Congressional Mandates Overheated Housing, Not Wall Street

Mort Zuckerman writes a helpful essay explaining the complex world of mortgage finance and the role of derivatives, and lays much of the blame for the crisis we are going through squarely where it belongs, on the Congress of the United States, instead of on Wall Street:

But we also need to understand how the housing market got as hot as it did. Why did it keep rising, generating more and more derivatives geared to a rising market? It turns out that Fannie Mae, Freddie Mac, and the Federal Housing Administration had financed a lot more subprime and Alt-A (alternative documentation) loans than anyone realized, mostly as a result of congressional mandates. Indeed, of their total outstanding mortgage portfolios of $10.6 trillion, roughly half turned out to be of low quality. Had this been known, it would have been clear that the American public's capacity to assume this amount of housing debt was at great risk.

That is at the heart of the now-famous Goldman-Paulson saga. Hedge fund manager John Paulson judged that the housing market was a bubble, so he shorted the securities through Goldman Sachs and an insurer called ACA, which sold the package to a German bank. The buyers judged that it was safe to count on housing prices continuing to rise. They chose which mortgage securities would be bundled by Goldman. And they have paid a heavy price for their judgment.

The American public has hereby had a peek into the bewildering complexities of the world of finance. The natural instinct is for the public to blame the housing decline on those who shorted. But it is the other way around. They should be blaming those who let the market get pumped up, inviting a dramatic and painful correction that took most people by surprise.

The complete story is well worth reading, here.

Q1 2010 GDP Drops to 3.2% from Q4 2009's 5.7%

The following discussion of the initial report of first quarter GDP appeared here at HotAir.com:

Obama: Drop in GDP growth rate means we’re on the right track, or something

APRIL 30, 2010

ED MORRISSEY

Er, come again? The White House crowed endlessly about the 2009Q4 annualized GDP growth rate of 5.7% in January, even after most of it was shown to come from inventory adjustments. Now Barack Obama wants to treat today’s announcement of a 3.2% annualized GDP growth rate as a continuing improvement, when (a) it failed to meet analyst expectations of 3.5%, and (b) it’s a significant drop from the last report. Don’t worry, though, because as Obama explains . . . he has a different measure of progress:

The economy that was losing jobs a year ago is creating jobs today. After the single biggest economic crisis in our lifetimes, we’re heading in the right direction. We’re moving forward. Our economy is stronger — that economic heartbeat is growing stronger. But I measure progress by a different pulse.

Well, obviously. A 3.2% annualized GDP growth rate is better than the -6.0% of a year ago, but it’s still not a figure that will create the kind of economic expansion that will move large numbers of Americans from unemployment rolls to payrolls. Even the White House acknowledges that much in its own projections of unemployment. Despite Obama’s claims above, we still aren’t at a level of net job creation, and the continuing status of initial jobless claims in the mid-400K range means we’re not even getting close to break-even yet.

One last point . . . : Federal spending only rose 1.4% in 2010Q1, while state government spending dropped by 3.8%. The Porkulus money has all but stopped appearing in the economic measures. That makes the 3.2% a bit more solid than earlier measures, but it also means that Obama’s ability to artificially boost numbers before the midterms appears to be dissipating. The next quarters’ numbers will be quite interesting in terms of [their] affect on the national debate. If it’s still stuck at around 3% and unemployment continues to stagnate, Democrats will have trouble trying to use the spin Obama applied today.

Federal Judge Asks Prosecutors Of Hutaree: Where's The Sedition?

The Associated Press has reported that after two days of hearings this week, a federal judge who must decide whether to keep the Hutaree militia locked up hasn't heard anything so far which indicated specific acts of violence were about to be unleashed by the group, nor anything qualifying as seditious conspiracy.

One prosecutor quoted the leader of the militia as saying, "It's now time to strike and take our nation back so that we may be free again from tyranny. Time is up," leading one defense attorney to retort that talk of that sort can routinely be heard on conservative talk radio and that millions of Americans are talking that way these days.

Read the full story here.

51% of Americans Favor New Arizona Immigration Law

The latest Gallup poll shows widespread support for Arizona's new immigration legislation, despite a barrage of negative stories in the media in the wake of its passage:

More than three-quarters of Americans have heard about the state of Arizona's new immigration law, and of these, 51% say they favor it and 39% oppose it.

