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September 24, 2008

Comments

Truther

Although Monica covers it well, McCain is seriously off his game. If he thinks a rush to pass this awful legislation, can be worked out behind closed doors with Bush, by avoiding this in public in this debate, he has another thing coming. IF ever he needed to distance himself from Bush, it would be now. He is trying to let Bush take the responsibility for this, when in fact it is the greedy people who are pushing for it, and telling John to do it. I would say they have John by the nose.

John, will return to Washington after speaking at the Clinton Global Initiative. Why in the world, would he be attending this? Has Wall St cancelled the election?
Will Bush impose martial law? Will he declare himself emperor for life?


Truther

Could this be impeachment?

FK

I think this is lame political posturing.

Carter was accused of polticial posturing when he refrained from campaigning and debating during the Democratic primaries in 1979 because of the Iranian hostage crisis and the Soviet invasion of Afghanistan. But at least he was the president at the time. McCain is a senator. The crisis does not require that he take control of the crisis and stop campaigning.

The debate is an important event in this election season. Cancelling it will not resolve the financial crisis, but it will deprive voters of the opportunity for voters to see the two candidates face off is crucial.

The financial crisis may continue for months. Does that mean no debates? Note: Carter had a problem because the hostage crisis continued all the way up to (and past) the election of 1980; he put himself in a position where campaigning was inappropriate while the Americans in Iran were still being held.

Ron Mwangaguhunga

We cannot fail to note that John McCain was SILENT yesterday during the thick of the Senate Banking Committe hearings but now that the WashPo poll shows him 9 points nationally behind Obama (Fox has him down 6), all of a sudden McCain gets this eureka moment. Please, Monica.

GilbertWashington

Fred:

It appears that Gringotontobobo and fellow fascista are having a meltdown. Gringoman did not like this post:

"Gringoman risks getting airbrushed out of the kremlin photo:

"We do not support government bailouts of private institutions. Government interference in the markets exacerbates problems in the marketplace and causes the free market to take longer to correct itself."

-- The 2008 Republican Party Platform,


Move over for the Brave New (Republican) World"."


While jogging this morning I heard that both Barak & McCain will support the big bailout of Republican largesse on Wall St. SQA for Dems, but we have also entered the Brave New Republican Socilaista World, Too.

Tontobobo and his kimosabe have been writing nine ways to Sunday about Obamas ties to Wall St.

Come to find out the McC's campaign manager, Rick Davis, has been pulling down $15k/month from FreddieMac (a consulting position provided him by McC). AND has received a total of $340,000 including $15/k paid to him in August.
The purpose of the engagement was specifically to maintain a posture of derugulation of FreddieMac which, as it turns out... brought us Socialism!


FK

The debate is an important event in this election season. Cancelling it will not resolve the financial crisis, but it will deprive voters of the opportunity for voters to see the two candidates face off is crucial.
Posted by: FredK2929 | September 24, 2008 at 04:14 PM

A little proofreading by me would have been nice. What I meant to say:

The debate is an important event in this election season. Cancelling it will not resolve the financial crisis, but it will deprive voters of the opportunity to see the two candidates face off, which is crucial in picking our next leader.

J. Pierpont Finch

As economics is one of McCain's strong suits, I'm sure his skills will be welcomed in helping to get a consensus to enact a "comprehensive" solution to the challenges that face our system. Expect to see him lead a "neo-gang of 10" to reach bi-partisan agreement on watered down ineffective legistlation to no-where.

Get ready for the hard times ahead!

GilbertWashington

BACK TO THEIR DAY JOBS, INDEED.

Gringoman who educated himself on the Wall St Crisis yesterday, came to the stunning conculsion that it was all the doing of "SOCIALISTS" and was he ever right: We just were not aware of how many socialists were in the Republican Party. Here is just one of the New Republican Socialists acting on behalf of the cause:


Loan Titans Paid McCain Adviser Nearly $2 Million
By DAVID D. KIRKPATRICK and CHARLES DUHIGG
Senator John McCain’s campaign manager was paid more than $30,000 a month for five years as president of an advocacy group set up by the mortgage giants Fannie Mae and Freddie Mac to defend them against stricter regulations, current and former officials say.

Mr. McCain, the Republican candidate for president, has recently begun campaigning as a critic of the two companies and the lobbying army that helped them evade greater regulation as they began buying riskier mortgages with implicit federal backing. He and his Democratic rival, Senator Barack Obama, have donors and advisers who are tied to the companies.

But last week the McCain campaign stepped up a running battle of guilt by association when it began broadcasting commercials trying to link Mr. Obama directly to the government bailout of the mortgage giants this month by charging that he takes advice from Fannie Mae’s former chief executive, Franklin Raines, an assertion both Mr. Raines and the Obama campaign dispute.

Incensed by the advertisements, several current and former executives of the companies came forward to discuss the role that Rick Davis, Mr. McCain’s campaign manager and longtime adviser, played in helping Fannie Mae and Freddie Mac beat back regulatory challenges when he served as president of their advocacy group, the Homeownership Alliance, formed in the summer of 2000. Some who came forward were Democrats, but Republicans, speaking on the condition of anonymity, confirmed their descriptions.

“The value that he brought to the relationship was the closeness to Senator McCain and the possibility that Senator McCain was going to run for president again,” said Robert McCarson, a former spokesman for Fannie Mae, who said that while he worked there from 2000 to 2002, Fannie Mae and Freddie Mac together paid Mr. Davis’s firm $35,000 a month. Mr. Davis “didn’t really do anything,” Mr. McCarson, a Democrat, said.

Mr. Davis’s role with the group has bubbled up as an issue in the campaign, but the extent of his compensation and the details of his role have not been reported previously.

