THEY MUST HAVE RUN THE TAPE LIKE HELL TODAY TO BEAT THE BAD GDP NEWS

Because for all intents and purposes, the markets closed unchanged.

The first estimate of Q2 2010 GDP was released today: 2.4%. Pretty weak.

Q1 GDP was revised up to 3.7% from 2.7%. Go figure. In April the estimate was 3.2%. Then in May it was down to 3%. By June it was down to 2.7%. Now we're back up all the way to 3.7%. Who believes this stuff?!

Q4 2009 was reported today at 5%. That's down from 5.7% in April.

Worst of all, perhaps, 2009 overall was revised downward. It had been thought the economy shrank last year at 2.4%. Now the estimate is that it shrank 2.6%, despite the late surge in Q4. "The steepest drop since 1946," according to this story, which goes on to say 3% growth at least is needed just to keep up with population growth.

Look out below!

TALK OF CAESARS . . . AND OTHER SUCH LIKE

In this editorial, "Will Washington's Failures Lead To Second American Revolution?" by Mr. Christian and Mr. Robbins, the first sentence alone deserves reproduction for its grasp of the present day political reality on the ground, which is that the revolution is of Obama's making, and the reaction it has caused seeks to prevent it:

The Internet is a large-scale version of the "Committees of Correspondence" that led to the first American Revolution — and with Washington's failings now so obvious and awful, it may lead to another.

People are asking, "Is the government doing us more harm than good? Should we change what it does and the way it does it?"

Pruning the power of government begins with the imperial presidency.

Too many overreaching laws give the president too much discretion to make too many open-ended rules controlling too many aspects of our lives. There's no end to the harm an out-of-control president can do.

The rest tells you how. Don't miss it, here.

"The Constitution Recognizes That People Are Swine"

Just a little reminder today that there is a kind of hope which is justified: that misguided people can change their minds. In the old days, it was called repentance:

For the Constitution, rather than suggesting that all behave in a godlike manner, recognizes that, to the contrary, people are swine and will take any opportunity to subvert any agreement in order to pursue what they consider to be their proper interests.

To that end, the Constitution separates the power of the state into those three branches which are for most of us (I include myself) the only thing we remember from 12 years of schooling.

The Constitution, written by men with some experience of actual government, assumes that the chief executive will work to be king, the Parliament will scheme to sell off the silverware, and the judiciary will consider itself Olympian and do everything it can to much improve (destroy) the work of the other two branches. So the Constitution pits them against each other, in the attempt not to achieve stasis, but rather to allow for the constant corrections necessary to prevent one branch from getting too much power for too long.

Rather brilliant.

If you haven't read the rest of David Mamet's 2008 essay, "Why I Am No Longer A 'Brain-Dead Liberal'" in The Village Voice, you owe it to yourself to do so. Here it is.

h/t Terry Teachout@commentarymagazine.com

ANOTHER ATTEMPTED END RUN AROUND THE CONSTITUTION

People who think one state, Florida, jammed an unwanted president down the throats of the American people in the year 2000 now want to make sure this happens more frequently, but on a broader scale. If you can't beat 'em, join 'em, I guess. It's called the National Popular Vote (NPV) campaign, an innovation of recent provenance whose latest progress is in Massachusetts, reported here.

I think these people are motivated by a vendetta against George Bush. They still can't get over the guy, and it makes absolutely no difference to them that the country ratified Florida's decision in 2000 by re-electing George Bush decisively in 2004. 

Massachusetts is about to join five other states in what is really an attempted power grab for the Democrat party. I say they are a pestilence on the body politic, and it's time to stop them before more states join Illinois, New Jersey, Hawaii, Maryland, Washington and Massachusetts and attempt to sully a presidential election and throw the country into another constitutional crisis.

Imagine what would happen if enough states with 270 electoral votes got together to agree to this, and tried to force their will on the rest of us because their states individually voted to do so. Can you imagine your president elected by just 11 states? That's all it would take under their proposal: California, Texas, New York, Florida, Illinois, Pennsylvania, Ohio, Michigan, New Jersey, North Carolina and Georgia, the eleven most populous states with 271 electoral college votes in all. Do you want them deciding who your president should be?

In 2008, only Texas and Georgia went Republican, giving the Democrats 222 electoral votes. Of the next ten most populous states, Virginia, Massachusetts, Tennessee, Missouri, Washington, Indiana, Minnesota, Arizona, Maryland and Wisconsin, only Tennessee, Missouri and Arizona went Republican, giving the Democrats another 77 electoral college votes, more than enough to win.