MediaMatters.org is not happy:

Gallup polled adults nationally about a law that only applies to one state and that, at the time of the survey, had only really been in the national news for a few days, and assumed people who had "heard" of the new law knew what the law was about?

Clearly the left has a lot more work to do to convince people to change their opinion on this subject. The pesky center-right character of the American people just keeps getting in the way.

"Only Controlling The Border Has To Be Settled Right Away"

The ever practical and often wise Peggy Noonan strikes another blow for Edmund Burke in a piece on the illegal immigration problem, "The Big Alienation," for The Wall Street Journal:

In the past four years, I have argued in this space that nothing can or should be done, no new federal law passed, until the border itself is secure. That is the predicate, the commonsense first step. Once existing laws are enforced and the border made peaceful, everyone in the country will be able to breathe easier and consider, without an air of clamor and crisis, what should be done next. What might that be? How about relax, see where we are, and absorb. Pass a small, clear law—say, one granting citizenship to all who serve two years in the armed forces—and then go have a Coke. Not everything has to be settled right away. Only controlling the border has to be settled right away.

To read more, go here.

President Mussolini Anyone?

Investors.com calls the prospect of the Dodd bill becoming law nothing short of fascism:

As it stands, Dodd's bill amounts to a nationalization of our financial sector. It creates permanent bailouts in the U.S. for any company that regulators consider to be in danger of default. That includes any company "substantially engaged in activities ... that are financial in nature."

In other words, virtually any big company, since many industrial giants — GM and GE leap to mind — have their own finance units.

This would give sweeping discretionary control over the economy to the Federal Reserve, the Federal Deposit Insurance Corp. and the Treasury — the very regulators who, asleep at the switch in 2005 and 2006, let the U.S. economic locomotive run off the rails.

If the Dodd bill passes intact, regulators can essentially shut down any company at will and force it into receivership. This style of state-directed capitalism has been tried before — in Italy under Mussolini and, later, in Argentina under Peron. It didn't work then, it won't work now.

Read the rest, here.

Why Are Community Bankers Against The Dodd Bill?

"Now ask yourself a simple question: Notwithstanding yesterday's grilling of Goldman execs and Congressional histrionics about "shitty deals," why are the CEO's of two of the largest banks on Wall Street in favor of passing Dodd's bill while community bankers all across the country like Tippens are against it?"

Doug Tippens of Oklahoma will tell you his side of the story here.

The story was also posted here.

U.S. Law Already Requires Aliens To Carry Proof Of Registration At All Times

U.S. Code:

TITLE 8 > CHAPTER 12 > SUBCHAPTER II > Part VII > § 1304

(d) Certificate of alien registration or alien receipt card

Every alien in the United States who has been registered and fingerprinted under the provisions of the Alien Registration Act, 1940, or under the provisions of this chapter shall be issued a certificate of alien registration or an alien registration receipt card in such form and manner and at such time as shall be prescribed under regulations issued by the Attorney General.

(e) Personal possession of registration or receipt card; penalties

Every alien, eighteen years of age and over, shall at all times carry with him and have in his personal possession any certificate of alien registration or alien registration receipt card issued to him pursuant to subsection (d) of this section. Any alien who fails to comply with the provisions of this subsection shall be guilty of a misdemeanor and shall upon conviction for each offense be fined not to exceed $100 or be imprisoned not more than thirty days, or both.

Arizona Law Is "Sensibly Written And Rigorously Focused"

In "A Carefully Crafted Immigration Law in Arizona," Byron York for The Washington Examiner asks:

Has anyone actually read the law? Contrary to the talk, it is a reasonable, limited, carefully-crafted measure designed to help law enforcement deal with a serious problem in Arizona. Its authors anticipated criticism and went to great lengths to make sure it is constitutional and will hold up in court. It is the criticism of the law that is over the top, not the law itself.

Read the rest of what he has to say, here.

FBI Looks Incompetent in Hutaree Militia Case

The lead FBI agent in charge of the Hutaree militia case, Leslie Larsen, was questioned by militia defense lawyers yesterday and couldn't remember many of the details from what turns out to have been a two year investigation, according to the Toledo Blade.

