http://www.drudge.com/user/STIRSUMUP New links and comments. en-us http://www.rssboard.org/rss-specification Wordzilla/0.58 10 http://www.drudge.com/news/113647/root-cause-financial http://www.intellectualconservative.com/2008/10/14/what-is-the-root-cause-of-the-financial-crisis/ The mortgage meltdown has disrupted financial markets throughout the world. As we assess our own financial condition we ask, what is the root cause of the financial crisis?<p>Speaker of the House Nancy Pelosi said, "This came out of nowhere, this is all about the Republicans. We [Democrats] had nothing to do with this." This is a fallacious statement and she knows it.<p> Many financial gurus point to the Carter era Community Reinvestment Act (CRA) that established the notion that government had a responsibility to provide home loans to unqualified buyers. This faulty notion was expanded during the Clinton Administration and as a result thousands of unqualified people were playing the role of homeowners. These toxic loans caused the failure of Freddie Mac and Fannie Mae and the subsequent failure of numerous other banks. But the CRA was not the root cause of the financial failure. <p>To find the root cause we need to go back to our high school civics class. When I took civics in high school we studied the U.S. Constitution and learned the limited power of the federal government. Our founders knew that if left unchecked eventually government would replace private endeavors to the detriment of liberty and economic growth. Our Founders envisioned a government of strictly limited powers. These powers are clearly specified in Article I, Section 8 of the Constitution. <p>Nowhere in the U.S. Constitution does it state that the U.S. Government has a responsibility to provide homes for anyone. But you wouldn't know it from the legislation proposed, passed, and signed into law. But we can't place all the blame on the politicians. After all the most asked question a politician hears is, "What can you do for me?" This attitude from the public has corrupted our politicians. Politicians are programmed to please. When have you ever heard a politician tell a voter that a request is outside the scope and responsibility of the government? So if politicians think the public wants something, even if it isn't the government's responsibility, the politicians will disregard their oath of office to get votes. <p> Tue, 14 Oct 2008 07:50:58 -0400 STIRSUMUP http://www.drudge.com/news/113647/root-cause-financial#discuss tag:drudge.com,2005:weblog.113647 discussion, 113647 http://www.drudge.com/news/113451/congress-mulls-major-401k-changes http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20081007/REG/810079894 A wide range of sweeping changes to the 401(k) system were proposed Tuesday at a hearing on how the market crisis has devastated retirement savings plans. Chief among them was eliminating $80 billion in tax savings for higher-income people enrolled in 401(k) retirement savings plans. <p>This was suggested by the chairman of the House Committee on Education and Labor. <p>"With respect to the 401(k), it appears to be a plan that is not really well-devised for the changes in the market," Rep. George Miller, D-Calif., said. <p> Thu, 09 Oct 2008 13:05:08 -0400 STIRSUMUP http://www.drudge.com/news/113451/congress-mulls-major-401k-changes#discuss tag:drudge.com,2005:weblog.113451 discussion, 113451 http://www.drudge.com/news/113365/snl-banned-video http://www.youtube.com/watch?v=FhBEdgrOXxA Check this out! Tue, 07 Oct 2008 13:07:33 -0400 STIRSUMUP http://www.drudge.com/news/113365/snl-banned-video#discuss tag:drudge.com,2005:weblog.113365 113365 http://www.drudge.com/news/113359/sarah-can-win-matt-damons-liberal-heart http://www.intellectualconservative.com/2008/10/07/how-sarah-palin-can-win-matt-damon%e2%80%99s-liberal-heart/print/ Laughing at empty slogans and deciphering messianic messages are critical when fighting Hollywood's schizophrenic culture and the elite media's Obamaganda; and Ann Coulter confirms this when she writes, "In general, Hollywood actors don't know any facts but they are 100% committed. 1. Damon opposes free trade (when he isn't shopping at Armani with his American Express card). Thus, Governor Palin can win Hollywood by adopting Obama's crazy socialistic goals. The liberal senator's record to be sure, reveals that he rejects all free trade agreements, unless, of course, we're talking about the Muslim Sultanate of Oman. (Jot that down Governor.) 