Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : I Will Continue to Continue, to Pretend.... -- Ignore unavailable to you. Want to Upgrade?

To: Sully- who wrote (35063)	9/14/2010 10:04:17 PM
From: Sully-	1 Recommendation Respond to of 35834

H/T to Peter Dierks: The Democrats' Fannie Is Showing Posted 09/13/2010 07:00 PM ET Irresponsibility: After the global financial crisis, no politician would dare chide another for too much "safety and soundness." But in 2004, 76 Democrats actually asked President Bush not to manage Fannie Mae responsibly. There are smoking guns and then there are smoking bazookas. The June 28, 2004, letter from Rep. Barney Frank, D-Mass., House Speaker Nancy Pelosi, D-Calif., and dozens of other House Democrats to President Bush, posted by Moe Lane on Redstate.com last week, forever squashes Democratic claims about the mortgage crisis not being their fault. "We urge you to reconsider your administration's criticisms of the housing-related government sponsored enterprises (the 'GSEs') and instead work with Congress to strengthen the mission and oversight of the GSEs," states the missive of nearly a page and a half, signed by a rogues' gallery of 76 House Democrats. They include not only Frank, current chairman of the House Banking Committee; but Rep. Maxine Waters, D-Calif., now being probed for reportedly laundering TARP money in her husband's bank; and erstwhile House Ways and Means Committee Chairman Charles Rangel, D-N.Y., who is charged with more than a dozen counts of violating House rules and federal laws. Almost comically, the letter states that the Democrats are unhappy the Bush administration is "emphasizing only safety and soundness," claiming that "an exclusive focus on safety and soundness is likely to come, in practice, at the expense of affordable housing." And the Democratic representatives charged that "because Congress has not been willing to jeopardize the GSEs' mission, the administration has turned to attacking the GSEs publicly." Such attacks could mean "negative opinions in the financial markets regarding the GSEs, raising their cost of financing." It turned out, of course, that the negative opinions of Fannie Mae, and its evil twin Freddie Mac, in the financial markets were due to the GSEs taking a lead role in crippling the global economy. The GSEs used the taxpayer-funded financial power of the federal government to give ultralow rate mortgages to millions of Americans with rotten credit ratings — which ended up poisoning the portfolios of investors around the world. That Fannie and Freddie are disasters is, of course, today undeniable. Even Frank last month told Fox Business Network's Neil Cavuto regarding Fannie and Freddie, "I think they should be abolished." In an election year in which voters are sick of governmental largesse and Uncle Sam's mismanagement of everything, and in which even Frank's "safe" seat in Taxachusetts is endangered, Frank doesn't dare say anything less. Six years ago was another story: "Join us," Frank and the 75 other Democrats were demanding, "in advocating for more innovative loan products and programs for people who desire to buy manufactured housing, similar products to preserve as affordable and rehabilitate aging affordable housing, and more meaningful GSE affordable housing goals." They insisted that President Bush "place a high priority on working with the GSEs to close as many loans as possible this year" and reiterated "that an exclusive emphasis on safety and soundness . .. is misplaced." The 9.6% unemployment that Americans now suffer is directly connected to the many years of Democrats' demagoguery. They said that any attempt to rein in Fannie and Freddie was anti-poor and anti-minority — fiscal soundness be damned. With the worst attributes of government entity and private business, Fannie Mae holds about $6 trillion in mortgages. These GSEs' reduced capital requirements and exemptions from state and local taxes let them eventually corner about half of the entire U.S. mortgage market. President Bill Clinton added a "Trillion Dollar Commitment" to give 10 million poor Americans their own homes, and he intensified President Jimmy Carter's Community Reinvestment Act. The cumulative result was that banks and other lenders were pressured to give mortgages to unqualified borrowers in the name of social and racial justice. Last year, the Obama administration raised Fannie and Freddie's $400 billion borrowing cap. Every single politician who signed this letter is guilty of taking part in the gross financial mismanagement of this country. They betrayed the trust of those who elected them, and that trust should be rescinded this November. investors.com HT: Burp-up OBonehead

To: Sully- who wrote (35063)	10/15/2010 4:01:35 AM
From: Sully-	1 Recommendation Respond to of 35834

