Waddling Back To The Trough

Here comes a squealing Fannie Mae, begging to suck on the taxpayer teat yet again. Hey, I know, let’s throw some more good money after bad.

Fannie Mae Seeks $8.5 Billion in U.S. Aid After Reporting Loss

Fannie Mae, the mortgage-finance company operating under U.S. conservatorship, will seek $8.5 billion in Treasury Department aid to balance its books after reporting a $6.5 billion loss in the first quarter.

Fannie Mae is requesting the money to eliminate a net worth deficit of $8.4 billion for the three-month period that ended March 31, according to a Securities and Exchange Commission filing today. The $6.5 billion loss for the quarter compares with an $11.5 billion shortfall in the same period a year ago.

. . .

Fannie Mae’s smaller rival, Freddie Mac of McLean, Virginia, posted a $676 million first-quarter profit on May 4. Freddie Mac reported a net worth of $1.2 billion and didn’t request additional aid.

The two companies, which own or guarantee more than half of U.S. single-family mortgages, have drawn more than $160 billion in Treasury aid since September 2008, when they were seized by the federal government amid losses that pushed them to the brink of insolvency.

See also:
Fannie Mae Falls Back Into the Loss Column
Fannie Mae to ask $8.5bn of Treasury
Fannie Mae seeks $8.5 billion from taxpayers
Fannie Mae Posts Deep Loss
Fannie Mae requests additional 8.5 billion dollars in government aid
Fannie’s Friday Earnings Release: $8.7-Billion Loss

And who’s responsible for this financial black hole?

Why are we continuing to prop up this bull[expletive deleted]? Let Fannie Mae fail. How much worse can the housing market get? In fact, the government’s insistence in meddling in the housing market. led by the Democrats, only prolongs the inevitable and prevents the free market from sorting itself out.

/take away the trough, wean Fannie Mae from the taxpayer teat, vote Republican in 2012, it’s the only way to be sure

Let The Games Begin

Like it or not, here come the Republicans, armed with the House majority and subpoena power, ready to investigate the Obama administration and do what they can to roll back the last two years of economically destructive Democrat policies.

Incoming House GOP chairmen have a long list of issues to investigate

House Republican leaders announced plans Monday for congressional investigations into a wide range of issues, from corruption in Afghanistan to Washington’s regulation of private industries, using the power of their new majority to launch probes that could embarrass the Obama administration.

Rep. Darrell Issa (R-Calif.), who will become chairman of the House Oversight and Government Reform Committee when the 112th Congress is sworn in Wednesday, said he would lead six major investigations in the first three months of the year. This is an ambitious undertaking by conventional standards, as congressional investigations often take months to bear fruit.

Issa, who will have power to subpoena government officials to appear before the committee, said he intended to conduct inquiries into the release of classified diplomatic cables by Wikileaks; recalls at the Food and Drug Administration; the role of Fannie Mae and Freddie Mac in the foreclosure crisis; the Financial Crisis Inquiry Commission’s failure to identify the origins of the meltdown; as well as business regulations and alleged corruption in Afghanistan.

Other incoming Republican committee chairmen are planning investigations into the Justice Department’s civil rights division, the radicalization of Muslims in the United States, homeland security grant money and air cargo and port and chemical plant security.

See also:
Issa targets ‘broken bureaucracy’
Darrell Issa asks business: Tell me what to change
Issa and Obama: At Odds, but Not at War
Movers and Shakers: Issa Predicts ‘Constant Battle’ With White House Over Economy
Issa to investigate government regulation, fiscal crisis, WikiLeaks
Issa Sets Sights on WikiLeaks, Government Regulation and Afghanistan for Future Hearings
Will GOP chairmen conduct meaningful oversight?
New GOP oversight chairman calls administration ‘corrupt’
GOPer calls Obama administration ‘corrupt’
What Darrell Issa Means When He Calls the White House “Corrupt”
Democrats tap top Obama lawyer to counter Darrell Issa
Upton may tackle global warming issue more quickly than Issa

After two years of Obama czars and recess appointments, incestuous Chicago and union cronyism, and a Democrat Congress running roughshod over the will of the American people, without any meaningful oversight, there’s a lot of corruption and political dirt that’s been swept under the rug. Now it’s time for some good old fashioned nose rubbing and public embarrassment. In other words, it’s payback time.

/pass the popcorn

Double The Record Bailout, Double The Criminality

Franklin Raines, Barney Frank, Maxine Waters, and all the rest of these thieving Democrat criminals should be made to forfeit of every last penny’s worth of their personal property and then be thrown in Federal prison for the rest of their lives. They’ve done immeasurable damage to the U.S. economy, the U.S. taxpayers, and everyone who own a house or a retirement account. And it’s not over yet and it’s only going to get worse.

