CLICK HERE for all the News You Can Use!
Filed under: Uncategorized | Tagged: News You Can Use, Round Up | Leave a Comment »
CLICK HERE for all the News You Can Use!
Filed under: Uncategorized | Tagged: News You Can Use, Round Up | Leave a Comment »
I have been toying with a blogger blog (my main one is on wordpress) to check out the functionality…
And somehow I ended up with a few readers, so I decided to make it a kind of a news aggregator with links to news stories, opinion pieces and blogs of interest that will be updated daily.
I will still maintain this one, but please come check out the other one regularly… and if you think i missed something, you can always email me at texashillcountry@live.com
http://texashillblog.blogspot.com/
Thanks!
Filed under: General Politics | 3 Comments »
You can get the info on the fact that the Bailout failed all over the place, so I am not going to cite the info for you… what I am going to do instead is talk about why it failed and what happens next.
First, why…
Well, when the bill was submitted, it was sold to the public in the wrong manner.
Yes, in politics you have to “sell” ideas to the public first, so that people aren’t unhappy with your decisions and vote you out of office.
Instead of harping on the “if we don’t do this” negatives for the banks, they should have talked about the positive things that the bill would have done for the average person, but because it was framed in the worst way the initial reaction from the public amounted to 200 million people saying… “Oh, hell no. You are gonna bailout Wall Street fat cats?!?!”
Once the initial reaction passed, the pulic began begrudgingly to accept that the bill was gonna happen, even though they were none too pleased… and then the Democrats politicized the hell out of it.
Reid called out McCain, so McCain called him on his bluff and headed to DC. Reid then backpeddaled when Obama decided to stay on the trail. Bush said ”oh hell no, you are not gonna callout my boy and then sit on the sidelines” and ordered Obama back to DC too. Pelosi began bashing the Republicans saying that the Democrats bear no responsibility what-so-ever. Obama led some talks, apparently poorly, that ended up in shouting matches. Democrats began to rail against the “failed Republican economic philosphy” when in actuality, the Dems bear as much responsibility as the Republicans, the Banks and, honestly, the people that took loans they could not afford or did not understand.
And then the Democrats started earmarking the bill… for organizations like ACORN and it’s subsidiaries.
The blogosphere and the Republicans gave a unanimous “WTF? Oh, hell no! You are not giving 20% of the profits to ACORN!” This then filtered up to the mainstream, and then the public got jittery once again, and I don’t blame them. Earmarking the damn Bailout bill for an organization that is complicit in the subprime crisis, is registering Democratic voters and is under investigation for voter registration fraud in a very large number of states… this is not the way to win over Republicans.
It is because of these fumbles in handling the bill starting with Bush, and then with the Democrats that the bill was doomed to failure.
The optomistic estimates were that it was going to be close, but it was not. At all. As a matter of fact, the estimated 40 Democrats that were going to vote against it turned into 90+.
The blame for the bills failure certainly cannot not be lain at the feet of the House Republicans as Democrats comprised about 45% of the Nay votes, but I am sure they are going to try to spin it that way. As a matter of fact, many in the House are laying the blame squarely on the shoulders of Nancy Pelosi and her alone.
So, it failed… now what?
Well, there will inevitably some sort of bill that comes out. The new iteration will be either massively larger or significantly smaller… my guess, unfortunately, is larger.
Also, in the meantime, the stock market is going to continue to freak out. My guess is that we are going to see the Dow drop below 10,000. This is going to have the interesting effect, considering the circumstances, of pushing down the yield on the 10 year bond.
The reason the yield on the 10yr bond is significant is that mortgage rates tend to follow it, so as the yield drops, it is very likely that mortgage rates will too… and if the yield hits the floor, and rates follow, then there is going to be a mini-refi boom and very possibly a run on housing currently on the market. I mean, if rates drop to the low 5′s or even high 4s for 30 year fixes… all those houses on the market with their depressed values will start to be snapped up… investment companies will not be able to resist.
Another thing that I would not be surprised to see happen is that the Fed might just drop rates another quarter in the next few days and open up borrowing capabilities for even more banks at cheaper rates.
If these two things happen in tandem… the market may correct itself… if there is a swift enough reaction from the Fed and the banks can hold on for a few weeks longer.
We are looking at some razor thin margins here and who knows what might really happen, but just because this bill did not pass does not mean that there is a death-knell sounding yet.
