“The real problem is not that we are different, nor that we disagree and have conflict. It's that most of us automatically view conflict as something negative rather than as a tool God can use to help us better understand ourselves and one another.

--Robert Ricciardelli”

Tuesday, September 30, 2008

09/30 Morning Report

Deregulation and greed go across party lines. Before we blame it all on Bush, it’s important to remember that some of the deregulation occurred during the Reagan years, with Democratic controlled Congresses. But, deregulation is not the only issue involved here. think of the debt that's caused all of this...real estate and other kinds of debt, like credit cards. I think most of us realize how spread out the debt risk of those mortgages is. But, that isn't the only debt bought and sold and repackaged in the economic system today.

Let’s start with a brief overview of the money multiplier effect. Banks are required to keep a certain percentage of every deposit at the Federal Reserve. So, assuming that to be 10%, if someone deposits $100, the bank puts $10 at the federal reserve, and loans the rest. Assume that $90 is deposited somewhere. The fed gets $9, and the rest is loaned out. And so on, and so on. In the end, you have something like $100 at the fed, and thousands of dollars of debt held by a large group of people. In other words, according to this viewpoint, our economy is based on debt creation. Most companies buy and sell debt in order to increase returns or immediate cash flow. Many times Company A will sell their receivables for a discount in order to have cash now, instead of say 3 months from now. This keeps factories going, workers employed, etc. However, without that debt, we would not have the standard of living or economic growth we have today--worldwide.

Now, let's carry the example a bit further. Let's just look at mortgages. If I buy a house (which we just did), the mortgage company is probably going to sell that loan to someone for a discounted rate in order to have cash to make another loan. The other firm probably borrowed or leveraged that deal by using some type of debt. Freddie Mac and Fannie Mae, for example, bought a lot of that debt. They, and many other lenders, then repackaged it as various types of bonds and notes, selling that to use the money to buy up more mortgages and so on. Companies bought those, and used the interest to pay their own debts. When people could no longer pay those fancy mortgages developed to get more people to buy houses and put more money into the economy, things started to unwind. As you can see, following the line of reasoning behind this particular viewpoint, the dark cloud we are under suddenly looks a lot worse.

Now, back to the point about deregulation being the cause. I agree that deregulation was involved, as was human greed. But, was it the main culprit? There has always been a measure of sub-prime debt. But, banks and lenders always tried to minimize that debt amount. The amount of sub-prime lending actually took off during the Clinton years. And, that happened under the banner of stopping racially based lending (so-called "red lining")--which needed to be stopped. But, to finance the increased borrowing, or more accurately compensate for the increased risk, banks needed to find a way to get money back...and that's what lead to the increase of derivative debt instruments behind so many problems today. Now, before anyone rants about blaming Clinton, here are some sources on these claims:

The Law & Economics of Subprime Lending
Boston Globe article: Subprime Lending Misconceptions
Investors Business Daily aarticle: The Real Culprits In This Meltdown
Investor’s.com Editorial: Whose Bailout Is It?

Whether the solution is a government bailout, with payback requirements as there were for Chrysler, or not something must be done. Many people have pointed out it isn't just the Republicans and the Bush administration who did this. This is the cumulative effect of many years and administrations--from both parties. The finger pointing and politicking has to stop before America bleeds to death economically.

Thursday, September 25, 2008

09/25 Morning Report

Does anyone besides me have some questions for Rep. Barney Frank, D-Mass.? I do. Does he really want family life to be fair game for campaign discussion? Why don’t we discuss his involvement with executives at Fannie mae! Or at least their campaign contributions. Now, admittedly, the romantic involvement ended 10 years ago. But, even in those years, Frank was on the House Banking Committee.

I brought up yesterday, the Clinton years saw the Justice Department forcing banks to make loans to those who did not qualify. Granted, it was part of an effort to end the disgusting practice of “redlining.” But, this pressure definitely expanded the risks and number of sub-prime loans—all in the name of anti-discrimination. Even, Barney Frank got into the act:

In 1991, Frank and former Rep. Joe Kennedy, D-Mass., lobbied for Fannie to soften rules on multi-family home mortgages although those dwellings showed a default rate twice that of single-family homes, according to the Nov. 22, 1991, Boston Globe.

BusinessWeek reported in its Nov. 14, 1994, issue that Fannie Mae called on Frank to exert his influence against a Housing & Urban Development proposal that would force the GSE to focus on minority and low-income buyers and police bias by lenders regardless of their location. Fannie Mae opposed HUD on the issue because it claimed doing so would “ignore the urban middle class.

