Economist Jeffrey Miron - $700 Billion Bailout - NO!

Quoting Economist Jeffrey Miron
(I inserted the link):

“This bailout was a terrible idea.”

“The fact that government bears such a huge responsibility for the current mess means any response should eliminate the conditions that created this situation in the first place, not attempt to fix bad government with more government.”

“The bailout has more problems. The final legislation will probably include numerous side conditions and special dealings that reward Washington lobbyists and their clients.”

Click the image & read the rest:

Click here for the primary post on the cause of the housing mess.
Click here for the primary post on this terrible bailout proposal.

CRA Thugs

Click the image to enlarge:

Click here for more cartoons.
Click here to read the primary post on this topic
(and all the rest).

The Obama Youth Movement

A simple plea to so-called “Liberals”:

Let your kids be kids!

Stop scaring your kids to death
with your Eco-Extremist propaganda:


Stop indoctrinating your kids
into your totalitarian ideology:

Click here (and beyond) for the original unedited
Obama Youth video and some great commentary on it.

al-Qaida and Thermobaric Bombs

Quoting WorldNetDaily:

“Investigators now believe the bombing on Sep. 21 that killed dozens and left massive damage at the Islamabad Marriott, including a gaping hole in the ground in front of the building, was a crude form of a device that intensifies and enhances an explosive – a thermobaric bomb, according to a report from Joseph Farah's G2 Bulletin.

The bomb was delivered in a truck that contained what investigators believe was aluminum powder in addition to grenades and artillery shells. The aluminum power [SIC] is believed to have been responsible for the acceleration and expansion of the impact of the bomb.

While barriers around the hotel kept the truck bomb at some distance from the structure, the devastation indicated that there had to be something capable of raising the devastation level considerably.”

Click the image & read the rest:

Now, recall this post (and more).
Do you REALLY want a President Obama?

Click here for all posts on Obama.

I Want One

Quoting The U.K. TimesOnline:

“A small black shape dropped into sight in my aeroplane's windscreen as we circled high over Calais in a brilliant blue haze after lunch today. Yves Rossy had just leaped from the safety of his jump plane. Following behind, we watched in awe as "Fusionman" extended the eight foot wings strapped to his back, ending his free-fall and swooped into level flight.

Like a black hawk, Rossy throttled up his four little but noisy jets, accelerating in level flight to over 100 knots and headed out towards the thin white line that shimmered through the haze on the other side of the Channel. The distant Dover Cliffs were the only thing we could make out in the intense blue goldfish bowl in which sky meets the sea with no horizon.”

Click the image & read the rest:

700 Billion Dollar Bailout and The TED Spread

A metric known as “The TED Spread” may be what caused Secretary Paulson to panic and request a $700 Billion Bailout. If so, I wish he would have mentioned it when addressing the Senate Banking Committee.

Quoting Wikipedia:

“The TED spread is a measure of liquidity and shows the degree to which banks are willing to lend money to one another.”

Click here for a chart of “The TED Spread” and examine the 5 year history.

Click here (for a somewhat dated chart) and note that recent spreads in excess of 300 basis points are higher than levels reached during what some call “The Crash of 1987”.

But, click here for a chart of the S&P500 Index and put the so-called “Crash” of 1987 in perspective.

Personally, I am NOT convinced that “The TED Spread” justifies this $700 Billion Bailout. But, at LEAST we now have a somewhat legitimate metric to debate and discuss.

Speaking of which, quoting Felix Salmon:

“I think… so long as banks can borrow from the central bank overnight, the TED spread is largely unrelated to their real-world cost of capital. Which doesn't make me an optimist, by any means. But I do think that the TED spread can remain elevated for some time without the world coming to an end.”

Click here to read the primary post on this topic.

Chavez With Nukes?

Quoting Fox News:

“President Hugo Chavez said Sunday that Russia will help Venezuela develop nuclear energy — a move likely to raise U.S. concerns over increasingly close cooperation between Caracas and Moscow.”

Click the image & read the rest:

Do you REALLY want a President Obama?

Click here for my primary post on Obama.

Click here for the next post on Obama.

Second CRA Video

Regular readers:

Just updated: A second must see video was just added to this post.

Burning Down The House - Substantiations

Below, you will find citations substantiating
almost all assertions presented in the second video in the post titled:
1977 Community Reinvestment Act - Carter, Clinton, Obama.

Note: Clicking the previous link will open a new browser instance so that you may pause the video and come back to this page to substantiate any given assertion.

I may add a few more citations over time.
Some citations will disappear over time (as the sources delete them).

1) Timestamp = 0:23
Subprime Lender Implosion: Bad Omen For Housing Market

2) Timestamp = 0:35
Wikipedia - Community Reinvestment Act

3) Timestamp = 0:47
Wikipedia - CRA - Clinton Administration Changes of 1995

Note - The following quotes have, for reasons probably to do more with politics than fact checking, been removed from the Wikipedia entry. However, for now, both quotes are still available in the Google cached version:

“Part of the increase in home loans was due to…lenders, like Countrywide, that do not mitigate loan risk…using the new subprime authorization”

“The revisions allowed the securitization of CRA loans containing subprime mortgages.”