Either way, this is going to be a close call… we shall see what happens, but if rates drop significantly and oil prices continue to slide as they did today, then we may not need the bailout at after all.
Filed under: General Politics, Mortgage Bailout | Tagged: Bailout, democrats, Republicans | 10 Comments »
This is going to become a weekly series for me. I am going to try to pick out my favorite posts of the week and news I think everyone should read.
I am also going to try to stay away from the posts that appear in the Just Say No Deal blogbox, with a few rare exceptions, that everyone should be checking out anyway.
Hope you like and find this illuminating.
And now, in no particular order, I present the following.
Obama’s Money Cartel: How Barack Obama Fronted for the Most Vicious Predators on Wall Street
Burning Down The House: What Caused Our Economic Crisis? (with links to information in video)
Consumer Rights League, Obama, Acorn and the Subprime Mortgage Crisis
So Much For That Political Stunt
DOJ may open Investigation into Obama’s use of Law Enforcement to Quell Critics
Silencing Critics Using The Obama Method
Gov of MO: Statement on Obama’s Abusive Use of Law Enforcement
Obama Threatens TV Stations In PA
Barack Obama and the Strategy of Manufactured Crisis
Palin-hatred raises it’s ugly head — for what?
Jopek Family Asked Obama To Stop Wearing Bracelet
It’s A Question Of Experience (from a wonderful French pro-Hillary blog… french on top, english on bottom)
Obama’s Presidential Portrait Already Chosen?
I Am A Feminist And I Am Voting Republican
Filed under: Uncategorized | Tagged: Best of the Rest, Links, monday morning round up | 5 Comments »
Filed under: General Politics, Video | Tagged: Bailout, exclude, kicked out, meetings | 1 Comment »
Click Here For The Draft Of The Bailout
The draft Bail Out Law appears to have what was stated in the media – sort of – as its provisions for the troubled assets relief program (“TARP”), and as to its other provisions.
There is a FDIC type insurance program that “may” be developed, where the Secretary may determine by category or class the troubled assets to be guaranteed and the premium associated with that class – with the methodology for setting the premium for a class and a discussion of the appropriateness of the class of assets for participation made available to the public, and with the premiums set at a level to create reserves sufficient to meet anticipated claims, based on an actuarial analysis.
There is a Financial Stability Oversight Board, which shall be responsible for reviewing the exercise of authority making recommendations, as appropriate, reporting any suspected fraud, and with authority to ensure that the policies implemented by the Secretary are— (1) in accordance with the purposes of this Act; (2) in the economic interests of the United States; and (3) consistent with protecting taxpayers, in accordance – in other words it can over-rule the Secretary.
Of course, the Secretary shall have authority to manage troubled assets purchased under this Act, and sell – at a price determined by the Secretary, sell those assets purchased under the Act.
There is a FORECLOSURE MITIGATION authorization to the Secretary saying he SHALL implement a plan and MAY use loan guarantees and credit enhancements to facilitate loan modifications to prevent avoidable foreclosures (Hillary Clinton’s idea that she has been pushing for a few years). The Secretary SHALL consent to reasonable requests for loss mitigation measures,including term extensions, rate reductions, principal write downs, increases in the proportion of loans within a trust or other structure allowed to be modified, or removal of other limitation on modifications. To the extent that the Federal property manager holds, owns, or controls mortgages, mortgage backed securities, and other assets secured by residential real estate, including multifamily housing, the Federal property manager shall implement a plan that seeks to maximize assistance for homeowners and use its authority to encourage the servicers of the underlying mortgages to take advantage of the HOPE for Homeowners Program under section 257 of the National Housing Act or other available programs to minimize foreclosures.
To the extent that FOREIGN financial authorities or banks hold troubled assets as a result of extending financing to financial institutions that have failed or defaulted on such financing, such troubled assets qualify for purchase the Bill.
EXECUTIVE COMPENSATION LIMITS sort of apply to ANY financial
institution that sells troubled assets to the Secretary under
this Act and they will be in effect as long as the Secretary
holds an equity or debt position in the financial institution.
But they only apply to the top five persons as disclosed in
filings under current SEC rules, and then they only apply if
the auction purchases have transferred $300 million of assets
to the Secretary from that financial institution. The only
restriction is that those five may not get any “golden parachute”,
but the Secretary can demand their compensation be limited to
“appropriate standards for executive compensation and corporate
governance” for any “new” contract. That $400,000 salary limit
did not last long.
