This ballot printing error costs Boulder County $35 thousand in an uncontested election. I hope they take the $35k out of the county prairie dog fund!
The Longmont Times Call has once again scooped the Boulder Daily Camera. DC, the clock is ticking, it only took you three days to report a “breaking news” that had already been reported in the Longmont paper. Fortunately for the Daily Camera, Boulderites wouldn’t lower themselves to read a Longmont paper or visit their web site.
An IBD editorial written by Fred L. Smith of the Competitive Enterprise Institute addresses how Fannie and Freddie are at the heart of the financial crisis.
Going back in time…
But eight years ago, when I testified before Congress that Fannie Mae and Freddie Mac’s “special privileges create a serious hazard to the market, to taxpayers (and) to the economy,” my criticism of these sacred financial entities was met with ridicule.
At the hearing on June 21, 2000, before the House Financial Services Committee, I called the government-sponsored enterprises “strange organizations, neither private- sector fish nor political-sector fowl” and said that “as a result, no one is quite sure how these entities should be evaluated or held accountable.”
I offered my opinion that the rapid growth of their debt portfolios and the new risks Fannie and Freddie were taking on — such as the purchase of various unproven mortgage instruments — “will certainly increase the likelihood of a Fannie-Freddie default.”
The typical Democratic reaction was…
“Mr. Smith, that is almost a fallacious argument,” Rep. Paul Kanjorski, D-Pa., said in pooh-poohing my testimony. He then proceeded to explain to me that the rapid growth of the GSEs’ debt holdings was nothing to worry about, because it was simply reflecting “inflation and the growth of population” and economic growth itself. “Everything, proportionately, is that much larger.”
Similarly, then-Rep. Marge Roukema, R-N.J., touted the complex capital rules governing the GSEs, saying that “very few banks or S&Ls could, even in this day and age, even now, meet the stress-testing requirements which Fannie and Freddie are required to meet.”
And Rep. Carolyn Maloney, D-N.Y., offered a fairly typical response from GSE defenders to my concerns about the long-standing line of credit of $2 billion from the Treasury Department. “It is really symbolic, it is obsolete, it has never been used,” she declared.
She asked, “Would you explain why it would be important to repeal something that seems to be of little use?”
I answered that “as long as the pipeline is there, it is like it is very expandable.” Then, in what even I thought might be a reach, I added, “It is only $2 billion today. It could be $200 billion tomorrow.”
“Tomorrow,” of course, arrived early this month.
As they say, read the whole thing!
Read about it over at OpenMarket.org. Here’s the meat and potato’s and some comments on mark-to-market…
The RSC plan is chock-full of measures to remove barriers to economic growth and market-distorting subsidies. It would suspend capital gains taxes to put trillions of dollars of capital in the economy, and set Fannie Mae and Freddie Mac, which as CEI has documented were at the root of this crisis, on the road to full privatization.
Most importantly for the crisis at hand, the RSC plan would make regulatory agencies suspend the mark-to-market accounting rules that a range of experts agree are spreading the contagion by forcing solvent banks’ to “write down” their assets, based on the last fire sale of a highly leveraged bank. As Gary Gorton, finance professor at Yale and member of the National Bureau of Economic Research has written, “With no liquidity and no market prices, the accounting practice of ‘marking-to-market’ became highly problematic and resulted in massive write-downs based on fire-sale prices and estimates.”
This accounting rule is forcing financial institutions to write down their debt securities to ridiculously low values which only causes the problems to “trickle down”. I’m not necessarily advocating getting rid of it. Apparently mark to market rules came after the S&L bailout so they are useful.
Also, re-implement the uptick rule on short sales. Of course with penny stock increments it doesn’t take much to have an uptick. Perhaps they should make it a nickle or something. The problem with this rule is it’s hard to enforce.
(click to enlarge)
Get your asian stock market quotes here.
Most major asian stock markets have opened down between 4 – 5%.
Get your oil price charts live charts. The above is a 1 hour chart. All the “dead space” is due to the weekend.
Think this has OPEC concerned? Short term, “yes” and long term “no”.