Mr. McCain was never a leading critic or defender of the mortgage giants, although several former executives of the companies said Mr. Davis did draw Mr. McCain to a 2004 awards banquet that the companies’ Homeownership Alliance held in a Senate office building. The organization printed a photograph of Mr. McCain at the event in its 2004 annual report, bolstering its clout and credibility. The event honored several other elected officials, including at least two Democrats, Gov. Edward G. Rendell of Pennsylvania and Representative Artur Davis of Alabama.

In an interview Sunday night with CNBC and The New York Times, Mr. McCain noted that Mr. Davis was no longer working on behalf of the mortgage giants. He said Mr. Davis “has had nothing to do with it since, and I’ll be glad to have his record examined by anybody who wants to look at it.”

Asked about the reports of Mr. Davis’s role, a spokesman for Mr. McCain said that during the time when Mr. Davis ran the Homeownership Alliance, the senator had backed legislation to increase oversight of the mortgage companies’ accounting and executive compensation. The legislation, however, did not seek to change their anomalous structure as private companies with federal support.

The spokesman, Tucker Bounds, also noted that the Homeownership Alliance included nonprofit organizations like Habitat for Humanity and the Urban League. “It’s not controversial to promote homeownership and minority homeownership,” Mr. Bounds said. More than a half-dozen current and former executives, however, said the Homeownership Alliance was set up mainly to defend Fannie Mae and Freddie Mac by promoting their role in the housing market, and the two companies paid almost the entire cost of the group’s operations.

“They were financed largely, possibly exclusively, by Fannie and Freddie,” said William R. Maloni, a Democrat who is a former head of industry relations for Fannie Mae. “We thought it would be helpful to have someone who was a broadly recognized Republican to be the face of the organization, and that person became Rick Davis.” Mr. Maloni added, “Rick, for that purpose, turned out to be quite good.” (Several executives said Mr. Davis’s compensation was not unusual for the companies’ well-connected consultants.)

The federal bailout of the two mortgage giants has become an emblem of what critics say is the outdated or inadequate regulatory system that allowed the financial system to slide into crisis this summer.

At the time that Fannie Mae and Freddie Mac recruited Mr. Davis to run the Homeownership Alliance in 2000, they were under new pressure from private industry rivals and deregulation-minded Republicans who argued that the two companies’ federal sponsorship gave them an unfair advantage and put taxpayers at risk. Critics of the companies had formed their own Washington-based advocacy group, FM Watch. They were pushing for regulations that would deter the companies from expanding into new areas, including riskier and more profitable mortgages.

Mr. Davis had recently returned to his lobbying firm from running Mr. McCain’s unexpectedly strong 2000 Republican primary campaign, which elevated Mr. McCain’s profile as a legislator and Mr. Davis’s as a lobbyist.

“You can say what you want about free-market distortions, but people like the system because it gets them into houses cheap,” Mr. Davis said to Institutional Investor magazine in 2000, adding that he would run the advocacy group out of his Alexandria, Va., lobbying firm.

The organization also hired Public Strategies, a communications firm that included former Bush adviser Mark McKinnon. Mr. Davis wrote letters and gave speeches for the group. In April 2001, he sent out a press release headlined, “It’s Tax Day — Do You Know Where Your Deductions Are? For Most Americans, They’re in Your Home.”

But by the end of 2005, Fannie Mae and Freddie Mac were recovering from accounting problems and re-examining costs, former executives said. The companies decided the Homeownership Alliance had outlived its usefulness, and it disappeared.

John Harwood contributed reporting.


gringoman

Let's assume that McCain's poll dip spurred him into this latest "Maverick Move."

And so? Most of the Obamasuck Media will say, "Ah, gotcha! Political ploy."

Many, many others will see Leadership---in a crisis teetering on the catastrophic. Decisive. Bold initiative.

McCain's inspiration? A poll dip? Who knows? The OSM shrinks? But even if it is, still, as Shakespeare put it, "Sweet are the uses of adversity."

Comparing this to Jimmuh Carter's hostage crisis misses the point and confuses the issue.

The time factor in the Iranian hostage crisis--at least compared to this Wall Street debacle---was open ended. Another week or two of their capitivity was not considered potentially catastrophic---clearly not in the way this international financial crisis is.

Even Democrats were reportedly struck speechless in the private debriefing they got from Paulson and Bernanke in Washington days ago.

It appears to be a crisis so pressing and so imminent, that to be in Washington, even if to assess how pressing and imminent it really is, would make sense to the sensible and sober. This is about the economic viability of the entire nation, not just a group of unfortunate hostages. Some can see that, some cannot.

Obama can brush it off and say, as he just did, "You can call me if you need me" (heh-heh.) He can insinuate "political ploy," and risk being called on that himself, not to mention his own judgement (judgement once again, post-Biden pick.)

So let the OSM flunky away for their guy.


ps. The smear merchant who trolls here as 'Gilbert Washington' and uses illegal private information and even smears a Vietnam combat vet and his anti-corruption website, and does it with an almost indecipherable English syntax(except when he cuts and pastes the work of others), should be reminded that although he himself, as far as we know, had nothing to do with the hacking of the site of Monica's friend, Bill O'Reilly, the FBI is homing in on it, just as they are the Fraudway operations of Fannie and Freddie's Raines, Johnson, Gorelick etc etc. Punks will be prosecuted, to the fullest extent. Ask Monica's friend, Bill O'Reilly.

Truther

Clinton + Bush = Satan + Satan

Bill is making the rounds because the hidden agenda here is globalism. This is where all the money is going. This is where all the investiture is being made. Recall Bush actually said he thought Hillary would be unstoppable? Now as Bush is asking for $800 billion or so, Clinton is pushing his global initiative. What could be clearer? The bailout is to add liquidity to banks that are heavily over leveraged to press these investments in Asia and Africa. This is what the fight is about, and the banks are holding our money hostage.

