Running Out of Wall Space

I am having the September 30, 1999 New York Times article predicting this crises as the result of the Clinton Administration pressure to give loans to the risky, framed.


The Times article will hang right next to Clinton’s signed admission of guilt to lying in a federal court, and accepting the fine and loss of his law license, over his personal signature.


Did the Bush administration do anything to stop the pending crises? No.


The Democratic Party is the Party of Social Engineering.


The Republican Party is the Party of Social Engineering, Lite.


Fewer Carbs, Same Terrible Taste.

The Rationality of Risk

 “Redlining” was ended by federal interference with the banking industry pretty well, but the reason for redlining was both a dollop of pure racism, and a dollop of rationality from the assumption of risk.


Individuals, and institutions had proportions of each – racism and rationality.


It is similar to grocery stores, which for generations have been in short supply in poor neighborhoods and those that existed had high prices. The fact they were there at all belied the charge of racism, but the charge was made because of their high prices. It was not easy to explain the high prices were a result of “shrinkage” (called theft in nice neighborhoods) and high insurance rates. (See Watts, California.)


High risk, for whatever reason, means that SOMEONE must cover the risk. The government decided to do that.


Yes, there are a few middle class who borrowed against their equity for a Lexus and must default in a downward market, but the greater proportion of problems are those poor whose reach exceeded their grasp.


And the lending institutions, knowing their risks were backed by FM Squared, took the easy money.

Instant Analysis

There is not sufficient information to properly analyze the Bailout, but that does not mean that we can’t discuss the general subject.


It is apparent that the final edition is better than what was proposed first, which was a Wall Street plum with sufficient pork to a particular segment of Special Interest Groups for the Democrats to jump on board.


The public screamed, so the pork was apparently reduced and a few safeguards were introduced to produce what can rightly be presented as a lipsticked pig to give the stock market a date for Monday.


Would the market have tanked? Who knows?


Markets are based on confidence, and confidence is impossible to predict.  It would have been an impossible situation, so I suppose doing something is better than doing nothing but the doing something did not include replacing Paulson, Cox, Frank, Dodd.


In the early 90s, I turned a computer company around for the federal Bankruptcy Court, and the second the Court released the company I resigned, saying to the President: “I can only do this once, but you will be back in bankruptcy because none of the top management has changed. Don’t call me again.”


Yes, they went into bankruptcy again. Managements do not change their style, but certain styles are more appropriate in different circumstances. There are probably 50 managers who could make this banking system whole, and none of them are part of the turnaround management package. The managers, and the overseers are all politicians who could not run a successful Dairy Queen, much less General Electric, and certainly not the national economy.


The names that brought us here, remain here. A new administration will permit changes but if you notice, new political administrations just bring in old political names.


The lawyers say “Hard cases make bad law” – and that is one thing I agree with them about: This is a hard case, and I suspect a bad law. Certainly one written hastily.

Could a Change be Coming?

The calls for Palin to resign because she does not have sufficient “heft” should be seriously considered in view of the economic crises – and she should be replaced by Mitt Romney.


This would put the nation first – and it would give the Democrats the opportunity to have their brilliant but erratic VP nominee to step aside for Bloomberg.


That lineup would give the nation the opportunity to have the best chance for the future.


Bet you have not heard the results of The House Select Committee on the Voting Irregularities of August 2, 2007.


No, of course you haven’t – even though they issued their report a few days ago.


You do remember vote 814 in the House? That is where the Republicans brought up an amendment that would stop illegal aliens from receiving taxpayer funded benefits under the Agriculture Bill of 2007.


You may recall that the Republicans won that vote (215-213), then the Acting House Speaker (Rep. Michael McNulty (D-N.Y.), gaveled the vote closed.


Then he gaveled the vote back open while Democratic House Leadership changed sufficient votes to overcome the previous vote, and the gavel came down a second time (212-216) with illegal aliens getting the taxpayer funded benefits.


Republicans walked out in protest to this extra-legal and high-handed activity. The Acting House Speaker apologized the next day but the vote was not overturned.