None So Blind by Richard Fernandez Belmont Club October 14, 2010 The Boston.com looks at Barney Frank’s admission that he failed to see the dangers to Freddie Mac and Fannie Mae because he was blinded by the fear of the Republican “right”. <<< Frank, in his most detailed explanation to date about his actions, said in an interview he missed the warning signs because he was wearing ideological blinders. He said he had worried that Republican lawmakers and the Bush administration were going after Fannie and Freddie for their own ideological reasons and would curtail the lenders’ mission of providing affordable housing. “I was late in seeing it, no question,’’ Frank said about the lenders’ descent into insolvency. >>> It is a variation on that very old political theme: Bush made me do it. This despite the fact that in early 2003, Congress had been warned by the director of the federal office responsible for overseeing Fannie and Freddie, Armando Falcon, who said “in a 118-page report of the companies’ potential for a catastrophic failure that could jeopardize the economy.” This was followed by efforts by the Bush administration to rein in Fannie and Freddy somewhat via new Treasury rules. <<< But Frank and other Democrats still opposed tighter regulation, Frank most notably in his public statements saying there was nothing wrong with Fannie and Freddie. He and other House Democrats also sent a letter to President George W. Bush in June 2004, saying the proposed crackdown could “weaken affordable housing performance . . . by emphasizing only safety and soundness.’’ >>> Frank’s most convincing excuse is that he wasn’t chairman of the House Banking Committee until 2007. “My mistake was a nonoperational one”, he said, which if it means anything suggests that he rose to power too late to commit the blunder he was fixing to commit earlier. The collapsing economy has become a hot potato that both parties are eager to hand to the other. If the Rassmussen poll is any guide, more voters are now beginning to blame Democrats than Republicans. “Bush did it” is slowly but surely morphing into “Obama did it”. The Wall Street Journal says that the only miracle President Obama has wrought so far is to make Bush look good. CNN reported that the former President is nearly level with Obama in terms of popularity and that “Democrats would be wise to think twice before bringing up the name of President Bush on the campaign trail this fall.” Washington’s best blame shifting gambit has been for one party to blame the other. Paradoxically this strategy creates a kind of self-protection for the larger herd. Although the elite is rotated, the same general set of people are left in charge at the conclusion of each election except that they take turns. The public is often left with the illusion that one set of policies has been ‘punished’ when in fact, the same set of policies continue, albeit at faster or slower rates. Victor Davis Hanson noted that the Republicans and Democrats advanced deficits in a bipartisan manner up until the crash. He argues that November will show whether the public now perceives the question in terms of Washington vs the USA instead of the traditional Republican vs Democrat. <<< In 2008, the public was furious at George W. Bush, not because he was too much of a right-wing tightwad, but because he ran up a series of what were then thought to be gargantuan deficits. The result was that under a supposedly conservative administration, and despite six years of an allegedly small-government Republican Congress, the deficit nearly doubled from $3.3 trillion to $6.3 trillion in just eight years. Barack Obama apparently never figured out that he had been elected in part because that massive Republican borrowing had sickened the American people. So in near-suicidal fashion, he took Bush’s last scheduled budget deficit of more than $500 billion — in a Keynesian attempt to get the country out of the 2008 recession and financial panic — and nearly tripled it by 2010. Obama’s new red ink will add more than $2.5 trillion to the national debt — with near-trillion-dollar yearly deficits scheduled for the next decade. All of that will result in a U.S. debt of more than $20 trillion. >>> Has the public figured it out? That is an open question. As for Washington, it is far from clear whether the politicians are truly awake to the dangers of the deficit, which by definition, means their bloated existence. From their public pronouncements it appears that neither Barney Frank nor Barack Obama are aware that Big Government is no longer in vogue. For them it is a matter of more programs, more regulations, more Hope and Change. Like the Bourbon dynasty they appear to remember everything and learn nothing. From all accounts, a political tsunami will hit Washington this November, but even with the wave upon them, some politicians appear as blithe as ever. There are none so blind as they who will not see. .