If you ask me, Bush should be impeached, and Clinton arrested. He and his wife have been allowed to break campaign laws and have accepted payouts from foreign countries. There is no doubt about it. People should check into the money he received as speaker fees also. Where did that money come from? What deals were made? Did Clinton become a traitor to his country because he
was orally embarrassed?

GilbertWashington

Gringoman cannot admit that his co-editor of MilitaryCorruption.com, MAJ GLENN MACDONALD USAR(ret), appeared in the film 911 RIPPLE EFFECT. (One need only google his name and the film name and see for themselves)
It's not a big deal for the Major, he thinks what he thinks. However since Gringoman (Dan Cameron-Rodill) co-edits the militarycorruption.com website with the Major, and has not repudiated the Major's statements (that military aricraft hit the WTC), then all of Gringoman's posts here should be seen in that light.
Furthermore Gringoman has responded at various times that the Major was not in the film; or was only giving inciteful reportage; or is being considered for a Pulitzer.
I have seen the film. Anyone can as it is on YouTube.
If that is smear then so be it.

Other (sic) private information which I learned about Gringoman and his activities came from various internet sources within the public domain including gringoman.com which is his own blog.

To suggest that I hacked into websites, his or anyone elses, are crazy. I have a tough enough time using the computer. I agree that those who Hacked into various websites must answer according to the alleged violation.

Ummahgummah

GILBERT WASHINGTON OR WHATEVER YOUR NAME IS!! YOU ARE AN INSUFFERABLE LITTLE PUNK!!!!

STOP HARRASSING AND SPAMMING THIS BLOG WITH YOUR SILLY VENDETTA AGAINST GRINGOMAN!!!!


N O B O D O D Y C A R E S !!!!!!!!!!!!!

Shoo fly.. go AWAY!

gringoman

To suggest that I hacked into websites, his or anyone elses, are crazy. I have a tough enough time using the computer. I agree that those who Hacked into various websites must answer according to the alleged violation.

Posted by: GilbertWashington | September 24, 2008 at 06:02 PM

Right. Got it. Disingenuous and slippery. As if a smear operative/stalker has to be one and the same with the jerk who does the actual hacking. Right. Got it.

And Major Mac's anti-corruption site was hacked just around the time that smear merchant GW, a 'Republican' in harmony with the Obamasuck Media, brought his dopey and boring 9.11 allegations here like a bat out of Creedmore.

Major Mac (http://www.militarycorruption.com/ was working on breaking wide open the Jill Metzger fraud story rocking the Air Force.

Bill O'Reilly's site was hacked after he dared to deal with the Obama-inspired punks who got into Sarah Palin's email.

These are all just coincidences.

We understand. Just advising.

ps. According to O'Reilly, it won't just be the FBI on the hacking of his site. The Secret Service is getting in too.

GilbertWashington

Fred:

It appears that Gringotontobobo and fellow fascista are having a meltdown. Gringoman did not like this post:

"Gringoman risks getting airbrushed out of the kremlin photo:

"We do not support government bailouts of private institutions. Government interference in the markets exacerbates problems in the marketplace and causes the free market to take longer to correct itself."

-- The 2008 Republican Party Platform,


Move over for the Brave New (Republican) World"."


GilbertWashington

UG is having a bad hair day:

"GILBERT WASHINGTON OR WHATEVER YOUR NAME IS!! YOU ARE AN INSUFFERABLE LITTLE PUNK!!!!"

Harassing Gringoman?!!! Isn't this what you do to Fred for a living?(!)

Do you have comments on Rick Davis collecting $$ from FreddieMac or is more fun to shoot the mailman?

BTW: my posting above was in reply to Gringotontobobo's "PS". Since you two have been let down and sold up the river by your party, you gotta blame somebody.

I am surprised that after Gringoman's laundry list of hacked websites that he didn't blame me for 911!

Oh, I forgot... that was the work of Uncle Sam.

Ciao guys!


GilbertWashington

Gringoman connects the dots and finds nefarious doings:


"Major Mac (http://www.militarycorruption.com/ was working on breaking wide open the Jill Metzger fraud story rocking the Air Force.

Bill O'Reilly's site was hacked after he dared to deal with the Obama-inspired punks who got into Sarah Palin's email.

These are all just coincidences."

Gringoman, you are no Bill O'Reilly.

Ummahgummah

Ciao brutto.


Good riddance too. Take your FreaK with you and don't let the door hit you on the way out, little zerO-punk.

The only meltdown around here is your incoherent babblings which do nothing but interrupt what might otherwise be a somewhat productive dialogue among people seeking solutions to problems.

You're the fruitfly that keeps interrupting what would otherwise be a pleasant dinner.

Ciao stronzo di merda.

M/M

SAY NO TO AMNESTY FOR WALL STREET. CALL YOUR ELECTED OFFICIALS TODAY:

http://www.senate.gov/general/contact_information/senators_cfm.cfm

https://forms.house.gov/wyr/welcome.shtml

"1) He (NEWT) called it a "stupid plan" that looks like it had been designed by autocrat Vladimir Putin. He also said it will be a "nightmare" to implement and full of corruption."

http://www.usnews.com/blogs/capital-commerce/2008/9/23/newt-gingrich-kill-the-paulson-plan-hard.html

http://www.youtube.com/watch?v=3A19q7rysLs&feature=related

M/M

Here is Newt's site:
http://newt.org/

M/M

Here is Senator Jim DeMint:

http://www.cnn.com/2008/POLITICS/09/23/congress.bailout.reax/?iref=hpmostpop#cnnSTCVideo

GilbertWashington

Michael:

Cramer on Mad Money gave quite a sermon last nite on the necessity of following Paulsens advice.

Sine both campaigns are poised to support, isn't passage a fait d'accompli?