So in any given election, just 21 of the 50 states could control the outcome of the election, with Democrats highly favored to win the White House every time, by a margin of 299 to 81 in those states. The supporters of the NPV complain that under the present arrangement where it's "winner takes all electoral votes," more or less, in 48 states, elections get determined by battleground states, where candidates actually have to compete for votes. The horror. Their solution? Eliminate the battle.

These five, and now six, states don't want to award their electoral college votes based on who won the election in their respective states, but rather to the winner of the most votes nationally, so that not only can the will of the people of their own states be subverted if necessary, but the will of other states as well, for that is what this revolution of elections would accomplish. It marginalizes the 29 states with fewer than 10 electoral votes by telling them their votes for president don't matter.

And it is easy to imagine a situation where the voters in a state are told that even though they voted for president X the electors of their state are going to vote for president Y because their state is a party to the NPV sponsored law which requires them to cast their votes for the overall winner. It is amusing to imagine electors attempting to hide behind the skirts of this law in this way and pointing the finger at voters in another state exclaiming "They made me do it!"  

The constitution is deliberately arranged as it is to protect the smaller states by population from being lorded over by the states with the larger. That is why even the smallest states have two senators, same as the largest do, to act as a counterweight to the power and interests of the larger states. That is also why changes to the constitution must be approved by states, 75% of them, not popular majorities. The NPV is an end run around this amendment process, which stands in the way of changing the electoral college system, the real enemy of the NPV. On those grounds alone it should be challenged in court as an extra-constitutional attempt to change the constitution. 

Can you imagine a country where a minority of states vote to ignore the electoral college system and try to force their president on the majority? To do so really would be to create two countries, because what the NPV campaign does in actuality is create a rival electoral college. If that isn't seditious, I don't know what is. 

Peter at Bayou Renaissance Man frames the issue helpfully:

The fourth and most worrying element of the NPV campaign, in my eyes, is that it's a blatant attempt to bypass the Constitution of the United States. The provision of an Electoral College is a federal, constitutional matter, not determined by each individual State. You'll find it in Article II, Section 1 of the Constitution, as modified by the 12th, 20th and 25th Amendments. If we want to change that (or any other) part of the Constitution, there's a mechanism provided to do so (Article 5). The NPV campaign ignores this altogether, and seeks to alter the way in which individual States allocate their electoral college votes without modifying the Constitution itself.

Appropriately quoted in the Boston Globe article, linked above, is Massachusetts Senate minority leader Richard Tisei, who says: "The thing about this that bothers me the most is it's so sneaky. This is the way that liberals do things a lot of times, very sneaky. This is sort of an end run around the Constitution."

Truer words were never spoken.

George Will, National Treasure, Font of American Wisdom

Some excerpts from his address to The CATO Institute in May:

We are not Europeans. We are not, in Orwell's phrase, a "state-broken people."

It is a principle of liberal social legislation that a program for the poor is a poor program.

[D]ependency is the agenda of the other side.

I believe that today, as has been the case for 100 years, and as will be the case for the foreseeable future, the American political argument is an argument between two Princetonians: James Madison of the class of 1771, and Thomas Woodrow Wilson of the class of 1879.

The very virtue of a constitution is that it's not changeable. It exists to prevent change, to embed certain rights so that they cannot easily be taken away.

Madison said rights pre-exist government. Wilson said government exists to dispense whatever agenda of rights suits its fancy, and to annihilate, regulate, attenuate, or dilute others.

We are going to come to a time when America is going to have to revisit Madison's Federalist Paper no. 45, and his statement, "The powers delegated by the proposed Constitution to the federal government are few and defined."

Gridlock is not an American problem, it is an American achievement!

[W]e always have more to fear from government speed than government tardiness.

We are told that one must not be a "Party of No." To "No," I say an emphatic "Yes!"

[T]he most beautiful five words in the English language are the first five words of the First Amendment, "Congress shall make no law."

The Bill of Rights is a litany of "No's."

The American people are, I think, healthier than they are given credit for. They have only one defect. They have nothing to fear, right now, but an insufficiency of their fear itself. It is time for a wholesome fear of what people with a dependency agenda are trying to do. We have few allies. We don't have Hollywood, we don't have academia, and we don't have the mainstream media. But we have two things. First, we have arithmetic. The numbers do not add up, and cannot be made to do so. Second, we have the Cato Institute. The people in this room are what the Keynesians call "a multiplier." And, for once, they are right!

