You might recall, Obama tried this very same phrase back in 2008 with John McCain. It didn’t get much traction then, but that hasn’t stopped Obama from trotting it back out now, trying to scare the crap out of people and malign the Republicans all at the same time.

And may I digress for a moment and say, this whole thing about forgiving student loans at OUR expense pisses me off. I just paid off my student loans last month. I am not kidding. It is expensive to go to graduate school in New York City and Boston, but I did it because that is what I needed to do for ordination. No one forgave my loans, no one helped pay off my loans, and I damn sure didn’t ask my fellow taxpayers to cover the debt I CHOSE to incur. Just sayin’. Frankly, I do not think MoveOn.org should be dictating our public policy. But that’s me.

Ahem. But that is precisely what Obama is talking about doing in his current jaunt around the country at our expense, trying to get back the 20-somethings who have become disenchanted with The One. But it is not just at our financial expense, but at the expense of our Constitution. There is a reason we have checks and balances, and it is precisely to keep the president from acting as King. But that is not stopping the so-called Constitutional Scholar in Chief. No sirree. His claims belittling Republicans and Congress have gotten out of hand, and his rhetoric is negative, to put it mildly.

One Congressman who is not taking it sitting down is Rep. Paul Ryan. Ryan is fighting back against Obama’s allegations that the reason he willfully plans to violate the Constitution (and just WHEN is someone going to call him on that) is because those horrible Republicans will not pass any of his plans, damn their eyes. Not only does Ryan speak out against the plans, but claims, rightfully, IMHO, that Obama is “sowing social unrest.” I could not agree with him more (Photo by US Embassy Kabul):

“Instead of working together where we agree, the president has opted for divisive rhetoric and the broken politics of the past,” Ryan will say, according to speech excerpts. “He is going from town to town, impugning the motives of Republicans, setting up straw men and scapegoats, and engaging in intellectually lazy arguments, as he tries to build support for punitive tax hikes on job creators.”

“Pitting one group against another only distracts us from the true sources of inequity in this country – corporate welfare that enriches the powerful, and empty promises that betray the powerless,” Ryan also plans to say.

[...]

“Instead of appealing to the hope and optimism that were hallmarks of his first campaign, he has launched his second campaign by preying on the emotions of fear, envy, and resentment,” Ryan says, according to his prepared remarks.

“This has the potential to be just as damaging as his misguided policies. Sowing social unrest and class resentment makes America weaker, not stronger. Pitting one group against another only distracts us from the true sources of inequity in this country – corporate welfare that enriches the powerful, and empty promises that betray the powerless.” (Click here to read the rest.)

You tell ‘em, Rep. Ryan – that is PRECISELY what Obama is doing. He is playing people off each other, threatening them with doom and gloom should they not keep him in the White House, like the past 3 years have been anything to crow about (continued high unemployment, continued low house sales, escalating health costs, etc.).

Obama’s fear-mongering in an attempt to keep people in his camp is disingenuous at best, especially given his lack of effort in actually working with the House, and his convenient amnesia that the Senate is controlled by Democrats. I am glad Rep. Paul Ryan is standing up to Obama, and calling him out on his divisive rhetoric. It reminds me of why I wish he was running for president. Someone who actually has a grasp of economics seems like a mighty good choice to me right now, not to mention someone who doesn’t antagonize half of the nation.

But hey, that’s Mr. Unity Hope and Change for you – you can bet if he says something, the exact opposite is the case, at least as far as I can tell. How about you?

Meanwhile, now that Libya has made it clear that they are in a Sharia frame of mind, concerns are escalating about how things are going to turn out in the Middle East. Add to that Afghanistan saying they will stand with Pakistan against the United States, if push comes to shove. Oh, yippee. More good news from the diplomatic efforts of this Administration. Ahem.

Back here in the good ol’ US of A, seems folks are not too optimistic about the outlook of the country. In fact, over two thirds of voters feel the nation is in decline. Wow. That is pretty significant. Americans have been an optimistic bunch generally. We have believed if we worked hard enough, we could achieve great things. Now, not so much. That is a sad state of affairs, indeed.

Okay. Just getting us started. What is on your minds?

Here is Stuart Varney explaining it all:

Yes, you heard that right – $160 MILLION dollars we have shelled out for these folks thus far. It is in their contract. Nice.

Fannie and Freddie are STILL dragging us down, be it through paying for these executives, or continuing to lost money on mortgages. To recap, in 2008, Fannie Mae lost $58.7 BILLION dollars, and Freddie Mac lost $50.1 BILLION dollars. And we are already in the red to the tune of $145 Billion now since 2008. One can only hope that the bleeding of money from these two institutions will be stanched, and SOON. Until then, though, it is the mother of bailouts since we owe 80% of the two now. You don’t even want to know what the anticipated amount is to fix them. If you can stomach it, click here.

But I am not holding my breath that Fannie and Freddie will get their comeuppance, which is long overdue. Considering Obama is expected to assert he wants to keep his spending ways when he gives the SOTU Tuesday night, I sure don’t see him taking on these two F’s.

Speaking of Obama, why is everyone acting like his actually getting a 50% approval in a few polls is the greatest thing since sliced bread? Is this an indication of our poor performance in mathematics that we see that as a GOOD thing? Many polls still have him below 50%, which is not exactly a glowing recommendation in my book (unless someone is a meteorologist, and then being right half of the time isn’t so bad. Ahem.).