BTW my wife favors letting the s--- to hit the fan. Scaring me is the spectre of going to use an ATM and finding out there are not working.

I'll pass on the iranian cavier but have a good bottle of pinot here, somewhere.

BTW: I had asked if the banks are being called too big to fail does that mean that they are too big and should be cut down? Is this the type of regulation you disfavor?

GilbertWashington

Gringoman does not want the smoking gun to come in the form of a mushroom cloud:


"It appears to be a crisis so pressing and so imminent, that to be in Washington, even if to assess how pressing and imminent it really is, would make sense to the sensible and sober"

Gringoman, maybe they are lying now like they were lying then?
But you seem to be all over the map here: It's been at various times, Socialists, Democrats, Democrats w/ some republican enablers, Acorn, Obama, Race sharpies... did I leave a few out? Oh yeah, Kojo Anan.

mjfell

President Bush announced tonight in his prime time speech on the economic crisis that he and Congressional leaders would be meeting tomorrow at the White House with Senators McCain and Obama.

This is exactly what John McCain called for in his announcement today that he was suspending his campaign, going back to Washington DC to work on the problem and suggested that Friday's debate be postponed.

Obama's response was that he'd keep talking on the phone with those in Washington and continue on with his campaign, including Friday's debate.

McCain comes out a leader by taking action.

Obama wanted to keep on talking.

neutralview07

Please, I don't buy that for a second. McCain had to call Bush to get Obama to come to Washington as if those two can solve the financial crisis themselves? Why weren't they called in earlier in the week?

Know what I think? I think if McCain postpones the debates he postpones the Vice debate too and buys Palin time to study more...or for the important issues to change.

McCain is running. There is NOTHING he can do in Washington that he can't do in converence or over the phone. What is McCain leading? Hes not minority or majority leader. If President Bush can't help foster a bi-partisan deal...what the *blank* are McCain and Obama going to do besides waste time.

McCain loses points on this gamble. I hope he explodes in his face. Silly rabbit.

gringoman

[From gringIntel (Open Source)]

Army Unit to Deploy in October for Domestic Operations

Beginning in October, the Army plans to station an active unit inside the United States for the first time to serve as an on-call federal response in times of emergency. The 3rd Infantry Division’s 1st Brigade Combat Team has spent thirty-five of the last sixty months in Iraq, but now the unit is training for domestic operations. The unit will soon be under the day-to-day control of US Army North, the Army service component of Northern Command. The Army Times reports this new mission marks the first time an active unit has been given a dedicated assignment to Northern Command. The paper says the Army unit may be called upon to help with civil unrest and crowd control. The soldiers are learning to use so-called nonlethal weapons designed to subdue unruly or dangerous individuals and crowds.

neutralview07

Wow, Orwell 1984, here we come.

GilbertWashington

NeutralView07 must be hacking into right-wing Gringoman websites:


"Know what I think? I think if McCain postpones the debates he postpones the Vice debate too and buys Palin time to study more...or for the important issues to change.

McCain is running. There is NOTHING he can do in Washington that he can't do in converence or over the phone. What is McCain leading?"

Contrarian views are welcome here as foils for right wing groupthink.
Facts are relevant only if they may be cherrypicked to fit an ideological conclusion:

These people live the Downing St memo on a daily basis.

The FBI (Secret Service too) will be on to you, lad.

Truther

Neutral :

You are right. Pat Buchanan's sister brought out the fact that McCain did not even want these debates with Obama, let alone a debate about the economy or this bailout.

He decided to take action, and vaporize.

GilbertWashington

UG can't be serious:

"N O B O D O D Y C A R E S !!!!!!!!!!!!!"

Gringoman is apoplectic!

Dude, check it out! Why be a jailbitch for this clown?

Q Is the major in the film?

Q Does Rodill co-edit the website? ( A webite by the way which headlines that the DoD is hacking them)


WHAT DOESN'T DESTROY US, ONLY MAKES US
STRONGER - MILITARYCORRUPTION.COM HACKED
AND SHUT DOWN - PENTAGON DENIES "KNOWING
ANYTHING ABOUT" WHAT ONE SOURCE TELLS
US WAS A CALCULATED "DOD (DEPARTMENT OF
DEFENSE) CYBER ATTACK" -
http://militarycorruption.com/

gringoman

WALL STREET ATTACKED FROM DUBAI? (Not Just From Democratistan?)


" Over the weekend, I discovered there might have been more to that decision than I initially thought. There was chatter on the Beltway that we may have been the victim of economic terrorism, a coordinated short raid that originated in London and Dubai.
While the legitimacy of that remains to be seen, my source is well-respected. Further, as the goals of terrorism are economic destruction and social upheaval, it makes some sense. The stock market is the world's largest thermometer and breaking the capital market construct -- as some would say they did last week -- would effectively achieve both goals. "


http://www.marketwatch.com/news/story/shock-awe-five-things-you/story.aspx?guid={0FBD43B9-A7CA-4816-95C2-2ABA25FE8ED8}

GilbertWashington

Gringoman let's be friends:

[From gringIntel (Open Source)]

Army Unit to Deploy in October for Domestic Operations

Beginning in October, the Army plans to station an active unit inside the United States for the first time to serve as an on-call federal response in times of emergency. The 3rd Infantry Division’s 1st Brigade Combat Team has spent thirty-five of the last sixty months in Iraq, but now the unit is training for domestic operations. The unit will soon be under the day-to-day control of US Army North, the Army service component of Northern Command. The Army Times reports this new mission marks the first time an active unit has been given a dedicated assignment to Northern Command. The paper says the Army unit may be called upon to help with civil unrest and crowd control. The soldiers are learning to use so-called nonlethal weapons designed to subdue unruly or dangerous individuals and crowds.