4) Timestamp = 1:00
Equitable Development Toolkit - CRA
Also see the home page for the above citation.

5) Timestamp = 1:03
The Trillion-Dollar Bank Shakedown That Bodes Ill for Cities

6) Timestamp = 1:10
Bear, Stearns & Co. Price Securities Offering Backed By Affordable Mortgages

7) Timestamp = 1:15
Fannie Mae Announces Pilot to Purchase $2 Billion of "MyCommunityMortgage" Loans

8) Timestamp = 1:20
Going Subprime

9) Timestamp = 1:22
Chart of Fannie Mae Subprime, Alt A, Other Purchases 1995-1999:
Still looking (charts are harder to Google).

10) Timestamp = 1:26
OFHEO Price Index Chart (subset looking at 1992-1998):
See this chart, from page six of this document.

Side Note: For purposes of understanding that the national housing market bottomed out in February of 2008, the above links documenting “quarterly price change” and “four quarter price change” should be compared against the monthly median sales price data presented in this post.

11) Timestamp = 1:44
Fannie's Perilous Pursuit of Subprime Loans

12) Timestamp = 1:49
Chart depicting “Adjustable Rate Loans” & “Affordability Products”:
Derived from this chart from page 2 (as Adobe sees it) of this document.

13) Timestamp = 1:52
Another quote from - citation #7:
“give flexibility to lenders by allowing variances that borrowers need to qualify for loans”

“These variances apply to… loan-to-value ratio, borrower contribution, housing expense-to-income ratio, and others”

14) Timestamp = 2:09
Still looking for a substantiating source for these assertions:
“2004 Fannie Mae Subprime Loans: 92% were Variable Rate”
“2005 Fannie Mae Subprime Loans: 91% were Variable Rate”

14A) Timestamp = 2:12
Still looking for a substantiating source for the stacked chart of:
“Fannie Mae Subprime, Alt A, Other Purchases”
(stacking “Variable Rate” on “Other”)

15) Timestamp = 2:19
An expanded view of citation #10 to include more years of data.

16) Timestamp = 2:24
Chart depicting “Variable Rate Mortgage Payments Explode”:
See this chart from this page.

17) Timestamp = 2:34
Chart depicting “Loans with Affordability Features and Adjustable Rates Have Lost Significant Market Share”:
This is an expanded view of one of the charts in citation #12.

18) Timestamp = 2:38
Caused the Collapse of Subprime Credit Organizations Chart:
This chart from page 3 (as Adobe sees it) of this document.

19) Timestamp = 2:45
An even more expanded view of citation #10 to include more years of data.

20) Timestamp = 2:48
Skyrocketing Subprime Delinquencies Chart:
This chart from page 3 (as Adobe sees it) of this document.

21) Timestamp = 2:53
Options expert calls Fannie, Freddie shares 'worthless'

22) Timestamp = 2:57
Regulators Spin Public to Boost Fannie, Freddie: Jonathan Weil

23) Timestamp = 3:01
12th bank failure of the year announced

24) Timestamp = 3:09
IMF says US crisis is 'largest financial shock since Great Depression'

25) Timestamps = 3:20, 3: 22, 3:25, 3: 28, 3: 35
Charts of Home Prices & Inflation:
I believe the data come from The National Association of Realtors and the Bureau of Labor Statistics. I will probably create my own chart and cite the sources. For now, there are similar charts available which document the decoupling of home prices from CPI just after Clinton’s revisions to the CRA (and predict, in 2006, the bursting of the housing bubble).

26) Timestamp = 3:46 through 4:07
New Agency Proposed to Oversee Freddie Mac and Fannie Mae includes:

A) These quotes:
“The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.”

“a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.”

“Supporters of the companies said efforts to regulate the lenders tightly under those agencies might diminish their ability to finance loans for lower-income families”

B) This quote from Barney Frank, (D-MA):
“The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

C) This quote from Melvin Watt, (D-NC):
“and in the process weakening the bargaining power of poorer families and their ability to get affordable housing”

27) Timestamp = 4:17
John McCain Warned of Mortgage Collapse In 2005

28) Timestamps = 4:23 through 4:33
S. 190 [109th]: Federal Housing Enterprise Regulatory Reform Act of 2005

29) Timestamp = 4:42
Chris Dodd’s Loan Problem

30) Timestamp = 4:52
Obama turns to trusted political insider Jim Johnson for key campaign role

31) Timestamp = 5:21
Barack Obama advisor Jim Johnson quits under fire

32) Timestamp = 5:25
James Johnson resigns from Obama team

32A) Timestamp = 5:29
The “Center for Responsive Politics” site reports this data.

33) Timestamp = 5:37
Countrywide Friends Got Good Loans
(Raines - $7.6 million dollar home)

34) Timestamp = 5:40
Advice from Raines
Note: Obama has tried to run from this one. But, I believe Ann Althouse has proven neither Obama nor the Washington Post can run from this one.

