squad’s agenda for the next press conference. The Today Show is in Tampa today because “it is an important swing state” for the general election. They are brodcasting from the University of Tampa because “it’s a beautiful campus”. What they don’t say is that they are here because Obama is in Tampa this week and, as they are part of the Obama camp, they follow his every move.
Regardless, Liz, Larry is to be applauded, and I am thankful that the truth is out there (right here) for those who seek it.
My husband and I are anxious to see what the Today people will do with our interview. Trust me, we gave them plenty of facts about Obama, and we definitely told them we were Clinton supporters. In fact, they have a picture of my husband, my son, and me with Hillary last February. (I was crying because my mom died last year, and she loved Hillary, so I was overwhelmed when she stopped to talk to us) Anyway, it’s on tomorrow morning, and I must say the crew we hung out with all day were super. That being said, God only knows what they chose to air. It will only be about 2 minutes worth of tape, so who knows?
We don’t need anymore stimulus packages. Know what I did w my check? Stuck it in the bank. Alot of people paid for groceries, gas and utilities w theirs. That didn’t stimulate the economy. People need to buckle down, cut back on expenses and let McCain and Palin kick ass. This shit w bailing people out every time they make a mistake or giving them freebies they haven’t earned NEEDS TO STOP. People need to work hard and be willing to make some sacrifices when times get tough. I have a cell phone and had a landline phone. I barely use one let alone both. So I disconnected the landline and am saving $40 a month. I get $8 haircuts, I don’t buy shrimp at the store. I turn down the heat and a/c. I don’t go without but I have cut back. I don’t go out to eat all the time and I don’t smoke. Cut back on all things not necessary during tough times. We can’t keep racking up all of this debt.
I agree about the tax rebates. If we must save essential financial companies, that’s one thing. But the rebate thing is just fishing for votes. People should reject that.
That’s how bush won… 300 dollar checks! Funny that Bush could buy everyone off so cheaply. Obama is trying the same tactic but will be shelling out more… In his dreams b/c he is not going to win!
The Dems now know what Reagan knew and the Rep knew. That stimulating spending keeps the economy from tanking. Spending by the government keeps the economy from tanking. The money goes to the rich and everyone is happy. Except that a SERVICE SECTOR economy has an upper limit on that. Why? Because the revenue from goods go to the producing countries. Bummer. With that revenue they can buy Hawaii if they so choose.
Amen!! I agree 100%!!
Oh and downstairs Katie Couric asked Biden what did he think about the Republicans smearing such as the lipstick on a pig? What is she talking about? Obama made the lipstick on a pig comment.
Couric was referring to the fact that the Republican made use of the comments to reflect badadly on Obama. Any criticism of Obama is considered a “smear” because, of course, Obama has a brilliant record with how he treated Clinton and how he has treated other women. LOL.
We could go all day saying it was the Democrats or it was the Republicans. We must stop thinking of them as parties and refer to them as individuals. It’s time to get over it.
IT’S THOSE DAMN FOOLS WE KEEP VOTING IN! Regardless of party affiliation, each representative did this. It was ignored by them and perpetuated by them. We as Americans must stand up as ONE against those with personal agendas.
If we have not learned anything, especially with Obama taking over the DNC, conduct of the one with the buying power has the upper hand. It’s time we put a stop to all of them and do our homework to get people like this out of office.
Blame all you want by party affiliation, but I am personally watching and caring more what this government and the people we vote in are doing.
I wholeheartedly agree.
Yes, like the Illinois Combine, the Washington Combine is nonpartisan. But we have no choice but to vote those “fools” in, as those are the only options we are given, the only candidates money and its media approves of. Occasionally outrage will spill out into unelectable third party protests, but the Washington Combine grinds on.
Another aspect of the easy money flowing from these agencies was a glut of new construction, and especially larger, more expensive homes.
This drove the cost of building supplies through the roof!
As these residences sat empty, buyers who were unqualified financially were actually recruited with every incentive in the book!
Yesterday, I read that we taxpayers may get bombed with mortgage, credit card debt, car loans of other people!
Isn’t that RICH?
another true statement.
Wrong. Buyers were recruited to buy the homes that the middle class were selling when they wanted to buy newly constructed homes. And that included white flight. But with the value of the dollar plummeting, Europeans began buying more and more properties. Thus the excessive boom in the house construction sector.
it depends on what city you live in. Where I live they certainly were qualifying people for any and all types of mortgages by giving them balloon rates etc. and making the eligible when w regular restrictions they wouldn’t have been.
The unusually active hurricane and tornado seasons over the past couple of years have also contributed significantly to the price increases in building materials.
Gallup poll September 8-14 reported that McCain at 47% Obama at 45% now if you go back to the break down by education it looks like this
High school or less 41% Obama 48% McCain.