Clay Evans picks up the “It’s all Bush’s fault” baton in this Daily Camera editorial. Clay concludes…
But at the political level, I wonder: Would we still be arguing, or would he look at the relative prosperity of the Clinton years (can you say “surplus” ?) and agree with me that the deregulating, big-spending (and borrowing), tax-cutting, wealthy-coddling Bush administration is the problem?
It’s always so simple in liberals eyes, especially the Daily Camera editors. No mention of sub-prime lending by Fannie and Freddie. Why not? I’ll not argue that Wall Street firms twisted this subprime paper into a bigger problem but there is plenty of blame to go around. Liberals can argue that more blame is the conservatives and vice-versa, but a biased conclusion like Clay writes only comes from someone who:
1. Is not interested in the truth
2. Who’s outlook on life is blinded by a combination of hatred of Bush and Wall Street and the liberal kool-aid.
3. Can’t even consider that just like this crisis is a combination of negative economic issues, the Clinton boom was also a confluence of various economic factors. No doubt Clinton can take credit for some, but some was a combination of unique times. Remember the Internet back then Clay?
In closing, this is a party line editorial with absolutely no critical thinking. Of course, critical thinking is not a prerequisite to writing an editorial in papers much larger than the Boulder Daily Camera. Not to mention that one thing Clay does know is his audience!
Greed for political power and greed for money are both toxic. When you combine them you get a financial crisis of earthshattering proportions. Read the greed for politcial power argument over at Hot Air where Ed Morrissey analyzes a 1999 column in the NY Times where Steven Holmes actually predicts a government bailout of Fannie and Freddie during an economic downturn.
I’d say we’re flying blind at the moment. It may be the right thing, it may be the wrong thing but there is no flight path and I’m not sure we can land safely.
I don’t know if the bailout bill is a good or bad scheme. For the short term it is probably good, but I have little idea regarding the long term implications. Raising the debt ceiling by more than 10% with one bill is more than mildly disturbing. That said, I have little sympathy for House members worried about losing their jobs. It would be nice if they voted because they had courage, not because they are a bunch of sissies.
McCain had nothing to offer. Yea, right. Probably works for people who can’t pop the hood of their trunk. Read more about “Obama the arrogant“. Great picture by the way!
OMG, what the heck is going on here. What will happen if/when this guy becomes President and someone disagrees with him?
The people in law enforcement so eager to sign up to be members of the “truth squad” is very troubling indeed.
If anyone needed a truth squad it was/is Sarah Palin.
According to the self selected group of Instapundit readers, McCain won in a landslide.
I didn’t watch or listen to a lot of the debate. What I saw, I thought McCain did well, but Obama seemed to be doing a fine job of being Obama.
The advertisement below was part of an e-mail I received today…
I don’t think that will happen again!
“Dr. Doom”, Marc Faber believes $700 billion isn’t close to enough.
Marc Faber, editor & publisher of ‘The Gloom, Boom & Doom Report’, told CNBC’s Asia Squawk Box on Friday, he doubts that $700 billion would make any difference when you consider the size of U.S. credit markets.
“Looking at the size of the credit market in the United States, the equities market, the housing market and then looking at the size of the credit default swap market, which is around $62 trillion now, and the world wide derivatives market which is now $1,300 trillion dollars, I very much doubt that $700 billion would make any difference at all. In fact, I think it’s a bad proposal in the sense that it will distort market pricing,” Faber said. (Watch the complete Marc Faber interview on the U.S. bailout plan on the left)
See the complete article and the video here.
Burn the excess houses down? According to Faber, perhaps the idea is as valid as $700 billion making a difference. Some comments on executive pay at the end of the video.
Perhaps the closing of Washington Mutual by the government, the largest US bank failure ever, will spur our lawmakers to act on the bailout bill.
This article, “How to Blow a Scoop” sums it up and concludes…
It’s an perfect lesson in what’s gone wrong with America’s major media. No potential scoop is so big that it can’t be ignored if it doesn’t conform to the regnant political bias. A Republican with a personal email account? Scandal! A Democrat who hacks a Republican’s personal email account? Ho-hum
Certainly rings true locally.