Fannie and Freddie support may reach $363 billion by 2013

Mortgage finance giants Fannie Mae and Freddie Mac could need as much as $363 billion in government payments by 2013, regulators said Thursday.

The Treasury Department has pumped $148 billion into the agencies since the government took them over in 2008.

The new projections by the Federal Housing Finance Agency, based on a series of assumptions about home prices, indicate that Fannie and Freddie will require an additional $73 billion to $215 billion before 2013.

Read the projections:

Projections of the Enterprises’ Financial Performance

See also:

Fannie, Freddie May Draw $363 Billion, FHFA Says
Fannie/Freddie Bailout Could Total $363 Billion
Fannie, Freddie May Need $215 Billion More in Aid
Fannie & Freddie ‘could cost US $363bn’
Fannie Mae, Freddie Mac bailouts could hit $363 billion, report says
Fannie, Freddie bailout could hit $363 billion
US taxpayers warned Fannie Mae and Freddie Mac may need $363bn bailouts
Fannie Mae and Freddie Mac deep in the hole
Fannie Mae, Freddie Mac Bailout Costs Could Soar
Fannie and Freddie May Need Infusion
Fannie, Freddie Rise Despite Giant Potential Tab With U.S Treasury

Yes folks, the Fannie and Freddie bailout is going to end up costing more than the AIG and Auto bailouts combined, by an order of magnitude, and the U.S. taxpayers are going to get stuck with the bill.

/why do the known criminals who obviously caused this 1/3 of a trillion dollar mess remain unpunished?

Smell The Arrogance

Can you just imagine what would have happened if George Bush had said this?

Obama Tells Economic Critics to ‘Get Out of the Way’

A fired up President Obama said Thursday that he wants his critics to just “get out of the way” so his administration can clean up the economic “mess” that Republicans left for him.

Obama spoke Thursday night at a rally in Virginia for state Sen. Creigh Deeds, the Democratic candidate for governor.

He used the bulk of his pep talk to dress down critics who say his economic stimulus is not working and who complain about his administration’s spending. Obama noted that he was handed a deficit topping $1 trillion when he walked into office, and urged the “naysayers” to step aside.

“We’ve got some work to do. I don’t mind, by the way, being responsible. I expect to be held responsible for these issues because I’m the president,” Obama said. “But I don’t want the folks that created the mess — I don’t want the folks who created the mess to do a lot of talking. I want them just to get out of the way so we can clean up the mess.

“I don’t mind cleaning up after them, but don’t do a lot of talking,” Obama said.

See also:
Obama Rallies Deeds Supporters Amidst Tumbling Poll Numbers
At Deeds Rally, Obama Knocks GOP Critics
In Virginia, Obama says US needs pragmatic leaders
Barack Obama wants you to get out of the way
Get out of the way Obama orders

What a pompous, self-righteous, sanctimonious, vainglorious little prick. Look out Moneychangers! Here comes Lord Obama from on high to cleanse the temple! Shut up you evil Republicans, the financial crisis was all your fault and now only Obamanomics can repair all the damage you’ve done and save the country. We won!

Nevermind the extensive role of Barney Frank, Chris Dodd, and the rest of the Democrats had in creating the global financial meltdown, by pushing relaxed lending standards through Fannie Mae and Freddie Mac, covering up problems at Fannie Mae and Freddie Mac, and resisting Rebublican calls for regulation.

The “stimulus” is working, really? Hardly any of it has even been spent! The economy is starting to recover on it’s own, in spite of the “stimulus”. In fact, once all the back loaded “stimulus” does hit the economy, it’ll do nothing except crowd out private sector investment, retard GDP growth, and spur inflation. Obama inherited a huge deficit? Sure, and then he immediately proceeded to triple it in six months. The markets don’t like it and wonder aloud, who the [expletive deleted] is going to end up paying for all this out of control Obama deficit spending?

Frankly, it’s exceedingly obvious that global capital markets are frightened by Obama economic policies and what he might possibly do next. Not one Obama economic policy introduced so far has been business friendly (you know, the people who actually create jobs) or pro economic growth.

If anyone should shut up and get out of the way it’s Obama. He has no earthly idea what he’s doing and his policies are an obvious drag on the economy. If he would just do nothing, the markets would be trading much higher than they are now and the economy would already be recovering at a much faster pace.

