Homeland Stupidity http://www.homelandstupidity.us Government is stupid. Discover a better way to organize society. Tue, 15 Apr 2014 02:34:15 +0000 en-US hourly 1 http://wordpress.org/?v=4.1.1 The Big Bailout Circus http://www.homelandstupidity.us/2008/09/28/the-big-bailout-circus/ http://www.homelandstupidity.us/2008/09/28/the-big-bailout-circus/#comments Mon, 29 Sep 2008 00:22:00 +0000 http://www.homelandstupidity.us/2008/09/28/the-big-bailout-circus/ ]]> The Big Bailout Circus has the nation in stitches. Taxpayers are being sewn into a skin-tight forever suit by an amazingly bipartisan group of government clowns. But despite the agreement about the need for a slap dash redo of the U.S. financial system — and by extension our political system — the designing bozos disagree about details. And none can resist an occasional hit of the rubber chicken . . .

“This sucker WILL go down’ fumes President Bush as he yanks the zipper on John Q’s paycheck.

“Further than your approval ratings?’ House Speaker Nancy Pelosi is quick with the chicken.

Bap! The right hits back with a ref to the toilet numbers of Democrat-controlled Congress.

Treasury Secretary Henry Paulson needs that toilet. In exchange for Dem support for the bailout flush, Nancy-with-the-laughing-face and Rep Barney Frank demanded, among other things, an affordable housing slush fund. Frank was ready to cram the cash into the baggy pants of assorted “non-profit’ clowns. The Volkswagen headed for Mortgage Fraud City is already packed. HUD has made a mega taxpayer contribution* via billions in emergency Community Development Block Grant (CDBG) funds that local pols and players can use to buy foreclosed properties. Slum fun will be had by all. Except the poor. Who luckily, are always with us. Dumb luck? Or systemic corruption and chuckle headed housing policy?

Never never forget that HUD spelled backwards is DUH.

Thuk! Another rubber chicken comes down. Republican clowns in Congress kill the Big Bailout slush fund, fearing non-profits would use it to get out the Dem vote by any means necessary. The cut is part of the Republican’s price for agreeing to indenture U.S. taxpayers to global markets.

Honk-a-dollar! The team of Mac N’ Cheese, aka John McCain and Barack Obama, tumbles into the ring. Each carries a comic valentine for Average Americans. Sometimes called “Folks.’ Both guys do a killer routine of cautious caution re the Big Bailout. Both tinker toy with the master plan, albeit in different ways. (Though both agree on the big easy — sock greedy CEOs.) Neither presidential candidate sez dump it Dano, let’s start from scratch. Profiles in courage are so yesterday. Another yesterday thing: Dubya beating the imminent disaster drum. By the time the ballyhooed profits for taxpayers from the bailout prove as imaginary as WMD, Dubya will be back at the ranch. Rounding up memorabilia for yet another presidential museum.

Big Bailout urgency is also drum boogied by the majority of the mainstream press. Dubya is dirt in the eye of most media beholders but taxpayer revolts (except when directed at military spending) are a beam. A nip and tuck of the Bailout is acceptable if done by the same crew who didn’t flag the housing bubble or its derivative trash and who’ve been consistently wrong about how to fix the aftermath. But please, no meddling by the peanut gallery. Or for that matter, by the myriad economists and financial experts who spotted the bad moon rising years ago and issued countless warnings. Few of which got much coverage. Though predictions of non-stop home value appreciation from the National Association of Realtors (NAR) got the gospel choir. Vested interest, much? Speaking of the NAR -

In September, Lawrence Yun, chief economist for the NAR, addressed a gaggle of regional Realtors in Saratoga Springs, New York. Whee! Yun thinks the federal read taxpayer takeover of Fannie Mae and Freddie Mac will make it easier for prospective homebuyers to get mortgages. (Fannie and Freddie incidentally, are currently under investigation for fraud by the FBI.) But Yun is ticked off at the NAR’s former news media pals — and at Federal Reserve Chairman Ben Bernanke. Yun sez both have been spreading “negativity’** about the housing market and scaring off buyers. Yun even bapped Ben with a letter saying Ben’s bad mouth was “inappropriate.’ Cause people “react to that.’ He’d also like to make Alan Greenspan stick to housing happy talk. Alas. Not much can be done on that front. The X Fed head is beyond the reach of Yun’s rubber chicken. Though Greenspan hasn’t escaped seeing his rep go down in flames. Immolated by exploding ARMs.

Meanwhile, back at the Big Bailout Circus, the audience is getting restless. Feet are being stamped and popcorn boxes thrown. Pow! Wham! How long before the amazingly bi-partisan rage of Average Americans (sometimes called “Folks’) erupts into the ring?