35) Timestamp = 5:52
On the Outside Now, Watching Fannie Falter:
“Franklin Raines, who stepped down at Fannie Mae four years ago, now has an office with a view of St. Matthews Cathedral at Revolution offices”

36) Timestamp = 5:57
This graphic from Countrywide Friends Got Good Loans

37) Timestamp = 6:02
Senior Fannie Mae bosses resign

38) Timestamp = 6:09
All Recipients of Fannie Mae and Freddie Mac Campaign Contributions, 1989-2008

39) Timestamp = 6:12
Fannie Mae contributions per year in Congress:
Various sources have done this calculations based on this data.
One example is found in this chart from this page.

40) Timestamp = 6:29
Miner, Barnhill and Galland - Chicago, Illinois - Obama’s employer.

41) Timestamp = 6:38
OBAMA'S LEGAL CAREER (fighting the utterly fabricated “red-lining”)

42) Timestamp = 6:53
Schools in Chicago Are Called the Worst By Education Chief

43) Timestamp = 6:56
Obama, Education, and Accountability

44) Timestamp = 7:00
Kids' protest highlights rich-poor schools gap in Illinois

45) Timestamp = 7:13
The Immigration Debate: Its Impact on Workers, Wages and Employers

46) Timestamp = 8:18
Fannie Mae, Freddie Mac blind to bubble

47) Timestamp = 8:20
4 Fannie Mae senior execs resign

48) Timestamp = 8:22
Pelosi: Dems bear no responsibility for economic crisis

49) Timestamp = 8:34
Obama Ridicules McCain's Economic Response

New CRA Video Citations

Regular readers:

Just included: Don’t miss the cited source list for the new video recently added to this post.

New CRA Video

Regular readers:

Don’t miss the new video just added to this post.

Obama on Funding The Troops

Biden vs. Obama:

Click here for a discussion of
how this relates to last night’s debate.

BEA Reports Q2 GDP Grew at 2.8%

Yesterday, lost amid all the financial hysteria, was the fact that the BEA “final” report indicated that Q2 real GDP GREW at 2.8%.

Click here and review that latest update to “The Recession of 2008 That Wasn't?”.

Clinton, Raines, Fannie Mae and Obama - 9/30/1999

Quoting The New York Times from 9/30/1999:

“In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.”

“Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

‘Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,’ said Franklin D. Raines [current Obama advisor?], Fannie Mae's chairman and chief executive officer. ‘Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.’ ”

“In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.”

Click the image & read the rest
of this damning tale:

Also see:

1999 NY Times Article Revealed True Cause of Current Fannie Mae Crises

Barney Frank's Bankrupt Ideas

Testimony
Sandra F. Braunstein, Director, Division of Consumer and Community Affairs
The Community Reinvestment Act
Before the Committee on Financial Services, U.S. House of Representatives

Click here to read the primary post on this topic
(and all the rest).

Are We at an Inflection Point?

Anybody who was not a politically aware adult at the time that Nixon and Carter overregulated the economy would do well to read this and help prevent us from repeating the dreadful mistakes of history.

Quoting NRO:

“You can sum up much of 20th century history by saying that in the 1930s Americans decided that markets didn’t work and government did, and that in the 1970s Americans decided that government didn’t work and markets did.

The protracted and painful experiences of those decades changed basic public attitudes on the balance between government and markets, between regulation and enterprise, between government aid programs and self-reliance. The breadlines and depression of the 1930s moved Americans in one direction; the gas lines and stagflation of the 1970s moved them in the other.

Which raises the question of whether the financial ructions of 2007-08 (09?) will move them back again. One reason to believe this is possible is the passage of time. Americans in the 1980s and 1990s were ready to accept deregulation and tax cuts and welfare reform because so few of them had personal memories of the 1930s.

In 1992, Bill Clinton ran as a different kind of Democrat because so many voters then had personal memories of the 1970s. Today, fewer do. Half the voters did not reach adulthood until the 1980s. They never sat behind the steering wheel in a gas line or paid monthly bills as inflation was skyrocketing. It’s plausible that they may be more open to big government programs than their elders.”

Click the image & read the rest:

Click here for another excellent insight.

P.S.) Anybody who thinks “Big Government” Socialist programs ever worked to
the benefit of the nation should read the book reviewed in this link.

Obama - The Audacity of Socialism

Quoting IBD Editorials:

“Barack Obama has styled himself a centrist, but does his record support that claim?

In this series, we examine Senator Obama's past, his voting record and the people who've served as his advisers and mentors over the years. We'll show how the facts of Obama's actions and associations reveal a far more left-leaning tilt to his background — and to his politics.”

Click the image & read this essential series:


Click here for my primary post on Obama.

Click here for the next post on Obama.

Obama Regurgitates Pickens Deception

Quoting (or paraphrasing) Obama from tonight’s debate:

“We use 25% of the world’s oil, but only have 3% of the world’s oil”

Click the image & know EXACTLY where Obama,
the superficial, got that enormously deceptive line:

Click here for all my posts on Obama.

Preliminary Judgement - McCain Wins, Obama Loses (Big Time)

Tomorrow, one of the more superficial (and, simultaneously relevant) widespread observations on tonight’s debate will note that Obama learned NOTHING from the Al Gore debate mistakes.

