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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: maceng2 who wrote (4811)	8/19/2002 3:33:51 PM
From: Rascal	Read Replies (1) \| Respond to of 89467

Lindsey Undermines Bush on Key SSI Reform. Bush Hosts 160 W.H. Sleepovers. Was I the only editorial writer that noticed the remarkable comment by President Bush's chief economic advisor Saturday? Lawrence Lindsey was doing his bit this weekend to put the best possible face on last week's embarrassingly vacuous Waco economic summit. One of his stops was CNN's Novak, Hunt & Shields. Even though archconservative, Robert Novak tossed Lindsey softball questions that would have embarrassed Larry King it was tough sledding for the normally straight-talking Lindsey. Towards the end of the program, having apparently exhausted all available spin, Lindsey slipped into candor and, in so doing, making a shocking personal confession: NOVAK: The Big Question for Larry Lindsey: Mr. Lindsey, you sold all your stock when the Dow was at 8,500 on the way beyond 10,000. It's on the way back now, not much over 8,500. To give a boost to the American economy, a confidence to the American people, would you consider now, just as an act of patriotism, to reinvest in the stock market? LINDSEY: Well, I sold my stock in part because I have three kids, and at that point I had an ailing mother-in-law who had just moved in with us. I couldn't afford to have money anywhere but where it was safe. I couldn't take any chances. I still have the three kids, and my pay's gone down now that I work for the government. I would recommend that all Americans ... read the financial press, they do what's in their own self- interest, they look at their own financial condition and they not risk money. Hellooooo…? Is this the chief economic advisor for the same administration that wants to privatize Social Security and invest retiree's futures in stock? I suspect that some folks back at the White House sprayed their morning coffee across the room. Here was the President's economic advisor admitting - live, in color and on tape, that he wouldn't touch stocks with a ten foot vaccinated crowbar. Am I wrong or isn't the centerpiece of the Bush administration's plan for reforming Social Security to privatize a portion of deductions so the money can be invested where? -- the STOCK MARKET. So, let me get this straight; - The Bush administration believes the stock market offers the promise of better returns and more security my Social Security savings. - But, over the past two years stocks have lost nearly $12 trillion in value. - And, the President's own economic advisor abandoned stocks years ago because he did not believe it was a safe place for his family's savings. - And, by golly, he turned out to be right about that. - But, he continues to support the President's plan to put a portion of my Social Security savings into stocks. Maybe I am making too much of Lindsey's comment. Apparently no one else thought it was strange because I could not find any mention of it in the press this morning. What am I missing? Maybe someone over at the Wall Street Journal can explain it to us. No Vacancies at Hotel White House Remember how Republicans clucked, frowned, and wagged their fingers in disapproval when they discovered that President Bill Clinton had let friends and campaign contributors snooze in the Lincoln bedroom? Why it was "a disgrace," they said. How crass. Just further proof that Bill Clinton was not presidential material. What the nation needed was a president who could return the White House to dignity. Oh how they carried on about it, too; "It's now abundantly clear that President Clinton decided to exploit the White House for campaign fundraising," said Rep. Dan Burton, chairman of the House panel." His own handwritten notes confirm that the highly questionable overnight stays in the Lincoln Bedroom occurred at his direction. At a minimum, this is a highly unethical use of government property for political purposes." (Rep. Dan Burton, R-IN, said in February 1997) "Is it a criminal violation? It could be." [Joseph DiGenova, a former Assistant United States Attorney and Reagan Appointee (1983-1988, District of Columbia), said in March 1997.] Well, administration's changed but the “No Vacancy” stayed up. Last week we learned that no sooner had the sheets been changed from the last Clinton houseguests than the first batch of Bush cronies were ringing the White House doorbell suitcases in hand. During the first 18 months in office the Bush's have played host to over 160 White House sleepover guests. Because of obvious sensitivities (the Lincoln bedroom was most often used by Clinton guests) the Bush White House refused to identify which of the named bedrooms they occupied during their stay. Among the guests were members of Bush's "Pioneers," - individuals who donated at least $100,000 to his campaign. And what do Republicans have to say about President Bush's White House guests? Nothing. thedailyenron.com

