PoliticalChatter

The bailout spin is in full force. Republicans point the finger at Nancy Pelosi, Barney Frank, one of the main players in setting up this meltdown, offered a snide remark and both presidential candidates are standing as if deer in headlights. In the meantime, the media is in full meltdown mode, despite the fact the DOW Futures are pointing towards an upward start and the rest of the world’s markets barely took notice.  

Although it is scary and every single American is concerned, the fact remains the bailout plan was a bad plan. It would have socialized the mortgage sector, but more importantly it would have put in motion a serious of events that would have concluded with the shutting off of the financial market.  

The government’s plan was to take control of these mortgages and eventually sell them off, creating a windfall profit for the taxpayers. First, there would have been no benefit for the taxpayer. The money would have been transferred to more government spending. Second, even more devastating would have been the closing off of the market. The largest banks that survive and those closest to the political leaders would have struck the best deals, crushed all competition and shut off the market, by buying up trillions of dollars of mortgages for pennies Just like the energy sector where only a few companies remain, the banking system would been dominated by a select few, decided by which bank donated how much to the what person; some system.

It looks like the bailout plan is failing in the House…Hurray for capitalism and rationality. If the boys on Wall Street want to sleep with those in D.C., they can pay their own bill!

Political talk this morning is of course the bail out. The bill is being debated and soon passed, but the fall out is still coming. It will be interesting to see how this is spun and which presidential candidate comes out on top. One aspect to watch is to see if the conservatives are deflated a bit with John McCain. 

Barack Obama’s inner circle is talking about a landslide victory based on first time voters, this is nothing more than moral building. Sure first time voters may flood the ballot boxes, but history shows even with a great turnout it won’t be that great. Also, Obama is talking about Indiana and Florida. Both states are doubtful for Obama and this is the same as when Republicans talk about New Jersey.  

There are some states that can be flipped andColorado is certainly one that can go for Obama, along withVirginia. For McCain he has a chance to make some inroads in the
Great Lakes with Michigan, Wisconsin and even Minnesota. Michigan is in turmoil, mostly under Dem rule, putting it in play. Wisconsin and Minnesota like the maverick idea and McCain could pull some votes.  

However, with all the talk about this voting group and that group, look for the red states to stay red and the blue states blue. When election night comes all eyes will turn towards Ohio and Virginia, they will decided the winner.

After a marathon session a bailout deal appears to have been struck. It is unclear what the bill will contain, but the political spin has started. Word is Nancy Pelosi played a big role in getting it done as the deadline approached.  

Of course both presidential candidates are rushing to make statements as Obama noted he spent two weeks on the phone, in contact with the necessary officials. John McCain said it will be a hard pill for everyone to sallow.  

As for the American taxpayer, there is little to be encouraged at, unless you are facing foreclosure. It is still baffling that the government can make a $700 billion dump in mortgage market and proclaim success. True success would have been to hand out the $700 billion to all qualifying taxpayers and pay off the mortgages. Such a move would have flooded the financial segments with cash and eliminated debt, something this plan is supposedly going to do.  

What is going on with the bailout plans? Not what’s being said. First the Democrats and Bush could push this deal through, with or without the House Republicans. They have enough votes to get it done, but they are scared this bill will fail and the meltdown will continue into next year. The Democrats are looking for cover by forcing the Republicans to come with them. 

Second, word is coming out that John McCain did not blow up at the White House. What really happened may never be known, but some are saying it was Barack Obama who started attacking the Republican House plan, raising tensions rapidly. Confirming that is nearly impossible.  

What we do know is this, both sides are playing presidential politics and both fear being wrong on this entire situation; which is likely to be those in favor of the bailout. Lastly, unless Fannie Mae and Freddy Mac are locked up the situation will never be cured and the credit problems will rage.  

Also, here’s a thought. If the government is concerned about the credit market, take that trillion dollars and distribute to those with mortgages. This would eliminate many mortgages, toss cash back to the banks and free up the market. If that is really their intentions.

Enough of this. I am going to rant, so if you wish not to read it move on. I say to all politicians stop, enough! This entire meltdown is your fault period. You may not have pulled the trigger, but it was you Barack Obama, Barney Frank, Christopher Dodd, John McCain, John Boehner et al, who created this entire situation.

Politicians are playing the American voters as fools. They are using fear and irrational thoughts of the voters as their reason and the law as their weapon. They pass laws under the disguise of being fair, understanding and caring. After pontificating about their own greatness, they walk off the stage and stuff their wallets with money generated by a system that shutdown with each piece of legislation. We have no invitation to this market and the gang in Washington wants it that way and their cohorts in New York are using it.

Nothing will be solved by this bailout package, it will only close the market tighter, leaving us looking in, while they continue to get rich. If you have any doubts take time to explore the personal wealth that many congressmen are building while making a relatively small income while living in one of America’s most expensive cities.

As for John McCain suspending his campaign, come on Senator get out there and debate Barack Obama and stop using us as your reason and demonstrating your greatness.

The Fannie and Freddie debacle continues. Congress is debating the Bush bailout plan with both parties racing for political capital. In the meantime F and F is just sitting there ready and still handing out millions of dollars in risky mortgages. This is an outrage.  