I don’t get it. But that is the meme going into the SOTU – how Obama is doing SO well. Being crappy half the time (or more) at your job is NOT a good report, people, no matter how the pundits might want to spin it. I believe that would qualify as an “F” by most (all?) academic standards. Or at least it was back when I went to school (we didn’t get the “well, even though you failed at your homework, and failed your test, we are still going to pass you because we don’t want to hamper your self-esteem” pedagogy. We had to earn our grades, had to pass our tests, had to do WAY better than 50%, if we wanted to move on. Just sayin’.)

So, we continue to be bilked by Fannie and Freddie. They will continue to get our hard earned tax paying dollars to continue to operate in the red. Obama will continue his spending, deficit increasing ways, and ALL of this is passed on to us.

Gee – and he’s getting close to 50% approval? I guess some people don’t mind throwing their money away, especially to bail out a bunch of guys who lied, lied, and lied some more. But I do. How about you?

I hasten to add, the stories of the six victims in Tucson, Judge John Roll, Christina Taylor Green, Giffords Aide Gabe Zimmerman, Phyllis Schneck, Dorwin Stoddard, and Dorothy Morris, need to be held in the fore, our prayers going out to their families. The continued updates regarding Rep. Giffords miraculous improvements, as well as the condition of the other 13 injured, is also important to keep in the fore.

But here are some of the things you may have missed. Amy Siskind of The New Agenda had a very interesting post about Obama, and the number of women in his cabinet/inner circle. Bottom line, it is low, as her post, “After Arizona, Will Obama Learn to Include Women?” indicates:

[snip] Yes, just as I was snapping to, Air Force One would be landing back in D.C. Senator Gillibrand and Congresswomen Wasserman Schultz and Pelosi would deplane and return to their 17% minority. President Obama would be head back to the White House — or should I say, the “fraternity house”: his inner-circle is composed almost exclusively of men.

Yes, to the president’s credit, he did appoint two women to the Supreme Court. That’s the end of the good news for women. Here’s the bad news:

* Obama’s cabinet picks are just 25% women.

* Obama’s czars are only 12% women.

* No women have leadership roles in running our country’s economy.

* Obama has only one woman in his inner-circle: Valerie Jarrett.

[...]

Paradoxically, Speaker Boehner in his opening days seems quite comfortable with women. One of his first symbolic gestures: to build a women’s restroom near the House floor. Next, Boehner shocked even me: he officially endorsed a woman for RNC chair (Maria Cino). And here’s a prediction: Boehner’s ability to cry in public will make it easier for women candidates to do the same in the future. Hey — I gotta admit — although I agree with Speaker Boehner on very few issues, I like the guy! He walks the walk for women on the right.

[...]

So I say this to our president: yes, let’s live up to the dreams of Christina Green, the nine-year-old who was tragically and senselessly killed in the Arizona shooting. The girl who was interested in politics and therefore came to see Congresswoman Giffords, Arizona’s only female representative in the U.S. House or Senate. Why don’t we have more women in leadership for girls like Christina to see and model after? And President Obama, what will YOU do to live up to her expectations? (Click HERE to read the rest.)

Yes, I can see why so many “feminists” wanted to support Obama over Hillary Clinton. He is SO good on the women’s equality issue – not.

But wait, there is more. Once again, LGBT groups are unhappy with Obama. Yes, yes, I know he signed the bill to repeal DADT, but he did blessed little to get that to come about, and did exactly what I thought he would do – have it in the Lame Duck session so he could blame the Republicans in case it didn’t pass.

Well, that is exactly what he did in terms of DOMA, but not before his Justice Department did this:

Supporting DOMA: Gay rights advocates are criticizing the Obama Justice Department after its attorneys filed a court motion Thursday in support of the Defense of Marriage Act despite the president’s view that the law should be repealed.

[...]

The Justice Department says it’s obligated to defend U.S. policy regardless of the president’s personal beliefs. The department made the same case after it had to, awkwardly, fight a judge’s ruling against “don’t ask, don’t tell” in the months before it was repealed by Congress.

But that’s no salve to the gay rights community, which has called on the administration to show more resolve against laws like DOMA. [snip]

And it is not true, either. Other Administrations have stood up to laws they thought were un-Constitutional, not continuing to defend them, as the Obama Administration has done repeatedly with DOMA. Indeed, it continues in that same vein in this filing:

[snip] “All families deserve the recognition and respect of their government. We know the president supports us. It’s time for him to help lead the American public toward full equality for all Americans,” Human Rights Campaign President Joe Solmonese said in a statement. The gay rights group said the Justice Department should at least “acknowledge that the law is unconstitutional.”

It does not. In its filing, Justice Department attorneys said the law was “not unconstitutional under this court’s binding precedent.” The Justice Department argued that the law “reflects Congress’s reasonable response to this still-evolving debate among the states regarding same-sex marriage.”

Why Solmonese, that Hillary Clinton backstabber, continues to act all insulted is beyond me, but I will spare you my diatribe on him this time around.

But here’s what I knew would happen with Obama:

[snip] “The Department of Justice has long followed the practice of defending federal statutes as long as reasonable arguments can be made in support of their constitutionality, even if the administration disagrees with a particular statute as a policy matter, as it does here,” the brief said.

“Indeed, the president supports repeal of DOMA and has taken the position that Congress should extend federal benefits to individuals in same-sex marriages. But a consensus behind that approach has not yet developed, and Congress could properly take notice of the divergent views regarding same-sex marriage across the states,” it said.