To: maceng2 who wrote (4811)	8/19/2002 3:54:32 PM
From: Jim Willie CB	Read Replies (2) \| Respond to of 89467

Re-Fi Boom's Downside, by Rick Ackerman, 321Gold I've been writing regularly about deflation for ten years, but new manifestations of it continue to outpace my imagination. There's the eerie rally in Treasurys, for instance -- "eerie" because, as far as I can determine, there are no healthy coordinates for it in the U.S. economy. Granted, a related and seemingly positive development is that mortgage borrowers are able to reduce their monthly payments as rates in general fall. But this is not strengthening the economy; it is merely keeping it afloat -- barely -- to the extent robust consumption levels can be temporarily sustained as U.S. incomes stagnate or fall. But what many observers seem to be overlooking is that consumers' reduced borrowing costs come at the expense, in particular, of investors whose portfolios are loaded with mortgage-backed securities. They have been exchanging these securities for Treasurys by the truckload in recent weeks, since a new wave of mortgage refinancings threatens to devastate mortgage yields. The run on Treasurys is an unintended consequence of the Fed's last-ditch effort to keep the housing boom alive. One could argue that lower rates all around have the potential to make everyone a winner, but this ignores a few disquieting facts. For one, there is the huge hit to savers and their institutional proxies who are weighted in mortgage-backed securities. For two, the unnaturally heavy skew of money toward housing is creating an asset bubble vastly larger in size, even, than the S&P bubble; and, three, all bets will lose if the dollar falls. On that last point we should wonder whether, merely by becoming unthinkable, so potentially catastrophic an event may have become inevitable. FYI, here's the Reuters dispatch concerning recent dumping of mortgage-backed securities: "U.S. mortgage-backed security prices fell early Thursday, underperforming Treasuries, with lenders unloading positions in anticipation of a huge wave of borrowers locking in their home loans, market sources said. An early Thursday spike in longer-dated Treasury yields -- rate benchmarks for fixed-rate U.S. mortgages -- spurred lenders to sell $2 billion in mortgage positions after selling about that amount late Wednesday, analysts said. But a rise in Treasury yields did not quell fears of a huge loss of interest income expected by investors whose mortgage holdings could be prepaid quickly in the coming months due to heavy refinancing, market sources said. " 'This is a temporary pullback,' said Michael Cheah, who invests about $1.5 billion in bonds for SunAmerica Mutual Funds in New York. 'There'll be a serious loss of income in mortgages.' To offset the negative effect of rapid prepayments, fund managers like Cheah have snapped up less prepayment sensitive fixed-income instruments like Treasuries, agency bonds and interest rate swaps. For some of his accounts, the split between Treasuries and mortgages stands at 60 percent and 40 percent, respectively, a reversal of the split a month earlier, Cheah said. On Wednesday, the mortgage-backed securities market moved into uncharted waters where virtually all fixed-rate mortgage loans that support the $4.3 trillion market are eligible for refinancing. This first-time phenomenon was a result of a sharp decline in Treasury yields as players sought safe haven from an uncertain U.S. economic recovery and a rocky stock market. 'The market has been panicking to buy bonds' that are less prepayment sensitive,' Cheah said."

To: maceng2 who wrote (4811)	8/19/2002 4:03:04 PM
From: Jim Willie CB	Read Replies (3) \| Respond to of 89467

the number of 8balls for US Auto Industry is staggering - unfunded pension trusts in the multiple $B's, with GM claiming last week to need $6B more infusions in the next 6-7 years - profitless sales, with cashbacks and zero pct loans, which have become pervasive - horrendous debt levels, as a ratio of mktcap, with Ford the worst at $23B per $1B in mktcap - Japanese invaded US turf, building better cars & trucks, thus removing currency risk from hurting at least Japanese mfrs - continued product recalls, as result of poor quality, as your link announces - then you have the Firestone Tire liabilities in my view, it is not a question of whether US Auto Industy will be bankruptcies it is more a question of which one first and what the restructurings will look like and what the production levels will become afterwards / jim