Don't miss the rest at the link!

OBAMA'S LAZY CLEAN AIR AND ENERGY POLICIES

The Associated Press is reporting today "President Barack Obama wants federal workers to cut down on business travel and commuting by car as he seeks to reduce heat-trapping emissions produced by the federal government." Remarkably, the report indicates "the federal government is the largest energy consumer in the US economy," which does make sense when you consider that with 2.7 million employees, it's also the biggest employer. By using mass transit, Obama thinks emissions like CO2 can be reduced by federal commuters by 13% in the next ten years, which doesn't make much sense. The federal vehicle fleet comes to about 600,000 vehicles, so that leaves a minimum of 2.1 million federal workers who aren't all going to be fitting on the Washington Metro, the expansion plans for which involve only a million daily riders by 2030. The rest will have to take . . . the bus?

More to the point about clean air, is Obama so uninformed that he doesn't know that CO2 emissions from CNG (compressed natural gas) vehicles are nearly 40% fewer than from  conventionally powered ones? Does he realize that barely 1% of the federal fleet uses CNG (just 6,472 vehicles)? Does he know that 8-11 million vehicles worldwide use CNG, but that in the US there are only 150,000 doing so, most of which are buses? Does he know that huge deposits of shale gas in this country have been discovered in just the last few years, giving us 45 years of energy independence, if we want it? Does he know that Honda Motor Company already has quite a long history of successful production of its CNG powered Civic, sold now in several states besides California?

Has he ever looked at this map of the existing infrastructure for the US natural gas pipeline network and pondered its potential?

Every passing day proves that Obama is a man without a grip on reality, and with very little imagination.

FORWARD EARNINGS ANALYSTS ON AVERAGE 100% TOO OPTIMISTIC

Mish has a good post here citing a new study which shows that forecasts of S&P 500 companies' earnings by analysts over the last twenty-five years have been wildly and consistently off, on average too high by 100%.

He mentions five factors, not the least of which is talking their book.

Salesmen. 

OBAMA LIED TO THE AMERICAN PEOPLE ABOUT THE HEALTHCARE BILL

The New York Times must be desperate to sell newspapers because it is almost reporting that Obama lied when he said the fine which will be levied on people who do not purchase health insurance is not a tax:

When Congress required most Americans to obtain health insurance or pay a penalty, Democrats denied that they were creating a new tax. But in court, the Obama administration and its allies now defend the requirement as an exercise of the government’s “power to lay and collect taxes.”

Read the rest for yourself, here.

DIVIDED GOVERNMENT IS A SOLUTION, NOT A PROBLEM

A new kind of check and balance, in the opinion of Ronald Brownstein, writing for National Journal Magazine:

"To the Constitution's enumerated checks and balances we have informally added our own by habitually dividing power between the parties. . . . The public's default switch may have flipped from centralizing authority in one party to fragmenting it."

Read the whole piece, here.

BUSH SUBSIDIZED THE POOREST AMERICANS AND CUT THEIR TAXES 33%

Because George Bush was a flaming socialist. The left hated him as they did not because of the Iraq war but because he out-performed them as a liberal. And if Obama lets the Bush tax cuts expire, the poorest Americans will lose their subsidies and their taxes will go up 50%, and Obama will become a conservative and all will be well with the world!

In 2000, the top 60 percent of taxpayers paid 100 percent of all income taxes.

The bottom 40 percent collectively paid no income taxes.

Lawmakers writing the 2001 tax cuts faced quite a challenge in giving the bulk of the income tax savings to a population that was already paying no income taxes.

Rather than exclude these Americans, lawmakers used the tax code to subsidize them. (Some economists would say this made that group's collective tax burden negative.)

First, lawmakers lowered the initial tax brackets from 15 percent to 10 percent and then expanded the refundable child tax credit, which, along with the refundable earned income tax credit (EITC), reduced the typical low-income tax burden to well below zero.

As a result, the US Treasury now mails tax "refunds" to a large proportion of these Americans that exceed the amounts of tax that they actually paid.

All in all, the number of tax filers with zero or negative income tax liability rose from 30 million to 40 million, or about 30 percent of all tax filers.

The remaining 70 percent of tax filers received lower income tax rates, lower investment taxes, and lower estate taxes from the 2001 legislation.