Carola Von Hoffmannstahl-Solomonoff
Mondo QT

*Help is on the Way, Center for American Progress, 07/21/08

**Realtors given some reason for optimisim, Chris Churchill, Albany Times Union, 09/16/08

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Stimulus Package Store, GSE Jumbo Out Back http://www.homelandstupidity.us/2008/01/30/stimulus-package-store-gse-jumbo-out-back/ http://www.homelandstupidity.us/2008/01/30/stimulus-package-store-gse-jumbo-out-back/#comments Wed, 30 Jan 2008 14:00:00 +0000 http://www.homelandstupidity.us/2008/01/30/stimulus-package-store-gse-jumbo-out-back/ ]]> Hot damn. The government is going to stimulate the economy. Not with a lap dance or lubricated love glove, but with taxpayer dollars. Come summer, Mister and Miz America will get a rebate from Uncle Sam. What a man! Some people will get more than a thou of their own money back. Consumers will rush out and pump the economy. Wal-Mart here we come. Simultaneously, just like in romance novels.

Meanwhile, back at Rancho Notorious for Tax and Spend, pols will do it the usual way. On top, with the lights out.

Suddenly, next Summer…

Americans feel soiled and empty after trysting with Wal-Mart. Thanks to Helicopter Ben’s interest rate cuts/puts, the heat was fleeting. (Folks with saving accounts never defrosted.) “Is that all there is?” asks the collective Peggy Lee, “A couple of plastic lawn chairs and a bag of groceries?” Wal-Mart winks and promises more trash for more cash. While Starbucks says coffee is for closers.

Real estate! Will the stimulus pack bring sexy back? Rebates are the front load of the package; the spoonful of sugar that helps the medicine go down. The potential kicker, as agreed upon by President Bush and the House of Reps (the Senate still has to sign on) is the lifting of limits and loosening of standards governing Fannie Mae and Freddie Mac, the GSE mortgage giants.

GSE equals government-sponsored enterprise. GSEs are private companies, but enjoy considerable support and advantages from the federal government. In return, they perform certain public chores and are regulated differently than non-GSE mortgage meisters. The largest GSEs are Fannie Mae and Freddie Mac. Their original mission was to buy conforming (not subprime) mortgages from lenders, thereby enabling them to make more loans. Fan and Fred hold some mortgages and market others as mortgage-backed securities (MBS). The securities are GSE guaranteed. While Fan and Fred aren’t pure government poodles, investors assume taxpayers will clean up after any mess they make, or do a bailout should they fail. The bailout assumption is fed by unclear policy re the level of support the GSEs would receive in a major crisis. The chance of meltdown is said to be slim. Until recently, so was the chance of a national housing crash. And until well into 2007, many financial pundits said subprime damage was contained.

Together, Fannie and Freddie back more than $4 trillion in mortgages. The question has often arisen as to whether their capital cushion is too thin to support such massive debt. At times, it’s been difficult to measure their cushion, due to pervasive book juggling.

Before Wall Street screamed bloody murder at the opening of 2008, President Bush was resisting pressure to lift the financial limit on the mortgages Fannie Mae and Freddie Mac purchase and securitize. The Office of Federal Housing Enterprise Oversight (OFHEO), the GSEs’ wimpy watchdog, also objected to lifting the limit and continues to do so post stimulus agreement. The present GSE limit is $417,000. The stimulus would snap the cap to $625,500, and to $729,750 in extra pricey housing markets. Allowing Fannie and Freddie to purchase and securitize jumbo mortgages, the oversize loans MBS investors now shun as too risky.

The jumbo shun makes lenders, Realtors, developers, and the pols who represent inflated housing markets, sad. The cap snap makes them happy. A GSE guarantee could stimulate investor interest in jumbo! Hopefully, jumbo won’t get too frisky and drop dead in the sack ala Nelson Rockefeller. Taxpayers would be flattened.

Speaking of being crushed, Fannie Mae and Freddie Mac are big buyers of mortgages cut by Countrywide Financial. They bought some 40% of Countrywide loans in 2006. The year mortgage lending went sub-cellar. Countrywide has been hit hard by lack of investor appetite for jumbo — and by its own unhinged underwriting. Of late, the mega lender has been denying bankruptcy rumors while selling itself to Bank of America. Bankruptcy talk caused Fan and Fred shares to tumble. That happens a lot these days. As do massive write downs. The GSEs took it on the chin in the 3rd quarter of 2007. Freddie had a record loss of $2 billion, Fannie lost $1.4 billion. The 4th quarter is expected to follow through.

As investors abandoned subprime MBS in 2007, Fannie Mae and Freddie Mac mounted a rescue mission. Fannie funded over $66 billion in subprime mortgage loans in the first half of 2007. But Patricia Parsons, director of product development, said Fannie “would continue to step lightly into this business.”* According to Becky Froass, senior director in industry and state relations at Freddie Mac, the company’s MBS portfolio held 15% subprime in 2006. Freddie hoped to buy $9 billion more in 2007.