A judge was surprised that the FBI agent was unprepared to answer despite being notified to be ready last week, saying "she doesn't know anything."

The agent indicated she hadn't yet finished listening to the recordings made by an infiltrator of the group, and couldn't say whether the Hutaree weapons were in fact illegal because they were still (!) being examined. She also seemed unfamiliar with other reports from the investigation, nor would she say definitively that the group's leader had taught anyone how to build a bomb.

Read more about it, here.

Nothing Personal, Just (Left-Wing Thug) Business

Michael Graham is just a little ticked off about the easy way the intallekshuls at Brandeis lump together the Tea Party movement with extremism and neo-Nazism while ignoring the actual violence committed by leftists, such as last weekend by opponents to immigration law enforcement in Arizona, or by two Brandeis women, encouraged by one Bill Ayers, who once participated in a bank stick up in which a policeman was killed.

Read all about it here at the Boston Herald.

Five Million Jobs Lost, Net, In 2009, Over A Million Green Cards Issued!

The following appeared here:

April 26, 2010

WND.COMMENTARY

Whose country is this?

'Obama has done everything but his duty to enforce the law'

By Patrick J. Buchanan

With the support of 70 percent of its citizens, Arizona has ordered sheriffs and police to secure the border and remove illegal aliens, half a million of whom now reside there.

Arizona acted because the U.S. government has abdicated its constitutional duty to protect the states from invasion and refuses to enforce America's immigration laws.

"We in Arizona have been more than patient waiting for Washington to act," said Gov. Jan Brewer. "But decades of inaction and misguided policy have created an unacceptable situation."

We have a crisis in Arizona because we have a failed state in Washington.

What is the response of Barack Obama, who took an oath to see to it that federal laws are faithfully executed?

He is siding with the law-breakers. He is pandering to the ethnic lobbies. He is not berating a Mexican regime that aids and abets this invasion of the country of which he is commander in chief. Instead, he attacks the government of Arizona for trying to fill a gaping hole in law enforcement left by his own dereliction of duty.

He has denounced Arizona as "misguided." He has called on the Justice Department to ensure that Arizona's sheriffs and police do not violate anyone's civil rights. But he has said nothing about the rights of the people of Arizona who must deal with the costs of having hundreds of thousands of lawbreakers in their midst.

How's that for Andrew Jackson-style leadership?

Obama has done everything but his duty to enforce the law.

Undeniably, making it a state as well as a federal crime to be in this country illegally, and requiring police to check the immigration status of anyone they have a "reasonable suspicion" is here illegally, is tough and burdensome. But what choice did Arizona have?

The state has a fiscal crisis caused in part by the burden of providing schooling and social welfare for illegals and their families, who consume far more in services than they pay in taxes and who continue to pour in. Even John McCain is now calling for 3,000 troops on the border.

Police officers and a prominent rancher have been murdered. There have been kidnappings believed to be tied to the Mexican drug cartels. There are nightly high-speed chases through the barrios where innocent people are constantly at risk.

If Arizona does not get control of the border and stop the invasion, U.S. citizens will stop coming to Arizona and will begin to depart, as they are already fleeing California.

What we are talking about here is the Balkanization and breakup of a nation into ethnic enclaves. A country that cannot control its borders isn't really a country anymore, Ronald Reagan reminded us.

The tasks that Arizonans are themselves undertaking are ones that belong by right, the Constitution and federal law to the Border Patrol, Immigration and Customs Enforcement, and Homeland Security.

Arizona has been compelled to assume the feds' role because the feds won't do their job. And for that dereliction of duty the buck stops on the desk of the president of the United States.

Why is Obama paralyzed? Why does he not enforce the law, even if he dislikes it, by punishing the businessmen who hire illegals and by sending the 12 million to 20 million illegals back home? President Eisenhower did it. Why won't he?

Because he is politically correct. Because he owes a big debt to the Hispanic lobby that helped deliver two-thirds of that vote in 2008. Though most citizens of Hispanic descent in Arizona want the border protected and the laws enforced, the Hispanic lobby demands that the law be changed.