[...]

He told a gay-and-lesbian magazine last month that while a repeal of DOMA may not be possible, particularly with Republicans in control of the House, “that’s something that I think we have to strategize on over the next several months.” (Click HERE to read the rest.)

Yep, like I expected, Obama will blame the Republicans if it doesn’t get changed now. The Democrats were in control of the entire Congress for FOUR years, and now it is all the Republicans fault…(Civility? Oh, that is only for Conservatives, not Democrats.)

Here is a whopper of what came out this week. It was foretold by none other than Sarah Palin back in November when the government was looking to buy more bonds:

“All this pump priming will come at a serious price. And I mean that literally: everyone who ever goes out shopping for groceries knows that prices have risen significantly over the past year or so. Pump priming would push them even higher. And it’s not just groceries. Oil recently hit a six month high, at more than $87 a barrel. The weak dollar — a direct result of the Fed’s decision to dump more dollars onto the market — is pushing oil prices upward.”

I intentionally withheld the title of that article: “What Sarah Palin Gets Wrong About Inflation.” And that would be what, exactly? Haven’t all of those things, along with foreclosures setting another record high in 2010, and an increase in unemployment claims, come to pass? Yes.

In that same article, though, there was this (condescending) response:

[snip] Sudeep Reddy of The Wall Street Journal pointed out that Palin didn’t seem to be quite up on what’s been going on with inflation. In fact, he noted, grocery prices haven’t risen that much. “The consumer price index’s measure of food and beverages for the first nine months of this year showed average annual inflation of less than 0.6%, the slowest pace on record (since the Labor Department started keeping this measure in 1968).” [snip]

Hey, Reedy – guess which one of you is wrong here? I’ll give you a hint – it is not Palin. No need to take my word for it. Here is Stuart Varney discussing this issue:

These are just a few of the issues that have been going on this week (I know, Daley came onboard on Friday, but the massacre on Saturday pretty much knocked that way down, as it should have). Women still are underrepresented, Obama’s Justice Department is still targeting gay people, and we are increasingly in an economic world of hurt.

We cannot forget the victims of last week’s shooting, but nor can we allow ourselves to allow the political smoke and mirrors to distract us from what else is going on in our country.

What else happened this week that was low on the media totem pole? Consider this an Open Thread.

1. Can we now declare the HAMP (Making Home Affordable) program to be totally futile? How is it that everybody on Wall Street and in Washington is now promoting that the economy will be harmed if we forestall the mortgage foreclosure process? What the hell have the wizards in Washington been doing via HAMP and through Freddie and Fannie for the last 18 months? The simple fact is our policy makers have done everything in their power to inhibit the markets from working. Now, all of a sudden, they become proponents of free market principles? Were we born yesterday? Not here at NoQuarter.

I have continually harangued our Washington politicos for not allowing the housing market to clear, and highlighted how forestalling that process would only prolong our economic pain. We’re feeling that pain now and will be for the foreseeable future.

2. Where are we going with this moratorium?

Do the banks, mortgage servicers, and originators run significant  litigation risks for improperly foreclosing on selected mortgages? Perhaps, BUT I personally believe the smokescreen created by this process is a precursor to having Uncle Sam impose mortgage principal forgiveness as the price for settling the potential legal fiasco of improper mortgage foreclosures. Am I being overly cynical, if not outright conspiratorial, in my line of reasoning? The fact is I believe the White House has always wanted to write down mortgage principal as the mechanism to support housing. Does crafting principal forgiveness as the ‘settlement’ for alleged improprieties by the aforementioned mortgage originators become a convenient way to subvert the courts on the issue of contract law? I am not an attorney, but my gut instincts tell me we are headed in this direction. Who gets hurt under this scenario? Mortgage investors who hold the mortgages which will have some form of principal forgiven. On that note, let’s navigate further.

3. The imposition of principal forgiveness may actually be less expensive for banks and servicers than addressing the real root problem behind many mortgages. What is that problem? The fact that a lot of mortgages in our nation today were fraudulently underwritten from point of origination and were then fraudulently conveyed via mortgage securitizations. A handful of investors (including some FHLBS and Freddie/Fannie) have pursued legal actions to have these frauds unearthed and adjudicated in their favor. How would that work? The banks and originators would have to purchase the fraudulently underwritten mortgages back at par. That cost would be enormous. Forgiving principal on an original fraud will not necessarily cure the problem, BUT it does become a means of buying time or ‘kicking the can down the road.’ That, my friends, is all we have been doing for the last few years anyway, so why stop now?

In less polite terms, Wall Street and Washington have been and continue to be hard at work to continue to disguise the massive Ponzi scheme that was our nation’s economy. The moratorium on foreclosures may seem like the principals are trying to be good citizens. I view it in a decidedly different light. The principals on Wall Street and their cronies in Washington are looking for a means to write off the stranglehold of massive mortgage debt that continues to cripple our economy. These developments are merely the next leg in the great financial experiment playing out on our national stage and economic landscape.

Navigate accordingly.

Larry Doyle

I have no affiliation or business interest with any entity referenced in this commentary. As President of Greenwich Investment Management, an SEC regulated privately held registered investment adviser, I am merely a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

The challenges on our economic landscape remain daunting. While employment and manufacturing may be stabilizing, the housing and mortgage markets remain mired with real issues.