Then there are the lawsuits and investigations. Just like the subprime and/or jumbo players who operated sans government mattress, Fannie and Freddie have acquired a saucy rep.

In January, the Ohio Public Employees Retirement System and state Attorney General Mark Dan filed a class action suit against Freddie Mac. The retirement fund lost $27.2 million in Freddie Mac MBS. Attorney General Dan alleges Freddie Mac hid the fact that the securities were backed by subprime. Saying the GSE “participated in one of the largest housing investment deceptions in modern U.S. economic times.”** In 2006, Freddie coughed up $410 million in a national class action suit headed by two Ohio pension funds. In that case, fudged financial statements were at issue. And OFHEO is seeking $215 million in damages from Fannie Mae, related to account manipulation at Fannie during the reign of former Chief Executive Officer Franklin Raines.

In November, 2007, the office of New York State Attorney General Andrew Cuomo issued subpoenas to Fannie and Freddie. Seeking, among other things, “Information about all of the mortgage loans Fannie Mae and Freddie Mac have purchased from any bank, including Washington Mutual, and the mortgage backed securities associated with those loans.” According to Cuomo, Washington Mutual, aka WaMu, colluded with First American Corporation and subsidiary, eAppraiseIT (one of the nations largest appraisal management companies) to inflate appraisal values on homes WaMu mortgaged. If so, the value of the mortgage backed securities based on those appraisals would also be false. In 2007 alone, WaMu provided Freddie Mac with $24.7 billion in potential MBS. Fannie Mae bought $7.8 billion.

President Bush and his fellow economic stimulators say the GSE cap will only be raised temporarily. All the bad buzz re Fannie and Freddie could be as false as the alleged false appraisals buoying WaMu MBS. And buying, securitizing, and guaranteeing jumbo mortgages when housing values are slip-sliding may be a wise financial strategy. But come Summer, when the rebate part of the stimulus package arrives, taxpayers might want to sink their windfall into a bottle of generic hooch and party as if it were Fat Tuesday. Because the GSE jack in the back could mean one long stint in Lentville.

Carola Von Hoffmannstahl-Solomonoff
Mondo QT

*Risky credit shunned by Wall Street,” Neil J. Morse, Inman News, 09/28/07

**Ohio vs. Freddie Mac: Mortgage lender hid big risks, suit alleges,” James Nash, Columbus Dispatch, 01/23/08

Sources include but are not limited to:

Fannie Risks Won’t Rise With Bigger Loans, Mudd Says,” Kathleen Hays and James Tyson, Bloomberg News, 01/29/08

Fannie and Freddie to the Rescue?,” Dawn Kopecki, Business Week, 01/25/08

Statement of OFHEO Director James B. Lockhart on Conforming Loan Limit Increase, Office of Federal Housing Enterprise Oversight, 01/24/08

Housing slump to continue: Fannie CEO,” Marcy Gordon, Associated Press, 01/08/08

No Rescue Here: Fannie Mae and Freddie Mac are in no position to bail out the housing market,” Washington Post, 11/23/07

On Wall Street: Subprime flames lick at Freddie,” Saskia Scholtes, Financial Times, 11/23/07

“New York Attorney General Cuomo Sends Letters of Notice and Demand to Freddie Mac and Fannie Mae,” Press Release, 11/06/07

Fannie Mae Ex-Officers Sued by U.S.,” Eric Dash, New York Times, 12/19/06

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Hillary Clinton, The Shadow Party and Me http://www.homelandstupidity.us/2007/10/31/hillary-clinton-the-shadow-party-and-me/ http://www.homelandstupidity.us/2007/10/31/hillary-clinton-the-shadow-party-and-me/#comments Wed, 31 Oct 2007 13:00:00 +0000 http://www.homelandstupidity.us/2007/10/31/hillary-clinton-the-shadow-party-and-me/ ]]> Halloween 2009. A big night at Castle Clinton. Aka the White House. Even though Bill Clinton is the first black ex-president, his face glows phosphorescent. Bill is thrilled. President Hillary has raised him from the international dead zone to serve as co-host of her first Halloween bash. “The Shadow Party” has Washington abuzz. Anybody who is anybody is coming to the costume ball. Bill is in Dracula drag, sporting a cape given him by an actual descendant of Vlad the Impaler. Transylvania being one of the stops on Bill’s International Listening Tour.

Boom boom goes the knocker. The guests are arriving. Bill swings wide the door. First on the scene are lesser lights, eager to speak truck to power. A couple of robot reps from machine districts. A county exec wrapped like a mummy in indictments. A mayor from some mosh pit dressed as a HUD buck. She crinkles enticingly as she walks. Bill makes a mental note and steers her to the free booze and noshes.