Gore lost much ground solely on his facial expressions and sighs. Obama is currently making Gore look cool, calm and collected (and I am dying laughing watching the neophyte self-destruct). McCain, by contrast, IS cool, calm, collected and smiling amiably while listening to Obama’s utter nonsense.

On substance, Obama is getting creamed. Obama, like most Dems, is doing nothing but regurgitating demonstrably false media mythology (especially as relates to the Iraq War). But, what else would we expect from a novice who was doing nothing but reading The Old York Times while the seasoned combat veteran, McCain, was visiting the battlefields?

Tomorrow, I will probably flesh out these casual observations a bit more. For tonight - McCain wins, Obama loses big time (even with the usual hard left debate moderator).

Read This Before Donating to an Environmental Cause

Suggested reading for anyone considering a donation to any
organization purporting to advance any “Environmental Issue”:

“Environmental activism has become a multibillion dollar industry in the U.S. Campaigns to save the whales or stop mining beg average Americans for their support through donation of their hard earned dollars. These environmental campaigns also receive millions from charitable foundations such as the PEW Foundation, Turner Foundation, and Heinz Foundation. But what most don’t know when they donate to a cause to ‘save the rainforest’ or ‘save the polar bear’ is that their money could end up being used for partisan activities that are only tangentially related, if related at all, to the cause for which they are intended.”

Click the image & read the rest:

Many of these so-called “Environmental” groups do little more than file lawsuits to block domestic energy production, thereby increasing the price we all pay for all manner of energy (to no useful end).

For a summary (and/or to dive deeper), see this press release
and the additional links/reports from there.

McCain is Correct on Housing

Quoting The Wall Street Journal:

“Sen. McCain was a leading advocate of raising down-payment requirements on loans backed by the Federal Housing Administration and has warned against lending to homeowners who don't have enough of their own capital in the investment.”

“The Fannie-Freddie rescue has revealed differences between the campaigns over how they believe the next president should approach long-term reforms. Sen. McCain supports downsizing the companies, then selling them off, severing all ties to the government.”

Click the image & read the rest:

I would go two steps further than McCain and entirely abolish:

1) Yet another FDR atrocity, the Federal Housing Administration (aka FHA).

2) Yet another LBJ atrocity, the US Department of Housing and Urban Development (aka HUD).

That would pretty much get the Federal Government entirely out of the business of housing (a place we desperately need to be). Since all local Housing Authorities are tied back to HUD, that would also eliminate that local scourge.

As the article notes, this topic was a glaring example of why the so-called “Compassionate Conservatism” of President Bush was nothing more than a kinder, gentler version of the hardcore Socialism promoted by Democrats.

Does that make President Bush equally culpable vis a vis Carter, Clinton and Obama (and FDR and LBJ)? Not by a long shot! Does it make President Bush a willful enabler of this enormously destructive Socialist stupidity? Yep! SHAME ON BUSH!

Today, by advocating for a $700 billion bailout of these utterly destructive institutions, President Bush has now REALLY “jumped the shark” on this topic. We would do FAR better to take our medicine now and FINALLY rid ourselves of these Democrat enriching killer parasites!

If we fail to do that, we will:

1) See the same sort of prolonged economic stagnation which afflicted Japan for so long.

2) Relive the EXACT same nightmare somewhere down the road.

3) Continue to repeatedly relive that nightmare until we rid ourselves of these utterly corrupt and entirely counterproductive Socialist parasites!

We BADLY need a President McCain to steer us away from the Socialist Abyss we are currently peering into! The LAST THING we need is a President Obama still “clinging” (pun intended) to his days as a so-called “public-interest lawyer” for the enormously destructive ACORN (a job title which Obama euphemistically refers to as “Community Organizer”).

Click here to read the primary post on this topic
(and all the rest).

Affirmative Action and the Housing Crisis

First, read Dr. Perry’s summary.

Then, click the image & read the rest:

I would add that:
Despite turmoil in some areas, we are not currently in a recession.
Personally, I do not expect a recession in 2008 or 2009.

Click here to read the primary post on this topic
(and all the rest).

700 Billion Dollar Bailout - Economists Say NO!

Quoting WorldNetDaily:

“At least 165 economists have signed a letter to Congress members warning of three pitfalls in the Bush administration's $700 billion proposal to deal with the Wall Street crisis.

The economists say they are well aware of the current financial situation and agree there's a need for bold action but ask Congress ‘not to rush.’ ”

Click the image & read the rest:

Click here for the primary post on why this bailout is a TERRIBLE idea.
Click here to learn what caused this housing mess.

700 Billion Dollar Bailout - Poll

Quoting Rasmussen Reports:

“Only 30% of U.S. voters think the federal government should step in to rescue the country’s troubled financial markets, according to a new Rasmussen Reports national telephone survey.”

Click the image & read the rest:


Also See:

Click here for the primary post on why this bailout is a TERRIBLE idea.
Click here to learn what caused this housing mess.