2. Matt appears comfortable with black-liberation theology. Here's an idea: If a discerning senator can sustain a twenty-year-long commitment to a "God Damn America" fellowship of Jew-haters, then, Palin needs to find a cult where the pastors also preach that the U.S. government creates AIDS, and spreads "genocide" in Africa. (Happy church shopping!) <p>3. Damon argues that Obama is a man of change. Obama argues that he is a matchless man of change. To no avail. Palin fails to obey. The Governor needs to show that she is for "change" by: (a) repeating the Democratic Party's old lie that crushing a baby's skull is simply an expression of choice; (b) carrying the old feminist guard's pro-infanticide buckets to look progressive; and (c) shunning Gianna Jessen, a saline-abortion survivor, because she is "old news." <p>Today's lesson: in liberal circles, change means never having to say that babies feel pain. <p>4. Matt believes that we must reward the poor for their efforts. So too Obama. As such, Governor Palin needs to keep in mind that Michelle Obama's employer, University of Chicago Hospitals, gave her a "modest" wage increase from $121,910 (in 2004) to $316,962 (in 2005), around the same time her husband became a senator. <p>Message: liberals help the poor through wasting their taxes on Mrs. Obama's designer wardrobe. 5. Damon is a Hollywood green. My advice? Parrot Obama's pro-ethanol sermons from The Audacity of Hope: "The bottom line is that fuel-efficient cars and alternative fuels like E85, a fuel formulated with 85 percent ethanol, represent the future of the auto industry." Just disregard Africa's skinny farmers now. Also, deny that to subsidize corn is to spend, say, $9.00, to create a posh gallon of gasoline. <p>6. Matt, a man of letters, supports education. Today's tip? Palin needs to follow Obama's example, and pull her kids out of the public system, and send them to a private school. But, she must never offer the prisoners of failing public schools the same rights, or let parents so much as see a Christian school voucher. Never. <p>7. Damon's a partisan's partisan. Obviously, therefore, it pays to memorize Obama's mantras. Says, The One, "The Republican Party has been successfully scaring voters since 1968, when Richard Nixon built a Silent Majority out of lower middle class folks frightened or disturbed by hippies and student radicals and blacks rioting in the inner cities." Indeed, Palin must glamorize the 1970s, when Black Panthers were acting out on granny's lawn, and defecating on subways. <p>8. Matt loves sharing milkshakes with Democrats. So does Obama. So, Palin is to pretend (my plan) that the Democrats never scare voters. Did President Wilson choose to screen Ku Klux Klan movies in the White House? Yep, but it was a triumphant day for white free speech! Don't embarrass The One. Or The Party. <p>9. Damon looks down on townsfolk. Obama says they hide behind guns and Christianity. The path toward Obamania is also a nature cult walk. Trees are all the rage in Hollywood. Hide behind trees. Hug trees. Worship trees. You can't go wrong. In my professional judgment, Palin needs to bow to Mother Earth. If thousands of trees can sacrifice their lives for Obama's 1.9 million dollar book deal, then, we too must surrender to the eerie tree force. <p>10. Matt knows how to play a gay, gay-killer. Likewise, Obama knows how to support liberal judges and their crusades against the "homophobic" Boy Scouts. How can Palin use this information to her advantage? I suggest she watch The Talented Mr. Ripley, to further her "education." I also suggest that she ignores the First Amendment freedom of association nonsense, in order to open the floodgates to cross-dressing camp instructors. Revere Obama. <p> Tue, 07 Oct 2008 11:04:13 -0400 STIRSUMUP http://www.drudge.com/news/113359/sarah-can-win-matt-damons-liberal-heart#discuss tag:drudge.com,2005:weblog.113359 discussion, 113359 http://www.drudge.com/news/113344/why-federal-reserve-policy-failing http://www.americaneconomicalert.org/view_art.asp?Prod_ID=3059 The Federal Reserve and U.S. Treasury continue to fail in their attempts to stabilize the U.S. financial system. That is due to failure to grasp the nature of the problem, which concerns the parallel banking system. Rescue policy remains stuck in the past, focused on the traditional banking system while ignoring the parallel unregulated system that was permitted to develop over the past twenty-five