Hasn't posse comitatus been repealed?

mjfell

Please, I don't buy that for a second. McCain had to call Bush to get Obama to come to Washington as if those two can solve the financial crisis themselves? Why weren't they called in earlier in the week?

Know what I think? I think if McCain postpones the debates he postpones the Vice debate too and buys Palin time to study more...or for the important issues to change.

McCain is running. There is NOTHING he can do in Washington that he can't do in converence or over the phone. What is McCain leading? Hes not minority or majority leader. If President Bush can't help foster a bi-partisan deal...what the *blank* are McCain and Obama going to do besides waste time.

McCain loses points on this gamble. I hope he explodes in his face. Silly rabbit.

Posted by: neutralview07 | September 24, 2008 at 10:30 PM


Neutralview07--

Neutral view? For the sake of accuracy I suggest you try Leftview07.

Given your obvously left slant I don't expect you to buy anything but the snake oil Obama's been peddling to people wowed by great speeches who don't look at facts.

Truther

They are threatening to stop our student loans.

We have lost confidence on the banks. Why should we be held hostage by the banks like this?

Why not take our money and provide a fund independent of the banks to lend money at double the rate being paid by these banks, for things like car loans, student loans, etc. until they fix the banking system.

IF a patient is sick, who would want them to work that way? After they are well, then we could consider their liquidity, and who knows, maybe they need to sell off some assets, and terminate many risky loans.

Usually I would not advocate such a measure, but if the banking system is down
they should not be messing with our money.


mjfell

They are threatening to stop our student loans.

We have lost confidence on the banks. Why should we be held hostage by the banks like this?

Why not take our money and provide a fund independent of the banks to lend money at double the rate being paid by these banks, for things like car loans, student loans, etc. until they fix the banking system.

IF a patient is sick, who would want them to work that way? After they are well, then we could consider their liquidity, and who knows, maybe they need to sell off some assets, and terminate many risky loans.

Usually I would not advocate such a measure, but if the banking system is down
they should not be messing with our money.

Posted by: Truther | September 25, 2008 at 12:22 AM


Truther--

The plan is for the Federal Government to buy bad mortgages at low costs and hold them until the houses are worth selling. This will free banks of the bad paper which is freezing credit.

They're not proposing giving money to banks. They're proposing to buy mortgages from banks to make them solvent enough to get back to the business of extending loans.

GilbertWashington

Business Week June 12, 2006 had a view of Paulsen that is quite different than is bandied about now:
MR RISK GOES TO WASHINGTON

"If he can translate Wall Street's language of speculation into something the public and politicians understand, the President's gamble in appointing him will pay off for everyone"

-


-


-

Mr. Risk Goes To Washington
Hank Paulson's profound understanding of risk and reward makes him the perfect pick for the Treasury


COVER STORY PODCAST


What does a Treasury Secretary do? Good question. It's much easier to tick off the things a Treasury Secretary can't do. He can't control the money supply, even though the Treasury Dept. includes the Bureau of Engraving & Printing, which prints the paper currency, and the U.S. Mint, which makes the coins (7.7 billion pennies last year). He can't set tax policy, even though he supervises the Internal Revenue Service. While he controls the Bureau of the Public Debt, he can't expand or shrink the budget deficit. One might say the Treasury Secretary, especially in the Bush Administration, gets all of the scut work and none of the fun.

That's why many people were surprised when Henry M. Paulson Jr., CEO of Goldman Sachs Group (GS ) -- a power position if ever there was one -- accepted President George W. Bush's request to become the new Treasury chief. Treasury has been so minimized in recent years that most news outlets have been conditioned to downplay it. Most of their accounts of the Paulson nomination were heavy on fluff and devoid of specifics. Paulson was repeatedly lauded for the "credibility" he would bestow on the Administration's economic policy in the eyes of the financial markets. Some commentators opined, hopefully, that he would be a voice for "fiscal responsibility" who would have a "seat at the table" when economic policy was made. Others saw Paulson as a "heavyweight" who could more effectively deliver the Bush Administration's message of economic growth before the November elections.


Slide Show >>But all of that chatter misses the true significance of Paulson's appointment. What he'll bring to Treasury, and to Washington, is a more sophisticated understanding of risk and return than his two immediate predecessors had. As Treasury Secretary, he'll be perfectly positioned to explain to Senators and citizens alike the true consequences of various policy choices in such vital areas as free trade, where avoiding risk means falling further behind.

PROFIT MACHINE
Think of Paulson as Mr. Risk. He's one of the key architects of a more daring Wall Street, where securities firms are taking greater and greater chances in their pursuit of profits. By some key measures, the securities industry is more leveraged now than it was at the height of the 1990s boom. It has also extended its global supremacy since then.

Goldman, under Paulson's leadership, became one of the greatest and most profitable risk-taking machines ever built. Since 1999, when he took over as sole CEO, Goldman has competed with bigger rivals such as Citigroup (C ) and JPMorgan Chase & Co. by being aggressive, making smart gambles, and putting the company's own money into deals. Paulson stresses Goldman's willingness to take risks along with clients in the latest annual report: "Investment banks are expected to commit more of their own capital when executing transactions."

The subject has become an obsession at Goldman: how to find profitable risks, how to control and monitor them, and how to avoid the catastrophic missteps that can bring down whole companies. That means taking on more debt: $100 billion in long-term debt in 2005, compared with about $20 billion in 1999. It means placing big bets on all sorts of exotic derivatives and other securities. And it means holding almost $50 billion in the piggy bank, enough cash and liquid securities to keep the firm going in the event of a financial crisis.

By contrast, Robert E. Rubin, head of the National Economic Council and later Treasury Secretary under President Bill Clinton, was Mr. Prudent. Rubin also came out of Goldman Sachs, but it was a much smaller firm back then, and because Goldman was a private partnership, it had limited access to the public capital markets. That made Rubin far more attuned to the need to preserve and protect capital. Perhaps that's one reason why he pushed for frugality from the very moment he entered government.