Democrats allow drilling ban to lapse

Updated 9/25/08 - Reed is trying to slip in a renewed ban on Oil Shale.
See the link below.

Quoting CNN:

“ Democrats have decided to allow a quarter-century ban on drilling for oil off the Atlantic and Pacific coasts to expire next week, conceding defeat in a month-long battle with the White House and Republicans set off by $4 a gallon gasoline prices this summer.”

Click the image & read the rest:

That is the best news I have heard in years!
Next step, open ANWR!

But, wait! Does Pelosi have another trick up her sleeve?
Or, will Pelosi/Reed cry “Havoc” and let slip the dogs of war “law”?
Reed is trying to slip in a renewed ban on Oil Shale.

Click here to learn more.

Obama Got Some 'Splainin' to do - 700 Billion Dollar Bailout

Quoting NRO:

“One of the reasons so many bad mortgage loans were made in the first place is that Barack Obama’s celebrated community organizers make their careers out of forcing banks to do so. ACORN, for which Obama worked, is one of many left-wing organizations that spent decades pressuring banks and bank regulators to do more to make mortgages available to people without much in the way of income, assets, or credit. These campaigns often were couched in racially inflammatory terms. The result was the Community Reinvestment Act. The CRA empowers the FDIC and other banking regulators to punish those banks which do not lend to the poor and minorities at the level that Obama’s fellow community organizers would like. Among other things, mergers and acquisitions can be blocked if CRA inquisitors are not satisfied that their demands — which are political demands — have been met. There is a name for loans made to people who do not have the credit, assets, income, or down payment to qualify for a normal mortgage: subprime.”

Click the image & read the rest:

Click here for a directly related post.
Click here to read the primary post on this topic
(and all the rest).

Senator Dodd - Lap Dog

Click here for more cartoons.
Click here to read the primary post on this topic
(and all the rest).

What Price Stability?

Quoting James Dorn
(emphasis mine):

“The US Treasury's takeover of Fannie Mae and Freddie Mac, the nation's largest mortgage financers, was predictable.”

“In the past, Fannie and Freddie showered large sums on members of Congress to win votes and retain their privileged position. Although those payments are now illegal, Fannie and Freddie have many friends on Capitol Hill who believe the GSEs are essential to [so-called] affordable housing; they will fight hard to maintain the status quo.”

“Preserving the status quo by maintaining Fannie and Freddie's crony capitalism would expand the size and scope of government, rather than make individuals responsible for their mistakes.”

“The takeover of Fannie and Freddie could cost taxpayers US$200 billon to US$300 billion - and far more if housing prices fail to stabilise.”

Click the image & read the rest:

Click here for the primary post on why this bailout is a TERRIBLE idea.
Click here to learn what caused this housing mess.

Socialized Risks, Private Rewards (at Fannie and Freddie)

Click the image & listen to James Dorn on
“Socialized Risks, Private Rewards” (at Fannie & Freddie)

This is NOT a time for panic and haste!
SHAME on Paulson & Bernanke for caving in to hysteria!
Click here for the primary post on why this bailout is a TERRIBLE idea.
Click here to learn what caused this housing mess.

700 Billion Dollar Bailout - Credit Crunch? Where?

All charts were updated on 2/21/09.
Some of the data reveal a sudden surge in lending after the bailout was approved. Perhaps this injection of liquidity resulted, to some extent, in additional lending. But, an unprecedented “credit crunch”? The data indicate it simply NEVER EXISTED! PERIOD!

My fellow Americans, we’ve been HAD!

Click here for my previous commentary on this $700 billion bailout.

Today, 9/24/08, the talk at the Senate Banking Committee was mostly about the so-called “Credit Crunch”.

Again, lots of allegations and anecdotes flew. Again, there was NO HARD DATA presented!

Again, the data which I have access to does NOT support the thesis that a $700 Billion Bailout is needed!

WHERE is the Credit Crunch? Why are present circumstances, in the words of Paulson, “unprecedented”? If Secretary Paulson has more recent data than I have access to, PRESENT IT! The following is the most recent data which I have access to:

Total Consumer Credit Outstanding
(Through the end of December)
Click the image to enlarge & view the source:

Sorry Paulson, nothing “unprecedented” here!
Click here for a broader view of the same metric.

Consumer (Individual) Loans at All Commercial Banks
(Through January 1st)
Click the image to enlarge & view the source:

Sorry Paulson, nothing “unprecedented” here!
Click here for a broader view of the same metric.

Commercial and Industrial Loans of Weekly Reporting Large Commercial Banks
(Through February 4th)
Click the image to enlarge & view the source:

Sorry Paulson, nothing “unprecedented” here!
Click here for a broader view of the same metric.

Total Commercial and Industrial Loans Including Foreign Related Institutions
(Through February 4th)
Click the image to enlarge & view the source:

Sorry Paulson, nothing “unprecedented” here!
Click here for a broader view of the same metric.

Commercial and Industrial Loans at All Commercial Banks
(Through January 1st)
Click the image to enlarge & view the source:

Sorry Paulson, nothing “unprecedented” here!
Click here for a broader view of the same metric.

