The Mortgage Debacle - Not Enough Blame To Share Some With The Democrats?

Nancy Pelosi somewhat implausibly insisted that Democrats are blameless in the current mortgage debacle:                                       

House Speaker Nancy Pelosi, when asked Tuesday whether Democrats bear some of the responsibility regarding the current crisis on Wall Street, had a one-word answer: “No.”

Pelosi (D-Calif.) ripped President Bush’s “mismanagement” of the economy and a lack of regulation that led to the current situation.

“I think the American people have had it with this situation where the middle-income people in our country are not protected from the ramifications of the risk-taking and the greed of these financial institutions,” Pelosi told MSNBC.

Barack Obama blames Bush for slack oversight:

When the White House is hostile to any kind of oversight, corporations cut corners and consumers pay the price.

However, the record tells the opposite story - Bush has been pushing for stricter regulation of Fanni Mae and Freddie Mac for years and has been blocked by Congressional Democrats.  Let's go back to 2003 with the NY Times:

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, 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.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

Prescient!  So what happened? 

The proposal is the opening act in one of the biggest and most significant lobbying battles of the Congressional session. 

But who could be opposed to more stringent regulation?

Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said.

Bloomberg News recapped what happened:

In September 2003, Treasury Secretary John Snow urged Congress to get tough with Fannie Mae, the giant mortgage company run by former Seattleite Franklin Raines.

Snow said lawmakers needed to create a strong federal regulator to scrutinize Fannie Mae, which controls almost $1 trillion of home mortgages.

Raines, Fannie Mae's chief executive officer, said he welcomed the idea.

"Fannie Mae looks forward to working with Congress and the administration to see the proposal enacted into law this year," Raines told the House Financial Services Committee.

But behind the scenes, Fannie Mae's Chicago office mobilized to gut Snow's plan.

"Hi everyone -- We are reaching out for your help!!" the office wrote to mortgage bankers in an Oct. 6 e-mail. The note urged recipients to tell congressional leaders to keep their hands off Fannie Mae. Within days, the initiative died.

Bush and his Republican allies in Congress pushed again for tighter regulation in 2005:

Senator Richard K. Shelby, the Alabama Republican who is chairman of the banking committee, said on Wednesday that Mr. Raines's departure would almost certainly give Congress renewed impetus to crack down on Fannie Mae, the nation's largest source of financing for home mortgages.

The dismissal "does not obviate the need for enhanced regulation," he said in a statement, adding that "if anything, this change in management reinforces the need for comprehensive regulatory reform."

Similarly in the House, Representative Richard H. Baker, a Louisiana Republican and member of the financial services committee, said he would reintroduce legislation early next year to create a new regulatory agency for government-sponsored enterprises like Fannie Mae and its smaller brother, Freddie Mac.

The legislation, expected to have the strong backing of the Bush administration, would grant the agency the power to bar such companies from creating new lines of business, a move that Mr. Raines has opposed, saying it could raise the cost of borrowing money for new homeowners.

By October 2005 the Senate was sitting on a tougher bill but the House version was watered down:

WASHINGTON, Oct. 26 - Responding to the accounting scandals at  Fannie Mae and  Freddie Mac, the House of Representatives approved legislation on Wednesday overhauling the regulatory oversight of the two huge mortgage financing companies.

The legislation, approved by a lopsided vote of 331 to 90, would create a new regulator for the Federal Home Loan Banks and for Fannie Mae and Freddie Mac, companies formally known as government-sponsored enterprises. The new agency, the Federal Housing Finance Agency, would be financed through assessments on the banks and companies. It would have the authority to set capital requirements, reject new business products being offered by the companies and limit their portfolio holdings.

"What we enable with the passage of this bill is the creation of an independent regulator with all the tools necessary to protect the taxpayer," said Representative Richard H. Baker, a Louisiana Republican who is the chief sponsor of the bill. "This is a fair compromise."

But the measure was sharply criticized by the Bush administration and differs significantly from legislation moving through the Senate.

Even as they have weathered financial scandals and management shakeouts, Fannie Mae and Freddie Mac, along with their political allies in Congress and the mortgage and construction industries, continue to exert considerable political influence on the legislation.

They soundly defeated one attempt to eliminate Fannie's and Freddie's ability to borrow money from the federal Treasury and a second amendment that would have given their new regulator greater authority. They also saved a provision that would give them the ability to provide financing for larger and more lucrative loans.

By a voice vote, the House also approved an amendment supported by Fannie and Freddie and opposed by the Bush administration that would continue letting the White House select a number of board members. In the past, investors have inferred that such political appointments mean that the federal government will rescue Fannie and Freddie in case of default. It is that belief that has enabled Fannie and Freddie to pay lower interest rates on their bonds than most other companies pay.