AUCTION PURCHASES are not required, nor is the process of asset acquisition detailed – except that the Secretary is to seek minimization of long term cost and maximum benefit to taxpayers – where “maximum benefit” can mean over paying for assets so as to get credit flowing more quickly – so it is a bit of a con-job. However, the Secretary is to – where appropriate -USE MARKET MECHANISMS like buy at lowest prices, and use market mechanisms like auctions or reverse auctions. A bit of trust is involved here.
We can pretend that a financial institution is OK by using assets values that are higher than current market values as MARK TO MARKET accounting can be changed by the SEC as needed to give the illusion – if doing so is a good idea, I guess.
Filed under: General Politics, Mortgage Bailout | Tagged: Bailout, Draft, leave out | 1 Comment »
I must say that this election season has been the craziest I have ever seen. I feel like I have stepped through the looking glass and what was down is now up.
In the most recent of unexpected twists… I think Bill O’Reilly might be my new hero?
via MOUNTAIN SAGE
Filed under: Best of the Rest | Tagged: Bailout, Bill, meltdown, o'reilly | 5 Comments »
Reverse Auction Design – will it be in the final bill?
With over 100,000 individual designed mortgage-related securities, obligations, and other instruments outstanding, further divided by multiple rated tranches, auctions to price each piece are not workable. But the Mortgage Bailout Bill depends on price discovery via auction – and as far as I can tell does not have rules for that discovery. So we are left with “trust me” and regulations to be announced later. Knowing loan vintage, maturity, loan type, interest rate, location, payment history, FICO score, and initial loan/value ratio will not prevent are narrowly restricted, a package of some degree of heterogeneity in any package of loans. Prior over-the-counter trading in mortgage-related assets has ended because computer models are no longer trusted for price discovery.
The Paulson program of auctions for mortgage-related assets seems to be intended to be a one-time event – why I do not know since a standardized investment form and an exchange for that form would seem to be the best way to avoid our current problem in the future. But as I understand the Bailout Bill, the plan is to have each asset hit the auction block once and then stopping there, or stopping once the money runs out.
In some statements Fed Chairman Ben S. Bernanke appeared to identify as the objective finding a “hold-to-maturity” value – but that means paying a great deal more than market value – later he indicated he was referring to the higher market value post auction because of US Gov ownership of the asset was the value he wanted to pay – this is a major difference – and still sounds like an “auction” with a floor that is above market value. Will there be anything in the Bill to address this? Treasury can not just offer to buy the Banks non-saleable assets – a Bank would be a fool if it did not greatly over price those assets in that situation. Treasury can not commit to purchasing the entire quantity offered of a given package – it must allocate its budget among the various packages available for sale – buying a portion of each package.
The Packages (packages of assets since individual auctions for each asset design is impractical because every asset is an individual design) will give good price discovery, but by definition, the more heterogeneous the package the more likely the US Taxpayer will be screwed because of the adverse selection problem of relatively inferior assets being disproportionately offered for sale at the lowest prices. Treasury will end up buying the worst of the lot and, if a single price is paid for all units, overpaying, with Banks with higher quality assets asking for a higher bid, and finding they can not sell at that higher price – but with the high quality asset bank being screwed as it is forced to mark down its higher quality asset to the price given for the low quality package.
The order of sale of the packages will determine how badly the taxpayer is screwed – Treasury must start with packages of securities having severely depressed prices in their computer model, relatively simple features, and substantial face value owned (e.g., straight pass-through securities with subprime mortgage collateral), Will this requirement be in the Bill?
.
With luck we will be able to end the now stalled “over-the-counter” markets, replacing it with an exchange and standardized packages, with a non-standard package area in that exchange (as exists now at our exchanges).
We will still need to buy and sell some assets purely by looking at the computer model output – but where that output is not trusted today because input parameters are felt to be possibly incorrect, it will be easier to get to a sale once the newly available market data generated by auctions are used, to estimate the contribution to value of the various asset characteristics. Applying the estimated models to the non-auctioned assets would then yield a predicted price for each asset. Transparency requires that today’s “proprietary” formulas be reveal – they caused this mess and have no value, so with luck they will be donated to Treasury and we will not pay the Banks for that bit of information.