The issues within housing and mortgages are at the base of our economic crisis encompassing both Wall Street and Washington. From structured transactions on Wall Street to financial regulatory reforms in Washington, the issues ultimately come back to housing and mortgages. I will discuss all these issues tonight from 8-9pm ET as No Quarter Radio’s Sense on Cents with Larry Doyle. Bill Berliner is uniquely qualified to address these topics. Bill has extensive experience within the financial industry and currently shares this experience from his firm, Berliner Consulting and Research, LLC:

Berliner Consulting & Research is devoted to providing information, data, and advice on mortgage lending and mortgage-backed securities acquisition and management. Formed in 2008 by William Berliner, the firm is dedicated to providing outstanding information, advice, and commentary to its clients.

The firm provides advice and analysis to clients on a wide variety of mortgage products and mortgage-backed securities. Located in Southern California, Berliner Consulting & Research provides assistance in developing loan origination, securities valuation, and risk-management systems. We also help lenders and investors deal with the increased reporting required for directors and regulators by providing expert writing and report-creation services.

In regard to Bill’s background:

A respected analyst and author with a wide variety of experience, Mr. Berliner began his career in the Government Operations department at Bear, Stearns & Company in 1985. He was promoted to the trading floor in 1986, and eventually ran the position tracking (“Pops”) desk for the MBS trading desk. He worked in CMO trading from 1988-1993, when he left to join Nikko Securities. After stints at Nikko, Prebon Yamane, and the New York State Banking Department, he joined Countrywide’s Capital Markets unit as a CMO trader in 1996. He moved to the Fixed Income Research Department in 1998, and eventually ran the firm’s highly-regarded Trade Strategies Group until September of 2008.

Please join me this evening for what will be an engaging and informative discussion. Listen LIVE at the BlogTalkRadio website. Dial in with questions at 347-677-0792 or join our always energized chat room. As a reminder, all NQR shows are taped, archived, and available as podcasts on iTunes.

LD

Holy moley, did you catch all of that? Let’s see: Socialism, Check! Demean Tea Party members, Check! And on it goes.

Perhaps it was because of this speech that ACORN’s funds are once again on hold, as this article spells out:

Appeals Court Temporarily Reinstates ACORN Funding Ban

The ruling by the three-judge panel of the 2nd U.S. Circuit Court of Appeals in Manhattan will remain in place until full arguments on the issue can be heard during the summer.

A federal appeals court on Wednesday temporarily blocked a judge’s ruling that it was unconstitutional for Congress to cut funding to the activist group ACORN.

The ruling by the three-judge panel of the 2nd U.S. Circuit Court of Appeals in Manhattan will remain in place until full arguments on the issue can be heard during the summer.

Rep. Darrell Issa, the top Republican on the House Oversight and Government Reform Committee, who has led the charge against taxpayer funding for ACORN, cheered the ruling.

“I applaud the Court of Appeals for immediately addressing the effects of Judge Gershon’s attempt to legislate from the bench,” he said in a written statement. “With today’s action by the Appeals Court, the Obama administration must take immediate steps to re-implement the funding ban for ACORN Congress put into law.”

“In recent months, ACORN has undergone a rebranding campaign to disguise itself and its affiliates,” Issa added. “As a result, the White House and all federal agencies must be extremely vigilant to ensure that rebranded organizations who have continued to make deals and maintain connections to ACORN don’t receive taxpayer dollars.”

Well, this is certainly an interesting change of fortune for ACORN. Maybe all of that name changing sleight of hand raised some red flags. Or maybe the Court wanted to look a bit closer into the reasons why the Funding was restored in the first place:

U.S. District Judge Nina Gershon has ruled twice in the past six months that the funding cutoff was unconstitutional.

The Brooklyn judge said ACORN was punished by Congress without having gone through processes to decide whether money had been handled inappropriately.

A series of secretly taped videos filmed at ACORN offices around the country last year caught employees giving advice to a couple posing as a pimp and prostitute, sparking a national scandal and helping drive the organization to near ruin.

On Wednesday, attorney Mark Stern argued for the Justice Department that Congress did nothing wrong when it took action last year against ACORN after it identified “widespread mismanagement.”

Attorney Jules Lobel of the Center for Constitutional Rights said that funding for economically distressed people who receive government subsidies for homes was being blocked and that the money needed to be freed or some people would be homeless.

I am all for economically distressed people receiving funds to ensure they keep their homes. I am not all for the organization handling those funds to be rabidly partisan, and there is no doubt ACORN is that. It receives federal dollars – OUR dollars – as a non-partisan organization. That is but one of the many reasons why its funds are at risk, as well as charges of voter registration fraud, voter fraud, and a number of other potential hot-water issues.

It’s a shame, too – it didn’t have to be this way, but that is the road down which ACORN chose to go, no doubt emboldened by their relationship to Obama. They seem incapable of accepting responsibility for their own actions, blaming those who expect them to operate above board and want to hold them accountable for how they spend our money instead.

It could have been different, it SHOULD have been different. As a result of ACORN’s own actions, people who needed this money will not be able to get it. ACORN has no one else to blame for this but itself.

So, I wonder when we can expect their acknowledgment of wrong doing, and an apology for mismanaging our money? Yeah, I’m scheduling it for “Never.” How about you?

ACORN, the embattled community activist group, says it is disbanding.

The group, the Association of Community Organizations for Reform Now, claims it will close its affiliates and field offices by April 1st. But some of its critics think the move is really an April fool’s switch. They claim ACORN actually isn’t going anywhere, just rebranding under different local organizations with new names but with the same mission.