Some collage 42% Obama 51% McCain
Collage Graduate 44% Obama 51% McCain.
Post Graduate 58% Obama 37% McCain
According to the census:
9% hold post graduate degrees.
17% hold Collage degrees
27% hold some collage
47% hold High School or less
I guess they must assume that people with High School or less are not registered to vote at the same rate as the other groups. Otherwise, the numbers do not add up.
I don’t like the way this issue is playing out politically. There is no logical reason why Obama should be benefiting from it but he is. McCain and surrogates are not responding forcefully enough. I’m a little surprised this hasn’t triggered the first wave of 527 bombs. I understand the need for patience but we are coming upon the last week in Sept.
Peolple remember McCain’s economic advisor Phil Gramm’s remarks and they see McCain as out of touch on the economy and McCain’s comments last week back that up.
Found this on another site and I think it needs to be noted, exposed, and rejected!!
Under the appropriately named Section 8 of his unprecedented bailout swindle, Treasury Secretary Henry Paulson included a clause which decrees that none of his actions can be overturned or modified by any court or administrative agency. That would eliminate any legal challenges or appeals, and effectively place Paulson and his bailout operation above the law, creating a virtual bankers’ dictatorship.
The relevant section of his legislative proposal reads: “Sec. 8. Review. Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”
THIS MUST BE REJECTED!!
They are turning this bailout into a Christmas tree bill with no accountability or oversight. We must demand and have accountability and oversight in this bailout plan!!
I seen that was in there yesterday and was appalled. McCain has made the distinction and demands oversight of this amount of money. It’s insane.
Uh… Is it just me, or does that relevant section sound like total insanity?
“Someone in McCain’s office was paying attention. We cannot say we were not warned. We were warned, we just did not want to listen.”
I am not surprised that this issue got John McCain’s attention. Certainly, residential and commercial development had to be one of the top, if not the top economic force in his home state, Arizona.
Seeing the extreme activity in Arizona, even the most casual observer had to ask…who is buying these homes? Where are they going to work? Who is paying for the infrastructure? What’s going on here”
There are a lot more problems beneath the surface than just the obvious financial crisis. A lot of the problems could have been avoided by just enforcing existing state regulations in a number of areas. But the administration of Arizona’s Democratic governor looked the other way for a couple of reasons.
First, the revenues made the governor look good and she could expand the budget; and secondly, the political influence of the developer interests was absolutely obscene.
We need regulations and we need to enforce them and we absolutely need Congressional oversight over any Federal activity related to this crisis.
Smart words from 2006:
If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole. -John McCain
Stupid words from 2003:
”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63&sec=&spon=&pagewanted=print
Diane Swonk on Bloomberg Radio this morning was noting that both Dems and Repubs were asleep at the switch in Congress and that they allowed a crisis to occur before they somewhat woke up. There was “no political will beforehand.”
Elizabeth Dole on today’s congressional panel was noting that she was among those calling for new legislation a couple of years ago.
As far as I can tell this means Congress, even though leaning Democratic, has been doing NOTHING for the American people.
George Will has had enough:
http://comments.realclearpolitics.com/read/1/202799.html
KHP,
George Will says he is against imposing oversight on the institutions that have generated the current economic mess through their fraudulent practises. As an Obama supporter, given that he is bought and paid for by the authors of this problem, you must feel oddly cosy cavorting in bed with Will. It is funny to note that your cries against PUMAs oriented towards McCain, come while you are carrassing Will’s position.
Is it reasonable to assume that you also view regulation as an evil? Are not laws regulations?
SM
EXCLUSIVE: Maliki Suggests Bush Pushed To Extend U.S. Presence In Iraq To Help McCain:
http://thinkprogress.org/2008/09/23/maliki-bush-mccain-iraq/
nothing like going off topic to avoid discussion of the actual issue at hand.
dummy
Thanks Larry great work….
NQ the home where everyone can read and learn and come to their own decisions!
Obama has to prepare for 3 days for his debate. I am not sure if the past 20months has not helped how 3 days will lend a hand. No net advantage there I guess…
McCain is a LEADER. It’s as Simple as that.
Thanks Larry for putting together and adding to the pieces I’ve been posting and putting on my Blog.
I’m actually watching this boring thing now.
Paulson is full of it. Everyone knows that he needs to act now but the problem is his 3 page proposal didn’t do jack except give him power and immunity.
How can he come to the hearing without any idea about how he’s going to spend the money. Even if he clarified how he planned to spend the money in the Mae and Mac I think I would be more confident giving him money.
CNN says Paulson has a personal fortune worth $500-700 million, which he built as CEO of Goldman-Sachs.
I’m mildly curious how his own investments might be affected by the bail-out he’s proposing. Isn’t that something someone should be inquiring about?