Real Estate Loans at All Commercial Banks
(Through January 1st)
Click the image to enlarge & view the source:

Sorry Paulson, nothing “unprecedented” here!
Click here for a broader view of the same metric.

Total Loans and Leases of Commercial Banks
(Through February 4th)
Click the image to enlarge & view the source:

Sorry Paulson, nothing “unprecedented” here!
Click here for a broader view of the same metric.

Click here and here for the latest data on each chart.

Secretary Paulson - WHERE is the
“unprecedented” Credit Crunch?

Was it the “TED Spread” that spooked you?

Please Register Your Opinion -
Please contact your representatives and tell them you oppose this bailout!

From the above link, I suggest you copy and paste the following into the form:

I oppose the $700 billion dollar mortgage bailout because the data do not support the thesis:
http://sbvor.blogspot.com/2008/09/700-billion-dollar-bailout-for-what.html
http://sbvor.blogspot.com/2008/09/700-billion-dollar-bailout-credit.html

Act NOW! Congress will probably vote in just a few days (at MOST)!

700 Billion Dollar Bailout - For WHAT?

Please register your opinion with your representatives.
Please ask your friends & neighbors to do the same.
It is QUICK and EASY! See the bottom of this post.

Quoting Treasury Secretary Paulson in his statement
before the Senate Banking Committee on 9/23/08
(Emphasis Mine):

“ We must now take further, decisive action to fundamentally and comprehensively address the root cause of this turmoil.

And that root cause is the housing correction which has resulted in illiquid mortgage-related assets that are choking off the flow of credit which is so vitally important to our economy.”

Click the image & read the rest:


If “the housing correction” is the best excuse Paulson can muster for a $700 billion bailout, I say NO WAY!

1) Last July, I commented on Media Housing Hysteria vs. Their Own Source.

2) The following represents the latest data for Median Sales Price of Existing Homes:

Click the image to enlarge:

I personally created and uploaded the above chart.
The data used in the above chart are found in
this spreadsheet downloaded from this page.

Contrary to media hysteria, the data clearly demonstrate that this “housing correction” is already bouncing back WITHOUT any $700 billion bailout!

2A) 10/5/08 - Update to the original post of 9/24/08:

The latest data indicate home prices declined again in July and August. However, February still represents a bottom. New data will be released around 10/25/08.


Click the image to enlarge:

I personally created and uploaded the above chart.
The data used in the above chart are found in
this spreadsheet downloaded from this page.

3) Furthermore, there are very few states where there existed any “housing correction” at all! The condition of the housing market in each individual state can be graphically verified in the previous link. Why should the entire nation pay for the follies of a very few states?

As an example, here is California in blue and Florida in red mapped against Colorado in green:

Click the image to enlarge & view the source:


4) Data from the St. Louis Federal Reserve on the condition of the nation’s banks does not seem to justify a $700 billion bailout:

Click the image to enlarge & view the source:


5) Although some large financial institutions have failed this year, the following data present further evidence suggesting that the overall banking system is not in crisis:

On 9/19/08 CNN reported the 12th bank failure of the year. According to the data presented by CNN, 1/10th of 1% of the banks insured by FDIC have failed this year (12 failures, 8,451 insured).

From this FDIC page, I produced a detailed report including the total assets associated with each failure for each year.

From that report:

1) 2008 - 11 Bank failures totaling $40,443,315,000 in assets.
The 12th failure, reported on 9/19/08, is not yet in their database.

2) 1989 - 534 Bank failures totaling $164,180,003,000 in assets.

Note: At the FDIC link, the assets are reported in thousands of dollars.

Update: On 9/26/08 it was reported that Washington Mutual, with assets of $307 Billion, “failed”. The Federal Deposit Insurance Corp. seized Washington Mutual. But, WaMu’s assets were sold to JP Morgan Chase in a transaction which did not cost the FDIC anything.

What really counts in these failures is not the “Total Assets” but the “Estimated Loss” paid out by the FDIC. That metric is not yet available for 2008. But, we know two things for sure:

* The “Estimated Loss” to the FDIC cannot exceed the Total Assets.

* Washington Mutual will add a grand total of $0.00 to the “Estimated Loss” metric.

6) The condition of the overall economy also does not support this draconian $700 billion bailout.

The Conclusion -
Sorry Secretary Paulson - NO SALE! You are welcome to try again. But, next time, SHOW ME SOME DATA!

Also See -
For LOTS more information, click here & see my original reaction to this proposed bailout.

Please Register Your Opinion -
Please contact your representatives and tell them you oppose this bailout!

From the above link, I suggest you copy and paste the following into the form:

I oppose the $700 billion dollar mortgage bailout because the data do not support the thesis:
http://sbvor.blogspot.com/2008/09/700-billion-dollar-bailout-for-what.html

Act NOW! Congress will probably vote in just a few days (at MOST)!

FBI Probing for Fraud at Fannie and Freddie

Quoting Reuters
(I inserted the link):

“The FBI is investigating Fannie Mae, Freddie Mac… and their senior executives for potential mortgage fraud”

Click the image & read the rest:

Click here to read the primary post on this topic
(and all the rest).