years. <p>This parallel banking system financed vast amounts of real estate lending and consumer borrowing. The system (which included the likes of Thornburg Mortgage, Bear Stearns and Lehman Brothers) made loans but had no deposit base. Instead, it relied on roll-over funding obtained through money markets. Additionally, it operated with little capital and extremely high leverage ratios, which was critical to its tremendous profitability. Finally, loans were often securitized and traded among financial firms. <p>This business model has now proven extremely fragile. First, the model created a fundamental maturity mismatch, whereby loans were of a long term nature but funding was short-term. That left firms vulnerable to disruptions of money market funding, as has now occurred. <p>Second, securitization converted loans into financial instruments that could be priced according to market conditions. That was fine when prices were rising, but when they started falling firms had to take large mark-to-market losses. Given their low capital ratios, those losses quickly wiped out firms' capital bases, thereby freezing roll-over funding. <p>In effect, the parallel banking business model completely lacked shock absorbers, and it has now imploded in a vicious cycle. Lack of roll-over financing has compelled asset sales, which has driven down prices. That has further eroded capital, triggering margin calls that have caused more asset sales and even lower prices, making financing impossible for even the best firms. <p>Though the parallel banking system engaged in riskier lending than the traditional banking system, those differences were a matter of degree. Traditional banks like Washington Mutual, Wachovia, and Citigroup have also all lost huge sums. However, the traditional banking system is more protected for two reasons Tue, 07 Oct 2008 06:09:12 -0400 STIRSUMUP http://www.drudge.com/news/113344/why-federal-reserve-policy-failing#discuss tag:drudge.com,2005:weblog.113344 discussion, 113344 http://www.drudge.com/news/113290/story-freddie-and-fannie http://www.intellectualconservative.com/2008/10/04/the-story-of-freddie-and-fannie/print/ Fannie Mae and Freddie Mac play a dominant role in the housing market by buying up mortgages and reselling them to investors. With approximately 5 trillion dollars of investment portfolios, they owned or guaranteed about 70% of the U.S. mortgage market these banks simply became too large to fail. Throughout the years, Fannie and Freddie have come to play a dominant role in the housing market by buying up mortgages and reselling them to investors. With approximately 5 trillion dollars of investment portfolios, Freddie and Fannie owned or guaranteed about 70% of the U.S. mortgage market - these banks have simply become too large to fail. <p>For years, financial experts, economists, and regulators warned Congress that Fannie and Freddie have grown too large, have become too risky in their lending practices, and ultimately lacked the sufficient capital to protect itself against inevitable losses. Since 2001, the Bush Administration issued 34 warnings to Congress about the need to reform Fannie Mae and Freddie Mac before it caused substantial economic turmoil in the financial markets. However, they met continual opposition by Congressional Democrats who feared that tighter regulations Mon, 06 Oct 2008 05:40:22 -0400 STIRSUMUP http://www.drudge.com/news/113290/story-freddie-and-fannie#discuss tag:drudge.com,2005:weblog.113290 discussion, 113290 http://www.drudge.com/news/113212/jones-statement-financial-bailout http://www.drudge.com/news/113212/jones-statement-financial-bailout WASHINGTON, D.C. In a House vote today, Third District Representative Walter B. Jones (R-NC) voted against H.R. 1424, the Emergency Economic Stabilization Act of 2008. The $700 billion financial bailout legislation passed the House by a vote of 263 to 171 and now goes to the President for signature into law. Congressman Jones' statement on the bill follows below. "Over the past two weeks, hundreds of phone calls and e-mails have poured into my office from Eastern North Carolina residents who have shared their concerns about today's current economic situation. Without a doubt, most Americans agree that our credit market situation is serious and something must be done to address the problem. Unfortunately, today's hasty passage of a $700 billion bailout is not the proper solution." <p> "This legislation is a vast expansion of the