Meanwhile, the FBI is investigating Freddie Mac, Fannie Mae, AIG and others for possible fraud. Now, fraud for having mislead investors and doctoring the books I could understand, though I think that is more properly the role of the SEC. But, according to the media:
The FBI has been looking at lenders who sold home loans to buyers on low or unpredictable incomes and also the investment banks that packaged these loans and sold them on.
. Forgive me…but…isn’t that what Clinton and Barney Frank were pushing for, along with Ted Kennedy apparently?

Should we be surprised that the Democrats overlook their own part in this drama? Probably not. Republicans have been known to do it, too. But, we the people shouldn’t let either group get away with it. Or allow the media to ignore the facts. While the Democrats are making so much hay about how Bush and the Republicans got us into this mess, maybe they should be looking in their own closets.

(…but…then again…given the bias…I’m not holding my breath waiting for the media to come down on their darling Democrats…)

Wednesday, September 24, 2008

Wednesday Hero - Yeoman 3rd Class Margret Ueberlauer

Click Image For Full Size
Yeoman 3rd Class Margret Ueberlauer
U.S. Navy

Yeoman 3rd Class Margret Ueberlauer hands out toys to HIV infected children during a community relations project at the Camillian Center in Pattaya, Thailand. The USS Abraham Lincoln Strike Group is on a scheduled deployment in the U.S. 7th Fleet area of responsibility.

These brave men and women sacrifice so much in their lives so that others may enjoy the freedoms we get to enjoy everyday. For that, I am proud to call them Hero.
We Should Not Only Mourn These Men And Women Who Died, We Should Also Thank God That Such People Lived

This post is part of the Wednesday Hero Blogroll. For more information about Wednesday Hero, or if you would like to post it on your site, you can go here.
Wednesday Hero Logo

Tuesday, September 23, 2008

09/23 Morning Report

Our two Presidential candidates are out and about casting blame for the financial meltdown—and both proclaiming the bailout necessary. No surprise that Obama is blaming Republican policies. McCain blames human greed. I tend to agree with McCain. Let’s face it…all these companies that signed massive contracts with CEOs without requiring performance guarantees is insane. That is not the fault of government. That is simple human greed and stupidity.

But, there was an article Monday over at CNSNews that startled me. The article relies quotes Sheldon Richman, editor of The Freeman and an economist with the Foundation for Economic Education, who believes that government intervention is to blame for our problems. Among other things, Richman said:

…government policy laid the foundation of this crisis more than 30 years ago when Congress passed the Community Reinvestment Act of 1977. This law forced banks to loan money to low-income borrowers as a way to ensure that financial institutions would “meet the credit needs of the local community.”

Under the Clinton administration, federal regulators began using the act to combat “red-lining,” a practice by which banks loaned money to some communities but not to others, based on economic status. “No loan is exempt, no bank is immune,” warned then-Attorney General Janet Reno. “For those who thumb their nose at us, I promise vigorous enforcement.”

The Clinton-Reno threat of “vigorous enforcement” pushed banks to make the now infamous loans that many blame for the current meltdown, Richman said. “Banks, in order to not get in trouble with the regulators, had to make loans to people who shouldn’t have been getting mortgage loans.”
And that is definitely food for thought. That is definitely information you won’t hear shared by the mainstream media, or Barak Obama. And, what you won’t hear either candidate doing is making the same conclusion that Richman reaches:
What this financial crisis really shows, Richman said, is that politicians “don’t know what they’re doing. They don’t understand economics. They think there are no laws of economics, that they can decree whatever they want and that there won’t be consequences.”

(…it’s an interesting article. go read it, and check his claims, too…)

Friday, September 12, 2008

09/12 Morning Report

It may be late, but it is always time to remember those who have fallen.

You can read my thoughts on that awful day at “Where Were You.” It’s a couple of years old, but the sentiment, the hurt, and the final question still remain. I’m still trying to answer it. How about you?

Meanwhile, politics had a dead day yesterday, as the candidates agreed to shelve everything in honor of 911. That is a rare and awesome thing, to have both parties lay down their bitter disagreements and stand together for anything. It reinforces the adage that we might fight amonst ourselves, but that’s just a family squabble. Don’t you get involved or we will both kick your @$#. Nice to know some things don’t really change much.

In one piece of good news, Saudi police arrested five men who were using the internet to recruit for al Qaeda.”

The five men are accused of encouraging people to take up arms in Afghanistan and Iraq.