Fair enough. But the nation rose up as one to reject the "path-to-citizenship" – i.e., amnesty – that the 2007 plan of George W. Bush, McCain, Hillary Clinton and Barack Obama envisioned.

Al Sharpton threatens to go to Phoenix and march in the streets against the new Arizona law. Let him go.

Let us see how many African-Americans, who are today frozen out of the 8 million jobs held by illegal aliens that might otherwise go to them or their children, will march to defend an invasion for which they are themselves paying the heaviest price.

Last year, while Americans were losing a net of 5 million jobs, the U.S. government – Bush and Obama both – issued 1,131,000 green cards to legal immigrants to come and take the jobs that did open up, a flood of immigrants equaled in only four other years in our history.

What are we doing to our own people?

Whose country is this, anyway?

America today has an establishment that, because it does not like the immigration laws, countenances and condones wholesale violation of those laws.

Nevertheless, under those laws, the U.S. government is obligated to deport illegal aliens and punish businesses that knowingly hire them.

This is not an option. It is an obligation.

Can anyone say Barack Obama is meeting that obligation?

On Systematizing Too Big To Fail

Jonah Goldberg channels William F. Buckley, Jr. to remind us that it is human nature to try to game the system, even the capitalist system:

Washington’s solution to Wall Street’s problems is to get Washington deeply, deeply involved in Wall Street. So involved that the savvier capitalists will recognize — once again — that the safest bets are not to be found in the vicissitudes of a fickle marketplace, but in gaming the system run from Washington. The “reform” coming down the pike will put bureaucrats in charge of investors. If bureaucrats were better than investors, they wouldn’t be bureaucrats. The government will decide which firms are worthy — “systemically important” — and which are not. Those that are will use their official “importance” to game the system. Instead of eradicating “too big to fail,” we will systematize it.

Read the whole thing here.

Obama's Gangster Government To Become Law In Dodd Bill

In "Gangster Government Becomes a Long-Running Series," Michael Barone writes:

Almost a year ago, in a Washington Examiner column on the Chrysler bailout, I reflected on the Obama administration's decision to force bondholders to accept 33 cents on the dollar on secured debts while giving United Auto Worker retirees 50 cents on the dollar on unsecured debts.

This was a clear violation of the ordinary bankruptcy rule that secured creditors are fully paid off before unsecured creditors get anything. The politically connected UAW folk got preference over politically unconnected bondholders. "We have just seen an episode of Gangster Government," I wrote. "It is likely to be a continuing series." ...

The Dodd bill['s] ... provisions promise to give us one episode of Gangster Government after another.

At the top of the list is the $50 billion fund that the Federal Deposit Insurance Corp could use to pay off creditors of firms identified as systemically risky -- i.e., "too big to fail."

"The Dodd bill," writes Democratic Rep. Brad Sherman, "has unlimited executive bailout authority. That's something Wall Street desperately wants but doesn't dare ask for."

Be sure to read the rest here.

Bailouts Remain The Problem, Not The Solution

Nicole Gelinas for Investors.com explains why the Dodd bill is a very unfunny joke:

The idea that the financial industry can pre-fund its next arbitrary bailout with $50 billion is a pleasant fiction. How much would an "orderly liquidation fund" have needed to stem investor panic starting in 2008? Try $20 trillion.

You can read the rest here.

"In America Nobody Loves A Smart-Ass"

Having good reason to have assholes on his mind these days, P. J. O'Rourke reminds us that "the Mayflower was full of C students," and that "The C student starts a restaurant. The A student writes restaurant reviews."

Read the whole thing, here.

Limited Government Presupposes Social Conservatism

Phyllis Schlafly for Investors.com explains how limited government can't exist without social conservatism:

If limited-government conservatives are dreaming of taking back America for fiscal sanity in the November elections, they should study how the unprecedented decline in marriage and the increase in illegitimacy are the major causes of our bloated government and gigantic welfare spending.

In 2008, 40.6% of children born in the U.S. were born outside of marriage; that's 1,720,000 children. This is not, as the media try to tell us, a teenage problem. Only 7% of those illegitimate babies were born to girls under age 18, and over three-fourths were born to women over 20. The problem is the collapse of marriage as the social institution responsible for the costs of child care.

