Wednesday, February 25, 2009

Look at the Left Hand, Pay No Attention to the Right Hand

It’s an old sleight of hand trick. Distract your subject by doing something with one hand while the real "magic" occurs in the other hand. At the end of the act, the subject is amazed that something seemingly occurred right before their eyes, yet they didn't see it.

In one breath President Obama chastises us like this, “Short-term gains were prized over long-term prosperity… we failed to look beyond the next payment, the next quarter, or the next election… difficult decisions were put off for some other time on some other day,”. Yet actions speak louder than words, provided you can take your eyes off the distraction. The President still intends to bailout irresponsible homeowners who got them selves over extended with a loan they didn't even bother to read the terms on.

The President even said “people bought homes they knew they couldn't afford”, yet he still intended to help those people out, at the expense of people who were smart and avoided the bad gamble.

The President went easy on Iran, North Korea and China, but not once did he mention that his plan was going to take tax dollars from tens of millions of Americans who don't own their home and use those tax dollars against them by propping up unsustainably high home prices. I guess it’s smart to not alienate our biggest creditor and our 2 biggest protagonists whom we lack the stomach to coerce. Not only will that action forsake much of the current and future generation to salvage a relatively small minority, it will prolong the economic malaise which grips this country.

Sunday, February 22, 2009

She Was Right

I've read the stimulus package and I have come to the conclusion that this woman is right and we're all a bunch of chumps and suckers.

The White House Press Secretary Gets Pwned

Pay particular attention to Mr. Denninger's closing remarks in the video from 9:20 though 9:30.

Friday, February 20, 2009

Thursday, February 19, 2009

Rep. Maxine Watters : Complete Moron

I base the title of this posting on my observations from her interview with Newsweek.

The first question asked will TARP be enough to provide relief to consumers. Her reply was, "Yes, it will. But I'm worried that it won't be enough". She's concerned that not enough will be done help consumers. Well duh! The goal of TARP is to keep banks sufficiently capitalized.

The next question posed was, "What else can you do"? Representative Watters thinks Congress needs to regulate lending to weed out predatory lending. Lets keep in mind, this is the same Maxine Watters who appeared in this video and was against regulating Fannie Mae & Freddie Mac any further, when her good buddy Frankin Raines was running things into the ground. Without the GSEs buying up these bad mortgages, sub-prime never gets off the ground.

Honestly, what ever happened to the idea that the best and brightest are the ones who ascend to the leadership roles? The glow from Washington DC is almost out and there is nothing convincing me that the new crop of leaders who were sworn into office last month are going to be markedly better than those who were ushered out the door.

Wednesday, February 18, 2009

Bill Clinton : Revisionist Historian

On Monday's Today Show, Ann Curry did a softball interview with Bill Clinton. She asked him about his appearance on Time Magazine's list of 25 People to Blame for the real estate bubble. Like the good politician who has enjoyed ample top cover from the media, he hit the softball out of the park.

President Clinton said, "oh no", and went on to say, "My question to them is: Do any of them seriously believe if I had been president, and my economic team had been in place the last eight years, that this would be happening today? I think they know the answer to that: No."

That’s a really tough question to answer, since he wasn't the decision maker as this bubble began to burst, he also wasn't out there calling for changes in policy for dealing with the real estate bubble's collapse. Where was President Clinton, when his good ideas could have been heard and possibly helped influence policy? He was busy collecting donations from foreign governments for his foundation.

Now I blame Ms. Curry for not following up with a tough and obvious question. I would have asked him something like this ... "Mr. President, how do you explain that in 1998, the home price appreciation curve began climbing away from the personal income growth & inflation curves"? However she either wasn't ready to give this interview or she agreed to give a softball interview. Either circumstance is unacceptable and unprofessional. There were only 2 possible answers to her original question, "yes I belonged on that list" or "no I didn't belong on that list", Ms. Curry should have been prepared for either. I don't know what her follow up question would have been had he agreed with the piece in Time, but she fell down like the lady in the I've fallen and I can't get up commercials, when she failed to follow up with any kind of challenging, pointed question.

Lets also not forget that the tech bubble began on Bill Clinton's watch and was left to blow up on George W. Bush's plate. President Clinton was the beneficiary of the prosperity the tech bubble's expansion and President Bush's legacy took the lumps for cleaning it up, the real estate bubble is no different. I don't agree with the way in which the Bush admninistration dealt with some of the bailouts, particularly AIG & Bear Stears, but he certainly should not shoulder all the blame. In fact, were this a corporate scandal, Bill Clinton, as the chief executive, would potentially be on the hook under Sarbanes/Oxley, which ironically is part of President Bush's legacy in cleaning up another debacle which began forming on President Clinton's watch. Bill Clinton handled himself about as well in this interview as Alex Rodriguez did yesterday. There has been talk of claw backs on bonuses paid to financial executives for their performance prior to the bubble bursting, mostly at the behest of Democratic Senators and Congressmen. If bank executives are subject to revisionist compensation, than so should a Presidents legacy, but Ann Curry let President Clinton off the hook.

If someone else can explain away Bill Clinton's culpability on this matter, the comment box is below. I look forward to seeing the defense argument on Bill Clinton's behalf.

