Wednesday, December 31, 2008

Monday, December 22, 2008

Dark Ages

Rush Limbaugh offered something like the following perceptive observation on Friday last:

Scientists have become alarmed at the accelerating decrease in sunlight available each day in the Northern Hemisphere. Since the end of this past June, the minutes of daylight have steadily shrunk to the point of near panic. All U.N. scientists now agree that, if this decrease continues apace, our 24-hour day will be totally dark by the end of this coming June … not one glimmer of luminescence. And what is worse – it seems that this lost light has been leaking down below the equator. While we here would be forced to live without natural illumination, those in Africa, South America, and Australia would enjoy twenty-four hours of sunlight … obviously Nature’s reward for these peoples’ limited use of the world’s natural resources.

So everyone in the Northern Hemisphere is besought to stop driving their cars, heating their homes, and using electricity for any purpose. And moreover, everyone is also asked to purchase daylight offsets from the George Hamilton Daylight Offset Foundation. Each $1,000 donated will allow us to regain one more second of daylight over the next six months. Please, please, please don’t let George Hamilton fade to pastiness. Thank you all!

Friday, December 19, 2008

Bush Derangement Syndrome

President Bush was interviewed on television today … of which snippets were replayed on MSNBC tonight. I happened to catch this exchange:
Questioner: “What are you going to do about the auto industry bailout?”
Pres. Bush: “You’re assuming I’ve made up my mind.”
Switch to Keith [D]Oberman back in the MSNBC studio: “No, that’s assuming Bush has a mind!”

Also today I received the following link from my wife’s cousin in France:
At this site you get to throw shoes at President Bush. Over 44 million shoe hits have occurred (from around the world). Now, isn’t that special?

Both these instances above indicate a galloping lack of civility toward the United States and our current leadership. They display a degree of rabid disrespect and even hatred that I have seldom seen exhibited … except perhaps for our mortal enemies in time of war. This “Bush Derangement Syndrome” is freely displayed by TV commentators/talking heads, in many published venues, by most reporters, and very often in “polite” conversation. It seems that everyone is now vying with John Stewart of the “Daily Report” to out-snide him. As bad as Jimmy Carter was, I don’t recall him ever being excoriated like President Bush. We have now a wood-chipper main stream media which likes to pulverize public figures just for the sport of it. And, if Barack Obama thinks he will be forever immune from their blood lust, then he is more naïve than perspicacious.

Friday, December 12, 2008

I Believe …

- Many powerful liberal politicians believed that everyone in America should own a home regardless of their means or morals. (Some now believe that they were wrong ... how quaint.)
- They coerced, with regulatory and oversight threats, banks and other institutions into offering such “sub-prime” mortgages.
- Banks and these other institutions discovered that they could package these mortgages (collateralized debt obligations -- CDOs) and sell them to, among others, Fannie Mae and Freddie Mac.
- Since the origination fees from this pass-through sub-prime mortgage process was very profitable to these banks and other institutions, they became willing co-conspirators.
- Because of the implicit government guarantees of these packaged mortgages, credit rating agencies placed unrealistic high ratings on them and on the institutions that held them.
- Fannie and Freddie were overly-populated with liberal ex-pols who were more than willing to participate in this fraud since their annual compensation was based on the volume of said transactions. The growth in the portfolios of sub-prime mortgage packages at Freddie and Fannie was exponential.
- All efforts to monitor and/or regulate this sub-prime process at Fannie and Freddie were squelched by accusations of racism from liberals in Congress
- At the start, the ease with which these sub-prime mortgages were off-loaded caused banks and others (such as Countrywide) to drop any semblance of checking the credit-worthiness of their mortgage borrowers. The writing of mortgages without suitable documentation became rife. Home-buyers couldn’t believe their luck and many went hog wild.
- The volume of these sub-prime mortgages grew to such an extent that many remained at their originators because, for no other reason, the origination fees were so profitable.
- Concurrent with this, because of accounting frauds at Enron and others, accounting rules were changed by the SEC to force companies to “mark to market” all balance sheet assets
- Also concurrent with this, a financial instrument appeared called a Credit Default Swap (CDS) which allowed institutions to insure most any financial asset against credit default
- Banks and other institutions sold CDS’s to protect themselves against losses that would occur if the collateralized mortgages on their books went into default. But they went much further; they (including many insurance companies and foreign institutions) bought and sold CDS’s far beyond the face value of the underlying assets (as much as ten times their value). CDS’s became, effectively, a gigantic, unregulated casino.
- When sub-prime mortgages began to default in droves, asset packages including these mortgages became difficult to value (or mark to market). Many of these asset packages (even though producing a steady, albeit somewhat reduced, income flow) were forced to be drastically devalued on balance sheets.
- Because of the sheer size of the CDS market ($60 trillion?) and its lack of regulation, many of the insurance policies on these defaulting sub-prime mortgage packages could not be honored which put the buyers and sellers of these CDS’s in great financial jeopardy (eg. AIG). This then began the world-wide freezing up of capital markets.
- Because of the capital-ratio requirements at banks, many of such institutions were forced to raise more capital in a capital market that was rapidly freezing up. It was then either insolvency or a government bailout.
- Enter Henry Paulson and the U.S. taxpayer.

Tuesday, December 09, 2008

Car Czar

My wife made a beautiful suggestion this AM regarding the automaker's bailout. Make Mitt Romney the "Car Czar" ... the one who oversees the bailout money and the reorganization plans of the automakers (since it now seems inevitable that they will get a ton of taxpayer money). He has all the qualifications and then some ... and seems to have the time. Nah!!! He would probably insist on the unions biting the bullet and it would also set him up as a political rival to the Democratic juggernaut. We can't have that!! It will probably be some doofus like Robert Kennedy Jr. Sigh ...