/you know, half of America didn’t vote for this hopey changey, sweet smelling unicorn farts bull[expletive deleted]

Your Government, Totally Out Of Control

Barney Frank: Let’s spend TARP profits before taxpayers can get them

When President Obama announced on June 9 that some financial institutions would be allowed to repay Troubled Asset Relief Program dollars, he said the massively expensive TARP bailout had made money for the federal government. “It is worth noting that in the first round of repayments from these [TARP recipients], the government has actually turned a profit,” the president said. Indeed, TARP supporters have long held out the hope that the program might be profitable.

But now Rep. Barney Frank, the chairman of the House Financial Services Committee, has come up with a proposal to spend any TARP profits before they can be returned to the taxpayers. Last Friday, Frank introduced the “TARP for Main Street Act of 2009,” a bill that would take profits from the program and immediately redirect them toward housing proposals favored by Frank and some fellow Democrats.

In exchange for receiving TARP money, financial institutions were required to hand over shares of preferred stock that paid a dividend for the government. In theory, if a financial institution paid the dividend faithfully, and then repaid the TARP money, then the government would turn a profit. Last month, the General Accountability Office (GAO) reported that, through June 12, 2009, the government had received $6.2 billion in dividend payments. The original TARP legislation required that money made from the program “shall be paid into the general fund of the Treasury for reduction of the public debt.”

Frank, however, wants to spend the money before it can be used to pay down anything. First, the “TARP for Main Street” proposal would take $1 billion “from dividends paid by financial institutions that have received financial assistance provided under…the Emergency Economic Stabilization Act” and apply it to a trust fund that Frank has long wanted to create for low-income rental housing. (The measure, unfunded, was part of last year’s bailout of Fannie Mae and Freddie Mac.) Next, Frank would take $1.5 billion from TARP dividends for a so-called “neighborhood stabilization” fund. Republican critics have charged that both measures might allow federal dollars to be distributed to activist groups like the Association of Community Organizers for Reform Now, or ACORN.

The “TARP for Main Street” bill would also spend $2 billion, apparently from remaining TARP funds, to subsidize people who are delinquent on their mortgages, and another $2 billion to “stabilize multifamily properties that are in default or foreclosure.”

Congress’s Travel Tab Swells

Spending by lawmakers on taxpayer-financed trips abroad has risen sharply in recent years, a Wall Street Journal analysis of travel records shows, involving everything from war-zone visits to trips to exotic spots such as the Galápagos Islands.

The spending on overseas travel is up almost tenfold since 1995, and has nearly tripled since 2001, according to the Journal analysis of 60,000 travel records. Hundreds of lawmakers traveled overseas in 2008 at a cost of about $13 million. That’s a 50% jump since Democrats took control of Congress two years ago.

The cost of so-called congressional delegations, known among lawmakers as “codels,” has risen nearly 70% since 2005, when an influence-peddling scandal led to a ban on travel funded by lobbyists, according to the data.

Mortgage-Rescue Plan to Cover More Borrowers

The Obama administration is expanding the number of borrowers who can refinance home loans under its housing-rescue program, an acknowledgment that more needs to be done to help people who are upside down on their mortgages.

The administration said Wednesday that borrowers with mortgages worth up to 125% of their home’s value will now be eligible to refinance under its program, up from a 105% limit.

To be eligible, borrowers must be current on their mortgages and have loans owned or backed by government-controlled mortgage companies Fannie Mae and Freddie Mac.

/had enough Hope and Change yet?

The Banks And Car Companies Are Not Enough!

Obama must have more power, more control! He must reign over everything, the entire U.S. economy belongs to him! You cannot be trusted with capitalism and free markets. Obama knows best and Obama has spoken.

New Foundation, New Stability

Over the past decades, government has often haphazardly weakened and jettisoned the regulations on the financial sector that were designed to bring stability to the economy. The result has been what the President refers to as a “bubble and bust” economy, leaving American families at the whim of greed and excess far beyond their control and hundreds of miles away. As the President said today, it is indisputable that this peril was a leading contributor the economic breakdown America has seen over the past years.

Today marked a culmination of a months-long process in which the President consulted with the most expert and experienced regulators, leaders in Congress, and his entire economic team to craft a revamping of the system, a “new foundation” on which our economy can grow for decades to come. Many of them joined him today as he announced the principles they had agreed upon.

The President began his remarks by diagnosing the problem:

In recent years, financial innovators, seeking an edge in the marketplace, produced a huge variety of new and complex financial instruments. And these products, such as asset-based securities, were designed to spread risk, but unfortunately ended up concentrating risk. Loans were sold to banks, banks packaged these loans into securities, investors bought these securities often with little insight into the risks to which they were exposed. And it was easy money — while it lasted. But these schemes were built on a pile of sand. And as the appetite for these products grew, lenders lowered standards to attract new borrowers. Many Americans bought homes and borrowed money without being adequately informed of the terms, and often without accepting the responsibilities.