The appointment of Paulson, Mr. Risk, as Treasury Secretary is at once ironic and completely appropriate. According to conventional economic wisdom, the single biggest problem the U.S. faces is a massive accumulation of debt. Both liberal and conservative economists warn that the bulging trade deficit, now roughly 6% of gross domestic product, poses a danger of sending the dollar plunging and causing a financial meltdown. The federal budget deficit for 2006 will hit at least $300 billion. And current projections call for Social Security and Medicare to run up enormous deficits in the long run.

Yet Goldman actually has leveraged up faster than the U.S. government in recent years. In 1999, Goldman had about $1.60 in long-term debt for every dollar in net revenue. In the same year, the federal government had $3.10 in debt, mostly long-term, for every dollar in revenue. Today the government has about $3.70; Goldman, around $4.

Clearly, Paulson isn't scared by debt and risk-taking. That might make him the ideal person to grapple with the U.S. economic and fiscal situation, which is more similar to Goldman's than most economists will admit. Facing intense competition from around the world, the only way the American economy can thrive is through risk-taking. Indeed, some economists have characterized the U.S. as a giant venture capital fund that sucks in money from overseas and invests it in high-risk, high-return projects.

OLD ECONOMY THINKING
The two previous heads of Treasury, Paul O'Neill and John W. Snow, came out of the old industrial economy. Before moving to Treasury, O'Neill was head of Alcoa Inc. (AA ), the aluminum giant, and Snow led the railroad giant CSX Corp. (CSX ) -- two industries where growth is slow and borrowing is to be avoided. Paulson comes out of the part of the economy where the U.S. still has a preeminent global position, growth is strong, and borrowing to take advantage of opportunities makes sense.

It's hard to know whether Bush and his staff understood the difference between Paulson and his predecessors when he was first approached several weeks ago. At the time, Paulson said he wasn't interested. He didn't change his mind until he met with Bush on May 20. According to an individual close to Paulson, the President told the Goldman chief he wanted a "very senior person" from Wall Street. He also said he wanted Paulson to play a broader role in his Administration than had previous Treasury secretaries, taking on the role of Bush's "principal adviser" on economic matters and driving economic policy.

Heady stuff. Yet it seems hard to imagine that Paulson will have more than a marginal influence on tax policy, especially if the Democrats make political inroads in November, as seems likely. And the dollar will be affected far more by economic events, such as the course of inflation and growth, than by anything the Treasury Secretary can do.

Instead, what Paulson brings to the Treasury Dept., the Bush Administration, and, in fact, all of Washington, in addition to his understanding of risk, is an ability to communicate its upside and downside.

The importance of risk shows up in virtually every economic issue of the day. Take free trade, a subject that falls under the purview of the Treasury Secretary. Keeping the U.S. open to foreign goods and services is essential for growth, both in this country and abroad. Yet free trade creates risks for Americans. If Paulson can communicate the pros and cons of trade to voters and politicians, he'll do the country a service.

Or consider tax cuts, a subject dear to the President's heart. Whether or not you believe lowering taxes is a good idea, the logic seems clear: Cutting taxes accepts the certainty of a bigger budget deficit today in exchange for a less certain boost to economic growth in the future. A Treasury Secretary who can get that idea across could be highly influential in Washington. Paulson is already on the record as favoring the risk-reward proposition. "I still prefer the situation we're in to a situation without a deficit but with no growth," he told German news magazine Der Spiegel last November.

Within Goldman, Paulson is known as an exceedingly effective communicator. If he can translate Wall Street's language of speculation into something the public and politicians understand, the President's gamble in appointing him will pay off for everyone.

GilbertWashington

UG likes to blog while eating dinner:


"You're the fruitfly that keeps interrupting what would otherwise be a pleasant dinner."


Look what's on the menu:

"Ciao stronzo di merda."

That and sugar are two things sure to attract flies.
Yeecccch!

Truther

If the bad paper is worthless then we have bought it, right?

These bankrupt companies should go out of business and be dissolved.
What they have done is similar to a guy that gets 30 credit cards with 100K
limits, and then spends like crazy, giving risky loans - not only to home owners in the US, but also loans to foreign companies, and US companies relocating abroad.
IN many cases the returns have been slow to nonexistent. In some cases criminals took the money and left town. Crazy greed with no supportive system, no political protection like we have in the US, is also responsible.

We should build up banks that have been responsible, even when it was legal to be irresponsible.

Truther

Now they are proposing letting each bank, print its own money, to rid the government of the Mint.


Truther

Oh I was just kidding - how about putting Bush on a paper bill that is worth a quarter, just so we can remember him.

M/M

Newt on the bailout "in his own words".

http://www.foxnews.com/video/index.html?playerId=videolandingpage&streamingFormat=FLASH&referralObject=3110655&referralPlaylistId=0bc56e415b2e04a215f6a3dba55a3402fc523c09


Account Deleted

President Bush did a god job of explaining the origins of the financial crisis last night:
He acknowledge that loose money inflated home prices (sorry, Greenspan). He said foreign entities injected large amounts of capital into this country “because this is safest place to invest” [paraphrased], which further dorve prices up. He neglected to say it was because he cut capital gains taxes--that was the time to take credit for a good policy. He accurately described “mortgage back securities”, how they were rated and how they were sold on Wall Street. He implicated Freddie and Fannie for taking on too much risk in buying those securities with cheap money, and abusing their privilege as GSEs [paraphrased and interpreted]. And he accurately portrayed the housing market as too little demand for too much supply, hence home prices dropping. Good job up to that point.