The fiscal conservative faction of the Republican Party should also study why Republicans won their big congressional majority in 1994 and what has happened since. The Democratic Party's welfare boondoggle was a major reason for the GOP victory.

Go here to read the full argument.

Failed Broadway Bank Linked To Giorango, Rezko, Giannoulias And Obama

John McCormick for Bloomberg.com is reporting some interesting details about Broadway Bank of Chicago, IL, which failed yesterday:

April 24 (Bloomberg) -- U.S. Senate candidate Alexi Giannoulias, the Democratic candidate seeking the seat once held by President Barack Obama in Illinois, vowed to press on with his campaign after regulators seized the bank his family owns. ...

Broadway Bank had been operating since January under terms of a consent order with the Federal Deposit Insurance Corp. because of commercial real-estate loan losses. ...

Some Broadway Bank loans have drawn notice, including those made to Michael Giorango, a convicted bookmaker and prostitution-ring promoter. The bank also made loans to convicted Illinois influence peddler Antoin “Tony” Rezko and a family accused of having connections to organized crime. ...

In March, a Chicago restaurateur who gave more than $100,000 to Giannoulias -- and $4,600 to Obama -- was charged with defrauding banks by writing $1.8 million in bad checks.

Read the complete story here.

70% Support Sheriff Joe's Revenge

As detailed by RasmussenReports.com:

A new Rasmussen Reports telephone survey finds that 70% of likely voters in Arizona approve of the legislation, while just 23% oppose it. . . .

The new law puts into state statute some of the policies that have long been practiced by Maricopa County Sheriff Joe Arpaio. But his aggressive enforcement of federal laws against illegal immigration have triggered a Justice Department probe and moves by the Obama administration to reduce his ability to enforce federal immigration laws.

Read the full story here.

"Obama Is Against Law Enforcement, Our Citizens And The Rule Of Law"

The Washington Post is reporting "Ariz. governor signs immigration enforcement bill":

The legislation, sent to the Republican governor by the GOP-led Legislature, makes it a crime under state law to be in the country illegally. It also requires local police officers to question people about their immigration status if there is reason to suspect they are illegal immigrants; allows lawsuits against government agencies that hinder enforcement of immigration laws; and makes it illegal to hire illegal immigrants for day labor or knowingly transport them. . . .

The bill's Republican sponsor, state Rep. Russell Pearce of Mesa, said Obama and other critics of the bill were "against law enforcement, our citizens and the rule of law."

Read the full story, here.

On The Supreme Court

"The Supremes aren't."

-- Imam John

On Intimacy

"If you talk about intimacy in public, it's not intimacy anymore."

-- Imam John

Papers Please

Politico is reporting that birth certificate legislation has now been sponsored in the U.S. House of Representatives:

The House sponsor of legislation that would require presidential candidates to provide a copy of their original birth certificate is praising a similar Arizona measure, which is drawing condemnation from one of George W. Bush’s former White House press secretaries [Dana Perino].

Rep. Bill Posey (R-Fla.), sponsor of the House bill, which has attracted 11 co-sponsors, said an Arizona House-passed measure would help clarify murky guidelines about presidential eligibility.

The measure, adopted 31-22 earlier this week as part of a separate bill, would require President Barack Obama to show his birth certificate if he hopes to be on the state’s ballot when he runs for re-election. It would require U.S. presidential candidates who want to appear on the ballot in Arizona to submit documents proving they meet the constitutional requirements to be president.

Read more here.

"I'm A Democrat But I'm Not A Communist"

Peter Ferrara of The American Spectator puts his finger on the Democrats' growing political problem:

Start with the brutal fact that this is not your father's Democrat party. Sean Hannity, Glenn Beck, and others have thoroughly documented Obama's radical left roots, from his openly communist father, to his Marxist mother, to the Communist Party's Franklin Marshall Davis who mentored Obama through adolescence, while his parents were off pursuing the cause around the world. Obama's own books disclose that he was drawn to radical left Marxist professors in college and law school. And all of this was before Obama the adult hooked up with 1960s Weatherman bomb thrower Bill Ay[er]s, the anti-American preacher Jeremiah Wright, and the far left radical front group ACORN. This is all well-established public information, as hard as that should be to believe.