Meanwhile, executive compensation — unmoored from long-term performance or even reality — rewarded recklessness rather than responsibility. And this wasn’t just the failure of individuals; this was a failure of the entire system. The actions of many firms escaped scrutiny. In some cases, the dealings of these institutions were so complex and opaque that few inside or outside these companies understood what was happening. Where there were gaps in the rules, regulators lacked the authority to take action. Where there were overlaps, regulators lacked accountability for their inaction.

. . .

The President concluded by making clear the necessity of the solution:

There’s always been a tension between those who place their faith in the invisible hand of the marketplace and those who place more trust in the guiding hand of the government — and that tension isn’t a bad thing. It gives rise to healthy debates and creates a dynamism that makes it possible for us to adapt and grow. For we know that markets are not an unalloyed force for either good or for ill. In many ways, our financial system reflects us. In the aggregate of countless independent decisions, we see the potential for creativity — and the potential for abuse. We see the capacity for innovations that make our economy stronger — and for innovations that exploit our economy’s weaknesses.

We are called upon to put in place those reforms that allow our best qualities to flourish — while keeping those worst traits in check. We’re called upon to recognize that the free market is the most powerful generative force for our prosperity — but it is not a free license to ignore the consequences of our actions.

This is a difficult time for our nation. But from this period of challenge, we can once again tap those values and ideals that have allowed us to lead the global economy, and will allow us to lead once again. That’s how we’ll help more Americans live their own dreams. That’s why these reforms are so important. And I look forward to working with leaders in Congress and all of you to see these proposals put to work so that we can overcome this crisis and build a lasting foundation for prosperity.

And, of course, Obama has a detailed plan for tightening his grip on the free market system.

Financial Regulatory Reform: A New Foundation

We must act now to restore confidence in the integrity of our financial system. The lasting economic damage to ordinary families and businesses is a constant reminder of the urgent need to act to reform our financial regulatory system and put our economy on track to a sustainable recovery. We must build a new foundation for financial regulation and supervision that is simpler and more effectively enforced, that protects consumers and investors, that rewards innovation and that is able to adapt and evolve with changes in the financial market.

In the following pages, we propose reforms to meet five key objectives:

(1) Promote robust supervision and regulation of financial firms. Financial institutions that are critical to market functioning should be subject to strong oversight. No financialfirm that poses a significant risk to the financial system should be unregulated or weakly regulated. We need clear accountability in financial oversight and supervision. We propose:

• A new Financial Services Oversight Council of financial regulators to identify emerging systemic risks and improve interagency cooperation.

• New authority for the Federal Reserve to supervise all firms that could pose a threat to financial stability, even those that do not own banks.

• Stronger capital and other prudential standards for all financial firms, and even higher standards for large, interconnected firms.

• A new National Bank Supervisor to supervise all federally chartered banks.

• Elimination of the federal thrift charter and other loopholes that allowed some depository institutions to avoid bank holding company regulation by the Federal Reserve.

• The registration of advisers of hedge funds and other private pools of capital with the SEC.

(2) Establish comprehensive supervision of financial markets. Our major financial markets must be strong enough to withstand both system-wide stress and the failure of one or more large institutions. We propose:

• Enhanced regulation of securitization markets, including new requirements for market transparency, stronger regulation of credit rating agencies, and a requirement that issuers and originators retain a financial interest in securitized loans.

• Comprehensive regulation of all over-the-counter derivatives.

• New authority for the Federal Reserve to oversee payment, clearing, and settlement systems.

(3) Protect consumers and investors from financial abuse. To rebuild trust in our markets, we need strong and consistent regulation and supervision of consumer financial services and investment markets. We should base this oversight not on speculation or abstract models, but on actual data about how people make financial decisions. We must promote transparency, simplicity, fairness, accountability, and access. We propose:

• A new Consumer Financial Protection Agency to protect consumers across the financial sector from unfair, deceptive, and abusive practices.

• Stronger regulations to improve the transparency, fairness, and appropriateness of consumer and investor products and services.

• A level playing field and higher standards for providers of consumer financial products and services, whether or not they are part of a bank.

(4) Provide the government with the tools it needs to manage financial crises. We need to be sure that the government has the tools it needs to manage crises, if and when they arise, so that we are not left with untenable choices between bailouts and financial collapse. We propose:

• A new regime to resolve nonbank financial institutions whose failure could have serious systemic effects.