But then the whole thing fell apart. Suddenly the speech ended without us learning why the Treasury needs $700 billion, how they are going to buy “toxic” assets (maybe we need the EPA to step in with a Superfund?), why the American taxpayer should participate in this toxicity, what the alternatives are … you can’t just go before the American people and say “it is this way or the whole country stops”. We are intelligent; we need choices.

Then Newt came on Hannity and called this socialism. Flat out. Thank you, Newt; on target again. He offered some good ideas: end mark-to-market accounting to allow banks to re-value assets accurately; eliminate the capital gains tax to allow investment and savings to grow again (and, following Bush’s logic above, to attract foreign money) and home prices to stop declining; increase domestic energy supply to stop the exportation of $500 billion/ year for oil; allow the Fed to lend to the banks at a low Treasury rate + 2%. This would be significantly below prime; T-bills and notes were trading at near zero yesterday. This latter proposal would let the banks figure out a private way to restructure and liquidate the bad assets and not put the taxpayer on the hook.

We hear a lot about “this is no time for principle” and “we must rise above partisan politics”. This is precisely the time for highlighting differences in principle; if not now, when? This is precisely the time to have faith in democratic capitalism, mentioned by Bush as the greatest form of political economy. We can get through the present crisis in a number of ways. But our way of life in the long run is threatened if we accept larger, more intrusive government.

The Wall Street Journal today reports that around the world countries are questioning the American way in economics. That is tragic, especially if we question and abandon it ourselves.

Regards,

Account Deleted

drove ... sorry

M/M

Thanks Michael:

"Then Newt came on Hannity and called this socialism. Flat out. Thank you, Newt; on target again. He offered some good ideas: end mark-to-market accounting to allow banks to re-value assets accurately; eliminate the capital gains tax to allow investment and savings to grow again (and, following Bush’s logic above, to attract foreign money) and home prices to stop declining; increase domestic energy supply to stop the exportation of $500 billion/ year for oil; allow the Fed to lend to the banks at a low Treasury rate + 2%. This would be significantly below prime; T-bills and notes were trading at near zero yesterday. This latter proposal would let the banks figure out a private way to restructure and liquidate the bad assets and not put the taxpayer on the hook."


Time to call your elected officials and tell them EXACTLY what you think of them.

http://www.senate.gov/
https://forms.house.gov/wyr/welcome.shtml

Here are petitions against the bailout:

http://nowallstreetbailout.com/
http://www.votenobailout.org/

gringoman

gringoNOTE: The following is essentially a commercial flyer designed to sell subscriptions to a financial advisory service. (Name of the service not included here, as gringoVision has no commercial interest in it.) So why post it at all? Here is why:

1. gringoVision Financial does not endorse it. Nevertheless,
2. It speaks to issues that are currently burning with a hot white flame.
3. For years this type of grab-you-by-the-jugular ads have been warning about the "Coming Implosion," the "mortgage meltdown," the "derivatives time-bomb" etc etc.
Until recently, one might laugh it off.

4. As experience proves, even if hair-raising predictions are accurate, nobody really knows about the correct timing, or "when the bomb will go off." In other words, this particular ad might be correct in basics, but be way off in the timing. Maybe we don't fall off the cliff till next year, or five years from now etc.

5. Believe this or not. Your call. However, as gringoVision formerly put it, the Democratic socialistas clearly have scored a great blow for their Big Government Utopia. The capitalist bloodstream is mortally infected thanks to their socialist dictum of HOMES FOR OUR IRRESPONSIBLE VOTERS. The Dems and the Obamasuck Media are deflecting blame and pinning it all on "Wall Street greed." Could banks have acted more wisely? Maybe, but how could they have avoided the Democratic dictates against "redlining" and be called "racists" who do not "serve the underprivileged"? The socialistas made sure there was no escape for anyone trying to do traditional sound business practice. Anyone who tried would be crucified with race cards. And of course the Republicans and George Bush have proven themselves too weak-kneed to stop the piously poisonous social engineering. They remain intimidated hostages of Liberal Racism, which even right now will play its race card in behalf of Barack Obama, calling "racist" any white who does not vote for Flim-Flam.

6. In any event, our Finance Advisor, Michael Avari, is the go-to guy for what (in his opinion) this ad gets wrong.

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

National bankruptcy and financial chaos are here. The politicians are preparing a draconian emergency response which will loot your assets and seriously undermine your freedom...
You need a plan. NOW!
Dear Fellow Concerned American:

We face a financial implosion of the American Dream on a scale that truly dwarfs the gas shock and out-of-control inflation of the ‘70s...

...the Savings and Loan failures of the ‘80s and ‘90s...

...or any other financial crisis our nation has faced since the Great Depression itself!

You know big trouble is brewing when top federal Comptroller General (David Walker) recently quit in frustration because as our government's top accountant had warned in vain – the nation's finances are going over a cliff and no one is acting to stop it...

...or a recent finding by the Congressional Budget Office that the federal insolvency crisis is so deep every U.S. household would have to cough up half-a-million dollars each just to save the federal government from bankruptcy! (And, as I show you shortly, the financial debt leverage of U.S. consumers themselves is even more scary.)

Now the word "Depression" is a strong term. But the "D-word" is exactly what's being bandied about by a surprising number of experts. Read on, because I name names!


Look Who Also Sees a
"Perfect Economic Storm" Building

A significant number of former high-level U.S. officials share my alarm that a "perfect storm" of financial woes are finally starting to catch up with the U.S. economy.

Unfortunately, because so many of these former insiders are no longer in a position of authority, the mainstream financial media rarely quote their blunt statements about dark storm clouds building over our economy.

For example, Former Treasury official (and now columnist) Paul Craig Roberts, recently said "Financially the U.S. is not an independent country... the U.S. is bankrupt."

Very recently, former Federal Reserve Bank Chairman Paul Volcker stunned conferees of the prestigious New York Economic Club with this comment about the emerging dollar and bankruptcy crisis, "You don't have to predict it. We're in it."