ACORN has faced a variety of allegations over the past two years, from voter registration fraud to Republican charges that it uses public funds for liberal political purposes. ACORN workers have gone to jail, and undercover tapes of ACORN workers seemingly giving advice on how to skirt the law especially made the group a lightning rod for criticism.

ACORN has denied the charges, pointing to its own commissioned investigation that found allegations against it baseless.

“ACORN has faced a series of well-orchestrated, relentless, well-funded right wing attacks that are unprecedented since the McCarthy era,” claims ACORN CEO Bertha Lewis. In a statement she said in part, “Our effective work empowering African-Americans and low-income voters made us a target.”

You know, I am so tired of being called a racist for calling people on their actions, and this is no exception. It has NOTHING to do with who ACORN helps, but HOW it helps them:

But critics say ACORN’s undoing is entirely its own fault.

“I don’t think we are done with this,” Iowa Republican Congressman Steve King, a noted ACORN critic, told Fox News. “This is a big step in the right direction because I believe they are a corrupt, criminal enterprise.”

King calls the move “a downsize of ACORN,” but believes its operations will be shifted to state organizations that “may well grow.” He says “tigers don’t change their stripes and neither to people who are operating in a corrupt fashion.”

Critics point to a variety of new local organizations that are springing up to apparently take ACORN’s place. In Brooklyn, New York the ACORN office now has a new sign: “New York Communities for Change,” and in Massachusetts the president of the new group, “New England United for Justice” is listed as Maude Hurd, the president of ACORN, in its articles of Organization.

There are a growing number of such local groups replacing ACORN, according to Matthew Vadum, of the Capital Research Center. He says ACORN Housing has changed its name to Affordable Housing Centers of America, Inc., and that other ACORN connected groups include: Arkansas Community Organizations, Alliance of Californians for Community Empowerment, and Missourians Organizing for Reform Empowerment.

“This is a trick, a public relations trick,” says Vadum, calling the move an attempt “to dupe Congress and the American people to think they have gone away and they have not.” He says “the same people are running the new chapters that have sprung up and in some cases, out of the same offices.”

Yep, that’s pretty much what I think, too, that this is more smoke and mirrors from the group for whom our Smoke and Mirrors President did his internship.

As a reminder of why ACORN’s funds were cut:

The moves in Congress to cut ACORN’s funding came after the shocking undercover video-tapes made by conservative activists James O’Keefe and Hannah Giles who posed as a pimp and a prostitute trying to secure ACORN’s help to open a supposed brothel using underage girls. A federal Judge has since declared the Congressional move unconstitutional, but the financial damage may have been done. Several federal agencies have cut their ACORN funding and ACORN even tried to use the example of the tapes for fundraising purposes.

Giles has not returned a request for comment on ACORN’s announcement, and O’Keefe told me he cannot comment because of the on-going investigation of another of his video projects. He and three others have been charged with trying to “manipulate” the phone system of Democratic Louisiana Senator Mary Landrieu. O’Keefe says he was engaged in a journalistic endeavor, going undercover to try and show that there was no problem with the Senator’s phone system during the run-up to the health care vote.

Another article goes into a little more detail from ACORN’s perspective:

ACORN to Shut Down in Wake of Scandal

The once mighty community activist group ACORN announced Monday it is folding amid falling revenues — six months after video footage emerged showing some of its workers giving tax tips to conservative activists posing as a pimp and prostitute.

“It’s really declining revenue in the face of a series of attacks from partisan operatives and right-wing activists that have taken away our ability to raise the resources we need,” ACORN spokesman Kevin Whelan said.

Again, it apparently has NOTHING to do with this organization engaging in voter registration fraud, voter fraud, and counseling in ways to subvert the tax system, among other issues. Yeah, it’s all “partisan.” Way to take any accountability there. What else is new??

But are they really disbanding? Like I said, I don’t think so. An ACORN by any other name is still ACORN:

Several of its largest affiliates, including ACORN New York and ACORN California, broke away this year and changed their names in a bid to ditch the tarnished image of their parent organization and restore revenue that ran dry in the wake of the video scandal.

ACORN’s financial situation and reputation went into free fall within days of the videos’ release in September. Congress reacted by yanking ACORN’s federal funding, private donors held back cash and scores of ACORN offices closed.

Earlier this month, a U.S. judge reiterated an earlier ruling that the federal law blacklisting ACORN and groups allied with it was unconstitutional because it singled them out. But that didn’t mean any money would be automatically be restored.

Bertha Lewis, the CEO of ACORN, which stands for the Association of Community Organizations for Reform Now, alluded to financial hardships in a weekend statement as the group’s board prepared to deliberate by phone.

“ACORN has faced a series of well-orchestrated, relentless, well-funded right wing attacks that are unprecedented since the McCarthy era,” she said. “The videos were a manufactured, sensational story that led to rush to judgment and an unconstitutional act by Congress.”

ACORN’s board decided to close remaining state affiliates and field offices by April 1 because of falling revenues, with some national operations will continue operating for at least several weeks before shutting for good, Whelan said Monday.

For years, ACORN could draw on 400,000 members to lobby for liberal causes, such as raising the minimum wage or adopting universal health care. ACORN was arguably most successful at registering hundreds of thousands of low-income voters, though that mission was dogged by fraud allegations, including that some workers submitted forms signed by ‘Mickey Mouse’ or other cartoon characters.