As Beck has so rightly asked, if Obama has grown up and changed from this radical foundation, when exactly did that happen? There is nothing in the public record to support such a change. ...

In the Democrat party of the past, Southern conservatives were the longest serving members of Congress, heading all the Committees as a result, where they sharply restrained the Left in the '60s and '70s. But today the former Southern conservative Democrats have mostly been replaced by Republicans, and it is the northern urban ultraliberals who are the longest serving, and now head all the committees.

This ugly and dangerous reality is what moved one recent talk radio caller to proclaim, "I'm a Democrat, but I'm not a Communist." The left-wing extremism of the currently ruling Democrat party is one huge dark cloud on the horizon indicating the coming political tsunami. Treating grassroots voters who question that left-wing extremism with disdain and name-calling is only further gathering the storm.

Read the rest here.

It All Depends On What The Meaning Of "They" Is

The Boston Herald editorial staff pointed out yesterday how Bill Clinton's recent attempt to vilify the whole Tea Party Movement depended, as usual, on the slick use of a single term, "they."

By that sleight of hand, Clinton hoped to convey the notion of equivalency between Timothy McVeigh and the Tea Parties, presupposing that a whole movement existed behind McVeigh when in reality he had "one accomplice and two other individuals who knew of his plans."

The Tea Party Movement, by contrast, is enormous, is Everyman, and must be one hell of a threat if the inventor of the politics of personal destruction at Waco has to be trotted out to join the battle.

We'll see you on the battlefield, in November, creep.

The opinion was posted here.

Bill Clinton's War Crimes

A fine one to warn us about other people's character and motives. He was lucky he was impeached only for perjury, and ended up losing his law license for five years, when he should have been convicted of a crime against humanity.

Saddam Hussein gassed Kurds.

Bill Clinton gassed American kids.

In case you forgot.

Refresh your memory here. And here.

Financial Reform: Of Torches And Pitchforks

Edward Harrison of creditwritedowns.com weighs in on the Goldman case, but can't quite bring himself to commit to the view that this is all just for show and will do nothing but continue the lie that is America and the farce of extend and pretend in particular which government has modeled for decades, and the consumer, business and the banking system have dutifully imitated in their turn. Abandon hope all ye who enter here: Everything Obama says comes with an expiration date. The following excerpts come from here:As I left for the conference, I chatted with a friend who is far from the financial sector. Her take puts this debate into perspective. The issues are pretty easy to understand:We have had an economic crisis the likes of which we haven’t seen since the Great Depression. People are still losing their jobs and homes as a direct result of the boom and bust caused by the financial sector. Yet, we have bailed the banks out with taxpayer money and the bankers act like they never needed the bailout, didn’t cause the crisis or some other ridiculous argument of that ilk. In fact, they are rewarding themselves with huge bonuses while everyone else is still in a world of hurt.Forget about whether these arguments make any sense. They don’t. The only thing ordinary Americans need to know is that these people are paying themselves obscene amounts of money while everyone else is suffering despite the fact that we bailed them out of the crisis they caused. That’s the pitchfork thesis in a nutshell.  All of the other stuff is a sideshow. Johnson confirmed that this is exactly what people have been telling him in his book signings all across America. To my mind, this is what the Goldman fraud case is all about. Do you think the political payoff would be as high for going after JPMorgan Chase? Goldman is the vampire squid in mainstream America’s eyes and the Feds know this. That is why they have been targeted.

A Nation Of Laws . . . A Refuge Of Liberty

Sarah Palin In The News

Back in January I wrote that "In my department, this move removes Sarah Palin from my list of serious candidates for president in 2012. It wouldn't matter what news organization she joined, either. One does not pursue statesmanship by lowering oneself in this way. And perhaps that's what she is trying to tell everyone: that she's packing it in."

Someone who knows her well, Fred Malek, recently came to a similar conclusion about Palin here.

h/t Allahpundit

A Simple Illustration Of Why Healthcare Is Not A Right

Because, quite simply, it's a contract. And if the provider doesn't agree to make a contract with you, no healthcare is provided. As in this case of yet another doctor who puts up a warning notice to his patients:

“If you voted for Obamacare, be aware these doors will close before it goes into effect.” The note is signed Joseph M. Scherzer M.D. and includes the following addendum: “****Unless Congress or the Courts repeal the BILL.”