Times editors were pleased by the bill, which directed more money towards affordable and low-income housing.  However, opponents of the bill managed to run out the clock in 2006 despite more problems at Fannie and Freddie.  When the housing crisis become unavoidable the Federal Housing Finance Agency was finally created in 2008 as part of a deal in which Democrats got more aid for distressed homeowners and Republicans got a tougher regulator.

I know what you're thinking - why didn't anyone realize that Fannie Mae and Freddie Mac were contributing to a housing bubble?  Actually they did - this is from a 2005 Heritage paper:

In 2003, Wayne Passmore, a Federal Reserve economist, wrote that “the GSE’s [Government Sponsored Entities] implicit subsidy does not appear to have substantially increased home-ownership or homebuilding” and argued that the GSE’s activity slightly lowered mortgage rates for some homeowners.[10] More recently, an article in the prestigious Journal of Eco­nomic Perspectives contends that “it does not appear that the companies’ activities have appreciably affected the rate of homeownership in the United States” and cites several other studies that support that view.[11]

One reason for the tenuous connection between a general increase in mortgage credit and increased homeownership is that beyond some point, an increase in mortgage credit availability mostly makes itself felt in higher loan-to-value ratios (lower down payments), higher home prices, and/ or a diversion of mortgage credit to non-housing investments. As the early postwar record indicates, existing private credit markets were perfectly capa­ble of driving the homeownership rate into the mid-60 percent range. However, as more credit is forced into the system through the creation and expansion of subsidized GSEs, mortgage interest rates may fall somewhat, but this encourages pri­vate financial institutions that provide housing credit to look elsewhere for investments with better yields. While the slightly lower interest rates encourage and/or allow some moderate-income borrowers on the margin of eligibility to become homeowners, this stimulative effect may be partly or wholly offset by a credit-induced rise in home prices in excess of the growth in personal incomes.

We saw the rise of home prices in excess of income growth, higher loan-to-value ratios and a search for higher yields on the part of restless lenders.

Plenty of blame to go around but Bush may actually deserve a bit less and Pelosi and Congressional Democrats a bit more than they realize.

Comments

[Jim Rhoads aka Vnjagvet]

And here's where a big part of the discussion on the Iraq thread fits in.

Obama and Biden were part and parcel of the "anti redline" (i.e. easy credit to risky borrowers in low value real estate areas) crowd who got big donations from home builders like Resko, Fanny, Freddie and Countrywide. High ranking advisors too.

Who will publicize these facts?

We will, of course. Hopefully the McCain ads will now counter Pelosi's willful lying BS with the well-documented facts.

Watch the fur fly.

[PrestoPundit]

Let's put a little bit more bipartisan blame where bipartisan blame belongs: with the Federal Reserve.

The housing market and the mortgage business and the finance industry couldn't have become a full blown economic crisis without the flood of money supplied by the Fed at far below the natural rate of interest.

This is a classic artificial boom / inevitable bust explained and predicted by the economics of Nobel winner Friedrich Hayek.

Yes these institutions are badly constructed, and these regulatory schemes are an outrage, and Congress did nothing but make matters worse over the last decade. But the giant numbers we're talking about would not have happened without the bipartisan disaster which is the Federal Reserve Board over the past dozen years.

[M. Simon]

Presto,

You also need to look into places like China that hold a lot of American $$ and wanted a better Government backed ROI than T-Bills.

[kim]

So we know the Democrats lie and the media perverts the news. What is the solution?
========================

[M. Simon]

Defeat the Democrats and let the Shrinking Media shrink further. Evolution in action.

[Neo]

This seems to condense it quite well ...

The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but "predatory."

Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the '90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train wreck.

And it was the Clinton administration that mismanaged the quasi-governmental agencies that over the decades have come to manage the real estate market in America.

Story short, Clinton et al super-charged the role of Fannie and her brother Freddie Mac, appointed a bunch of cronies to sack them, others joined in the fun, and we are left with a big mess that will cost billions.

[Bob]

Hope to see this on the front page of the NYT and WP this morning./s

BREAKING THE BANK

The woman whom Barack Obama is crediting for organizing the Barbra Streisand fundraiser it held last night in Hollywood is also partially responsible for one of the greater banking collapses in American history.

Penny Pritzker, Obama's national finance chair was, with her family, the half owner of Superior Bank, which was shut down in 2001 by the FDIC after it had lost nearly all of its more than $2 billion of assets on bad loans to high-risk borrowers, federal regulators said.

Pritzker has avoided media attention over the past week as reporters covering the Obama campaign sought comment on the Fannie Mae and Freddie Mac debacle.

Pritzker also served as finance chair for Obama's Senate run, and supported him during his time in the Illinois state legislature.