Yes, Mickey Mouse was but one fictional character “signed up” by ACORN workers. As I have noted about a GAZILLION times, they have been under investigation in up to 14 states, including Florida, Nevada, and Louisiana, for submitting THOUSANDS of false voter registrations. Recently, a conviction for voter fraud was returned in Pennsylvania for an ACORN worker.

So, enough with the “poor me” victim crapola. ACORN brought this on themselves with their underhanded, illegal dealings. Having to disband because their funding is cut is just what happens when organizations operate in unlawful ways.

But is ACORN really running out of money? Not if Peter Orzag has anything to say about it, and he does. That would explain the name changes, and the April 1st date:

While America is distracted by Democrats’ attempts to unconstitutionally ram government-run healthcare down the throats of the American people, the Obama administration began preparing to resume funding to President Obama’s favorite community organizing group.

The fiscal floodgates are opening for the Association of Community Organizations for Reform Now (ACORN), the president’s former employer and legal client, despite a congressional ban on funding the activist group that has long been a practitioner of election fraud.

In a March 16 memo Office of Management and Budget (OMB) director Peter Orszag quietly ordered federal agencies to resume funding the group whose employees were caught on hidden camera videos last year condoning a variety of crimes including child prostitution and tax evasion.

Well, I’ll be darned. Someone inside Obama’s office is making sure ACORN gets its funds restored, all while we are focused on the Healthcare Legislation. The ol’ “Look over there!” trick. Well, that sleight of hand almost worked. But now we know Obama’s buddy is looking out for his his buddies. Seems ACORN, or whatever it’s calling itself these days, is here to stay, if Obama has his way…

The assault on the principles of free market capitalism is escalating with news that banks are poised to start reducing principal balances on certain mortgages.

I empathize with those who are strapped, but I have never felt more strongly on a topic than this principal reduction. Despite any and all bulls*%# put forth by those in Washington, the principal reduction program is an enormous escalation of the violation of moral hazard which our country sadly continues to embrace. I have no doubt it will expedite the development of a socialized housing finance system.

Do not think for a second that banks will take the hit on these principal reductions. Who will take the hit? Me and you. Those who have worked hard, saved, played by the rules, and taught our children to do the same. I have no intention of changing that approach and will work that much harder to instill these virtues in my children. That said, these virtues are under assault under this program. My children’s future is being negatively impacted as the costs of principal reduction will be pushed off on them.

The Wall Street Journal addresses this topic this morning in writing, New Plan to Cut Some Mortgage Balances:

The White House will announce Friday an expansion of its foreclosure-prevention efforts to include reducing mortgage loan balances for some borrowers, a controversial step that policy makers have long resisted, people familiar with the plans said.

The revisions, which will also include temporary help for unemployed borrowers, serve as a recognition that the administration’s foreclosure rescue plan hasn’t kept pace with the rising number of souring loans.

Under the plan, the Federal Housing Administration (LD’s edit: the FHA is you and me, boys and girls) will take on a much bigger role in government efforts to avert foreclosures by allowing some homeowners who owe more than their homes are worth to refinance into government-backed loans, according to people familiar with the plans. The FHA, which doesn’t make loans but insures lenders against losses, already faces rising losses on loans it has backed.

Reduced balances, reduced rates, and taxpayers assuming the risk via FHA-insurance is socialized housing. Yes, socialized!!

The WSJ continues:

On Thursday, lawmakers and a government watchdog sharply criticized the administration’s effort to modify loans at a congressional hearing. Neil Barofsky, the special inspector general for the government’s $700 billion TARP, warned that the program risks helping few borrowers and could instead spread out the foreclosure crisis over several years.

Kick the can down the road and have our kids pick up the tab. Screw that!!

Herbert Allison, an assistant Treasury secretary, said that the administration didn’t “fully envision the challenges that we would encounter” but defended the program as the first wide-scale effort that had moved banks toward substantially reducing payments.

Herb, stop the bulls*%#! If the government didn’t understand, then they were too stupid. More likely, the government, including you right here, has lied and continues to lie to the American public.

So far, around 170,000 borrowers have received permanent modifications, while another 835,000 are in a trial stage.

The administration also has struggled to launch a program designed to encourage banks to modify second-lien mortgages. The administration is expected to increase incentive payments under that program.

Increase incentive payments? Read that as more taxpayer bailouts for a failed banking system. If you think you’re getting screwed. You’re right. You are. Your kids are getting screwed, as well.

You can read a copy of what I call the “Socialized Housing Manifesto” here. Now, let’s revisit fall 2008 when one young woman was truly prescient:

LD

U.S. Rep. Barney Frank (D-MA)

Banks are increasingly healthy, right? Our nation’s accounting rules promote real transparency and integrity in our financial reporting, right? Housing is bottoming, right? No, no, and no!

Why so pessimistic, you may ask? I am not pessimistic at all. I am merely searching for the truth in the midst of the smoke and mirrors on Wall Street and in Washington.

Thank you to our friends at 12th Street Capital for sharing a recently released letter from Congressman Barney Frank imploring the four largest banks involved in mortgage originations to write off second liens they are holding on their books at inflated values.

Why does Congressman Frank believe these loans need to be written off? The liens must be largely written off so that Washington can then compel banks to engage in writing down principal on first liens in an attempt to keep people in their homes. Keeping people and families in homes is certainly a worthy cause, but the process is fraught with all kinds of violations of moral hazards and assorted unintended consequences. When you hear that your neighbor receives a principal reduction, how long will it take you to go to your bank and demand the same?

