Tuesday, October 21, 2008

Former Secretary Colin Powell is Not Consistent Except in Being an Opportunist

Former Secretary Colin Powell is Not Consistent Except in Being an Opportunist

Former Secretary of State Colin Powell on Meet the Press endorsed for President Senator Barack H. Obama II. What should we make of it?

See http://voices.washingtonpost.com/the-trail/2008/10/19/colin_powell_endorses_obama.html
See Wall Street Journal October 21, 2008 column by Bret Stephens at http://online.wsj.com/article/SB122455043537052547.html “Powell Catches the Beltway Breeze”

■ “To what extent is Mr. Powell's endorsement of Mr. Obama a case of sour grapes?” “what are we to make of a resignation that arrives nearly four years after its author was let go by the president -- despite his widely reported desire to stay on in the second term?”
■ “Tom Brokaw might have usefully asked Mr. Powell … If America's reputation needs fixing, what part does the former secretary think he played in its malfunction?”
■ “What responsibility does Mr. Powell assign himself for the four-year Beltway drama that involved the leak of CIA analyst Valerie Plame's name to columnist Robert Novak?” “Mr. Powell knew all along that the original leaker was his own deputy, Richard Armitage, a fact the two of them didn't publicly reveal for years.”
■ “Also of interest: Exactly what advice did Mr. Powell give President Bush about the advisability of invading Iraq?”
■ “At a conference in Aspen in 2007, Mr. Powell reportedly claimed that he ‘spent 2½ hours vainly trying to persuade President George W. Bush not to invade Iraq and believes today's conflict cannot be resolved by U.S. forces’."
■ But earlier, Secretary Powell had said "I said to the president in 2002, we should try to solve this diplomatically and avoid war. The president accepted that recommendation, we took it to the U.N. But the president, by the end of 2002, believed the U.N. was not going to solve the problem, and he made a decision that we had to prepare for military action. I fully supported that. And I have never said anything to suggest I did not support going to war."
■ “he later oppose the surge, telling Tim Russert in June 2007 that ‘the only thing it can do is put a heavier lid on this boiling pot of civil war stew’?”
■ “His endorsement of Mr. Obama sends his reputation aloft again, floating high above a record that stands for nothing.”

Sunday, October 19, 2008

Clinton HUD Sec. Cisneros Caused the Housing Mortgage Mess – New York Times

THE RECKONING, Building Flawed American Dreams by David Streitfeld and Gretchen Morgenson New York Times front page article, Sunday, October 19, 2008 includes:
■ Clinton administration’s top housing official Henry G. “Cisneros loosened mortgage restrictions so first-time buyers could qualify for loans they could never get before.”
■ “he encouraged the unprepared to buy homes — part of a broad national trend with dire economic consequences.”
■ “He reflects often on his role in the debacle, he says…’I’ve been waiting for someone to put all the blame at my doorstep’,”
■ “It was, he argues, impossible to know in the beginning that the federal push to increase homeownership would end so badly.”
■ “until recently getting a mortgage was a challenge for low-income families. Many of these families were minorities, which naturally made the subject of special interest to Mr. Cisneros, who, in 1993, became the first Hispanic head of the Department of Housing and Urban Development.”
■ “Thus was born the National Homeownership Strategy, which promoted ownership … HUD, an agency that greased the mortgage wheel for first-time buyers by insuring billions of dollars in loans. Families no longer had to prove they had five years of stable income”
■ “Countrywide signed a government pledge to use ‘proactive creative efforts’ to extend homeownership to minorities and low-income Americans. … Countrywide … set up a subprime unit in 1996.”
■ “There were real gains during the Clinton years, as homeownership rose to 67.4 percent in 2000 from 64 percent in 1994. Hispanics and African-Americans were the biggest beneficiaries.”
■ “Mr. Cisneros … acknowledges that ‘people came to homeownership who should not have been homeowners’.”
■ “lenders were allowed to hire their own appraisers rather than rely on a government-selected panel.”
■ “two more changes HUD made on Mr. Cisneros’s watch: they no longer had to interview most government-insured borrowers face to face or maintain physical branch offices.”
■ “Mr. Cisneros left government in 1997 …. HUD continued to draw attention in the news media and among consumer advocates for an overly lenient posture toward the housing industry.”
■ “Then, capitalizing on a housing expansion he helped unleash, he joined the boards of a major builder, KB Home, and the largest mortgage lender in the nation, Countrywide Financial — two companies that rode the housing boom, drawing criticism along the way for abusive business practices.”
■ “Countrywide expanded subprime lending aggressively while Mr. Cisneros served on its board. In September 2004, according to documents provided by a former employee, lending audits in six of Countrywide’s largest regions showed about one in eight loans was ‘severely unsatisfactory’ because of shoddy underwriting.”
■ “Mr. Cisneros says his mistake was not the greed that afflicted many of his counterparts in banking and housing; it was unwavering belief.”

Senator Obama Old Economic Distribution of Wealth ideas Don’t Work

“I think when you spread the wealth around, it's good for everybody."
Senator Barack Obama II (D-IL) Oct. 12, 08

This economics has failed everywhere it has been tried.