The House Select Committee on the Voting Irregularities of August 2, 2007 was established, and a few days ago they issued their report: The second vote was indeed illegal, immoral and fattening.


Now, what is Miss Nancy going to do about it?

NY Times: Exposes the Genesis of the Problem

If you believe that the New York Times is the Newspaper of Record, then it’s September 30, 1999 article points to the Genesis of the sub-prime meltdown, and it is, Bill Clinton:

(Quote) 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.

The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

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.

”Fannie Mae has expanded home ownership for millions of families in the 1990’s by reducing down payment requirements,” said Franklin D. Raines, 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. (UNQUOTE)




Economy Bailout

The sooner everyone realizes that the purpose of a home is to keep the rain off, the rattlesnakes away, and the sun from scorching the top of your head, the sooner all of the markets will recover.



We live Walter Middy lives in our minds, where we could play professional level sports, compete in F1 with the right car, and we would have gone to an elite Eastern college except our (brother)(mother)(father) got sick.

There are a very few first-rate economic minds, but those we have are not in Washington and are unlikely to be there because their minds work differently than being around political people.

My studies of WWII showed me that we won only because we made fewer mistakes than our enemies, and I now conclude that our economy is better than the rest of the world only because their economies are run from Paris, or London or Brussels with more mistakes than Washington makes, hard as that is to believe.

This entire crises was begun and fostered by selling homes to people who were never qualified to pay for them. When the smoke clears, we need to find out how that happened.

The economic crises was caused in Washington and on Wall Street – what makes us think either of them is the solution?


There are minds who can solve the problem – without concern for their political party: Jack Welsh, Warren Buffet, Bill Gates, Michael Dell, Mitt Romney…people who have demonstrated that they know how markets and industry work without printing money or demanding money from the taxpayers.








The Left Just Gets Nuttier and Nuttier

From Reuters:

(Quote)Nobel Peace Prize winner and environmental crusader Al Gore urged young people on Wednesday to engage in civil disobedience to stop the construction of coal plants without the ability to store carbon.(Unquote)

Tickets to China, anyone?

(The left just gets nuttier, and nuttier.

The Nuts are Busy

The left wing nuts are at it – again.


PETA is asking Ben & Jerry’s to substitute mother’s milk for cows milk.  


Then there is a report from the Guardian on research claiming that there is a large middle-class of environmentalists who recycle, then jet off to two distant ski trips a year – net earth abusers, but with a clear environmental conscious.

(Quote)Stewart Barr, of Exeter University, who led the research, said: “Green living is largely something of a myth. There is this middle class environmentalism where being green is part of the desired image. But another part of the desired image is to fly off skiing twice a year. And the carbon savings they make by not driving their kids to school will be obliterated by the pollution from their flights.”(Quote)

But then Bette Midler is giving up touring to “save the planet.”

Now if we can get Al Gore and Governor Arnold to do the same – so I remain Greener than Gore, and Arnold.

Follow the Money

I am certain most people can tell the difference between the teaching of Christ, which were an admonition that HIS FOLLOWERS “should” help the poor; and government which uses the force of arms to require that EVERYONE “must” help the poor.


The Center for Responsible Politics tracks donations to Congresscritters at Open Secrets dot org — by industry, by year, by Congresscritters. It also lists % given to Democrats and to Republicans in Congress.


If you look at the 2008 for the top 50 industries, you will see that the most money was donated by lawyers and Law Firms, $88+ million of which 78% went to Democrats and 22% to Republicans, and the top recipient was Barack Obama.


The second largest pool of money came from those who list their Occupation as “Retired.’ That amount was $79+ Million, 55% went to Democrats and 45% went to Republicans, and the top recipient was Barrack Obama.


The third largest industry to curry favor was the Securities and Investment Industry which donated $47+ million, 66% went to Democrats and 34% to Republicans, and the largest single recipient was Barrack Obama.


Etc., etc., etc. Read the industry, the money and the list. Real Estate went to Hillary (#4), and Insurance to McCain (#7), and Susan Collins is on the list as is John Murtha.


Read the list  for yourself. That website has tons of data. Follow the money.