One reason Pritzker may have been enamored with Obama was his willingness to press legislation that loosened state regulatory policies for land developers and multi-family property owners.

Pritzker is also known to be close to Obama adviser Valerie Jarrett, a former political operative for Mayor Richard M. Daley, and the CEO of a housing and development company based in Chicago with ties to Obama going back to his Illinois legislature days.

Jarrett, by the way, is now considered to be the top candidate to fill Obama's Senate seat should he be elected President.

see the link for good stuff on Obama and Iraq...

STANDING BY THE STORY The Obama campaign spent more than five hours on Monday attempting to figure out the best refutation of the explosive New York Post report that quoted Iraqi Foreign Minister Hoshyar Zebari as saying that Barack Obama during his July visit to Baghdad demanded that Iraq not negotiate with the Bush Administration on the withdrawal of American troops. Instead, he asked that they delay such negotiations until after the presidential handover at the end of January.

[PeterUK]

Is Nancy with the locked on eyes saying the Democrats have failed in their role of congressional oversight?Have the Democrats been spending too much time on witch hunts and neglecting their job?

[Pagar]

Good Morning to All!
With the mortgage scandal finally putting some
Democrats in the limelight, it is important to remember that the American voter could replace every single House member that has an challenger on Nov 4. We can make a difference in the election booth.

[syn]

Whether it is this issue, the energy issue, fraulent climate change issue the fact is this Congress is the most corrupt Congress in US history.

Unfortunately there is only one candidate who is not a member and dear friend of the most corrupt institution.

Whereas McCain, Obama and Biden are.

I cannot believe McCain's 'Reform' when he has invested so much love and care for his corrupt friends.

What good will come of McCain imposing more regulations on Wallstreet when his dear friends in COngress who are in charge of this oversight are doing the dirty back-door dealing.

McCain is only going after Obama just because he is the opponent, I might be able to trust McCain when he goes after his other corrupt dear friends in Congress.

Take your own advice Senator McCain:

Stand up and fight against your own dear friends in COngress who operate the largest corruption in America!

Going after your corrupt dear friends in Congress is the only way you'll be about to Reform Washington DC.

The reason why I don't trust you Senator MCCain is because you're going to put all the blame on the banks while covering for your dear friend's corruption in Congress.

Senator McCain, you are part of the dirty-dealing back-door, good ole boy and girl problem and unless you change then your your corrupt Congressional friends will remain the same.

[M. Simon]

McCain goes after ∅ and cronies on mortgage scam - video

[M. Simon]

syn,

You think ∅ will go up against his cronies? The ones on his campaign staff? His D friends in Congress? How about old what's his name?

Do you think Johnny Mac will fight his own party? How about Our girl The Moose Hunter?

[SWarren]

O/T
House Passes Drilling Bill.
The games Democrats play!
This is just a sop to the outcry from their constituents demanding more drilling. But they've loaded it with so many restrictions that it's nothing but a facade to get them through the elections.
"See, we passed a drilling bill."
Same old same old!

LUN

[Pofarmer]

“I think the American people have had it with this situation where the middle-income people in our country are not protected from the ramifications of the risk-taking and the greed of these financial institutions,” Pelosi told MSNBC.

If you didn't borrow yourself into too big of a house, boat, RV, etc. Just what exactly are the ramifications to middle america? Sure, the majority of folks have 401k's now, so are more at risk in the stock market, but I doubt that's what Pelosi means. I really wish she would explian herself. Fat chance.

[rhodeymark]

And here is a perfect example of how Bush has damaged the brand, hopefully not fatally (this election is a good marker). He is willing to use the bully pulpit to go to the mat over Iraq, but takes shots from the MSM over issues like this, while allowing disinformation to take hold. He far too often concedes the moral and strategic high ground given to him. I believe the media actually respected Bill Clinton's audacity in using the power of the presidency for partisan and CYA purposes where he had no moral standing, i.e., the truth.

[Captain Hate]

rhodeymark, I think you give GWB too much credit in addressing Iraq; I believe he hasn't done nearly enough as far as using the power of his office to keep the nation informed of the progress. I don't know what the reason for that is (a couple hypotheses are that he either doesn't like doing it and/or feels that it should be unnecessary) but imo it's been an area in which he's been sadly deficient and has allowed others to shape the agenda. Clinton understood the power of the image of the presidency going back to his early infatuation with JFK. Plus he's such a tireless windbag.

[Robert Bell]

Nice timeline, although Mike Oxley seems to have a different take:

http://www.ft.com/cms/s/0/8780c35e-7e91-11dd-b1af-000077b07658.html

About all we can say for sure is that the right regulation did not happen at the right time. I'm also not sure anyone is certain what the correct regulation should have been.