Consequently, from 2000 to 2004, the share of all individual income taxes paid by the bottom 40 percent dropped from zero percent to minus 4 percent, meaning that the average family in those quintiles received a subsidy from the IRS.

By contrast, the share paid by the top quintile of households (by income) increased from 81 percent to 85 percent.

Expanding the data to include all federal taxes, the share paid by the top quintile edged up from 66.6 percent in 2000 to 67.1 percent in 2004, while the bottom 40 percent's share dipped from 5.9 percent to 5.4 percent.

Clearly, the tax cuts have led to the rich shouldering more of the income tax burden and the poor shouldering less.


Read the rest from Brian Riedl, here.

MAKING AFGHANISTAN SAFE FOR THE OPIUM TRADE

Not that long ago, going to war meant destroying the enemy's ability to make it on you.

That quaint idea has been replaced by the asshats' better idea of "winning hearts and minds."

In Afghanistan we're trying to do that with electricity, which the Taliban in turn steals in areas it controls and "sells" to the locals, who use it to power irrigation pumps which help the opium poppies grow. Like good organized criminals, the Taliban then also skims the drug trade pipeline to Iran to fund its insurgency.

The electricity skimming operation nets the Taliban about $4 million annually, according to this report in The Wall Street Journal. But the drug skimming must net them far more. The United Nations estimates the export value of Afghanistan's opium production at $4 billion annually, only a quarter of which may actually go to the growers.

You'd think "shoot 'em all, let God sort 'em out" would be the appropriate response to this situation, if it were a real war. But then you would be wrong. Instead, America is making Afghanistan safe for the Taliban gangsters and for the world's primary source of heroin.

So far the Kajaki hydroelectric power plant in the south has gotten $100 million in upgrades from the US. $400 million more is being requested for 2011, some of which will go to fund electricity generation also in the southern city of Kandahar.

In a real war the dams and power plants would be targets. That we can't even imagine the necessity of destroying them explains why there's not going to be a victory in Afghanistan for the US.

CONSERVATIVE PLEBEIANS

"While we will continue to strive to eliminate expletives from live broadcasts, the inherent challenges broadcasters face with live television, coupled with the human element required for monitoring, must allow for the unfortunate isolated instances where inappropriate language slips through," Fox said in a statement.

Go here for more on News Corp.'s suit against the FCC in defense of your First Amendment right to hear the language of the gutter on television.

"THE MOST DANGEROUS AND INCOMPETENT PRESIDENT WE HAVE EVER HAD"

Not my words, but those of the Jewish atheist Nat Hentoff:

July 12, 2010

Health Care Rationing Obama Believes In

By Nat Hentoff

As a reporter, I do not use euphemisms - such as calling murderous terrorists "militants" or "activists." And as an American, I can exercise my First Amendment right to say plainly that President Obama is a liar with regard to our new health-care law, often referred to as Obamacare.

When a number of critics of Obamacare, including myself, warned that it would bring the rationing of treatments, medications and research into new procedures, the president said to the American Medical Association (June 15, 2009) that this rationing charge was a "fear tactic."

The next month, he said flat out: "I don't believe that government can or should run health care" (firstthings.com, May 31, 2010).

But in May of this year, the president nominated Dr. Donald Berwick, a professor at Harvard Medical School, to head Health and Human Services' Centers for Medicare and Medicaid Services (CMS) - the most powerful health-care position. As Hal Scherz underlines (RealClearPolitics.com, May 26): "CMS covers over 100 million Americans, has an annual $800 billion budget that is larger than the Defense Department's and is the second-largest insurance company in the world."

Unlike Obama, Berwick is enthusiastically, openly candid in his support of Britain's socialistic National Health Service. In a 2008 speech to British physicians, our new health czar said: "I am romantic about National Health Service. I love it (because it is) 'generous, hopeful, confident, joyous and just.'"

That "just" National Health Care Service decides which care can be too costly for the government to pay. Its real-time decider of life-or-death outcomes is the National Institute for Health and Clinical Excellence (NICE). Here is how "nicely" it works, described by Michael Tanner, senior fellow and health-care expert at the Cato Institute (where I, too, am a senior fellow):

"It acts as a comparative-effectiveness tool for the National Health Care Service, comparing various treatments and determining whether the benefits the patients receives - SUCH AS PROLONGED LIFE - are cost-efficient for the government" (lifenews.com, May 27).