And it has been tried quite a few places. “From each according to his ability, to each according to his needs” Karl Marx 1875

Friday, October 17, 2008

Governor Sarah Palin

Governor Palin’s selection has little to do with sex. If pro-choice is the most important issue to you, you should vote for Senator Obama. Her appeal is to the Republican base, since Senator McCain has worked so often compromising to work with Democrats, and to those interested in a reformer working to make the government smaller.

Most politicians, certainly big-time Senator Biden and Obama are go along to get along politicians. Not reformers at all. Governor Palin is a courageous, principle (but small government) reformer. She has taken on the Republican establishment in Alaska defeating Frank Murkowski in the Republican primary for Governor. He was considered unbeatable after serving 22 years in the United States Senate and then four years as Governor. Sarah Palin then was expected to lose to popular former Governor Democrat Tony Knowles.

She is our Margaret Thatcher and will do for the United States what Thatcher did for the United Kingdom.

Wednesday, October 15, 2008

Senator Barrack Obama on the Surge in Iraq

■ "I am not persuaded that 20,000 additional troops in Iraq is going to solve the sectarian violence. In fact, I think it will do the reverse."

■ "Had those political factors not occurred, I think that my assessment would have been correct."
Senator Barack Obama II (D-IL)

Sunday, October 12, 2008

McCain Letter Demanded 2006 Action on Fannie and Freddie


McCain Letter Demanded 2006 Action on Fannie and Freddie
by Human Events 10/10/2008

“Sen. John McCain's 2006 demand for regulatory action on Fannie Mae and Freddie Mac could have prevented current financial crisis”.
“McCain's letter -- signed by nineteen other senators -- said that it was "...vitally important that Congress take the necessary steps to ensure that [Fannie Mae and Freddie Mac]...operate in a safe and sound manner.[and]..More importantly, Congress must ensure that the American taxpayer is protected in the event that either...should fail."
“Sen. Obama did not sign the letter, nor did any other Democrat.”

See full text of letter at http://www.humanevents.com/article.php?id=28973

U.S. Missiles Kill Eleven al Qaeda and Militants in Pakistan This Week

See Reuters Saturday, October 11, 2008 Five killed in U.S. missile attack in Pakistan at http://www.reuters.com/article/topNews/idUSTRE49A32I20081011?feedType=RSS&feedName=topNews&rpc=22&sp=true by Haji Mujtaba

MIRANSHAH, Pakistan (Reuters) –
■ “Suspected U.S. drones fired two missile on Saturday into a Pakistani region regarded as an al Qaeda and Taliban safe haven, killing at least five militants”
■ “It was the second such attack in North Waziristan tribal region on the Afghan border this week.”
■ “five militants were killed in the attack on a house in a shanty neighborhood known as Machis Colony. There were foreigners also among those killed and their number and nationality had not yet been ascertained”
■ “the drones had been flying over Miranshah for hours and tribesmen also fired shots in the air before they struck.”
■ “Six people, including three Arab fighters linked to al Qaeda, were killed in a similar attack near Miranshah on Thursday night.”
■ “Since the start of September the United States has carried out at least ten missile attacks and a commando raid on militant targets in Pakistan's tribal areas.”