[SWarren]

Prominent Clinton backer and DNC member to endorse McCain

Heh!! methinks a little Hillary strategy is in play. She can continue loyal support for Obama while her people abandon him. She needs Obama to lose.

[fdcol63]

" ... but takes shots from the MSM over issues like this, while allowing disinformation to take hold ..."

No doubt. He or his press secretary should hold a large press conference, and basically preset the same information and quotes from the NYT that TM has here.

Throw the Dems words right back at them, and destroy their credibility.

[fdcol63]

preset .. shoulda been "present"

[SWarren]

No doubt. He or his press secretary should hold a large press conference, and basically preset the same information and quotes from the NYT that TM has here.

Throw the Dems words right back at them, and destroy their credibility.

Sigh. If only he still had Tony Snow.

[Porchlight]

Clinton pulls out of Ahmadinejad protest rally because of Palin

Hill was supposed to be the keynote speaker. Maybe she's afraid she'll be upstaged.

[TCO]

Figuring an even share per person, just this most recent bailout is like a $1,000+* investment in something I don't want to be invested in.

We should not be spending taxpayer money bailing out any of these financial entities. Let them go into bankruptcy. Equity owners will lose all. Subordinated debt holders will lose much. Senior debt holders will lose little.

There is no reason to be bailing out fatcat managers. And no reason to be bailing out all the speculators who held subordinated debt.

No compelling reason for nationalizing the financial industry. (It will exist fine after rottenness is purged. There will still be someone around to charge you commissions, don't worry about that.) And also no reason to think that the government is valuing the entities more appropriately than the market (which refuses to lend them money).

Even politically, this thing is a loser. It totally saps any type of ethic of free market belief. Many of the individual wealthy people being made whole are New York liberal Democrat financiers.

The only conceiveable reason to do this is some sort of fear of being portrayed as "Hoover". However, this is the same fear that led Republican Congresses to spend at a higher rate than Democrat ones. What's the point of having Republicans in power then?

If I don't hear from the McCain-Palin camp bashing the Bush administration's taxpayer giveaways, I will have to switch my vote back to Barr.

I'm actually wondering if things would be better under Obama. Not because he is more free enterprise. But because he has to defend himself from being called socialistic. Whereas the Republicans bend over like a shtuppable limbo dancer to avoid being called scroogey.

----------------

Country first.

* On a per capita basis, it's $300. But most people don't pay taxes.

[Extraneus]

I believe he hasn't done nearly enough as far as using the power of his office to keep the nation informed of the progress. I don't know what the reason for that is (a couple hypotheses are that he either doesn't like doing it and/or feels that it should be unnecessary) but imo it's been an area in which he's been sadly deficient and has allowed others to shape the agenda.

The Captain is right. This was Bush's most major failing, and it wasn't just his image that suffered as a result. I only hope that if McCain pulls it out, his first action is to form a rapid-response team, made up of partisan street fighters unafraid to get into the gutter when necessary. I fear, however, that his instinct will be to try the bipartisan route instead.

[SWarren]

No doubt. He or his press secretary should hold a large press conference, and basically preset the same information and quotes from the NYT that TM has here.

Throw the Dems words right back at them, and destroy their credibility.

Sigh:>( ...If only he still had Tony Snow.

[boris]

In the first place nobody wants to hear from GWB anymore. In the second place the guy as been PalinBorked for 7 years. Even with the blatent MSM deconstruction of Sarah, people still want to believe Obama didn't really call her a pig with lipstick. The MSM has to concentrate Borking Sarah into just a few weeks and as obvious as that is it still works. Like it or not the MSM can still swing conventional wisdom.

Once the dimorats are safely in power the MSM can go back to pretend fairness.

[RichatUF]

test

[boris]

pass

[M. Simon]

SWarren,

I just talked to my Senate Staffer and told him to flood the zone re: the poison pills in the drilling bill.

He liked the idea.

[you're an idiot]

"By October 2005 the Senate had passed a tough bill but the House version was watered down."

And you're blaming Democrats for this?

October 2005! you sad sorry lying fool.

This is when Delay and his ilk ran the House (into the ground).

The Schiavo affair was in 2005. Bush and Delay could have gotten anything they really wanted through the House.

Goddamn i hate dishonesty.

[bio mom]

Pagar: I agree. Throw all the bumbs out of Congress and start over.

[M. Simon]

TCO is running for Herbert Hoover's old job.

[rhodeymark]

Boris - that is what is so energizing about the Governor. There is a hope bordering on belief that she will not allow herself to be kicked-dog-syndrome conditioned. That is also why she deserves full throated support as she weathers her first taste of the National Sneer©
CNN just had a story about how she keeps the curtain closed on her plane instead of yucking it up with the haters. They truly think they can urinate on her shoes and tell her it's raining. My fervent hope is that she meant what she said when she declared she would talk over and past them to the American people. FEED ME SEYMOUR!!