Round midnight the party is popping. Global financier George Soros holds court in a corner. The crowd hangs on his every word about transcending the limitations of national governments and buying local elections. When a drunk slurs something about “power hungry prog elitists” a hefty babe dressed like an ACORN punches out his lights. A few guys in mole costumes from the Working Families Party Store step forward to heave ho the body. Soros doesn’t notice: his King Kong mask lacks eye holes.

When the clock strikes twelve the music stops. The crowd falls silent. President Hillary is at the top of the stairs, looking as splendiferous as Vincent Price in a Roger Corman flick. In her glass, a bleeding man.

Bill gives a shout out “Throw your hands up for the Commander-In-Chief!” The crowd roars “Here’s to the Mideast Wars!”

Smiling graciously President Hillary descends. Her train held by her handmaidens. When she spots favored courtiers in the crowd, she throws them a finger point, eye pop, and full tombstone flash. Her choppers dazzle even her critics. Not many are present; the handmaidens have been busy bees.

Foreign guests include contributors and fund-raisers. One clever bundler is dressed as a teapot, with a cozy draped over his face. Vlad the Impaler’s descendant is present, with his extended family. Bill gives them a Transylvanian high five. Demonstrating, yet again, his ability to connect with all kinds of folks.

Hillary zeros in on Xi Jinping, of the Politburo Standing Committee of the Communist Party of China. Top dogs of the People’s Republic. Word has it that when the next Communist Party Congress meets in 2012, Xi Jinping will step into the shoes of President Hu. While carefully avoiding his toes.

Xi Jinping joined the Politboro pack in October, 2007. Xi is a “princeling.” Not in costume, but social position. According to Forbes (China’s Communists Revamp Politburo, 10/22/07) the epithet refers to “the offspring of the Communist Party’s political family dynasties . . . the princeling clique, while widely resented by the Chinese public, commands top posts in Beijing and in China’s largest companies.”

“Xi!” Hillary is on him like white on rice. Mentioning their mutual background as lawyers. Calling the 2008 Beijing Olympics “absolutely fabulous.” Keeping it lite re the government crackdowns that preceded The Games, chuckling how mosquitoes are the only thing more aggravating than journalists and dissidents. Oh — except for bloggers. Waxing serious, Hillary references Xi’s interest in educational ideology* and expresses concern that Our Children are being harmed by an Internet full of bad people who undermine faith in government and torpedo economic growth. As she speaks, her accent turns ersatz Chinese. Xi seems puzzled by her Charlie Chan chat, but nods and smiles. Xi is nothing if not politic.

The Me

Seriously folks, there’s a book titled The Shadow Party. Written by David Horowitz and Richard Poe. Published in 2006 by Nelson Current. Richard Poe recently sent me a copy. He and I were ships that passed in the night of NYC’s Punk scene in the 1980’s. We were both involved (at different times and in different ways) with the East Village Eye, a culture rag that covered the scene like warm leatherette. While not on an identical political wave length circa 2007, we agree on some things. Including gun control. We’re against it. We also agree Hillary Clinton shouldn’t be president. Though our reasons differ. Horowitz and Poe are Dubya lovin’ hawks who believe Hillary won’t do the do in the Mideast. Whereas I believe Hillary will do plenty. And IMHO, America shouldn’t be ruled by political family dynasties. Be they Bush or Clinton.

The Shadow Party is subtitled “How George Soros, Hillary Clinton, and Sixties Radicals Seized Control of the Democratic Party.” A finger in the eye and a damn fine cup of polemic. Whether writing from the left (Ramparts in the 60’s) or the right, David Horowitz has always been a talented polemicist. Richard Poe is his match. The Shadow Party is well researched and does what a good polemic should; make you look sharp at power. Some of the philanthropic activities of international financier George Soros may be admirable. But his meddling in our local governments and elections, via groups empowered with his soft money, is deeply creepy. As is the related trend of moguls buying political office. IMHO, America shouldn’t be ruled by princelings. No matter their ideology.

One last thing. Each chapter of Party kicks off with a pic of shadow figures that look like the demons who haul souls down to hell in the movie “Ghost.” How Halloween Ball is that?

Carola Von Hoffmannstahl-Solomonoff
Mondo QT

*Xi Jinping, Who’s Who in China’s Leadership, China Internet Information Center

Sources include but are not limited to:

To Lead China, Hu’s Next?,” Asia Editor Clay Chandler, Fortune, 10/22/07

China: Media Freedom Attacks Continue Despite Pledges, 11 Months Ahead of Beijing Olympics, Journalist Harassment Ongoing,” Human Rights Watch, 09/11/07

The Shadow Party, David Horowitz and Richard Poe, Nelson Current, subsidiary of Thomas Nelson Inc., 2006

Bio of George Soros, Open Society Institute

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