Sunday, October 05, 2008

Democrats Pressured Fannie Mae to Buy Risky Loans Made to Low-Income

From New York Times front page October 5, 2008 article “Pressured to Take More Risk, Fannie Reached Tipping Point” by Charles Duhigg
■ “When the mortgage giant Fannie Mae recruited Daniel H. Mudd, he told a friend he wanted to work for an altruistic business.”…“Mr. Mudd collected more than $10 million in his first four years at Fannie.”
■ “Capitol Hill bore down on Mr. Mudd as well. The same year he took the top position, regulators sharply increased Fannie’s affordable-housing goals. Democratic lawmakers demanded that the company buy more loans that had been made to low-income and minority homebuyers.”
■ “When homes are doubling in price in every six years and incomes are increasing by a mere one percent per year, Fannie’s mission is of paramount importance,” Senator Jack Reed, a Rhode Island Democrat, lectured Mr. Mudd at a Congressional hearing in 2006. “In fact, Fannie and Freddie can do more, a lot more.”
■ Said a former senior Fannie executive. “Everybody understood that we were now buying loans that we would have previously rejected, and that the models were telling us that we were charging way too little. But our mandate was to stay relevant and to serve low-income borrowers. So that’s what we did.”
■ “Between 2005 and 2007, the company’s acquisitions of mortgages with down payments of less than 10 percent almost tripled. As the market for risky loans soared to $1 trillion, Fannie expanded in white-hot real estate areas like California and Florida.”
■ “Lawmakers, particularly Democrats, leaned on Fannie and Freddie to buy and hold … troubled debts, hoping that removing them from the system would help the economy recover. The companies, eager to regain market share and buy what they thought were undervalued loans, rushed to comply.” “I’m not worried about Fannie and Freddie’s health, I’m worried that they won’t do enough to help out the economy,” the chairman of the House Financial Services Committee, Barney Frank, Democrat of Massachusetts, said at the time. “That’s why I’ve supported them all these years — so that they can help at a time like this.”
■ “Fannie, a government-sponsored company, had long helped Americans get cheaper home loans by serving as a powerful middleman, buying mortgages from lenders and banks and then holding or reselling them to Wall Street investors. This allowed banks to make even more loans — expanding the pool of homeowners and permitting Fannie to ring up handsome profits along the way.”
■ “But by the time Mr. Mudd became Fannie’s chief executive in 2004, his company was under siege. Competitors were snatching lucrative parts of its business. Congress was demanding that Mr. Mudd help steer more loans to low-income borrowers. Lenders were threatening to sell directly to Wall Street unless Fannie bought a bigger chunk of their riskiest loans.”
■ “So Mr. Mudd made a fateful choice. Disregarding warnings from his managers that lenders were making too many loans that would never be repaid, he steered Fannie into more treacherous corners of the mortgage market, according to executives. For a time, that decision proved profitable.”
■ “Fannie Mae’s new chief executive, under pressure from Wall Street firms, Congress and company shareholders, took additional risks that pushed his company, and, in turn, a large part of the nation’s financial health, to the brink.”
■ “Between 2005 and 2008, Fannie purchased or guaranteed at least $270 billion in loans to risky borrowers — more than three times as much as in all its earlier years combined, according to company filings and industry data.”
■ According to Fannie Mae CEO Daniel H. Mudd ““Fannie Mae faced the danger that the market would pass us by,” he said. “We were afraid that lenders would be selling products we weren’t buying and Congress would feel like we weren’t fulfilling our mission. The market was changing, and it’s our job to buy loans, so we had to change as well.”
■ “Fannie never actually made loans. It was essentially a mortgage insurance company, buying mortgages, keeping some but reselling most to investors and, for a fee, promising to pay off a loan if the borrower defaulted.” “The riskier the loan, the more Fannie charged to handle it. In theory, those high fees would offset any losses.”
■ “With that self-assurance, the company announced in 2000 that it would buy $2 trillion in loans from low-income, minority and risky borrowers by 2010.”
■ “All this helped supercharge Fannie’s stock price and rewarded top executives with tens of millions of dollars. [former CEO Franklin D.] Raines received about $90 million between 1998 and 2004”
■ “Whenever competitors asked Congress to rein in the company, lawmakers were besieged with letters and phone calls from angry constituents, some orchestrated by Fannie itself.”
■ “The ripple effect of Fannie’s plunge into riskier lending was profound. Fannie’s stamp of approval made shunned borrowers and complex loans more acceptable to other lenders, particularly small and less sophisticated banks.” “Between 2001 and 2004, the overall subprime mortgage market — loans to the riskiest borrowers — grew from $160 billion to $540 billion”.
■ “Regulators, spurred by the revelation of a wide-ranging accounting fraud at Freddie, began scrutinizing Fannie’s books. In 2004 they accused Fannie of fraudulently concealing expenses to make its profits look bigger.”
■ “Countrywide Financial … sold more loans to Fannie than anyone else…threatened to upend their partnership unless Fannie started buying Countrywide’s riskier loans.” “Firms like Bear Stearns, Lehman Brothers and Goldman Sachs had started bundling home loans and selling them to investors — bypassing Fannie and dealing with Countrywide directly.” “In the previous year, Fannie had already lost 56 percent of its loan-reselling business to Wall Street and other competitors.”
■ “For two years, Mr. Mudd operated without a permanent chief risk officer to guard against unhealthy hazards. When Enrico Dallavecchia was hired for that position in 2006, he told Mr. Mudd that the company should be charging more to handle risky loans.” “In the following months to come, Mr. Dallavecchia warned that some markets were becoming overheated and argued that a housing bubble had formed, according to a person with knowledge of the conversations. But many of the warnings were rebuffed.”

Saturday, October 04, 2008

Liberal Democrats Pushed Fannie Mae in Promoting Subprime Mortgages

See October 04, 2008 “Do Facts Matter? by Thomas Sowell

■ “The current financial bailout crisis has propelled Barack Obama back into a substantial lead over John McCain-- which is astonishing in view of which man and which party has had the most to do with bringing on this crisis.”
■ “It was liberal Democrats, led by Senator Christopher Dodd and Congressman Barney Frank, who for years-- including the present year-- denied that Fannie Mae and Freddie Mac were taking big risks that could lead to a financial crisis.”
■ “It was liberal Democrats, again led by Dodd and Frank, who for years pushed for Fannie Mae and Freddie Mac to go even further in promoting subprime mortgage loans, which are at the heart of today's financial crisis.”
■ “We also hear that it is the free market that is to blame. But the facts show that it was the government that pressured financial institutions in general to lend to subprime borrowers, with such things as the Community Reinvestment Act and, later, threats of legal action by then Attorney General Janet Reno if the feds did not like the statistics on who was getting loans and who wasn't.”