[M. Simon]

idiot,

You might want to find out who watered down the bill.

Then you might want to ask yourself why the most honest Congress in history hasn't attacked the problem left by the previous miscreants?

[M. Simon]

TCO,

Pay attention.

∅ has the crooks on his payroll.

[clarice]

CNN reports Fiorina under the bus. Bye Bye. She deserved it for such a stupid remark.

[boris]

blaming Democrats ...

Need reading glasses? Title: Enough Blame To Share Some With The Democrats

Apparently the group that tried to prevent the current meltdown were Republican, including McCain and Bush.

Goddam You are One Stupid Idiot.

[bad]

A staffer on Bidens prep for VP debates: LUN

He really wants to be in the zone for this debate and he is working hard. I saw him work hard to prep on the Roberts and Alito confirmation hearings. He's working twice as hard on this, because the stakes and the rewards are so much higher."

Get in the zone Joe. I loved, loved, LOVED you in the confirmation hearings.

[rhodeymark]

Idiot - I believe the theme of this post is premised on Pelosi's "who me?" schtick. You have seen the list of the players so stop scratching the highchair. Johnny Mac is one of the first to admit that *that* Congress also dropped the ball.

[clarice]

Move America Forward has a video on Obama's two step re the Iraq pullout.
http://www.youtube.com/watch?v=bKqHFk-3yQM

[RichatUF]

boris-

YEA!!!!! I wonder if the UN passes out red stars.

And for the troll, sure the Bush Administration could have done "anything they wanted", which is way they belled the cat twice and the Congress (and the DNC cronies that ran Fannie and Freddie) took a pass.

In other market news, the Russian market is in a free fall-halted yesterday and today (so much for the BRIC-decoupling thesis and the oil boom). Guess they are getting the dividends from their foreign policy they deserve. Also its interesting they are blowing more steam about the Arctic (now they want to take the whole thing) and am curious if the USGS Arctic survey is in part driving the paranoia.

[SWarren]

M.Simon
Great! You know President Bush has already indicated he will veto the Bill because it is just crapola. But an uninforned electorate will fault him for vetoing a Drill Bill and the Dems will of course make a big display of him thwarting their efforts.
Best to get word out loud and clear that this is NOT a Drill Bill.

[boris]

There is a hope ... that she will not allow herself to be ...

It is not up to her. And if they succeed we then get to hear what she should have done, how she should have been more assertive, or less assertive, or this or that and why do our people always "allow" themselves to be Borked.

It seems like many are only dimly aware of the nature of the problem.

[Sue]

Get in the zone Joe. I loved, loved, LOVED you in the confirmation hearings.

LOL.

[Neo]

Drudge:DON'T BLAME US; PELOSI ORDERS WALL ST. PROBE

Yeah. Put it off till after the election.

[clarice]

Very good, bad. If it weren't so long, a video clip of Biden at those confirmation hearings would be a hoot.

For someone far cleverer than I a great ditty on the FNMA meltdown to the tune of "I don't know why she swallowed the fly" would be great. Here are a few grafs of the lyrics to get your creative juices flowing:
I know an old lady
She swallowed a fly
But I don't know why
She swallow the fly

- I guess she'll die

I know an old lady
Who swallow a spider
It wiggled and jiggled
And tickled inside her

She swallowed a spider
To catch the fly
But I don't know why
She swallowed the fly

- I guess she'll die

[boris]

I know an old lady who swallowed a cat.

Imagine that! She swallowed a cat.

She swallowed the cat to catch the spider
That wriggled and jiggled and tickled inside her

I don't know why she swallowed the fly
Perhaps she'll die

[boris]

Actually she swallowed the cat to catch the bird (Oh My Word!).

[Neo]

House Democrats plan to aggressively look at the administration’s role in the meltdown over the weekend and to explore further regulation and government structures that would be taken up under the new president.

Republican aides accused Democrats of trying to shift blame with a series of “show trials,” but acknowledged that key officials will wind up cooperating.

The hearings will take place over the next few weeks, the officials said. Treasury Secretary Henry Paulson, who regularly appears on Capitol Hill, will be called to testify as part of the investigation.

"House Democrats" will do what ? Coverup ? Misdirect ?

[Gabriel Sutherland]

What do you guys know about "Perseus LLC"?

I usually judge my investment bankers based on the amount of their campaign contributions, and the principles at Perseus LLC are the biggest Republican cheerleaders I have ever seen.

Of course I made up that last part. Perseus is the home of Republican stalwarts Richard Holbrooke, James Johnson, Philip Deutch, and Frank Pearl. OK. I made that up too. They actually all support Democrats.