Let’s review Frank’s brief, two-page letter (click on image below to access pdf document). Focus on Frank’s comment that the second liens have no real value but accounting rules allow the banks to carry them at artificially high values. Can you say, “cooking the books”?

What are the projected losses in these second liens? Well, how much of this paper is outstanding? The Wall Street Journal provides a bar graph in an article, Home-Savings Moves Afoot:

So, with $1 trillion in outstanding second liens on the books, the question begs as to how much of this indebtedness is current, how much is delinquent, and how much is truly worthless but not yet acknowledged. In discussions with those in the industry, suffice it to say, the most optimistic assessment is that the industry has at least a few hundred billion in losses yet to be acknowledged.

The larger banks addressed by Congressman Frank are the largest holders of these second liens. These banks do have earnings power given the free flow of liquidity provided by the Fed and accompanying capital markets activities. That is not the case with smaller institutions. How many of those institutions are already dead, but not yet buried?

Wonder why banks are reluctant to provide credit? They need to increase capital knowing these second liens are truly an ongoing sinkhole.

LD

The embattled liberal group ACORN is in the process of dissolving its national structure, with state and local-chapters splitting off from the underfunded, controversial national group, an official close to the group confirmed.

“ACORN has dissolved as a national structure of state organizations,” said a senior official close to the group, who declined to be identified by name because of the fierce conservative attacks on the group that began when a conservative filmmaker caught some staffers of its tax advisory arms on tape appearing to offer advice on incorporating a prostitution business.

Ah, yes – this is all the fault of that pesky James O’Keefe and those mean Republicans. It has absolutely ZIP to do with ACORN being under investigation in at least 14 states for voter registration fraud, and is under federal indictment in Nevada, or their participation in the mortgage lending crisis, or anything like that.

The article referenced above also has this Update:

A person familiar with the New York reorganization said the new group has a new board, including some relative outsiders, like an official at the union Workers United, Wilfredo Larancuent, as well as most of the old leadership.

But the impact appears to be minimal.

“It’s not like this is some kind of hostile thing,” said the New York source. “This is what Fox has produced. National Acorn and Bertha Lewis are continuing doing their thing, but the New York flagship has been forced into this new organization.”

“As far as the work in the communities and policy campaigns, no one will notice the difference,” the source said. “It’s people who still believe in their basic mission of fighting for poor people.”

ALSO: National ACORN says it continues to exist, despite the departure of state chapters, including also California’s, which departed under similar terms last month.

Yes, yes, it is clear – this has nothing to do with voter registration fraud, voter fraud, bad mortgages, or the fact that this is SUPPOSED to be a non-partisan organization that is working primarily to hep Democrats, including Obama, elected to office. Nope – it’s all because Fox News and James O’Keefe are mean to them. I got it.

Do they really think we are so stupid that we are not going to KNOW they are the same group as before? Hey, we’re not in Congress or anything – we aren’t THAT easily duped. I’m pretty sure we can keep up.

But guess who apparently cannot? Oh, yes indeedy – President Obama. Remember this little clip from his interview with George Stephanopoulos?

Wait until you get a load of THIS one:

Again, do these politicians really NOT know we have VIDEOTAPE??? Holy moley, Obama, you are way too young to be that forgetful. Oh, wait – that’s not forgetfulness, that’s flat out lying. No doubt, once ACORN has finished changing its name and banners, he’s going to claim he has NO idea who or what that organization is.

Hey, here’s a fun little contest we can have. “Liar, liar, pants on fire!” is a bit dated as an expression, and we so need a new one for Obama and the numerous whoppers he lets fly (not to mention most politicians). What pithy saying can you craft that about Obama and his numerous lies? This should be fun. Oh, and prize ideas, too, would be welcome. Have at it!

America doesn’t need legislators who operate by looking in the rear view mirror. With the sole exception of Frank’s remark in support of auditing the Fed, he offers platitudes that can only be compared to a social misfit. In fact, as I watched this clip, I constantly envisioned Barney collecting tickets and serving soda at a local theatre . . . said with all due respect to ticket takers and soda jerks.

For Barney Frank to effectively absolve himself of the massive and corrupt bankrupting of Freddie Mac and Fannie Mae is a sin. For America not to hold him accountable is a greater sin.

This clip runs 18 minutes. WARNING: Barf bags highly recommended!

LD

We witness that dynamic in almost all corners of our economic and political landscape. In the world of finance, no market segment seems to have fostered more lying than the mortgage business. It continues. Let’s navigate.

A strong and vibrant mortgage market is vitally necessary in order for our country to regain its economic health. Regrettably, the mortgage business has a bad reputation given the preponderance of lying. Far too many people took out oversized mortgages based upon inflated incomes. Those ‘liar loans’ have defaulted at exceptionally high rates.

Let’s turn the page as many mortgages are attempting to be modified. What do we learn? People are once again lying about their incomes, this time understating income in an attempt to have their mortgages modified to a lower level.

Thanks to 12th Street Capital for sharing a release from Making Home Affordable:

Permanent HAMP Waiver for Elimination of the 25% Trial Period Restart Rule #20091203 Supplemental Directive 09-01 (issued April 6, 2009) required borrowers to be reevaluated for a HAMP trial period if their verified income (as evidenced by the borrower’s documentation) exceeded the initial income information used by the servicer to place the borrower in the trial period by more than 25%. The borrower would be reevaluated based on the program eligibility and underwriting requirements and, if eligible, would have to restart the trial period.