So listen to our very own decider of how the Obama administration will lower our national debt by cutting inefficient health-care costs. After declaring his ardent romantic attachment to the British system, Berwick said: "All I need to do to rediscover the romance is to look at health care in my own country." He will, of course, be too busy to attend the funerals of the sacrificial Americans whose lives - not only those of the elderly - may thereby be cut short.

Tanner makes a grim point as Berwick rediscovers the romance of government cost-effectiveness: "Recent reports suggest that the recently passed health-care bill will be far more expensive than originally projected. As it becomes apparent that Obamacare is unsustainable, the calls for controlling its costs through rationing will grow louder. With Donald Berwick running the government's health-care efforts, those voices have a ready ear" (dailycaller.com, May 27).

By then, Berwick will be involved in the government-controlled health of more than 100 million Americans and - notes Michael Tanner - "Maybe those worries about death panels weren't so crazy after all."

Keep in mind that already, in May, "the Congressional Budget Office updated its cost projections (of Obamacare). It found that the new health legislation would cost $115 billion more than estimated when it was enacted ("ObamaCare's Ever-Rising Price Tag," Wall Street Journal, June 3).

How soon will the romantic rhythms of health rationing follow?

Wesley Smith, an invaluable investigative reporter on the dangers of government-controlled health care, describes the consequences if Obamacare is not repealed by the next Congress after the midterm elections:

"Once the centralized planning of medical delivery is complete - with cost-containment boards controlling the standards of care and the extent of coverage for both the private and public sectors - insurance companies, HMOs and the government will be able to legally discriminate against the sickest, most disabled and most elderly in our country. In other words, those whose care is most expensive."

For what to watch for during the reign of Berwick, whom Secretary of Health and Human Services Kathleen Sibelius recently glorified as "absolutely the right leader for this time" (CNSNews.com, May 26), I bring back Michael Tanner:

In the British Health Service Berwick loves, "750,000 patients are awaiting admission to NHS hospitals. ...The latest estimates suggest that for most specialties, only 30 to 50 percent of patients are treated within 18 weeks. For trauma and orthopedic patients, the figure is only 20 percent. ... Every year 50,000 surgeries are canceled because patients become too sick on the waiting list to proceed."

And, again unlike the president, Berwick tells it like it frighteningly is in a June 2009 interview for the magazine, Biotechnology Healthcare:

"It's not a question of whether we will ration health care. It is whether we will ration with our eyes open."

There are many reasons why it is vital for Americans to vote in the midterm elections - and, of course, in 2012, to prevent a second term for the most dangerous and incompetent president we have ever had - but for many Americans, it is particularly important this year to vote against supporters of Obamacare. The question for many voters should be whether, in the years ahead, they will be in condition to vote if they are on waiting lists for government-controlled health care.

More of us are learning that during the Obama administration, it is essential to continually keep our eyes open on all it does.

Nat Hentoff is a nationally renowned authority on the First Amendment and the Bill of Rights. He is a member of the Reporters Committee for Freedom of the Press, and the libertarian Cato Institute, where he is a senior fellow.

This piece appeared here.

THE RESPONSIBLES VS. THE DEADBEATS

Mark Gimein writes here that the Tea Party Movement has more to do with responsible people's anger over government handouts to irresponsible people, and institutions, than anything else. His essay is well worth reading at TheBigMoney.com.

TWO PROCLAMATIONS TOO POOFY

Just in case you thought the second one was, er, well, anomalous (as in deviant):

Nurturing families come in many forms, and children may be raised by two parents, a single mother, two mothers, a step-mom, a grandmother, or a guardian.

 -- Barack Obama, Mother's Day Proclamation, May 7, 2010 (available here)

Nurturing families come in many forms, and children may be raised by a father and mother, a single father, two fathers, a step father, a grandfather, or caring guardian.

 -- Barack Obama, Father's Day Proclamation, June 18, 2010 (available here)

OBAMA EMBRACES STALIN'S UNIQUE DESCRIPTION OF WWII

Finally, I would simply add that the new partnership between our people spans the spectrum, from space to science to sports. I think, President, you're aware that recently I welcomed to the White House a group of young Russian basketball players -- both boys and girls -- who were visiting the United States. We went on the White House basketball court, and I have to admit some of them out-shot me. (Laughter.) They represented the hope for the future that brings our countries together.