Traditional security measures have led to the arrest of hundreds of al-Qaeda suspects over the last seven years.
(…interesting that it makes no claim on what non-traditional security measures have done…other than an implied innuendo…)

Meanwhile, General Petraeus is dinged by the BBC for refusing to declare victory in Iraq.. They did say all the right things, though—there is a long difficult road ahead, the surge was a success, that Iraqi forces were standing up and taking control. But, they mostly said using the word “not”--“He did not say…He did not confirm…he resued to say…, etc. Too bad it’s such a negative article on someone who has done something very successfully that the entire left wing establishment claimed was impossible.

And, here at home, Hurricane Ike is headed for the Texas coast. And, like always, some stubborn folks are refusing to get out of the way. I understand the sentiment. Some have no where to go. Some see no reason to go, in case they have to start all over. But, I think life is a reason to go. It speaks of hope. And that’s the thing that has kept this country alive in some very dark hours and trying times.

(…personally, I’m worried that too many in our country have lost hope and that will make way for other, darker things…)

Wednesday, September 10, 2008

09_10 Wednesday Hero SSgt. Andy Pena

SSgt. Andy Pena
SSgt. Andy Pena

U.S. Air Force

Staff Sgt. Andy Pena performs in-flight calibrations on a HH-60 Pave Low while flying Sept. 3 over Ellington Field, Texas. He and members of the 55th Rescue Squadron deployed from Davis-Mothan Air Force Base, Ariz., to Ellington Field in response to Hurricane Gustav with less than 24 hours after notification. Sergeant Pena is an aerial gunner.

These brave men and women sacrifice so much in their lives so that others may enjoy the freedoms we get to enjoy everyday. For that, I am proud to call them Hero.
We Have Every Right To Dream Heroic Dreams. Those Who Say That We're In A Time When There Are No Heroes, They Just Don't Know Where To Look

This post is part of the Wednesday Hero Blogroll. For more information about Wednesday Hero, or if you would like to post it on your site, you can go here.
Wednesday Hero Logo

Tuesday, September 09, 2008

09/09 Morning Report

Well, Obama’s positions are pretty clear. If you’ve had doubts, or confusion on some points, you can go read Biil O’Reilly’s article in full. Here are a couple of excerpts…

As far as philosophy goes, Obama is convinced that the federal government should be in control of income distribution and, to some extent, should regulate the free marketplace. That is a classic liberal position and he promotes it well.

In other words, I don’t get to say what my money buys or who gets to spend it…the government does. I may not be quite that blunt and hard lined, but that is what it boils down to.
The senator also believes that poor Americans have a basic right to free health care and monetary supplements from the government with no strings attached. The American substance abuser, for example, would derive the same benefits as would a hard-working, laid-off worker.

Now, do not get me wrong. I think everyone in hard times needs help. That is supposed to be a basic tenent of most religions, though many religious (Christian and non-Christian, by the way) tend to practice it only towards those in their particular religious group as opposed to all men. But, here is my beef…why should those who abuse the system, and break the law, get that kind of treatment? It’s a lot like illegal immigration. If we make everyone provide proof of citizenship, how is that discriminatory towards any group?

(…but liberalism is what it is…and it does not make sense to me very often…)

Meanwhile, one USA Today article said that Republicnas got a HUGE lift from the convention (,,,duh…)
McCain leads Democrat Barack Obama by 50%-46% among registered voters, the Republican's biggest advantage since January and a turnaround from the USA TODAY poll taken just before the convention opened in St. Paul. Then, he lagged by 7 percentage points.
Meanwhile, one USA Today article said that Republicnas got a HUGE lift from the convention (,,,duh…)
McCain leads Democrat Barack Obama by 50%-46% among registered voters, the Republican's biggest advantage since January and a turnaround from the USA TODAY poll taken just before the convention opened in St. Paul. Then, he lagged by 7 percentage points.
In another article, a so-called “fact-check” on “the Bridge to no where”, the same news agency points out that:
As a candidate for governor, however, Palin supported the bridge.
"We need to come to the defense of southeast Alaska when proposals are on the table, like the bridge, and not allow the spinmeisters to turn this project or any other into something that's so negative," Palin said in August 2006, according to the Ketchikan Daily News.
Here’s my problem with these things. Liberal candidates are allowed and regularly reported to have done similar things, and changed their minds later. This is considered admirable. Obama has even done on issues involving Iraq, which the media thinks nothing of. So why is this any different?
(…maybe it relates to…say…liberals being behind in the polls?...oh I forgot…there is no such thing as media bias…how silly of me…)

Thursday, September 04, 2008

9/04 Morning Report

I've been gone for a while. It's been really busy around our home. We now have two teenagers here. We are buying a house. I'm still trying to make it through college. And...I made the mistake of taking up online gaming...oh boy!

Anyway, I thought I would weigh in with a quick comment (someone else's) on the McCain/Palin thing...

Enough said.