Obama and Ayers Pushed Radicalism On Schools

Quoting Bill Ayers in The New York Times, 9/11/2001:

“I don't regret setting bombs”

“I feel we didn't do enough”

“Everything was absolutely ideal on the day I bombed the Pentagon”

The NYT article goes on to say:

“Mr. Ayers… in 1970 was said to have summed up the Weatherman philosophy as: ‘Kill all the rich people. Break up their cars and apartments. Bring the revolution home, kill your parents, that's where it's really at’ ”

Quoting The Weekly Standard:

“[Bill Ayers] brags at the end of [his autobiography] Fugitive Days that he is ‘Guilty as hell, free as a bird—it’s a great country.’ As for those who might believe without irony that America is a great country, Ayers has one reaction: ‘It makes me want to puke.’ ”

“This man still hates America and seeks its destruction.”

Quoting Stanley Kurtz at The Wall Street Journal:

“Despite having authored two autobiographies, Barack Obama has never written about his most important executive experience. From 1995 to 1999, he led an education foundation called the Chicago Annenberg Challenge (CAC), and remained on the board until 2001. The group poured more than $100 million into the hands of community organizers and radical education activists.

The CAC was the brainchild of Bill Ayers, a founder of the Weather Underground in the 1960s. Among other feats, Mr. Ayers and his cohorts bombed the Pentagon, and he has never expressed regret for his actions. Barack Obama's first run for the Illinois State Senate was launched at a 1995 gathering at Mr. Ayers's home.”

“The CAC's agenda flowed from Mr. Ayers's educational philosophy, which called for infusing students and their parents with a radical political commitment, and which downplayed achievement tests in favor of activism. In the mid-1960s, Mr. Ayers taught at a radical alternative school, and served as a community organizer in Cleveland's ghetto.

In works like ‘City Kids, City Teachers’ and ‘Teaching the Personal and the Political,’ Mr. Ayers wrote that teachers should be community organizers dedicated to provoking resistance to American racism and oppression. His preferred alternative? ‘I'm a radical, Leftist, small 'c' communist,’ Mr. Ayers said in an interview in Ron Chepesiuk's, ‘Sixties Radicals,’ at about the same time Mr. Ayers was forming CAC.”

“CAC's in-house evaluators comprehensively studied the effects of its grants on the test scores of Chicago public-school students. They found no evidence of educational improvement.”

What?
ANOTHER failed Socialist Utopian scheme?
SHOCKING!
Click the image & read the rest:


Click here for my primary post on Obama.

Click here for the next post on Obama.

Good Intentions Paved The Road To Subprime-Stoked Meltdown

Quoting IBD Editorials
(I inserted the link):

“As of last year, the homeownership rate among all Americans was 68.1% — up from 63% in 1970. For black Americans, it's up from just below 42% in 1970 to 47.2% last year. It's still below 50%, and still the lowest of any minority group.

Today, Americans might rightly ask 31 years after the CRA was passed whether the more than $1 trillion lent under its auspices did what its proponents promised.”

Answer: Obviously NOT!
But, Socialist Utopian schemes NEVER DO!
The REAL question is: When will they learn?
The answer is: NEVER!

In the “mind” of the Socialist, their ideology (actually, their religion)
is never at fault, ONLY the current implementation.
They are ALL hopeless ideologues. They will NEVER LEARN!

Click the image & read the rest:

Click here to read the primary post on this topic
(and all the rest).

700 Billion Dollar Bailout - Just Say No

Click the Cartoon to Enlarge:

The answer is a resounding NO!
1) Paulson’s claims regarding “the housing correction” are unconvincing.
2) I can find no data supporting Paulson’s claim of an “unprecedented” credit crunch.
9/29/08 Update: Was “The TED Spread” what panicked Secretary Paulson?
3) Click here for all my posts on why this is a terrible idea.

Click here to learn what caused this mess & read this commentary.
The Democratic Congress is already on a spending binge that we cannot afford.
And, it is a mathematical certainty that we CANNOT tax our way out of this!

Click here for more cartoons.

Blame Fannie Mae, Freddie Mac and Congress

Quoting Charles W. Calomiris and Peter J. Wallison at The Wall Streeet Journal
(emphasis mine):

“the vast accumulation of toxic mortgage debt that poisoned the global financial system was driven by the aggressive buying of subprime and Alt-A mortgages, and mortgage-backed securities, by Fannie Mae and Freddie Mac. The poor choices of these two government-sponsored enterprises (GSEs) -- and their sponsors in Washington -- are largely to blame for our current mess

How did we get here? Let's review: In order to curry congressional support after their accounting scandals in 2003 and 2004, Fannie Mae and Freddie Mac committed to increased financing of "affordable housing." They became the largest buyers of subprime and Alt-A mortgages between 2004 and 2007, with total GSE exposure eventually exceeding $1 trillion. In doing so, they stimulated the growth of the subpar mortgage market and substantially magnified the costs of its collapse.”