Filed under: General Politics, Mortgage Bailout | Tagged: Bailout, bernake, Bill, Bush, FICO, interest rate, McCain, Mortgage, Obama, Paulso, securities, treasury | Leave a Comment »
Filed under: John McCain, Video | Tagged: Ad, Debate, McCain, Obama, Right | 1 Comment »
UPDATE: You should see the Senate version of the bill… I just got done reading it… holy god.
Note: Background info on ACORN as a follow up has been posted HERE
Back to our original programming…
HOLY CRAP!
No wonder the Republicans are freaking out over this bill and the whole thing is about to fall through…
The friggin Democrats put EARMARKS in the bill!!!!
And not only are they trying to earmark the bill, they are earmarking the bill for ACORN, an activist group that is under investigation for voter registration fraud in several states.
Leave it to the Democrats….
Will it never end? Seriously?
For more info MM is keeping updates.
UPDATE: An explanation from Papau2 (An Author Here On Texas Hill Country)
Sen. Lindsay Graham has jumped a few logic hurdles to get from the Affordable Housing Trust Fund — part of the legislation that passed the Senate Banking Committee in May and is poised to come to the Senate floor as early as this week — to a 20% of bailout bill will go to groups like the ACORN and the National Council of La Raza.
The “trust fund” does get its revenues from a legislatively fixed share of the surpluses of the government’s Federal Housing Administration or the profits from the government-sponsored enterprises Fannie Mae and Freddie Mac. The latest version — in the housing and GSE oversight bill that cleared the Senate Banking Committee in May — would establish the fund by taking 1.2 basis points of interest from Fannie and Freddie’s loan portfolio — about $500 million a year. – over the 2 year life of the bailout that is 1 billion out of $700 billion in the rescue bill with $625 million going to Acorn and such groups for “housing aid”- after two years, all of the money to Acorn would go to the housing grant for bailing out troubled homeowners through FHA guarantees of modified loans (Richard Shelby in May stated he had reached a “compromise” with committee chairman Chris Dodd on the housing fund such that money from the “trust fund” would be used to fund the bill’s main action of bailing out troubled homeowners through FHA guarantees of modified loans. After two years, all of the money would go to the housing grant. The version of the bill that passed the Senate committee in May “diverted” half of the money intended for the housing trust fund in its first year and 25% in its second year, but after that 100% of the funds go into the housing trust fund).
The trust fund would allow recipients (Acorn and such) to use the money for lobbying and possibly political campaigning only because the prohibitions on using the funds for lobbying and political activity contain virtually no teeth in enforcing these bans. There are no explicit requirements for recipients of the grants to fill out timesheets for housing activity, or restrictions on groups using grant money to pay employees who also happen to do other things — such as lobbying and political campaigning. And there are really no penalties other than being forced to give the money back and being disqualified for a new grant.
It is true that ACORN histrory includes election fraud and misuse of federal funds with several ACORN workers indicted and/or convicted of voter registration fraud with phony signatures, and with Acorn sanctioned specifically for misuse of federal housing funds. In 1994, the ACORN Housing Corporation (AHC) received a grant from the newly created Americorps to assist low-income families at finding housing. In applying for the grant, the AHC claimed its activities were completley separate from ACORN – only to find out one year later via the Americorps Inspector General that “AHC used Americorps grant funds to benefit ACORN either directly or indirectly” with several instances of cost-shifting from ACORN’s lobbying group to the housing entity, and also found several instances of steering recipients of housing counseling into ACORN memberships.
Filed under: Congress, General Politics | Tagged: acorn, Bailout, Delay, democrats, earmarks, Fail, Obama | 40 Comments »
I came across this on AnnieNYC’s blog today and it is fantastic. Highly recommend the read!
This is my 2nd post on why nobama, but i figured now that I’ve finally made my choice of the lesser of 2 evils, even though I do not necessarily endorse my choice, but rather nothing on top, I’ll go into why Nobama for me. I am a Democrat. I have never voted for a Republican candidate but I will this year. And here is why.
Much more at the link. Go read it. Leave a comment.
Remember, the campaigns and the media do read our blogs. By leaving your comment, you are telling them what you think… often times directly.
Love your blogs, Make Your Voice Heard, Leave A Comment.
Filed under: Best of the Rest | Tagged: Nobama, Obama | 4 Comments »