To: Sully- who wrote (35063)	10/22/2010 9:56:38 AM
From: Sully-	Respond to of 35834

Mother Of All Bailouts IBD Editorials Posted 10/21/2010 07:02 PM ET Subprime Scandal: The price tag for bailing out Fannie and Freddie keeps rising. The latest figure nearly doubles earlier projections, making Washington's role in home finance even harder to defend. The federally controlled mortgage giants will now need as much as $215 billion more from taxpayers in the next three years to stay solvent. That's on top of the $148 billion Treasury already has injected into Fannie and Freddie. The Obama administration says the new infusion of cash should cover their losses. But it assumes housing prices will bounce back soon, even though private forecasters don't see a recovery for years. With a key election approaching, and voters fed up with government bailouts and open-ended spending, the administration seems to be putting a happy face on an open-ended bailout. Early on, it pledged $400 billion to keep Fannie and Freddie afloat — twice the $200 billion President Bush pledged after seizing the toxic twins. Then late last year it quietly pledged unlimited support. Some estimates put the final price tag as high as $1 trillion. Fannie and Freddie aren't just a major liability for taxpayers; they're a major political liability for Democrats. Fannie and Freddie are the chief cause of the financial crisis, and Democrats are the chief reason for that. They pushed them to underwrite $1.8 trillion in subprime and other risky loans to help close the "mortgage gap" between minorities and whites. Despite all the talk of reforming Fannie and Freddie, Democrats gave them a pass in the "most sweeping financial regulatory reforms since the Great Depression." In another punt, the administration says it'll address the issue in a report to Congress this January. Truth is, they want to continue to use Fannie and Freddie as their off-budget piggy banks for social improvement. And they'll circle the wagons around them while paying lip service to reform. It's no coincidence that several former Fannie and Freddie alumni — all Democrats — landed posts in the Obama administration. Take Tom Donilon. Recently tapped as Obama's national security adviser, Donilon was the Fannie official in charge of "managing" its relations with Congress. There's evidence Donilon's office actually blocked attempts to expose Fannie corruption during his 1999 to 2005 tenure, including: • A 2006 Office of Federal Housing Enterprise Oversight report concluded: "Fannie Mae succeeded in creating a large volume of negative publicity about the OFHEO examination report . .. to distract attention from its multibillion-dollar accounting errors." • Another 2006 report from Fannie's regulators reminding Congress "that Fannie Mae senior management presented an image of the Enterprise as one of the lowest-risk financial institutions in the world and as 'best-in-class' in terms of risk management, financial reporting, internal controls and corporate governance." That was "false," it said, and Fannie's risks "were greatly understated and senior management manipulated accounting and earnings." The report was addressed to Rep. Barney Frank, D-Mass. The House banking panel chief told the media everything was fine. Donilon was protecting another Democrat — Fannie CEO Franklin Raines, a Clinton appointee, who was busted for cooking the company's books. Raines looted Fannie for almost $100 million in pay by the time he left in early 2005 under an ethical cloud. Raines is now an informal adviser to President Obama. So is his predecessor at Fannie's helm, Jim Johnson, another big Democrat. Other Obama advisers include: Ellen Seidman, a former senior Fannie official and Clinton appointee, and Wendy Sherman, who was president and CEO of the Fannie Mae Foundation and also a Clinton official. (And, of course, departing White House Chief of Staff Rahm Emanuel sat on Freddie Mac's board.) As long as Fannie and Freddie kept underwriting politically correct mortgages, Democrats turned a blind eye to the rising risk. And they ignored the book-cooking and looting going on there. In turn, Fannie and Freddie paid them protection money in the form of generous political donations through their foundations. In fact, Frank, Democratic Sen. Chris Dodd, and Obama himself were among the top recipients of their largesse in Congress. If they want to pursue a social agenda in housing, they should fund it through the FHA — instead of continuing to abuse the secondary mortgage market (and taxpayers) by disguising it as subsidies to Fannie and Freddie. .

To: Sully- who wrote (35063)	10/27/2010 7:27:33 PM
From: Sully-	1 Recommendation Respond to of 35834