With the issuance of this waiver, borrowers are no longer required to restart the trial period. The trial period payments would not be adjusted, but the permanent modification terms would be based on the borrower’s higher verified income.

What does this mean? In plain English, if a person intentionally understates his income level (that is, lies about his income), he no longer needs to restart the mortgage modification process but merely continues from that point based upon verified income level.

In essence, this waiver will promote people to lie about their income levels. Why? There is no downside to lying. People are not thrown out of the process nor even sent to the back of the line. They stay in line, adjust their income levels if caught, and continue along.

Why is Uncle Sam promoting this practice? The numbers of successful and permanent mortgage modifications are so abysmal that Uncle Sam will do almost anything to expedite the process and inflate the numbers.

What should happen if people lie during the mortgage modification process? They should be told, “get the hell out of here and don’t let the door hit you in the back on the way out.”

What is happening? Nothing. With this waiver, people actually have an incentive to lie . . . and when not properly addressed and punished, it will perpetuate.

We have become a nation of liars.

That is no foundation for long term economic health and prosperity.

LD

Home Affordable Modification Program (HAMP) Snapshot through November 2009

HAMP Trial Plans Offered to Borrowers

Making Home Affordable Program Servicer Performance Report Through November 2009

Number of Requests for Financial Information Sent to Borrowers (Cumulative): 3,137,548

Number of Trial Period Plan Offers Extended to Borrowers (Cumulative): 1,032,837

All HAMP Trials Started Since Program Inception: 759,058

All Active Modifications (Trial and Permanent): 728,408

Number of Active Trial Modifications: 697,026

Number of Permanent Modifications: 31,382

What does that 31,382 figure under the permanent modifications represent? 4% of all active modifications and 1% of those who have been solicited. At this rate, we will be waiting a LONG time for this program to have a meaningful impact on our housing market.

Where is this leading? Mortgage cram-downs. Reps. John Conyers and Barney Frank are starting to wave the cram-down flag once again. For those unfamiliar with a mortgage cram-down, it is the practice of reducing principal on the mortgage. In the process, the homeowner will be less underwater or not underwater at all and thus choose to stay in his home. Given the fact that there is no free lunch, taxpayers pick up the tab along with investors who have purchased mortgage securities backed by these mortgages.

Expect a massive fight over the implementation of mortgage cram-downs in 2010.

Thanks to our friends at 12th Street Capital for sharing the link to the Making Home Affordable Program.

LD

Related Sense on Cents Commentary:
   What is a Mortgage Cram Down? (January 1, 2009)

The U.S. Department of the Treasury and Department of Housing and Urban Development (HUD) today kick off a nationwide campaign to help borrowers who are currently in the trial phase of their modified mortgages under the Obama Administration’s Home Affordable Modification Program (HAMP) convert to permanent modifications. The modification program, which has helped over 650,000 borrowers, is part of the Administration’s broader commitment to stabilize housing markets and to provide relief to struggling homeowners and is a primary focus of financial stability efforts moving forward. Roughly 375,000 of the borrowers who have begun trial modifications since the start of the program are scheduled to convert to permanent modifications by the end of the year.

375,000? I will take the under on that. Why? As I highlighted on October 29th in my commentary “Mortgage Modifications: Statistically Insignificant”, up to that point a whopping 1,080 mortgages had been successfully and permanently modified. Policy makers believe 374,000 mortgages will be successfully and permanently modified in the last ten weeks of the year. Who’s zooming who? Would they like to place a wager on that? I’ll give odds.

Through the efforts being announced today, Treasury and HUD will implement new outreach tools and borrower resources to help convert as many trial modifications as possible to permanent ones.

Without spending excessive time detailing the administration’s efforts, the fact is very little has changed with their basic approach. They will attempt to facilitate the modification process by compelling mortgage servicers to perform.

Servicer Accountability. As part of the Administration’s ongoing efforts to hold servicers accountable for their commitment to the program and responsibility to borrowers, the following measures will be added:

– Top servicers will be required to submit a schedule demonstrating their plans to reach a decision on each loan for which they have documentation and to communicate either a modification agreement or denial letter to those borrowers. Treasury/Fannie Mae “account liaisons” are being assigned to these servicers and will follow up daily as necessary to monitor progress against the servicer’s plan. Daily progress will be aggregated by the end of each business day and reported to the Administration.

– Servicers failing to meet performance obligations under the Servicer Participation Agreement will be subject to consequences which could include monetary penalties and sanctions.

If in fact they do not perform or are delinquent in the process, the administration has agreed to publicly highlight their ineptitude. I read this as shaming them into performing. Does the administration truly think that approach will work? How do you shame the shameless? The banks that originate and service these mortgages are so far beyond being shamed that the mere thought of the administration considering this approach is comical.

Shaming banks at this juncture is the equivalent of stating, “the beatings will continue until morale improves.” The problem is the banks are not receiving the beatings but au contraire, the banks are dispensing the beatings on both Washington and America.

Make no mistake, Wall Street still owns Washington. Socialized housing is akin to pissing into the wind. Where is this headed? Do not be surprised to see the Obama administration look to reignite efforts for mortgage cramdowns in which mortgage principal is reduced.

LD