[Jane]

Clarice,

After the election when Obama is returned to the senate, I would like to see him ousted from the Senate for his dirty dealing in Iraq. It won't happen, but of all the issues in this campaign, this one bothers me more than any other.

[PeterUK]

Mr Ballard ,
According to Data Explorers,a company which tracks share movements,some 20% of Lehman Brothers shares were shorted before the crash.This, apparently,is somewhat unusual The finger points to hedge fund traders.
Not a few financial institutions are being shorted and then subject to a rumour campaign as to their viability.
This needs a JOM investigation.

[Neo]

Lynn Forester de Rothschild, a prominent Hillary Clinton supporter and member of the Democratic National Committee’s Platform Committee, will endorse John McCain for president on Wednesday, her spokesman tells CNN.

This will leave a mark.

[Bob]

Good video Clarice... hopefully more will come from Move America Forward and will finally see some scrutiny of the "messiahs" hypocrisy!

[Extraneus]

Looks like there was quite a bit of jockeying involved in that 2005 bill.

The House bill sets aside 3.5 percent to 5 percent of the company's profits over the next five years for grants to build low-income housing. But a provision inserted in the bill at the 11th hour to assuage conservative Republicans provoked considerable debate because it would prohibit any group that engages in voter mobilization efforts from applying for grants.

The provision was opposed by more than 600 nonprofit and faith-based groups, including the National Urban League, Catholic Social Services, the N.A.A.C.P. and the Leadership Conference on Civil Rights. They said the provision was unconstitutional, contending that it interfered with voter registration efforts, and undermined the purpose of creating the housing fund.

"Under the Republican provision, you can't do get-out-the-vote efforts if you work in affordable housing," said Representative Barney Frank of Massachusetts, the senior Democrat on the House Financial Services Committee. "There is an extremism here that is not comprehensible except if you know the history."

"It has always been clear that the money can only be spent on affordable housing," Mr. Frank said of the housing grants.

Representative John Lewis, the Georgia Democrat who became a national figure for his leading role in civil rights struggles of the 1960's, concurred.

"I can't believe this is happening in 2005," he said. "This is not 1964. This is not 1965. What we are saying is our own people, churches, synagogues, cannot participate in nonpartisan voter registration drives. What are we saying to the world? This provision will take us back to the dark past. We can do better, much better."

But the Republicans disagreed, saying the provision would insulate the money from being used for political purposes.

"This provides accountability for where the money goes," said Representative Michael G. Oxley of Ohio, the chairman of the House Financial Services Committee and a main sponsor of the legislation. "We want to make certain that every dollar we make available goes for housing."

Mr. Baker said that for those groups who want to apply for grants and are also politically involved, "They will have to make a choice."

[bio mom]

Carly Fiorina: First tanks Lucent, then almost HP, now trying McCain campaign.

[Rick Ballard]

"What do you guys know about "Perseus LLC"?"

Aside from the fact that it's a Soros brothel with a publishing arm, not a lot. When you see Perseus you're seeing a termite colony working overtime.

[bio mom]

Typical Dem response: Just blame Bush. I hope the electorate is on to this scheme by now.

[clarice]

It would help, as Kaus noted, if the Lynn anti-elitist didn't have the de Rothschild after her name.

Palin and Hillary were BOTH supposed to address the anti-Irani (pro-Israel) rally outside the UN next week. Today Hill backed out.

[bio mom]

And who will she put in charge? Charlie Rangel??

[clarice]

It bothers me a great deal, too, Jane. It's such obvious perfidy, self-dealing at the expense of his nation, I cannot imagine how it could not enrage voters. But it doesn't seem to have..yet.

[Gabriel Sutherland]

You know who I would put in charge of investigating financial failures on Wall Street?

The 14 percent approval rated US Congress.

I can't believe this is happening. When the heck did the Bilderbergers acquire more credibility than the US Congress? And a Rothschild can publicly support a Republican for President?

Alex Jones must be ballistic today.

[DebinNC]

Given the importance of the jewish vote and the misperception that BO's muslim, would someone tell me how Hillary huffily spurning the NY anti-Iran nutjob rally is helpful to Obama?

[ben]

"I'm actually wondering if things would be better under Obama. Not because he is more free enterprise. But because he has to defend himself from being called socialistic."

Right, I can see that as one Obama's biggest worries, avoiding being called socialistic. He will be really worried as the government takes over health care and he institutes "wealth redistribution". He was really worried about it "when he sought out Marxist professors", and when he was pals with terrorist bomber Ayers. He is really worried about it now as he dines with all the leftist kooks in Hollywood, and uses Moveon and Kos to further his candidacy. Socialism is a badge of honor for Obama, he will wear it on his sleeve if he is elected.