H/T to Tim Fowler: Is Barney Frank? Thomas Sowell You would be hard pressed to find a politician who is less frank than Congressman Barney Frank. Even in an occupation where truth and candor are often lacking, Congressman Frank is in a class by himself when it comes to rewriting history in creative ways. Moreover, he has a lot of history to rewrite in his re-election campaign this year. No one contributed more to the policies behind the housing boom and bust, which led to the economic disaster we are now in, than Congressman Barney Frank. His powerful position on the House of Representatives' Committee on Financial Services gave him leverage to force through legislation and policies which pressured banks and other lenders to grant mortgage loans to people who would not qualify under the standards which had long prevailed, and had long made mortgage loans among the safest investments around. All this was done in the name of promoting more home-ownership among people who had neither the income nor the credit history that would meet traditional mortgage lending standards. To those who warned of the risks in the new policies, Congressman Frank replied in 2003 that critics "exaggerate a threat of safety" and "conjure up the possibility of serious financial losses to the Treasury, which I do not see." Far from being reluctant to promote risky practices, Barney Frank said, "I want to roll the dice a little bit more in this situation." With the federal regulators leaning on banks to make more loans to people who did not meet traditional qualifications -- the "underserved population" in political Newspeak -- and quotas being given to Fannie Mae and Freddie Mac to buy more of these riskier mortgages from the original lenders, critics pointed out the dangers in these pressures to meet arbitrary home ownership goals. But Barney Frank counter-attacked against these critics. In 2004 he said: "I believe that we, as the Federal Government, have probably done too little rather than too much to push them to meet the goals of affordable housing." He went further: "I would like to get Fannie and Freddie more deeply into helping low-income housing." Fannie Mae and Freddie Mac were crucial to these schemes to force lenders to lend to those whom politicians wanted them to lend to, rather than to those who were most likely to pay them back. So it is no surprise that Barney Frank was very protective towards these two government-sponsored enterprises that were buying up mortgages that banks were willing to make under political pressure, but were often unwilling to keep. The risks which banks were passing on to Fannie Mae and Freddie Mac were ultimately risks to the taxpayers. Although there was no formal guarantee to these enterprises, everybody knew that the federal government would always bail them out, if necessary, to keep them from failing. Everybody except Barney Frank. "There is no guarantee," according Congressman Frank in 2003, "there is no explicit guarantee, there is no implicit guarantee, there is no wink-and-nod guarantee." Barney Frank is a master of rhetoric, who does not let the facts cramp his style. Fast forward now to 2008, after the risky mortgages had led to huge numbers of defaults, dragging down Fannie Mae, Freddie Mac and the financial markets in general -- and with them the whole economy. Barney Frank was all over the media, pointing the finger of blame at everybody else. When financial analyst Maria Bartiromo asked Congressman Frank who was responsible for the financial crisis, he said, "right-wing Republicans." It so happens that conservatives were the loudest critics who had warned for years against the policies that Barney Frank pushed, but why let facts get in the way? Ms. Bartiromo did not just accept whatever Barney Frank said. She said: "With all due respect, congressman, I saw videotapes of you saying in the past: 'Oh, let's open up the lending. The housing market is fine.'"His reply? "No, you didn't see any such tapes." "I did. I saw them on TV," she said. But Barney Frank did not budge. He understood that a good offense is the best defense. He also understands that rewriting history this election year is his best bet for keeping his long political career alive. To find out more about Thomas Sowell and read features by other Creators Syndicate columnists and cartoonists, visit the Creators Syndicate web page at www.creators.com. Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University, Stanford, CA 94305. His Web site is www.tsowell.com.

To: Sully- who wrote (35063)	10/27/2010 7:41:37 PM
From: Sully-	1 Recommendation Respond to of 35834