Monday, February 16, 2009

A Letter to the President

Dear Mr. President,

I see where you are considering a housing plan that would allow homeowners to stay in their over priced, ill financed homes, by allowing them to rent the home from the bank and hopefully buy the home back from the bank at some point in the future. I can certainly see and respect the motivations of your plan.

However, I am troubled by any plan which keeps homes off the market and delays or worse yet, forestalls any amelioration in home prices. As I am sure you have been told by your economic advisors, the disparity between personal incomes and home prices are at or near all time highs. So is the disparity between costs of renting and home ownership. Home price appreciation is vastly ahead of historical trends. I believe that it is essential to a healthy economy for these costs and prices to adhere to historical trends and be in relative equilibrium with respect to affordability. Past housing booms have been ended by a return to pre-boom pricing levels, adjusted for inflation. If these homes are not returned to the market there will be no end to the bubble and I, along with millions of others who did not make the mistake of taking a bad loan on an over priced home will forever be denied the American dream.

All of that said, I believe that your intentions are altruistic and I would understand if you felt it was essential to forsake the American dream of millions of savers who did not buy an over priced home with flim flam style loan, in order to save millions of people who made a bad investment on a home during the latter part of the bubble cycle. The only things I would ask for are these … First, an acknowledgement that renters like myself are being told to take one for the team. Second, since I watched you on TV, take an oath to uphold the Constitution, I would like an explanation as to why someone else’s pursuit of happiness is worth more to you than mine and that of other renters in this country.


A Taxpayer

Thursday, February 12, 2009

A Prime Piece of Pork

Here is $30 million for the Speaker of House's home district. To preserve wetlands and an obscure mouse breed which Speaker Nancy Pelosi has championed before. Once again, the President's word is devalued, after shouting from the highest hill top in Washington that there WAS NO PORK in this bill. This was a read my lips sort of moment for President Obama.

Oh yea, don't forget to spend that $13 a week in one place. You voted these bafoons into office, they are yours, I am just a concerned bystander at this point. For the first time in my life, there isn't a single sitting politician that I voted for.

Monday, February 09, 2009

The Audacity of Pork

First it was a promise of doing things differently. A more ethical White House, but that dream flew out the window with Turbo Tax Timmy, Tom Daschle and some woman who didn't stick around long enough for anyone to remember her name as a nominee for some made up office. George Bush may have made up words, but President Obama is making up 6 figure jobs, one at a time. In truth, President Obama should be in charge of collections at the IRS. Nobody gets people to pay their delinquent taxes any better than he does with his nominations.

Later it would be a $1.1 trillion dollar stimulus package that had something for everyone. And the best part was that Congressional Democrats would take the rap for all that pork. Senator Max Baucus got $26 billion for private equity firms. Senator Robert Byrd got 4.6 billion for his constituents and clean coal, which Obama contends is a fallacy. Even under the guise of green education, there was $100 million for children to learn green construction. Seriously? Children can learn green construction on the job after they drop out of high school, they don't need $100 million for it in elementary school. Don't forget, this is a do as I say, not a do as I do White House.

However, while Nancy Pelosi, Harry Reid and the rest of the Dems on the Hill loaded up the stimulus with pork barrel spending, the President was still watching out for his friends. There was $4 billion, give or take, for community action groups like ACORN.

Now with the door of public opinion getting slammed on the fingers of hill Democrats, they revised the bill down, from $1.1 trillion, to $827 billion. They cut the bill by about a third, but does anyone believe that the pork is all gone? I sure don't. You can rest assured that there is plenty of extraneous spending in this bill and that there will be plenty of favors returned. Eight and quarter billion dollars to be spent at break neck speed leaves a lot of room for fudging and not much time to catch the pork spending.

One last thing to consider... when a Senator or Congressman attaches a piece of pork to a piece of spending, he or she is doing what they need to do, to keep their constituents happy and get themselves reelected, but are they really acting in the best interests of their constituents? Not very often. That’s the inherent conflict of interest in Capitol Hill politics. All to often, the players are busy trying to get reelected as opposed to fulfilling their oath of office to best serve the people.

Wednesday, February 04, 2009

Entire US Population Growing & Unemployed

According to the mathematically challenged Speaker of the House, Nancy Pelosi, the United States suddenly added 200,000,000 citizens to go on the unemployement & welfare rolls along with the currently verified 300,000,000 US citizens who will all be unemployed tomorrow. There is no word on whether or not they will continue paying their mortgages.

Daschle Gives Up

Once, unmasked, like the villan in a Scooby Doo cartoon, former US Senator and nominee for Secretary of Health & Human Services, Tom Daschle withdrew his name from consideration. I suspect he said something like this, "Curses! I would have gotten the job if it wasn't for you meddling bloggers".

Monday, February 02, 2009

Speaking of Irony Mr. Daschle...

We all know that former health care industry lobbyist, Tom Daschle, owes a ton of money to the IRS. If you’re a pro athlete, $128,000 is not a lot of money, but for the average American, that is about 3 years worth of a wages. And know the irony bug is rearing its ugly head.

Sen. Tom Daschle, Congressional Record, May 7, 1998, p. S4507.
“Make no mistake, tax cheaters cheat us all, and the IRS should enforce our laws to the letter. ”