People who insist that healthcare is a right would enslave another human being to make him or her provide it. If they really mean it then they ought to take intellectually promising children away from their mothers and fathers at an early age and raise and educate them to this end, just as Plato discussed long ago.

Funny how it's the Democrat Party which is so enthusiastic for a new form of slavery. Didn't they have something to do with it the last time? That went well.

The Daily Caller has the story and a picture here.

I Said, "Hey Bartender!"

"Last year alone, the State Department sent taxpayers tabs totaling nearly $300,000 for alcoholic beverages — about twice as much compared to the previous year, according to an analysis of spending records by The Washington Times."

Read all about it, here.

Asset Value Lies Are S.O.P. In Banking

Karl Denninger has a new post here reflecting on a recent entry at Institutional Risk Analytics on "Events of Default" which shines the light on approximately $500 billion in private collateralized debt obligations which continue to be carried by the banks at par value but which are in fact nearly worthless:

It's called legalized accounting fraud, and I've been hollering about it for three years. As the loss severities have continued to climb and the impact accelerate[s] into other areas of securitized debt, the so-called "regulators" have scrambled to find new corners of the carpet to allow the banksters to hide the truth under.

A culture built on lies cannot endure.

The Bailouts Still Do Not Add Up

Ritholtz gets it right on the bailouts, bringing up what others would still like us to forget. Notice the little problem of toxic assets he includes on his list of six things which today's happy talkers ignore. Those non-performing assets remain spread all over the place like so much pig manure, stinking up the springtime air. It's the huge problem which STILL remains unresolved, even though the public and Congress were fervently pitched the story that TARP was necessary and designed to address it, until a couple of weeks later when it wasn't. The old bait and switch. These bastards should all hang for it, starting with George Bush and Henry Paulson, and every member of Congress who voted for it.

The following appeared here, with supporting links:

- The Big Picture - http://www.ritholtz.com/blog -

An Improved Version of Bailout Math

By Barry Ritholtz

April 13, 2010

The New York Times one ups the Wall Street Journal, taking a more philosophical — and broader — look at the Treasury’s Bailout Math.

It is still incomplete, but a significant improvement. Recall yesterday we criticized the WSJ’s wide approach (Light At the End of the Bailout Tunnel) as so much happy talk.

The Times' Andrew Ross Sorkin followed our advice. In addition to a snarkier tone (Uncle Sam down $89 billion? “It’s enough to make us all feel rich, isn’t it?”) his article included the following bullet points:

• Probable losses from American International Group = $48 billion

• Losses from Fannie Mae and Freddie Mac = about $320 billion

• The Federal Reserve virtually interest-free loans to Wall Street = $1 trillion dollars

• Moral Hazard: Numbers don’t help avoid another financial mess in the future

• Last, its about right and wrong.

It's a more skeptical improvement over other less critical takes on the success of the Bailouts. Still, Sorkin’s piece is also incomplete, leaving out:

• Depleted FDIC reserves;

• FASB 157 suspension allowed banks to hide losses

• Bad loans on bank balance sheets

• General Motors & Chrysler Bailouts

• Ongoing Foreclosures and Housing Problems

• Highly concentrated banking sector/lack of competition

I believe the best we can honestly say about the bailouts (without any spin or bias) is that, so far, the worst case scenarios have not played out, and that the return on investment is in the top quartile of expectations. Further, we still do not know what the final costs will look like, given a variety of factors such as housing, economy, etc. Also, we have no idea what the longstanding repercussions and moral hazard will end up doing in the future. Lastly, we have created a less competitive banking system, and allowed banks to fabricate their balance sheets.

But other than that Mrs. Lincoln . . .

Born To Serv . . . ility

The Answer: "Bo Has Papers"

The Question: "What's the difference between Obama and his dog, Bo?"

h/t Jimmy Kimmel

The Original Birthers: ModernGhana.Com

The Original Birthers: The Nigerian Observer