federal government at the expense of the American taxpayer and the free enterprise system. High-flying Wall Street firms created this problem and got rich in the process. Taxpayers should not have to pick up the tab for their poor business decisions. With each citizen's share of the national debt at $33,000 before this bailout, the American people do not need to be saddled with even more federal debt. They also don't need to be saddled with the billions of dollars of pork in this bill for things like wooden arrow makers and Caribbean rum producers." <p>"Following the House's defeat of similar bailout legislation on Monday, I was hopeful that Congress would immediately reconvene and seek the counsel of outside experts on alternative courses of action. Yet the Congressional leadership continued to craft this bailout behind closed doors, without input from those with alternatives that would be more effective and cost the taxpayers less. Furthermore, the financial experts who have contacted me in the past several days including three Nobel Prize-winning economists and the heads of successful financial institutions like BB&T and First Citizens Bank have told me there is little reason to believe this bailout package will work." <p>"One credible alternative to the $700 billion bailout proposal was a bipartisan bill I cosponsored this week, the No BAILOUTS Act, which would correct the capital shortfalls experienced by many financial institutions and help protect the integrity and quality of the securities market without costing American taxpayers billions of dollars. By addressing the current credit crisis with a regulatory-based proposal, this alternative plan could have been quickly implemented without burdening taxpayers. Passing this $700 billion bailout was not the only available option." Fri, 03 Oct 2008 14:30:45 -0400 STIRSUMUP http://www.drudge.com/news/113212/jones-statement-financial-bailout#discuss tag:drudge.com,2005:weblog.113212 discussion, 113212 http://www.drudge.com/news/113188/does-pro-life-now-mean-pro-libertinism http://www.intellectualconservative.com/2008/10/02/does-pro-life-now-mean-pro-libertinism/ Are we to be civilized people whose fun is spoiled by barbarism, or barbarians whose fun is spoiled by civilization? . . . the pro-life movement has come to terms with the sexual revolution. So long as unwed parenthood is considered disgraceful, many unwed mothers will choose abortion to escape disgrace. And so, step by step, the pro-life movement has evolved to an accepting even welcoming attitude toward pregnancy outside marriage . . . <p>. . . this approach seems to have worked. As the stigma attached to unwed motherhood has diminished, the United States has seen both a huge increase in the proportion of babies born out of wedlock now reaching almost 37% and a striking decline in the incidence of abortions . . . <p>. . . In 1981, 29.3 abortions were carried out for every 1,000 women of childbearing age in the United States. By 2005, that rate had tumbled to 19.1 per 1,000 women. <p> Fri, 03 Oct 2008 06:12:02 -0400 STIRSUMUP http://www.drudge.com/news/113188/does-pro-life-now-mean-pro-libertinism#discuss tag:drudge.com,2005:weblog.113188 discussion, 113188 http://www.drudge.com/news/113112/congress-encouraged-irresponsibility http://www.intellectualconservative.com/2008/09/30/congress-encouraged-irresponsibility/ Throughout our lives we are reminded to act responsibly. Our parents, neighbors, teachers, employers etc. all have extolled the virtues of responsibility. But all this wisdom was washed down the drain by politicians.<p> In the dark days of the Carter Administration, congress passed The Community Reinvestment Act (CRA). The CRA essentially reduced the requirements to buy houses. But in 1995 under the Clinton Administration, the CRA lending standards were lowered even further. The Boston Federal Reserve produced a manual for mortgage lenders that said: "discrimination may be observed when a lender's underwriting policies contain arbitrary or outdated criteria that effectively disqualify many urban or lowerincome minority applicants." Lenders were told credit history, proof of income, and source of downpayment were outdated criteria. Would you loan someone a significant amount of money without some assurance of repayment? <p> Wed, 01 Oct 2008 13:37:50 -0400 STIRSUMUP http://www.drudge.com/news/113112/congress-encouraged-irresponsibility#discuss tag:drudge.com,2005:weblog.113112 discussion, 113112