High-profile international capital giants such as Barclays Capital are now advising their elite clientele to "batten down the hatches for a worldwide financial storm." Departing from its typically diplomatic tone, Barclays Capital added that the U.S. Federal Reserve has allowed the inflation genie out of its bottle and let its credibility fall "below zero."

gringoman

THE SOCIALISTA WRECKING BALL

ANN COULTER pinpoints how the Democrats, although unable to tar John McCain successfully in the Keating 5 Democratic scandal, have used Political Correctness to wreck American sports, entertainment, education, law etc and now, perhaps their greatest destruction of all, American Finance.

The liberal social engineers attacked sound business practice with the fury of pious piranha. They dictated new terms to "redlining" banks. GET OUR VOTERS INTO HOMES.
In Germany, you need to put 40% down for a mortgage. In the US it had been closer to 10%. Under the new Democratic social engineering you could qualify by putting nothing down but (1) having a good jump-shot or (2)being a baby mama whose welfare checks counted as "equity."

http://www.humanevents.com/article.php?id=28714

Account Deleted

M/M - Thank you.

Gringoman, I wasn't around then :-) but I assume that during the Depression there were con artists handing out "the sky is falling" brochures too.

We are not going to have a depression. The Great Depression was caused by a combination of over-inflated money supply, plus high trade barriers that institutionalized inefficient production and high prices, plus inaction by the Fed when people started running on banks and hoarding cash.

Believe it or not, free trade actually acts like a cushion for expansion and contraction in any one country, and will help us now.

With regard to money supply, it is true we got here because of loose money, but now the Fed is stepping in to inject money in selective sectors. Mainline banking is not as healthy as a few years ago, but the contraction there is not full collapse. What collapsed is investment banking for all the reasons we have been discussing in the past several days.

We can get out of this cleanly, if the Fed has to be agrressive but prudent. There should be emergency lending to banks, with a long term steady growth in the money supply. This will prevent a sell-off of the dollar too which would be harmful.

I must be fair and observe that Hilliary has it right in today's WSJ. She says this is an economic crisis, not just financial. Are you listening Bush and McCain? ... the permanent way out is to rebuild the economy.

Regards,

Account Deleted

"A Crisis of Global Statism"

http://mises.org/story/3120

Conslusion: "The present financial turmoil is really a failure of global statism. Socialism has failed once again. Let's try capitalism."

Right on!

Ree

Time for Some Rattler Gator, Black Conservatives support “Country First” J.B. White, is a wonderful writer. I highly recommend his blog. Obviously he is also a Gators Fan:)

How come there isn't any Media Coverage of the Conservative Black constituents?

http://rattlergator.typepad.com/rattlergator/2008/09/operation-country-first-the-campaign-theme.html

GilbertWashington

Gringoman finds social engineering behind every mortgage instrument:


"The capitalist bloodstream is mortally infected thanks to their socialist dictum of HOMES FOR OUR IRRESPONSIBLE VOTERS. The Dems and the Obamasuck Media are deflecting blame and pinning it all on "Wall Street greed." Could banks have acted more wisely? Maybe, but how could they have avoided the Democratic dictates against "redlining" and be called "racists" who do not "serve the underprivileged"?"

First, in the america voters are essentially given two choices, and conventional wisdom is the one holds ones nose and casts a ballot for the least worst.
So you tell me who is the "irresponsible voter"? Second, awarding home ownership cannot be based on voter preferences as 1/2 of the people don't vote anyway.
Third, it is pure ideo drivel to say the lenders were forced to sell homes. The fact is lenders themselves devised SUB PRIME LOAN INSTRUMENTS for the express purpose of selling MORE homes. In fact if REDLINING were at issue then how would you account for forclosures in million dollar neighborhoods where buyers were induced into hybrid prime/sub-prime loans?

Fourth, for your theory 'it's da niggas, stupid' which caused the meltdown is to have any legs you would need to assert that a zero-down mortgage was offered primarily to people of color and that the lender had NO FAITH IN THE COLLATERAL ASSET at the time the loan was made. If this is the case there should be 100% home ownership in the USA because PRIVATE LENDERS have decided that home loans should be unsecured.

Fifth: Gringoman is revising the history of the bubble. Since the value of homes were appreciating so rapidly marginally qualified buyers were betting on a quick increase of equity to afford the home while lenders believed that in case of default that they could repo and resell an appreciated asset.

Shame on you, dude. Three days ago you confessef to Fr. Michael Avari on this board with respect to the crisis: 'Help me (Fr) Michael. I essentially know nothing..'
You've proven that again.

gringoman

THE GREAT 'GIVE OUR VOTERS HOMES' MORTGAGE FRAUD


By STEVEN MALANGA


September 25, 2008

"JOURNALISTS like simple stories with clear-cut villains. So, in the financial crisis, Time magazine tells us that Wall Street "sold out" America, while The New York Times decries "Wall Street's . . . real-estate bender."

Such chatter makes it easy to forget that this mess began with a heap of bad mortgages made by consumers who never came within a hundred miles of the card sharps on Wall Street.

The inability (and in a good deal of cases, the unwillingness) of these ordinary Americans to pay back these loans (many sitting in mortgage-backed securities held by institutions around the world) helped tilt us toward this systemic threat to our financial system."


Contd: (Barely mentioned at all in Obamasuck Media.) How The Scam Expanded. FBI says the scams are still expanding, even today, after mortally infecting both the US and the international financial system. Meanwhile Dems do their slick old "Wall Street vs. Main Street" mantras for Flim-Flam Man! In the 'Nam that was called "blowing smoke."

Are we witnessing Financial 'AIDS' on a truly grand scale?

http://www.nypost.com/seven/09252008/postopinion/opedcolumnists/the_meltdowns_main_street_roots_130640.htm

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