H/T to Tim Fowler Is Barney Frank?: Part II Thomas Sowell Among long-time politicians who are being seriously challenged for the first time this election year, Congressman Barney Frank of Massachusetts best epitomizes the cynical ruthlessness which hides behind their lofty rhetoric. Having been a key figure in promoting the risky mortgage lending practices imposed by the federal government on lenders, and on Fannie Mae and Freddie Mac to buy these risky mortgages from the lenders, Barney Frank blamed the resulting collapse of financial markets and the economy on everybody except Barney Frank. In February 2009, as chairman of the House Financial Services Committee, Congressman Frank summoned the heads of some of the biggest banks in the country before his committee. In the words of the Los Angeles Times, these bankers "endured hours of hectoring" by "indignant lawmakers" on that committee. These bankers were in no position to talk back to members of this committee, much less point out how committee members -- including Chairman Barney Frank -- had themselves promoted laws and policies responsible for the current economic disaster. This is a committee with the power to promote legislation detrimental to this heavily regulated industry. That in turn gives the committee the power to force others to sit there and take it, when they are demonized on nationwide TV. Congressman Barney Frank has never hesitated to use his power ruthlessly. On one occasion, he threatened bankers with summoning them before his committee and forcing them to reveal their home addresses -- which would of course put their spouses and children at the mercy of any kooks that might come along. Meanwhile, Congressman Frank could piously invoke "social justice" in defense of similarly ruthless community activist groups like ACORN or National People's Action, which had in fact besieged the homes not only of bankers but also of public officials who dared to oppose their agendas. In Barney Frank's words, these groups were simply people who "cared about equity" and who were just "trying very hard to preserve some equity and some social justice." But the harassment and shakedown activities of such groups were perhaps best captured by the words of a leader of one of these groups, who addressed her followers by saying: "We want it. They've got it. Let's go get it." These were not just idle words. The dirty little secret that few in the media seem to want to discuss is that community activists, including Jesse Jackson, have over the years extracted literally billions of dollars from financial institutions, as the price of peace and of not challenging these institutions in hearings before federal regulators, as these groups are empowered to do under the Community Reinvestment Act. Much of this money has been extracted in the form of risky mortgage loans of the sort that have been at the center of the housing boom and bust, and its repercussions in financial markets and in the economy as a whole. Among others who have been at the heart of the risky lending behind the financial meltdown are Fannie Mae and Freddie Mac, whom Congressman Barney Frank has also championed and protected. When federal regulators uncovered irregularities in Fannie Mae's accounting, and in 2004 issued what Barron's magazine called "a blistering 211-page report," Barney Frank lashed out -- not at Fannie Mae, but at the regulators who uncovered Fannie Mae's misdeeds. He said "a leadership change" in the regulatory agency was "overdue." Politicians who say we need more regulation almost never mean regulation in the sense of impartially enforcing explicit rules, such as the accounting rules that Fannie Mae was violating to cover up its own risks. They mean regulation with arbitrary powers, such as those under the Community Reinvestment Act, which enable regulators to carry out the agendas that politicians give them. When Congressman Jim Leach tried to get stronger regulation of Fannie Mae and Freddie Mac back in 1992, and when President George W. Bush did so in 2004, Barney Frank opposed them. A reining in of Fannie Mae and Freddie Mac would be a reining in of Barney Frank's power. But he can't stop the voters from reining in his power, unless he can once more get by this election year with pious rhetoric to conceal his cynical actions. To find out more about Thomas Sowell and read features by other Creators Syndicate columnists and cartoonists, visit the Creators Syndicate web page at www.creators.com. Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University, Stanford, CA 94305. His Web site is www.tsowell.com.

To: Sully- who wrote (35063)	11/16/2010 9:36:00 AM
From: Sully-	1 Recommendation Respond to of 35834

Taxpayers Taking a Hit in Struggles of Fannie Mae, Freddie Mac, and It Could Get Worse By Jim Angle FoxNews.com Published November 15, 2010 When you see a foreclosure sign, chances are good that you, as a taxpayer, are on the hook for the costs involved because Congress has its very own money pit -- federal guarantees of mortgages gone bad. And the official estimates for the damage put it at more than $300 billion. "It's probably likely to be closer to $500 billion by the time all of this is finished," David Johns of the Heritage Foundation said. "And you and I get to pay that." Peter Wallison of the American Enterprise Institute warns that "the taxpayers ought to get ready to suffer some very substantial losses because of Fannie and Freddie." That would be Fannie Mae and Freddie Mac, which are now in conservatorship, meaning they are under the complete control of the federal government. One reason the costs to the taxpayer are so high is that they control the lion's share of the mortgage market. "Fannie Mae and Freddy Mac own or guarantee a little over half the mortgages in this country," said Ed DeMarco, the acting director of the Federal Housing Finance Agency under which the two lenders fall. And their role is getting bigger, not smaller. "They are buying about 90 percent of all the loans that are made in the United States, all the home loans that are made in the united states today," Wallison said. Fannie and Freddie now hold some 240,000 foreclosures, which means additional costs for the taxpayer because lots of things can happen to an empty house, none of them good. People sometimes strip the houses of pipes or vandalize them, for example. In fact, Fannie and Freddie have spent more than $2 billion dollars of taxpayer money just this year to maintain empty homes. One of many reasons DeMarco said foreclosures should go forward if they are justified so the homes can be sold. "If we delay foreclosures for no good reason, that is going to add cost to the taxpayer," he said. "And as the conservator of Fannie and Freddie, I'm charged with trying to minimize those taxpayer losses, and we're working very hard here to do that." Wallison agrees. "They'll never recover the total amount that they are owed, but the longer we do not foreclose, the worse their losses are going to be," he said. With all that on the table, President Obama has nominated a new person to run the agency, Joseph A. Smith. Johns said Smith has worked to slow down foreclosures in North Carolina, which some fear could pose a problem at the federal level. .