The entire housing meltdown can be pinpointed to F and F and now the federal government is the biggest single holder of mortgages. In essence, the federal government is wiping out the private property market, thanks in part to the private banking system and their reckless behavior.  

This can have a far more reaching and destructive effect than anyone is noting. The private sector cannot compete with the government simply because one is attempting to make money, the other is not. The government will offer mortgages at low rates, with few if any requirements focused on financial reasons. The mortgage sector is at a real risk of being taken over directly or indirectly 100 percent by the federal government. At the very least the mortgage system will soon be at the mercy of the federal government and their endless hurdles of red tape and political correctness. It is the unavoidable evolution of the process and in the end the destruction of private property.  

I encourage you to call your congressmen and demand that F and F be shutdown.  

This link will take you to a listing of the phone numbers, just simply type in your zip code on the left tool bar.  

http://www.congress.org/congressorg/home/

My plan was to spend all week pounding on the financial bail out issue and for good reason. The fact is for those fellow capitalism loving folks such as myself, this week is a crucial battle. Everyone is looking to point the finger as to the reason for the bailout and as usual most are pointing at Wall Street. The fact is some of those fingers need to point at
Washington D.C. and right back to

.  

Anyhow, I came across a story that was simply too captivating to overlook. Joe Biden told Katie Couric that a recent ad run by Barack Obama was terrible. Than later Obama scolded Biden for opposing the AIG bailout. This is an amazing turn of events with a presidential ticket opposing each other so openly. Although my memory is not long I cannot recall this happening so publicly. Biden was brought in to be an attack dog and yet he is scolding the campaign for doing just that? Amazing.  

So what does this all mean? Well, for fun perhaps this is an orchestrated dispute, one that will lead to Biden making a difficult decision; dropping off the ticket. Then of course that would create an opening for Obama to correct his biggest mistake of the campaign; Hillary Rodham Clinton.  

It is an interesting option and one that cannot be overlooked as Obama continues to struggle with blue collar democrats and the once large gender gap is just a mere crack in the sidewalk.  

The debacle that is Fannie and Freddie continues to grow. Now the federal government is about to toss in a major bail out plan for the entire financial system. Yet, standing in the corner watching is F and F, ready to continue subsidizing the reckless behavior of lenders around the nation.  

In the meantime, while bankers, lawyers, politicians and lobbyist grew richer and ranked in the benefits of the F and F, the taxpayer pays dearly. Not only have portfolios fallen for the average person, but nothing has changed. All those involved are free and spending; the politicians are on the verge of socializing the banking system and lobbyist are jumping in joy knowing that the financial market has been closed and their clients safe.  

The American voter should be outraged, but instead many are feeling gratitude for being saved by the politician. Instead of thanking them we should be tossing them out.

Oh Fannie and Freddie (F and F) what have you done to us? About a month ago I declared the
United States government should in fact, let them die. The reason is simple, they are the main driving force behind the financial meltdown, one that is only being patched not fixed.  

The creation of Fannie and Freddie (F and F) was done so in the name of doing what’s right. Their purpose was to finance mortgages to those applicants that would have otherwise been rejected; in essence it was mortgage welfare. It was another nobell cause that never did and was never intended to meet its proclaimed purpose.  

Banks around the nation soon realized that F and F was the golden goose. Loan officers were coming down with carpel tunnel, hitting the approval stamp so often. The reason is that these banks would accept questionable borrowers and loans beyond the borrowers’ means by the thousands, buddle them up and sell them to F and F. It was the perfect storm, they handed out the cheap money created by the Federal Reserve, built up the loans and sold them for profit to the F and F or more pointedly the
United States government.  

The problem is clear; the government was subsidizing reckless, poor financial decisions for banks around the nation. For F and F they were continuing to swallow up loans that were at risk of defaulting, making the worthless and putting the institutions are peril, but that was never a worry, because it was the government not a business.  

That is exactly what happened when the Federal Reserve was forced to raise interest rates. Those on a variable rate were caught in a loan they could not pay back with the high rates. The defaults starting rolling in and banks were stuck, especially F and F. As more houses flooded the market the value dropped, leaving banks with defaulted loans and houses were the mortgage payoff far exceeded the value of the house. They had no way of recouping the money and therefore fell rapidly into the red.  

It was a destructive pattern, one that politicians not only allowed, but fueled with the creation of F and F. Millions of dollars in loans were handed out, without consequence because the banks knew they had a buyer for the mortgages Fannie and Freddie. Back in 2003 the Bush administration attempted to establish a committee to oversee the operations of F and F but it was killed off. Even with all the warning signs, F and F was left to roll along, because those in power of regulating and their friends were benefiting the most. One of those was Freddy and Fannie CEO Franklin Raines, who collected millions of dollars and below market loans. He was also the former White House Budget Director under Bill Clinton, shocking.  

Now with the bail out of Freddie and Fannie and other financial institutions, the government is proclaiming that everyone has been saved. Who has been saved? Was it the average American taxpayer and those who took a standard loan and built a house within their means? The answer is no, they are the ones paying the bill, while the politicians, bankers and lobbyist have their money and are facing no consequences for their reckless actions.