[RichatUF]

Gabriel-

What do you guys know about "Perseus LLC"?

My quick googling got a hit on Clean Energy Fuels Corp (the green scam which has Nancy Pelosi as investor). Also got a hit on Soros. This topic came up when McClellan published his book.

[Neo]

Unfortunately, this wasn’t the case for the 1,406 people who lost much of their life savings when Superior Bank of Chicago went belly up in 2001 with over $1 billion in insured and uninsured deposits. This collapse came amid harsh criticism of how Superior’s owners promoted sub-prime home mortgages. As part of a settlement, the owners paid $100 million and agreed to pay another $335 million over 15 years at no interest.

The uninsured depositors were dealt another blow recently when the U.S. Supreme Court let stand a lower court decision to put any recovered money toward the debt that the bank owners owe the federal government before the depositors get anything.

But this seven-year-old bank failure has relevance in another way today, since the chair of Superior’s board for five years was Penny Pritzker, a member of one of America’s richest families and the current Finance Chair for the presidential campaign of Barack Obama, the same candidate who has lashed out against predatory lending.

[rhodeymark]

boris - the media has only as much filter power as they are given. Maybe I underestimate the enormity of the problem, but I think the gist of it is clear. Unless and until they are either a) called out by someone who actually has a bigger megaphone, or b) circumvented by official elevation of new media, then they will continue to wield the rod, even in a declining circulation and revenue environment. The wires are the worst, but they have institutional advantages that haven't been overcome - yet.

[matt]

Can the SEC or Justice Department open their own inquiries? Perhaps that is what is needed. Much of the blame seems to reside with Congress, and an outside investigator should be appointed.

[ben]

"It would help, as Kaus noted, if the Lynn anti-elitist didn't have the de Rothschild after her name."

Why, wasn't that her name when she was supporting the Democrats?

[bio mom]

Obama would fit right in with the Dem Congress favoring socialism. Why would he fight them??

[bio mom]

A worrisome event posted at Red State this morning. Seems some money-markets are threatened. I really do not understand economics (wish I did now) but some there are quite concerned. If anyone here knows about this stuff could they clarify it to the rest of us?

[PeterUK]

The back story on Lehman Brothers crash.

[clarice]

Good point, ben..still with that much money and that name one wonders how much cred she has in attacking elitism.
Mind you, I'm glad she's jumping ship. I hope she brought her purse with her.

[Bob]

Vets for Freedom ad: Recognize the victory, Senator Obama from Hot Air

Another Good Video

[TCO]

Why are we bailing out companies. It does not make sense economically OR politically. Now we are doing the wrong thing and allowing the Democrats to take a position to the right of us. This is insane. Grow some balls, M. Simon and Bush and the rest of you party hacks.

[fdcol63]

" ... Socialism is a badge of honor for Obama, he will wear it on his sleeve if he is elected."

And we'll all get a good look at it as he shoves it down our throats.

[sbw]

"What do you guys know about "Perseus LLC"?"

...Soros brothel with a publishing arm? I KNEW that rang a bell! Their subsidiary published Scott McClellan's sorry book.

[sbw]

Whoops! Rich beat me to it.

[boris]

Why are we bailing out companies

Maybe because the dimorats have swerved the economy into a ditch and are in position to exploit the crash.

[Gabriel Sutherland]

Much of the blame seems to reside with Congress, and an outside investigator should be appointed.

This isn't one person or one institution's fault. If you want to blame anyone, the blame would go to the Federal Reserve System. You can only control inflation for so long without adverse consequences. Even without a Federal Reserve System, the United States experienced identical crises about every 20 to 25 years.

AIG's business is inherently risky without trying to insure the subprime market. But whomever made the decision to insure those subprime mortgage backed securities is a colossal failure.

[SWarren]

The wires are the worst, but they have institutional advantages that haven't been overcome - yet.

There is the crux! The stories are biased from the get go. Old media amplifies it. It's only the new media that exposes the bias

[bad]

"It would help, as Kaus noted, if the Lynn anti-elitist didn't have the de Rothschild after her name."

Her name could be a big advantage in persuading those who are waffling about voting for McCain because of the "trailer trash" label applied to Palin.

[PeterUK]

"I'm actually wondering if things would be better under Lenin. Not because he is more free enterprise. But because he has to defend himself from being called socialistic."

[TCO]

Bullshit. Bush could stop Paulson with a direct order. He's the captain of this ship and the decisions to do the bailouts are ON HIS WATCH. I'm not blaming Bush for the economy. Not blaming him for the financial crisis. I'm blaming him for responding in a way that is transferring taxpayer wealth to bondholders. Let the bondholders take their loss. That is the free market, people.

[PeterUK]

TCO,
Congressional oversight.