If you’re looking for some responsibility for this crisis then, in the words of Deep Throat, “Follow the Credit Default Swap” and why it was not regulated.
Excellent Larry, thank you.
McCain voted for the Gramm-Leach-Bliley Financial Services Modernization Act. The deregulation measures contained in that legislation led to the sub-prime mortgage crisis. How can he claim his hands are clean?
McCain also voted for the Commodity Futures Modernization Act, which included Phil Gramm’s “Enron Loophole”. The “Enron loophole” exempted energy commodity trading from government regulation. Gasoline prices eventually skyrocketed–due to unregulated speculation, if not outright manipulation. The loophole was finally closed on June 18, 2008, when Bush’s veto of H.R. 6124 was overridden. Since then the average price for a gallon of gasoline has dropped by $0.37. McCain–who had voted for the bill containing the loophole to begin with– opposed H.R. 6124, the bill that ultimately closed it.
Johnson, ever since the shit hit the fan all the old Reagan sycophants have made a stampede for the Spic ‘N Span.
The sky is black with flights of chickens coming home to roost.
McCain has been an unfettered free market acolyte since he got to Congress in the Reagan years when the damage was first done.
Worse yet, McCain has voted with the Bush administration’s wishes, economic or not, 91% of the time. Then, to gag the maggot, over the last year he voted with the Bush administration 95% of the time.
Book ‘em Dano.
Great post Larry. Thanks for all the details. Obama is a fraud and the media is aiding and abetting.
I was just watching McCain answering questions in Freeland, Michigan. The topic was the $800 billion bail-out proposal–a $10,000 commitment on the part of every household in America, he pointed out.
A question came up: Where do we get the money? What will have to be cut from the budget to pay for this?
John’s answer? There’s no transcript yet, so I’ll paraphrase:
We need to cut taxes to grow the economy. Ireland taxes business at an 11% rate. Here, we tax business at over 30%.
So, we’ll deal with the cost of an $800 billion Wall Street handout by reducing their taxes, and reducing federal revenues?
John was also asked what he thought about including stimulus provisions in the bail-out package to ease the difficulties on Main Street.
Nope, says John. Nothing should be attached to the bail-out legislation. It should stick to it’s single defined purpose.
The way I read this–the reality of it—is that we’re basically just going create the bail-out money. The cost will be inflation–a further drop in the value of the dollar, which has already dropped 41% since Bush took office.
If anyone has a more cheerful interpretation, I sure would like to hear it.
Bail-outs are the price we pay for tax cuts.
That goddam Orangeman missed the circles of gold stars that riddled Ireland these past 15 years or so. The EU put into Ireland about as much as those Sasana bastards sucked out our blood over the past 700 years (before we bit the hand that bled us, of course). It is no wonder that they can offer low taxes, in some cases NO taxes.
So, kiddiepoos, how about going to the EU for a handout to lower our taxes and lure Intel back to our fair shores from Kildare?
The Government and the taxpayers are not exactly getting nothing for $800 billion.
Unlike when the Gov’t usually spends tax dollars, they are getting an INVESTMENT.
The proposal is to buy the bad debt in the form of either the bundled securities, or the actual paper loans. The purchase is proposed at 30 - 70 cents on the dollar.
Eventually, these loans may have more value than 30 - 70 cents on the dollar. In that case, the Gov’t and THE TAXPAYER stand to gain a profit.
The problem for Fannie, Freddie, and Investment Banks, is that none of them have anywhere near the assets to cover 800 billion in bad debt for 5 weeks, much less a few years.
The Fed Gov’t is the only entity that can cover that amount of liability.
And, at 30 - 70 cents on the dollar, the banks will still have substantial losses for their greed and stupidity.
Why hasn’t McCain et al put this information out there?? Mitt Romney and the gang should be bringing this up every opp they have on TV!
British take on this crisis at end of last year…
Comedians Bird and Fortune…
http://www.youtube.com/watch?v=mzJmTCYmo9g
Good research. Best summary, yet.
McCain has got to flood the airways with 1,000 video ads touting his foresight: Immediately! His actions clearly demonstrate his “maverick” characteristic. Kudos, as well to Dole, Sununu and Hagel.
So sad that 96 members of the Senate put their own interests ahead of the taxpayers who were, unknowingly, making the Fan/Fred con-men filthy rich.
I suggest going viral and emailing this post to everyone you know. I have.
“His actions clearly demonstrate his “maverick” characteristic”
McCain voted with the Bush administration 91% over it’s lifetime and 95% within this last year.
Maverick? That’s a lotta bull.
That’s a mule, not a maverick, townie.
Maybe you need to re-read the post. Your comprehension is a little short.
You dilettantes would not know Arrow-Debreu if it took a bite out of your collective ass the size of a dumpster.