• Revisions to the Federal Reserve’s emergency lending authority to improve accountability.

(5) Raise international regulatory standards and improve international cooperation. The challenges we face are not just American challenges, they are global challenges. So,as we work to set high regulatory standards here in the United States, we must ask the
world to do the same. We propose:

• International reforms to support our efforts at home, including strengthening the capital framework; improving oversight of global financial markets; coordinating supervision of internationally active firms; and enhancing crisis management tools.

Nowhere in the President’s remarks or in his new regulation plan will you find any mention, let alone an admission, of the government’s primary role in causing the latest financial collapse. Fortunately, IBD tells it like it was.

Regulation Nation

Regulation: The White House wants to impose sweeping new rules for the financial industry to prevent another meltdown. Unfortunately, it was government — not the private sector — that was to blame.

Citing a “culture of irresponsibility” that it says helped cause last year’s financial crisis, the White House on Wednesday released an 88-page report that proposes major changes in America’s financial system. The Associated Press aptly called it “the greatest regulatory transformation since the Great Depression.”

Among the reforms put forward were a new, pumped-up Federal Reserve with greater powers to regulate and oversee the entire financial system, a new consumer credit watchdog to oversee home loans and credit cards, and new rules and oversight for hedge funds and exotic securities, such as credit default swaps and collateralized debt obligations, which some blame for making the financial crisis worse.

It’s nice to see that our government is so concerned about not repeating the errors of the past. But our advice comes from an ancient proverb:

“Physician, heal thyself.”

The White House’s financial regulation proposal blames “gaps in regulation” for our financial crisis. Wrong. It was in fact government misregulation and miscalculation that created our financial crisis — not private businesses. The record on this is quite clear.

As economic historian Lawrence White of the University of Missouri has written:

“The expansion in risky mortgages to underqualified borrowers was encouraged by the federal government. The growth of ‘creative’ nonprime lending followed Congress’ strengthening of the Community Reinvestment Act, the Federal Housing Administration’s loosening of down-payment standards, and the Department of Housing and Urban Development’s pressuring lenders to extend mortgages to borrowers who previously would not have qualified.”

Add to that Fannie Mae and Freddie Mac — created and regulated by acts of Congress — which together at one point controlled nearly half of the nation’s $12 trillion mortgage market. The two quasi-private entities served as the grand financial engine by which Congress would boost homeownership.

It worked well for a while. And we can’t fault the intent to help people. But the failure was one of too much government — not too little, which is the rationale for the new financial regulation regime sought for Wall Street and the banks.

As for the Fed’s new powers, we happen to believe the central bank has done a reasonably good job responding to this crisis — though as many others have noted, the vast expansion of the U.S. money supply in the last year poses a future inflationary threat.

But we don’t think the Fed needs enhanced powers. Far from it. It’s too powerful already. Giving it virtually unbridled control over our financial system without having to directly answer to the people is a danger to free market capitalism.

Many have argued that the Fed’s slashing of interest rates from 6.25% in 2001 to 1% in 2003 — following a stock market meltdown, a recession, the 9/11 attacks and the start of the War on Terror — was too much and led to the housing market bubble.

Now, strangely, many of the same people advocate giving the Fed even more power. It makes no sense.

If the White House really wants to fix our ailing financial system, it would do well to start by repealing what remains of TARP, undoing the government’s takeover of our auto industry and halting the fraudulent and wasteful $787 billion “stimulus” program.

Then you might see a real economic recovery take place.

See also:
Obama Defends Financial Overhaul
Geithner: Govt. Needs Better ‘Crisis Management’ Tools
In huge change, Obama’d strip Fed of credit card oversight
Obama: ‘A sweeping overhaul’
Historic Overhaul of Finance Rules
Obama Lays Out ‘Sweeping Overhaul’ of Financial Rules (Update3)
Not Everyone Is Cheering Fed’s New Role
New financial rules: Major changes for big, small
Obama unveils ‘sweeping overhaul’ of financial regulations

The truly ironic part is that most of Obama’s free market control plan has to go through Congress to become law, those most responsible for the financial mess in the first place. Can you just imagine what hideous manner of bull[expletive deleted] regulation will come out the other end? How much additional U.S. government oppression can free enterprise take before major corporations will just say enough already and reincorporate in another country with a more business friendly environment?

/one thing I know for sure from daily first hand stock trading experience, between Obama’s encroachment into the private sector economy and his out of control government spending, he’s spooking the ever loving [expletive deleted] out of the markets