Those were the same hopes of another generation of Americans and Russians -- the generation that stood together as allies in the Second World War -- the Great Patriotic War in which the Russian people suffered and sacrificed so much. We recently marked the 65th anniversary of our shared victory in that war, including that historic moment when American and Soviet troops came together in friendship at the Elbe River in Germany.

 -- Barack Obama, June 24, 2010 (transcript here)

"The term is not generally used outside the former Soviet Union" (Wikipedia, here), except, apparently, by aficionados.

GDP REVISED DOWN FOR Q1 2010 TO 2.7% FROM 3.0%

According to The Associated Press:

Gross domestic product rose by an annual rate of 2.7 percent in the January-to-March period, the Commerce Department said Friday. That was less than the 3 percent estimate for the quarter that the government released last month. It was also much slower than the 5.6 percent pace in the previous quarter.

ON TRADITION

"The development of a tradition is as unthinkable without some initial innovation as the progress of an innovation is apart from its regularization in one."
      -- Imam John

THE LEADERSHIP WE DESERVE

CONGRESS OF IDIOTS BAILS OUT THE STUPID

My favorite line from the following is "but it will help keep . . . I slightly above poverty level." Just how people who talk that way end up accumulating such large sums is something of a puzzle.

From "Retroactive Nonsense" by Thomas Brown, here:

[S]ometimes a proposal is so idiotic, so misconceived, and so harebrained that it’s impossible to ignore. In Washington yesterday, House and Senate conferees on the financial regulation bill agreed on one such nutty item, when they voted to make retroactive the increase in the FDIC’s insurance limit, to $250,000 from $100,000, back to January of 2008. . . .

What can these people be thinking? Congress’s move yesterday—which essentially bails out 8,700 ex-IndyMac depositors who were stupid enough to have more than the then-FDIC limit on deposit there—aren’t poor downtrodden souls who’ve been screwed by the system. They’re rich. Each has more than $100,000! Some of them, a lot more! They’re so wealthy, in fact, they could afford to let that much money languish earning passbook rates. In the long and unseemly line of bailouts that have happened as the credit crunch has progressed, these are the last people—the very last people—who should be granted a special, surprise place at the federal trough.

But instead, our idiot representatives feel sorry for them. Is there no minimum level of personal responsibility Congress won’t insist that people, or at least wealthy people, accept?

Apparently not. Meanwhile, if the group the Los Angeles Times talked to yesterday is any indication, the beneficiaries of this new windfall are a bunch of pathetic fools.  “It’s nothing to the government,” one of them, a retiree name[d] Craig Phinney, rationalises, “but it will help keep my wife and I slightly above poverty level for a couple of more years.” Uh-huh. Actually, the move will cost the Deposit Insurance Fund around $200 million. And Mr. Phinney, if you’re really so concerned about staying above the poverty line, why not take a moment (and it won’t take much more than a moment) to learn about how federal deposit insurance actually works? It’s pretty common knowledge that there are limits to coverage. Nor was it any secret that IndyMac was a shaky institution before it was finally seized. If you’re so close to the poverty line, why did you have so much money at IndyMac in the first place?

In the meantime, the moral hazard that Congress’s move yesterday creates is not unsubstantial. I can’t imagine why large depositors won’t be more willing now to shop for yield at institutions they know are less than completely sound. Then, when one fails, depositors will point to the precedent set yesterday and demand that they, too, be made whole. So at the margin, the conferees’ vote yesterday will make the financial system less strong rather than more so. This is reform?

You’re thinking that I’m being too tough on Congress and the hapless depositors it’s helping. No. The government has bailed out the automakers. It’s bailed out big banks. It’s shoveling stimulus money in order to bail out the states. Now it wants to bail out people who have so much money already that their bank balances exceeded FDIC limits? It’s insane.

WHERE BANKS' BAD PAPER GOES TO DIE

The taxpayer-backstopped Fanny and Freddie, of course:

The Obama administration is continuing one of the more horrific policies of the Bush administration: Using the GSEs as a back door bailout for the rest of the banking sector: These banks are selling their garbage to the GSEs — and according to some anecdotal evidence, are getting pretty close to full boat (100 cents on the dollar) for these bad loans.

Hence, Fannie and Freddie have become a dumping ground for all manner of bad bank loans.

The GSEs have had their own problems over the years — accounting fraud, recklessly chasing market share, lowering loan quality, etc. — but they have now become . . . the last stop for every crappy mortgage ever written.

Ritholtz has more here, on the story from Bloomberg.