[Gabriel Sutherland]

A direct order from Bush has happened before. Arthur Anderson? No bail. Enron? No bail. Worldcom? No bail.

The same Democrats like Bob Rubin and Richard Holbrooke were begging for Enron and Arthur to be rescued back in 2001 and 2002. These firms dug their own graves.

What has changed is the political market. AIG failing is a real big problem. The major banks know it. That's why their lobbyist(The Federal Reserve System) was organizing meetings to see if the banks themselves could save AIG. They could. They aren't. The banks made a political decision to force the AIG failure on to the Federal governments plate at the worst time possible. It's 50 days to election day. The US Congress has the worst approval ratings EVER. The President has low ratings, but they're rising.

Is this bad? Believe it. But it gets worse. The Council on Foreign Relations(the think tank for the Banking and Finance sector) is turning a blind eye towards Russia expanding their forward operating zone into sovereign nations AND launching new arms sales contracts with inherently risky dictatorships in Venezeula and Bolivia. What the heck does Chavez need Tu-160 long range bombers for in Caracas?

[Gabriel Sutherland]

Oh, and the CFR is out there on television with the talking point "the Monroe doctrine is outdated".

[boris]

That is the free market, people.

Clever. Now for the first time ever let's pretend the housing market is "free" and tank the economy just to get TCO's one vote.

whatever happened to "you broke it, you fix it"?

[Charlie (Colorado)]

However, the record tells the opposite story....

There's a shocker.

[Ranger]

This may not play out the way the Dems think it will.

http://hotair.com/archives/2008/09/17/rasmussen-mccain-edging-obama-on-economic-issues/>Rasmussen: McCain edging Obama on economic issues

In times of trouble, people look for a leader, not a talker.

[Charlie (Colorado)]

TCO, I think this is more of a case of the "Pottery Barn Rule": you broke it, you bought it.

[RichatUF]

Gabriel-

...If you want to blame anyone, the blame would go to the Federal Reserve System

Don't go Ron Paul on us. The Fed has the dual mandate of full employment and price stability-a pretty difficult challange with the falling knives of housing and autos.

The Fannie and Freddie debacle were in addition to financial crises, foreign policy crises. The problem with AIG, after AAG Spitzer got done with them, is they went on a Euro-zone binge.

[Ranger]

BTW, I have a feeling Putin is going to get his wings clipped here by the Oligarchs pretty soon. His Grand Adventure in Georgia cause a liquidity crunch when a lot of foreign money bailed out. Now the Russian stock market is in melt down because the drop in oil prices is forcing Russians to liquidate to get their hands on cash to make up for the lost cash flow from oil and there is not enough foreign money left to keep the share prices up. Oligarchs don't like it when you cost them huge chunks of their wealth.

[RichatUF]

Seems my other comment has disappeared into the ether.

[bad]

Seems my other comment has disappeared into the ether.

Mine got caught in a spam filter?

[Charlie (Colorado)]

Alex Jones must be ballistic today.

You mean Alex Jones the Consummate Ass?

Hee hee.

[TCO]

Tradesports has Obama back over McCain. You idiots can follow Bush into a path of bailing out New York Democrat financiers. You will lose the conservative-libertarian wing of the party. Have fun, folks.

[TCO]

If you think that having taxpayers pay for endangered assets changes their value, you are stupid. Also if you think that propping up business with government cash is more beneficial for the economy than letting them find their bottom. Read some Milton Friedman, folks. You all are almost trite in your endorsement of classical goverment interventionism.

The bailout actions are DESTROYING wealth. And are transferring wealth from the taxpayers as a whole to individual losers on investments.

[Rick Ballard]

Mr Uk,

The hedge funds didn't show any particular brilliance by shorting Lehman. The jackals scent weakness (and Lehman made itself weak) and then pull down the prey. BTW - they have CITI's scent today and will be doing the world a great favor by ridding it of CITI's incestuously supine Board of Directors. The SEC stepped in this morning and stopped naked short sales, so CITI might survive. That would be unfortunate but perhaps the near death experience might force a board change.

[Enlightened]

OT - Getting back to Lipstick on a Pig -
If no one thought Bambi was referring to Pail with that remark - then why this?

Lovely blurb on leftwing gossip site TMZ (who pretty much led the smears on Bristol Palin and Levi Johnston)

"Palin –- The Pig Wears Valentino"

Sarah Palin's just your average hockey mom –- in silk shantung Valentino.

The Veep-seeker splurged for a $2,500 jacket from Saks designed by the fashion legend for her big RNC speech, reports the New York Post. It was at the urging of a team of stylists Palin's peeps have been trying to keep under the radar, so as not to confuse her hockey-mom, moose-hunting image.

The Gov's running mate's wife Cindy McCain recently took some flak for wearing big bling on stage.