“If they [Fannie Mae and Freddie Mac] were not making mortgages cheaper and were creating risks for the taxpayers and the economy, what value were they providing? The answer was their affordable-housing mission. So it was that, beginning in 2004, their portfolios of subprime and Alt-A loans and securities began to grow. Subprime and Alt-A originations in the U.S. rose from less than 8% of all mortgages in 2003 to over 20% in 2006. During this period the quality of subprime loans also declined, going from fixed rate, long-term amortizing loans to loans with low down payments and low (but adjustable) initial rates, indicating that originators were scraping the bottom of the barrel to find product for buyers like the GSEs.

The strategy of presenting themselves to Congress as the champions of affordable housing appears to have worked. Fannie and Freddie retained the support of many in Congress, particularly Democrats, and they were allowed to continue unrestrained.”

“If the Democrats had let the 2005 legislation come to a vote, the huge growth in the subprime and Alt-A loan portfolios of Fannie and Freddie could not have occurred, and the scale of the financial meltdown would have been substantially less. The same politicians who today decry the lack of intervention to stop excess risk taking in 2005-2006 were the ones who blocked the only legislative effort that could have stopped it.”

Bottom Line?
Blame the tyranny of the Socialist Housing Agenda.
Click the image & read the rest:

Click here to learn how Socialist Housing was
tyrannically imposed on Steamboat Springs.

Click here to read the primary post on this topic
(and all the rest).

Here We Go Again

Prologue:
I do NOT believe we are entering the second coming of the Great Depression. The data to date do not even indicate a Recession. And, the economic forecast calls for continued growth in real GDP throughout 2008 AND 2009.

But, I KNOW that:
1) The present mess was created by government intervention.
2) MORE government intervention will ONLY make it WORSE and last LONGER!
3) Ergo, the analogy presented below is valid.

Quoting Durham Ellis at American Thinker:
(I inserted the link)

“Once again, we have a financial crisis, and once again, the American lemmings are rushing off the cliff to our destruction, running to our nanny government for help. With some combination of the media, creative historians, misinformed voters, our government monopoly schools, and opportunistic politicians, we just never seem to benefit from the lessons of history.

We all know that there was a financial crisis starting in 1929. We know that President Franklin Delano Roosevelt cared about the people and used the Federal government to try to end their problems, and we all know that the Great Depression ended many years later in the 1940's. Unfortunately, only a few economists and their students know just how counter-productive FDR's actions were and how much his intervention prolonged the misery of the American people.”

Click the image & read the rest:

Obama - The Wrong Choice For Commander in Chief

1) Quoting The U.K. TimesOnline:

“Russia flexed its muscles in America’s backyard yesterday as it sent one of its largest warships to join military exercises in the Caribbean. The nuclear-powered flagship Peter the Great set off for Venezuela with the submarine destroyer Admiral Chabanenko and two support vessels in the first Russian naval mission in Latin America since the end of the Cold War.”

“Peter the Great is armed with 20 nuclear cruise missiles and up to 500 surface-to-air missiles, making it one of the most formidable warships in the world. The Kremlin has courted Venezuela and Cuba as tensions with the West soared over the proposed US missile shield in Eastern Europe and the Russian invasion of Georgia last month. Vladimir Putin, the Prime Minister, said recently that Russia should “restore its position in Cuba” – the nation where deployment of Soviet nuclear missiles in 1962 brought Russia and the United States to the brink of nuclear war.”

Click the image & read the rest:


2) Watch this video:


3) Tell me who you plan to vote for.

P.S.) Click here and here for the facts on Iraq.
Click here for my primary post on Obama.

Click here for the next post on Obama.

Crony Capitalism Is Root Cause Of Fannie And Freddie Troubles

Quoting IBD Editorials:

“Fannie and Freddie… became a kind of jobs program for out-of-work Democrats…

Franklin Raines and Jim Johnson, the CEOs under whom the worst excesses took place in the late 1990s to mid-2000s, were both high-placed Democratic operatives and advisers to presidential candidate Barack Obama…

Meanwhile, Freddie and Fannie opened what were euphemistically called ‘Partnership Offices’ in the districts of key members of Congress to channel millions of dollars in funding and patronage to their supporters…

It emerged that Clinton aide Raines, who took Fannie Mae's helm as CEO in 1999, took in nearly $100 million by the time he left in 2005. Others, including former Clinton Justice Department official Gorelick, took $75 million from the Fannie-Freddie piggy bank.

Even so, Fannie and Freddie were forced to restate their earnings by some $3.5 billion, due to the accounting shenanigans…

President Bush, reviled and criticized by Democrats, tried no fewer than 17 times, by White House count, to raise the issue of Fannie-Freddie reform. A bill cleared the Senate Banking panel in 2005, but stalled due to implacable opposition from Democrats and a critical core of GOP abettors. Rep. Barney Frank, who now runs the powerful House Financial Services Committee, helped spearhead that fight.”

Click the image & read the rest:

The initial $200 billion Fannie/Freddie bailout was doubled.
Later, it was declared to be an UNLIMITED bailout!
Yet, the $170 Billion AIG bailout is all the media are interested in!

Click here to read the primary post on this topic
(and all the rest).